PRAIRIE FUNDS, N14AE24, 1994-11-18

PRAIRIE FUNDS
N14AE24, 1994-11-18

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Registration No. 33-_____
==============================================================

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-14

REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933

/__/ Pre-Effective Amendment No. __
/__/ Post-Effective Amendment No. __

(Check appropriate box or boxes)

PRAIRIE FUNDS
____________________________________________________________
(Exact Name of Registrant as Specified in Charter)

(312) 732-4231
____________________________________________________________
(Area Code and Telephone Number)

Three First National Plaza, Chicago, Illinois 60670
____________________________________________________________
(Address of Principal Executive Offices: Number,
Street, City, State, Zip Code)

(Name and Address of Agent for Service)

APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as
practicable after this Registration Statement is declared
effective.

_____________________

Registrant has previously filed a declaration of
indefinite registration of its shares pursuant to Rule 24f-2
under the Investment Company Act of 1940, as amended;
accordingly, no fee is payable herewith. Registrant's Rule
24f-2 Notice for the fiscal year ending September 30, 1995 is
expected to be filed on November 28, 1995.

It is proposed that this filing will become effective
on December 19, 1994 pursuant to Rule 488.

<PAGE>
PRAIRIE FUNDS

Cross Reference Sheet
Pursuant to Rule 481(a) Under the
Securities Act of 1933

<TABLE>
<CAPTION>
Proxy Statement/
Form N-14 Item No. Prospectus Caption
- ------------------ ------------------
Part A
- ------
<S> <C> <C>
Item 1. Beginning of Registration Prospectus Cover
Statement and Outside Front
Cover Page of Prospectus

Item 2. Beginning and Outside Back Cover Page
Cover Page of Prospectus

Item 3. Synopsis Information and Not Applicable
Risk Factors

Item 4. Information About the Letter to Shareholders;
Transaction Proposal No. 1; Certain
Differences Between the
Existing Fund and the
Series

Item 5. Information About the Letter to Shareholders;
Registrant Certain Differences
Between the Existing Fund
and the Series

Item 6. Information About the Letter to Shareholders;
Company being Acquired Certain Differences
Between the Existing Fund
and the Series

Item 7. Voting Information Letter to Shareholders;
Voting Information

Item 8. Interest of Certain Not Applicable
Persons and Experts

Item 9. Additional Information Not Applicable
Required for Reoffering
by Persons Deemed to be
Underwriters
</TABLE>

Statement of Additional
Part B
Information Caption
- ------
- -----------------------
<S> <C> <C>
Item 10. Cover Page Cover Page

Item 11. Table of Contents Not Applicable

Item 12. Additional Information Statement of Additional
about the Registrant Information of Prairie
Funds dated ______, 1994<F1>

Item 13. Additional Information about Statements of
the Company being Acquired Additional Information of
Transferors<F2>

Item 14. Financial Statements Statement of Additional
Information of Prairie
Funds dated ______, 1994<F1>
- ---------------------
<FN> Incorporated herein by reference to the Registration
Statement of the Registrant on Form N-1A dated
October 28, 1994 (File No. 33-56217).

<FN> Incorporated herein by reference to the Registration
Statement on Form N-1A of First Prairie Diversified
Asset Fund dated April 22, 1994 (File No. 2-95547);
incorporated herein by reference to the Registration
Statement on Form N-1A of First Prairie Money Market
Fund dated April 11, 1994 (File No. 2-95546);
incorporated herein by reference to the Registration
Statement on Form N-1A of First Prairie Municipal
Money Market Fund dated April 29, 1994 (File No. 2-95548);
and incorporated herein by reference to the Registration
Statement on Form N-1A of First Prairie Tax Exempt
Bond Fund, Inc. dated June 27, 1994 (File No. 33-18954).
</TABLE>

Part C
- ------
Item 15. Indemnification

Item 16. Exhibits

Item 17. Undertakings

<PAGE>

Preliminary Copy

FIRST PRAIRIE DIVERSIFIED ASSET FUND
Three First National Plaza
Chicago, Illinois 60670

Dear Shareholder:

As a shareholder of First Prairie Diversified
Asset
Fund (the "Existing Fund"), you are entitled to vote on the
proposal described below and in the enclosed materials.
Currently, the Existing Fund is organized as a
Massachusetts business trust. Because the Existing Fund is
part of the Prairie Family of Funds and is designed for
individual investors, management of the Existing Fund has
determined that certain operational efficiencies might be
achievable if the Existing Fund--while continuing as a separate
entity for purposes of the Investment Company Act of 1940--were
to reorganize as a separate series of a single Massachusetts
business trust. The transaction will not result in the
imposition of Federal income tax on you.

The proposal provides that the Existing Fund
exchange all of its assets, subject to its liabilities, for
shares of a separate new series of Prairie Funds, a newly
formed investment company organized as a Massachusetts business
trust (the "Trust"). The Trust is comprised of twelve series,
including the Managed Assets Income Series (the "Series") into
which the Existing Fund is proposed to be reorganized. Under
the proposal, the Existing Fund would receive, in exchange for
its assets attributable to Class A, Class A shares of
beneficial interest of the Series, par value $.001 per share
("Series Shares"). Upon consummation of this transaction (the
"Exchange"), the Series Shares received by the Existing Fund
will be distributed by the Existing Fund to its shareholders
(the "Shareholders"), with each Shareholder receiving the same
number of Series Shares (or fractions thereof) as Existing Fund
shares held immediately prior to the Exchange. The Existing
Fund then will be liquidated and dissolved.

The Series will have the same investment objective
as the Existing Fund with which it is to be reorganized.
Differences between the Existing Fund and the Series regarding
the investment adviser and fees, management policies, lower
sales charges, and shareholder services are set forth in the
enclosed Proxy Statement/Prospectus.

Further information about the transaction is
contained in the enclosed materials, which you should review
carefully.

Please take the time to consider the enclosed
materials and then vote by completing, dating and signing the
enclosed proxy card. A self-addressed, postage-paid envelope
has been enclosed for your convenience.
THE EXISTING FUND'S BOARD MEMBERS RECOMMEND
THAT YOU VOTE IN FAVOR OF THE PROPOSED TRANSACTION. If you have
any questions after considering the enclosed materials, please
feel
free to call _________ between the hours of 9:00 a.m. and 5:30
p.m. (New York time), Monday through Friday.

Sincerely,

[NAME],
[TITLE]

December __, 1994

<PAGE>

Preliminary Copy

FIRST PRAIRIE DIVERSIFIED ASSET FUND

- -------------------------------------------

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

- ----------------------------------------

To the Shareholders:
A Special Meeting of Shareholders of
First
Prairie Diversified Asset Fund (the "Existing Fund") will be
held at the offices of [NAME, ADDRESS], on Monday, January 16,
1995 at __:__ _.m. for the following purposes:
1. To consider an Agreement and Plan of
Exchange (the "Plan") for the Existing Fund
providing for the transfer of all or
substantially
all of its assets, subject to its liabilities,
to a
new series (the "Series") of Prairie Funds, a
newly
created Massachusetts business trust (the
"Trust").
Under the Plan, the Existing Fund would
receive, in
exchange (the "Exchange") for its assets
attributable to Class A, Class A shares of
beneficial interest of the Series, par value $.001
per share ("Series Shares"). Series Shares
received
in the Exchange will be distributed by the
Existing
Fund to its shareholders in liquidation of the
Existing Fund, after which the Existing Fund
will be
dissolved; and
2. To transact such other business as may
properly come before the meeting, or any
adjournment
or adjournments thereof.
Shareholders of record at the close of
business
on December 5, 1994, will be entitled to receive notice of and
to vote at the meeting.
By Order of the Board of Trustees

[NAME]
[TITLE]

[PLACE]
___________, 1994

WE NEED YOUR PROXY VOTE IMMEDIATELY

A SHAREHOLDER MAY THINK HIS VOTE IS NOT
IMPORTANT, BUT IT IS VITAL. BY LAW, THE
MEETING OF SHAREHOLDERS OF THE EXISTING
FUND WILL HAVE TO BE ADJOURNED WITHOUT
CONDUCTING ANY BUSINESS IF LESS THAN A
MAJORITY OF ITS SHARES ELIGIBLE TO VOTE
IS REPRESENTED. IN THAT EVENT, THE
EXISTING FUND, AT SHAREHOLDERS' EXPENSE,
WOULD CONTINUE TO SOLICIT VOTES IN AN
ATTEMPT TO ACHIEVE A QUORUM. CLEARLY,
YOUR VOTE COULD BE CRITICAL TO ENABLE THE
EXISTING FUND TO HOLD THE MEETING AS
SCHEDULED, SO PLEASE RETURN YOUR PROXY
CARD IMMEDIATELY. YOU AND ALL OTHER
SHAREHOLDERS WILL BENEFIT FROM YOUR
COOPERATION.

<PAGE>

Preliminary Copy

FIRST PRAIRIE DIVERSIFIED ASSET FUND

PROXY STATEMENT/PROSPECTUS
----------------------------

Special Meeting of Shareholders
to be held on January 16, 1995

This Proxy Statement/Prospectus is furnished in
connection with a solicitation of proxies by the Board of First
Prairie Diversified Asset Fund (the "Existing Fund") to be used
at the Special Meeting of Shareholders (the "Meeting") to be
held on Monday, January 16, 1995 at __:__ _.m., at the offices
of [NAME, ADDRESS] for the purposes set forth in the
accompanying Notice of Special Meeting of Shareholders.
Shareholders of record at the close of business on December 5,
1994 (each, a "Shareholder" and, collectively, the
"Shareholders") are entitled to receive notice of and to vote
at the Meeting. Shareholders are entitled to one vote for each
share of beneficial interest of the Existing Fund, par value
$.001 per share ("Existing Fund Share"), held and fractional
votes for each fractional Existing Fund Share held. Existing
Fund Shares are classified into two classes--Class A and Class
B. Only Class A shares are outstanding. Existing Fund Shares
represented by executed and unrevoked proxies will be voted in
accordance with the specifications made thereon. If the
enclosed form of proxy is executed and returned, it
nevertheless may be revoked by giving another proxy or by
letter or telegram directed to the Existing Fund, which must
indicate the Shareholder's name and account number. To be
effective, such revocation must be received before the Meeting.
Also, any Shareholder who attends the Meeting in person may
vote by ballot at the Meeting, thereby canceling any proxy
previously given. As of ______________, 1994, __________
Existing Fund Shares were issued and outstanding.
[5% holders of the Existing Fund to be
inserted]
PROPOSAL 1. APPROVAL OF AN AGREEMENT AND
PLAN OF EXCHANGE PROVIDING FOR THE
TRANSFER OF ALL OR SUBSTANTIALLY ALL OF THE
ASSETS OF THE EXISTING FUND TO A NEW SERIES
OF A NEWLY CREATED MASSACHUSETTS BUSINESS
TRUST INTRODUCTION
It is proposed that the Existing Fund transfer
all
or substantially all of its assets, subject to its liabilities,
to a separate new series of Prairie Funds, a newly created
Massachusetts business trust (the "Trust"). The Trust is
comprised of twelve series, including the Managed Assets Income
Series (the "Series") into which the Existing Fund is proposed
to be reorganized, having the same investment objective and
management policies of the Existing Fund, except to the extent
described below under "Certain Differences Between the Existing
Fund and the Series." Under the Plan, the Existing Fund would
receive, in exchange (the "Exchange") for its assets
attributable to Class A, Class A shares of beneficial interest
of the Series, par value $.001 per share ("Series Shares"), all
as more fully described herein. Upon consummation of the
Exchange, Series Shares received by the Existing Fund will be
distributed to its Shareholders, with each Shareholder
receiving a distribution of an identical number of Series
Shares (or fractions thereof) for Existing Fund Shares held
immediately prior to the Exchange. The Existing Fund then will
be dissolved.
At a meeting of the Existing Fund's Board held
on
November 18, 1994, The First National Bank of Chicago ("FNBC"),
the Existing Fund's investment adviser, recommended that the
Board consider, and the Board approved, an Agreement and Plan
of Exchange (the "Plan"), a form of which is attached hereto as
Exhibit A, and the Exchange.

THE PLAN
The following summary of the important terms and
conditions of the Plan is qualified in its entirety by
reference to the Plan. The Plan provides that, subject to the
requisite approval of the Shareholders, on the date of the
Exchange the Existing Fund shall assign, transfer and convey to
the Series all of the assets (subject to liabilities) of the
Existing Fund, including all securities and cash, in exchange
for Series Shares having an aggregate net asset value equal to
the value of the net assets of the Existing Fund acquired. The
Existing Fund will distribute all Series Shares received by it
among its Shareholders so that each Shareholder will receive
Series Shares identical in number and class to the number and
class of Existing Fund Shares held by such Shareholder
immediately prior to the Exchange. Thereafter, the Existing
Fund will dissolve. The dissolution of the Existing Fund is
expected to occur as soon as practicable after the Exchange.
Immediately following the Exchange, the former Shareholders of
the Existing Fund will hold the only outstanding Series Shares
(other than one Series Share which will be held by Concord
Financial Group, Inc., the Series' distributor, for regulatory
purposes). After the Exchange has been completed, the Series
will operate as an open-end, diversified management investment
company.
Unless postponed by the Existing Fund and the
Series, the Exchange is expected to occur on ____________,
1995, on the basis of the net assets of the Existing Fund as of
the close of trading on the floor of the New York Stock
Exchange (currently 4:00 p.m., New York time), on that day.
The Exchange will not be effected until certain conditions are
satisfied, including approval of the Plan by the Shareholders.
The Plan may be amended at any time prior to
the Exchange.
The total expenses of the Exchange are expected to
be approximately $________.
If the Exchange is not approved by the
Shareholders, the Existing Fund's Board will consider other
appropriate courses of action, including continuing operation of
the Existing Fund in its present form.

REASONS FOR THE EXCHANGE
The Exchange will establish the Series as the
successor investment vehicle to the Existing Fund. It is
believed that reorganization of the Existing Fund as a new
series of a newly created Massachusetts business trust will
prove beneficial in that the Series will be less expensive to
operate than the Existing Fund individually. In addition, it
is believed that the differences in management policies
described under "Certain Differences Between the Existing Fund
and the Series" should make the Series a more attractive
investment vehicle than the Existing Fund.

TAX CONSEQUENCES
The exchange of Existing Fund assets for Series
Shares is intended to qualify for Federal income tax purposes
as a tax-free reorganization under Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"). As a
condition to the closing of the Exchange, the Series and
Existing Fund will receive the opinion of Stroock & Stroock &
Lavan, counsel to both the Series and the Existing Fund, to the
effect that, on the basis of the existing provisions of the
Code, Treasury regulations issued thereunder, current
administrative regulations and pronouncements and court
decisions, and certain facts, assumptions and representations,
for Federal income tax purposes: (1) the transfer of all or
substantially all of the Existing Fund's assets in exchange for
Series Shares and the assumption by the Series of Existing Fund
liabilities will constitute a "reorganization" within the
meaning of Section 368(a)(1)(F) of the Code; (2) no gain or
loss will be recognized by the Series upon the receipt of
Existing Fund assets solely in exchange for Series Shares and
the assumption by the Series of liabilities of the Existing
Fund; (3) no gain or loss will be recognized by the Existing
Fund upon the transfer of its assets to the Series in exchange
for Series Shares and the assumption by the Series of the
Existing Fund's liabilities or upon the distribution (whether
actual or constructive) of Series Shares to Shareholders in
exchange for their Existing Fund Shares; (4) no gain or loss
will be recognized by the Existing Fund Shareholders upon the
exchange of Existing Fund Shares for Series Shares; (5) the
aggregate tax basis for Series Shares received by each Existing
Fund Shareholder pursuant to the Exchange will be the same as
the aggregate tax basis for Existing Fund Shares held by such
Shareholder immediately prior to the Exchange, and the holding
period of Series Shares to be received by each Existing Fund
Shareholder will include the period during which Existing Fund
Shares surrendered in exchange therefor were held by such
Shareholder (provided Existing Fund Shares were held as capital
assets on the date of the Exchange); and (6) the tax basis of
Existing Fund assets acquired by the Series will be the same as
the tax basis of such assets to the Existing Fund immediately
prior to the Exchange, and the holding period of Existing Fund
assets in the hands of the Series will include the period
during which those assets were held by the Existing Fund.

NEITHER THE EXISTING FUND NOR THE SERIES HAS
SOUGHT
A TAX RULING FROM THE INTERNAL REVENUE SERVICE ("IRS"). THE
OPINION OF COUNSEL IS NOT BINDING ON THE IRS NOR DOES IT
PRECLUDE THE IRS FROM ADOPTING A CONTRARY POSITION. Existing
Fund Shareholders should consult their tax advisers regarding
the effect, if any, of the proposed Exchange in light of their
individual circumstances. Since the foregoing discussion
relates only to the Federal income tax consequences of the
Exchange, Existing Fund Shareholders also should consult their
tax advisers as to state and local tax consequences, if any, of
the Exchange.
SECURITIES TO BE ISSUED
The Series will issue Series Shares in exchange for
the transfer of the Existing Fund's assets. Series Shares have
no preemptive or subscription rights and are freely
transferable. Series Shares issued in the Exchange will be
fully paid, legally binding and non-assessable by the Series.
The Series has authorized an indefinite number of shares of
beneficial interest and has classified its shares as Class A,
Class B and Class I.
REQUIRED VOTE AND BOARD'S RECOMMENDATION
The Existing Fund's Board has approved the Plan and
the Exchange and has determined that (i) participation in the
Exchange is in the Existing Fund's best interests and (ii) the
interests of the Existing Fund's Shareholders will not be
diluted as a result of the Exchange. Pursuant to the Existing
Fund's charter documents, an affirmative vote of a majority of
its Shareholders is required to approve the Plan and the
Exchange.
THE EXISTING FUND'S BOARD, INCLUDING THE "NON-
INTERESTED" BOARD MEMBERS, RECOMMENDS THAT SHAREHOLDERS VOTE
"FOR" APPROVAL OF THE PLAN AND THE EXCHANGE.

CERTAIN DIFFERENCES BETWEEN THE EXISTING FUND AND THE SERIES
INVESTMENT ADVISER AND ADMINISTRATOR. The investment adviser
of the Existing Fund is The First National Bank of Chicago
("FNBC"), acting through its Investment Management Department.
The Existing Fund entered into an Investment Advisory Agreement
dated as of December 16, 1985 (as revised October 1, 1993) with
FNBC, pursuant to which the Existing Fund has agreed to pay
FNBC a monthly fee at the annual rate of .65 of 1% of the value
of the Existing Fund's average daily net assets. The
administrator of the Existing Fund is The Dreyfus Corporation
("Dreyfus"). The Existing Fund entered into an Administration
Agreement dated as of December 16, 1985 (as revised October 1,
1993) with Dreyfus, pursuant to which the Existing Fund has
agreed to pay Dreyfus a monthly fee at the annual rate of .30
of 1% of the value of the Existing Fund's average daily net
assets.
The investment adviser of the Series will be
First
Chicago Investment Management Company ("FIMCO"), a newly formed
subsidiary of FNBC, which will employ substantially all the
investment personnel who currently provide advisory services to
the Existing Fund. The Trust will enter into an Investment
Advisory Agreement with FIMCO, pursuant to which the Trust will
pay FIMCO a monthly advisory fee at the annual rate of .65 of
1% of the value of the Series' average daily net assets. The
administrator of the Trust also will be FIMCO. The Trust will
enter into an Administration Agreement with FIMCO, pursuant to
which the Trust will pay FIMCO a monthly administration fee at
the annual rate of .15 of 1% of the value of the Series'
average daily net assets (the "Administration Fee"). In
addition, FIMCO will enter into a Master Sub-Administration
Agreement with Concord Holding Corporation ("Concord"),
pursuant to which FIMCO will pay Concord a portion of its
Administration Fee in consideration of Concord's providing
administrative services to the Series.
MANAGEMENT POLICIES. The Series will follow an asset
allocation strategy that first involves determining the asset
mix that FIMCO, as investment adviser, believes, based on its
assessment of economic conditions and investment opportunities,
will achieve the Series' objective and next involves choosing
within the asset classes - namely, equity securities, fixed-
income securities and money market instruments - securities
believed appropriate for the Series.
The Existing Fund is permitted to invest in the
same
securities as the Series, with the exception described in the
next sentence, but its investment approach does not include, in
a formal way, the allocations among asset classes described
above. The Existing Fund is not permitted to purchase a fixed-
income security rated below investment grade by each rating
agency rating the security. The Series is permitted to invest
up to 5% of its net assets in convertible bonds rated below
investment grade by the rating agencies rating the securities.
The Existing Fund's Board believes that the
Series,
with its formal asset allocation strategy and somewhat broader
investment policies, should be a more attractive investment
vehicle than the Existing Fund.
INITIAL SALES CHARGE. The schedules of the initial sales
charge imposed on the Existing Fund's Class A shares differ
somewhat from those applicable to Series Shares. The maximum
initial sales charge is the same for both the Existing Fund and
the Series; in addition, at higher purchase levels, the initial
sales charge imposed on Series Shares is lower than that
imposed on Class A shares of the Existing Fund.
The schedules of the initial sales charge
imposed on
Series Shares and Existing Fund Class A shares are set forth
below:

<TABLE>

SERIES' TOTAL SALES LOAD
<CAPTION>

AMOUNT OF TRANSACTION As a % of As a % of Dealers'
offering net asset Reallowance
price value as a % of
per share per share offering price

<S> <C> <C> <C>
Less than $50,000 4.50 4.70 4.00
$50,000 to less than $100,000 4.00 4.20 3.50
$100,000 to less than $250,000 3.00 3.10 2.50
$250,000 to less than $500,000 2.00 2.00 1.50
$500,000 to less than $1,000,000 1.50 1.50 1.25
$1,000,000 and above none none none

</TABLE>

<TABLE>

EXISTING FUND'S TOTAL SALES LOAD
<CAPTION>

AMOUNT OF TRANSACTION As a % of As a % of Dealers'
offering net asset Reallowance
price value as a % of
per share per share offering price
<S> <C> <C> <C>
Less than $50,000 4.50 4.70 4.25
$50,000 to less than $100,000 4.00 4.20 3.75
$100,000 to less than $250,000 3.00 3.10 2.75
$250,000 to less than $500,000 2.50 2.60 2.25
$500,000 to less than $1,000,000 2.00 2.00 1.75
$1,000,000 to less than $3,000,000 1.00 1.00 1.00
$3,000,000 to less than $5,000,000 .50 .50 .50
$5,000,000 and above .25 .25 .25

</TABLE>

While there is no initial sales charge on
purchases of
$1,000,000 or more of Series Shares, if an investor redeems
those Shares within a certain period after purchase, a
contingent deferred sales charge ("CDSC") will be imposed at
the time of redemption. Class A shares of the Existing Fund
were not subject to such a CDSC at the time of redemption. The
following table sets forth the CDSC imposed on Series Shares
for the indicated time periods:
<PAGE>
<TABLE>

<CAPTION>
Amount of CDSC as a % Year Since
Transactions at of Amount Invested Purchase was
Offering Price or Redemption Proceeds Made
<S> <C> <C>
$1,000,000 to 1.00% First or Second
less than
$2,500,000

$2,500,000 to less 0.50% First
than $5,000,000

$5,000,000 and above 0.25% First

</TABLE>

The following shareholder services are offered by
the Existing Fund but not by the Series: Auto-Exchange
Privilege--allows you to automatically exchange Existing Fund
shares for shares of certain other First Prairie mutual funds
at regular intervals which you select; Government Direct
Deposit Privilege--enables you to purchase Existing Fund shares
by having Federal salary, Social Security or certain veterans',
military or other payments from the Federal government
automatically deposited into your Existing Fund account;
Automatic Withdrawal Plan--allows you to withdraw a specified
dollar amount from your Existing Fund account every month or
quarter; and Dividend Options--allows you to "sweep" your
dividends and capital gain distributions into certain other
First Prairie mutual funds.

Conversely, the Series offers a Reinstatement
Privilege (not offered by the Existing Fund), which allows you
to repurchase Series Shares at the then-current net asset
value, within 30 days of a redemption, in any amount not to
exceed the redemption proceeds received.

ADDITIONAL INFORMATION ABOUT THE SERIES AND EXISTING FUND
Information about the Series is included in the
Trust's current Prospectus and Statement of Additional
Information for the Series, each dated December ___, 1994.
Information about the Existing Fund is included in the Existing
Fund's current Prospectus and Statement of Additional
Information for the Existing Fund, each dated April 22, 1994.
Copies of each of the Series' and the Existing Fund's
Prospectuses and Statements of Additional Information are being
furnished with this Prospectus/Proxy Statement and are
incorporated herein by reference.

FINANCIAL STATEMENTS AND EXPERTS
The audited financial statements of the
Existing Fund for the fiscal year ended December 31, 1993, which
are
included in the Existing Fund's Statement of Additional
Information, dated April 22, 1994, have been examined by Ernst
& Young LLP, independent auditors, whose reports thereon are
included therein. The financial statements examined by Ernst &
Young LLP have been incorporated herein by reference in
reliance upon their report given on their authority as experts
in accounting and auditing.
OTHER MATTERS
The Existing Fund's Trustees are not aware of
any
other matters which may come before the Meeting. However,
should any such matters properly come before the Meeting, it is
the intention of the persons named in the accompanying form of
proxy to vote the proxy in accordance with their judgment on
such matters.
VOTING INFORMATION
The Existing Fund will bear the cost of
soliciting
proxies. In addition to the use of the mails, proxies may be
solicited personally, by telephone or by telegraph, and the
Existing Fund may pay persons holding Existing Fund Shares in
their names or those of their nominees for their expenses in
sending soliciting materials to their principals.
If a proxy is properly executed and returned
accompanied by instructions to withhold authority to vote,
represents a broker "non-vote" (that is, a proxy from a broker
or nominee indicating that such person has not received
instructions from the beneficial owner or other person entitled
to vote Existing Fund Shares on a particular matter with
respect to which the broker or nominee does not have
discretionary power) or is marked with an abstention
(collectively, "abstentions"), the Existing Fund Shares
represented thereby will be considered to be present at the
Meeting for purposes of determining the existence of a quorum
for the transaction of business. Abstentions, however, will
have the effect of a "no" vote for the purpose of obtaining
requisite approval for Proposal No. 1.

NOTICE TO BANKS, BROKER/DEALERS AND VOTING TRUSTEES
AND THEIR NOMINEES

Please advise the Existing Fund, in care of The
First National Bank of Chicago, Three First National Plaza,
Chicago, Illinois 60670, Attention: ________________, whether
other persons are the beneficial owners of Existing Fund Shares
for which proxies are being solicited from you, and, if so, the
number of copies of the Proxy Statement/Prospectus and other
soliciting material you wish to receive in order to supply
copies to the beneficial owners of Existing Fund Shares.
IT IS IMPORTANT THAT PROXIES BE RETURNED
PROMPTLY.
THEREFORE, SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND IN PERSON
ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE PROXY CARD IN
THE ENCLOSED STAMPED ENVELOPE.

Dated: December __, 1994

<PAGE>

Exhibit A

FORM OF
AGREEMENT AND PLAN OF EXCHANGE

AGREEMENT AND PLAN OF EXCHANGE dated
________________, 1994 (the "Agreement"), between FIRST PRAIRIE
DIVERSIFIED ASSET FUND, a Massachusetts business trust (the
"Existing Fund"), and the MANAGED ASSETS INCOME SERIES (the
"Series") of PRAIRIE FUNDS, a Massachusetts business trust (the
"Trust").
WHEREAS, the Boards of the Existing Fund and
the
Trust have determined that it is in the best interests of the
Existing Fund and Series, respectively, that the assets of the
Existing Fund be acquired by the Series pursuant to this
Agreement and in accordance with the applicable statutes of The
Commonwealth of Massachusetts; and

WHEREAS, the parties desire to enter into a
plan of
exchange pursuant to Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code").

NOW THEREFORE, in consideration of the premises
and
of the covenants and agreements hereinafter set forth, the
parties agree as follows:

1. PLAN OF EXCHANGE.

(b) Delivery of the assets of the Existing
Fund to
be transferred shall be made not later than the next business
day following the Exchange Date. Assets transferred shall be
delivered to The Bank of New York, 110 Washington Street, New
York, New York, the Trust's custodian (the "Custodian"), for
the account of the Series, with all securities not in book
entry or bearer form duly endorsed, or accompanied by duly
executed separate assignments or stock powers, in proper form
for transfer, with signatures guaranteed, and with all
necessary stock transfer stamps, sufficient to transfer good
and marketable title thereto (including all accrued interest
and dividends and rights pertaining thereto) to the Custodian
for the account of the Series free and clear of all liens,
encumbrances, rights, restrictions and claims. All cash
delivered shall be in the form of immediately available funds
payable to the order of the Custodian for the account of the
Series.

(c) The Existing Fund will pay or cause to be
paid
to the Series any interest received on or after the Exchange
Date with respect to assets transferred to the Series
hereunder. The Existing Fund will transfer to the Series any
distributions, rights or other assets received by the Existing
Fund after the Exchange Date as distributions on or with
respect to the securities transferred. Such assets shall be
deemed included in assets transferred to the Series on the
Exchange Date and shall not be separately valued.

(d) The Exchange Date shall be ____________,
1995,
or such earlier or later date as may be mutually agreed upon by
the parties.
(e) As soon as practicable after the Exchange
Date
the Existing Fund shall distribute all Series Shares received
by it among the Shareholders in proportion to the number of
shares each Shareholder holds in the Existing Fund (the
"Existing Fund Shares"), and thereafter will dissolve.

2. THE EXISTING FUND'S REPRESENTATIONS AND WARRANTIES.
2.1. The Existing Fund represents and warrants
to
and agrees with the Series as follows:

(a) The Existing Fund (i) is a
business trust
duly organized, validly existing and in good standing under the
laws of The Commonwealth of Massachusetts, and (ii) has power
to own all of its properties and assets and, subject to the
approval of the Shareholders, to carry out this Agreement.

(b) The Existing Fund is registered
under the
Investment Company Act of 1940, as amended (the "1940 Act"), as
an open-end, diversified, management investment company, and
such registration has not been revoked or rescinded and is in
full force and effect.

(c) Except as shown on the financial
statements of the Existing Fund for the period ended December
31, 1993 and as incurred in the ordinary course of the
Existing Fund's business since December 31, 1993, the Existing
Fund has no known liabilities of a material amount, contingent
or otherwise, and there are no material legal, administrative
or other proceedings pending or threatened against the Existing
Fund.

(d) For each fiscal year of its
operation, the
Existing Fund has met the requirements of Subchapter M of the
Code for qualification and treatment as a regulated investment
company.

(e) On the Exchange Date, the Existing Fund
will have full right, power and authority to sell, assign,
transfer and deliver the assets to be transferred by it
hereunder.

3. THE SERIES' REPRESENTATIONS AND WARRANTIES.
The Series represents and warrants to and agrees
with the Existing Fund as follows:
(a) The Series (i) is a series of the
Trust, a
business trust duly organized, validly existing and in good
standing under the laws of The Commonwealth of Massachusetts,
and (ii) has power to carry on its business as it is now being
conducted and to carry out this Agreement.
(b) The Series is registered under the
1940
Act as an open-end, diversified, management investment company,
and such registration has not been revoked or rescinded and is
in full force and effect.
(c) The Series has no known
liabilities
of a
material amount, contingent or otherwise, and there are no
material legal, administrative or other proceedings pending or
threatened against the Series.
(d) For its fiscal year in which the
exchange
contemplated hereby occurs and for each taxable year
thereafter, the Series intends to meet the requirements of
Subchapter M of the Code for qualification and treatment as a
regulated investment company.
(e) At the Exchange Date, the Series
Shares to
be issued to the Existing Fund (the only Series Shares to be
issued as of the Exchange Date, except for the initial capital
of the Series) will have been duly authorized and, when issued
and delivered pursuant to this Agreement, will be legally and
validly issued and will be fully paid and non-assessable by the
Series. No Series shareholder will have any preemptive right
of subscription or purchase in respect thereof.

4. THE SERIES' CONDITIONS PRECEDENT.
The obligations of the Series hereunder shall
be
subject to the following conditions:
(a) The Existing Fund shall have
furnished to
the Series a statement of the Existing Fund's assets, including
a list of securities owned by the Existing Fund with their
respective tax costs and values determined as provided in
Section 1 hereof, all as of the Exchange Date.
(b) As of the Exchange Date, all
representations and warranties of the Existing Fund made in
this Agreement shall be true and correct as if made at and as
of such date, and the Existing Fund shall have complied with
all the agreements and satisfied all the conditions on its part
to be performed or satisfied at or prior to such date.
(c) A vote approving this Agreement
and
the
transactions and exchange contemplated hereby shall have been
adopted by the holders of at least a majority of the
outstanding Existing Fund Shares entitled to vote.

5. THE EXISTING FUND'S CONDITIONS PRECEDENT.

The obligations of the Existing Fund hereunder
shall
be subject to the condition that as of the Exchange Date all
representations and warranties of the Series made in this
Agreement shall be true and correct as if made at and as of
such date, and that the Series shall have complied with all of
the agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to such date.

6. THE SERIES' AND THE EXISTING FUND'S CONDITIONS
PRECEDENT.
The obligations of both the Series and the
Existing
Fund hereunder shall be subject to the following conditions:
(a) This Agreement and the
transactions
contemplated hereby shall have been approved by the affirmative
vote of at least a majority of the Existing Fund Shares as of
the close of business on _____________, 1995, or such earlier
or later date as may be mutually agreed upon by the parties.
(b) There shall not be any material
litigation
pending with respect to the matters contemplated by this
Agreement.

7. TERMINATION OF AGREEMENT.
This Agreement and the transactions
contemplated
hereby may be terminated and abandoned by resolution of the
Board of either the Existing Fund or the Trust, at any time
prior to the Exchange Date (and notwithstanding any vote of the
Shareholders) if circumstances should develop that, in the
opinion of either of the Boards, make proceeding with this
Agreement inadvisable.
If this Agreement is terminated and the
exchange
contemplated hereby is abandoned pursuant to the provisions of
this Section 7, this Agreement shall become void and have no
effect, without any liability on the part of any party hereto
or the Trustees, officers or shareholders of the Series, the
Trust, or the Existing Fund, in respect of this Agreement.

8. WAIVER.
At any time prior to the Exchange Date, any of
the
foregoing conditions may be waived by the Board of either the
Existing Fund or the Trust, if, in the judgment of the waiving
party, such waiver will not have a material adverse effect on
the benefits intended under this Agreement to the Shareholders.

9. NO SURVIVAL OF REPRESENTATIONS.
None of the representations and warranties
included
or provided for herein shall survive consummation of the
transactions contemplated hereby.

10. GOVERNING LAW.
This Agreement shall be governed and construed
in
accordance with the internal laws of the State of New York,
without giving effect to principles of conflict of laws;
PROVIDED, HOWEVER, that the due authorization, execution and
delivery of this Agreement shall be governed and construed in
accordance with the internal laws of The Commonwealth of
Massachusetts, without giving effect to principles of conflict
of laws.

11. COUNTERPARTS.
This Agreement may be executed in counterparts,
each
of which, when executed and delivered, shall be deemed to be an
original.

12. LIMITATION OF LIABILITY.
(a) The names "Managed Asset Income Series of
Prairie Funds" and "Trustees of the Trust" refer, respectively,
to the Series and the Trustees of the Trust, as trustees but
not individually or personally, acting from time to time under
the Trust's Agreement and Declaration of Trust, a copy of which
is on file at the office of the Secretary of State of The
Commonwealth of Massachusetts and at the principal office of
the Trust. The obligations of the Series entered into in the
name or on behalf thereof by any of the Trustees of the Trust,
or its representatives or agents are made not individually, but
in such capacities, and are not binding upon any of the
Trustees, shareholders, representatives or agents of the Series
or Trust personally, but bind only the Series' property, and
all persons dealing with any class or series of shares of the
Series must look solely to the Series' property belonging to
such class or series for the enforcement of any claims against
the Series.
(b) The names "Existing Fund" and "Trustees of the
Existing Fund" refer, respectively, to the Existing Fund and
the Trustees of the Existing Fund, as trustees but not
individually or personally, acting from time to time under the
Existing Fund's Agreement and Declaration of Trust, a copy of
which is on file at the office of the Secretary of State of The
Commonwealth of Massachusetts and at the principal office of
the Existing Fund. The obligations of the Existing Fund
entered into in the name or on behalf thereof by any of its
Trustees, representatives or agents are made not individually,
but in such capacities, and are not binding upon any of the
Trustees, shareholders, representatives or agents of the
Existing Fund personally, but bind only the Existing Fund's
property, and all persons dealing with any class or series of
shares of the Existing Fund must look solely to the Existing
Fund's property belonging to such class or series for the
enforcement of any claims against the Existing Fund.
<PAGE>
IN WITNESS WHEREOF, each of the Series and
Existing
Fund has caused this Agreement and Plan of Exchange to be
executed and attested on its behalf by its duly authorized
representatives as of the date first above written.
PRAIRIE FUNDS,
on behalf of
MANAGED ASSETS INCOME SERIES

ATTEST:_________________ By:_____________________
[Name, Title] [Name, Title]

FIRST PRAIRIE DIVERSIFIED
ASSET FUND

ATTEST:__________________ By:____________________
[Name, Title] [Name, Title]

<PAGE>
Preliminary Copy

FIRST PRAIRIE DIVERSIFIED ASSET FUND

The undersigned shareholder of First Prairie
Diversified Asset Fund (the "Fund") hereby appoints
__________________ and __________________, and each of them,
the attorneys and proxies of the undersigned, with full power
of substitution, to vote, as indicated herein, all of the
shares of beneficial interest of the Fund standing in the name
of the undersigned at the close of business on December 5,
1994, at a Special Meeting of Shareholders to be held at the
offices of [NAME], [ADDRESS], at __:__ _.m. on Monday, January
16, 1995, and at any and all adjournments thereof, with all of
the powers the undersigned would possess if then and there
personally present and especially (but without limiting the
general authorization and power hereby given) to vote as
indicated on the proposal, as more fully described in the Proxy
Statement/Prospectus for the meeting.

Please mark boxes in blue or black ink.

1. To approve an Agreement and Plan of
Exchange
between the Fund and the Managed Assets Income Series of
Prairie Funds providing for the transfer of substantially all
of the assets of the Fund, subject to its liabilities, and for
its subsequent dissolution.

/__/ FOR /__/ AGAINST /__/ ABSTAIN

2. In their discretion, the proxies are
authorized
to vote upon such other business as may properly come before
the meeting, or any adjournment(s) thereof.

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES AND WILL BE
VOTED FOR THE ABOVE PROPOSAL UNLESS OTHERWISE INDICATED.

Signature(s) should be exactly as
name or names appearing on this
proxy. If shares are held jointly,
each holder should sign. If signing
is by attorney, executor, administrator, trustee
or guardian, please give full title.

Dated:________________, 199_

____________________________
Signature(s)

Sign, Date and Return the Proxy
Card Promptly Using the
Enclosed Envelope

<PAGE>
PRAIRIE FUNDS

PART B

STATEMENT OF ADDITIONAL INFORMATION

December __, 1994

Acquisition of the Assets of

FIRST PRAIRIE DIVERSIFIED ASSET FUND

By and in Exchange for Shares of

MANAGED ASSETS INCOME SERIES OF PRAIRIE FUNDS

This Statement of Additional
Information,
which is not a prospectus, supplements and should be read in
conjunction with the Proxy Statement/Prospectus dated December
__, 1994, relating specifically to the proposed transfer of all
or substantially all of the assets and liabilities of First
Prairie Diversified Asset Fund in exchange for shares of the
Managed Assets Income Series of Prairie Funds. The transfer is
to occur pursuant to an Agreement and Plan of Exchange. This
Statement of Additional Information consists of this cover page
and the following described documents, each of which is
attached hereto and incorporated herein by reference:
1. The Statement of Additional
Information
of Prairie Funds dated December __, 1994.
2. The Statement of Additional
Information
of First Prairie Diversified Asset Fund dated
April
22, 1994.
The Proxy Statement/Prospectus dated
December
__, 1994 may be obtained by writing to Prairie Funds, Three
First National Plaza, Chicago, Illinois 60670.

<PAGE>
Preliminary Copy

FIRST PRAIRIE MUNICIPAL BOND FUND
(INTERMEDIATE SERIES)

Dear Shareholder:

As a shareholder of the Intermediate
Series
(the "Existing Fund") of First Prairie Municipal Bond Fund, a
Maryland corporation (the "Corporation"), you are entitled to
vote on the proposal described below and in the enclosed
materials.
Currently, the Existing Fund is
organized as a
separate series of a Maryland corporation, that has two series-
- -one is the Existing Fund and the other is the Insured Series.
Because the Existing Fund is part of the Prairie Family of
Funds and is designed for individual investors, management of
the Existing Fund has determined that certain operational
efficiencies might be achievable if the Existing Fund--while
continuing as a separate entity for purposes of the Investment
Company Act of 1940--were to reorganize as a separate series of
a single Massachusetts business trust. The transaction will
not result in the imposition of Federal income tax on you.
The proposal provides that the
Existing Fund
exchange all of its assets, subject to its liabilities, for
Class A Shares ("Series Shares") of a separate new series of
Prairie Funds, a newly-formed investment company organized as a
Massachusetts business trust (the "Trust"). The Trust is
comprised of twelve series, including the Intermediate
Municipal Bond Series (the "Series") into which the Existing
Fund is proposed to be reorganized. Upon consummation of this
transaction (the "Exchange"), the Series Shares received by the
Existing Fund will be distributed by the Existing Fund to its
shareholders (the "Shareholders"), with each Shareholder
receiving the same number of Series Shares (or fractions
thereof) as Existing Fund shares held by such Shareholder
immediately before the Exchange. The Existing Fund then will
be liquidated and dissolved.
The Series will have the same
investment
objective as the Existing Fund. The Existing Fund and the
Series differ in several respects: (i) the Existing Fund is a
series of a Maryland corporation and the Series is a series of
a Massachusetts business trust; (ii) the investment adviser of
the Existing Fund is The First National Bank of Chicago
("FNBC"), acting through its Investment Management Department;
the investment adviser of the Series will be a newly formed
subsidiary of FNBC which will employ substantially all the
investment personnel who currently provide advisory services to
the Existing Fund; (iii) the Series' aggregate management fee
will be lower, and its structure will be different, than the
Existing Fund's; and (iv) certain management policies will
differ somewhat as a result of standardizing the policies of
the funds in the Prairie family. These differences are
described in the enclosed Proxy Statement/Prospectus.
Further information about the
transaction is
contained in the enclosed materials, which you should review
carefully.
Please take the time to consider the
enclosed
materials and then vote by completing, dating and signing the
enclosed proxy card. A self-addressed, postage-paid envelope
has been enclosed for your convenience.
THE CORPORATION'S BOARD MEMBERS
RECOMMEND THAT
YOU VOTE IN FAVOR OF THE PROPOSED TRANSACTION. If you have any
questions after considering the enclosed materials, please feel
free to call __________ between the hours of 9:00 a.m. and 5:30
p.m. (New York time), Monday through Friday.

Sincerely,

[NAME],
[TITLE]

December __, 1994

<PAGE>

Preliminary Copy

FIRST PRAIRIE MUNICIPAL BOND
FUND
(INTERMEDIATE SERIES)

___________________________________________

NOTICE OF SPECIAL MEETING OF
SHAREHOLDERS

To The Shareholders:
A Special Meeting of Shareholders of
the
Intermediate Series (the "Existing Fund") of First Prairie
Municipal Bond Fund will be held at the offices of [NAME,
ADDRESS], on Monday, January 16, 1995 at __:__ _.m. for the
following purposes:
1. To consider an Agreement and Plan
of
Exchange (the "Plan") for the Existing Fund
providing for the transfer of all or
substantially
all of its assets, subject to its liabilities,
to a
new series (the "Series") of Prairie Funds, a
newly
created Massachusetts business trust (the
"Trust").
Under the Plan, the Existing Fund would
receive,
in
exchange (the "Exchange") for its assets
attributable to Class A, Class A shares of
beneficial interest of the Series, par value
$.001
per share ("Series Shares"). Series Shares
received
in the Exchange will be distributed by the
Existing
Fund to its shareholders in liquidation of the
Existing Fund, after which the Existing Fund
will be
dissolved; and
2. To transact such other business as
may
properly come before the meeting, or any
adjournment
or adjournments thereof.
Shareholders of record at the close of
business
on December 5, 1994, will be entitled to receive notice of and
to vote at the meeting.
By Order of the Board of
Directors

[NAME]

[TITLE]

[PLACE]
___________, 1994

WE NEED YOUR PROXY VOTE
IMMEDIATELY A SHAREHOLDER MAY THINK HIS VOTE IS NOT
IMPORTANT, BUT IT IS VITAL. BY LAW, THE
MEETING OF SHAREHOLDERS OF THE EXISTING
FUND WILL HAVE TO BE ADJOURNED WITHOUT
CONDUCTING ANY BUSINESS IF LESS THAN A
MAJORITY OF ITS SHARES ELIGIBLE TO VOTE
IS REPRESENTED. IN THAT EVENT, THE
EXISTING FUND, AT SHAREHOLDERS' EXPENSE,
WOULD CONTINUE TO SOLICIT VOTES IN AN
ATTEMPT TO ACHIEVE A QUORUM. CLEARLY,
YOUR VOTE COULD BE CRITICAL TO ENABLE THE
EXISTING FUND TO HOLD THE MEETING AS
SCHEDULED, SO PLEASE RETURN YOUR PROXY
CARD IMMEDIATELY. YOU AND ALL OTHER
SHAREHOLDERS WILL BENEFIT FROM YOUR
COOPERATION.

<PAGE>

Preliminary Copy

FIRST PRAIRIE MUNICIPAL BOND FUND
(INTERMEDIATE SERIES)

PROXY STATEMENT/PROSPECTUS
----------------------------

Special Meeting of Shareholders
to be held on January 16, 1995

This Proxy Statement/Prospectus is
furnished in
connection with a solicitation of proxies by the Board of First
Prairie Municipal Bond Fund (the "Corporation") to be used at
the Special Meeting of Shareholders (the "Meeting") of the
Intermediate Series (the "Existing Fund") of the Corporation,
to be held on Monday, January 16, 1995 at __:__ _.m., at the
offices of [NAME, ADDRESS] for the purposes set forth in the
accompanying Notice of Special Meeting of Shareholders.
Shareholders of record at the close of business on December 5,
1994 (each, a "Shareholder" and, collectively, the
"Shareholders") are entitled to receive notice of and to vote
at the Meeting. Shareholders are entitled to one vote for each
share of common stock of the Existing Fund, par value $.001 per
share ("Existing Fund Share"), held and fractional votes for
each fractional Existing Fund Share held. Existing Fund Shares
are classified into two classes--Class A and Class B. Only
Class A shares are outstanding. Existing Fund Shares
represented by executed and unrevoked proxies will be voted in
accordance with the specifications made thereon. If the
enclosed form of proxy is executed and returned, it
nevertheless may be revoked by giving another proxy or by
letter or telegram directed to the Existing Fund, which must
indicate the Shareholder's name and account number. To be
effective, such revocation must be received before the Meeting.
Also, any Shareholder who attends the Meeting in person may
vote by ballot at such meeting, thereby canceling any proxy
previously given. As of ______________, 1994, __________
Existing Fund Shares were issued and outstanding.
[5% holders of the Existing Fund to be
inserted]
PROPOSAL 12.0.1. APPROVAL OF AN AGREEMENT AND
PLAN OF EXCHANGE PROVIDING FOR
THE TRANSFER OF ALL OR SUBSTANTIALLY
ALL OF THE ASSETS OF THE EXISTING
FUND TO A NEW SERIES OF A NEWLY CREATED MASSACHUSETTS
BUSINESS TRUST

INTRODUCTION
It is proposed that the Existing Fund
transfer
all or substantially all of its assets, subject to its
liabilities, to a new series of Prairie Funds, a newly created
Massachusetts business trust (the "Trust"). The Trust is
comprised of twelve series, including the Intermediate
Municipal Bond Series (the "Series") into which the Existing
Fund is proposed to be reorganized. Under the Plan, the
Existing Fund would receive, in exchange (the "Exchange") for
its assets attributable to Class A, Class A shares of
beneficial interest of the Series, par value $.001 per share
("Series Shares"), all as more fully described herein. Upon
consummation of the Exchange, Series Shares received by the
Existing Fund will be distributed to its Shareholders, with
each Shareholder receiving a distribution of an identical
number of Series Shares (or fractions thereof) for Existing
Fund Shares held prior to the Exchange. The Existing Fund then
will be dissolved.
The Existing Fund and the Series differ in several
respects: (i) the Existing Fund is a series of a Maryland
corporation and the Series is a series of a Massachusetts
business trust; (ii) the investment adviser of the Existing
Fund is The First National Bank of Chicago ("FNBC"), acting
through its Investment Management Department; the investment
adviser of the Series will be a newly formed subsidiary of FNBC
which will employ substantially all the investment personnel
who currently provide advisory services to the Existing Fund;
(iii) the Series' aggregate management fee will be lower, and
its structure will be different, than the Existing Fund's; and
(iv) certain management policies will differ somewhat as a
result of standardizing the policies of the funds in the
Prairie Family. These differences are described in "Certain
Differences Between the Existing Fund and the Series" below.
At a meeting of the Board of the
Corporation
held on October 28, 1994, FNBC recommended that the Board
consider, and the Board approved, an Agreement and Plan of
Exchange (the "Plan"), a form of which is attached hereto as
Exhibit A, and the Exchange.
THE PLAN
The following summary of the important
terms
and conditions of the Plan is qualified in its entirety by
reference to the Plan. The Plan provides that, subject to the
requisite approval of its Shareholders, on the date of the
Exchange the Existing Fund shall assign, transfer and convey to
the Series all of the assets (subject to liabilities) of the
Existing Fund including all securities and cash in exchange for
Series Shares having an aggregate net asset value equal to the
value of the net assets of the Existing Fund acquired. The
Existing Fund will distribute all Series Shares received by it
among its Shareholders so that each Shareholder will receive
Series Shares identical in number and class to the number of
Existing Fund Shares held by such Shareholder immediately
before the Exchange. Thereafter, the Existing Fund will
dissolve. The dissolution of the Existing Fund is expected to
occur as soon as practicable after the Exchange. Immediately
following the Exchange, the former Shareholders of the Existing
Fund will hold the only outstanding Series Shares (other than
one Series Share which will be held by Concord Financial Group,
Inc., the Series' distributor, for regulatory purposes). After
the Exchange has been completed, the Series will operate as an
open-end, non-diversified management investment company.
Unless postponed by the Existing Fund
and the
Series, the Exchange is expected to occur on ____________,
1995, on the basis of the net assets of the Existing Fund as of
the close of trading on the floor of the New York Stock
Exchange (currently 4:00 p.m., New York time), on that day.
The Exchange will not be effected until certain conditions are
satisfied, including approval of the Plan by the Shareholders.
The Plan may be amended at any time prior to
the Exchange.
The expenses of the Exchange are
expected to be approximately $________.
If the Exchange is not approved by the
Shareholders, the Corporation's Board will consider other
appropriate courses of action, including continuing operation
of the Existing Fund in its present form.
REASONS FOR THE EXCHANGE
The Exchange will establish the Series
as the
successor investment vehicle to the Existing Fund. It is
believed that reorganization of the Existing Fund as a new
series of a newly created Massachusetts business trust will
prove beneficial in that the Series will be less expensive to
operate than the Existing Fund.
TAX CONSEQUENCES
The exchange of Existing Fund assets
for
Series
Shares is intended to qualify for Federal income tax purposes
as a tax-free reorganization under Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"). As a
condition to the closing of the Exchange, the Series and
Existing Fund will receive the opinion of Stroock & Stroock &
Lavan, counsel to both the Series and the Existing Fund, to the
effect that, on the basis of the existing provisions of the
Code, Treasury regulations issued thereunder, current
administrative regulations and pronouncements and court
decisions, and certain facts, assumptions and representations,
for Federal income tax purposes: (1) the transfer of all or
substantially all of the Existing Fund's assets in exchange for
Series Shares and the assumption by the Series of Existing Fund
liabilities will constitute a "reorganization" within the
meaning of Section 368(a)(1)(F) of the Code; (2) no gain or
loss will be recognized by the Series upon the receipt of
Existing Fund assets solely in exchange for Series Shares and
the assumption by the Series of liabilities of the Existing
Fund; (3) no gain or loss will be recognized by the Existing
Fund upon the transfer of its assets to the Series in exchange
for Series Shares and the assumption by the Series of the
Existing Fund's liabilities or upon the distribution (whether
actual or constructive) of Series Shares to Shareholders in
exchange for their Existing Fund Shares; (4) no gain or loss
will be recognized by the Existing Fund Shareholders upon the
exchange of Existing Fund Shares for Series Shares; (5) the
aggregate tax basis for Series Shares received by each Existing
Fund Shareholder pursuant to the Exchange will be the same as
the aggregate tax basis for Existing Fund Shares held by such
Shareholder immediately prior to the Exchange, and the holding
period of Series Shares to be received by each Existing Fund
Shareholder will include the period during which Existing Fund
Shares surrendered in exchange therefor were held by such
Shareholder (provided Existing Fund Shares were held as capital
assets on the date of the Exchange); and (6) the tax basis of
Existing Fund assets acquired by the Series will be the same as
the tax basis of such assets to the Existing Fund immediately
prior to the Exchange, and the holding period of Existing Fund
assets in the hands of the Series will include the period
during which those assets were held by the Existing Fund.
NEITHER THE EXISTING FUND NOR THE
SERIES HAS
SOUGHT A TAX RULING FROM THE INTERNAL REVENUE SERVICE ("IRS").
THE OPINION OF COUNSEL IS NOT BINDING ON THE IRS NOR DOES IT
PRECLUDE THE IRS FROM ADOPTING A CONTRARY POSITION. Existing
Fund Shareholders should consult their tax advisers regarding
the effect, if any, of the proposed Exchange in light of their
individual circumstances. Since the foregoing discussion
relates only to the Federal income tax consequences of the
Exchange, Existing Fund Shareholders also should consult their
tax advisers as to state and local tax consequences, if any, of
the Exchange.
SECURITIES TO BE ISSUED
The Series will issue Series Shares in
exchange
for the transfer of the Existing Fund's assets. Series Shares
have no preemptive or subscription rights and are freely
transferable. Series Shares issued in the Exchange will be
fully paid, legally binding and non-assessable by the Series.
The Series has authorized an indefinite number of shares of
beneficial interest and has classified its shares as Class A,
Class B and Class I.
REQUIRED VOTE AND BOARD'S RECOMMENDATION
The Corporation's Board has approved
the
Plan
and the Exchange and has determined that (i) participation in
the Exchange is in the Existing Fund's best interests and (ii)
the interests of the Existing Fund's Shareholders will not be
diluted as a result of the Exchange. Pursuant to the Existing
Fund's charter documents, an affirmative vote of a majority of
its Shareholders is required to approve the Plan and the
Exchange.
THE CORPORATION'S BOARD, INCLUDING THE
"NON-
INTERESTED" BOARD MEMBERS, RECOMMENDS THAT SHAREHOLDERS VOTE
"FOR" APPROVAL OF THE PLAN AND THE EXCHANGE.

CERTAIN DIFFERENCES BETWEEN THE EXISTING FUND AND THE SERIES
INVESTMENT ADVISER AND ADMINISTRATOR. The investment adviser of
the Existing Fund is FNBC, acting through its Investment
Management Department. The Corporation entered into an
Investment Advisory Agreement dated as of December 16, 1989 (as
revised October 1, 1993) with FNBC, pursuant to which the
Corporation has agreed to pay FNBC a monthly fee at the annual
rate of .40 of 1% of the value of the Existing Fund's average
daily net assets. The administrator of the Existing Fund is
The Dreyfus Corporation ("Dreyfus"). The Corporation entered
into an Administration Agreement dated as of December 16, 1989
(as revised October 1, 1993) with Dreyfus, pursuant to which
the Corporation has agreed to pay Dreyfus a monthly fee at the
annual rate of .20 of 1% of the value of the Existing Fund's
average daily net assets.
The investment adviser of the Series
will be
First Chicago Investment Management Company ("FIMCO"), a newly
formed subsidiary of FNBC, which will employ substantially all
the investment personnel who currently provide advisory
services to the Existing Fund. The Trust will enter into an
Investment Advisory Agreement with FIMCO, pursuant to which the
Trust will pay FIMCO a monthly advisory fee at the annual rate
of .40 of 1% of the value of the Series' average daily net
assets. The administrator of the Series also will be FIMCO.
The Trust will enter into an Administration Agreement with
FIMCO, pursuant to which the Trust will pay FIMCO a monthly
administration fee at the annual rate of .15 of 1% of the value
of the Series' average daily net assets (the "Administration
Fee"). In addition, FIMCO will enter into a Master Sub-
Administration Agreement with Concord Holding Corporation
("Concord"), pursuant to which FIMCO will pay Concord a portion
of its Administration Fee in consideration of Concord's
providing administrative services to the Series.
INVESTMENT RESTRICTIONS. The Existing Fund has adopted
investment restrictions as fundamental policies that cannot be
changed without Shareholder approval. The Series has adopted
investment restrictions that differ, but not materially, from
those of the Existing Fund.
The investment restrictions of both the
Series
and the Existing Fund are set forth below and also may be found
in their respective Statements of Additional Information, under
"Investment Objective and Management Policies--Investment
Restrictions."<F1> Language pertaining only to the Series is
underscored; language pertaining only to the Existing Fund is
bracketed.<F2> Neither the Series nor the Existing Fund may:
[FN] Unless otherwise noted, the language of the
Series'
Investment Restriction Nos. 1 through 9 differs
only
semantically from the corresponding language of
the
Existing Fund's Investment Restrictions. The
differences reflect language changes believed
more
appropriate for an investment company with
multiple
series that have different objectives and
policies.

[FN] In its investment restrictions, the Existing
Fund is
referred to as the "Series"; in its investment
restrictions, the Series is referred to as the
"Fund." This difference is only semantic.
<PAGE>
[8]1. Invest in commodities, except that
each
[Series] Fund may purchase and sell options, forward contracts,
futures contracts, including those relating to indexes, and
options on futures contracts or indexes.
This investment restriction is revised for
the
Series to clarify that the Series may invest
not
only in options on futures contracts or
indexes but
in other types of options as well.
[3]2. Purchase [or sell], hold or deal in
real
estate, or oil [and], gas [interests] or other mineral leases
or exploration or development programs, but each [Series] Fund
may [invest in Municipal Obligations] purchase and sell
securities that are secured by real estate or [interests
therein] issued by companies that invest or deal in real
estate.
[2]3. Borrow money, except to the extent
permitted
under the 1940 Act. For purposes of this investment
restriction, [the] a Fund's entry into options, forward
contracts, futures contracts, including those relating to
indexes, and options on futures contracts or indexes shall not
constitute borrowing.
[5]4. Make loans to others, except through
the
purchase of debt obligations and the entry into repurchase
agreements[;]. [h]However, each [Series] Fund may lend its
[portfolio] securities in an amount not to exceed 33-1/3% of
the value of its total assets. Any loans of portfolio
securities will be made according to guidelines established by
the Securities and Exchange Commission and the [Fund's] Trust's
Board of [Directors] Trustees.
[4]5. [Underwrite the] Act as an underwriter
of
securities of other issuers, except to the extent [the Series]
a Fund may be deemed an underwriter under the Securities Act of
1933, as amended, by virtue of disposing of portfolio
securities, and except that the [Series] Fund may bid
separately or as part of a group for the purchase of Municipal
Obligations directly from an issuer for its own portfolio to
take advantage of the lower purchase price available.<F1>
[FN] With respect to the Existing Fund, the two
exceptions to this investment restriction are
set
forth above in reverse order.
<PAGE>
6. Issue any senior security (as such term
is
defined in Section 18(f) of the 1940 Act), except to the extent
the activities permitted [in] under Investment Restriction Nos.
[2, 7, 8 and 11] 1, 3, 9 and 10 may be deemed to give rise to
[a] senior [security] securities.
7. Purchase securities on margin, but [the
Series]
each Fund may make margin deposits in connection with
transactions in options, forward contracts, futures contracts,
including those relating to indexes, and options on futures
contracts or indexes.
[13]8. Invest in [companies] the securities
of a
company for the purpose of exercising management or control,
but each Fund will vote the securities it owns in its portfolio
as a shareholder in accordance with its views.
[11]9. Pledge, mortgage or hypothecate [,
mortgage
or otherwise encumber] its assets, except to the extent
necessary to secure permitted borrowings and to the extent
related to the deposit of assets in escrow in connection with
writing covered put and call options and the purchase of
securities on a when-issued or [delayed-delivery] forward
commitment basis and collateral and initial or variation margin
arrangements with respect to options, forward contracts,
futures contracts, including those [related] relating to
indexes, and options on futures contracts[,] or indexes.
10. Purchase, sell or write puts, calls or
combinations thereof, except as described in the Trust's
Prospectus and this Statement of Additional Information.
The Existing Fund's investment restrictions
do
not limit the Existing Fund's ability to enter
into options transactions. Investment Restriction
No.10 has been added for the Series to clarify
the extent to which the Series may enter into
such transactions. THIS CHANGE WILL NOT RESULT IN
ANY
CHANGE IN THE MANNER IN WHICH THE SERIES, AS
COMPARED TO THE EXISTING FUND, CONDUCTS ITS
OPERATIONS.
[12]11. Enter into repurchase agreements
providing
for settlement in more than seven days after notice or purchase
securities which are illiquid [(which securities could include
participation interests (including municipal lease/purchase
agreements) that are not subject to the demand feature
described in the Fund's Prospectus and floating and variable
rate demand notes and bonds as to which each Series cannot
exercise the demand feature described in the Fund's Prospectus
on less than seven days' notice and as to which there is no
secondary market)], if, in the aggregate, more than 15% of the
value of [its] the Fund's net assets would be so invested.
To conform this investment restriction for
the
Series with a similar investment restriction
applicable to other funds in the Prairie
Family of
Funds, the Series' Investment Restriction No. 11
does not include examples of specific types
of
illiquid securities. THE SERIES INTENDS, HOWEVER,
TO CONTINUE TO TREAT AS ILLIQUID ALL TYPES OF
SECURITIES THAT THE EXISTING FUND TREATED AS
ILLIQUID UNTIL SUCH TIME AS A LIQUID
SECONDARY
MARKET EXISTS FOR THEM.
[10]12. Invest in securities of other
investment
companies, except to the extent permitted under the Act.
13. Purchase securities of any company
having
less
than three years' continuous operations (including operations
of any predecessors) if such purchase would cause the value of
the Fund's investments in all such companies to exceed 5% of
the value of its total assets.
This investment restriction has been added
for
the
Series to comply with certain state
securities
laws
requirements applicable to one or more series
of
the Trust, other than the Series.
[1]16. Invest more than 25% of its total
assets in
the securities of issuers in any single industry[;], provided
that there shall be no such limitation on the purchase of
Municipal Obligations and, for temporary defensive purposes,
obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities. INITIAL SALES CHARGE. The
schedules of the initial sales charge imposed on the Existing
Fund's Class A shares differ somewhat from those applicable to
Series Shares. The maximum initial sales charge is the same
for both the Existing Fund and the Series; in addition, at
higher purchase levels, the initial sales charge imposed on
Series Shares is lower than that imposed on Class A shares of
the Existing Fund.
The schedules of the initial sales charge
imposed
on Series Shares and Existing Fund Class A shares are set forth
below:
<TABLE>

SERIES' TOTAL SALES LOAD
<CAPTION>

AMOUNT OF TRANSACTION As a % of As a % of Dealers'
offering net asset Reallowance
price value as a % of
per share per share offering price
<S> <C> <C> <C>
Less than $50,000 3.00 3.10 2.75
$50,000 to less than $100,000 2.50 2.60 2.25
$100,000 to less than $250,000 2.00 2.00 1.75
$250,000 to less than $500,000 1.50 1.50 1.25
$500,000 to less than $1,000,000 1.00 1.00 0.75
$1,000,000 and above none none none

</TABLE>
<TABLE>

EXISTING FUND'S TOTAL SALES LOAD

AMOUNT OF TRANSACTION As a % of As a % of Dealers'
offering net asset Reallowance
price value as a % of
per share per share offering price
<S> <C> <C> <C>
Less than $100,000 3.00 3.10 2.75
$100,000 to less than $500,000 2.50 2.55 2.25
$500,000 to less than $1,000,000 2.00 2.00 1.75
$1,000,000 and above 1.00 1.00 1.00
</TABLE>

While there is no initial sales charge on
purchases
of $1,000,000 or more of Series Shares, if an investor redeems
those Shares within a certain period after purchase, a
contingent deferred sales charge ("CDSC") will be imposed at
the time of redemption. Class A shares of the Existing Fund
were not subject to such a CDSC at the time of redemption. The
following table sets forth the CDSC imposed on Series Shares
for the indicated time periods:
<TABLE>

Amount of CDSC as a % Year Since
Transactions at of Amount Invested Purchase was
Offering Price or Redemption Proceeds Made
<S> <C> <C>
$1,000,000 to 1.00% First or Second
less than
$2,500,000

$2,500,000 to less 0.50% First
than $5,000,000

$5,000,000 and above 0.25% First
</TABLE>

SHAREHOLDER SERVICES. Both the Existing Fund and the Series
offer the following shareholder services: Exchange Privilege--
allows you to exchange your shares for shares of another
eligible fund; Automatic Investment Plan (or Automatic Asset
Builder)--allows you to purchase shares automatically at
regular intervals which you select; and Letter of Intent -
Class A Shares--by signing a Letter of Intent to purchase
additional Class A shares or Series Shares, as the case may be,
within 13 months, you become eligible for any reduced sales
charge applicable to the total purchase.
The following shareholder services are offered
by
the Existing Fund but not by the Series: Auto-Exchange
Privilege--allows you to automatically exchange Existing Fund
shares for shares of certain other First Prairie mutual funds
at regular intervals which you select; Government Direct
Deposit Privilege--enables you to purchase Existing Fund shares
by having Federal salary, Social Security or certain veterans',
military or other payments from the Federal government
automatically deposited into your Existing Fund account;
Automatic Withdrawal Plan--allows you to withdraw a specified
dollar amount from your Existing Fund account every month or
quarter; and Dividend Options--allows you to "sweep" your
dividends and capital gain distributions into certain other
First Prairie mutual funds.
Conversely, the Series offers a Reinstatement
Privilege (not offered by the Existing Fund), which allows you
to repurchase Series Shares at the then-current net asset
value, within 30 days of a redemption, in any amount not to
exceed the redemption proceeds received.
CERTAIN ORGANIZATIONAL DIFFERENCES. The Trust is a
Massachusetts business trust and the rights of the Series'
shareholders are governed by the Trust's Agreement and
Declaration of Trust, Bylaws and applicable Massachusetts law.
The Corporation is a Maryland corporation and the rights of
Existing Fund Shareholders are governed by the Corporation's
Articles of Incorporation (the "Charter"), Bylaws and the
Maryland General Corporation Law. Certain relevant differences
between the two forms of organization are summarized below.
Voting Requirements. The Boards of the
Corporation
and the Trust are each required to call a special meeting of
shareholders for any purpose when requested to do so in writing
by the holders of no less than 10%, in the case of the Existing
Fund, and 30%, in the case of the Series, of the Existing
Fund's or Series' outstanding shares entitled to vote.
Under the Trust's Agreement and Declaration of
Trust, the Series' shareholders are entitled to vote only with
respect to the following matters: (1) the election or removal
of Trustees if a meeting is called for such purpose; (2) the
adoption of any contract for which shareholder approval is
required by the 1940 Act; (3) any amendment of the Trust's
Agreement and Declaration of Trust, other than amendments to
change the Trust's name, authorize additional series or classes
of shares, supply any omission or cure, correct or supplement
any ambiguity or defective or inconsistent provision contained
therein; (4) any termination or reorganization of the Trust to
the extent and as provided in the Trust's Agreement and
Declaration of Trust; (5) a determination as to whether a court
action, proceeding or claim should or should not be brought or
maintained derivatively or as a class action on behalf of the
Series or its shareholders, to the same extent as the
shareholders of a Massachusetts business corporation would be
entitled to vote on such a determination; and (6) such
additional matters relating to the Series as may be required by
law, the Trust's Agreement and Declaration of Trust, the
Trust's Bylaws, or any registration of the Trust with the
Securities and Exchange Commission (the "Commission") or any
state, or as the Trustees may consider necessary or desirable.
The Series' shareholders also vote upon changes in fundamental
investment policies or restrictions.
The Trust's Agreement and Declaration of Trust
provides that any question, except the election of Trustees--
which requires a plurality--and the removal of a Trustee--which
requires two-thirds of the outstanding shares entitled to vote
thereon--requires a majority of the votes cast at a meeting at
which a quorum is present. On any matter submitted to a vote
of shareholders, all shares of the Trust then entitled to vote
will be voted in the aggregate as a single class without regard
to series or classes of shares, except (i) when required by the
1940 Act or when the Trustees shall have determined that the
matter affects one or more series or classes differently,
shares will be voted by individual series or class and (ii)
when the Trustees have determined that the matter affects only
the interests of one or more series or classes, then only
shareholders of such series or classes will be entitled to vote
thereon.
The Corporation's charter documents provide
that
certain matters, such as an amendment to the Charter, a merger,
consolidation or transfer of all or substantially all assets,
dissolution and removal of a Director, require the affirmative
vote of a majority of the votes entitled to be cast; election
of Directors requires a plurality of votes cast; and other
matters require the approval of the affirmative vote of a
majority of the votes cast at a meeting at which a quorum is
present. All holders of shares of stock vote as a single class
except as may otherwise be required by law pursuant to any
applicable order, rule or interpretation issued by the
Commission, or otherwise, or except with respect to any matter
which affects only one or more classes of stock, in which case
only the holders of shares of the class or classes affected
will be entitled to vote.
The Trust's Agreement and Declaration of Trust
provides that 30% of the outstanding shares shall constitute a
quorum for the transaction of business at a shareholders'
meeting. The Corporation's Charter provide that the presence
at a shareholders' meeting in person or by proxy of the holders
of one-third of the shares entitled to vote on a matter shall
constitute a quorum. Matters requiring a larger vote by law or
under the organization documents for either fund are not
affected by such quorum requirements.
Shareholder Liability. Under Massachusetts
law,
shareholders of a Massachusetts business trust, under certain
circumstances, could be held personally liable for the
obligations of the business trust. However, the Trust's
Agreement and Declaration of Trust disclaims shareholder
liability for acts or obligations of the Series and requires
that notice of such disclaimer be given in every note, bond,
contract or other undertaking issued or entered into by or on
behalf of the Series or the Trust's Trustees. The Trust's
Agreement and Declaration of Trust provides for indemnification
out of the Series' property for all losses and expenses of any
shareholder held personally liable for the obligations of the
Series solely by reason of his being or having been a Series
shareholder and not because of his acts or omissions or some
other reason. Thus, the Series considers the risk of a Series
shareholder incurring financial loss on account of shareholder
liability to be remote since it is limited to circumstances in
which a disclaimer is inoperative or the Series itself would be
unable to meet its obligations. The Agreement and Declaration
of Trust also provides that the Series, upon request, shall
assume the defense of any claim made against any shareholder
for any act or obligation of the Series and satisfy any
judgment thereon. A substantial number of mutual funds in the
United States are organized as Massachusetts business trusts.
Under Maryland law, Existing Fund shareholders have no personal
liability as such for the Existing Fund's acts or obligations.
Liability and Indemnification of Directors and
Trustees. Under the Corporation's Charter and Maryland law,
subject to the 1940 Act, a Director or officer of the
Corporation is not liable to the Corporation or its
shareholders for monetary damages except to the extent he
receives an improper personal benefit or his action or his
failure to act was the result of active and deliberate
dishonesty and was material to the cause of action adjudicated.
In addition, a Director is entitled to indemnification against
judgments, penalties, fines, settlements and reasonable
expenses unless his act or omission was material to the cause
of action and was committed in bad faith or was the result of
active and deliberate dishonesty or the individual received an
improper personal benefit (or, in a criminal case, had
reasonable cause to believe that his act or omission was
unlawful). Indemnification may be made against amounts
recoverable by settlement of suits brought by or in the right
of a corporation except where the individual is adjudged liable
to the corporation. The termination of a civil proceeding by
judgment, order or settlement does not create a presumption
that the requisite standard of conduct was not met. A Director
or officer is entitled to advances of expenses in the course of
litigation if (i) such Director or officer undertakes to repay
such sums if indemnification is ultimately denied and provides
acceptable security, (ii) the Corporation is insured against
losses arising from the advances, or (iii) the disinterested
non-party directors or independent legal counsel determine
there is a reason to believe the Director or officer ultimately
will be found to be entitled to indemnification. Officers,
employees and agents may be indemnified to the same extent as
Directors and to such further extent as is consistent with law.

If these provisions of Maryland law are
amended,
the
Directors and officers will be entitled to limited liability
and to indemnification to the fullest extent of Maryland law as
amended. No amendment or repeal of the provisions of the
Charter relating to limited liability and indemnification will
apply to any event, omission or proceeding which precedes the
amendment or repeal.
Under the Trust's Agreement and Declaration of
Trust, a Trustee is entitled to indemnification against all
liability and expenses reasonably incurred by him in connection
with the defense or disposition of any threatened or actual
proceeding by reason of his being or having been a Trustee,
unless such Trustee shall have been adjudicated to have acted
with bad faith, willful misfeasance, gross negligence or in
reckless disregard of his duties. Representatives and
employees of the Series may be indemnified to the same extent
as Trustees.
Under the 1940 Act, a director or trustee may
not be
protected against liability to a fund and its security holders
to which he would otherwise be subject as a result of his
willful misfeasance, bad faith or gross negligence in the
performance of his duties, or by reason of reckless disregard
of his obligations and duties. The staff of the Commission
interprets the 1940 Act to require additional limits on
indemnification of directors, or trustees, and officers.
* * *
The foregoing is only a summary of certain
differences between (i) the Corporation or Existing Fund, the
Corporation's Charter, Bylaws and Maryland law, and (ii) the
Trust or Series, the Trust's Agreement and Declaration of
Trust, Bylaws and Massachusetts law. It is not a complete list
of differences, but only of material differences. Shareholders
desiring copies of the Corporation's Charter and Bylaws and the
Trust's Agreement and Declaration of Trust and Bylaws should
write to the respective fund.
ADDITIONAL INFORMATION ABOUT THE SERIES
AND EXISTING FUND
Information about the Series is included in the
Trust's current Prospectus and Statement of Additional
Information for the Series, each dated December __, 1994.
Information about the Existing Fund is included in the
Corporation's current Prospectus and Statement of Additional
Information for the Existing Fund, each dated June 27, 1994.
Copies of each of the Trust's and the Corporation's
Prospectuses and Statements of Additional Information are being
furnished with this Prospectus/Proxy Statement and are
incorporated herein by reference.
FINANCIAL STATEMENTS AND EXPERTS
The audited financial statements of the
Existing
Fund for the fiscal year ended February 28, 1994, which are
included in the Corporation's Statement of Additional
Information, dated June 27, 1994, have been examined by Ernst &
Young LLP, independent auditors, whose reports thereon are
included therein. The financial statements examined by Ernst &
Young LLP have been incorporated herein by reference in
reliance upon their report given on their authority as experts
in accounting and auditing.
OTHER MATTERS
The Corporation's Directors are not aware of
any
other matters which may come before the Meeting. However,
should any such matters properly come before the Meeting, it is
the intention of the persons named in the accompanying form of
proxy to vote the proxy in accordance with their judgment on
such matters.
VOTING INFORMATION
The Existing Fund will bear the cost of
soliciting
proxies. In addition to the use of the mails, proxies may be
solicited personally, by telephone or by telegraph, and the
Existing Fund may pay persons holding Existing Fund Shares in
their names or those of their nominees for their expenses in
sending soliciting materials to their principals.
If a proxy is properly executed and returned
accompanied by instructions to withhold authority to vote,
represents a broker "non-vote" (that is, a proxy from a broker
or nominee indicating that such person has not received
instructions from the beneficial owner or other person entitled
to vote Existing Fund Shares on a particular matter with
respect to which the broker or nominee does not have
discretionary power) or is marked with an abstention
(collectively, "abstentions"), the Existing Fund Shares
represented thereby will be considered to be present at the
Meeting for purposes of determining the existence of a quorum
for the transaction of business. Abstentions, however, will
have the effect of a "no" vote for the purpose of obtaining
requisite approval for Proposal No. 1.

NOTICE TO BANKS, BROKER/DEALERS AND
VOTING TRUSTEES
AND THEIR NOMINEES

Please advise the Existing Fund, in care of The
First National Bank of Chicago, Three First National Plaza,
Chicago, Illinois 60670, Attention:
___________________________, whether other persons are the
beneficial owners of Existing Fund Shares for which proxies are
being solicited from you, and, if so, the number of copies of
the Proxy Statement/Prospectus and other soliciting material
you wish to receive in order to supply copies to the beneficial
owners of Existing Fund Shares.
IT IS IMPORTANT THAT PROXIES BE RETURNED
PROMPTLY.
THEREFORE, SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND IN PERSON
ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE PROXY CARD IN
THE ENCLOSED STAMPED ENVELOPE.

Dated: December __, 1994

<PAGE>

Exhibit A

FORM OF
AGREEMENT AND PLAN OF EXCHANGE

AGREEMENT AND PLAN OF EXCHANGE dated
________________, 1994 (the "Agreement"), between the
INTERMEDIATE SERIES (the "Existing Fund") of FIRST PRAIRIE
MUNICIPAL BOND FUND, a Maryland corporation (the
"Corporation"), and the INTERMEDIATE MUNICIPAL BOND SERIES (the
"Series") of PRAIRIE FUNDS, a Massachusetts business trust (the
"Trust").
WHEREAS, the Boards of the Corporation and the
Trust
have determined that it is in the best interests of the
Existing Fund and Series, respectively, that the assets of the
Existing Fund be acquired by the Series pursuant to this
Agreement and in accordance with the applicable statutes of the
State of Maryland and The Commonwealth of Massachusetts; and
WHEREAS, the parties desire to enter into a
plan
of
exchange pursuant to Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code").
NOW THEREFORE, in consideration of the premises
and
of the covenants and agreements hereinafter set forth, the
parties agree as follows:
1. PLAN OF EXCHANGE.

(a) Subject to the requisite approval of the
shareholders of the Existing Fund (the "Shareholders"), and to
the terms and conditions contained herein, on the Exchange Date
(as defined herein) the Existing Fund shall assign, transfer
and convey to the Series, and the Series shall acquire, all of
the Class A assets of the Existing Fund, including all
securities and cash (subject to liabilities), for full Class A
shares of beneficial interest of the Series, par value $.001
per share (the "Series Shares"), and, to the extent necessary,
a fractional Series Share, all to be issued by the Series and
all having an aggregate net asset value equal to the value of
the net assets of the Existing Fund acquired. The value of the
Existing Fund's assets to be acquired by the Series and the net
asset value per share of the Series Shares shall be determined,
as of the Exchange Date, in accordance with the procedures for
determining the value of the Series' assets set forth in the
Trust's Agreement and Declaration of Trust and in the then-
current prospectus and statement of additional information that
forms part of the Trust's Registration Statement on Form N-1A.
In lieu of delivering certificates for the Series Shares, the
Series shall credit the Series Shares to the Existing Fund's
account on the share record books of the Series and shall
deliver a confirmation thereof to the Existing Fund. The
Existing Fund shall then deliver written instructions to the
Trust's transfer agent to establish accounts for the
Shareholders on the share record books of the Series.
(b) Delivery of the assets of the Existing
Fund
to
be transferred shall be made not later than the next business
day following the Exchange Date. Assets transferred shall be
delivered to The Bank of New York, 110 Washington Street, New
York, New York, the Trust's custodian (the "Custodian"), for
the account of the Series, with all securities not in book
entry or bearer form duly endorsed, or accompanied by duly
executed separate assignments or stock powers, in proper form
for transfer, with signatures guaranteed, and with all
necessary stock transfer stamps, sufficient to transfer good
and marketable title thereto (including all accrued interest
and dividends and rights pertaining thereto) to the Custodian
for the account of the Series free and clear of all liens,
encumbrances, rights, restrictions and claims. All cash
delivered shall be in the form of immediately available funds
payable to the order of the Custodian for the account of the
Series.
(c) The Existing Fund will pay or cause to be
paid
to the Series any interest received on or after the Exchange
Date with respect to assets transferred to the Series
hereunder. The Existing Fund will transfer to the Series any
distributions, rights or other assets received by the Existing
Fund after the Exchange Date as distributions on or with
respect to the securities transferred. Such assets shall be
deemed included in assets transferred to the Series on the
Exchange Date and shall not be separately valued.
(d) The Exchange Date shall be ____________,
1995,
or such earlier or later date as may be mutually agreed upon by
the parties.
(e) As soon as practicable after the Exchange
Date
the Existing Fund shall distribute all Series Shares received
by it among the Shareholders in proportion to the number of
shares each Shareholder holds in the Existing Fund (the
"Existing Fund Shares"), and thereafter will dissolve.

2. THE EXISTING FUND'S REPRESENTATIONS AND WARRANTIES.
2.1. The Existing Fund represents and warrants
to
and agrees with the Series as follows:
(a) The Existing Fund (i) is a series
of the
Corporation, which is duly organized, validly existing and in
good standing under the laws of the State of Maryland, and (ii)
has power to own all of its properties and assets and, subject
to the approval of the Shareholders, to carry out this
Agreement.
(b) The Existing Fund is registered
under the
Investment Company Act of 1940, as amended (the "1940 Act"), as
an open-end, non-diversified, management investment company,
and such registration has not been revoked or rescinded and is
in full force and effect.
(c) Except as shown on the financial
statements of the Existing Fund for the period ended February
28, 1994 and as incurred in the ordinary course of the
Existing Fund's business since February 28, 1994, the Existing
Fund has no known liabilities of a material amount, contingent
or otherwise, and there are no material legal, administrative
or other proceedings pending or threatened against the Existing
Fund.
(d) For each fiscal year of its
operation, the
Existing Fund has met the requirements of Subchapter M of the
Code for qualification and treatment as a regulated investment
company.
(e) On the Exchange Date, the Existing
Fund
will have full right, power and authority to sell, assign,
transfer and deliver the assets to be transferred by it
hereunder.

3. THE SERIES' REPRESENTATIONS AND WARRANTIES.
The Series represents and warrants to and
agrees
with the Existing Fund as follows:
(a) The Series (i) is a series of the
Trust, a
business trust duly organized, validly existing and in good
standing under the laws of The Commonwealth of Massachusetts,
and (ii) has power to carry on its business as it is now being
conducted and to carry out this Agreement.
(b) The Series is registered under the
1940
Act as an open-end, non-diversified, management investment
company, and such registration has not been revoked or
rescinded and is in full force and effect.
(c) The Series has no known
liabilities
of a
material amount, contingent or otherwise, and there are no
material legal, administrative or other proceedings pending or
threatened against the Series.
(d) For its fiscal year in which the
exchange
contemplated hereby occurs and for each taxable year
thereafter, the Series intends to meet the requirements of
Subchapter M of the Code for qualification and treatment as a
regulated investment company.
(e) At the Exchange Date, the Series
Shares to
be issued to the Existing Fund (the only Series Shares to be
issued as of the Exchange Date, except for the initial capital
of the Series) will have been duly authorized and, when issued
and delivered pursuant to this Agreement, will be legally and
validly issued and will be fully paid and non-assessable by the
Series. No Series shareholder will have any preemptive right
of subscription or purchase in respect thereof.

4. THE SERIES' CONDITIONS PRECEDENT.
The obligations of the Series hereunder shall
be
subject to the following conditions:
(a) The Existing Fund shall have
furnished to
the Series a statement of the Existing Fund's assets, including
a list of securities owned by the Existing Fund with their
respective tax costs and values determined as provided in
Section 1 hereof, all as of the Exchange Date.
(b) As of the Exchange Date, all
representations and warranties of the Existing Fund made in
this Agreement shall be true and correct as if made at and as
of such date, and the Existing Fund shall have complied with
all the agreements and satisfied all the conditions on its part
to be performed or satisfied at or prior to such date.
(c) A vote approving this Agreement
and the
transactions and exchange contemplated hereby shall have been
adopted by the holders of at least a majority of the
outstanding Existing Fund Shares entitled to vote.

5. THE EXISTING FUND'S CONDITIONS PRECEDENT.

The obligations of the Existing Fund hereunder
shall be subject to the condition that as of the Exchange Date
all
representations and warranties of the Series made in this
Agreement shall be true and correct as if made at and as of
such date, and that the Series shall have complied with all of
the agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to such date.

7. TERMINATION OF AGREEMENT.
This Agreement and the transactions
contemplated
hereby may be terminated and abandoned by resolution of the
Board of either the Corporation or the Trust, at any time prior
to the Exchange Date (and notwithstanding any vote of the
Shareholders) if circumstances should develop that, in the
opinion of either of the Boards, make proceeding with this
Agreement inadvisable.
If this Agreement is terminated and the
exchange
contemplated hereby is abandoned pursuant to the provisions of
this Section 7, this Agreement shall become void and have no
effect, without any liability on the part of any party hereto
or the Trustees, officers or shareholders of the Series or
Trust, or the Directors, officers or shareholders of the
Existing Fund or Corporation, in respect of this Agreement.

8. WAIVER.
At any time prior to the Exchange Date, any of
the
foregoing conditions may be waived by the Board of either the
Corporation or the Trust, if, in the judgment of the waiving
party, such waiver will not have a material adverse effect on
the benefits intended under this Agreement to the Shareholders.

9. NO SURVIVAL OF REPRESENTATIONS.
None of the representations and warranties
included
or provided for herein shall survive consummation of the
transactions contemplated hereby.

10. GOVERNING LAW.
This Agreement shall be governed and construed
in
accordance with the internal laws of the State of New York,
without giving effect to principles of conflict of laws;
provided, however, that the due authorization, execution and
delivery of this Agreement, in the case of the Existing Fund,
shall be governed and construed in accordance with the internal
laws of the State of Maryland and, in the case of the Series,
shall be governed and construed in accordance with the internal
laws of The Commonwealth of Massachusetts, in each case without
giving effect to principles of conflict of laws.

11. COUNTERPARTS.
This Agreement may be executed in counterparts,
each
of which, when executed and delivered, shall be deemed to be an
original.

12. LIMITATION OF LIABILITY.
The names "Intermediate Municipal Bond Series
of
Prairie Funds" and "Trustees of the Trust" refer, respectively,
to the Series and the Trustees of the Trust, as trustees but
not individually or personally, acting from time to time under
the Trust's Agreement and Declaration of Trust, a copy of which
is on file at the office of the Secretary of State of The
Commonwealth of Massachusetts and at the principal office of
the Trust. The obligations of the Series entered into in the
name or on behalf thereof by any of the Trustees of the Trust,
or its representatives or agents are made not individually, but
in such capacities, and are not binding upon any of the
Trustees, shareholders, representatives or agents of the Series
or Trust personally, but bind only the Series' property, and
all persons dealing with any class or series of shares of the
Series must look solely to the Series' property belonging to
such class or series for the enforcement of any claims against
the Series.
IN WITNESS WHEREOF, each of the Series and
Existing
Fund has caused this Agreement and Plan of Exchange to be
executed and attested on its behalf by its duly authorized
representatives as of the date first above written.
PRAIRIE
FUNDS,
on
behalf of

INTERMEDIATE MUNICIPAL
BOND SERIES

ATTEST:______________________
By:__________________________
[Name, Title] [Name, Title]

FIRST PRAIRIE MUNICIPAL BOND FUND,
on behalf of
INTERMEDIATE SERIES

ATTEST:_________________ By:______________________________
[Name, Title] [Name, Title]

<PAGE>

Preliminary Copy

FIRST PRAIRIE MUNICIPAL BOND FUND
(INTERMEDIATE SERIES)

The undersigned shareholder of the Intermediate
Series of First Prairie Municipal Bond Fund (the "Fund") hereby
appoints __________________ and __________________, and each of
them, the attorneys and proxies of the undersigned, with full
power of substitution, to vote, as indicated herein, all of the
shares of beneficial interest of the Fund standing in the name
of the undersigned at the close of business on December 5,
1994, at a Special Meeting of Shareholders to be held at the
offices of [NAME], [ADDRESS], at __:__ _.m. on Monday, January
16, 1995, and at any and all adjournments thereof, with all of
the powers the undersigned would possess if then and there
personally present and especially (but without limiting the
general authorization and power hereby given) to vote as
indicated on the proposal, as more fully described in the Proxy
Statement/Prospectus for the meeting.

Please mark boxes in blue or black ink.

1. To approve an Agreement and Plan of
Exchange
between the Fund and the Intermediate Municipal Bond Series of
Prairie Funds providing for the transfer of substantially all
of the assets of the Fund, subject to its liabilities, and for
its subsequent dissolution.

/__/ FOR /__/ AGAINST /__/ ABSTAIN

2. In their discretion, the proxies are
authorized
to vote upon such other business as may properly come before
the meeting, or any adjournment(s) thereof.

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS AND WILL BE
VOTED FOR THE ABOVE PROPOSAL UNLESS OTHERWISE INDICATED.

Signature(s) should be exactly as
name or names appearing on this
proxy. If shares are held jointly,
each holder should sign.
If signing is by attorney,
executor, administrator, trustee or
guardian, please give full title.

Dated:_______________ ,199_

_________________________________

Signature(s)

_________________________________

Signature(s)

Sign, Date and Return the Proxy
Card Promptly Using the
Enclosed Envelope

<PAGE>
PRAIRIE FUNDS

PART B

STATEMENT OF ADDITIONAL INFORMATION

December __, 1994

Acquisition of the Assets of

INTERMEDIATE SERIES OF FIRST PRAIRIE
MUNICIPAL BOND FUND

By and in Exchange for Shares of

INTERMEDIATE MUNICIPAL BOND SERIES OF PRAIRIE FUNDS

This Statement of Additional
Information, which is not a prospectus, supplements and should be
read in
conjunction with the Proxy Statement/Prospectus dated December
__, 1994, relating specifically to the proposed transfer of all
or substantially all of the assets and liabilities of the
Intermediate Series of First Prairie Municipal Bond Fund in
exchange for shares of the Intermediate Municipal Bond Series
of Prairie Funds. The transfer is to occur pursuant to an
Agreement and Plan of Exchange. This Statement of Additional
Information consists of this cover page and the following
described documents, each of which is attached hereto and
incorporated herein by reference:
1. The Statement of Additional
Information of Prairie Funds dated December __, 1994.
2. The Statement of Additional
Information of
First Prairie Municipal Bond Fund dated June
27,
1994.
The Proxy Statement/Prospectus dated
December
__, 1994 may be obtained by writing to Prairie Funds, Three
First National Plaza, Chicago, Illinois 60670.
<PAGE>
Preliminary Copy

FIRST PRAIRIE MONEY MARKET FUND
FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND
Three First National Plaza
Chicago, Illinois 60670

Dear Shareholder:

As a shareholder of the Money Market
Series of
First Prairie Money Market Fund (the "Existing Money Market
Fund") or of First Prairie Municipal Money Market Fund (the
"Existing Municipal Money Market Fund" and, together with the
Existing Money Market Fund, the "Existing Funds"), you are
entitled to vote on the proposal described below and in the
enclosed materials.
Each Existing Fund is organized as a
separate
unincorporated Massachusetts business trust. Because each
Existing Fund is part of the Prairie Family of Funds and is
designed for individual investors, management of each Existing
Fund has determined that certain operational efficiencies might
be achievable if each Existing Fund--while continuing as a
separate entity for purposes of the Investment Company Act of
1940--were to reorganize as a separate series of a single
Massachusetts business trust. The transaction will not result
in the imposition of Federal income tax on you.
The proposal provides that each
Existing
Fund
exchange all of its assets, subject to its liabilities, for
Class A shares ("Series Shares") of a separate new series of
Prairie Funds, a newly formed investment company organized as a
Massachusetts business trust (the "Trust"). The Trust is
comprised of twelve series, including the Money Market Series--
into which the Existing Money Market Fund is proposed to be
reorganized--and the Municipal Money Market Series--into which
the Existing Municipal Money Market Fund is proposed to be
reorganized (each, a "Series" and, collectively, the "Series").
Upon consummation of this transaction (the "Exchange"), the
Series Shares received by each Existing Fund will be
distributed by such Existing Fund to its shareholders (the
"Shareholders"), with each Shareholder receiving the same
number of Series Shares (or fractions thereof) as Existing Fund
shares held by such Shareholder immediately before the
Exchange. The Existing Funds then will be liquidated and
dissolved.
Each Series will have the same
investment
objective as the Existing Fund with which it is to be
reorganized. The Existing Funds and the Series differ in
certain respects: (i) the investment adviser of the Existing
Funds is The First National Bank of Chicago ("FNBC"), acting
through its Investment Management Department; the investment
adviser of each Series will be a newly formed subsidiary of
FNBC which will employ substantially all the investment
personnel who currently provide advisory services to its
corresponding Existing Fund; (ii) the aggregate management fee
will remain the same, but its structure will be different; and
(iii) certain management policies will differ somewhat as a
result of standardizing the policies of the funds in the
Prairie Family. These differences are described in the
enclosed Joint Proxy Statement/Prospectus.
Further information about the
transaction is
contained in the enclosed materials, which you should review
carefully. You are entitled to vote on the proposed
transaction with respect to each Existing Fund in which you are
a Shareholder.
Please take the time to consider the
enclosed
materials and then vote by completing, dating and signing the
enclosed proxy card(s). A self-addressed, postage-paid
envelope has been enclosed for your convenience.
EACH EXISTING FUND'S BOARD MEMBERS
RECOMMEND
THAT ITS SHAREHOLDERS VOTE IN FAVOR OF THE PROPOSED TRANSACTION
WITH RESPECT TO THEIR EXISTING FUND. If you have any questions
after considering the enclosed materials, please feel free to
call ___________ between the hours of 9:00 a.m. and 5:30 p.m.
(New York time), Monday through Friday.

Sincerely,

[NAME],
[TITLE]
_________ __, 1994
<PAGE>
Preliminary Copy

FIRST PRAIRIE MONEY MARKET FUND
FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND

NOTICE OF SPECIAL MEETINGS
OF SHAREHOLDERS

- ------------------------------------------

To the Shareholders:
Special Meetings of Shareholders of
each of the
Money Market Series of First Prairie Money Market Fund (the
"Existing Money Market Fund") and of First Prairie Municipal
Money Market Fund (the "Existing Municipal Money Market Fund"
and, together with the Existing Money Market Fund, the
"Existing Funds") will be held at the offices of [NAME,
ADDRESS], on Monday, January 16, 1995 at __:__ _.m. for the
following purposes:
1. To consider an Agreement and Plan of
Exchange
(each, a "Plan" and, collectively, the "Plans") for each
Existing Fund providing for the transfer of all or
substantially all of its assets, subject to its
liabilities, to a separate new series (each, a "Series")
of Prairie Funds, a newly created Massachusetts business
trust. Under the Plans, each Existing Fund would
receive,
in exchange (the "Exchange") for its assets, Class A
shares of beneficial interest, par value $.001 per share
("Series Shares"), of the corresponding Series. Series
Shares received in the Exchange will be distributed by
each Existing Fund to its shareholders in liquidation of
the Existing Fund, after which the Existing Funds will
be
dissolved; and
2. To transact such other business as may
properly
come before the meetings, or any adjournment or
adjournments thereof.
Shareholders of record at the close of business
on
December 5, 1994, will be entitled to receive notice of and to
vote at the meetings.
By Order of the Boards of Trustees

[NAME]

[TITLE]

[PLACE]
_________ __, 1994

WE NEED YOUR PROXY VOTE
IMMEDIATELY A SHAREHOLDER MAY THINK HIS VOTE IS NOT
IMPORTANT, BUT IT IS VITAL. BY LAW, THE
MEETING OF SHAREHOLDERS OF AN EXISTING
FUND WILL HAVE TO BE ADJOURNED WITHOUT
CONDUCTING ANY BUSINESS IF LESS THAN A
MAJORITY OF ITS SHARES ELIGIBLE TO VOTE
IS REPRESENTED. IN THAT EVENT, SUCH
FUND, AT ITS SHAREHOLDERS' EXPENSE, WOULD
CONTINUE TO SOLICIT VOTES IN AN ATTEMPT
TO ACHIEVE A QUORUM. CLEARLY, YOUR VOTE
COULD BE CRITICAL TO ENABLE YOUR FUND TO
HOLD THE MEETING AS SCHEDULED, SO PLEASE
RETURN YOUR PROXY CARD IMMEDIATELY. YOU
AND ALL OTHER SHAREHOLDERS WILL BENEFIT
FROM YOUR COOPERATION.

<PAGE>
Preliminary Copy

FIRST PRAIRIE MONEY MARKET FUND
FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND

JOINT PROXY
STATEMENT/PROSPECTUS

- -----------------------------------

Special Meetings of
Shareholders
to be held on January 16, 1995

This Joint Proxy Statement/Prospectus is
furnished in
connection with a solicitation of proxies by the Boards of each
of First Prairie Money Market Fund on behalf of its Money
Market Series (the "Existing Money Market Fund") and First
Prairie Municipal Money Market Fund (the "Existing Municipal
Money Market Fund" and, together with the Existing Money Market
Fund, the "Existing Funds") to be used at the respective
Special Meetings of Shareholders (each, a "Meeting") of the
Existing Funds to be held on Monday, January 16, 1995 at __:__
_.m., at the offices of [NAME, ADDRESS] for the purposes set
forth in the accompanying Notice of Special Meetings of
Shareholders. Shareholders of record at the close of business
on December 5, 1994 (each, a "Shareholder" and, collectively,
the "Shareholders") are entitled to receive notice of and to
vote at their respective Meetings. Shareholders are entitled
to one vote for each share of beneficial interest of an
Existing Fund, par value $.01 per share ("Existing Fund
Share"), held and fractional votes for each fractional Existing
Fund Share held. Existing Fund Shares represented by executed
and unrevoked proxies will be voted in accordance with the
specifications made thereon. If the enclosed form of proxy is
executed and returned, it nevertheless may be revoked by giving
another proxy or by letter or telegram directed to the relevant
Existing Fund, which must indicate the Shareholder's name and
account number. To be effective, such revocation must be
received before the relevant Existing Fund's Meeting. Also,
any Shareholder who attends an Existing Fund's Meeting in
person may vote by ballot at the Meeting, thereby canceling any
proxy previously given. As of __________, 1994, the following
numbers of Existing Fund Shares were issued and outstanding:
Name of Existing Fund Shares
Outstanding

Money Market Series of
First Prairie Money Market Fund _____

First Prairie Municipal
Money Market Fund _____

[5% holders of each Existing Fund to
be
inserted]

This Joint Proxy Statement/Prospectus is being
used
in order to reduce the preparation, printing, handling and
postage expenses that would result from the use of a separate
proxy statement/prospectus for each Existing Fund and, because
Shareholders may own Existing Fund Shares of more than one
Existing Fund, to avoid burdening Shareholders with more than
one proxy statement/prospectus. Shareholders of each Existing
Fund will vote separately as a single class on Proposal No. 1.
Separate proxy cards are enclosed for each Existing Fund in
which a Shareholder is a record owner of Existing Fund Shares.
Thus, if Proposal No. 1 is approved by Shareholders of one
Existing Fund, but not by Shareholders of the other Existing
Fund, the proposal will be implemented for the Existing Fund
that approved the proposal and will not be implemented for the
Existing Fund that did not approve the proposal. Therefore, it
is essential that Shareholders complete, date, sign and return
each enclosed proxy card.
PROPOSAL 1. APPROVAL OF AN AGREEMENT AND PLAN
OF
EXCHANGE PROVIDING FOR THE TRANSFER OF ALL
OR SUBSTANTIALLY ALL OF THE ASSETS
OF AN EXISTING FUND TO A SEPARATE NEW
SERIES OF A NEWLY CREATED MASSACHUSETTS
BUSINESS TRUST INTRODUCTION
It is proposed that each Existing Fund transfer
all
or substantially all of its assets, subject to its liabilities,
to a separate new series of Prairie Funds, a newly created
Massachusetts business trust (the "Trust"). The Trust is
comprised of twelve series, including the Money Market Series--
into which the Existing Money Market Fund is proposed to be
reorganized--and the Municipal Money Market Series--into which
the Existing Municipal Money Market Fund is proposed to be
reorganized--(each, a "Series" and, collectively, the
"Series"). Under the Plans, each Existing Fund would receive,
in exchange for its assets (the "Exchange"), Class A shares of
beneficial interest of its corresponding Series, par value
$.001 per share ("Series Shares"), all as more fully described
herein (the "Exchange"). Upon consummation of the Exchange,
the Series Shares received by an Existing Fund will be
distributed to its Shareholders, with each Shareholder
receiving a distribution of an identical number of Series
Shares (or fractions thereof) for Existing Fund Shares held
prior to the Exchange. The Existing Fund then will be
dissolved.
The Existing Funds and the Series differ in certain
respects: (i) the investment adviser of the Existing Funds is
The First National Bank of Chicago ("FNBC"), acting through its
Investment Management Department; the investment adviser of the
Series will be a newly formed subsidiary of FNBC which will
employ substantially all the investment personnel who currently
provide advisory services to its corresponding Existing Fund;
(ii) the aggregate management fee will remain the same, but its
structure will be different; and (iii) certain management
policies will differ somewhat as a result of standardizing the
policies of the funds in the Prairie Family. These differences
are described below under "Certain Differences between the
Existing Funds and the Series."
At a meeting of the Boards of the Existing Funds
held
on November 18, 1995, FNBC recommended that the Board of each
Existing Fund consider, and the Boards approved, an Agreement
and Plan of Exchange (each, a "Plan" and, collectively, the
"Plans"), a form of which is attached hereto as Exhibit A, and
the Exchange, with respect to each Existing Fund.

THE PLANS
The following summary of the important terms and
conditions of the Plans is qualified in its entirety by
reference to the Plans. The Plans are identical except for the
name of the parties. Each Plan provides that, subject to the
requisite approval of its Shareholders, on the date of the
Exchange each Existing Fund shall assign, transfer and convey
to its corresponding Series all of the assets (subject to
liabilities) of the Existing Fund, including all securities and
cash, in exchange for Series Shares having an aggregate net
asset value equal to the value of the net assets of the
Existing Fund acquired. Each Existing Fund will distribute all
Series Shares received by it among its Shareholders so that
each Shareholder will receive Series Shares identical in number
to the number of Existing Fund Shares held by such Shareholder
immediately before the Exchange. Thereafter, the Existing Fund
will dissolve. The dissolution of each Existing Fund is
expected to occur as soon as practicable after the related
Exchange. Immediately following the Exchange, the former
Shareholders of each Existing Fund will hold the only
outstanding corresponding Series Shares (other than one Series
Share which will be held by Concord Financial Group, Inc., each
Series' distributor, for regulatory purposes). After the
Exchange has been completed, each Series will operate as an
open-end, diversified management investment company.
Unless postponed by an Existing Fund and its
corresponding Series, the Exchange is expected to occur on
__________, 1995, on the basis of the net assets of each
Existing Fund as of 12:00 Noon, New York time, on that day.
The Exchange will not be effected with regard to an Existing
Fund until certain conditions are satisfied, including approval
of the Plan by its Shareholders.
The Plans may be amended at any time prior to
the
Exchange.
The total expenses of the Exchange are expected
to be
approximately $___________ for the Existing Money Market Fund
and $________ for the Existing Municipal Money Market Fund.
Each Existing Fund will bear its own expenses, except for the
expenses of preparing, printing and mailing this Joint Proxy
Statement/Prospectus, the proxy cards and other related
materials, which will be borne by each Existing Fund ratably
according to their respective aggregate net assets on the date
of the Exchange.
If the Exchange is not approved by an Existing
Fund's
Shareholders, the relevant Existing Fund's Board will consider
other appropriate courses of action, including continuing to
operate as the Existing Fund currently is operating.
REASONS FOR THE EXCHANGE
The Exchanges will establish the Series as
successor
investment vehicles to the Existing Funds. It is believed that
reorganization of each Existing Fund as a separate new series
of a newly created Massachusetts business trust will prove
beneficial in that the Series will be less expensive to operate
than the Existing Funds separately.
TAX CONSEQUENCES
The exchange of Existing Fund assets for Series
Shares is intended to qualify for Federal income tax purposes
as a tax-free reorganization under Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"). As a
condition to the closing of the Exchange, the Series and
Existing Funds will receive the opinion of Stroock & Stroock &
Lavan, counsel to the Series and each Existing Fund, to the
effect that, on the basis of the existing provisions of the
Code, Treasury regulations issued thereunder, current
administrative regulations and pronouncements and court
decisions, and certain facts, assumptions and representations,
for Federal income tax purposes: (1) the transfer of all or
substantially all of an Existing Fund's assets in exchange for
Series Shares and the assumption by a Series of Existing Fund
liabilities will constitute a "reorganization" within the
meaning of Section 368(a)(1)(F) of the Code; (2) no gain or
loss will be recognized by a Series upon the receipt of its
corresponding Existing Fund assets solely in exchange for
Series Shares and the assumption by the Series of liabilities
of the Existing Fund; (3) no gain or loss will be recognized by
an Existing Fund upon the transfer of its assets to its
corresponding Series in exchange for Series Shares and the
assumption by the Series of the Existing Fund's liabilities or
upon the distribution (whether actual or constructive) of
Series Shares to Shareholders in exchange for their Existing
Fund Shares; (4) no gain or loss will be recognized by the
Existing Fund Shareholders upon the exchange of Existing Fund
Shares for Series Shares; (5) the aggregate tax basis for
Series Shares received by each Existing Fund Shareholder
pursuant to the Exchange will be the same as the aggregate tax
basis for Existing Fund Shares held by such Shareholder
immediately prior to the Exchange, and the holding period of
Series Shares to be received by each Existing Fund Shareholder
will include the period during which Existing Fund Shares
surrendered in exchange therefor were held by such Shareholder
(provided Existing Fund Shares were held as capital assets on
the date of the Exchange); and (6) the tax basis of Existing
Fund assets acquired by the Series will be the same as the tax
basis of such assets to the corresponding Existing Fund
immediately prior to the Exchange, and the holding period of
Existing Fund assets in the hands of the corresponding Series
will include the period during which those assets were held by
the Existing Fund.
NONE OF THE EXISTING FUNDS OR SERIES HAS SOUGHT A
TAX RULING FROM THE INTERNAL REVENUE SERVICE ("IRS"). THE
OPINION
OF COUNSEL IS NOT BINDING ON THE IRS NOR DOES IT PRECLUDE THE
IRS FROM ADOPTING A CONTRARY POSITION. Existing Fund
Shareholders should consult their tax advisers regarding the
effect, if any, of the proposed Exchange in light of their
individual circumstances. Since the foregoing discussion
relates only to the Federal income tax consequences of the
Exchange, Existing Fund Shareholders also should consult their
tax advisers as to state and local tax consequences, if any, of
the Exchange.
SECURITIES TO BE ISSUED
Each Series will issue Series Shares in exchange
for
the transfer of its corresponding Existing Fund's assets.
Series Shares have no preemptive or subscription rights and are
freely transferable. Series Shares issued in the Exchange will
be fully paid, legally binding and non-assessable by the
issuing Series. Each Series has authorized an indefinite
number of shares of beneficial interest and has classified its
shares as Class A, which are referred to herein as Series
Shares, and, in the case of the Money Market Series only, Class
B.
REQUIRED VOTE AND BOARDS' RECOMMENDATION
The Board of each Existing Fund has approved the
Plan
and the Exchange and has determined that (i) participation in
the Exchange is in the respective Existing Fund's best
interests and (ii) the interests of Shareholders of such
Existing Fund will not be diluted as a result of the Exchange.
Pursuant to each Existing Fund's charter documents, an
affirmative vote of a majority of its Shareholders is required
to approve its Plan and the Exchange.
THE BOARD OF EACH EXISTING FUND, INCLUDING THE
"NON-INTERESTED" BOARD MEMBERS, RECOMMENDS THAT ITS SHAREHOLDERS
VOTE "FOR" APPROVAL OF THE EXISTING FUND'S PLAN AND THE
EXCHANGE.

CERTAIN DIFFERENCES BETWEEN THE EXISTING FUND AND THE SERIES
INVESTMENT ADVISER AND MANAGEMENT FEE STRUCTURE. The
investment adviser of each Existing Fund is FNBC, acting
through its Investment Management Department. The investment
adviser of each Series will be First Chicago Investment
Management Company ("FIMCO"), a newly formed subsidiary of
FNBC, which will employ substantially all the investment
personnel who currently provide advisory services to the
Existing Funds.
Each Existing Fund has entered into a Management
Agreement with FNBC, pursuant to which the Existing Fund has
agreed to pay FNBC a monthly fee at the annual rate of .55 of
1% of the value of the relevant Existing Fund's average daily
net assets. In addition, FNBC has entered into a Master
Administration Agreement with The Dreyfus Corporation (the
"Administrator"), pursuant to which FNBC, from its own funds,
has agreed to pay the Administrator for administrative services
provided to each Existing Fund.
The Trust has entered into an Investment
Advisory
Agreement with FIMCO, pursuant to which the Trust has agreed to
pay FIMCO a monthly advisory fee at the annual rate of .40 of
1% of the value of each Series' average daily net assets. In
addition, the Trust has entered into an Administration
Agreement with FIMCO, pursuant to which the Trust has agreed to
pay FIMCO a monthly administration fee at the annual rate of
.15 of 1% of the value of each Series' average daily net
assets. The Investment Advisory Agreement is substantially
identical to the Management Agreement, except that: (i) under
the Management Agreement, FNBC is responsible for providing
administrative services to the Existing Funds--services that
currently are provided to the Existing Funds by the
Administrator pursuant to the Master Administration Agreement
between FNBC and the Administrator--which services will be
provided to the Series pursuant to FIMCO's Administration
Agreement with the Trust, and FIMCO will have the right to
engage other entities to assist it in performing such services-
- -and it has engaged Concord Holding Corporation to provide such
services; (ii) the fees payable by the Trust on behalf of the
Series to FIMCO under the Investment Advisory Agreement will be
lower than the fees payable by the Existing Funds to FNBC under
the relevant Management Agreement in recognition of the fact
that FIMCO will be responsible for the cost of providing
administrative services to the Series pursuant to a separate
agreement--but the contractual rate payable by the Series for
management services (consisting of investment advisory and
administrative services) will be identical to the aggregate
contractual rate payable by the Existing Funds for these
services; and (iii) the Investment Advisory Agreement will be
dated currently.
SERVICE PLAN AND SHAREHOLDER SERVICES PLAN. Each Existing Fund
has adopted a Service Plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended (the "1940 Act"),
pursuant to which each Existing Fund bears the costs and
expenses in connection with advertising and marketing its
shares and pays the fees of certain Service Agents (as defined
in the Existing Fund's Prospectus) for servicing shareholders
and shareholder accounts at a rate not exceeding .25 of 1% per
annum of the value of each Existing Fund's average daily net
assets.
The Trust has not adopted a Service Plan
pursuant
to
Rule 12b-1 with respect to Series Shares. The Trust has
adopted with respect to Series Shares a Shareholder Services
Plan pursuant to which the Trust pays its distributor for the
provision of certain services to the holders of Series Shares a
fee at the annual rate of .25 of 1% of the value of the average
daily net assets of Series Shares. The services provided may
include personal services relating to shareholder accounts,
such as answering shareholder inquiries regarding the Series
and providing reports and other information, and services
related to the maintenance of shareholder accounts Under the
Shareholder Services Plan, the Trust's distributor may make
payments to Service Agents in respect of these services. The
Shareholder Services Plan will be adopted and operated
generally in accordance with the procedures set forth in Rule
12b-1 under the 1940 Act, except that Shareholders will not
enjoy the voting rights provided in Rule 12b-1. See
"Distribution Plan and Shareholder Services Plan" in the
Trust's Prospectus.
INVESTMENT RESTRICTIONS. Each Existing Fund has adopted
investment restrictions as fundamental policies that cannot be
changed without Shareholder approval. These investment
restrictions are set forth in each Existing Fund's Statement of
Additional Information under "Investment Objective and
Management Policies--Investment Restrictions."
The 1940 Act requires that a relatively limited
number of investment policies and restrictions be designated as
fundamental policies. These policies relate to (a) the
classification and subclassification under the 1940 Act within
which an Existing Fund may operate, (b) borrowing money, (c)
issuing senior securities, (d) engaging in the business of
underwriting securities issued by other persons, (e)
concentrating investments in a particular industry or group of
industries, (f) purchasing and selling real estate or
commodities and (g) making loans to other persons. When each
Existing Fund was formed, its Board designated a number of
other policies as fundamental, in large part in response to
certain regulatory, business or industry conditions that are no
longer believed to be in effect.
When determining each Series' investment
restrictions, the Trust's Board considered the foregoing and
adopted for the Series investment restrictions which offer
somewhat broader investment opportunities than those of the
Existing Funds. In addition, because the Series will be part
of a single Massachusetts business trust, their investment
restrictions have been designed to provide uniformity of
language among the Series. As such, although the substance of
many of the Series' investment restrictions is the same as
those of the Existing Funds, certain semantic differences
exist. The differences reflect language changes believed more
appropriate for an investment company with multiple series that
have different objectives and policies. If the Exchange is
consummated, the Shareholders of each Existing Fund will become
shareholders of a Series with these different investment
restrictions.
The investment restrictions of the Series are
set
forth on Exhibit C hereto and may be found in the Trust's
Statement of Additional Information, under "Investment
Objective and Management Policies--Investment Restrictions."
The investment restrictions of the Existing Funds are set forth
on Exhibit B hereto and may be found in the Existing Funds'
respective Statements of Additional Information, under
"Investment Objective and Management Policies--Investment
Restrictions." Shareholders are urged to review the complete
text of the investment restrictions of the Series and the
Existing Funds.
Specific changes include the deletion for the
Money
Market Series of the Existing Money Market Fund's investment
restriction number 10 prohibiting the purchase of common
stocks, preferred stocks, warrants or other equity securities,
or purchase of corporate bonds or debentures, state bonds,
municipal bonds or industrial revenue bonds. This investment
restriction has been deleted for the Money Market Series
because it could be viewed as preventing the Series from
purchasing securities that, while technically equity securities
or longer term debt instruments, have the investment
characteristics of the other securities in which the Money
Market Series is permitted to invest.
With respect to the Existing Municipal Money
Market
Fund, investment restriction number 3 limits the Fund's ability
to borrow money. Currently, the Existing Municipal Money
Market Fund may borrow money from banks for temporary or
emergency (not leveraging) purposes in an amount up to 15% of
the value of the Existing Municipal Money Market Fund's total
assets (including the amount borrowed) based on the lesser of
cost or market, less liabilities (not including the amount
borrowed) at the time the borrowing is made. While borrowings
exceed 5% of the value of the Existing Municipal Money Market
Fund's total assets, the Fund will not make any additional
investments. The Municipal Money Market Series is permitted to
borrow to the extent permitted under the 1940 Act. Currently,
under the 1940 Act, total borrowings of an investment company
may not exceed 33-1/3% of the value of such company's total
assets. However, the Municipal Money Market Series intends to
borrow money only to the extent the Existing Municipal Money
Market Fund is currently permitted pursuant to its investment
restriction number 3 and will not change this policy unless the
Trust's Prospectus is revised appropriately and notice is given
to its shareholders.
SHAREHOLDER SERVICES. Both the Existing Fund and the Series
offer the following shareholder services: Exchange Privilege--
allows you to exchange your shares for shares of another
eligible fund; and Automatic Investment Plan (or Automatic
Asset Builder)--allows you to purchase shares automatically at
regular intervals which you select.
The following shareholder services are offered
by
the
Existing Fund but not by the Series: Auto-Exchange Privilege--
allows you to automatically exchange Existing Fund shares for
shares of certain other First Prairie mutual funds at regular
intervals which you select; Government Direct Deposit
Privilege--enables you to purchase Existing Fund shares by
having Federal salary, Social Security or certain veterans',
military or other payments from the Federal government
automatically deposited into your Existing Fund account;
Automatic Withdrawal Plan--allows you to withdraw a specified
dollar amount from your Existing Fund account every month or
quarter; and Dividend Options--allows you to "sweep" your
dividends and capital gain distributions into certain other
First Prairie mutual funds.
ADDITIONAL INFORMATION ABOUT THE SERIES AND
EXISTING FUNDS
Information about each Series is included in the
Trust's current Prospectus and Statement of Additional
Information for the Series, each dated December __, 1994.
Information about the Existing Money Market Fund is included in
First Prairie Money Market Fund's current Prospectus and
Statement of Additional Information, each dated April 11, 1994.
Information about the Existing Municipal Money Market Fund is
included in its current Prospectus and Statement of Additional
Information, each dated April 29, 1994. Copies of each of the
Series' and Existing Fund's Prospectuses and Statements of
Additional Information are being furnished with this Joint
Prospectus/Proxy Statement and are incorporated by reference
herein.
FINANCIAL STATEMENTS AND
EXPERTS
The audited financial statements of the Existing
Money Market Fund and Existing Municipal Money Market Fund for
the fiscal year ended December 31, 1993, which are included in
the respective Existing Fund's Statement of Additional
Information, have each been examined by Ernst & Young LLP,
independent auditors, whose respective reports thereon are
included therein. The financial statements of each Existing
Fund examined by Ernst & Young LLP have been incorporated
herein by reference in reliance upon their reports given on
their authority as experts in accounting and auditing.
OTHER MATTERS
Each Existing Fund's Trustees are not aware of
any
other matters which may come before each Meeting. However,
should any such matters properly come before a Meeting, it is
the intention of the persons named in the accompanying form of
proxy to vote the proxy in accordance with their judgment on
such matters.
VOTING INFORMATION
In addition to the use of the mails, proxies may
be
solicited personally, by telephone or by telegraph, and each
Existing Fund may pay persons holding its Existing Fund Shares
in their names or those of their nominees for their expenses in
sending soliciting materials to their principals.
If a proxy is properly executed and returned
accompanied by instructions to withhold authority to vote,
represents a broker "non-vote" (that is, a proxy from a broker
or nominee indicating that such person has not received
instructions from the beneficial owner or other person entitled
to vote Existing Fund Shares on a particular matter with
respect to which the broker or nominee does not have
discretionary power) or is marked with an abstention
(collectively, "abstentions"), the Existing Fund Shares
represented thereby will be considered to be present at a
Meeting for purposes of determining the existence of a quorum
for the transaction of business. Abstentions, however, will
have the effect of a "no" vote for the purpose of obtaining
requisite approval for Proposal No. 1.
NOTICE TO BANKS, BROKER/DEALERS AND
VOTING TRUSTEES
AND THEIR NOMINEES

Please advise the Existing Funds, in care of The
First National Bank of Chicago, Three First National Plaza,
Chicago, Illinois 60670, Attention: _______________, whether
other persons are the beneficial owners of Existing Fund Shares
for which proxies are being solicited from you, and, if so, the
number of copies of the Joint Proxy Statement/Prospectus and
other soliciting material you wish to receive in order to
supply copies to the beneficial owners of Existing Fund Shares.
IT IS IMPORTANT THAT PROXIES BE RETURNED
PROMPTLY.
THEREFORE, SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND IN PERSON
ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE PROXY CARDS IN
THE ENCLOSED STAMPED ENVELOPE.

Dated: December __, 1994
<PAGE>

Exhibit A

FORM OF
AGREEMENT AND PLAN OF EXCHANGE

AGREEMENT AND PLAN OF EXCHANGE dated
________________, 1994 (the "Agreement"), between ____<F1>____
, a Massachusetts business trust (the "Existing Fund"), and
_______<F2>_____ (the "Series"), a series of PRAIRIE FUNDS, a
Massachusetts business trust (the "Trust").
[FN] Insert THE MONEY MARKET SERIES OF FIRST PRAIRIE
MONEY MARKET FUND or FIRST PRAIRIE MUNICIPAL MONEY
MARKET FUND, as appropriate.

[FN] Insert MONEY MARKET SERIES or MUNICIPAL MONEY
MARKET SERIES, as appropriate.
<PAGE>
WHEREAS, the Boards of Trustees of each Existing
Fund
and the Trust have determined that it is in the best interests
of the Existing Fund and Series, respectively, that the assets
of the Existing Fund be acquired by the Series pursuant to this
Agreement and in accordance with the applicable statutes of The
Commonwealth of Massachusetts; and
WHEREAS, the parties desire to enter into a plan
of
exchange pursuant to Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code").
NOW THEREFORE, in consideration of the premises
and
of the covenants and agreements hereinafter set forth, the
parties agree as follows:
1. PLAN OF EXCHANGE.

(a) Subject to the requisite approval of the
shareholders of the Existing Fund (the "Shareholders"), and to
the terms and conditions contained herein, on the Exchange Date
(as defined herein) the Existing Fund shall assign, transfer
and convey to the Series, and the Series shall acquire, all of
the assets of the Existing Fund, including all securities and
cash (subject to liabilities), for full Class A shares of
beneficial interest of the Series, par value $.001 per share
(the "Series Shares") and, to the extent necessary, a
fractional Series Share, to be issued by the Series, having an
aggregate net asset value equal to the value of the net assets
of the Existing Fund acquired. The value of the Existing
Fund's assets to be acquired by the Series and the net asset
value per share of the Series Shares shall be determined, as of
the Exchange Date, in accordance with the procedures for
determining the value of the Series' assets set forth in the
Trust's Agreement and Declaration of Trust and in the then-
current prospectus and statement of additional information that
forms part of the Trust's Registration Statement on Form N-1A.
In lieu of delivering certificates for the Series Shares, the
Series shall credit the Series Shares to the Existing Fund's
account on the share record books of the Series and shall
deliver a confirmation thereof to the Existing Fund. The
Existing Fund shall then deliver written instructions to the
Trust's transfer agent to establish accounts for the
Shareholders on the share record books of the Series.
(b) Delivery of the assets of the Existing Fund
to
be transferred shall be made not later than the next business
day following the Exchange Date. Assets transferred shall be
delivered to The Bank of New York, 110 Washington Street, New
York, New York, the Trust's custodian (the "Custodian"), for
the account of the Series, with all securities not in book
entry or bearer form duly endorsed, or accompanied by duly
executed separate assignments or stock powers, in proper form
for transfer, with signatures guaranteed, and with all
necessary stock transfer stamps, sufficient to transfer good
and marketable title thereto (including all accrued interest
and dividends and rights pertaining thereto) to the Custodian
for the account of the Series free and clear of all liens,
encumbrances, rights, restrictions and claims. All cash
delivered shall be in the form of immediately available funds
payable to the order of the Custodian for the account of the
Series.
(c) The Existing Fund will pay or cause to be
paid
to the Series any interest received on or after the Exchange
Date with respect to assets transferred to the Series
hereunder. The Existing Fund will transfer to the Series any
distributions, rights or other assets received by the Existing
Fund after the Exchange Date as distributions on or with
respect to the securities transferred. Such assets shall be
deemed included in assets transferred to the Series on the
Exchange Date and shall not be separately valued.
(d) The Exchange Date shall be ____________,
1995,
or such earlier or later date as may be mutually agreed upon by
the parties.
(e) As soon as practicable after the Exchange
Date
the Existing Fund shall distribute all Series Shares received
by it among the Shareholders in proportion to the number of
shares each Shareholder holds in the Existing Fund (the
"Existing Fund Shares"), and thereafter will dissolve.
2. THE EXISTING FUND'S REPRESENTATIONS AND WARRANTIES.
2.1. The Existing Fund represents and warrants
to
and agrees with the Series as follows:
(a) The Existing Fund is (i) a
_____<F1>_____
duly organized and validly existing under the laws of The
Commonwealth of Massachusetts, and (ii) has power to own all of
its properties and assets and, subject to the approval of the
Shareholders, to carry out this Agreement.
[FN] Insert SERIES OF FIRST PRAIRIE MONEY MARKET
FUND,
A
BUSINESS TRUST or BUSINESS TRUST, as
appropriate.

<PAGE>
(b) The Existing Fund is registered
under the
Investment Company Act of 1940, as amended (the "1940 Act"), as
an open-end, diversified, management investment company, and
such registration has not been revoked or rescinded and is in
full force and effect.
(c) Except as shown on the financial
statements
of the Existing Fund for the period ended December 31, 1993 and
as incurred in the ordinary course of the Existing Fund's
business since December 31, 1993, the Existing Fund has no
known liabilities of a material amount, contingent or
otherwise, and there are no material legal, administrative or
other proceedings pending or threatened against the Existing
Fund.
(d) For each fiscal year of its
operation, the
Existing Fund has met the requirements of Subchapter M of the
Code for qualification and treatment as a regulated investment
company.
(e) On the Exchange Date, the Existing
Fund
will have full right, power and authority to sell, assign,
transfer and deliver the assets to be transferred by it
hereunder.
3. THE SERIES' REPRESENTATIONS AND WARRANTIES.
The Series represents and warrants to and agrees
with
the Existing Fund as follows:
(a) The Series (i) is a series of the
Trust, a
business trust duly organized, validly existing and in good
standing under the laws of The Commonwealth of Massachusetts,
and (ii) has power to carry on its business as it is now being
conducted and to carry out this Agreement.
(b) The Series is registered under the
1940 Act
as an open-end, diversified, management investment company, and
such registration has not been revoked or rescinded and is in
full force and effect.
(c) The Series has no known liabilities
of a
material amount, contingent or otherwise, and there are no
material legal, administrative or other proceedings pending or
threatened against the Series.
(d) For its fiscal year in which the
exchange
contemplated hereby occurs and for each taxable year
thereafter, the Series intends to meet the requirements of
Subchapter M of the Code for qualification and treatment as a
regulated investment company.
(e) At the Exchange Date, the Series
Shares to
be issued to the Existing Fund (the only Series Shares to be
issued as of the Exchange Date, except for the initial capital
of the Series) will have been duly authorized and, when issued
and delivered pursuant to this Agreement, will be legally and
validly issued and will be fully paid and non-assessable by the
Series. No Series shareholder will have any preemptive right
of subscription or purchase in respect thereof.
4. THE SERIES' CONDITIONS PRECEDENT.
The obligations of the Series hereunder shall be
subject to the following conditions:
(a) The Existing Fund shall have
furnished to
the Series a statement of the Existing Fund's assets, including
a list of securities owned by the Existing Fund with their
respective tax costs and values determined as provided in
Section 1 hereof, all as of the Exchange Date.
(b) As of the Exchange Date, all
representations and warranties of the Existing Fund made in
this Agreement shall be true and correct as if made at and as
of such date, and the Existing Fund shall have complied with
all the agreements and satisfied all the conditions on its part
to be performed or satisfied at or prior to such date.
(c) A vote approving this Agreement and
the
transactions and exchange contemplated hereby shall have been
adopted by the holders of at least a majority of the
outstanding Existing Fund Shares entitled to vote.
5. THE EXISTING FUND'S CONDITIONS PRECEDENT.
The obligations of the Existing Fund hereunder
shall
be subject to the condition that as of the Exchange Date all
representations and warranties of the Series made in this
Agreement shall be true and correct as if made at and as of
such date, and that the Series shall have complied with all of
the agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to such date.
6. THE SERIES' AND THE EXISTING FUND'S CONDITIONS
PRECEDENT:
The obligations of both the Series and the
Existing
Fund hereunder shall be subject to the following conditions:
(a) This Agreement and the transactions
contemplated hereby shall have been approved by the affirmative
vote of at least a majority of the Existing Fund Shares as of
the close of business on _____________, 1995, or such earlier
or later date as may be mutually agreed upon by the parties.
(b) There shall not be any material
litigation
pending with respect to the matters contemplated by this
Agreement.
7. EXPENSES
The Existing Fund understands that concurrently
with
the transactions contemplated hereby ______<F1>_______ intends
to enter into a similar transaction (the "Concurrent Exchange")
with a separate series of the Trust. The parties hereto agree
that the expenses incurred in connection with the preparation,
printing and mailing of the Joint Proxy Statement/Prospectus,
proxy cards and other related materials for the Concurrent
Exchange and the Exchange shall be allocated on a pro rata
basis between the Existing Fund and ______<F1>______ (each, a
"Fund"), according to the aggregate net assets of each such
Fund on the Exchange Date.
[FN] Insert THE MONEY MARKET SERIES OF FIRST PRAIRIE
MONEY MARKET FUND or FIRST PRAIRIE MUNICIPAL MONEY
MARKET FUND, as appropriate.

<PAGE>

8. TERMINATION OF AGREEMENT.
This Agreement and the transactions contemplated
hereby may be terminated and abandoned by resolution of the
Board of Trustees of either the Existing Fund or the Trust, at
any time prior to the Exchange Date (and notwithstanding any
vote of the Shareholders) if circumstances should develop that,
in the opinion of either of the Boards of Trustees, make
proceeding with this Agreement inadvisable.
If this Agreement is terminated and the exchange
contemplated hereby is abandoned pursuant to the provisions of
this Section 8, this Agreement shall become void and have no
effect, without any liability on the part of any party hereto
or the Trustees, officers or shareholders of the Series or
Trust, or of the Existing Fund, in respect of this Agreement.
9. WAIVER.
At any time prior to the Exchange Date, any of
the
foregoing conditions may be waived by the Board of Trustees of
either the Existing Fund or the Trust, if, in the judgment of
the waiving party, such waiver will not have a material adverse
effect on the benefits intended under this Agreement to the
Shareholders.
10. NO SURVIVAL OF REPRESENTATIONS.
None of the representations and warranties
included
or provided for herein shall survive consummation of the
transactions contemplated hereby.
11. GOVERNING LAW.
This Agreement shall be governed and construed
in
accordance with the internal laws of the State of New York,
without giving effect to principles of conflict of laws;
provided, however, that the due authorization, execution and
delivery of this Agreement shall be governed and construed in
accordance with the internal laws of The Commonwealth of
Massachusetts, without giving effect to principles of conflict
of laws.
12. COUNTERPARTS.
This Agreement may be executed in counterparts,
each
of which, when executed and delivered, shall be deemed to be an
original.
13. LIMITATION OF LIABILITY.
(a) The names "_______<F1>_______" and
"Trustees
of
the Trust" refer, respectively, to the Series and the Trustees
of the Trust, as trustees but not individually or personally,
acting from time to time under the Trust's Agreement and
Declaration of Trust, a copy of which is on file at the office
of the Secretary of State of The Commonwealth of Massachusetts
and at the principal office of the Trust. The obligations of
the Series entered into in the name or on behalf thereof by any
of the Trustees of the Trust, or its representatives or agents
are made not individually, but in such capacities, and are not
binding upon any of the Trustees, shareholders, representatives
or agents of the Series or Trust personally, but bind only the
Series' property, and all persons dealing with any class or
series of shares of the Series must look solely to the Series'
property belonging to such class or series for the enforcement
of any claims against the Series.
(b) The names "_______<F2>_______" and
"Trustees
of
the Existing Fund" refer, respectively, to the Existing Fund
and the Trustees of the Existing Fund, as trustees but not
individually or personally, acting from time to time under the
Existing Fund's Agreement and Declaration of Trust, a copy of
which is on file at the office of the Secretary of State of The
Commonwealth of Massachusetts and at the principal office of
Existing Fund. The obligations of the Existing Fund entered
into in the name or on behalf thereof by the Trustees of the
Existing Fund, or its representatives or agents are made not
individually, but in such capacities, and are not binding upon
any of the Trustees, shareholders, representatives or agents of
the Existing Fund personally, but bind only the Existing Fund's
property, and all persons dealing with any class or series of
shares of the Existing Fund must look solely to the Existing
Fund's property belonging to such class or series for the
enforcement of any claims against the Existing Fund.
[FN] Insert MONEY MARKET SERIES or MUNICIPAL MONEY
MARKET SERIES, as appropriate.

[FN] Insert MONEY MARKET SERIES OF FIRST PRAIRIE
MONEY MARKET FUND or FIRST PRAIRIE MUNICIPAL MONEY
MARKET FUND, as appropriate.

<PAGE>
IN WITNESS WHEREOF, each of the Existing Fund
and the
Series has caused this Agreement and Plan of Exchange to be
executed and attested on its behalf by its duly authorized
representatives as of the date first above written.
PRAIRIE
FUNDS,
on behalf of

<F1>

- -----------------------------

ATTEST:________________________
By:__________________________
[Name, Title] [Name,
Title]

<F2>

- -----------------------------

ATTEST:________________________
By:__________________________
[Name, Title] [Name,
Title]

[FN] Insert MONEY MARKET SERIES or MUNICIPAL MONEY MARKET
SERIES, as appropriate.

[FN] Insert FIRST PRAIRIE MONEY MARKET FUND, ON BEHALF OF
ITS
MONEY MARKET SERIES or FIRST PRAIRIE MUNICIPAL MONEY
MARKET FUND, as appropriate.
<PAGE>

EXHIBIT B

Existing Funds' Investment Restrictions

Existing Money Market Fund. The Existing Money Market
Fund has adopted investment restrictions numbered 1 through 8
as fundamental policies. These restrictions cannot be changed
without approval by the holders of a majority (as defined in
the 1940 Act) of such Existing Fund's outstanding voting
shares. Investment restrictions numbered 9 through 14 are not
fundamental policies and may be changed by a vote of a majority
of the Existing Money Market Fund's Trustees at any time.

The Existing Money Market Fund may not:

1. Invest more than 5% of its assets in the
obligations
of any single issuer, except that up to 25% of the value of its
total assets may be invested (subject to the provisions of Rule
2a-7 under the 1940 Act) without regard to such limitation.

2. Invest less than 25% of its assets in securities
issued by banks, including foreign banks and branches, or
invest more than 25% of its assets in the securities of issuers
in any other industry, provided that there shall be no
limitation on the purchase of obligations issued or guaranteed
by the U.S. Government, its agencies or instrumentalities.
Notwithstanding the foregoing, for temporary defensive purposes
the Existing Money Market Fund may invest less than 25% of its
assets in bank obligations.

3. Borrow money, except to the extent permitted under
the 1940 Act.

4. Purchase or sell real estate, commodities or
commodities contracts, or oil and gas interests.

5. Underwrite the securities of other issuers, except
to the extent the Existing Money Market Fund may be deemed an
underwriter under the Securities Act of 1933, as amended, by
virtue of disposing of portfolio securities.

6. Make loans to others except through the purchase
of
debt obligations or the entry into repurchase agreements;
however, the Existing Money Market Fund may lend its portfolio
securities in an amount not to exceed 33-1/3% of the value of
its total assets. Any loans of portfolio securities will be
made according to guidelines established by the Securities and
Exchange Commission and the Existing Money Market Fund's Board
of Trustees.

7. Issue any senior security (as such term is defined
in Section 18(f) of the 1940 Act), except to the extent that
the activities permitted in Investment Restriction Nos. 3 and
12 may be deemed to give rise to a senior security.

8. Sell securities short or purchase securities on
margin.

9. Write or purchase put or call options or
combinations thereof.

10. Purchase common stocks, preferred stocks,
warrants
or other equity securities, or purchase corporate bonds (except
as set forth in the Prospectus) or debentures, state bonds,
municipal bonds or industrial revenue bonds.

11. Invest in securities of other investment
companies,
except to the extent permitted under the 1940 Act.

12. Pledge, hypothecate, mortgage or otherwise
encumber
its assets, except to the extent necessary to secure permitted
borrowings and to the extent related to the deposit of assets
in escrow in connection with the purchase of securities on a
when-issued or delayed-delivery basis.

13. Enter into repurchase agreements providing for
settlement in more than seven days after notice or purchase
securities which are illiquid (which securities could include
participation interests that are not subject to the demand
feature described in the Existing Money Market Fund's
Prospectus), if, in the aggregate, more than 10% of its net
assets would be so invested.

14. Invest in companies for the purpose of exercising
control.

Existing Municipal Money Market Fund. The Existing
Municipal Money Market Fund has adopted investment restrictions
numbered 1 through 8 as fundamental policies. These
restrictions cannot be changed without approval by the holders
of a majority (as defined in the 1940 Act) of the Existing
Municipal Money Market Fund's outstanding voting shares.
Investment restrictions numbered 9 through 13 are not
fundamental policies and may be changed by a vote of a majority
of the Existing Municipal Money Market Fund's Trustees at any
time. The Existing Municipal Money Market Fund may not:

1. Invest more than 5% of its assets in the
obligations
of any single issuer, except that up to 25% of the value of its
total assets may be invested, and securities issued or
guaranteed by the U.S. Government or its agencies or
instrumentalities may be purchased for temporary defensive
purposes, without regard to any such limitation.

2. Invest more than 25% of its total assets in the
securities of issuers in any single industry; provided that
there shall be no such limitation on the purchase of Municipal
Obligations and, for temporary defensive purposes, securities
issued by banks and obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities.

3. Borrow money, except from banks (other than the
Manager or its affiliates) for temporary or emergency (not
leveraging) purposes in an amount up to 15% of the value of the
Existing Municipal Money Market Fund's total assets (including
the amount borrowed) based on the lesser of cost or market,
less liabilities (not including the amount borrowed) at the
time the borrowing is made. While borrowings exceed 5% of the
value of the Existing Municipal Money Market Fund's total
assets, the Fund will not make any additional investments.

4. Purchase or sell real estate, commodities or
commodities contracts, or oil and gas interests, but this shall
not prevent the Existing Municipal Money Market Fund from
investing in Municipal Obligations secured by real estate or
interests therein.

5. Underwrite the securities of other issuers, except
that the Existing Municipal Money Market Fund may bid
separately or as part of a group for the purchase of Municipal
Obligations directly from an issuer for its own portfolio to
take advantage of the lower purchase price available, and
except to the extent the Fund may be deemed an underwriter
under the Securities Act of 1933, as amended, by virtue of
disposing of portfolio securities.

6. Make loans to others except through the purchase
of
debt obligations and the entry into repurchase agreements;
however, the Existing Municipal Money Market Fund may lend its
portfolio securities in an amount not to exceed 33-1/3 % of the
value of its total assets. Any loans of portfolio securities
will be made according to guidelines established by the
Securities and Exchange Commission and the Existing Municipal
Money Market Fund's Board of Trustees.

7. Issue any senior security (as such term is defined
in Section 18(f) of the 1940 Act), except to the extent that
the activities permitted in Investment Restriction Nos. 3 and
11 may be deemed to give rise to a senior security.

8. Sell securities short or purchase securities on
margin.

9. Purchase securities other than Municipal
Obligations
and Taxable Investments.

10. Invest in securities of other investment
companies,
except to the extent permitted under the 1940 Act.

12. Enter into repurchase agreements providing for
settlement in more than seven days after notice or purchase
securities which are illiquid (which securities could include
participation interests (including municipal lease/purchase
agreements) that are not subject to the demand feature
described in the Existing Municipal Money Market Fund's
Prospectus and floating and variable rate demand obligations as
to which the Fund cannot exercise the demand feature described
in its Prospectus on less than seven days' notice and as to
which there is no secondary market) if, in the aggregate, more
than 10% of its net assets would be so invested.

13. Invest in companies for the purpose of exercising
control.

While not a fundamental policy, the Existing Municipal
Money Market Fund will not invest in oil, gas or other mineral
leases, or real estate limited partnerships.

Notwithstanding any of the foregoing Investment
Restrictions, the Existing Municipal Money Market Fund reserves
the
right to enter into interest rate futures contracts, and
municipal bond index futures contracts, and any options that
may be offered in respect thereof, subject to the restrictions
then in effect of the Securities and Exchange Commission and
the Commodity Futures Trading Commission and to the receipt or
taking, as the case may be, of appropriate consents, approvals
and other actions from or by those regulatory bodies. In any
event, no such contracts or options will be entered into until
a general description of the terms thereof is set forth in a
subsequent prospectus and statement of additional information,
and a registration statement with respect thereto has been
filed with and declared effective by the Securities and
Exchange Commission.

For purposes of Investment Restriction No. 2,
industrial
development bonds, where the payment of principal and interest
is the ultimate responsibility of companies within the same
industry, are grouped together as an "industry."
<PAGE>

EXHIBIT C

Series' Investment Restrictions

Each Series has adopted investment restrictions
numbered 1 through 7 as fundamental policies. In addition, the
Money Market Series has adopted investment restrictions
numbered 14 and 15 and the Municipal Money Market Series has
adopted investment restrictions numbered 16 and 17 as
additional fundamental policies. These restrictions cannot be
changed, as to a Series, without approval by the holders of a
majority (as defined in the 1940 Act) of such Series'
outstanding voting shares. Investment restrictions numbered 8
through 13 and 20 and 21 are not fundamental policies and may
be changed by vote of a majority of the Trust's Trustees at any
time. No Series may:

1. Invest in commodities, except that each Series
may
purchase and sell options, forward contracts, futures
contracts, including those relating to indexes, and options on
futures contracts or indexes.

2. Purchase, hold or deal in real estate, or oil,
gas
or other mineral leases or exploration or development programs,
but each Series may purchase and sell securities that are
secured by real estate or issued by companies that invest or
deal in real estate.

3. Borrow money, except to the extent permitted
under
the 1940 Act. For purposes of this investment restriction, a
Series' entry into options, forward contracts, futures
contracts, including those relating to indexes, and options on
futures contracts or indexes shall not constitute borrowing.

4. Make loans to others, except through the
purchase
of debt obligations and the entry into repurchase agreements.
However, each Series may lend its securities in an amount not
to exceed 33-1/3% of the value of its total assets. Any loans
of portfolio securities will be made according to guidelines
established by the Securities and Exchange Commission and the
Trust's Board of Trustees.

5. Act as an underwriter of securities of other
issuers, except to the extent a Series may be deemed an under-
writer under the Securities Act of 1933, as amended, by virtue
of disposing of portfolio securities, and except that the
Series may bid separately or as part of a group for the
purchase of Municipal Obligations directly from an issuer for
its own portfolio to take advantage of the lower purchase price
available.

6. Issue any senior security (as such term is
defined
in Section 18(f) of the 1940 Act), except to the extent the
activities permitted under Investment Restriction Nos. 1, 3, 9
and 10 may be deemed to give rise to senior securities.

7. Purchase securities on margin, but each Series
may
make margin deposits in connection with transactions in
options, forward contracts, futures contracts, including those
relating to indexes, and options on futures contracts or
indexes.

8. Invest in the securities of a company for the
purpose of exercising management or control, but each Series
will vote the securities it owns in its portfolio as a
shareholder in accordance with its views.

9. Pledge, mortgage or hypothecate its assets,
except
to the extent necessary to secure permitted borrowings and to
the extent related to the deposit of assets in escrow in
connection with writing covered put and call options and the
purchase of securities on a when-issued or forward commitment
basis and collateral and initial or variation margin
arrangements with respect to options, forward contracts,
futures contracts, including those relating to indexes, and
options on futures contracts or indexes.

10. Purchase, sell or write puts, calls or
combinations
thereof, except as described in the Trust's Prospectus and this
Statement of Additional Information.

11. Enter into repurchase agreements providing for
settlement in more than seven days after notice or purchase
securities which are illiquid, if, in the aggregate, more than
10% of the value of the Series' net assets would be so
invested.

12. Invest in securities of other investment
companies,
except to the extent permitted under the Act.

13. Purchase securities of any company having less
than
three years' continuous operations (including operations of any
predecessors) if such purchase would cause the value of the
Series' investments in all such companies to exceed 5% of the
value of its total assets.

The following investment restrictions numbered 14 and
15
apply only to the Money Market Series. The Money Market Series
may not:

14. Invest more than 5% of its assets in the
obligations of any one issuer, except that up to 25% of the
value of the Money Market Series' total assets may be invested
(subject to Rule 2a-7 under the 1940 Act) without regard to any
such limitation.

15. Invest less than 25% of its total assets in
securities issued by banks or invest more than 25% of its
assets in the securities of issuers in any other industry,
provided that there shall be no limitation on the purchase of
obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities. Notwithstanding the foregoing,
for temporary defensive purposes, the Money Market Series may
invest less than 25% of its total assets in bank obligations.

The following investment restrictions numbered
16
and 17 apply only to the Municipal Money Market Series. The
Municipal Money Market Series may not:

16. Invest more than 25% of its total assets in the
securities of issuers in any single industry, provided that
there shall be no such limitation on the purchase of Municipal
Obligations and, for temporary defensive purposes, obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.

17. Invest more than 5% of its assets in the
obligations of any single issuer, except that up to 25% of the
value of the Series' total assets may be invested, and
securities issued or guaranteed by the U.S. Government, or its
agencies or instrumentalities may be purchased, without regard
to any such limitation.

The following investment restriction number 20,
which is not a fundamental policy, applies to both the Money
Market Series and Municipal Money Market Series. Investment
restriction number 21 applies only to the Municipal Money
Market Series. Neither Series may:

20. Sell securities short.

21. Purchase securities other than Municipal
Obligations and taxable Money Market Instruments.

For purposes of Investment Restriction No. 16,
industrial development bonds, where the payment of principal
and interest is the ultimate responsibility of companies within
the same industry, are grouped together as an "industry."

NOTE: Neither Series has any present intention of engaging in
options, forward contracts, futures contracts, including those
relating to indexes, or options on futures contracts or
indexes.
<PAGE>
Preliminary Copy

FIRST PRAIRIE MONEY MARKET FUND
(MONEY MARKET SERIES)

The undersigned shareholder of the Money Market Series
of First Prairie Money Market Fund (the "Fund") hereby appoints
__________________ and ______________________, and each of
them, the attorneys and proxies of the undersigned, with full
power of substitution, to vote, as indicated herein, all of the
shares of beneficial interest of the Fund standing in the name
of the undersigned at the close of business on December 5,
1994, at a Special Meeting of Shareholders to be held at the
offices of [NAME], [ADDRESS], at __:__ _.m. on Monday, January
16, 1995, and at any and all adjournments thereof, with all of
the powers the undersigned would possess if then and there
personally present and especially (but without limiting the
general authorization and power hereby given) to vote as
indicated on the proposal, as more fully described in the Joint
Proxy Statement/Prospectus for the meeting.

Please mark boxes in blue or black ink.

1. To approve an Agreement and Plan of Exchange
between
the Fund and the Money Market Series of Prairie Funds,
providing for the transfer of substantially all of the assets
of the Fund, subject to its liabilities, and for its subsequent
dissolution.

/__/ FOR /__/ AGAINST /__/ ABSTAIN

2. In their discretion, the proxies are authorized to
vote upon such other business as may properly come before the
meeting, or any adjournment(s) thereof.

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES AND WILL BE
VOTED FOR THE ABOVE PROPOSAL UNLESS OTHERWISE INDICATED.

Signature(s) should be exactly as name or
names appearing on this proxy. If shares
are held jointly, each holder should sign.
If signing is by attorney, executor,
administrator, trustee or guardian, please
give full title.

Dated:____________, 1995

________________________

Signature(s)

________________________

Signature(s)
Sign, Date and Return the Proxy
Card Promptly Using the
Enclosed Envelope
<PAGE>
Preliminary Copy

FIRST PRAIRIE MUNICIPAL MONEY
MARKET FUND

The undersigned shareholder of First Prairie Municipal
Money Market Fund (the "Fund") hereby appoints
__________________ and ______________________, and each of
them, the attorneys and proxies of the undersigned, with full
power of substitution, to vote, as indicated herein, all of the
shares of beneficial interest of the Fund standing in the name
of the undersigned at the close of business on December 5,
1994, at a Special Meeting of Shareholders to be held at the
offices of [NAME], [ADDRESS], at __:__ _.m. on Monday, January
16, 1995, and at any and all adjournments thereof, with all of
the powers the undersigned would possess if then and there
personally present and especially (but without limiting the
general authorization and power hereby given) to vote as
indicated on the proposal, as more fully described in the Joint
Proxy Statement/Prospectus for the meeting.

Please mark boxes in blue or black ink.

1. To approve an Agreement and Plan of Exchange
between
the Fund and the Municipal Money Market Series of Prairie
Funds, providing for the transfer of substantially all of the
assets of the Fund, subject to its liabilities, and for its
subsequent dissolution.

/__/ FOR /__/ AGAINST /__/ ABSTAIN

2. In their discretion, the proxies are
authorized to vote upon
such other business as may properly come before the meeting, or
any adjournment(s) thereof.

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES AND WILL BE
VOTED FOR THE ABOVE PROPOSAL UNLESS OTHERWISE INDICATED.
Signature(s) should be exactly as name or
names appearing on this proxy. If shares
are held jointly, each holder should sign.
If signing is by attorney, executor,
administrator, trustee or guardian, please
give full title.

Dated:______________, 1995

__________________________

Signature(s)

__________________________

Signature(s)

Sign, Date and Return the Proxy
Card Promptly Using the
Enclosed Envelope
<PAGE>
PRAIRIE FUNDS

PART B

STATEMENT OF ADDITIONAL INFORMATION

December __, 1994

Acquisition of the Assets of

MONEY MARKET SERIES OF
FIRST PRAIRIE MONEY MARKET FUND

By and in Exchange for Class A Shares of

MONEY MARKET SERIES
OF PRAIRIE FUNDS

Acquisition of Assets of

FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND

By and in Exchange for Class A Shares of

MUNICIPAL MONEY MARKET SERIES OF
PRAIRIE FUNDS

This Statement of Additional Information, which is not
a
prospectus, supplements and should be read in conjunction with
the Joint Proxy Statement/Prospectus dated December __, 1994,
relating specifically to the proposed transfer of all or
substantially all of the assets and liabilities of (i) the
Money Market Series of First Prairie Money Market Fund in
exchange for Class A shares of the Money Market Series of
Prairie Funds and (ii) First Prairie Municipal Money Market
Fund in exchange for Class A shares of the Municipal Money
Market Series of Prairie Funds. Each such transfer is to occur
pursuant to an Agreement and Plan of Exchange. This Statement
of Additional Information consists of this cover page and the
following described documents, each of which is attached hereto
and incorporated herein by reference:
1. The Statement of Additional Information of
Prairie
Funds dated December __, 1994.
2. The Statement of Additional Information of
First
Prairie Money Market Fund dated April 11, 1994.
3. The Statement of Additional Information of
First
Prairie Municipal Money Market Fund dated April 29,
1994.
The Joint Proxy Statement/Prospectus dated December __,
1994 may be obtained by writing to Prairie Funds, Three First
National Plaza, Chicago, Illinois 60670.
<PAGE>

PRAIRIE FUNDS
- ----------

PROSPECTUS - ____________, 1994

Prairie Funds (the "Trust") is an open-end,
management
investment company, known as a series fund. The Trust permits
investors to invest in any of 12 separate series (the "Funds"),
divided into five general fund types: Asset Allocation; Equity;
Bond; Municipal Bond; and Money Market.

- - ASSET ALLOCATION FUNDS--These Funds will follow an
asset
allocation strategy by investing in equity securities,
fixed-income securities and short-term instruments of
domestic and foreign issuers:

- The MANAGED ASSETS INCOME FUND seeks to
maximize
current income; capital appreciation is a
secondary,
but nonetheless important, goal.

- The MANAGED ASSETS BALANCED FUND seeks to

maximize
total return, consisting of capital
appreciation
and current income, without assuming undue risk.

- - EQUITY FUNDS--These Funds will invest principally in
equity
securities:

- The EQUITY INCOME FUND seeks to provide income;
capital
appreciation and growth of earnings are
secondary, but
nonetheless important, goals. This Fund will
invest
primarily in income-producing equity securities
of
domestic issuers.

- The GROWTH FUND seeks long-term capital
appreciation.
This Fund will invest primarily in equity
securities of
domestic issuers believed by the Fund's
investment
adviser to have above-average growth
characteristics.

- The SPECIAL OPPORTUNITIES FUND seeks long-term
capital
appreciation. This Fund will invest primarily
in
equity securities of small- to medium-sized
emerging
growth domestic issuers that the Fund's
investment
adviser believes are undervalued in the
marketplace.

- The INTERNATIONAL EQUITY FUND seeks long-term
capital
appreciation. This Fund will invest primarily
in
equity securities of foreign issuers.

- - BOND FUNDS--These Funds will invest principally in
fixed- income securities:

- The BOND FUND seeks to provide as high a level
of current income as is consistent with the
preservation
of capital. This Fund will invest in a
portfolio of
U.S. dollar denominated investment grade
fixed-income
securities of domestic and foreign issuers,
without
regard to maturity.

- The INTERNATIONAL BOND FUND seeks to maximize
investment return. This Fund will invest
primarily in
investment grade debt securities of foreign
issuers.

- - MUNICIPAL BOND FUND--This Fund will invest principally
in Municipal Obligations:

- The INTERMEDIATE MUNICIPAL BOND FUND seeks to
provide as high a level of current income exempt from
Federal income tax as is consistent with the
preservation of
capital. This Fund will invest primarily in a
portfolio of investment grade Municipal
Obligations which, under normal conditions, will have a
dollar-weighted average maturity expected to range
between three and ten years.

- - MONEY MARKET FUNDS--These Funds will invest in various
kinds of money market instruments and will seek a
stable
net asset value of $1.00 per share:

- The U.S. GOVERNMENT MONEY MARKET FUND seeks to
provide
as high a level of current income as is
consistent with
the preservation of capital and the maintenance
of
liquidity. This Fund will invest only in
short-term
securities issued or guaranteed as to principal
or
interest by the U.S. Government, its agencies
and
instrumentalities, and repurchase agreements in
respect
of such securities.

- The MONEY MARKET FUND seeks to provide as high
a level
of current income as is consistent with the
preservation of capital and the maintenance of
liquidity. This Fund will invest in short-term
money market instruments.

- The MUNICIPAL MONEY MARKET FUND seeks to
provide as
high a level of current income exempt from
Federal income tax as is consistent with the
preservation of
capital and the maintenance of liquidity. This
Fund will invest in short-term Municipal
Obligations.

First Chicago Investment Management Company
("FIMCO" or
the "Investment Adviser") will serve as each Fund's investment
adviser and administrator. The Investment Adviser has engaged
ANB Investment Management and Trust Company ("ANB-IMC") to serve
as sub-investment adviser to the International Equity Fund and
to
provide day-to-day management of that Fund's investments.

Concord Financial Group, Inc. (the
"Distributor") will
serve as each Fund's distributor.

By this Prospectus, Class A shares of each
Fund, Class
B shares of each Fund other than the U.S. Government Money
Market
and Municipal Money Market Funds, and Class I shares of each
Fund
other than the Money Market Funds, are being offered.

Class A shares of each Fund, other than the Money
Market Funds, are subject to a sales charge imposed at the time
of purchase and Class B shares of each such Fund are subject to
a
contingent deferred sales charge imposed on redemptions made
within up to six years of purchase. Class A and Class B shares
are offered to any investor. Each Fund offers these
alternatives
to permit an investor to choose the method of purchasing shares
that is most beneficial given the amount of the purchase, the
length of time the investor expects to hold the shares and other
circumstances. Class B shares of the Money Market Fund may be
acquired only through the exchange of Class B shares of the
other Funds.

Class I shares are offered without a sales
charge and
are sold only to qualified trust and agency account clients of
FIMCO, The First National Bank of Chicago ("FNBC"), American
National Bank and Trust Company ("ANB") or their affiliates and
to certain qualified employee benefit plans or other programs.

Other differences between the Classes include
the
services offered to and expenses borne by each Class and certain
voting rights, as described herein.

Fund shares are not deposits or obligations of,
or
guaranteed by, any bank, and are not federally insured by the
Federal Deposit Insurance Corporation ("FDIC"), the Federal
Reserve Board, or any other agency. Fund shares involve certain
investment risks, including the possible loss of principal. For
all Funds other than the Money Market Funds, investors should
recognize that the share price, yield and investment return of
each Fund fluctuate and are not guaranteed.

For the Money Market Funds, investors should
recognize
that an investment in a Money Market Fund is neither insured nor
guaranteed by the U.S. Government. There can be no assurance
that the Money Market Funds will be able to maintain a stable
net
asset value of $1.00 per share.

______________________

This Prospectus sets forth concisely
information
about
the Trust and Funds that an investor should know before
investing. It should be read and retained for future reference.

Part B (also known as the Statement of
Additional
Information), dated ____________, 1994, which may be revised
from
time to time, provides a further discussion of certain areas in
this Prospectus and other matters which may be of interest to
some investors. It has been filed with the Securities and
Exchange Commission and is incorporated herein by reference.
For
a free copy, write to the Trust at
___________________________________________________ or call

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

________________________________________________________________

Table of Contents

Fee Table
Highlights
Description of the Funds
Alternative Purchase Methods
How to Buy Shares
Shareholder Services
How to Redeem Shares
Management of the Trust
Distribution Plan and Shareholder Services Plan
Dividends, Distributions and Taxes
Performance Information
General Information
Appendix

<PAGE>

<TABLE>

FEE TABLE

<CAPTION>
CLASS A CLASS B CLASS I
INTERMEDIATE ALL INTERMEDIATE ALL OTHER ALL FUNDS
SHAREHOLDER TRANACTION MONEY MARKET MUNICIPAL OTHER MUNICIPAL FUNDS OFFERING OFFERING
EXPENSES FUNDS BOND FUND FUNDS BOND FUND CLASS B CLASS I
<S> <C> <C> <C> <C> <C> <C>
Maximum Sales Charge
Imposed On Purchases
(as percentage of
offering price) None 3.00% 4.50% None None None

Sales Charge On
Reinvested Dividends None None None None None None

Maximum Deferred Sales
Charge Imposed On
Redemption (as a
percentage of the amount
subject to charge) None None* None* 3.00% 5.00% None

Redemption Fees None None None None None None

Exchange Fees None None None None None None

________________________
* A contingent deferred sales charge of up to 1.00% may be
assessed on certain redemptions of Class A shares purchased
without an
initial sales charge as part of an investment of $1 million
or more.

</TABLE>

(Fee Table continued on next page)
<PAGE>

FEE TABLE
(continued)
<TABLE>

Annual Fund Operating Expenses
(as a percentage of average daily
net assets)
<CAPTION>

EXAMPLE
AN INVESTOR WOULD PAY THE
FOLLOWING EXPENSES ON A $1,000
INVESTMENT, ASSUMING (1) 5% ANNUAL
TOTAL RETURN AND (2) REDEMPTION AT
MANAGEMENT 12B-1 OTHER OPERATING THE END OF EACH TIME PERIOD:
CLASS A SHARES FEES FEES EXPENSES EXPENSES 1 YEAR 3 YEARS
<S> <C> <C> <C> <C> <C> <C>
Asset Allocation Funds:
Managed Assets Income Fund .65% none ___% ___% $___ $___
Managed Assets Balanced Fund .65% none ___%* ___%* $___ $___

Equity Funds:
Equity Income Fund .50% none ___% ___% $___ $___
Growth Fund .65% none ___% ___% $___ $___
Special Opportunities Fund .70% none ___% ___% $___ $___
International Equity Fund .80% none ___% ___% $___ $___

Bond Funds:
Bond Fund .55% none ___% ___% $___ $___
International Bond Fund .70% none ___%* ___%* $___ $___

Municipal Bond Fund:
Intermediate Municipal Bond Fund .40% none ___% ___% $___ $___

Money Market Funds:
U.S. Government Money Market Fund .55% none ___%* ___%* $___ $___
Money Market Fund .55% none ___%* ___%* $___ $___
Municipal Money Market Fund .55% none ___%* ___%* $___ $___

_______________________________________
* After expense reimbursements or fee waivers.
</TABLE>

(Fee Table continued on next page)
<PAGE>

FEE TABLE
(continued)

<TABLE>

Annual Fund Operating Expenses
(as a percentage of average daily
net assets)
<CAPTION>

EXAMPLE

AN INVESTOR WOULD PAY THE
FOLLOWING EXPENSES ON A $1,000
INVESTMENT, ASSUMING (1) 5% ANNUAL
TOTAL RETURN AND (2) REDEMPTION AT
MANAGEMENT 12B-1 OTHER OPERATING THE END OF EACH TIME PERIOD:
CLASS B SHARES FEES FEES EXPENSES EXPENSES 1 YEAR 3 YEARS
<S> <C> <C> <C> <C> <C> <C>
Asset Allocation Funds:
Managed Assets Income Fund .65% .75% ___% ___% $___ $___/$___**
Managed Assets Balanced Fund .65% .75% ___%* ___%* $___ $___/$___**

Equity Funds:
Equity Income Fund .50% .75% ___% ___% $___ $___/$___**
Growth Fund .65% .75% ___% ___% $___ $___/$___**
Special Opportunities Fund .70% .75% ___% ___% $___ $___/$___**
International Equity Fund .80% .75% ___% ___% $___ $___/$___**

Bond Funds:
Bond Fund .55% .75% ___% ___% $___ $___/$___**
International Bond Fund .70% .75% ___%* ___%* $___ $___/$___**

Municipal Bond Fund:
Intermediate Municipal Bond Fund .40% .50% ___% ___% $___ $___/$___**

Money Market Funds:
Money Market Fund .55% .75% ___% ___% $___ $___

___________________________

* After expense reimbursements or fee waivers.
** Assuming no redemption of Class B shares.

</TABLE>
(Fee Table continued on next page)

<PAGE>
FEE TABLE
(continued)

<TABLE>

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

EXAMPLE
AN INVESTOR WOULD PAY THE
FOLLOWING EXPENSES ON A $1,000
INVESTMENT, ASSUMING (1) 5% ANNUAL
TOTAL RETURN AND (2) REDEMPTION AT
MANAGEMENT 12B-1 OTHER OPERATING THE END OF EACH TIME PERIOD:
CLASS I SHARES FEES FEES EXPENSES* EXPENSES* 1 YEAR 3 YEARS
<S> <C> <C> <C> <C> <C> <C>
Asset Allocation Funds:
Managed Assets Balanced Fund .65% none ___% ___% $___ $___
Managed Assets Income Fund .65% none ___% ___% $___ $___

Bond Funds:
Bond Fund .55% none ___% ___% $___ $___
International Bond Fund .70% none ___% ___% $___ $___

Municipal Bond Fund:
Intermediate Municipal Bond Fund .40% none ___% ___% $___ $___

_____________________
* After expense reimbursements or fee waivers.
</TABLE>

- ---------------------------------------------------------------
THE AMOUNTS LISTED IN THE EXAMPLES SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE
GREATER OR LESS THAN THOSE INDICATED. MOREOVER, WHILE EACH
EXAMPLE ASSUMES A 5% ANNUAL RETURN, A FUND'S ACTUAL PERFORMANCE
WILL VARY AND MAY RESULT IN AN ACTUAL RETURN GREATER OR LESS
THAN 5%.
- ---------------------------------------------------------------

The purpose of the foregoing table is to assist
investors in understanding the various costs and expenses that
investors in a Fund will bear, directly or indirectly, the
payment of which will reduce investors' return on an annual
basis. Long-term investors in Class B shares of a Fund could
pay more in 12b-1 fees than the economic equivalent of paying a
front-end sales charge. Other Expenses and Total Operating
Expenses are based on estimated amounts for the current fiscal
year. Other Expenses and Total Operating Expenses noted above,
without expense reimbursements or fee waivers, would be
increased, with respect to Class A and Class B, by ____% for
the Managed Assets Balanced Fund, ____% for the International
Bond Fund, .__% for the U.S. Government Money Market Fund, .__%
for the Money Market Fund and .__% for the Municipal Money
Market Fund, and, with respect to Class I, by .__% for each of
the International Equity Fund and International Bond Fund and
.__% for each other Fund. With respect to each Fund, the
Investment Adviser has undertaken until such time as it gives
investors at least 60 days' notice to the contrary that if, in
any fiscal year, certain expenses of the Fund, including the
investment advisory fee, exceed the Total Operating Expenses
noted above in the table for such Fund, the Investment Adviser
may waive a portion of its investment advisory fee or bear
certain other expenses to the extent of such excess expense.
FIMCO, FNBC, ANB and their affiliates and certain Service
Agents (as defined below) may charge their clients direct fees
for effecting transactions in Fund shares; such fees are not
reflected in the foregoing table. See "How to Buy Shares,"
"Management of the Trust" and "Distribution Plan and
Shareholder Services Plan."
<PAGE>
HIGHLIGHTS

The following summary is qualified in its
entirety by
the more detailed information appearing elsewhere in this
Prospectus.

THE TRUST The Trust is an open-end, management investment
company, known as a series fund. The Trust currently has
established 12 series.

INVESTMENT OBJECTIVES AND MANAGEMENT POLICIES Each Fund's
investment objective is set forth on the cover page of this
Prospectus. The differences in objectives and policies among
the Funds determine the types of portfolio securities in which
each Fund invests and can be expected to affect the degree of
risk to which each Fund is subject and each Fund's yield or
return. The Funds' management policies are described on the
page of this Prospectus indicated below.

Name of Fund Page
Managed Assets Income Fund
Managed Assets Balanced Fund
Equity Income Fund
Growth Fund
Special Opportunities Fund
International Equity Fund
Bond Fund
International Bond Fund
Intermediate Municipal Bond Fund
U.S. Government Money Market Fund
Money Market Fund
Municipal Money Market Fund

INVESTMENT ADVISER AND ADMINISTRATOR First Chicago Investment
Management Company is each Fund's investment adviser and
administrator. The Trust has agreed to pay the Investment
Adviser an annual fee as set forth under "Management of the
Trust." The Investment Adviser has engaged ANB-IMC to serve as
sub-investment adviser to the International Equity Fund.

ALTERNATIVE PURCHASE METHODS Each Fund offers Class A shares;
each Fund, other than the U.S. Government Money Market and
Municipal Money Market Funds, offers Class B shares; and each
Fund, other than the Money Market Funds, offers Class I shares.
Each Class A, Class B and Class I share represents an identical
pro rata interest in the relevant Fund's investment portfolio.

Class A shares are sold at net asset value per
share
plus, for each Fund, other than the Money Market Funds, an
initial sales charge imposed at the time of purchase. The
initial sales charge may be reduced or waived for certain
purchases. See "How to Buy Shares--Class A Shares." Class A
shares of each Fund are subject to an annual service fee.

Class B shares are sold at net asset value per
share
with no initial sales charge at the time of purchase; as a
result, the entire purchase price is immediately invested in
the Fund. Class B shares are subject to a contingent deferred
sales charge ("CDSC"), which is assessed only if the Class B
shares are redeemed within six years (five years in the case of
Intermediate Municipal Bond Fund) of purchase. Class B shares
of the Money Market Fund may be acquired only through the
exchange of Class B shares of the other Funds and are subject
to the CDSC, if any, of the shares with which the exchange is
made. See "How to Redeem Shares--Contingent Deferred Sales
Charge--Class B Shares." Class B shares are subject to an
annual distribution fee and service fee. The distribution fee
paid by Class B will cause Class B to have a higher expense
ratio and to pay lower dividends than Class A. Approximately
eight years after the date of purchase, Class B shares
automatically will convert to Class A shares, based on the
relative net asset values for shares of each such Class, and
will no longer be subject to a distribution fee.

Class I shares are sold at net asset value with
no
sales charge. Class I shares are offered exclusively to
qualified trust and agency account clients of FNBC, ANB or
their affiliates ("Fiduciary Accounts") and qualified benefit
plans or other programs with assets in excess of $100 million
("Eligible Retirement Plans"). Class I shares held by
investors who after purchasing Class I shares terminate their
Fiduciary Accounts automatically will convert to Class A
shares, based on the relative net asset values for shares of
each such Class.

See "Alternative Purchase Methods."

<TABLE>

Historical Performance Information

Composite Performance for the
Predecessor Funds for Various Average Annual
Periods Ended September 30, 1994 Total Return

CLASS A SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
ASSET ALLOCATION FUNDS:
Managed Assets Balanced Fund (1) N/A N/A N/A N/A
Managed Assets Income Fund (2)
EQUITY FUNDS:
Equity Income Fund (3)
Growth Fund (3)
Special Opportunities Fund (3)
International Equity Fund (1) N/A N/A N/A N/A
BOND FUNDS:
Bond Fund (3)
International Bond Fund (3)
MUNICIPAL BOND FUND:
Intermediate Municipal Bond Fund (2)
MONEY MARKET FUNDS:
U.S. Government Money Market Fund (2)
Money Market Fund (2)
Municipal Money Market Fund (2)

_______________________________________
<PAGE>

</TABLE>
<TABLE>

CLASS B SHARES 1 YEAR 3YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
ASSET ALLOCATION FUNDS:
Managed Assets Balanced Fund (1) N/A N/A N/A N/A
Managed Assets Income Fund (2)
EQUITY FUNDS:
Equity Income Fund (3)
Growth Fund (3)
Special Opportunities Fund (3)
International Equity Fund (1) N/A N/A N/A N/A
BOND FUNDS:
Bond Fund (3)
International Bond Fund (3)
MUNICIPAL BOND FUND:
Intermediate Municipal Bond Fund (2)
MONEY MARKET FUND:
Money Market Fund (2)

_______________________________________

<PAGE>

</TABLE>
<TABLE>

CLASS I SHARES 1 YEAR 3YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
ASSET ALLOCATION FUNDS:
Managed Assets Balanced Fund (1) N/A N/A N/A N/A
Managed Assets Income Fund (2)
EQUITY FUNDS:
Equity Income Fund (3)
Growth Fund (3)
Special Opportunities Fund (3)
International Equity Fund (1) N/A N/A N/A N/A
BOND FUNDS:
Bond Fund (3)
International Bond Fund (3)
MUNICIPAL BOND FUND:
Intermediate Municipal Bond Fund (2)
_______________________________________
</TABLE>

(1) No predecessor exists; thus, no prior performance
information is available.

(2) The Fund will commence operations through a transfer of
assets from an investment company advised by FNBC, using
substantially
the same investment objective, policies, restrictions and
methodologies as the Fund. The predecessor funds are: for
Managed
Assets Income Fund, First Prairie Diversified Asset Fund;
for Intermediate Municipal Bond Fund, the Intermediate Series of
First Prairie Municipal Bond Fund; for U.S. Government
Money Market Fund, the Government Series of First Prairie Money
Market
Fund; for Money Market Fund, the Money Market Series of
First Prairie Money Market Fund; and for Municipal Money Market
Fund,
First Prairie Municipal Money Market Fund. The performance
shown is that of the predecessor fund.

(3) The Fund will commence operations through a transfer of
assets from a common trust fund managed by FNBC, using
substantially
the same investment objective, policies, restrictions and
methodologies as the Fund. The common trust fund did not charge
any
expenses. The performance information reflects the
operating expenses that are expected to be charged as more fully
set forth
in the Fee Table above.

The historical pro-forma performance information presented
above for each Fund is deemed relevant because the predecessor
was
advised by FNBC which reorganized the personnel responsible for
advising the predecessor into FIMCO, its wholly-owned
subsidiary,
which will manage the Fund, using substantially the same
investment objective, policies, restrictions and methodologies
as those
used by the Fund. However, this performance information is not
necessarily indicative of the future performance of any Fund.
Because each Fund will be actively managed, its investments will
vary from time to time and will not be identical to the past
portfolio investments of the predecessor. Each Fund's
performance will fluctuate so that an investor's shares, when
redeemed, may
be worth more or less than their original cost.

HOW TO BUY SHARES Orders for the purchase of Class A and Class
B shares may be placed through a number of institutions
including
FIMCO, FNBC, ANB and their affiliates, including First Chicago
Investment Services, Inc. ("FCIS"), a registered broker-dealer,
the
Distributor and certain banks, securities dealers and other
industry professionals such as investment advisers, accountants
and
estate planning firms (collectively, "Service Agents").

Investors purchasing Class I shares through
their Fiduciary Accounts at FNBC, ANB or their affiliates should
contact such
entity directly for appropriate instructions, as well as for
information about conditions pertaining to the account and any
related
fees. Class I shares may be purchased for a Fiduciary Account
or Eligible Retirement Plan only by a custodian, trustee,
investment
manager or other entity authorized to act on behalf of such
Account or Plan.

The minimum initial investment is $1,000. All
subsequent investments must be at least $100.

See "How to Buy Shares."

SHAREHOLDER SERVICES The Trust offers Fund shareholders certain
services and privileges including: Exchange Privilege, Letter
of
Intent and Automatic Investment Plan. Certain services and
privileges may not be available through all Service Agents.

HOW TO REDEEM SHARES Generally, investors should contact their
representatives at FIMCO, FNBC, ANB or appropriate Service Agent
for
redemption instructions. Investors who are not clients of
FIMCO, FNBC, ANB or a Service Agent may redeem Fund shares by
written
request to the Trust's transfer agent.

See "How to Redeem Shares."

DESCRIPTION OF THE FUNDS

GENERAL

The Trust is a "series fund," which is a mutual
fund divided into separate portfolios. Each portfolio is
treated
as a
separate entity for certain matters under the Investment Company
Act of 1940, as amended (the "1940 Act"), and for other
purposes,
and a shareholder of one portfolio is not deemed to be a
shareholder of any other portfolio. As described below, for
certain
matters Trust shareholders vote together as a group; as to
others they vote separately by portfolio. By this Prospectus,
shares of
12 of the Trust's portfolios are being offered: five
diversified portfolios (the "Diversified Funds")--Managed Assets
Income Fund,
Managed Assets Balanced Fund, U.S. Government Money Market Fund,
Money Market Fund and Municipal Money Market Fund--and seven
non-
diversified portfolios (the "Non-Diversified Funds")--Equity
Income Fund, Special Opportunities Fund, Growth Fund,
International
Equity Fund, Bond Fund, International Bond Fund and Intermediate
Municipal Bond Fund. From time to time, other portfolios may be
established and sold pursuant to other offering documents. See
"General Information."

INVESTMENT OBJECTIVES

Each Fund's investment objective is set forth
on the cover page of this Prospectus. The differences in
objectives
and
policies among the Funds determine the types of portfolio
securities in which each Fund invests and can be expected to
affect the
degree of risk to which each Fund is subject and each Fund's
yield or return. See "Management Policies" below, and
"Appendix."
Each Fund's investment objective cannot be changed without
approval by the holders of a majority (as defined in the 1940
Act) of
such Fund's outstanding voting securities. There can be no
assurance that each Fund's investment objective will be
achieved.

MANAGEMENT POLICIES

The following section should be read in
conjunction with "Certain Portfolio Securities" and "Investment
Techniques"
in the
Appendix.

ASSET ALLOCATION FUNDS--Each of the Managed Assets Income Fund
and Managed Assets Balanced Fund will follow an asset allocation
strategy by investing in equity, fixed-income and short-term
securities of domestic and foreign issuers. For each Asset
Allocation
Fund, the asset classes, market sectors, securities and
portfolio strategies selected will be those that the Investment
Adviser
believes prudent and offer the greatest potential for achieving
the relevant Asset Allocation Fund's investment objective. The
Investment Adviser has broad latitude in selecting investments
and portfolio strategies.

The equity securities in which each Asset
Allocation Fund may invest consist of common stocks, preferred
stocks and
convertible securities, including those in the form of
depositary receipts, as well as warrants to purchase such
securities
(collectively, "Equity Securities"). The fixed-income
securities in which each Asset Allocation Fund may invest
include bonds and
debentures (including those that are convertible), notes,
mortgage-related securities, asset-backed securities, municipal
obligations and convertible debt obligations (collectively,
"Fixed-Income Securities"), with maturities of more than three
years.
The short-term securities which may be purchased by an Asset
Allocation Fund include fixed-income securities with maturities
of less
than three years at the time of purchase, and money market
instruments of the type in which the Money Market Fund invests
(collectively, "Money Market Instruments"), as described below.

Each Asset Allocation Fund's portfolio of debt
securities will consist primarily of those which are rated no
lower
than
Baa by Moody's Investors Service, Inc. ("Moody's") or BBB by
Standard & Poor's Corporation ("S&P"), Fitch Investors Service,
Inc.
("Fitch") or Duff & Phelps, Inc. ("Duff"), or, if unrated,
deemed to be of comparable quality by the Investment Adviser.
Debt
securities rated Baa by Moody's or BBB by S&P, Fitch or Duff are
considered investment grade obligations which lack outstanding
investment characteristics and may have speculative
characteristics as well. The Managed Assets Balanced Fund may
invest up to 20%
of its net assets in debt securities rated below investment
grade and the Managed Assets Income Fund may invest up to 5% of
its net
assets in convertible bonds rated below investment grade. See
"Risk Factors--Lower Rated Securities" below.
<PAGE>
The following table sets forth for each Asset
Allocation Fund the asset classes, benchmark percentages and
asset
class
strategy ranges within which the Investment Adviser intends to
manage the Fund's assets:

<TABLE>

<CAPTION>
MANAGED ASSETS MANAGED ASSETS
INCOME FUND BALANCED FUND
ASSET BENCHMARK STRATEGY BENCHMARK STRATEGY
CLASS PERCENTAGE RANGE PERCENTAGE RANGE
<S> <C> <C> <C> <C>
Equity 25% 5-45% 50% 30-70%
Fixed-Income 55% 35-75% 40% 25-60%
Short-Term 20% 0-40% 10% 0-30%
</TABLE>

"Benchmark percentage" represents the asset mix the
Investment Adviser would expect to maintain when its assessment
of economic conditions and investment opportunities indicate
that the financial markets are fairly valued relative to each
other. The asset class "strategy range" indicates ordinarily
expected variations from this benchmark and reflects the fact
that the Investment Adviser expects to make policy weight
shifts within specific asset classes. Under normal conditions,
the Investment Adviser expects to adhere to the asset class
strategy ranges set forth above; however, the Investment
Adviser reserves the right to vary, except as noted below, the
asset class mix and the percentage of securities invested in
any asset class or market from the benchmark percentages and
asset class strategy ranges set forth above as the risk/return
characteristics of either markets or asset classes, as assessed
by the Investment Adviser, vary over time. In any event, at
least 25% of the Managed Assets Balanced Fund's total assets
under normal market conditions will be invested in Fixed-Income
Securities. When the Investment Adviser determines that
adverse market conditions exist, each Asset Allocation Fund may
adopt a temporary defensive posture and invest its entire
portfolio in Money Market Instruments. Each Asset Allocation
Fund will invest in substantially the same securities within an
investment class. The amount of each Asset Allocation Fund's
aggregate assets invested in a particular investment class, and
thus in particular securities, will differ, but the relative
percentage that a particular security comprises within an
investment class ordinarily will remain substantially the same.
The asset allocation mix selected will be a primary determinant
in the respective Asset Allocation Fund's investment
performance.

Each Asset Allocation Fund also may engage in
futures
and options transactions and other derivative securities
transactions, such as interest rate and equity index swaps,
leveraging, short-selling, foreign exchange transactions and
lending portfolio securities, each of which involves risk. See
"Risk Factors" below and "Appendix--Investment Techniques."

EQUITY FUNDS--Each of the Equity Income Fund, Growth Fund,
Special Opportunities Fund and International Equity Fund (the
"Equity Funds") will invest at least 65% of the value of its
total assets (except when maintaining a temporary defensive
position) in Equity Securities, as defined under "Asset
Allocation Funds" above.

Each Equity Fund may invest, in anticipation of
otherwise investing cash positions, to meet asset segregation
or margin requirements or as otherwise noted below, in Money
Market Instruments. Under normal market conditions, no Equity
Fund expects to have a substantial portion of its assets
invested in Money Market Instruments. However, when the
Investment Adviser determines that adverse market conditions
exist, an Equity Fund may adopt a temporary defensive posture
and invest entirely in Money Market Instruments.

Each Equity Fund also may invest in
Fixed-Income
Securities (as defined under "Asset Allocation Funds" above) to
the extent described below.

Each Equity Fund also may engage in futures and
options transactions and other derivative securities
transactions, such as equity index swaps, leveraging, short-
selling and lending portfolio securities, and, except for the
Equity Income Fund, may engage in foreign exchange
transactions, each of which involves risk. See "Risk Factors"
below and "Appendix--Investment Techniques."

- - The EQUITY INCOME FUND will invest primarily in income-
producing Equity Securities of domestic issuers. The
Investment Adviser will be particularly alert to
companies
which pay above-average dividends, yet offer
opportunities
for capital appreciation and growth of earnings. In
addition, the Fund may invest up to 35% of the value of
its net assets in convertible debt securities that
generally have features similar to both common stocks
and
bonds and offer the potential for current income and
capital appreciation over time.

While the Fund will invest primarily in Equity
Securities
of domestic issuers, the Fund also may invest in
depository receipts of foreign issuers. The Fund also
may
invest in Fixed-Income Securities and Money Market
Instruments based on the Investment Adviser's assessment
of economic conditions and investment opportunities.
The
Fixed-Income Securities, other than convertible debt
securities, in which the Fund may invest must be rated
investment grade, or, if unrated, deemed to be of
comparable quality by the Investment Adviser. The
convertible debt securities in which the Fund may invest
may be rated lower than investment grade. See "Risk
Factors--Lower Rated Securities" below.

- - The GROWTH FUND will invest primarily in Equity
Securities
of domestic issuers believed by the Investment Adviser
to
have above-average growth characteristics. The
Investment
Adviser will consider some of the following factors in
making its investment decisions: the development of new
or improved products or services, a favorable outlook
for
growth in the industry, patterns of increasing sales and
earnings, the probability of increased operating
efficiencies, cyclical conditions, or other signs that
the
company is expected to show greater than average
earnings growth and capital appreciation.

While the Fund will invest primarily in Equity
Securities
of domestic issuers, the Fund also may invest in
depository receipts of foreign issuers and may invest up
to 20% of its total assets (valued at the time of
investment) in Equity Securities of foreign issuers.
The
Fund also may invest in Fixed-Income Securities which,
other than convertible debt securities, are rated
investment grade, or, if unrated, deemed to be of
comparable quality by the Investment Adviser. The Fund
may invest in convertible debt securities rated lower
than
investment grade. See "Risk Factors--Lower Rated
Securities" below.

- The SPECIAL OPPORTUNITIES FUND will invest
primarily
in Equity Securities of small- to medium-sized
emerging growth domestic issuers that the
Investment
Adviser believes are undervalued in the
marketplace.
The Investment Adviser will consider some of
the
following factors in making its investment
decisions:
high quality management, significant equity
ownership
positions by management, a leading or dominant
position in a major product line, a sound
financial
position and a relatively high rate of return
on
invested capital. The Fund also may invest in
companies that offer the possibility of
accelerating
earnings growth because of management changes,
new
products or structural changes in industry or
the economy.

- - The INTERNATIONAL EQUITY FUND will invest in Equity
Securities of issuers located throughout the world,
except
the United States. As a neutral position, the Fund will
hold Equity Securities of issuers located in the
countries
which constitute the Morgan Stanley Capital
International-
Europe, Australia and Far East ("EAFE") Index. The EAFE
Index is a broadly diversified international index
composed of the Equity Securities of approximately 1,000
companies located outside the United States. Building
on
this base, the Investment Adviser and ANB-IMC will shift
the Fund's holdings to emphasize or de-emphasize regions
of the international market based on such region's
relative attractiveness. In making these shifts, the
Investment Adviser and ANB-IMC will use a computer-based
model which takes into account a number of factors,
including relative economic strength, relative inflation
rates, relative valuation of equity markets, bond yield
differentials, forecasts of trade flows and financial
market volatility.

The Fund will seek to identify those countries offering
the greatest relative potential investment return,
rather
than selecting individual companies in each country
which
will outperform the major stock index of their
respective
countries. Thus, the individual stocks selected will
generally be chosen through a statistical procedure to
approximate the investment performance of the relevant
country index. The Fund is not an index fund and is
neither sponsored by nor affiliated with Morgan Stanley
Capital International.

BOND FUNDS--Each of the Bond Fund and International Bond Fund
(the "Bond Funds") will invest at least 65% of the value of its
total assets (except when maintaining a temporary defensive
position) in bonds, debentures and other debt instruments.
Each Bond Fund will invest in Fixed-Income Securities. When
management believes it advisable for temporary defensive
purposes or in anticipation of otherwise investing cash
positions, each Bond Fund may invest in Money Market
Instruments.

Each Bond Fund also may engage in futures and
options
transactions and other derivative securities transactions, such
as interest rate swaps, leveraging, short-selling and lending
portfolio securities, and the International Bond Fund may
engage in foreign exchange transactions, each of which involves
risk. See "Risk Factors" below and "Appendix--Investment
Techniques."

- - The BOND FUND will invest in a broad range of U.S.
dollar
denominated investment grade Fixed-Income Securities of
domestic and foreign issuers, without regard to
maturity.

The Fund also may invest in Fixed-Income Securities
which,
while not rated, are determined by the Investment
Adviser
to be of comparable quality to those rated securities in
which the Fund may invest.

- - The INTERNATIONAL BOND FUND will invest in Fixed-Income
Securities of issuers located throughout the world,
except
the United States. The Fund also may invest in
convertible preferred stocks. The Fund may hold foreign
currency, and may purchase debt securities or hold
currencies in combination with forward currency exchange
contracts. The Fund will be alert to opportunities to
profit from fluctuations in currency exchange rates.
The
Fund will be particularly alert to favorable arbitrage
opportunities (such as those resulting from favorable
interest rate differentials) arising from the relative
yields of the various types of securities in which the
Fund may invest and market conditions generally. The
Fund
may invest without restriction in companies in, or
governments of, developing countries. Developing
countries have economic structures that are generally
less
diverse and mature, and political systems that are less
stable, than those of developed countries. The markets
of
developing countries may be more volatile than the
markets
of more mature economies; however, such markets may
provide higher rates of return to investors. See "Risk
Factors--Investing in Foreign Securities" below.

At least 65% of the value of
the Fund's
net assets will consist of Fixed-Income Securities
which, at the time of purchase, are rated at least investment
grade, or, if unrated, deemed to be of comparable
quality by the Investment Adviser. The Fund may invest up to
35% of the value of its net assets in Fixed-Income
Securities
rated lower than investment grade. See "Risk Factors--
Lower Rated Securities" below.

MUNICIPAL FUNDS--It is a fundamental policy of the Intermediate
Municipal Bond Fund (the "Municipal Bond Fund" and, together
with the Municipal Money Market Fund, the "Municipal Funds")
that it will invest (except when maintaining a temporary
defensive position) at least 80% of the value of its net assets
in Municipal Obligations and at least 65% of the value of its
total assets in bonds, debentures and other debt instruments.
Municipal Obligations in which the Municipal Funds will invest
are debt obligations issued by states, territories and
possessions of the United States and the District of Columbia
and their political subdivisions, agencies and
instrumentalities, or multi-state agencies or authorities, the
interest from which is, in the opinion of bond counsel to the
issuer, exempt from Federal income tax.

From time to time, each Municipal Fund may
invest
more than 25% of the value of its total assets in industrial
development bonds which, although issued by industrial
development authorities, may be backed only by the assets and
revenues of the non-governmental users. Interest on Municipal
Obligations (including certain industrial development bonds)
which are specified private activity bonds, as defined in the
Internal Revenue Code of 1986, as amended (the "Code"), issued
after August 7, 1986, while exempt from Federal income tax, is
a preference item for the purpose of the alternative minimum
tax. Where a regulated investment company receives such
interest, a proportionate share of any exempt-interest dividend
paid by the investment company may be treated as such a
preference item to the shareholder. Each Municipal Fund may
invest without limitation in such Municipal Obligations if the
Investment Adviser determines that their purchase is consistent
with the Fund's investment objective. See "Risk Factors--
Municipal Obligations" below.

From time to time, on a temporary basis other
than
for temporary defensive purposes (but not to exceed 20% of the
value of the Fund's net assets) or for temporary defensive
purposes, each Municipal Fund may invest in taxable Money
Market Instruments. Dividends paid by the Fund that are
attributable to income earned by it from these securities will
be taxable to investors. See "Dividends, Distributions and
Taxes." Under normal market conditions, the Trust anticipates
that not more than 5% of the value of a Municipal Fund's total
assets will be invested in any one category of these
securities.

- - The INTERMEDIATE MUNICIPAL BOND FUND will invest in a
portfolio of Municipal Obligations which, under normal
market conditions, will have a dollar-weighted average
maturity expected to range between three and ten years.
The Fund will purchase Municipal Obligations only if
rated
investment grade, or, if unrated, determined by the
Investment Adviser to be of the comparable quality to
the
rated securities in which the Fund may invest. The Fund
also may engage in futures and options transactions and
lending portfolio securities, each of which involves
risk.
See "Risk Factors" below and "Appendix--Investment
Techniques."

MONEY MARKET FUNDS--Each of the U.S. Government Money Market
Fund, Money Market Fund and Municipal Money Market Fund (the
"Money Market Funds") seeks to maintain a net asset value of
$1.00 per share for purchases and redemptions. To do so, the
Trust uses the amortized cost method of valuing each Money
Market Fund's securities pursuant to Rule 2a-7 under the 1940
Act, certain requirements of which are summarized below.

In accordance with Rule 2a-7, each Money Market
Fund
is required to maintain a dollar-weighted average portfolio
maturity of 90 days or less, purchase only instruments having
remaining maturities of 13 months or less and invest only in
U.S. dollar denominated securities determined in accordance
with procedures established by the Board of Trustees to present
minimal credit risks and, in the case of the Money Market Fund
and Municipal Money Market Fund, which are rated in one of the
two highest rating categories for debt obligations by at least
two nationally recognized statistical rating organizations (or
one rating organization if the instrument was rated by only one
such organization) or, if unrated, are of comparable quality as
determined in accordance with procedures established by the
Board of Trustees. The nationally recognized statistical
rating organizations currently rating instruments of the type
the Money Market Fund and Municipal Money Market Fund may
purchase are Moody's, S&P, Duff, Fitch, IBCA Limited and IBCA
Inc., and Thomson BankWatch, Inc. and their rating criteria are
described in the Appendix to the Trust's Statement of
Additional Information. For further information regarding the
amortized cost method of valuing securities, see "Determination
of Net Asset Value" in the Trust's Statement of Additional
Information. There can be no assurance that each Money Market
Fund will be able to maintain a stable net asset value of $1.00
per share.

- - The U.S. GOVERNMENT MONEY MARKET FUND will invest only
in
short-term securities issued or guaranteed as to
principal
or interest by the U.S. Government, its agencies or
instrumentalities and may enter into repurchase
agreements. The Fund also may lend securities from its
portfolio as described under "Appendix--Investment
Techniques."

- - The MONEY MARKET FUND will invest in short-term money
market obligations, including securities issued or
guaranteed by the U.S. Government or its agencies or
instrumentalities, certificates of deposit, time
deposits,
bankers' acceptances and other short-term obligations
issued by domestic banks, foreign branches of domestic
banks, foreign subsidiaries of domestic banks, domestic
and foreign branches of foreign banks and thrift
institutions, repurchase agreements, and high quality
domestic and foreign commercial paper and other
short-term
corporate obligations, including those with floating or
variable rates of interest. In addition, the Money
Market
Fund is permitted to lend portfolio securities and enter
into reverse repurchase agreements to the extent
described
under "Appendix--Investment Techniques." During normal
market conditions, at least 25% of the Fund's total
assets
will be invested in bank obligations.

The Fund will not invest more
than 5% of
its total assets in the securities (including the
securities collateralizing a repurchase agreement) of,
or
subject to puts issued by, a single issuer, except that
(i) the Fund may invest more than 5% of its total assets
in a single issuer for a period of up to three business
days in certain limited circumstances, (ii) the Fund may
invest in obligations issued or guaranteed by the U.S.
Government without any such limitation, and (iii) the
limitation with respect to puts does not apply to
unconditional puts if no more than 10% of the Money
Market
Fund's total assets is invested in securities issued or
guaranteed by the issuer of the unconditional put.
Investments in rated securities not rated in the highest
category by at least two rating organizations (or one
rating organization if the instrument was rated by only
one such organization), and unrated securities not
determined by the Board of Trustees to be comparable to
those rated in the highest category, will be limited to
5%
of the Money Market Fund's total assets, with the
investment in any one such issuer being limited to no
more
than the greater of 1% of the Fund's total assets or
$1,000,000. As to each security, these percentages are
measured at the time the Money Market Fund purchases the
security.

- - The MUNICIPAL MONEY MARKET FUND will invest at least 80%
of the value of its net assets (except when maintaining
a
temporary defensive position) in short-term Municipal
Obligations. Subject to the requirements of Rule 2a-7,
the Fund will engage in management policies that are
substantially identical to those of the Intermediate
Municipal Bond Fund. See "Appendix--Certain Portfolio
Securities--Municipal Obligations." The Fund also may
lend securities from its portfolio as described under
"Appendix--Investment Techniques."

CERTAIN FUNDAMENTAL POLICIES

Each Fund may (i) borrow money to the extent
permitted under the 1940 Act; and (ii) invest up to 25% of the
value of its total assets in the securities of issuers in a
single industry, provided there is no limitation on the
purchase of obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities or, in the case
of the Municipal Funds, Municipal Obligations. In addition,
(i) each of the Diversified Funds may invest up to 5% of its
total assets in the obligations of any one issuer, except that
up to 25% of the value of the Fund's total assets may be
invested (subject, in the case of the Money Market Funds, to
the provisions of Rule 2a-7), and obligations issued or
guaranteed by the U.S. Government, its agencies or
instrumentalities may be purchased, without regard to any such
limitation; and (ii) the Money Market Fund will invest, except
when it has adopted a temporary defensive position, at least
25% of its total assets in securities issued by banks,
including foreign banks and branches. This paragraph describes
fundamental policies that cannot be changed as to a Fund
without approval by the holders of a majority (as defined in
the 1940 Act) of such Fund's outstanding voting shares. See
"Investment Objectives and Management Policies--Investment
Restrictions" in the Trust's Statement of Additional
Information.

CERTAIN ADDITIONAL NON-FUNDAMENTAL POLICIES

Each Fund may (i) purchase securities of any
company
having less than three years' continuous operation (including
operations of any predecessors) if such purchase does not cause
the value of such Fund's investments in all such companies to
exceed 5% of the value of its total assets; (ii) pledge,
hypothecate, mortgage or otherwise encumber its assets, but
only to secure permitted borrowings; and (iii) invest up to 15%
(10% in the case of the Money Market Funds) of the value of its
net assets in repurchase agreements providing for settlement in
more than seven days after notice and in other illiquid
securities. See "Investment Objectives and Management Policies
- --Investment Restrictions" in the Trust's Statement of
Additional Information.

RISK FACTORS

GENERAL--Since each Fund will pursue different types of
investments, the risks of investing will vary depending on the
Fund selected for investment. Before selecting a Fund in which
to invest, the investor should assess the risks associated with
the types of investments made by the Fund. The net asset value
per share of each Fund, other than a Money Market Fund, is not
fixed and should be expected to fluctuate. Investors should
consider each Fund as a supplement to an overall investment
program and should invest only if they are willing to undertake
the risks involved.

INVESTMENT TECHNIQUES--Each Fund may engage in various
investment techniques to the extent described herein. The use
of investment techniques such as short-selling, engaging in
financial futures and options transactions, leverage through
borrowing, purchasing securities on a forward commitment basis,
and lending portfolio securities--techniques that are not
necessarily employed by each Fund--involves greater risk than
that incurred by many other funds with similar objectives that
do not engage in such techniques. See "Appendix--Investment
Techniques." Using these techniques may produce higher than
normal portfolio turnover and may affect the degree to which a
Fund's net asset value fluctuates. Higher portfolio turnover
rates are likely to result in comparatively greater brokerage
commissions. In addition, short-term gains realized from
portfolio transactions are taxable to shareholders as ordinary
gains.

A Fund's ability to engage in certain
short-term transactions may be limited by the requirement that,
to qualify as a regulated investment company, it must earn less
than 30%
of its gross income from the disposition of securities held for
less than three months. This 30% test limits the extent to
which a Fund may sell securities held for less than three
months and invest in certain futures contracts, among other
strategies. However, portfolio turnover will not otherwise be
a limiting factor in making investment decisions. See
"Portfolio Transactions" in the Statement of Additional
Information.

EQUITY SECURITIES--(Asset Allocation and Equity Funds only)
Investors should be aware that Equity Securities fluctuate in
value, often based on factors unrelated to the value of the
issuer of the securities, and that fluctuations can be
pronounced. Changes in the value of a Fund's portfolio
securities will result in changes in the value of such Fund's
shares and thus the Fund's yield and total return to investors.

The securities of the smaller companies may
be
subject to more abrupt or erratic market movements than larger,
more-established companies, both because the securities
typically are traded in lower volume and because the issuers
typically are subject to a greater degree to changes in
earnings and prospects.

FIXED-INCOME SECURITIES--(Asset Allocation, Equity, Bond and
Municipal Bond Funds and, to a limited extent, each Money
Market Fund) Investors should be aware that even though
interest-bearing securities are investments which promise a
stable stream of income, the prices of such securities are
inversely affected by changes in interest rates and, therefore,
are subject to the risk of market price fluctuations. The
values of Fixed-Income Securities also may be affected by
changes in the credit rating or financial condition of the
issuing entities. Certain securities that may be purchased by
these Funds, such as those rated Baa by Moody's and BBB by S&P,
Fitch and Duff, may be subject to such risk with respect to the
issuing entity and to greater market fluctuations than certain
lower yielding, higher rated Fixed-Income Securities. See
"Lower Rated Securities" below and "Appendix--Certain Portfolio
Securities--Ratings" and Appendix in the Trust's Statement of
Additional Information.

LOWER RATED SECURITIES--(Asset Allocation, Equity Income,
Growth, Special Opportunities and International Bond Funds
only) Investors should carefully consider the relative risks of
investing in the higher yielding (and, therefore, higher risk)
debt securities in which each of the Managed Assets Balanced
Fund, Managed Assets Income Fund and International Bond Fund
may invest up to 20%, 5% and 35% of its net assets,
respectively, and convertible debt securities in which each of
the Equity Income, Growth and Special Opportunities Funds may
invest up to 35% of its net assets. The International Bond
Fund, Equity Income Fund, Growth Fund and Special Opportunities
Fund each intend to invest less than 35% of the value of its
net assets in such securities. These are securities such as
those rated Ba by Moody's or BB by S&P, Fitch or Duff or as low
as the lowest rating assigned by Moody's, S&P, Fitch or Duff.
They generally are not meant for short-term investing and may
be subject to certain risks with respect to the issuing entity
and to greater market fluctuations than certain lower yielding,
higher rated fixed-income securities. Securities rated Ba by
Moody's are judged to have speculative elements; their future
cannot be considered as well assured and often the protection
of interest and principal payments may be very moderate.
Securities rated BB by S&P, Fitch or Duff are regarded as
having predominantly speculative characteristics and, while
such obligations have less near-term vulnerability to default
than other speculative grade debt, they face major ongoing
uncertainties or exposure to adverse business, financial or
economic conditions which could lead to inadequate capacity to
meet timely interest and principal payments. Securities rated
C by Moody's are regarded as having extremely poor prospects of
ever attaining any real investment standing. Securities rated
D by S&P, Fitch and Duff are in default and the payment of
interest and/or repayment of principal is in arrears. Such
securities, though high yielding, are characterized by great
risk. See Appendix in the Trust's Statement of Additional
Information for a general description of securities ratings.
Although these ratings may be an initial criterion for
selection of portfolio investments, the Investment Adviser also
will evaluate these securities and the ability of the issuers
of such securities to pay interest and principal. The Fund's
ability to achieve its investment objectives may be more
dependent on the Investment Adviser's credit analysis than
might be the case for a fund that invested in higher rated
securities. See "Appendix--Certain Portfolio Securities--
Fixed-Income Securities--Ratings."

The market price and yield of securities
rated Ba or lower by Moody's and BB or lower by S&P, Fitch or
Duff are more volatile than those of higher rated securities.
Factors
adversely affecting the market price and yield of these
securities will adversely affect the Fund's net asset value.
In addition, the retail secondary market for these securities
may be less liquid than that of higher rated securities;
adverse conditions could make it difficult at times for the
Fund to sell certain securities or could result in lower prices
than those used in calculating such Fund's net asset value.

The market values of certain lower rated
debt
securities tend to reflect specific developments with respect
to the issuer to a greater extent than do higher rated
securities, which react primarily to fluctuations in the
general level of interest rates, and tend to be more sensitive
to economic conditions than are higher rated securities.
Issuers of such debt securities often are highly leveraged and
may not have available to them more traditional methods of
financing. Therefore, the risk associated with acquiring the
securities of such issuers generally is greater than is the
case with higher rated securities.

MUNICIPAL OBLIGATIONS--(Municipal Funds only) Certain
provisions in the Code relating to the issuance of Municipal
Obligations may reduce the volume of Municipal Obligations
qualifying for Federal tax exemption. One effect of these
provisions could be to increase the cost of the Municipal
Obligations available for purchase by the Municipal Funds and
thus reduce the available yield. Shareholders of the Municipal
Funds should consult their tax advisers concerning the effect
of these provisions on an investment in the Fund. Proposals
that may restrict or eliminate the income tax exemption for
interest on Municipal Obligations may be introduced in the
future. If any such proposal were enacted that would reduce
the availability of Municipal Obligations for investment by any
of these Funds so as to adversely affect its shareholders, the
Trust would reevaluate the affected Fund's investment objective
and policies and submit possible changes in the Fund's
structure to shareholders for their consideration. If
legislation were enacted that would treat a type of Municipal
Obligation as taxable, the Trust would treat such security as a
permissible taxable investment within the applicable limits set
forth herein.

Each Municipal Fund may invest more than
25%
of the
value of its total assets in Municipal Obligations which are
related in such a way that an economic, business or political
development or change affecting one such security also would
affect the other securities; for example, securities the
interest upon which is paid from revenues of similar types of
projects, or securities of issuers that are located in the same
state. As a result, each Municipal Fund may be subject to
greater risk as compared to a fund that does not follow this
practice.

Certain municipal lease/purchase
obligations
in
which the Municipal Funds may invest may contain "non-
appropriation" clauses which provide that the municipality has
no obligation to make lease payments in future years unless
money is appropriated for such purpose on a yearly basis.
Although "non-appropriation" lease/purchase obligations are
secured by the leased property, disposition of the leased
property in the event of foreclosure might prove difficult. In
evaluating the credit quality of a municipal lease/purchase
obligation that is unrated, the Investment Adviser will
consider, on an ongoing basis, a number of factors including
the likelihood that the issuing municipality will discontinue
appropriating funding for the leased property.

FOREIGN SECURITIES--(Asset Allocation, Growth, Special
Opportunities, International Equity and International Bond
Funds and, to a limited extent, Equity Income and Money Market
Funds only) Foreign securities markets generally are not as
developed or efficient as those in the United States.
Securities of some foreign issuers are less liquid and more
volatile than securities of comparable U.S. issuers.
Similarly, volume and liquidity in most foreign securities
markets are less than in the United States and, at times,
volatility of price can be greater than in the United States.
In addition, there may be less publicly available information
about a non-U.S. issuer, and non-U.S. issuers generally are not
subject to uniform accounting and financial reporting
standards, practices and requirements comparable to those
applicable to U.S. issuers. See "Appendix--Certain Portfolio
Securities--Taxable Money Market Securities--Bank Obligations."

Because evidences of ownership of such
securities
usually are held outside the United States, each of these Funds
will be subject to additional risks which include possible
adverse political and economic developments, possible seizure
or nationalization of foreign deposits and possible adoption of
governmental restrictions which might adversely affect the
payment of principal and interest on the foreign securities or
might restrict the payment of principal and interest to
investors located outside the country of the issuers, whether
from currency blockage or otherwise. Custodial expenses for a
portfolio of non-U.S. securities generally are higher than for
a portfolio of U.S. securities.

Since foreign securities often are
purchased
with
and payable in currencies of foreign countries, the value of
these assets as measured in U.S. dollars may be affected
favorably or unfavorably by changes in currency rates and
exchange control regulations. Some currency exchange costs
generally will be incurred when a Fund changes investments from
one country to another.

Furthermore, some of these securities may
be
subject to brokerage or stamp taxes levied by foreign
governments, which have the effect of increasing the cost of
such investment and reducing the realized gain or increasing
the realized loss on such securities at the time of sale.
Income received by a Fund from sources within foreign countries
may be reduced by withholding and other taxes imposed by such
countries. Tax conventions between certain countries and the
United States, however, may reduce or eliminate such taxes.
All such taxes paid by a Fund will reduce its net income
available for distribution to its shareholders.

FOREIGN CURRENCY EXCHANGE--(Asset Allocation, Growth, Special
Opportunities, International Equity and International Bond
Funds only) Currency exchange rates may fluctuate significantly
over short periods of time. They generally are determined by
the forces of supply and demand in the foreign exchange markets
and the relative merits of investments in different countries,
actual or perceived changes in interest rates and other complex
factors, as seen from an international perspective. Currency
exchange rates also can be affected unpredictably by
intervention by U.S. or foreign governments or central banks,
or the failure to intervene, or by currency controls or
political developments in the United States or abroad.

The foreign currency market offers less
protection
against defaults in the forward trading of currencies than is
available when trading in currencies occurs on an exchange.
Since a forward currency contract is not guaranteed by an
exchange or clearinghouse, a default on the contract would
deprive the Fund of unrealized profits or force such Fund to
cover its commitments for purchase or resale, if any, at the
current market price.

FOREIGN COMMODITY TRANSACTIONS--(Asset Allocation, Growth,
Special Opportunities, International Equity and International
Bond Funds only) Unlike trading on domestic commodity
exchanges, trading on foreign commodity exchanges is not
regulated by the Commodity Futures Trading Commission (the
"CFTC") and may be subject to greater risks than trading on
domestic exchanges. For example, some foreign exchanges are
principal markets so that no common clearing facility exists
and an investor may look only to the broker for performance of
the contract. In addition, any profits that the Fund might
realize in trading could be eliminated by adverse changes in
the exchange rate, or such Fund could incur losses as a result
of those changes. Transactions on foreign exchanges may
include both commodities which are traded on domestic exchanges
and those which are not.

MORTGAGE-RELATED SECURITIES--(Asset Allocation, Equity and Bond
Funds only) No assurance can be given as to the liquidity of
the market for certain mortgage-backed securities, such as
collateralized mortgage obligations and stripped mortgage-
backed securities. Determination as to the liquidity of
interest-only and principal-only fixed mortgage-backed
securities issued by the U.S. Government or its agencies and
instrumentalities will be made in accordance with guidelines
established by the Trust's Board of Trustees. In accordance
with such guidelines, the Investment Adviser will monitor
investments in such securities with particular regard to
trading activity, availability of reliable price information
and other relevant information. The Trust intends to treat
other stripped mortgage-backed securities as illiquid
securities. See "Appendix--Certain Portfolio Securities--
Fixed-Income Securities--Mortgage-Related Securities" and "--
Illiquid Securities."

ZERO COUPON SECURITIES--(Asset Allocation, Equity, Bond and
Municipal Bond Funds only) Federal income tax law requires the
holder of a zero coupon security or of certain pay-in-kind
bonds to accrue income with respect to these securities prior
to the receipt of cash payments. To maintain its qualification
as a regulated investment company and avoid liability for
Federal income taxes, each Fund that invests in such securities
may be required to distribute such income accrued with respect
to these securities and may have to dispose of portfolio
securities under disadvantageous circumstances in order to
generate cash to satisfy these distribution requirements.

OTHER INVESTMENT CONSIDERATIONS--The classification of each
Non-Diversified Fund as a "non-diversified" investment company
means that the proportion of such Fund's assets that may be
invested in the securities of a single issuer is not limited by
the 1940 Act. A "diversified" investment company is required
by the 1940 Act generally, with respect to 75% of its total
assets, to invest not more than 5% of such assets in the
securities of a single issuer and to hold not more than 10% of
the voting securities of any single issuer. However, each Fund
intends to conduct its operations so as to qualify as a
"regulated investment company" for purposes of the Code, which
requires that, at the end of each quarter of its taxable year,
(i) at least 50% of the market value of its total assets be
invested in cash, U.S. Government securities, the securities of
other regulated investment companies and other securities, with
such other securities of any one issuer limited for the
purposes of this calculation to an amount not greater than 5%
of the value of each such Fund's total assets and (ii) not more
than 25% of the value of its total assets be invested in the
securities of any one issuer (other than U.S. Government
securities or the securities of other regulated investment
companies). Since a relatively high percentage of each Non-
Diversified Fund's assets may be invested in the securities of
a limited number of issuers, some of which may be within the
same industry or economic sector, its portfolio securities may
be more susceptible to any single economic, political or
regulatory occurrence than the portfolio securities of a
diversified investment company.

Investment decisions for each Fund are made
independently from those of the other investment companies or
investment advisory accounts that may be advised by the
Investment Adviser. However, if such other investment
companies or managed accounts are prepared to invest in, or
desire to dispose of, securities in which a Fund invests at the
same time as the Fund, available investments or opportunities
for sales will be allocated equitably to each of them. In some
cases, this procedure may adversely affect the size of the
position obtained for or disposed of by a Fund or the price
paid or received by a Fund.

ALTERNATIVE PURCHASE
METHODS

The Trust offers investors three methods of
purchasing Fund shares. Orders for purchases of Class I
shares, however, may be placed only for certain eligible
investors as described below. An investor who is not eligible
to purchase Class I shares may choose from Class A and Class B
the Class of shares that best suits the investor's needs, given
the amount of purchase, the length of time the investor expects
to hold the shares and any other relevant circumstances. Each
Class A, Class B and Class I share represents an identical pro
rata interest in a Fund's investment portfolio.

Class A shares are sold at net asset value
per
share plus, for each Fund other than a Money Market Fund, a
maximum initial sales charge of 4.50% (3.00% in the case of the
Intermediate Municipal Bond Fund) of the public offering price
imposed at the time of purchase. The initial sales charge may
be reduced or waived for certain purchases. See "How to Buy
Shares--Class A Shares." Class A shares of each Fund are
subject to an annual service fee at the rate of up to .25% of
the value of the average daily net assets of Class A. See
"Distribution Plan and Shareholder Services Plan."

Class B shares are sold at net asset value
per
share with no initial sales charge at the time of purchase; as
a result, the entire purchase price is immediately invested in
the Fund. Class B shares are subject to a maximum 5.00% (3.00%
in the case of the Intermediate Municipal Bond Fund) CDSC,
which is assessed only if Class B shares are redeemed within
six years (five years in the case of the Intermediate Municipal
Bond Fund) of purchase. Class B shares of the Money Market
Fund may be acquired only through exchanges with Class B shares
of the other Funds and are subject to the CDSC, if any, of the
shares with which the exchange is made. See "How to Buy
Shares--Class B Shares" and "How to Redeem Shares--Contingent
Deferred Sales Charge--Class B Shares." These shares are
subject to an annual service fee and distribution fee. See
"Distribution Plan and Shareholder Services Plan."
Approximately eight years after the date of purchase, Class B
shares automatically will convert to Class A shares, based on
the relative net asset values for shares of each Class, and
will no longer be subject to the distribution fee. Class B
shares that have been acquired through the reinvestment of
dividends and distributions will be converted on a pro rata
basis together with other Class B shares, in the proportion
that a shareholder's Class B shares converting to Class A
shares bears to the total Class B shares not acquired through
the reinvestment of dividends and distributions.

Class I shares are sold at net asset value
with no
sales charge. Class I shares are sold exclusively to qualified
trust and agency account clients of FNBC, ANB or their
affiliates ("Fiduciary Accounts") and to qualified benefit
plans or other programs with assets in excess of $100 million
("Eligible Retirement Plans"). Class I shares are not subject
to an annual service fee or distribution fee. Class I shares
held by investors who after purchasing Class I shares for their
Fiduciary Accounts terminate such Accounts automatically will
convert to Class A shares, based on the relative net asset
values for shares of each such Class.

Class B shares will receive lower per share
dividends and at any given time the performance of Class B
should be expected to be lower than for shares of each other
Class because of the higher expenses borne by Class B.
Similarly, Class A shares will receive lower per share
dividends and the performance of Class A should be expected to
be lower than Class I shares because of the higher expenses
borne by Class A. See "Fee Table."

An investor who is not eligible to purchase
Class I
shares should consider whether, during the anticipated life of
the investor's investment in the Fund, the accumulated
distribution fee and CDSC on Class B shares prior to conversion
would be less than the initial sales charge, if any, on Class A
shares purchased at the same time, and to what extent, if any,
such differential would be offset by the return of Class A.
Additionally, investors qualifying for reduced initial sales
charges who expect to maintain their investment for an extended
period of time might consider purchasing Class A shares because
the accumulated continuing distribution fees on Class B shares
may exceed the initial sales charge on Class A shares during
the life of the investment. Generally, Class A shares may be
more appropriate for investors who invest $_________ or more in
Fund shares.

HOW TO BUY SHARES

INFORMATION APPLICABLE TO ALL PURCHASERS

When purchasing Fund shares, an investor
must
specify the Class of shares being purchased. If no Class of
shares is specified, Class A shares will be purchased.

Class A and Class B shares are offered to
the general public and may be purchased through a number of
institutions, including FIMCO, FNBC, ANB and their affiliates,
other Service Agents, and directly through the Distributor.
Class B shares of the Money Market Fund may be acquired only
through the exchange of Class B shares of the other Funds.

Orders for purchases of Class I shares may
be
placed only for clients of FNBC, ANB or their affiliates for
their Fiduciary Accounts maintained at FNBC, ANB or one of
their affiliates and Eligible Retirement Plans with assets in
excess of $100 million. Class I shares may be purchased for a
Fiduciary Account or Eligible Retirement Plan only by a
custodian, trustee, investment manager or other entity
authorized to act on behalf of such Account or Plan.

Share certificates will not be issued. It
is not
recommended that the Municipal Funds be used as a vehicle for
Keogh, IRA or other qualified retirement plans. The Trust
reserves the right to reject any purchase order.

The minimum initial investment for each
Class is
$1,000. However, for IRAs and other retirement plans, the
minimum initial purchase is $250. All subsequent investments
must be at least $100. The initial investment must be
accompanied by the Account Application. FIMCO and Service
Agents may impose initial or subsequent investment minimums
which are higher or lower than those specified above and may
impose different minimums for different types of accounts or
purchase arrangements.

As to each Fund, net asset value per share
of each
Class is computed by dividing the value of the Fund's net
assets represented by such Class (i.e., the value of its assets
less liabilities) by the total number of shares of such Class
outstanding. See "Determination of Net Asset Value" in the
Trust's Statement of Additional Information.

Each Money Market Fund's net asset value
per
share
is determined as of 12:00 Noon, New York time, on each business
day (which, as used herein, shall include each day the New York
Stock Exchange is open for business, except Martin Luther King,
Jr. Day, Columbus Day and Veterans Day).

Shares of each Money Market Fund are sold
on
a
continuous basis at the net asset value per share next
determined after an order in proper form and Federal Funds
(moneys of member banks within the Federal Reserve System which
are held on deposit at a Federal Reserve Bank) are received by
the Transfer Agent. If an investor does not remit Federal
Funds, his payment must be converted into Federal Funds. This
usually occurs within one business day of receipt of a bank
wire and within two business days of receipt of a check drawn
on a member bank of the Federal Reserve System. Checks drawn
on banks which are not members of the Federal Reserve System
may take considerably longer to convert into Federal Funds.
Prior to receipt of Federal Funds, the investor's money will
not be invested.

For each Fund, other than the Money Market
Funds,
shares are sold on a continuous basis at the public offering
price (i.e., net asset value plus the applicable sales load, if
any, set forth below). Net asset value per share of these
Funds is determined as of the close of trading on the floor of
the New York Stock Exchange (currently 4:00 p.m., New York
time), on each business day. For purposes of determining net
asset value per share, options and futures contracts will be
valued 15 minutes after the close of trading on the New York
Stock Exchange. Each of these Funds' investments are valued
each business day by one or more independent pricing services
approved by the Board of Trustees and are valued at fair value
as determined by the pricing service. Each pricing services'
procedures are reviewed under the general supervision of the
Board of Trustees.

For each Fund, other than the Money Market
Funds,
if an order is received by the Transfer Agent by the close of
trading on the floor of the New York Stock Exchange (currently
4:00 p.m., New York time) on any business day, shares will be
purchased at the public offering price determined as of the
close of trading on the floor of the New York Stock Exchange on
that day. Otherwise, shares will be purchased at the public
offering price determined as of the close of trading on the
floor of the New York Stock Exchange on the next business day.

Federal regulations require that an
investor
provide a certified Taxpayer Identification Number ("TIN") upon
opening or reopening an account. See "Dividends, Distributions
and Taxes" and the Account Application for further information
concerning this requirement. Failure to furnish a certified
TIN to the Trust could subject an investor to a $50 penalty
imposed by the Internal Revenue Service (the "IRS").

CLASS A SHARES The public offering price for Class A shares of
each Fund, other than the Money Market Funds, is the net asset
value per share of that Class plus a sales load as shown below:

<TABLE>

ASSET ALLOCATION, EQUITY AND BOND FUNDS
TOTAL SALES LOAD

As a % of As a % of Dealers' Reallowance
AMOUNT OF TRANSACTION offering price net asset value as a % of
per share per share offering price
<S> <C> <C> <C>
Less than $50,000 4.50 4.70 4.00
$50,000 to less than $100,000 4.00 4.20 3.50
$100,000 to less than $250,000 3.00 3.10 2.50
$250,000 to less than $500,000 2.00 2.00 1.50
$500,000 to less than $1,000,000 1.50 1.50 1.25
$1,000,000 and above none none none

</TABLE>

<TABLE>

INTERMEDIATE MUNICIPAL BOND FUND

TOTAL SALES LOAD
<CAPTION>

As a % of As a % of Dealers' Reallowance
AMOUNT OF TRANSACTION offering price net asset value as a % of
per share per share offering price
<S> <C> <C> <C>
Less than $50,000 3.00 3.10 2.75
$50,000 to less than $100,000 2.50 2.60 2.25
$100,000 to less than $250,000 2.00 2.00 1.75
$250,000 to less than $500,000 1.50 1.50 1.25
$500,000 to less than $1,000,000 1.00 1.00 0.75
$1,000,000 and above none none none
</TABLE>

There is no initial sales charge on
purchases of
$1,000,000 or more of Class A shares. However, if an investor
purchases Class A shares without an initial sales charge as part
of an investment of at least $1,000,000 and redeems those shares
within a certain period after purchase, a CDSC will be imposed
at
the time of redemption as described below. The terms contained
in the section of the Fund's Prospectus entitled "How to Redeem
Fund Shares--Contingent Deferred Sales Charge--Class B" (other
than the amount of the CDSC and its time periods) are applicable
to the Class A shares subject to a CDSC. Letter of Intent and
Right of Accumulation apply to such purchases of Class A shares.

The following table sets forth the rates of such CDSC for the
indicated time periods:

<TABLE>

AMOUNT OF CDSC AS A % OF
TRANSACTIONS AMOUNT INVESTED OR YEAR SINCE PURCHASE
AT OFFERING PRICE REDEMPTION PROCEEDS PAYMENT WAS MADE
<S> <C> <C>
$1,000,000 to less
than $2,500,000 1.00% First or Second

$2,500,000 to less
than $5,000,000 0.50% First

$5,000,000 and above 0.25% First
</TABLE>

The dealer reallowance may be changed from time
to time
but will remain the same for all dealers. With respect to
purchases of $1,000,000 or more of Class A shares made through
Service Agents (other than FIMCO, FNBC, ANB or their
affiliates),
the Distributor may pay such Service Agents from its own funds a
fee of up to .75% for Intermediate Municipal Bond Fund and 1.00%
for each other Fund of the amount invested to compensate such
Service Agents for their distribution assistance in connection
with such purchases.

Full-time employees of NASD member firms and
full time
employees of other financial institutions which have entered
into
an agreement with the Distributor pertaining to the sale of Fund
shares (or which otherwise have a brokerage-related or clearing
arrangement with an NASD member firm or other financial
institution with respect to sales of Fund shares), their spouses
and minor children, and accounts opened by a bank, trust company
or thrift institution, acting as a fiduciary or custodian, may
purchase Class A shares for themselves or itself, as the case
may
be, at net asset value, provided that they have furnished the
Distributor appropriate notification of such status at the time
of the investment and such other information as it may request
from time to time in order to verify eligibility for this
privilege. This privilege also applies to full-time employees
of
financial institutions affiliated with NASD member firms whose
employees are eligible to purchase Class A shares at net asset
value. In addition, Class A shares may be purchased at net
asset
value for accounts registered under the Uniform Gifts to Minors
Act or Uniform Transfers to Minors Act which are opened through
FCIS. Class A shares also may be purchased at net asset value
on
behalf of clients of FNBC, ANB or their affiliates for their
custody accounts. Class A shares are also offered at net asset
value to directors and full-time or part-time employees of First
Chicago Corporation, or any of its affiliates and subsidiaries,
retired employees of First Chicago Corporation, or any of its
affiliates and subsidiaries, Board members of a fund advised by
the Investment Adviser, including members of the Trust's Board,
or the spouse or minor child of any of the foregoing.

Class A shares may be purchased at net asset
value
through certain broker-dealers, registered investment advisers
and other financial institutions which have entered into an
agreement with the Distributor, which includes a requirement
that
such shares be sold for the benefit of clients participating in
a
"wrap account" or a similar program under which such clients pay
a fee to such broker-dealer, registered investment advisers or
other financial institution.

Class A shares also may be purchased at net
asset
value, without a sales charge, with the proceeds from the
redemption of shares of an investment company sold with a sales
charge or commission and not distributed by the Distributor.
(This does not include shares of a mutual fund which were or
would be subject to a contingent deferred sales charge upon
redemption.) The purchase must be made within 60 days of the
redemption, and the Distributor must be notified by the investor
in writing, or by the investor's investment professional, at the
time the purchase is made. The Distributor will offer to pay
dealers an amount equal to .___% of the net asset value of
shares
purchased by the dealers' clients or customers in this manner.
If an investor purchasing shares in this manner redeems those
shares within one year after purchase, a ___% CDSC will be
imposed at the time of redemption.

Class A shares also will be offered at net
asset
value
without a sales load to employees participating in qualified or
nonqualified employee benefit plans or other programs where
(i) the employers or affiliated employers maintaining such plans
or programs have a minimum of 250 employees eligible for
participation in such plans or programs or (ii) such plan's or
program's aggregate investment in the Trust and certain other
funds advised by the Investment Adviser exceeds one million
dollars ("Eligible Benefit Plans"). The determination of the
number of employees eligible for participation in such a plan or
program shall be made on the date that the Class A shares are
first purchased by or on behalf of employees participating in
such plan or program and on each subsequent January 1st.

CLASS B SHARES The public offering price for Class B shares is
the net asset value per share of that Class. No initial sales
charge is imposed at the time of purchase. A CDSC is imposed,
however, on certain redemptions of Class B shares, as described
under "How to Redeem Shares." The Distributor may compensate
certain Service Agents for selling Class B shares at the time of
purchase from its own assets. Proceeds of the CDSC and
distribution fees payable to the Distributor, in part, would be
used to defray these expenses.

CLASS I SHARES The public offering price for Class I shares is
the net asset value per share of that Class. No sales charge is
imposed for Class I shares.

PURCHASING SHARES THROUGH ACCOUNTS WITH FIMCO, FNBC, ANB OR A
SERVICING AGENT Investors who desire to purchase shares through
their accounts at FIMCO, FNBC, ANB or their affiliates or a
Service Agent should contact such entity directly for
appropriate
instructions, as well as for information about conditions
pertaining to the account and any related fees. Service Agents,
FIMCO, FNBC and ANB may charge clients direct fees for effecting
transactions in shares, as well as fees for other services
provided to clients in connection with accounts through which
shares are purchased. These fees, if any, would be in addition
to fees received by a Service Agent under a Shareholder Services
Plan or Service Plan or fees received by FIMCO under the
Investment Advisory Agreement or Administration Agreement. Each
Service Agent has agreed to transmit to its clients a schedule
of
such fees. In addition, Service Agents, FIMCO, FNBC and ANB may
receive different levels of compensation for selling different
Classes of shares and may impose minimum account and other
conditions, including conditions which might affect the
availability of certain shareholder privileges described in this
Prospectus. Certain investor accounts with FNBC, ANB and their
affiliates and certain Service Agents may be eligible for an
automatic investment privilege, commonly called a "sweep," under
which amounts in excess of a certain minimum held in these
accounts will be invested automatically in shares at
predetermined intervals. Each investor desiring to use this
privilege should consult FNBC, ANB or his Service Agent for
details. It is the responsibility of FNBC, ANB and Service
Agents to transmit orders on a timely basis.

Copies of the Trust's Prospectus and Statement
of
Additional Information may be obtained from the Distributor,
FIMCO, certain affiliates of FIMCO or certain Service Agents, as
well as from the Trust.

RIGHT OF ACCUMULATION--CLASS A SHARES Reduced sales loads apply
to any purchase of Class A shares where the dollar amount of
shares being purchased, plus the value of shares of such Fund,
shares of other Funds of the Trust, and shares of certain other
investment companies advised by the Investment Adviser purchased
with a sales load or acquired by a previous exchange of shares
purchased with a sales load (hereinafter referred to as
"Eligible
Funds") held by an investor and any related "purchaser" as
defined in the Statement of Additional Information, is $50,000
or
more. If, for example, an investor previously purchased and
still holds Class A shares of the Equity Income Fund, or of any
other Eligible Fund or combination thereof, with an aggregate
current market value of $40,000 and subsequently purchases Class
A shares of such Fund or an Eligible Fund having a current value
of $20,000, the sales load applicable to the subsequent purchase
would be reduced to 4.00% of the offering price (4.20% of the
net
asset value). All present holdings of Eligible Funds may be
combined to determine the current offering price of the
aggregate
investment in ascertaining the sales load applicable to each
subsequent purchase.

To qualify for reduced sales loads, at the time
of a
purchase an investor or his Service Agent must notify the
Distributor if orders are made by wire, or the Transfer Agent if
orders are made by mail. The reduced sales load is subject to
confirmation of the investor's holdings through a check of
appropriate records.

SHAREHOLDER SERVICES

The Exchange Privilege and Automatic Investment
Plan are available to shareholders of any class. The Letter of
Intent and Reinstatement Privilege are available only for Class A
and Class B shareholders, respectively. In addition, such
services
and privileges may not be available to clients of certain
Service
Agents and some Service Agents may impose certain conditions on
their clients which are different from those described in this
Prospectus. Each investor should consult his Service Agent in
this regard.

EXCHANGE PRIVILEGE. The Exchange Privilege enables an investor
to purchase, in exchange for shares of a Fund, shares of the
same
Class of the other Funds. This privilege may be expanded to
permit exchanges between a Fund and other funds that, in the
future, may be advised by the Investment Adviser.

Shares of the same Class of Funds purchased by
exchange
will be purchased on the basis of relative net asset value per
share as follows:

A. Exchanges for shares of Funds that are offered
without
a sales load will be made without a sales load.

B. Shares of Funds purchased without a sales load
may be
exchanged for shares of other Funds sold with a
sales
load, and the applicable sales load will be
deducted.

C. Shares of Funds purchased with a sales load may
be
exchanged without a sales load for shares of
other
Funds sold without a sales load.

D. Shares of Funds purchased with a sales load,
shares of
Funds acquired by a previous exchange from
shares
purchased with a sales load and additional
shares
acquired through reinvestment of dividends or
distributions of any such Funds (collectively
referred
to herein as "Purchased Shares") may be
exchanged for
shares of other Funds sold with a sales load
(referred
to herein as "Offered Shares"), provided that,
if the
sales load applicable to the Offered Shares
exceeds the
maximum sales load that could have been imposed
in
connection with the Purchased Shares (at the
time the
Purchased Shares were acquired), without giving
effect
to any reduced loads, the difference will be
deducted.

E. Shares of Funds subject to a CDSC that are
exchanged
for shares of another Fund will be subject to
the
higher applicable CDSC of the two Funds, and
for
purposes of calculating CDSC rates and
conversion
periods, if any, will be deemed to have been
held since
the date the shares being exchanged were
initially
purchased.

To accomplish an exchange under item D above,
shareholders
must notify the Transfer Agent of their prior ownership of Fund
shares and their account number.

No fees currently are charged shareholders
directly in
connection with exchanges although the Trust reserves the right,
upon not less than 60 days' written notice, to charge
shareholders a nominal fee in accordance with rules promulgated
by the Securities and Exchange Commission. The Trust reserves
the right to reject any exchange request in whole or in part.
The Exchange Privilege may be modified or terminated at any time
upon notice to shareholders.

The exchange of shares of one Fund for shares
of
another is treated for Federal income tax purposes as a sale of
the shares given in exchange by the shareholder and, therefore,
an exchanging shareholder may realize a taxable gain or loss.

LETTER OF INTENT--CLASS A SHARES. By signing a Letter of Intent
form, available from the Distributor, FIMCO, certain affiliates
of FIMCO, or certain Service Agents, an investor becomes
eligible
for the reduced sales load applicable to the total number of
Eligible Fund shares purchased in a 13-month period (beginning
up
to 30 days before the date of execution of the Letter of Intent)
pursuant to the terms and conditions set forth in the Letter of
Intent. A minimum initial purchase of $5,000 is required. To
compute the applicable sales load, the offering price of shares
the investor holds (on the date of submission of the Letter of
Intent) in any Eligible Fund that may be used toward "Right of
Accumulation" benefits described above may be used as a credit
toward completion of the Letter of Intent. However, the reduced
sales load will be applied only to new purchases.

The Transfer Agent will hold in escrow 5% of
the
amount
indicated in the Letter of Intent for payment of a higher sales
load if the investor does not purchase the full amount indicated
in the Letter of Intent. The escrow will be released when the
investor fulfills the terms of the Letter of Intent by
purchasing
the specified amount. Assuming completion of the total minimum
investment specified under a Letter of Intent, an adjustment
will
be made to reflect any reduced sales load applicable to shares
purchased during the 30-day period before submission of the
Letter of Intent. In addition, if the investor's purchases
qualify for a further sales load reduction, the sales load will
be adjusted to reflect the investor's total purchase at the end
of 13 months. If total purchases are less than the amount
specified, the investor will be requested to remit an amount
equal to the difference between the sales load actually paid and
the sales load applicable to the aggregate purchases actually
made. If such remittance is not received within 20 days, the
Transfer Agent, as attorney-in-fact pursuant to the terms of the
Letter of Intent, will redeem an appropriate number of Class A
shares held in escrow to realize the difference. Signing a
Letter of Intent does not bind the investor to purchase, or the
Trust to sell, the full amount indicated at the sales load in
effect at the time of signing, but the investor must complete
the
intended purchase to obtain the reduced sales load. At the time
an investor purchases Class A shares, the investor must indicate
his or her intention to do so under a Letter of Intent.

AUTOMATIC INVESTMENT PLAN. The Automatic Investment Plan
permits
an investor to purchase shares at regular intervals selected by
the investor. Provided the investor's bank or other financial
institution allows automatic withdrawals, shares may be
purchased
by transferring funds from the bank account designated by the
investor. At the investor's option, the account designated will
be debited in the specified amount, and shares will be
purchased,
once a month, on either the first or fifteenth day, or twice a
month, on both days. Only an account maintained at a domestic
financial institution which is an Automated Clearing House
member
may be so designated. To establish an Automatic Investment Plan
account, the investor must check the appropriate box and supply
the necessary information on the Account Application. Investors
may obtain the necessary applications from the Distributor. An
investor may cancel his or her participation in the Plan or
change the amount of purchase at any time by mailing written
notification to __________________, and such notification will
be
effective three business days following receipt. The Trust may
modify or terminate the Automatic Investment Plan at any time or
charge a service fee. No such fee currently is contemplated.

REINSTATEMENT PRIVILEGE. The Reinstatement Privilege enables
investors who have redeemed Class A or Class B shares to
repurchase, within 30 days of such redemption, Class A or Class
B
shares in an amount not to exceed the redemption proceeds
received. Class A shares so reinstated will be offered at a
purchase price equal to the then-current net asset value of
Class
A determined after a reinstatement request and payment for Class
A shares are received by the Transfer Agent. With respect to
Class B shares so reinstated, the CDSC applicable on redemption
of the acquired Class B shares will be calculated from the date
of the initial purchase of such Class B shares previously
redeemed. This privilege also enables such investors to
reinstate their account for the purpose of exercising the
Exchange Privilege. To use the Reinstatement Privilege, an
investor must submit a written reinstatement request to the
Transfer Agent. The reinstatement request and payment must be
received within 30 days of the trade date of the redemption.
There currently are no restrictions on the number of times an
investor may use this privilege.

HOW TO REDEEM SHARES

GENERAL. An investor may request redemption of his shares at
any
time. Redemption requests should be transmitted to the Transfer
Agent as described below. An investor who has purchased shares
through his Fiduciary Account or as a participant in an Eligible
Retirement Plan must redeem shares by following instructions
pertaining to such Account or Plan. It is the responsibility of
FNBC to transmit the redemption order to the Transfer Agent and
credit the investor's account with the redemption proceeds on a
timely basis. When a request is received in proper form, the
Trust will redeem the shares at the next determined net asset
value as described below. If an investor holds Fund shares of
more than one Class, any request for redemption must specify the
Class of shares being redeemed. If an investor fails to specify
the Class of shares to be redeemed, Class A shares will be
redeemed first. If an investor owns fewer shares of the Class
than specified to be redeemed, the redemption request may be
delayed until the Transfer Agent receives further instructions
from the investor or his Service Agent.

The Trust imposes no charges when shares are
redeemed.
However, the Distributor may impose a CDSC as described below.
Service Agents may charge a nominal fee for effecting
redemptions
of Fund shares. The value of the shares redeemed may be more or
less than their original cost, depending upon the Fund's
then-current net asset value.

The Trust ordinarily will make payment for all
shares
redeemed within seven days after receipt by the Transfer Agent
of
a redemption request in proper form, except as provided by the
rules of the Securities and Exchange Commission. HOWEVER, IF AN
INVESTOR HAS PURCHASED FUND SHARES BY CHECK AND SUBSEQUENTLY
SUBMITS A WRITTEN REDEMPTION REQUEST TO THE TRANSFER AGENT, THE
REDEMPTION PROCEEDS WILL BE TRANSMITTED TO THE INVESTOR PROMPTLY
UPON BANK CLEARANCE OF THE INVESTOR'S PURCHASE CHECK, WHICH MAY
TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUND
WILL NOT HONOR REDEMPTION CHECKS FOR A PERIOD OF EIGHT BUSINESS
DAYS AFTER RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE CHECK
AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE PROCEDURES
WILL NOT APPLY IF THE INVESTOR OTHERWISE HAS A SUFFICIENT
COLLECTED BALANCE IN HIS ACCOUNT TO COVER THE REDEMPTION
REQUEST.

PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS ON SUCH
SHARES WILL ACCRUE AND BE PAYABLE, AND THE INVESTOR WILL BE
ENTITLED TO EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP.
Fund shares will not be redeemed until the Transfer Agent has
received the investor's Account Application.

The Trust reserves the right to redeem an
investor's
account at the Trust's option upon not less than 45 days'
written
notice if the account's net asset value is $500 or less and
remains so during the notice period.

CONTINGENT DEFERRED SALES CHARGE--CLASS B SHARES. A CDSC
payable
to the Distributor may be imposed on redemptions of Class B
shares depending on the number of years such shares were held by
the investor. The following tables set forth the rates of the
CDSC applied for the indicated Funds:

Asset Allocation, Equity
and Bond Funds

CDSC as a
% of Amount
Year Since Invested or
Purchase Payment Redemption
Was Made Proceeds

First 5.00
Second 4.00
Third 3.00
Fourth 3.00
Fifth 2.00
Sixth 1.00
Seventh None
Eighth *
________________
*Conversion to Class A shares.

Intermediate
Municipal
Bond Fund

CDSC as a
% of Amount
Year Since Invested or
Purchase Payment Redemption
Was Made Proceeds

First 3.00
Second 3.00
Third 2.00
Fourth 2.00
Fifth 1.00
Sixth None
Seventh None
Eighth *
________________
*Conversion to Class A shares.

In determining whether a CDSC is applicable to
a
redemption, the calculation will be made in a manner that
results in the lowest possible rate. Class B shares redeemed
will not be subject to a CDSC to the extent that the value of
such shares represents capital appreciation or reinvestment of
dividends or distributions. It will be assumed that the
redemption is made first of Class B shares acquired pursuant to
the reinvestment of dividends and distributions or representing
any capital appreciation in the value of the Class B shares
held by the investor; then of Class B shares held for the
longest period of time.

WAIVER OF CDSC. The CDSC will be waived in connection with (a)
redemptions made within one year after the death of the
shareholder, (b) redemptions by shareholders after age 70-1/2
for purposes of the minimum required distribution from an IRA,
Keogh plan or custodial account pursuant to Section 403(b) of
the Code, (c) distributions from a qualified plan upon
retirement, (d) redemptions of shares acquired through a
contribution in excess of permitted amounts, (e) redemptions
initiated by the Trust of accounts with net assets of less than
$500, and (f) redemptions by such shareholders as the
Securities and Exchange Commission or its staff may permit.

CONVERSION OF CLASS B SHARES. Class B shares automatically
convert to Class A shares (and thus become subject to the lower
expenses borne by Class A shares) in the eighth year after the
date of purchase, together with the pro rata portion of all
Class B shares representing dividends and other distributions
paid in additional Class B shares. The conversion will be
effected at the relative net asset values per share of the two
Classes on the first business day of the month following the
seventh anniversary of the original purchase occurs. If any
exchanges of Class B shares during the eight-year period
occurred, the holding period for the shares exchanged will be
counted toward the eight-year period. At the time of the
conversion the net asset value per share of the Class A shares
may be higher or lower than the net asset value per share of
the Class B shares; as a result, depending on the relative net
asset values per share, a shareholder may receive fewer or more
Class A shares than the number of Class B shares converted.

The Trust reserves the right to cease offering
Class
B shares for sale at any time or reject any order for the
purchase of Class B shares and to cease offering any services
provided by Service Agent.

PROCEDURES. An investor who has purchased shares through his
account at FIMCO, FNBC or a Service Agent must redeem shares by
following instructions pertaining to such account. If an
investor has given his Service Agent authority to instruct the
Transfer Agent to redeem shares and to credit the proceeds of
such redemption to a designated account at the Service Agent,
the investor may redeem shares only in this manner and in
accordance with a written redemption request described below.
It is the responsibility of FIMCO, FNBC or the Service Agent,
as the case may be, to transmit the redemption order and credit
the investor's account with the redemption proceeds on a timely
basis.

An investor may redeem or exchange shares by
telephone if the investor has checked the appropriate box on
the Account Application. By selecting a telephone redemption
or exchange privilege, an investor authorizes the Transfer
Agent to act on telephone instructions from any person
representing himself or herself to be the investor, or a
representative of the investor's Service Agent, and reasonably
believed by the Transfer Agent to be genuine. The Trust will
require the Transfer Agent to employ reasonable procedures,
such as requiring a form of personal identification, to confirm
that instructions are genuine and, if it does not follow such
procedures, the Trust or the Transfer Agent may be liable for
any losses due to unauthorized or fraudulent instructions.
Neither the Trust nor the Transfer Agent will be liable for
following telephone instructions reasonably believed to be
genuine.

During times of drastic economic or market
conditions, an investor may experience difficulty in contacting
the Transfer Agent by telephone to request a redemption or
exchange of Fund shares. In such cases, investors should
consider using the other redemption procedures described
herein. Use of these other redemption procedures may result in
the investor's redemption request being processed at a later
time than it would have been if telephone redemption had been
used. During the delay, the Fund's net asset value may
fluctuate.

WRITTEN REDEMPTION REQUESTS. Investors may redeem shares by
written request mailed to Prairie Funds, ___________________.
Redemption requests must be signed by each shareholder,
including each owner of a joint account, and each signature
must be guaranteed. The Transfer Agent has adopted standards
and procedures pursuant to which signature-guarantees in proper
form generally will be accepted from domestic banks, brokers,
dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and
savings associations, as well as from participants in the New
York Stock Exchange Medallion Signature Program, the Securities
Transfer Agents Medallion Program ("STAMP"), and the Stock
Exchanges Medallion Program.

CHECK REDEMPTION PRIVILEGE--CLASS A OF MONEY MARKET FUNDS ONLY.
An investor may request on the Account Application or by later
written request to the Trust that a Money Market Fund provide
Redemption Checks drawn on the Fund's account. Redemption
Checks may be made payable to the order of any person in the
amount of $500 or more. Redemption Checks should not be used
to close an account. Redemption Checks are free, but the
Transfer Agent will impose a fee for stopping payment of a
Redemption Check at the investor's request or if the Transfer
Agent cannot honor the Redemption Check due to insufficient
funds or other valid reason. An investor should date his
Redemption Checks with the current date when the investor
writes them. Please do not postdate Redemption Checks. If an
investor does, the Transfer Agent will honor, upon presentment,
even if presented before the date of the check, all postdated
Redemption Checks which are dated within six months of
presentment of payment, if they are otherwise in good order.
This Privilege may be modified or terminated at any time by the
Trust or the Transfer Agent upon notice to shareholders.

MANAGEMENT OF THE TRUST

INVESTMENT ADVISER AND ADMINISTRATOR

First Chicago Investment Management Company,
located
at Three First National Plaza, Chicago, Illinois 60670, is each
Fund's investment adviser and administrator. FIMCO is a newly-
formed, registered investment adviser and a wholly-owned
subsidiary of The First National Bank of Chicago ("FNBC"),
which in turn is a wholly-owned subsidiary of First Chicago
Corporation, a registered bank holding company. FNBC is a
commercial bank offering a wide range of banking and investment
services to customers throughout the United States and around
the world. As of June 30, 1994, FNBC was one of the largest
commercial banks in the United States and the largest in the
mid-western United States in terms of assets ($41.8 billion)
and in terms of deposits ($23.8 billion). As of June 30, 1994,
FNBC provided investment management services to portfolios
containing approximately $9.6 billion in assets.

FIMCO serves as investment adviser for each
Fund
pursuant to an Investment Advisory Agreement dated as of
____________, 1994 with the Trust. Under the Investment
Advisory Agreement, FIMCO provides the day-to-day management of
each Fund's investments, subject to the overall authority of
the Trust's Board of Trustees and in conformity with
Massachusetts law and the stated policies of the Trust. FIMCO
is responsible for making investment decisions for each Fund,
placing purchase and sale orders (which may be allocated to
various dealers based on their sales of Fund shares) and
providing research, statistical analysis and continuous
supervision of each Fund's investment portfolio. FIMCO has
advised the Trust that in making its investment decisions FIMCO
does not obtain or use material inside information in its or
any of its affiliate's possession.

FIMCO has engaged ANB-IMC, located at 1 North
LaSalle
Street, Chicago, Illinois 60690, to serve as the International
Equity Fund's sub-investment adviser. ANB-IMC, a registered
investment adviser formed in 1973, is a wholly-owned subsidiary
of American National Bank and Trust Company, which in turn is a
wholly-owned subsidiary of First Chicago Corporation. As of
[March 31,] 1994, ANB-IMC managed approximately $17 billion in
assets, including over $500 million in international equities,
primarily for pension funds. ANB-IMC, subject to the
supervision and approval of FIMCO, provides investment advisory
assistance and the day-to-day management of the International
Equity Fund's investments, as well as investment research and
statistical information, under a Sub-Investment Advisory
Agreement with FIMCO, subject to the overall authority of the
Trust's Board in accordance with Massachusetts law.

The Trust's primary portfolio managers will be:
_______________________.

Under the terms of the Investment Advisory
Agreement
with the Trust, the Trust has agreed to pay FIMCO a monthly fee
at the annual rate of .65% of the value of each Asset
Allocation Fund's average daily net assets; .50% of the value
of the Equity Income Fund's average daily net assets; .65% of
the value of the Growth Fund's average daily net assets; .70%
of the value of the Special Opportunities Fund's average daily
net assets; .80% of the value of the International Equity
Fund's average daily net assets; .55% of the value of the Bond
Fund's average daily net assets; .70% of the value of the
International Bond Fund's average daily net assets; .40% of the
value of the Intermediate Municipal Bond Fund's average daily
net assets; and .55% of the value of each Money Market Fund's
average daily net assets. Under the Sub-Investment Advisory
Agreement between FIMCO and ANB-IMC, FIMCO has agreed to pay
ANB-IMC a monthly fee at the annual rate of .40% of the value
of the International Equity Fund's average daily net assets.
The investment advisory fee payable by the International Equity
Fund is higher than that paid by most other funds.

FIMCO serves as the Trust's administrator
pursuant to
an Administration Agreement with the Trust. Under the
Administration Agreement, FIMCO generally assists in all
aspects of the Trust's operations, other than providing
investment advice, subject to the overall authority of the
Trust's Board in accordance with Massachusetts law. Under the
terms of the Administration Agreement, the Trust has agreed to
pay FIMCO a monthly fee at the annual rate of .15% of the value
of each Fund's average daily net assets. FIMCO has engaged
Concord Holding Corporation, located at 125 West 55th Street,
New York, New York 10019 (the "Sub-Administrator"), to assist
it in providing certain administrative services for the Trust
pursuant to a Master Sub-Administration Agreement between FIMCO
and the Sub-Administrator. FIMCO, from its own funds, will pay
the Sub-Administrator for the Sub-Administrator's services.

DISTRIBUTOR

Concord Financial Group, Inc., located at 125
West
55th Street, New York, New York 10019, serves as the Trust's
principal underwriter and distributor of each Fund's shares.
The Distributor, a wholly-owned subsidiary of the Sub-
Administrator, was organized to distribute shares of mutual
funds to institutional and retail investors. The Distributor
distributes the shares of other investment companies with over
$21 billion in assets.

TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN

_____________________________________, is the
Trust's
Transfer and Dividend Disbursing Agent (the "Transfer Agent").
The Bank of New York, 110 Washington Street, New York, New York
10286, is the Trust's Custodian.

EXPENSES

All expenses incurred in the operation of the
Trust
are borne by the Trust, except to the extent specifically
assumed by FIMCO. The expenses borne by the Trust include:
organizational costs, taxes, interest, loan commitment fees,
interest and distributions paid on securities sold short,
brokerage fees and commissions, if any, fees of Board members,
Securities and Exchange Commission fees, state Blue Sky
qualification fees, advisory fees, charges of custodians,
transfer and dividend disbursing agents' fees, certain
insurance premiums, industry association fees, outside auditing
and legal expenses, costs of maintaining the Trust's existence,
costs of independent pricing services, costs attributable to
investor services (including, without limitation, telephone and
personnel expenses), costs of shareholders' reports and
meetings, costs of preparing and printing prospectuses and
statements of additional information for regulatory purposes
and for distribution to existing shareholders, and any
extraordinary expenses. In addition, Class B shares are
subject to an annual distribution fee for advertising,
marketing and distributing such shares and an annual service
fee for ongoing personal services relating to shareholder
accounts and services related to the maintenance of shareholder
accounts. See "Distribution Plan and Shareholder Services
Plan." Expenses attributable to a particular Fund or Class are
charged against the assets of that Fund or Class, respectively;
other expenses of the Trust are allocated among the Funds on
the basis determined by the Board of Trustees, including, but
not limited to, proportionately in relation to the net assets
of each Fund.

The imposition of the advisory fee, as well as
other
operating expenses, including the fees paid under any
Distribution Plan and Shareholder Services Plan, will have the
effect of reducing the yield to investors. From time to time,
FIMCO may waive receipt of its fees and/or voluntarily assume
certain expenses of a Fund, which would have the effect of
lowering that Fund's overall expense ratio and increasing yield
to investors at the time such amounts are waived or assumed, as
the case may be. The Trust will not pay FIMCO at a later time
for any amounts which may be waived, nor will the Trust
reimburse FIMCO for any amounts which may be assumed.

DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN

Class B shares of each Fund are subject to an
annual
distribution fee pursuant to the Distribution Plan. Class A
and Class B shares of each Fund are subject to an annual
service fee pursuant to the Shareholder Services Plan.

DISTRIBUTION PLAN--(Class B only) Under the Distribution Plan,
adopted pursuant to Rule 12b-1 under the 1940 Act, the Trust
has agreed to pay the Distributor for advertising, marketing
and distributing shares of the relevant Fund at an aggregate
annual rate of .75% (.50% in the case of the Intermediate Bond
Fund) of the value of the average daily net assets of Class B.
The Distributor may pay one or more Service Agents in respect
of these services. FIMCO, FNBC, ANB and their affiliates may
act as Service Agents and receive fees under the Distribution
Plan. The Distributor determines the amounts, if any, to be
paid to Service Agents under the Distribution Plan and the
basis on which such payments are made. The fees payable under
the Distribution Plan are payable without regard to actual
expenses incurred.

SHAREHOLDER SERVICES PLAN--(Class A and Class B) Under the
Shareholder Services Plan, the Trust pays the Distributor for
the provision of certain services to the holders of these
shares a fee at an annual rate of .25% of the value of the
average daily net assets of Class A or Class B. The services
provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the
Fund and providing reports and other information, and services
related to the maintenance of shareholder accounts. Under the
Shareholder Services Plan, the Distributor may make payments to
Service Agents in respect of these services. FIMCO, FNBC, ANB
and their affiliates may act as Service Agents and receive fees
under the Shareholder Services Plan. The Distributor
determines the amounts to be paid to Service Agents. Each
Service Agent is required to disclose to its clients any
compensation payable to it by the Trust pursuant to the
Shareholder Services Plan and any other compensation payable by
their clients in connection with the investment of their assets
in Fund shares.

DIVIDENDS, DISTRIBUTIONS AND TAXES

MANAGED ASSETS BALANCED, GROWTH, SPECIAL OPPORTUNITIES AND
INTERNATIONAL EQUITY FUNDS--Declare and pay dividends from net
investment income quarterly.

MANAGED ASSETS INCOME AND EQUITY INCOME FUNDS--Declare and pay
dividends from net investment income monthly, usually on the
last calendar day of the month.

BOND, MUNICIPAL BOND AND MONEY MARKET FUNDS--Declare dividends
from net investment income on each day the New York Stock
Exchange is open for business, except on Martin Luther King,
Jr. Day, Columbus Day and Veterans Day. Dividends usually are
paid on the last calendar day of each month. Shares begin
accruing dividends on the day the purchase order is effective.
The earnings for Saturdays, Sundays and holidays are declared
as dividends on the preceding business day.

APPLICABLE TO ALL FUNDS--Each Fund will make distributions from
net realized securities gains, if any, once a year, but may
make distributions on a more frequent basis to comply with the
distribution requirements of the Code, in all events in a
manner consistent with the provisions of the 1940 Act.
Dividends are automatically reinvested in additional Fund
shares of the same Class from which they were paid at net asset
value, unless payment in cash is requested.

Dividends paid by each Fund, other than a
Municipal
Fund, derived from net investment income and dividends paid by
a Municipal Fund derived from taxable investments, together
with distributions from any net realized short-term securities
gains, will be taxable to U.S. investors as ordinary income
whether or not reinvested in additional Fund shares.
Distributions from net realized long-term securities gains, if
any, will be taxable to U.S. shareholders as long-term capital
gains for Federal income tax purposes, regardless of how long
investors have held shares and whether such distributions are
received in cash or reinvested in additional shares.

Federal regulations generally require the Trust
to
withhold ("backup withholding") and remit to the U.S. Treasury
31% of dividends, distributions from net realized securities
gains and the proceeds of any redemption, regardless of the
extent to which gain or loss may be realized, paid to a
shareholder if such shareholder fails to certify either that
the TIN furnished in connection with opening an account is
correct or that such shareholder has not received notice from
the IRS of being subject to backup withholding as a result of a
failure to properly report taxable dividend or interest income
on a Federal income tax return. Furthermore, the IRS may
notify the Trust to institute backup withholding if the IRS
determines a shareholder's TIN is incorrect or if a shareholder
has failed to properly report taxable dividend and interest
income on a Federal income tax return. A TIN is either the
Social Security number or employer identification number of the
record owner of the account.

It is expected that each Fund will qualify as a
"regulated investment company" under the Code so long as such
qualification is in the best interests of its shareholders.
Such qualification relieves the Fund of any liability for
Federal income tax to the extent its earnings are distributed
in accordance with applicable provisions of the Code. In
addition, each Fund is subject to a non-deductible 4% excise
tax, measured with respect to certain undistributed amounts of
taxable investment income and capital gains.

Each investor should consult his or her tax
adviser
regarding specific questions as to Federal, state or local
taxes.

PERFORMANCE
INFORMATION

SPECIAL OPPORTUNITIES, GROWTH AND INTERNATIONAL EQUITY FUNDS--
For purposes of advertising, performance of these Funds may be
calculated on the bases of average annual total return and/or
total return. Average annual total return is calculated
pursuant to a standardized formula which assumes that an
investment in such Fund was purchased with an initial payment
of $1,000 and that the investment was redeemed at the end of a
stated period of time, after giving effect to the reinvestment
of dividends and distributions during the period. The return
is expressed as a percentage rate which, if applied on a
compounded annual basis, would result in the redeemable value
of the investment at the end of the period. Advertisements of
a Fund's performance will include such Fund's average annual
total return for one, five and ten year periods, or for shorter
time periods depending upon the length of time during which the
Fund has operated. Computations of average annual total return
for periods of less than one year represent an annualization of
the Fund's actual total return for the applicable period.

Total return is computed on a per share basis
and
assumes the reinvestment of dividends and distributions. Total
return generally is expressed as a percentage rate which is
calculated by combining the income and principal changes for a
specified period and dividing by the maximum offering price per
share at the beginning of the period. Advertisements may
include the percentage rate of total return or may include the
value of a hypothetical investment at the end of the period
which assumes the application of the percentage rate of total
return. Total return also may be calculated by using the net
asset value per share at the beginning of the period instead of
the maximum offering price per share at the beginning of the
period for Class A shares or without giving effect to any
applicable CDSC at the end of the period for Class B shares.
Calculations based on the net asset value per share do not
reflect the deduction of the applicable sales charge which, if
reflected, would reduce the performance quoted.

MANAGED ASSETS INCOME, MANAGED ASSETS BALANCED, EQUITY INCOME,
BOND AND MUNICIPAL BOND FUNDS--For purposes of advertising,
performance of these Funds may be calculated on several bases,
including current yield, average annual total return and/or
total return. Current yield refers to the Fund's annualized
net investment income per share over a 30-day period, expressed
as a percentage of the net asset value per share at the end of
the period. For purposes of calculating current yield, the
amount of net investment income per share during that 30-day
period, computed in accordance with regulatory requirements, is
compounded by assuming that it is reinvested at a constant rate
over a six-month period. An identical result is then assumed
to have occurred during a second six-month period which, when
added to the result for the first six months, provides an
"annualized" yield for an entire one-year period.

The Municipal Bond Funds may advertise tax
equivalent
yield, which is calculated by determining the pre-tax yield
which, after being taxed at a certain rate, would be equivalent
to a stated current yield calculated as described above.

Average annual total return and total return
will be
calculated as described above.

MONEY MARKET FUNDS--From time to time, each Money Market Fund
may advertise its yield and effective yield. Both yield
figures are based on historical earnings and are not intended
to indicate future performance. It can be expected that these
yields will fluctuate substantially. The yield of the Fund
refers to the income generated by an investment in the Fund
over a seven-day period (which period will be stated in the
advertisement). This income is then annualized. That is, the
amount of income generated by the investment during that week
is assumed to be generated each week over a 52-week period and
is shown as a percentage of the investment. The effective
yield is calculated similarly but, when annualized, the income
earned by an investment in the Fund is assumed to be
reinvested. The effective yield will be slightly higher than
the yield because of the compounding effect of this assumed
reinvestment.

The Municipal Money Market Fund also may
advertise
tax equivalent yield, which would be calculated as described
above.

APPLICABLE TO ALL FUNDS--Performance will vary from time to
time and past results are not necessarily representative of
future results. Investors should remember that performance is
a function of the type and quality of portfolio securities held
by the Fund and is affected by operating expenses. Yield and
performance information, such as that described above, may not
provide a basis for comparison with other investments or other
investment companies using a different method of calculating
performance. Performance for each Class will be calculated
separately.

Comparative performance information may be used
from
time to time in advertising or marketing a Fund's shares,
including data from Lipper Analytical Services, Inc., Bank Rate
Monitor, N. Palm Beach, Fla. 33408, Bond 20-Bond Index, Moody's
Bond Survey Bond Index, Lehman Corporate Bond Index,
IBC/Donoghue's Money Fund Report, S&P 500 Index, Lehman
Brothers Government/Corporate Bond Index, the Dow Jones
Industrial Average, CDA/Wiesenberger Investment Companies
Service, Mutual Fund Values; Mutual Fund Forecaster, Schabacker
Investment Management, Inc., Morningstar, Inc. and other
industry publications.

GENERAL INFORMATION

The Trust was organized as an unincorporated
business
trust under the laws of the Commonwealth of Massachusetts
pursuant to an Agreement and Declaration of Trust (the "Trust
Agreement") dated October 20, 1994, and has not engaged in
active business to the date of this Prospectus. The Trust is
authorized to issue an unlimited number of shares of beneficial
interest, par value $.001 per share. The Trust's shares are
classified into three classes. Each share has one vote and
shareholders will vote in the aggregate and not by class except
as otherwise required by law or with respect to any matter
which affects only one class.

To date, the Board of Trustees has authorized
the
creation of 12 separate portfolios of shares. All
consideration received by the Trust for shares of one of the
portfolios and all assets in which such consideration is
invested will belong to that portfolio (subject only to the
rights of creditors of the Trust) and will be subject to the
liabilities related thereto. The income attributable to, and
the expenses of, one portfolio (and as to classes within a
portfolio) are treated separately from those of the other
portfolios (and classes). The Trust has the ability to create,
from time to time, new portfolios without shareholder approval.

Under Massachusetts law, shareholders could,
under
certain circumstances, be held personally liable for the
obligations of the Trust. However, the Trust Agreement
disclaims shareholder liability for acts or obligations of the
Trust and requires that notice of such disclaimer be given in
each agreement, obligation or instrument entered into or
executed by the Trust or a Trustee. The Trust Agreement
provides for indemnification from the Trust's property for all
losses and expenses of any shareholder held personally liable
for the obligations of the Trust. Thus, the risk of a
shareholder incurring financial loss on account of shareholder
liability is limited to circumstances in which the Trust itself
would be unable to meet its obligations, a possibility which
management believes is remote. Upon payment of any liability
incurred by the Trust, the shareholder paying such liability
will be entitled to reimbursement from the general assets of
the Trust. The Trustees intend to conduct the operations of
the Trust in such a way so as to avoid, as far as possible,
ultimate liability of the shareholders for liabilities of the
Trust. As described under "Management of the Trust" in the
Statement of Additional Information, the Trust ordinarily will
not hold shareholder meetings; however, shareholders under
certain circumstances have the right to call a meeting of
shareholders for the purpose of voting to remove Trustees.

The Transfer Agent maintains a record of each
investor's ownership and sends confirmations and statements of
account.

Investor inquiries may be made by writing to
the
Trust at the address shown on page one or by calling the
appropriate telephone number.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION
OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND IN THE TRUST'S OFFICIAL SALES LITERATURE IN
CONNECTION WITH THE OFFER OF THE FUNDS' SHARES, AND, IF GIVEN
OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRUST. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH,
OR TO ANY PERSON TO WHOM, SUCH OFFERING MAY NOT LAWFULLY BE
MADE.

<PAGE>
APPENDIX

CERTAIN PORTFOLIO SECURITIES

EQUITY SECURITIES

American, European and Continental Depositary Receipts--(Asset
Allocation, Equity Income, Growth, International and Special
Opportunities Funds only) Securities of foreign issuers may be
sold in the form of American Depositary Receipts ("ADRs") and
European Depositary Receipts ("EDRs"). These securities may
not necessarily be denominated in the same currency as the
securities into which they may be converted. ADRs are receipts
typically issued by a United States bank or trust company which
evidence ownership of underlying securities issued by a foreign
corporation. EDRs, which are sometimes referred to as
Continental Depositary Receipts ("CDRs"), are receipts issued
in Europe typically by non-United States banks and trust
companies that evidence ownership of either foreign or domestic
securities. Generally, ADRs in registered form are designed
for use in the United States securities markets and EDRs and
CDRs in bearer form are designed for use in Europe.

Warrants--(Asset Allocation and Equity Funds only) A warrant is
an instrument issued by a corporation which gives the holder
the right to subscribe to a specified amount of the
corporation's capital stock at a set price for a specified
period of time. Each of these Funds may invest up to 5% of its
net assets in warrants, except that this limitation does not
apply to warrants acquired in units or attached to securities.

FIXED-INCOME SECURITIES

Convertible Securities--(Asset Allocation, Equity and Bond
Funds only) Convertible securities are fixed-income securities
that may be converted at either a stated price or stated rate
into underlying shares of common stock. Convertible securities
have general characteristics similar to both fixed-income and
equity securities. Although to a lesser extent than with
fixed-income securities generally, the market value of
convertible securities tends to decline as interest rates
increase and, conversely, tends to increase as interest rates
decline. In addition, because of the conversion feature, the
market value of convertible securities tends to vary with
fluctuations in the market value of the underlying common
stock, and, therefore, also will react to variations in the
general market for equity securities. A unique feature of
convertible securities is that as the market price of the
underlying common stock declines, convertible securities tend
to trade increasingly on a yield basis, and so may not
experience market value declines to the same extent as the
underlying common stock. When the market price of the
underlying common stock increases, the prices of the
convertible securities tend to rise as a reflection of the
value of the underlying common stock. While no securities
investments are without risk, investments in convertible
securities generally entail less risk than investments in
common stock of the same issuer.

As fixed-income securities, convertible
securities
are investments that provide for a stable stream of income with
generally higher yields than common stocks. Of course, like
all fixed-income securities, there can be no assurance of
current income because the issuers of the convertible
securities may default on their obligations. Convertible
securities, however, generally offer lower interest or dividend
yields than non-convertible securities of similar quality
because of the potential for capital appreciation. A
convertible security, in addition to providing fixed income,
offers the potential for capital appreciation through the
conversion feature, which enables the holder to benefit from
increases in the market price of the underlying common stock.
There can be no assurance of capital appreciation, however,
because securities prices fluctuate.

Convertible securities generally are
subordinated to
other similar but non-convertible securities of the same
issuer, although convertible bonds, as corporate debt
obligations, enjoy seniority in right of payment to all equity
securities, and convertible preferred stock is senior to common
stock, of the same issuer. Because of the subordination
feature, however, convertible securities typically have lower
ratings than similar non-convertible securities.

U.S. Government Securities--These securities are described
under "Taxable Money Market Instruments--U.S. Government
Securities" below and may be purchased without regard to
maturity.

Zero Coupon and Stripped Securities--(Asset Allocation, Equity,
Bond and Municipal Bond Funds only) Zero coupon U.S. Treasury
securities are Treasury Notes and Bonds that have been stripped
of their unmatured interest coupons, the coupons themselves and
receipts or certificates representing interests in such
stripped debt obligations and coupons. Zero coupon securities
also are issued by corporations and financial institutions
which constitute a proportionate ownership of the issuer's pool
of underlying U.S. Treasury securities. A zero coupon security
pays no interest to its holder during its life and is sold at a
discount to its face value at maturity. The amount of the
discount fluctuates with the market price of the security. The
market prices of zero coupon securities generally are more
volatile than the market prices of securities that pay interest
periodically and are likely to respond to a greater degree to
changes in interest rates than non-zero coupon securities
having similar maturities and credit qualities.

Participation Interests--(Asset Allocation, Equity, Bond and
Money Market Funds only) A participation interest gives the
purchaser an undivided interest in a security in the proportion
that such purchaser's participation interest bears to the total
principal amount of the security. These instruments may have
fixed, floating or variable rates of interest, with, in the
case of the Money Market Fund, remaining maturities of 13
months or less. If the participation interest is unrated, or
has been given a rating below that which is permissible for
purchase by a Fund, the participation interest will be backed
by an irrevocable letter of credit or guarantee of a bank, or
the payment obligation otherwise will be collateralized by U.S.
Government securities, or, in the case of unrated participation
interests, the Investment Adviser must have determined that the
instrument is of comparable quality to those instruments in
which such Fund may invest.

Mortgage-Related Securities--(Asset Allocation, Equity and Bond
Funds only) Mortgage-related securities are securities
collateralized by pools of mortgage loans assembled for sale to
investors by various governmental agencies, such as the
Government National Mortgage Association and government-related
organizations such as the Federal National Mortgage Association
and the Federal Home Loan Mortgage Corporation, as well as by
private issuers such as commercial banks, savings and loan
institutions, mortgage banks and private mortgage insurance
companies, and similar foreign entities. Mortgage-related
securities are a form of derivative security. The mortgage-
related securities which may be purchased include those with
fixed, floating and variable interest rates, those with
interest rates that change based on multiples of changes in
interest rates and those with interest rates that change
inversely to changes in interest rates, as well as stripped
mortgage-backed securities. Stripped mortgage-backed
securities usually are structured with two classes that receive
different proportions of interest and principal distributions
on a pool of mortgage-backed securities or whole loans. A
common type of stripped mortgage-backed security will have one
class receiving some of the interest and most of the principal
from the mortgage collateral, while the other class will
receive most of the interest and the remainder of the
principal. In the most extreme case, one class will receive
all of the interest (the interest-only or "IO" class), while
the other class will receive all of the principal (the
principal-only or "PO" class). Although certain mortgage-
related securities are guaranteed by a third party or otherwise
similarly secured, the market value of the security, which may
fluctuate, is not so secured. If a mortgage-related security
is purchased at a premium, all or part of the premium may be
lost if there is a decline in the market value of the security,
whether resulting from changes in interest rates or prepayments
in the underlying mortgage collateral. As with other interest-
bearing securities, the prices of certain of these securities
are inversely affected by changes in interest rates. However,
though the value of a mortgage-related security may decline
when interest rates rise, the converse is not necessarily true,
since in periods of declining interest rates the mortgages
underlying the security are more likely to prepay. For this
and other reasons, a mortgage-related security's stated
maturity may be shortened by unscheduled prepayments on the
underlying mortgages, and, therefore, it is not possible to
predict accurately the security's return to a Fund. Moreover,
with respect to stripped mortgage-backed securities, if the
underlying mortgage securities experience greater than
anticipated prepayments of principal, the Fund may fail to
fully recoup its initial investment in these securities even if
the securities are rated in the highest rating category by a
nationally recognized statistical rating organization. In
addition, regular payments received in respect of mortgage-
related securities include both interest and principal. No
assurance can be given as to the return the Fund will receive
when these amounts are reinvested. For further discussion
concerning the investment considerations involved, see
"Description of the Funds--Risk Factors--Fixed-Income
Securities" and "Illiquid Securities" below and "Investment
Objectives and Management Policies--Portfolio Securities--
Mortgage-Related Securities" in the Statement of Additional
Information.

Asset-Backed Securities--(Asset Allocation, Equity and Bond
Funds only) The securitization techniques used for asset-backed
securities are similar to those used for mortgage-related
securities. Asset-backed securities are a form of derivative
security. These securities include debt securities and
securities with debt-like characteristics. The collateral for
these securities has included home equity loans, automobile and
credit card receivables, boat loans, computer leases, airplane
leases, mobile home loans, recreational vehicle loans and
hospital account receivables. These Funds may invest in these
and other types of asset-backed securities that may be
developed in the future.

Asset-backed securities present certain risks
that
are not presented by mortgage-backed securities. Primarily,
these securities do not have the benefit of the same security
interest in the related collateral. Credit card receivables
generally are unsecured and the debtors are entitled to the
protection of a number of state and Federal consumer credit
laws, many of which give such debtors the right to set off
certain amounts owed on the credit cards, thereby reducing the
balance due. Most issuers of asset-backed securities backed by
automobile receivables permit the servicers of such receivables
to retain possession of the underlying obligations. If the
servicer were to sell these obligations to another party, there
is a risk that the purchaser would acquire an interest superior
to that of the holders of the related asset-backed securities.
In addition, because of the large number of vehicles involved
in a typical issuance and technical requirements under state
laws, the trustee for the holders of asset-backed securities
backed by automobile receivables may not have a proper security
interest in all of the obligations backing such receivables.
Therefore, there is the possibility that recoveries on
repossessed collateral may not, in some cases, be available to
support payments on these securities.

Municipal Obligations--(Asset Allocation, Equity, Bond and
Municipal Funds only) Municipal Obligations generally include
debt obligations issued to obtain funds for various public
purposes as well as certain industrial development bonds issued
by or on behalf of public authorities. While in general,
Municipal Obligations are tax exempt securities having
relatively low yields as compared to taxable, non-municipal
obligations of similar quality, certain issues of Municipal
Obligations, both taxable and non-taxable, offer yields
comparable and in some cases greater than the yields available
on other permissible investments. Dividends received by
shareholders of a Fund, other than a Municipal Fund, which are
attributable to interest income received by it from Municipal
Obligations generally will be subject to Federal income tax.
Municipal Obligations bear fixed, floating or variable rates of
interest, which are determined in some instances by formulas
under which the Municipal Obligation's interest rate will
change directly or inversely to changes in interest rates or an
index, or multiples thereof, in many cases subject to a maximum
and minimum. Each of these Funds, other than the Municipal
Funds, currently intends to invest no more than 25% of its
respective assets in Municipal Obligations. However, this
percentage may be varied from time to time without shareholder
approval.

Unregistered Notes--(Asset Allocation, Equity, Bond and Money
Market Funds only) Each of these Funds may purchase unsecured
promissory notes ("Notes") which are not readily marketable and
have not been registered under the Securities Act of 1933, as
amended, provided such investments are consistent with such
Fund's goal.

Foreign Government Obligations; Securities of Supranational
Entities--(Asset Allocation, International Equity, Growth,
Special Opportunities, Bond and Money Market Funds only) Each
of these Funds may invest in obligations issued or guaranteed
by one or more foreign governments or any of their political
subdivisions, agencies or instrumentalities that are determined
by the Investment Adviser to be of comparable quality to the
other obligations in which such Fund may invest. Such
securities also include debt obligations of supranational
entities. Supranational entities include international
organizations designated or supported by governmental entities
to promote economic reconstruction or development and
international banking institutions and related government
agencies. Examples include the International Bank for
Reconstruction and Development (the World Bank), the European
Coal and Steel Community, the Asian Development Bank and the
InterAmerican Development Bank. The percentage of a Fund's
assets invested in securities issued by foreign governments
will vary depending on the relative yields of such securities,
the economic and financial markets of the countries in which
the investments are made and the interest rate climate of such
countries.

Ratings--The ratings of Moody's, S&P, Fitch and Duff represent
their opinions as to the quality of the obligations which they
undertake to rate. It should be emphasized, however, that
ratings are relative and subjective and, although ratings may
be useful in evaluating the safety of interest and principal
payments, they do not evaluate the market value risk of such
obligations. Therefore, although these ratings may be an
initial criterion for selection of portfolio investments, the
Investment Adviser also will evaluate such obligations and the
ability of their issuers to pay interest and principal. Each
Fund will rely on the Investment Adviser's judgment, analysis
and experience in evaluating the creditworthiness of an issuer.
In this evaluation, the Investment Adviser will take into
consideration, among other things, the issuer's financial
resources, its sensitivity to economic conditions and trends,
the quality of the issuer's management and regulatory matters.
It also is possible that a rating agency might not timely
change the rating on a particular issue to reflect subsequent
events. Once the rating of a security held by a Fund has been
changed, the Investment Adviser will consider all circumstances
deemed relevant in determining whether such Fund should
continue to hold the security.

TAXABLE MONEY MARKET INSTRUMENTS

Each Fund may invest, in the circumstances
described
under "Description of the Funds--Management Policies," in the
following types of Money Market Instruments, each of which at
the time of purchase must have or be deemed to have under the
rules of the Securities and Exchange Commission remaining
maturities of 13 months or less.

U.S. Government Securities--Securities issued or guaranteed by
the U.S. Government or its agencies or instrumentalities
include U.S. Treasury securities that differ in their interest
rates, maturities and times of issuance. Treasury Bills have
initial maturities of one year or less; Treasury Notes have
initial maturities of one to ten years; and Treasury Bonds
generally have initial maturities of greater than ten years.
Some obligations issued or guaranteed by U.S. Government
agencies and instrumentalities, for example, Government
National Mortgage Association pass-through certificates, are
supported by the full faith and credit of the U.S. Treasury;
others, such as those of the Federal Home Loan Banks, by the
right of the issuer to borrow from the U.S. Treasury; others,
such as those issued by the Federal National Mortgage
Association, by discretionary authority of the U.S. Government
to purchase certain obligations of the agency or
instrumentality; and others, such as those issued by the
Student Loan Marketing Association, only by the credit of the
agency or instrumentality. These securities bear fixed,
floating or variable rates of interest. Principal and interest
may fluctuate based on generally recognized reference rates or
the relationship of rates. While the U.S. Government provides
financial support to such U.S. Government-sponsored agencies or
instrumentalities, no assurance can be given that it will
always do so, because it is not so obligated by law.

Bank Obligations--(each Fund, except U.S. Government Money
Market Fund) Bank obligations include certificates of deposit,
time deposits, bankers' acceptances and other short-term
obligations of domestic banks, foreign subsidiaries of domestic
banks, foreign branches of domestic banks, and domestic and
foreign branches of foreign banks, domestic savings and loan
associations and other banking institutions. With respect to
such securities issued by foreign branches of domestic banks,
foreign subsidiaries of domestic banks, and domestic and
foreign branches of foreign banks, a Fund may be subject to
additional investment risks that are different in some respects
from those incurred by a fund which invests only in debt
obligations of U.S. domestic issuers. Such risks include
possible future political and economic developments, the
possible imposition of foreign withholding taxes on interest
income payable on the securities, the possible establishment of
exchange controls or the adoption of other foreign governmental
restrictions which might adversely affect the payment of
principal and interest on these securities and the possible
seizure or nationalization of foreign deposits.

Certificates of deposit are negotiable
certificates
evidencing the obligation of a bank to repay funds deposited
with it for a specified period of time.

Time deposits are non-negotiable deposits
maintained
in a banking institution for a specified period of time at a
stated interest rate. Time deposits which may be held by each
Fund will not benefit from insurance from the Bank Insurance
Fund or the Savings Association Insurance Fund administered by
the Federal Deposit Insurance Corporation.

Repurchase Agreements--Repurchase agreements involve the
acquisition by a Fund of an underlying debt instrument, subject
to an obligation of the seller to repurchase, and such Fund to
resell, the instrument at a fixed price usually not more than
one week after its purchase. Certain costs may be incurred by
a Fund in connection with the sale of the securities if the
seller does not repurchase them in accordance with the
repurchase agreement. In addition, if bankruptcy proceedings
are commenced with respect to the seller of the securities,
realization on the securities by a Fund may be delayed or
limited.

Certain Corporate Obligations--(each Fund, except U.S.
Government Money Market Fund) Commercial paper consists of
short-term, unsecured promissory notes issued by domestic or
foreign entities to finance short-term credit needs. Floating
and variable rate demand notes and bonds are obligations
ordinarily having stated maturities in excess of one year, but
which permit the holder to demand payment of principal at any
time or at specified intervals. Variable rate demand notes
include variable amount master demand notes, which are
obligations that permit a Fund to invest fluctuating amounts at
varying rates of interest pursuant to direct arrangements
between the Fund, as lender, and the borrower. These notes
permit daily changes in the amounts borrowed. As mutually
agreed between the parties, the Fund may increase the amount
under the notes at any time up to the full amount provided by
the note agreement, or decrease the amount, and the borrower
may repay up to the full amount of the note without penalty.
Because these obligations are direct lending arrangements
between the lender and borrower, it is not contemplated that
such instruments generally will be traded, and there generally
is no established secondary market for these obligations,
although they are redeemable at face value, plus accrued
interest, at any time. Accordingly, where these obligations
are not secured by letters of credit or other credit support
arrangements, a Fund's right to redeem is dependent on the
ability of the borrower to pay principal and interest on
demand.
TAX EXEMPT MONEY MARKET INSTRUMENTS

Tax Exempt Participation Interests--(Municipal Funds only) A
participation interest in Municipal Obligations (such as
industrial development bonds and municipal lease/purchase
agreements) gives the purchaser an undivided interest in the
Municipal Obligation in the proportion that such purchaser's
participation interest bears to the total principal amount of
the Municipal Obligation. These instruments may have fixed,
floating or variable rates of interest, with remaining
maturities of 13 months or less. If the participation interest
is unrated, or has been given a rating below that which
otherwise is permissible for purchase by a Fund, the
participation interest will be backed by an irrevocable letter
of credit or guarantee of a bank that the Board of Trustees has
determined meets the prescribed quality standards for banks set
forth above, or the payment obligation otherwise will be
collateralized by U.S. Government securities. For certain
participation interests, a Fund will have the right to demand
payment, on not more than seven days' notice, for all or any
part of such Fund's participation interest in the Municipal
Obligation, plus accrued interest. As to these instruments,
each Fund intends to exercise its right to demand payment only
upon a default under the terms of the Municipal Obligation, as
needed to provide liquidity to meet redemptions, or to maintain
or improve the quality of its investment portfolio. No Fund
will invest more than 15% (10% in the case of the Municipal
Money Market Fund) of the value of its net assets in
participation interests that do not have this demand feature,
and in other illiquid securities.

Tender Option Bonds--(Municipal Funds only) A tender option
bond is a Municipal Obligation (generally held pursuant to a
custodial arrangement) having a relatively long maturity and
bearing interest at a fixed rate substantially higher than
prevailing short-term tax exempt rates, that has been coupled
with the agreement of a third party, such as a bank, broker-
dealer or other financial institution, pursuant to which such
institution grants the security holders the option, at periodic
intervals, to tender their securities to the institution and
receive the face value thereof. As consideration for providing
the option, the financial institution receives periodic fees
equal to the difference between the Municipal Obligation's
fixed coupon rate and the rate, as determined by a remarketing
or similar agent at or near the commencement of such period,
that would cause the securities, coupled with the tender
option, to trade at par on the date of such determination.
Thus, after payment of this fee, the security holder
effectively holds a demand obligation that bears interest at
the prevailing short-term tax exempt rate. The Investment
Adviser, on behalf of a Fund, will consider on an ongoing basis
the creditworthiness of the issuer of the underlying Municipal
Obligation, of any custodian and of the third party provider of
the tender option. In certain instances and for certain tender
option bonds, the option may be terminable in the event of a
default in payment of principal or interest on the underlying
Municipal Obligations and for other reasons. No Fund will
invest more than 15% (10% in the case of the Money Market
Funds) of the value of its net assets in securities that are
illiquid, which would include tender option bonds as to which
it cannot exercise the tender feature on not more than seven
days' notice if there is no secondary market available for
these obligations.

Stand-By Commitments--(Municipal Funds only) Each Municipal
Fund may acquire "stand-by commitments" with respect to
Municipal Obligations held in its portfolio. Under a stand-by
commitment, the Fund obligates a broker, dealer or bank to
repurchase, at the Fund's option, specified securities at a
specified price and, in this respect, stand-by commitments are
comparable to put options. The exercise of a stand-by
commitment therefore is subject to the ability of the seller to
make payment on demand. Each Municipal Fund will acquire
stand-by commitments solely to facilitate portfolio liquidity
and does not intend to exercise its rights thereunder for
trading purposes. Each Municipal Fund may pay for stand-by
commitments if such action is deemed necessary, thus increasing
to a degree the cost of the underlying Municipal Obligation and
similarly decreasing such security's yield to investors.

ILLIQUID SECURITIES

Each Fund may invest up to 15% (10% in the case of the Money
Market Funds) of the value of its net assets in securities as
to which a liquid trading market does not exist, provided such
investments are consistent with the Fund's investment
objective. Such securities may include securities that are not
readily marketable, such as certain securities that are subject
to legal or contractual restrictions on resale, repurchase
agreements providing for settlement in more than seven days
after notice, and certain options traded in the over-the-
counter market and securities used to cover such options. As
to these securities, a Fund is subject to a risk that should
such Fund desire to sell them when a ready buyer is not
available at a price the Fund deems representative of their
value, the value of such Fund's net assets could be adversely
affected.

INVESTMENT TECHNIQUES

LEVERAGE THROUGH BORROWING--(Asset Allocation, Equity, Bond
and, to a limited extent, Money Market Funds only) Borrowing
for investment purposes is known as leveraging and generally
will be unsecured, except to the extent a Fund enters into
reverse repurchase agreements described below. The Money
Market Fund may borrow for investment purposes only through
entering into reverse repurchase agreements. The 1940 Act
requires each Fund that engages in such borrowing to maintain
continuous asset coverage (that is, total assets including
borrowings, less liabilities exclusive of borrowings) of 300%
of the amount borrowed. If the 300% asset coverage should
decline as a result of market fluctuations or other reasons,
the Fund may be required to sell some of its portfolio holdings
within three days to reduce the debt and restore the 300% asset
coverage, even though it may be disadvantageous from an
investment standpoint to sell securities at that time.
Leveraging may exaggerate the effect on net asset value of any
increase or decrease in the market value of the Fund's
portfolio. Money borrowed for leveraging will be subject to
interest costs that may or may not be recovered by appreciation
of the securities purchased; in certain cases, interest costs
may exceed the return received on the securities purchased.
The Fund also may be required to maintain minimum average
balances in connection with such borrowing or to pay a
commitment or other fee to maintain a line of credit; either of
these requirements would increase the cost of borrowing over
the stated interest rate.

Among the forms of borrowing in which a Fund
may
engage is the entry into reverse repurchase agreements with
banks, brokers or dealers. These transactions involve the
transfer by the Fund of an underlying debt instrument in return
for cash proceeds based on a percentage of the value of the
security. The Fund retains the right to receive interest and
principal payments on the security. At an agreed upon future
date, the Fund repurchases the security at principal, plus
accrued interest. In certain types of agreements, there is no
agreed upon repurchase date and interest payments are
calculated daily, often based on the prevailing overnight
repurchase rate. The Fund will maintain in a segregated
custodial account cash or U.S. Government securities or other
high quality liquid debt securities at least equal to the
aggregate amount of its reverse repurchase obligations, plus
accrued interest, in certain cases, in accordance with releases
promulgated by the Securities and Exchange Commission. The
Securities and Exchange Commission views reverse repurchase
transactions as collateralized borrowings by the Fund. These
agreements, which are treated as if reestablished each day, are
expected to provide the Fund with a flexible borrowing tool.

SHORT-SELLING--(Asset Allocation, Equity and Bond Funds only)
Each of these Funds may make short sales, which are
transactions in which the Fund sells a security it does not own
in anticipation of a decline in the market value of that
security. To complete such a transaction, the Fund must borrow
the security to make delivery to the buyer. The Fund then is
obligated to replace the security borrowed by purchasing it at
the market price at the time of replacement. The price at such
time may be more or less than the price at which the security
was sold by the Fund. Until the security is replaced, the Fund
is required to pay to the lender amounts equal to any dividends
or interest which accrue during the period of the loan. To
borrow the security, the Fund also may be required to pay a
premium, which would increase the cost of the security sold.
The proceeds of the short sale will be retained by the broker,
to the extent necessary to meet margin requirements, until the
short position is closed out.

Until a Fund closes its short position or
replaces
the borrowed security, the Fund will: (a) maintain a
segregated account, containing cash or U.S. Government
securities, at such a level that (i) the amount deposited in
the account plus the amount deposited with the broker as
collateral will equal the current value of the security sold
short and (ii) the amount deposited in the segregated account
plus the amount deposited with the broker as collateral will
not be less than the market value of the security at the time
it was sold short; or (b) otherwise cover its short position.

The Fund will incur a loss as a result of the
short
sale if the price of the security increases between the date of
the short sale and the date on which the Fund replaces the
borrowed security. The Fund will realize a gain if the
security declines in price between those dates. This result is
the opposite of what one would expect from a cash purchase of a
long position in a security. The amount of any gain will be
decreased, and the amount of any loss increased, by the amount
of any premium or amounts in lieu of dividends or interest a
Fund may be required to pay in connection with a short sale.

Each Fund may purchase call options to provide
a
hedge against an increase in the price of a security sold short
by such Fund. When a Fund purchases a call option it has to
pay a premium to the person writing the option and a commission
to the broker selling the option. If the option is exercised
by the Fund, the premium and the commission paid may be more
than the amount of the brokerage commission charged if the
security were to be purchased directly. See "Options
Transactions" below.

It is expected that the frequency of short
sales
on
behalf of each Fund will vary substantially under different
market conditions, and it is not intended that any specified
portion of a Fund's assets, as a matter of practice, will be
invested in short sales. However, no securities will be sold
short if, after effect is given to any such short sale, the
total market value of all securities sold short would exceed
25% of the value of the Fund's net assets. A Fund will not
sell short the securities of any single issuer listed on a
national securities exchange to the extent of more than 5% of
the value of such Fund's net assets and will not sell short the
securities of any class of an issuer to the extent, at the time
of transaction, of more than 5% of the outstanding securities
of that class.

In addition to the short sales discussed above,
each
Fund may make short sales "against the box," a transaction in
which a Fund enters into a short sale of a security which such
Fund owns. The proceeds of the short sale will be held by a
broker until the settlement date at which time the Fund
delivers the security to close the short position. The Fund
receives the net proceeds from the short sale. At no time will
a Fund have more than 15% of the value of its net assets in
deposits on short sales against the box.

OPTIONS TRANSACTIONS--(Asset Allocation, Equity and Bond Funds
only) Each of these Funds is permitted to invest up to 5% of
its assets, represented by the premium paid, in the purchase of
call and put options.

Each of these Funds is permitted to purchase
call and
put options in respect of specific securities (or groups or
"baskets" of specific securities) in which the Fund may invest.
Each Fund may write and sell covered call option contracts on
securities owned by the Fund not exceeding 20% of the market
value of its net assets at the time such option contracts are
written. Each Fund also may purchase call options to enter
into closing purchase transactions. Each Fund also may write
covered put option contracts to the extent of 20% of the value
of its net assets at the time such option contracts are
written. A call option gives the purchaser of the option the
right to buy, and obligates the writer to sell, the underlying
security at the exercise price at any time during the option
period. Conversely, a put option gives the purchaser of the
option the right to sell, and obligates the writer to buy, the
underlying security at the exercise price at any time during
the option period. A covered put option sold by a Fund exposes
the Fund during the term of the option to a decline in price of
the underlying security or securities. A put option sold by a
Fund is covered when, among other things, cash or liquid
securities are placed in a segregated account with the Trust's
custodian to fulfill the obligation undertaken.

Each of these Funds also may purchase and sell
call
and put options on foreign currency for the purpose of hedging
against changes in future currency exchange rates. Call
options convey the right to buy the underlying currency at a
price which is expected to be lower than the spot price of the
currency at the time the option expires. Put options convey
the right to sell the underlying currency at a price which is
anticipated to be higher than the spot price of the currency at
the time the option expires.

Each of these Funds also may purchase
cash-settled
options on interest rate swaps, interest rate swaps denominated
in foreign currency and equity index swaps. See "--Interest
Rate and Equity Index Swaps" below. A cash-settled option on a
swap gives the purchaser the right, but not the obligation, in
return for the premium paid, to receive an amount of cash equal
to the value of the underlying swap as of the exercise date.
These options typically are purchased in privately negotiated
transactions from financial institutions, including securities
brokerage firms.

Each of these Funds may purchase and sell call
and
put options on stock indexes listed on U.S. securities
exchanges or traded in the over-the-counter market. A stock
index fluctuates with changes in the market values of the
stocks included in the index. Because the value of an index
option depends upon movements in the level of the index rather
than the price of a particular stock, whether a Fund will
realize a gain or loss from the purchase or writing of options
on an index depends upon movements in the level of stock prices
in the stock market generally or, in the case of certain
indexes, in an industry or market segment, rather than
movements in the price of a particular stock.

Successful use by a Fund of options will be
subject
to the Investment Adviser's ability to predict correctly
movements in the direction of individual stocks, the stock
market generally, foreign currencies or interest rates. To the
extent the Investment Adviser's predictions are incorrect, the
Fund may incur losses which could adversely affect the value of
a shareholder's investment.

FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS--(Asset
Allocation, Equity, Bond and Municipal Bond Funds only) Each of
these Funds may enter into stock index futures contracts,
interest rate futures contracts and currency futures contracts,
and options with respect thereto. See "--Options Transactions"
above. These transactions will be entered into as a substitute
for comparable market positions in the underlying securities or
for hedging purposes. Although none of these Funds would be a
commodity pool, each would be subject to rules of the CFTC
limiting the extent to which it could engage in these
transactions.

Engaging in these transactions involves risk of
loss
to a Fund which could adversely affect the value of a
shareholder's investment. Although each of these Funds intends
to purchase or sell futures contracts only if there is an
active market for such contracts, no assurance can be given
that a liquid market will exist for any particular contract at
any particular time. Many futures exchanges and boards of
trade limit the amount of fluctuation permitted in futures
contract prices during a single trading day. Once the daily
limit has been reached in a particular contract, no trades may
be made that day at a price beyond that limit or trading may be
suspended for specified periods during the trading day.
Futures contract prices could move to the limit for several
consecutive trading days with little or no trading, thereby
preventing prompt liquidation of futures positions and
potentially subjecting the Fund to substantial losses. In
addition, engaging in futures transactions in foreign markets
may involve greater risks than trading in domestic exchanges.

Successful use of futures by a Fund also is
subject
to the Investment Adviser's ability to predict correctly
movements in the direction of the market, interest rates or
foreign currencies and, to the extent the transaction is
entered into for hedging purposes, to ascertain the appropriate
correlation between the transaction being hedged and the price
movements of the futures contract. For example, if a Fund has
hedged against the possibility of a decline in the market
adversely affecting the value of securities held in its
portfolio and prices increase instead, the Fund will lose part
or all of the benefit of the increased value of securities
which it has hedged because it will have offsetting losses in
its futures positions. In addition, in such situations, if the
Fund has insufficient cash, it may have to sell securities to
meet daily variation margin requirements. Such sales of
securities may, but will not necessarily, be at increased
prices which reflect the rising market. A Fund may have to
sell securities at a time when it may be disadvantageous to do
so.

Pursuant to regulations and/or published
positions of
the Securities and Exchange Commission, each of these Funds may
be required to segregate cash or high quality money market
instruments in connection with its commodities transactions in
an amount generally equal to the value of the underlying
commodity. The segregation of such assets will have the effect
of limiting the Fund's ability otherwise to invest those
assets.

INTEREST RATE AND EQUITY INDEX SWAPS--(Asset Allocation, Equity
and Bond Funds only) Each of these Funds may enter into
interest rate swaps and equity index swaps, to the extent
described under "Description of the Funds--Management
Policies," in pursuit of their respective investment
objectives. Interest rate swaps involve the exchange by a Fund
with another party of their respective commitments to pay or
receive interest (for example, an exchange of floating-rate
payments for fixed-rate payments). Equity index swaps involve
the exchange by a Fund with another party of cash flows based
upon the performance of an index or a portion of an index which
usually includes dividends. In each case, the exchange
commitments can involve payments to be made in the same
currency or in different currencies.

Each of these Funds usually will enter into
swaps on
a net basis. In so doing, the two payment streams are netted
out, with the Fund receiving or paying, as the case may be,
only the net amount of the two payments. If a Fund enters into
a swap, it would maintain a segregated account in the full
amount accrued on a daily basis of the Fund's obligations with
respect to the swap. Each of these Funds will enter into swap
transactions with counterparties only if: (i) for transactions
with maturities under one year, such counterparty has
outstanding short-term paper rated at least A-1 by S&P, Prime-1
by Moody's, F-1 by Fitch or Duff-1 by Duff, or (ii) for
transactions with maturities greater than one year, the
counterparty has outstanding debt securities rated at least Aa
by Moody's or AA by S&P, Fitch or Duff. If there is a default
by the other party to such a transaction, the Fund will have
contractual remedies pursuant to the agreements related to the
transaction.

The use of swaps is a highly specialized
activity
which involves investment techniques and risks different from
those associated with ordinary portfolio security transactions.
There is no limit on the amount of swap transactions that may
be entered into by a Fund. These transactions do not involve
the delivery of securities or other underlying assets or
principal. Accordingly, the risk of loss with respect to swaps
is limited to the net amount of payments that a Fund is
contractually obligated to make. If the other party to a swap
defaults, the relevant Fund's risk of loss consists of the net
amount of payments that such Fund contractually is entitled to
receive.

FOREIGN CURRENCY TRANSACTIONS--(Asset Allocation, Growth,
International Equity, Special Opportunities and International
Bond Funds only) Each of these Funds may engage in currency
exchange transactions either on a spot (i.e., cash) basis at
the rate prevailing in the currency exchange market, or through
entering into forward contracts to purchase or sell currencies.
A forward currency exchange contract involves an obligation to
purchase or sell a specific currency at a future date, which
must be more than two days from the date of the contract, at a
price set at the time of the contract. These contracts are
entered into in the interbank market conducted directly between
currency traders (typically commercial banks or other financial
institutions) and their customers.

Each of these Funds also may combine forward
currency
exchange contracts with investments in securities denominated
in other currencies.

Each of these Funds also may maintain short
positions
in forward currency exchange transactions, which would involve
it agreeing to exchange an amount of a currency it did not
currently own for another currency at a future date in
anticipation of a decline in the value of the currency sold
relative to the currency such Fund contracted to receive in the
exchange.

FUTURE DEVELOPMENTS--(Asset Allocation, Equity, Bond and
Municipal Bond Funds only) Each of these Funds may take
advantage of opportunities in the area of options and futures
contracts, options on futures contracts and any other
derivative investments which are not presently contemplated for
use by a Fund or which are not currently available but which
may be developed, to the extent such opportunities are both
consistent with a Fund's investment objective and legally
permissible for such Fund. Before entering into such
transactions or making any such investment, the Trust will
provide appropriate disclosure in its prospectus.

LENDING PORTFOLIO SECURITIES--From time to time, each Fund may
lend securities from its portfolio to brokers, dealers and
other financial institutions needing to borrow securities to
complete certain transactions. Such loans may not exceed 33-
1/3% of the value of a Fund's total assets. In connection with
such loans, a Fund will receive collateral consisting of cash,
U.S. Government securities or, except in the case of the U.S.
Government Money Market Fund, irrevocable letters of credit
which will be maintained at all times in an amount equal to at
least 100% of the current market value of the loaned
securities. Each Fund can increase its income through the
investment of such collateral. A Fund continues to be entitled
to payments in amounts equal to the interest, dividends and
other distributions payable on the loaned security and receives
interest on the amount of the loan. Such loans will be
terminable at any time upon specified notice. A Fund might
experience risk of loss if the institution with which it has
engaged in a portfolio loan transaction breaches its agreement
with such Fund.

FORWARD COMMITMENTS--Each Fund may purchase securities on a
when-issued or forward commitment basis, which means that the
price is fixed at the time of commitment, but delivery and
payment ordinarily take place a number of days after the date
of the commitment to purchase. A Fund will make commitments to
purchase such securities only with the intention of actually
acquiring the securities, but the Fund may sell these
securities before the settlement date if it is deemed
advisable. The Fund will not accrue income in respect of a
security purchased on a forward commitment basis prior to its
stated delivery date.

Securities purchased on a when-issued or
forward
commitment basis and certain other securities held in a Fund's
portfolio are subject to changes in value (both generally
changing in the same way, i.e., appreciating when interest
rates decline and depreciating when interest rates rise) based
upon the public's perception of the creditworthiness of the
issuer and changes, real or anticipated, in the level of
interest rates. Securities purchased on a when-issued or
forward commitment basis may expose a Fund to risk because they
may experience such fluctuations prior to their actual
delivery. Purchasing securities on a when-issued or forward
commitment basis can involve the additional risk that the yield
available in the market when the delivery takes place actually
may be higher than that obtained in the transaction itself. A
segregated account of each Fund consisting of cash or U.S.
Government securities or other high quality liquid debt
securities of the type in which the Fund invests at least equal
at all times to the amount of the when-issued or forward
commitments will be established and maintained at the Trust's
custodian bank. Purchasing securities on a forward commitment
basis when a Fund is fully or almost fully invested may result
in greater potential fluctuation in the value of such Fund's
net assets and its net asset value per share.

BORROWING MONEY--As a fundamental policy, each Fund is
permitted to borrow to the extent permitted under the 1940 Act.
However, Intermediate Municipal Bond Fund, the Municipal Money
Market Fund and U.S. Government Money Market Fund currently
intend to borrow money only for temporary or emergency (not
leveraging) purposes, in an amount up to 15% of the value of
its total assets (including the amount borrowed) valued at the
lesser of cost or market, less liabilities (not including the
amount borrowed) at the time the borrowing is made. While
borrowings exceed 5% of such Fund's total assets, the Fund will
not make any additional investments.

<PAGE>

PRAIRIE FUNDS
CLASS A, CLASS B AND CLASS I SHARES
PART B (STATEMENT OF ADDITIONAL
INFORMATION)
__________, 1994

This Statement of Additional Information, which
is
not a prospectus, supplements and should be read in conjunction
with the current Prospectus for 12 separate portfolios (each, a
"Fund") of Prairie Funds (the "Trust"), dated _________, 1994,
as it may be revised from time to time. To obtain a copy of
the Trust's Prospectus, please write to the Trust at
________________________________________ or call toll free
1-800-________.

First Chicago Investment Management Company
(the
"Investment Adviser" or "FIMCO") serves as each Fund's
investment adviser and administrator.

Concord Financial Group, Inc. (the
"Distributor")
serves as the distributor of the Funds' shares.

TABLE OF CONTENTS

Page

Investment Objectives and Management Policies . . . . . . .B-2
Management of the Trust. . . . . . . . . . . . . . . . . . B-18
Management Arrangements . . . . . . . . . . . . . . . . . .B-18
Purchase of Shares. . . . . . . . . . . . . . . . . . . . .B-20
Distribution Plan and Shareholder Services Plan . . . . . .B-21
Redemption of Shares. . . . . . . . . . . . . . . . . . . .B-22
Determination of Net Asset Value. . . . . . . . . . . . . .B-23
Portfolio Transactions. . . . . . . . . . . . . . . . . . .B-26
Dividends, Distributions and Taxes. . . . . . . . . . . . B-29
Performance Information . . . . . . . . . . . . . . . . . .B-31
Information About the Trust . . . . . . . . . . . . . . . .B-32
Counsel and Independent Auditors. . . . . . . . . . . . . .B-32
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . .B-33
Financial Statements. . . . . . . . . . . . . . . . . . . B-43
Report of Independent Auditors. . . . . . . . . . . . . . .B-__

<PAGE>
INVESTMENT OBJECTIVES AND
MANAGEMENT POLICIES

The following information supplements and
should
be
read in conjunction with the section in the Trust's Prospectus
entitled "Description of the Funds."

Portfolio Securities

Bank Obligations. (Each Fund, except the U.S.
Government Money Market Fund) Domestic commercial banks
organized under Federal law are supervised and examined by the
Comptroller of the Currency and are required to be members of
the Federal Reserve System and to have their deposits insured
by the Federal Deposit Insurance Corporation (the "FDIC").
Domestic banks organized under state law are supervised and
examined by state banking authorities but are members of the
Federal Reserve System only if they elect to join. In
addition, state banks whose certificates of deposit ("CDs") may
be purchased by each Fund are insured by the FDIC (although
such insurance may not be of material benefit to a Fund,
depending on the principal amount of the CDs of each bank held
by such Fund) and are subject to Federal examination and to a
substantial body of Federal law and regulation. As a result of
Federal or state laws and regulations, domestic branches of
domestic banks whose CDs may be purchased by the Fund generally
are required, among other things, to maintain specified levels
of reserves, are limited in the amounts which they can loan to
a single borrower and are subject to other regulation designed
to promote financial soundness. However, not all of such laws
and regulations apply to the foreign branches of domestic
banks.

Obligations of foreign branches of domestic
banks,
foreign subsidiaries of domestic banks and domestic and foreign
branches of foreign banks, such as CDs and time deposits
("TDs"), may be general obligations of the parent banks in
addition to the issuing branch, or may be limited by the terms
of a specific obligation and governmental regulation. Such
obligations are subject to different risks than are those of
domestic banks. These risks include foreign economic and
political developments, foreign governmental restrictions that
may adversely affect payment of principal and interest on the
obligations, foreign exchange controls and foreign withholding
and other taxes on interest income. These foreign branches and
subsidiaries are not necessarily subject to the same or similar
regulatory requirements that apply to domestic banks, such as
mandatory reserve requirements, loan limitations, and
accounting, auditing and financial record keeping requirements.
In addition, less information may be publicly available about a
foreign branch of a domestic bank or about a foreign bank than
about a domestic bank.

Obligations of United States branches of
foreign
banks may be general obligations of the parent bank in addition
to the issuing branch, or may be limited by the terms of a
specific obligation or by Federal or state regulation as well
as governmental action in the country in which the foreign bank
has its head office. A domestic branch of a foreign bank with
assets in excess of $1 billion may be subject to reserve
requirements imposed by the Federal Reserve System or by the
state in which the branch is located if the branch is licensed
in that state.

In addition, Federal branches licensed by the
Comptroller of the Currency and branches licensed by certain
states ("State Branches") may be required to: (1) pledge to
the regulator, by depositing assets with a designated bank
within the state, a certain percentage of their assets as fixed
from time to time by the appropriate regulatory authority; and
(2) maintain assets within the state in an amount equal to a
specified percentage of the aggregate amount of liabilities of
the foreign bank payable at or through all of its agencies or
branches within the state. The deposits of Federal and State
Branches generally must be insured by the FDIC if such branches
take deposits of less than $100,000.

In view of the foregoing factors associated
with
the
purchase of CDs and TDs issued by foreign branches of domestic
banks, by foreign subsidiaries of domestic banks, by foreign
branches of foreign banks or by domestic branches of foreign
banks, the Investment Adviser carefully evaluates such
investments on a case-by-case basis.

Repurchase Agreements. The Trust's custodian
or
sub-
custodian will have custody of, and will hold in a segregated
account, securities acquired by a Fund under a repurchase
agreement. Repurchase agreements are considered by the staff
of the Securities and Exchange Commission to be loans by the
Fund. In an attempt to reduce the risk of incurring a loss on
a repurchase agreement, each Fund will enter into repurchase
agreements only with domestic banks with total assets in excess
of one billion dollars, or primary government securities
dealers reporting to the Federal Reserve Bank of New York, with
respect to securities of the type in which the Fund may invest,
and will require that additional securities be deposited with
it if the value of the securities purchased should decrease
below the resale price. The Investment Adviser will monitor on
an ongoing basis the value of the collateral to assure that it
always equals or exceeds the repurchase price. The Trust will
consider on an ongoing basis the creditworthiness of the
institutions with which a Fund enters into repurchase
agreements.

Commercial Paper and Other Short-Term Corporate
Obligations. (Each Fund, except the U.S. Government Money
Market Fund) Variable rate demand notes include variable
amount master demand notes, which are obligations that permit a
Fund to invest fluctuating amounts at varying rates of interest
pursuant to direct arrangements between the Fund, as lender,
and the borrower. These notes permit daily changes in the
amounts borrowed. As mutually agreed between the parties, the
Fund may increase the amount under the notes at any time up to
the full amount provided by the note agreement, or decrease the
amount, and the borrower may repay up to the full amount of the
note without penalty. Because these obligations are direct
lending arrangements between the lender and borrower, it is not
contemplated that such instruments generally will be traded,
and there generally is no established secondary market for
these obligations, although they are redeemable at face value,
plus accrued interest, at any time. Accordingly, where these
obligations are not secured by letters of credit or other
credit support arrangements, a Fund's right to redeem is
dependent on the ability of the borrower to pay principal and
interest on demand. In connection with floating and variable
rate demand obligations, the Investment Adviser will consider,
on an ongoing basis, earning power, cash flow and other
liquidity ratios of the borrower, and the borrower's ability to
pay principal and interest on demand. Such obligations
frequently are not rated by credit rating agencies, and a Fund
may invest in them only if at the time of an investment the
borrower meets the criteria set forth in the Prospectus for
other commercial paper issuers.

Mortgage-Related Securities (Asset Allocation, Equity and Bond
Funds only)

Government Agency Securities. Mortgage-related
securities issued by the Government National Mortgage
Association ("GNMA") include GNMA Mortgage Pass-Through
Certificates (also known as "Ginnie Maes") which are guaranteed
as to the timely payment of principal and interest by GNMA and
such guarantee is backed by the full faith and credit of the
United States. GNMA is a wholly-owned U.S. Government
corporation within the department of Housing and Urban
Development. GNMA certificates also are supported by the
authority of GNMA to borrow funds from the U.S. Treasury to
make payments under its guarantee.

Government Related Securities.
Mortgage-related
securities issued by the Federal National Mortgage Association
("FNMA") include FNMA Guaranteed Mortgage Pass-Through
Certificates (also known as "Fannie Maes") which are solely the
obligations of the FNMA and are not backed by or entitled to
the full faith and credit of the United States. The FNMA is a
government-sponsored organization owned entirely by private
stockholders. Fannie Maes are guaranteed as to timely payment
of principal and interest by FNMA.

Mortgage-related securities issued by the
Federal
Home Loan Mortgage Corporation ("FHLMC") include FHLMC Mortgage
Participation Certificates (also known as "Freddie Macs" or
"PCs"). The FHLMC is a corporate instrumentality of the United
States created pursuant to an Act of Congress, which is owned
entirely by Federal Home Loan Banks. Freddie Macs are not
guaranteed by the United States or by any Federal Home Loan
Bank and do not constitute a debt or obligation of the United
States or of any Federal Home Loan Bank. Freddie Macs entitle
the holder to timely payment of interest, which is guaranteed
by the FHLMC. The FHLMC guarantees either ultimate collection
or timely payment of all principal payments on the underlying
mortgage loans. When the FHLMC does not guarantee timely
payment of principal, FHLMC may remit the amount due on account
of its guarantee of ultimate payment of principal at any time
after default on an underlying mortgage, but in no event later
than one year after it becomes payable.

Municipal Obligations. (Asset, Allocation,
Equity,
Bond and Municipal Funds only) Municipal Obligations are
classified as general obligation bonds, revenue bonds and
notes. General obligation bonds are secured by the issuer's
pledge of its faith, credit and taxing power for the payment of
principal and interest. Revenue bonds are payable from the
revenue derived from a particular facility or class of
facilities or, in some cases, from the proceeds of a special
excise or other specific revenue source, but not from the
general taxing power. Industrial development bonds, in most
cases, are revenue bonds and generally do not carry the pledge
of the credit of the issuing municipality, but generally are
guaranteed by the corporate entity on whose behalf they are
issued. Notes are short-term instruments which are obligations
of the issuing municipalities or agencies and are sold in
anticipation of a bond sale, collection of taxes or receipt of
other revenues. Municipal Obligations include municipal
lease/purchase agreements which are similar to installment pur-
chase contracts for property or equipment issued by municipal-
ities. Certain Municipal Obligations are subject to redemption
at a date earlier than their stated maturity pursuant to call
options, which may be separated from the related Municipal
Obligation and purchased and sold separately. Each of these
Funds will invest in Municipal Obligations, the ratings of
which correspond with the ratings of other permissible Fund
investments.

For the purpose of diversification under the
Investment Company Act of 1940 (the "1940 Act"), the
identification of the issuer of Municipal Obligations depends
on the terms and conditions of the security. When the assets
and revenues of an agency, authority, instrumentality or other
political subdivision are separate from those of the government
creating the subdivision and the security is backed only by the
assets and revenues of the subdivision, such subdivision would
be deemed to be the sole issuer. Similarly, in the case of an
industrial development bond, if that bond is backed only by the
assets and revenues of the non-governmental user, then such
non-governmental user would be deemed to be the sole issuer.
If, however, in either case, the creating government or some
other entity guarantees a security, such a guaranty would be
considered a separate security and will be treated as an issue
of such government or other entity.

The yields on Municipal Obligations are
dependent on
a variety of factors, including general economic and monetary
conditions, money market factors, conditions in the Municipal
Obligations market, size of a particular offering, maturity of
the obligation, and rating of the issue. The imposition of the
Fund's management fee, as well as other operating expenses,
will have the effect of reducing the yield to investors.

Municipal lease obligations or installment
purchase
contract obligations (collectively, "lease obligations") have
special risks not ordinarily associated with Municipal
Obligations. Although lease obligations do not constitute
general obligations of the municipality for which the
municipality's taxing power is pledged, a lease obligation
ordinarily is backed by the municipality's covenant to budget
for, appropriate and make the payments due under the lease
obligation. However, certain lease obligations contain "non-
appropriation" clauses which provide that the municipality has
no obligation to make lease or installment purchase payments in
future years unless money is appropriated for such purpose on a
yearly basis. Although "non-appropriation" lease obligations
are secured by the leased property, disposition of the property
in the event of foreclosure might prove difficult. The
Municipal Money Market Fund will seek to minimize these risks
by investing only in those lease obligations that (1) are rated
in one of the two highest categories for debt obligations by at
least two nationally recognized statistical rating
organizations (or one rating organization if the lease
obligation was rated by only one such organization); or (2) if
unrated, are purchased principally from the issuer or domestic
banks or other responsible third parties, in each case only if
the seller shall have entered into an agreement with the
Municipal Money Market Fund providing the seller or other
responsible third party will either remarket or repurchase the
lease obligations within a short period after demand by the
Fund. With respect to the Intermediate Municipal Bond Fund,
the Board has established guidelines for the Investment Adviser
to determine the liquidity and appropriate valuation of lease
obligations based on factors which include: (1) the frequency
of trades and quotes for the lease obligation or similar
securities; (2) the number of dealers willing to purchase or
sell the lease obligation or similar securities and the number
of other potential buyers; (3) the willingness of dealers to
undertake to make a market in the security or similar
securities; and (4) the nature of the marketplace trades,
including the time needed to dispose of the security, the
method of soliciting offers, and the mechanics of transfer.
Not more than 15% (10% in the case of the Municipal Money
Market Fund) of the value of the Fund's net assets will be
invested in lease obligations that are illiquid and in other
illiquid securities. See "Investment Restriction No. 11"
below.

The Intermediate Municipal Bond Fund will
purchase
tender option bonds only when it is satisfied that the
custodial and tender option arrangements, including the fee
payment arrangements, will not adversely affect the tax exempt
status of the underlying Municipal Obligations and that payment
of any tender fees will not have the effect of creating taxable
income for the Fund. Based on the tender option bond
agreement, the Trust expects to be able to value the tender
option bond at par; however, the value of the instrument will
be monitored to assure that is valued at fair value.

The Municipal Money Market Fund will not
purchase
tender option bonds unless (a) the demand feature applicable
thereto is exercisable by the Fund within 13 months of the date
of such purchase upon no more than 30 days' notice and
thereafter is exercisable by the Fund no less frequently than
annually upon no more than 30 days' notice and (b) at the time
of such purchase, the Investment Adviser reasonably expects (i)
based upon its assessment of current and historical interest
rate trends, that prevailing short-term tax exempt rates will
not exceed the stated interest rate on the underlying Municipal
Obligations at the time of the next tender option to terminate
the tender option would not occur prior to the time of the next
tender opportunity. At the time of each tender opportunity,
the Fund will exercise the tender option with respect to any
tender option bonds unless the Investment Adviser reasonably
expects, (x) based upon its assessment of current and
historical interest rate trends, that prevailing short-term tax
exempt rates will not exceed the stated interest rate on the
underlying Municipal Obligations at the time of the next tender
fee adjustment, and (y) that the circumstances which might
entitle the grantor of a tender option to terminate the tender
option would not occur prior to the time of the next tender
opportunity. The Municipal Money Market Fund will exercise the
tender feature with respect to tender option bonds, or
otherwise dispose of its tender option bonds, prior to the time
the tender option is scheduled to expire pursuant to the terms
of the agreement under which the tender option is granted. The
Municipal Money Market Fund otherwise will comply with the
provisions of Rule 2a-7 in connection with the purchase of
tender option bonds, including, without limitation, the
requisite determination by the Board of Trustees that the
tender option bonds in question meet the quality standards
described in Rule 2a-7, which, in the case of a tender option
bond subject to a conditional demand feature, would include a
determination that the security has received both the required
short-term and long-term quality rating or is determined to be
of comparable quality. In the event of a default of the
Municipal Obligation underlying a tender option bond, or the
termination of the tender option agreement, the Municipal Money
Market Fund would look to the maturity date of the underlying
security for purposes of compliance with Rule 2a-7 and, if its
remaining maturity was greater than 13 months, the Fund would
sell the security as soon as would be practicable. The
Municipal Money Market Fund will purchase tender option bonds
only when it is satisfied that the custodial and tender option
arrangements, including the fee payment arrangements, will not
adversely affect the tax exempt status of the underlying
Municipal Obligations and that payment of any tender fees will
not have the effect of creating taxable income for the Fund.
Based on the tender option bond agreement, the Municipal Money
Market Fund expects to be able to value the tender option bond
at par; however, the value of the instrument will be monitored
to assure that it is valued at fair value.

If, subsequent to its purchase by the Municipal
Money
Market Fund, (a) an issue of rated Municipal Obligations ceases
to be rated in the highest rating category by at least two
ratings organizations (or one rating organization if the
instrument was rated by only one such organization), or the
Trust's Board determines that it is no longer of comparable
quality; or (b) the Investment Adviser becomes aware that any
portfolio security not so highly rated or any unrated security
has been given a rating by any rating organization below the
rating organization's second highest rating category, the
Trust's Board will reassess promptly whether such security
presents minimal credit risk and will cause the Fund to take
such action as it determines is in the best interest of the
Fund and its shareholders, provided that the reassessment
required by clause (b) is not required if the portfolio
security is disposed of or matures within five business days of
the Investment Adviser becoming aware of the new rating and the
Trust's Board is subsequently notified of the Investment
Adviser's actions.

To the extent that the ratings given by Moody's
Investors Service, Inc. ("Moody's"), Standard & Poor's
Corporation ("S&P") or Fitch Investors Service Inc. ("Fitch")
for Municipal Obligations may change as a result of changes in
such organizations or their rating systems, the Municipal Money
Market Fund will attempt to use comparable ratings as standards
for its investments in accordance with the investment policies
contained in the Trust's Prospectus and this Statement of
Additional Information. The ratings of Moody's, S&P and Fitch
represent their opinions as to the quality of the Municipal
Obligations which they undertake to rate. It should be
emphasized, however, that ratings are relative and subjective
and are not absolute standards of quality. Although these
ratings may be an initial criterion for selection of portfolio
investments, the Investment Adviser will also evaluate these
securities and the creditworthiness of the issuers of such
securities.

Convertible Securities. (Asset Allocation,
Equity
and Bond Funds only) In general, the market value of a
convertible security is the higher of its "investment value"
(i.e., its value as a fixed-income security) or its "conversion
value" (i.e., the value of the underlying shares of common
stock if the security is converted). As a fixed-income
security, the market value of a convertible security generally
increases when interest rates decline and generally decreases
when interest rates rise. However, the price of a convertible
security also is influenced by the market value of the
security's underlying common stock. Thus, the price of a
convertible security generally increases as the market value of
the underlying stock increases, and generally decreases as the
market value of the underlying stock declines. Investments in
convertible securities generally entail less risk than
investments in the common stock of the same issuer.

Illiquid Securities. When purchasing
securities
that
have not been registered under the Securities Act of 1933, as
amended, and are not readily marketable, the Trust will
endeavor to obtain the right to registration at the expense of
the issuer. Generally, there will be a lapse of time between a
Fund's decision to sell any such security and the registration
of the security permitting sale. During any such period, the
price of the securities will be subject to market fluctuations.
However, if a substantial market of qualified institutional
buyers develops pursuant to Rule 144A under the Securities Act
of 1933, as amended, for certain unregistered securities held
by a Fund, such Fund intends to treat them as liquid securities
in accordance with procedures approved by the Trust's Board of
Trustees. Because it is not possible to predict with assurance
how the market for restricted securities pursuant to Rule 144A
will develop, the Trust's Board of Trustees has directed the
Investment Adviser to monitor carefully each Fund's investments
in such securities with particular regard to trading activity,
availability of reliable price information and other relevant
information. To the extent that, for a period of time,
qualified institutional buyers cease purchasing restricted
securities pursuant to Rule 144A, a Fund's investing in such
securities may have the effect of increasing the level of
illiquidity in such Fund during such period.

Management Policies

Options Transactions. (Asset Allocation,
Equity
and
Bond Funds only) Each of these Funds may engage in options
transactions, such as purchasing or writing covered call or put
options. The principal reason for writing covered call options
is to realize, through the receipt of premiums, a greater
return than would be realized on a Fund's securities alone. In
return for a premium, the writer of a covered call option
forfeits the right to any appreciation in the value of the
underlying security above the strike price for the life of the
option (or until a closing purchase transaction can be
effected). Nevertheless, the call writer retains the risk of a
decline in the price of the underlying security. Similarly,
the principal reason for writing covered put options is to
realize income in the form of premiums. The writer of a
covered put option accepts the risk of a decline in the price
of the underlying security. The size of the premiums that a
Fund may receive may be adversely affected as new or existing
institutions, including other investment companies, engage in
or increase their option-writing activities.

Options written ordinarily will have expiration
dates
between one and nine months from the date written. The
exercise price of the options may be below, equal to or above
the market values of the underlying securities at the time the
options are written. In the case of call options, these
exercise prices are referred to as "in-the-money," "at-the-
money" and "out-of-the-money," respectively. Each Fund may
write (a) in-the-money call options when the Investment Adviser
expects that the price of the underlying security will remain
stable or decline moderately during the option period, (b) at-
the-money call options when the Investment Adviser expects that
the price of the underlying security will remain stable or
advance moderately during the option period and (c) out-of-the-
money call options when the Investment Adviser expects that the
premiums received from writing the call option plus the
appreciation in market price of the underlying security up to
the exercise price will be greater than the appreciation in the
price of the underlying security alone. In these
circumstances, if the market price of the underlying security
declines and the security is sold at this lower price, the
amount of any realized loss will be offset wholly or in part by
the premium received. Out-of-the-money, at-the-money and in-
the-money put options (the reverse of call options as to the
relation of exercise price to market price) may be utilized in
the same market environments that such call options are used in
equivalent transactions.

So long as a Fund's obligation as the writer of
an
option continues, such Fund may be assigned an exercise notice
by the broker-dealer through which the option was sold,
requiring the Fund to deliver, in the case of a call, or take
delivery of, in the case of a put, the underlying security
against payment of the exercise price. This obligation
terminates when the option expires or a Fund effects a closing
purchase transaction. A Fund can no longer effect a closing
purchase transaction with respect to an option once it has been
assigned an exercise notice.

While it may choose to do otherwise, each Fund
generally will purchase or write only those options for which
the Investment Adviser believes there is an active secondary
market so as to facilitate closing transactions. There is no
assurance that sufficient trading interest to create a liquid
secondary market on a securities exchange will exist for any
particular option or at any particular time, and for some
options no such secondary market may exist. A liquid secondary
market in an option may cease to exist for a variety of
reasons. In the past, for example, higher than anticipated
trading activity or order flow, or other unforeseen events, at
times have rendered certain clearing facilities inadequate and
resulted in the institution of special procedures, such as
trading rotations, restrictions on certain types of orders or
trading halts or suspensions in one or more options. There can
be no assurance that similar events, or events that otherwise
may interfere with the timely execution of customers' orders,
will not recur. In such event, it might not be possible to
effect closing transactions in particular options. If as a
covered call option writer a Fund is unable to effect a closing
purchase transaction in a secondary market, it will not be able
to sell the underlying security until the option expires or it
delivers the underlying security upon exercise or it otherwise
covers its position.

Stock Index Options. (Asset Allocation and
Equity
Funds only) Each of these Funds may purchase and write put and
call options on stock indexes listed on a securities exchange
or traded in the over-the-counter market. A stock index
fluctuates with changes in the market values of the stocks
included in the index.

Options on stock indexes are similar to options
on
stock except that (a) the expiration cycles of stock index
options are generally monthly, while those of stock options are
currently quarterly, and (b) the delivery requirements are
different. Instead of giving the right to take or make
delivery of a stock at a specified price, an option on a stock
index gives the holder the right to receive a cash "exercise
settlement amount" equal to (i) the amount, if any, by which
the fixed exercise price of the option exceeds (in the case of
a put) or is less than (in the case of a call) the closing
value of the underlying index on the date of exercise,
multiplied by (ii) a fixed "index multiplier." Receipt of this
cash amount will depend upon the closing level of the stock
index upon which the option is based being greater than, in the
case of a call, or less than, in the case of a put, the
exercise price of the option. The amount of cash received will
be equal to such difference between the closing price of the
index and the exercise price of the option expressed in dollars
times a specified multiple. The writer of the option is
obligated, in return for the premium received, to make delivery
of this amount. The writer may offset its position in stock
index options prior to expiration by entering into a closing
transaction on an exchange or it may let the option expire
unexercised.

Futures Contracts and Options on Futures
Contracts.
(Asset Allocation, Equity, Bond and Municipal Bond Funds Only)
Each of these Funds may trade futures contracts and options on
futures contracts in U.S. domestic markets, such as the Chicago
Board of Trade and the International Monetary Market of the
Chicago Mercantile Exchange, or, to the extent permitted under
applicable law, on exchanges located outside the United States,
such as the London International Financial Futures Exchange and
the Sydney Futures Exchange Limited. Foreign markets may offer
advantages such as trading in commodities that are not
currently traded in the United States or arbitrage
possibilities not available in the United States.

Each of these Funds' commodities transactions
must
constitute bona fide hedging or other permissible transactions
pursuant to regulations promulgated by the Commodity Futures
Trading Commission (the "CFTC"). In addition, a Fund may not
engage in such transactions if the sum of the amount of initial
margin deposits and premiums paid for unexpired commodity
options, other than for bona fide hedging transactions, would
exceed 5% of the liquidation value of the Fund's assets, after
taking into account unrealized profits and unrealized losses on
such contracts it has entered into; provided, however, that in
the case of an option that is in-the-money at the time of
purchase, the in-the-money amount may be excluded in
calculating the 5%. To the extent a Fund engages in the use of
futures and options on futures for other than bona fide hedging
purposes, the Fund may be subject to additional risk.

Initially, when purchasing or selling futures
contracts a Fund will be required to deposit with the Trust's
custodian in the broker's name an amount of cash or cash
equivalents up to approximately 10% of the contract amount.
This amount is subject to change by the exchange or board of
trade on which the contract is traded and members of such
exchange or board of trade may impose their own higher
requirements. This amount is known as "initial margin" and is
in the nature of a performance bond or good faith deposit on
the contract which is returned to the Fund upon termination of
the futures position, assuming all contractual obligations have
been satisfied. Subsequent payments, known as "variation
margin," to and from the broker will be made daily as the price
of the index or securities underlying the futures contract
fluctuates, making the long and short positions in the futures
contract more or less valuable, a process known as "marking-to-
market." At any time prior to the expiration of a futures
contract, the Fund may elect to close the position by taking an
opposite position, at the then prevailing price, which will
operate to terminate the Fund's existing position in the
contract.

Although each of these Funds intends to
purchase
or
sell futures contracts only if there is an active market for
such contracts, no assurance can be given that a liquid market
will exist for any particular contract at any particular time.
Many futures exchanges and boards of trade limit the amount of
fluctuation permitted in futures contract prices during a
single trading day. Once the daily limit has been reached in a
particular contract, no trades may be made that day at a price
beyond that limit or trading may be suspended for specified
periods during the trading day. Futures contract prices could
move to the limit for several consecutive trading days with
little or no trading, thereby preventing prompt liquidation of
futures positions and potentially subjecting a Fund to
substantial losses. If it is not possible, or the Fund
determines not, to close a futures position in anticipation of
adverse price movements, the Fund will be required to make
daily cash payments of variation margin. In such
circumstances, an increase in the value of the portion of the
portfolio being hedged, if any, may offset partially or
completely losses on the futures contract. However, no
assurance can be given that the price of the securities being
hedged will correlate with the price movements in a futures
contract and thus provide an offset to losses on the futures
contract.

In addition, to the extent a Fund is engaging
in
a
futures transaction as a hedging device, due to the risk of an
imperfect correlation between securities owned by the Fund that
are the subject of a hedging transaction and the futures
contract used as a hedging device, it is possible that the
hedge will not be fully effective in that, for example, losses
on the portfolio securities may be in excess of gains on the
futures contract or losses on the futures contract may be in
excess of gains on the portfolio securities that were the
subject of the hedge. In futures contracts based on indexes,
the risk of imperfect correlation increases as the composition
of a Fund's investments varies from the composition of the
index. In an effort to compensate for the imperfect
correlation of movements in the price of the securities being
hedged and movements in the price of futures contracts, the
Fund may buy or sell futures contracts in a greater or lesser
dollar amount than the dollar amount of the securities being
hedged if the historical volatility of the futures contract has
been less or greater than that of the securities. Such "over
hedging" or "under hedging" may adversely affect a Fund's net
investment results if market movements are not as anticipated
when the hedge is established.

Upon exercise of an option, the writer of the
option
will deliver to the holder of the option the futures position
and the accumulated balance in the writer's futures margin
account, which represents the amount by which the market price
of the futures contract exceeds, in the case of a call, or is
less than, in the case of a put, the exercise price of the
option on the futures contract. The potential loss related to
the purchase of options on futures contracts is limited to the
premium paid for the option (plus transaction costs). Because
the value of the option is fixed at the time of sale, there are
no daily cash payments to reflect changes in the value of the
underlying contract; however, the value of the option does
change daily and that change would be reflected in the net
asset value of each Fund.

Foreign Currency Transactions. (Asset
Allocation,
Growth, International Equity, Special Opportunities and
International Bond Funds only) If a Fund enters into a currency
transaction, it will deposit, if so required by applicable
regulations, with its custodian cash or readily marketable
securities in a segregated account of the Fund in an amount at
least equal to the value of the Fund's total assets committed
to the consummation of the forward contract. If the value of
the securities placed in the segregated account declines,
additional cash or securities will be placed in the account so
that the value of the account will equal the amount of the
Fund's commitment with respect to the contract.

At or before the maturity of a forward
contract,
the
Fund either may sell a security and make delivery of the
currency, or retain the security and offset its contractual
obligation to deliver the currency by purchasing a second
contract pursuant to which the Fund will obtain, on the same
maturity date, the same amount of the currency which it is
obligated to deliver. If the Fund retains the portfolio
security and engages in an offsetting transaction, such Fund,
at the time of execution of the offsetting transaction, will
incur a gain or loss to the extent movement has occurred in
forward contract prices. Should forward prices decline during
the period between the Fund's entering into a forward contract
for the sale of a currency and the date it enters into an
offsetting contract for the purchase of the currency, the Fund
will realize a gain to the extent the price of the currency it
has agreed to sell exceeds the price of the currency it has
agreed to purchase. Should forward prices increase, the Fund
will suffer a loss to the extent the price of the currency it
has agreed to purchase exceeds the price of the currency it has
agreed to sell.

The cost to each of these Funds of engaging in
currency transactions varies with factors such as the currency
involved, the length of the contract period and the market
conditions then prevailing. Because transactions in currency
exchange usually are conducted on a principal basis, no fees or
commissions are involved. The use of forward currency exchange
contracts does not eliminate fluctuations in the underlying
prices of the securities, but it does establish a rate of
exchange that can be achieved in the future. If a devaluation
generally is anticipated, a Fund may not be able to contract to
sell the currency at a price above the devaluation level it
anticipates. The requirements for qualification as a regulated
investment company under the Internal Revenue Code of 1986, as
amended (the "Code"), may cause the Fund to restrict the degree
to which each Fund engages in currency transactions. See
"Dividends, Distributions and Taxes."

Lending Portfolio Securities. To a limited
extent,
each Fund may lend its portfolio securities to brokers, dealers
and other financial institutions, provided it receives cash
collateral which at all times is maintained in an amount equal
to at least 100% of the current market value of the securities
loaned. By lending its portfolio securities, a Fund can
increase its income through the investment of the cash
collateral. For purposes of this policy, a Fund considers
collateral consisting of U.S. Government securities or, except
in the case of the U.S. Government Money Market Fund,
irrevocable letters of credit issued by banks whose securities
meet the standards for investment by such Fund to be the
equivalent of cash. From time to time, a Fund may return to
the borrower or a third party which is unaffiliated with such
Fund, and which is acting as a "placing broker," a part of the
interest earned from the investment of collateral received for
securities loaned.

The Securities and Exchange Commission
currently
requires that the following conditions must be met whenever
portfolio securities are loaned: (1) the Fund must receive at
least 100% cash collateral from the borrower; (2) the borrower
must increase such collateral whenever the market value of the
securities rises above the level of such collateral; (3) the
Fund must be able to terminate the loan at any time; (4) the
Fund must receive reasonable interest on the loan, as well as
any dividends, interest or other distributions payable on the
loaned securities, and any increase in market value; (5) the
Fund may pay only reasonable custodian fees in connection with
the loan; and (6) while voting rights on the loaned securities
may pass to the borrower, the Trust's Board of Trustees must
terminate the loan and regain the right to vote the securities
if a material event adversely affecting the investment occurs.
These conditions may be subject to future modification.

Investment Restrictions

Each Fund has adopted investment restrictions
numbered 1 through 7 as fundamental policies. In addition, the
Money Market Fund has adopted investment restrictions numbered
14 and 15, the Municipal Funds have adopted investment
restriction number 16 and the Diversified Funds, other than the
Money Market and Municipal Funds, have adopted investment
restrictions number 17, 18 and 19 as additional fundamental
policies. These restrictions cannot be changed, as to a Fund,
without approval by the holders of a majority (as defined in
the 1940 Act) of such Fund's outstanding voting shares.
Investment restrictions numbered 8 through 13 are not
fundamental policies and may be changed by vote of a majority
of the Trust's Trustees at any time. No Fund may:

1. Invest in commodities, except that
each
Fund may
purchase and sell options, forward contracts, futures
contracts, including those relating to indexes, and
options on futures contracts or indexes.

2. Purchase, hold or deal in real estate,
or oil,
gas or other mineral leases or exploration or
development
programs, but each Fund may purchase and sell
securities
that are secured by real estate or issued by companies
that invest or deal in real estate.

3. Borrow money, except to the extent
permitted
under the 1940 Act. For purposes of this investment
restriction, a Fund's entry into options, forward
contracts, futures contracts, including those relating
to
indexes, and options on futures contracts or indexes
shall
not constitute borrowing.

4. Make loans to others, except through
the
purchase of debt obligations and the entry into
repurchase
agreements. However, each Fund may lend its securities
in
an amount not to exceed 33-1/3% of the value of its
total
assets. Any loans of portfolio securities will be made
according to guidelines established by the Securities
and
Exchange Commission and the Trust's Board of Trustees.

5. Act as an underwriter of securities of
other
issuers, except to the extent a Fund may be deemed an
underwriter under the Securities Act of 1933, as
amended,
by virtue of disposing of portfolio securities, and
except
that the Fund may bid separately or as part of a group
for
the purchase of Municipal Obligations directly from an
issuer for its own portfolio to take advantage of the
lower purchase price available.

6. Issue any senior security (as such
term
is
defined in Section 18(f) of the 1940 Act), except to
the
extent the activities permitted under Investment
Restriction Nos. 1, 3, 9 and 10 may be deemed to give
rise
to senior securities.

7. Purchase securities on margin, but
each
Fund may
make margin deposits in connection with transactions in
options, forward contracts, futures contracts,
including
those relating to indexes, and options on futures
contracts or indexes.

8. Invest in the securities of a company for
the
purpose of exercising management or control, but each
Fund
will vote the securities it owns in its portfolio as a
shareholder in accordance with its views.

9. Pledge, mortgage or hypothecate its
assets,
except to the extent necessary to secure permitted
borrowings and to the extent related to the deposit of
assets in escrow in connection with writing covered put
and call options and the purchase of securities on a
when-
issued or forward commitment basis and collateral and
initial or variation margin arrangements with respect
to
options, forward contracts, futures contracts,
including
those relating to indexes, and options on futures
contracts or indexes.

10. Purchase, sell or write puts, calls or
combinations thereof, except as described in the
Trust's
Prospectus and this Statement of Additional
Information.

11. Enter into repurchase agreements providing
for
settlement in more than seven days after notice or
purchase securities which are illiquid, if, in the
aggregate, more than 15% (10% in the case of a Money
Market Fund) of the value of the Fund's net assets
would
be so invested.

12. Invest in securities of other investment
companies, except to the extent permitted under the
Act.

13. Purchase securities of any company having
less
than three years' continuous operations (including
operations of any predecessors) if such purchase would
cause the value of the Fund's investments in all such
companies to exceed 5% of the value of its total
assets.

The following investment restrictions numbered
14 and
15 apply only to the Money Market Fund. The Money Market Fund
may not:

14. Invest more than 5% of its assets in the
obligations of any one issuer, except that up to 25% of
the value of the Money Market Fund's total assets may
be
invested (subject to Rule 2a-7 under the 1940 Act)
without
regard to any such limitation.

15. Invest less than 25% of its total assets
in
securities issued by banks or invest more than 25% of
its
assets in the securities of issuers in any other
industry,
provided that there shall be no limitation on the
purchase
of obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.
Notwithstanding the foregoing, for temporary defensive
purposes, the Money Market Fund may invest less than
25%
of its total assets in bank obligations.

The following investment restriction number 16
applies only to the Municipal Funds. None of these Funds may:

16. Invest more than 25% of its total assets
in
the
securities of issuers in any single industry, provided
that there shall be no such limitation on the purchase
of
Municipal Obligations and, for temporary defensive
purposes, obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.

The following investment restriction numbers
17,
18
and 19 apply only to the Diversified Funds, other than the
Money Market and Municipal Funds. None of these Funds may:

17. Invest more than 5% of its assets in the
obligations of any single issuer, except that up to 25%
of
the value of the Fund's total assets may be invested,
and
securities issued or guaranteed by the U.S. Government,
or
its agencies or instrumentalities may be purchased,
without regard to any such limitation.

18. Hold more than 10% of the outstanding
voting
securities of any single issuer. This Investment
Restriction applies only with respect to 75% of the
Fund's
total assets.

19. Invest more than 25% of its assets in the
securities of issuers in any single industry, except
that,
there shall be no limitation on the purchase of
obligations issued or guaranteed by the U.S.
Government,
its agencies or instrumentalities.

If a percentage restriction is adhered to at
the
time
of investment, a later increase or decrease in percentage
resulting from a change in values or assets will not constitute
a violation of such restriction.

The Trust may make commitments more restrictive
than
the restrictions listed above so as to permit the sale of Fund
shares in certain states. Should the Trust determine that a
commitment is no longer in the best interests of a Fund and its
shareholders, the Trust reserves the right to revoke the
commitment by terminating the sale of such Fund's shares in the
state involved.

MANAGEMENT OF THE
TRUST

Trustees and officers of the Trust, together
with
information as to their principal business occupations during
at least the last five years, are shown below. Each Trustee
who is deemed to be an "interested person" of the Trust, as
defined in the 1940 Act, is indicated by an asterisk.

Trustees and Officers of the Trust

[TO BE PROVIDED]

For so long as a plan described in the section
captioned "Distribution, Shareholder Services and Service
Plans" remains in effect, the Trustees of the Trust who are not
"interested persons" of the Trust, as defined in the 1940 Act,
will be selected and nominated by the Trustees who are not
"interested persons" of the Trust.

Officers of the Trust Not Listed Above

[TO BE PROVIDED]

MANAGEMENT
ARRANGEMENTS

The following information supplements and
should
be
read in conjunction with the section in the Prospectus entitled
"Management of the Trust."

Investment Advisory Agreement. FIMCO provides
investment advisory services pursuant to the Investment
Advisory Agreement (the "Agreement") dated _____________, 1994,
with the Trust. As to each Fund, the Agreement is subject to
annual approval by (i) the Trust's Board of Trustees or (ii)
vote of a majority (as defined in the 1940 Act) of the
outstanding voting securities of such Fund, provided that in
either event the continuance also is approved by a majority of
the Trustees who are not "interested persons" (as defined in
the 1940 Act) of the Trust or FIMCO, by vote cast in person at
a meeting called for the purpose of voting on such approval.
As to each Fund, the Agreement is terminable without penalty,
on 60 days' notice, by the Trust's Board of Trustees or by vote
of the holders of a majority of such Fund's shares, or, on not
less than 90 days' notice, by FIMCO. The Agreement will
terminate automatically, as to the relevant Fund, in the event
of its assignment (as defined in the 1940 Act).

FIMCO is responsible for investment decisions
for
each Fund in accordance with the stated policies of such Fund,
subject to the approval of the Trust's Board of Trustees. All
purchases and sales are reported for the Trustees' review at
the meeting subsequent to such transactions.

The following persons are officers and/or
directors
of FIMCO: __________________.

Sub-Investment Advisory Agreement. ANB
Investment
Management and Trust Company ("ANB-IMC") provides investment
advisory assistance and day-to-day management of the
International Equity Fund's investments pursuant to the Sub-
Investment Advisory Agreement dated _____________, 1994 between
ANB-IMC and FIMCO. The Sub-Investment Advisory Agreement is
subject to annual approval by (i) the Trust's Board or (ii)
vote of a majority (as defined in the Act) of the International
Equity Fund's outstanding voting securities, provided that in
either event the continuance also is approved by a majority of
Trustees who are not "interested persons" (as defined in the
Act) of the Trust or ANB-IMC, by vote cast in person at a
meeting called for the purpose of voting on such approval. The
Sub-Investment Advisory Agreement is terminable without
penalty, (i) by FIMCO on 60 days' notice, (ii) by the Trust's
Board or by vote of the holders of a majority of the Fund's
outstanding voting securities on 60 days' notice, or (iii) upon
not less than 90 days' notice, by ANB-IMC. The Sub-Investment
Advisory Agreement will terminate automatically in the event of
its assignment (as defined in the Act).

ANB-IMC provides day-to-day management of the
International Equity Fund's investments, subject to the
supervision of FIMCO and the Trust's Board. The fees payable
to ANB-IMC for its services are paid by FIMCO.

The following persons are officers and/or
directors
of ANB-IMC: _____________________________________________.

Administration and Sub-Administration
Agreements.
Pursuant to an Administration Agreement dated ______________,
1994 with the Trust, FIMCO assists in all aspects of the
Trust's operations, other than providing investment advice,
subject to the overall authority of the Trust's Board in
accordance with Massachusetts law. FIMCO has engaged Concord
Holding Corporation (the "Sub-Administrator") to assist it in
providing certain administrative services to the Trust.
Pursuant to its agreement with FIMCO (the "Sub-Administration
Agreement"), the Administrator assists FIMCO in furnishing the
Trust clerical help and accounting, data processing,
bookkeeping, internal auditing and legal services and certain
other services required by the Trust, preparing reports to the
funds' shareholders, tax returns, reports to and filings with
the Securities and Exchange Commission and state Blue Sky
authorities, calculating the net asset value of each Fund's
shares and generally in providing for all aspects of the
Trust's operation, other than providing investment advice. The
fees payable to the Sub-Administrator for its services are paid
by FIMCO.

The Fund has agreed that FIMCO, ANB-IMC and the
Sub-Administrator will not be liable for any error of judgment
or mistake of law or for any loss suffered by the Trust in
connection with the matters to which respective agreements
relate, except for a loss resulting from wilful misfeasance,
bad faith or gross negligence on the part of FIMCO in the
performance of its obligations or from reckless disregard by it
of its obligations and duties under its Agreements or on the
part of ANB-IMC or the Sub-Administrator in the performance of
their respective obligations or from reckless disregard by
either of its obligations and duties under its agreement.

Expenses and Expense Information. All expenses
incurred in the operation of the Trust are borne by the Trust,
except to the extent specifically assumed by FIMCO. The
expenses borne by the Trust include: organizational costs,
taxes, interest, brokerage fees and commissions, if any, fees
of Board members, Securities and Exchange Commission fees,
state Blue Sky qualification fees, advisory fees, charges of
custodians, transfer and dividend disbursing agents' fees,
certain insurance premiums, industry association fees, outside
auditing and legal expenses, costs of maintaining the Trust's
existence, costs of independent pricing services, costs
attributable to investor services (including, without
limitation, telephone and personnel expenses), costs of
shareholders' reports and meetings, costs of preparing and
printing prospectuses and statements of additional information
for regulatory purposes and for distribution to existing
shareholders, and any extraordinary expenses. In addition,
Class A and Class B are subject to an annual distribution
and/or service fee. Expenses attributable to a particular Fund
or Class are charged against the assets of that Fund or Class,
respectively; other expenses of the Trust are allocated among
the Funds on the basis determined by the Board of Trustees,
including, but not limited to, proportionately in relation to
the net assets of each Fund.

The Agreement provides that if, in any fiscal
year,
the aggregate expenses of a Fund, exclusive of taxes,
brokerage, interest on borrowings and (with the prior written
consent of the necessary state securities commissions)
extraordinary expenses, but including the advisory fee, exceed
the expense limitation of any state having jurisdiction over
the Fund, the Trust may deduct from the payment to be made to
FIMCO under the Agreement, or FIMCO will bear, such excess
expense to the extent required by state law. Such deduction or
payment, if any, will be estimated daily, and reconciled and
effected or paid, as the case may be, on a monthly basis.

The aggregate of the fees payable to FIMCO is
not
subject to reduction as the value of a Fund's net assets
increases.

PURCHASE OF SHARES

The following information supplements and
should
be
read in conjunction with the section in the Trust's Prospectus
entitled "How to Buy Shares."

The Distributor. The Distributor serves as the
Trust's distributor pursuant to an agreement which is renewable
annually.

Using Federal Funds. The Shareholder Services
Group,
Inc., the Fund's transfer and dividend disbursing agent (the
"Transfer Agent"), or the Trust may attempt to notify the
investor upon receipt of checks drawn on banks that are not
members of the Federal Reserve System as to the possible delay
in conversion into Federal Funds and may attempt to arrange for
a better means of transmitting the money. If the investor is a
customer of a securities dealer, bank or other financial
institution and his order to purchase Fund shares is paid for
other than in Federal Funds, the securities dealer, bank or
other financial institution, acting on behalf of its customer,
generally will complete the conversion into, or itself advance,
Federal Funds on the business day following receipt of the
customer order. The order is effective only when so converted
and received by the Transfer Agent. An order for the purchase
of Fund shares placed by an investor with a sufficient Federal
Funds or cash balance in his brokerage account with a
securities dealer, bank or other financial institution will
become effective on the day that the order, including Federal
Funds, is received by the Transfer Agent. In some states,
banks or other institutions effecting transactions in Fund
shares may be required to register as dealers pursuant to state
law.

DISTRIBUTION PLAN AND SHAREHOLDER
SERVICES PLAN

The following information supplements and
should
be
read in conjunction with the section in the Trust's Prospectus
entitled "Distribution Plan and Shareholder Services Plan."

Distribution Plan. Rule 12b-1 (the "Rule")
adopted
by the Securities and Exchange Commission under the 1940 Act
provides, among other things, that an investment company may
bear expenses of distributing its shares only pursuant to a
plan adopted in accordance with the Rule. The Trust's Board
has adopted such a plan with respect to Class B shares of each
Fund (the "Plan"). The Trust's Board believes that there is a
reasonable likelihood that the Plan will benefit each Fund and
the holders of its Class B shares.

A quarterly report of the amounts expended
under
each
Plan, and the purposes for which such expenditures were
incurred, must be made to the Trustees for their review. In
addition, the Plan provides that it may not be amended to
increase materially the cost which holders of Class B shares of
the Fund may bear pursuant to the Plan without the approval of
the shareholders of such Class and that other material
amendments of the Plan must be approved by the Board of
Trustees and by the Trustees who are not "interested persons"
(as defined in the 1940 Act) of the Trust and have no direct or
indirect financial interest in the operation of the Plan or in
any agreements entered into in connection with the Plan, by
vote cast in person at a meeting called for the purpose of
considering such amendments. The Plan is subject to annual
approval by such vote of the Trustees cast in person at a
meeting called for the purpose of voting on the Plan. The Plan
was so approved by the Trustees at a meeting held on
__________, 1994. The Plan may be terminated at any time by
vote of a majority of the Trustees who are not "interested
persons" and have no direct or indirect financial interest in
the operation of the Plan or in any agreements entered into in
connection with the Plan or by vote of the holders of a
majority of Class B shares of the Fund.

Shareholder Services Plan. The Trust has
adopted a
Shareholder Services Plan, pursuant to which the Trust pays the
Distributor for the provision of certain services to the
holders of Class A and Class B shares of each Fund.

A quarterly report of the amounts expended
under
the
Shareholder Services Plan, and the purposes for which such
expenditures were incurred, must be made to the Trustees for
their review. In addition, the Shareholder Services Plan
provides that it may not be amended without approval of the
Trustees, and by the Trustees who are neither "interested
persons" (as defined in the 1940 Act) of the Trust nor have any
direct or indirect financial interest in the operation of the
Shareholder Services Plan or in any agreements entered into in
connection with the Shareholder Services Plan, by vote cast in
person at a meeting called for the purpose of considering such
amendments. The Shareholder Services Plan is subject to annual
approval by such vote of the Trustees cast in person at a
meeting called for the purpose of voting on the Shareholder
Services Plan. The Shareholder Services Plan was so approved
on ___________, 1994. The Shareholder Services Plan is
terminable at any time by vote of a majority of the Trustees
who are not "interested persons" and who have no direct or
indirect financial interest in the operation of the Shareholder
Services Plan or in any agreements entered into in connection
with the Shareholder Services Plan.

REDEMPTION OF SHARES

The following information supplements and
should
be
read in conjunction with the section in the Trust's Prospectus
entitled "How to Redeem Fund Shares."

Redemption Commitment. The Trust has committed
itself to pay in cash all redemption requests by any
shareholder of record of a Fund, limited in amount during any
90-day period to the lesser of $250,000 or 1% of the value of
such Fund's net assets at the beginning of such period. Such
commitment is irrevocable without the prior approval of the
Securities and Exchange Commission. In the case of requests
for redemption in excess of such amount, the Board of Trustees
reserves the right to make payments in whole or in part in
securities or other assets in case of an emergency or any time
a cash distribution would impair the liquidity of the Fund to
the detriment of the existing shareholders. In such event, the
securities would be valued in the same manner as the Fund's
securities are valued. If the recipient sold such securities,
brokerage charges would be incurred.

Suspension of Redemptions. The right of
redemption
may be suspended or the date of payment postponed (a) during
any period when the New York Stock Exchange is closed (other
than customary weekend and holiday closing), (b) when trading
in the markets the Fund ordinarily utilizes is restricted, or
when an emergency exists as determined by the Securities and
Exchange Commission so that disposal of the Fund's investments
or determination of its net asset value is not reasonably
practicable, or (c) for such other periods as the Securities
and Exchange Commission by order may permit to protect the
Fund's shareholders.

DETERMINATION OF NET ASSET
VALUE

The following information
supplements and
should be read in conjunction with the section in the Trust's
Prospectus entitled "How to Buy Shares."

Applicable to each Fund, other than
the Money
Market Funds--Equity Securities and covered call options
written by a Fund are valued at the last sale price on the
securities exchange or national securities market on which such
securities primarily are traded. Equity Securities not listed
on an exchange or national securities market, or securities in
which there were no transactions, are valued at the most recent
bid prices. Any securities or other assets for which recent
market quotations are not readily available are valued at fair
value as determined in good faith by the Trust's Board of
Trustees.

Fixed-Income Securities are valued
each
business day using available market quotations or at fair value
as determined by one or more independent pricing services
(collectively, the "Service") approved by the Trust's Board of
Trustees. The Service may use available market quotations,
employ electronic data processing techniques and/or a matrix
system to determine valuations. The Service's procedures are
reviewed by the Trust's officers under the general supervision
of the Trust's Board of Trustees.

Municipal Obligations are carried
at
fair
value as determined by the Service, based on methods which
include consideration of: yields or prices of municipal bonds
of comparable quality, coupon, maturity and type; indications
as to values from dealers; and general market conditions. The
Service also may employ electronic data processing techniques
and/or a matrix system to determine valuations. When, in the
judgment of the Service, quoted bid prices for investments are
readily available and are representative of the bid side of the
market, these investments are valued at the mean between the
quoted bid prices (as obtained by the Service from dealers in
such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities).

Short-term investments are carried
at
amortized cost, which approximates value.

Restricted securities, as well as
securities
or other assets for which market quotations are not readily
available, or are not valued by a pricing service approved by
the Trust's Board of Trustees, are valued at fair value as
determined in good faith by the Trust's Board of Trustees. The
Trust's Board of Trustees will review the method of valuation
on a current basis. In making its good faith valuation of
restricted securities, the Board of Trustees generally will
take the following factors into consideration: restricted
securities which are, or are convertible into, securities of
the same class of securities for which a public market exists
usually will be valued at market value less the same percentage
discount at which purchased. This discount will be revised
periodically by the Trust's Board of Trustees if its members
believe that the discount no longer reflects the value of the
restricted securities. Restricted securities not of the same
class as securities for which a public market exists usually
will be valued initially at cost. Any subsequent adjustment
from cost will be based upon considerations deemed relevant by
the Trust's Board of Trustees.

Any assets or liabilities initially
expressed
in terms of foreign currency will be translated into dollars at
the midpoint of the New York interbank market spot exchange
rate as quoted on the day of such translation by the Federal
Reserve Bank of New York or if no such rate is quoted on such
date, at the exchange rate previously quoted by the Federal
Reserve Bank of New York or at such other quoted market
exchange rate as may be determined to be appropriate by the
Investment Adviser. Forward currency contracts will be valued
at the current cost of offsetting the contract. Because of the
need to obtain prices as of the close of trading on various
exchanges throughout the world, the calculation of net asset
value for the International Equity and International Bond Funds
does not take place contemporaneously with the determination of
prices of such securities. In addition, portfolio securities
held by such Funds may be traded actively in securities markets
which are open for trading on days when the Fund will not be
determining its net asset value. Accordingly, there may be
occasions when these Funds will not calculate it net asset
value but when the value of the Fund's portfolio securities
will be affected by such trading activity.

Expenses and fees of a Fund,
including the
advisory fee, are accrued daily and taken into account for the
purpose of determining the net asset value of that Fund's
shares.

Money Market Funds. The valuation
of each
Money Market Fund's investment securities is based upon their
amortized cost which does not take into account unrealized
capital gains or losses. This involves valuing an instrument
at its cost and thereafter assuming a constant amortization to
maturity of any discount or premium, regardless of the impact
of fluctuating interest rates on the market value of the
instrument. While this method provides certainty in valuation,
it may result in periods during which value, as determined by
amortized cost, is higher or lower than the price the Fund
would receive if it sold the instrument.

The Board of Trustees has
established
procedures, as a particular responsibility within the overall
duty of care owed to the Money Market Fund's investors,
reasonably designed to stabilize the Money Market Fund's price
per share as computed for purposes of purchases and redemptions
at $1.00. Such procedures include review of each Money Market
Fund's portfolio holdings by the Board of Trustees, at such
intervals as it deems appropriate, to determine whether the
Money Market Fund's net asset value calculated by using
available market quotations or market equivalents deviates from
$1.00 per share based on amortized cost. In such review of the
portfolio of the Money Market Fund and U.S. Government Money
Market Fund, investments for which market quotations are
readily available will be valued at the most recent bid price
or yield equivalent for such securities or for securities of
comparable maturity, quality and type, as obtained from one or
more of the major market makers for the securities to be
valued. Other investments and assets of these Money Market
Funds will be valued at fair value as determined in good faith
by the Board of Trustees. Market quotations and market
equivalents used in such review of the Municipal Money Market
Fund are obtained from an independent pricing service (the
"Service") approved by the Board of Trustees. The Service will
value the Municipal Money Market Fund's investments based on
methods which include consideration of: yields or prices of
municipal obligations of comparable quality, coupon, maturity
and type; indications of values from dealers; and general
market conditions. The Service also may employ electronic data
processing techniques and/or a matrix system to determine
valuations.

The extent of any deviation between
a Money
Market Fund's net asset value based upon available market
quotations or market equivalents and $1.00 per share based on
amortized cost will be examined by the Board of Trustees. If
such deviation exceeds 1/2 of 1%, the Board of Trustees will
consider what actions, if any, will be initiated. In the event
the Board of Trustees determines that a deviation exists which
may result in material dilution or other unfair results to
investors or existing shareholders, it has agreed to take such
corrective action as it regards as necessary and appropriate,
including: selling portfolio instruments prior to maturity to
realize capital gains or losses or to shorten average portfolio
maturity; withholding dividends or paying distributions from
capital or capital gains; redeeming shares in kind; or estab-
lishing a net asset value per share by using available market
quotations or market equivalents.

New York Stock Exchange Closings.
The
holidays (as observed) on which the New York Stock Exchange is
closed currently are: New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving
and Christmas.

PORTFOLIO
TRANSACTIONS

Transactions are allocated to
various dealers
by the Trust's investment personnel in their best judgment.
The primary consideration is prompt and effective execution of
orders at the most favorable price. Subject to that primary
consideration, dealers may be selected to act on an agency
basis for research, statistical or other services to enable the
Investment Adviser to supplement its own research and analysis
with the views and information of other securities firms.

Research services furnished by
brokers through
which the Funds effect securities transactions may be used by
the Investment Adviser in advising other funds or accounts it
advises and, conversely, research services furnished to the
Investment Adviser by brokers in connection with other funds or
accounts the Investment Adviser advises may be used by the
Investment Adviser in advising the Funds. Although it is not
possible to place a dollar value on these services, it is the
opinion of the Investment Adviser that the receipt and study of
such services should not reduce the overall expenses of its
research department.

Brokers also are selected because
of
their
ability to handle special executions such as are involved in
large block trades or broad distributions, provided the primary
consideration is met. Large block trades may, in certain
cases, result from two or more clients the Investment Adviser
might advise being engaged simultaneously in the purchase or
sale of the same security.

When transactions are executed in
the over-
the-counter market, the Investment Adviser will deal with the
primary market makers unless a more favorable price or
execution otherwise is obtainable.

Portfolio turnover may vary from
year to year,
as well as within a year. Higher turnover rates are likely to
result in comparatively greater brokerage expenses. The
overall reasonableness of brokerage commissions paid is
evaluated by the Investment Adviser based upon its knowledge of
available information as to the general level of commissions
paid by other institutional investors for comparable services.

Under normal market conditions, the
portfolio
turnover rate of each Fund, other than the Money Market Funds,
generally will not exceed the rate set forth below:

Portfolio
Name of Fund Turnover Rate

Managed Assets Balanced Fund ____%
Managed Assets Income Fund ____%
Equity Income Fund ____%
Growth Fund ____%
International Equity Fund ____%
Special Opportunities Fund ____%
International Bond Fund ____%
Bond Fund ____%
Intermediate Municipal Bond Fund ____%

Purchases and sales of Fixed-Income Securities
and
Money Market Instruments usually are principal transactions.
These portfolio securities ordinarily are purchased directly
from the issuer or from an underwriter or market maker.
Usually no brokerage commissions are paid by the Fund for such
purchases and sales. The prices paid to the underwriters of
newly-issued securities usually include a concession paid by
the issuer to the underwriter, and purchases of securities from
market makers may include the spread between the bid and asked
price.

DIVIDENDS, DISTRIBUTION
AND
TAXES

THE FOLLOWING INFORMATION SUPPLEMENTS AND
SHOULD
BE
READ IN CONJUNCTION WITH THE SECTION IN THE TRUST'S PROSPECTUS
ENTITLED "DIVIDENDS, DISTRIBUTIONS AND TAXES."

Each Fund intends to qualify as a "regulated
investment company" under the Code, so long as such
qualification is in the best interests of its shareholders. To
qualify as a regulated investment company, a Fund must pay out
to its shareholders at least 90% of its net income (consisting
of net investment income from tax exempt obligations and net
short-term capital gain), must derive less than 30% of its
annual gross income from gain on the sale of securities held
for less than three months, and must meet certain asset
diversification and other requirements. Accordingly, the Fund
may be restricted in the selling of securities held for less
than three months, and in the utilization of certain of the
investment techniques described in the Prospectus. The Code,
however, allows the Fund to net certain offsetting positions
making it easier for the Fund to satisfy the 30% test.
Qualification as a regulated investment company relieves the
Fund from any liability for Federal income taxes to the extent
its earnings are distributed in accordance with the applicable
provisions of the Code. The term "regulated investment
company" does not imply the supervision of management or
investment practices or policies by any government agency.

Any dividend or distribution paid shortly after
an
investor's purchase may have the effect of reducing the
aggregate net asset value of his shares below the cost of his
investment. Such a distribution would be a return on
investment in an economic sense although taxable as stated in
"Dividends, Distributions and Taxes" in the Prospectus. In
addition, the Code provides that if a shareholder holds shares
for six months or less and has received a capital gain dividend
with respect to such shares, any loss incurred on the sale of
such shares will be treated as a long-term capital loss to the
extent of the capital gain dividend received.

Except for dividends from taxable investments,
the
Fund anticipates that substantially all dividends paid by a
Municipal Fund will not be subject to Federal income tax.
Dividends and distributions paid by a Municipal Fund may be
subject to certain state and local taxes. Although all or a
substantial portion of the dividends paid by a Municipal Fund
may be excluded by shareholders of the Fund from their gross
income for Federal income tax purposes, each Municipal Fund may
purchase specified private activity bonds, the interest from
which may be (i) a preference item for purposes of the
alternative minimum tax, (ii) a component of the "adjusted
current earnings" preference item for purposes of the corporate
alternative minimum tax as well as a component in computing the
corporate environmental tax or (iii) a factor in determining
the extent to which a shareholder's Social Security benefits
are taxable. If a Municipal Fund purchases such securities,
the portion of its dividends related thereto will not
necessarily be tax exempt to shareholders subject to the
alternative minimum tax and/or tax on Social Security benefits
and may cause such shareholders to be subject to such taxes.

Dividends paid by a Fund to qualified
Retirement
Plans or certain non-qualified deferred compensation plans
ordinarily will not be subject to taxation until the proceeds
are distributed from the Retirement Plan. The Trust will not
report dividends paid by a Fund to such Plans to the IRS.
Generally, distributions from such Retirement Plans, except
those representing returns of non-deductible contributions
thereto, will be taxable as ordinary income and, if made prior
to the time the participant reaches age 59-1/2, generally will
be subject to an additional tax equal to 10% of the taxable
portion of the distribution. If the distribution from such a
Retirement Plan (other than certain governmental or church
plans) for any taxable year following the year in which the
participant reaches age 70-1/2 is less than the "minimum
required distribution" for that taxable year, an excise tax
equal to 50% of the deficiency may be imposed by the IRS. The
administrator, trustee or custodian of such a Retirement Plan
will be responsible for reporting distributions from such Plans
to the IRS. Participants in qualified Retirement Plans will
receive a disclosure statement describing the consequences of a
distribution from such a Plan from the administrator, trustee
or custodian of the Plan prior to receiving the distribution.
Moreover, certain contributions to a qualified Retirement Plan
in excess of the amounts permitted by law may be subject to an
excise tax.

Taxable dividends derived from net investment
income
and distributions from net realized short-term securities gains
paid by a Fund to a foreign investor generally are subject to
U.S. nonresident withholding taxes at the rate of 30%, unless
the foreign investor claims the benefits of a lower rate
specified in a tax treaty. Distributions from net realized
long-term securities gains paid by a Fund to a foreign
investor, as well as the proceeds of any redemptions from a
foreign investor's account, regardless of the extent to which
gain or loss may be realized, will not be subject to U.S.
nonresident withholding tax. However, such distributions may
be subject to backup withholding, as described below, unless
the foreign investor certifies his non-U.S. residency status.

Ordinarily, gains and losses realized from
portfolio
transactions will be treated as capital gains and losses.
However, a portion of the gain or loss realized from the
disposition of non-U.S. dollar denominated securities
(including debt instruments, certain financial futures and
options, and certain preferred stock) may be treated as
ordinary income or loss under Section 988 of the Code.

Under Section 1256 of the Code, gain or loss
realized
by a Fund from certain financial futures and options
transactions (other than those taxed under Section 988 of the
Code) will be treated as 60% long-term capital gain or loss and
40% short-term capital gain or loss. Gain or loss will arise
upon the exercise or lapse of such futures and options as well
as from closing transactions. In addition, any such futures or
options remaining unexercised at the end of the Fund's taxable
year will be treated as sold for their then fair market value,
resulting in additional gain or loss to the Fund characterized
in the manner described above.

Offsetting positions held by a Fund involving
certain
contracts or options may constitute "straddles." "Straddles"
are defined to include "offsetting positions" in actively
traded personal property. The tax treatment of "straddles" is
governed by Sections 1092 and 1258 of the Code, which, in
certain circumstances, overrides or modifies the provisions of
Sections 1256 and 988. As such, all or a portion of any short-
term or long-term capital gain from certain "straddle"
transactions may be recharacterized to ordinary income. If the
Fund were treated as entering into "straddles" by reason of its
engaging in certain forward contracts or options transactions,
such "straddles" would be characterized as "mixed straddles" if
the forward contracts or options transactions comprising a part
of such "straddles" were governed by Section 1256 of the Code.
A Fund may make one or more elections with respect to "mixed
straddles." Depending on which election is made, if any, the
results to the Fund may differ. If no election is made to the
extent the "straddle" and conversion transactions rules apply
to positions established by the Fund, losses realized by the
Fund will be deferred to the extent of unrealized gain in the
offsetting position. Moreover, as a result of the "straddle"
rules, short-term capital loss on "straddle" positions may be
recharacterized as long-term capital loss, and long-term
capital gains may be treated as short-term capital gains or
ordinary income.

Investment by a Fund in securities issued or
acquired
at a discount, or providing for deferred interest or for
payment of interest in the form of additional obligations could
under special tax rules affect the amount, timing and character
of distributions to shareholders by causing the Fund to
recognize income prior to the receipt of cash payments. For
example, the Fund could be required to accrue a portion of the
discount (or deemed discount) at which the securities were
issued and to distribute such income in order to maintain its
qualification as a regulated investment company. In such case,
the Fund may have to dispose of securities which it might
otherwise have continued to hold in order to generate cash to
satisfy these distribution requirements.

If a Fund invests in an entity that is
classified as
a "passive foreign investment company" ("PFIC") for federal
income tax purposes, the operation of certain provisions of the
Code applying to PFICs could result in the imposition of
certain federal income taxes on the Fund. In addition, gain
realized from the sale or other disposition of PFIC securities
may be treated as ordinary income under Section 1291 of the
Code.

YIELD AND PERFORMANCE
INFORMATION

THE FOLLOWING INFORMATION SUPPLEMENTS AND
SHOULD
BE
READ IN CONJUNCTION WITH THE SECTION IN THE TRUST'S PROSPECTUS
ENTITLED "PERFORMANCE INFORMATION."

SPECIAL OPPORTUNITIES, GROWTH AND INTERNATIONAL
EQUITY FUNDS. Average annual total return is calculated by
determining the ending redeemable value of an investment
purchased with a hypothetical $1,000 payment made at the
beginning of the period (assuming the reinvestment of dividends
and distributions), dividing by the amount of the initial
investment, taking the "n"the root of the quotient (where "n"
is the number of years in the period) and subtracting 1 from
the result.

Total return is calculated by subtracting the
amount
of the net asset value per share at the beginning of a stated
period from the net asset value per share at the end of the
period (after giving effect to the reinvestment of dividends
and distributions during the period), and dividing the result
by the net asset value per share at the beginning of the
period.

MANAGED ASSETS INCOME, MANAGED ASSETS BALANCED,
EQUITY INCOME, BOND AND MUNICIPAL BOND FUNDS. Current yield is
computed pursuant to a formula which operates as follows: The
amount of the Fund's expenses accrued for the 30-day period
(net of reimbursements) is subtracted from the amount of the
dividends and interest earned by the Fund during the period.
That result is then divided by the product of: (a) the average
daily number of shares outstanding during the period that were
entitled to receive dividends, and (b) the net asset value per
share on the last day of the period less any undistributed
earned income per share reasonably expected to be declared as a
dividend shortly thereafter. The quotient is then added to 1,
and that sum is raised to the 6th power, after which 1 is
subtracted. The current yield is then arrived at by
multiplying the result by 2.

Average annual total return and total return is
calculated as described above.

MONEY MARKET FUNDS. Yield will be computed in
accordance with a standardized method which involves
determining the net change in the value of a hypothetical pre-
existing Fund account having a balance of one share at the
beginning of a seven calendar day period for which yield is to
be quoted, dividing the net change by the value of the account
at the beginning of the period to obtain the base period
return, and annualizing the results (i.e., multiplying the base
period return by 365/7). The net change in the value of the
account reflects the value of additional shares purchased with
dividends declared on the original share and any such
additional shares and fees that may be charged to shareholder
accounts, in proportion to the length of the base period and
the Fund's average account size, but does not include realized
gains and losses or unrealized appreciation and depreciation.
Effective annualized yield is computed by adding 1 to the base
period return (calculated as described above), raising that sum
to a power equal to 365 divided by 7, and subtracting 1 from
the result.

Yields will fluctuate and are not necessarily
representative of future results. Investors should remember
that yield is a function of the type and quality of the
instruments held, their maturity and operating expenses. An
investor's principal in a Money Market Fund is not guaranteed.
See "Determination of Net Asset Value" for a discussion of the
manner in which the Money Market Fund's price per share is
determined.

INFORMATION ABOUT THE TRUST

THE FOLLOWING INFORMATION SUPPLEMENTS AND
SHOULD BE
READ IN CONJUNCTION WITH THE SECTION IN THE TRUST'S PROSPECTUS
ENTITLED "GENERAL INFORMATION."

Each Fund share has one vote and, when issued
and
paid for in accordance with the terms of the offering, is fully
paid and non-assessable. Shares have no preemptive or
subscription rights and are freely transferable.

For clients of The First National Bank of
Chicago
("FNBC") whose assets are invested in common trust funds, the
Trust will be used in place of such investments. FNBC's
decision to replace the common trust funds is based on its
belief that mutual funds provide greater flexibility and more
investment opportunities for its clients.

Each Fund will send annual and semi-annual
financial
statements to all its shareholders.

COUNSEL AND INDEPENDENT AUDITORS

Stroock & Stroock & Lavan, 7 Hanover Square,
New
York, New York 10004-2594, as counsel for the Fund, has
rendered its opinion as to certain legal matters regarding the
due authorization and valid issuance of the shares of
beneficial interest being sold pursuant to the Fund's
Prospectus.

Ernst & Young LLP, 787 Seventh Avenue, New
York, New York 10019, independent auditors, have been selected as
auditors of the Fund.

<PAGE>
APPENDIX

Description of certain ratings
assigned by
Standard & Poor's Corporation ("S&P"), Moody's Investors
Service, Inc. ("Moody's"), Fitch Investors Service, Inc.
("Fitch"), Duff & Phelps, Inc. ("Duff"), IBCA Inc. and IBCA
Limited ("IBCA") and Thomson BankWatch, Inc. ("BankWatch"):

S&P

BOND RATINGS

AAA

Bonds rated AAA have the highest
rating
assigned by S&P. Capacity to pay interest and repay principal
is extremely strong.

Bonds rated AA have a very strong
capacity to
pay interest and repay principal and differ from the highest
rated issues only in small degree.

Bonds rated A have a strong capacity
to pay
interest and repay principal although they are somewhat more
susceptible to the adverse effects of changes in circumstances
and economic conditions than obligations in higher rated
categories.

BBB

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

BB, B, CCC, CC, C

Debt rated BB, B, CCC, CC and C is
regarded as
having predominantly speculative characteristics with respect
to capacity to pay interest and repay principal. BB indicates
the least degree of speculation and C the highest degree of
speculation. While such debt will likely have some quality and
protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.

Debt rated BB has less near-term
vulnerability
to default than other speculative grade debt. However, it
faces major ongoing uncertainties or exposure to adverse
business, financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal
payment.

Debt rated B has a greater
vulnerability to
default but presently has the capacity to meet interest
payments and principal repayments. Adverse business, financial
or economic conditions would likely impair capacity or
willingness to pay interest and repay principal.

CCC

Debt rated CCC has a current
identifiable
vulnerability to default, and is dependent upon favorable
business, financial and economic conditions to meet timely
payments of principal. In the event of adverse business,
financial or economic conditions, it is not likely to have the
capacity to pay interest and repay principal.

The rating CC is typically applied to
debt
subordinated to senior debt which is assigned an actual or
implied CCC rating.

The rating C is typically applied to
debt
subordinated to senior debt which is assigned an actual or
implied CCC- debt rating.

Bonds rated D are in default, and
payment of
interest and/or repayment of principal is in arrears.

Plus (+) or minus (-): The ratings
from AA to
CCC may be modified by the addition of a plus or minus sign to
show relative standing within the major ratings categories.

COMMERCIAL PAPER RATING

The designation A-1 by S&P indicates
that the
degree of safety regarding timely payment is either
overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted with a
plus sign (+) designation. Capacity for timely payment on
issues with an A-2 designation is strong. However, the
relative degree of safety is not as high as for issues
designated A-1.

Moody's

BOND RATINGS

Aaa

Bonds which are rated Aaa are judged
to be of
the best quality. They 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.

Bonds which are rated Aa are judged
to
be of
high quality by all standards. Together with the Aaa group
they comprise what generally are known as high grade bonds.
They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude
or there may be other elements present which make the long-term
risks appear somewhat larger than in Aaa securities.

Bonds which are rated A possess many
favorable
investment attributes and are to be considered as upper medium
grade obligations. 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.

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

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

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.

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

Bonds which are rated C are the
lowest
rated
class of bonds, and issues so rated can be regarded as having
extremely poor prospects of ever attaining any real investment
standing.

Moody's applies the numerical
modifiers 1, 2
and 3 to show relative standing within the major rating
categories, except in the Aaa category and in categories below
B. The modifier 1 indicates a ranking for the security in the
higher end of a rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates a ranking in
the lower end of a rating category.

COMMERCIAL PAPER RATING

Issuers (or relating supporting
institutions)
rated Prime-2 (P-2) have a strong capacity for repayment of
short-term promissory obligations. This ordinarily will be
evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while
sound, will be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected
by external conditions. Ample alternate liquidity is
maintained.

Fitch

BOND RATINGS

The ratings represent Fitch's
assessment of the
issuer's ability to meet the obligations of a specific debt
issue or class of debt. The ratings take into consideration
special features of the issue, its relationship to other
obligations of the issuer, the current financial condition and
operative performance of the issuer and of any guarantor, as
well as the political and economic environment that might
affect the issuer's future financial strength and credit
quality.

AAA

Bonds rated AAA are considered to be
investment
grade and of the highest credit quality. The obligor has an
exceptionally strong ability to pay interest and repay
principal, which is unlikely to be affected by reasonably
foreseeable events.

Bonds rated AA are considered to be
investment
grade and of very high credit quality. The obligor's ability
to pay interest and repay principal is very strong, although
not quite as strong as bonds rated AAA. Because bonds rated in
the AAA and AA categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these
issuers is generally rated F-1+.

Bonds rated A are considered to be
investment
grade and of high credit quality. The obligor's ability to pay
interest and repay principal is considered to be strong, but
may be more vulnerable to adverse changes in economic
conditions and circumstances than bonds with higher ratings.

BBB

Bonds rated BBB are considered to be
investment
grade and of satisfactory credit quality. The obligor's
ability to pay interest and repay principal is considered to be
adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have an adverse
impact on these bonds and, therefore, impair timely payment.
The likelihood that the ratings of these bonds will fall below
investment grade is higher than for bonds with higher ratings.

Bonds rated BB are considered
speculative. The
obligor's ability to pay interest and repay principal may be
affected over time by adverse economic changes. However,
business and financial alternatives can be identified which
could assist the obligor in satisfying its debt service
requirements.

Bonds rated B are considered highly
speculative. While bonds in this class are currently meeting
debt service requirements, the probability of continued timely
payment of principal and interest reflects the obligor's
limited margin of safety and the need for reasonable business
and economic activity throughout the life of the issue.

CCC

Bonds rated CCC have certain
identifiable
characteristics, which, if not remedied, may lead to default.
The ability to meet obligations requires an advantageous
business and economic environment.

Bonds rated CC are minimally
protected.
Default payment of interest and/or principal seems probable
over time.

Bonds rated C are in imminent default
in
payment of interest or principal.

DDD, DD and D

Bonds rated DDD, DD and D are in
actual or
imminent default of interest and/or principal payments. Such
bonds are extremely speculative and should be valued on the
basis of their ultimate recovery value in liquidation or
reorganization of the obligor. DDD represents the highest
potential for recovery on these bonds and D represents the
lowest potential for recovery.

Plus (+) and minus (-) signs are used
with a
rating symbol to indicate the relative position of a credit
within the rating category. Plus and minus signs, however, are
not used in the AAA category covering 12-36 months or the DDD,
DD or D categories.

SHORT-TERM RATINGS

Fitch's short-term ratings apply to
debt
obligations that are payable on demand or have original
maturities of up to three years, including commercial paper,
certificates of deposit, medium-term notes, and municipal and
investment notes.

Although the credit analysis is
similar to
Fitch's bond rating analysis, the short-term rating places
greater emphasis than bond ratings on the existence of
liquidity necessary to meet the issuer's obligations in a
timely manner.

F-1+

EXCEPTIONALLY STRONG CREDIT QUALITY.
Issues
assigned this rating are regarded as having the strongest
degree of assurance for timely payment.

F-1

VERY STRONG CREDIT QUALITY. Issues
assigned
this rating reflect an assurance of timely payment only
slightly less in degree than issues rated F-1+.

F-2

GOOD CREDIT QUALITY. Issues carrying
this
rating have a satisfactory degree of assurance for timely
payments, but the margin of safety is not as great as the F-1+
and F-1 categories.

Duff

BOND RATINGS

AAA

Bonds rated AAA are considered
highest
credit
quality. The risk factors are negligible, being only slightly
more than for risk-free U.S. Treasury debt.

Bonds rated AA are considered high
credit
quality. Protection factors are strong. Risk is modest but
may vary slightly from time to time because of economic
conditions.

Bonds rated A have protection factors
which are
average but adequate. However, risk factors are more variable
and greater in periods of economic stress.

BBB

Bonds rated BBB are considered to
have
below
average protection factors but still considered sufficient for
prudent investment. Considerable variability in risk during
economic cycles.

Bonds rated BB are below investment
grade but
are deemed by Duff as likely to meet obligations when due.
Present or prospective financial protection factors fluctuate
according to industry conditions or company fortunes. Overall
quality may move up or down frequently within the category.

Bonds rated B are below investment
grade and
possess the risk that obligations will not be met when due.
Financial protection factors will fluctuate widely according to
economic cycles, industry conditions and/or company fortunes.
Potential exists for frequent changes in quality rating within
this category or into a higher or lower quality rating grade.

CCC

Bonds rated CCC are well below
investment grade
securities. Such bonds may be in default or have considerable
uncertainty as to timely payment of interest, preferred
dividends and/or principal. Protection factors are narrow and
risk can be substantial with unfavorable economic or industry
conditions and/or with unfavorable company developments.

Defaulted debt obligations. Issuer
has failed
to meet scheduled principal and/or interest payments.

Plus (+) and minus (-) signs are used
with a
rating symbol (except AAA) to indicate the relative position of
a credit within the rating category.

COMMERCIAL PAPER RATING

The rating Duff-1 is the highest
commercial
paper rating assigned by Duff. Paper rated Duff-1 is regarded
as having very high certainty of timely payment with excellent
liquidity factors which are supported by ample asset
protection. Risk factors are minor. Paper rated Duff-2 is
regarded as having good certainty of timely payment, good
access to capital markets and sound liquidity factors and
company fundamentals. Risk factors are small.

IBCA

BOND AND LONG-TERM RATINGS

Obligations rated AAA by IBCA have
the
lowest
expectation of investment risk. Capacity for timely repayment
of principal and interest is substantial, such that adverse
changes in business, economic or financial conditions are
unlikely to increase investment risk significantly.
Obligations for which there is a very low expectation of
investment risk are rated AA by IBCA. Capacity for timely
repayment of principal and interest is substantial. Adverse
changes in business, economic or financial conditions may
increase investment risk albeit not very significantly.

COMMERCIAL PAPER AND SHORT-TERM RATINGS

The designation A1 by IBCA indicates
that the
obligation is supported by a very strong capacity for timely
repayment. Those obligations rated A1+ are supported by the
highest capacity for timely repayment. Obligations rated A2
are supported by a strong capacity for timely repayment,
although such capacity may be susceptible to adverse changes in
business, economic or financial conditions.

INTERNATIONAL AND U.S. BANK RATINGS

An IBCA bank rating represents IBCA's
current
assessment of the strength of the bank and whether such bank
would receive support should it experience difficulties. In
its assessment of a bank, IBCA uses a dual rating system
comprised of Legal Ratings and Individual Ratings. In
addition, IBCA assigns banks Long- and Short-Term Ratings as
used in the corporate ratings discussed above. Legal Ratings,
which range in gradation from 1 through 5, address the question
of whether the bank would receive support provided by central
banks or shareholders if it experienced difficulties, and such
ratings are considered by IBCA to be a prime factor in its
assessment of credit risk. Individual Ratings, which range in
gradations from A through E, represent IBCA's assessment of a
bank's economic merits and address the question of how the bank
would be viewed if it were entirely independent and could not
rely on support from state authorities or its owners.

BankWatch

COMMERCIAL PAPER AND SHORT-TERM RATINGS

The rating TBW-1 is the highest
short-term
rating assigned by BankWatch; the rating indicates that the
degree of safety regarding timely repayment of principal and
interest is very strong.

In addition to ratings of short-term
obligations, BankWatch assigns a rating to each issuer it
rates, in gradations of A through E. BankWatch examines all
segments of the organization including, where applicable, the
holding company, member banks or associations, and other
subsidiaries. In those instances where financial disclosure is
incomplete or untimely, a qualified rating (QR) is assigned to
the institution. BankWatch also assigns, in the case of
foreign banks, a country rating which represents an assessment
of the overall political and economic stability of the country
in which the bank is domiciled.

<PAGE>

FINANCIAL STATEMENTS

[TO BE PROVIDED]

REPORT OF INDEPENDENT ACCOUNTANTS

[TO BE PROVIDED]

<PAGE>

AUGUST 24, 1994

FIRST PRAIRIE DIVERSIFIED ASSET FUND

SUPPLEMENT TO PROSPECTUS DATED APRIL 22, 1994.

THE FOLLOWING ANTICIPATED CHANGES HAVE OCCURRED:

I. CONSUMMATION OF THE MERGER

The following information supplements and
supersedes any contrary information contained in the Fund's
Prospectus.

On this date, the previously announced
merger
between The Dreyfus Corporation ("Dreyfus") and a subsidiary of
Mellon Bank
Corporation was completed, and as a result, Dreyfus now is a
wholly-owned subsidiary of Mellon Bank, N.A. instead of a
publicly-owned corporation.

II. NEW DISTRIBUTOR

The following information supersedes and
replaces any contrary information contained in the Fund's
Prospectus and
specifically in the section entitled "How to Buy Fund Shares."

The Fund's distributor is Premier Mutual
Fund
Services, Inc. (the "Distributor"), located at One Exchange
Place, Boston,
Massachusetts 02109. The Distributor is a wholly-owned
subsidiary of Institutional Administration Services, Inc., a
provider of
mutual fund administration services, the parent company of which
is Boston Institutional Group, Inc.

Accordingly, references in the Prospectus to
Dreyfus Service Corporation as the Fund's distributor should be
substituted with Premier Mutual Fund Services, Inc.

<PAGE>

FIRST PRAIRIE DIVERSIFIED ASSET FUND

PROSPECTUS

The First National Bank of Chicago
INVESTMENT ADVISER

Dreyfus Service Corporation
DISTRIBUTOR

Prospectus begins on page one.

<PAGE>

FIRST PRAIRIE DIVERSIFIED ASSET FUND

PROSPECTUS-April 22, 1994

First Prairie Diversified Asset Fund (the "Fund")
is an open-end, diversified, management investment company,
known
as a mutual
fund. Its primary goal is the maximization of current income; a
secondary but nonetheless important goal is capital
appreciation.

By this Prospectus, Class A and Class B shares of
the Fund are being offered. Class A shares are subject to a
sales charge
imposed at the time of purchase and Class B shares are subject
to
a contingent deferred sales charge imposed on redemptions made
within six years of purchase. Other differences between the two
Classes include the services offered to and the expenses borne
by
each Class and certain voting rights, as described herein. The
Fund offers these alternatives to permit an investor to choose
the
method of purchasing shares that is most beneficial given the
amount of the purchase, the length of time the investor expects
to hold
the shares and other circumstances.

The First National Bank of Chicago (the "Adviser")
serves as the Fund's investment adviser.

The Dreyfus Corporation (the "Administrator")
serves as the Fund's administrator. Dreyfus Service Corporation
(the
"Distributor"), a wholly-owned subsidiary of the Administrator,
serves as the Fund's distributor.

The Fund's shares are sold with a sales load. The
Fund also bears certain costs of advertising, administration
and/or
distribution pursuant to a plan adopted in accordance with Rule
12b-1 under the Investment Company Act of 1940.

The Fund's shares are not deposits or obligations
of, or guaranteed by, the Adviser or any of its affiliates or
any
banks, and
are not federally insured by the Federal Deposit Insurance
Corporation ("FDIC"), the Federal Reserve Board, or any other
agency. The
Fund's shares involve certain investment risks, including the
possible loss of principal. The Fund's share price and
investment return fluctuate and are not guaranteed.

______________________________

This Prospectus sets forth concisely information
about the Fund that an investor should know before investing.
It
should be read and retained for future reference.

Part B (also known as the Statement of Additional
Information), dated April 22, 1994, which may be revised from
time to time,
provides a further discussion of certain areas in this
Prospectus
and other matters which may be of interest to some investors.
It
has been filed with the Securities and Exchange Commission and
is
incorporated herein by reference. For a free copy, write to the
Fund
at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144,
or call 1-800-346-3621. When telephoning, ask for Operator 666.

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

TABLE OF CONTENTS

Fee Table
Condensed Financial Information . . . . . . . . . . . . . . . .
Highlights. . . . . . . . . . . . . . . . . . . . . . . . . . .
Alternative Purchase Methods. . . . . . . . . . . . . . . . . .
Description of the Fund . . . . . . . . . . . . . . . . . . . .
Management of the Fund. . . . . . . . . . . . . . . . . . . . .
How to Buy Fund Shares. . . . . . . . . . . . . . . . . . . . .
Shareholder Services. . . . . . . . . . . . . . . . . . . . . .
How to Redeem Fund Shares . . . . . . . . . . . . . . . . . . .
Distribution Plan and Shareholder
Services Plan . . . . . . . . . . . . . . . . . . . . . . . .
Dividends, Distributions and Taxes. . . . . . . . . . . . . . .
Performance Information . . . . . . . . . . . . . . . . . . . .
General Information . . . . . . . . . . . . . . . . . . . . . .

<PAGE>

<TABLE>

<CAPTION>
FEE TABLE

<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) 4.50% none

Maximum Deferred Sales Charge Imposed
on Redemptions (as a percentage of the
amount subject to charge) none 4.00%

ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)

Management Fees .65% .65%
12b-1 Fees none .75%
Other Expenses 1.00% 1.00%
Total Fund Operating Expenses 1.65% 2.40%

</TABLE>

EXAMPLE
An investor would pay the following expenses
on a $1,000 investment, assuming (1) 5% annual
return and (2) except where noted, redemption
at the end of each time period:
<TABLE>

<CAPTION>
CLASS A CLASS B CLASS B*
<S> <C> <C> <C>

1 YEAR $62 $64 $24
3 YEARS $95 $105 $75
5 YEARS $131 $148 $128
10 YEARS** $232 $238 $238
______________

* Assuming no redemption of Class B shares.

** Ten-year figures assume conversion of Class B shares to
Class A shares at end of sixth year following the date of
purchase.

</TABLE>

The purpose of the foregoing table is to assist investors in
understanding the various costs and expenses that investors will
bear, directly or indirectly, the payment of which will reduce
investors' return on an annual basis. Prior to February 8,
1994,
Class
A shares were subject to 12b-1 fees but no service fees.
Long-term investors in Class B shares could pay more in 12b-1
fees than the economic equivalent of paying a front-end sales
charge. The information in the foregoing table does not reflect
any fee waivers or expense reimbursement arrangements that may
be
in effect. The Adviser, affiliates of the Adviser and certain
Service Agents (as defined below) may charge their clients
direct
fees for effecting transactions in Fund shares; such fees are
not
reflected in the foregoing table. See "Management of the Fund,"
"How to Buy Fund Shares" and "Distribution Plan and Shareholder
Services Plan."

CONDENSED FINANCIAL INFORMATION

The information in the following table has been audited by
Ernst & Young, the Fund's independent auditors, whose report
thereon appears in the Statement of Additional Information.
Further financial data and related notes are included in the
Statement of
Additional Information, available upon request. Class B shares
had not been offered as of the date of the financial statements
and, accordingly, no financial data are available for Class B.

FINANCIAL HIGHLIGHTS. Contained below is per share
operating performance data for a Class A share of beneficial
interest
outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated.
This
information has been derived from information provided in the
Fund's financial statements.

<PAGE>

<TABLE>

Year Ended December 31,

<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA: 1986(1) 1987 1988 1989 1990 1991 1992 1993

Net asset value, beginning
of period. . . . . . . . . $ 10.00 $ 10.75 $9.73 $ 10.66 $ 11.54 $ 10.79 $ 12.56 $ 12.68

INVESTMENT OPERATIONS:

Investment income--net .63 .70 .78 .88 .86 .83 .79 .72

Net realized and unrealized
gain (loss) on investments .70 (.85) .92 1.10 (.54) 1.77 .26 .61

TOTAL FROM INVESTMENT
OPERATIONS . . . . . . . 1.33 (.15) 1.70 1.98 .32 2.60 1.05 1.33

DISTRIBUTIONS:

Dividends from investment
income--net. . . . . . . . (.58) (.77) (.74) (.89) (.88) (.83) (.77) (.72)

Dividends from net realized
gain on investments. . . . -- (.10) (.03) (.21) (.19) -- (.16) (.18)

TOTAL DISTRIBUTIONS (.58) (.87) (.77) (1.10) (1.07) (.83) (.93) (.90)
Net asset value, end of
period . . . . . . . . . . $ 10.75 $ 9.73 $ 10.66 $ 11.54 $ 10.79 $ 12.56 $ 12.68 $ 13.11
TOTAL INVESTMENT RETURN(2) 13.59%(2) (1.73%) 17.78% 19.08% 2.94% 24.87% 8.68% 10.70%

RATIOS/SUPPLEMENTAL DATA:

Ratio of expenses to
average net assets . . . . -- -- -- -- -- -- .02% .39%

Ratio of net investment
income to average net
assets . . . . . . . . . . 5.90%(3) 6.61% 7.38% 7.74% 7.71% 7.04% 6.24% 5.54%

Portfolio Turnover Rate 15.19%(3) 23.99% 15.71% 49.46% 29.97% 26.02% 22.14% 16.40%

Net Assets, end of period
(000's Omitted). . . . . . $2,212 $4,989 $5,890 $7,407 $8,950 $14,038 $34,262 $51,586
</TABLE>

(1)From January 23, 1986 (commencement of operations) to December
31, 1986.
(2)Exclusive of sales charge.
(3)Not annualized.

Further information about the Fund's performance
is contained in the Fund's annual report, which may be obtained
without
charge by writing to the address or calling the number set forth
on the cover page of this Prospectus.

HIGHLIGHTS

The following summary is qualified in its
entirety by the more detailed information appearing elsewhere in
this Prospectus.

THE FUND. The Fund is an open-end, diversified, management
investment company, known as a mutual fund.

INVESTMENT OBJECTIVES. The Fund's primary goal is the
maximization of current income. A secondary but important goal
is capital
appreciation.

This includes investment grade bonds, preferred
stocks, dividend paying common stocks, securities convertible
into common
stock and securities with warrants attached. In addition, the
Fund may invest in U.S. Government securities, high-grade
commercial
paper, bank obligations of domestic and foreign banks, and
short-term money market instruments.

The proportion of assets invested in each type
of security will vary from time to time depending on market and
economic
conditions. The Fund may emphasize fixed-income investments for
protracted periods of time if the Fund deems it advisable.

The Fund also may lend its portfolio securities,
write covered call options and purchase put and call options in
respect of
specific securities.

INVESTMENT ADVISER. The First National Bank of Chicago is the
Fund's investment adviser. The Fund has agreed to pay the
Adviser a
monthly fee at the annual rate of .65 of 1% of the value of the
Fund's average daily net assets.

ADMINISTRATOR. The Dreyfus Corporation assists in all aspects
of the Fund's operations other than providing investment advice.
The
Fund has agreed to pay the Administrator a monthly fee at the
annual rate of .30 of 1% of the value of the Fund's average
daily net
assets.

ALTERNATIVE PURCHASE METHODS. The Fund offers investors two
methods of purchasing Fund shares; an investor may choose the
Class of
shares that best suits the investor's needs, given the amount of
purchase, the length of time the investor expects to hold the
shares
and any other relevant circumstances. Each Class A and Class B
share represents an identical pro rata interest in the Fund's
investment portfolio.

Class A shares are sold at net asset value per
share plus a maximum initial sales charge of 4.50% of the public
offering price
imposed at the time of purchase. The initial sales charge may
be reduced or waived for certain purchases. See "How to Buy
Fund
Shares--Class A Shares." Class A shares are subject to an
annual service fee at the rate of .25 of 1% of the value of the
average
daily net assets of Class A.

Class B shares are sold at net asset value per
share with no initial sales charge at the time of purchase; as a
result, the
entire purchase price is immediately invested in the Fund.
Class B shares are subject to a maximum 4% contingent deferred
sales
charge ("CDSC"), which is assessed only if the Class B shares
are redeemed within six years of purchase. See "How to Redeem
Fund
Shares--Contingent Deferred Sales Charge--Class B Shares."
Class B shares also are subject to an annual service fee at the
rate of
up to .25 of 1% of the value of the average daily net assets of
Class B. In addition, Class B shares are subject to an annual
distribution fee at the rate of .75 of 1% of the value of the
average daily net assets of Class B. The distribution fee paid
by Class
B will cause such Class to have a higher expense ratio and to
pay lower dividends than Class A. Approximately six years after
the
date of purchase, Class B shares automatically will convert to
Class A shares, based on the relative net asset values for
shares of
each Class, and will no longer be subject to the distribution
fee. See "Alternative Purchase Methods."

HOW TO BUY FUND SHARES. Orders for purchases of Fund shares may
be placed through a number of institutions including the
Adviser,
affiliates of the Adviser, including First Chicago Investment
Services, Inc. ("FCIS"), a registered broker-dealer, the
Distributor
and
certain other banks, securities dealers and other industry
professionals, such as investment advisers, accountants and
estate planning firms (collectively, "Service Agents").

The minimum initial investment is $1,000 ($250
for IRA's and other personal retirement plans). All subsequent
investments must be at least $100. See "How to Buy Fund Shares."

SHAREHOLDER SERVICES. The Fund offers its shareholders certain
services and privileges including: Exchange Privilege, Auto-
Exchange
Privilege, Automatic Asset Builder, Government Direct Deposit
Privilege, Automatic Withdrawal Plan, Dividend Options
privileges and
TeleTransfer Privilege. (Certain services and privileges may not
be available through all Service Agents.)

HOW TO REDEEM FUND SHARES. Generally, investors should contact
their representatives at the Adviser or appropriate Service
Agent
for
redemption instructions. Investors who are not clients of the
Adviser or a Service Agent may redeem Fund shares by written
request
or
through the Wire Redemption Privilege, the Telephone Redemption
Privilege or the TeleTransfer Privilege. See "How to Redeem
Fund
Shares."

MONTHLY DIVIDENDS. The Fund declares and pays dividends from
net investment income monthly. Distributions from net realized
securities gains, if any, generally are declared and paid once a
year. Investors may choose whether to receive dividends in cash
or
to reinvest in additional Fund shares of the same Class at net
asset value.

RISKS AND SPECIAL CONSIDERATIONS. The value of the Fund's
shares is not fixed and can be expected to fluctuate.

Certain securities purchased by the Fund,
including those rated Baa by Moody's Investors Service, Inc.
("Moody's")
and BBB by
Standard & Poor's Corporation ("S&P"), are subject to greater
market fluctuation than certain lower yielding, higher rated
fixed-income securities and also may be affected by changes in
the credit rating or financial condition of the issuing
entities.
Debt
securities rated Baa by Moody's and BBB by S&P, while considered
investment grade obligations, lack outstanding investment
characteristics and may have speculative characteristics as
well.

Since the Fund's portfolio may contain
securities issued by foreign banks, the Fund may be subject to
additional
investment
risks that are different from those incurred by a fund which
invests only in U.S. domestic securities. See "Description of
the
Fund--Risk Factors."

ALTERNATIVE
PURCHASE METHODS

The Fund offers investors two methods of
purchasing Fund shares; an investor may choose the Class of
shares that
best suits
the investor's needs, given the amount of purchase, the length
of time the investor expects to hold the shares and any other
relevant
circumstances. Each Class A and Class B share represents an
identical pro rata interest in the Fund's investment portfolio.

Class A shares are sold at net asset value per
share plus a maximum initial sales charge of 4.50% of the public
offering price
imposed at the time of purchase. The initial sales charge may
be reduced or waived for certain purchases. See "How to Buy
Fund
Shares--Class A Shares." These shares are subject to an annual
service fee at the rate of .25 of 1% of the value of the average
daily
net assets of Class A. See "Distribution Plan and Shareholder
Services Plan--Shareholder Services Plan."

Class B shares are sold at net asset value per
share with no initial sales charge at the time of purchase; as a
result, the
entire purchase price is immediately invested in the Fund.
Class B shares are subject to a maximum 4% CDSC, which is
assessed only
if
Class B shares are redeemed within six years of purchase. See
"How to Buy Fund Shares--Class B Shares" and "How to Redeem Fund
Shares--Contingent Deferred Sales Charge--Class B Shares."
These shares also are subject to an annual service fee at the
rate of .25
of 1% of the value of the average daily net assets of Class B.
In addition, Class B shares are subject to an annual
distribution fee
at the rate of .75 of 1% of the value of the average daily net
assets of Class B. See "Distribution Plan and Shareholder
Services
Plan." The distribution fee paid by Class B will cause such
Class to have a higher expense ratio and to pay lower dividends
than
Class A. Approximately six years after the date of purchase,
Class B shares automatically will convert to Class A shares,
based on
the relative net asset values for shares of each Class, and will
no longer be subject to the distribution fee. Class B shares
that
have been acquired through the reinvestment of dividends and
distributions will be converted on a pro rata basis together
with other
Class B shares, in the proportion that a shareholder's Class B
shares converting to Class A shares bears to the total Class B
shares
not acquired through the reinvestment of dividends and
distributions.

An investor should consider whether, during the
anticipated life of the investor's investment in the Fund, the
accumulated
distribution fee and CDSC on Class B shares prior to conversion
would be less than the initial sales charge on Class A shares
purchased at the same time, and to what extent, if any, such
differential would be offset by the return of Class A. In this
regard,
investors qualifying for reduced initial sales charges who
expect to maintain their investment for an extended period of
time might
consider purchasing Class A shares because the accumulated
continuing distribution fees on Class B shares may exceed the
initial sales
charge on Class A shares during the life of the investment.
Generally, Class A shares may be more appropriate for investors
who invest $100,000 or more in Fund shares.

DESCRIPTION OF THE FUND

[For left margin side bar: The Fund's primary
goal is the maximization of current income. Its secondary goal
is capital appreciation.]

INVESTMENT OBJECTIVES. The Fund's primary goal is the
maximization of current income; the Fund's secondary goal is
capital
appreciation. The Fund's investment objectives cannot be changed
without approval by the holders of a majority (as defined in the
Investment Company Act of 1940) of the Fund's outstanding voting
shares. There can be no assurance that the Fund's investment
objectives will be achieved.

[For left margin side bar: The Fund invests
primarily in marketable securities of established companies
which provide
reasonable income and may have capital appreciation potential.]

MANAGEMENT POLICIES. The Fund attempts to achieve its goals by
investing primarily in marketable securities of established
companies
which provide reasonable income and which, where consistent with
this objective, may have capital appreciation potential. This
includes investment grade bonds rated at least Baa by Moody's or
at least BBB by S&P, preferred stocks, dividend paying common
stocks,
securities convertible into common stock and securities with
warrants attached. Bonds rated Baa by Moody's are considered
medium
grade obligations which lack outstanding investment
characteristics and in fact have speculative characteristics as
well, while those
rated BBB by S&P are considered as having an adequate capacity
to pay principal and interest. See "Risk Factors" below, and
"Appendix" in the Statement of Additional Information. The
proportion of the Fund's assets invested in each type of
security will
vary from time to time depending on market and economic
conditions, and the Fund may emphasize fixed-income investments
for protracted
periods of time if the Fund deems it advisable in that capital
appreciation is not compatible with the production of income at
that time.

[For left margin side bar: The proportion of
assets invested in each type of security will vary from time to
time
depending
on market and economic conditions.]

The Fund may invest up to 15% of the value of
its net assets in securities as to which a liquid trading market
does
not exist,
provided such investments are consistent with the Fund's
investment objectives. Such securities may include securities
that are not
readily marketable, such as certain securities that are subject
to legal or contractual restrictions on resale and repurchase
agreements providing for settlement in more than seven days
after notice. As to these securities, the Fund is subject to a
risk
that
should the Fund desire to sell them when a ready buyer is not
available at a price the Fund deems representative of their
value, the
value of the Fund's net assets could be adversely affected.
When purchasing securities that have not been registered under
the
Securities Act of 1933, as amended, and are not readily
marketable, the Fund will endeavor to obtain the right to
registration at
the
expense of the issuer. Generally, there will be a lapse of time
between the Fund's decision to sell any such security and the
registration of the security permitting sale. During any such
period, the price of the securities will be subject to market
fluctuations. However, if a substantial market of qualified
institutional buyers develops pursuant to Rule 144A under the
Securities
Act of 1933, as amended, for certain unregistered securities
held by the Fund, the Fund intends to treat such securities as
liquid
securities in accordance with procedures approved by the Fund's
Board of Trustees. Because it is not possible to predict with
assurance how the market for restricted securities pursuant to
Rule 144A will develop, the Fund's Board of Trustees has
directed the
Adviser to monitor carefully the Fund's investments in such
securities with particular regard to trading activity,
availability of
reliable price information and other relevant information. To
the extent that, for a period of time, qualified institutional
buyers
cease purchasing such restricted securities pursuant to Rule
144A, the Fund's investing in such securities may have the
effect of
increasing the level of illiquidity in the Fund's investments
during such period.

The Fund may invest up to 5% of its net assets
in warrants, except that this limitation does not apply to
warrants
acquired in
units or attached to securities. A warrant is an instrument
issued by a corporation which gives the holder the right to
subscribe
to
a specified amount of the corporation's capital stock at a set
price for a specified period of time.

The Fund may invest in U.S. Government
securities; investment grade corporate bonds; high-grade
commercial paper;
certificates
of deposit, time deposits and bankers' acceptances issued by
domestic banks, foreign subsidiaries of domestic banks, foreign
branches
of domestic banks and domestic and foreign branches of foreign
banks; and other short-term instruments, including fixed,
floating
and
variable rate corporate notes and bonds, participation interests
in such obligations and repurchase agreements. The Fund will
not
invest more than 25% of its total assets in securities issued by
foreign banks.

Securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities include U.S.
Treasury
securities,
which differ in their interest rates, maturities and times of
issuance. Treasury Bills have initial maturities of one year or
less;
Treasury Notes have initial maturities of one to ten years; and
Treasury Bonds generally have initial maturities of greater than
ten
years. Some obligations issued or guaranteed by U.S. Government
agencies and instrumentalities, for example, Government National
Mortgage Association pass-through certificates, are supported by
the full faith and credit of the U.S. Treasury; others, such as
those
of the Federal Home Loan Banks, by the right of the issuer to
borrow from the Treasury; others, such as those issued by the
Federal
National Mortgage Association, by discretionary authority of the
U.S. Government to purchase certain obligations of the agency or
instrumentality; and others, such as those issued by the Student
Loan Marketing Association, only by the credit of the agency or
instrumentality. These securities bear fixed, floating or
variable rates of interest. Principal and interest may
fluctuate based
on
generally recognized reference rates or the relationship of
rates. While the U.S. Government provides financial support to
such
U.S. Government-sponsored agencies or instrumentalities, no
assurance
can be given that it will always do so, since it is not so
obligated
by law. The Fund will invest in such securities only when it is
satisfied that the credit risk with respect to the issuer is
minimal.

Commercial paper consists of short-term,
unsecured promissory notes issued to finance short-term credit
needs. The
commercial
paper purchased by the Fund will consist only of direct
obligations which, at the time of their purchase, are (a) rated
not lower
than Prime-2 by Moody's or A-2 by S&P, (b) issued by companies
having an outstanding unsecured debt issue currently rated at
least Aa3
by
Moody's or at least AA by S&P, or (c) if unrated, determined by
the Adviser to be of comparable quality to those rated
obligations
which may be purchased by the Fund. The Fund may purchase
floating and variable rate notes and bonds issued by
corporations.
Floating and variable rate notes and bonds include variable
amount master demand notes, which are obligations that permit
the Fund to
invest fluctuating amounts at varying rates of interest pursuant
to direct arrangements between the Fund, as lender, and the
borrower.
These obligations permit daily changes in the amounts borrowed.
As mutually agreed between the parties, the Fund may increase
the
amount under the notes at any time up to the full amount
provided by the note agreement, or decrease the amount, and the
borrower may
repay up to the full amount of the note without penalty.
Because these obligations are direct lending arrangements
between the
lender
and borrower, it is not contemplated that such instruments
generally will be traded, and there generally is no established
secondary
market for these obligations, although they are redeemable at
face value, plus accrued interest, at any time. Accordingly,
where these notes are not secured by letters of credit or other
credit support arrangements, the Fund's right to redeem is
dependent on
the ability of the borrower to pay principal and interest on
demand.
In connection with floating and variable demand obligations, the
Adviser will consider, on an ongoing basis, earning power, cash
flow and other liquidity ratios of the borrower, and the
borrower's
ability to pay principal and interest on demand. Such
obligations frequently are not rated by credit rating agencies,
and the Fund
may invest in them only if at the time of an investment the
borrower meets the criteria set forth above for other commercial
paper issuers.

[For left margin side bar: The Fund also
invests in various bank deposit products such as CDs, time
deposits and bankers' acceptances.]

Certificates of deposit are negotiable
certificates evidencing the obligation of a bank to repay funds
deposited
with it for a
specified period of time.

Time deposits are non-negotiable deposits
maintained in a banking institution for a specified period of
time (in no
event
longer than seven days) at a stated interest rate. The Fund
will invest in time deposits of banks that have total assets in
excess of
one billion dollars. Time deposits which may be held by the
Fund will not benefit from insurance from the Bank Insurance
Fund or the
Savings Association Insurance Fund administered by the FDIC.

A participation interest gives the Fund an
undivided interest in the security in the proportion that the
Fund's
participation
interest bears to the total principal amount of the security.
These instruments will be purchased from financial institutions
and may
have fixed, floating or variable rates of interest with
remaining maturities of one year or less. If the participation
interest is
unrated, or has been given a rating below that which otherwise
is permissible for purchase by the Fund, the participation
interest
will be backed by an irrevocable letter of credit or guarantee
of a bank that the Board of Trustees has determined meets the
prescribed quality standards for banks set forth herein, or the
payment obligation otherwise will be collateralized by U.S.
Government
securities, or, in the case of an unrated instrument, the
Adviser must have determined that the instrument is of
comparable quality
to instruments in which the Fund may invest.

[For left margin side bar: The Fund may only
enter into repurchase agreements when the Fund's custodian or
sub-custodian has custody of the underlying collateral.]

Repurchase agreements involve the acquisition by
the Fund of an underlying debt instrument, subject to an
obligation of the
seller to repurchase, and the Fund to resell, the instrument at
a fixed price, usually not more than one week after its
purchase.
The
Fund's custodian will have custody of, and will hold in a
segregated account, securities acquired by the Fund under a
repurchase
agreement. Repurchase agreements are considered by the staff of
the Securities and Exchange Commission to be loans by the Fund.
In
an attempt to reduce the risk of incurring a loss on a
repurchase agreement, the Fund will enter into repurchase
agreements only with
domestic banks with total assets in excess of one billion
dollars or primary government securities dealers reporting to
the Federal
Reserve Bank of New York, with respect to securities of the type
in which the Fund may invest, and will require that additional
securities be deposited with it if the value of the securities
purchased should decrease below resale price. The Adviser
and/or the
Administrator will monitor on an ongoing basis the value of the
collateral to assure that it always equals or exceeds the
repurchase
price. Certain costs may be incurred in connection with the
sale of the securities if the seller does not repurchase them in
accordance with the repurchase agreement. In addition, if
bankruptcy proceedings are commenced with respect to the seller
of the
securities, realization on the securities by the Fund may be
delayed or limited. The Fund will consider on an ongoing basis
the
creditworthiness of the institutions with which it enters into
repurchase agreements.

[For left margin side bar: The Fund may use
various investment techniques which may enhance its performance;
their use involves certain risks.]

From time to time, the Fund may lend securities
from its portfolio to brokers, dealers and other financial
institutions
needing to borrow securities to complete certain transactions.
Such loans may not exceed 33-1/3% of the value of the Fund's
total
assets. In connection with such loans, the Fund will receive
collateral consisting of cash, U.S. Government securities or
irrevocable
letters of credit issued by financial institutions. Such
collateral will be maintained at all times in an amount equal to
at least
100% of the current market value of the loaned securities. The
Fund can increase its income through the investment of such
collateral. The Fund continues to be entitled to payments in
amounts equal to the interest, dividends or other distributions
payable
on the loaned security, and receives interest on the amount of
the loan. Such loans will be terminable at any time upon
specified
notice. The Fund might experience risk of loss if the
institution with which it has engaged in a portfolio loan
transaction breaches its agreement with the Fund.

To earn additional income on its portfolio, the
Fund may write covered call option contracts on securities it
owns to the
extent of 20% of the value of its net assets at the time such
option contracts are written. In addition, the Fund may invest
up to 5%
of its assets, represented by the premium paid, in the purchase
of put and call options in respect of specific securities (or
groups or "baskets" of specific securities). A call option gives
the
purchaser of the option the right to buy, and obligates the
writer to
sell, the underlying security or securities at the exercise
price at any time during the option period. Conversely, a put
option
gives the purchaser of the option the right to sell, and
obligates the writer to buy, the underlying security or
securities at the
exercise price at any time during the option period. A covered
call option sold by the Fund, which is a call option with
respect to
which the Fund owns the underlying security or securities,
exposes the Fund during the term of the option to possible loss
of
opportunity to realize appreciation in the market price of the
underlying security or to possible continued holding of a
security or
securities which might otherwise have been sold to protect
against depreciation in the market price thereof.

As a fundamental policy, the Fund is permitted
to borrow money to the extent permitted under the Investment
Company
Act of
1940. However, the Fund currently intends to borrow money, only
for temporary or emergency (not leveraging) purposes, in an
amount
up
to 15% of the value of the Fund's total assets (including the
amount borrowed) valued at the lesser of cost or market, less
liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of the Fund's
total
assets, the Fund will not make any additional investments.

[For left margin side bar: The Fund has adopted
certain fundamental policies intended to limit the risk of its
investment
portfolio. These policies cannot be changed without approval by
a majority of shareholders.]

CERTAIN FUNDAMENTAL POLICIES. The Fund may (i) borrow
money to the extent permitted under the Investment Company Act
of 1940; (ii) invest up to 5% of the value of its total assets
in the
securities of any one issuer, except that up to 25% of the value
of the Fund's total assets may be invested, and obligations
issued
or
guaranteed by the U.S. Government, its agencies or
instrumentalities may be purchased, without regard to any such
limitation; and
(iii) invest up to 25% of its total assets in any single
industry, provided that, when the Fund has adopted a temporary
defensive
posture, there shall be no limitation on the purchase of
obligations issued or guaranteed by the U.S. Government, its
agencies or
instrumentalities. This paragraph describes fundamental
policies that cannot be changed without approval by the holders
of a
majority
(as defined in the Investment Company Act of 1940) of the Fund's
outstanding voting shares. See "Investment Objectives and
Management
Policies-- Investment Restrictions" in the Statement of
Additional Information.

CERTAIN ADDITIONAL NON-FUNDAMENTAL POLICIES. The Fund may (i)
purchase securities of any company having less than three years'
continuous operation (including operations of any predecessors)
if such purchase does not cause the value of its investments in
all
such companies to exceed 5% of the value of its total assets;
(ii) pledge, hypothecate, mortgage or otherwise encumber its
assets,
but
only to secure permitted borrowings; and (iii) invest up to 15%
of its net assets in repurchase agreements providing for
settlement
in
more than seven days after notice and in other illiquid
securities. See "Investment Objectives and Management
Policies--Investment
Restrictions" in the Statement of Additional Information.

[For left margin side bar: The Fund may be
subject to risks that are different from those incurred by a
fund which
invests
only in U.S. debt securities.]

RISK FACTORS. Since the Fund's portfolio may contain securities
issued by foreign branches of domestic banks, foreign
subsidiaries
of
domestic banks, and domestic and foreign branches of foreign
banks, the Fund may be subject to additional investment risks
with
respect to these securities that are different in some respects
from those incurred by a fund which invests only in debt
obligations
of U.S. domestic issuers. Such risks include possible future
political and economic developments, the possible imposition of
foreign
withholding taxes on interest income payable on the securities,
the possible establishment of exchange controls or the adoption
of
other foreign governmental restrictions which might adversely
affect the payment of principal and interest on these securities
and
the
possible seizure or nationalization of foreign deposits.

[For left margin side bar: Certain securities
purchased by the Fund are subject to greater market fluctuation
than
higher-
rated fixed income securities.]

For the portion of the Fund's portfolio invested
in debt securities, investors should be aware that even though
interest-
bearing securities are investments which promise a stable stream
of income, the prices of such securities are inversely affected
by
changes in interest rates and, therefore, are subject to the
risk of market price fluctuations. The values of fixed-income
securities
also may be affected by changes in the credit rating or
financial condition of the issuing entities. Once the rating of
a portfolio
security has been changed, the Fund will consider all
circumstances deemed relevant in determining whether to continue
to hold the
security. Certain securities purchased by the Fund, such as
those rated Baa by Moody's and BBB by S&P, while considered
investment
grade obligations, are subject to greater market fluctuation
than certain lower yielding, higher rated fixed-income
securities.
Bonds
which are rated Baa are neither highly protected nor poorly
secured, and are considered by Moody's to have speculative
characteristics. Bonds rated BBB by S&P are regarded as having
adequate capacity to pay interest and repay principal, and while
such
bonds normally exhibit adequate protection parameters, adverse
economic conditions or changing circumstances are more likely to
lead
to a weakened capacity to pay interest and repay principal for
bonds in this category than in higher rated categories. See
"Appendix"
in the Statement of Additional Information.

OTHER INVESTMENT CONSIDERATIONS. The Fund's portfolio
turnover rate may vary from year to year, as well as within a
year. The Adviser believes that the annual portfolio turnover
rate
should not ordinarily exceed 100%, but the amount of portfolio
turnover will not be a limiting factor when making portfolio
decisions.

Investment decisions for the Fund are made
independently from those of other investment companies,
investment advisory
accounts, custodial accounts, individual trust accounts and
commingled funds that may be advised by the Adviser. However,
if such
other investment companies or managed accounts are prepared to
invest in, or desire to dispose of, securities of the type in
which
the
Fund invests at the same time as the Fund, available investments
or opportunities for sales will be allocated equitably to each
of
them. In some cases, this procedure may adversely affect the
size of the position obtained for or disposed of by the Fund or
the
price paid or received by the Fund.

MANAGEMENT OF THE FUND

[For left margin side bar: The investment
adviser, The First National Bank of Chicago, is one of the
largest
commercial banks
in the United States and the largest in the mid-Western United
States and manages $11.8 billion of investment assets.]

INVESTMENT ADVISER. The Adviser, located at Three First
National Plaza, Chicago, Illinois 60670, is the Fund's
investment adviser.
The Adviser, a wholly-owned subsidiary of First Chicago
Corporation, a registered bank holding company, is a commercial
bank
offering
a wide range of banking and investment services to customers
throughout the United States and around the world. As of March
31,
1994,
it was one of the largest commercial banks in the United States
and the largest in the mid-Western United States in terms of
assets
($59.8 billion) and in terms of deposits ($28.8 billion). As of
March 31, 1994, the Adviser provided personal investment
management
services to portfolios containing approximately $15.5 billion in
assets. The Adviser serves as investment adviser for the Fund
pursuant to an Investment Advisory Agreement dated as of
December 16, 1985 (as revised October 1, 1993). Under the
Investment
Advisory Agreement, the Adviser, subject to the supervision of
the Fund's Board of Trustees and in conformity with
Massachusetts law
and the stated policies of the Fund, manages the investment of
the Fund's assets. The Adviser is responsible for making
investment
decisions for the Fund, placing purchase and sale orders and
providing research, statistical analysis and continuous
supervision of
the investment portfolio. The Adviser provides these services
through its Investment Management Department. The investment
advisory
services of the Adviser are not exclusive under the terms of the
Investment Advisory Agreement. The Adviser is free to, and
does,
render investment advisory services to others, including other
investment companies as well as commingled trust funds and a
broad
spectrum of individual trust and investment management
portfolios, which have varying investment objectives. The
Adviser has
advised
the Fund that in making its investment decisions the Adviser
does not obtain or use material inside information in the
possession of
any other division or department of the Adviser or in the
possession of any affiliate of the Adviser.

The Adviser and its affiliates presently intend
to continue to charge and collect customary account and account
transaction
fees with respect to accounts through which or for which Fund
shares are purchased or redeemed. This will result in the
receipt by
the Adviser and its affiliates of customer account fees in
addition to advisory and Service Agent fees from the Fund with
respect to
assets in certain accounts. See "Distribution Plan and
Shareholder Services Plan."

Under the terms of the Investment Advisory
Agreement, the Fund has agreed to pay the Adviser a monthly fee
at the
annual rate
of .65 of 1% of the value of the Fund's average daily net
assets. For the fiscal year ended December 31, 1992, no
investment
advisory
fee was paid by the Fund pursuant to an undertaking by the
Adviser.

The Fund's primary portfolio manager is Arthur
P. Krill. He has held that position since the Fund's inception,
and
has been
employed by the Adviser since June 1973. The Adviser also
provides research services for the Fund as well as for other
funds it
advises through a professional staff of portfolio managers and
security analysts.

GLASS-STEAGALL ACT. The Glass-Steagall Act and other applicable
laws prohibit Federally chartered or supervised banks from
engaging
in certain aspects of the business of issuing, underwriting,
selling and/or distributing securities, although banks such as
the
Adviser are permitted to purchase and sell securities upon the
order and for the account of their customers. The Adviser has
advised
the Fund of its belief that it may perform the services for the
Fund contemplated by the Investment Advisory Agreement and this
Prospectus without violating the Glass-Steagall Act or other
applicable banking laws or regulations. The Adviser has pointed
out,
however, that there are no cases deciding whether a bank such as
the Adviser may perform services comparable to those performed
by
the
Adviser and that future changes in either Federal or state
statutes and regulations relating to permissible activities of
banks and
their subsidiaries and affiliates, as well as future judicial or
administrative decisions or interpretations of present and
future
statutes and regulations, could prevent the Adviser from
continuing to perform such services for the Fund. If the
Adviser were to
be
prevented from providing such services to the Fund, the Fund's
Board of Trustees would review the Fund's relationship with the
Adviser
and consider taking all actions necessary in the circumstances.

[For left margin side bar: The Dreyfus
Corporation, which manages or administers approximately $77
billion in
mutual fund
assets, serves as the Fund's administrator.]

ADMINISTRATOR. The Administrator, located at 200 Park Avenue,
New York, New York 10166, serves as the Fund's administrator
pursuant
to an Administration Agreement with the Fund. Under this
Agreement, the Administrator generally assists in all aspects of
the
Fund's
operations, other than providing investment advice, subject to
the overall authority of the Fund's Trustees in accordance with
Massachusetts law. The Administrator was formed in 1947 and as
of February 28, 1994, managed or administered approximately $77
billion in assets for more than 1.9 million investor accounts
nationwide.

Under the terms of the Administration Agreement,
the Fund has agreed to pay the Administrator a monthly fee at
the
annual rate
of .30 of 1% of the value of the Fund's average daily net
assets. For the fiscal year ended December 31, 1993, no
administration
fee
was paid by the Fund pursuant to an undertaking by the
Administrator.

[For left margin side bar: The Shareholder
Services Group, Inc. is the Fund's transfer agent.

TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN. The
Shareholder Services Group, Inc., a subsidiary of First Data
Corporation,
P.O. Box 9671, Providence, Rhode Island 02940-9671, is the
Fund's Transfer and Dividend Disbursing Agent (the "Transfer
Agent").
The
Bank of New York, 110 Washington Street, New York, New York
10286, is the Fund's Custodian.

EXPENSES. All expenses incurred in the operation of the Fund
are borne by the Fund, except to the extent specifically assumed
by
the
Adviser and/or the Administrator. The expenses borne by the
Fund include the following: taxes, interest, brokerage fees and
commissions, if any, fees of Trustees who are not officers,
directors, employees or holders, directly or indirectly, of 5%
or more of
the outstanding voting securities of the Adviser or the
Administrator, Securities and Exchange Commission fees, state
Blue Sky
qualification fees, advisory and administration fees, charges of
custodians, transfer and dividend disbursing agents' fees,
certain
insurance premiums, industry association fees, outside auditing
and legal expenses, costs of maintaining the Fund's existence,
costs
attributable to investor services (including, without
limitation, telephone and personnel expenses), costs of
shareholders' reports
and meetings and any extraordinary expenses. Class A and Class
B shares are subject to an annual service fee for ongoing
personal
services relating to shareholder accounts and services related
to the maintenance of shareholder accounts. In addition, Class
B
shares are subject to an annual distribution fee for
advertising, marketing and distributing Class B shares pursuant
to a
distribution
plan adopted in accordance with Rule 12b-1 under the Investment
Company Act of 1940. See "Distribution Plan and Shareholder
Services
Plan."

From time to time, the Adviser and/or the
Administrator or any of their affiliates may waive receipt of
their fees
and/or
voluntarily assume certain expenses of the Fund, which would
have the effect of lowering the overall expense ratio of the
Fund and
increasing yield to investors at the time such amounts are
waived or assumed, as the case may be. The Fund will not pay
the Adviser
and/or the Administrator or their affiliates at a later time for
any amounts which may be waived, nor will the Fund reimburse the
Adviser and/or the Administrator or their affiliates for any
amounts which may be assumed.

HOW TO BUY FUND SHARES

[For left margin side bar: The Fund offers a
number of convenient ways to purchase shares.]

INFORMATION APPLICABLE TO ALL PURCHASERS. The Fund's
distributor is Dreyfus Service Corporation, a wholly-owned
subsidiary of the
Administrator, located at 200 Park Avenue, New York, New York
10166. The shares it distributes are not deposits or
obligations of
The
Dreyfus Security Savings Bank, F.S.B. or the Adviser and
therefore are not insured by the FDIC.

When purchasing Fund shares, an investor must
specify whether the purchase is for Class A or Class B shares.
Fund
shares may
be purchased by all clients of the Adviser and its affiliates,
including qualified custody, agency and trust accounts, through
their
accounts with the Adviser and its affiliates, or by clients of
certain other Service Agents through their accounts with the
Service
Agent. Fund shares also may be purchased directly through the
Distributor. Share certificates will not be issued. The Fund
reserves
the right to reject any purchase order.

[For left margin side bar: You can open an
account with as little as $1,000 ($250 for IRAs or other
retirement
plans).
Subsequent investments can be as little as $100.]

The minimum initial investment for each Class is
$1,000. However, for IRAs and other personal retirement plans,
the
minimum
initial purchase is $250. All subsequent investments must be at
least $100. The initial investment must be accompanied by the
Fund's
Account Application. The Adviser and Service Agents may impose
initial or subsequent investment minimums which are higher or
lower
than those specified above and may impose different minimums for
different types of accounts or purchase arrangements.

If an order is received by the Transfer Agent by
the close of trading on the floor of the New York Stock Exchange
(currently
4:00 p.m., New York time) on any business day (which, as used
herein, shall include each day the New York Stock Exchange is
open for
business, except Martin Luther King, Jr. Day, Columbus Day and
Veterans Day), Fund shares will be purchased at the public
offering
price (i.e., net asset value plus the applicable sales load set
forth below) determined as of the close of trading on the floor
of
the
New York Stock Exchange on that day. Otherwise, Fund shares
will be purchased at the public offering price determined as of
the
close
of trading on the floor of the New York Stock Exchange on the
next business day, except where shares are purchased through a
dealer
as
provided below.

[For left margin side bar: Net asset value is
determined at the close of trading on the floor of the New York
Stock
Exchange
(currently 4:00 p.m., New York time) on each business day.]

Fund shares are sold on a continuous basis. Net
asset value per share is determined as of the close of trading
on
the floor
of the New York Stock Exchange (currently 4:00 p.m., New York
time), on each business day. Net asset value per share of each
class
is
computed by dividing the value of the Fund's net assets
represented by such Class (i.e., the value of its assets less
liabilities)
by
the total number of shares of such Class outstanding. The
Fund's investments are valued each business day using available
market
quotations or at fair value which may be determined by one or
more independent pricing services approved by the Board of
Trustees.
Each pricing service's procedures are reviewed under the general
supervision of the Board of Trustees. For further information
regarding the methods employed in valuing Fund investments, see
"Determination of Net Asset Value" in the Fund's Statement of
Additional Information.

Federal regulations require that investors
provide a certified Taxpayer Identification Number ("TIN") upon
opening
or
reopening an account. See "Dividends, Distributions and Taxes"
and the Fund's Account Application for further information
concerning
this requirement. Failure to furnish a certified TIN to the
Fund could subject an investor to a $50 penalty imposed by the
Internal
Revenue Service (the "IRS").

Orders for the purchase of Fund shares received
by dealers by the close of trading on the floor of the New York
Stock Exchange
on any business day and transmitted to the Distributor by the
close of its business day (normally 5:15 p.m., New York time)
will be
based on the public offering price per share determined as of
the close of trading on the floor of the New York Stock Exchange
on
that
day. Otherwise, the orders will be based on the next determined
public offering price. It is the dealers' responsibility to
transmit
orders so that they will be received by the Distributor before
the close of its business day.

[For left margin side bar: Class A shares are
sold with a maximum sales load of 4.50%. There are several ways
to
reduce or
eliminate the sales load.]

CLASS A SHARES. The public offering price for
Class A shares is the net asset value per share of that Class
plus a sales load
as shown below:
<TABLE>

<CAPTION>
TOTAL SALES LOAD

Dealer's
As a % of As a % of Reallowance
offering net asset as a % of
price per value per offering
AMOUNT OF TRANSACTION share share price
<S> <C> <C> <C>
Less than $50,000 4.50 4.70 4.25
$50,000 to less than $100,000 4.00 4.20 3.75
$100,000 to less than $250,000 3.00 3.10 2.75
$250,000 to less than $500,000 2.50 2.60 2.25
$500,000 to less than $1,000,000 2.00 2.00 1.75
$1,000,000 to less than $3,000,000 1.00 1.00 1.00
$3,000,000 to less than $5,000,000 .50 .50 .50
$5,000,000 and above .25 .25 .25
</TABLE>

Full-time employees of NASD member firms and
full-time employees of other financial institutions which have
entered
into an
agreement with the Distributor pertaining to the sale of Fund
shares (or which otherwise have a brokerage-related or clearing
arrangement with an NASD member firm or other financial
institution with respect to sales of Fund shares), their spouses
and minor
children, and accounts opened by a bank, trust company or thrift
institution, acting as a fiduciary, may purchase Class A shares
for
themselves or itself, as the case may be, at net asset value,
provided that they have furnished the Distributor appropriate
notification of such status at the time of the investment and
such other information as it may request from time to time in
order to
verify eligibility for this privilege. This privilege also
applies to full-time employees of financial institutions
affiliated with
NASD member firms whose employees are eligible to purchase Class
A shares at net asset value. In addition, Class A shares may be
purchased at net asset value for Fund accounts registered under
the Uniform Gifts to Minors Act or Uniform Transfers to Minors
Act
which are opened through FCIS. Class A shares are also offered
at net asset value to directors, employees and retired employees
of
First Chicago Corporation, or any of its affiliates and
subsidiaries, Board members of a fund advised by the Adviser,
including
members of the Fund's Board, or the spouse or minor child of any
of the foregoing.

Class A shares will be offered at net asset
value without a sales load to employees participating in
qualified or
nonqualified
employee benefit plans or other programs where (i) the employers
or affiliated employers maintaining such plans or programs have
a
minimum of 250 employees eligible for participation in such
plans or programs or (ii) such plan's or program's aggregate
initial
investment in the Fund, certain other funds advised by the
Adviser and certain other funds advised by the Administrator
exceeds one
million dollars ("Eligible Benefit Plans"). Plan sponsors,
administrators or trustees, as applicable, are responsible for
notifying
the Distributor when the relevant requirement is satisfied.

In fiscal 1993, FCIS, an affiliate of the
Adviser, retained $34,436 from sales loads on Class A shares.
The dealer
reallowance may be changed from time to time but will remain the
same for all dealers.

CLASS B SHARES. The public offering price for
Class B shares is the net asset value per share of that Class.
No
initial
sales charge is imposed at the time of purchase. A CDSC is
imposed, however, on certain redemptions of Class B shares as
described
under "How to Redeem Fund Shares." FCIS may compensate certain
Service Agents for selling Class B shares at the time of
purchase
from
its own assets. Proceeds of the CDSC and distribution fees
payable to FCIS, in part, are used to defray these expenses.

[For left margin side bar: Contact your
investment representative or Service Agent to learn how to
purchase
shares.]

PURCHASING SHARES THROUGH ACCOUNTS WITH THE ADVISER OR A SERVICE
AGENT. Investors who desire to purchase Fund shares through
their
accounts at the Adviser or its affiliates or a Service Agent
should contact such entity directly for appropriate
instructions, as
well
as for information about conditions pertaining to the account
and any related fees. Service Agents and the Adviser may charge
clients
direct fees for effecting transactions in Fund shares, as well
as fees for other services provided to clients in connection
with
accounts through which Fund shares are purchased. These fees,
if any, would be in addition to fees received by a Service Agent
under
the Shareholder Services Plan or advisory fees received by the
Adviser under the Investment Advisory Agreement. Each Service
Agent
has agreed to transmit to its clients a schedule of such fees.
In addition, Service Agents and the Adviser receive different
levels
of compensation for selling different classes of shares and may
impose minimum account and other conditions, including
conditions
which might affect the availability of certain shareholder
privileges described in this Prospectus. It is the
responsibility of the
Adviser and Service Agents to transmit client orders on a timely
basis.

Copies of the Fund's Prospectus and Statement of
Additional Information may be obtained from the Distributor, the
Adviser,
certain affiliates of the Adviser or certain Service Agents, as
well as from the Fund.

PURCHASING SHARES THROUGH THE DISTRIBUTOR. Fund shares also may
be purchased directly through the Distributor by check or wire,
or
through the TeleTransfer Privilege described below. The initial
investment must be accompanied by the Fund's Account Application
which can be obtained from the Distributor and certain Service
Agents. Checks should be made payable to "The First Prairie
Family
of
Funds." Payments to open new accounts which are mailed should
be sent to The First Prairie Family of Funds, P.O. Box 9387,
Providence, Rhode Island 02940-9387, together with the
investor's Account Application indicating the Class of shares
being
purchased.
For subsequent investments, the investor's Fund account number
should appear on the check and an investment slip should be
enclosed
and sent to The First Prairie Family of Funds, P.O. Box 105,
Newark, New Jersey 07101-0105. Neither initial nor subsequent
investments should be made by third party check. A charge will
be imposed if any check used for investment in an investor's
account
does not clear. All payments should be made in U.S. dollars
and, to avoid fees and delays, should be drawn only on U.S.
banks.

Subsequent investments also may be made by
electronic transfer of funds from an account maintained in a
bank or
other domestic
financial institution that is an Automated Clearing House
member. The investor must direct the institution to transmit
immediately
available funds through the Automated Clearing House to The Bank
of New York with instructions to credit the investor's Fund
account.
The instructions must specify the investor's Fund account
registration and the investor's Fund account number preceded by
the digits
"1111."

[For left margin side bar: Reduced sales loads
for Class A shares apply to combined purchases of $50,000 or
more of
this Fund
and other eligible First Prairie Funds.]

RIGHT OF ACCUMULATION--CLASS A SHARES. Reduced sales loads
apply to any purchase of Class A shares where the dollar amount
of
shares
being purchased plus the value of Fund shares, shares of certain
other funds advised by the Adviser purchased with a sales load
or
acquired by a previous exchange of shares purchased with a sales
load, and shares of certain other funds advised by the
Administrator
which are sold with a sales load (hereinafter referred to as
"Eligible Funds") held by an investor and any related
"purchaser" as
defined in the Statement of Additional Information, where the
aggregate investment, including such purchase, is $50,000 or
more.
If, for example, an investor previously purchased and still holds
Class A shares of the Fund, or of any other Eligible Fund or
combination
thereof, with an aggregate current market value of $40,000 and
subsequently purchases Class A shares of the Fund or an Eligible
Fund
having a current value of $20,000, the sales load applicable to
the subsequent purchase would be reduced to 4.00% of the
offering
price (4.20% of the net asset value). All present holdings of
Eligible Funds may be combined to determine the current offering
price
of the aggregate investment in ascertaining the sales load
applicable to each subsequent purchase.

To qualify for reduced sales loads, at the time
of a purchase an investor or his Service Agent must notify the
Distributor if
orders are made by wire, or the Transfer Agent if orders are
made by mail. The reduced sales load is subject to confirmation
of an investor's holdings through a check of appropriate records.

[For left margin side bar: You can purchase
additional shares by telephone after you supply the necessary
information on your
Account Application.]

TELETRANSFER PRIVILEGE. An investor may purchase Fund shares
(minimum $500, maximum $150,000 per day) by telephone if he has
checked
the appropriate box and supplied the necessary information on
the Fund's Account Application or has filed a Shareholder
Services Form
with the Transfer Agent. The proceeds will be transferred
between the bank account designated in one of these documents
and the
investor's Fund account. Only a bank account maintained in a
domestic financial institution which is an Automated Clearing
House
member may be so designated. The Fund may modify or terminate
this Privilege at any time or charge a service fee upon notice
to shareholders. No such fee currently is contemplated.

Investors who have selected the TeleTransfer
Privilege may request a TeleTransfer purchase of Fund shares by
calling
1-800-227-0072 or, if calling from overseas, 1-401-455-3309.

SHAREHOLDER SERVICES

The services and privileges described under this heading may not
be available to clients of certain Service Agents and some
Service
Agents may impose certain conditions on their clients which are
different from those described in this Prospectus. Each
investor
should consult his Service Agent in this regard.

[For left margin side bar: You can exchange
your shares for shares of other eligible First Prairie funds.]

EXCHANGE PRIVILEGE. The Exchange Privilege enables an investor
to purchase, in exchange for Class A or Class B shares of the
Fund,
shares of the same class of certain other funds advised by the
Adviser or shares of the same class of certain funds advised by
the
Administrator, to the extent such shares are offered for sale in
the investor's state of residence. These funds have different
investment objectives that may be of interest to investors. The
Exchange Privilege may be expanded to permit exchanges between
the
Fund and other funds that, in the future, may be advised by the
Adviser. Investors will be notified of any such change. If an
investor desires to use this Privilege, he should consult his
Service Agent or the Distributor to determine if it is available
and
whether any conditions are imposed on its use.

Shares will be exchanged at the next determined
net asset value; however, a sales load may be charged with
respect
to
exchanges of Class A shares into funds sold with a sales load.
No CDSC will be imposed on Class B shares at the time of an
exchange;
however, Class B shares acquired through an exchange will be
subject on redemption to the higher CDSC applicable to the
exchanged or
acquired shares. The CDSC applicable on redemption of the
acquired Class B shares will be calculated from the date of the
initial
purchase of the Class B shares exchanged. If an investor is
exchanging Class A shares into a fund that charges a sales load,
the
investor may qualify for share prices which do not include the
sales load or which reflect a reduced sales load, if the shares
of
the
fund from which the investor is exchanging were: (a) purchased
with a sales load, (b) acquired by a previous exchange from
shares
purchased with a sales load, or (c) acquired through
reinvestment of dividends or distributions paid with respect to
the foregoing
categories of shares. To qualify, at the time of an exchange
the investor must notify the Transfer Agent or the investor's
Service
Agent must notify the Distributor. Any such qualification is
subject to confirmation of the investor's holdings through a
check of
appropriate records. See "Shareholder Services" in the
Statement of Additional Information. No fees currently are
charged
shareholders directly in connection with exchanges, although the
Fund reserves the right, upon not less than 60 days' written
notice,
to charge shareholders a nominal fee in accordance with rules
promulgated by the Securities and Exchange Commission. The Fund
reserves the right to reject any exchange request in whole or in
part. The Exchange Privilege may be modified or terminated at
any
time upon notice to shareholders.

The exchange of shares of one fund for shares of
another is treated for Federal income tax purposes as a sale of
the
shares
given in exchange by the shareholder and, therefore, an
exchanging shareholder may realize a taxable gain or loss.

[For left margin side bar: You can
automatically exchange Fund shares for shares of certain other
First Prairie
mutual funds
at regular intervals which you select.]

AUTO-EXCHANGE PRIVILEGE. The Auto-Exchange Privilege enables an
investor to invest regularly (on a semi-monthly, monthly,
quarterly
or annual basis), in exchange for Class A or Class B shares of
the Fund, in shares of the same Class of certain other funds in
the
First Prairie Family of Funds or certain funds advised by the
Administrator of which he is currently an investor. The amount
an
investor designates, which can be expressed either in terms of a
specific dollar or share amount ($100 minimum), will be
exchanged
automatically on the first and/or fifteenth of the month
according to the schedule the investor has selected. Shares
will be
exchanged at the then-current net asset value; however, a sales
load may be charged with respect to exchanges of Class A shares
into
funds sold with a sales load. No CDSC will be imposed on Class
B shares at the time of an exchange; however, Class B shares
acquired
through an exchange will be subject on redemption to the higher
CDSC applicable to the exchanged or acquired shares. The CDSC
applicable on redemption of the acquired Class B shares will be
calculated from the date of the initial purchase of the Class B
shares
exchanged. See "Shareholder Services" in the Statement of
Additional Information. The right to exercise this Privilege
may be
modified or canceled by the Fund or the Transfer Agent. The
investor or the investor's Service Agent may modify or cancel
this
Privilege at any time by writing to The First Prairie Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. The
Fund may charge a service fee for the use of this Privilege. No
such fee currently is contemplated. The exchange of shares of
one fund
for shares of another is treated for Federal income tax purposes
as a sale of the shares given in exchange by the shareholder
and,
therefore, an exchanging shareholder may realize a taxable gain
or loss. For more information concerning this Privilege and the
funds eligible to participate in this Privilege, or to obtain an
Auto-Exchange Authorization Form, please call toll free in
Illinois 1-800-621-6592, or, outside Illinois 1-800-537-4938 if
Fund shares were purchased through FCIS, or 1-800-645-6561 if
Fund shares were
purchased through the Distributor.

[For left margin side bar: You can purchase
shares automatically at regular intervals which you select.]

AUTOMATIC ASSET BUILDER. Automatic Asset Builder permits an
investor to purchase Fund shares (minimum of $100 and maximum of
$150,000
per transaction) at regular intervals selected by the investor.
Fund shares are purchased by transferring funds from the bank
account
designated by an investor. At the investor's option, the bank
account designated by the investor will be debited in the
specified
amount, and Fund shares will be purchased, once a month, on
either the first or fifteenth day, or twice a month, on both
days. Only
an account maintained at a domestic financial institution which
is an Automated Clearing House member may be so designated. To
establish an Automatic Asset Builder account, the investor must
file an authorization form with the Transfer Agent. The
necessary authorization form may be obtained from the
Distributor, the
Adviser, certain affiliates of the Adviser or certain Service
Agents.
An investor may cancel his participation in this Privilege or
change the amount of purchase at any time by mailing written
notification
to The First Prairie Family of Funds, P.O. Box 9671, Providence,
Rhode Island 02940-9671, and the notification will be effective
three
business days following receipt. The Fund may modify or
terminate this Privilege at any time or charge a service fee.
No such fee
currently is contemplated.

[For left margin side bar: Many Federal
payments are eligible for full or partial direct deposit into
your Fund account to purchase shares.]

GOVERNMENT DIRECT DEPOSIT PRIVILEGE. Government Direct
Deposit Privilege enables an investor to purchase Fund shares
(minimum of $100 and maximum of $50,000 per transaction) by
having
Federal salary, Social Security or certain veterans', military
or other payments from the Federal government automatically
deposited
into the investor's Fund account. An investor may deposit as
much of such payments as he elects. To enroll in Government
Direct
Deposit, the investor must file with the Transfer Agent a
completed Direct Deposit Sign-Up Form for each type of payment
that the
investor desires to include in this Privilege. The appropriate
form may be obtained from the Distributor, the Adviser, certain
affiliates of the Adviser or certain Service Agents. Death or
legal incapacity will terminate an investor's participation in
this
Privilege. An investor may elect at any time to terminate his
participation by notifying in writing the appropriate Federal
agency.

Further, the Fund may terminate an investor's participation upon
30 days' notice to the investor.

[For left margin side bar: You can withdraw a
specified dollar amount from your Fund account every month or
quarter.]

AUTOMATIC WITHDRAWAL PLAN. The Automatic Withdrawal Plan
permits an investor to request withdrawal of a specified dollar
amount
(minimum of $50) on either a monthly or quarterly basis if the
investor has a $5,000 minimum account. An application for the
Automatic Withdrawal Plan can be obtained from the Distributor,
the Adviser, certain affiliates of the Adviser or certain
Service
Agents. The Automatic Withdrawal Plan may be ended at any time
by the investor, the Fund or the Transfer Agent.

Class B shares withdrawn pursuant to the
Automatic Withdrawal Plan will be subject to any applicable
CDSC.
Purchases of
additional Class A shares where a sales load is imposed
concurrently with withdrawals of Class A shares generally are
undesirable.

[For left margin side bar: You can "sweep" your
dividends and capital gain distributions into certain other
First
Prairie
mutual funds.]

DIVIDEND OPTIONS. The Dividend Sweep enables an investor to
invest automatically dividends or dividends and capital gain
distributions, if any, paid by the Fund in shares of the same
class of another fund in the First Prairie Family of Funds or
certain
funds advised or administered by the Administrator of which the
investor is a shareholder. Shares of the other fund will be
purchased
at the then-current net asset value; however, a sales load may
be charged with respect to investments in shares of a fund sold
with
a
sales load. If an investor is investing in a fund that charges
a sales load, the investor may qualify for share prices which do
not
include the sales load or which reflect a reduced sales load.
If an investor is investing in a fund that charges a CDSC, the
shares
purchased will be subject to the CDSC, if any, applicable to the
purchased shares. See "Shareholder Services" in the Statement
of
Additional Information. Dividend ACH permits a shareholder to
transfer electronically on the payment date their dividends or
dividends and capital gains, if any, from the Fund to a
designated bank account. Only an account maintained at a
domestic financial
institution which is an Automated Clearing House member may be
so designated. Banks may charge a fee for this service.

For more information concerning these
privileges, or to request a Dividend Options Form, investors
should call toll
free in
Illinois 1-800-621-6592; or outside Illinois, 1-800-537-4938 if
Fund shares were purchased through FCIS, or 1-800-645-6561 if
Fund
shares were purchased through the Distributor. To cancel these
privileges, the investor or the investor's Service Agent must
mail
written notification to The First Prairie Family of Funds, P.O.
Box 9671, Providence, Rhode Island 02940-9671. Enrollment in or
cancellation of these privileges is effective three business
days following receipt by the Transfer Agent. These privileges
are
available only for existing accounts and may not be used to open
new accounts. Minimum subsequent investments do not apply for
Dividend Sweep. The Fund may modify or terminate these
privileges at any time or charge a service fee. No such fee
currently is
contemplated. Shares held under Keogh Plans, IRAs or other
retirement plans are not eligible for these privileges.

[For left margin side bar: By signing a Letter
of Intent to purchase additional Class A shares within 13
months,
you become
eligible for any reduced sales charges applying to the total
purchase.]

LETTER OF INTENT--CLASS A SHARES. By signing a Letter of Intent
form, available from the Distributor, the Adviser, certain
affiliates
of the Adviser or certain Service Agents, an investor becomes
eligible for the reduced sales load applicable to the total
number of
Eligible Fund shares purchased in a 13-month period pursuant to
the terms and under the conditions set forth in the Letter of
Intent.
A minimum initial purchase of $5,000 is required. To compute
the applicable sales load, the offering price of shares the
investor
holds (on the date of submission of the Letter of Intent) in any
Eligible Fund that may be used toward "Right of Accumulation"
benefits described above may be used as a credit toward
completion of the Letter of Intent. However, the reduced sales
load will be
applied only to new purchases.

The Transfer Agent will hold in escrow 5% of the
amount indicated in the Letter of Intent for payment of a higher
sales load
if the investor does not purchase the full amount indicated in
the Letter of Intent. The escrow will be released when the
investor
fulfills the terms of the Letter of Intent by purchasing the
specified amount. If the investor's purchases qualify for a
further
sales load reduction, the sales load will be adjusted to reflect
the investor's total purchase at the end of 13 months. If total
purchases are less than the amount specified, the investor will
be requested to remit an amount equal to the difference between
the
sales load actually paid and the sales load applicable to the
aggregate purchases actually made. If such remittance is not
received
within 20 days, the Transfer Agent, as attorney-in-fact pursuant
to the terms of the Letter of Intent, will redeem an appropriate
number of Class A shares held in escrow to realize the
difference. Signing a Letter of Intent does not bind the
investor to
purchase,
or the Fund to sell, the full amount indicated at the sales load
in effect at the time of signing, but the investor must complete
the
intended purchase to obtain the reduced sales load. At the time
an investor purchases Class A shares, he must indicate his
intention
to do so under a Letter of Intent.

HOW TO REDEEM FUND SHARES

[For left margin side bar: You can redeem Fund
shares at any time.]

GENERAL. An investor may request redemption of his Class A or
Class B shares at any time. Redemption requests should be
transmitted
to the Transfer Agent as described below. When a request is
received in proper form, the Fund will redeem the shares at the
next
determined net asset value as described below. If an investor
holds Fund shares of more than one Class, any request for
redemption
must specify the Class of shares being redeemed. If an investor
fails to specify the Class of shares to be redeemed or if an
investor
owns fewer shares of the Class than specified to be redeemed,
the redemption request may be delayed until the Transfer Agent
receives
further instructions from the investor or his Service Agent.

The Fund imposes no charges (other than any
applicable CDSC with respect to Class B shares) when shares are
redeemed. Service
Agents may charge a nominal fee for effecting redemptions of
Fund shares. The value of the shares redeemed may be more or
less than
their original cost, depending upon the Fund's then-current net
asset value.

The Fund ordinarily will make payment for all
shares redeemed within seven days after receipt by the Transfer
Agent
of a
redemption request in proper form, except as provided by the
rules of the Securities and Exchange Commission. HOWEVER, IF AN
INVESTOR
HAS PURCHASED FUND SHARES BY CHECK, BY TELETRANSFER PRIVILEGE OR
THROUGH AUTOMATIC ASSET BUILDER AND SUBSEQUENTLY SUBMITS A
WRITTEN
REDEMPTION REQUEST TO THE TRANSFER AGENT, THE REDEMPTION
PROCEEDS WILL BE TRANSMITTED TO THE INVESTOR PROMPTLY UPON BANK
CLEARANCE
OF
THE INVESTOR'S PURCHASE CHECK, TELETRANSFER PURCHASE OR
AUTOMATIC ASSET BUILDER ORDER, WHICH MAY TAKE UP TO EIGHT
BUSINESS DAYS OR
MORE. IN ADDITION, THE FUND WILL REJECT REQUESTS TO REDEEM
SHARES BY WIRE OR TELEPHONE OR PURSUANT TO THE TELETRANSFER
PRIVILEGE
FOR
A PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER
AGENT OF THE PURCHASE CHECK, THE TELETRANSFER PURCHASE OR THE
AUTOMATIC
ASSET BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS REQUESTED.
THESE PROCEDURES WILL NOT APPLY IF THE INVESTOR'S SHARES WERE
PURCHASED BY WIRE PAYMENT, OR IF THE INVESTOR OTHERWISE HAS A
SUFFICIENT COLLECTED BALANCE IN HIS ACCOUNT TO COVER THE
REDEMPTION
REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE,
DIVIDENDS ON SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND THE
INVESTOR WILL BE
ENTITLED TO EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP.
Fund shares will not be redeemed until the Transfer Agent has
received
the investor's Account Application.

The Fund reserves the right to redeem an
investor's account at the Fund's option upon not less than 45
days' written
notice if
the account's net asset value is $500 or less and remains so
during the notice period.

CONTINGENT DEFERRED SALES CHARGE--CLASS B SHARES. A CDSC
payable to FCIS and other Service Agents is imposed on any
redemption of
Class B shares which reduces the current net asset value of an
investor's Class B shares to an amount which is lower than the
dollar
amount of all payments by the investor for the purchase of Class
B shares of the Fund held by the investor at the time of
redemption.
No CDSC will be imposed to the extent that the net asset value
of the Class B shares redeemed does not exceed (i) the current
net
asset value of Class B shares acquired through reinvestment of
dividends or capital gain distributions, plus (ii) increases in
the
net
asset value of an investor's Class B shares above the dollar
amount of all the investor's payments for the purchase of Class
B shares
of the Fund held by the investor at the time of redemption.

If the aggregate value of Class B shares
redeemed has declined below their original cost as a result of
the Fund's
performance, a CDSC may be applied to the then-current net asset
value rather than the purchase price.

In circumstances where the CDSC is imposed, the
amount of the charge will depend on the number of years from the
time the
investor purchased the Class B shares until the time of
redemption of such shares. Solely for purposes of determining
the number of
years from the time of any payment for the purchase of Class B
shares, all payments during a month will be aggregated and
deemed to
have been made on the first day of the month. The following
table sets forth the rates of the CDSC:

CDSC as a
% of Amount
Year Since Invested or
Purchase Payment Redemption
Was Made Proceeds

First 4.00
Second 4.00
Third 3.00
Fourth 3.00
Fifth 2.00
Sixth 1.00

In determining whether a CDSC is applicable
to a redemption, the calculation will be made in a manner that
results in the
lowest possible rate. It will be assumed that the redemption is
made first of amounts representing shares acquired pursuant to
the
reinvestment of dividends and distributions; then of amounts
representing the increase in net asset value of Class B shares
above the
total amount of payments for the purchase of Class B shares made
during the preceding six years; then of amounts representing the
cost
of shares purchased six years prior to the redemption; and
finally, of amounts representing the cost of shares held for the
longest
period of time within the applicable six-year period.

For example, assume an investor purchased
100 shares at $10 a share for a cost of $1,000. Subsequently,
the shareholder
acquired five additional shares through dividend reinvestment.
During the second year after the purchase the investor decided
to
redeem $500 of his or her investment. Assuming at the time of
the redemption the net asset value had appreciated to $12 per
share,
the value of the investor's shares would be $1,260 (105 shares
at $12 per share). The CDSC would not be applied to the value
of the
reinvested dividend shares and the amount which represents
appreciation ($260). Therefore, $240 of the $500 redemption
proceeds ($500 minus $260) would be charged at a rate of 4% (the
applicable rate in the second year after purchase) for a total
CDSC of $9.60.

WAIVER OF CDSC. The CDSC will be waived in connection with (a)
redemptions made within one year after the death or disability,
as
defined in Section 72(m)(7) of the Internal Revenue Code of
1986, as amended (the "Code"), of the shareholder, (b)
redemptions by
Eligible Benefit Plans, (c) redemptions as a result of a
combination of any investment company with the Fund by merger,
acquisition
of
assets or otherwise, (d) a distribution following retirement
under a tax-deferred retirement plan or upon attaining age
70-1/2 in the
case of an IRA or Keogh plan or custodial account pursuant to
Section 403(b) of the Code, and (e) redemptions by such
shareholders as
the Securities and Exchange Commission or its staff may permit.
If the Fund's Trustees determine to discontinue the waiver of
the
CDSC, the disclosure in the Fund's prospectus will be revised
appropriately. Any Fund shares subject to a CDSC which were
purchased
prior to the termination of such waiver will have the CDSC
waived as provided in the Fund's prospectus at the time of the
purchase of such shares.

To qualify for a waiver of the CDSC, at the
time of redemption the investor must notify the Transfer Agent
or
the investor's
Service Agent must notify the Distributor or FCIS. Any such
qualification is subject to confirmation of your entitlement.

[For left margin side bar: The Fund offers
a number of convenient ways to access your investment.]

PROCEDURES. An investor who has purchased shares through his
account at the Adviser or a Service Agent must redeem shares by
following instructions pertaining to such account. If an
investor has given his Service Agent authority to instruct the
Transfer
Agent to redeem shares and to credit the proceeds of such
redemptions to a designated account at the Service Agent, the
investor may
redeem shares only in this manner and in accordance with a
written redemption request pursuant to the regular redemption
procedure
described below. Investors who wish to use the other redemption
methods described below must arrange with their Service Agents
for
delivery of the required application(s) to the Transfer Agent.
It is the responsibility of the Adviser or the Service Agent, as
the
case may be, to transmit the redemption order and credit the
investor's account with the redemption proceeds on a timely
basis.
Investors are urged to consult their Service Agents for
instructions concerning redemption of Fund shares held in IRAs
or other
personal retirement plans. Other investors may redeem shares by
using the regular redemption procedure through the Transfer
Agent, by
wire or telephone, or through the TeleTransfer Privilege, as
described below.

An investor's redemption request may direct
that the redemption proceeds be used to purchase shares of other
funds advised
by the Adviser or advised or administered by the Administrator
that are not available through the Exchange Privilege. The
applicable
CDSC will be charged upon the redemption of Class B shares. The
investor's redemption proceeds will be invested in shares of the
other fund on the next business day. Before making such a
request, the investor must obtain and should review a copy of
the current
prospectus of the fund being purchased. Prospectuses may be
obtained from the Adviser, the Distributor or certain Service
Agents.
The prospectus will contain information concerning minimum
investment requirements and other conditions that may apply to
the investor's purchase.

During times of drastic economic or market
conditions, investors may experience difficulty in contacting
the Transfer Agent
by telephone to request a redemption or exchange of Fund shares.
In such cases, investors should consider using the other
redemption
procedures described herein. Use of these other redemption
procedures may result in the investor's redemption request being
processed
at a later time than it would have been if telephone redemption
had been used. During the delay, the Fund's net asset value may
fluctuate.

[For left margin side bar: Shares may be
redeemed by written request.]

REGULAR REDEMPTION. Under the regular redemption procedure, an
investor may redeem shares by written request, indicating the
class
of
shares being redeemed, mailed to The First Prairie Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671.
Redemption
requests must be signed by each shareholder, including each
owner of a joint account, and each signature must be guaranteed.
The
Transfer Agent has adopted standards and procedures pursuant to
which signature guarantees in proper form generally will be
accepted
from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations,
clearing
agencies and savings associations, as well as from participants
in the New York Stock Exchange Medallion Signature Program, the
Securities Transfer Agents Medallion Program ("STAMP") and the
Stock Exchange Medallion Program. For more information with
respect to
signature-guarantees, please call the telephone number shown on
the front cover.

Redemption proceeds of at least $1,000 will
be wired to any member bank of the Federal Reserve System in
accordance with a
written, signature-guaranteed request.

[For left margin side bar: You can redeem
shares by wire if you check the appropriate box on your Account
Application.]

WIRE REDEMPTION PRIVILEGE. An investor may request by wire or
telephone that redemption proceeds (minimum $1,000) be wired to
his
account at a bank which is a member of the Federal Reserve
System, or a correspondent bank if the investor's bank is not a
member.
To
establish the Wire Redemption Privilege, an investor must check
the appropriate box and supply the necessary information on the
Fund's
Account Application or file a Shareholder Services Form with the
Transfer Agent. An investor may direct that redemption proceeds
be paid by check (maximum $150,000 per day) made out to the
owners of record and mailed to the investor's address.
Redemption proceeds
of less than $1,000 will be paid automatically by check.
Holders of jointly registered Fund or bank accounts may have
redemption
proceeds of only up to $250,000 wired within any 30-day period.
An investor may telephone redemption requests by calling
1-800-227-
0072 or, if calling from overseas, 1-401-455-3309. The Fund
reserves the right to refuse any redemption request, including
requests
made shortly after a change of address, and may limit the amount
involved or the number of such requests. This Privilege may be
modified or terminated at any time by the Transfer Agent or the
Fund. The Fund's Statement of Additional Information sets forth
instructions for transmitting redemption requests by wire.
Shares held under Keogh Plans, IRAs or other retirement plans,
and shares
for which certificates have been issued, are not eligible for
this Privilege.

TELEPHONE REDEMPTION PRIVILEGE. An investor may redeem Fund
shares (maximum $150,000 per day) by telephone if he has checked
the
appropriate box on the Fund's Account Application or has filed a
Shareholder Services Form with the Transfer Agent. The
redemption
proceeds will be paid by check and mailed to the investor's
address. An investor may telephone redemption instructions by
calling
1-800-221-0072 or, if calling from overseas, 1-401-455-3309. The
Fund reserves the right to refuse any request made by telephone,
including requests made shortly after a change of address, and
may limit the amount involved or the number of telephone
redemption
requests. This Privilege may be modified or terminated at any
time by the Transfer Agent or the Fund. Shares held under Keogh
Plans,
IRAs or other retirement plans, and shares for which
certificates have been issued, are not eligible for this
Privilege.

[For left margin side bar: Call
1-800-227-0072 for TeleTransfer transactions.]

TELETRANSFER PRIVILEGE. An investor may redeem Fund shares
(minimum $500 per day) by telephone if he has checked the
appropriate box
and supplied the necessary information on the Fund's Account
Application or has filed a Shareholder Services Form with the
Transfer
Agent. The proceeds will be transferred between the investor's
Fund account and the bank account designated in one of these
documents. Only such an account maintained in a domestic
financial institution which is an Automated Clearing House
member may be so
designated. Redemption proceeds will be on deposit in the
investor's account at an Automated Clearing House member bank
ordinarily
two days after receipt of the redemption request or, at the
investor's request, paid by check (maximum $150,000 per day) and
mailed
to
his address. Holders of jointly registered Fund or bank
accounts may redeem through the TeleTransfer Privilege for
transfer to
their
bank account only up to $250,000 within any 30-day period. The
Fund reserves the right to refuse any request made by telephone,
including requests made shortly after a change of address, and
may limit the amount involved or the number of such requests.
The Fund
may modify or terminate this Privilege at any time or charge a
service fee upon notice to shareholders. No such fee currently
is contemplated.

Investors who have selected the TeleTransfer
Privilege may request TeleTransfer redemptions of Fund shares by
telephoning
1-800-227-0072 or, if calling from overseas, 1-401-455-3309.
Shares held under Keogh Plans, IRAs or other retirement plans,
and shares issued in certificate form, are not eligible for this
Privilege.

DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN

Class A and Class B shares are subject to a
Shareholder Services Plan and Class B shares only are subject to
a Distribution Plan.

DISTRIBUTION PLAN. Under the Distribution Plan, adopted
pursuant to Rule 12b-1 under the Investment Company Act of 1940,
the Fund
pays for advertising, marketing and distributing Class B shares
at an annual rate of up to .75 of 1% of the value of the average
daily
net assets of Class B. Under the Distribution Plan, the Fund
may make payments to Service Agents, including FCIS and the
Distributor,
in respect of these services. The Fund determines the amounts
to be paid to Service Agents. Service Agents receive such fees
in
respect of the average daily value of Class B shares owned by
their clients. From time to time, Service Agents may defer or
waive
receipt of fees under the Distribution Plan while retaining the
ability to be paid by the Fund under the Distribution Plan
thereafter.
The fees payable to Service Agents under the Distribution Plan
for advertising, marketing and distributing Class B shares are
payable
without regard to actual expenses incurred.

SHAREHOLDER SERVICES PLAN. Under the Shareholder Services Plan,
the Fund pays Service Agents, including FCIS and the
Distributor, for
the provision of certain services to the holders of Class A and
Class B shares a fee at the annual rate of up to .25 of 1% of
the
value of the average daily net assets of Class A and Class B.
The services provided may include personal services relating to
shareholder accounts, such as answering shareholder inquiries
regarding the Fund and providing reports and other information,
and
services related to the maintenance of shareholder accounts.
The Fund determines the amounts to be paid to Service Agents.
Each
Service Agent is required to disclose to its clients any
compensation payable to it by the Fund pursuant to the
Shareholder Services
Plan and any other compensation payable by their clients in
connection with the investment of their assets in Class A or
Class B shares.

DIVIDENDS, DISTRIBUTIONS AND TAXES

[For left margin side bar: The Fund
declares and pays dividends from net investment income monthly.
You may choose whether
to receive dividends in cash or to reinvest in additional
shares.]

The Fund ordinarily declares and pays
dividends from net investment income monthly. Investors may
choose
whether to receive
dividends in cash or to reinvest in additional Fund shares at
net asset value.

Distributions from net realized securities
gains, if any, generally are declared and paid once a year, but
the Fund may make
distributions on a more frequent basis to comply with the
distribution requirements of the Code in all events in a manner
consistent
with the provisions of the Investment Company Act of 1940. The
Fund will not make distributions from net realized securities
gains
unless capital loss carryovers, if any, have been utilized or
have expired. Investors may choose whether to receive
distributions
in
cash or to reinvest in additional Fund shares of the same Class
at net asset value. If an investor redeems all shares in his
account
at any time prior to the payment of dividends, all dividends to
which such investor is entitled will be paid to him along with
the
proceeds of the redemption. All expenses are accrued daily and
deducted before declaration of dividends to investors.
Dividends paid
by each Class will be calculated at the same time and in the
same manner and will be of the same amount, except that the
expenses attributable solely to Class A or Class B will be borne
exclusively by such Class. Class B shares will receive lower
per share
dividends than Class A shares because of the higher expenses
borne by Class B. See "Fee Table."

[For left margin side bar: Dividends and
distributions will be taxable to most U.S. investors.]

Dividends derived from net investment
income, together with distributions of net realized short-term
securities
gains and
all or a portion of any gains from the sale or other disposition
of certain market discount bonds, paid by the Fund to U.S.
shareholders generally are taxable as ordinary income whether
received in cash or reinvested in additional Fund shares.
Distributions
from net realized long-term securities gains of the Fund
generally are taxable to U.S. shareholders as long-term capital
gains
regardless of how long the shareholder has held his Fund shares
and whether such distributions are received in cash or
reinvested in
additional Fund shares. The Code provides that the net capital
gain of an individual generally will not be subject to Federal
income
tax at a rate in excess of 28%. Dividends and distributions may
be subject to certain state and local taxes.

Only a relatively small portion of the
dividends paid by the Fund is likely to qualify for the
dividends received deduction
allowable to certain U.S. corporations.

The Code provides for the "carryover" of
some or all of the sales load imposed on Class A shares if an
investor exchanges
his Class A shares for shares of certain other funds advised by
the Adviser, or for shares of certain funds advised by the
Administrator, within 91 days of purchase and the other fund
reduces or eliminates its otherwise applicable sales load charge
for the
purpose of the exchange. In this case the amount of the
investor's sales load for the Fund's Class A shares, up to the
amount of the
reduction of the sales load charge on the exchange, is not
included in the basis of the investor's Fund Class A shares for
purposes of
computing gain or loss on the exchange, and instead is added to
the basis of the fund shares received in the exchange.

Dividends derived from net investment
income, together with distributions from net realized short-term
securities gains and
all or a portion of any gains realized from the sale or other
disposition of certain market discount bonds, paid by the Fund
to a
foreign investor generally are subject to U.S. nonresident
withholding taxes at the rate of 30%, unless the foreign
investor claims
the benefit of a lower rate specified in a tax treaty.
Distributions from net realized long-term securities gains paid
by the Fund to
a foreign investor as well as the proceeds of any redemptions
from a foreign investor's account, regardless of the extent to
which
gain or loss may be realized, generally will not be subject to
U.S. non-resident withholding tax. However, such distributions
may be
subject to backup withholding, as described below, unless the
foreign investor certifies his non-U.S. residency status.

[For left margin side bar: If you have not
furnished the Fund with a correct Taxpayer Identification
Number,
you may be
subject to tax withholding of 31% of all taxable dividends,
distributions and redemption proceeds.]

Federal regulations generally require the
Fund to withhold ("backup withholding") and remit to the U.S.
Treasury 31% of
dividends, distributions from net realized securities gains and
the proceeds of any redemption, regardless of the extent to
which gain
or loss may be realized, paid to a shareholder if such
shareholder fails to certify either that the TIN furnished in
connection with
opening an account is correct or that such shareholder has not
received notice from the IRS of being subject to backup
withholding as
a result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore,
the IRS may
notify the Fund to institute backup withholding if the IRS
determines a shareholder's TIN is incorrect or if a shareholder
has failed
to properly report taxable dividend and interest income on a
Federal income tax return.

Notice as to the tax status of an investor's
dividends and distributions will be mailed to such investor
annually. Each
investor also will receive periodic summaries of his account
which will include information as to dividends and distributions
from
securities gains, if any, paid during the year.

Management of the Fund believes that the
Fund qualified for the fiscal year ended December 31, 1993 as a
"regulated
investment company" under the Code. The Fund intends to
continue to so qualify if such qualification is in the best
interests of
its
shareholders. Such qualification relieves the Fund of any
liability for Federal income tax to the extent its earnings are
distributed
in accordance with applicable provisions of the Code. The Fund
is subject to a non-deductible 4% excise tax, measured with
respect to
certain undistributed amounts of taxable investment income and
capital gains.

Each investor should consult his tax adviser
regarding specific questions as to Federal, state or local
taxes.

PERFORMANCE INFORMATION

For purposes of advertising, performance for
each Class is calculated on several bases, including current
yield,
average
annual total return and/or total return. These total return
figures reflect changes in the price of the shares and assume
that any
income dividends and/or capital gains distributions made by the
Fund during the measuring period were reinvested in shares of
the
same
Class. Class A total return figures include the maximum initial
sales charge and Class B total return figures include any
applicable
CDSC. These figures also take into account any applicable
service and distribution fees. As a result, at any given time,
the
performance of Class B should be expected to be lower than that
of Class A. Performance for each Class will be calculated
separately.

[For left margin side bar: "Current yield"
is the Fund's net investment income over a 30-day period,
expressed
as an annual
percentage and assuming all income is reinvested.]

Current yield refers to the Fund's
annualized net investment income per share over a 30-day period,
expressed as a
percentage of the maximum offering price per share in the case
of Class A or the net asset value per share in the case of Class
B at
the end of the period. For purposes of calculating current
yield, the amount of net investment income per share during that
30-day period, computed in accordance with regulatory
requirements, is
compounded by assuming that it is reinvested at a constant rate
over a
six-month period. An identical result is then assumed to have
occurred during a second six-month period which, when added to
the result for the first six months, provides an "annualized"
yield
for an entire one-year period. Calculations of the Fund's
current yield may reflect absorbed expenses pursuant to any
undertaking
that may be in effect. See "Management of the Fund."

Average annual total return is calculated
pursuant to a standardized formula which assumes that an
investment in
the Fund
was purchased with an initial payment of $1,000 and that the
investment was redeemed at the end of a stated period of time,
after
giving effect to the reinvestment of dividends and distributions
during the period. The return is expressed as a percentage rate
which, if applied on a compounded annual basis, would result in
the redeemable value of the investment at the end of the period.

Advertisements of the Fund's performance will include the Fund's
average annual total return of Class A and Class B for one, five
and
ten year periods, or for shorter time periods depending upon the
length of time during which the Fund has operated. Computations
of
average annual total return for periods of less than one year
represent an annualization of the Fund's actual return for the
applicable period.

[For left margin side bar: "Total return"
combines the income and principal changes for a specified
period, assuming all
dividends and distributions are reinvested.]

Total return is computed on a per share
basis and assumes the reinvestment of dividends and
distributions.
Total return
generally is expressed as a percentage rate which is calculated
by combining the income and principal changes for a specified
period
and dividing by the maximum offering price per share in the case
of Class A or the net asset value per share in the case of Class
B
at
the beginning of the period. Advertisements may include the
percentage rate of total return or may include the value of a
hypothetical investment at the end of the period which assumes
the application of the percentage rate of total return. Total
return
may also be calculated by using the net asset value per share at
the beginning of the period instead of the maximum offering
price
per
share at the beginning of the period for Class A shares or
without giving effect to any applicable CDSC at the end of the
period for
Class B shares. Calculations based on the net asset value per
share do not reflect the deduction of the sales load which, if
reflected, would reduce the performance quoted.

[For left margin side bar: As of the date
of this Prospectus, the Fund was rated 4-star by Morningstar,
Inc. Performance
varies from time to time and past results are not necessarily
representative of future results.]

As of the date of this Prospectus, the Fund
was rated 4-Star by Morningstar, Inc. This rating represents
Morningstar's
measure of the Fund's risk-adjusted performance. Morningstar's
ratings are based on its overall assessment of a fund's risk
level and
historical total return, net of expenses and sales loads, as
compared to other funds in its class. Performance will vary
from time to
time and past results are not necessarily representative of
future results. Investors should remember that performance is a
function
of portfolio management in selecting the type and quality of
portfolio securities and is affected by operating expenses.
Performance
information, such as that described above, may not provide a
basis for comparison with other investments or other investment
companies
using a different method of calculating performance.

Comparative performance information may be
used from time to time in advertising or marketing the Fund's
shares, including
data from Lipper Analytical Services, Inc., Standard & Poor's
500 Composite Stock Price Index, Standard & Poor's MidCap 400
Index, the
Dow Jones Industrial Average, Morningstar, Inc. and other
industry publications.

GENERAL
INFORMATION

The Fund was organized as an unincorporated
business trust under the laws of the Commonwealth of
Massachusetts
pursuant to
an Agreement and Declaration of Trust (the "Trust Agreement")
dated October 8, 1985, and commenced operations on January 23,
1986.
The Fund is authorized to issue an unlimited number of shares of
beneficial interest, par value $.01 per share. The Fund's
shares are
classified into two classes--Class A and Class B. Each share
has one vote and shareholders will vote in the aggregate and not
by
class except as otherwise required by law or when class voting
is permitted by the Board of Trustees. However, holders of
Class A
and
Class B shares will be entitled to vote on matters submitted to
shareholders pertaining to the Shareholder Services Plan and
only
holders of Class B shares will be entitled to vote on matters
submitted to shareholders pertaining to the Distribution Plan.

On January 31, 1994, shareholders approved a
proposal to change certain of the Fund's fundamental policies
and investment
restrictions, among other things, to increase (i) the amount the
Fund may borrow, (ii) the amount of assets that the Fund may
pledge to secure such borrowings, (iii) the percentage of Fund
assets which may be invested in illiquid securities and make such
policy non-fundamental and (iv) the amount of portfolio
securities which the Fund may lend.

Under Massachusetts law, shareholders could,
under certain circumstances, be held personally liable for the
obligations of
the Fund. However, the Trust Agreement disclaims shareholder
liability for acts or obligations of the Fund and requires that
notice
of such disclaimer be given in each agreement, obligation or
instrument entered into or executed by the Fund or a Trustee.
The Trust
Agreement provides for indemnification from the Fund's property
for all losses and expenses of any shareholder held personally
liable
for the obligations of the Fund. Thus, the risk of a
shareholder incurring financial loss on account of shareholder
liability is
limited to circumstances in which the Fund itself would be
unable to meet its obligations, a possibility which management
believes is
remote. Upon payment of any liability incurred by the Fund, the
shareholder paying such liability will be entitled to
reimbursement
from the general assets of the Fund. The Trustees intend to
conduct the operations of the Fund in such a way so as to avoid,
as far
as possible, ultimate liability of the shareholders for
liabilities of the Fund. As discussed under "Management of the
Fund" in the
Statement of Additional Information, the Fund ordinarily will
not hold shareholder meetings; however, shareholders under
certain
circumstances may have the right to call a meeting of
shareholders for the purpose of voting to remove Trustees.

The Transfer Agent maintains a record of
each investor's ownership and sends confirmations and statements
of account.

Investor inquiries may be made to the
investor's Service Agent, including the Adviser, or by writing
to the Fund
at the
address shown on the front cover or by calling the appropriate
telephone number.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE
CONTAINED
IN THIS
PROSPECTUS AND IN THE FUND'S OFFICIAL SALES LITERATURE IN
CONNECTION WITH THE OFFER OF THE FUND'S SHARES, AND, IF GIVEN OR
MADE,
SUCH
OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO
WHOM, SUCH OFFERING MAY NOT LAWFULLY BE MADE.

FIRST PRAIRIE DIVERSIFIED ASSET FUND STATEMENT OF INVESTMENTS

DECEMBER 31, 1993
<TABLE>
PRINCIPAL BONDS AND NOTES__33.0%

AMOUNT VALUE
<S> <C> <C>
AUTOMOTIVE-1.0% Hertz
6 5/8%, 2000.... $ 500,000 $ 500,013

BANKING-5.3% Barclays American Corp., Deb.,
9 1/8%, 1997....... 750,000 840,016
Chemical Banking Corp., Sub. Notes,
7 5/8%, 2003............ 500,000 537,549
Citicorp:
9 3/4%,1999....................... 250,000 293,279
8 5/8%,2002........................ 350,000 398,934
NationsBank Corp., Sub. Notes,
8 1/8%, 2002........................ 350,000 389,325
Westpac Banking Corp., Sub. Deb.,
9 1/8%, 2001........................ 250,000 289,660

2,748,763

BASIC INDUSTRIES-1.0% USX-Marathon Group,
6 3/8%, 1998........................ 500,000 490,508

ENERGY-3.3% Burlington Resources,
8 1/2%, 2001........................ 250,000 285,038
Coastal Corp.,Sr. Deb.,
10 1/4%, 2004....................... 500,000 597,500
Occidental Petroleum, Sr. Notes,
11 1/8%, 2010....................... 400,000 550,941
Shell Canada Corp., Deb.,
7 3/8%, 1999........................ 250,000 270,000

1,703,479
ENTERTAINMENT-1.0% Time Warner, Notes,
7.95%, 2000 .................. 500,000 535,000

------------
FINANCE-6.8% Associates Corp. of North America,
Med.-Term Sr. Notes,
8 3/4%, 1996...................... 200,000 216,902
Discover Credit Card Corp., Notes,
8.37%, 1999................... 250,000 274,925
General Motors Acceptance Corp., Deb.:
8.65%, 1996......................... 400,000 430,724
7 3/4%, 1997........................ 250,000 265,913
7%,2000............................ 500,000 515,311
International Lease Finance Corp., Notes,
8.35%, 1998.................... 500,000 551,887
KFW International Finance,
Mortgage Guaranteed Notes,
8.85%, 1999.................. 250,000 287,378
Salomon, Sr. Notes,
7 1/2%, 2003................. 500,000 522,693
Wells Fargo & Co., Sub. Notes,
8 3/8%, 2002.................. 400,000 446,081

3,511,814

FOOD AND BEVERAGES-5.0% Grand Metro Investment
Corp., Deb.,
9%, 2011............ 250,000 297,886
Philip Morris Corp., Deb.:
8 5/8%, 1999......... 500,000 563,929
7 1/8%, 2004 ........ 250,000 260,983

RJR Nabisco Guaranteed Sr. Notes:
8.30%, 1999................ $750,000 $ 750,937
8 5/8%, 2002....... 700,000 689,009
2,562,744
------------
RETAIL-.6% May Department Stores, Notes,
9.45%, 1999................ 250,000 285,270

TECHNOLOGY-1.1% Digital Equipment, Deb.,
8 5/8%, 2012............. 500,000 559,204

UTILITIES-2.1% Commonwealth Edison,
First Mortgage, Ser. 81,
8 5/8%, 2022.......... 250,000 267,313
Long Island Lighting, Notes,
9%, 2022.............. 300,000 313,164
Pacific Bell, Notes,
7%, 2004............... 500,000 526,156

1,106,633

U.S. GOVERNMENT AND AGENCIES-5.8% Federal Home Loan Banks, Notes,
8 1/4%, 1996............ 100,000 108,360
Federal National Mortgage Assn., Deb.:
7.60%, 1997............. 400,000 432,095
8.35%, 1999............. 500,000 569,451
Student Loan Marketing Assn.,
ECU/YEN Reverse Principal Exchange
Rate Linked Securities,
10 3/8%, 1995............ 200,000 112,500
FHLMC Series 98,
8 1/4%, 2020 .............. 500,000 520,625
U.S. Treasury Notes:
8 1/2%, 1997............... 100,000 111,594
8 1/8%, 1998............... 500,000 557,578
8%, 2001................ 500,000 571,953
2,984,156
TOTAL BONDS AND NOTES
(cost $16,172,418).................. $ 16,987,584

QUITY-RELATED SECURITIES-50.9%(COMMON STOCKS AND
CONVERTIBLE SECURITIES)COMMON STOCKS-31.8%
SHARES
BANKING-4.3% BankAmerica.................... 18,000 $ 834,750
First Union.................... 19,000 783,750
NationsBank.................... 11,912 583,688
2,202,188

BASIC INDUSTRIES-.9% Union Camp... ......... 10,000 476,250

SHARES VALUE

DRUGS AND HEALTH CARE-7.5% Bristol-Myers Squibb... 20,000 $ 1,162,500
Glaxo Holdings PLC A.D.R............... 24,000 501,000
Johnson and Johnson.................... 11,000 492,250
Pfizer................................. 17,000 1,173,000
Schering-Plough........................ 8,000 548,000
3,876,750
ENERGY-3.7% Atlantic Richfield... ......... 5,000 526,250
British Petroleum PLC A.D.S........... 9,000 576,000
Occidental Petroleum................... 20,000 342,500
Texaco................................. 7,500 484,687
1,929,437
FINANCE-1.5% American Express........... 20,000 795,000
FOOD AND BEVERAGES-2.2% Philip Morris Cos 20,000 1,115,000
HOSPITAL RELATED-3.0% National Health Investors... 55,000 1,526,250
MANUFACTURING-1.0% Jostens Inc....... 25,000 493,750
TECHNOLOGY-1.0% International Business Machines. 9,000 508,500
UTILITIES-6.7% British Telecommunications.... 10,000 321,250
GTE...................... 14,000 490,000
Long Island Lighting..... 20,000 487,500
Philadelphia Electric..... 16,000 484,000
Sprint.................... 20,000 695,000
Texas Utilities........... 12,000 519,000
U.S. West................ 10,000 458,750

3,455,500

TOTAL COMMON STOCKS 16,378,625

CONVERTIBLE PREFERRED STOCKS-14.4%
AUTOMOTIVE-4.3% Ford Motor, Ser.A, Cum., $4.20... 8,000 868,000
General Motors, Ser.A, Cum., $3.31..... 15,000 765,000
General Motors, Ser.C, Cum., $3.2 11,000 602,250
2,235,250
BANKING-3.8%
BankAmerica, Ser.G, Cum., $3.25........ 7,000 414,750
Citicorp, Cum., $1.22...... 25,000 496,875
Citicorp, Cum., $5.375......... 6,000 (a) 651,750
National City, Cum., $4.00... . 6,000 411,000
1,974,375
ENERGY-1.0% Snyder Oil, Cum., $6.00..... 20,000 540,000
FOOD AND BEVERAGES-1.8% Conagra, Ser. E, Cum.,$1.69 11,000 343,750
RJR Nabisco Holdings, Cum., $2.00...... 80,000 560,000
903,750
INSURANCE-2.6% Aon, Ser.B, Cum., $3.04... 12,000 564,000
Conseco, Ser. D, Cum., $3.25........... 14,000 770,000
1,334,000
RETAIL-.9% Kmart, Ser.A, Cum., $3.41........ 10,000 443,750
TOTAL CONVERTIBLE PREFERRED STOCKS... .. 7,431,125

DECEMBER 31, 1993
EQUITY-RELATED SECURITIES (CONTINUED)

PRINCIPAL CONVERTIBLE SUBORDINATE DEBENTURES-4.7%
AMOUNT VALUE
BANKING-.8% Bank of New York,
7 1/2%, 2001............. $ 275,000 $ 435,188
ENERGY-.6% Swift Energy,
6 1/2%, 2003.......... 300,000 309,000
ENTERTAINMENT-.5% Time Warner,
8 3/4%, 2015............... 248,000 261,330
HOSPITAL MANAGEMENT-.9% Genesis Health
6%, 2003......................... 400,000 480,000
MINING AND METALS-.6% Trimas Corp.,
5%, 2003................... 250,000 308,750
RETAIL-1.3% Hechinger,
5 1/2%, 2012....................... 350,000 279,125
Price,
6 3/4%, 2001................ 350,000 365,750
644,875
TOTAL CONVERTIBLE
SUBORDINATED DEBENTURES..... 2,439,143
TOTAL EQUITY-RELATED SECURITIES
(cost $24,078,883)......... $ 26,248,893

SHORT-TERM INVESTMENTS-15.5%
COMMERCIAL PAPER: Ford Motor Credit Corp.,
3.35%, 1/3/94................. $ 3,700,000 $ 3,700,000
General Electric Cap. Corp.:
3.4032%, 1/7/94.... ..... 3,950,000 3,950,000
3.20%, 1/10/94.......... 370,000 370,000
TOTAL SHORT-TERM INVESTMENTS
(cost $8,020,000)................... $ 8,020,000

TOTAL INVESTMENTS (cost $48,271,301)............... 99.4% $ 51,256,477
CASH AND RECEIVABLES (NET)................ .6% $ 329,266
NET ASSETS...................................... 100.0% $ 51,585,743
</TABLE>

NOTE TO STATEMENT OF
INVESTMENTS;(a) Security exempt from registration under Rule
144A of the Securities Act of 1933. This security may be
resold in transactions exempt from registration, normally to
qualified institutional buyers. At December 31, 1993, this
security amounted to $651,750 or 1.3% of net assets.
See notes to financial statements.

FIRST PRAIRIE DIVERSIFIED ASSET FUND STATEMENT OF
ASSETS AND LIABILITIES DECEMBER 31, 1993
ASSETS:
<S> <C> <C>
Investments in securities, at value
(cost $48,271,301)-see statement...... $51,256,477
Dividends and interest receivable............. 495,261
Receivable for shares of Beneficial Interest subscribed... 204,466
Prepaid expenses............ 19,146
Due from administrator............. 5,834

51,981,184
LIABILITIES:
Due to custodian....................... $217,571
Payable for shares of Beneficial Interest redeemed...... 120,261
Accrued expenses............................. 57,609 395,441
NET ASSETS......................... $51,585,743

REPRESENTED BY:
Paid-in capital............................... $48,421,161
Accumulated undistributed investment income-net.................. 110,357
Accumulated undistributed net realized gain on investments........ 69,049
Accumulated net unrealized appreciation on investments-Note 3..... 2,985,176

NET ASSETS at value applicable to 3,934,557 shares outstanding
(unlimited number of $.01 par value shares of Beneficial
Interest authorized)................... $51,585,743

NET ASSET VALUE, offering and redemption price per share
($51,585,743 / 3,934,557 shares)...................... $13.11
</TABLE>

See notes to financial statements.
<TABLE>
<CAPTION>
FIRST PRAIRIE DIVERSIFIED ASSET
FUND STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1993
<S> <C> <C>
INVESTMENT INCOME:
INCOME:
Interest................................ $1,734,098
Cash dividends (net of $9,316
foreign taxes withheld at source)........ 941,289
TOTAL INCOME.......................... $2,675,387
EXPENSES:
Investment advisory fee-Note 2(a)........ 293,405
Administration fee-Note 2(a)........ 135,418
Shareholder servicing costs-Note 2(b) 187,815
Prospectus and shareholders' reports-Note 2(b) 29,430
Legal fees......................... 28,415
Auditing fees................. 21,613
Registration fees................. 19,140
Custodian fees................... 16,335
Trustees' fees and expenses-Note 2(c). 4,999
Miscellaneous................... 7,920
744,490
Less-expense reimbursement from Adviser
and Administrator due to undertakings-Note
2(a).................................. 570,074
TOTAL EXPENSES................... 174,416

INVESTMENT INCOME-NET......... 2,500,971
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments-Note 3.. $ 625,561
Net unrealized appreciation on
investments.............................. 1,377,749

NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 2,003,310

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.. $4,504,281
</TABLE>

See notes to financial statements.FIRST PRAIRIE

<TABLE>
<CAPTION>
DIVERSIFIED ASSET FUND
STATEMENT OF CHANGES IN NET ASSETS

YEAR ENDED DECEMBER 31,
<S> <C> <C>
OPERATIONS: 1992 1993

Investment income-net......... $ 1,391,154 $ 2,500,971
Net realized gain on
investments.............................. 179,839 625,561
Net unrealized appreciation on
investments for the year.................... 343,006 1,377,749

NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS........ 1,913,999 4,504,281
NET EQUALIZATION CREDITS-Note 1(e) 51,331 59,053
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net............. (1,385,188) (2,506,116)
Net realized gain on investments. (279,770) (674,754)

TOTAL DIVIDENDS.............. (1,664,958) (3,180,870)

BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold.... 20,593,226 17,738,182
Dividends reinvested.......... 1,264,046 2,955,407
Cost of shares redeemed......... (1,933,539) (4,752,158)

INCREASE IN NET ASSETS FROM BENEFICIAL
INTEREST TRANSACTIONS........... 19,923,733 15,941,431

TOTAL INCREASE IN NET ASSETS...... ...... 20,224,105 17,323,895
NET ASSETS:
Beginning of year............. 14,037,743 34,261,848

End of year (including undistributed
investment income-net:
$56,449 at December 31, 1992 and
$110,357 at December 31, 1993)........ $34,261,848 $51,585,743

SHARES SHARES

CAPITAL SHARE TRANSACTIONS:
Shares sold.............. 1,637,986 1,371,296
Shares issued for
dividends reinvested.......... 100,550 226,486
Shares redeemed....... (153,827) (365,489)

NET INCREASE IN SHARES OUTSTANDING........ 1,584,709 1,232,293
</TABLE>

See notes to financial statements.

FIRST PRAIRIE DIVERSIFIED ASSET
FUND CONDENSED FINANCIAL INFORMATION
Reference is made to pages 4 and 5 of the Prospectus dated
April 22, 1994
See notes to financial statements.FIRST PRAIRIE DIVERSIFIED
ASSET FUND NOTES TO FINANCIAL STATEMENTS NOTE 1-SIGNIFICANT
ACCOUNTING POLICIES: The Fund is registered under the
Investment Company Act of 1940("Act") as a diversified open-end
management investment company. The First National Bank of Chicago
("Adviser") serves as the Fund's investment adviser. The Dreyfus
Corporation ("Administrator") serves as the Fund's administrator.
Dreyfus Service Corporation ("Distributor"), a wholly-owned
subsidiary of the Administrator, acts as the distributor of the
Fund's shares. (A) PORTFOLIO VALUATION: Most debt securities
(excluding short-term investments) are valued each business day
by an independent pricing service ("Service") approved by the
Board of Trustees. Debt securities for which quoted bid prices in
the judgement of the Service are readily available and are
representative of the bid side of the market are valued at the
mean between the quoted bid prices (as obtained by the
Service from dealers in such securities) and asked prices (as
calculated by the Service based upon its evaluation of the market
for such securities). Other debt securities are carried at fair
value as determined by the Service,based on methods which
include consideration of: yields or prices of securities of
comparable quality, coupon, maturity and type; indications as to
values from dealers; and general market conditions.
Short-term investments are carried at amortized cost, which
approximates value.Other securities are valued at the average of
the most recent bid and asked prices in the market in which such
securities are primarily traded,or at the last sales price for
securities traded primarily on an exchange or the national
securities market. In the absence of reported sales of securities
traded primarily on an exchange or the national
securities market, the average of the most recent bid and asked
prices is used. Bid price is used when no asked price is
available. (B) SECURITIES TRANSACTIONS AND INVESTMENT
INCOME: Securities transactions are recorded on a trade date
basis. Realized gain and loss from securities transactions are
recorded on the identified cost basis.Dividend income is
recognized on the ex-dividend date and interest income,
including, where applicable, amortization of discounts
on investments, is recognized on the accrual basis. (C)
DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the
ex-dividend date. Dividends from investment income-net are
declared and paid monthly. Dividends from net realized capital
gain are normally declared and paid annually, but the Fund may
make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code. This may
result in distributions that are in excess of investment
income-net and net realized gain on a fiscal year basis. To the
extent that net realized capital gain can be offset by capital
loss carryovers, if any, it is the policy of the Fund not to
distribute such gain. On January 31, 1994, the Board of
Trustees declared a cash dividend of $.047 per share from
undistributed investment income-net, payable on February 1, 1994
(ex-dividend date) to shareholders of record as of the close of
business on January 31, 1994. (D) FEDERAL INCOME TAXES: It is
the policy of the Fund to continue to qualify as a regulated
investment company, if such qualification is in the best
interests of its shareholders, by complying with the
provisions available to certain investment companies, as defined
in applicable sections of the Internal Revenue Code, and to make
distributions of taxable income sufficient to relieve it from
all, or substantially all,Federal income taxes. (E)
EQUALIZATION: The Fund follows the accounting practice known
as"equalization" by which a portion of the amounts received on
issuances and paid on redemptions of Fund shares is allocated to
undistributed investment income-net so that undistributed
investment income-net per share is unaffected by Fund shares
issued or redeemed.FIRST PRAIRIE DIVERSIFIED ASSET FUND NOTES TO
FINANCIAL STATEMENTS (CONTINUED)NOTE 2-INVESTMENT ADVISORY FEE,
ADMINISTRATION FEE AND OTHER TRANSACTIONS WITH AFFILIATES: (A)
Fees payable by the Fund pursuant to the provisions of
an Investment Advisory Agreement with the Adviser and an
Administration Agreement with the Administrator are payable
monthly based on annual rates of .65 of 1% and .30 of 1%,
respectively, of the average daily value of the Fund's net
assets. The agreements further provide that if in any full year
the aggregate expenses of the Fund, excluding taxes,
brokerage,interest on borrowings and extraordinary expenses,
exceed the expense limitation of any state having jurisdiction
over the Fund, the Fund may deduct from the payments to be made
to the Adviser and the Administrator, or the Adviser and the
Administrator will each bear, such excess expense in proportion
to their respective fees. The most stringent state expense
limitation applicable to the Fund presently
requires reimbursement of expenses in any full year that such
expenses (exclusive of distribution expenses and certain expenses
as described above) exceed 2 1/2% of the first $30 million, 2% of
the next $70 million and 1 1/2% of the excess over $100 million
of the average value of the Fund's net assets in accordance with
California "blue sky" regulations. However, the Adviser and
the Administrator had undertaken, from January 1, 1993 through
October 24, 1993, to reduce the Advisory fee and the
Administration fee paid by, or reimburse such excess expenses of
the Fund, to the extent that the Fund's aggregate expenses
(excluding certain expenses as described above) exceeded
specified annual percentages of the Fund's average daily net
assets. The Adviser and Administrator have currently undertaken
from October 25, 1993 to waive receipt of the Advisory fee and
the Administration fee paid by the Fund in excess of an annual
rate of .50 of 1% of the Fund's average daily net assets.
Pursuant to such undertakings, the Adviser and the Administrator
reimbursed the Fund$293,405 and $276,669, respectively. First
Chicago Investment Services, Inc., an affiliate of the
Adviser,retained $34,436 during the year ended December 31, 1993
from commissions earned on sales of Fund shares. (B) The Fund
has adopted a Service Plan (the "Plan") pursuant to which it has
agreed to pay costs and expenses in connection with advertising
and marketing shares of the Fund and payments made to one or more
Service Agents (which may include the Adviser, the Administrator
and the Distributor) based on the value of the Fund's shares
owned by clients of the Service Agent. These advertising and
marketing expenses and fees of the Service Agents may not exceed
an annual rate of .30 of 1% of the Fund's average daily net
assets. The Plan also separately provides for the Fund to bear
the costs of preparing, printing and distributing certain of the
Fund's prospectuses and statements of additional information
and costs associated with implementing and operating the Plan,
not to exceed the greater of $100,000 or .005 of 1% of the Fund's
average daily net assets for any full year. During the year ended
December 31, 1993,$145,590 was charged to the Fund pursuant to
the Plan, of which $141,251 was waived pursuant to an undertaking
by the Administrator. (C) Certain officers and trustees of
the Fund are "affiliated persons,"as defined in the Act, of the
Adviser or the Administrator. Each trustee who is not an
"affiliated person" receives an annual fee of $1,500 and
an attendance fee of $250 per meeting.FIRST PRAIRIE DIVERSIFIED
ASSET FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (D) On
December 5, 1993, Dreyfus entered into an Agreement and Plan
of Merger providing for the merger of Dreyfus with a subsidiary
of Mellon Bank Corporation ("Mellon"). Following the merger,
it is planned that Dreyfus will be a direct subsidiary of Mellon
Bank, N.A. Closing of this merger is subject to a number of
contingencies, including the receipt of certain
regulatory approvals and the approvals of the stockholders of
Dreyfus and of Mellon.The merger is expected to occur in
mid-1994, but could occur later.NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment
securities,other than short-term securities, during the year
ended December 31,1993 amounted to $20,117,316 and $6,059,306,
respectively. At December 31, 1993, accumulated net
unrealized appreciation on investments was $2,985,176, consisting
of $3,879,019 gross unrealized appreciation and $893,843 gross
unrealized depreciation. At December 31, 1993, the cost of
investments for Federal income tax purposes was substantially the
same as the cost for financial reporting purposes (see the
Statement of Investments).FIRST PRAIRIE DIVERSIFIED ASSET
FUND REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS SHAREHOLDERS
AND BOARD OF TRUSTEES FIRST PRAIRIE DIVERSIFIED ASSET FUND We
have audited the accompanying statement of assets and
liabilities of First Prairie Diversified Asset Fund, including
the statement of investments, as of December 31, 1993, and the
related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in
the period then ended, and financial highlights for each of the
years indicated therein. These financial statements and financial
highlights are the responsibility of the Fund's management.
Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits. We
conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements and financial highlights are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of
securities owned as of December 31, 1993 by correspondence with
the custodian. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for
our opinion. In our opinion, the financial statements and
financial highlights referred to above present fairly, in all
material respects, the financial position of First Prairie
Diversified Asset Fund, at December 31, 1993,the results of its
operations for the year then ended, the changes in its net assets
for each of the two years in the period then ended, and
the financial highlights for each of the indicated years, in
conformity with generally accepted accounting principles.

(Ernst & Young Signature Logo)New York, New York February 9,
1994
<PAGE>
June 27, 1994

FIRST PRAIRIE MUNICIPAL BOND FUND

Supplement to Prospectus Dated June 27, 1994

The following information supplements and should be read in
conjunction with the section of the Fund's Prospectus entitled
"Management of The Fund."

The Dreyfus Corporation ("Dreyfus") has entered into an
Agreement and Plan Merger providing for the merger of Dreyfus
with a subsidiary of Mellon Bank Corporation ("Mellon").

Following the merger, it is planned that Dreyfus will be a
direct subsidiary of Mellon Bank, N.A. Closing of this merger
is subject to a number of contingencies, including certain
regulatory approvals and approvals of the stockholders of
Dreyfus and of Mellon. The merger is expected to occur in
August 1994, but could occur significantly later.
<PAGE>
FIRST PRAIRIE MUNICIPAL BOND FUND

INTERMEDIATE SERIES AND INSURED SERIES

PROSPECTUS

The First National Bank of Chicago
Investment Adviser

The Dreyfus Corporation
Administrator

Dreyfus Service Corporation
Distributor

Prospectus begins on page one.
<PAGE>
FIRST PRAIRIE MUNICIPAL BOND FUND

INTERMEDIATE SERIES AND INSURED SERIES

PROSPECTUS--JUNE 27, 1994

First Prairie Municipal Bond Fund (the "Fund") is an
open-end, non-diversified, management investment company, known
as a municipal bond fund. Its goal is to provide investors with
as high a level of current income exempt from Federal income tax
as is consistent with the preservation of capital.

The Fund permits investors to invest in two separate
portfolios, the Insured Series and the Intermediate Series.
Each Series invests primarily in a portfolio of Municipal
Obligations (as defined below). Under normal market conditions,
the Insured Series invests primarily in a portfolio of Municipal
Obligations, without regard to maturity, that are insured as to
the timely payment of principal and interest by recognized
insurers of Municipal Obligations. The market value of the
Insured Series' shares is not insured. Under normal market
conditions, the Intermediate Series invests in a portfolio of
Municipal Obligations which has a dollar-weighted average
maturity ranging between three and ten years.

By this Prospectus, Class A and Class B shares of each
Series are being offered. Class A shares are subject to a sales
charge imposed at the time of purchase and Class B shares are
subject to a contingent deferred sales charge imposed on
redemptions made within five years of purchase. Other
differences between the two Classes include the services offered
to and the expenses borne by each Class and certain voting
rights, as described herein. The Fund offers these alternatives
to permit an investor to choose the method of purchasing shares
that is most beneficial given the amount of the purchase, the
length of time the investor expects to hold the shares and other
circumstances.

The Fund provides free redemption checks with respect to
Class A, which investors can use in amounts of $500 or more for
cash or to pay bills. Investors continue to earn income on the
amount of the check until it clears. Investors can purchase or
redeem shares by telephone using the TeleTransfer Privilege.

The First National Bank of Chicago (the "Adviser") serves
as the Fund's investment adviser.

The Dreyfus Corporation (the "Administrator") serves as the
Fund's administrator. Dreyfus Service Corporation (the
"Distributor"), a wholly-owned subsidiary of the Administrator,
serves as the Fund's distributor.

Mutual fund shares are not deposits or obligations of, or
guaranteed or endorsed by, any bank, and are not federally
insured by the Federal Deposit Insurance Corporation ("FDIC"),
the Federal Reserve Board or any other agency. Mutual fund
shares involve certain investment risks, including the possible
loss of principal.

_______________

This Prospectus sets forth concisely information about the
Fund that an investor should know before investing. It should
be read and retained for future reference.

Part B (also known as the Statement of Additional
Information), dated June 27, 1994, which may be revised from
time to time, provides a further discussion of certain areas in
this Prospectus and other matters which may be of interest to
some investors. It has been filed with the Securities and
Exchange Commission and is incorporated herein by reference.
For a free copy, write to the Fund at 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144, or call
1-800-346-3621. When telephoning, ask for Operator 666.

________________________________________________________________

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

TABLE OF CONTENTS

Fee Table. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Condensed Financial Information. . . . . . . . . . . . . . . . .
Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . .
Alternative Purchase Methods . . . . . . . . . . . . . . . . . .
Description of the Fund. . . . . . . . . . . . . . . . . . . . .
Management of the Fund . . . . . . . . . . . . . . . . . . . . .
How to Buy Fund Shares . . . . . . . . . . . . . . . . . . . . .
Shareholder Services . . . . . . . . . . . . . . . . . . . . . .
How to Redeem Fund Shares. . . . . . . . . . . . . . . . . . . .
Distribution Plan and Shareholder Services Plan. . . . . . . . .
Dividends, Distributions and Taxes . . . . . . . . . . . . . . .
Performance Information. . . . . . . . . . . . . . . . . . . . .
General Information. . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
<TABLE>
<CAPTION>
FEE TABLE
________________________________________________________________

Intermediate Insured
Series Series

Shareholder Transaction Expenses Class A Class B Class A Class B
<S> <C> <C> <C> <C>
Maximum Sales Load Imposed
on Purchases (as a percentage
of offering price) 3.00% none 4.50% none
Maximum Deferred Sales
Charge Imposed on Redemptions
(as a percentage of the amount
subject to charge) none 3.00% none 3.00%
_________________________________________________________________

Annual Fund Operating Expenses
(as a percentage of average
daily net assets)
Management Fees .40% .40% .40% .40%
12b-1 Fees none .50% none .50%
Other Expenses .87% .87% 1.04% 1.04%
Total Fund Operating Expenses 1.27% 1.77% 1.44% 1.94%

Example
An investor would pay the following
expenses on a $1,000 investment,
assuming (1) 5% annual return and
(2) except where noted, redemption
at the end of each time period:
_________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Intermediate Insured
Series Series

Class A Class B Class B* Class A Class B Class B*

<S> <C> <C> <C> <C> <C> <C>
1 YEAR $ 43 $ 48 $ 18 $ 59 $ 50 $ 20
3 YEARS $ 69 $ 76 $ 56 $ 89 $ 81 $ 61
5 YEARS $ 98 $106 $ 96 $120 $115 $105
10 YEARS** $179 $183 $183 $210 $202 $202

* Assuming no redemption of Class B shares
** Ten-year figures assume conversion of Class B shares to Class
A shares at end of sixth year following the date of purchase.
_________________________________________________________________
</TABLE>

The purpose of the foregoing table is to assist investors in
understanding the various costs and expenses that investors in a
Series will bear, directly or indirectly, the payment of which
will reduce investors' return on an annual basis. Long-term
investors in Class B shares could pay more in 12b-1 fees than
the economic equivalent of paying a front-end sales charge. For
Class A shares, Other Expenses are based on data for the Fund's
fiscal year ended February 28, 1994. For Class B shares, Other
Expenses and Total Fund Operating Expenses are estimated based
on expenses incurred by the Class A shares. Prior to February
8, 1994, Class A shares were subject to 12b-1 fees, but no
service fees. The information in the foregoing table does not
reflect any fee waivers or expense reimbursement arrangements
that may be in effect. The Adviser, affiliates of the Adviser
and certain Service Agents (as defined below) may charge their
clients direct fees for effecting transactions in shares of a
Series; such fees are not reflected in the foregoing table. See
"Management of the Fund," "How to Buy Fund Shares" and
"Distribution Plan and Shareholder Services Plan."
<PAGE>
CONDENSED FINANCIAL INFORMATION

Financial Highlights Contained below is per share operating
performance data for a share of common stock outstanding, total
investment return, ratios to average net assets and other
supplemental data for the Intermediate Series for each year
indicated. This information has been derived from information
provided in the Fund's financial statements.

<TABLE>
<CAPTION>
Class A Shares Class B Shares
Intermediate Series--Fiscal Year Ended February 28/29, Year Ended
February 28,

PER SHARE DATA: 1989(1) 1990 1991 1992 1993 1994 1994(2)
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $11.46 $11.43 $11.65 $11.95 $12.25 $12.79 $12.32

Investment Operations:

Investment income-net .79 .78 .80 .76 .64 .61 .03

Net realized and unrealized gain (loss)
on investments (.03) .22 .31 .37 .68 .01 (.14)

Total from Investment Operations .76 1.00 1.11 1.13 1.32 .62 (.11)

Distributions:

Dividends from investment income-net (.79) (.78) (.80) (.76) (.64) (.61) (.03)

Dividends from net realized gain
on investments -- -- (.01) (.07) (.14) (.62) --

Total Distributions (.79) (.78) (.81) (.83) (.78) (1.23) (.03)

Net asset value, end of year $11.43 $11.65 $11.95 $12.25 $12.79 $12.18 $12.18

TOTAL INVESTMENT RETURN(3) 6.82%(4) 9.00% 9.94% 9.78% 11.26% 4.94% (.93%)(5)

RATIO/SUPPLEMENTAL DATA:

Ratio of expenses to average
net asset -- -- -- -- -- .06% .75%(4)

Ratio of net investment income to
avenge net assets 6.83%(4) 6.62% 6.76% 6.15% 5.16% 4.78% 1.68%(4)

Portfolio Turnover Rate 101.17% 46.68% 12.22% 86.91% 63.67% 167.95% 167.95%

Net Assets, end of year
(000's omitted) $2,593 $4,582 $7,251 $18,310 $27,885 $28,826 $12

___________________

(1) From March 1, 1988 (commencement of operations) to February 28, 1989.
(2) From February 8, 1994 (commencement of initial offering) to February 28, 1994.
(3) Exclusive of sales charges.
(4) Annualized.
(5) Not annualized.
</TABLE>
Financial Highlights Contained below is per share operating
performance
data for a share of common stock outstanding, total investment
return,
ratios to average net assets and other supplemental data for the
Insured
Series(1) for each year indicated. This information has been
derived from
information provided in the Fund's financial statements.

[CAPTION]
<TABLE>

Class A Shares Class B Shares
Insured Series -- Fiscal Year Ended February 28/29, Year Ended
February 28,

PER SHARE DATA: 1989(2) 1990 1991 1992 1993 1994 1994(3)
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $11.94 $11.82 $11.77 $12.10 $12.49 $13.25 $12.37

Investment Operations:
Investment income-net .89 .81 .81 .76 .70 .63 .03
Net realized and unrealized
gain (loss) on investments (.12) .28 .33 .47 1.01 (.15) (.23)
Total from Investment Operations .77 1.09 1.14 1.23 1.71 .48 (.20)

Distributions:
Dividends from investment
income-net (.89) (.81) (.81) (.76) (.70) (.63) (.03)
Dividends from net realized gain
on investments (.33) - (.08) (.25) (.96) -
Dividends from excess net realized
gain on investments - - - - - - -

Total Distributions (.89) (1.14) (.81) (.84) (.95) (1.60) (.03)

Net asset value, end of year $11.82 $11.77 $12.10 $12.49 $13.25 $12.13 $12.14

TOTAL INVESTMENT RETURN(4) 6.82% 9.39% 10.13% 10.50% 14.37% 3.70% (1.64%)(5)

RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to net assets - - - - - - .50%(5)
Ratio of net investment income to
avenge net assets 7.46% 6.60% 6.87% 5.99% 5.49% 4.85% 4.10%(5)

Decrease reflected in above expense ratios due
to undertakings by the Adviser and Administrator
(limited to the expense limitation provision
of the Investment Advisory and
Administration Agreements) 2.25%(5) 2.75% 2.75% 2.75% 1.59% 1.44% 2.41%(5)
Portfolio Turnover Rate 36.19%(6) 85.07% 32.40% 66.28% 88.53% 175.06% 175.06%
Net Assets, end of year
(000's omitted) $673 $1,192 $2,244 $6,591 $11,290 $9,234 $2

__________________
(1) Formerly, the Long Term Series. On September 12, 1989, the investment and management policies of the Insured Series
were changed as described herein. See "General Information."
(2) From March 1, 1988 (commencement of operations) to February 28, 1989.
(3) From February 8, 1994 (commencement of initial offering) to February 28, 1994.
(4) Exclusive of sales charges.
(5) Annualized.
(6) Not annualized.
</TABLE>
Further information about each Series performance is contained in
the
Fund's annual report for the fiscal year ended February 28, 1994,
which
may be obtained without charge by writing to the address or
calling the
number set forth on the cover page of this Prospectus.
<PAGE>
HIGHLIGHTS

The following summary is qualified in its entirety by the more
detailed information appearing elsewhere in this Prospectus.

The Fund The Fund is an open-end, non-diversified, management
investment company, known as a municipal bond fund.

Investment Objective The Fund's goal is to provide investors
with as high a level of current income exempt from Federal income
tax as is consistent with the preservation of capital.

The Series The Fund is a "series fund" which permits investors
to invest in two separate portfolios: the Intermediate Series
and the Insured Series.

Management Policies Each Series will invest at least 80% of its
net assets in Municipal Obligations, under normal circumstances.
At least 65% of each Series' net assets will be invested in bonds
and debentures.

Each Series will purchase Municipal Obligations only if
they are rated at least: Baa, MIG-2/VMIG-2 or Prime-1 (P-1) by
Moody's Investors Service, Inc. ("Moody's"); BBB, SP-2 or A-1 by
Standard & Poor's Corporation ("S&P"); BBB or F-2 by Fitch
Investors Service, Inc. ("Fitch"); BBB or Duff-2 by Duff &
Phelps, Inc. ("Duff"); or, if not rated, of comparable quality as
determined by the Adviser.

Each Series may engage in certain investment techniques,
such as futures and options transactions and lending portfolio
securities, each of which involves risk and the gains from which
may give rise to taxable income.

Intermediate Series The Intermediate Series invests primarily in
a portfolio of Municipal Obligations which has a dollar-weighted
average maturity ranging between three and ten years.

Insured Series The Insured Series invests primarily in a port-
folio of Municipal Obligations, without regard to maturity, that
are insured as to timely payment of principal and interest by
recognized insurers of Municipal Obligations. The value of the
Insured Series' shares is not insured.

The insurance feature is intended to reduce financial risk.
However, the cost of insurance premiums and restrictions on
investments imposed by guidelines in the insurance policy will
result in a reduction in yield.

Municipal Obligations Municipal Obligations are debt obligations
issued by states, territories and possessions of the United
States, by the District of Columbia, and their political
subdivisions, agencies and instrumentalities, or multistate
agencies or authorities, the interest from which is, in the
opinion of bond counsel to the issuer, exempt from Federal income
tax. Municipal Obligations are generally issued to obtain funds
for various public purposes. They also include certain
industrial development bonds issued by or on behalf of public
authorities. Municipal Obligations are classified as general
obligation bonds, revenue bonds and notes.

Investment Adviser The First National Bank of Chicago is the
Fund's investment adviser. The Fund has agreed to pay the
Adviser a monthly fee at the annual rate of .40 of 1% of the
value of each Series' average daily net assets.

Administrator The Dreyfus Corporation assists in all aspects of
the Fund's operations other than providing investment advice.
The Fund has agreed to pay the Administrator a monthly fee of .20
of 1% of the value of each Series' average daily net assets.

Alternative Purchase Methods The Fund offers investors two
methods of purchasing Fund shares; an investor may choose the
Class of shares that best suits the investor's needs, given the
amount of purchase, the length of time the investor expects to
hold the shares and any other relevant circumstances. Each Class
A and Class B share represents an identical pro rata interest in
the Series' investment portfolio.

Class A shares are sold at net asset value per share plus a
maximum initial sales charge of 3.00% for the Intermediate Series
and 4.50% for the Insured Series of the public offering price
imposed at the time of purchase. The initial sales charge
may be reduced or waived for certain purchases. See "How to Buy
Fund Shares--Class A Shares." Class A shares are subject to an
annual service fee at the rate of up to .25 of 1% of the value of
the average daily net assets of Class A.

Class B shares are sold at net asset value per share with no
initial sales charge at the time of purchase; as a result, the
entire purchase price is immediately invested in the Fund. Class
B shares are subject to a maximum 3% contingent deferred sales
charge ("CDSC"), which is assessed only if the Class B shares are
redeemed within five years of purchase. See "How to Redeem Fund
Shares--Contingent Deferred Sales Charge--Class B Shares." Class
B shares also are subject to an annual service fee at the rate of
up to .25 of 1% of the value of the average daily net assets of
Class B. In addition, Class B shares are subject to an annual
distribution fee at the rate of up to .50 of 1% of the value of
the average daily net assets of Class B. The distribution fee
paid by Class B will cause such Class to have a higher expense
ratio and to pay lower dividends than Class A. Approximately six
years after the date of purchase, Class B shares automatically
will convert to Class A shares, based on the relative net asset
values for shares of each Class, and will no longer be subject to
the distribution fee.

See "Alternative Purchase Methods."

How to Buy Fund Shares Orders for the purchase of shares may be
placed through a number of institutions including the Adviser and
affiliates of the Adviser, including First Chicago Investment
Services, Inc. ("FCIS"), a registered broker-dealer, the
Distributor and certain other banks, securities dealers and other
industry professionals such as investment advisers, accountants
and estate planning firms (collectively, "Service Agents").

The minimum initial investment is $1,000. All subsequent
investments must be at least $100.

See "How to Buy Fund Shares."

Shareholder Services The Fund offers its shareholders certain
services and privileges including: Exchange Privilege, AUTOMATIC
Asset Builder, Government Direct Deposit Privilege, Automatic
Withdrawal Plan, Dividend Options privileges and TeleTransfer
Privilege. (Certain services and privileges may not be available
through all Service Agents.)

Free Checkwriting--Class A Shares Investors in Class A
to shares may request on the Account Application that the Fund
provide Redemption Checks drawn on the Fund's account.
Redemption Checks may be made payable to any person in the
amount of $500 or more. There is no charge for this service.

How to Redeem Fund Shares Generally, investors should
contact their representatives at the Adviser or appropriate
Service Agent for redemption instructions. Investors who are not
clients of the Adviser or a Service Agent may redeem Fund shares
by written request, or through the Wire Redemption Privilege, the
Telephone Redemption Privilege or the Tele Transfer Privilege.

See "How to Redeem Fund Shares."

Monthly Dividends The Fund ordinarily declares dividends
from each Series' net investment income daily. Dividends are
usually paid on the last calendar day of each month, and are
automatically reinvested in additional shares unless the investor
elects payment in cash.

Distributions from net realized securities gains, if any,
generally are declared and paid once a year. Investors may
choose whether to receive distributions in cash or to reinvest in
additional shares at net asset value.

Risks and Special Considerations The value of the Fund's
shares is not fixed and can be expected to fluctuate.

Even though interest-bearing securities promise a stable
stream of income, the prices of such securities are affected by
changes in interest rates and, therefore, are subject to the risk
of market price fluctuations.

Certain securities purchased by the Fund, including those
rated Baa by Moody's and BBB by S&P, Fitch and Duff, are subject
to greater market fluctuation than certain lower yielding, higher
rated fixed-income securities.

ALTERNATIVE PURCHASE METHODS

The Fund offers investors two methods of purchasing Fund
shares; an investor may choose the Class of shares that best
suits the investor's needs, given the amount of purchase, the
length of time the investor expects to hold the shares and any
other relevant circumstances. Each Class A and Class B share
represents an identical pro rata interest in the Fund's
investment portfolio.

Class A shares are sold at net asset value per share plus a
maximum initial sales charge of 3.00% for the Intermediate Series
and 4.50% for the Insured Series of the public offering price
imposed at the time of purchase. The initial sales charge may be
reduced or waived for certain purchases. See "How to Buy Fund
Shares--Class A Shares." These shares are subject to an annual
service fee at the rate of up to .25 of 1% of the value of the
average daily net assets of Class A. See "Distribution Plan and
Shareholder Services Plan--Shareholder Services Plan."

Class B shares are sold at net asset value per share with no
initial sales charge at the time of purchase; as a result, the
entire purchase price is immediately invested in the Fund. Class
B shares are subject to a maximum 3% CDSC, which is assessed only
if Class B shares are redeemed within five years of purchase.
See "How to Buy Fund Shares--Class B Shares" and "How to Redeem
Fund Shares--Contingent Deferred Sales Charge--Class B Shares."
These shares also are subject to an annual service fee at the
rate of up to .25 of 1% of the value of the average daily net
assets of Class B. In addition, Class B shares are subject to an
annual distribution fee at the rate of up to .50 of 1% of the
value of the average daily net assets of Class B. See
"Distribution Plan and Shareholder Services Plan." The
distribution fee paid by Class B will cause such Class to have a
higher expense ratio and to pay lower dividends than Class A.
Approximately six years after the date of purchase, Class B
shares automatically will convert to Class A shares, based on the
relative net asset values for shares of each Class, and will no
longer be subject to the distribution fee. Class B shares that
have been acquired through the reinvestment of dividends and
distributions will be converted on a pro rata basis together with
other Class B shares, in the proportion that a shareholder's
Class B shares converting to Class A shares bears to the total
Class B shares not acquired through the reinvestment of dividends
and distributions.

An investor should consider whether, during the anticipated
life of the investor's investment in the Fund, the accumulated
distribution fee and CDSC on Class B shares prior to conversion
would be less than the initial sales charge on Class A shares
purchased at the same time, and to what extent, if any, such
differential would be offset by the return of Class A. In this
regard, generally, Class B shares may be more appropriate for
investors who invest less than $100,000 in Fund shares.
Additionally, investors qualifying for reduced initial sales
charges who expect to maintain their investment for an extended
period of time might consider purchasing Class A shares because
the accumulated continuing distribution fees on Class B shares
may exceed the initial sales charge on Class A shares during the
life of the investment. Generally, Class A shares may be more
appropriate for investors who invest $100,000 or more in the
Intermediate Series or $250,000 or more in the Insured Series.

DESCRIPTION OF THE FUND

[For left margin side bar: The Fund is a series fund,
currently offering two portfolios: the Insured Series and the
Intermediate Series.]

General The Fund is a "series fund," which is a mutual fund
divided into separate portfolios. Each portfolio is treated as a
separate entity for certain matters under the Investment Company
Act of 1940 and for other purposes, and a shareholder of one
Series is not deemed to be a shareholder of any other Series. As
described below, for certain matters Fund shareholders vote
together as a group; as to others they vote separately by Series.

[For left margin side bar: The Fund's goal is to provide as
high a level of current income exempt from Federal income tax as
is consistent with the preservation of capital.]

Investment Objective The Fund's goal is to provide investors
with as high a level of current income exempt from Federal income
tax as is consistent with the preservation of capital. The Fund
permits investors to invest in two separate portfolios, the
Insured Series and the Intermediate Series. Each Series invests
primarily in a portfolio of Municipal Obligations. Under normal
conditions, the Insured Series invests primarily in a portfolio
of Municipal Obligations, without regard to maturity, that are
insured as to timely payment of principal and interest by
recognized insurers of Municipal Obligations. Under normal
market conditions, the Intermediate Series invests primarily in a
portfolio of Municipal Obligations which has a dollar-weighted
average maturity ranging between three and ten years. Each
Series' investment objective cannot be charged without approval
by the holders of a majority (as defined in the Investment
Company Act of 1940) of such Series' outstanding voting shares.
There can be no assurance that the Series' investment objective
will be achieved.

[For left margin side bar: Each Series invests primarily in
a portfolio of Municipal Obligations, the interest from which is
exempt from Federal income tax.]

Municipal Obligations Municipal Obligations are debt obligations
issued by states, territories and possessions of the United
States and the District of Columbia and their political
subdivisions, agencies and instrumentalities, or multi-state
agencies or authorities, the interest from which is, in the
opinion of bond counsel to the issuer, exempt from Federal income
tax. Municipal Obligations generally include debt obligations
issued to obtain funds for various public purposes as well as
certain industrial development bonds issued by or on behalf of
public authorities. Municipal Obligations are classified as
general obligation bonds, revenue bonds and notes. General
obligation bonds are secured by the issuer's pledge of its faith,
credit and taxing power for the payment of principal and
interest. Revenue bonds are payable from the revenue derived
from a particular facility or class of facilities or, in some
cases, from the proceeds of a special excise or other specific
revenue source, but not from the general taxing power. Tax
exempt industrial development bonds, in most cases, are revenue
bonds that generally do not carry the pledge of the credit of the
issuing municipality, but generally are guaranteed by the
corporate entity on whose behalf they are issued. Notes are
short-term instruments which are obligations of the issuing
municipalities or agencies and are sold in anticipation of a bond
sale, collection of taxes or receipt of other revenues.
Municipal Obligations include municipal lease/purchase agreements
which are similar to installment purchase contracts for property
or equipment issued by municipalities. Municipal Obligations
bear fixed, floating or variable rates of interest, which are
determined in some instances by formulas under which the
Municipal Obligation's interest rate will change directly or
inversely to changes in interest rates or an index, or multiples
thereof, in many cases subject to a maximum and minimum. Certain
Municipal Obligations are subject to redemption at a date earlier
than their stated maturity pursuant to call options, which may be
separated from the related Municipal Obligation and purchased and
sold separately.

[For left margin side bar: Municipal Obligations purchased
by a Series must be rated at least investment grade by a
nationally recognized independent rating agency.]

Management Policies It is a fundamental policy of each Series
that it will invest at least 80% of the value of its net assets
(except when maintaining a temporary defensive position) in
Municipal Obligations. At least 65% of the value of each Series'
net assets (except when maintaining a temporary defensive
position) will be invested in bonds and debentures. Under normal
circumstances, at least 65% of the value of the Insured Series'
total assets will be invested in Municipal Obligations that are
insured as to the timely payment of principal and interest by
recognized insurers of Municipal Obligations. See "Insurance
Feature" below.

Each Series will purchase Municipal Obligations only if
rated at least Baa, MIG-2/VMIG-2 or Prime-1 (P-1) by Moody's,
BBB, SP-2 or A-1 by S&P, BBB or F-2 by Fitch or BBB or Duff-2 by
Duff. See "Appendix" in the Statement of Additional Information.

Municipal Obligations rated Baa by Moody's or BBB by S&P, Fitch
or Duff are considered investment grade obligations; those rated
BBB by S&P, Fitch and Duff are regarded as having an adequate
capacity to pay principal and interest, while those rated Baa by
Moody's are considered medium grade obligations and have
speculative characteristics. Each Series also may invest in
securities which, while not rated, are determined by the Adviser
to be of comparable quality to the rated securities in which the
Fund may invest. Each Series also may invest in Taxable
Investments of the quality described below.

Each Series may invest more than 25% of the value of its
total assets in Municipal Obligations which are related in such a
way that an economic, business or political development or change
affecting one such security also would affect the other
securities; for example, securities the interest upon which is
paid from revenues of similar types of projects, or securities of
issuers that are located in the same state. As a result, each
Series may be subject to greater risk as compared to a fund that
does not follow this practice.

From time to time, a Series may invest more than 25% of the
value of its total assets in industrial development bonds which,
although issued by industrial development authorities, may be
backed only by the assets and revenues of the non-governmental
users. Interest on Municipal Obligations (including certain
industrial development bonds) which are specified private
activity bonds, as defined in the Internal Revenue Code of 1986,
as amended (the "Code"), issued after August 7, 1986, while
exempt from Federal income tax, is a preference item for the
purpose of the alternative minimum tax. Where a regulated
investment company receives such interest, a proportionate share
of any exempt-interest dividend paid by the investment company
may be treated as such a preference item to the shareholder.
Each Series may invest without limitation in such Municipal
Obligations if the Adviser determines that their purchase is
consistent with such Series' investment objective. See "Other
Investment Considerations" below.

Each Series may purchase floating and variable rate demand
notes and bonds, which are tax exempt obligations ordinarily
having stated maturities in excess of one year, but which permit
the holder to demand payment of principal at any time, or at
specified intervals. Variable rate demand notes include master
demand notes which are obligations that permit the Fund to invest
fluctuating amounts, which may change daily without penalty,
pursuant to direct arrangements between the Fund, as lender, and
the borrower. The interest rates on these obligations fluctuate
from time to time. Frequently, such obligations are secured by
letters of credit or other credit support arrangements provided
by banks. Use of letters of credit or other credit support
arrangements will not adversely affect the tax exempt status of
these obligations. Because these obligations are direct lending
arrangements between the lender and borrower, it is not
contemplated that such instruments generally will be traded, and
there generally is no established secondary market for these
obligations, although they are redeemable at face value.
Accordingly, where these obligations are not secured by letters
of credit or other credit support arrangements, a Series' right
to redeem is dependent on the ability of the borrower to pay
principal and interest on demand. Each obligation purchased will
meet the quality criteria established for the purchase of
Municipal Obligations. The Adviser, on behalf of the Fund, will
consider on an ongoing basis the creditworthiness of the issuers
of the floating and variable rate demand obligations in each
Series' portfolio. Neither Series will invest more than 15% of
the value of its net assets in floating or variable rate demand
obligations as to which it cannot exercise the demand feature on
not more than seven days' notice if there is no secondary market
available for these obligations, and in other illiquid
securities.

Each Series may purchase from financial institutions
participation interests in Municipal Obligations (such as
industrial development bonds and municipal lease/purchase
agreements). A participation interest gives the Series an
undivided interest in the Municipal Obligation in the proportion
that such Series' participation interest bears to the total
principal amount of the Municipal Obligation. These instruments
may have fixed, floating or variable rates of interest. If the
participation interest is unrated, or has been given a rating
below that which otherwise is permissible for purchase by the
Fund, the participation interest will be backed by an irrevocable
letter of credit or guarantee of a bank that the Board of
Directors has determined meets the prescribed quality standards
for banks set forth below, or the payment obligation otherwise
will be collateralized by U.S. Government securities. For
certain participation interests, the Series will have the right
to demand payment, on not more than seven days' notice, for all
or any part of such Series' participation interest in the
Municipal Obligation, plus accrued interest. As to these
instruments, each Series intends to exercise its right to demand
payment only upon a default under the terms of the Municipal
Obligation, as needed to provide liquidity to meet redemptions,
or to maintain or improve the quality of its investment
portfolio. Neither Series will invest more than 15% of the value
of its net assets in participation interests that do not have
this demand feature, and in other illiquid securities.

Each Series may purchase tender option bonds. A tender
option bond is a Municipal Obligation (generally held pursuant to
a custodial arrangement) having a relatively long maturity and
bearing interest at a fixed rate substantially higher than
prevailing short-term tax exempt rates, that has been coupled
with the agreement of a third party, such as a bank,
broker-dealer or other financial institution, pursuant to which
such institution grants the security holders the option, at
periodic intervals, to tender their securities to the institution
and receive the face value thereof. As consideration for
providing the option, the financial institution receives periodic
fees equal to the difference between the Municipal Obligations
fixed coupon rate and the rate, as determined by a remarketing or
similar agent at or near the commencement of such period, that
would cause the securities, coupled with the tender option, to
trade at par on the date of such determination. Thus, after
payment of this fee, the security holder effectively holds a
demand obligation that bears interest at the prevailing
short-term tax exempt rate. The Adviser, on behalf of the Fund,
will consider on an ongoing basis the creditworthiness of the
issuer of the underlying Municipal Obligation, of any custodian
and of the third party provider of the tender option. In certain
instances and for certain tender option bonds, the option may be
terminable in the event of a default in payment of principal or
interest on the underlying Municipal Obligations and for other
reasons. Neither Series will invest more than 15% of the value
of its net assets in illiquid securities, which would include
tender option bonds as to which it cannot exercise the tender
feature on not more than seven days' notice if there is no
secondary market available for these obligations.

Each Series may purchase custodial receipts representing the
right to receive certain future principal and interest payments
on Municipal Obligations which underlie the custodial receipts.
A number of different arrangements are possible. In a typical
custodial receipt arrangement, an issuer or a third party owner
of Municipal Obligations deposits such obligations with a
custodian in exchange for two classes of custodial receipts. The
two classes have different characteristics, but, in each case,
payments on the two classes are based on payments received on the
underlying Municipal Obligations. One class has the
characteristics of a typical auction rate security, where at
specified intervals its interest rate is adjusted, and ownership
changes, based on an auction mechanism. This class's interest
rate generally is expected to be below the coupon rate of the
underlying Municipal Obligations and generally is at a level
comparable to that of a Municipal Obligation of similar quality
and having a maturity equal to the period between interest rate
adjustments. The second class bears interest at a rate that
exceeds the interest rate typically borne by a security of
comparable quality and maturity; this rate also is adjusted, but
in this case inversely to changes in the rate of interest of the
first class. If the interest rate on the first class exceeds the
coupon rate of the underlying Municipal Obligations, its interest
rate will exceed the rate paid on the second class. In no event
will the aggregate interest paid with respect to the two classes
exceed the interest paid by the underlying Municipal Obligations.
The value of the second class and similar securities should be
expected to fluctuate more than the value of a Municipal
Obligation of comparable quality and maturity and their purchase
by the Series should increase the volatility of its net asset
value and, thus, its price per share. These custodial receipts
are sold in private placements. Each Series also may purchase
directly from issuers, and not in a private placement, Municipal
Obligations having characteristics similar to custodial receipts.
These securities may be issued as part of a multi-class offering
and the interest rate on certain classes may be subject to a cap
or floor.

Each Series may invest up to 15% of the value of its net
assets in securities as to which a liquid trading market does not
exist, provided such investments are consistent with the Fund's
investment objective. Such securities may include securities
that are not readily marketable, such as certain securities that
are subject to legal or contractual restrictions on resale and
repurchase agreements providing for settlement in more than seven
days after notice. As to these securities, the Series are
subject to a risk that should the Fund desire to sell them when a
ready buyer is not available at a price the Fund deems
representative of their value, the value of the Series' net
assets could be adversely affected. However, if a substantial
market of qualified institutional buyers develops pursuant to
Rule 144A under the Securities Act of 1933, as amended, for
certain of these securities held by the Fund, the Fund intends to
treat such securities as liquid securities in accordance with
procedures approved by the Fund's Board of Directors. Because it
is not possible to predict with assurance how the market for
restricted securities pursuant to Rule 144A will develop, the
Fund's Board of Directors has directed the Adviser to monitor
carefully the Fund's investments in such securities with
particular regard to trading activity, availability of reliable
price information and other relevant information. To the extent
that, for a period of time, qualified institutional buyers cease
purchasing restricted securities pursuant to Rule 144A, the
Series' investing in such securities may have the effect of
increasing the level of illiquidity in that Series portfolio
during such period.

Each Series may acquire "stand-by commitments" with respect
to Municipal Obligations held in its portfolio. Under a stand-by
commitment, the Series obligates a broker, dealer or bank to
repurchase at such Series' option specified securities at a
specified price and, in this respect, stand-by commitments are
comparable to put options. The exercise of a stand-by
commitment, therefore, is subject to the ability of the seller to
make payment on demand. Each Series will acquire stand-by
commitments solely to facilitate its portfolio liquidity and does
not intend to exercise its rights thereunder for trading
purposes. Each Series may pay for stand-by commitments if such
action is deemed necessary thus increasing to a degree the cost
of the underlying Municipal Obligation and similarly decreasing
such security's yield to investors. The Fund also may acquire
call options on specific Municipal Obligations. The Fund
generally would purchase these call options to protect the Fund
from the issuer of the related Municipal Obligation redeeming, or
other holder of the call option from calling away, the Municipal
Obligation before maturity. The sale by the Fund of a call
option that it owns on a specific Municipal Obligation could
result in the receipt of taxable income by the Fund.

From time to time, on a temporary basis other than for
temporary defensive purposes (but not to exceed 20% of the value
of the Series' net assets) or for temporary defensive purposes,
each Series may invest in taxable short-term investments
("Taxable Investments") consisting of: notes of issuers having,
at the time of purchase, a quality rating within the two highest
grades of Moody's, S&P, Fitch or Duff; obligations of the U.S.
Government, its agencies or instrumentalities; commercial paper
rated not lower than P-1 by Moody's, A-1 by S&P, F-1 by Fitch or
Duff-1 by Duff; certificates of deposit of U.S. domestic banks,
including foreign branches of domestic banks, with assets of one
billion dollars or more; time deposits; bankers' acceptances and
other short-term bank obligations; and repurchase agreements in
respect of any of the foregoing. Dividends paid by each Series
that are attributable to income earned by the Series from Taxable
Investments will be taxable to investors. See "Dividends,
Distributions and Taxes." Except for temporary defensive
purposes, at no time will more than 20% of the value of a Series'
net assets be invested in Taxable Investments. Under normal
market conditions, the Fund anticipates that not more than 5% of
the value of a Series' total assets will be invested in any one
category of Taxable Investments. Taxable Investments are more
fully described in the Statement of Additional Information, to
which reference hereby is made.

[For left margin side bar: The Series may use various
investment techniques which involve certain risks.]

Investment Techniques Each Series may employ, among others, the
investment techniques described below. Use of these techniques
may give rise to taxable income. Options and futures
transactions involve so-called "derivative securities."

When-Issued Securities New issues of Municipal Obligations
usually are offered on a when-issued basis, which means that
delivery and payment for such Municipal Obligations ordinarily
take place within 45 days after the date of the commitment to
purchase. The payment obligation and the interest rate that will
be received on the Municipal Obligations are fixed at the time
the Series enters into the commitment. Each Series will make
commitments to purchase such Municipal Obligations only with the
intention of actually acquiring the securities, but the Series
may sell these securities before the settlement date if it is
deemed advisable, although any gain realized on such sale would
be taxable. Neither Series will accrue income in respect of a
when-issued security prior to its stated delivery date. No
additional when-issued commitments will be made for a Series if
more than 20% of the value of such Series' net assets would be so
committed.

Municipal Obligations purchased on a when-issued basis and
the securities held in a Series' portfolio are subject to changes
in value (both generally changing in the same way, i.e.,
appreciating when interest rates decline and depreciating when
interest rates rise) based upon the public's perception of the
creditworthiness of the issuer and changes, real or anticipated,
in the level of interest rates. Municipal Obligations purchased
on a when-issued basis may expose a Series to risk because they
may experience such fluctuations prior to their actual delivery.
Purchasing Municipal Obligations on a when-issued basis can
involve the additional risk that the yield available in the
market when the delivery takes place actually may be higher than
that obtained in the transaction itself. A segregated account
consisting of cash, cash equivalents or U.S. Government
securities or other high quality liquid debt securities at least
equal at all times to the amount of the when-issued commitments
will be established and maintained at the Fund's custodian bank.
Purchasing securities on a when-issued basis when a Series is
fully or almost fully invested may result in greater potential
fluctuation in the value of such Series' net assets and its net
asset value per share.

[For left margin side bar: The Fund may engage in futures
and options transactions, subject to applicable regulations.]

Futures Transactions--In General The Fund is not a commodity
pool. However, as a substitute for a comparable market position
in the underlying securities and for hedging purposes, each
Series may engage in futures and options on futures transactions
as described below.

Each Series' commodities transactions must constitute bona
fide hedging or other permissible transactions pursuant to
regulations promulgated by the Commodity Futures Trading
Commission. In addition, a Series may not engage in such
transactions if the sum of the amount of initial margin deposits
and premiums paid for unexpired commodity options, other than for
bona fide hedging transactions, would exceed 5% of the
liquidation value of the Series' assets, after taking into
account unrealized profits and unrealized losses on such
contracts it has entered into; provided, however, that in the
case of an option that is in-the-money at the time of purchase,
the in-the-money amount may be excluded in calculating the 5%.
Pursuant to regulations and/or published positions of the
Securities and Exchange Commission, each Series may be required
to segregate cash or high quality money market instruments in
connection with its commodities transactions in an amount
generally equal to the value of the underlying commodity.

Initially, when purchasing or selling futures contracts the
Series will be required to deposit with the Fund's custodian in
the broker's name an amount of cash or cash equivalents up to
approximately 10% of the contract amount. This amount is subject
to change by the exchange or board of trade on which the contract
is traded and members of such exchange or board of trade may
impose their own higher requirements. This amount is known as
"initial margin" and is in the nature of a performance bond or
good faith deposit on the contract which is returned to the
Series upon termination of the futures position, assuming all
contractual obligations have been satisfied. Subsequent
payments, known as "variation margin," to and from the broker
will be made daily as the price of the index or securities
underlying the futures contract fluctuates, making the long and
short positions in the futures contract more or less valuable, a
process known as "marking-to-market." At any time prior to the
expiration of a futures contract, the Series may elect to close
the position by taking an opposite position at the then
prevailing price, which will operate to terminate the Series'
existing position in the contract.

Although each Series intends to purchase or sell futures
contracts only if there is an active market for such contracts,
no assurance can be given that a liquid market will exist for any
particular contract at any particular time. Many futures
exchanges and boards of trade limit the amount of fluctuation
permitted in futures contract prices during a single trading day.

Once the daily limit has been reached in a particular contract,
no trades may be made that day at a price beyond the limit or
trading may be suspended for specified periods during the trading
day. Futures contract prices could move to the limit for several
consecutive trading days with little or no trading, thereby
preventing prompt liquidation of futures positions and
potentially subjecting a Series to substantial losses. If it is
not possible or the Series determines not to close a futures
position in anticipation of adverse price movements, the Series
will be required to make daily cash payments of variation margin.

In such circumstances, an increase in the value of the portion of
a Series' portfolio being hedged, if any, may offset partially or
completely losses on the futures contract. However, no assurance
can be given that the price of the securities being hedged will
correlate with the price movements in a futures contract and thus
provide an offset to losses on the futures contract.

In addition, to the extent the Series is engaging in a
futures transaction as a hedging device, due to the risk of an
imperfect correlation between securities in the Series' portfolio
that are the subject of a hedging transaction and the futures
contract used as a hedging device, it is possible that the hedge
will not be fully effective in that, for example, losses on the
portfolio securities may be in excess of gains on the futures
contract or losses on the futures contract may be in excess of
gains on the portfolio securities that were the subject of the
hedge. In futures contracts based on indexes, the risk of
imperfect correlation increases as the composition of a Series'
portfolio varies from the composition of the index. In an effort
to compensate for the imperfect correlation of movements in the
price of the securities being hedged and movements in the price
of futures contracts, the Series may buy or sell futures
contracts in a greater or lesser dollar amount than the dollar
amount of the securities being hedged if the historical
volatility of the futures contract has been less or greater than
that of the securities. Such "over hedging" or "under hedging"
may adversely affect a Series' net investment results if market
movements are not as anticipated when the hedge is established.

Successful use of futures by a Series also is subject to the
Adviser's ability to predict correctly movements in the direction
of the market or interest rates. For example, if a Series has
hedged against the possibility of a decline in the market
adversely affecting the value of securities held in its portfolio
and prices increase instead, the Series will lose part or all of
the benefit of the increased value of securities which it has
hedged because it will have offsetting losses in its futures
positions. In addition, in such situations, if the Series has
insufficient cash, it may have to sell securities to meet daily
variation margin requirements. Such sales of securities may, but
will not necessarily, be at increased prices which reflect the
rising market. The Series may have to sell securities at a time
when it may be disadvantageous to do so.

An option on a futures contract gives the purchaser the
right, in return for the premium paid, to assume a position in a
futures contract (a long position if the option is a call and a
short position if the option is a put) at a specified exercise
price at any time during the option exercise period. The writer
of the option is required upon exercise to assume an offsetting
futures position (a short position if the option is a call and a
long position if the option is a put). Upon exercise of the
option, the assumption of offsetting futures positions by the
writer and holder of the option will be accompanied by delivery
of the accumulated cash balance in the writer's futures margin
account which represents the amount by which the market price of
the futures contract, at exercise, exceeds, in the case of a
call, or is less than, in the case of a put, the exercise price
of the option on the futures contract.

Call options sold by a Series with respect to futures
contracts will be covered by, among other things, entering into a
long position in the same contract at a price no higher than the
strike price of the call option, or by ownership of the
instruments underlying, or instruments the prices of which are
expected to move relatively consistently with the instruments
underlying, the futures contract. Put options sold by a Series
with respect to futures contracts will be covered when, among
other things, cash or liquid securities are placed in a
segregated account to fulfill the obligation undertaken.

Each Series may utilize municipal bond index futures to
protect against changes in the market value of the Municipal
Obligations in its portfolio or which it intends to acquire.
Municipal bond index futures contracts are based on an index of
long-term Municipal Obligations. The index assigns relative
values to the Municipal Obligations included in the index, and
fluctuates with changes in the market value of such Municipal
Obligations. The contract is an agreement pursuant to which two
parties agree to take or make delivery of an amount of cash based
upon the difference between the value of the index at the close
of the last trading day of the contract and the price at which
the index contract was originally written. The acquisition or
sale of a municipal bond index futures contract enables the
Series to protect its assets from fluctuations in rates on tax
exempt securities without actually buying or selling such
securities.

[For left margin side bar: The Fund may hedge against
rising or falling interest rates by purchasing or selling
interest rate futures contracts.]

Interest Rate Futures Contracts and Options on Interest Rate
Futures Contracts Each Series may purchase and sell interest
rate futures contracts and options on interest rate futures
contracts as a substitute for a comparable market position and to
hedge against adverse movements in interest rates. To the extent
a Series has invested in interest rate futures contracts or
options on interest rate futures contracts as a substitute for a
comparable market position, such Series will be subject to the
investment risks of having purchased the securities underlying
the contract.

Each Series may purchase call options on interest rate
futures contracts to hedge against a decline in interest rates
and may purchase put options on interest rate futures contracts
to hedge its portfolio securities against the risk of rising
interest rates.

If a Series has hedged against the possibility of an
increase in interest rates adversely affecting the value of
securities held in such Series' portfolio and rates decrease
instead, the Series will lose part or all of the benefit of the
increased value of the securities which it has hedged because it
will have offsetting losses in its futures positions. In
addition, in such situations, if the Series has insufficient
cash, it may have to sell securities to meet daily variation
margin requirements at a time when it may be disadvantageous to
do so. These sales of securities may, but will not necessarily,
be at increased prices which reflect the decline in interest
rates.

Each Series may sell call options on interest rate futures
contracts to partially hedge against declining prices of its
portfolio securities. If the futures price at expiration of the
option is below the exercise price, the Series will retain the
full amount of the option premium which provides a partial hedge
against any decline that may have occurred in such Series'
portfolio holdings. Each Series may sell put options on interest
rate futures contracts to hedge against increasing prices of the
securities which are deliverable upon exercise of the futures
contract. If the futures price at expiration of the option is
higher than the exercise price, the Series will retain the full
amount of the option premium which provides a partial hedge
against any increase in the price of securities which the Series
intends to purchase. If a put or call option sold by a Series is
exercised, the Series will incur a loss which will be reduced by
the amount of the premium it receives. Depending on the degree
of correlation between changes in the value of its portfolio
securities and changes in the value of its futures positions, a
Series' losses from existing options on futures may to some
extent be reduced or increased by changes in the value of its
portfolio securities.

Each Series also may sell options on interest rate futures
contracts as part of closing purchase transactions to terminate
its options positions. No assurance can be given that such
closing transactions can be effected or that there will be a
correlation between price movements in the options on interest
rate futures and price movements in a Series' portfolio
securities which are the subject of the hedge. In addition, a
Series' purchase of such options will be based upon predictions
as to anticipated interest rate trends, which could prove to be
inaccurate.

Lending Portfolio Securities From time to time, each Series may
lend securities from its portfolio to brokers, dealers and other
financial institutions needing to borrow securities to complete
certain transactions. Such loans may not exceed 33 1/3% of the
value of such Series' total assets. In connection with such
loans, the Series will receive collateral consisting of cash,
U.S. Government securities or irrevocable letters of credit which
will be maintained at all times in an amount equal to at least
100% of the current market value of the loaned securities. Each
Series can increase its income through the investment of such
collateral. A Series engaging in the portfolio loan transaction
continues to be entitled to payments in amounts equal to the
interest or other distributions payable on the loaned security
and receives interest on the amount of the loan. Such loans will
be terminable at any time upon specified notice. A Series might
experience risk of loss if the institution with which it has
engaged in a portfolio loan transaction breaches its agreement
with the Series.

Borrowing Money As a fundamental policy, each Series is
permitted to borrow money to the extent permitted under the
Investment Company Act of 1940. However, each Series currently
intends to borrow money only for temporary or emergency (not
leveraging) purposes, in an amount up to 15% of the value of such
Series' total assets (including the amount borrowed) valued at
the lesser of cost or market, less liabilities (not including the
amount borrowed) at the time the borrowing is made. While
borrowings exceed 5% of a Series' total assets, such Series will
not make any additional investments.

[For left margin side bar: The Fund has adopted certain
fundamental policies intended to limit the risk of its investment
portfolio. These policies cannot be changed without approval by
a majority of shareholders.]

Certain Fundamental Policies Each Series may (i) borrow money to
the extent permitted under the Investment Company Act of 1940;
and (ii) invest up to 25% of its total assets in the securities
of issuers in any industry, provided that there is no such
limitation on investments in Municipal Obligations and, for
temporary defensive purposes, obligations issued or guaranteed by
the U.S. Government, its agencies or instrumentalities
(industrial development bonds, where the payment of principal and
interest is the ultimate responsibility of companies within the
same industry, are grouped together as an "industry"). This
paragraph describes fundamental policies that cannot be changed,
as to a Series, without approval by the holders of a majority (as
defined in the Investment Company Act of 1940) of such Series'
outstanding voting shares. See "Investment Objective and
Management Policies--Investment Restrictions" in the Statement of
Additional Information.

Certain Additional Non-Fundamental Policies Each Series may
(i) pledge, hypothecate, mortgage or otherwise encumber its
assets, but only to secure permitted borrowings; and (ii) invest
up to 15% of its net assets in repurchase agreements providing
for settlement in more than seven days after notice and in other
illiquid securities (which securities could include participation
interests (including municipal lease/purchase agreements) that
are not subject to the demand feature described above, and
floating and variable rate demand obligations as to which the
Fund cannot exercise the related demand feature described above
and as to which there is no secondary market). See "Investment
Objective and Management Policies--Investment Restrictions" in
the Statement of Additional Information.

[For left margin side bar: Municipal Obligations held by
the Insured Series that are subject to insurance will be insured
as to timely payment of interest and principal. The value of the
Insured Series' shares is not insured.]

Insurance Feature (Applicable to the Insured Series only) The
Municipal Obligations held in the Insured Series' portfolio that
are subject to insurance will be insured as to timely payment of
principal and interest under an insurance policy (i) purchased by
the Insured Series or by a previous owner of the Municipal
Obligation ("Mutual Fund Insurance") or (ii) obtained by the
issuer or underwriter of the Municipal Obligation ("New Issue
Insurance"). The insurance of principal refers to the face or
par value of the Municipal Obligation and is not affected by nor
does it insure the price paid therefor by the Insured Series or
the market value thereof. The value of the Insured Series'
shares is not insured.

New Issue Insurance is obtained by the issuer of the
Municipal Obligations and all premiums respecting such securities
are paid in advance by such issuer. Such policies are
noncancellable and continue in force so long as the Municipal
Obligations are outstanding and the insurer remains in business.

Certain types of Mutual Fund Insurance which may be obtained
by the Insured Series are effective only so long as the Insured
Series is in existence, the insurer remains in business and the
Municipal Obligations described in the policy continue to be held
by the Insured Series. The Insured Series will pay the premiums
with respect to such insurance. Depending upon the terms of the
policy, in the event of a sale of any Municipal Obligation so
insured by the Insured Series, the Mutual Fund Insurance may
terminate as to such Municipal Obligation on the date of sale and
in such event the insurer may be liable only for those payments
of principal and interest which then are due and owing. Other
types of Mutual Fund Insurance may not have this termination
feature. The Insured Series may purchase Municipal Obligations
with this type of insurance from parties other than the issuer
and the insurance would continue for the Insured Series' benefit.

Typically, the insurer may not withdraw coverage on insured
securities held by the Insured Series, nor may the insurer cancel
the policy for any reason except failure to pay premiums when
due. The insurer may reserve the right at any time upon 90 days'
written notice to the Insured Series to refuse to insure any
additional Municipal Obligations purchased by the Insured Series
after the effective date of such notice. The Fund's Board of
Directors has reserved the right to terminate the Mutual Fund
Insurance policy if it determines that the benefits to the
Insured Series of having its portfolio insured are not justified
by the expense involved. See "Special Investment Considerations
Relating to the Insured Series" below.

[For left margin side bar: Insurance for Municipal
Obligations is obtained from recognized municipal bond insurers.]

Mutual Fund Insurance and New Issue Insurance can be
obtained from Municipal Bond Investors Assurance Corporation
("MBIA"), Financial Guaranty Insurance Company ("Financial
Guaranty"), AMBAC Indemnity Corporation ("AMBAC Indemnity") and
Capital Guaranty Insurance Company ("Capital Guaranty"), although
the Insured Series may purchase insurance from, or Municipal
Obligations insured by, other insurers.

The following information regarding these insurers has been
derived from information furnished by the insurers. The Fund has
not independently verified any of the information, but the Fund
is not aware of facts which would render such information
inaccurate.

MBIA is the principal operating subsidiary of MBIA Inc., a
New York Stock Exchange listed company. Neither MBIA Inc. nor
its shareholders are obligated to pay the debts of or claims
against MBIA. MBIA is a limited liability corporation domiciled
in New York and licensed to do business in 50 states, the
District of Columbia and the Commonwealth of Puerto Rico. As of
December 31, 1993, MBIA had admitted assets of approximately $3.1
billion, total liabilities of approximately $2.1 billion and
total capital and surplus of approximately $978 million. The
claims-paying ability of MBIA is rated "AAA" by S&P and "Aaa" by
Moody's.

Financial Guaranty is a monoline financial guaranty
insurance company regulated by the New York State Department of
Insurance and authorized to provide insurance in 50 states and
the District of Columbia. Financial Guaranty is a wholly-owned
subsidiary of FGIC Corporation, a Delaware holding company, which
is 99% owned by FGIC Holdings, Inc. (a Delaware Corporation and
wholly-owned subsidiary of General Electric Capital Corporation)
and 1% owned by Sumitomo Marine and Fire Insurance Company
Limited. Financial Guaranty, in addition to providing insurance
for the payment of interest on and principal of Municipal
Obligations held in unit investment trust and mutual fund
portfolios, provides New Issue Insurance and insurance for
secondary market issues of Municipal Obligations and for portions
of new and secondary market issues of Municipal Obligations. As
of December 31, 1993, Financial Guaranty had $1.03 billion of
qualified statutory capital, with $777.1 million in
policyholders' surplus and $252.5 million in contingency
reserves. The claims-paying ability of Financial Guaranty is
rated "AAA" by S&P, "Aaa" by Moody's and "AAA" by Fitch.

AMBAC Indemnity is a Wisconsin-domiciled stock insurance
corporation, regulated by the Office of The Commissioner of
Insurance of the State of Wisconsin and licensed to do business
in 50 states, the District of Columbia and the Commonwealth of
Puerto Rico. AMBAC Indemnity is a wholly-owned subsidiary of
AMBAC Inc., a publicly-held company. AMBAC Indemnity had
admitted assets of approximately $1.9 billion and statutory
capital of approximately $1.1 billion as of December 31, 1993.
Statutory capital consists of AMBAC Indemnity's statutory
contingency reserve and policyholders' surplus. The
claims-paying ability of AMBAC Indemnity is rated "AAA" by S&P
and "Aaa" by Moody's.

Capital Guaranty is an "Aaa/AAA" rated monoline stock
insurance company incorporated in the State of Maryland, and is a
wholly-owned subsidiary of Capital Guaranty Corporation, a
Maryland insurance holding company. Capital Guaranty Corporation
is a publicly-owned company whose shares are traded on the New
York Stock Exchange. Capital Guaranty is authorized to provide
insurance in 49 states, the District of Columbia and three U.S.
territories. As of December 31, 1993, the total statutory
policyholders' surplus and contingency reserve of Capital
Guaranty was approximately $191 million and the total admitted
assets were approximately $285 million.

Additional information concerning the insurance feature
appears in the Statement of Additional Information to which your
attention is directed.

[For left margin side bar: While the insurance is intended
to reduce financial risk, it will result in a reduction in the
Insured Series' yield.]

Special Investment Considerations Relating to the Insured Series
The insurance feature is intended to reduce financial risk, but
the cost thereof and the restrictions on investments imposed by
the guidelines in the insurance policy will result in a reduction
in the yield on the Municipal Obligations purchased by the
Insured Series.

Because coverage under certain Mutual Fund Insurance
policies may terminate upon sale of a security from the Insured
Series' portfolio, insurance with this termination feature should
not be viewed as assisting the marketability of securities in the
Insured Series' portfolio, whether or not the securities are in
default or subject to a serious risk of default. The Adviser
intends to retain any Municipal Obligations subject to such
insurance which are in default or, in the view of the Adviser, in
significant risk of default and to recommend to the Fund's Board
of Directors that the Insured Series place a value on the
insurance which will be equal to the difference between the
market value of the defaulted security and the market value of
similar securities of minimum investment grade (i.e., rated Baa
by Moody's or BBB by S&P, Fitch or Duff) which are not in
default. To the extent that the Insured Series holds defaulted
securities subject to Mutual Fund Insurance with this termination
feature, it might be limited in its ability in certain
circumstances to purchase other Municipal Obligations. While a
defaulted Municipal Obligation is held in the Insured Series'
portfolio, the Insured Series would continue to pay the insurance
premium thereon but also would be entitled to collect interest
payments from the insurer and would retain the right to collect
the full amount of principal from the insurer when the security
comes due.

Unlike certain Mutual Fund Insurance policies, New Issue
Insurance does not terminate with respect to a Municipal
Obligation once it is sold by the Insured Series. Therefore, the
Insured Series expects that the market value, and thus the
marketability, of a defaulted security covered by New Issue
Insurance generally will be greater than the market value of an
otherwise comparable defaulted security covered by Mutual Fund
Insurance with the termination feature. The Insured Series, at
its option, may purchase from Financial Guaranty secondary market
insurance ("Secondary Market Insurance") on any Municipal
Obligation purchased by the Series. By purchasing Secondary
Market Insurance, the Insured Series would obtain, upon payment
of a single premium, insurance against nonpayment of scheduled
principal and interest for the remaining term of the Municipal
Obligation, regardless of whether the Insured Series then owned
such security. Such insurance coverage would be noncancellable
and would continue in force so long as the security so insured is
outstanding and the insurer remains in business. The purpose of
acquiring Secondary Market Insurance would be to enable the
Insured Series to sell a Municipal Obligation to a third party as
a high rated insured Municipal Obligation at a market price
greater than what otherwise might be obtainable if the security
were sold without the insurance coverage.

[For left margin side bar: Securities in which the Series
invest are subject to the risk of market price fluctuations and
changes in the credit rating or financial condition of the
issuers.]

Other Investment Considerations Even though interest-bearing
securities are investments which promise a stable stream of
income, the prices of such securities are inversely affected by
changes in interest rates and, therefore, are subject to the risk
of market price fluctuations. Certain securities that may be
purchased by a Series, such as those with interest rates that
fluctuate directly or indirectly based on multiples of a stated
index, are designed to be highly sensitive to changes in interest
rates and can subject the holders thereof to extreme reductions
of yield and possibly loss of principal. The values of fixed-
income securities also may be affected by changes in the credit
rating or financial condition of the issuing entities. Once the
rating of a portfolio security has been changed, the Fund will
consider all circumstances deemed relevant in determining whether
to continue to hold the security. Certain securities purchased
by the Series, such as those rated Baa by Moody's and BBB by S&P,
Fitch and Duff, may be subject to such risk with respect to the
issuing entity and to greater market fluctuations than certain
lower yielding, higher rated fixed-income securities.
Obligations which are rated Baa by Moody's are considered medium
grade obligations; they are neither highly protected nor poorly
secured, and are considered by Moody's to have speculative
characteristics. Bonds rated BBB by S&P are regarded as having
adequate capacity to pay interest and repay principal, and while
such bonds normally exhibit adequate protection parameters,
adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay
principal for bonds in this category than in higher rated
categories. Fitch considers the obligor's ability to pay
interest and repay principal on bonds rated BBB to be adequate;
adverse changes in economic conditions and circumstances,
however, are more likely to have an adverse impact on these bonds
and, therefore, impair timely payment. Bonds rated BBB by Duff
are considered to have below average protection factors but still
considered sufficient for prudent investment. See "Appendix" in
the Statement of Additional Information. Each Series' net asset
value generally will not be stable and should fluctuate based
upon changes in the value of the Series' portfolio securities.
Securities in which each Series will invest may earn a higher
level of current income than certain shorter-term or higher
quality securities which generally have greater liquidity, less
market risk and less fluctuation in market value.

Certain municipal lease/purchase obligations in which the
Fund may invest may contain "non-appropriation" clauses which
provide that the municipality has no obligation to make lease
payments in future years unless money is appropriated for such
purpose on a yearly basis. Although "non-appropriation"
lease/purchase obligations are secured by the leased property,
disposition of the leased property in the event of foreclosure
might prove difficult. In evaluating the credit quality of a
municipal lease/purchase obligation that is unrated, the Adviser
will consider, on an ongoing basis, a number of factors including
the likelihood that the issuing municipality will discontinue
appropriating funding for the leased property.

[For left margin side bar: Changes in the Federal income
tax code could affect the performance of the Fund. Consult your
tax adviser concerning the effect of any such provisions.]

Certain provisions in the Code relating to the issuance of
Municipal Obligations may reduce the volume of Municipal
Obligations qualifying for Federal tax exemption. One effect of
these provisions could be to increase the cost of the Municipal
Obligations available for purchase by the Fund and thus reduce
the available yield. Investors should consult their tax advisers
concerning the effect of these provisions on an investment in the
Fund. Proposals that may restrict or eliminate the income tax
exemption for interest on Municipal Obligations may be introduced
in the future. If any such proposal were enacted that would
reduce the availability of Municipal Obligations for investment
by the Fund so as to adversely affect Fund shareholders, the Fund
would reevaluate its investment objective and policies and submit
possible changes in the Fund's structure to shareholders for
their consideration. If legislation were enacted that would
treat a type of Municipal Obligation as taxable, the Fund would
treat such security as a permissible Taxable Investment within
the applicable limits set forth herein.

The Fund's classification as a "non-diversified" investment
company means that the proportion of each Series' assets that may
be invested in the securities of a single issuer is not limited
by the Investment Company Act of 1940. A "diversified"
investment company is required by the Investment Company Act of
1940 generally to invest, with respect to 75% of its total
assets, not more than 5% of such assets in the securities of a
single issuer. However, the Fund intends to conduct its
operations so as to qualify each Series as a "regulated
investment company" for purposes of the Code, which requires
that, with respect to each Series' assets, at the end of each
quarter of its taxable year, (i) at least 50% of the market value
of such Series' total assets be invested in cash, U.S. Government
securities, the securities of other regulated investment
companies and other securities, with such other securities of any
one issuer limited for the purposes of this calculation to an
amount not greater than 5% of the value of such total assets and
(ii) not more than 25% of the value of such Series' total assets
be invested in the securities of any one issuer (other than U.S.
Government securities or the securities of other regulated
investment companies). Since a relatively high percentage of
each Series' assets may be invested in the securities of a
limited number of issuers, each Series' portfolio securities may
be more susceptible to any single economic, political or
regulatory occurrence than the portfolio securities of a
diversified investment company.

Investment decisions for each Series are made independently
from those of other investment companies, investment advisory
accounts, custodial accounts, individual trust accounts and
commingled funds that may be advised by the Adviser. However, if
such other investment companies or managed accounts are prepared
to invest in, or desire to dispose of, Municipal Obligations or
Taxable Investments at the same time as a Series, available
investments or opportunities for sales will be allocated
equitably to each of them. In some cases, this procedure may
adversely affect the size of the position obtained for or
disposed of by a Series or the price paid or received by a
Series.

MANAGEMENT OF THE FUND

[For left margin side bar: The Adviser, The First National
Bank of Chicago, is one of the largest commercial banks in the
United States and the largest in the mid-western United States.
The Adviser manages approximately $15.5 billion of investment
assets.]

Investment Adviser The Adviser, located at Three First National
Plaza, Chicago, Illinois 60670, is the Fund's investment adviser.

The Adviser, a wholly-owned subsidiary of First Chicago
Corporation, a registered bank holding company, is a commercial
bank offering a wide range of banking and investment services to
customers throughout the United States and around the world. As
of March 31, 1994, it was one of the largest commercial banks in
the United States and the largest in the mid-western United
States in terms of assets ($59.8 billion) and in terms of
deposits ($28.8 billion). As of March 31, 1994, the Adviser
provided personal investment management services to portfolios
containing approximately $15.5 billion in assets. The Adviser
serves as investment adviser for the Fund pursuant to an
Investment Advisory Agreement dated as of December 16, 1987 (as
revised October 1, 1993). Under the Investment Advisory
Agreement, the Adviser, subject to the supervision of the Fund's
Board of Directors and in conformity with Maryland law and the
stated policies of the Fund, manages the investment of the assets
of each Series. The Adviser is responsible for making investment
decisions for the Fund, placing purchase and sale orders and
providing research, statistical analysis and continuous
supervision of the investment portfolio. The Adviser provides
these services through its Investment Management Department. The
investment advisory services of the Adviser are not exclusive
under the terms of the Investment Advisory Agreement. The
Adviser is free to, and does, render investment advisory services
to others, including other investment companies as well as
commingled trust funds and a broad spectrum of individual trust
and investment management portfolios, which have varying
investment objectives.

The Adviser and its affiliates deal, trade and invest for
their own accounts in the types of securities in which the Series
may invest and may have deposit, loan and commercial banking
relationships with the issuers of securities purchased by a
Series. The Adviser and its affiliates sell and purchase
securities of the type in which the Series may invest to and from
other investment companies sponsored by the Administrator. The
Adviser will not invest any assets of the Series in any of these
securities purchased directly or indirectly from itself or any
affiliate. The Adviser has advised the Fund that in making its
investment decisions the Adviser does not obtain or use material
inside information in the possession of any other division or
department of the Adviser or in the possession of any affiliate
of the Adviser.

The Adviser and its affiliates presently intend to continue
to charge and collect customary account and account transaction
fees with respect to accounts through which or for which shares
of a Series are purchased or redeemed. This will result in the
receipt by the Adviser and its affiliates of customer account
fees in addition to advisory and Service Agent fees from the Fund
with respect to assets in certain accounts. See "Distribution
Plan and Shareholder Services Plan."

Under the terms of the Investment Advisory Agreement, the
Fund has agreed to pay the Adviser a monthly fee at the annual
rate of .40 of 1% of the value of each Series' average daily net
assets. No fees were paid by the Fund for the fiscal year ended
February 28, 1994, pursuant to various undertakings by the
Adviser.

The Fund's primary portfolio manager is John H. Erickson.
He has held that position since the Fund's inception, and has
been employed by the Adviser since August 1, 1979. The Adviser
also provides research services for the Fund as well as for other
funds it advises through a professional staff of portfolio
managers and security analysts.

Glass-Steagall Act The Glass-Steagall Act and other applicable
laws prohibit Federally chartered or supervised banks from
engaging in certain aspects of the business of issuing,
underwriting, selling and/or distributing securities, although
banks such as the Adviser are permitted to purchase and sell
securities upon the order and for the account of their customers.

The Adviser has advised the Fund of its belief that it may
perform the services for the Fund contemplated by the Investment
Advisory Agreement and this Prospectus without violating the
Glass-Steagall Act or other applicable banking laws or
regulations. The Adviser has pointed out, however, that there
are no cases deciding whether a bank such as the Adviser may
perform services comparable to those performed by the Adviser and
that future changes in either Federal or state statutes and
regulations relating to permissible activities of banks and their
subsidiaries and affiliates, as well as future judicial or
administrative decisions or interpretations of present and future
statutes and regulations, could prevent the Adviser from
continuing to perform such services for the Fund. If the Adviser
were to be prevented from providing such services to the Fund,
the Fund's Board of Directors would review the Fund's
relationship with the Adviser and consider taking all actions
necessary in the circumstances.

[For left margin side bar: The Dreyfus Corporation, which
manages or administers approximately $72 billion in mutual fund
assets, will assist the Adviser in providing certain
administrative services for the Fund.]

Administrator The Administrator, located at 200 Park Avenue,
New York, New York 10166, serves as the Fund's administrator
pursuant to an Administration Agreement with the Fund. Under the
Administration Agreement, the Administrator generally assists in
all aspects of the Fund's operations, other than providing
investment advice, subject to the overall authority of the Fund's
Board of Directors in accordance with Maryland law. The
Administrator was formed in 1947 and, as of May 31, 1994, managed
or administered approximately $72 billion in assets for more than
1.9 million investor accounts nationwide.

Under the terms of the Administration Agreement, the Fund
has agreed to pay the Administrator a monthly fee at the annual
rate of .20 of 1% of the value of each Series' average daily net
assets. No fees were paid by the Fund for the fiscal year ended
February 28, 1994, pursuant to various undertakings by the
Administrator.

[For left margin side bar: The Shareholder Services Group, Inc.
is the Fund's transfer agent.]

Transfer and Dividend Disbursing Agent and Custodian The
Shareholder Services Group, Inc., a subsidiary of First Data
Corporation, P.O. Box 9671, Providence, Rhode Island 02940-9671,
is the Fund's Transfer and Dividend Disbursing Agent (the
"Transfer Agent"). The Bank of New York, 110 Washington Street,
New York, New York 10286, is the Fund's Custodian.

Expenses All expenses incurred in the operation of the Fund are
borne by the Fund, except to the extent specifically assumed by
the Adviser and/or Administrator. The expenses borne by the Fund
include the following: taxes, interest, brokerage fees and
commissions, if any, fees of Directors who are not officers,
directors, employees or holders, directly or indirectly, of 5% or
more of the outstanding voting securities of the Adviser or the
Administrator, Securities and Exchange Commission fees, state
Blue Sky qualification fees, advisory and administration fees,
charges of custodians, transfer and dividend disbursing agents'
fees, certain insurance premiums, industry association fees,
outside auditing and legal expenses, costs of independent pricing
services, costs of maintaining corporate existence, costs
attributable to investor services (including, without limitation,
telephone and personnel expenses), costs of shareholders' reports
and corporate meetings and any extraordinary expenses. Class A
and Class B shares are subject to an annual service fee for
ongoing personal services relating to shareholder accounts and
services related to the maintenance of shareholder accounts. In
addition, Class B shares are subject to an annual distribution
fee for advertising, marketing and distributing Class B shares
pursuant to a distribution plan adopted in accordance with Rule
12b-1 under the Investment Company Act of 1940. See
"Distribution Plan and Shareholder Services Plan." Expenses
attributable to a particular Series are charged against the
assets of that Series; other expenses of the Fund are allocated
between the Series on the basis determined by the Board of
Directors, including, but not limited to, proportionately in
relation to the net assets of each Series.

The imposition of the investment advisory and administration
fees, as well as other operating expenses, including the fees
paid under the Distribution Plan and Shareholder Services Plan,
will have the effect of reducing the yield to investors. From
time to time, the Adviser and/or the Administrator may waive
receipt of their fees and/or voluntarily assume certain expenses
of the Fund, which would have the effect of lowering a Series'
overall expense ratio and increasing yield to investors at the
time such amounts were waived or assumed, as the case may be.
The Fund will not pay the Adviser and/or the Administrator at a
later time for any amounts which may be waived, nor will the Fund
reimburse the Adviser and/or the Administrator for any amounts
which may be assumed.

HOW TO BUY FUND SHARES

[For left margin side bar: The Fund offers a number of
convenient ways to purchase shares.]

Information Applicable to All Purchasers The Fund's distributor
is Dreyfus Service Corporation, a wholly-owned subsidiary of the
Administrator, located at 200 Park Avenue, New York, New York
10166. The shares it distributes are not deposits or obligations
of The Dreyfus Security Savings Bank, F.S.B. or the Adviser and
therefore are not insured by the FDIC.

When purchasing Fund shares, an investor must specify
whether the purchase is for Class A or Class B shares. Shares
may be purchased by all clients of the Adviser and its
affiliates, including qualified custody, agency and trust
accounts, through their accounts with the Adviser and its
affiliates, or by clients of certain other Service Agents through
their accounts with the Service Agent. Shares also may be
purchased directly through the Distributor. Stock certificates
are issued only upon request. No certificates are issued for
fractional shares. It is not recommended that the Fund be used
as a vehicle for Keogh, IRA or other qualified retirement plans.
The Fund reserves the right to reject any purchase order.

[For left margin side bar: You can open an account with as
little as $1,000 ($250 for IRAs or other retirement plans).
Subsequent investments can be as little as $100.]

The minimum initial investment for each Class is $1,000.
All subsequent investments must be at least $100. The initial
investment must be accompanied by the Fund's Account Application.

The Adviser and Service Agents may impose initial or subsequent
investment minimums which are higher or lower than those
specified above and may impose different minimums for different
types of accounts or purchase arrangements.

[For left margin side bar: Orders received by the close of
trading on the floor of the New York Stock Exchange (currently
4:00 p.m., New York time) will be executed at that day's public
offering price. Orders received later will be executed at the
next business day's price.]

If an order is received by the Transfer Agent by the close
of trading on the floor of the New York Stock Exchange (currently
4:00 p.m., New York time) on any business day (which, as used
herein, shall include each day the New York Stock Exchange is
open for business, except Martin Luther King, Jr. Day, Columbus
Day and Veterans Day), Fund shares will be purchased at the
public offering price determined as of the close of trading on
the floor of the New York Stock Exchange on that day. Otherwise,
Fund shares will be purchased at the public offering price
determined as of the close of trading on the floor of the
New York Stock Exchange on the next business day, except where
shares are purchased through a dealer as provided below.

[For left margin side bar: Net asset value is determined at
the close of trading on the floor of the New York Stock Exchange
(currently 4:00 p.m. New York time) on each business day.]

Shares of each Series are sold on a continuous basis. Net
asset value per share of each Class is determined as of the close
of trading on the floor of the New York Stock Exchange (currently
4:00 p.m., New York time), on each business day. For purposes of
determining net asset value per share, options and futures
contracts will be valued 15 minutes after the close of trading on
the New York Stock Exchange. Net asset value per share of each
Class is computed by dividing the value of each Series' net
assets represented by such Class (i.e., the value of its assets
less liabilities) by the total number of its shares of such Class
outstanding. Each Series' investments are valued each business
day by an independent pricing service approved by the Board of
Directors and are valued at fair value as determined by the
pricing service. The pricing service's procedures are reviewed
under the general supervision of the Board of Directors. For
further information regarding the methods employed in valuing
each Series' investments, see "Determination of Net Asset Value"
in the Fund's Statement of Additional Information.

Federal regulations require that an investor provide a
certified Taxpayer Identification Number ("TIN") upon opening or
reopening an account. See "Dividends, Distributions and Taxes"
and the Fund's Account Application for further information
concerning this requirement. Failure to furnish a certified TIN
to the Fund could subject an investor to a $50 penalty imposed by
the Internal Revenue Service (the "IRS").

Orders for the purchase of Fund shares received by dealers
by the close of trading on the floor of the New York Stock
Exchange on any business day and transmitted to the Distributor
by the close of its business day (normally 5:15 p.m., New York
time) will be based on the public offering price per share
determined as of the close of trading on the floor of the
New York Stock Exchange on that day. Otherwise, the orders will
be based on the next determined public offering price. It is the
dealers' responsibility to transmit orders so that they will be
received by the Distributor before the close of its business day.

[For left margin side bar: Class A shares of the
Intermediate Series are sold with a maximum sales load of 3.00%
and Class A shares of the Insured Series are sold with a maximum
sales load of 4.50%. There are several ways to reduce or
eliminate the sales load.]

Class A Shares The public offering price for Class A shares is
the net asset value per share of that Class plus a sales load as
shown below:

<TABLE>

<CAPTION>
INTERMEDIATE SERIES

TOTAL SALES LOAD

Dealers'
As a % of As a % of net Reallowance
AMOUNT OF TRANSACTION offering price asset value per as a % of
per share share offering price

<S> <C> <C> <C>
Less than $100,000 3.00 3.10 2.75
$100,000 to less than $500,000 2.50 2.55 2.25
$500,000 to less than $1,000,000 2.00 2.00 1.75
$1,000,000 and above 1.00 1.00 1.00

INSURED SERIES
TOTAL SALES LOAD
Dealers'
As a % of As a % of net Reallowance
offering price asset value per as a % of
AMOUNT OF TRANSACTION per share share offering price

Less than $50,000 4.50 4.70 4.25
$50,000 to less than $100,000 4.00 4.20 3.75
$100,000 to less than $250,000 3.00 3.10 2.75
$250,000 to less than $500,000 2.50 2.60 2.25
$500,000 To less than $1,000,000 2.00 2.00 1.75
$1,000,000 to less than $3,000,000 1.00 1.00 1.00
$3,000,000 to less than $5,000,000 0.50 0.50 0.50
$5,000,000 and above 0.25 0.25 0.25
</TABLE>

Full-time employees of NASD member firms and full-time
employees of other financial institutions which have entered into
an agreement with the Distributor pertaining to the sale of
Series' shares (or which otherwise have a brokerage-related or
clearing arrangement with an NASD member firm or other financial
institution with respect to the sale of Series' shares), their
spouses and minor children and accounts opened by a bank, trust
company or thrift institution, acting as a fiduciary, may
purchase Class A shares at net asset value, provided that they
have furnished the Distributor appropriate notification of such
status at the time of the investment and such other information
as the Distributor may request from time to time in order to
verify eligibility for this privilege. This privilege also
applies to full-time employees of financial institutions
affiliated with NASD member firms whose employees are eligible to
purchase Series' shares at net asset value. In addition, Class A
shares of each Series may be purchased at net asset value for
Fund accounts registered under the Uniform Gifts to Minors Act or
Uniform Transfers to Minors Act which are opened through FCIS.
Each Series' Class A shares also are offered at net asset value
to directors, employees and retired employees of First Chicago
Corporation, or any of its affiliates and subsidiaries, Board
members of a fund advised by the Adviser, including members of
the Fund's Board, or the spouse or minor child of any of the
foregoing.

In fiscal 1994, FCIS, an affiliate of the Adviser, retained
$124,945 with respect to the Intermediate Series, and $34,389
with respect to the Insured Series, from sales loads on Class A
shares. The dealer reallowance may be changed from time to time
but will remain the same for all dealers.

Class B Shares The public offering price for Class B shares is
the net asset value per share of that Class. No initial sales
charge is imposed at the time of purchase. A CDSC is imposed,
however, on certain redemptions of Class B shares as described
under "How to Redeem Fund Shares." FCIS may compensate certain
Service Agents for selling Class B shares at the time of purchase
from its own assets. Proceeds of the CDSC and distribution fees
payable to FCIS, in part, are used to defray these expenses. In
fiscal 1994, no amount was retained by FCIS from the CDSC on
Class B shares.

[For left margin side bar: Contact your investment
representative or Service Agent to learn how to purchase shares.]

Purchasing Shares Through Accounts with the Adviser or a Service
Agent Investors who desire to purchase shares through their
accounts at the Adviser or its affiliates or a Service Agent
should contact such entity directly for appropriate instructions,
as well as for information about conditions pertaining to the
account and any related fees. Service Agents and the Adviser may
charge clients direct fees for effecting transactions in shares,
as well as fees for other services provided to clients in
connection with accounts through which shares are purchased.
These fees, if any, would be in addition to fees received by a
Service Agent under the Shareholder Services Plan or advisory
fees received by the Adviser under the Investment Advisory
Agreement. Each Service Agent has agreed to transmit to its
clients a schedule of such fees. In addition, Service Agents and
the Adviser may receive different levels of compensation for
selling different classes of shares and may impose minimum
account and other conditions, including conditions which might
affect the availability of certain shareholder privileges
described in this Prospectus. Each investor desiring to use this
privilege should consult the Adviser or his Service Agent for
details. It is the responsibility of the Adviser and Service
Agents to transmit orders on a timely basis.

Copies of the Fund's Prospectus and Statement of Additional
Information may be obtained from the Distributor, the Adviser,
certain affiliates of the Adviser or certain Service Agents, as
well as from the Fund.

Purchasing Shares Through the Distributor Shares also may be
purchased directly through the Distributor by check or wire, or
through the TeleTransfer Privilege described below. The initial
investment must be accompanied by the Fund's Account Application
which can be obtained from the Distributor and certain Service
Agents. Checks should be made payable to "The First Prairie
Family of Funds." Payments to open new accounts which are mailed
should be sent to The First Prairie Family of Funds, P.O. Box
9387, Providence, Rhode Island 02940-9387, together with the
investor's Account Application indicating the name of the Series
and Class of shares being purchased. For subsequent investments,
the investor's Fund account number should appear on the check and
an investment slip should be enclosed and sent to The First
Prairie Family of Funds, P.O. Box 105, Newark, New Jersey 07101-
0105. Neither initial nor subsequent investments should be made
by third party check. A charge will be imposed if any check used
for investment in an investor's account does not clear. All
payments should be made in U.S. dollars and, to avoid fees and
delays, should be drawn only on U.S. banks.

Wire payments may be made if the investor's bank account is
in a commercial bank that is a member of the Federal Reserve
System or any other bank having a correspondent bank in New York
City or Chicago. Immediately available funds may be transmitted
by wire to The Bank of New York, DDA#8900052333/First Prairie
Municipal Bond Fund, Intermediate Series--Class A shares, or
DDA#8900115394/First Prairie Municipal Bond Fund, Intermediate
Series--Class B shares or DDA#8900052279/First Prairie Municipal
Bond Fund, Insured Series--Class A shares, or DDA#8900115408/
First Prairie Municipal Bond Fund, Insured Series--Class B
shares, as the case may be, for purchase of shares in the
investor's name. The wire must include the name of the Series
being purchased, the investor's account number (for new accounts,
the investor's TIN should be included instead), account
registration and dealer number, if applicable. If an investor's
initial purchase of shares of the Series is by wire, the investor
should call 1-800-645-6561 after completing his wire payment to
obtain his Fund account number. An investor must include his
Fund account number on the Fund's Account Application and
promptly mail the Account Application to the Fund, as no
redemptions will be permitted until the Account Application is
received. Further information about remitting funds in this
manner is provided in "Payment and Mailing Instructions" on the
Fund's Account Application.

Subsequent investments also may be made by electronic
transfer of funds from an account maintained in a bank or other
domestic financial institution that is an Automated Clearing
House member. The investor must direct the institution to
transmit immediately available funds through the Automated
Clearing House to The Bank of New York with instructions to
credit the investor's Fund account. The instructions must
specify the investor's Fund account registration and the
investor's Fund account number preceded by the digits "1111."

[For left margin side bar: Reduced sales loads for Class A
shares apply to certain purchases of shares of the Fund and other
eligible First Prairie funds.]

Right of Accumulation--Class A Shares Reduced sales loads apply
to any purchase of Class A shares of a Series where the dollar
amount of shares being purchased, plus the value of shares of
such Series, the other Series of the Fund, shares of certain
other funds advised by the Adviser purchased with a sales load or
acquired by a previous exchange of shares purchased with a sales
load, and shares of certain other funds advised by the
Administrator which are sold with a sales load (hereinafter
referred to as "Eligible Funds") held by an investor and any
related "purchaser" as defined in the Statement of Additional
Information, is $50,000 or more with respect to the Insured
Series or $100,000 or more with respect to the Intermediate
Series. If, for example, an investor previously purchased and
still holds Class A shares of the Insured Series, or of any other
Eligible Fund or combination thereof, with an aggregate current
market value of $40,000 and subsequently purchases Class A shares
of such Series or an Eligible Fund having a current value of
$20,000, the sales load applicable to the subsequent purchase
would be reduced to 4.00% of the offering price (4.20% of the net
asset value). All present holdings of Eligible Funds may be
combined to determine the current offering price of the aggregate
investment in ascertaining the sales load applicable to each
subsequent purchase.

To qualify for reduced sales loads, at the time of a
purchase an investor or his Service Agent must notify the
Distributor if orders are made by wire, or the Transfer Agent if
orders are made by mail. The reduced sales load is subject to
confirmation of the investor's holdings through a check of
appropriate records.

[For left margin side bar: You can purchase additional
shares by telephone after you supply the necessary information on
your Account Application.]

TeleTransfer Privilege An investor may purchase Fund shares
(minimum $500, maximum $150,000 per day) by telephone if he has
checked the appropriate box and supplied the necessary
information on the Fund's Account Application or has filed a
Shareholder Services Form with the Transfer Agent. The proceeds
will be transferred between the bank account designated in one of
these documents and the investor's Fund account. Only a bank
account maintained in a domestic financial institution which is
an Automated Clearing House member may be so designated. The
Fund may modify or terminate this Privilege at any time or charge
a service fee upon notice to shareholders. No such fee currently
is contemplated.

Investors who have selected the TeleTransfer Privilege may
request TeleTransfer purchases of Fund shares by calling 1-800-
227-0072 or, if calling from overseas, 1-401-455-3309.

SHAREHOLDER SERVICES

The services and privileges described under this heading may not
be available to clients of certain Service Agents and some
Service Agents may impose may impose certain conditions on their
clients which are different from those described in this
Prospectus. Each investor should consult his Service Agent in
this regard.

[For left margin side bar: There is no charge for exchanges
with certain other First Prairie funds.]

Exchange Privilege The Exchange Privilege enables an investor to
purchase, in exchange for Class A or Class B shares of a Series,
shares of the same Class of the other Series, shares of certain
other funds advised by the Adviser, or shares of the same Class
of certain funds advised by the Administrator, to the extent such
shares are offered for sale in the investor's state of residence.

These funds have different investment objectives that may be of
interest to investors. The Exchange Privilege may be expanded to
permit exchanges between a Series and other funds that, in the
future, may be advised by the Adviser. Investors will be
notified of any such change. If an investor desires to use this
Privilege, he should consult his Service Agent or the Distributor
to determine if it is available and whether any conditions are
imposed on its use.

To use the Privilege, an investor or his Service Agent
acting on his behalf must give exchange instructions to the
Transfer Agent in writing, by wire or by telephone. If an
investor previously has established the Telephone Exchange
Privilege, the investor may telephone exchange instructions by
calling 1-800-227-0072 or, if calling from overseas, 1-401-455-
3309. See "How to Redeem Fund Shares--Procedures." Before any
exchange, an investor must obtain and should review a copy of the
current prospectus of the fund into which the exchange is being
made. Prospectuses may be obtained from the Distributor, the
Adviser, certain affiliates of the Adviser or certain Service
Agents. The shares being exchanged must have a current value of
at least $500; furthermore, when establishing a new account by
exchange, the shares being exchanged must have a value of at
least the minimum initial investment required for the fund or
Series into which the exchange is being made. Telephone
exchanges may be made only if the appropriate "YES" box has been
checked on the Account Application, or a separate signed
Shareholder Services Form is on file with the Transfer Agent.
Upon an exchange into a new account, the following shareholder
services and privileges, as applicable and where available, will
be automatically carried over to the fund or Series into which
the exchange is made: Exchange Privilege, Wire Redemption
Privilege, Telephone Redemption Privilege, TeleTransfer Privilege
and the dividend/capital gain distribution option (except for
Dividend Sweep) selected by the investor.

If an investor is exchanging Class A shares into a fund that
charges a sales load, the investor may qualify for share prices
which do not include the sales load or which reflect a reduced
sales load, if the shares from which the investor is exchanging
were: (a) purchased with a sales load, (b) acquired by a
previous exchange from shares purchased with a sales load, or (c)
acquired through reinvestment of dividends or distributions paid
with respect to the foregoing categories of shares. To qualify,
at the time of an exchange, the investor must notify the Transfer
Agent or the investor's Service Agent must notify the
Distributor. Any such qualification is subject to confirmation
of the investor's holdings through a check of appropriate
records. See "Shareholder Services" in the Statement of
Additional Information. No fees currently are charged
shareholders directly in connection with exchanges, although the
Fund reserves the right, upon not less than 60 days' written
notice, to charge shareholders a nominal fee in accordance with
rules promulgated by the Securities and Exchange Commission. The
Fund reserves the right to reject any exchange request in whole
or in part. The Exchange Privilege may be modified or terminated
at any time upon notice to shareholders.

The exchange of shares of one fund or Series of shares of
another is treated for Federal income tax purposes as a sale of
the shares given in exchange by the shareholder and, therefore,
an exchange shareholder may realize a taxable gain or loss.

Auto-Exchange Privilege The Auto-Exchange Privilege enables an
investor to invest regularly (on a semi-monthly, monthly,
quarterly or annual basis), in exchange for Class A or Class B
shares of a Series, in shares of the same class of the other
Series, certain other hands in the First Prairie Family of Funds
or certain funds advised by the Administrator of which he is
currently an investor. The amount an investor designates, which
can be expressed either in terms of a specific dollar or share
amount ($100 minimum), will be exchanged automatically on the
first and/or fifteenth of the month according to the exchange
schedule that the investor has selected. Shares will be
exchanged at the then-current net asset value; however, a sales
load may be charged with respect to exchanges of Class A shares
into hands sold with a sales load. No CDSC will be imposed on
Class B shares at the time of an exchange; however, Class B
shares acquired through an exchange will be subject on redemption
to the higher CDSC applicable to the exchanged or acquired
shares. The CDSC applicable on redemption of the acquired Class
B shares will be calculated from the date of the initial purchase
of the Class B shares exchanged. See "Shareholder Services" in
the Statement of Additional Information. The right to exercise
this Privilege may be modified or cancelled by the Fund or the
Transfer Agent. The investor or the investor's Service Agent may
modify or cancel this Privilege at any time by writing to The
First Prairie Family of Funds, P.O. Box 9671, Providence, Rhode
Island 02940-9671. The Fund may charge a service fee for the use
of this Privilege. No such fee currently is contemplated. The
exchange of shares of one fund or Series for shares of another is
treated for Federal income tax purposes as a sale of the shares
given in exchange by the shareholder and, therefore, an
exchanging shareholder may realize a taxable gain or loss. For
more information concerning this Privilege and the funds eligible
to participate in this Privilege, or to obtain an Auto-Exchange
Authorization Form, please call toll free in Illinois
1-800-621-6592, or, outside Illinois 1-800-537-4938 if Fund
shares were purchased through FCIS, or 1-800-645-6561 if Fund
shares were purchased through the Distributor.

[For left margin side bar: You can purchase shares
automatically at regular intervals which you select.]

AUTOMATIC Asset Builder AUTOMATIC Asset Builder permits an
investor to purchase shares of a Series (minimum of $100 and
maximum of $150,000 per transaction) at regular intervals
selected by the investor. Shares are purchased by transferring
funds from the bank account designated by an investor. At the
investor's option, the bank account designated by the investor
will be debited in the specified amount, and shares will be
purchased, once a month, on either the first or fifteenth day, or
twice a month, on both days. Only an account maintained at a
domestic financial institution which is an Automated Clearing
House member may be so designated. To establish an AUTOMATIC
Asset Builder account, the investor must file an authorization
form with the Transfer Agent. The necessary authorization form
may be obtained from the Distributor, the Adviser, certain
affiliates of the Adviser or certain Service Agents. An investor
may cancel this Privilege or change the amount of purchase at any
time by mailing written notification to The First Prairie Family
of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671, and
the notification will be effective three business days following
receipt. The Fund may modify or terminate this Privilege at any
time or charge a service fee. No such fee currently is
contemplated.

[For left margin side bar: Many Federal payments are
eligible for full or partial direct deposit into your account to
purchase shares.]

Government Direct Deposit Privilege Government Direct Deposit
Privilege enables an investor to purchase shares (minimum of $100
and maximum of $50,000 per transaction) by having Federal salary,
Social Security or certain veterans', military or other payments
from the Federal government automatically deposited into the
investor's Fund account. An investor may deposit as much of such
payments as the investor elects. To enroll in Government Direct
Deposit, the investor must file with the Transfer Agent a
completed Direct Deposit Sign-Up Form for each type of payment
that the investor desires to include in this Privilege. The
appropriate form may be obtained from the Distributor, the
Adviser, certain affiliates of the Adviser or certain Service
Agents. Death or legal incapacity will terminate an investor's
participation in this Privilege. An investor may elect at any
time to terminate his participation by notifying in writing the
appropriate Federal agency. Further, the Fund may terminate an
investor's participation upon 30 days' notice to the investor.

[For left margin side bar: You can withdraw a specified
dollar amount from your account every month or quarter.]

Automatic Withdrawal Plan The Automatic Withdrawal Plan permits
an investor to request withdrawal of a specified dollar amount
(minimum of $50) on either a monthly or quarterly basis if the
investor has a $5,000 minimum account. An application for the
Automatic Withdrawal Plan can be obtained from the Distributor,
the Adviser, certain affiliates of the Adviser or certain Service
Agents. The Automatic Withdrawal Plan may be ended at any time
by the investor, the Fund or the Transfer Agent. Shares for
which certificates have been issued may not be redeemed through
the Automatic Withdrawal Plan.

Class B shares withdrawn pursuant to the Automatic
Withdrawal Plan will be subject to any applicable CDSC.
Purchases of additional Class A shares where a sales load is
imposed concurrently with withdrawals of Class A shares generally
are undesirable.

[For left margin side bar: You can "sweep" your dividends
and capital gain distributions into certain other First Prairie
funds.]

Dividend Options Dividend Sweep enables an investor to invest
automatically dividends or dividends and capital gain
distributions, if any, paid by the Series in shares of another
fund or series in the First Prairie Family of Funds or certain
other funds advised or administered by the Administrator of which
the investor is a shareholder. Shares of the other fund will be
purchased at the then-current net asset value; however, a sales
load may be charged with respect to investments in shares of a
fund sold with a sales load. If an investor is investing in a
fund that charges a sales load, the investor may qualify for
share prices which do not include the sales load or which reflect
a reduced sales load. If an investor is investing in a fund that
charges a CDSC, the shares purchased will be subject to the CDSC,
if any, applicable to the purchased shares. See "Shareholder
Services" in the Statement of Additional Information. Dividend
ACH permits an investor to transfer electronically dividends or
dividends and capital gain distributions, if any, from the Fund
to a designated bank account. Only an account maintained at a
domestic financial institution which is an Automated Clearing
House member may be so designated. Banks may charge a fee for
this service.

For more information concerning these privileges or to
request a Dividend Options Form, investors should call toll free
in Illinois 1-800-621-6592, or, outside Illinois, 1-800-537-4938
if Fund shares were purchased through FCIS, or 1-800-645-6561 if
Fund shares were purchased through the Distributor. To cancel
these privileges, the investor or the investor's Service Agent
must mail written notification to The First Prairie Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. These
privileges will be cancelled with respect to Fund shares
exchanged for shares of another hand through the Exchange
Privilege or Auto-Exchange Privilege. Enrollment in or
cancellation of these privileges is effective three business days
following receipt by the Transfer Agent. These privileges are
available only for existing accounts and may not be used to open
new accounts. Minimum subsequent investments do not apply for
Dividend Sweep. The Fund may modify or terminate these privileges
at any time or charge a service fee. No such fee currently is
contemplated.

[For left margin side bar: By signing a Letter of Intent to
purchase additional Class A shares within 13 months, you become
eligible for any reduced sales charges applying to the total
purchase.]

Letter of Intent--Class A Shares By signing a Letter of Intent
form, available from the Distributor, the Adviser, certain
affiliates of the Adviser or certain Service Agents, an investor
becomes eligible for the reduced sales load applicable to the
total number of Eligible Fund shares purchased in a 13-month
period pursuant to the terms and conditions set forth in the
Letter of Intent. A minimum initial purchase of $5,000 is
required. To compute the applicable sales load, the offering
price of shares the investor holds (on the date of submission of
the Letter of Intent) in any Eligible Fund that may be used
toward "Right of Accumulation" benefits described above may be
used as a credit toward completion of the Letter of Intent.
However, the reduced sales load will be applied only to new
purchases.

The Transfer Agent will hold in escrow 5% of the amount
indicated in the Letter of Intent for payment of a higher sales
load if the investor does not purchase the full amount indicated
in the Letter of Intent. The escrow will be released when the
investor fulfills the terms of the Letter of Intent by purchasing
the specified amount. If the investor's purchases qualify for a
further sales load reduction, the sales load will be adjusted to
reflect the investor's total purchase at the end of 13 months.
If total purchases are less than the amount specified, the
investor will be requested to remit an amount equal to the
difference between the sales load actually paid and the sales
load applicable to the aggregate purchases actually made. If
such remittance is not received within 20 days, the Transfer
Agent, as attorney-in-fact pursuant to the terms of the Letter of
Intent, will redeem an appropriate number of Class A shares held
in escrow to realize the difference. Signing a Letter of Intent
does not bind the investor to purchase, or the Fund to sell, the
full amount indicated at the sales load in effect at the time of
signing, but the investor must complete the intended purchase to
obtain the reduced sales load. At the time an investor purchases
shares, he must indicate his intention to do so under a Letter of
Intent. Purchases pursuant to a Letter of Intent will be made at
the then current net asset value, plus the lower of the
applicable sales load in effect at the time such Letter of Intent
was executed or the current applicable sales load.

HOW TO REDEEM FUND SHARES

[For left margin side bar: You can redeem Fund shares at
any time.]

General An investor may request redemption of his Class A or
Class B shares at any time. Redemption requests should be
transmitted to the Transfer Agent as described below. When a
request is received in proper form, the Fund will redeem the
shares at the next determined net asset value as described below.

If an investor holds Fund shares of more than one Class, any
request for redemption must specify the Class of shares being
redeemed. If an investor fails to specify the Class of shares to
be redeemed or if an investor owns fewer shares of the Class than
specified to be redeemed, the redemption request may be delayed
until the Transfer Agent receives further instructions from the
investor or his Service Agent.

The Fund imposes no charges (other than any applicable CDSC
with respect to Class B shares) when shares are redeemed.
Service Agents may charge a nominal fee for effecting redemptions
of Fund shares. Any certificates representing a Series' shares
being redeemed must be submitted with the redemption request.
The value of the shares redeemed may be more or less than their
original cost, depending upon the Series' then-current net asset
value.

The Fund ordinarily will make payment for all shares
redeemed within seven days after receipt by the Transfer Agent of
a redemption request in proper form, except as provided by the
rules of the Securities and Exchange Commission. However, if an
investor has purchased Fund shares by check, by TeleTransfer
Privilege or through AUTOMATIC Asset Builder and subsequently
submits a written redemption request to the Transfer Agent, the
redemption proceeds will be transmitted to the investor promptly
upon bank clearance of the investor's purchase check,
TeleTransfer purchase or AUTOMATIC Asset Builder order, which may
take up to eight business days or more. In addition, the Fund
will not honor Redemption Checks under the Check Redemption
Privilege, and will reject requests to redeem shares by wire or
telephone or pursuant to the TeleTransfer Privilege, for a period
of eight business days after receipt by the Transfer Agent of the
purchase check, the TeleTransfer purchase or the AUTOMATIC Asset
Builder order against which such redemption is requested. These
procedures will not apply if the investor's shares were purchased
by wire payment, or if the investor otherwise has a sufficient
collected balance in his account to cover the redemption request.

Prior to the time any redemption is effective, dividends on such
shares will accrue and be payable, and the investor will be
entitled to exercise all other rights of beneficial ownership.
Fund shares will not be redeemed until the Transfer Agent has
received the investor's Account Application.

The Fund reserves the right to redeem an investor's
account at the Fund's option upon not less than 45 days' written
notice if the account's net asset value is $500 or less and
remains so during the notice period.

Contingent Deferred Sales Charge--Class B Shares A CDSC payable
to FCIS and other Service Agents is imposed on any redemption of
Class B shares which reduces the current net asset value of an
investor's Class B shares to an amount which is lower than the
dollar amount of all payments by the investor for the purchase of
Class B shares of the Fund held by the investor at the time of
redemption. No CDSC will be imposed to the extent that the net
asset value of the Class B shares redeemed does not exceed
(i) the current net asset value of Class B shares acquired
through reinvestment of dividends or capital gain distributions,
plus (ii) increases in the net asset value of an investor's Class
B shares above the dollar amount of all the investor's payments
for the purchase of Class B shares of the Fund held by the
investor at the time of redemption.

If the aggregate value of Class B shares redeemed has
declined below their original cost as a result of the Series'
performance, a CDSC may be applied to the then-current net asset
value rather than the purchase price.

In circumstances where the CDSC is imposed, the amount of
the charge will depend on the number of years from the time the
investor purchased the Class B shares until the time of
redemption of such shares. Solely for purposes of determining
the number of years from the time of any payment for the purchase
of Class B shares, all payments during a month will be aggregated
and deemed to have been made on the first day of the month. The
following table sets forth the rates of the CDSC:

CDSC as a % of
Year Since Purchase Amount Invested or
Payment was Made Redemption Proceeds
First 3.00
Second 3.00
Third 2.00
Fourth 2.00
Fifth 1.00
Sixth 0.00

In determining whether a CDSC is applicable to a redemption,
the calculation will be made in a manner that results in the
lowest possible rate. It will be assumed that the redemption is
made first of amounts representing shares acquired pursuant to
the reinvestment of dividends and distributions; then of amounts
representing the increase in net asset value of Class B shares
above the total amount of payments for the purchase of Class B
shares made during the preceding five years; then of amounts
representing the cost of shares purchased five years prior to the
redemption; and finally, of amounts representing the cost of
shares held for the longest period of time within the applicable
five-year period.

For example, assume an investor purchased 100 shares at $10
a share for a cost of $1,000. Subsequently, the shareholder
acquired five additional shares through dividend reinvestment.
During the second year after the purchase the investor decided to
redeem $500 of his or her investment. Assuming at the time of
the redemption the net asset value had appreciated to $12 per
share, the value of the investor's shares would be $1,260 (105
shares at $12 per share). The CDSC would not be applied to the
value of the reinvested dividend shares and the amount which
represents appreciation ($260). Therefore, $240 of the $500
redemption proceeds ($500 minus $260) would be charged at a rate
of 3% (the applicable rate in the second year after purchase) for
a total CDSC of $7.20.

Waiver of CDSC The CDSC will be waived in connection with (a)
redemptions made within one year after the death or disability,
as defined in Section 72(m)(7) of the Code, of the shareholder,
(b) redemptions by employees participating in qualified or
nonqualified employee benefit plans or other programs where (i)
the employers or affiliated employers maintaining such plans or
programs have a minimum of 250 employees eligible for
participation in such plans or programs or (ii) such plan's or
program's aggregate investment in the Fund, certain other funds
advised by the Adviser and certain other funds advised by the
Administrator exceeds one million dollars, (c) redemptions as a
result of a combination of any investment company with the Fund
by merger, acquisition of assets or otherwise, (d) a distribution
following retirement under a tax-deferred retirement plan or upon
attaining age 70-1/2 in the case of an IRA or Keogh plan or
custodial account pursuant to Section 403(b) of the Code, and
(e) redemptions by such shareholders as the Securities and
Exchange Commission or its staff may permit. If the Fund's
Directors determine to discontinue the waiver of the CDSC, the
disclosure in the Fund's prospectus will be revised
appropriately. Any Fund shares subject to a CDSC which were
purchased prior to the termination of such waiver will have the
CDSC waived as provided in the Fund's prospectus at the time of
the purchase of such shares.

To qualify for a waiver of the CDSC, at the time of
redemption the investor must notify the Transfer Agent or the
investor's Service Agent must notify the Distributor or FCIS.
Any such qualification is subject to confirmation of the
investor's entitlement.

[For left margin side bar: The Fund offers a number of
convenient ways to access your investment.]

Procedures An investor who has purchased shares through his
account at the Adviser or a Service Agent must redeem shares by
following instructions pertaining to such account. If an
investor has given his Service Agent authority to instruct the
Transfer Agent to redeem shares and to credit the proceeds of
such redemption to a designated account at the Service Agent, the
investor may redeem shares only in this manner and in accordance
with a written redemption request pursuant to the regular
redemption procedure described below. Investors who wish to use
the other redemption methods described below, must arrange with
their Service Agents for delivery of the required application(s)
to the Transfer Agent. It is the responsibility of the Adviser
or the Service Agent to transmit the redemption order and credit
the investor's account with the redemption proceeds on a timely
basis. Other investors may redeem shares by using the regular
redemption procedure through the Transfer Agent, the Check
Redemption Privilege, the Wire Redemption Privilege, the
Telephone Redemption Privilege or the TeL Transfer Privilege, as
described below.

An investor's redemption request may direct that the
redemption proceeds be used to purchase shares of other funds
advised by the Adviser or advised or administered by the
Administrator that are not available through the Exchange
Privilege. The applicable CDSC will be charged upon the
redemption of Class B shares. The investor's redemption proceeds
will be invested in shares of the other fund on the next business
day. Before making such a request, the investor must obtain and
should review a copy of the current prospectus of the fund being
purchased. Prospectuses may be obtained from the Adviser, the
Distributor or certain Service Agents. The prospectus will
contain information concerning minimum investment requirements
and other conditions that may apply to the investor's purchase.

During times of drastic economic or market conditions, an
investor may experience difficulty in contacting the Transfer
Agent by telephone to request a redemption or exchange of shares
of a Series. In such cases, investors should consider using the
other redemption procedures described herein. Use of these other
redemption procedures may result in the investor's redemption
request being processed at a later time than it would have been
if telephone redemption had been used. During the delay, the
Series' net asset value may fluctuate.

[For left margin side bar: Shares may be redeemed by
written request.]

Regular Redemption Under the regular redemption procedure, an
investor may redeem shares by written request, indicating the
Series from which shares are to be redeemed, mailed to The First
Prairie Family of Funds, P.O. Box 9671, Providence, Rhode Island
02940-9671. Redemption requests must be signed by each
shareholder, including each owner of a joint account, and each
signature must be guaranteed. The Transfer Agent has adopted
standards and procedures pursuant to which signature guarantees
in proper form generally will be accepted from domestic banks,
brokers, dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and savings
associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer
Agents Medallion Program ("STAMP") and the Stock Exchanges
Medallion Program. For more information with respect to
signature-guarantees, please call the telephone number shown on
the front cover.

Redemption proceeds of at least $1,000 will be wired to any
member bank of the Federal Reserve System in accordance with a
written signature-guaranteed request.

[For left margin side bar: The Fund provides free
redemption checks for Class A which you can use in amounts of
$500 or more.]

Check Redemption Privilege--Class A Shares An investor may
request on the Account Application, Shareholder, Services Form or
by later written request to the Fund that the Fund provide
Redemption Checks drawn on the Fund's account. Redemption Checks
may be made payable to the order of any person in the amount of
$500 or more. Potential fluctuations in the net asset value of
the Series' Class A shares should be considered in determining
the amount of the check. Redemption Checks should not be used to
close an account. Redemption Checks are free, but the Transfer
Agent will impose a fee for stopping payment of a Redemption
Check at the investor's request or if the Transfer Agent cannot
honor the Redemption Check due to insufficient funds or other
valid reason. An investor should date his Redemption Checks with
the current date when the investor writes them. Please do not
postdate Redemption Checks. If an investor does, the Transfer
Agent will honor, upon presentment, even if presented before the
date of the check, all postdated Redemption Checks which are
dated within six months of presentment of payment, if they are
otherwise in good order. Shares for which certificates have been
issued may not be redeemed by Redemption Check. This Privilege
may be modified or terminated at any time by the Fund or the
Transfer Agent upon notice to holders of Class A shares.

[For left margin side bar: You can redeem shares by wire if
you check the appropriate box on your Account Application.]

Wire Redemption Privilege An investor may request by wire or
telephone that redemption proceeds (minimum $1,000) be wired to
the investor's account at a bank which is a member of the Federal
Reserve System, or a correspondent bank if the investor's bank is
not a member. To establish the Wire Redemption Privilege, an
investor must check the appropriate box and supply the necessary
formation on the Fund's Account Application or file a Shareholder
Services Form with the Transfer Agent. An investor may direct
that redemption proceeds be paid by check (maximum $150,000 per
day) made out to the owners of record and mailed to the
investor's address. Redemption proceeds of less than $1,000 will
be paid automatically by check. Holders of jointly registered
Fund or bank accounts may have redemption proceeds of only up to
$250,000 wired within any 30-day period. An investor may
telephone redemption requests by calling 1-800-227-0072 or, if
calling from overseas, l-401-455-3309. The Fund reserves the
right to refuse any redemption request, including requests made
shortly after a change of address, and may limit the amount
involved or the number of such requests. This Privilege may be
modified or terminated at any time by the Transfer Agent or the
Fund. The Fund's Statement of Additional Information sets forth
instructions for transmitting redemption requests by wire.
Shares for which certificates have been issued are not eligible
for this Privilege.

[For left margin side bar: You can redeem shares by
telephone if you have checked the appropriate box on your Account
Application.]

Telephone Redemption Privilege An investor may redeem Fund
shares (maximum $150,000 per day) by telephone if the investor
has checked the appropriate box on the Fund's Account Application
or has filed a Shareholder Services Form with the Transfer Agent.

The redemption proceeds will be paid by check and mailed to the
investor's address. An investor may telephone redemption
instructions by calling 1-800-221-0072 or, if calling from
overseas, 1-401-455-3309. The Fund reserves the right to refuse
any request made by telephone, including requests made shortly
after a change of address, and may limit the amount involved or
the number of telephone redemption requests. This Privilege may
be modified or terminated at any time by the Transfer Agent or
the Fund. Shares for which certificates have been issued are not
eligible for this Privilege.

[For left margin side bar: Call 1-800-227-0072 for
TeleTransfer transactions.]

TeleTransfer Privilege An investor may redeem Fund shares
(minimum $500 per day) by telephone if he has checked the
appropriate box and supplied the necessary information on the
Fund's Account Application or has filed a Shareholder Services
Form with the Transfer Agent. The proceeds will be transferred
between the investor's Fund account and the bank account
designated in one of these documents. Only such an account
maintained in a domestic financial institution which is an
Automated Clearing House member may be so designated. Redemption
proceeds will be on deposit in the investor's account at an
Automated Clearing House member bank ordinarily two days after
receipt of the redemption request or, at the investor's request,
paid by check (maximum $150,000 per day) and mailed to the
investor's address. Holders of jointly registered Fund or bank
accounts may deem through the TeleTransfer Privilege for transfer
to their bank account only up to $250,000 within any 30-day
period. The Fund reserves the right to refuse any request made
by telephone, including requests made shortly after a change of
address, and may limit the amount involved or the number of such
requests. The Fund may modify or terminate this Privilege at any
time or charge a service fee upon notice to shareholders. No
such fee currently is contemplated.

Investors who have selected the TeleTransfer Privilege may
request a TeleTransfer redemption of Fund shares by calling
1-800-227-0072 or, if calling from overseas, 1-401-455-3309.
Shares issued in certificate form are not eligible for this
Privilege.

DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN

Class A and Class B shares are subject to a Shareholder Services
Plan and Class B shares only are subject to a Distribution Plan.

Distribution Plan Under the Distribution Plan, adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940, the Fund
pays for advertising, marketing and distributing Class B shares
at an annual rate of up to .50 of l% of the value of the average
daily net assets of Class B. Under the Distribution Plan, the
Fund may make payments to Service Agents, including FCIS and the
Distributor, in respect of these services. The Fund determines
the amounts to be paid to Service Agents. Service Agents receive
such fees in respect of the average daily value of Class B shares
owned by their clients. From time to time, Service Agents may
defer or waive receipt of fees under the Distribution Plan while
retaining the ability to be paid by the Fund under the
Distribution Plan thereafter. The fees payable to Service Agents
under the Distribution Plan for advertising, marketing and
distributing Class B shares are payable without regard to actual
expenses incurred.

Shareholder Services Plan Under the Shareholder Services Plan,
the Fund pays Service Agents, including FCIS and the Distributor,
for the provision of certain services to the holders of Class A
and Class B shares a fee at the annual rate of up to .25 of
1% of the value of the average daily net assets of Class A and
Class B. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder
inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of
shareholder accounts. The Fund determines the amounts to be paid
to Service Agents. Each Service Agent is required to disclose to
its clients any compensation payable to it by the Fund pursuant
to the Shareholder Services Plan and any other compensation
payable by their clients in connection with the investment of
their assets in Class A or Class B shares.

DIVIDENDS, DISTRIBUTIONS AND TAXES

[For left margin side bar: The Fund ordinarily declares
dividends from each Series' net investment on each business day.]

The Fund ordinarily declares dividends from each Series' net
investment income on each business day. Shares of each Series
begin earning dividends on the day immediately available finds
("Federal Funds" (monies of member banks within the Federal
Reserve System which are held on deposit at a Federal Reserve
Bank)) are received by the Transfer Agent in written or
telegraphic form. If a purchase order is not accompanied by
remittance in Federal Funds, there may be a delay between the
time the purchase becomes effective and the time the shares
purchased start earning dividends. If an investor's payment is
not made in Federal Funds, it must be converted into Federal
Funds. This usually occurs within one business day of receipt of
a bank wire and within two business days of receipt of a check
drawn on a member bank of the Federal Reserve System. Checks
drawn on banks which are not members of the Federal Reserve
System may take considerably longer to convert into Federal
Funds.

[For left margin side bar: Dividends are usually paid on
the last calendar day of each month and automatically reinvested
in additional shares with no sales charge, or paid in cash if you
so request.]

Dividends usually are paid on the last calendar day of each
month, and are automatically reinvested in additional shares of
the Series from which they were paid at net asset value without a
sales load or, at the investor's option, paid in cash. Each
Series' earnings for Saturdays, Sundays and holidays are declared
as dividends on the preceding business day. If an investor
redeems all shares in his account at any time during the month,
all dividends to which such investor is entitled are paid to the
investor along with the proceeds of the redemption.
Distributions from net realized securities gains, if any,
generally are declared and paid by each Series once a year, but
each Series may make distributions on a more frequent basis to
comply with the distribution requirements of the Code, in all
events in a manner consistent with the provisions of the
Investment Company Act of 1940. The Fund will not make
distributions from net realized securities gains unless capital
loss carryovers, if any, have been utilized or have expired.
Investors may choose whether to receive distributions in cash or
to reinvest in additional shares of the same Class of the Series
from which distributions were paid at net asset value without a
sales load. All expenses are accrued daily and deducted before
declaration of dividends to investors. Dividends paid by each
Class will be calculated at the same time and in the same manner
and will be of the same amount, except that the expenses
attributable solely to Class A or Class B will be borne
exclusively by such Class. Class B shares will receive lower per
share dividends than Class A shares because of the higher
expenses borne by Class B. See "Fee Table."

[For left margin side bar: Dividends from certain
investments and capital gain distributions are not tax exempt.]

Except for dividends from Taxable Investments, the Fund
anticipates that a substantial portion of the dividends paid by a
Series will not be subject to Federal income tax. Dividends
derived from Taxable Investments, together with distributions
from any net realized short-term securities gains and all or a
portion of any gains realized from the sale of other disposition
of certain market discount bonds, paid by a Series are taxable as
ordinary income whether received in cash or reinvested in
additional Fund shares. No dividend paid by a Series will
qualify for the dividends received deduction allowable to certain
U.S. corporations. Distributions from net realized long-term
securities gains of a Series generally are taxable as long-term
capital gains for Federal income tax purposes if an investor is a
citizen or resident of the United States. Dividends and
distributions attributable to gains derived from securities
transactions and from the use of certain of the investment
techniques described under "Description of the Fund--Investment
Techniques," will be subject to Federal income tax. The Code
provides that the net capital gain of an individual generally
will not be subject to Federal income tax at a rate in excess of
28%. Under the Code, interest on indebtedness incurred or
continued to purchase or carry Series' shares which is deemed to
relate to exempt-interest dividends is not deductible.

The Code provides for the "carryover" of some or all of the
sales load imposed on a Series' Class A shares if an investor
exchanges his Series' Class A shares for shares of another Series
or fund advised by the Adviser or the Administrator within 91
days of purchase and such other Series or fund reduces or
eliminates its otherwise applicable sales load charge for the
purpose of the exchange. In this case, the amount of the sales
load charge for the Series' Class A shares, up to the amount of
the reduction of the sales load charge on the exchange, is not
included in the basis of such Series' shares for purposes of
computing gain or loss on the exchange, and instead is added to
the basis of the other Series or fund shares received in the
exchange.

Although all or a substantial portion of the dividends paid
by a Series may be excluded by shareholders of the Series from
their gross income for Federal income tax purposes, the Series
may purchase specified private activity bonds, the interest from
which may be (i) a preference item for purposes of the
alternative minimum tax, (ii) a component of the "adjusted
current earnings" preference item for purposes of the corporate
alternative minimum tax as well as a component in computing the
corporate environmental tax or (iii) a factor in determining the
extent to which an investor's Social Security benefits are
taxable. If a Series purchases such securities, the portion of
such Series' dividends related thereto will not necessarily be
tax exempt to an investor who is subject to the alternative
minimum tax and/or tax on Social Security benefits and may cause
an investor to be subject to such taxes.

Taxable dividends derived from net investment income and
distributions from net realized short-term securities gains paid
by a Series to a foreign investor generally are subject to U.S.
nonresident withholding taxes at the rate of 30%, unless the
foreign investor claims the benefit of a lower rate specified in
a tax treaty. Distributions from net realized long-term
securities gains paid by a Series to a foreign investor as well
as the proceeds of any redemptions from a foreign investor's
account, regardless of the extent to which gain or loss may be
realized, generally will not be subject to U.S. nonresident
withholding tax. However, such distributions may be subject to
backup withholding, as described below, unless the foreign
investor certifies his non-U.S. residency status.

[For left margin side bar: Notice as to the tax status of
your dividends and distributions will be mailed to you each year.

You will also receive regular summaries of your account.]

Notice as to the tax status of an investor's dividends and
distributions will be mailed to such investor annually. Each
investor also will receive periodic summaries of such investor's
account which will include information as to dividends and
distributions from net securities gains, if any, paid during the
year. These statements set forth the dollar amount of income
exempt from Federal tax and the dollar amount, if any, subject to
Federal tax, the amount, if any, of interest which gives rise to
a preference item for the purpose of the alternative minimum tax
and the percentage of tax exempt income attributable to the
respective states. These dollar amounts will vary depending on
the size and length of time the investor has invested in a
Series. If a Series pays dividends derived from taxable income,
it intends to designate as taxable the same percentage of the
day's dividends as the actual taxable income earned on that day
bears to total income earned on that day. Thus, the percentage
of the dividend designated as taxable, if any, may vary from day
to day.

[For left margin side bar: An investor who does not furnish
the Fund with a correct Taxpayer Identification Number, may be
subject to 31% withholding tax on all taxable dividends,
distributions and redemption proceeds.]

Federal regulations generally require the Fund to withhold
("backup withholding") and remit to the U.S. Treasury 31% of
taxable dividends, distributions from net realized securities
gains and the proceeds of any redemption, regardless of the
extent to which gain or loss may be realized, paid to a
shareholder if such shareholder fails to certify either that the
TIN furnished in connection with opening an account is correct or
that such shareholder has not received notice from the IRS of
being subject to backup withholding as a result of a failure to
properly report taxable dividend or interest income on a Federal
income tax return. Furthermore, the IRS may notify the Fund to
institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has failed to
properly report taxable dividend and interest income on a Federal
income tax return.

Management of the Fund believes that each Series has
qualified for the fiscal year ended February 28,1994 as a
"regulated investment company" under Subchapter M of the Code and
has satisfied conditions which will enable interest from
Municipal Obligations, which is exempt from Federal income tax
with respect to the Series, to retain such tax exempt status when
distributed to the shareholders of the Series. As a regulated
investment company, the Series will not pay Federal income taxes
on net investment income and net realized capital gains otherwise
taxable to it that is distributed to investors. Each Series is
subject to a non-deductible 4% excise tax, measured with respect
to certain undistributed amounts of taxable investment income and
capital gains, if any.

The foregoing is a general summary of the applicable
provisions of the Code and Treasury regulations presently in
effect, and does not address state or local taxes. It does not
discuss all of the aspects of Federal income taxation that may be
relevant to investors who are subject to special treatment under
the Federal income tax laws (for example, foreign corporations or
persons). In addition, dividends and distributions from the
Series or Series shares themselves may be subject to state and
local taxes. Investors should consult their tax advisers
regarding specific questions as to Federal, state and local tax
law.

PERFORMANCE INFORMATION

For purposes of advertising, performance is calculated on several
bases, including current yield, tax equivalent yield, average
annual total return and/or total return. These total return
figures reflect changes in the price of the shares and assume
that any income dividends and/or capital gains distributions made
by the Fund during the measuring period were reinvested in shares
of the same Class. Class A total return figures include the
maximum initial sales charge and Class B total return figures
include any applicable CDSC. These figures also take into
account any applicable service and distribution fees. As a
result, at any given time, the performance of Class B should be
expected to be lower than that of Class A. Performance for each
Class will be calculated separately.

[For left margin side bar: "Current yield" is the Series'
net investment income over a 30-day period, expressed as an
annual percentage and assuming all income is reinvested.]

Current yield refers to the applicable Series' annualized
net investment income per share over a 30-day period, expressed
as a percentage of the maximum offering price per share in the
case of Class A or the net asset value per share in the case of
Class B at the end of the period. For purposes of calculating
current yield, the amount of net investment income per share
during that 30-day period, computed in accordance with regulatory
requirements, is compounded by assuming that it is reinvested at
a constant rate over a six-month period. An identical result is
then assumed to have occurred during a second six-month period
which, when added to the result for the first six months,
provides an "annualized" yield for an entire one-year period.
Calculations of each Series' current yield may reflect absorbed
expenses pursuant to any undertaking that may be in effect. See
"Management of the Fund."

Tax equivalent yield is calculated by determining the pre-
tax yield which, alter being taxed at a stated rate, would be
equivalent to a stated current yield calculated as described
above.

Average annual total return is calculated pursuant to a
standardized formula which assumes that an investment in the
applicable Series was purchased with an initial payment of $1,000
and that the investment was redeemed at the end of a stated
period of time, after giving effect to the reinvestment of
dividends and distributions during the period. The return is
expressed as a percentage rate which, if applied on a compounded
annual basis, would result in the redeemable value of the
investment at the end of the period. Advertisements of each
Series' performance will include the Series' average annual total
return of Class A and Class B for one, five and ten year periods,
or for shorter time periods depending upon the length of time
during which the Series has operated. Computations of average
annual total return for periods of less than one year represent
an annualization of the Series' actual return for the applicable
period.

[For left margin side bar: "Total return" combines the
income and principal changes for a specified period, assuming all
dividends and distributions are reinvented.]

Total return is computed on a per share basis and assumes
the reinvestment of dividends and distributions. Total return
generally is expressed as a percentage rate which is calculated
by combining the income and principal changes for a specified
period and dividing by the maximum offering price per share in
the case of Class A or the net asset value per share in the case
of Class B at the beginning of the period. Advertisements may
include the percentage rate of total return or may include the
value of a hypothetical investment at the end of the period which
assumes the application of the percentage rate of total return.
Total return also may be calculated by using the net asset value
per share at the beginning of the period instead of the maximum
offering price per share at the beginning of the period for Class
A shares or without giving effect to any applicable CDSC at the
end of the period for Class B shares. Calculations based on the
net asset value per share do not reflect the deduction of the
sales load which, if reflected, would reduce the performance
quoted.

[For left margin side bar: Performance varies from time to
time and past results are not necessarily representative of
future results.]

Performance will vary from time to time and past results are
not necessarily representative of future results. Each investor
should remember that performance is a function of portfolio
management in selecting the type and quality of portfolio
securities and is affected by operating expenses. Performance
information, such as that described above, may not provide a
basis for comparison with other investments or other investment
companies using a different method of calculating performance.

Comparative performance information may be used from time to
time in advertising or marketing the Fund's shares, including
data from Lipper Analytical Services, Inc., Morningstar, Inc.,
Moody's Bond Survey Bond Index, Lehman Brothers Municipal Bond
Index and other industry publications. The yield of the
Intermediate Series should generally be higher than comparable
money market funds (the Series, however, does not seek to
maintain a stabilized price per share and may not be able to
return an investor's principal) and its price per share should
fluctuate less than comparable long-term bond funds (which
generally have somewhat higher yields).

GENERAL INFORMATION

The Fund was incorporated under Maryland law on December 8, 1987,
and each Series commenced operations on March 1, 1988. On
February 8, 1994, the Fund, which is incorporated under the name
First Prairie Tax Exempt Bond Fund, Inc., began operating under
the name First Prairie Municipal Bond Fund. The Fund is
authorized to issue 10 billion shares of Common Stock (5 billion
in the Intermediate Series and 5 billion in the Insured Series),
par value $.001 per share. Each Series' shares are classified
into two classes--Class A and Class B. Each share has one vote
and shareholders will vote in the aggregate and not by class
except as otherwise required by law. However, holders of Class A
and Class B shares will be entitled to vote on matters submitted
to shareholders pertaining to the Shareholder Services Plan and
only holders of Class B shares will be entitled to vote on
matters submitted to shareholders pertaining to the Distribution
Plan.

On December 29, 1993, shareholders approved a proposal to
change certain of each Series' fundamental policies and
investment restrictions, among other things, to increase (i) the
amount the Series may borrow from banks for temporary or
emergency purposes, (ii) the amount of assets that it may pledge
to secure such borrowings, (iii) the percentage of assets which
may be invested in illiquid securities and make such policy non-
fundamental and (iv) the amount of portfolio securities which it
may lend.

To date, the Board of Directors has authorized the creation
of two series of shares. All consideration received by the Fund
for shares of one of the Series and all assets in which such
consideration is invested will belong to that Series (subject
only to the rights of creditors of the Fund) and will be subject
to the liabilities related thereto. The income attributable to,
and the expenses of, one Series (and as to classes within a
Series) are treated separately from those of the other Series
(and classes). The Fund has the ability to create, from time to
time, new series without shareholder approval.

Effective September 12, 1989, the Insured Series (then the
"Long-Term Series") adopted its current management policy and
changed its name from Long-Term Series to Insured Series. Prior
to the revision in management policies, the Insured Series was
not required to invest at least 65% of the value of its total
assets in Municipal Obligations insured as to timely payment of
principal and interest by recognized insurers of Municipal
Obligations and, under normal market conditions, the dollar-
weighted average maturity of such Series' portfolio exceeded ten
years and it invested in Municipal Obligations rated A or better
by Moody's or S&P. Any reference herein and in the Statement of
Additional Information to the Insured Series, including any
financial information and performance data, relating to such
Series prior to September 12, 1989 reflects such Series'
portfolio as constituted prior to the revision to its management
policy.

Unless otherwise required by the Investment Company Act of
1940, ordinarily it will not be necessary for the Fund to hold
annual meetings of shareholders. As a result, Fund shareholders
may not consider each year the election of Directors or the
appointment of auditors. However, pursuant to the Fund's
By-Laws, the holders of at least 10% of the shares outstanding
and entitled to vote may require the Fund to hold a special
meeting of shareholders for purposes of removing a Director from
office and for any other purpose. Fund shareholders may remove a
Director by the affirmative vote of a majority of the Fund's
outstanding voting shares. In addition, the Board of Directors
will call a meeting of shareholders for the purpose of electing
Directors if, at any time, less than a majority of the Directors
then holding office had been elected by shareholders.

Rule 18f-2 under the Investment Company Act of 1940 provides
that any matter required to be submitted under the provisions of
the Investment Company Act of 1940 or applicable state law or
otherwise to the holders of the outstanding voting securities of
an investment company, such as the Fund, will not be deemed to
have been effectively acted upon unless approved by the holders
of a majority of the outstanding shares of each Series affected
by such matter. Rule 18f-2 further provides that a Series shall
be deemed to be affected by a matter unless it is clear that the
interests of such Series in the matter are identical or that the
matter does not affect any interest of such Series. However, the
Rule exempts the selection of independent accountants and the
election of Directors from the separate voting requirements of
the Rule.

The Transfer Agent maintains a record of each investor's
ownership and sends confirmations and statements of account.

Investor inquiries may be made to the investor's Service
Agent, including the Adviser, or by writing to the Fund at the
address shown on the front cover or by calling the telephone
number shown on the front cover.

No person has been authorized to give any information or to make
any representations other than those contained in this Prospectus
and in the Fund's official sales literature in connection with
the offer of the Fund's shares, and, if given or made, such other
information or representations must not be relied upon as having
been authorized by the Fund. This Prospectus does not constitute
an offer in any state in which, or to any person to whom, such
offering may not lawfully be made.
<PAGE>

FIRST PRAIRIE MUNICIPAL BOND FUND
CLASS A AND CLASS B SHARES
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
JUNE 27, 1994

This Statement of Additional Information, which is not a
prospectus, supplements and should be read in conjunction with
the current Prospectus of First Prairie Municipal Bond Fund
(the "Fund"), dated June 27, 1994, as it may be revised from
time to time. To obtain a copy of the Fund's Prospectus,
please write to the Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144, or call toll free 1-800-346-
3621.

The First National Bank of Chicago (the "Adviser") serves
as the Fund's investment adviser.

The Dreyfus Corporation (the "Administrator") serves as
the Fund's administrator.

Dreyfus Service Corporation (the "Distributor"), a
wholly-owned subsidiary of the Administrator, is the
distributor of the Fund's shares.

TABLE OF CONTENTS

Page

Investment Objective and Management Policies . . . . . B-2
Management of the Fund . . . . . . . . . . . . . . . . B-10
Investment Advisory and Administration Agreements. . . B-12
Purchase of Fund Shares. . . . . . . . . . . . . . . . B-15
Distribution Plan and Shareholder Services Plan. . . . B-18
Redemption of Fund Shares. . . . . . . . . . . . . . . B-20
Shareholder Services . . . . . . . . . . . . . . . . . B-23
Determination of Net Asset Value . . . . . . . . . . . B-26
Portfolio Transactions . . . . . . . . . . . . . . . . B-27
Dividends, Distributions and Taxes . . . . . . . . . . B-27
Performance Information. . . . . . . . . . . . . . . . B-29
Information About the Fund . . . . . . . . . . . . . . B-32
Custodian, Transfer and Dividend Disbursing
Agent, Counsel and Independent Auditors. . . . . . . B-32
Appendix . . . . . . . . . . . . . . . . . . . . . . . B-33
Financial Statements . . . . . . . . . . . . . . . . . B-40
Report of Independent Auditors . . . . . . . . . . . . B-

<PAGE>
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES

THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED
"DESCRIPTION OF THE FUND."

The average distribution of investments (at value) in
Municipal Obligations by ratings for the fiscal year ended
February 28, 1994, computed on a monthly basis, was as follows:
<TABLE>

Percentage of Value
Fitch Investors Moody's Investors Standard & Poor's
Service, Inc. Service, Inc. Corporation Intermediate Insured
("Fitch") or ("Moody's") or ("S&P") Series Series
<S> <C> <C> <C> <C>
AAA Aaa AAA 42.2% 84.7%
AA Aa AA 21.6 1.1
A A A 26.3 .3
BBB Baa BBB 1.0 1.5
F1 MIG 1/VMIG 1 SP1 8.1 8.8
F1 P1 A1 .8 3.6
100.0% 100.0%
</TABLE>

MUNICIPAL OBLIGATIONS. The term "Municipal Obligations"
generally includes debt obligations issued to obtain funds for
various public purposes, including the construction of a wide
range of public facilities such as airports, bridges, highways,
housing, hospitals, mass transportation, schools, streets and
water and sewer works. Other public purposes for which
Municipal Obligations may be issued include refunding
outstanding obligations, obtaining funds for general operating
expenses and lending such funds to other public institutions and
facilities. In addition, certain types of industrial
development bonds are issued by or on behalf of public
authorities to obtain funds to provide for the construction,
equipment, repair or improvement of privately operated housing
facilities, sports facilities, convention or trade show
facilities, airport, mass transit, industrial, port or parking
facilities, air or water pollution control facilities and
certain local facilities for water supply, gas, electricity, or
sewage or solid waste disposal; the interest paid on such
obligations may be exempt from Federal income tax, although
current tax laws place substantial limitations on the size of
such issues. Such obligations are considered to be Municipal
Obligations if the interest paid thereon qualifies as exempt
from Federal income tax in the opinion of bond counsel to the
issuer. There are, of course, variations in the security of
Municipal Obligations, both within a particular classification
and between classifications.

Floating and variable rate demand notes and bonds are tax
exempt obligations ordinarily having stated maturities in excess
of one year, but which permit the holder to demand payment of
principal at any time, or at specified intervals. The issuer of
such obligations ordinarily has a corresponding right, after a
given period, to prepay in its discretion the outstanding
principal amount of the obligation plus accrued interest upon a
specified number of days' notice to the holders thereof. The
interest rate on a floating rate demand obligation is based on a
known lending rate, such as a bank's prime rate, and is adjusted
automatically each time such rate is adjusted. The interest
rate on a variable rate demand obligation is adjusted
automatically at specified intervals.

The yields on Municipal Obligations are dependent on a
variety of factors, including general economic and monetary con-
ditions, money market factors, conditions in the Municipal Obli-
gations market, size of a particular offering, maturity of the
obligation and rating of the issue. The imposition of the
Fund's advisory and administration fees, as well as other
operating expenses, including fees paid under the Fund's
Shareholder Services Plan with respect to each Class and the
Distribution Plan with respect to Class B only, will have the
effect of reducing the yield to investors.

Municipal lease obligations or installment purchase
contract obligations (collectively, "lease obligations") have
special risks not ordinarily associated with Municipal
Obligations. Although lease obligations do not constitute
general obligations of the municipality for which the
municipality's taxing power is pledged, a lease obligation
ordinarily is backed by the municipality's covenant to budget
for, appropriate and make the payments due under the lease
obligation. However, certain lease obligations contain
"non-appropriation" clauses which provide that the municipality
has no obligation to make lease or installment purchase payments
in future years unless money is appropriated for such purpose on
a yearly basis. Although "non-appropriation" lease obligations
are secured by the leased property, disposition of the property
in the event of foreclosure might prove difficult. The Fund
will seek to minimize these risks by not investing more than 15%
of a Series' total assets in lease obligations that contain
"non-appropriation" clauses, and by investing only in those
"non-appropriation" lease obligations where (1) the nature of
the leased equipment or property is such that its ownership or
use is essential to a governmental function of the municipality,
(2) the lease payments will commence amortization of principal
at an early date resulting in an average life of seven years or
less for the lease obligation, (3) appropriate covenants will be
obtained from the municipal obligor prohibiting the substitution
or purchase of similar equipment if lease payments are not
appropriated, (4) the lease obligor has maintained good market
acceptability in the past, (5) the investment is of a size that
will be attractive to institutional investors, and (6) the
underlying leased equipment has elements of portability and/or
use that enhance its marketability in the event foreclosure on
the underlying equipment is ever required. The staff of the
Securities and Exchange Commission currently considers certain
lease obligations to be illiquid. Accordingly, not more than
15% of the value of a Series' net assets will be invested in
lease obligations that are illiquid and in other illiquid
securities. See "Investment Restriction No. 11" below.

The Fund will purchase tender option bonds only when it is
satisfied that the custodial and tender option arrangements,
including the fee payment arrangements, will not adversely
affect the tax status of the underlying Municipal Obligations
and that payment of any tender fees will not have the effect of
creating taxable income for the Fund. Based on the tender
option bond agreement, the Fund expects to be able to value the
tender option bond at par; however, the value of the instrument
will be monitored to assure that it is valued at fair value.

INSURANCE FEATURE (Applicable to Insured Series only). A
Mutual Fund Insurance policy provides for a policy period of one
year which the insurer typically renews for successive annual
periods at the request of the Insured Series for so long as the
Insured Series is in compliance with the terms of the policy.
The insurance premiums are payable monthly by the Insured Series
and are adjusted for purchases and sales of covered Municipal
Obligations during the month on a daily basis. Premium rates
for each issue of Municipal Obligations covered by Mutual Fund
Insurance are fixed for as long as the Insured Series owns the
security, although similar Municipal Obligations purchased at
different times may have different premiums. In addition to the
payment of premiums, a Mutual Fund Insurance policy requires
that the Insured Series notify the insurer on a daily basis as
to all Municipal Obligations in the insured portfolio and permit
the insurer to audit its records. The insurer cannot cancel
coverage already in force with respect to Municipal Obligations
owned by the Insured Series and covered by the Mutual Fund
Insurance policy, except for non-payment of premiums.

Municipal Obligations are eligible for Mutual Fund
Insurance if, at the time of purchase by the Insured Series,
they are identified separately or by category in qualitative
guidelines furnished by the insurer and are in compliance with
the aggregate limitations set forth in such guidelines. Premium
variations are based in part on the rating of the security being
insured at the time the Insured Series purchases such security.
The insurer may prospectively withdraw particular securities
from the classifications of securities eligible for insurance or
change the aggregate amount limitation of each issue or category
of eligible Municipal Obligations but must continue to insure
the full amount of such securities previously acquired so long
as they remain in the Insured Series' portfolio. The
qualitative guidelines and aggregate amount limitations
established by the insurer from time to time will not
necessarily be the same as the Insured Series or the Adviser
would use to govern selection of securities for the Insured
Series' portfolio. Therefore, from time to time such guidelines
and limitations may affect portfolio decisions.

New Issue Insurance provides that in the event of a
municipality's failure to make payment of principal or interest
on an insured Municipal Obligation, the payment will be made
promptly by the insurer. There are no deductible clauses or
cancellation provisions, and the tax exempt status of the
securities is not affected. The premiums, whether paid by the
issuing municipality or the municipal bond dealer underwriting
the issue, are paid in full for the life of the Municipal
Obligation. The statement of insurance is attached to or
printed on the instrument evidencing the Municipal Obligation
purchased by the Insured Series and becomes part of the
Municipal Obligation. The benefits of the insurance accompany
the Municipal Obligations in any resale.

RATINGS OF MUNICIPAL OBLIGATIONS. Subsequent to its
purchase by the Fund, an issue of rated Municipal Obligations
may cease to be rated or its rating may be reduced below the
minimum required for purchase by the Fund. Neither event will
require the sale of such Municipal Obligations by the Fund, but
the Adviser will consider such event in determining whether the
Fund should continue to hold the Municipal Obligations. To the
extent that the ratings given by Moody's, S&P, Fitch or Duff for
Municipal Obligations may change as a result of changes in such
organizations or their rating systems, the Fund will attempt to
use comparable ratings as standards for its investments in
accordance with the investment policies contained in the Fund's
Prospectus and this Statement of Additional Information. The
ratings of Moody's, S&P, Fitch and Duff represent their opinions
as to the quality of the Municipal Obligations which they
undertake to rate. It should be emphasized, however, that
ratings are relative and subjective and are not absolute
standards of quality. Although these ratings may be an initial
criterion for selection of portfolio investments, the Adviser
also will evaluate these securities and the creditworthiness of
the issuers of such securities based upon financial and other
available information.

FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS. Upon
exercise of an option, the writer of the option delivers to the
holder of the option the futures position and the accumulated
balance in the writer's futures margin account, which represents
the amount by which the market price of the futures contract
exceeds, in the case of a call, or is less than, in the case of
a put, the exercise price of the option on the futures contract.
The potential loss related to the purchase of an option on a
futures contract is limited to the premium paid for the option
(plus transaction costs). Because the value of the option is
fixed at the time of sale, there are no daily cash payments to
reflect changes in the value of the underlying contract;
however, the value of the option does change daily and that
change would be reflected in the net asset value of the Series.

LENDING PORTFOLIO SECURITIES. To a limited extent, each
Series may lend its portfolio securities to brokers, dealers and
other financial institutions, provided it receives cash
collateral which at all times is maintained in an amount equal
to at least 100% of the current market value of the securities
loaned. By lending its portfolio securities, a Series can
increase its income through the investment of the cash
collateral. For purposes of this policy, the Fund considers
collateral consisting of U.S. Government securities or
irrevocable letters of credit issued by banks whose securities
meet the standards for investment by the Series to be the
equivalent of cash. Such loans may not exceed 33-1/3% of a
Series' total assets. From time to time, the Series may return
to the borrower or a third party which is unaffiliated with the
Series, and which is acting as a "placing broker," a part of the
interest earned from the investment of collateral received for
securities loaned.

The Securities and Exchange Commission currently requires
that the following conditions must be met whenever portfolio
securities are loaned: (1) the Series must receive at least
100% cash collateral from the borrower; (2) the borrower must
increase such collateral whenever the market value of the
securities rises above the level of such collateral; (3) the
Series must be able to terminate the loan at any time; (4) the
Series must receive reasonable interest on the loan, as well as
any interest or other distributions payable on the loaned
securities, and any increase in market value; and (5) the Series
may pay only reasonable custodian fees in connection with the
loan. These conditions may be subject to future modification.

TAXABLE INVESTMENTS. Securities issued or guaranteed by
the U.S. Government or its agencies or instrumentalities include
U.S. Treasury securities, which differ in their interest rates,
maturities and times of issuance. Treasury Bills have initial
maturities of one year or less; Treasury Notes have initial
maturities of one to ten years; and Treasury Bonds generally
have initial maturities of greater than ten years. Some
obligations issued or guaranteed by U.S. Government agencies and
instrumentalities, for example, Government National Mortgage
Association pass-through certificates, are supported by the full
faith and credit of the U.S. Treasury; others, such as those of
the Federal Home Loan Banks, by the right of the issuer to
borrow from the U.S. Treasury; others, such as those issued by
the Federal National Mortgage Association, by discretionary
authority of the U.S. Government to purchase certain obligations
of the agency or instrumentality; and others, such as those
issued by the Student Loan Marketing Association, only by the
credit of the agency or instrumentality. These securities bear
fixed, floating or variable rates of interest. Principal and
interest may fluctuate based on generally recognized reference
rates or the relationship of rates. While the U.S. Government
provides financial support to such U.S. Government-sponsored
agencies or instrumentalities, no assurance can be given that it
will always do so, since it is not so obligated by law. The
Fund will invest in such securities only when it is satisfied
that the credit risk with respect to the issuer is minimal.

Commercial paper consists of short-term, unsecured
promissory notes issued to finance short-term credit needs.

Certificates of deposit are negotiable certificates
representing the obligation of a bank to repay funds deposited
with it for a specified period of time.

Time deposits are non-negotiable deposits maintained in a
banking institution for a specified period of time (in no event
longer than seven days) at a stated interest rate. Investments
in time deposits generally are limited to London branches of
domestic banks that have total assets in excess of $1 billion.
Time deposits which may be held by the Fund will not benefit
from insurance from the Bank Insurance Fund or the Savings
Association Insurance Fund administered by the Federal Deposit
Insurance Corporation.

Repurchase agreements involve the acquisition by a Series
of an underlying debt instrument, subject to an obligation of
the seller to repurchase, and the Series to resell, the
instrument at a fixed price, usually not more than one week
after its purchase. The Fund's custodian or subcustodian will
have custody of, and will hold in a segregated account,
securities acquired by the Fund under a repurchase agreement.
Repurchase agreements are considered by the staff of the
Securities and Exchange Commission to be loans by the Series
which enters into them. In an attempt to reduce the risk of
incurring a loss on a repurchase agreement, the Series will
enter into repurchase agreements only with domestic banks with
total assets in excess of $1 billion or primary government
securities dealers reporting to the Federal Reserve Bank of New
York, with respect to securities of the type in which the Series
may invest, and will require that additional securities be
deposited with it if the value of the securities purchased
should decrease below resale price. The Adviser will monitor on
an ongoing basis the value of the collateral to assure that it
always equals or exceeds the repurchase price. Certain costs
may be incurred in connection with the sale of the securities if
the seller does not repurchase them in accordance with the
repurchase agreement. In addition, if bankruptcy proceedings
are commenced with respect to the seller of the securities,
realization on the securities by a Series may be delayed or
limited. Each Series will consider on an ongoing basis the
creditworthiness of the institutions with which it enters into
repurchase agreements.

INVESTMENT RESTRICTIONS. Each Series has adopted
investment restrictions numbered 1 through 8 as fundamental
policies. These restrictions cannot be changed, as to a Series,
without approval by the holders of a majority (as defined in the
Investment Company Act of 1940, as amended (the "Act")) of such
Series' outstanding voting shares. Investment restrictions
numbered 9 through 13 are not fundamental policies and may be
changed by vote of a majority of the Directors at any time.
Neither Series may:

1. Invest more than 25% of its assets in the
securities of issuers in any single industry; provided that
there shall be no such limitation on the purchase of
Municipal Obligations and, for temporary defensive
purposes, obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.

2. Borrow money, except to the extent permitted under
the Act. For purposes of this investment restriction, the
entry into options, forward contracts, futures contracts,
including those relating to indexes, and options on futures
contracts or indexes shall not constitute borrowing.

3. Purchase or sell real estate, or oil and gas
interests, but each Series may invest in Municipal
Obligations secured by real estate or interests therein.

4. Underwrite the securities of other issuers, except
that the Series may bid separately or as part of a group
for the purchase of Municipal Obligations directly from an
issuer for its own portfolio to take advantage of the lower
purchase price available, and except to the extent the
Series may be deemed an underwriter under the Securities
Act of 1933, as amended, by virtue of disposing of
portfolio securities.

5. Make loans to others, except through the purchase
of debt obligations and the entry into repurchase
agreements; however, each Series may lend its portfolio
securities in an amount not to exceed 33-1/3% of the value
of its total assets. Any loans of portfolio securities
will be made according to guidelines established by the
Securities and Exchange Commission and the Fund's Board of
Directors.

6. Issue any senior security (as such term is defined
in Section 18(f) of the Act), except to the extent that the
activities permitted in Investment Restriction Nos. 2, 7, 8
and 11 may be deemed to give rise to a senior security.

7. Purchase securities on margin, but the Series may
make margin deposits in connection with transactions in
options, forward contracts, futures contracts, including
those relating to indexes, and options on futures contracts
or indexes.

8. Invest in commodities, except that each Series may
purchase and sell forward contracts, futures contracts,
including those relating to indexes, and options on futures
contracts or indexes.

9. Purchase securities other than Municipal
Obligations and Taxable Investments and those arising out
of transactions in futures and options or as otherwise
provided in the Fund's Prospectus.

10. Invest in securities of other investment
companies, except to the extent permitted under the Act.

11. Pledge, hypothecate, mortgage or otherwise
encumber its assets, except to the extent necessary to
secure permitted borrowings and to the extent related to
the deposit of assets in escrow in connection with the
purchase of securities on a when-issued or delayed-delivery
basis and collateral and initial or variation margin
arrangements with respect to options, forward contracts,
futures contracts, including those related to indexes and
options on futures contracts, or indexes.

12. Enter into repurchase agreements providing for
settlement in more than seven days after notice or purchase
securities which are illiquid (which securities could
include participation interests (including municipal
lease/purchase agreements) that are not subject to the
demand feature described in the Fund's Prospectus and
floating and variable rate demand notes and bonds as to
which each Series cannot exercise the demand feature
described in the Fund's Prospectus on less than seven day's
notice and as to which there is no secondary market), if,
in the aggregate, more than 15% of its net assets would be
so invested.

13. Invest in companies for the purpose of exercising
control.

For purposes of Investment Restriction No. 1, industrial
development bonds, where the payment of principal and interest
is the ultimate responsibility of companies within the same
industry, are grouped together as an "industry." If a per-
centage restriction is adhered to at the time of investment, a
later increase or decrease in percentage resulting from a change
in values or assets will not constitute a violation of such
restriction.

The Fund may make commitments more restrictive than the
restrictions listed above so as to permit the sale of Series'
shares in certain states. Should the Fund determine that a
commitment is no longer in the best interests of a Series and
its shareholders, the Fund reserves the right to revoke the
commitment by terminating the sale of such Series' shares in the
state involved.

MANAGEMENT OF THE FUND

Directors and officers of the Fund, together with informa-
tion as to their principal business occupations during at least
the last five years, are shown below. The Director who is
deemed to be an "interested person" of the Fund, as defined in
the Act, is indicated by an asterisk.

DIRECTORS AND OFFICERS OF THE FUND

*JOSEPH S. DiMARTINO, PRESIDENT AND DIRECTOR. President, Chief
Operating Officer and a Director of the Administrator,
Executive Vice President and a Director of the Distributor
and an officer, director or trustee of other investment
companies advised or administered by the Administrator. He
is also a Director of Noel Group, Inc., Vice President and
former Treasurer and Director of the National Muscular
Dystrophy Association and a Trustee of Bucknell University.
His address is 200 Park Avenue, New York, New York 10166.

JOHN P. GOULD, DIRECTOR. Distinguished Service Professor of
Economics of the University of Chicago Graduate School of
Business. From 1983 to 1993, Dean of the University of
Chicago Graduate School of Business. Dean Gould also
serves as Director of Harpor Capital Advisors. His address
is 1101 East 58th Street, Chicago, Illinois 60637.

MARILYN McCOY, DIRECTOR. Vice President of Administration
and Planning of Northwestern University. From 1981 to
1985, she was the Director of Planning and Policy
Development for the University of Colorado. She also
serves on the Board of Directors of Evanston Hospital,
the Chicago Metropolitan YMCA, the Chicago Network and
United Charities. Mrs. McCoy is a member of the
Chicago Economics Club. Her address is 1100 North
Lake Shore Drive, Chicago, Illinois 60611.

RAYMOND D. ODDI, DIRECTOR. Private consultant. A Director of
Caremark International, Inc. and Medisense, Inc., companies
in the health care industry, and Baxter Credit Union. From
1978 to 1986, Senior Vice President of Baxter
International, Inc., a company engaged in the production of
medical care products. He also is a member of the Illinois
Society of Certified Public Accountants. His address is
1181 Loch Lane, Lake Forest, Illinois 60045.

Each of the "non-interested" Directors also is a trustee of
First Prairie Cash Management, First Prairie Diversified Asset
Fund, First Prairie Money Market Fund, First Prairie Municipal
Money Market Fund, First Prairie U.S. Government Income Fund and
First Prairie U.S. Treasury Securities Cash Management.

The Fund does not pay any remuneration to its officers and
Directors other than fees and expenses to Directors who are not
officers, directors, employees or holders of 5% or more of the
outstanding voting securities of the Adviser or the Adminis-
trator or any affiliate of either of them. With respect to the
Intermediate Series and the Insured Series, such fees and
expenses totalled $4,414 and $1,443, respectively, for the
fiscal year ended February 28, 1994, for all such Directors as a
group.

For so long as the Fund's plans described in the section
captioned "Distribution Plan and Shareholder Services Plan"
remain in effect, the Directors of the Fund who are not
"interested persons" of the Fund, as defined in the Act, will be
selected and nominated by the Directors who are not "interested
persons" of the Fund.

OFFICERS OF THE FUND NOT LISTED ABOVE

DANIEL C. MACLEAN, VICE PRESIDENT. Vice President and General
Counsel of the Administrator, Secretary of the Distributor
and an officer or director of other investment companies
advised or administered by the Administrator.

JEFFREY N. NACHMAN, VICE PRESIDENT-FINANCIAL. Vice President-
-Mutual Fund Accounting of the Administrator and an officer
of other investment companies advised or administered by
the Administrator.

JOHN J. PYBURN, TREASURER. Assistant Vice President of the
Administrator and an officer of other investment companies
advised or administered by the Administrator.

JEAN FARLEY, CONTROLLER. Senior Accounting Manager of the Fund
Accounting Department of the Administrator and an officer
of other investment companies advised or administered by
the Administrator.

MARK N. JACOBS, SECRETARY. Secretary and Deputy General Counsel
of the Administrator and an officer of other investment
companies advised or administered by the Administrator.

CHRISTINE PAVALOS, ASSISTANT SECRETARY. Assistant Secretary of
the Administrator, the Distributor and other investment
companies advised or administered by the Administrator.

The address of each officer of the Fund is 200 Park Avenue,
New York, New York 10166.

Directors and officers of the Fund, as a group, owned less
than 1% of each Series' shares of common stock outstanding on
June 14, 1994.

As of June 14, 1994, The Dreyfus Corporation, a New York
corporation located at 200 Park Avenue, 7th Floor, New York, New
York 10166-0799, owned 100% of the Insured Series' Class B
shares outstanding and Donaldson Lufkin Jenrette Securities
Corporation, Inc., a New York corporation having an address at
P.O. Box 2052, Jersey City, New Jersey, owned 95% of the
Intermediate Series' Class B shares outstanding.

A stockholder who beneficially owns, directly or
indirectly, more than 25% of the Fund's voting securities may be
deemed a "control person" (as defined in the Act) of the Fund.

The following stockholder is known by the Fund to have
owned 5% or more of the Insured Series' Class A shares
outstanding on June 14, 1994: Jane M. Cook, Mesquite, Texas
75149-5844 - 5.1%.

INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENTS

THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED
"MANAGEMENT OF THE FUND."

INVESTMENT ADVISORY AGREEMENT. The Adviser provides
management services pursuant to the Investment Advisory
Agreement (the "Advisory Agreement") dated December 16, 1987 (as
revised October 1, 1993) with the Fund. As to each Series, the
Advisory Agreement is subject to annual approval by (i) the
Fund's Board of Directors or (ii) vote of a majority (as defined
in the Act) of such Series' outstanding voting securities,
provided that in either event the continuance also is approved
by a majority of the Directors who are not "interested persons"
(as defined in the Act) of the Fund or the Adviser, by vote cast
in person at a meeting called for the purpose of voting on such
approval. Shareholders of each Series last approved the
Advisory Agreement on June 14, 1989, and the Board of Directors,
including a majority of the Directors who are not "interested
persons" of any party to the Advisory Agreement, last voted to
renew the Advisory Agreement at a meeting held on December 10,
1993. The Advisory Agreement is terminable without penalty, as
to each Series, on 60 days' notice, by the Fund's Board of
Directors or by vote of the holders of a majority of such
Series' shares or, upon not less than 90 days' notice, by the
Adviser. The Advisory Agreement will terminate automatically,
as to the relevant Series, in the event of its assignment (as
defined in the Act).

As compensation for the Adviser's services to the Fund, the
Fund has agreed to pay the Adviser a fee, computed daily and
paid monthly, at an annual rate of .40 of 1% of the value of
each Series' average daily net assets. For the fiscal years
ended February 28/29, 1992, 1993 and 1994, no fees were paid by
the Fund pursuant to various undertakings by the Adviser.

The Fund has agreed that neither the Adviser nor the
Administrator will be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund in
connection with the matters to which the Adviser's or the
Administrator's respective agreement with the Fund relates,
except for a loss resulting from wilful misfeasance, bad faith
or gross negligence on the part of the Adviser or the
Administrator, as the case may be, in the performance of its
obligations or from reckless disregard by it of its obligations
and duties under its respective agreement with the Fund.

ADMINISTRATION AGREEMENT. Pursuant to the Administration
Agreement (the "Administration Agreement") dated December 16,
1987 (as revised October 1, 1993) with the Fund, the
Administrator furnishes the Fund clerical help and accounting,
data processing, bookkeeping, internal auditing and legal
services and certain other services required by the Fund,
prepares reports to the Fund's shareholders, tax returns,
reports to and filings with the Securities and Exchange
Commission and state Blue Sky authorities, calculates the net
asset value of each Series' shares and generally assists in all
aspects of the Fund's operation, other than providing investment
advice. The Administrator bears all expenses in connection with
the performance of its services and pays the salaries of all
officers and employees who are employed by both it and the Fund.

As to each Series, the Administration Agreement is subject
to annual approval by (i) the Fund's Board of Directors or (ii)
vote of a majority (as defined in the Act) of such Series'
outstanding voting securities, provided that in either event the
continuance also is approved by a majority of the Directors who
are not "interested persons" (as defined in the Act) of the Fund
or the Administrator, by vote cast in person at a meeting called
for the purpose of voting on such approval. Shareholders of
each Series last approved the Administration Agreement on June
14, 1989, and the Board of Directors, including a majority of
the Directors who are not "interested persons" of any party to
the Administration Agreement, last voted to renew the
Administration Agreement at a meeting held on December 10, 1993.
The Administration Agreement is terminable without penalty, as
to each Series, on not more than 60 days' notice, by the Fund's
Board of Directors or by vote of the holders of a majority of
such Series' shares or, upon not less than 90 days' notice, by
the Administrator. The Administration Agreement will terminate
automatically, as to the relevant Series, in the event of its
assignment (as defined in the Act).

As compensation for the Administrator's services to the
Fund, the Fund has agreed to pay the Administrator a fee,
computed daily and paid monthly, at an annual rate of .20 of 1%
of the value of each Series' average daily net assets. For the
fiscal years ended February 28/29, 1992, 1993 and 1994, no fees
were paid by the Fund pursuant to various undertakings by the
Administrator.

In addition to the persons named as such in the section
entitled "Management of the Fund," the following persons are
officers and/or directors of the Administrator: Howard Stein,
Chairman of the Board and Chief Executive Officer; Julian M.
Smerling, Vice Chairman of the Board of Directors; Alan M.
Eisner, Vice President and Chief Financial Officer; David W.
Burke, Vice President and Chief Administrative Officer;
Robert F. Dubuss, Vice President; Elie M. Genadry, Vice
President--Institutional Sales; Peter A. Santoriello, Vice
President; Robert H. Schmidt, Vice President; Kirk V. Stumpp,
Vice President--New Product Development; Philip L. Toia, Vice
President; Katherine C. Wickham, Assistant Vice President;
Maurice Bendrihem, Controller; and Mandell L. Berman, Alvin E.
Friedman, Lawrence M. Greene, Abigail Q. McCarthy and David B.
Truman, directors.

EXPENSES AND EXPENSE INFORMATION. All expenses incurred in
the operation of the Fund are borne by the Fund, except to the
extent specifically assumed by the Adviser and/or the
Administrator. The expenses borne by the Fund include the
following: organizational costs, taxes, interest, brokerage
fees and commissions, if any, fees of Directors who are not
officers, directors, employees or holders of 5% or more of the
outstanding voting securities of the Adviser or the
Administrator, Securities and Exchange Commission fees, state
Blue Sky qualification fees, advisory and administration fees,
charges of custodians, transfer and dividend disbursing agents'
fees, certain insurance premiums, industry association fees,
outside auditing and legal expenses, costs of maintaining
corporate existence, costs of independent pricing services,
costs attributable to investor services (including, without
limitation, telephone and personnel expenses), costs of
shareholders' reports and corporate meetings, and any extra-
ordinary expenses. Class A and Class B shares are subject to an
annual service fee for ongoing personal services relating to
shareholder accounts and services related to the maintenance of
shareholder accounts. In addition, Class B shares are subject
to an annual distribution fee for advertising, marketing and
distributing Class B shares pursuant to a distribution plan
adopted in accordance with Rule 12b-1 under the Act. See
"Distribution Plan and Shareholder Services Plan." Expenses
attributable to a particular Series are charged against the
assets of that Series; other expenses of the Fund are allocated
between the Series on the basis determined by the Board of
Directors, including, but not limited to, proportionately in
relation to the net assets of each Series.

The Adviser and the Administrator have agreed that, as to
each Series, if in any fiscal year the aggregate expenses of the
Series (including fees pursuant to the Advisory Agreement and
the Administration Agreement, but excluding interest, taxes,
brokerage and, with the prior written consent of the necessary
state securities commissions, extraordinary expenses) exceed the
expense limitation of any state having jurisdiction over the
Series, the Series may deduct from the fees to be paid to each
of the Adviser and the Administrator, or the Adviser and the
Administrator will bear, approximately 2/3 and 1/3,
respectively, of such excess expense, to the extent required by
state law. Such deduction or payment, if any, will be estimated
daily and reconciled and effected or paid, as the case may be,
on a monthly basis.

The aggregate of the fees payable to the Adviser and the
Administrator is not subject to reduction as the value of the
Series' net assets increases.

GLASS-STEAGALL ACT. For a discussion of the Glass-Steagall
Act in connection with the Fund's operations, see the Fund's
Prospectus.

From time to time, legislation has been introduced and may
be reintroduced in Congress, which would permit a bank, a bank
holding company or a subsidiary thereof to organize, sponsor,
control and distribute shares of an investment company such as
the Fund, notwithstanding present restrictions under the
Glass-Steagall Act and the Federal Bank Holding Company Act of
1956. As described herein, the Fund is currently distributed by
the Distributor, and the Administrator, its parent, sponsors the
Fund and provides it with administrative services. If current
restrictions preventing a bank from legally sponsoring,
organizing, controlling or distributing shares of an investment
company were relaxed, the Fund expects that the Adviser would
consider the possibility of offering to perform some or all of
the services now provided by the Administrator or the
Distributor. It is not possible, of course, to predict whether
or in what form such legislation might be enacted or the terms
upon which the Adviser might offer to provide services.

PURCHASE OF FUND SHARES

THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED
"HOW TO BUY FUND SHARES."

THE DISTRIBUTOR. The Distributor serves as the Fund's
distributor pursuant to an agreement which is renewable
annually. The Distributor also acts as distributor for the
other funds in the First Prairie Family of Funds, the funds in
the Dreyfus Family of Funds and certain other investment
companies.

USING FEDERAL FUNDS. The Shareholder Services Group, Inc.,
the Fund's transfer and dividend disbursing agent (the "Transfer
Agent"), or the Fund may attempt to notify the investor upon
receipt of checks drawn on banks that are not members of the
Federal Reserve System as to the possible delay in conversion
into Federal Funds and may attempt to arrange for a better means
of transmitting the money. If the investor is a customer of a
securities dealer, bank or other financial institution and his
order to purchase Series shares is paid for other than in
Federal Funds, the securities dealer, bank or other financial
institution acting on behalf of its customer, will complete the
conversion into, or itself advance, Federal Funds generally on
the business day following receipt of the customer order. The
order is effective only when so converted and received by the
Transfer Agent. An order for the purchase of Series shares
placed by an investor with sufficient Federal Funds or cash
balance in his brokerage account with a securities dealer, bank
or other financial institution will become effective on the day
that the order, including Federal Funds, is received by the
Transfer Agent.

SALES LOADS--CLASS A. The scale of sales loads applies to
purchases of Class A shares made by any "purchaser," which term
includes an individual and/or spouse purchasing securities for
his, her or their own account or for the account of any minor
children, or a trustee or other fiduciary purchasing securities
for a single trust estate or a single fiduciary account
(including a pension, profit-sharing or other employee benefit
trust created pursuant to a plan qualified under Section 401 of
the Internal Revenue Code of 1986, as amended (the "Code"))
although more than one beneficiary is involved; or a group of
accounts established by or on behalf of the employees of an
employer or affiliated employers pursuant to an employee benefit
plan or other program (including accounts established pursuant
to Sections 403(b), 408(k), and 457 of the Code); or an
organized group which has been in existence for more than six
months, provided that it is not organized for the purpose of
buying redeemable securities of a registered investment company
and provided that the purchases are made through a central
administration or a single dealer, or by other means which
result in economy of sales effort or expense.

<PAGE>

OFFERING PRICES. Based upon the Fund's net asset value at the
close of business on February 28, 1994, the maximum offering
price of the Intermediate Series' shares would have been as
follows:

Class A shares:

NET ASSET VALUE per share. . . . . . . . . . . .$12.18
Sales Load for individual sales
of shares aggregating less than
$100,000 - 3.0% of offering price
(approximately 3.1% of net asset
value per share) . . . . . . . . . . . . . . . .38
Offering price to public . . . . . . . . . . . .$12.56

Class B shares:

NET ASSET VALUE, redemption price
and offering price to public . . . . . . . . .$12.18

Based upon the Fund's net asset value at the close of business
on February 28, 1994 the maximum offering price of the Insured
Series' shares would have been as follows:

Class A shares:

NET ASSET VALUE per share. . . . . . . . . . . .$12.13
Sales Load for individual sales
of shares aggregating less than
$50,000 - 4.5% of offering price
(approximately 4.7% of net asset
value per share) . . . . . . . . . . . . . . . .57
Offering price to public . . . . . . . . . . . .$12.70

Class B shares:

NET ASSET VALUE, redemption price
and offering price to public*. . . . . . . . .$12.14

* Class B shares are subject to a contingent deferred sales
charge on certain redemptions, see "How to Redeem Fund
Shares" in the Fund's Prospectus.

TELETRANSFER PRIVILEGE. TELETRANSFER purchase orders may
be made between the hours of 8:00 a.m. and 4:00 p.m., New York
time, on any business day that the Transfer Agent and the New
York Stock Exchange are open, except Martin Luther King, Jr.
Day, Columbus Day and Veterans Day. Such purchases will be
credited to the shareholder's Fund account on the next bank
business day. To qualify to use the TELETRANSFER Privilege, the
initial payment for purchase of Fund shares must be drawn on,
and redemption proceeds paid to, the same bank and account as
are designated on the Account Application or Shareholder
Services Form on file. If the proceeds of a particular
redemption are to be wired to an account at any other bank, the
request must be in writing and signature-guaranteed. See
"Redemption of Fund Shares--TELETRANSFER Privilege."

REOPENING AN ACCOUNT. An investor may reopen an account
with a minimum investment of $100 without filing a new Account
Application during the calendar year the account is closed or
during the following calendar year, provided the information on
the old Account Application is still applicable.

DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN

THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED
"DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN."

Class A and Class B shares are subject to a Shareholder
Services Plan and Class B shares only are subject to a
Distribution Plan.

DISTRIBUTION PLAN. Rule l2b-1 (the "Rule") adopted by the
Securities and Exchange Commission under the Act provides, among
other things, that an investment company may bear expenses of
distributing its shares only pursuant to a plan adopted in
accordance with the Rule. The Fund's Board of Directors has
adopted such a plan (the "Distribution Plan") with respect to
Class B shares pursuant to which the Fund pays for advertising,
marketing and distributing Class B shares. Under the
Distribution Plan, the Fund may make payments to the Adviser,
its affiliates, including First Chicago Investment Services,
Inc., the Distributor or certain securities dealers, financial
institutions and other financial industry professionals
(collectively, "Service Agents") in respect of these services.
The Fund's Board of Directors believes that there is a
reasonable likelihood that the Distribution Plan will benefit
each Series and holders of its Class B shares. In some states,
certain financial institutions effecting transactions in Fund
shares may be required to register as dealers pursuant to state
law.

A quarterly report of the amounts expended under the
Distribution Plan, and the purposes for which such expenditures
were incurred, must be made to the Directors for their review.
In addition, the Distribution Plan provides that it may not be
amended to increase materially the costs which holders of Class
B shares may bear for distribution pursuant to the Distribution
Plan without the approval of the holders of Class B shares and
that other material amendments of the Distribution Plan must be
approved by the Board of Directors, and by the Directors who are
neither "interested persons" (as defined in the Act) of the Fund
or the Adviser nor have any direct or indirect financial
interest in the operation of the Distribution Plan or in any
agreements entered into in connection with the Distribution
Plan, by vote cast in person at a meeting called for the purpose
of considering such amendments. The Distribution Plan is
subject to annual approval by such vote of the Directors cast in
person at a meeting called for the purpose of voting on the
Distribution Plan. The Distribution Plan was approved by the
Fund's Board of Directors, including a majority of the Directors
who are not "interested persons," at a meeting held on
October 1, 1993. The Distribution Plan is terminable at any
time by vote of a majority of the Directors who are not
"interested persons" and have no direct or indirect financial
interest in the operation of the Distribution Plan or in any
agreements entered into in connection with the Distribution
Plan, or by vote of the holders of a majority of Class B shares.

For the period from February 8, 1994 (effective date of the
Distribution Plan) through February 28, 1994, $1.00 was charged
to the Intermediate Series, with respect to Class B shares, and
$1.00 was charged to the Insured Series, with respect to Class B
shares, under the Distribution Plan.

SHAREHOLDER SERVICES PLAN. The Fund has adopted a
Shareholder Services Plan, pursuant to which the Fund pays
Service Agents for the provision of certain services to the
holders of Class A and Class B shares.

A quarterly report of the amounts expended under the
Shareholder Services Plan, and the purposes for which such
expenditures were incurred, must be made to the Directors for
their review. In addition, the Shareholder Services Plan
provides that it may not be amended without approval of the
Board of Directors, and by the Directors who are neither
"interested persons" (as defined in the Act) of the Fund nor
have any direct or indirect financial interest in the operation
of the Shareholder Services Plan or in any agreements entered
into in connection with the Shareholder Services Plan, by vote
cast in person at a meeting called for the purpose of
considering such amendments. The Shareholder Services Plan is
subject to annual approval by such vote of the Directors cast in
person at a meeting called for the purpose of voting on the
Shareholder Services Plan. The Shareholder Services Plan was so
approved on October 1, 1993. The Shareholder Services Plan is
terminable at any time by vote of a majority of the Directors
who are not "interested persons" and who have no direct or
indirect financial interest in the operation of the Shareholder
Services Plan or in any agreements entered into in connection
with the Shareholder Services Plan.

For the period from February 8, 1994 (effective date of the
Shareholder Services Plan) through February 28, 1994, $4,122 was
charged to the Intermediate Series, with respect to Class A
shares, and approximately $1,272 was charged to the Insured
Series, with respect to Class A shares, under the Shareholder
Services Plan, but these amounts were not paid pursuant to
various undertakings in effect. No amounts were charged to the
Intermediate and Insured Series, with respect to Class B shares.

PRIOR RULE 12B-1 PLAN. As of February 8, 1994, the Fund
terminated its then existing Rule 12b-1 plan, which provided for
payments to be made to Service Agents for advertising, marketing
and/or distributing Class A shares and servicing holders of
Class A shares. For the period from March 1, 1993 through
February 8, 1994, no payments were made under the prior Rule
12b-1 plan by either Series pursuant to various undertakings in
effect.

REDEMPTION OF FUND SHARES

THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED
"HOW TO REDEEM FUND SHARES."

CHECK REDEMPTION PRIVILEGE--CLASS A. An investor may
indicate on the Account Application or by later written request
that the Fund provide Redemption Checks ("Checks") drawn on the
Fund's account. Checks will be sent only to the registered
owner(s) of the account and only to the address of record. The
Account Application or later written request must be manually
signed by the registered owner(s). Checks may be made payable
to the order of any person in an amount of $500 or more. When a
Check is presented to the Transfer Agent for payment, the
Transfer Agent, as the investor's agent, will cause the Fund to
redeem a sufficient number of full or fractional Class A shares
in the investor's account to cover the amount of the Check.
Dividends are earned until the Check clears. After clearance, a
copy of the Check will be returned to the investor. Investors
generally will be subject to the same rules and regulations that
apply to checking accounts, although election of this Privilege
creates only a shareholder-transfer agent relationship with the
Transfer Agent.

If the amount of the Check is greater than the value of the
shares in an investor's account, the Check will be returned
marked insufficient funds. Checks should not be used to close
an account.

WIRE REDEMPTION PRIVILEGE. By using this Privilege, the
investor authorizes the Transfer Agent to act on wire or
telephone redemption instructions from any person representing
himself or herself to be the investor, or a representative of
the investor's Service Agent, and reasonably believed by the
Transfer Agent to be genuine. Ordinarily, the Fund will
initiate payment for shares redeemed pursuant to this Privilege
on the next business day after receipt by the Transfer Agent of
a redemption request in proper form. Redemption proceeds will
be transferred by Federal Reserve wire only to the commercial
bank account specified by the investor on the Account
Application or Shareholder Services Form. Redemption proceeds,
if wired, must be in the amount of $1,000 or more and will be
wired to the investor's account at the bank of record designated
in the investor's file at the Transfer Agent, if the investor's
bank is a member of the Federal Reserve System, or to a
correspondent bank if the investor's bank is not a member. Fees
ordinarily are imposed by such bank and are borne by the
investor. Immediate notification by the correspondent bank to
the investor's bank is necessary to avoid a delay in crediting
the funds to the investor's bank account.

Investors with access to telegraphic equipment may wire
redemption requests to the Transfer Agent by employing the
following transmittal code which may be used for domestic or
overseas transmissions:

Transfer Agent's
Transmittal Code Answer Back Sign

144295 144295 TSSG PREP

Investors who do not have direct access to telegraphic
equipment may have the wire transmitted by contacting a TRT
Cables operator toll free at 1-800-654-7171. Investors should
advise the operator that the above transmittal code must be used
and should also inform the operator of the Transfer Agent's
answer back sign.

To change the commercial bank or account designated to
receive redemption proceeds, a written request must be sent to
the Transfer Agent. This request must be signed by each
shareholder, with each signature guaranteed as described below
under "Stock Certificates; Signatures."

TELETRANSFER PRIVILEGE. Investors should be aware that if
they have selected the TeleTransfer Privilege, any request for a
wire redemption will be effected as a TELETRANSFER transaction
through the Automated Clearing House ("ACH") system unless more
prompt transmittal specifically is requested. Redemption
proceeds will be on deposit in the investor's account at an ACH
member bank ordinarily two business days after receipt of the
redemption request. See "Purchase of Fund Shares--TELETRANSFER
Privilege."

STOCK CERTIFICATES; SIGNATURES. Any certificate
representing Series' shares to be redeemed must be submitted
with the redemption request. Written redemption requests must
be signed by each shareholder, including each holder of a joint
account, and each signature must be guaranteed. Signatures on
endorsed certificates submitted for redemption also must be
guaranteed. The Transfer Agent has adopted standards and
procedures pursuant to which signature-guarantees in proper form
generally will be accepted from domestic banks, brokers,
dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and
savings associations, as well as from participants in the New
York Stock Exchange Medallion Signature Program, the Securities
Transfer Agents Medallion Program ("STAMP") and the Stock
Exchanges Medallion Program. Guarantees must be signed by an
authorized signatory of the guarantor and "Signature-Guaranteed"
must appear with the signature. The Transfer Agent may request
additional documentation from corporations, executors,
administrators, trustees or guardians, and may accept other
suitable verification arrangements from foreign investors, such
as consular verification. For more information with respect to
signature-guarantees, please call the telephone number listed on
the cover.

REDEMPTION COMMITMENT. The Fund has committed itself to
pay in cash all redemption requests by any shareholder of
record, limited in amount during any 90-day period to the lesser
of $250,000 or 1% of the value of the Series' net assets at the
beginning of such period. Such commitment is irrevocable
without the prior approval of the Securities and Exchange
Commission. In the case of requests for redemption in excess of
such amount, the Board of Directors reserves the right to make
payments in whole or in part in securities or other assets in
case of an emergency or any time a cash distribution would
impair the liquidity of the Series to the detriment of the
existing shareholders. In such event, the securities would be
valued in the same manner as the Series' portfolio is valued.
If the recipient sold such securities, brokerage charges would
be incurred.

SUSPENSION OF REDEMPTIONS. The right of redemption may be
suspended or the date of payment postponed (a) during any period
when the New York Stock Exchange is closed (other than customary
weekend and holiday closings), (b) when trading in the markets
the Fund ordinarily utilizes is restricted, or when an emergency
exists as determined by the Securities and Exchange Commission
so that disposal of the Fund's investments or determination of
its net asset value is not reasonably practicable, or (c) for
such other periods as the Securities and Exchange Commission by
order may permit to protect the Fund's shareholders.

<PAGE>
SHAREHOLDER SERVICES

THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED
"SHAREHOLDER SERVICES."

EXCHANGE PRIVILEGE. The Exchange Privilege permits
investors to purchase, in exchange for all or part of their
shares of Class A or Class B of a Series, shares of the same
Class of the other Series, shares of the same Class of certain
other funds advised by the Adviser or shares of the same Class
of certain funds advised by the Administrator, on the basis of
relative net asset value per share at the time of the exchange
as follows:

A. Class A shares of funds purchased without a sales load
may be exchanged for Class A shares of other funds
sold with a sales load, and the applicable sales load
will be deducted.

B. Class A shares of funds purchased with or without a
sales load may be exchanged without a sales load for
Class A shares of other funds sold without a sales
load.

C. Class A shares of funds purchased with a sales load,
Class A shares of funds acquired by a previous
exchange from Class A shares purchased with a sales
load, and additional Class A shares acquired through
reinvestment of dividends or distributions of any such
funds (collectively referred to herein as "Purchased
Shares") may be exchanged for Class A shares of other
funds sold with a sales load (referred to herein as
"Offered Shares"), provided that, if the sales load
applicable to the Offered Shares exceeds the maximum
sales load that could have been imposed in connection
with the Purchased Shares (at the time the Purchased
Shares were acquired), without giving effect to any
reduced loads, the difference will be deducted.

D. Class B shares of any fund may be exchanged for Class
B shares of other funds without a sales load. Class B
shares of any fund exchanged for Class B shares of
another fund will be subject to the higher applicable
contingent deferred sales charge ("CDSC") of the two
funds and, for purposes of calculating CDSC rates and
conversion periods, will be deemed to have been held
since the date the Class B shares being exchanged were
initially purchased.

To accomplish an exchange under item C above, an investor's
Service Agent must notify the Transfer Agent of the investor's
prior ownership of such Class A shares and the investor's
account number.

To use this Privilege, an investor, or the investor's
Service Agent acting on the investor's behalf, must give
exchange instructions to the Transfer Agent in writing, by wire
or by telephone. Telephone exchanges may be made only if the
appropriate "YES" box has been checked on the Account
Application, or a separate signed Shareholder Services Form is
on file with the Transfer Agent. By using this Privilege, the
investor authorizes the Transfer Agent to act on telephonic,
telegraphic or written exchange instructions from any person
representing himself or herself to be the investor or a
representative of the investor's Service Agent, and reasonably
believed by the Transfer Agent to be genuine. Telephone
exchanges may be subject to limitations as to the amount
involved or the number of telephone exchanges permitted. Shares
issued in certificate form are not eligible for telephone
exchanges.

AUTO-EXCHANGE PRIVILEGE. The Auto-Exchange Privilege
permits an investor to purchase, in exchange for Class A or
Class B shares of the Series, shares of the same Class of the
other Series or certain other funds in the First Prairie Family
of Funds or certain funds advised by the Administrator. This
Privilege is available only for existing accounts. Shares will
be exchanged on the basis of relative net asset value as
described above under "Exchange Privilege." Enrollment in or
modification or cancellation of this Privilege is effective
three business days following notification by the investor. An
investor will be notified if his account falls below the amount
designated to be exchanged under this Privilege. In this case,
an investor's account will fall to zero unless additional
investments are made in excess of the designated amount prior to
the next Auto-Exchange transaction. Shares held under IRA and
other retirement plans are eligible for this Privilege.
Exchanges of IRA shares may be made between IRA accounts and
from regular accounts to IRA accounts, but not from IRA accounts
to regular accounts. With respect to all other retirement
accounts, exchanges may be made only among those accounts.

The Exchange Privilege and Auto-Exchange Privilege are
available to shareholders resident in any state in which shares
of the fund being acquired legally may be sold. Shares may be
exchanged only between accounts having identical names and other
identifying designations.

Shareholder Services Forms and prospectuses of the other
funds may be obtained from the Distributor, 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144. The Fund reserves
the right to reject any exchange request in whole or in part.
The Exchange Privilege or Auto-Exchange Privilege may be
modified or terminated at any time upon notice to shareholders.

AUTOMATIC WITHDRAWAL PLAN. The Automatic Withdrawal Plan
permits an investor with a $5,000 minimum account to request
withdrawal of a specified dollar amount (minimum of $50) on
either a monthly or quarterly basis. Withdrawal payments are
the proceeds from sales of Fund shares, not the yield on the
shares. If withdrawal payments exceed reinvested dividends and
distributions, the investor's shares will be reduced and
eventually may be depleted. An Automatic Withdrawal Plan may be
established by completing the appropriate application available
from the Distributor, the Adviser, certain affiliates of the
Adviser or certain Service Agents. Automatic Withdrawal may be
terminated at any time by the investor, the Fund or the Transfer
Agent. Shares for which stock certificates have been issued may
not be redeemed through the Automatic Withdrawal Plan. Class B
shares withdrawn pursuant to the Automatic Withdrawal Plan will
be subject to any applicable CDSC.

DIVIDEND SWEEP. Dividend Sweep allows investors to invest
on the payment date their dividends or dividends and capital
gains distributions, if any, from a Series in shares of the same
Class of the other Series or another fund in the First Prairie
Family of Funds or certain funds advised or administered by the
Administrator of which the investor is a shareholder. Shares of
the same Class of other funds purchased pursuant to this
privilege will be purchased on the basis of relative net asset
value per share as follows:

A. Dividends and distributions paid with respect to Class
A shares by a fund may be invested without imposition
of a sales load in Class A shares of other funds that
are offered without a sales load.

B. Dividends and distributions paid with respect to Class
A shares by a fund which does not charge a sales load
may be invested in Class A shares of other funds sold
with a sales load, and the applicable sales load will
be deducted.

C. Dividends and distributions paid with respect to Class
A shares by a fund which charges a sales load may be
invested in Class A shares of other funds sold with a
sales load (referred to herein as "Offered Shares"),
provided that, if the sales load applicable to the
Offered Shares exceeds the maximum sales load charged
by the fund from which dividends or distributions are
being swept, without giving effect to any reduced
loads, the difference will be deducted.

D. Dividends and distributions paid with respect to Class
B shares by a fund may be invested without imposition
of any applicable CDSC in Class B shares of other
funds and the Class B shares of such other funds will
be subject on redemption to any applicable CDSC.

DETERMINATION OF NET ASSET VALUE

THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED
"HOW TO BUY FUND SHARES."

VALUATION OF PORTFOLIO SECURITIES. Each Series'
investments are valued by an independent pricing service (the
"Service") approved by the Board of Directors. When, in the
judgment of the Service, quoted bid prices for investments are
readily available and are representative of the bid side of the
market, these investments are valued at the mean between the
quoted bid prices (as obtained by the Service from dealers in
such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities).
Other investments (which constitute a majority of the portfolio
securities) are carried at fair value as determined by the
Service, based on methods which include consideration of:
yields or prices of municipal bonds of comparable quality,
coupon, maturity and type; indications as to values from
dealers; and general market conditions. The Service may employ
electronic data processing techniques and/or a matrix system to
determine valuations. The Service's procedures are reviewed by
the Fund's officers under the general supervision of the Board
of Directors. Expenses and fees of each Series, including the
investment advisory and administration fees (reduced by the
expense limitation, if any) and expenses under the Shareholder
Services Plan with respect to Class A and Class B shares, and
fees pursuant to the Distribution Plan, with respect to Class B
shares only, are accrued daily and taken into account for the
purpose of determining the net asset value of each Series'
shares. Because of the difference in operating expenses
incurred by each Class, the per share net asset value of each
Class will differ.

Subject to guidelines established by the Fund's Board of
Directors, the Adviser intends to retain in the Insured Series'
portfolio Municipal Obligations which are insured under the
Mutual Fund Insurance policy and which are in default or in
significant risk of default in the payment of principal or
interest until the default has been cured or the principal and
interest are paid by the issuer or the insurer. In establishing
fair value for these securities the Board of Directors will give
recognition to the value of the insurance feature as well as the
market value of the securities. Absent any unusual or
unforeseen circumstances, the Adviser will recommend valuing
these securities at the same price as similar securities of a
minimum investment grade (i.e., rated Baa by Moody's or BBB by
S&P, Fitch or Duff).

NEW YORK STOCK EXCHANGE CLOSINGS. The holidays (as
observed) on which the New York Stock Exchange is closed
currently are: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas.

PORTFOLIO TRANSACTIONS

Portfolio securities ordinarily are purchased from and sold
to parties acting as either principal or agent. Newly-issued
securities are purchased directly from the issuer or from an
underwriter; other purchases and sales usually are placed with
those dealers from which it appears that the best price or
execution will be obtained. Ordinarily, no brokerage
commissions, as such, are paid by the Fund for such purchases
and sales, although the price paid usually includes an
undisclosed compensation to the dealer acting as agent. The
prices paid to underwriters of newly-issued securities usually
include a concession paid by the issuer to the underwriter, and
purchases of after-market securities from dealers ordinarily are
executed at a price between the bid and asked price. No
brokerage commissions have been paid by either Series to date.

Transactions are allocated to various dealers by the Fund's
investment personnel in their best judgment. The primary
consideration is prompt and effective execution of orders at the
most favorable price. Subject to that primary consideration,
dealers may be selected for research, statistical or other
services to enable the Adviser to supplement its own research
and analysis with the views and information of other securities
firms and may be selected based upon their sales of Fund shares.

Research services furnished by brokers through which the
Fund effects securities transactions may be used by the Adviser
in advising other funds or accounts it may advise and,
conversely, research services furnished to the Adviser by
brokers in connection with other funds or accounts the Adviser
may advise may be used by the Adviser in advising the Fund.
Although it is not possible to place a dollar value on these
services, it is the opinion of the Adviser that the receipt and
study of such services should not reduce its overall research
expenses.

DIVIDENDS, DISTRIBUTIONS AND TAXES

THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED
"DIVIDENDS, DISTRIBUTIONS AND TAXES."

The Code provides that if a shareholder has not held his
shares of a Series for more than six months (or such shorter
period as the Internal Revenue Service may prescribe by
regulation) and has received an exempt-interest dividend with
respect to such shares, any loss incurred on the sale of such
shares will be disallowed to the extent of the exempt-interest
dividend received. In addition, any dividend or distribution
paid shortly after an investor's purchase may have the effect of
reducing the net asset value of his shares below the cost of his
investment. Such a distribution would be a return on the
investment in an economic sense although taxable as stated in
"Dividends, Distributions and Taxes" in the Prospectus.

Under Section 1256 of the Code, gain or loss a Series
realizes from certain futures and options transactions will be
treated as 60% long-term capital gain or loss and 40% short-term
capital gain or loss. Gain or loss will arise upon exercise or
lapse of such futures and options as well as from closing
transactions. In addition, any such futures or options
remaining unexercised at the end of a Series' taxable year will
be treated as sold for their then fair market value, resulting
in additional gain or loss to the Series characterized in the
manner described above.

Ordinarily, gains and losses realized from portfolio
transactions will be headed as capital gain or loss. However,
all or a portion of any gains realized from the sale or other
disposition of certain market discount bonds will be treated as
ordinary income under Section 1276. In addition, all or a
portion of the gain realized from engaging in "conversion
transactions" may be treated as ordinary income under Section
1258. "Conversion transactions" are defined to include certain
option and straddle transactions, transactions marketed or sold
to produce capital gains, or transactions described in Treasury
regulations to be issued in the future.

Offsetting positions held by a Series involving certain
futures and options transactions may constitute "straddles."
"Straddles" are defined to include "offsetting positions" in
actively traded personal property. The tax treatment of
"straddles" is governed by Sections 1092 and 1258 of the Code,
which, in certain circumstances, overrides or modifies the
provisions of Section 1256. As such, all or a portion of any
short or long-term capital gain from certain "straddle" and/or
conversion transactions may be recharacterized to ordinary
income.

If a Series were treated as entering into "straddles" by
reason of its futures and options transactions, such "straddles"
would be characterized as "mixed straddles" if the futures or
options transactions comprising a part of such "straddles" were
governed by Section 1256 of the Code. A Series may make one or
more elections with respect to "mixed straddles." If no
election is made, to the extent the "straddle" and conversion
transaction rules apply to positions established by the Series,
losses realized by the Series will be deferred to the extent of
unrealized gain in the offsetting position. Moreover, as a
result of the "straddle" rules, short-term capital losses on
"straddle" positions may be recharacterized as long-term capital
loss, and long-term capital gain may be treated as short-term
capital gain or ordinary income.

PERFORMANCE INFORMATION

THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED
"PERFORMANCE INFORMATION."

The offering of Class B shares commenced on February 8,
1994 and, accordingly, only limited performance data are
available for Class B.

The Intermediate Series' current yield for Class A for the
30-day period ended February 28, 1994 was 3.98%, which reflects
the absorption of certain expenses by the Adviser and
Administrator and/or a waiver of the advisory and administration
fees, without which the Intermediate Series' yield for the
30-day period ended February 28, 1994 would have been 3.10%.
The Insured Series' current yield for Class A for such period
was 4.40%, which reflects the absorption of certain expenses by
the Adviser and Administrator and/or a waiver of the advisory
and administration fees, without which the Insured Series' yield
for the 30-day period ended February 28, 1994 would have been
3.03%. Current yield is computed pursuant to a formula which
operates as follows: The amount of the Series' expenses accrued
for the 30-day period (net of reimbursements) is subtracted from
the amount of the dividends and interest earned (computed in
accordance with regulatory requirements) by the Series during
the period. That result is then divided by the product of: (a)
the average daily number of shares outstanding during the period
that were entitled to receive dividends, and (b) the maximum
offering price per share in the case of Class A or the net asset
value per share in the case of Class B on the last day of the
period less any undistributed earned income per share reasonably
expected to be declared as a dividend shortly thereafter. The
quotient is then added to 1, and that sum is raised to the 6th
power, after which 1 is subtracted. The current yield is then
arrived at by multiplying the result by 2.

Based upon a 1994 Federal income tax rate of 39.6%, the
Intermediate Series' tax equivalent yield for Class A for the
30-day period ended February 28, 1994 was 6.59%, which reflects
the absorption of certain expenses by the Adviser and
Administrator and/or a waiver of the advisory and administration
fees, without which the Intermediate Series' yield for the
30-day period ended February 28, 1994 would have been 5.13%.
Based upon such tax rate, the Insured Series' tax equivalent
yield for Class A for such period was 7.28%, which reflects the
absorption of certain expenses by the Adviser and Administrator
and/or a waiver of the advisory and administration fees, without
which the Insured Series' tax equivalent yield for Class A for
the 30-day period ended February 28, 1994 would have been 5.02%.
See "Management of the Fund" in the Prospectus. Tax equivalent
yield is computed by dividing that portion of the current yield
(calculated as described above) which is tax exempt by 1 minus a
stated tax rate and adding the quotient to that portion, if any,
of the yield of the Series that is not tax exempt.

The tax equivalent yields noted above represent the
application of the highest Federal marginal personal income tax
rate presently in effect. The tax equivalent yield figures,
however, do not reflect the potential effect of any state or
local (including, but not limited to, county, district or city)
taxes, including applicable surcharges. In addition, there may
be pending legislation which could affect such stated tax rate
or yields. Each investor should consult its tax adviser, and
consider its own factual circumstances and applicable tax laws,
in order to ascertain the relevant tax equivalent yield.

Average annual total return is calculated by determining
the ending redeemable value of an investment purchased with a
hypothetical $1,000 payment made at the beginning of the period
(assuming the reinvestment of dividends and distributions),
dividing by the amount of the initial investment, taking the
"n"th root of the quotient (where "n" is the number of years in
the period) and subtracting 1 from the result. A Class's
average annual total return figures calculated in accordance
with such formula assume that in the case of Class A the maximum
sales load had been deducted from the hypothetical initial
investment at the time of purchase or in the case of Class B the
maximum applicable CDSC has been paid upon redemption at the end
of the period. The Intermediate Series' average annual total
return for Class A for the 1, 5 and 6 year periods ended
February 28, 1994 was 1.76%, 8.31% and 8.06%, respectively.
Average annual total return of the Insured Series (which
operated as the Long-Term Series until September 12, 1989) for
Class A for such periods was -.94%, 8.55% and 8.27%,
respectively. Class B shares were first offered for sale on
February 8, 1994 and, therefore, no relevant average annual
total return data for the fiscal year ended February 28, 1994
was available for Class B.

Total return is calculated by subtracting the amount of the
applicable Series' maximum offering price per share in the case
of Class A or the net asset value per share in the case of Class
B at the beginning of a stated period from the net asset value
per share at the end of the period (after giving effect to the
reinvestment of dividends and distributions during the period),
and dividing the result by the maximum offering price per share
in the case of Class A or the net asset value per share in the
case of Class B at the beginning of the period. Total return
also may be calculated based on the net asset value per share at
the beginning of the period instead of the maximum offering
price per share at the beginning of the period for Class A
shares or without giving effect to any applicable CDSC at the
end of the period for Class B shares. In such cases, the
calculation would not reflect the deduction of the sales load
with respect to Class A shares or any applicable CDSC with
respect to Class B shares, which, if reflected, would reduce the
performance quoted.

The Intermediate Series' total return for Class A for the
period March 1, 1988 (commencement of operations) to February
28, 1994, based on maximum offering price per share, was 59.23%.
Based on net asset value per share, the Intermediate Series'
total return for Class A was 64.09% for this period. The total
return for the period February 8, 1994 (commencement of initial
offering of Class B shares) through February 28, 1994 for Class
B of the Intermediate Series, after giving effect to the maximum
applicable CDSC, was -3.90%, without giving effect to the
maximum applicable CDSC the total return for Class B was -.93%
for this period. Total return of the Insured Series (which
operated as the Long-Term Series until September 12, 1989) for
Class A for the period March 1, 1988 (commencement of
operations) to February 28, 1994, based upon maximum offering
price per share, was 61.08%. Based on net asset value per
share, the Insured Series' total return for Class A was 68.63%
for this period. The total return for the period February 8,
1994 (commencement of initial offering of Class B shares)
through February 28, 1994 for Class B of the Insured Series,
after giving effect to the maximum applicable CDSC, was -4.58%
without giving effect to the maximum applicable CDSC the total
return for Class B was -1.64% for this period.

The performance figures set forth above for the
Intermediate Series for periods prior to July 1, 1992 reflect
such Series' management policy at the time to invest in
Municipal Obligations rated A or better by Moody's or S&P. The
Intermediate Series currently must invest in Municipal
Obligations rated at least Baa by Moody's or BBB by S&P, Fitch
or Duff.

From time to time, the Fund may use hypothetical tax
equivalent yields or charts in its advertising. These
hypothetical yields or charts will be used for illustrative
purposes only and are not indicative of a Series' past or future
performance.

From time to time, advertising for the Fund may describe
the costs of a college education at public or private
institutions; how such costs may increase over time, based on an
assumed rate of growth; and how investments in the Fund can be
used to help pay for such costs. Advertisements for the Fund
also may refer to comparisons of a Series' performance with
historical rates of inflation or may describe how an investment
in the Fund may be used to fund retirement costs or other
economic goals. From time to time advertising materials for the
Fund also may refer to Morningstar ratings and related analyses
supporting the rating.

INFORMATION ABOUT THE FUND

THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED
"GENERAL INFORMATION."

Each Series' share has one vote and, when issued and paid
for in accordance with the terms of the offering, is fully paid
and non-assessable. Series' shares have no preemptive or
subscription rights and are freely transferable.

The Fund sends annual and semi-annual financial statements
to all its shareholders and sends statements concerning
shareholder accounts monthly.

On June 14, 1989, shareholders of the Fund approved a
proposal to change the Fund's name from First Lakeshore Tax
Exempt Bond Fund, Inc. to First Prairie Tax Exempt Bond Fund,
Inc. On August 1, 1989, shareholders of the Insured Series
(then the Long-Term Series) approved a proposal to change such
Series' name to the Insured Series. Effective February 8, 1994,
the Fund began operating under the assumed name First Prairie
Municipal Bond Fund.

CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT, COUNSEL
AND INDEPENDENT AUDITORS

The Bank of New York, 110 Washington Street, New York, New
York 10286, is the Fund's custodian. The Shareholder Services
Group, Inc., a subsidiary of First Data Corporation, P.O. Box
9671, Providence, Rhode Island 02940-9671, is the Fund's
transfer and dividend disbursing agent. Neither The Bank of New
York nor The Shareholder Services Group, Inc. has any part in
determining the investment policies of the Fund or which
securities are to be purchased or sold by the Fund.

Stroock & Stroock & Lavan, 7 Hanover Square, New York, New
York 10004-2696, as counsel for the Fund, has rendered its
opinion as to certain legal matters regarding the due
authorization and valid issuance of the shares of Common Stock
being sold pursuant to the Fund's Prospectus.

Ernst & Young, 787 Seventh Avenue, New York, New York
10019, independent auditors, have been selected as auditors of
the Fund.

<PAGE>

APPENDIX

Description of S&P, Moody's, Fitch and Duff ratings:

S&P

MUNICIPAL BOND RATINGS

An S&P municipal bond rating is a current assessment
of the creditworthiness of an obligor with respect to a specific
obligation.

The ratings are based on current information furnished
by the issuer or obtained by S&P from other sources it considers
reliable, and will include: (1) likelihood of default-capacity
and willingness of the obligor as to the timely payment of
interest and repayment of principal in accordance with the terms
of the obligation; (2) nature and provisions of the obligation;
and (3) protection afforded by, and relative position of, the
obligation in the event of bankruptcy, reorganization or other
arrangement under the laws of bankruptcy and other laws
affecting creditors' rights.

AAA

Debt rated AAA has the highest rating assigned by S&P.
Capacity to pay interest and repay principal is extremely
strong.

Debt rated AA has a very strong capacity to pay
interest and repay principal and differs from the highest rated
issues only in a small degree.

Principal and interest payments on bonds in this
category are regarded as safe. This rating describes the third
strongest capacity for payment of debt service. It differs from
the two higher ratings because:

General Obligation Bonds -- There is some weakness in
the local economic base, in debt burden, in the balance between
revenues and expenditures, or in quality of management. Under
certain adverse circumstances, any one such weakness might
impair the ability of the issuer to meet debt obligations at
some future date.

Revenue Bonds -- Debt service coverage is good, but
not exceptional. Stability of the pledged revenues could show
some variations because of increased competition or economic
influences on revenues. Basic security provisions, while
satisfactory, are less stringent. Management performance
appears adequate.

BBB

Of the investment grade, this is the lowest.

General Obligation Bonds -- Under certain adverse
conditions, several of the above factors could contribute to a
lesser capacity for payment of debt service. The difference
between "A" and "BBB" rating is that the latter shows more than
one fundamental weakness, or one very substantial fundamental
weakness, whereas the former shows only one deficiency among the
factors considered.

Revenue Bonds -- Debt coverage is only fair.
Stability of the pledged revenues could show substantial
variations, with the revenue flow possibly being subject to
erosion over time. Basic security provisions are no more than
adequate. Management performance could be stronger.

Plus (+) or minus (-): The ratings from AA to BBB may
be modified by the addition of a plus or minus designation to
show relative standing within the major ratings categories.

MUNICIPAL NOTE RATINGS

SP-1

The issuers of these municipal notes exhibit very
strong or strong capacity to pay principal and interest. Those
issues determined to possess overwhelming safety characteristics
are given a plus sign (+) designation.

SP-2

The issuers of these municipal notes exhibit
satisfactory capacity to pay principal and interest.

COMMERCIAL PAPER RATINGS

An S&P commercial paper rating is a current assessment
of the likelihood of timely payment of debt having an original
maturity of no more than 365 days. Issues assigned an A rating
are regarded as having the greatest capacity for timely payment.
Issues in this category are delineated with the numbers 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 either overwhelming or very strong.
Those issues determined to possess overwhelming safety
characteristics are denoted with a plus sign (+) designation.

A-2

Capacity for timely payment on issues with this
designation is strong. However, the relative degree of safety
is not as high as for issues designated A-1.

Moody's

MUNICIPAL BOND RATINGS

Aaa

Bonds which are rated Aaa are judged to be of the best
quality. They 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.

Bonds which are rated A possess many favorable
investment attributes and are to be considered as upper medium-
grade obligations. Factors giving security to principal and
interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment some time 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.

Moody's applies the numerical modifiers 1, 2 and 3 to
show relative standing within the major rating categories,
except in the Aaa category. The modifier 1 indicates a ranking
for the security in the higher end of a rating category; the
modifier 2 indicates a mid-range ranking; and the modifier 3
indicates a ranking in the lower end of a rating category.

MUNICIPAL NOTE RATINGS

Moody's ratings for state and municipal notes and
other short-term loans are designated Moody's Investment Grade
(MIG). Such ratings recognize the differences between
short-term credit risk and long-term risk. Factors affecting
the liquidity of the borrower and short-term cyclical elements
are critical in short-term ratings, while other factors of major
importance in bond risk, long-term secular trends for example,
may be less important over the short run.

A short-term rating may also be assigned on an issue
having a demand feature. Such ratings will be designated as
VMIG or, if the demand feature is not rated, as NR.

Short-term ratings on issues with demand features are
differentiated by the use of the VMIG symbol to reflect such
characteristics as payment upon periodic demand rather than
fixed maturity dates and payment relying on external liquidity.
Additionally, investors should be alert to the fact that the
source of payment may be limited to the external liquidity with
no or limited legal recourse to the issuer in the event the
demand is not met.

Moody's short-term ratings are designated Moody's
Investment Grade as MIG 1 or VMIG 1 through MIG 4 or VMIG 4. As
the name implies, when Moody's assigns a MIG or VMIG rating, all
categories define an investment grade situation.

MIG 1/VMIG 1

This designation denotes best quality. There is
present strong protection by established cash flows, superior
liquidity support or demonstrated broad-based access to the
market for refinancing.

MIG 2/VMIG 2

This designation denotes high quality. Margins of
protection are ample although not so large as in the preceding
group.

COMMERCIAL PAPER RATINGS

Fitch

BOND RATINGS

The ratings represent Fitch's assessment of the issuer's
ability to meet the obligations of a specific debt issue or
class of debt. The ratings take into consideration special
features of the issue, its relationship to other obligations of
the issuer, the current financial condition and operative
performance of the issuer and of any guarantor, as well as the
political and economic environment that might affect the
issuer's future financial strength and credit quality.

AAA

Bonds rated AAA are considered to be investment grade and
of the highest credit quality. The obligor has an exceptionally
strong ability to pay interest and repay principal, which is
unlikely to be affected by reasonably foreseeable events.

Bonds rated AA are considered to be investment grade and of
very high credit quality. The obligor's ability to pay interest
and repay principal is very strong, although not quite as strong
as bonds rated AAA. Because bonds rated in the AAA and AA
categories are not significantly vulnerable to foreseeable
future developments, short-term debt of these issuers is
generally rated F-1+.

Bonds rated A are considered to be investment grade and of
high credit quality. The obligor's ability to pay interest and
repay principal is considered to be strong, but may be more
vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.

BBB

Bonds rated BBB are considered to be investment grade and
of satisfactory credit quality. The obligor's ability to pay
interest and repay principal is considered to be adequate.
Adverse changes in economic conditions and circumstances,
however, are more likely to have an adverse impact on these
bonds and, therefore, impair timely payment. The likelihood
that the ratings of these bonds will fall below investment grade
is higher than for bonds with higher ratings.

Plus (+) and minus (-) signs are used with a rating symbol
to indicate the relative position of a credit within the rating
category.

SHORT-TERM RATINGS

Fitch's short-term ratings apply to debt obligations that
are payable on demand or have original maturities of up to three
years, including commercial paper, certificates of deposit,
medium-term notes, and municipal and investment notes.

Although the credit analysis is similar to Fitch's bond
rating analysis, the short-term rating places greater emphasis
than bond ratings on the existence of liquidity necessary to
meet the issuer's obligations in a timely manner.

F-1+

EXCEPTIONALLY STRONG CREDIT QUALITY. Issues assigned this
rating are regarded as having the strongest degree of assurance
for timely payment.

F-1

VERY STRONG CREDIT QUALITY. Issues assigned this rating
reflect an assurance of timely payment only slightly less in
degree than issues rated F-1+.

Duff

BOND RATINGS

AAA

Bonds rated AAA are considered highest credit quality. The
risk factors are negligible, being only slightly more than for
risk-free U.S. Treasury debt.

Bonds rated AA are considered high credit quality.
Protection factors are strong. Risk is modest but may vary
slightly from time to time because of economic conditions.

Bonds rated A have protection factors which are average but
adequate. However, risk factors are more variable and greater
in periods of economic stress.

BBB

Bonds rated BBB are considered to have below average
protection factors but still considered sufficient for prudent
investment. Considerable variability in risk during economic
cycles.

Plus (+) and minus (-) signs are used with a rating symbol
(except AAA) to indicate the relative position of a credit
within the rating category.

COMMERCIAL PAPER RATING

<PAGE>
FIRST PRAIRIE MUNICIPAL BOND FUND, INTERMEDIATE
SERIES (INCORPORATED AS FIRST PRAIRIE TAX EXEMPT BOND FUND,
INC.)-SEE NOTE 1
<TABLE>

<CAPTION>
STATEMENT OF INVESTMENTS FEBRUARY 28, 1994
PRINCIPAL
MUNICIPAL BONDS-78.0% AMOUNT VALUE
<S> <C> <C>
ALASKA-3.3%
Alaska Student Loan Corp., Student Loan Revenue
5.50%, 7/1/2004 (Insured; AMBAC) $1,000,000 $ 1,013,030
ARIZONA-.9%
University of Arizona, University Revenues 6.75%,
6/1/2001 250,000 280,370
CALIFORNIA-4.0%
Fresno, Health Facility Revenue, Refunding
(Holy Cross Health System Corp.):
4.875%, 12/1/2001 575,000 582,182
5.10%, 12/1/2003 635,000 647,668
COLORADO-1.7%
Denver City and County, Airport Systems
Subordinated Revenue
6.35%, 12/1/1994 (LOC; Sumitomo Trust and
Banking Co., Ltd.) (a) 500,000 512,625
ILLINOIS-14.4%
Chicago O'Hare International Airport,
Revenue, Refunding (General Second Lien)
5.20%, 1/1/2002 (Insured; MBIA) 1,000,000 1,014,710
Illinois Health Facilities Authority, Improvement
Revenue, Refunding:
(Illinois Masonic Medical Center) 4.90%,
10/1/2000 825,000 823,119
(Swedish Covenant) 6.10%, 8/1/2008 1,000,000 1,021,220
Metropolitan Pier and Exposition
Authority, Dedicated State Tax Revenue:
6.125%, 6/1/2000 500,000 534,565
6.50%, 6/15/2027 1,000,000 1,047,170
INDIANA-5.1%
Indiana Bond Bank, Revenue (Revolving
Fund Program) 5.80%, 2/1/2002 500,000 523,305
Indiana Health Facility Financing Authority, HR,
Refunding (Floyd Memorial Hospital Project) 6.625%,
2/15/2022 1,000,000 1,064,010
IOWA-.3%
Iowa School Corps., Warrants Certificates
3.60%, 12/30/1994 (Insured; CGIC) 100,000 100,490
MICHIGAN-3.0%
Michigan Hospital Finance Authority,
Revenue, Refunding (McLaren Obligation Group)
2.75%, 10/15/1994 925,000 920,616
MINNESOTA-4.1%
Minneapolis and Saint Paul
Metropolitan Airports Commission 5%, 1/1/1996 1,250,000 1,274,363
NEVADA-2.4%
City of Las Vegas, Refunding 6.20%, 10/1/2001 500,000 540,110
Nevada Housing Division (Single Family
Program) 7.20%, 10/1/1998 200,000 212,254
NEW MEXICO-.7%
New Mexico Educational Assistance
Foundation, Student Loan Revenue 3.20%, 12/1/1994 200,000 200,246
NORTH DAKOTA-.3%
State of North Dakota, Student Loan
Revenue 7.40%, 1/1/1998 (Insured; AMBAC) 70,000 76,901
OHIO-8.0%
Franklin County, HR, Refunding (Riverside
United Methodist):
5.10%, 5/15/2000 780,000 795,740
5.20%, 5/15/2001 435,000 445,736
Ohio Public Facilities Commission (Higher
Education Capital Facilities) 5.30%,
12/1/1997 1,180,000 1,229,194
PENNSYLVANIA-7.0%
Philadelphia, Gas Works Revenue:
4.90%, 8/1/2002 $ 1,200,000 $ 1,172,256
5.10%, 8/1/2004 1,000,000 971,020
TEXAS-3.6%
Brazos River Authority, PCR (Texas
Utilities-Electric) 8.25%, 12/1/2016
(Insured; FGIC) 500,000 556,500
Texas Housing Agency, SFMR 7.35%,
3/1/1998 50,000 52,318
Weslaco Health Facilities Development
Corp., HR (Knapp Medical Center Project)
4.70%, 6/1/2002 500,000 492,650
UTAH-6.8%
Intermountain Power Agency, Special
Obligation (5th Crossover) 7%, 7/1/2015
(Insured; FGIC) 1,775,000 1,958,038
Utah Building Ownership Authority, LR
(Department Employment Security Project)
7.50%, 8/15/2003 (Prerefunded
8/15/1998)(b) 100,000 112,869
Utah Housing Finance Agency, Single Family
Mortgage 7.70%, 1/1/1998 25,000 25,894
WASHINGTON-3.4%
Snohomish County Public Utility District
No. 001, Electric Revenue (Generation System)
5.25%, 1/1/2004 1,050,000 1,044,341
WISCONSIN-9.0%
State of Wisconsin, Transportation Revenue 5.30%, 7/1/1995 500,000 13,325
Wisconsin Health and Educational Facilities Authority, Revenue
(Milwaukee Regional Medical Center, Inc. Project)
6.50%, 8/1/2013 (Insured; AMBAC) 2,000,000 2,132,020 Wisconsin Housing and Economic
Development Authority, Homeownership Revenue: 7.50%,
9/1/1997.................... ........................ 50,000 51,545 7.70%,
9/1/1998................................ ............ 75,000 77,057
--TOTAL MUNICIPAL BONDS (cost $23,806,385).............. $24,019,457

SHORT-TERM MUNICIPAL INVESTMENTS-22.0%
ARKANSAS-.8% Magnolia, IDR, VRDN (American Fuel Cell) 2.55%
(LOC; Barclays Bank)(a,c)................ $ 250,000 $ 250,000
MINNESOTA-13.0%
Osseo Independent School District No. 279, Revenue:
2.90%, 5/1/1994..................... 1,000,000 1,000,000
2.93%, 5/1/1994............. 3,000,000 3,000,000
NEW YORK-.3%
New York City, GO, VRDN 2.30% (Line of Credit; FGIC)(c) 100,000 100,000
NORTH CAROLINA-4.2%
Person County Industrial Facilities and Pollution
Control Financing Authority, SWDR, VRDN (Carolina P&L) 2.30%
(LOC; Fuji Bank)(a,c).......................................1,300,000 1,300,000
TEXAS-3.4%
Panhandle-Plains Higher Education Authority,
Student Loan Revenue, Refunding 2.90%, 9/1/1994 1,040,000 1,038,419
WASHINGTON-.3%
Pierce County Economic
Development Corp., Industrial Revenue, VRDN
(Northwest Banking Project) 2.55% (LOC; Barclays Bank)(a,b) 100,000 100,000

-TOTAL SHORT-TERM MUNICIPAL INVESTMENTS (cost $6,790,000) $ 6,788,419

TOTAL INVESTMENTS-100.0% (cost $30,596,385) $30,807,876

FIRST PRAIRIE MUNICIPAL BOND FUND, INSURED
SERIES(INCORPORATED AS FIRST PRAIRIE TAX EXEMPT BOND FUND,
INC.)-SEE NOTE 1STATEMENT OF INVESTMENTS (CONTINUED)

FEBRUARY 28, 1994

PRINCIPAL
AMOUNT VALUE MUNICIPAL
<S> <C> <C>
BONDS-90.7%
DISTRICT OF COLUMBIA-2.4%
District of Columbia 7.25%, 6/1/2002 (Prerefunded 6/1/1999)
(Insured; AMBAC)(b)......... $ 200,000 $ 228,644
FLORIDA-3.3%
Jacksonville, Guaranteed Entitlement Revenue, Refunding 5.60%,
10/1/2003 (Insured; AMBAC) 300,000 316,491
ILLINOIS-7.1%
Hoffman Estates, Refunding 5.30%, 12/1/2004
(Insured; MBIA)............................. 250,000 253,785
Northern Cook County Solid Waste Agency,
Contract Revenue 6.40%, 5/1/2006 (Insured; MBIA).. 400,000 433,116
IOWA-4.8%
Iowa School Corp., Warrants Certificates 3.60%, 12/30/1994 (Insured; CGIC) 150,000 150,735
Muscatine, Electric Revenue, Refunding 5.50%, 1/1/2001 (Insured; AMBAC) 300,000 312,279
KENTUCKY-3.7%
Jefferson County Health Facilities, Revenue (Jewish Hospital
Healthcare Services, Inc.)
6.55%, 5/1/2022 (Insured; AMBAC).......... 325,000 352,485
LOUISIANA-4.2%
Louisiana Public Facilities Authority, Special Insured Assessment Revenue,
Refunding
3.45%, 4/1/1995 (Insured; FSA)......................... 400,000 400,416
MINNESOTA-3.2%
Minneapolis and Saint Paul Metropolitan Airports Commission 5%, 1/1/1996 300,000 305,847
NEVADA-7.1%
Clark County, Passenger Facility Charge Revenue
(Las Vegas McCarran International Airport)
5.80%, 7/1/2003 (Insured; AMBAC)..................... 300,000 318,405
Henderson Sewer 7.20%, 1/1/2007 (Insured; MBIA).............. 325,000 361,686
OHIO-4.3%
Ohio Public Facilities Commission, Higher
Education Capital Facilities
5.30%, 12/1/1997 (Insured; FSA)................... 400,000 416,676
PENNSYLVANIA-15.3%
Philadelphia, Gas Works Revenue:
5%, 8/1/2003....................................... 315,000 307,242 5.10%,
8/1/2004........................... 1,200,000 1,165,224
SOUTH CAROLINA-21.7%
Piedmont Municipal Power Agency, Electric Revenue,
Refunding 6.30%, 1/1/2022 (Insured; MBIA) 1,000,000 1,040,540
South Carolina Public Service Authority, Electric
System Expansion Revenue, Refunding
7%, 7/1/2022 (Insured; AMBAC)................... 1,000,000 1,045,990
TEXAS-2.7%
Houston, Water and Sewer System Revenue, Refunding 5.75%,
12/1/2003 (Insured; MBIA)..... 250,000 264,317
WASHINGTON-10.9%
Seattle Municipality Metropolitan, Sewer Revenue 6.30%, 1/1/2033
(Insured; MBIA)........ 1,000,000 1,048,750

TOTAL MUNICIPAL BONDS (cost $8,715,167)....... $ 8,722,628

=SHORT-TERM MUNICIPAL INVESTMENTS-9.3%
IOWA-1.1%
Des Moines Methodist System, Inc., Hospital Facility Revenue, VRDN
(Iowa Methodist Medical Center Project) 2.40% (LOC; Fuji Bank)(a,c) $ 100,000 $ 100,000

<PAGE>

</TABLE>
<TABLE>
FIRST PRAIRIE MUNICIPAL BOND FUND, INSURED SERIES
(INCORPORATED AS FIRST PRAIRIE TAX EXEMPT BOND FUND, INC.)-SEE NOTE 1
<CAPTION>

STATEMENT OF INVESTMENTS (CONTINUED) FEBRUARY 28, 1994
PRINCIPAL
SHORT-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
----------- -----------
<S> <C> <C>
NEW YORK-3.1%
New York State Energy Research and Development Authority, PCR, VRDN
(Niagara Mohawk Power)
2.35% (LOC; Toronto-Dominion Bank)(a,c).......................................... $ 300,000 $ 300,000

WASHINGTON-5.1%
Pierce County Economic Development Corp., Industrial Revenue, VRDN
(Northwest Banking Project)
2.55% (LOC; Toronto Dominion Bank)(a,c).......................................... 160,000 160,000

Washington Community Economic Revitalization Board, Economic Revenue, VRDN
2.55% (LOC; Industrial Bank of Japan)(a,c)....................................... 330,000 330,000
-----------
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS (cost $890,000).............................. $ 890,000
===========

TOTAL INVESTMENTS-100.0% (cost $9,605,167).......................................... $ 9,612,628
===========
</TABLE>
<TABLE>

SUMMARY OF ABBREVIATIONS
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation LOC Letter of Credit
CGIC Capital Guaranty Insurance Company LR Lease Revenue
FGIC Financial Guaranty Insurance Corporation MBIA Municipal Bond Insurance Association
FSA Financial Security Assurance PCR Pollution Control Revenue
GO General Obligation SFMR Single Family Mortgage Revenue
HR Hospital Revenue SWDR Solid Waste Disposal Revenue
IDR Industrial Development Revenue VRDN Variable Rate Demand Notes

</TABLE>
<TABLE>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
<CAPTION>

PERCENTAGE OF VALUE
STANDARD INTERMEDIATE INSURED
FITCH(D) OR MOODY'S OR & POOR'S SERIES SERIES
- -------- ------- -------- ------------ -------
<S> <C> <C> <C> <C>
AAA Aaa AAA 33.1% 175.4%
AA Aa AA 24.9 -
A A A 29.4 -
BBB Baa BBB 6.9 15.3
F1 MIG1 & VMIG1 SP1 .7 2.7
F1(e) P1(e) A1(e) 5.0 6.6
------ ------
100.0% 100.0%
====== ======
</TABLE>

NOTES TO STATEMENTS OF INVESTMENTS:
(a) Secured by bank letters of credit.
(b) Bonds which are prerefunded are collateralized by U.S.
Government securities which are held in escrow and are used to
pay principal and interest on the tax-exempt issue and to retire
the bonds in full at the earliest refunding date.
(c) Securities payable on demand. The interest
rate, which is subject to change is based upon bank prime
rates or an index of market interest rates.(d) Fitch currently
provides creditworthiness information for a limited amount of
investments.
(e) The ratings F1, P1, and A1 are the highest
ratings assigned tax exempt commercial paper by Fitch,
Moody's and Standard & Poor's, respectively.(f) At February 28,
1994, 35.4% of the Insured Series' investments are insured by
MBIA and 26.8% are insured by AMBAC.

See notes to financial statements.
<PAGE>
<TABLE>

FIRST PRAIRIE MUNICIPAL BOND FUND
(INCORPORATED AS FIRST PRAIRIE TAX EXEMPT BOND FUND, INC.)-SEE NOTE 1
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 28, 1994
INTERMEDIATE INSURED ASSETS:
SERIES SERIES

------------ ---------------
<S> <C> <C>
Investments in securities, at value
(cost $30,596,385 and $9,605,167, respectively)-see statement................... $30,807,876 $ 9,612,628

Cash................................................................................ -- 34,655
Receivable for investment securities sold....................................... 991,427 1,022,427
Interest receivable............................................................. 287,640 103,713
Receivable for subscriptions to Common Stock.................................... 10,000 -
Prepaid expenses................................................................ 10,101 6,257
Due from Administrator.......................................................... 104,059 60,398
------------ -----------
32,211,103 10,840,078
------------ -----------
LIABILITIES:
Payable for investment securities purchased.................................... 2,208,788 1,584,160
Payable for Common Stock redeemed.............................................. 1,113,453 _
Accrued expenses and other liabilities......................................... 50,503 19,783
------------ -----------
NET ASSETS.......................................................................... $28,838,359 $ 9,236,135
=========== ===========

REPRESENTED BY:
Paid-in capital................................................................. $28,564,872 $ 9,235,292
Accumulated undistributed net realized gain on investments...................... 61,996 _
Accumulated distributions in excess of net realized gain on investments-Note 1(d) - (6,618)
Accumulated net unrealized appreciation on investments-Note 3.................... 211,491 7,461
------------ -----------
NET ASSETS at value................................................................. $28,838,359 $ 9,236,135
============ ===========
Shares of Common Stock outstanding:
Class A Shares:
(2.5 billion shares of $.001 par value authorized).......................... 2,365,884
===========
(2.5 billion shares of $.001 par value authorized).......................... 761,127
===========

Class B Shares:
(2.5 billion shares of $.001 par value authorized).......................... 981
===========
(2.5 billion shares of $.001 par value authorized).......................... 162
===========
NET ASSET VALUE per share:
Class A Shares:
($28,826,406 / 2,365,884 shares)............................................. $12.18
===========
($9,234,168 / 761,127 shares)................................................ $12.13
===========
Class B Shares:
($11,953 / 981 shares)....................................................... $12.18
===========
($1,967 / 162 shares)....................................................... $12.14
===========

See notes to financial statements.

<PAGE>

</TABLE>
<TABLE>

FIRST PRAIRIE MUNICIPAL BOND FUND
(INCORPORATED AS FIRST PRAIRIE TAX EXEMPT BOND FUND, INC.)-SEE NOTE 1
<CAPTION>

STATEMENT OF OPERATIONS YEAR ENDED FEBRUARY 28, 1994
INTERMEDIATE INSURED
SERIES SERIES
----------- -----------
<S> <C> <C>

INVESTMENT INCOME:
INTEREST INCOME..................................................................... $ 1,411,868 $ 497,242
----------- -----------
EXPENSES-Note 1(c):
Investment advisory fee-Note 2(a)............................................... $ 116,711 $ 40,987
Administration fee-Note 2(a).................................................... 58,356 20,494
Shareholder servicing costs-Note 2(b,c)......................................... 89,165 35,683
Auditing fees................................................................... 25,765 6,932
Legal fees...................................................................... 25,719 8,335
Prospectus and shareholders' reports-Note 2(b).................................. 13,664 7,974
Registration fees............................................................... 12,239 12,769
Custodian fees.................................................................. 9,701 4,436
Directors' fees and expenses-Note 2(d).......................................... 4,414 1,443
Distribution fees (Class B Shares)-Note 2(b).................................... 1 1
----------- -----------
Miscellaneous................................................................... 13,353 8,444
----------- -----------
369,088 147,498
Less-expense reimbursement from Adviser and
Administrator due to undertakings-Note 2(a).................................. 352,071 147,497
----------- -----------
TOTAL EXPENSES............................................................ 17,017 1
----------- -----------
INVESTMENT INCOME-NET..................................................... 1,394,851 497,241
----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments-Note 3........................................ $ 1,275,347 $ 607,250
Net unrealized (depreciation) on investments................................... (1,243,092) (728,931)
----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS.................... 32,255 (121,681)
----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................... $ 1,427,106 $ 375,560
=========== ===========
</TABLE>

See notes to financial statements.
<PAGE>
<TABLE>

FIRST PRAIRIE MUNICIPAL BOND FUND
(INCORPORATED AS FIRST PRAIRIE TAX EXEMPT BOND FUND, INC.)-SEE NOTE 1
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS INTERMEDIATE SERIES
--------------------------
YEAR ENDED FEBRUARY 28,
--------------------------
1993 1994
----------- -----------
<S> <C> <C>
OPERATIONS:
Investment income-net............................................................... $ 1,174,284 $ 1,394,851
Net realized gain on investments.................................................... 302,855 1,275,347
Net unrealized appreciation (depreciation) on investments for the year.............. 1,086,267 (1,243,092)
----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................... 2,563,406 1,427,106

DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Class A shares..................................................................... (1,174,284) (1,394,847)
Class B shares..................................................................... _ (4)
----------- -----------
Net realized gain on investments:
Class A shares................................................................. (251,807) (1,471,722)
Class B shares................................................................. _ _
----------- -----------
TOTAL DIVIDENDS............................................................ (1,426,091) (2,866,573)
----------- -----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A shares................................................................. 12,024,536 6,634,160
Class B shares................................................................. _ 12,000

Dividends reinvested:
Class A shares................................................................. 952,307 1,972,927
Class B shares................................................................. _ 4

Cost of shares redeemed:
Class A shares................................................................. (4,539,502) (6,226,132)
Class B shares................................................................. _ _
----------- -----------

INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS................................. 8,437,341 2,392,959
----------- -----------
TOTAL INCREASE IN NET ASSETS...................................................... 9,574,656 953,492
NET ASSETS:
Beginning of year................................................................. 18,310,211 27,884,867
----------- -----------
End of year....................................................................... $27,884,867 $28,838,359
=========== ===========

</TABLE>
<TABLE>

<CAPTION>
SHARES
--------------------------------------------
CLASS A CLASS B
-------------------- --------------------
YEAR ENDED
YEAR ENDED FEBRUARY 28, FEBRUARY 28,
1993 1994 1994*
-------- --------- ------------
<S> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold........................................................ 976,152 523,996 980
Shares issued for dividends reinvested............................. 77,235 158,309 1
Shares redeemed.................................................... (367,959) (496,647) _
--------- --------- ---------
NET INCREASE IN SHARES OUTSTANDING........................... 685,428 185,658 981
========= ========= =========
</TABLE>

* From February 8, 1994 (commencement of initial offering) to

February 28, 1994.

See notes to financial statements.

<PAGE>

<TABLE>
FIRST PRAIRIE MUNICIPAL BOND
FUND (INCORPORATED AS FIRST PRAIRIE TAX EXEMPT BOND FUND,
INC.)-SEE NOTE 1 STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
<CAPTION>
INSURED SERIES
--------------------------
YEAR ENDED FEBRUARY 28,
--------------------------
1993 1994
----------- -----------
<S> <C> <C>
OPERATIONS:
Investment income-net............................................................ $ 474,329 $ 497,241
Net realized gain on investments................................................. 249,775 607,250
Net unrealized appreciation (depreciation) on investments for the year........... 556,530 (728,931)
----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS......................... 1,280,634 375,560
----------- -----------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Class A shares.................................................................. (474,329) (497,237)
Class B shares.................................................................. -- (4)
---------- ----------
Net realized gain on investments:
Class A shares.................................................................. (172,263) (717,815)
Class B shares.................................................................. -- --
----------- -----------
Excess net realized gain on investments:
Class A shares.................................................................. -- (6,618)
Class B shares.................................................................. -- --
----------- -------
TOTAL DIVIDENDS............................................................. (646,592) (1,221,674)
----------- ----------

CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A shares.................................................................. 6,253,771 3,586,206
Class B shares.................................................................. -- 2,000
Dividends reinvested:
Class A shares.................................................................. 515,334 956,593
Class B shares.................................................................. -- 4
Cost of shares redeemed:
Class A shares.................................................................. (2,704,291) (5,752,746)
Class B shares.................................................................. -- --
----------- ----------
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS............. 4,064,814 (1,207,943)
----------- ----------
TOTAL INCREASE (DECREASE) IN NET ASSETS..................................... 4,698,856 (2,054,057)
NET ASSETS:
Beginning of year............................................................... 6,591,336 11,290,192
----------- ----------
End of year..................................................................... $11,290,192 $ 9,236,135
=========== ===========
</TABLE>
<TABLE>
<CAPTION>

SHARES
___________________________________________
CLASS A CLASS B
------------------------ ---------------
YEAR ENDED FEBRUARY 28, YEAR ENDED
------------------------ FEBRUARY 28,
1993 1994 1994*
--------- ----------- ----------------
<S> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold.................................................... 496,701 275,363 161
Shares issued for dividends reinvested.............................. 40,732 75,829 1
Shares redeemed..................................................... (213,167) (441,865) --
--------- ----------- -----------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING.................. 324,266 (90,673) 162
========= =========== ===========
* From February 8, 1994 (commencement of initial offering) to February 28, 1994.

See notes to financial statements.
</TABLE>

<PAGE>

FIRST PRAIRIE
MUNICIPAL BOND FUND, INTERMEDIATE SERIES(INCORPORATED AS FIRST
PRAIRIE TAX EXEMPT BOND FUND, INC.)-SEE NOTE 1 FINANCIAL
HIGHLIGHTS

Reference is made to page 4 of the Prospectus Dated June 27,
1994.

See notes to financial statements.

<PAGE>

FIRST PRAIRIE MUNICIPAL BOND FUND, INSURED
SERIES (INCORPORATED AS FIRST PRAIRIE TAX EXEMPT BOND FUND,
INC.)-SEE NOTE 1 FINANCIAL HIGHLIGHTS (CONTINUED)

Reference is made to page 5 of the Prospectus Dated June 27,
1994.

See notes to financial statements.
<PAGE>

FIRST PRAIRIE MUNICIPAL BOND
FUND(INCORPORATED
AS FIRST PRAIRIE TAX EXEMPT BOND FUND, INC.)-SEE NOTE 1 NOTES TO
FINANCIAL STATEMENTS NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The
Fund is registered under the Investment Company Act of
1940 ("Act") as a non-diversified open-end management investment
company and
operates as a series company issuing two classes of Common
Stock: the Intermediate Series and the Insured Series. The Fund
accounts separately for the assets, liabilities and operations
of
each series. The First National Bank of Chicago ("Adviser")
serves
as the Fund's investment adviser. The Dreyfus Corporation
("Administrator") serves as the Fund's administrator. Dreyfus
Service
Corporation ("Distributor"), a wholly-owned subsidiary of the
Administrator, acts as the distributor of the Fund's shares.
Effective February 8, 1994, your Fund began operating under the
name First Prairie Municipal Bond Fund. On December 29, 1993,
shareholders approved an amendment to the Fund's Articles of
Incorporation to provide for the issuance of additional
classes of
shares. On October 1, 1993, the Fund's Board of Directors
classified the Fund's existing shares as Class A shares and
authorized
the issuance of 5 billion shares of $.001 par value Class B
shares for the Intermediate Series and the Insured Series. The
Fund
began offering both Class A and Class B shares on February 8,
1994 for the Intermediate Series and the Insured Series. Class A
shares are subject to a sales charge imposed at the time of
purchase and Class B shares are subject to a contingent deferred
sales
charge imposed at the time of redemption on redemptions made
within five years of purchase. Other differences between the
two classes include the services offered to and the expenses
borne by each Class and certain voting rights. (A) PORTFOLIO
VALUATION: Each series' investments are valued each business day
by an independent pricing service ("Service") approved by
the Board
of Directors. Investments for which quoted bid prices in
the judgment of the Service are readily available and are
representative
of the bid side of the market are valued at the mean between the
quoted bid prices (as obtained by the Service from dealers in
such
securities) and asked prices (as calculated by the Service based
upon its evaluation of the market for such securities). Other
investments (which constitute a majority of the portfolio
securities) are carried at fair value as determined by the
Service, based
on methods which include consideration of: yields or prices of
municipal securities of comparable quality, coupon,maturity and
type; indications as to values from dealers; and general market
conditions. (B) SECURITIES TRANSACTIONS AND INVESTMENT
INCOME:
Securities transactions are recorded on a trade date basis.
Realized gain and loss from securities transactions are recorded
on the
identified cost basis.Interest income, adjusted for amortization
of premiums and, when appropriate, discounts on investments, is
earned from settlement date and recognized on the accrual basis.
Securities purchased or sold on a when-issued or
delayed-delivery
basis may be settled a month or more after the trade date.
(C)
EXPENSES: Expenses directly attributable to each series are
charged to that series' operations; expenses which are
applicable
to both series are allocated between them. (D) DIVIDENDS TO
SHAREHOLDERS: It is the policy of the Fund, with respect to both
series, to declare dividends daily from investment income-net.
Such
dividends are paid monthly. Dividends from net realized capital
gain, with respect to both series, are normally declared and
paid annually, but each series may make distributions on a more
frequent basis to comply with the distribution requirements of
the
Internal Revenue Code. However, to the extent that a net
realized
capital gain of either series can be reduced by capital loss
carryovers, if any, of that series,such gain will not be
distributed.

FIRST PRAIRIE MUNICIPAL BOND FUND(INCORPORATED AS
FIRST
PRAIRIE TAX EXEMPT BOND FUND, INC.)-SEE NOTE 1 NOTES TO
FINANCIAL
STATEMENTS (CONTINUED) Dividends in excess of net realized
gains on investment for financial statement purposes result
primarily from losses from securities transactions during the
year ended
February 28, 1994 which are treated for Federal income tax
purposes as arising in Fiscal 1995. (E) FEDERAL INCOME TAXES:
It is
the policy of each series to continue to qualify as a regulated
investment company, which can distribute tax exempt dividends,
by
complying with the provisions available to certain investment
companies, as defined in applicable sections of the
Internal Revenue
Code, and to make distributions of income and net realized
capital gain sufficient to relieve it from all, or substantially
all,
Federal income taxes. For Federal income tax purposes, each
series is treated as a single entity for the purpose of
determining such
qualification.NOTE 2-INVESTMENT ADVISORY FEE, ADMINISTRATION FEE
AND OTHER TRANSACTIONS WITH AFFILIATES: (A) Fees payable by
the
Fund pursuant to the provisions of an Investment Advisory
Agreement with the Adviser and an Administration Agreement with
the
Administrator are payable monthly based on annual rates of .40
of
1% and .20 of 1%, respectively, of the average daily value of
each
series' net assets. The agreements further provide that if in
any full fiscal year the aggregate expenses of either series,
excluding interest on borrowings, taxes, brokerage and
extraordinary expenses, exceed the expense limitation of any
state having
jurisdiction over the Fund, that series may deduct from the
payments to be made to the Adviser and the Administrator, or the
Adviser
and the Administrator will bear their proportionate share of
such
excess to the extent required by state law.The most stringent
state expense limitation applicable to the Fund presently
requires reimbursement of expenses in any full fiscal year
that such
expenses (exclusive of distribution expenses and certain
expenses as described above) exceed 2 1/2% of the first $30
million, 2% of
the next$70 million and 1 1/2% of the excess over $100 million
of the average value of either series' net assets in accordance
with
the California "blue sky" regulations. With respect to the
Insured Series, the Adviser and the Administrator had undertaken
to
reimburse all fees and expenses (excluding 12b-1 fee).During the
year ended February 28, 1994, the Adviser and the Administrator
reimbursed the series $40,987 and $106,510,
respectively.Pursuant to the undertakings, with respect to the
Intermediate Series,
the adviser and the administrator had undertaken through
November
21, 1993 to reimburse all fees and expenses of the series and
thereafter, had undertaken, from November 22, 1993 through
December 29, 1993 to reduce the advisory and the administration
fee paid
by, or reimburse such excess expenses of the Series to the
extent
that the Series' aggregate expenses (excluding certain expenses
as
described above) exceeded specified annual percentages of the
Series' average daily net assets. The Adviser and
the Administrator
have currently undertaken from December 30, 1993 to waive
receipt
of the Advisory fee and the Administration fee paid by the
Series
in excess of an annual rate of .25 of 1% (excluding 12b-1 fee)
of the Series' average daily net assets. The Adviser and the
Administrator reimbursed the series $116,711 and $235,360,
respectively. First Chicago Investment Services, Inc. an
affiliate of
the Adviser,retained $124,945 and $34,389 during the year ended
February 28, 1994 from commissions earned on sales of
Intermediate
Series shares and Insured Series shares, respectively. The
Distributor retained $10,274 and $2,251 during the year
ended February
28, 1994 from commissions earned on sales of Intermediate Series
shares and Insured Series shares, respectively.

FIRST PRAIRIE
MUNICIPAL BOND FUND(INCORPORATED AS FIRST PRAIRIE TAX EXEMPT
BOND FUND, INC.)-SEE NOTE 1

NOTES TO FINANCIAL STATEMENTS
(CONTINUED)

No amounts were retained by the Distributor during the period
ended February 28, 1994 from contingent deferred sales charges
imposed upon redemptions of the Fund's Class B Shares for the
Intermediate Series and Insured Series. (B) Under the
Distribution Plan ("Class B Distribution Plan") adopted pursuant
to Rule 12b-1 under the Act, effective February 8, 1994, each
Series pays the Service Agents (which may include the Adviser,
the Administrator
and the Distributor) at an annual rate of .50 of 1% of the value
of
each Series' Class B shares average daily net assets, for
the costs and expenses in connection with advertising, marketing
and distributing each Series' Class B shares. Each Series may
make payments to one or more Service Agents (a securities dealer,
financial institution,or other industry professional) based on
the value of each Series' Class B shares owned by clients of the
Service Agent. Prior to February 8, 1994, each Series'
Service Plan ("prior Service Plan") provided that each Series pay
the
Service Agents (which may include the Adviser, the Administrator
and the Distributor), at an annual rate of .25 of 1% of the value
of each Series' average daily net assets, for costs and expenses
in connection with advertising, marketing and distribution of
each
Series' shares and for servicing shareholder accounts.Each
Series made payments to one or more Service Agents based on
the value of
each Series' shares owned by clients of the Service Agent.
The prior Service Plan also provided for each Series to bear the
costs
of preparing, printing and distributing certain of the Fund's
prospectuses and statements of additional information and costs
associated with implementing and operating the Plan, not to
exceed the greater of $100,000 or .005 of 1% of each Series'
average
daily net assets for any full fiscal year. During the period
ended February 28, 1994 $75,139 and $28,654 was charged to the
Intermediate Series and the Insured Series pursuant to the prior
Service plan and $1 and $1 was charged to the Intermediate
Series and the Insured Series pursuant to the Class B
Distribution Plan. (C) Under the Shareholder Services Plan,
effective
February 8, 1994,each Series pays the Service Agents (which may
include the Adviser, the Administrator and the Distributor) an
annual rate of .25 of 1% of the value of the Series' average
daily net assets of Class A and Class B shares for servicing
shareholder accounts. The services provided may include personal
services relating to shareholder accounts, such as
answering shareholder inquiries regarding each Series and
providing reports and other information, and services related to
the
maintenance of shareholder accounts. For the period ended
February 28, 1994, $4,122 and $1,272 were chargeable to the
Intermediate
Series and the Insured Series Class A and Class B shares,
respectively, pursuant to the Shareholder Services Plan,but
these amounts
were not paid pursuant to the undertakings in effect(see Note
2(a)). (D) Certain officers and directors of the Fund are
"affiliated persons,"as defined in the Act, of the Adviser or
the Administrator. Each director who is not an "affiliated
person"
receives from the Fund an annual fee of$1,500 and an attendance
fee of $250 per meeting. (E) On December 5, 1993, Dreyfus
entered into an agreement and Plan of Merger (the "Merger
Agreement") providing for the merger of Dreyfus with a subsidiary
of
Mellon Bank Corporation ("Mellon"). Following the merger, it
is planned that Dreyfus will be a direct subsidiary of Mellon
Bank,
N.A. Closing of this merger is subject to a number of
contingencies, including receipt of certain regulatory
approvals and approvals
of the stockholders of Dreyfus and of Mellon. The merger
is expected to occur in mid-1994, but could occur later.FIRST
PRAIRIE
MUNICIPAL BOND FUND(INCORPORATED AS FIRST PRAIRIE TAX EXEMPT
BOND FUND, INC.)-SEE NOTE 1 NOTES TO FINANCIAL STATEMENTS
(CONTINUED)NOTE 3-SECURITIES TRANSACTIONS: The following
summarizes the securities transactions by the Fund,which
consisted
entirely of municipal bonds and short-term tax
exempt investments, for the year ended February 28, 1994:

PURCHASES SALES
----------- -----------
<S> <C> <C>
Intermediate Series................... $88,155,866 $85,466,890
Insured Series........................ $31,384,159 $32,589,954
</TABLE>

At February 28, 1994, accumulated net unrealized appreciation
on investments was $211,491, consisting of $331,530 gross
unrealized appreciation and $120,039 gross unrealized
depreciation for the Intermediate Series.

At February 28, 1994, accumulated net unrealized appreciation
on investments was $7,461, consisting of $97,713 gross unrealized
appreciation and $90,252 gross unrealized depreciation for the
Insured Series.

At February 28, 1994, the cost of investments for Federal
income tax purposes was substantially the same as the cost for
financial reporting purposes (see the Statement of Investments).

REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS SHAREHOLDERS AND
BOARD OF DIRECTORS FIRST PRAIRIE MUNICIPAL BOND FUND

We have audited the accompanying statement of assets and
liabilities,including the statements of investments, of First
Prairie Municipal Bond Fund (comprising, respectively, the
Intermediate Series and the Insured Series) (formerly First
Prairie Tax Exempt Bond Fund, Inc.) as of February 28, 1994, and
the related statement of operations for the year then ended,the
statement of changes in net assets for each of the two years in
the period then ended, and financial highlights for each of the
years indicated therein. These financial statements and financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.

In our opinion, the financial statements and
financial highlights referred to above present fairly, in all
material respects, the financial position of each of the
respective series constituting First Prairie Municipal Bond Fund
at February 28, 1994, the results of their operations for the
year then ended, the changes in their net assets for each of the
two years in the period then ended, and the financial highlights
for each of the indicated years, in conformity with generally
accepted accounting principles.

(Ernst & Young Signature Logo) New York, New York April 6, 1994

<PAGE>
August 24, 1994
FIRST PRAIRIE MONEY
MARKET FUND

Supplement to Prospectus
Dated April 11, 1994

The following anticipated changes have occurred:

I. CONSUMMATION OF THE MERGER

The following information supplements and supersedes any
contrary information contained in the Fund's Prospectus.

On this date, the previously announced merger between The
Dreyfus Corporation ("Dreyfus") and a subsidiary of Mellon Bank
Corporation was completed, and as a result, Dreyfus now is a
wholly-owned subsidiary of Mellon Bank, N.A. instead of a
publicly-owned corporation.

II. NEW DISTRIBUTOR

The following information supersedes and replaces any
contrary information contained in the Fund's Prospectus and
specifically in the section entitled "How to Buy Fund Shares."

The Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at One Exchange Place, Boston,
Massachusetts 02109. The Distributor is a wholly-owned
subsidiary of Institutional Administration Services, Inc., a
provider of mutual fund administration services, the parent
company of which is Boston Institutional Group, Inc.

Accordingly, references in the Prospectus to Dreyfus Service
Corporation as the Fund's distributor should be substituted with
Premier Mutual Fund Services, Inc.

<PAGE>
- -----------------------------------------------------------
FIRST
[LOGO] PRAIRIE
FUNDS
First Prairie Money Market Fund
MONEY MARKET SERIES AND GOVERNMENT SERIES PROSPECTUS

The First National Bank of Chicago
MANAGER

Dreyfus Service Corporation
DISTRIBUTOR

Prospectus begins on page one.

[ART]

<PAGE>

FIRST [LOGO]
PRAIRIE
FUNDS

First Prairie
Money Market Fund

MONEY MARKET SERIES AND GOVERNMENT SERIES
- ---------------------------------------------------

PROSPECTUS--April 11, 1994

First Prairie Money Market Fund (the "Fund") is an open-end,
diversified, management investment company, known as a money
market mutual fund. Its goal is to provide investors with as high
a level of current income as is consistent with the preservation
of capital and the maintenance of liquidity.

The Fund permits investors to invest in two separate
portfolios, the Money Market Series and the Government Series.
The Money Market Series invests in short-term money market
instruments consisting of securities issued or
guaranteed by the U.S. Government or its agencies or
instrumentalities, bank obligations, repurchase agreements,
commercial paper and other corporate obligations. The Government
Series invests only in short-term securities issued or guaranteed
as to principal and interest by the U.S. Government and
repurchase agreements in respect thereof.

Investors can invest, reinvest or redeem shares at any
time without charge or penalty imposed by the Fund.

The First National Bank of Chicago (the "Manager") serves
as the Fund's investment adviser. Dreyfus Service Corporation
(the "Distributor"), a wholly-owned subsidiary of The Dreyfus
Corporation, serves as the Fund's distributor.

The Fund bears certain costs of advertising, administration
and/or distribution pursuant to a plan adopted in accordance with
Rule 12b-1 under the Investment Company Act of 1940.

An investment in the Fund is neither insured nor guaranteed by
the U.S. Government. There can be no assurance that the Series
will be able to maintain a stable net asset value of $1.00 per
share. The Fund's shares are not deposits or obligations of, or
guaranteed by, the Manager or any of its affiliates or any
bank, and are not insured by the Federal Deposit Insurance
Corporation ("FDIC"), the Federal Reserve Board or any other
agency. The Fund's shares involve certain investment risks,
including the possible loss of principal. The Fund's yield
fluctuates and is not guaranteed.

This Prospectus sets forth concisely information about the Fund
that an investor should know before investing. It should be read
and retained for future reference.

Part B (also known as the Statement of Additional Information),
dated April 11, 1994, which may be revised from time to time,
provides a further discussion of certain areas in this Prospectus
and other matters which may be of interest to some investors. It
has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. For a free copy, write to
the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York
11556-0144, or call toll free 1-800-346-3621. When telephoning,
ask for Operator 666.
- ------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

PAGE 1

<PAGE>

Table of Contents

<TABLE>
<S> <C>
Annual Fund Operating Expenses................ 3
Condensed Financial Information............... 4
Highlights.................................... 6
Yield Information............................. 9
Description of the Fund....................... 9
Management of the Fund........................ 21
How to Buy Fund Shares........................ 24
Shareholder Services.......................... 28
How to Redeem Fund Shares..................... 33
Service Plan.................................. 38
Dividends, Distributions and Taxes............ 40
General Information........................... 42
</TABLE>

PAGE 2

<PAGE>
Annual Fund Operating Expenses
(as a percentage of average daily net assets)

<TABLE>

MONEY MARKET GOVERNMENT
SERIES SERIES
- ---------------------------------------------------------------
<S> <C> <C>
Management Fees .55% .55%
12b-1 Fees (distribution and servicing) .25% .25%
Other Expenses .19% .08%
Total Series Operating Expenses .99% .88%
</TABLE>
---------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
EXAMPLE
An investor 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 $ 10 $ 9
3 YEARS $ 32 $ 28
5 YEARS $ 55 $ 49
10 YEARS $121 $108
</TABLE>

- --------------------------------------------------------------

THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES
MAY BE GREATER OR LESS THAN THOSE INDICATED. MOREOVER, WHILE
THE EXAMPLE ASSUMES A 5% ANNUAL RETURN, THE SERIES' ACTUAL
PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL RETURN
GREATER OR LESS THAN 5%.
- --------------------------------------------------------------
The purpose of the foregoing table is to assist investors in
understanding the various costs and expenses borne by each
Series, and therefore indirectly by investors, the payment of
which will reduce investors' return on an annual basis.
Long-term investors could pay more in 12b-1 fees than the
economic equivalent of paying a front-end sales charge. The
information in the foregoing table does not reflect any fee
waiver or expense reimbursement arrangements that may be in
effect. The Manager, affiliates of the Manager and certain
Service Agents (as defined below) may charge their clients
direct fees for effecting transactions in Series shares; such
fees are not reflected in the foregoing table. See
"Management of the Fund," "How to Buy Fund Shares" and
"Service Plan."

PAGE 3

<PAGE>
Condensed Financial
Information

The information in the following tables has been audited by Ernst
& Young, the Fund's independent auditors, whose report thereon
appears in the Statement of Additional Information.
Further financial data and related notes are included in
the Statement of Additional Information, available
upon request.

FINANCIAL HIGHLIGHTS Contained below is per share operating
performance data for a share of beneficial interest outstanding,
total investment return, ratios to average net assets and other
supplemental data for the Money Market Series for each year
indicated. This information has been derived from information
provided in the Fund's financial statements.

Money Market Series
Year Ended December 31,

- -------------------------------------------------------------------------------------------------
1986(1) 1987 1988 1989 1990 1991 1992 1993
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value,
beginning of year $1.0000 $1.0000 $ .9999 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
------- ------- ------- ------- ------- ------- ------- -------
INVESTMENT
OPERATIONS:
Investment
income--net .0552 .0585 .0679 .0842 .0734 .0543 .0313 .0274
Net realized gain
(loss) on
investments -- (.0001) .0001 -- -- -- -- .0001
------- ------- ------- ------- ------- ------- ------- -------
TOTAL FROM
INVESTMENT
OPERATIONS .0552 .0584 .0680 .0842 .0734 .0543 .0313 .0275
------- ------- ------- ------- ------- ------- ------- -------
DISTRIBUTIONS:
Dividends from
investment
income--net (.0552) (.0585) (.0679) (.0842) (.0734) (.0543) (.0313) (.0274)
Dividends from net
realized gain on
investments -- -- -- -- -- -- -- --
------- ------- ------- ------- ------- ------- ------- -------
TOTAL
DISTRIBUTIONS (.0552) (.0585) (.0679) (.0842) (.0734) (.0543) (.0313) (.0274)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end
of year $1.0000 $ .9999 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0001
------- ------- ------- ------- ------- ------- ------- -------
TOTAL INVESTMENT
RETURN 6.26%(2) 6.01% 7.01% 8.75% 7.59% 5.57% 3.18% 2.77%
RATIOS/SUPPLEMENTAL
DATA:
Ratio of expenses to
average net assets .88%(2) .96% .98% .95% .96% .97% .98% .94%
Ratio of net
investment income
to average net
assets 5.73%(2) 5.82% 6.82% 8.34% 7.33% 5.42% 3.17% 2.73%
Decrease reflected
in above expense
ratios due to
expense
reimbursements .23%(2) .03% .01% -- -- -- -- .05%
Net Assets, end of
year (000's
omitted) $174,024 $128,485 $159,814 $355,260 $414,258 $456,791 $260,865 $162,623
<FN>
- ------------------------
(1) From February 5, 1986 (commencement of operations) to December 31, 1986.
(2) Annualized.
</TABLE>

PAGE 4

<PAGE>
FINANCIAL HIGHLIGHTS Contained below is per share operating
performance data for a share of beneficial interest outstanding,
total investment return, ratios to average net assets and other
supplemental data for the Government Series for each year
indicated. This information has been derived from information
provided in the Fund's financial statements.

Government Series
Year Ended December 31,

- -------------------------------------------------------------------------------
1987(1) 1988 1989 1990 1991 1992 1993
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value,
beginning of year $1.0000 $1.0004 $1.0001 $1.0000 $1.0000 $1.0000 $1.0000
------- ------- ------- ------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income--net .0409 .0652 .0811 .0715 .0498 .0283 .0249
Net realized gain
(loss)
on investments .0004 -- -- -- -- -- (.0001)
------- ------- ------- ------- ------- ------- -------
TOTAL FROM
INVESTMENT
OPERATIONS .0413 .0652 .0811 .0715 .0498 .0283 .0248
------- ------- ------- ------- ------- ------- -------
DISTRIBUTIONS:
Dividends from
investment
income--net (.0409) (.0652) (.0811) (.0715) (.0498) (.0283) (.0249)
Dividends from net
realized gain on
investments -- (.0003) (.0001) -- -- -- --
------- ------- ------- ------- ------- ------- -------
TOTAL
DISTRIBUTIONS (.0409) (.0655) (.0812) (.0715) (.0498) (.0283) (.0249)
------- ------- ------- ------- ------- ------- -------
Net asset value, end
of year $1.0004 $1.0001 $1.0000 $1.0000 $1.0000 $1.0000 $ .9999
------- ------- ------- ------- ------- ------- -------
TOTAL INVESTMENT
RETURN 6.21%(2) 6.75% 8.43% 7.39% 5.10% 2.87% 2.52%
RATIOS/SUPPLEMENTAL
DATA:
Ratio of expenses to
average net assets .56%(2) .80% .93% .93% .90% .91% .74%
Ratio of net
investment income to
average net assets 6.11%(2) 6.56% 8.05% 7.09% 4.97% 2.87% 2.48%
Decrease reflected in
above expense ratios
due to expense
reimbursements .42%(2) .17% .02% -- -- -- .14%
Net Assets, end of
year (000's omitted) $99,904 $141,348 $272,578 $777,257 $990,897 $548,733 $154,613
<FN>
- ------------------------
(1) From May 1, 1987 (commencement of operations) to December 31, 1987.
(2) Annualized.
</TABLE>

PAGE 5

<PAGE>
Highlights

The following summary is qualified in its entirety by the more
detailed information appearing elsewhere in this Prospectus.

THE FUND The Fund is an open-end, management investment company,
known as a money market mutual fund.

INVESTMENT OBJECTIVE The Fund's goal is to provide investors
with as high a level of current income as is consistent with the
preservation of capital and the maintenance of liquidity.

THE SERIES The Fund permits investors to invest in two separate
portfolios: the Money Market Series and the Government Series.

MANAGEMENT POLICIES Each Series seeks to maintain a stable net
asset value of $1.00 per share for purchases and redemptions.
There can be no assurance that it will be able to do so.

In accordance with Rule 2a-7 under the Investment Company
Act of 1940, each Series will maintain a dollar-weighted average
portfolio maturity of 90 days or less, and purchase only
instruments with remaining maturities of 13 months or less.

MONEY MARKET SERIES The Money Market Series invests in
short-term money market instruments, including securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, bank obligations, repurchase agreements,
commercial paper and other corporate obligations. During normal
market conditions, at least 25% of the Money Market Series'
assets will be invested in bank obligations.

The Series will purchase only instruments which are rated
in one of the two highest rating categories by at least two
nationally recognized independent rating agencies, or of
comparable quality, in accordance with Rule 2a-7.

GOVERNMENT SERIES The Government Series invests only in
short-term securities issued or guaranteed as to principal and
interest by the U.S. Government, and repurchase agreements in
respect of such securities.

PAGE 6

<PAGE>
MANAGER AND MANAGEMENT FEE The First National Bank of Chicago
("Manager") is the Fund's investment adviser.

The Fund has agreed to pay the Manager a monthly fee at the
annual rate of .55 of 1% of the value of each Series' average
daily net assets.

SALES CHARGES AND EXPENSES Investors may invest, reinvest or
redeem shares at any time without charge or penalty imposed by
the Fund.

All expenses incurred in the operation of the Fund are
borne by the Fund, including taxes, interest, brokerage fees and
investment advisory fees. Shareholders also bear certain costs of
administration and/or distribution pursuant to a plan adopted in
accordance with Rule 12b-1 under the Investment Company Act of
1940, as more fully described under "Service Plan."

HOW TO BUY FUND SHARES Orders for the purchase of shares may be
placed through a number of institutions including the Manager,
the Distributor and affiliates of the Manager including First
Chicago Investment Services, Inc., a registered broker-dealer,
and certain other banks, securities dealers and other industry
professionals, such as investment advisers, accountants and
estate planning firms (collectively, "Service Agents").

The minimum initial investment is $1,000 ($250 for IRAs and other
personal retirement plans). All subsequent investments must be
at least $100.

See "How to Buy Fund Shares."

SHAREHOLDER SERVICES The Fund offers its shareholders certain
services and privileges including: Exchange Privilege,
Auto-Exchange Privilege, Automatic Asset Builder, Government
Direct Deposit Privilege, Dividend Sweep Privilege, Automatic
Withdrawal Plan and TeleTransfer Privilege. (Certain services and
privileges may not be available through all Service Agents.)

FREE CHECKWRITING Investors may request on the Account
Application that the Fund provide Redemption Checks drawn on the
Fund's account. Redemption Checks may be made payable to any
person in the amount of $500 or more. There is no charge for
this service.

PAGE 7

<PAGE>
MONTHLY DIVIDENDS The Fund ordinarily declares dividends from
each Series' net investment income daily. Dividends are usually
paid on the last calendar day of each month, and are
automatically reinvested in additional shares unless the
investor elects payment in cash.

HOW TO REDEEM FUND SHARES Generally, investors should contact
their representatives at the Manager or appropriate Service Agent
for redemption instructions.

Investors who are not clients of the Manager or a Service Agent
may redeem Fund shares by written request, through the Wire
Redemption Privilege, through the Telephone Redemption Privilege
or through the TeleTransfer privilege.

See "How to Redeem Fund Shares."

There can be no assurance the Series will be able to
maintain a stable net asset value of $1.00 per share.

Since the Money Market Series' portfolio may contain
securities issued by foreign banks, the Series may be subject to
additional investment risks that are different from those
incurred by a fund which invests only in U.S. domestic
securities.

See "Descriptions of the Fund--Risk Factors Relating to
the Money Market Series."

PAGE 8

<PAGE>
Yield Information

From time to time, each Series advertises its yield. Both yield
figures are basedon historical earnings and are not intended to
indicate future performance. It can be expected that these
yields will fluctuate substantially. The yield of a Series
refers to the income generated by an investment in such Series
over a seven-day period (which period will be stated in the
advertisement). This income is then annualized. That is, the
amount of income generated by the investment during that week is
assumed to be generated each week over a 52-week period and is
shown as a percentage of the investment. The effective yield is
calculated similarly, but, when annualized, the income earned by
an investment in the Series is assumed to be reinvested. The
effective yield will be slightly higher than the yield because of
the compounding effect of this assumed reinvestment. Each Series'
yield and effective yield may reflect absorbed expenses pursuant
to any undertaking that may be in effect. See "Management of the
Fund."

"Yield" refers to the Series' income over a 7-day period, which
is then annualized.

"Effective yield" assumes that income is reinvested; it will be
slightly higher than "yield" because of the effect of compounding
reinvested income.

Yield information is useful in reviewing a Series' performance,
but because yields will fluctuate, under certain conditions such
information may not provide a basis for comparison with domestic
bank deposits, other investments which pay a fixed yield for a
stated period of time, or other investment companies which may
use a different method of computing yield.

Yields fluctuate, so this information may not be directly
comparable to bank deposits or other investments which
pay a fixed yield for a stated period of time.

Comparative performance information may be used from time to
time in advertising or marketing the Fund's shares, including
data from Lipper Analytical Services, Inc., Bank Rate MonitorTM,
N. Palm Beach, Fla. 33408, IBC/Donoghue's Money Fund Report,
Morningstar, Inc. and other industry publications.

Description of the Fund

GENERAL The Fund is a "series fund," which is a mutual fund
divided into separate portfolios. Each portfolio is treated as a
separate entity for certain matters under the Investment Company
Act of 1940 and for other purposes, and a shareholder of one
Series is not deemed to be a shareholder of any other

PAGE 9
The Fund is a "series fund" currently offering two portfolios the
Money Market Series and the Government Series.

<PAGE>
Series. As described below, for certain matters Fund
shareholders vote together as a group: as to others they vote
separately by Series.

INVESTMENT OBJECTIVE The Fund's goal is to provide investors
with as high a level of current income as is consistent with the
preservation of capital and the maintenance of liquidity. The
Fund's investment objective cannot be changed without approval by
the holders of a majority (as defined in the Investment Company
Act of 1940) of the Fund's outstanding voting shares. There can
be no assurance that the Fund's investment objective will be
achieved. Securities in which the Series invest may not earn as
high a level of current income as long-term or lower quality
securities which generally have less liquidity, greater market
risk and more fluctuation in market value.

The Fund's goal is to provide as high a level of current income
as is consistent with preservation of capital and maintenance of
liquidity.

MANAGEMENT POLICIES Each Series seeks to maintain a net asset
value of $1.00 per share for purchases and redemptions. To do so,
the Fund uses the amortized cost method of valuing each Series'
securities pursuant to Rule 2a-7 under the Investment Company Act
of 1940, certain requirements of which are summarized below.
There can be no assurance that the Series will be able to
maintain a stable net asset value of $1.00 per share.

Each Series seeks to maintain a net asset value of $1.00 per
share for purchases and redemptions. There can be no assurance it
will be able to do so.

In accordance with Rule 2a-7, each Series will maintain a
dollar-weighted average portfolio maturity of 90 days or less,
purchase only instruments having remaining maturities of 13
months or less and invest only in U.S. dollar denominated
securities determined in accordance with procedures
established by the Board of Trustees to present minimal credit
risks and, with respect to the Money Market Series only, which
are rated in one of the two highest rating categories for debt
obligations by at least two nationally recognized statistical
rating organizations (or one rating organization if the
instrument was rated by only one such organization) or, if
unrated, are of comparable quality as determined in accordance
with procedures established by the Board of Trustees. The
nationally recognized statistical rating organizations currently
rating instruments of the type the Money Market Series may
purchase are Moody's Investors Service, Inc., Standard & Poor's
Corporation, Duff & Phelps, Inc., Fitch Investors Service, Inc.,
IBCA Limited and
<PAGE>
IBCA Inc. and Thomson BankWatch, Inc. and their rating criteria
are described in the Appendix to the Fund's Statement of
Additional Information. This discussion concerning investment
ratings and rating organizations does not apply to the
Government Series because it invests exclusively in securities
issued or guaranteed by the U.S. Government and repurchase
agreements in respect thereof.
For further information regarding the amortized cost method of
valuing securities, see "Determination of Net Asset Value" in the
Fund's Statement of Additional Information.

MONEY MARKET SERIES The Money Market Series invests in
short-term money market obligations, including securities issued
or guaranteed by the U.S. Government or its agencies or
instrumentalities, certificates of deposit, time deposits,
bankers' acceptances and other short-term obligations issued by
domestic banks, foreign branches of domestic banks, foreign
subsidiaries of domestic banks and domestic and foreign branches
of foreign banks, repurchase agreements, and high quality
commercial paper and other short-term corporate obligations,
including those with floating or variable rates of interest. In
addition, the Money Market Series is permitted to lend portfolio
securities and enter into reverse repurchase agreements to the
extent described below. During normal market conditions, at least
25% of the Money Market Series' assets will be invested in bank
obligations, including obligations of foreign banks and branches
described above.

The Money Market Series invests in short-term money market
obligations.

The Money Market Series will not invest more than 5% of
its total assets in the securities (including the securities
collateralizing a repurchase agreement) of, or subject to puts
issued by, a single issuer, except that (i) the Series may invest
more than 5% of its total assets in a single issuer for a period
of up to three business days in certain limited circumstances,
(ii) the Series may invest in obligations issued or guaranteed by
the U.S. Government without any such limitation, and (iii) the
limitation with respect to puts does not apply to unconditional
puts if no more than 10% of the Series' total assets is invested
in securities issued or guaranteed by the issuer of the
unconditional put. Investments in rated securities not rated in
the highest category by at least two rating organizations (or one
rating organization if the instrument was rated by only one such
organization), and unrated securities not determined by
<PAGE>
the Board of Trustees to be comparable to those rated in the
highest category, will be limited to 5% of the Money Market
Series' total assets, with the investment in any one such issuer
being limited to no more than the greater of 1% of the Series'
total assets or $1,000,000. As to each security, these
percentages are measured at the time the Money Market Series
purchases the security.

THE GOVERNMENT SERIES The Government Series invests only in
short-term securities issue or guaranteed as to principal and
interest by the U.S. Government and repurchase agreements in
respect to such securities.

The Government Series invests only in short-term securities
issued or guaranteed by the U.S. Government and repurchase
agreements in respect of such securities.

PORTFOLIO SECURITIES Securities issued or guaranteed by the
U.S. Government include U.S. Treasury securities, which differ
only in their interest rates, maturities and times of issuance.
The Money Market Series and the Government Series may
invest in Treasury Bills, Treasury Notes and Treasury Bonds,
Treasury Bills have initial maturities of one year or less;
Treasury Notes have have initial maturities of one to ten years;
and Treasury Bonds generally have initial maturities of greater
than ten years. The Government Series and the Money Market
Series also may invest in other securities issued or guaranteed
by the U.S. Government, examples of which are Government
National Mortgage Association or Small Business Administration
pass-through certificates and instruments issued by the
United States Maritime Administration. Such securities are
supported by the full faith and credit of the U.S. Treasury.

The Money Market Series and the Government Series may invest in
Treasury Bills, Treasury Notes and Treasury Bonds.

In addition, the Money Market Series may invest in obligations
issued or guaranteed by U.S. Government agencies and
instrumentalities. Some of these obligations, such as those of
the Federal Home Loan Banks, are supported by the right of the
issuer to borrow from the U.S. Treasury; others, such as those
issued by the Federal National Mortgage Association, by
discretionary authority of the U.S. Government to purchase
certain obligations of the agency or instrumentality; and others,
such as those issued by the Student Loan Marketing Association,
only by the credit of the agency or instrumentality. These
securities bear fixed, floating or variable rates of interest.
Interest may fluctuate based on generally recognized reference
rates or the relationship of rates. While the U.S. Government
provides financial support to such U.S. Government-sponsored
<PAGE>
The Money Market Series also may invest in securities of U.S.
Government agencies and instrumentalities such as FHLB, FNMA and
SLMA.

agencies and instrumentalities, no assurance can be given that
it will always do so, since it is not so obligated by law. The
Money Market Series will invest in such securities only when it
is satisfied that the credit risk with respect to the issuer is
minimal. Certificates of deposit are negotiable certificates
evidencing the obligation of a bank to repay funds deposited with
it for a specified period of time.
Time deposits are non-negotiable deposits maintained in a
banking institution for a specified period of time at a stated
interest rate. The Fund will invest in time deposits of banks
that have total assets in excess of one billion dollars. Time
deposits which may be held by the Fund will not benefit
from insurance from the Bank Insurance Fund or the Savings
Association Insurance Fund administered by the FDIC.

The Money Market Series also invests in various bank deposit
products such as CDs, time deposits and bankers' acceptances.

Bankers' acceptances are credit instruments evidencing
the obligation of a bank to pay a draft drawn on it by a
customer. These instruments reflect the obligation both of the
bank and of the drawer to pay the face amount of the instrument
upon maturity. The short-term obligations may include uninsured,
direct obligations bearing fixed, floating or variable interest
rates.
Repurchase agreements involve the acquisition by a Series
of an underlying debt instrument, subject to an obligation of the
seller to repurchase, and the Series to resell, the instrument at
a fixed price, usually not more than one week after its purchase.
The Fund's custodian or sub-custodian will have custody of, and
will hold in a segregated account, securities acquired by a
Series under a repurchase agreement. Repurchase agreements
are considered by the staff of the Securities and Exchange
Commission to be loans by the Series which enters into them. In
an attempt to reduce the risk of incurring a loss on a repurchase
agreement, the Government Series will enter into repurchase
agreements only with selected registered or unregistered
securities dealers or banks with total assets in excess of one
billion dollars, with respect to securities of the type in which
the Government Series may invest; and the Money Market Series
will enter into repurchase agreements only with domestic banks
with total assets in excess of one billion dollars or primary
government securities dealers reporting to the Federal Reserve
Bank of New York, with respect to securities of the type in which
the Money Market Series may Each Series may only enter into
repurchase agreements when the Fund's custodian or sub-custodian
has custody of the underlying collateral.

<PAGE>
invest. Each Series will require that additional securities be
deposited with it if the value of the securities purchased should
decrease below resale price. The Manager will monitor on an
ongoing basis the value of the collateral to assure that it
always equals or exceeds the repurchase price. Certain costs may
be incurred in connection with the sale of the securities if the
seller does not repurchase them in accordance with the repurchase
agreement. In addition, if bankruptcy proceedings are commenced
with respect to the seller of the securities, realization on the
securities by a Series may be delayed or limited. Each Series
will consider on an ongoing basis the creditworthiness of the
institutions with which it enters into repurchase agreements.
Commercial paper consists of short-term, unsecured promissory
notes issued to finance short-term credit needs. The commercial
paper purchased by the Money Market Series will consist only of
direct obligations. The other corporate obligations in which the
Money Market Series may invest consist of high quality,
short-term fixed, floating and variable rate notes and bonds
issued by corporations.
The Money Market Series also may purchase floating and
variable rate demand notes and bonds, which are obligations
ordinarily having stated maturities in excess of 13 months, but
which permit the holder to demand payment of principal at any
time, or at specified intervals not exceeding 13 months, in
each case upon not more than 30 days' notice. Variable rate
demand notes include master demand notes which are obligations
that permit the Series to invest fluctuating amounts, which may
change daily without penalty, pursuant to direct arrangements
between the Series, as lender, and the borrower. The interest
rates on these notes fluctuate from time to time. The issuer
of such obligations ordinarily has a corresponding right, after a
given period, to prepay in its discretion the outstanding
principal amount of the obligations plus accrued interest upon a
specified number of days' notice to the holders of such
obligations. The interest rate on a floating rate demand
obligation is based on a known lending rate, such as a bank's
prime rate, and is adjusted automatically each time such rate is
adjusted. The interest rate on a variable rate demand
obligation is adjusted automatically at specified intervals.
Frequently, such obligations are secured by letters of credit or
other credit support arrangements provided by banks.

<PAGE>
Because these obligations are direct lending arrangements
between the lender and the borrower, it is not contemplated that
such instrument generally will be traded, and there generally is
no established secondary market for these obligations, although
they are redeemable at face value.
Accordingly, where these obligations are not secured by letters
of credit or other credit support arrangements, the Money Market
Series' right to redeem is dependent on the ability of the
borrower to pay principal and interest on demand.
Such obligations frequently are not rated by credit rating
agencies and the Money Market Series may invest in obligations
which are not so rated only if the Manager determines at the time
of investment that the obligations are of comparable quality to
the other obligations in which the Money Market Series may
invest. The Manager, on behalf of the Money Market Series, will
consider on an ongoing basis the creditworthiness of the issuers
of the floating and variable rate demand obligations in the Money
Market Series' portfolio. The Money Market Series will not invest
more than 10% of the value of its net assets in floating
or variable rate demand obligations as to which the Series
cannot exercise the demand feature on not more than seven days'
notice if there is no secondary market available for these
obligations, and in other illiquid securities.

The Money Market Series may purchase from financial institutions
participation interests in securities in which such Series may
invest. A participation interest gives the Money Market Series an
undivided interest in the security in the proportion that the
Money Market Series' participation interest bears to the total
principal amount of the security. These instruments may have
fixed, floating or variable rates of interest, with remaining
maturities of 13 months or less. If the participation interest
is unrated, or has been given a rating below that which is
permissible for purchase by the Money Market Series, the
participation interest will be backed by an irrevocable
letter of credit or guarantee by a bank that the Board of
Trustees has determined meets the prescribed quality standards
for banks set forth below, or the payment obligation otherwise
will be collateralized by U.S. Government securities, or, in the
case of unrated participation interests, the Manager must
have determined that the instrument is of comparable quality to
those instruments in which the Money Market Series
<PAGE>
may invest. For certain participation interests, the Money
Market Series will have the right to demand payment, on not more
than seven days' notice, for all or any part of the Money Market
Series' participation interest in the security, plus accrued
interest. As to these instruments, the Money Market Series
intends to exercise its right to demand payment only upon a
default under the terms of the security, as needed to provide
liquidity to meet redemptions, or to maintain or improve the
quality of its investment portfolio. The Money Market Series will
not invest more than 10% of its net assets in participation
interests that do not have this demand feature, and in other
illiquid securities.

The Money Market Series may invest up to 10% of the value
of its net assets in securities as to which a liquid trading
market does not exist, provided such investments are consistent
with such Series' investment objective. Such securities may
include securities that are not readily marketable, such as
certain securities that are subject to legal or contractual
restrictions on resale and repurchase agreements providing for
settlement in more than seven days after notice. As to these
securities, the Money Market Series is subject to a risk that
should the Series desire to sell them when a ready buyer is not
available at a price that the Fund deems representative of their
value, the value of the Money Market Series' net assets could be
adversely affected. However, if a substantial market of
qualified institutional buyers develops pursuant to Rule 144A
under the Securities Act of 1933, as amended, for certain of
these securities held by the Money Market Series, such Series
intends to treat such securities as liquid securities in
accordance with procedures approved by the Fund's Board of
Trustees. Because it is not possible to predict with assurance
how the market for restricted securities pursuant to Rule 144A
will develop, the Fund's Board of Trustees has directed the
Manager to monitor carefully the Money Market Series' investments
in such securities with particular regard to trading activity,
availability of reliable price information and other relevant
information. To the extent that for a period of time qualified
institutional buyers cease purchasing restricted securities
pursuant to Rule 144A, the Money Market Series' investing in
such securities may have the effect of increasing the level of
illiquidity in such Series' portfolio during such period.

<PAGE>

The Money Market Series may borrow for temporary or emergency
purposes and for investment purposes, on a secured basis through
entering into reverse repurchase agreements with banks, brokers
or dealers. Reverse repurchase agreements involve the transfer by
the Money Market Series of an underlying debt instrument in
return for cash proceeds based on a percentage of the value of
the security. The Money Market Series retains the right to
receive interest and principal payments on the security. The
Money Market Series will use the proceeds of reverse repurchase
agreements only to make investments which generally either mature
or have a demand feature to resell to the issuer at a date
simultaneous with or prior to the expiration of the reverse
repurchase agreement. At an agreed upon future date, the Money
Market Series repurchases the security, at principal, plus
accrued interest. In certain types of agreements, there is no
agreed upon repurchase date and interest payments are
calculated daily, often based on the prevailing overnight
repurchase rate. The Money Market Series will maintain in a
segregated custodial account cash, cash equivalents, U.S.
Government securities or other high quality liquid debt
securities equal to the aggregate amount of its reverse
repurchase obligations, plus accrued interest, in certain cases,
in accordance with releases promulgated by the Securities and
Exchange Commission. The Securities and Exchange Commission views
reverse repurchase agreement transactions as collateralized
borrowings, and, pursuant to the Investment Company Act of 1940,
the Money Market Series must maintain continuous asset coverage
(that is, total assets including borrowings, less liabilities
exclusive of borrowings) of 300% of the amount borrowed. If the
300% asset coverage with respect to the Money Market Series
should decline as a result of market fluctuations or other
reasons, such Series may be required to sell some of its
portfolio holdings within three days to reduce the debt and
restore 300% asset coverage, even though it may be
disadvantageous from an investment standpoint to sell securities
at that time. As a result of these transactions, the Money
Market Series is exposed to greater potential fluctuations in the
value of its assets and its net asset value per share. Interest
costs on the money borrowed may exceed the return received on
the securities purchased. The Fund's Trustees have considered
the risks to the Money Market Series and its shareholders which
may result from the entry into reverse repurchase agreements

<PAGE>
and have determined that the entry into such agreements is
consistent with the Money Market Series' investment objective and
management policies.
From time to time, the Money Market Series may lend
securities from its portfolio to brokers, dealers and other
financial institutions needing to borrow securities to complete
certain transactions. Such loans may not exceed 33 1/3%
of the value of the Money Market Series' total assets. In
connection with such loans, the Money Market Series will receive
collateral consisting of cash, U.S. Government securities or
irrevocable letters of credit. Such collateral will be
maintained at all times in an amount equal to at least 100% of
the current market value of the loaned securities. The Money
Market Series can increase its income through the investment of
such collateral. The Money Market Series continues to be entitled
to the payments in amounts equal to the interest or other
distributions payable on the loaned security and receives
interest on the amount of the loan. Such loans will be terminable
at any time upon specified notice. The Money Market Series might
experience risk of loss if the institution with which it has
engaged in a portfolio loan transaction breaches its agreement
with such Series. The Money Market Series will limit the
entities with which it will enter into securities lending
transactions to those whose securities are eligible for purchase
by the Money Market Series.

CERTAIN FUNDAMENTAL POLICIES The Money Market Series: (i) may
borrow money, to the extent permitted under the Investment
Company Act of 1940; (ii) may invest up to 5% of its total assets
in the obligations of any single issuer, except that up to 25% of
the value of its total assets may be invested (subject to the
provisions of Rule 2a-7), and obligations issued or guaranteed
by the U.S. Government, its agencies or instrumentalities may be
purchased, without regard to any such limitation; and (iii) will
invest, under normal market conditions, at least 25% of its total
assets in securities issued by banks, including foreign banks and
branches, and may invest up to 25% of its total assets in the
securities of issuers in any other industry, provided that there
is no limitation on investments in obligations issued or
guaranteed by the U.S. Government, its agencies or
instrumentalities. The Government Series may: (i) borrow money
from banks (other than the Manager or The Fund has adopted
certain fundamental policies intended to limit the risk of
each Series' investment portfolio. These policies cannot be
changed, as to either Series, without approval by a majority of
such Series' shareholders.

<PAGE>
its affiliates), but only for temporary or emergency (not
leveraging) purposes, in an amount up to 10% of the value of such
Series' total assets (including the amount borrowed) valued at
the lesser of cost or market, less liabilities (not including the
amount borrowed) at the time the borrowing is made. While
borrowings exceed 5% of the Government Series' total assets, such
Series will not make any additional investments: and (ii) pledge,
hypothecate, mortgage or otherwise encumber its assets, but only
in an amount up to 10% of the value of its total assets to secure
borrowings for temporary or emergency purposes. This
paragraph describes fundamental policies that cannot be changed,
as to either Series, without approval by the holders of a
majority (as defined in the Investment Company Act of 1940) of
the outstanding voting shares of such Series.
See "Investment Objective and Management Policies--Investment
Restrictions" in the Statement of Additional Information.

CERTAIN ADDITIONAL NON-FUNDAMENTAL POLICIES OF THE MONEY MARKET
SERIES The Money Market Series may (i) pledge, hypothecate,
mortgage or otherwise encumber its assets, but only to secure
permitted borrowings; and (ii) invest up to 10% of its net assets
in repurchase agreements providing for settlement in more than
seven days after notice and in other illiquid securities (which
securities could include participation interests that are not
subject to the demand feature described above and floating and
variable rate demand obligations as to which the Money Market
Series cannot exercise the related demand feature described
above and as to which there is no secondary market). See
"Investment Objective and Management Policies--Investment
Restrictions" in the Statement of Additional Information.

RISK FACTORS RELATING TO THE MONEY MARKET SERIES Since the Money
Market Series' portfolio may contain securities issued by foreign
branches of domestic banks, foreign subsidiaries of domestic
banks, and domestic and foreign branches of foreign banks, the
Money Market Series may be subject to additional investment
risks with respect to such securities that are different in some
respects from those incurred by a fund which invests only in debt
obligations of U.S. domestic issuers, although such obligations
may be higher yielding when compared to the securities of U.S.
domestic The Money Market Series may be subject to risks
that are different from those incurred by a fund which invests
only in U.S. debt securities.

<PAGE>
issuers. Such risks include possible future political and
economic developments, the possible imposition of foreign
withholding taxes on interest income payable on the securities,
the possible establishment of exchange controls or the adoption
of other foreign governmental restrictions which might adversely
affect the payment of principal and interest on these securities
and the possible seizure or nationalization of foreign deposits.

OTHER INVESTMENT CONSIDERATIONS Each Series attempts to increase
yields by trading to take advantage of short-term market
variations. This policy is expected to result in high portfolio
turnover but should not adversely affect the Series since they
usually do not pay brokerage commissions when they purchase
short-term debt obligations. The value of the portfolio
securities held by the Series will vary inversely to changes in
prevailing interest rates. Thus, if interest rates have increased
from the time a security was purchased, such security, if sold,
might be sold at a price less than its purchase cost.
Similarly, if interest rates have declined from the time a
security was purchased, such security, if sold, might be sold at
a price greater than its purchase cost. In either instance, if
the security was purchased at face value and held to maturity, no
gain or loss would be realized.
Investment decisions for each Series are made independently from
those of other investment companies, investment advisory
accounts, custodial accounts, individual trust accounts and
commingled funds that may be advised by the
Manager. However, if such other investment companies or managed
accounts are prepared to invest in, or desire to dispose of,
securities of the type in which a Series invests at the same time
as such Series, available investments or opportunities for sales
will be allocated equitably to each of them. In some cases, this
procedure may adversely affect the size of the position obtained
for or disposed of by a Series or the price paid or received by a
Series.

<PAGE>
Management of the Fund

provided personal investment management services to portfolios
containing approximately $11.8 billion in assets. The Manager
serves as investment adviser for the Fund pursuant to a
Management Agreement dated April 30, 1993. Prior thereto, the
Manager provided investment advisory services to the Fund
pursuant to an Investment Advisory Agreement (the "Prior Advisory
Agreement"). Under the Management Agreement, the Manager, subject
to the supervision of the Fund's Board of Trustees and in
conformity with Massachusetts law and the stated
policies of the Fund, manages the investment of the assets of
each Series. The Manager is responsible for making investment
decisions for the Fund, placing purchase and sale orders and
providing research, statistical analysis and continuous
supervision of the investment portfolio. The Manager provides
these services through its Investment Management Department. The
investment advisory services of the Manager are not exclusive
under the terms of the Management Agreement. The Manager is free
to, and does, render investment advisory services to others,
including other investment companies as well as commingled trust
funds and a broad spectrum of individual trust and investment
management portfolios, which have varying investment objectives.
The Manager has advised the Fund that in making its investment
decisions the Manager does not obtain or use material inside
information in the possession of any other division or department
of the Manager or in the possession of any affiliate of the
Manager. The investment adviser, The First National Bank of
Chicago, is one of the argest commercial banks in the United
States and the largest in the mid-Western United States and
manages $11.8 billion of investment assets.

The Manager and its affiliates presently intend to continue to
charge and collect customary account and account transaction fees
with respect to accounts through which or for
<PAGE>
which shares of a Series are purchased or redeemed. This will
result in the receipt by the Manager and its affiliates of
customer account fees in addition to management and Service Agent
fees from the Fund with respect to assets in certain accounts.
See "Service Plan."

The Manager has engaged The Dreyfus Corporation ("Dreyfus"),
located at 200 Park Avenue, New York, New York 10166, to assist
it in providing certain administrative services for the Fund
pursuant to a Master Administration Agreement between the Manager
and Dreyfus effective April 30, 1993. Prior thereto, Dreyfus
provided administrative services to the Fund pursuant to an
Administration Agreement with the Fund (the "Prior
Administration Agreement"). Dreyfus was formed in 1947 and, as of
February 28, 1994, managed or administered approximately $77
billion in assets for more than 1.9 million investor accounts
nationwide.

The Dreyfus Corporation, which manages or administers
approximately $77 billion in mutual fund assets, will assist the
Manager in providing certain administrative services for the
Fund.

Under the terms of the Prior Advisory Agreement and Prior
Administration Agreement, which were terminated on April 30,
1993, the Fund agreed to pay the Manager and Dreyfus monthly fees
at the annual rate of .40 and .20, respectively, of 1% of the
value of each Series' average daily net assets. Under the terms
of the Management Agreement, the Fund has agreed to pay the
Manager a monthly management fee at the annual rate of .55 of 1%
of the value of each Series' average daily net assets, which is
.05 of 1% less than the combined fees payable by the Fund to the
Manager and Dreyfus under the Prior Advisory Agreement and Prior
Administration Agreement. Pursuant to its agreement with Dreyfus,
the Manager, from its own funds, will pay Dreyfus for Dreyfus'
services. For the fiscal year ended December 31, 1993, the Fund
paid the Manager pursuant to the Management Agreement and Prior
Advisory Agreement a monthly fee at the effective aggregate
annual rate of .37 of 1% of the value of the Government Series'
average daily net assets and .45 of 1% of the value of the
Money Market Series' average daily net assets, pursuant to
undertakings in effect. For the period January 1, 1993 to April
29, 1993, the Fund paid Dreyfus pursuant to the Prior
Administration Agreement a monthly administration fee at
the effective annual rate of .14 of 1% of the value of the
Government Series' average daily net assets and .16 of 1% of the
value of the Money Market Series' average daily net assets
pursuant to undertakings in effect.

<PAGE>
GLASS-STEAGALL ACT The Glass-Steagall Act and other applicable
laws prohibit Federally chartered or supervised banks from
engaging in certain aspects of the business of issuing,
underwriting, selling and/or distributing securities, although
banks such as the Manager are permitted to purchase and
sell securities upon the order and for the account of their
customers. The Manager has advised the Fund of its belief that it
may perform the services for the Fund contemplated by the
Management Agreement and this Prospectus without violating
the Glass-Steagall Act or other applicable banking laws or
regulations. The Manager has pointed out, however, that there are
no cases deciding whether a bank such as the Manager may perform
services comparable to those to be performed by the Manager and
that future changes in either Federal or state statutes and
regulations relating to permissible activities of banks and their
subsidiaries and affiliates, as well as future judicial or
administrative decisions or interpretations of present and future
statutes and regulations, could prevent the Manager from
continuing to perform such services for the Fund.
If the Manager were to be prevented from providing such services
to the Fund, the Fund's Board of Trustees would review the Fund's
relationship with the Manager and consider taking all actions
necessary in the circumstances. For a discussion of the
Glass-Steagall Act in connection with the Fund's Service Plan,
see "Service Plan."

TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN The
Shareholder Services Group, Inc., a subsidiary of First Data
Corporation, P.O. Box 9671, Providence, Rhode Island 02940-9671,
is the Fund's Transfer and Dividend Disbursing Agent (the
"Transfer Agent"). The Bank of New York, 110 Washington Street,
New York, New York 10286, is the Fund's Custodian.

The Shareholder Services Group, Inc. is the Fund's transfer
agent.

EXPENSES All expenses incurred in the operation of the Fund are
borne by the Fund, except to the extent specifically assumed by
the Manager. The expenses borne by the Fund include the
following: taxes, interest, brokerage fees and commissions, if
any, fees of Trustees who are not officers, directors, employees
or holders, directly or indirectly, of 5% or more of the
outstanding voting securities of the Manager or Dreyfus.
Securities and Exchange Commission fees, state Blue Sky
qualification
<PAGE>
fees, advisory fees, charges of custodians, transfer and
dividend disbursing agents' fees, certain insurance premiums,
industry association fees, outside auditing and legal expenses,
costs of independent pricing services, costs of maintaining the
Fund's existence, costs attributable to investor services
(including, without limitation, telephone and personnel
expenses), costs of shareholders' reports and meetings and any
extraordinary expenses. Expenses attributable to a particular
Series are charged against the assets of that Series; other
expenses of the Fund are allocated between the Series on the
basis determined by the Board of Trustees, including, but not
limited to, proportionately in relation to the net assets of each
Series. In addition, each Series bears certain costs of
distributing Fund shares in accordance with a plan (the "Service
Plan") adopted pursuant to Rule 12b-1 under the Investment
Company Act of 1940. See "Annual Fund Operating Expenses"
and "Service Plan".
The imposition of the management fee, as well as other
operating expenses, including the fees paid under the Service
Plan, will have the effect of reducing the yield to investors.

How to Buy Fund Shares

INFORMATION APPLICABLE TO ALL PURCHASERS The Fund's distributor
is Dreyfus Service Corporation, a wholly-owned subsidiary of
Dreyfus, located at 200 Park Avenue, New York, New York 10166.
The shares it distributes are not deposits or obligations of The
Dreyfus Security Savings Bank, F.S.B. or the Manager and
therefore are not insured by the FDIC. The Fund offers a number
of convenient ways to purchase shares.

Shares may be purchased by all clients of the Manager and
its affiliates, including qualified custody, agency and trust
accounts, through their accounts with the Manager and its
affiliates, or by clients of certain Service Agents
through their accounts with the Service Agent. Shares also may
be purchased directly through the Distributor. Share certificates
will not be issued. The Fund reserves the right to reject any
purchase order.

You can open an account with as little as $1,000 ($250 for IRAs
or other retirement plans). Subsequent investments can be as
little as $100.

The minimum initial investment is $1,000. However, for
IRAs and other personal retirement plans, the minimum initial
purchase is $250. All subsequent investments must be at least
$100. The initial investment must be accompanied by the

<PAGE>
Fund's Account Application. The Manager and Service Agents may
impose initial or subsequent investment minimums which are higher
or lower than those specified above and may impose different
minimums for different types of accounts or purchase
arrangements. Shares of each Series are sold on a continuous
basis at the net asset value per share next determined after an
order in proper form and Federal Funds (moneys of member banks
within the Federal Reserve System which are held on
deposit at a Federal Reserve Bank) are received by the Transfer
Agent. If an investor does not remit Federal Funds, his payment
must be converted into Federal Funds. This usually occurs within
one business day of receipt of a bank wire and within two
business days of receipt of a check drawn on a member bank
of the Federal Reserve System. Checks drawn on banks which are
not members of the Federal Reserve System may take considerably
longer to convert into Federal Funds. Prior to receipt of Federal
Funds, the investor's money will not be invested. Each Series'
net asset value per share is determined as of 12:00 Noon,
New York time, on each day the New York Stock Exchange is open
for business, except on Martin Luther King, Jr. Day, Columbus Day
and Veterans Day. Net asset value per share is computed by
dividing the value of each Series' net assets
(i.e., the value of its assets less liabilities) by the total
number of its shares outstanding. See "Determination of Net Asset
Value" in the Fund's Statement of Additional Information.
Federal regulations require that an investor provide a
certified Taxpayer Identification Number ("TIN") upon opening or
reopening an account. See "Dividends, Distributions and Taxes"
and the Fund's Account Application for further information
concerning this requirement. Failure to furnish a certified
TIN to the Fund could subject an investor to a $50 penalty
imposed by the Internal Revenue Service (the "IRS").

Contact your investment representative or Service Agent to learn
how to purchase shares.

<PAGE>
transactions in shares, as well as fees for other services
provided to clients in connection with accounts through which
shares are purchased. These fees, if any, would be in addition to
fees received by a Service Agent under the Service Plan or
management fees received by the Manager under the Management
Agreement. Each Service Agent has agreed to transmit to its
clients a schedule of such fees. In addition, Service Agents and
the Manager may impose minimum account and other conditions,
including conditions which might affect the availability of
certain shareholder privileges described in this Prospectus.
Certain investor accounts with the Manager and its affiliates and
certain Service Agents may be eligible for an automatic
investment privilege, commonly called a "sweep," under
which amounts in excess of a certain minimum held in these
accounts will be invested automatically in shares at
predetermined intervals. Each investor desiring to use this
privilege should consult the Manager or his Service Agent
for details. It is the responsibility of the Manager and Service
Agents to transmit client orders on a timely basis.
Copies of the Fund's Prospectus and Statement of
Additional Information may be obtained from the Distributor, the
Manager, certain affiliates of the Manager or certain Service
Agents, as well as from the Fund.

PURCHASING SHARES THROUGH THE DISTRIBUTOR Shares also may be
purchased directly through the Distributor by check or wire, or
through the TeleTransfer Privilege described below. The initial
investment must be accompanied by the Fund's Account Application
which can be obtained from the Distributor and certain Service
Agents. Checks should be made payable to "The First Prairie
Family of Funds." Payments to open new accounts which are mailed
should be sent to The First Prairie Family of Funds, P.O. Box
9387, Providence, Rhode Island 02940-9387, together with the
investor's Account Application indicating the name of the Series
being purchased. For subsequent investments, the investor's Fund
account number should appear on the check and an investment slip
should be enclosed and sent to The First Prairie Family of Funds,
P.O. Box 105, Newark, New Jersey 07101-0105. Neither initial nor
subsequent investments should be made by third party check. A
charge will be imposed if any check used for investment
in an investor's
<PAGE>
account does not clear. All payments should be in U.S. dollars
and, to avoid fees and delays, should be drawn only on U.S.
banks.
Wire payments may be made if the investor's bank account
is in a commercial bank that is a member of the Federal Reserve
System or any other bank having a correspondent bank in New York
City or Chicago. Immediately available funds may be transmitted
by wire to The Bank of New York, DDA#8900052066/First Prairie
Money Market Fund--Money Market Series or DDA#8900052244/First
Prairie Money Market Fund--Government Series, as the case may be,
for purchase of Fund shares in the investor's name. The wire must
include the name of the Series being purchased, the investor's
account number (for new accounts, the investor's TIN should be
included instead), account registration and dealer number, if
applicable. If the investor's initial purchase of Fund shares is
by wire, the investor should call 1-800-645-6561 after completing
his wire payment to obtain a Fund account number. An investor
must include his Fund account number on the Fund's Account
Application and promptly mail the Account Application to the
Fund, as no redemptions will be permitted until the Account
Application is received. Further information about remitting
funds in this manner is provided in "Payment and Mailing
Instructions" on the Fund's Account Application.
Subsequent investments also may be made by electronic
transfer of funds from an account maintained in a bank or other
domestic financial institution that is an Automated Clearing
House member. The investor must direct the institution to
transmit immediately available funds through the Automated
Clearing House to The Bank of New York with instructions to
credit the investor's Fund account. The instructions must specify
the investor's Fund account registration and the investor's Fund
account number preceded by the digits "1111."

TELETRANSFER PRIVILEGE Investors may purchase Fund shares
(minimum $500, maximum $150,000 per day) by telephone if they
have checked the appropriate box and supplied the necessary
information on the Fund's Account Application or have filed a
Shareholder Services Form with the Transfer Agent. The proceeds
will be transferred between the bank account designated in one of
these documents and the investor's Fund Call 1-800-227-0072 for
TeleTransfer transactions
<PAGE>
account. Only a bank account maintained in a domestic financial
institution which is an Automated Clearing House member may be so
designated. The Fund may modify or terminate this Privilege at
any time or charge a service fee upon notice to shareholders. No
such fee currently is contemplated. Investors who have selected
the TeleTransfer Privilege may request a TeleTransfer purchase of
Fund shares by calling 1-800-227-0072 or, if calling from
overseas, 1-401-455-3309.

Shareholder Services

The services and privileges described under this heading may not
be available to clients of certain Service Agents and some
Service Agents may impose certain conditions on their clients
which are different from those described in this Prospectus. Each
investor should consult his Service Agent in this regard.

EXCHANGE PRIVILEGE The Exchange Privilege enables an investor to
purchase, in exchange for shares of a Series, shares of the other
Series or shares of certain other funds advised by the Manager or
shares of certain funds advised by Dreyfus, to the extent such
shares are offered for sale in the investor's state of residence.
These funds have different investment objectives that may be of
interest to investors. The Exchange Privilege may be expanded to
permit exchanges between a Series and other funds that, in the
future, may be advised by the Manager. Investors will be notified
of any such change. If an investor desires to use this Privilege,
he should consult his Service Agent or the Distributor to
determine if it is available and whether any conditions are
imposed on its use.

You can exchange your shares for shares of other eligible First
Prairie funds.

To use this Privilege, an investor or his Service Agent
acting on his behalf must give exchange instructions to the
Transfer Agent in writing, by wire or by telephone. If an
investor previously has established the Telephone Exchange
Privilege, the investor may telephone exchange instructions by
calling 1-800-227-0072 or, if calling from overseas,
1-401-455-3309. See "How to Redeem Fund Shares-- Procedures."
Before any exchange, an investor must obtain and should review a
copy of the current prospectus of the fund into which the
exchange is being made. Prospectuses may be obtained from the
Distributor, the Manager, certain affiliates of
<PAGE>
the Manager or certain Service Agents. The shares being
exchanged must have a current value of at least $500;
furthermore, when establishing a new account by exchange, the
shares being exchanged must have a value of at least the minimum
initial investment required for the fund into which the exchange
is being made.
Telephone exchanges may be made only if the appropriate "YES"
box has been checked on the Account Application, or a separate
signed and signature-guaranteed Shareholder Services Form is on
file with the Transfer Agent. Upon an exchange into a new
account, the following shareholder services and privileges, as
applicable and where available, will be automatically carried
over to the fund in which the exchange is made: Exchange
Privilege, Check Redemption Privilege, Wire Redemption Privilege,
Telephone Redemption Privilege, TeleTransfer Privilege and the
dividend/ capital gain distribution option (except for the
Dividend Sweep Privilege) selected by the investor.
Shares will be exchanged at the next determined net asset
value; however, a sales load may be charged with respect to
exchanges into funds sold with a sales load. If an investor is
exchanging into a fund that charges a sales load, the investor
may qualify for share prices which do not include the sales load
or which reflect a reduced sales load, if the shares of the
Series from which the investor is exchanging were: (a) purchased
with a sales load, (b) acquired by a previous exchange from
shares purchased with a sales load, or (c) acquired through
reinvestment of dividends or distributions paid with
respect to the foregoing categories of shares. To qualify, at the
time of an exchange, the investor must notify the Transfer Agent
or the investor's Service Agent must notify the Distributor. Any
such qualification is subject to confirmation of the investor's
holdings through a check of appropriate records. See "Shareholder
Services" in the Statement of Additional Information. No fees
currently are charged shareholders directly in connection with
exchanges, although the Fund reserves the right, upon not less
than 60 days' written notice, to charge shareholders a nominal
fee in accordance with rules promulgated by the Securities and
Exchange Commission. The Fund reserves the right to reject any
exchange request in whole or in part. The Exchange Privilege may
be modified or terminated at any time upon notice to
shareholders.

<PAGE>
The exchange of shares of one fund or Series for shares
of another is treated for Federal income tax purposes as a sale
of the shares given in exchange by the shareholder and,
therefore, an exchanging shareholder may realize a taxable gain
or loss.

AUTO-EXCHANGE PRIVILEGE The Auto-Exchange Privilege enables an
investor to invest regularly (on a semi-monthly, monthly,
quarterly or annual basis), in exchange for shares of a Series,
in shares of the other Series, certain other funds in the First
Prairie Family of Funds or certain funds advised by Dreyfus
of which he is currently an investor. The amount an investor
designates, which can be expressed either in terms of a specific
dollar or share amount ($100 minimum), will be exchanged
automatically on the first and/or fifteenth of the month
according to the exchange schedule that the investor has
selected. Shares will be exchanged at the then-current net asset
value; however, a sales load may be charged with respect to
exchanges into funds sold with a sales load. See "Shareholder
Services" in the Statement of Additional Information. The right
to exercise this Privilege may be modified or canceled by the
Fund or the Transfer Agent. The investor or the investor's
Service Agent may modify or cancel this Privilege at any time by
writing to The First Prairie Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671. The Fund may charge a
service fee for the use of this Privilege. No such fee currently
is contemplated. The exchange of shares of one fund or Series for
shares of another is treated for Federal income tax purposes as a
sale of the shares given in exchange by the shareholder and,
therefore, an exchanging shareholder may realize a taxable
gain or loss. For more information concerning this Privilege and
the funds eligible to participate in this Privilege, or to obtain
an Auto-Exchange Authorization Form, please call toll free in
Illinois 1-800-621-6592, or, outside Illinois 1-800-537-4938 if
Fund shares were purchased through First Chicago Investment
Services, Inc. or 1-800-645-6561 if Fund shares were purchased
through the Distributor.

You can exchange Fund shares automatically at regular intervals
which you select.

AUTOMATIC ASSET BUILDER Automatic Asset Builder permits an
investor to purchase shares of a Series (minimum of $100 and
maximum of $150,000 per transaction) at regular intervals
selected by the investor. Shares are purchased by transferring
funds from the bank account designated by an investor. At the
investor's option, the bank account designated by the investor
will be debited in the specified amount, and shares will be
You can purchase shares automatically at regular intervals which
you select.

<PAGE>
purchased, once a month, on either the first or fifteenth day,
or twice a month, on both days. Only an account maintained at a
domestic financial institution which is an Automated Clearing
House member may be so designated. To establish an Automatic
Asset Builder account, the investor must file an authorization
form with the Transfer Agent. The necessary authorization form
may be obtained from the Distributor, the Manager, certain
affiliates of the Manager or certain Service Agents. An investor
may cancel his participation in this Privilege or change the
amount of purchase at any time by mailing written notification to
The First Prairie Family of Funds, P.O. Box 9671, Providence,
Rhode Island 02940-9671, and the notification will be effective
three business days following receipt. The Fund may modify or
terminate this Privilege at any time or charge a service fee. No
such fee currently is contemplated.

GOVERNMENT DIRECT DEPOSIT PRIVILEGE Government Direct Deposit
Privilege enables an investor to purchase shares (minimum of $100
and maximum of $50,000 per transaction) by having Federal salary,
Social Security or certain veterans', military or other payments
from the Federal government automatically deposited into the
investor's Fund account. An investor may deposit as much of such
payments as he elects. To enroll in Government Direct Deposit,
the investor must file with the Transfer Agent a completed Direct
Deposit Sign-Up Form for each type of payment that the investor
desires to include in this Privilege. The appropriate form may be
obtained from the Distributor, the Manager, certain affiliates of
the Manager or certain Service Agents. Death or legal incapacity
will terminate an investor's participation in this Privilege. An
investor may elect at any time to terminate his participation by
notifying in writing the appropriate Federal agency. Further, the
Fund may terminate an investor's participation upon 30 days'
notice to the investor.

Many Federal payments are eligible for full or partial direct
deposit into your account to purchase shares.

DIVIDEND OPTIONS The Dividend Sweep enables an investor to
invest automatically dividends or dividends and capital gain
distributions, if any, paid by the Series in shares of another
fund or series in the First Prairie Family of Funds or certain
other funds advised or administered by the Dreyfus of which the
investor is a shareholder. Shares of the other fund will be
purchased at the then-current net asset value; however, a sales
load may be charged with respect to investments in shares of a
fund sold with a sales load. If an investor is investing in a
fund You can "sweep" your dividends and capital gain
distributions into certain other First Prairie funds.

<PAGE>
that charges a sales load, the investor may qualify for share
prices which do not include the sales load or which reflect a
reduced sales load. If an investor is investing in a fund that
charges a contingent deferred sales charge, the shares purchased
will be subject to the contingent deferred sales charge, if
any, applicable to the purchased shares. See "Shareholder
Services" in the Statement of Additional Information.
Dividend ACH permits a shareholder to transfer
electronically on the payment date their dividends or dividends
and capital gains, if any, from the Fund to a designated bank
account. Only an account maintained at a domestic financial
institution which is an Automated Clearing House member may be so
designated. Banks may charge a fee for this service.
For more information concerning these privileges, or to request
a Dividend Options Authorization Form, investors should call toll
free in Illinois 1-800-621-6592, or, outside Illinois,
1-800-537-4938 if Fund shares were purchased through First
Chicago Investment Services, Inc., or 1-800-645-6561 if
Fund shares were purchased through the Distributor. To cancel
these privileges, the investor or the investor's Service Agent
must mail written notification to The First Prairie Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671.
Enrollment in or cancellation of these privileges is effective
three business days following receipt by the Transfer Agent.
These privileges are available only for existing accounts and may
not be used to open new accounts. Minimum subsequent investments
do not apply for Dividend Sweep. The Fund may modify or terminate
these privileges at any time or charge a service fee. No such fee
currently is contemplated. Shares held under Keogh Plans, IRAs or
other retirement plans are not eligible for these privileges.

AUTOMATIC WITHDRAWAL PLAN The Automatic Withdrawal Plan permits
an investor to request withdrawal of a specified dollar amount
(minimum of $50) on either a monthly or quarterly basis if the
investor has a $5,000 minimum account. An application for the
Automatic Withdrawal Plan can be obtained from the Distributor,
the Manager, certain affiliates of the Manager or certain Service
Agents. The Automatic Withdrawal Plan may be ended at any time
by the investor, the Fund or the Transfer Agent.

You can withdraw a specified dollar amount from your account
every month or quarter.

<PAGE>
How to Redeem Fund Shares

GENERAL An investor may request redemption of his shares at any
time. Redemption requests should be transmitted to the Transfer
Agent as described below. When a request is received in proper
form, the Fund will redeem the shares at the next determined net
asset value.

You can redeem Fund shares at any time.

The Fund ordinarily will make payment for all shares
redeemed within seven days after receipt by the Transfer Agent of
a redemption request in proper form, except as provided by the
rules of the Securities and Exchange Commission.
HOWEVER, IF AN INVESTOR HAS PURCHASED FUND SHARES BY CHECK, BY
TELETRANSFER PRIVILEGE OR THROUGH AUTOMATIC ASSET BUILDER AND
SUBSEQUENTLY SUBMITS A WRITTEN REDEMPTION REQUEST TO THE TRANSFER
AGENT, THE REDEMPTION WILL BE EFFECTIVE AND THE REDEMPTION
PROCEEDS WILL BE TRANSMITTED TO THE INVESTOR PROMPTLY UPON BANK
CLEARANCE OF THE INVESTOR'S PURCHASE CHECK, TELETRANSFER
PURCHASE OR AUTOMATIC ASSET BUILDER ORDER, WHICH MAY TAKE UP TO
EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUND WILL NOT HONOR
REDEMPTION CHECKS UNDER THE CHECK REDEMPTION PRIVILEGE, AND WILL
REJECT REQUESTS TO REDEEM SHARES BY WIRE OR TELEPHONE OR
PURSUANT TO THE TELETRANSFER PRIVILEGE, FOR A PERIOD OF EIGHT
BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE
CHECK, THE TELETRANSFER PURCHASE OR THE AUTOMATIC ASSET BUILDER
ORDER AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE
PROCEDURES WILL NOT APPLY IF THE INVESTOR'S SHARES WERE
PURCHASED BY WIRE PAYMENT, OR IF THE INVESTOR OTHERWISE HAS A
SUFFICIENT COLLECTED BALANCE IN HIS ACCOUNT TO COVER THE
REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS
EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL ACCRUE AND BE
PAYABLE, AND THE

<PAGE>
INVESTOR WILL BE ENTITLED TO EXERCISE ALL OTHER RIGHTS OF
BENEFICIAL OWNERSHIP.
Fund shares will not be redeemed until the Transfer Agent has
received the investor's Account Application.
The Fund reserves the right to redeem an investor's
account at the Fund's option upon not less than 30 days' written
notice if the account's net asset value is $500 or less and
remains so during the notice period.

PROCEDURES An investor who has purchased shares through his
account at the Manager or a Service Agent must redeem shares by
following instructions pertaining to such account. If an investor
has given his Service Agent authority to instruct the Transfer
Agent to redeem shares and to credit the proceeds of such
redemptions to a designated account at the Service Agent,
the investor may redeem shares only in this manner and in
accordance with a written redemption request pursuant to the
regular redemption procedure described below. Investors
who wish to use the other redemption methods described below
must arrange with their Service Agents for delivery of the
required application(s) to the Transfer Agent. It is the
responsibility of the Manager or the Service Agent, as the case
may be, to transmit the redemption order and credit the
investor's account with the redemption proceeds on a timely
basis. Investors are urged to consult their Service Agents for
instructions concerning redemption of Fund shares held in
IRAs or other personal retirement accounts. Other investors may
redeem shares by using the regular redemption procedure through
the Transfer Agent, using the Check Redemption Privilege, through
the Wire Redemption Privilege, through the Telephone Redemption
Privilege, or through the TeleTransfer Privilege, as described
below.

The Fund offers a number of convenient ways to access your
investment.

An investor may redeem or exchange shares by telephone if the
investor has checked the appropriate box on the Fund's Account
Application or has filed a Shareholder Services Form with the
Transfer Agent. By selecting a telephone redemption or exchange
privilege, an investor authorizes the Transfer Agent to
act on telephone instructions from any person representing
himself or herself to be the investor, or a representative of the
investor's Service Agent, and reasonably believed by the Transfer
Agent to be genuine. The Fund will require the Transfer Agent to
employ reasonable procedures, such as requiring a form of
identification, to confirm that
<PAGE>
instructions are genuine and, if it does not follow such
procedures, the Fund or the Transfer Agent may be liable for any
losses due to unauthorized or fraudulent instructions. Neither
the Fund nor the Transfer Agent will be liable for following
telephone instructions reasonably believed to be genuine.
During times of drastic economic or market conditions, an
investor may experience difficulty in contacting the Transfer
Agent by telephone to request a redemption or exchange of shares
of a Series. In such cases, investors should consider using the
other redemption procedures described herein.
Use of these other redemption procedures may result in the
investor's redemption request being processed at a later time
than it would have been if telephone redemption had been used.

REGULAR REDEMPTION Under the regular redemption procedure, an
investor may redeem shares by written request, indicating the
Series from which shares are to be redeemed, mailed to The First
Prairie Family of Funds, P.O. Box 9671, Providence, Rhode Island
02940-9671. Redemption requests must be signed by the individual
shareholder, including each owner of a joint account,
and each signature must be guaranteed. The Transfer Agent has
adopted standards and procedures pursuant to which
signature-guarantees in proper form generally will
be accepted from domestic banks, brokers, dealers, credit
unions, national securities exchanges, registered securities
associations, clearing agencies and savings associations, as well
as from participants in the New York Stock Exchange Medallion
Signature Program, the Securities Transfer Agents Medallion
Program ("STAMP") and the Stock Exchanges Medallion Program. For
more information with respect to signature-guarantees, please
call the telephone number shown on the front cover. Redemption
proceeds of at least $1,000 will be wired to any member bank of

the Federal Reserve System in accordance with a written
signature-guaranteed request.

Shares may be redeemed by written request.

<PAGE>
Agent will impose a fee for stopping payment of a Redemption
Check at the investor's request or if the Transfer Agent cannot
honor the Redemption Check due to insufficient funds or other
valid reason. An investor should date his Redemption Checks with
the current date when the investor writes them. Investors
should not postdate Redemption Checks. If an investor does, the
Transfer Agent will honor, upon presentment, even if presented
before the date of the check, all postdated Redemption Checks
which are dated within six months of presentment for payment, if
they are otherwise in good order. This Privilege may be modified
or terminated at any time by the Fund or the Transfer Agent upon
notice to shareholders.

WIRE REDEMPTION PRIVILEGE An investor may request by wire or
telephone that redemption proceeds (minimum $1,000) be wired to
his account at a bank which is a member of the Federal Reserve
System, or a correspondent bank if the investor's bank is not a
member. To establish the Wire Redemption Privilege, an investor
must check the appropriate box and supply the necessary
information on the Fund's Account Application or file a
Shareholder Services Form with the Transfer Agent. An investor
may direct that redemption proceeds be paid by check
(maximum $150,000 per day) made out to the owners of record and
mailed to the investor's address. Redemption proceeds of less
than $1,000 will be paid automatically by check. Holders of
jointly registered Fund or bank accounts may have redemption
proceeds of only up to $250,000 wired within any 30-day period.
An investor may telephone redemption requests by calling
1-800-227-0072 or, if calling from overseas, 1-401-455-3309. The
Fund reserves the right to refuse any redemption request,
including requests made shortly after a change of address,
and may limit the amount involved or the number of such
requests. This Privilege may be modified or terminated at any
time by the Transfer Agent or the Fund. The
Fund's Statement of Additional Information sets forth
instructions for transmitting redemption requests by wire. Shares
held under Keogh Plans, IRAs or other retirement plans are not
eligible for this Privilege.

You can redeem shares by wire if you check the appropriate box on
your Account Application.

TELEPHONE REDEMPTION PRIVILEGE An investor may redeem Fund
shares (maximum $150,000 per day) by telephone if he has checked
the appropriate box on the Fund's

<PAGE>
Account Application or has filed a Shareholder Services Form
with the Transfer Agent. The redemption proceeds will be paid by
check and mailed to the investor's address. An investor may
telephone redemption instructions by calling 1-800-227-0072 or,
if calling from overseas, 1-401-455-3309. The Fund reserves
the right to refuse any request made by telephone, including
requests made shortly after a change of address, and may limit
the amount involved or the number of telephone redemption
requests. This Privilege may be modified or terminated at any
time by the Transfer Agent or the Fund. Shares held under
Keogh Plans, IRAs or other retirement plans are not eligible for
this Privilege.

TELETRANSFER PRIVILEGE An investor may redeem Fund shares
(minimum $500 per day) by telephone if he has checked the
appropriate box and supplied the necessary information on the
Fund's Account Application or has filed a Shareholder
Services Form with the Transfer Agent. The proceeds will be
transferred between the investor's Fund account and the bank
account designated in one of these documents. Only such an
account maintained in a domestic financial institution
which is an Automated Clearing House member may be so
designated. Redemption proceeds will be on deposit in the
investor's account at an Automated Clearing House member bank
ordinarily two days after receipt of the redemption request
or, at the investor's request, paid by check (maximum $150,000
per day) and mailed to his address. Holders of jointly registered
Fund or bank accounts may redeem through the TeleTransfer
Privilege for transfer to their bank account
only up to $250,000 within any 30-day period. The Fund reserves
the right to refuse any request made by telephone, including
requests made shortly after a change of address, and may limit
the amount involved or the number of such
requests. The Fund may modify or terminate this Privilege at any
time or charge a service fee upon notice to shareholders. No such
fee is currently contemplated. Call 1-800-227-0072 for
TeleTransfer transactions.

Investors who have selected the TeleTransfer Privilege
may request a TeleTransfer redemption of Fund shares by
telephoning 1-800-227-0072 or, if calling from overseas,
1-401-455-3309. Shares held under Keogh Plans, IRAs or
other retirement plans are not eligible for this Privilege.

<PAGE>
Service Plan

Under the Service Plan, adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940, each Series bears the costs and
expenses in connection with advertising and marketing its shares
and pays the fees of certain Service Agents for Servicing, as
defined below, at a rate not exceeding .25 of
1% per annum of the value of each Series' average daily net
assets. Service Agents receive fees based upon the average daily
value of the Series' shares owned by shareholders for which the
Service Agent is the dealer or holder of record or
for which the Service Agent has a servicing relationship. The
Service Plan provides that the Manager, Dreyfus and the
Distributor may act as Service Agents and receive fees
under the Service Plan. From time to time, the Manager, Dreyfus
and/or the Distributor may waive as to either or both Series
receipt of fees under the Service Plan while retaining the
ability to be paid by the Fund under the Service Plan thereafter.
The fees payable to the Manager, Dreyfus and/or the
Distributor for Servicing are payable without regard to actual
expenses incurred.

The Fund has adopted a plan so that it can pay
for advertising and marketing and compensate
others for providing services to you.

Each Series also bears the costs of preparing and
printing prospectuses and statements of additional information
used for regulatory purposes and for distribution to existing
shareholders. Under the Service Plan,
each Series bears (a) the costs of preparing, printing and
distributing prospectuses and statements of additional
information used for other purposes and (b) the costs
associated with implementing and operating the Service Plan
(such as costs of printing and mailing service agreements), the
aggregate of such amounts not to exceed in any fiscal year of the
Fund the greater of $100,000 or .005 of 1% of
the value of such Series average daily net assets for such
fiscal year. Each item for which a payment may be made under the
Service Plan may constitute an expense of distributing Fund
shares as the Securities and Exchange Commission
construes such term under Rule 12b-1.

Expenses under the Service Plan may be carried forward
from one year to another to the extent they remain unpaid. All or
part of any such amount will be paid at such time, if ever, as
the Board of Trustees determines to pay it. The
Series will not

<PAGE>
be charged for interest, carrying or other finance charges on
any unreimbursed
distribution or other expense incurred and not paid in a prior
year.
Servicing may include, among other things, one or more of
the following:
answering client inquiries regarding the Fund; assisting clients
in changing dividend options, account designations and addresses;
performing sub-accounting; establishing and maintaining
shareholder accounts and records; processing
purchase and redemption transactions; investing client cash
account balances automatically in shares of a Series; providing
periodic statements showing a client's account balance and
integrating such statements with those of other
transactions and balances in the client's other accounts
serviced by the Service Agent; arranging for bank wires; and such
other services as the Fund may request, to the extent the Service
Agent is permitted by applicable statute,
rule or regulation.
The Glass-Steagall Act and other applicable laws prohibit
Federally chartered or supervised banks from engaging in certain
aspects of the business of issuing, underwriting, selling and/or
distributing securities. Accordingly, banks will be engaged to
act as Service Agents only to perform administrative
and shareholder servicing functions. While the matter is not
free from doubt, the Fund's Board of Trustees believes that such
laws should not preclude a bank from acting as a Service Agent.
However, judicial or administrative decisions or
interpretations of such laws, as well as changes in either
Federal or state statutes or regulations relating to the
permissible activities of banks or their subsidiaries or
affiliates, could prevent a bank from continuing
to perform all or a part of its Servicing activities. If a bank
were prohibited from so acting, its shareholder clients would be
permitted to remain Fund shareholders and alternative means for
continuing the Servicing of such shareholders would be
sought. In such event, changes in the operation of the Fund
might occur and shareholders serviced by such bank might no
longer be able to avail themselves of any automatic investment or
other services then being provided by such bank.
The Fund does not expect that shareholders would suffer any
adverse financial consequences as a result of any of these
occurrences.

<PAGE>
Dividends, Distributions and Taxes

The Fund ordinarily declares dividends from each Series' net
investment income on each day the New York Stock Exchange is open
for business, except on Martin Luther King, Jr. Day, Columbus Day
and Veterans Day. Dividends usually are paid
on the last calendar day of each month, and are automatically
reinvested in additional shares of the Series from which they
were paid unless the investor elects payment in cash, or the
investor's customer arrangement with the Manager
or a Service Agent provides for payment in cash. Shares of each
Series begin earning income dividends on the day the purchase
order is effective. Each Series' earnings for Saturdays, Sundays
and holidays are declared as dividends
on the preceding business day. If an investor redeems all shares
in his account at any time during the month, all dividends to
which the investor is entitled are paid along with the proceeds
of the redemption. Distributions from net realized securities
gains, if any, generally are declared and paid once a year
by each Series, but each Series may make distributions on a more
frequent basis to comply with the distribution requirements of
the Internal Revenue Code of 1986, as amended (the "Code"), in
all events in a manner consistent with the
provisions of the Investment Company Act of 1940. The Fund will
not make distributions from net realized securities gains unless
capital loss carryovers, if any, have been utilized or have
expired. Investors may choose whether to
receive distributions in cash or to reinvest in additional
shares of the Series from which distributions were paid at net
asset value. All expenses are accrued
daily and deducted before declaration of dividends to investors.

Each Series declares dividends from net investment income on each
business day. Dividends are usually paid on the last day of each
month.

Dividends derived from net investment income, together
with distributions from any net realized short-term securities
gains, all or a portion of any gains
realized from the sale or other disposition of certain market
discount bonds, paid by a Series will be taxable to U.S.
investors as ordinary income, whether
received in cash or reinvested in shares of the Series. No
dividend paid by a Series will qualify for the dividends received
deduction allowable to certain U.S. corporations. Distributions
from net realized long-term securities gains,
if any, of a Series will be taxable to U.S. investors as
long-term capital Dividends and distributions will
be taxable to U.S. investors as ordinary income.

<PAGE>
gains regardless of how long investors have held such Series'
shares and whether such distributions are received in cash or
reinvested in shares of the Series.
The Code provides that the net capital gains of an individual
generally will not be subject to Federal income tax at a rate in
excess of 28%. Dividends and distributions may be subject to
certain state and local taxes.
Dividends derived from net investment income, together
with distributions from net realized short-term securities gains
and all or a portion of any gains realized from the sale or other
disposition of certain market discount bounds,
paid by the Fund to a foreign investor generally are subject to
U.S. nonresident withholding taxes at the rate of 30%, unless the
foreign investor claims the benefit of a lower rate specified in
a tax treaty. Distributions from net
realized long-term securities gains paid by the Fund to a
foreign investor generally will not be subject to U.S.
nonresident withholding tax. However, such
distributions may be subject to backup withholding, as described
below, unless the foreign investor certifies his non-U.S.
residency status.
Notice as to the tax status of an investor's dividends
and distributions will be mailed to such investor annually. Each
investor also will receive
periodic summaries of his account which will include information
as to dividends and distributions from securities gains, if any,
paid during the year. The Fund
intends to provide shareholders with a statement which sets
forth the percentage of dividends and distributions paid by a
Series that is attributable to interest
income from direct obligations of the United States.
Federal regulations generally require the Fund to
withhold ("backup withholding") and remit to the U.S. Treasury
31% of taxable dividends, distributions from net realized
securities gains of the Fund paid to a
shareholder if such shareholder fails to certify either that the
TIN furnished in connection with opening an account is correct or
that such shareholder has not received notice from the IRS of
being subject to backup withholding as a
result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore, the
IRS may notify the Fund to institute
backup withholding if the IRS determines a shareholder's TIN is
incorrect or if a shareholder has failed to properly report
taxable dividend and interest income
on a Federal income tax return.

If you have not furnished us with a correct Taxpayer
Identification Number, you may be subject to tax withholding of
31% of all taxable dividends and distributions.
The Money Market Series also may invest in
securities of U.S. Government agencies and
instrumentalities such as FHLB, FNMA and SLMA.

<PAGE>
A TIN is either the Social Security number or employer
identification number of the record owner of the account. Any tax
withheld as a result of
backup withholding does not constitute an additional tax imposed
on the record owner of the account, and may be claimed as a
credit on the record owner's Federal income tax return.
Management of the Fund believes that each Series has
qualified for the fiscal year ended December 31, 1993 as a
"regulated investment company" under
the Code. The Fund intends to continue to have each series so
qualify if such qualification is in the best interests of its
shareholders. Such qualification
relieves the Series of any liability for Federal income tax to
the extent its earnings are distributed in accordance with
applicable provisions of the Code.
The Fund is subject to a non-deductible 4% excise tax, measured
with respect to certain undistributed amounts of taxable
investment income and capital gains.
Each investor should consult his tax adviser regarding
specific questions as to Federal, state or local taxes.

General Information

The Fund was organized as an unincorporated business trust under
the laws of the Commonwealth of Massachusetts pursuant to an
Agreement and Declaration of Trust
(the "Trust Agreement") dated October 8, 1985. The Money Market
Series commenced operations on February 5, 1986 and the
Government Series on May 1, 1987. The Fund is authorized to issue
an unlimited number of shares of beneficial interest, par value
$.01 per share. Each share has one vote.

In February, 1993, the shareholders of the Money Market
Series and in March, 1993, the shareholders of the Government
Series voted to approve the
Management Agreement between the Fund and the Manager and
terminate the Prior Advisory Agreement and the Prior
Administration Agreement. In addition,
shareholders of the Money Market Series voted to change certain
of such Series' fundamental policies and investment restrictions,
among other things, to (i) increase the amount such Series may
borrow to the extent permitted under the
Investment Company Act of 1940, (ii) increase the amount of such
Series' assets which it may pledge to the extent
<PAGE>
necessary to secure such borrowings and make such policy
non-fundamental, (iii) permit such Series to invest up to 10% of
the value of its net assets in illiquid securities and make such
policy non-fundamental and (iv) permit such
Series to lend its portfolio securities in an amount not to
exceed 33 1/3% of the value of its total assets.
To date, the Trustees have authorized the creation of two
series of shares. All consideration received by the Fund for
shares of one of the Series and all assets in which such
consideration is invested will belong to that
Series (subject only to the rights of creditors of the Fund) and
will be subject to the liabilities related thereto. The income
attributable to, and the expenses of, one Series will be treated
separately from those of the other Series. The Fund has the
ability to create, from time to time, new series without
shareholder approval.
Rule 18f-2 under the Investment Company Act of 1940
provides that any matter required to be submitted under the
provisions of the Investment Company
Act of 1940 or applicable state law or otherwise to the holders
of the outstanding voting securities of an investment company,
such as the Fund, will not be deemed to have been effectively
acted upon unless approved by the holders
of a majority of the outstanding shares of each Series affected
by such matter.
Rule 18f-2 further provides that a Series shall be deemed to be
affected by a matter unless it is clear that the interests of
such Series in the matter are identical or that the matter does
not affect any interest of such Series.
However, the Rule exempts the selection of independent
accountants and the election of trustees from the separate voting
requirements of the Rule.
Under Massachusetts law, shareholders could, under
certain circumstances, be held personally liable for the
obligations of the Fund.
However, the Trust Agreement disclaims shareholder liability for
acts or obligations of the Fund and requires that notice of such
disclaimer be given in each agreement,
obligation or instrument entered into or executed by the Fund or
a Trustee. The Trust Agreement provides for indemnification from
the Fund's property for all losses and expenses of any
shareholder held personally liable
for the obligations of the Fund. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is
limited to circumstances in which the Fund itself would be unable
to meet its obligations, a
<PAGE>
possibility which management believes is remote. Upon payment of
any liability incurred by the Fund, the shareholder paying such
liability will be entitled to reimbursement from the general
assets of the Fund. The Trustees intend to
conduct the operations of the Fund in such a way so as to avoid,
as far as possible, ultimate liability of the shareholders for
liabilities of the Fund. As discussed under "Management of the
Fund" in the Statement of Additional
Information, the Fund ordinarily will not hold shareholder
meetings; however, shareholders under certain circumstances may
have the right to call a meeting of
shareholders for the purpose of voting to remove Trustees.
The Transfer Agent maintains a record of each investor's
ownership and sends confirmations and statements of account.
Investor inquiries may be made to the investor's Service
Agent, including the Manager, or by writing to the Fund at the
address shown on the front cover or by calling the appropriate
telephone number.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR
TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND IN THE FUND'S
OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE
FUND'S SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR
REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR
TO ANY PERSON TO WHOM, SUCH OFFERING MAY NOT LAWFULLY BE MADE.
<PAGE>

FIRST PRAIRIE MONEY MARKET FUND
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
APRIL 11, 1994

This Statement of Additional Information, which is not a
prospectus, supplements and should be read in conjunction with
the current Prospectus of First Prairie Money Market Fund (the
"Fund"), dated April 11, 1994, as it may be revised from time to
time. To obtain a copy of the Fund's Prospectus, please write to
the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York
11556-0144, or call toll free 1-800-346-3621.

The First National Bank of Chicago (the "Manager") serves as
the Fund's investment adviser.

Dreyfus Service Corporation (the "Distributor"), a wholly-
owned subsidiary of The Dreyfus Corporation ("Dreyfus"), is the
distributor of the Fund's shares.

TABLE OF CONTENTS
Page

Investment Objective and Management Policies . . . . . . .B-2
Management of the Fund . . . . . . . . . . . . . . . . . .B-7
Management Agreement . . . . . . . . . . . . . . . . . . .B-10
Purchase of Fund Shares. . . . . . . . . . . . . . . . . .B-14
Service Plan . . . . . . . . . . . . . . . . . . . . . . .B-15
Redemption of Fund Shares. . . . . . . . . . . . . . . . .B-16
Shareholder Services . . . . . . . . . . . . . . . . . .B-19
Determination of Net Asset Value .. . . . . . . . . . . .B-21
Dividends, Distributions and Taxes . . . . . . . . . . . .B-23
Yield Information. . . . . . . . . . . . . . . . . . . . .B-23
Portfolio Transactions . . . . . . . . . . . . . . . . . .B-24
Information About the Fund . . . . . . . . . . . . . . . .B-24
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors. . . . . . . . . . . .B-25
Appendix . . . . . . . . . . . . . . . . . . . . . . . . .B-26
Financial Statements . . . . . . . . . . . . . . . . . . .B-30
Report of Independent Auditors . . . . . . . . . . . . . .B-__

INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES

The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Description of the Fund."

Portfolio Securities

Bank Obligations. Domestic commercial banks organized under
Federal law are supervised and examined by the Comptroller of the
Currency and are required to be members of the Federal Reserve
System and to have their deposits insured by the Federal Deposit
Insurance Corporation (the "FDIC"). Domestic banks organized
under state law are supervised and examined by state banking
authorities but are members of the Federal Reserve System only if
they elect to join. In addition, state banks whose certificates
of deposit ("CDs") may be purchased by the Money Market Series
are insured by the Bank Insurance Fund administered by the FDIC
(although such insurance may not be of material benefit to the
Money Market Series, depending on the principal amount of the CDs
of each bank held by the Money Market Series) and are subject to
Federal examination and to a substantial body of Federal law and
regulation. As a result of Federal or state laws and
regulations, domestic branches of domestic banks whose CDs may be
purchased by the Money Market Series, among other things,
generally are required to maintain specified levels of reserves,
are limited in the amounts which they can loan to a single
borrower and are subject to other regulations designed to promote
financial soundness. However, not all of such laws and
regulations apply to foreign branches of domestic banks.

Obligations of foreign branches of domestic banks, foreign
subsidiaries of domestic banks and domestic and foreign branches
of foreign banks, such as CDs and time deposits ("TDs"), may be
general obligations of the parent banks in addition to the
issuing branches, or may be limited by the terms of a specific
obligation and governmental regulation. Such obligations are
subject to different risks than are those of domestic banks.
These risks include foreign economic and political developments,
foreign governmental restrictions that may adversely affect
payment of principal and interest on the obligations, foreign
exchange controls and foreign withholding and other taxes on
interest income. Foreign branches and subsidiaries are not
necessarily subject to the same or similar regulatory
requirements that apply to domestic banks, such as mandatory
reserve requirements, loan limitations, and accounting, auditing
and financial recordkeeping requirements. In addition, less
information may be publicly available about a foreign branch of a
domestic bank or about a foreign bank than about a domestic bank.

Obligations of United States branches of foreign banks may
be general obligations of the parent banks in addition to the
issuing branches, or may be limited by the terms of a specific
obligation or by Federal or state regulation as well as
governmental action in the country in which the foreign bank has
its head office. A domestic branch of a foreign bank with assets
in excess of $1 billion may be subject to reserve requirements
imposed by the Federal Reserve System or by the state in which
the branch is located if the branch is licensed in that state.

In addition, Federal branches licensed by the Comptroller of
the Currency and branches licensed by certain states ("State
Branches") may be required to: (1) pledge to the regulator, by
depositing assets with a designated bank within the state, a
certain percentage of their assets as fixed from time to time by
the appropriate regulatory authority; and (2) maintain assets
within the state in an amount equal to a specified percentage of
the aggregate amount of liabilities of the foreign bank payable
at or through all of its agencies or branches within the state.
The deposits of Federal and State Branches generally must be
insured by the FDIC if such branches take deposits of less than
$100,000.

In view of the foregoing factors associated with the
purchase of CDs and TDs issued by foreign branches of domestic
banks, by foreign subsidiaries of domestic banks, by foreign
branches of foreign banks or by domestic branches of foreign
banks, the Manager carefully evaluates such investments on a
case-by-case basis.

The Money Market Series may purchase CDs issued by banks,
savings and loan associations and similar thrift institutions
with less than $1 billion in assets, the deposits of which are
insured by the FDIC, provided the Money Market Series purchases
any such CD in a principal amount of not more than $100,000,
which amount would be fully insured by the Bank Insurance Fund or
the Savings Association Insurance Fund administered by the FDIC.
Interest payments on such a CD are not insured by the FDIC. The
Money Market Series will not own more than one such CD per such
issuer.

Lending Portfolio Securities. To a limited extent, the
Money Market Series may lend its portfolio securities to brokers,
dealers and other financial institutions, provided it receives
cash collateral which at all times is maintained in an amount
equal to at least 100% of the current market value of the
securities loaned. By lending its portfolio securities, the
Money Market Series can increase its income through the
investment of the cash collateral. For purposes of this policy,
the Money Market Series considers collateral consisting of U.S.
Government securities or irrevocable letters of credit issued by
banks whose securities meet the standards for investment by such
Series to be the equivalent of cash. Such loans may not exceed
33/% of the value of the Money Market Series' total assets. From
time to time, the Money Market Series may return to the borrower
or a third party which is unaffiliated with the Fund, and which
is acting as a "placing broker," a part of the interest earned
from the investment of collateral received for securities loaned.

The Securities and Exchange Commission currently requires
that the following conditions must be met whenever portfolio
securities are loaned: (1) the Money Market Series must receive
at least 100% cash collateral from the borrower; (2) the borrower
must increase such collateral whenever the market value of the
securities rises above the level of such collateral; (3) the
Money Market Series must be able to terminate the loan at any
time; (4) the Money Market Series must receive reasonable
interest on the loan, as well as any interest or other
distributions payable on the loaned securities, and any increase
in market value; and (5) the Money Market Series may pay only
reasonable custodian fees in connection with the loan. These
conditions may be subject to future modification.

Investment Restrictions

Money Market Series. The Money Market Series has adopted
investment restrictions numbered 1 through 8 as fundamental
policies. These restrictions cannot be changed without approval
by the holders of a majority (as defined in the Investment
Company Act of 1940, as amended (the "Act")) of such Series'
outstanding voting shares. Investment restrictions numbered 9
through 14 are not fundamental policies and may be changed by a
vote of a majority of the Trustees at any time.

The Money Market Series may not:

1. Invest more than 5% of its assets in the
obligations of any single issuer, except that up to 25% of the
value of the Money Market Series' total assets may be invested
(subject to the provisions of Rule 2a-7 under the Act) without
regard to such limitation.

2. Invest less than 25% of its assets in securities
issued by banks, including foreign banks and branches, or invest
more than 25% of its assets in the securities of issuers in any
other industry, provided that there shall be no limitation on the
purchase of obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities. Notwithstanding
the foregoing, for temporary defensive purposes the Money Market
Series may invest less than 25% of its assets in bank
obligations.

3. Borrow money, except to the extent permitted
under the Act.

4. Purchase or sell real estate, commodities or
commodities contracts, or oil and gas interests.

5. Underwrite the securities of other issuers,
except to the extent the Money Market Series may be deemed an
underwriter under the Securities Act of 1933, as amended, by
virtue of disposing of portfolio securities.

6. Make loans to others except through the purchase
of debt obligations or the entry into repurchase agreements;
however, the Money Market Series may lend its portfolio
securities in an amount not to exceed 33/% of the value of its
total assets. Any loans of portfolio securities will be made
according to guidelines established by the Securities and
Exchange Commission and the Fund's Board of Trustees.

7. Issue any senior security (as such term is
defined in Section 18(f) of the Act), except to the extent that
the activities permitted in Investment Restriction Nos. 3 and 12
may be deemed to give rise to a senior security.

8. Sell securities short or purchase securities on
margin.

9. Write or purchase put or call options or
combinations thereof.

10. Purchase common stocks, preferred stocks,
warrants or other equity securities, or purchase corporate bonds
(except as set forth in the Prospectus) or debentures, state
bonds, municipal bonds or industrial revenue bonds.

11. Invest in securities of other investment
companies, except to the extent permitted under the Act.

12. Pledge, hypothecate, mortgage or otherwise
encumber its assets, except to the extent necessary to secure
permitted borrowings and to the extent related to the deposit of
assets in escrow in connection with the purchase of securities on
a when-issued or delayed-delivery basis.

13. Enter into repurchase agreements providing for
settlement in more than seven days after notice or purchase
securities which are illiquid (which securities could include
participation interests that are not subject to the demand
feature described in the Fund's Prospectus), if, in the
aggregate, more than 10% of its net assets would be so invested.

14. Invest in companies for the purpose of
exercising
control.

Government Series. The Government Series has adopted the
following restrictions as fundamental policies. These
restrictions cannot be changed without approval by the holders of
a majority (as defined in the Act) of such Series' outstanding
voting shares.

The Government Series may not:

1. Purchase common stocks, preferred stocks,
warrants or other equity securities, or purchase corporate bonds
(except as set forth in the Prospectus) or debentures, state
bonds, municipal bonds or industrial revenue bonds.

2. Borrow money except from banks (other than the
Manager or its affiliates) for temporary or emergency (not
leveraging) purposes in an amount up to 10% of the value of the
Government Series' total assets (including the amount borrowed)
based on the lesser of cost or market, less liabilities (not
including the amount borrowed) at the time the borrowing is made.

While borrowings exceed 5% of the value of the Government Series'
total assets, such Series will not make any additional
investments.

3. Pledge, hypothecate, mortgage or otherwise
encumber its assets, except in an amount up to 10% of the value
of its total assets, but only to secure borrowings for temporary
or emergency purposes.

4. Sell securities short or purchase securities on
margin.

5. Write or purchase put or call options or
combinations thereof.

6. Underwrite the securities of other issuers or purchase
securities subject to restrictions on disposition under the
Securities Act of 1933 (so called "restricted securities"). The
Government Series may not enter into repurchase agreements
providing for settlement in more than seven days after notice or
purchase securities which are not readily marketable (which
securities could include participation interests that are not
subject to the demand feature described in the Prospectus), if,
in the aggregate, more than 10% of its net assets would be so
invested. The Government Series may not invest in time deposits
maturing in more than seven days and time deposits maturing from
two business days through seven calendar days may not exceed 10%
of such Series' total assets.

7. Purchase or sell real estate, real estate
investment trust securities, commodities or commodities
contracts, or oil and gas interests.

8. Make loans to others except through the purchase
of debt obligations referred to in the Fund's Prospectus.

9. Invest in companies for the purpose of
exercising
control.

10. Purchase securities of any investment companies,
except (a) purchases limited to a maximum of (i) 3% of the total
voting stock of any one investment company and (ii) 5% of the
Government Series' net assets with respect to any one investment
company or (b) those received as part of a merger, consolidation
or acquisition of substantially all of the assets or
reorganization of another investment company.

While not a fundamental policy, the Fund will not invest in
oil, gas and other mineral leases, or real estate limited
partnerships.

If a percentage restriction is adhered to at the time of
investment, a later increase or decrease in percentage resulting
from a change in values or assets will not constitute a violation
of that restriction.

The Fund may make commitments on behalf of a Series more
restrictive than the restrictions listed above so as to permit
the sale of Series shares in certain states. Should the Fund
determine that a commitment is no longer in the best interests of
the Series and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of such Series'
shares in the state involved.

MANAGEMENT OF THE FUND

Trustees and officers of the Fund, together with information
as to their principal business occupations during at least the
last five years, are shown below. The Trustee who is deemed to
be an "interested person" of the Fund, as defined in the Act, is
indicated by an asterisk.

Trustees and Officers of the Fund

*JOSEPH S. DiMARTINO, President and Trustee. President, Chief
Operating Officer and a Director of Dreyfus, Executive Vice
President and a Director of the Distributor and an officer,
director or trustee of other investment companies advised or
administered by Dreyfus. He is also a Director of Noel
Group, Inc., Director and Corporate Member of The Muscular
Dystrophy Association and a Trustee of Bucknell University.
His address is 200 Park Avenue, New York, New York 10166.

JOHN P. GOULD, Trustee. Distinguished Service Professor of
Economics of the University of Chicago Graduate School of
Business. From 1983 to 1993, Dean of the University of
Chicago Graduate School of Business. Since 1988, a Director
of Vulcan Materials Company, a chemicals manufacturer and
producer of construction aggregates. Since 1986, Director
of Argonne-Chicago Development Corporation, an affiliate of,
and the entity responsible for commercializing the
technology of, both the University of Chicago and Argonne
National Laboratory. Since 1986, he also has served as a
Director of DFA Investment Dimensions Group, a series mutual
fund. His address is 1101 East 58th Street, Chicago,
Illinois 60637.

MARILYN McCOY, Trustee. Vice President of Administration and
Planning of Northwestern University. From 1981 to 1985, she
was a Director of Planning and Policy Development for the
University of Colorado. She is also a member of the Higher
Education Colloquim, Association for Institutional Research,
American Association for Higher Education and Society for
College and University Planning. Her address is 1100 North
Lake Shore Drive, Chicago, Illinois 60611.

RAYMOND D. ODDI, Trustee. Private Consultant. A Director of
Caremark International, Inc. and Medisense, Inc., companies
in the health care industry and Baxter Credit Union. From
1978 to 1986, Senior Vice President of Baxter International,
Inc., a company engaged in the production of medical care
products. He also is a member of the Illinois Society of
Certified Public Accountants. His address is 1181 Loch
Lane, Lake Forest, Illinois 60045.

Each of the "non-interested" Trustees also is a trustee of
First Prairie Cash Management, First Prairie Diversified Asset
Fund, First Prairie Municipal Money Market Fund, First Prairie
U.S. Government Income Fund and First Prairie U.S. Treasury
Securities Cash Management and a director of First Prairie
Municipal Bond Fund.

The Fund does not pay any remuneration to its officers and
Trustees other than fees and expenses to Trustees who are not
officers, directors, employees or holders of 5% or more of the
outstanding voting securities of the Manager or Dreyfus or any
affiliate of either of them. With respect to the Money Market
Series and the Government Series, such fees and expenses totalled
$2,979 and $6,768, respectively, for the fiscal year ended
December 31, 1993, for all such Trustees as a group.

Trustees were elected at the meeting of shareholders held on
September 28, 1987. No further shareholder meetings will be held
for the purpose of electing Trustees unless and until such time
as less than a majority of the Trustees holding office have been
elected by shareholders, at which time the Trustees then in
office will call a shareholders' meeting for the election of
Trustees. Under the Act, shareholders of record of not less than
two-thirds of the outstanding shares of the Fund may remove a
Trustee through a declaration in writing or by vote cast in
person or by proxy at a meeting called for that purpose. Under
the Fund's Agreement and Declaration of Trust, the Trustees are
required to call a meeting of shareholders for the purpose of
voting upon the question of removal of any such Trustee when
requested in writing to do so by the shareholders of record of
not less than 10% of the Fund's outstanding shares.

For so long as the Fund's plan described in the section
captioned "Service Plan" remains in effect, the Trustees of the
Fund who are not "interested persons" of the Fund, as defined in
the Act, will be selected and nominated by the Trustees who are
not "interested persons" of the Fund.

Officers of the Fund Not Listed Above

DANIEL C. MACLEAN, Vice President. Vice President and General
Counsel of Dreyfus, Secretary of the Distributor and an
officer of other investment companies advised or
administered by Dreyfus.

JEFFREY N. NACHMAN, Vice President-Financial. Vice President-
Mutual Fund Accounting of Dreyfus and an officer of other
investment companies advised or administered by Dreyfus.

JOHN J. PYBURN, Treasurer. Assistant Vice President of Dreyfus
and an officer of other investment companies advised or
administered by Dreyfus.

PAUL R. CASTI, JR., Controller. Senior Accounting Manager of the
Fund Accounting Department of Dreyfus and an officer of
other investment companies advised or administered by
Dreyfus.

MARK N. JACOBS, Secretary. Secretary and Deputy General Counsel
of Dreyfus and an officer of other investment companies
advised or administered by Dreyfus.

ROBERT I. FRENKEL, Assistant Secretary. Senior Assistant General
Counsel to Dreyfus and an officer of other investment
companies advised or administered by Dreyfus.

CHRISTINE PAVALOS, Assistant Secretary. Assistant Secretary of
Dreyfus and other investment companies advised or
administered by Dreyfus.

The address of each officer of the Fund is 200 Park Avenue,
New York, New York 10166.

Trustees and officers of the Fund, as a group, owned less
than 1% of each Series' shares of beneficial interest outstanding
on March 23, 1994.

MANAGEMENT AGREEMENT

The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Management of the Fund."

Management Agreement. The Manager provides management
services pursuant to the Management Agreement (the "Agreement")
dated April 30, 1993 with the Fund. As to each Series, the
Agreement is subject to annual approval by (i) the Fund's Board
of Trustees or (ii) vote of a majority (as defined in the Act) of
such Series' outstanding voting securities, provided that in
either event the continuance also is approved by a majority of
the Trustees who are not "interested persons" (as defined in the
Act) of the Fund or the Manager, by vote cast in person at a
meeting called for the purpose of voting on such approval.
Shareholders of the Money Market and Government Series last
approved the Agreement in February 1993 and March 1993,
respectively, and the Board of Trustees, including a majority of
the Trustees who are not "interested persons" of any party to the
Agreement, last voted to renew the Agreement on December 10,
1993. The Agreement is terminable without penalty, as to each
Series, on not more than 60 days' notice, by the Fund's Board of
Trustees or by vote of the holders of a majority of such Series'
shares or, upon not less than 90 days' notice, by the Manager.
The Agreement will terminate automatically, as to the relevant
Series, in the event of its assignment (as defined in the Act).

The Manager is responsible for each Series' investment
decisions and manages each Series' portfolio of investments in
accordance with the stated policies of the Series, subject to the
approval of the Fund's Board of Trustees. All purchases and
sales are reported for the Trustees' review at the meeting
subsequent to such transactions.

The Manager pays the salaries of all officers and employees
employed by both it and the Fund. The Manager also may make such
advertising and promotional expenditures, using its own
resources, as it from time to time deems appropriate.

The Manager has engaged Dreyfus to assist it in providing
certain administrative services to the Fund. Pursuant to its
agreement with the Manager, Dreyfus furnishes the Fund clerical
help and accounting, data processing, bookkeeping, internal
auditing and legal services and certain other services required
by the Fund, prepares reports to the Fund's shareholders, tax
returns, reports to and filings with the Securities and Exchange
Commission and state Blue Sky authorities, calculates the net
asset value of each Series' shares and generally assists the
Manager in providing for all aspects of the Fund's operation,
other than providing investment advice. The fees payable to
Dreyfus for its services are paid by the Manager.

The Fund has agreed that the Manager will not be liable for
any error of judgment or mistake of law or for any loss suffered
by the Fund in connection with the matters to which the Manager's
agreement with the Fund relates, except for a loss resulting from
wilful misfeasance, bad faith or gross negligence on the part of
the Manager in the performance of its obligations or from
reckless disregard by it of its obligations and duties under its
agreement with the Fund.

As compensation for the Manager's services to the Fund, the
Fund has agreed to pay the Manager a fee, computed daily and paid
monthly, at an annual rate of .55 of 1% of the value of each
Series' average daily net assets. Prior to April 30, 1993, the
Manager provided investment advisory services to the Fund
pursuant to an Investment Advisory Agreement (the "Prior Advisory
Agreement") with the Fund dated December 16, 1985 and Dreyfus
provided administration services to the Fund pursuant to an
Administration Agreement (the "Prior Administration Agreement")
with the Fund dated December 16, 1985. Pursuant to the Prior
Advisory Agreement, the Fund agreed to pay the Manager an
advisory fee at the annual rate of .40 of 1% of the value of each
Series' average daily net assets. Pursuant to the Prior
Administration Agreement, the Fund agreed to pay Dreyfus an
administration fee at the annual rate of .20 of 1% of the value
of each Series' average daily net assets.

The fees paid to the Manager pursuant to the Prior Advisory
Agreement with respect to the Money Market Series for the fiscal
years ended December 31, 1991 and 1992 were $1,752,647 and
$1,565,674, respectively. For the period January 1, 1993 through
April 29, 1993, the fee payable to the Manager pursuant to the
Prior Advisory Agreement was $345,615. For the period from April
30, 1993 (effective date of Management Agreement) to the fiscal
year ended December 31, 1993 the fee payable to the Manager was
$649,937. For the fiscal year ended December 31, 1993, the fee
payable to the Manager was reduced by $70,345, pursuant to an
undertaking in effect resulting in net fees paid of $925,207.

The fees paid to the Manager pursuant to the Prior Advisory
Agreement with respect to the Government Series for the fiscal
years ended December 31, 1991 and 1992 were $3,221,691 and
$2,661,832, respectively. For the period January 1, 1993 through
April 29, 1993, the fee payable to the Manager pursuant to the
Prior Advisory Agreement was $730,686. For the period from April
30, 1993 (effective date of Management Agreement) to the fiscal
year ended December 31, 1993, the fee payable to the Manager was
$1,635,057. For the fiscal year ended December 31, 1993, the fee
payable to the Manager was reduced by $567,879, pursuant to an
undertaking in effect resulting in net fees paid of $1,797,864.

The fees paid to Dreyfus pursuant to the Prior
Administration Agreement with respect to the Money Market Series
for the fiscal years ended December 31, 1991 and 1992 were
$876,324 and $782,837, respectively. For the period January 1,
1993 through April 29, 1993, the fee payable to Dreyfus pursuant
to the Prior Administration Agreement was $172,808; however,
pursuant to an undertaking in effect, Dreyfus reduced its fee by
$32,272, resulting in a net fee of $140,536.

The fees paid to Dreyfus pursuant to the Prior
Administration Agreement with respect to the Government Series
for the fiscal years ended December 31, 1991 and 1992 were
$1,610,845 and $1,330,916, respectively. For the period January
1, 1993 through April 29, 1993, the fee payable to Dreyfus
pursuant to the Prior Administration Agreement was $365,343;
however, pursuant to an undertaking in effect, Dreyfus reduced
its fee by $103,746, resulting in a net fee of $261,597.

Expenses and Expense Information. All expenses incurred in
the operation of the Fund are borne by the Fund, except to the
extent specifically assumed by the Manager. The expenses borne
by the Fund include the following: taxes, interest, brokerage
fees and commissions, if any, fees of Trustees who are not
officers, directors, employees or holders of 5% or more of the
outstanding voting securities of the Manager or Dreyfus,
Securities and Exchange Commission fees, state Blue Sky
qualification fees, advisory fees, charges of custodians,
transfer and dividend disbursing agents' fees, certain insurance
premiums, industry association fees, outside auditing and legal
expenses, costs of maintaining the Fund's existence, costs of
independent pricing services, costs attributable to investor
services (including, without limitation, telephone and personnel
expenses), costs of shareholders' reports and meetings, and any
extraordinary expenses. The Fund bears certain advertising,
marketing and Servicing expenses in accordance with the Fund's
Service Plan and also bears costs of preparing, printing and
distributing certain prospectuses and statements of additional
information and costs associated with implementing and operating
such plan. Expenses attributed to a particular Series are
charged against the assets of that Series; other expenses of the
Fund are allocated between the Series on the basis determined by
the Board of Trustees, including, but not limited to,
proportionately in relation to the net assets of each Series.
See "Service Plan."

The Manager has agreed that, as to each Series, if in any
fiscal year the aggregate expenses of a Series (including
management fees, but excluding taxes, brokerage, interest on
borrowings and, with the prior written consent of the necessary
state securities commissions, extraordinary expenses) exceed the
expense limitation of any state having jurisdiction over such
Series, the Series may deduct from the fees to be paid to the
Manager, or the Manager will bear, such excess expense, to the
extent required by state law. Such deduction or payment, if any,
will be estimated daily and reconciled and effected or paid, as
the case may be, on a monthly basis.

The aggregate of the fees payable to the Manager is not
subject to reduction as the value of the Series' net assets
increases.

Glass-Steagall Act. For an additional discussion of the
Glass-Steagall Act in connection with the Fund's operations, see
the Fund's Prospectus.

From time to time, legislation has been introduced and may
be reintroduced in Congress, which would permit a bank, a bank
holding company or a subsidiary thereof to organize, sponsor,
control and distribute shares of an investment company such as
the Fund, notwithstanding present restrictions under the
Glass-Steagall Act and the Federal Bank Holding Company Act of
1956. As described herein, the Fund is currently distributed by
the Distributor, and Dreyfus, its parent, sponsors the Fund and
provides it with administrative services. If current
restrictions preventing a bank from legally sponsoring,
organizing, controlling or distributing shares of an investment
company were relaxed, the Fund expects that the Manager would
consider the possibility of offering to perform some or all of
the services now provided by Dreyfus or the Distributor. It is
not possible, of course, to predict whether or in what form such
legislation might be enacted or the terms upon which the Manager
might offer to provide services.

PURCHASE OF FUND SHARES

The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"How to Buy Fund Shares."

The Distributor. The Distributor serves as the Fund's
distributor pursuant to an agreement which is renewable annually.

The Distributor also acts as distributor for the other funds in
the First Prairie Family of Funds, the funds in the Dreyfus
Family of Funds and certain other investment companies.

Using Federal Funds. The Shareholder Services Group, Inc.,
the Fund's transfer and dividend disbursing agent (the "Transfer
Agent"), or the Fund may attempt to notify the investor upon
receipt of checks drawn on banks that are not members of the
Federal Reserve System as to the possible delay in conversion
into Federal Funds and may attempt to arrange for a better means
of transmitting the money. If the investor is a customer of a
securities dealer, bank or other financial institution and his
order to purchase Fund shares is paid for other than in Federal
Funds, the securities dealer, bank or other financial
institution, acting on behalf of its customer, will complete the
conversion into, or itself advance, Federal Funds generally on
the business day following receipt of the customer order. The
order is effective only when so converted and received by the
Transfer Agent. An order for the purchase of Fund shares placed
by an investor with sufficient Federal Funds or cash balance in
his brokerage account with a securities dealer, bank or other
financial institution will become effective on the day that the
order, including Federal Funds, is received by the Transfer
Agent.

TeleTransfer Privilege. TeleTransfer purchase orders may be
made between the hours of 8:00 a.m. and 4:00 p.m., New York time,
on any business day that the Transfer Agent and the New York
Stock Exchange are open, except Martin Luther King, Jr. Day,
Columbus Day and Veterans Day. Such purchases will be credited
to the shareholder's Fund account on the next bank business day.
To qualify to use the TeleTransfer Privilege, the initial payment
for purchase of Fund shares must be drawn on, and redemption
proceeds paid to, the same bank and account as are designated on
the Account Application or Shareholder Services Form on file. If
the proceeds of a particular redemption are to be wired to an
account at any other bank, the request must be in writing and
signature-guaranteed. See "Redemption of Fund
Shares--TeleTransfer Privilege."

Reopening an Account. An investor may reopen an account
with a minimum investment of $100 without filing a new Account
Application during the calendar year the account is closed or
during the following calendar year, provided the information on
the old Account Application is still applicable.

SERVICE PLAN

The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Service Plan."

Rule 12b-1 (the "Rule") adopted by the Securities and
Exchange Commission under the Act provides, among other things,
that an investment company may bear expenses of distributing its
shares only pursuant to a plan adopted in accordance with the
Rule. Because some or all of the fees paid for advertising or
marketing the Fund's shares and the fees paid to certain
financial institutions (which may include banks), securities
dealers and other financial industry professionals (collectively,
"Service Agents") could be deemed to be payment of distribution
expenses, the Fund's Board of Trustees has adopted such a plan
(the "Plan"). The Fund's Board of Trustees believes that there
is a reasonable likelihood that the Plan will benefit the Fund
and its shareholders. In some states, banks or other financial
institutions effecting transactions in Fund shares may be
required to register as dealers pursuant to state law.

A quarterly report of the amounts expended under the Plan
and the purposes for which such expenditures were incurred, must
be made to the Board of Trustees for its review. In addition,
the Plan provides that it may not be amended to increase
materially the costs which a Series may bear for distribution
pursuant to the Plan without shareholder approval and that other
material amendments of the Plan must be approved by the Board of
Trustees, and by the Trustees who are not "interested persons"
(as defined in the Act) of the Fund and have no direct or
indirect financial interest in the operation of the Plan or in
the related service agreements, by vote of the Trustees cast in
person at a meeting called for the purpose of considering such
amendments. As to each Series, the Plan and the related service
agreements are subject to annual approval by such vote of the
Trustees cast in person at a meeting called for the purpose of
voting on the Plan. The Plan was so approved by the Board of
Trustees at a meeting held on December 10, 1993. The Plan may be
terminated, as to each Series, at any time by vote of a majority
of the Trustees who are not "interested persons" and have no
direct or indirect financial interest in the operation of the
Plan or in any of the related service agreements or by vote of a
majority of such Series' shares. As to each Series, any service
agreement may be terminated without penalty, at any time, by such
vote of the Trustees or, upon not more than 60 days' written
notice to the Service Agent, by vote of the holders of a majority
of the shares of such Series. Each service agreement will
terminate automatically, as to the relevant Series, in the event
of its assignment (as defined in the Act).

During the fiscal year ended December 31, 1993, $519,700 was
charged to the Money Market Series under the Plan, of which
$409,148 was paid to the Manager and its affiliates, $8,265 was
paid for preparing, printing and distributing prospectuses and
operating the Plan, and $102,287 was charged for advertising,
marketing and Servicing the Money Market Series' shares. During
the fiscal year ended December 31, 1993, $1,204,982 was charged
to the Government Series under the Plan, of which $959,910 was
paid to the Manager and its affiliates, $5,095 was paid for
preparing, printing and distributing prospectuses and operating
the Plan, and $239,977 was paid for advertising, marketing and
Servicing the Government Series' shares.

REDEMPTION OF FUND SHARES

The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"How to Redeem Fund Shares."

Check Redemption Privilege. An investor may indicate on the
Account Application or by later written request that the Fund
provide Redemption Checks ("Checks") drawn on the Fund's account.

Checks will be sent only to the registered owner(s) of the
account and only to the address of record. The Account
Application or later written request must be manually signed by
the registered owner(s). Checks may be made payable to the order
of any person in an amount of $500 or more. When a Check is
presented to the Transfer Agent for payment, the Transfer Agent,
as the investor's agent, will cause the Fund to redeem a
sufficient number of full or fractional shares in the investor's
account to cover the amount of the Check. Dividends are earned
until the Check clears. After clearance, a copy of the Check
will be returned to the investor. Investors generally will be
subject to the same rules and regulations that apply to checking
accounts, although election of this Privilege creates only a
shareholder-transfer agent relationship with the Transfer Agent.

If the amount of the Check is greater than the value of the
shares in an investor's account, the Check will be returned
marked insufficient funds. Checks should not be used to close an
account.

Wire Redemption Privilege. By using this Privilege, the
investor authorizes the Transfer Agent to act on wire or
telephone redemption instructions from any person representing
himself or herself to be the investor, or a representative of the
investor's Service Agent, and believed by the Transfer Agent to
be genuine. The Transfer Agent's records of such instructions
are binding. Ordinarily, the Fund will initiate payment for
shares redeemed pursuant to this Privilege on the same business
day if the Transfer Agent receives the redemption request in
proper form prior to noon on such day; otherwise the Fund will
initiate payment on the next business day. Redemption proceeds
will be transferred by Federal Reserve wire only to the
commercial bank account specified by the investor on the Account
Application or Shareholder Services Form. Redemption proceeds,
if wired, must be in the amount of $1,000 or more and will be
wired to the investor's account at the bank of record designated
in the investor's file at the Transfer Agent, if the investor's
bank is a member of the Federal Reserve System, or to a
correspondent bank if the investor's bank is not a member. Fees
ordinarily are imposed by such bank and usually are borne by the
investor. Immediate notification by the correspondent bank to
the investor's bank is necessary to avoid a delay in crediting
the funds to the investor's bank account.

Investors with access to telegraphic equipment may wire
redemption requests to the Transfer Agent by employing the
following transmittal code which may be used for domestic or
overseas transmission:

Transfer Agent's
Transmittal Code Answer Back Sign
144295 144295 TSSG PREP

TeleTransfer Privilege. Investors should be aware that if
they have selected the TeleTransfer Privilege, any request for a
wire redemption will be effected as a TeleTransfer transaction
through the Automated Clearing House ("ACH") system unless more
prompt transmittal specifically is requested. Redemption
proceeds will be on deposit in the investor's account at an ACH
member bank ordinarily two business days after receipt of the
redemption request. See "Purchase of Fund Shares--TeleTransfer
Privilege."

Signatures. Written redemption requests for redemption of
Fund shares must be signed by the individual shareholder,
including each owner of a joint account, and each signature must
be guaranteed. The Transfer Agent has adopted standards and
procedures pursuant to which signature-guarantees in proper form
generally will be accepted from domestic banks, brokers, dealers,
credit unions, national securities exchanges, registered
securities associations, clearing agencies and savings
associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer
Agents Medallion Program ("STAMP") and the Stock Exchanges
Medallion Program. Guarantees must be signed by an authorized
signatory of the guarantor and "Signature-Guaranteed" must appear
with the signature. The Transfer Agent may request additional
documentation from corporations, executors, administrators,
trustees or guardians and may accept other suitable verification
arrangements from foreign investors, such as consular
verification. For more information with respect to signature-
guarantees, please call the telephone number listed on the cover.

Redemption Commitment. For each Series, the Fund has
committed itself to pay in cash all redemption requests by any
shareholder of record, limited in amount during any 90-day period
to the lesser of $250,000 or 1% of the value of such Series' net
assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the Securities and
Exchange Commission. In the case of requests for redemption in
excess of such amount, the Board of Trustees reserves the right
to make payments in whole or in part in securities or other
assets of the relevant Series in case of an emergency or any time
a cash distribution would impair the liquidity of the Series to
the detriment of the existing shareholders. In this event, the
securities would be valued in the same manner as the Series'
portfolio is valued. If the recipient sold such securities,
brokerage charges would be incurred.

Suspension of Redemptions. The right of redemption may be
suspended or the date of payment postponed (a) during any period
when the New York Stock Exchange is closed (other than customary
weekend and holiday closings), (b) when trading in the markets
the Fund ordinarily utilizes is restricted, or when an emergency
exists as determined by the Securities and Exchange Commission so
that disposal of the Fund's investments or determination of its
net asset value is not reasonably practicable, or (c) for such
other periods as the Securities and Exchange Commission by order
may permit to protect the Fund's shareholders.

SHAREHOLDER SERVICES

The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Shareholder Services."

Exchange Privilege. The Exchange Privilege permits
investors to purchase, in exchange for all or part of their
shares of a Series, shares of the other Series or shares of
certain other funds advised by the Manager, or shares of certain
funds advised by Dreyfus, on the basis of relative net asset
value per share at the time of the exchange, as follows:

A. Exchanges for shares of any funds that are offered
without a sales load will be made without a sales
load.

B. Shares of funds purchased without a sales load may be
exchanged for shares of other funds sold with a sales
load, and the applicable sales load will be deducted.

C. Shares of funds purchased with a sales load may be
exchanged without a sales load for shares of other
funds sold without a sales load.

D. Shares of funds purchased with a sales load, shares of
funds acquired by a previous exchange from shares
purchased with a sales load, and additional shares
acquired through reinvestment of dividends or
distributions of any such funds (collectively referred
to herein as "Purchased Shares") may be exchanged for
shares of other funds sold with a sales load (referred
to herein as "Offered Shares"), provided that, if the
sales load applicable to the Offered Shares exceeds
the
maximum sales load that could have been imposed in
connection with the Purchased Shares (at the time the
Purchased Shares were acquired), without giving effect
to any reduced loads, the difference will be deducted.

To accomplish an exchange under item D above, an investor
must notify the Transfer Agent of his prior ownership of fund
shares and his account number.

To use this Privilege, an investor or the investor's Service
Agent acting on the investor's behalf must give exchange
instructions to the Transfer Agent in writing, by wire or by
telephone. Telephone exchanges may be made only if the
appropriate "YES" box has been checked on the Account
Application, or a separate signed Shareholder Services Form is on
file with the Transfer Agent. By using this Privilege, the
investor authorizes the Transfer Agent to act on telephonic,
telegraphic or written exchange instructions from any person
representing himself or herself to be the investor or a
representative of the investor's Service Agent, and reasonably
believed by the Transfer Agent to be genuine. Telephone
exchanges may be subject to limitations as to the amount involved
or the number of telephone exchanges permitted.

Auto-Exchange Privilege. Auto-Exchange permits an investor
to purchase, in exchange for shares of the Series, shares of the
other Series or certain other funds in the First Prairie Family
of Funds or certain other funds advised by Dreyfus. This
Privilege is available only for existing accounts. Shares will
be exchanged on the basis of relative net asset value as
described above under "Exchange Privilege." Enrollment in or
modification or cancellation of this Privilege is effective three
business days following notification by the investor. An
investor will be notified if his account falls below the amount
designated to be exchanged under this Privilege. In this case,
an investor's account will fall to zero unless additional
investments are made in excess of the designated amount prior to
the next Auto-Exchange transaction. Shares held under IRA and
other retirement plans are eligible for this Privilege.
Exchanges of IRA shares may be made between IRA accounts and from
regular accounts to IRA accounts, but not from IRA accounts to
regular accounts. With respect to all other retirement accounts,
exchanges may be made only among those accounts.

The Exchange Privilege and Auto-Exchange Privilege are
available to shareholders resident in any state in which shares
of the fund being acquired may legally be sold. Shares may be
exchanged only between accounts having identical names and other
identifying designations.

Shareholder Services Forms and prospectuses of the other
funds may be obtained from the Distributor, 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144. The Fund reserves the
right to reject any exchange request in whole or in part. The
Exchange Privilege or Auto-Exchange Privilege may be modified or
terminated at any time upon notice to shareholders.

Dividend Sweep Privilege. The Dividend Sweep Privilege
enables investors to invest automatically dividends or dividends
and capital gain distributions, if any, paid by the Series in
shares of another fund or series in the First Prairie Family of
Funds or certain other funds advised or administered by Dreyfus
of which the investor is a shareholder. Shares of other funds
purchased pursuant to this Privilege will be purchased on the
basis of relative net asset value per share as follows:

A. Dividends and distributions paid by a fund may be
invested without imposition of a sales load in shares
of other funds that are offered without a sales load.

B. Dividends and distributions paid by a fund which does
not charge a sales load may be invested in shares of
other funds sold with a sales load, and the applicable
sales load will be deducted.

C. Dividends and distributions paid by a fund which
charges a sales load may be invested in shares of
other
funds sold with a sales load (referred to herein as
"Offered Shares"), provided that, if the sales load
applicable to the Offered Shares exceeds the maximum
sales load charged by the fund from which dividends or
distributions are being swept, without giving effect
to
any reduced loads, the difference will be deducted.

D. Dividends and distributions paid by a fund may be
invested in shares of other funds that impose a
contingent deferred sales charge and the applicable
contingent deferred sales charge, if any, will be
imposed upon redemption of such shares.

Automatic Withdrawal Plan. The Automatic Withdrawal Plan
permits an investor with a $5,000 minimum account to request
withdrawal of a specified dollar amount (minimum of $50) on
either a monthly or quarterly basis. Withdrawal payments are the
proceeds from sales of Fund shares, not the yield on the shares.
If withdrawal payments exceed reinvested dividends and
distributions, the investor's shares will be reduced and
eventually may
be depleted. An Automatic Withdrawal Plan may be established by
completing the appropriate application available from the
Distributor, the Manager, certain affiliates of the Manager or
certain Service Agents. Automatic Withdrawal may be terminated
at any time by the investor, the Fund or the Transfer Agent.

DETERMINATION OF NET ASSET VALUE

The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"How to Buy Fund Shares."

Amortized Cost Pricing. The valuation of each Series'
portfolio securities is based upon their amortized cost which
does not take into account unrealized capital gains or losses.
This involves valuing an instrument at its cost and thereafter
assuming a constant amortization to maturity of any discount or
premium, regardless of the impact of fluctuating interest rates
on the market value of the instrument. While this method
provides certainty in valuation, it may result in periods during
which value, as determined by amortized cost, is higher or lower
than the price the Fund would receive if it sold the instrument.

The Board of Trustees has established, as a particular
responsibility within the overall duty of care owed to the Fund's
investors, procedures reasonably designed to stabilize each
Series' price per share as computed for the purpose of sales and
redemptions at $1.00. Such procedures include review of the
Series' portfolio holdings by the Board of Trustees, at such
intervals as it deems appropriate, to determine whether a Series'
net asset value calculated by using available market quotations
or market equivalents deviates from $1.00 per share based on
amortized cost. In such review, investments for which market
quotations are readily available will be valued at the most
recent bid price or yield equivalent for such securities or for
securities of comparable maturity, quality and type, as obtained
from one or more of the major market makers for the securities to
be valued. Other investments and assets will be valued at fair
value as determined in good faith by the Board of Trustees.

The extent of any deviation between a Series' net asset
value based upon available market quotations or market
equivalents and $1.00 per share based on amortized cost will be
examined by the Board of Trustees. If such deviation exceeds 1/2
of 1%, the Board of Trustees promptly will consider what action,
if any, will be initiated. In the event the Board of Trustees
determines that a deviation exists which may result in material
dilution or other unfair results to investors or existing
shareholders, it has agreed to take such corrective action as it
deems necessary and appropriate, including: selling portfolio
instruments prior to maturity to realize capital gains or losses
or to shorten average portfolio maturity; withholding dividends
or paying distributions from capital or capital gains; redeeming
shares in kind; or establishing a net asset value per share by
using available market quotations or market equivalents.

New York Stock Exchange Closings. The holidays (as
observed) on which the New York Stock Exchange is closed
currently are: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas.

DIVIDENDS, DISTRIBUTIONS AND TAXES

The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Dividends, Distributions and Taxes."

Ordinarily, gains and losses realized from portfolio
transactions will be treated as capital gain or loss. However,
all or a portion of any gains realized from the sale or other
disposition of certain market discount bonds will be treated as
ordinary income under Section 1276 of the Internal Revenue Code
of 1986, as amended.

YIELD INFORMATION

The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Yield Information."

For the seven-day period ended December 31, 1993, the Money
Market Series' yield was 2.68%, and its effective yield was
2.72%. The Government Series' yield for such period was 2.63%,
and its effective yield was 2.67%. Yield is computed in
accordance with a standardized method which involves determining
the net change in the value of a hypothetical pre-existing Series
account having a balance of one share at the beginning of a seven
calendar day period for which yield is to be quoted, dividing the
net change by the value of the account at the beginning of the
period to obtain the base period return, and annualizing the
results (i.e., multiplying the base period return by 365/7). The
net change in the value of the account reflects the value of
additional shares purchased with dividends declared on the
original share and any such additional shares and fees that may
be charged to shareholder accounts, in proportion to the length
of the base period and the Series' average account size, but does
not include realized gains and losses or unrealized appreciation
and depreciation. Effective yield is computed by adding 1 to the
base period return (calculated as described above), raising that
sum to a power equal to 365 divided by 7, and subtracting 1 from
the result.

Yields will fluctuate and are not necessarily representative
of future results. Each investor should remember that yield is a
function of the type and quality of the instruments in the
portfolio, portfolio maturity and operating expenses. An
investor's principal in the Fund is not guaranteed. See
"Determination of Net Asset Value" for a discussion of the manner
in which each Series' price per share is determined.

From time to time, advertising for the Fund may describe the
costs of a college education at public or private institutions;
how such costs may increase over time, based on an assumed rate
of growth; and how investments in the Series can be used to help
pay for such costs. Advertisements for the Fund also may refer
to how an investment in the Fund may be used as a savings vehicle
for various purposes such as a down payment on the purchase price
of a home or to fund retirement or medical costs. Advertisements
for the Fund also may refer to comparisons of the Fund's
performance with historical rates of inflation.

PORTFOLIO TRANSACTIONS

Portfolio securities ordinarily are purchased directly from
the issuer or an underwriter or a market maker for the
securities. Ordinarily, no brokerage commissions are paid by the
Fund for such purchases. Purchases from underwriters of port-
folio securities include a concession paid by the issuer to the
underwriter and the purchase price paid to, and sales price
received from, market makers for the securities may reflect the
spread between the bid and asked price. No brokerage commissions
have been paid by either Series to date.

Transactions are allocated to various dealers by the Fund's
investment personnel in their best judgment. The primary
consideration is prompt and effective execution of orders at the
most favorable price. Subject to that primary consideration,
dealers may be selected for research, statistical or other
services to enable the Manager to supplement its own research and
analysis with the views and information of other securities firms
and may be selected based upon their sales of Fund shares.

Research services furnished by brokers through which the
Fund effects securities transactions may be used by the Manager
in advising other funds or accounts it may advise and,
conversely, research services furnished to the Manager by brokers
in connection with other funds or accounts the Manager may advise
may be used by the Manager in advising the Fund. Although it is
not possible to place a dollar value on these services, it is the
opinion of the Manager that the receipt and study of such
services should not reduce its overall research expenses.

INFORMATION ABOUT THE FUND

The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"General Information."

Each Series share has one vote and, when issued and paid for
in accordance with the terms of the offering, is fully paid and
non-assessable. Series' shares have no preemptive, subscription
or conversion rights and are freely transferable.

The Fund sends annual and semi-annual financial statements
to all its shareholders and sends statements concerning
shareholder accounts monthly.

On March 15, 1989, the Fund's name was changed from First
Lakeshore Money Market Fund to First Prairie Money Market Fund.

CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT,
COUNSEL AND INDEPENDENT AUDITORS

The Bank of New York, 110 Washington Street, New York, New
York 10286, is the Fund's custodian. The Shareholder Services
Group, Inc., a subsidiary of First Data Corporation, P.O. Box
9671, Providence, Rhode Island 02940-9671, is the Fund's transfer
and dividend disbursing agent. Neither The Bank of New York nor
The Shareholder Services Group, Inc. has any part in determining
the investment policies of the Fund or which portfolio securities
are to be purchased or sold by the Fund.

Stroock & Stroock & Lavan, 7 Hanover Square, New York, New
York 10004-2696, as counsel for the Fund, has rendered its
opinion as to certain legal matters regarding the due
authorization and valid issuance of the shares of beneficial
interest being sold pursuant to the Fund's Prospectus.

Ernst & Young, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of the Fund.

APPENDIX

Description of the two highest commercial paper, bond and
other short- and long-term rating categories assigned by Standard
& Poor's Corporation ("S&P"), Moody's Investors Service, Inc.
("Moody's"), Fitch Investors Service, Inc. ("Fitch"), Duff &
Phelps, Inc. ("Duff"), IBCA Limited and IBCA Inc. ("IBCA") and
Thomson BankWatch, Inc. ("BankWatch"):

Commercial Paper and Short-Term Ratings

The designation A-1 by S&P indicates that the degree of
safety regarding timely payment is either overwhelming or very
strong. Those issues determined to possess overwhelming safety
characteristics are denoted with a plus sign (+) designation.
Capacity for timely payment on issues with an A-2 designation is
strong. However, the relative degree of safety is not as high as
for issues designated A-1.

The rating Prime-1 (P-1) is the highest commercial paper
rating assigned by Moody's. Issuers of P-1 paper must have a
superior capacity for repayment of short-term promissory
obligations and ordinarily will be evidenced by leading market
positions in well established industries, high rates of return on
funds employed, conservative capitalization structures with
moderate reliance on debt and ample asset protection, broad
margins in earnings coverage of fixed financial charges and high
internal cash generation, and well established access to a range
of financial markets and assured sources of alternate liquidity.
Issues (or related supporting institutions) rated Prime-2 (P-2)
have a strong capacity for repayment of senior short-term
promissory obligations. This ordinarily will be evidenced by
many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while
still appropriate, may be more affected by external conditions.
Ample alternate liquidity is maintained.

The rating Fitch-1 (Highest Grade) is the highest commercial
paper rating assigned by Fitch. Paper rated Fitch-1 is regarded
as having the strongest degree of assurance for timely payment.
The rating Fitch-2 (Very Good Grade) is the second highest
commercial paper rating assigned by Fitch which reflects an
assurance of timely payment only slightly less in degree than the
strongest issues.

The rating Duff-1 is the highest commercial paper rating
assigned by Duff. Paper rated Duff-1 is regarded as having very
high certainty of timely payment with excellent liquidity factors
which are supported by ample asset protection. Risk factors are
minor. Paper rated Duff-2 is regarded as having good certainty
of timely payment, good access to capital markets and sound
liquidity factors and company fundamentals. Risk factors are
small.

The designation A1 by IBCA indicates that the obligation is
supported by a very strong capacity for timely repayment. Those
obligations rated A1+ are supported by the highest capacity for
timely repayment. Obligations rated A2 are supported by a strong
capacity for timely repayment, although such capacity may be
susceptible to adverse changes in business, economic or financial
conditions.

The rating TBW-1 is the highest short-term obligation rating
assigned by BankWatch. Obligations rated TBW-1 are regarded as
having the strongest capacity for timely repayment. Obligations
rated TBW-2 are supported by a strong capacity for timely
repayment, although the degree of safety is not as high as for
issues rated TBW-1.

Bond and Long-Term Ratings

Bonds rated AAA are considered by S&P to be the highest
grade obligations and possess an extremely strong capacity to pay
principal and interest. Bonds rated AA by S&P are judged by S&P
to have a very strong capacity to pay principal and interest, and
in the majority of instances, differ only in small degree from
issues rated AAA. The rating AA may be modified by the addition
of a plus or minus sign to show relative standing within the
rating category.

Bonds rated Aaa are judged by Moody's to be of the best
quality. Bonds rated Aa by Moody's are judged by Moody's to be
of high quality by all standards. Together with the Aaa group,
they comprise what are generally known as high-grade bonds.
Bonds rated Aa are rated lower than Aaa bonds because margins of
protection may not be as large or fluctuations of protective
elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat
larger. Moody's applies the numerical modifiers 1, 2 and 3 in
the Aa rating category. The modifier 1 indicates a ranking for
the security in the higher end of this rating category, the
modifier 2 indicates a mid-range ranking and the modifier 3
indicates a ranking in the lower end of the rating category.

Bonds rated AAA by Fitch are judged by Fitch to be strictly
high-grade, broadly marketable and suitable for investment by
trustees and fiduciary institutions and liable to but slight
market fluctuation other than through changes in the money rate.
The prime feature of an AAA bond is a showing of earnings several
times or many times interest requirements, with such stability of
applicable earnings that safety is beyond reasonable question
whatever changes occur in conditions. Bonds rated AA by Fitch
are judged by Fitch to be of safety virtually beyond question and
are readily salable, whose merits are not unlike those of the AAA
class, but whose margin of safety is less strikingly broad. The
issue may be the obligation of a small company, strongly secured
but influenced as to rating by the lesser financial power of the
enterprise and more local type of market.

Bonds rated AAA by Duff are considered to be of the highest
credit quality. The risk factors are negligible, being only
slightly more than U.S. Treasury debt. Bonds rated AA are
considered by Duff to be of high credit quality with strong
protection factors. Risk is modest but may vary slightly from
time to time because of economic conditions.

Obligations rated AAA by IBCA have the lowest expectation of
investment risk. Capacity for timely repayment of principal and
interest is substantial, such that adverse changes in business,
economic or financial conditions are unlikely to increase
investment risk significantly. Obligations rated AA by IBCA have
a very low expectation of investment risk. Capacity for timely
repayment of principal and interest is substantial. Adverse
changes in business, economic or financial conditions may
increase investment risk, albeit not very significantly.

IBCA also assigns a rating to certain international and U.S.
banks. An IBCA bank rating represents IBCA's current assessment
of the strength of the bank and whether such bank would receive
support should it experience difficulties. In its assessment of
a bank, IBCA uses a dual rating system comprised of Legal Ratings
and Individual Ratings. In addition, IBCA assigns banks long-
and short-term ratings as used in the corporate ratings discussed
above. Legal Ratings, which range in gradations from 1 through
5, address the question of whether the bank would receive support
provided by central banks or shareholders if it experienced
difficulties, and such ratings are considered by IBCA to be a
prime factor in its assessment of credit risk. Individual
Ratings, which range in gradations from A through E, represent
IBCA's assessment of a bank's economic merits and address the
question of how the bank would be viewed if it were entirely
independent and could not rely on support from state authorities
or its owners.

In addition to its ratings of short-term obligations,
BankWatch assigns a rating to each issuer it rates, in gradations
of A through E. BankWatch examines all segments of the
organization, including, where applicable, the holding company,
member banks or associations, and other subsidiaries. In those
instances where financial disclosure is incomplete or untimely, a
qualified rating (QR) is assigned to the institution. BankWatch
also assigns, in the case of foreign banks, a country rating
which represents an assessment of the overall political and
economic stability of the country in which the bank is domiciled.

FIRST PRAIRIE MONEY MARKET FUND, MONEY MARKET SERIES
STATEMENT OF INVESTMENTS

<CAPTION>
DECEMBER 31, 1993
PRINCIPAL
NEGOTIABLE BANK CERTIFICATES OF DEPOSIT-3.1% AMOUNT VALUE
------------ ------------
<S> <C> <C>
Sanwa Bank Ltd. (Yankee)
3.31%, 1/7/1994 (cost $5,000,000)............................................ $ 5,000,000 $ 5,000,000
COMMERCIAL PAPER-34.9%
Bridgestone/Firestone Inc.
3.36%, 1/21/1994 (a)......................................................... $ 7,925,000 $ 7,910,251
Cogentrix of Richmond Inc.
3.35%, 1/12/1994 (a)........................................................ 6,202,000 6,195,652
Goldman Sachs Group L.P.
3.31%, 1/21/1994............................................................ 7,000,000 6,987,167
Morgan Stanley Group Inc.
3.35%, 1/27/1994............................................................ 6,000,000 5,985,527
N.S. Finance Inc.
.36%, 1/10/1994(a)......................................................... 5,700,000 5,695,226
New Center Asset Trust
3.39%, 2/7/1994............................................................ 7,000,000 7,000,000
Nichimen America Inc.
3.36%, 1/18/1994 (a)....................................................... 6,000,000 5,990,508
Pepsico Inc.
3.19%, 1/28/1994........................................................... 3,000,000 2,992,845
Pitney Bowes Credit Corp.
3.35%, 1/11/1994........................................................... 3,000,000 2,997,208
SRD Finance Inc.
3.35%, 2/1/1994 (a)........................................................ 5,000,000 4,985,663
------------
TOTAL COMMERCIAL PAPER (cost $56,740,047)...................................... $ 56,740,047
============
CORPORATE NOTES-1.5%
Merrill Lynch & Co. Inc. (b)
3.27%, 6/7/1994
(cost $2,500,000).......................................................... $ 2,500,000 $ 2,500,000
===========
SHORT-TERM BANK NOTES-3.1%
NationsBank of North Carolina NA
3.52%, 8/18/1994
(cost $4,999,375).......................................................... $ 5,000,000 $ 4,999,375
===========
U.S. TREASURY BILLS-4.7%
3.57%, 12/15/1994
(cost $7,733,587)......................................................... $ 8,000,000 $ 7,733,587
============
U.S. GOVERNMENT AGENCIES-44.4%
Federal Home Loan Banks
Floating Rate Notes
3.55%, 7/6/1995(c).............................................................$ 25,000,000 $ 25,000,000
4.29%, 4/7/2000(b)............................................................ 10,000,000 10,000,000
Federal Home Loan Mortgage Corp.
Floating Rate Notes (b)
5.00%, 3/22/2000.............................................................. 5,000,000 5,000,000
Small Business Administration
Individual Loan Certificates (b)
4.67%, 5/15/1997............................................................... 57,052 57,052
4.67%, 7/15/1997............................................................... 67,114 67,114
4.66%, 6/15/2000............................................................... 74,398 74,398
</TABLE>
<PAGE>
<TABLE>
FIRST PRAIRIE MONEY MARKET FUND, MONEY MARKET SERIES
STATEMENT OF INVESTMENTS (CONTINUED)
<CAPTION>
DECEMBER 31, 1993

PRINCIPAL
U.S. GOVERNMENT AGENCIES (CONTINUED) AMOUNT VALUE
------------- ------------
<S> <C> <C>
Small Business Administration (continued)
Individual Loan Certificates (b) (continued)
4.65%, 7/15/2000..................................................... $ 199,460 $ 199,460
4.59%, 11/15/2000.................................................... 176,915 176,915
4.68%, 12/15/2001.................................................... 93,801 93,801
4.54%, 6/15/2002..................................................... 92,151 92,151
4.68%, 6/15/2003..................................................... 131,306 131,306
4.64%, 10/15/2004.................................................... 360,667 360,667
4.67%, 11/15/2004................................................... 216,337 216,337
4.72%, 4/15/2009................................................... 420,528 420,528
4.67%, 7/15/2010................................................... 434,420 434,420
4.66%, 10/15/2010.................................................. 688,906 688,906
4.75%, 8/15/2012................................................... 459,573 459,573
4.76%, 1/15/2013................................................... 452,128 452,128
4.65%, 8/15/2013................................................... 280,830 280,830
4.68%, 1/15/2014.................................................... 512,421 512,421
4.76%, 4/15/2014.................................................... 232,165 232,165
4.80%, 4/15/2014.................................................... 296,052 296,052
4.66%, 12/15/2014................................................... 38,524 38,524
4.80%, 12/15/2014................................................... 133,377 133,377
4.65%, 7/15/2015.................................................... 586,883 586,883
4.64%, 9/15/2015.................................................... 125,566 125,566
Small Business Administration
Pool Certificates (b)
4.72%, 9/25/1995.................................................... 65,676 65,676
4.49%, 4/25/1996.................................................... 91,208 91,208
4.80%, 5/25/1999.................................................... 178,047 178,047
4.67%, 3/25/2000.................................................... 497,799 497,799
4.67%, 1/25/2001.................................................... 607,863 607,863
4.53%, 12/25/2001................................................... 436,155 436,155
4.68%, 9/25/2003................................................... 50,878 50,878
4.84%, 9/25/2003................................................... 420,018 420,018
3.26%, 10/25/2005.................................................. 1,512,299 1,512,299
4.55%, 1/25/2007................................................... 269,177 269,177
4.44%, 4/25/2007................................................... 2,335,703 2,335,703
4.79%, 6/25/2008................................................... 835,303 835,303
4.63%, 12/25/2008.................................................. 407,895 407,895
4.67%, 1/25/2009................................................... 929,581 929,581
4.87%, 4/25/2013................................................... 2,261,030 2,261,030
4.80%, 5/25/2013................................................... 1,678,744 1,678,744
4.64%, 7/25/2013................................................... 105,637 105,637
4.81%, 8/25/2013................................................... 1,836,400 1,836,400
4.69%, 12/25/2013.................................................. 2,057,961 2,057,961
4.69%, 12/25/2013.................................................. 265,793 265,793
4.80%, 1/25/2014................................................... 1,026,549 1,026,549
4.56%, 2/25/2014................................................... 397,475 397,475
4.69%, 2/25/2014................................................... 1,617,360 1,617,360
4.38%, 5/25/2014................................................... 960,843 960,843
4.87%, 7/25/2014................................................... 1,478,698 1,478,698
4.57%,12/25/2015................................................... 3,713,989 3,713,989
-----------
TOTAL U.S. GOVERNMENT AGENCIES (cost $72,168,655)...................... $72,168,655
===========

FIRST PRAIRIE MONEY MARKET FUND, MONEY MARKET SERIES
STATEMENT OF INVESTMENTS (CONTINUED)
<S> <C> <C>
REPURCHASE AGREEMENT-8.6%
National Westminster Bank USA, 3.25%
dated 12/31/1993, due 1/3/1994 in the amount of $14,003,792
(fully collateralized by $14,020,000 U.S. Treasury Notes
4.625%, due 12/31/1994, value $14,471,795)
(cost $14,000,000).................................................. $ 14,000,000 $ 14,000,000
============ ============
TOTAL INVESTMENTS (cost $163,141,664)...................... 100.3% $163,141,664
============
LIABILITIES, LESS CASH AND RECEIVABLES.................... (.3%) $ (518,187)
============
NET ASSETS................................................ 100.0% $162,623,477
====== ============

NOTES TO STATEMENT OF INVESTMENTS:
(a) Backed by an irrevocable letter of credit.
(b) Variable interest rate - subject to change approximately every 7 to 90 days
(c) Variable interest rate - subject to change daily.
</TABLE>

See notes to financial statements.

<PAGE>
FIRST PRAIRIE MONEY MARKET FUND, GOVERNMENT SERIES
STATEMENT OF INVESTMENTS
<TABLE>
<CAPTION>

DECEMBER 31, 1993
ANNUALIZED
YIELD ON
DATE OF PRINCIPAL
U.S. TREASURY BILLS-33.5% PURCHASE AMOUNT VALUE
---------- ------------ ------------
<S> <C> <C> <C>
4/14/1994..................................................... 3.17% $ 25,000,000 $ 24,775,404
5/5/1994...................................................... 3.27 17,500,000 17,308,919
10/20/1994.................................................... 3.52 10,000,000 9,723,006
------------
TOTAL U.S. TREASURY BILLS (cost $51,807,329).................. $ 51,807,329
============
U.S. GOVERNMENT AGENCIES-63.8%
Agency for International Development
Floating Rate Notes (a)
6/1/2005................................................... 3.58% $ 23,690,000 $ 23,690,000
9/15/2018.................................................. 3.81 10,000,000 10,231,217
1/1/2021................................................... 3.50 25,000,000 25,000,000
11/1/2021.................................................. 3.39 15,000,000 15,000,000
Small Business Administration
Pool Certificates (a)
6/25/2013.................................................. 4.69 963,875 963,875
9/25/2014.................................................. 4.58 920,905 920,905
7/25/2016.................................................. 4.18 14,133,814 14,182,121
9/25/2016.................................................. 4.18 8,668,941 8,698,589
------------
TOTAL U.S. GOVERNMENT AGENCIES (cost $98,686,707)............. $98,686,707
============
REPURCHASE AGREEMENT-2.6%
National Westminster Bank USA
dated 12/31/1993, due 1/3/1994 in the amount of $4,001,083
(fully collateralized by $4,005,000
U.S. Treasury Notes 4.625%, due 12/31/1994,
value $4,133,911)
(cost $4,000,000)......................................... 3.25% $ 4,000,000 $ 4,000,000
============
TOTAL INVESTMENTS (cost $154,494,036).................. 99.9% $154,494,036
====== ============
CASH AND RECEIVABLES (NET)............................. .1% $ 119,227
====== ============
NET ASSETS.............................................100.0% $154,613,263
============
</TABLE>

NOTE TO STATEMENT OF INVESTMENTS;
(a) Variable interest rate-subject to periodic change.

See notes to financial statements.
<PAGE>
<TABLE>

FIRST PRAIRIE MONEY MARKET FUND
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1993
MONEY MARKET GOVERNMENT
SERIES SERIES
------------ ------------
<S> <C> <C>
ASSETS:
Investments in securities, at value-Note 2(a,b)............................ $163,141,664 $154,494,036
Interest receivable........................................................ 773,526 1,037,531
Receivable for investment securities sold.................................. 114,818 54,007
Prepaid expenses........................................................... 33,232 12,599
------------ ------------
164,063,240 155,598,173
------------ ------------
LIABILITIES:
Due to The First National Bank of Chicago.................................. 103,884 107,619
Due to The Dreyfus Corporation............................................. 102,287 239,977
Due to Custodian........................................................... 1,164,365 566,747
Accrued expenses........................................................... 69,227 70,567
------------ ------------
1,439,763 984,910
------------ ------------
NET ASSETS..................................................................... $162,623,477 $154,613,263
============ ============
REPRESENTED BY:
Paid-in capital............................................................ $162,600,116 $154,633,611
Accumulated net realized gain (loss) on investments........................ 23,361 (20,348)
------------ ------------
NET ASSETS at value applicable to 162,600,116 and 154,633,611 shares outstanding
(unlimited number of $.01 par value shares of
Beneficial Interest authorized)............................................ $162,623,477 $154,613,263
============ ============
NET ASSET VALUE, offering and redemption price per share:
Money Market Series
($162,623,477 divided by $162,600,116 shares).............................. $1.00
=====
Government Series
($154,613,263 divided by 154,633,611 shares)............................... $1.00
=====

STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1993
MONEY MARKET GOVERNMENT
SERIES SERIES
------------ ------------
INVESTMENT INCOME:
INTEREST INCOME............................................................ $ 7,507,525 $ 15,470,122
------------ ------------
EXPENSES-Note 2(c):
Management fee-Note 3(a)............................................... $ 995,552 $ 2,365,743
Administration fee-Note 3(a)........................................... 172,808 365,343
Shareholder servicing costs-Note 3(b).................................. 715,035 1,241,878
Custodian fees......................................................... 62,357 118,324
Professional fees...................................................... 28,562 72,681
Prospectus and shareholders' reports-Note 3(b)......................... 20,484 15,693
Registration fees...................................................... 13,125 14,770
Trustees' fees and expenses-Note 3(c).................................. 2,979 6,768
Miscellaneous.......................................................... 14,114 40,202
------------ ------------
2,025,016 4,241,402
Less-reduction in management fee and administration
fee due to undertakings-Note 3(a).................................. 102,617 671,626
------------ ------------
TOTAL EXPENSES................................................. 1,922,399 3,569,776
------------ ------------
INVESTMENT INCOME-NET.......................................................... 5,585,126 11,900,346
NET REALIZED GAIN (LOSS) ON INVESTMENTS-Note 2(b).............................. 23,361 (13,557)
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................... $ 5,608,487 $ 11,886,789
============ ============
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>

FIRST PRAIRIE MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
MONEY MARKET SERIES GOVERNMENT SERIES
----------------------------- ---------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
----------------------------- ---------------------------
1992 1993 1992 1993
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
OPERATIONS:
Investment income-net....................................... $ 12,399,605 $ 5,585,126 $ 19,082,767 $ 11,900,346
Net realized gain (loss) on investments..................... 4,319 23,361 (5,649) (13,557)
------------ ------------ ------------ ------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS........................... 12,403,924 5,608,487 19,077,118 11,886,789
------------ ------------ ------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net....................................... (12,399,605) (5,585,126) (19,082,767) (11,900,346)
Net realized gain on investments............................ (5,410) (4,319) __ __
------------ ------------ ------------ ------------
TOTAL DIVIDENDS......................................... (12,405,015) (5,589,445) (19,082,767) (11,900,346)
------------ ------------ ------------ ------------
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold............................... 2,907,881,568 1,739,129,690 2,812,319,864 1,491,641,119
Dividends reinvested........................................ 3,510,328 2,244,715 847,877 564,832
Cost of shares redeemed.....................................(3,107,316,541)(1,839,635,459)(3,255,326,710)(1,886,311,644)
------------- ------------ ------------ ------------
(DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS.................... (195,924,645) (98,261,054) (442,158,969) (394,105,693)
------------- ------------ ------------ ------------
TOTAL (DECREASE) IN NET ASSETS.................. (195,925,736) (98,242,012) (442,164,618) (394,119,250)
NET ASSETS:
Beginning of year........................................... 456,791,225 260,865,489 990,897,131 548,732,513
------------ ------------ ------------ ------------
End of year................................................. $260,865,489 $162,623,477 $548,732,513 $154,613,263
============ ============ ============ ============

See notes to financial statements.
</TABLE>
<PAGE>
FIRST PRAIRIE MONEY MARKET FUND, MONEY MARKET SERIES
CONDENSED FINFNCIAL INFORMATION

Reference is made to page 4 of the Prospectus Dated April
11, 1994.

See notes to financial statements.
<PAGE>

FIRST PRAIRIE MONEY MARKET FUND, GOVERNMENT SERIES

CONDENSED FINFNCIAL INFORMATION

Reference is made to page 5 of the Prospectus Dated April
11, 1994.

See notes to financial statements.

<PAGE>

FIRST PRAIRIE MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1-GENERAL:

The Fund is registered under the Investment Company Act of
1940 ("Act") as a diversified open-end management investment
company and operates as a series company issuing two classes of
Beneficial Interest: the Money Market Series and the Government
Series. The Fund accounts separately for the assets, liabilities
and operations of each series. The First National Bank of Chicago
("Manager") serves as the Fund's investment adviser. The Dreyfus
Corporation ("Dreyfus") provides certain administrative services
to the Fund-see Note 3(a). Dreyfus Service Corporation
("Distributor"), a wholly-owned subsidiary of Dreyfus, acts as
the distributor of the Fund's shares, which are sold without
a sales load.

It is the Fund's policy to maintain a continuous net asset
value per share of $1.00 for each series; the Fund has adopted
certain investment, portfolio valuation and dividend and
distribution policies to enable it to do so.

NOTE 2-SIGNIFICANT ACCOUNTING POLICIES:

(A) PORTFOLIO VALUATION: Investments are valued at amortized
cost, which has been determined by the Fund's Board of Trustees
to represent the fair value of the Fund's investments.

(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME:
Securities transactions are recorded on a trade date basis.
Realized gain and loss from securities transactions are recorded
on the identified cost basis. Interest income is recognized on
the accrual basis. Cost of investments represents amortized cost.

The Fund may enter into repurchase agreements with financial
institutions, deemed to be creditworthy by the Fund's Adviser,
subject to the seller's agreement to repurchase and the Fund's
agreement to resell such securities at a mutually agreed upon
price. Securities purchased subject to repurchase agreements are
deposited with the Fund's custodian and, pursuant to the terms of
the repurchase agreement, must have an aggregate market value
greater than or equal to the repurchase price plus accrued
interest at all times. If the value of the underlying
securities falls below the value of the repurchase price plus
accrued interest, the Fund will require the seller to deposit
additional collateral by the next business day. If the request
for additional collateral is not met, or the seller defaults on
its repurchase obligation, the Fund maintains the right
to sell the underlying securities at market value and may claim
any resulting loss against the seller.

(C) EXPENSES: Expenses directly attributable to each series
are charged to that series' operations; expenses which are
applicable to both series are allocated between them.

(D) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund,
with respect to both series, to declare dividends daily from
investment income-net. Such dividends are paid monthly. Dividends
from net realized capital gain, with respect to both series, are
normally declared and paid annually, but each series may make
distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code. However,
to the extent that net realized capital gain of either series can
be reduced by capital loss carryovers of that series, such gain
will not be distributed.

(E) FEDERAL INCOME TAXES: It is the policy of each series to
continue to qualify as a regulated investment company, if such
qualification is in the best interests of its shareholders, by
complying with the provisions available to certain investment
companies, as defined in applicable sections of the Internal
Revenue Code, and to make distributions of taxable income
sufficient to relieve it from all, or substantially all,
Federal income taxes.

The Government Series has an unused capital loss carryover
of approximately $3,100 available for Federal income tax purposes
to be applied against future net securities profits, if any,
realized subsequent to December 31, 1993. The carryover does not
include net realized securities losses from November 1, 1993
through December 31, 1993 which are treated for Federal income
tax purposes as arising in 1994. If not applied, the carryover
expires in 2000.

At December 31, 1993, the cost of investments of each series
for Federal income tax purposes was substantially the same as the
cost for financial reporting purposes (see the Statement of
Investments).

FIRST PRAIRIE MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 3-INVESTMENT ADVISORY FEE, ADMINISTRATION FEE AND OTHER
TRANSACTIONS WITH AFFILIATES:

(A) Pursuant to a management agreement ("Agreement") with
the Manager, the management fee for each series is computed at
the annual rate of .55 of 1% of the average daily value of the
net assets of each series and is payable monthly. The agreement
further provides that if in any full year the aggregate expenses
of either series, excluding interest on borrowings, taxes,
brokerage, and extraordinary expenses, exceed the expense
limitation of any state having jurisdiction over the Fund, that
series may deduct from the payments to be made to the Manager,
or the Manager will bear such excess to the extent required by
state law. The most stringent state expense limitation applicable
to the Fund presently requires reimbursement of expenses in any
full year that such expenses (exclusive of distribution expenses
and certain expenses as described above) exceed 2 1/2% of the
first $30 million, 2% of the next $70 million and 1 1/2% of the
excess over $100 million of the average value of either
series' net assets in accordance with California "blue sky"
regulations.

However, the Manager and Dreyfus had undertaken from January 4,
1993 through April 29, 1993 and the Manager from April 30, 1993
through May 27, 1993 with respect to the Money Market Series and
through November 30, 1993 with respect to the Government Series,
to reduce the
management fee and administration fee paid by either series, to
the
extent that such series' aggregate expenses (excluding certain
expenses
as described above) exceeded specified annual percentages of
that series'
average daily net assets. The reductions in management fee and
the
administration fee for the year ended December 31, 1993,
pursuant to the
undertakings for the Money Market Series and the Government
Series
amounted to $102,617 and $671,626, respectively.

Effective April 30, 1993, the Manager has engaged Dreyfus to
assist it
in providing certain administrative services for each series
pursuant to a
Master Administration Agreement between the Manager and Dreyfus.
Pursuant to its agreement with Dreyfus, the Manager has agreed
to pay Dreyfus for Dreyfus' services.

Prior to April 30, 1993, pursuant to an Investment Advisory
Agreement with the Manager and an Administration Agreement with
Dreyfus, the Investment Advisory Fee and the Administration Fee
were computed at annual rates of .40 of 1% and .20 of 1%,
respectively, of the average daily value of each series net
assets. The agreements provided that if in any full year the
aggregate expenses of either series (excluding certain
expenses as described above), exceeded the expense limitation of
any state having jurisdiction over the series, that series could
deduct from the payments to be made to the Manager and Dreyfus,
or the Manager and Dreyfus would bear their proportionate share
of such excess to the extent required by state law.

(B) The Fund has adopted a Service Plan (the "Plan")
pursuant to which each series has agreed to pay costs and
expenses in connection with advertising and marketing shares of
the Fund and payments made to one or more Service Agents (which
may include the Manager, Dreyfus and the Distributor) based on
the value of the Fund's shares owned by clients of the Service
Agent. These advertising and marketing expenses and
fees of the Service Agents may not exceed an annual rate of .25
of 1% of each series' average daily net assets. The Plan also
separately provides for the Fund to bear the costs of preparing,
printing and distributing certain of the Fund's prospectuses and
statements of additional information and costs associated with
implementing and operating the Plan, not to exceed the greater of
$100,000 or .005 of 1% of each series' average daily net assets
for any full year. For the year ended December 31, 1993, the
Money Market Series and the Government Series were charged
$519,700 and $1,204,982, respectively, pursuant to the Plan,
substantially all of which was retained by the Manager and
Dreyfus.

(C) Certain officers and trustees of the Fund are
"affiliated persons," as defined in the Act, of the Manager or
the Dreyfus. Each trustee who is not an "affiliated person"
receives an annual fee of $2,500 and an attendance fee of $500
per meeting.

<PAGE>
FIRST PRAIRIE MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(D) On December 5, 1993, Dreyfus entered into an Agreement
and Plan of Merger providing for the merger of Dreyfus with a
subsidiary of Mellon Bank Corporation ("Mellon").

Following the merger, it is planned that Dreyfus will be a
direct subsidiary of Mellon Bank, N.A. Closing of this merger is
subject to a number of contingencies, including the receipt of
certain regulatory approvals and the approvals of the
stockholders of Dreyfus and of Mellon. The merger is expected to
occur in mid-1994, but could occur significantly later.

<PAGE>

FIRST PRAIRIE MONEY MARKET FUND
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
FIRST PRAIRIE MONEY MARKET FUND

We have audited the accompanying statement of assets and
liabilities of First Prairie Money Market Fund (comprising,
respectively, the Money Market Series and the Government Series),
including the statements of investments, as of December 31, 1993,
and the related statement of operations for the year then ended,
the statement of changes in net assets for each of the two years
in the period then ended, and financial highlights for each of
the years indicated therein. These financial statements and
financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our
audits.

In our opinion, the financial statements and financial
highlights referred to above present fairly, in all material
respects, the financial position of First Prairie Money Market
Fund, at December 31, 1993, the results of their operations for
the year then ended, the changes in their net assets for each of
the two years in the period then ended, and the financial
highlights for each of the indicated years, in conformity with
generally accepted accounting principles.

New York, New York
February 4, 1994

August 24, 1994

FIRST PRAIRIE MUNICIPAL
MONEY MARKET FUND

Supplement to Prospectus
Dated April 29, 1994

The following anticipated changes have occurred:

I. CONSUMMATION OF THE MERGER

The following information supplements and supersedes
any contrary information contained in the Fund's
Prospectus.

On this date, the previously announced merger between
The Dreyfus Corporation ("Dreyfus") and a subsidiary of
Mellon Bank Corporation was completed, and as a result,
Dreyfus now is a wholly-owned subsidiary of Mellon Bank,
N.A. instead of a publicly-owned corporation.

II. NEW DISTRIBUTOR

The following information supersedes and replaces
any contrary information contained in the Fund's
Prospectus and specifically in the section entitled
"How to Buy Fund Shares."

The Fund's distributor is Premier Mutual Fund
Services, Inc. (the "Distributor"), located at One
Exchange Place, Boston, Massachusetts 02109. The
Distributor is a wholly-owned subsidiary of
Institutional Administration Services, Inc. a provider
of mutual fund administration services, the parent
company of which is Boston Institutional Group, Inc.

Accordingly, references in the Prospectus to
Dreyfus Service Corporation as the Fund's distributor
should be substituted with Premier Mutual Fund
Services, Inc.

<PAGE>

First Prairie [LOGO]
Municipal Money Market Fund

PROSPECTUS

The First National Bank of Chicago
MANAGER

Dreyfus Service Corporation
DISTRIBUTOR

Prospectus begins on page one.
[ARTWORK]

<PAGE>

First Prairie [LOGO]
Municipal Money Market Fund

PROSPECTUS--April 29, 1994

First Prairie Municipal Money Market Fund (the "Fund") is an
open-end, diversified, management investment company, known as a
money market mutual fund. Its goal is to provide investors with
as high a level of current
income exempt from Federal income tax as is consistent with the
preservation of capital and the maintenance of liquidity.
Investors can invest, reinvest or redeem shares at any
time without charge or penalty imposed by the Fund.
The First National Bank of Chicago (the "Manager") serves
as the Fund's investment adviser. Dreyfus Service Corporation
(the "Distributor"), a
wholly-owned subsidiary of The Dreyfus Corporation, serves as
the Fund's distributor.
The Fund bears certain costs of advertising,
administration and/or distribution pursuant to a plan adopted in
accordance with Rule 12b-1 under the Investment Company Act of
1940.
An investment in the Fund is neither insured nor
guaranteed by the U.S. Government. There can be no assurance that
the Fund will be able to maintain a stable net asset value of
$1.00 per share.
The Fund's shares are not deposits or obligations of, or
guaranteed by, the Manager or any of its affiliates or any bank,
and are not insured by the Federal Deposit Insurance Corporation
("FDIC"), the Federal Reserve Board or any
other agency. The Fund's shares involve certain investment
risks, including the possible loss of principal. The Fund's yield
fluctuates and is not guaranteed.

This Prospectus sets forth concisely information about the Fund
that an investor should know before investing. It should be read
and retained for future reference.
Part B (also known as the Statement of Additional
Information), dated April 29, 1994, which may be revised from
time to time, provides a further
discussion of certain areas in this Prospectus and other matters
which may be of interest to some investors. It has been filed
with the Securities and Exchange Commission and is incorporated
herein by reference. For a free copy, write to
the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York
11556-0144, or call 1-800-346-3621. When telephoning, ask for
Operator 666.

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

<PAGE>
Table of Contents

Annual Fund Operating Expenses................ 3
Condensed Financial Information............... 4
Highlights.................................... 6
Yield Information............................. 9
Description of the Fund....................... 10
Management of the Fund........................ 20
How to Buy Fund Shares........................ 24
Shareholder Services.......................... 28
How to Redeem Fund Shares..................... 32
Service Plan.................................. 37
Dividends, Distributions and Taxes............ 39
General Information........................... 42

<PAGE>

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

Management Fee .55%
12b-1 Fees (distribution and servicing) .25%
Other Expenses .15%
Total Fund Operating Expenses .95%

EXAMPLE
An investor 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 $ 10
3 YEARS $ 30
5 YEARS $ 53
10 YEARS $117

The purpose of the foregoing table is to assist investors in
understanding the various costs and expenses borne by the
Fund, and therefore indirectly by investors, the payment of
which will reduce investors' return on an annual basis.
Long-term investors could pay more in 12b-1 fees than the
economic equivalent of paying a front-end sales charge. The
information in the foregoing table does not reflect any fee
waivers or expense reimbursement arrangements that may be in
effect. The Manager, affiliates of the Manager and certain
Service Agents (as defined below) may charge their clients
direct fees for effecting transactions in Fund shares; such
fees are not reflected in the foregoing table. See
"Management of the Fund," "How to Buy Fund Shares" and
"Service Plan."

CONDENSED FINANCIAL INFORMATION

The information in the following table has been audited by Ernst
& Young, the Fund's independent auditors, whose report on the
five years in the period ended December 31, 1993, appears in the
Statement of Additional Information. Further
financial data and related notes are included in the Statement
of Additional Information, available upon request.

FINANCIAL HIGHLIGHTS Contained below is per share operating
performance data for a share of beneficial interest outstanding,
total investment return, ratios to
average net assets and other supplemental data for each year
indicated. This information has been derived from information
provided in the Fund's financial statements.

<TABLE>

<CAPTION>
Year Ended December 31,
1986* 1987 1988 1989
<S> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of year $1.0000 $.9998 $.9999 $.9999

INVESTMENT OPERATIONS:
Investment income--net .0383 .0410 .0480 .0580
Net realized and unrealized
gain (loss) on investments (.0002) .0001 -- --

TOTAL FROM INVESTMENT
OPERATIONS .0381 .0411 .0480 .0580

DISTRIBUTIONS:
Dividends from investment
income--net (.0383) (.0410) (.0480) (.0580)

Net asset value, end of year $ .9998 $.9999 $.9999 $.9999

TOTAL INVESTMENT RETURN 4.30% 4.18% 4.91% 5.96%

RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets .71% .96% .98% .98%
Ratio of net investment income
to average net assets 4.02% 4.08% 4.79% 5.79%
Decrease reflected in above
expense ratios due to expense
reimbursement .34% -- -- --
Net Assets, end of year (000's
omitted) $211,271 $145,524 $142,806 $158,515

- ------------------------

* From February 5, 1986 (commencement of operations) to December
31, 1986.
</TABLE>

<TABLE>
<CAPTION>
Year Ended December 31,
1990 1991 1992 1993
<S> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of
year $.9999 $.9999 $.9999 $.9999

INVESTMENT OPERATIONS:
Investment income--net .0527 .0413 .0236 .0174
Net realized and unrealized
gain (loss) on investments -- -- -- --

TOTAL FROM INVESTMENT
OPERATIONS .0527 .0413 .0236 .0174

DISTRIBUTIONS:
Dividends from investment
income--net (.0527) (.0413) (.0236) (.0174)

Net asset value, end of year $.9999 $.9999 $.9999 $.9999

TOTAL INVESTMENT RETURN 5.40% 4.21% 2.38% 1.75%

RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets 1.00% .98% .95% .79%
Ratio of net investment income
to average net assets 5.27% 4.11% 2.38% 1.74%
Decrease reflected in above
expense ratios due to expense
reimbursement -- -- .01% .16%
Net Assets, end of year (000's
omitted) $176,009 $233,675 $210,000 $177,698
</TABLE>

HIGHLIGHTS

The following summary is qualified in its entirety by the more
detailed information appearing elsewhere in this Prospectus.

THE FUND The Fund is an open-end, diversified, management
investment company, known as a money market mutual fund.

MANAGEMENT POLICIES The Fund will invest at least 80% of its net
assets (except when maintaining a temporary defensive position)
in Municipal Obligations.
The Fund seeks to maintain a stable net asset value of
$1.00 per share for purchases and redemptions. There can be no
assurance that it will be able to do so.
In accordance with Rule 2a-7 under the Investment Company
Act of 1940, the Fund will maintain a dollar-weighted average
portfolio maturity of 90 days or less, purchase only instruments
with remaining maturities of 13 months or
less, and purchase only instruments which are rated in one of
the two highest rating categories by at least two nationally
recognized independent rating agencies (or of comparable
quality).

MUNICIPAL OBLIGATIONS Municipal Obligations are debt obligations
issued by states, territories and possessions of the United
States, by the District of Columbia, and by their political
subdivisions, agencies and instrumentalities or
multistate agencies or authorities, the interest from which, in
the opinion of bond counsel to the issuer, is exempt from Federal
income tax.
Municipal Obligations are generally issued to obtain
funds for various public purposes. They also include certain
industrial development bonds issued
by or on behalf of public authorities. Municipal Obligations are
classified as general obligation bonds, revenue bonds and notes.

MANAGER AND MANAGEMENT FEE The First National Bank of Chicago
("Manager") is the Fund's investment adviser.
The Fund has agreed to pay the Manager a monthly fee at
the annual rate of .55 of 1% of the value of the Fund's average
daily net assets.

SALES CHARGES AND EXPENSES Investors may invest, reinvest or
redeem shares at any time without charge or penalty imposed by
the Fund.
All expenses incurred in the operation of the Fund are
borne by the Fund, including investment advisory fees.
Shareholders also bear certain costs of
administration and/or distribution pursuant to a plan adopted in
accordance with Rule 12b-1 under the Investment Company Act of
1940.

HOW TO BUY FUND SHARES Orders for the purchase of shares may be
placed through a number of institutions including the Manager,
the Distributor and affiliates of
the Manager including First Chicago Investment Services, Inc., a
registered broker-dealer, and through certain other banks,
securities dealers and other
industry professionals, such as investment advisers, accountants
and estate planning firms (collectively, "Service Agents").
The minimum initial investment is $1,000. All subsequent
investments must be at least $100.
See "How to Buy Fund Shares."

SHAREHOLDER SERVICES The Fund offers its shareholders certain
services and privileges including: Exchange Privilege,
Auto-Exchange Privilege, Automatic
Asset Builder, Government Direct Deposit Privilege, Dividend
Options privileges, Automatic Withdrawal Plan and TeleTransfer
Privilege. (Certain services and
privileges may not be available through all Service Agents.)

FREE CHECKWRITING Investors may request on the Account
Application that the Fund provide Redemption Checks drawn on the
Fund's account. Redemption Checks may be
made payable to any person in the amount of $500 or more. There
is no charge for this service.

MONTHLY DIVIDENDS The Fund ordinarily declares dividends from
its net investment income daily. Dividends are usually paid on
the last calendar day of each month,
and are automatically reinvested in additional shares unless the
investor elects payment in cash.

TAXES Substantially all dividends derived from Municipal
Obligations are not subject to Federal income tax. However,
certain types of income from the Fund
may not be tax exempt. Notice as to the tax status of an
investor's dividends will be mailed annually.

HOW TO REDEEM FUND SHARES Generally, investors should contact
their representatives at the Manager or appropriate Service Agent
for redemption instructions. Investors who are not clients of the
Manager or a Service Agent
may redeem Fund shares by written request or through the Wire
Redemption Privilege, Telephone Redemption Privilege, or the
TeleTransfer Privilege.
See "How to Redeem Fund Shares."

RISKS AND SPECIAL CONSIDERATIONS Moneys invested in the Fund are
not bank deposits or obligations of, or guaranteed by, the
Manager or any of its
affiliates and are not insured by the FDIC or any other
governmental agency.
There can be no assurance the Fund will be able to
maintain a stable net
asset value of $1.00 per share.
See "Description of the Fund--Investment Considerations."

YIELD INFORMATION

From time to time, the Fund advertises its yield and effective
yield. Both yield figures are based on historical earnings and
are not intended to indicate future
performance. It can be expected that these yields will fluctuate
substantially. The yield of the Fund refers to the income
generated by an investment in the
Fund over a seven-day period (which period will be stated in the
advertisement). This income is then annualized. That is, the
amount of income generated by the
investment during that week is assumed to be generated each week
over a 52-week period and is shown as a percentage of the
investment. The effective yield is
calculated similarly, but, when annualized, the income earned by
an investment in the Fund is assumed to be reinvested. The
effective yield will be slightly
higher than the yield because of the compounding effect of this
assumed reinvestment. The Fund's yield and effective yield may
reflect absorbed expenses
pursuant to any undertaking that may be in effect. See
"Management of the Fund."
Tax equivalent yield is calculated by determining the
pre-tax yield which, after being taxed at a stated rate, would
be equivalent to a stated yield
or effective yield calculated as described above.
Yield information is useful in reviewing the Fund's
performance, but because yields will fluctuate, under certain
conditions such information may not
provide a basis for comparison with domestic bank deposits,
other investments which pay a fixed yield for a stated period
of time, or other investment
companies which may use a different method of computing yield.
Comparative performance information may be used from time
to time in advertising or marketing the Fund's shares, including
data from Lipper Analytical Services, Inc., Bank Rate MonitorTM,
N. Palm Beach, Fla. 33408,
IBC/Donoghue's Money Fund Report, Morningstar, Inc. and other
industry publications.

"Yield" refers to the Fund's income over a 7-day period, which is
then annualized. "Effective yield" assumes that income is
reinvested; it will be slightly higher
than "yield" because of the effect of compounding reinvested
income.

"Tax equivalent yield" is the pre-tax yield of a taxable
investment which equals the stated yield or effective yield after
being taxed at a given rate.

Yields fluctuate, so this information may not be directly
comparable to bank deposits or other
investments which pay a fixed yield for a stated period of time.

DESCRIPTION OF THE FUND

INVESTMENT OBJECTIVE The Fund's goal is to provide investors
with as high a level of current income exempt from Federal income
tax as is consistent with the
preservation of capital and the maintenance of liquidity. To
accomplish this goal, the Fund invests primarily in Municipal
Obligations (described below). The
Fund's investment objective cannot be changed without approval
by the holders of a majority (as defined in the Investment
Company Act of 1940) of the Fund's
outstanding voting shares. There can be no assurance that the
Fund's investment objective will be achieved. Securities in which
the Fund invests may not earn as
high a level of current income as long-term or lower quality
securities which generally have less liquidity, greater market
risk and more fluctuation in market value.

MUNICIPAL OBLIGATIONS Municipal Obligations are debt obligations
issued by states, territories and possessions of the United
States and the District of Columbia and their political
subdivisions, agencies and instrumentalities, or
multistate agencies or authorities, the interest from which is,
in the opinion of bond counsel to the issuer, exempt from Federal
income tax. Municipal Obligations generally include debt
obligations issued to obtain funds for
various public purposes as well as certain industrial
development bonds issued by or on behalf of public authorities.
Municipal Obligations are classified as
general obligation bonds, revenue bonds and notes. General
obligation bonds are secured by the issuer's pledge of its faith,
credit and taxing power for the
payment of principal and interest. Revenue bonds are payable
from the revenue derived from a particular facility or class of
facilities or, in some cases,
from the proceeds of a special excise or other specific revenue
source, but not from the general taxing power. Tax exempt
industrial development bonds, in most
cases, are revenue bonds that generally do not carry the pledge
of the credit of the issuing municipality, but generally are
guaranteed by the corporate entity
on whose behalf they are issued. Notes are short-term
instruments which are obligations of the issuing municipalities
or agencies and are sold in
anticipation of a bond sale, collection of taxes or receipt of
other revenues. Municipal Obligations include municipal
lease/purchase agreements which are similar to installment
purchase contracts for property or equipment issued
by municipalities. Municipal Obligations bear fixed,
floating or variable rates of interest.

The Fund's goal is to provide as high a level of current income
exempt from Federal income tax as is consistent with preservation
of capital and maintenance of liquidity.

The Fund invests primarily in a portfolio of Municipal
Obligations, the interest from which is exempt from Federal
income tax.

MANAGEMENT POLICIES It is a fundamental policy of the Fund that
it will invest at least 80% of the value of its net assets
(except when maintaining a temporary
defensive position) in Municipal Obligations.
The Fund seeks to maintain a net asset value of $1.00 per
share for purchases and redemptions. To do so, the Fund uses the
amortized cost method of
valuing its securities pursuant to Rule 2a-7 under the
Investment Company Act of 1940, certain requirements of which are
summarized as follows. In accordance
with Rule 2a-7, the Fund will maintain a dollar-weighted average
portfolio maturity of 90 days or less, purchase only instruments
having remaining maturities of 13 months or less and invest only
in U.S. dollar denominated
securities determined in accordance with procedures established
by the Board of Trustees to present minimal credit risks and
which are rated in one of the two
highest rating categories for debt obligations by at least two
nationally recognized statistical rating organizations (or one
rating organization if the
instrument was rated only by one such organization) or, if
unrated, are of comparable quality as determined in accordance
with procedures established by the Board of Trustees. The
nationally recognized statistical rating organizations
currently rating instruments of the type the Fund may
purchase are Moody's Investors Service, Inc.
("Moody's"), Standard & Poor's Corporation ("S&P"),
Fitch Investors Service, Inc. ("Fitch"), and IBCA Limited
and IBCA Inc. ("IBCA") and their rating criteria are
described in the Appendix to the Fund's Statement of Additional
Information. For further information regarding the amortized
cost method of valuing securities, see "Determination of Net
Asset Value" in the Fund's
Statement of Additional Information. There can be no assurance
that the Fund will be able to maintain a stable net asset value
of $1.00 per share.
The Fund may invest more than 25% of the value of its
total assets in Municipal Obligations which are related in such a
way that an economic, business
or political development or change affecting one such security
also would affect the other
securities; for example, securities the interests upon which is
paid from revenues of similar types of projects, or securities
whose issuers are located in the same state. As a result, the
Fund may be subject to greater risk as
compared to a fund that does not follow this practice.

The Fund seeks to maintain a net asset value of $1.00 per share
for purchases and redemptions. There can be no assurance it will
be able to do so.

The Fund purchases debt obligations rated in
one of the two highest rating categories by at
least two nationally recognized statistical rating
organizations, or of comparable rating.

From time to time, the Fund may invest more than 25% of
the value of its total assets in industrial development bonds
which, although issued by
industrial development authorities, may be backed only by the
assets and revenues of the non-governmental users. Interest on
Municipal Obligations (including certain industrial development
bonds) which are specified private
activity bonds, as defined in the Internal Revenue Code of 1986,
as amended (the "Code"), issued after August 7, 1986, while
exempt from Federal income tax, is a
preference item for the purpose of the alternative minimum tax.
Where a regulated investment company receives such interest, a
proportionate share of any exempt-interest dividend paid by the
investment company may be treated as
such a preference item to shareholders. The Fund may invest
without limitation in such Municipal Obligations if the Manager
determines their purchase is
consistent with the Fund's investment objective.
The Fund may purchase floating and variable rate demand
notes and bonds, which are tax exempt obligations ordinarily
having stated maturities in excess
of 13 months, but which permit the holder to demand payment of
principal at any time, or at specified intervals not exceeding 13
months, in each case upon not
more than 30 days' notice. Variable rate demand obligations
include master demand notes which are obligations that permit the
Fund to invest fluctuating
amounts, which may change daily without penalty, pursuant to
direct arrangements between the Fund, as lender, and the
borrower. The interest rates on these notes
fluctuate from time to time. Frequently, such obligations are
secured by letters of credit or other credit support arrangements
provided by banks. Use of letters
of credit or other credit support arrangements will not
adversely affect the tax exempt status of these obligations.
Because these obligations are direct lending
arrangements between the lender and borrower, it is not
contemplated that such instruments generally will be traded, and
there generally is no established
secondary market for these obligations, although they are
redeemable at face value. Accordingly, where these
obligations are not secured by letters of credit or other credit
support arrangements, the Fund's right to redeem is dependent on
the ability of the borrower to pay principal and interest on
demand. Each obligation purchased by
the Fund will meet the quality criteria established for the
purchase of Municipal Obligations. The Manager, on behalf of the
Fund, will consider on an
ongoing basis the creditworthiness of the issuers of the
floating and variable rate demand obligations in the Fund's
portfolio. The Fund will not invest more
than 10% of the value of its net assets in floating or variable
rate demand obligations as to which the Fund cannot exercise the
demand feature on not more than seven days' notice if there is no
secondary market available for these
obligations, and in other illiquid securities.

Some Municipal Obligations are secured by letters of credit or
other credit support arrangements provided by banks.

The Fund may purchase from financial institutions
participation interests in Municipal Obligations (such as
industrial development bonds and municipal
lease/purchase agreements). A participation interest gives the
Fund an undivided interest in the Municipal Obligation in the
proportion that the Fund's
participation interest bears to the total principal amount of
the Municipal Obligation. These instruments may have fixed,
floating or variable rates of
interest, with remaining maturities of 13 months or less. If the
participation interest is unrated, or has been given a rating
below that which otherwise is
permissible for purchase by the Fund, the participation interest
will be backed by an irrevocable letter of credit or guarantee of
a bank that the Board of
Trustees has determined meets the prescribed quality standards
for banks set forth below, or the payment obligation otherwise
will be collateralized by U.S.
Government securities, or, in the case of an unrated
participation interest, the Manager must have determined that the
instrument is of comparable quality to
those instruments in which the Fund may invest. For certain
participation interests, the Fund will have the right to demand
payment, on not more than
seven days' notice, for all or any part of the Fund's
participation interest in the Municipal Obligation, plus accrued
interest. As to these instruments, the
Fund intends to exercise its right to demand payment only upon a
default under the terms of the Municipal Obligation, as needed to
provide liquidity to meet
redemptions, or to maintain or improve the quality of its
investment portfolio. The Fund will not invest more than 10% of
the value of its net assets in
participation interests that do not have this demand feature,
and in other illiquid securities.
The Fund may acquire "stand-by commitments" with respect
to Municipal Obligations held in its portfolio. Under a stand-by
commitment, the Fund obligates a broker, dealer or bank to
repurchase, at the Fund's option,
specified securities at a specified price and, in this respect,
stand-by commitments are comparable to put options. The exercise
of a stand-by commitment, therefore, is subject to the ability of
the seller to make payment
on demand. The Fund will acquire stand-by commitments solely to
facilitate portfolio liquidity and does not intend to exercise
its rights thereunder for
trading purposes. The Fund may pay for stand-by commitments if
such action is deemed necessary, thus increasing to a degree the
cost of the underlying
Municipal Obligation and similarly decreasing such security's
yield to investors.
The Fund may purchase tender option bonds. A tender
option bond is a Municipal Obligation (generally held pursuant to
a custodial arrangement) having
a relatively long maturity and bearing interest at a fixed rate
substantially higher than prevailing short-term tax exempt rates,
that has been coupled with
the agreement of a third party, such as a bank, broker-dealer or
other financial institution, pursuant to which such institution
grants the security holders the
option, at periodic intervals, to tender their securities to the
institution and receive the face value thereof. As consideration
for providing the option, the
financial institution receives periodic fees equal to the
difference between the Municipal Obligation's fixed coupon rate
and the rate, as determined by a
remarketing or similar agent at or near the commencement of such
period, that would cause the securities, coupled with the tender
option, to trade at par on
the date of such determination. Thus, after payment of this fee,
the security holder effectively holds a demand obligation that
bears interest at the
prevailing short-term tax exempt rate. The Manager, on behalf of
the Fund, will consider on an ongoing basis the creditworthiness
of the issuer of the
underlying Municipal Obligation, of any custodian and of the
third party provider of the tender option. In certain instances
and for certain tender option bonds, the option may be terminable
in the event of a default in payment of principal or interest on
the underlying Municipal
Obligations and for other reasons. The Fund will not invest more
than 10% of the value of its net assets in securities that are
illiquid, which would include
tender option bonds as to which it cannot exercise the tender
feature on not more than seven days' notice if there is no
secondary market available for these obligations.
From time to time, on a temporary basis other than for
temporary defensive purposes (but not to exceed 20% of the value
of the Fund's net assets)
or for temporary defensive purposes, the Fund may invest in
taxable short-term investments ("Taxable Investments") consisting
of: notes of issuers having, at
the time of purchase, a quality rating within the two highest
grades of Moody's, S&P, Fitch or IBCA; obligations of the U.S.
Government, its agencies or
instrumentalities; commercial paper; certificates of deposit of
U.S. domestic banks, including foreign branches of domestic
banks, with assets of one billion
dollars or more; time deposits; bankers' acceptances and other
short-term bank obligations; and repurchase agreements in respect
of any of the foregoing.
Dividends paid by the Fund that are attributable to income
earned by the Fund from Taxable Investments will be taxable to
investors. See "Dividends,
Distributions and Taxes." Except for temporary defensive
purposes, at no time will more than 20% of the value of the
Fund's net assets be invested in Taxable
Investments. If the Fund purchases Taxable Investments, it will
value them using the amortized cost method and comply with the
provisions of Rule 2a-7 relating
to purchases of taxable instruments. Under normal market
conditions, the Fund anticipates that not more than 5% of the
value of its total assets will be
invested in any one category of Taxable Investments. Taxable
Investments are more fully described in the Statement of
Additional Information, to which
reference hereby is made.
The Fund may invest up to 10% of the value of its net
assets in securities as to which a liquid trading market does not
exist, provided such
investments are consistent with the Fund's investment objective.
Such securities may include securities that are not readily
marketable, such as certain securities that are subject to legal
or contractual restrictions on resale and
repurchase agreements providing for settlement in more than seven
days after notice. As to these
securities, the Fund is subject to a risk that should the Fund
desire to sell them when a ready buyer is not available at a
price that the Fund deems
representative of their value, the value of the Fund's net
assets could be adversely affected. However, if a substantial
market of qualified institutional
buyers develops pursuant to Rule 144A under the Securities Act
of 1933, as amended, for certain of these securities held by the
Fund, the Fund intends to
treat such securities as liquid securities in accordance with
procedures approved by the Fund's Board of Trustees. Because it
is not possible to predict
with assurance how the market for restricted securities pursuant
to Rule 144A will develop, the Fund's Board of Trustees has
directed the Manager to monitor
carefully the Fund's investments in such securities with
particular regard to trading activity, availability of reliable
price information and other relevant
information. To the extent that for a period of time qualified
institutional buyers cease purchasing such restricted securities
pursuant to Rule 144A, the
Fund's investing in such securities may have the effect of
increasing the level
of illiquidity in the Fund's portfolio during such period.
From time to time, the Fund may lend securities from its
portfolio to brokers, dealers and other financial institutions
needing to borrow securities
to complete certain transactions. Such loans may not exceed 33
1/3% of the value of the Fund's total assets. In connection with
such loans, the Fund will receive
collateral consisting of cash, U.S. Government securities or
irrevocable letters of credit issued by financial institutions.
Such collateral will be maintained
at all times in an amount equal to at least 100% of the current
market value of the loaned securities. The Fund can increase its
income through the investment
of such collateral. The Fund continues to be entitled to
payments in amounts equal to the interest or other distributions
payable on the loaned security and
receives interest on the amount of the loan. Such loans will be
terminable at any time upon specified notice. The Fund might
experience risk of loss if the
institution with which it has engaged in a portfolio loan
transaction breaches its agreement with the Fund. The Fund will
limit the entities with which it will enter
into securities lending transactions to those whose securities
are eligible for purchase by the Fund.

CERTAIN FUNDAMENTAL POLICIES The Fund may (i) borrow money from
banks (other than the Manager or its affiliates), but only for
temporary or emergency (not
leveraging) purposes, in an amount up to 15% of the value of the
Fund's total assets (including the amount borrowed) valued at the
lesser of cost or market,
less liabilities (not including the amount borrowed) at the time
the borrowing is made. While borrowings exceed 5% of the Fund's
total assets, the Fund will
not make any additional investments; (ii) invest up to 5% of its
total assets in the obligations of any single issuer, except that
up to 25% of the value of the
Fund's total assets may be invested, and securities issued or
guaranteed by the U.S. Government, its agencies or
instrumentalities may be purchased for
temporary defensive purposes, without regard to any such
limitation; and (iii) invest up to 25% of its total assets in the
securities of issuers in any single
industry, provided that there shall be no such limitation on
investments in Municipal Obligations and, for temporary defensive
purposes, obligations issued
or guaranteed by the U.S. Government, its agencies or
instrumentalities (industrial development bonds, where the
payment of principal and interest is
the ultimate responsibility of companies within the same
industry, are grouped together as an "industry"). This paragraph
describes fundamental policies that
cannot be changed without approval by the holders of a majority
(as defined in the Investment Company Act of 1940) of the Fund's
outstanding voting shares. See
"Investment Objective and Management Policies--Investment
Restrictions" in the Statement of Additional Information.

The Fund has adopted certain fundamental policies intended to
limit the risk of its investment portfolio. Fundamental policies
cannot be changed without
approval by a majority of shareholders.

CERTAIN ADDITIONAL NON-FUNDAMENTAL POLICIES The Fund may (i)
pledge, hypothecate, mortgage or otherwise encumber its assets,
but only to secure permitted borrowings and to the extent related
to the deposit of assets in
escrow in connection with the purchase of securities on a
when-issued or delayed-delivery basis; and (ii) invest up to 10%
of its net assets in
repurchase agreements providing for settlement in more than
seven days after notice and in other illiquid securities (which
securities could include participation interests (including
municipal lease/purchase agreements)
that are not subject to the demand feature described above and
floating and variable rate demand obligations as to which the
Fund cannot exercise the
related demand feature described above and as to which there is
no secondary market). See "Investment Objective and Management
Policies--Investment
Restrictions" in the Statement of Additional Information.

INVESTMENT CONSIDERATIONS Even though interest-bearing
securities are investments which promise a stable stream of
income, the prices of such
securities are inversely affected by changes in interest rates
and, therefore, are subject to the risk of market price
fluctuations. The value of fixed-income
securities also may be affected by changes in the credit rating
or financial condition of the issuing entities.

The Fund's investments are subject to the
risk of market price fluctuations.

New issues of Municipal Obligations usually are offered
on a when-issued basis, which means that delivery and payment for
such Municipal Obligations
ordinarily take place within 45 days after the date of the
commitment to purchase. The payment obligation and the interest
rate that will be received on
the Municipal Obligations are fixed at the time the Fund enters
into the commitment. The Fund will make commitments to purchase
such Municipal Obligations only with the intention of actually
acquiring the securities, but
the Fund may sell these securities before the settlement date if
it is deemed advisable, although any gain realized on such sale
would be taxable. The Fund
will not accrue income in respect of a when-issued security
prior to its stated delivery date. No additional when-issued
commitments will be made if more than
20% of the value of the Fund's net assets would be so committed.

Municipal Obligations purchased on a when-issued basis
and the securities held in the Fund's portfolio are subject to
changes in value (both generally
changing in the same way, i.e., appreciating when interest rates
decline and depreciating when interest rates rise) based upon the
public's perception of the
creditworthiness of the issuer and changes, real or anticipated,
in the level of interest rates. Municipal Obligations purchased
on a when-issued basis may
expose the Fund to risk because they may experience such
fluctuations prior to their actual delivery. Purchasing Municipal
Obligations on a when-issued basis can involve the additional
risk that the yield available in the
market when the delivery takes place actually may be higher than
that obtained in the transaction itself. A segregated account of
the Fund consisting of cash,
cash equivalents or U.S. Government securities or other high
quality liquid debt securities at least equal at all times to the
amount of the when-issued
commitments will be established and maintained at the Fund's
custodian bank. Purchasing Municipal Obligations on a
when-issued basis when the Fund is fully
or almost fully invested may result in greater potential
fluctuation in the value of the Fund's net assets and its net
asset value per share.
Certain municipal lease/purchase obligations in which the
Fund may invest may contain "non-appropriation" clauses which
provide that the municipality has
no obligation to make lease payments in future years unless
money is appropriated for such purpose on a yearly basis.
Although "non-appropriation"
lease/purchase obligations are secured by the leased property,
disposition of the leased property in the event of foreclosure
might prove difficult. In
evaluating the credit quality of a municipal lease/purchase
obligation that is unrated, the Manager will consider, on an
ongoing basis, a number of factors
including the likelihood that the issuing municipality will
discontinue appropriating funding for the leased property.
Certain provisions in the Code relating to the issuance
of Municipal Obligations may reduce the volume of Municipal
Obligations qualifying for
Federal tax exemption. One effect of these provisions could be
to increase the cost of the Municipal Obligations available for
purchase by the Fund and thus
reduce the available yield. Shareholders should consult their
tax advisers concerning the effect of these provisions on an
investment in the Fund.
Proposals that may restrict or eliminate the income tax
exemption for interest on Municipal Obligations may be introduced
in the future. If any such proposal
were enacted that would reduce the availability of Municipal
Obligations for investment by the Fund so as to adversely affect
Fund shareholders, the Fund
would reevaluate its investment objective and policies and
submit possible changes in the Fund's structure to shareholders
for their consideration. If
legislation were enacted that would treat a type of Municipal
Obligation as taxable, the Fund would treat such security as a
permissible Taxable
Investment within the applicable limits set forth herein.
Investment decisions for the Fund are made independently
from those of other investment companies, investment advisory
accounts, custodial accounts,
individual trust accounts and commingled funds that may be
advised by the Manager. However, if such other investment
companies or managed accounts are
prepared to invest in, or desire to dispose of, Municipal
Obligations or Taxable Investments at the same time as the Fund,
available investments or opportunities
for sales will be allocated equitably to each of them. In some
cases, this procedure may adversely affect the size of the
position obtained for or disposed
of by the Fund or the price paid or received by the Fund.

MANAGEMENT OF THE FUND

MANAGER The Manager, located at Three First National Plaza,
Chicago, Illinois 60670, is the Fund's investment adviser. The
Manager, a wholly-owned subsidiary
of First Chicago Corporation, a registered bank holding company,
is a commercial bank offering a wide range of banking and
investment services to customers
throughout the United States and around the world. As of March
31, 1994, it was one of the largest commercial banks in the
United States and the largest in the
mid-Western United States in terms of assets ($59.8 billion) and
in terms of deposits ($28.8 billion). As of March 31, 1994, the
Manager provided investment
management services to portfolios containing approximately $15.5
billion in assets. The Manager serves as investment adviser for
the Fund pursuant to a
Management Agreement dated April 30, 1993. Prior thereto, the
Manager provided investment advisory services to the Fund
pursuant to an Investment Advisory
Agreement (the "Prior Advisory Agreement"). Under the Management
Agreement, the Manager, subject to the supervision of the Fund's
Board of Trustees and in
conformity with Massachusetts law and the stated policies of the
Fund, manages the investment of the Fund's assets. The Manager is
responsible for making investment decisions for the Fund, placing
purchase and sale orders and
providing research, statistical analysis and continuous
supervision of the investment portfolio. The Manager provides
these services through its Investment Management Department. The
investment advisory services
of the Manager are not exclusive under the terms of the
Management Agreement. The Manager is free to, and does, render
investment advisory services to others,
including other investment companies as well as commingled trust
funds and a broad spectrum of individual trust and investment
management portfolios, which
have varying investment objectives. The Manager has advised the
Fund that in making its investment decisions the Manager does not
obtain or use material inside information in the possession of
any other division or department of the
Manager or in the possession of any affiliate of the Manager.

The investment adviser, The First National Bank of Chicago, is
one of the largest commercial banks in the United States and the
largest in the mid-Western
United States and manages $15.5 billion of investment assets.

The Manager and its affiliates underwrite, deal, trade
and invest for their own accounts in Municipal Obligations and
may have deposit, loan and
commercial banking relationships with the issuers of securities
purchased by the Fund. The Manager and its affiliates sell and
purchase Municipal Obligations to
and from other investment companies. The Manager will not invest
any Fund assets in any Municipal Obligations purchased directly
or indirectly from itself or any
affiliate, although under certain circumstances the Fund may
purchase such securities from other members of an underwriting
syndicate in which the Manager
or an affiliate is a member. This restriction may limit the
amount or type of Municipal Obligations available to be purchased
by the Fund. In addition, the
Manager and its affiliates from time to time issue letters of
credit securing obligations of certain corporate guarantors of
industrial revenue bonds issued
by various state municipalities. The Manager will not invest any
Fund assets in any such obligations and this restriction also may
limit the amount or type of
such obligations available for purchase by the Fund.
The Manager and its affiliates presently intend to
continue to charge and collect customary account and account
transaction fees with respect to accounts
through which or for which Fund shares are purchased or
redeemed. This will result in the receipt by the Manager and its
affiliates of customer account fees
in addition to advisory and Service Agent fees from the Fund
with respect to assets in certain accounts. See "Service Plan."

The Manager has engaged The Dreyfus Corporation
("Dreyfus"), located at 200 Park Avenue, New York, New York
10166, to assist it in providing certain
administrative services for the Fund pursuant to a Master
Administration Agreement between the Manager and Dreyfus
effective April 30, 1993. Prior
thereto, Dreyfus provided administrative services to the Fund
pursuant to an Administration Agreement with the Fund (the "Prior
Administration Agreement"). Dreyfus was formed in 1947 and, as of
March 31, 1994, managed or administered
approximately $74 billion in assets for more than 1.9 million
investor accounts nationwide.

The Dreyfus Corporation, which manages or administers
approximately $74 billion in mutual fund assets, will assist the
Manager in providing certain
administrative services for the Fund.

Under the terms of the Prior Advisory Agreement and Prior
Administration Agreement, which were terminated on April 30,
1993, the Fund agreed to pay the
Manager and Dreyfus monthly fees at the annual rate of .40 and
.20, respectively, of 1% of the value of the Fund's average daily
net assets. Under the terms of the Management Agreement, the Fund
has agreed to pay the Manager a
monthly management fee at the annual rate of .55 of 1% of the
value of the Fund's average daily net assets, which is .05 of 1%
less than the combined fees
payable by the Fund to the Manager and Dreyfus under the Prior
Advisory Agreement and Prior Administration Agreement. Pursuant
to its agreement with
Dreyfus, the Manager, from its own funds, will pay Dreyfus for
Dreyfus' services. For the fiscal year ended December 31, 1993,
the Fund paid the Manager
pursuant to the Management Agreement and Prior Advisory
Agreement a monthly fee at the effective aggregate annual rate of
.41 of 1% of the value of the Fund's
average daily net assets pursuant to an undertaking in effect.
For the period January 1, 1993 to April 29, 1993, the Fund paid
Dreyfus pursuant to the Prior
Administration Agreement a monthly administration fee at the
annual rate of .20
of 1% of the value of the Fund's average daily net assets.

GLASS-STEAGALL ACT The Glass-Steagall Act and other applicable
laws prohibit Federally chartered or supervised banks from
engaging in certain aspects of the
business of issuing, underwriting, selling and/or distributing
securities, although banks such as the Manager are permitted to
purchase and sell securities
upon the order and for the account of their customers. The
Manager has advised the Fund of its belief that it may
perform the services for the Fund contemplated by the Management
Agreement and this Prospectus without violating the
Glass-Steagall Act or other applicable
banking laws or regulations. The Manager has pointed out,
however, that there are no cases deciding whether a bank such as
the Manager may perform services
comparable to those performed by the Manager and that future
changes in either Federal or state statutes and regulations
relating to permissible activities of
banks and their subsidiaries and affiliates, as well as future
judicial or administrative decisions or interpretations of
present and future statutes and
regulations, could prevent the Manager from continuing to
perform such services for the Fund. If the Manager were to be
prevented from providing such services
to the Fund, the Fund's Board of Trustees would review the
Fund's relationship with the Manager and consider taking all
actions necessary in the circumstances.
For a discussion of the Glass-Steagall Act in connection
with the Fund's Service Plan, see "Service Plan."

TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN
The Shareholder Services Group, Inc., a subsidiary of First Data
Corporation, P.O. Box 9671, Providence, Rhode Island 02940-9671,
is the Fund's Transfer and
Dividend Disbursing Agent (the "Transfer Agent"). The Bank of
New York, 110 Washington Street, New York, New York 10286, is the
Fund's Custodian.

The Shareholder Services Group, Inc. is the Fund's transfer
agent.

EXPENSES All expenses incurred in the operation of the Fund are
borne by the Fund, except to the extent specifically assumed by
the Manager. The expenses
borne by the Fund include the following: taxes, interest,
brokerage fees and commissions, if any, fees of Trustees who are
not officers, directors, employees
or holders, directly or indirectly, of 5% or more of the
outstanding voting securities of the Manager or Dreyfus,
Securities and Exchange Commission fees,
state Blue Sky qualification fees, advisory fees, charges of
custodians, transfer and dividend disbursing agents' fees,
certain insurance premiums,
industry association fees, outside auditing and legal expenses,
costs of independent pricing services, costs of maintaining the
Fund's existence, costs
attributable to investor services (including,
without limitation, telephone and personnel expenses), costs of
shareholders'
reports and meetings and any extraordinary expenses.
In addition, the Fund bears certain costs of distributing
Fund shares in accordance with a plan (the "Service Plan")
adopted pursuant to Rule 12b-1 under
the Investment Company Act of 1940. See "Annual Fund Operating
Expenses" and "Service Plan."
The imposition of the management fee, as well as other
operating expenses, including the fees paid under the Fund's
Service Plan, will have the
effect of reducing the yield to investors.

HOW TO BUY FUND SHARES

INFORMATION APPLICABLE TO ALL PURCHASERS The Fund's distributor
is Dreyfus Service Corporation, a wholly-owned subsidiary of
Dreyfus, located at 200 Park
Avenue, New York, New York 10166. The shares it distributes are
not deposits or obligations of The Dreyfus Security Savings Bank,
F.S.B. or the Manager and
therefore are not insured by the FDIC.

The Fund offers a number of convenient ways to purchase shares.

Fund shares may be purchased by all clients of the
Manager and its affiliates, including qualified custody, agency
and trust accounts, through
their accounts with the Manager and its affiliates, or by
clients of certain Service Agents through their accounts with the
Service Agent. Fund shares also
may be purchased directly through the Distributor. Share
certificates will not be issued. It is not recommended that the
Fund be used as a vehicle for Keogh,
IRA or other qualified retirement plans. The Fund reserves the
right to reject any purchase order.
The minimum initial investment is $1,000. All subsequent
investments must be at least $100. The initial investment must be
accompanied by the Fund's
Account Application. The Manager and Service Agents may impose
initial or subsequent investment minimums which are higher or
lower than those specified
above and may impose different minimums for different types of
accounts or purchase arrangements.

You can open an account with as little as $1,000. Subsequent
investments can be as little as $100.

Fund shares are sold on a continuous basis at the net
asset value per share next determined after an order in proper
form and Federal Funds (monies of
member banks within the Federal Reserve System which are held on
deposit at a Federal
Reserve Bank) are received by the Transfer Agent. If an investor
does not remit Federal Funds, his payment must be converted into
Federal Funds. This usually
occurs within one business day of receipt of a bank wire and
within two business days of receipt of a check drawn on a member
bank of the Federal Reserve System.
Checks drawn on banks which are not members of the Federal
Reserve System may take considerably longer to convert into
Federal Funds. Prior to receipt of
Federal Funds, the investor's money will not be invested.
The Fund's net asset value per share is determined as of
12:00 Noon, New York time, on each day the New York Stock
Exchange is open for business, except
on Martin Luther King, Jr. Day, Columbus Day and Veterans Day.
Net asset value per share is computed by dividing the value of
the Fund's net assets (i.e., the
value of its assets less liabilities) by the total number of
shares outstanding. See "Determination of Net Asset Value" in
the Fund's Statement of Additional Information.
Federal regulations require that an investor provide a
certified Taxpayer Identification Number ("TIN") upon opening or
reopening an account. See
"Dividends, Distributions and Taxes" and the Fund's Account
Application for further information concerning this requirement.
Failure to furnish a certified
TIN to the Fund could subject an investor to a $50 penalty
imposed by the Internal Revenue Service (the "IRS").

PURCHASING SHARES THROUGH ACCOUNTS WITH THE MANAGER OR A SERVICE
AGENT Investors who desire to purchase shares through their
accounts at the Manager or its
affiliates or a Service Agent should contact such entity
directly for appropriate instructions, as well as for information
about conditions pertaining
to the account and any related fees. Service Agents and the
Manager may charge clients direct fees for effecting transactions
in Fund shares, as well as fees
for other services provided to clients in connection with
accounts through which Fund shares are purchased. These fees, if
any, would be in addition to fees
received by a Service Agent under the Service Plan or management
fees received by the Manager under the Management Agreement. Each
Service Agent has agreed to
transmit to its clients a schedule of such fees. In addition,
Service Agents and the Manager may impose minimum account and
other conditions, including conditions
which might affect the availability of certain shareholder
privileges described in this Prospectus. Certain investor
accounts with the Manager and its
affiliates and certain Service Agents may be eligible for an
automatic investment privilege, commonly called a "sweep," under
which amounts in excess
of a certain minimum held in these accounts will be invested
automatically in Fund shares at predetermined intervals. Each
investor desiring to use this
privilege should consult the Manager or his Service Agent for
details. It is the responsibility of the Manager and Service
Agents to transmit client orders on a timely basis.

Contact your investment representative or Service Agent to
learn how to purchase shares.

Copies of the Fund's Prospectus and Statement of
Additional Information may be obtained from the Distributor, the
Manager, certain affiliates of the
Manager or certain Service Agents, as well as from the Fund.

PURCHASING SHARES THROUGH THE DISTRIBUTOR Fund shares also may
be purchased directly through the Distributor by check or wire,
or through the TeleTransfer
Privilege described below. The initial investment must be
accompanied by the Fund's Account Application which can be
obtained from the Distributor and
certain Service Agents. Checks should be made payable to "The
First Prairie Family of Funds." Payments to open new accounts
which are mailed should be sent
to The First Prairie Family of Funds, P.O. Box 9387, Providence,
Rhode Island 02940-9387, together with the investor's Account
Application. For subsequent
investments, the investor's Fund account number should appear on
the check and an investment slip should be enclosed and sent to
The First Prairie Family of
Funds, P.O. Box 105, Newark, New Jersey 07101-0105. Neither
initial nor subsequent investments should be made by third party
check. A charge will be
imposed if any check used for investment in an investor's
account does not clear. All payments should be made in U.S.
dollars and, to avoid fees and
delays, should be drawn only on U.S. banks.

Wire payments may be made if the investor's bank account
is in a commercial bank that is a member of the Federal Reserve
System or any other bank
having a correspondent bank in New York City or Chicago.
Immediately available funds may be transmitted by wire to The
Bank of New York, DDA #8900052074/First
Prairie Municipal Money Market Fund, for purchase of Fund shares
in the investor's name. The
wire must include the investor's account number (for new
accounts, the investor's TIN should be included instead), account
registration and dealer
number, if applicable. If the investor's initial purchase of
Fund shares is by wire, the investor should call 1-800-645-6561
after completing his wire payment
to obtain a Fund account number. An investor must include his
Fund account number on the Fund's Account Application and
promptly mail the Account
Application to the Fund, as no redemptions will be permitted
until the Account Application is received. Further information
about remitting funds in this
manner is provided in "Payment and Mailing Instructions" on the
Fund's Account Application.
Subsequent investments also may be made by electronic
transfer of funds from an account maintained in a bank or other
domestic financial institution
that is an Automated Clearing House member. The investor must
direct the institution to transmit immediately available funds
through the Automated
Clearing House to The Bank of New York with instructions to
credit the investor's Fund account. The instruction must specify
the investor's Fund
account registration and the investor's Fund account number
preceded by the digits "1111."

TELETRANSFER PRIVILEGE An investor may purchase Fund shares
(minimum $500, maximum $150,000 per day) by telephone if he has
checked the appropriate box and
supplied the necessary information on the Fund's Account
Application or has filed a Shareholder Services Form with the
Transfer Agent. The proceeds will be
transferred between the bank account designated in one of these
documents and the investor's Fund account. Only a bank account
maintained in a domestic
financial institution which is an Automated Clearing House
member may be so designated. The Fund may modify or terminate
this Privilege at any time or
charge a service fee upon notice to shareholders. No such fee
currently is contemplated.

You can purchase additional shares by telephone after you supply
the necessary information on your Account Application.

Investors who have selected the TeleTransfer Privilege
may request TeleTransfer purchase of Fund shares by calling
1-800-227-0072 or, if calling from overseas, 1-401-455-3309.

SHAREHOLDER SERVICES

The services and privileges described under this heading may not
be available to clients of certain Service Agents and some
Service Agents may impose certain
conditions on their clients which are different from those
described in this Prospectus. Each investor should consult his
Service Agent in this regard.

EXCHANGE PRIVILEGE The Exchange Privilege enables an investor to
purchase, in exchange for shares of the Fund, shares of certain
other funds advised by the
Manager, or shares of certain funds advised by Dreyfus, to the
extent such shares are offered for sale in the investor's state
of residence. These funds
have different investment objectives that may be of interest to
investors. The Exchange Privilege may be expanded to permit
exchanges between the Fund and
other funds that, in the future, may be advised by the Manager.
Investors will be notified of any such change. If an investor
desires to use this Privilege, he
should consult his Service Agent or the Distributor to determine
if it is available and whether any conditions are imposed on its
use.

You can exchange your shares for shares of other eligible First
Prairie funds.

Upon an exchange into a new account, the following
shareholder services and privileges, as applicable and where
available, will be automatically carried
over to the fund into which the exchange is made: Exchange
Privilege, Check Redemption Privilege, Wire Redemption Privilege,
Telephone Redemption Privilege,
TeleTransfer Privilege and the dividend/ capital gain
distribution option
(except for Dividend Sweep) selected by the investor.
Shares will be exchanged at the next determined net asset
value; however, a sales load may be charged with respect to
exchanges into funds sold with a
sales load. If an investor is exchanging into a fund that
charges a sales load, the investor may qualify for share prices
which do not include the sales load or
which reflect a reduced sales load, if the shares of the fund
from which the investor is exchanging were: (a) purchased with a
sales load, (b) acquired by a
previous exchange from shares purchased with a sales load, or
(c) acquired through reinvestment of dividends or distributions
paid with respect to the
foregoing categories of shares. To qualify, at the time of an
exchange, the investor must notify the Transfer Agent or the
investor's Service Agent must
notify the Distributor. Any such qualification is subject to
confirmation of the investor's holdings through a check of
appropriate records. See "Shareholder
Services" in the Statement of Additional Information. No fees
currently are charged shareholders directly in connection with
exchanges, although the Fund
reserves the right, upon not less than 60 days' written notice,
to charge shareholders a nominal fee in accordance with rules
promulgated by the
Securities and Exchange Commission. The Fund reserves the right
to reject any exchange request in whole or in part. The Exchange
Privilege may be modified or
terminated at any time upon notice to shareholders.
The exchange of shares of one fund for shares of another
is treated for Federal income tax purposes as a sale of the
shares given in exchange by the
shareholder and, therefore, an exchanging shareholder may
realize a taxable gain or loss.

AUTO - EXCHANGE PRIVILEGE The Auto-Exchange Privilege enables an
investor to invest regularly (on a semi-monthly, monthly,
quarterly or annual basis), in
exchange for shares of the Fund, in shares of certain other
funds in the First Prairie Family of Funds or certain other funds
advised by Dreyfus of which he is
currently an investor. The amount an investor designates, which
can be expressed either in terms of a specific
dollar or share amount ($100 minimum), will be exchanged
automatically on the first and/or fifteenth of the month
according to the exchange schedule that the
investor has selected. Shares will be exchanged at the
then-current net asset value; however, a sales load may be
charged with respect to exchanges into funds
sold with a sales load. See "Shareholder Services" in the
Statement of Additional Information. The right to exercise this
Privilege may be modified or
cancelled by the Fund or the Transfer Agent. The investor or the
investor's Service Agent may modify or cancel this Privilege at
any time by writing to The
First Prairie Family of Funds, P.O. Box 9671, Providence, Rhode
Island 02940-9671. The Fund may charge a service fee for the use
of this Privilege. No
such fee currently is contemplated. The exchange of shares of
one fund for shares of another is treated for Federal income tax
purposes as a sale of the
shares given in exchange by the shareholder and, therefore, an
exchanging shareholder may realize a taxable gain or loss. For
more information concerning
this Privilege and the funds eligible to participate in this
Privilege, or to obtain an Auto-Exchange Authorization Form,
please call toll free in Illinois
1-800-621-6592, or, outside Illinois 1-800-537-4938 if Fund
shares were purchased through First Chicago Investment Services,
Inc. or 1-800-645-6561 if
Fund shares were purchased through the Distributor.

You can exchange Fund shares automatically at regular intervals
which you select.

AUTOMATIC ASSET BUILDER Automatic Asset Builder permits
an investor to purchase Fund shares (minimum of $100 and
maximum of $150,000 per transaction) at regular
intervals selected by the investor. Fund shares are purchased by
transferring funds from the bank account designated by an
investor. At the investor's
option, the bank account designated by the investor will be
debited in the specified amount, and Fund shares will be
purchased, once a month, on either the
first or fifteenth day, or twice a month, on both days. Only an
account maintained at a domestic financial institution which is
an Automated Clearing
House member may be so designated. To establish an Automatic
Asset Builder account, the investor must file an authorization
form with the Transfer Agent.
The necessary authorization form may be obtained from the
Distributor, the Manager, certain affiliates of the Manager or
certain Service Agents. An
investor may cancel his participation in this Privilege or
change the amount of purchase at any time by mailing written
notification to The First Prairie Family
of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671,
and the notification will be effective three business days
following receipt. The Fund
may modify or terminate this Privilege at any time or charge a
service fee. No such fee currently is contemplated.

You can purchase shares automatically at regular
intervals which you select.

GOVERNMENT DIRECT DEPOSIT PRIVILEGE Government Direct Deposit
Privilege enables an investor to purchase Fund shares (minimum of
$100 and maximum of $50,000 per
transaction) by having Federal salary, Social Security or
certain veterans', military or other payments from the Federal
government automatically deposited
into the investor's Fund account. An investor may deposit as
much of such payments as he elects. To enroll in Government
Direct Deposit, the investor must
file with the Transfer Agent a completed Direct Deposit Sign-Up
form for each type of payment that the investor desires to
include in this Privilege. The
appropriate form may be obtained from the Distributor, the
Manager, certain affiliates of the Manager or certain Service
Agents. Death or legal incapacity
will terminate an investor's participation in this Privilege. An
investor may elect at any time to terminate his participation by
notifying in writing the
appropriate Federal agency. Further, the Fund may terminate an
investor's participation upon 30 days' notice to the investor.

Many Federal payments are eligible for full or partial direct
deposit into your account to purchase shares.

DIVIDEND OPTIONS Dividend Sweep enables an investor to
invest automatically dividends or dividends and capital
gain distributions, if any, paid by the Fund in shares of
another fund in the First Prairie Family of Funds or certain
other funds advised or administered by Dreyfus of which the
investor is a shareholder. Shares of the other fund will be
purchased at the then-current net
asset value; however, a sales load may be charged with respect
to investments in shares of a fund sold with a sales load. If an
investor is investing in a fund
that charges a sales load, the investor may qualify for share
prices which do not include the sales load or which reflect a
reduced sales load. If an investor
is investing in a fund that charges a contingent deferred sales
charge, the shares purchased will be subject to the contingent
deferred sales charge, if
any, applicable to the purchased shares. See "Shareholder
Services" in the Statement of Additional Information. Dividend
ACH permits a shareholder to
transfer electronically on the payment date their dividends or
dividends and capital gain distributions, if any, from the Fund
to a designated bank account.
Only an account maintained at a domestic financial institution
which is an Automated Clearing
House member may be so designated. Banks may charge a fee for
this service.

You can "sweep" your dividends and capital
gain distributions into certain other First Prairie funds.

For more information concerning these privileges,
or to request a Dividend Options Form, investors should call
toll free in Illinois 1-800-621-6592; or, outside Illinois,
1-800-537-4938 if
Fund shares were purchased through First Chicago Investment
Services, Inc., or
1-800-645-6561 if Fund shares were purchased through the
Distributor. To cancel these privileges, the investor or the
investor's Service Agent must mail written
notification to The First Prairie Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671. Enrollment in or
cancellation of these privileges is
effective three business days following receipt by the Transfer
Agent. These privileges are available only for existing accounts
and may not be used to open
new accounts. Minimum subsequent investments do not apply for
Dividend Sweep. The Fund may modify or terminate these
privileges at any time or charge a
service fee. No such fee currently is contemplated.

AUTOMATIC WITHDRAWAL PLAN The Automatic Withdrawal Plan permits
an investor to request withdrawal of a specified dollar amount
(minimum of $50) on either a
monthly or quarterly basis if the investor has a $5,000 minimum
account. An application for the Automatic Withdrawal Plan can be
obtained from the
Distributor, the Manager, certain affiliates of the Manager or
certain Service Agents. The Automatic Withdrawal Plan may be
ended at any time by the investor,
the Fund or the Transfer Agent.

You can withdraw a specified dollar amount from your account
every month or quarter.

HOW TO REDEEM FUND SHARES

GENERAL An investor may request redemption of his shares at any
time. Redemption requests should be transmitted to the Transfer
Agent as described below. When a
request is received in proper form, the Fund will redeem the
shares at the next determined net asset value.

You can redeem Fund shares at any time.

The Fund imposes no charges when shares are redeemed.
Service Agents may charge a nominal fee for effecting redemptions
of Fund shares. The value of the
shares redeemed may be more or less than their original cost,
depending upon the Fund's then-current net asset value. As
described in "Determination
of Net Asset Value" in the Statement of Additional Information,
the Fund seeks to maintain a net asset value of $1.00 per share
for purchases and redemptions.
The Fund ordinarily will make payment for all shares
redeemed within seven days after receipt by the Transfer Agent of
a redemption request in proper
form, except as provided by the rules of the Securities and
Exchange Commission. HOWEVER, IF AN INVESTOR HAS PURCHASED FUND
SHARES BY CHECK, BY TELETRANSFER
PRIVILEGE OR THROUGH AUTOMATIC ASSET BUILDER AND SUBSEQUENTLY
SUBMITS A WRITTEN REDEMPTION REQUEST TO THE TRANSFER AGENT, THE
REDEMPTION WILL BE EFFECTIVE AND
THE REDEMPTION PROCEEDS WILL BE TRANSMITTED TO THE INVESTOR
PROMPTLY UPON BANK CLEARANCE OF THE INVESTOR'S PURCHASE CHECK,
TELETRANSFER PURCHASE OR AUTOMATIC
ASSET BUILDER ORDER, WHICH MAY TAKE UP TO EIGHT BUSINESS DAYS OR
MORE. IN ADDITION, THE FUND WILL NOT HONOR REDEMPTION CHECKS
UNDER THE CHECK REDEMPTION
PRIVILEGE, AND WILL REJECT REQUESTS TO REDEEM SHARES BY WIRE OR
TELEPHONE OR PURSUANT TO THE TELETRANSFER PRIVILEGE, FOR A PERIOD
OF EIGHT BUSINESS DAYS
AFTER RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE CHECK, THE
TELETRANSFER PURCHASE OR THE AUTOMATIC ASSET BUILDER ORDER
AGAINST WHICH SUCH REDEMPTION IS
REQUESTED. THESE PROCEDURES WILL NOT APPLY IF THE INVESTOR'S
SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF THE INVESTOR
OTHERWISE HAS A SUFFICIENT
COLLECTED BALANCE IN HIS ACCOUNT TO COVER THE REDEMPTION
REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS
ON SUCH SHARES WILL ACCRUE AND BE
PAYABLE, AND THE INVESTOR WILL BE ENTITLED TO EXERCISE ALL OTHER
RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares will not be redeemed
until the Transfer Agent
has received the investor's Account Application.
The Fund reserves the right to redeem an investor's
account at the Fund's option upon not less than 30 days' written
notice if the account's net asset
value is $500 or less and remains so during the notice period.

PROCEDURES An investor who has purchased shares through his
account at the Manager or a Service Agent must redeem shares by
following instructions
pertaining to such account. If an investor has given his Service
Agent authority to instruct the Transfer Agent to redeem shares
and to credit the proceeds of
such redemptions to a designated account at the Service Agent,
the investor may redeem shares only in this manner and in
accordance with a written redemption request pursuant to the
regular redemption procedure
described below. Investors who wish to use the other redemption
methods described below, must arrange with their Service Agent
for delivery of the
required application(s) to the Transfer Agent. It is the
responsibility of the Manager or the Service Agent, as the case
may be, to transmit the redemption
order and credit the investor's account with the redemption
proceeds on a timely basis. Other investors may redeem shares by
using the regular redemption
procedure through the Transfer Agent, using the Check Redemption
Privilege, the Wire Redemption Privilege, the Telephone
Redemption Privilege, or the
TeleTransfer Privilege, as described below.

The Fund offers a number of convenient ways to access your
investment.

An investor may redeem or exchange shares by telephone if
the investor has checked the appropriate box on the Fund's
Account Application or has filed a
Shareholder Services Form with the Transfer Agent. By selecting
a telephone redemption or exchange privilege, an investor
authorizes the Transfer Agent to
act on telephone instructions from any person representing
himself or herself to be the investor, or a representative of the
investor's Service Agent, and
reasonably believed by the Transfer Agent to be genuine. The
Fund will require the Transfer Agent to employ reasonable
procedures, such as requiring a form of
personal identification, to confirm that instructions are
genuine and, if it does not follow such procedures, the Fund or
the Transfer Agent may be liable
for any losses due to unauthorized or fraudulent instructions.
Neither the Fund nor the Transfer Agent will be liable for
following telephone instructions
reasonably believed to be genuine.
During times of drastic economic or market conditions,
investors may experience difficulty in contacting the Transfer
Agent by telephone to request a
redemption or exchange of Fund shares. In such cases, investors
should consider using the other redemption procedures described
herein. Use of these other
redemption procedures may result in the investor's redemption
request being processed at a later time than it would have been
if telephone redemption had been used.

REGULAR REDEMPTION Under the regular redemption procedure, an
investor may redeem shares by written request mailed to The First
Prairie Family of Funds,
P.O. Box 9671, Providence, Rhode Island 02940-9671. Redemption
requests must be signed by the individual shareholder, including
each owner of a joint account,
and each signature must be guaranteed. The Transfer Agent has
adopted standards and procedures pursuant to which
signature-guarantees in proper form generally
will be accepted from domestic banks, brokers, dealers, credit
unions, national securities exchanges, registered securities
associations, clearing agencies and
savings associations, as well as from participants in the New
York Stock Exchange Medallion Signature Program, the Securities
Transfer Agents Medallion
Program ("STAMP") and the Stock Exchanges Medallion Program. For
more information with respect to signature-guarantees, please
call the telephone number shown on the front cover.

Shares may be redeemed by written request.

Redemption proceeds of at least $1,000 will be wired to
any member bank of the Federal Reserve System in accordance with
a written signature-guaranteed request.

CHECK REDEMPTION PRIVILEGE An investor may request on the
Account Application, Shareholder Services Form or by later
written request to the Fund that the Fund
provide Redemption Checks drawn on the Fund's account.
Redemption Checks may be made payable to the order of any person
in the amount of $500 or more.
Redemption Checks should not be used to close an account.
Redemption Checks are free, but the Transfer Agent will impose a
fee for stopping payment of a
Redemption Check at the investor's request or if the Transfer
Agent cannot honor the Redemption Check due to insufficient funds
or other valid reason. An
investor should date his Redemption Checks with the current date
when the investor writes them. Investors should not postdate
Redemption Checks. If an
investor does, the Transfer Agent will honor, upon presentment,
even if presented before the date of the check, all postdated
Redemption Checks which
are dated within six months of presentment for payment, if they
are otherwise in good order. This Privilege may be modified or
terminated at any time by the Fund
or the Transfer Agent upon notice to shareholders.

You can write checks of $500 or more using a special checkbook
provided by the
Fund, if you request it on your Account Application.

WIRE REDEMPTION PRIVILEGE An investor may request by wire or
telephone that redemption proceeds (minimum $1,000) be wired to
his account at a bank which is
a member of the Federal Reserve System, or a correspondent bank
if the investor's bank is not a member. To establish the Wire
Redemption Privilege, an investor must check the appropriate box
and supply the necessary information on
the Fund's Account Application or file a Shareholder Services
Form with the Transfer Agent. An investor may direct that
redemption proceeds be paid by check
(maximum $150,000 per day) made out to the owners of record and
mailed to the investor's address. Redemption proceeds of less
than $1,000 will be paid
automatically by check. Holders of jointly registered Fund or
bank accounts may have redemption proceeds of only up to $250,000
wired within any 30-day period.
An investor may telephone redemption requests by calling
1-800-227-0072 or, if calling from overseas, 1-401-455-3309. The
Fund reserves the right to refuse any
redemption request, including requests made shortly after a
change of address, and may limit the amount involved or the
number of such requests. This Privilege
may be modified or terminated at any time by the Transfer Agent
or the Fund. The Fund's Statement of Additional Information sets
forth instructions for transmitting redemption requests by wire.

You can redeem shares by wire if you check the appropriate box
on your Account Application.

TELEPHONE REDEMPTION PRIVILEGE An investor may redeem Fund
shares (maximum $150,000 per day) by telephone if he has checked
the appropriate box on the
Fund's Account Application or has filed a Shareholder Services
Form with the Transfer Agent. The redemption proceeds will be
paid by check and mailed to the
investor's address. An investor may telephone redemption
instructions by calling 1-800-227-0072 or, if calling from
overseas, 1-401-455-3309. The Fund reserves
the right to refuse any request made by telephone, including
requests made shortly after a change of address, and may limit
the amount involved or the
number of telephone redemption requests. This Privilege may be
modified or terminated at any time by the Transfer Agent or the
Fund.

You can redeem shares by telephone if you have checked the
appropriate box on your Account Application.

TELETRANSFER PRIVILEGE An investor may redeem Fund shares
(maximum $150,000 per day) by telephone if he has checked the
appropriate box and supplied the
necessary information on the Fund's Account Application or has
filed a Shareholder Services Form with the Transfer Agent. The
proceeds will be
transferred between the investor's Fund account and the bank
account designated in one of these documents. Only such an
account maintained in a domestic
financial institution which is an Automated Clearing House
member may be so designated. Redemption proceeds will be on
deposit in the investor's account at
an Automated Clearing House member bank ordinarily two days
after receipt of the redemption request or, at the investor's
request, paid by check (maximum
$150,000 per day) and mailed to his address. Holders of jointly
registered Fund or bank accounts may redeem through the
TeleTransfer Privilege for transfer to
their bank account only up to $250,000 within any 30-day period.
The Fund reserves the right to refuse any request made by
telephone, including requests
made shortly after a change of address, and may limit the amount
involved or the number of such requests. The Fund may modify or
terminate this Privilege at any
time or charge a service fee upon notice to shareholders. No
such fee currently is contemplated.

Call 1-800-227-0072 for TeleTransfer transactions.

Investors who have selected the TeleTransfer Privilege
may request a TeleTransfer redemption of Fund shares by
telephoning 1-800-227-0072 or, if
calling from overseas, 1-401-455-3309.

SERVICE PLAN

Under the Service Plan, adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940, the Fund bears the costs and
expenses in connection with
advertising and marketing its shares and pays the fees of
Service Agents for Servicing, as defined below, at a rate not
exceeding .25 of 1% per annum of the
value of the Fund's average daily net assets. Service Agents
receive fees based upon the average daily value of the Fund's
shares owned by shareholders for
which the Service Agent is the dealer or holder of record, or
for which the Service Agent has a Servicing relationship. The
Service Plan provides that the
Manager, Dreyfus and the Distributor may act as Service Agents
and receive fees under the Service Plan. From time to time, the
Manager, Dreyfus and/or the Distributor may defer or waive
receipt of fees under the Service Plan
while retaining the ability to be paid by the Fund under the
Service Plan thereafter. The fees payable to the Manager, Dreyfus
and/or the Distributor for
Servicing are payable without regard to actual expenses
incurred.

The Fund has adopted a plan so that it can pay for advertising
and marketing and to compensate others for providing services to
you.

The Fund also bears the costs of preparing and printing
prospectuses and statements of additional information used for
regulatory purposes and for distribution to existing
shareholders. Under the Service Plan, the Fund bears
(a) the costs of preparing, printing and distributing
prospectuses and statements of additional information used for
other purposes and (b) the costs
associated with implementing and operating the Service Plan
(such as costs of printing and mailing service agreements), the
aggregate of such amounts not to
exceed in any fiscal year of the Fund the greater of $100,000 or
.005 of 1% of the value of the Fund's average daily net assets
for such fiscal year. Each item
for which a payment may be made under the Service Plan may
constitute an expense of distributing Fund shares as the
Securities and Exchange Commission construes
such term under Rule 12b-1.
Expenses under the Service Plan may be carried forward
from one year to another to the extent they remain unpaid. All or
part of any such amount will be
paid at such time, if ever, as the Board of Trustees determines
to pay it. The Fund will not be charged for interest, carrying or
other finance charges on any
unreimbursed distribution or other expense incurred and not paid
in a prior year.
Servicing may include, among other things, one or more of
the following: answering client inquiries regarding the Fund;
assisting clients in changing
dividend options, account designations and addresses; performing
sub-accounting; establishing and maintaining shareholder accounts
and records; processing
purchase and redemption transactions; investing client cash
account balances automatically in Fund shares; providing periodic
statements showing a client's
account balance and integrating such statements with those of
other transactions and balances in the client's other accounts
serviced by the Service Agent;
arranging for bank wires; and such other services as the Fund
may request, to the extent the Service Agent is permitted by
applicable statute, rule or regulation.

The Glass-Steagall Act and other applicable laws prohibit
Federally chartered or supervised banks from engaging in certain
aspects of the business
of issuing, underwriting, selling and/or distributing
securities. Accordingly, banks will be engaged to act as Service
Agents only to perform administrative
and shareholder servicing functions. While the matter is not
free from doubt, the Fund's Board of Trustees believes that such
laws should not preclude a bank
from acting as a Service Agent. However, judicial or
administrative decisions or interpretations of such laws, as well
as changes in either Federal or state
statutes or regulations relating to the permissible activities
of banks or their subsidiaries or affiliates, could prevent a
bank from continuing to perform all
or a part of its Servicing activities. If a bank were prohibited
from so acting, its shareholder clients would be permitted to
remain Fund shareholders and
alternative means for continuing the Servicing of such
shareholders would be sought. In such event, changes in the
operation of the Fund might occur and
shareholders serviced by such bank might no longer be able to
avail themselves of any automatic investment or other services
then being provided by such bank. The Fund does not expect that
shareholders would suffer any adverse financial
consequences as a result of any of these occurrences.

DIVIDENDS, DISTRIBUTIONS
AND TAXES

The Fund ordinarily declares dividends from net investment
income on each day the New York Stock Exchange is open for
business, except on Martin Luther King,
Jr. Day, Columbus Day and Veterans Day. Dividends usually are
paid on the last calendar day of each month, and are
automatically reinvested in additional Fund
shares unless the investor elects payment in cash, or the
investor's customer arrangement with the Manager or a Service
Agent provides for payment in cash.
Fund shares begin earning income dividends on the day the
purchase order is effective. The Fund's earnings for Saturdays,
Sundays and holidays are declared
as dividends on the preceding business day. If an investor
redeems all shares in his account at any time during the month,
all dividends to which the investor is
entitled are paid along with the proceeds of the redemption.
Distributions from net realized securities gains, if any,
generally are declared and paid once a
year, but the Fund may make distributions on a more frequent
basis to comply with the distribution requirements of the Code,
in all events in a manner
consistent with the provisions of the Investment Company Act of
1940. The Fund will not make distributions from net realized
securities gains unless capital
loss carryovers, if any, have been utilized or have expired.
Investors may choose whether to receive distributions in cash or
to reinvest in additional
Fund shares at net asset value. All expenses are accrued daily
and deducted before declaration of dividends to investors.

The Fund declares dividends from net investment income on each
business day.
Dividends are usually paid on the last day of each month.

Except for dividends from Taxable Investments, the Fund
anticipates that substantially all dividends paid by the Fund
will not be subject to Federal
income tax. Dividends derived from Taxable Investments, together
with distributions from any net realized short-term securities
gains and all or a
portion of gains realized from the sale or other disposition of
certain market discount bonds, are taxable as ordinary income
whether or not reinvested. No
dividend paid by the Fund will qualify for the dividends
received deduction allowable to certain U.S. corporations.
Distributions from net realized long-term securities gains of the
Fund generally are taxable as long-term capital
gains for Federal income tax purposes, if you are a citizen or
resident of the United States. The Code provides that the net
capital gain of an individual
generally will not be subject to Federal income tax at a rate in
excess of 28%. Under the Code, interest on indebtedness incurred
or continued to purchase or
carry Fund shares which is deemed to relate to exempt-interest
dividends is not deductible. Dividends and distributions may be
subject to state and local taxes.

Substantially all dividends derived from Municipal Obligations
are not subject to Federal income tax. However, certain types of
income dividends may not be tax exempt.

Although all or a substantial portion of the dividends
paid by the Fund may be excluded by shareholders of the Fund from
their gross income for Federal
income tax purposes, the Fund may purchase specified private
activity bonds, the interest from which may be (i) a preference
item for purposes of the alternative
minimum tax, (ii) a component of the "adjusted current earnings"
preference item for purposes of the corporate alternative minimum
tax as well as a component in
computing the corporate environmental tax or (iii) a factor in
determining the extent to which a shareholder's Social Security
benefits are taxable. If the
Fund purchases such securities, the portion of
the Fund's dividends related thereto will not necessarily be tax
exempt to an investor who is subject to the alternative minimum
tax and/or tax on Social
Security benefits and may cause an investor to be subject to
such taxes.

Taxable dividends derived from net investment income,
together with distributions from net realized short-term
securities gains and all or a portion
of gains realized from the sale or other dispositions of certain
market discount bonds, paid by the Fund to a foreign investor,
generally are subject to U.S.
nonresident withholding taxes at the rate of 30%, unless the
foreign investor claims the benefit of a lower rate specified in
a tax treaty. Distributions from
net realized long-term securities gains paid by the Fund to a
foreign investor generally will not be subject to U.S.
nonresident withholding tax. However, such
distributions may be subject to backup withholding, as described
below, unless the foreign investor certifies his non-U.S.
residency status.
Notice as to the tax status of an investor's dividends
and distributions will be mailed to such investor annually. Each
investor also will receive
periodic summaries of his account which will include information
as to dividends and distributions from securities gains, if any,
paid during the year. These
statements set forth the dollar amount of income exempt from
Federal tax and the dollar amount, if any, subject to Federal
tax. These dollar amounts will vary
depending on the size and length of time of the investor's
investment in the Fund. If the Fund pays dividends derived from
taxable income, it intends to
designate as taxable the same percentage of the day's dividend
as the actual taxable income earned on that day bears to total
income earned on that day.
Thus, the percentage of the dividend designated as taxable, if
any, may vary from day to day.

Notice as to the tax status of your dividends and distributions
will be mailed to you each year. You'll also receive regular
summaries of your account.

Federal regulations generally require the Fund to
withhold ("backup withholding") and remit to the U.S. Treasury
31% of taxable dividends and
distributions from net realized securities gains of the Fund
paid to a shareholder if such shareholder fails to certify either
that the TIN furnished
in connection with opening an account is correct, or that such
shareholder has not received notice from the IRS of being subject
to backup withholding as a
result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore, the
IRS may notify the Fund to institute
backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has failed to
properly report taxable dividend and interest income on a Federal
income tax return.

If you have not furnished us with a correct Taxpayer
Identification Number, you
may be subject to tax withholding of 31% of all
taxable dividends and distributions.

A TIN is either the Social Security number or employer
identification number of the record owner of the account. Any tax
withheld as a result of
backup withholding does not constitute an additional tax imposed
on the record owner of the account, and may be claimed as a
credit on the record owner's Federal income tax return.
Management of the Fund believes that the Fund has
qualified for the fiscal year ended December 31, 1993 as a
"regulated investment company" under
the Code. The Fund intends to continue to so qualify if such
qualification is in the best interests of its shareholders. Such
qualification relieves the Fund of
any liability for Federal income tax to the extent its earnings
are distributed in accordance with applicable provisions of the
Code. The Fund is subject to a non-deductible 4% excise tax,
measured with respect to certain undistributed amounts of taxable
investment income and capital gains.

Consult your tax adviser regarding specific questions about
Federal, state or local taxes.

Each investor should consult his tax adviser regarding
specific questions as to Federal, state or local taxes.

GENERAL INFORMATION

The Fund was organized as an unincorporated business trust under
the laws of the Commonwealth of Massachusetts pursuant to an
Agreement and Declaration of Trust
(the "Trust Agreement") dated October 8, 1985, and commenced
operations on February 5, 1986. Effective February 1, 1994, the
Fund's name was changed from
First Prairie Tax Exempt Money Market Fund to First Prairie
Municipal Money Market Fund. The Fund is authorized to issue an
unlimited number of shares of
beneficial interest, par value $.01 per share. Each share has
one vote.

On February 19, 1993, Fund shareholders voted to (a)
approve a Management Agreement between the Fund and the Manager
to replace the Prior Advisory
Agreement and the Prior Administration Agreement; and (b) change
certain of the Fund's fundamental policies and investment
restrictions, among other things, to
(i) increase the amount the Fund may borrow for temporary or
emergency purposes from 10% to
15% of the Fund's total assets, (ii) increase the amount of the
Fund's assets which it may pledge to the extent necessary to
secure such borrowings and make
such policy non-fundamental, (iii) permit the Fund to invest up
to 10% of its net assets in illiquid securities and make such
policy non-fundamental and (iv)
permit the Fund to lend its portfolio securities in an amount
not to exceed 33 1/3% of the value of the Fund's total assets.
Under Massachusetts law, shareholders could, under
certain circumstances, be held personally liable for the
obligations of the Fund. However, the Trust
Agreement disclaims shareholder liability for acts or
obligations of the Fund and requires that notice of such
disclaimer be given in each agreement,
obligation or instrument entered into or executed by the Fund or
a Trustee. The Trust Agreement provides for indemnification from
the Fund's property for all
losses and expenses of any shareholder held personally liable
for the obligations of the Fund. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is
limited to circumstances in which
the Fund itself would be unable to meet its obligations, a
possibility which management believes is remote. Upon payment of
any liability incurred by the
Fund, the shareholder paying such liability will be entitled to
reimbursement from the general assets of the Fund. The Trustees
intend to conduct the
operations of the Fund in such a way so as to avoid, as far as
possible, ultimate liability of the shareholders for liabilities
of the Fund. As discussed
under "Management of the Fund" in the Statement of Additional
Information, the Fund ordinarily will not hold shareholder
meetings; however, shareholders under
certain circumstances may have the right to call a meeting of
shareholders for the purpose of voting to remove Trustees.
The Transfer Agent maintains a record of each investor's
ownership and sends confirmations and statements of account.
Investor inquiries may be made to the investor's Service
Agent, including the Manager, or by writing to the Fund at the
address shown on the front cover
or by calling the appropriate telephone number.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR
TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND IN THE FUND'S
OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE
FUND'S SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR
REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR
TO ANY PERSON TO WHOM, SUCH
OFFERING MAY NOT LAWFULLY BE MADE.

FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
APRIL 29, 1994

This Statement of Additional Information, which is not
a
prospectus, supplements and should be read in conjunction
with
the current Prospectus of First Prairie Municipal Money
Market
Fund (the "Fund"), dated April 29, 1994, as it may be revised
from time to time. To obtain a copy of the Fund's
Prospectus,
please write to the Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144, or call toll free 1-800-346-3621.

The First National Bank of Chicago (the "Manager")
serves as
the Fund's investment adviser.

Dreyfus Service Corporation (the "Distributor"), a
wholly-owned subsidiary of The Dreyfus Corporation ("Dreyfus"),
is the distributor of the Fund's shares.

TABLE OF CONTENTS
Page

Investment Objective and Management Policies. . . . . . B-2
Management of the Fund. . . . . . . . . . . . . . . . . B-9
Management Agreement. . .. . . . . . . . . . . . . . . . B-11
Purchase of Fund Shares .. . . . . . . . . . . . . . . . B-13
Service Plan. . . . . . . . . . . . . . . . . . . . . . B-14
Redemption of Fund Shares . . . . . . . . . . . . . . . B-15
Shareholder Services. . . . . . . . . . . . . . . . . . B-17
Determination of Net Asset Value. .. . . . . . . . . . . B-19
Dividends, Distributions and Taxes.. . . . . . . . . . . B-20
Yield Information . . .. . . . . . . . . . . . . . . . . B-20
Portfolio Transactions.. . . . . . . . . . . . . . . . . B-21
Information About the Fund. . . . . . . . . . . . . . . B-22
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors. . . . . . . . . . . B-22
Appendix. . . .. . . . . . . . . . . . . . . . . . . . . B-24
Financial Statements. . . . . . . . . . . . . . . . . . B-32
Report of Independent Auditors. . . . . . . . . . . . . B-40

INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES

The following information supplements and should be
read in
conjunction with the section in the Fund's Prospectus
entitled
"Description of the Fund."

The distribution of investments (at value) in Municipal
Obligations by ratings for the fiscal year ended December 31,
1993, computed on a monthly basis, was as follows:

*The Fund may use IBCA Limited and IBCA, Inc. ("IBCA") as an
additional nationally statistical rating organization. As of
December 31, 1993, none of the Fund's investments were rated by
IBCA.

Fitch Moody's Standard
Investors Investors & Poor's
Service, Inc. or Service, Inc. or Corporation Percentage
("Fitch") ("Moody's") ("S&P") of Value

VMIG 1\MIG1, SP-1+\SP-1,
F-1+\F-1 P-1 A1+/A1 87.1%
AAA/AA Aaa/Aa AAA/AA 1.4%
Not Rated Not Rated Not Rated 11.5%

100.0%

Municipal Obligations. The term "Municipal Obligations"
generally includes debt obligations issued to obtain funds for
various public purposes, including the construction of a wide
range of public facilities such as airports, bridges, highways,
housing, hospitals, mass transportation, schools, streets and
water and sewer works. Other public purposes for which Municipal
Obligations may be issued include refunding outstanding
obligations, obtaining funds for general operating expenses and
lending such funds to other public institutions and facilities.
In addition, certain types of industrial development bonds are
issued by or on behalf of public authorities to obtain funds to
provide for the construction, equipment, repair or improvement of
privately operated housing facilities, sports facilities,
convention or trade show facilities, airport, mass transit,
industrial, port or parking facilities, air or water pollution
control facilities and certain local facilities for water supply,
gas, electricity or sewage or solid waste disposal; the interest
paid on such obligations may be exempt from Federal income tax,
although current tax laws place substantial limitations on the
size of such issues. Such obligations are considered to be
Municipal Obligations if the interest paid thereon qualifies as
exempt from Federal income tax in the opinion of bond counsel to
the issuer. There are, of course, variations in the security of
Municipal Obligations, both within a particular classification
and between classifications.

Floating and variable rate demand notes and bonds are tax
exempt obligations ordinarily having stated maturities in excess
of 13 months, but which permit the holder to demand payment of
principal at any time, or at specified intervals not exceeding 13
months, in each case upon not more than 30 days' notice. The
issuer of such obligations ordinarily has a corresponding right,
after a given period, to prepay in its discretion the outstanding
principal amount of the obligations plus accrued interest upon a
specified number of days' notice to the holders thereof. The
interest rate on a floating rate demand obligation is based on a
known lending rate, such as a bank's prime rate, and is adjusted
automatically each time such rate is adjusted. The interest rate
on a variable rate demand obligation is adjusted automatically at
specified intervals.

Municipal lease/purchase agreements take the form of a
lease
for accounting purposes but are considered installment purchase
contracts issued by state or local governmental authorities to
obtain funds to acquire a wide variety of equipment and
facilities such as fire and sanitation vehicles, computer
equipment and other capital assets. These obligations make it
possible for state or local governmental authorities to acquire
property and equipment without being required to meet
constitutional and statutory requirements for the issuance of
debt. Thus, municipal leases have special risks not ordinarily
associated with Municipal Obligations. These obligations
frequently contain "non-appropriation" clauses that provide that
the governmental issuer of the obligation has no obligation to
make future payments under the lease or contract unless money is
appropriated for such purposes by the legislative body on a
yearly or other periodic basis. However, such instruments
typically contain a "non-substitution" clause which prohibits the
municipality from substituting other assets for those underlying
the obligation. Although the obligations will be secured by the
financed equipment, the disposition of the equipment in the event
of foreclosure might prove difficult. The Fund will seek to
minimize these risks by investing only in those municipal lease
obligations that (1) are rated in one of the two highest rating
categories for debt obligations by at least two nationally
recognized statistical rating organizations (or one rating
organization if the obligation was rated only by one such
organization) or (2) if unrated, are purchased principally from
the issuer or domestic banks or other responsible third parties,
in each case only if the seller shall have entered into an
agreement with the Fund providing that the seller or other
responsible third party will either remarket or repurchase the
lease obligation within a short period after demand by the Fund.
The staff of the Securities and Exchange Commission currently
considers certain municipal lease obligations to be illiquid.
Accordingly, not more than 10% of the value of the Fund's net
assets will be invested in municipal lease obligations that are
illiquid and in other illiquid securities. See "Investment
Restriction No. 12" below.

For the purpose of diversification under the Investment
Company Act of 1940, as amended (the "Act"), the identification
of the issuer of Municipal Obligations depends on the terms and
conditions of the security. When the assets and revenues of an
agency, authority, instrumentality or other political subdivision
are separate from those of the government creating the
subdivision and the security is backed only by the assets and
revenues of the subdivision, such subdivision would be deemed to
be the sole issuer. Similarly, in the case of an industrial
development bond, if that bond is backed only by the assets and
revenues of the non-governmental user, then such non-governmental
user would be deemed to be the sole issuer. If, however, in
either case, the creating government or some other entity
guarantees a security, such a guaranty would be considered a
separate security and will be treated as an issue of such
government or other entity.

The yields on Municipal Obligations are dependent on a
variety of factors, including general economic and monetary
conditions, money market factors, conditions in the Municipal
Obligations market, size of a particular offering, maturity of
the obligation and rating of the issue. The imposition of the
Fund's management fee, as well as other operating expenses,
including fees paid under the Fund's Service Plan, will have the
effect of reducing the yield to investors.

The Fund will not purchase tender option bonds unless (a)
the demand feature applicable thereto is exercisable by the Fund
within 13 months of the date of such purchase upon no more than
30 days' notice and thereafter is exercisable by the Fund no less
frequently than annually upon no more than 30 days' notice and
(b) at the time of such purchase, the Manager reasonably expects
(i) based upon its assessment of current and historical interest
rate trends, that prevailing short-term tax exempt rates will not
exceed the stated interest rate on the underlying Municipal
Obligations at the time of the next tender fee adjustment, and
(ii) that the circumstances which might entitle the grantor of a
tender option to terminate the tender option would not occur
prior to the time of the next tender opportunity. At the time of
each tender opportunity, the Fund will exercise the tender option
with respect to any tender option bonds unless the Manager
reasonably expects, (x) based upon its assessment of current and
historical interest rate trends, that short-term tax exempt rates
will not exceed the stated interest rate on the underlying
Municipal Obligations at the time of the next tender fee
adjustment, and (y) that the circumstances which might entitle
the grantor of a tender option to terminate the tender option
would not occur prior to the time of the next tender opportunity.

The Fund will exercise the tender feature with respect to tender
option bonds, or otherwise dispose of its tender option bonds,
prior to the time the tender option is scheduled to expire
pursuant to the terms of the agreement under which the tender
option is granted. The Fund otherwise will comply with the
provisions of Rule 2a-7 in connection with the purchase of tender
option bonds, including, without limitation, the requisite
determination that the tender option bonds in question meet the
quality standards described in Rule 2a-7, which, in the case of a
tender option bond subject to a conditional demand feature, would
include a determination that the security has received both the
required short-term and long-term quality rating or is determined
to be of comparable quality. In the event of a default of the
Municipal Obligation underlying a tender option bond, or the
termination of the tender option agreement, the Fund would look
to the maturity date of the underlying security for purposes of
compliance with Rule 2a-7 and, if its remaining maturity was
greater than 13 months, the Fund would sell the security as soon
as would be practicable. The Fund will purchase tender option
bonds only when it is satisfied that the custodial and tender
option arrangements, including the fee payment arrangements, will
not adversely affect the tax exempt status of the underlying
Municipal Obligations and that payment of any tender fees will
not have the effect of creating taxable income for the Fund.
Based on the tender option bond agreement, the Fund expects to be
able to value the tender option bond at par; however, the value
of the instrument will be monitored to assure that it is valued
at fair value.

Ratings of Municipal Obligations. If, subsequent to its
purchase by the Fund, (a) an issue of rated Municipal Obligations
ceases to be rated in the highest rating category by at least two
rating organizations (or one rating organization if the
instrument was rated by only one such organization) or the Fund's
Board determines that it is no longer of comparable quality or
(b) the Manager becomes aware that any portfolio security not so
highly rated or any unrated security has been given a rating by
any rating organization below the rating organization's second
highest rating category, the Fund's Board will reassess promptly
whether such security presents minimal credit risk and will cause
the Fund to take such action as it determines is in the best
interest of the Fund and its shareholders; provided that the
reassessment required by clause (b) is not required if the
portfolio security is disposed of or matures within five business
days of the Manager becoming aware of the new rating and the
Fund's Board is subsequently notified of the Manager's actions.

To the extent that the ratings given by Moody's, S&P, Fitch
or IBCA for Municipal Obligations may change as a result of
changes in such organizations or their rating systems, the Fund
will attempt to use comparable ratings as standards for its
investments in accordance with the investment policies contained
in the Fund's Prospectus and this Statement of Additional
Information. The ratings of Moody's, S&P, Fitch and IBCA
represent their opinions as to the quality of the Municipal
Obligations which they undertake to rate. It should be
emphasized, however, that ratings are relative and subjective and
are not absolute standards of quality. Although these ratings
may be an initial criterion for selection of portfolio
investments, the Manager also will evaluate these securities and
the creditworthiness of the issuers of such securities.

Lending Portfolio Securities. To a limited extent, the
Fund
may lend its portfolio securities to brokers, dealers and other
financial institutions, provided it receives cash collateral
which at all times is maintained in an amount equal to at least
100% of the current market value of the securities loaned. By
lending its portfolio securities, the Fund can increase its
income through the investment of the cash collateral. For the
purposes of this policy, the Fund considers collateral consisting
of U.S. Government securities or irrevocable letters of credit
issued by banks whose securities meet the standards for
investment by the Fund to be the equivalent of cash. Such loans
may not exceed 33/% of the value of the Fund's total assets.
From time to time, the Fund may return to the borrower and/or a
third party, which is unaffiliated with the Fund, and which is
acting as a "placing broker," a part of the interest earned from
the investment of collateral received for securities loaned.

The Securities and Exchange Commission currently requires
that the following conditions must be met whenever portfolio
securities are loaned: (1) the Fund must receive at least 100%
cash collateral from the borrower; (2) the borrower must increase
such collateral whenever the market value of the securities rises
above the level of such collateral; (3) the Fund must be able to
terminate the loan at any time; (4) the Fund must receive
reasonable interest on the loan, as well as any interest or other
distributions payable on the loaned securities, and any increase
in market value; and (5) the Fund may pay only reasonable
custodian fees in connection with the loan. These conditions may
be subject to future modification.

Taxable Investments. Securities issued or guaranteed by
the
U.S. Government or its agencies or instrumentalities include U.S.
Treasury securities, which differ in their interest rates,
maturities and times of issuance. Treasury Bills have initial
maturities of one year or less; Treasury Notes have initial
maturities of one to ten years; and Treasury Bonds generally have

initial maturities of greater than ten years. Some obligations
issued or guaranteed by U.S. Government agencies and
instrumentalities, for example, Government National Mortgage
Association pass-through certificates, are supported by the full
faith and credit of the U.S. Treasury; others, such as those of
the Federal Home Loan Banks, by the right of the issuer to borrow
from the U.S. Treasury; others, such as those issued by the
Federal National Mortgage Association, by discretionary authority

of the U.S. Government to purchase certain obligations of the
agency or instrumentality; and others, such as those issued by
the Student Loan Marketing Association, only by the credit of the
agency or instrumentality. These securities bear fixed, floating
or variable rates of interest. Interest may fluctuate based on
generally recognized reference rates or the relationship of
rates. While the U.S. Government provides financial support to
such U.S. Government-sponsored agencies or instrumentalities, no
assurance can be given that it will always do so, since it is not
so obligated by law. The Fund will invest in such securities
only when it is satisfied that the credit risk with respect to
the issuer is minimal.

Commercial paper consists of short-term, unsecured
promissory notes issued to finance short-term credit needs.

Certificates of deposit are negotiable certificates
representing the obligation of a bank to repay funds deposited
with it for a specified period of time.

Time deposits are non-negotiable deposits maintained in a
banking institution for a specified period of time at a stated
interest rate. Investments in time deposits generally are
limited to London branches of domestic banks that have total
assets in excess of $1 billion. Time deposits which may be held
by the Fund will not benefit from insurance from the Bank
Insurance Fund or the Savings Association Insurance Fund
administered by the Federal Deposit Insurance Corporation.

Repurchase agreements involve the acquisition by the Fund
of
an underlying debt instrument, subject to an obligation of the
seller to repurchase, and the Fund to resell, the instrument at a

fixed price, usually not more than one week after its purchase.
The Fund's custodian or sub-custodian will have custody of, and
will hold in a segregated account, securities acquired by the
Fund under a repurchase agreement. Repurchase agreements are
considered by the staff of the Securities and Exchange Commission
to be loans by the Fund. In an attempt to reduce the risk of
incurring a loss on a repurchase agreement, the Fund will enter
into repurchase agreements only with domestic banks with total
assets in excess of $1 billion or primary government securities
dealers reporting to the Federal Reserve Bank of New York, with
respect to securities of the type in which the Fund may invest,
and will require that additional securities be deposited with it
if the value of the securities purchased should decrease below
resale price. The Manager will monitor on an ongoing basis the
value of the collateral to assure that it always equals or
exceeds the repurchase price. Certain costs may be incurred by
the Fund in connection with the sale of the securities if the
seller does not repurchase them in accordance with the repurchase
agreement. In addition, if bankruptcy proceedings are commenced
with respect to the seller of the securities, realization on the
securities by the Fund may be delayed or limited. The Fund will
consider on an ongoing basis the creditworthiness of the
institutions with which it enters into repurchase agreements.
Investment Restrictions. The Fund has adopted investment
restrictions numbered 1 through 8 as fundamental policies. These
restrictions cannot be changed without approval by the holders of
a majority (as defined in the Act) of the Fund's outstanding
voting shares. Investment restrictions numbered 9 through 13 are
not fundamental policies and may be changed by a vote of a
majority of the Trustees at any time. The Fund may not:

1. Invest more than 5% of its assets in the obligations
of
any single issuer, except that up to 25% of the value of the
Fund's total assets may be invested, and securities issued or
guaranteed by the U.S. Government or its agencies or
instrumentalities may be purchased for temporary defensive
purposes, without regard to any such limitation.

2. Invest more than 25% of its total assets in the
securities of issuers in any single industry; provided that there
shall be no such limitation on the purchase of Municipal
Obligations and, for temporary defensive purposes, securities
issued by banks and obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.

3. Borrow money, except from banks (other than the
Manager
or its affiliates) for temporary or emergency (not leveraging)
purposes in an amount up to 15% of the value of the Fund's total
assets (including the amount borrowed) based on the lesser of
cost or market, less liabilities (not including the amount
borrowed) at the time the borrowing is made. While borrowings
exceed 5% of the value of the Fund's total assets, the Fund will
not make any additional investments.

4. Purchase or sell real estate, commodities or
commodities contracts, or oil and gas interests, but this shall
not prevent the Fund from investing in Municipal Obligations
secured by real estate or interests therein.

5. Underwrite the securities of other issuers, except
that
the Fund may bid separately or as part of a group for the
purchase of Municipal Obligations directly from an issuer for its
own portfolio to take advantage of the lower purchase price
available, and except to the extent the Fund may be deemed an
underwriter under the Securities Act of 1933, as amended, by
virtue of disposing of portfolio securities.

6. Make loans to others except through the purchase of
debt obligations and the entry into repurchase agreements;
however, the Fund may lend its portfolio securities in an amount
not to exceed 33/% of the value of its total assets. Any loans
of portfolio securities will be made according to guidelines
established by the Securities and Exchange Commission and the
Fund's Board of Trustees.

7. Issue any senior security (as such term is defined in
Section 18(f) of the Act), except to the extent that the
activities permitted in Investment Restriction Nos. 3 and 11 may
be deemed to give rise to a senior security.

8. Sell securities short or purchase securities on
margin.

9. Purchase securities other than Municipal Obligations
and Taxable Investments.

10. Invest in securities of other investment companies,
except to the extent permitted under the Act.

12. Enter into repurchase agreements providing for
settlement in more than seven days after notice or purchase
securities which are illiquid (which securities could include
participation interests (including municipal lease/purchase
agreements) that are not subject to the demand feature described
in the Fund's Prospectus and floating and variable rate demand
obligations as to which the Fund cannot exercise the demand
feature described in the Fund's Prospectus on less than seven
days' notice and as to which there is no secondary market) if, in
the aggregate, more than 10% of its net assets would be so
invested.

13. Invest in companies for the purpose of exercising
control.

While not a fundamental policy, the Fund will not invest in
oil, gas or other mineral leases, or real estate limited
partnerships.

Notwithstanding any of the foregoing Investment
Restrictions, the Fund reserves the right to enter into interest
rate
futures contracts, and municipal bond index futures contracts,
and any options that may be offered in respect thereof, subject
to the restrictions then in effect of the Securities and Exchange
Commission and the Commodity Futures Trading Commission and to
the receipt or taking, as the case may be, of appropriate
consents, approvals and other actions from or by those regulatory
bodies. In any event, no such contracts or options will be
entered into until a general description of the terms thereof is
set forth in a subsequent prospectus and statement of additional
information, and a registration statement with respect thereto
has been filed with and declared effective by the Securities and
Exchange Commission.

For purposes of Investment Restriction No. 2, industrial
development bonds, where the payment of principal and interest is
the ultimate responsibility of companies within the same
industry, are grouped together as an "industry."

If a percentage restriction is adhered to at the time of
investment, a later increase in percentage resulting from a
change in values or assets will not constitute a violation of
such restriction.

The Fund may make commitments more restrictive than the
restrictions listed above so as to permit the sale of Fund shares
in certain states. Should the Fund determine that a commitment
is no longer in the best interests of the Fund and its
shareholders, the Fund reserves the right to revoke the
commitment by terminating the sale of Fund shares in the state
involved.

MANAGEMENT OF THE FUND

Trustees and officers of the Fund, together with
information
as to their principal business occupations during at least the
last five years, are shown below. The Trustee who is deemed to
be an "interested person" of the Fund, as defined in the Act, is
indicated by an asterisk.

Trustees and Officers of the Fund

*JOSEPH S. DiMARTINO, President and Trustee. President, Chief
Operating Officer and a
Director of Dreyfus, Executive Vice President and a
Director
of the Distributor and
an officer, director or trustee of other investment
companies advised or administered
by Dreyfus. He is also a Director of Noel Group, Inc.,
Director and Corporate
Member of The Muscular Dystrophy Association and a Trustee
of Bucknell
University. His address is 200 Park Avenue, New York, New
York 10166.

JOHN P. GOULD, Trustee. Distinguished Service Professor of
Economics of the University of Chicago Graduate School of
Business. Since 1986, he has served as a Director of DFA
Investment Dimensions Group, a series mutual fund. Dean
Gould also serves as a Director of Harpor Capital Advisors.

From 1983 to 1993, Dean of the University of Chicago
Graduate School of Business. His address is 1101 East 58th
Street, Chicago, Illinois 60637.

MARILYN McCOY, Trustee. Vice President of Administration and
Planning of Northwestern University. From 1981 to 1985,
she
was the Director of Planning and Policy Development for the
University of Colorado. She also serves on the Board of
Directors of Evanston Hospital, the Chicago Metropolitan
YMCA, the Chicago Network and United Charities. Mrs. McCoy
is also a member of the Chicago Economic Club. Her address
is 1100 North Lake Shore Drive, Chicago, Illinois 60611.

RAYMOND D. ODDI, Trustee. Private consultant. A Director of
Caremark International,
Inc. and Medisense, Inc., companies in the health care
industry and Baxter Credit
Union. From 1978 to 1986, Senior Vice President of Baxter
International, Inc., a
company engaged in the production of medical care products.

He also is a member
of the Illinois Society of Certified Public Accountants.
His address is 1181 Loch
Lane, Lake Forest, Illinois 60045.

Each of the "non-interested" Trustees also is a trustee of
First Prairie Cash Management, First Prairie Diversified Asset
Fund, First Prairie Money Market Fund, First Prairie U.S.
Government Income Fund and First Prairie U.S. Treasury Securities
Cash Management and a director of First Prairie Municipal Bond
Fund.

The Fund does not pay any remuneration to its officers and
Trustees other than fees and expenses to Trustees who are not
officers, directors, employees or holders of 5% or more of the
outstanding voting securities of Manager or Dreyfus or any
affiliate of either of them, which totalled $9,247 for the fiscal
year ended December 31, 1993 for all such Trustees as a group.

Trustees (except Mrs. McCoy) were elected at the meeting of
shareholders held on September 28, 1987. No further shareholder
meetings will be held for the purpose of electing Trustees unless
and until such time as less than a majority of the Trustees
holding office have been elected by shareholders, at which time
the Trustees then in office will call a shareholders' meeting for
the election of Trustees. Under the Act, shareholders of record
of not less than two-thirds of the outstanding shares of the Fund
may remove a Trustee through a declaration in writing or by vote
cast in person or by proxy at a meeting called for that purpose.
Under the Fund's Agreement and Declaration of Trust, the Trustees
are required to call a meeting of shareholders for the purpose of
voting upon the question of removal of any such Trustee when
requested in writing to do so by the shareholders of record of
not less than 10% of the Fund's outstanding shares.

Officers of the Fund Not Listed Above

DANIEL C. MACLEAN, Vice President. Vice President and General
Counsel of Dreyfus,
Secretary of the Distributor and an officer of other
investment companies
advised or administered by Dreyfus.

JEFFREY N. NACHMAN, Vice President-Financial. Vice President-
Mutual Fund
Accounting of Dreyfus and an officer of other investment
companies advised or
administered by Dreyfus.

JOHN J. PYBURN, Treasurer. Assistant Vice President of Dreyfus
and an officer of other
investment companies advised or administered by Dreyfus.

PAUL T. MOLLOY, Controller. Senior Accounting Manager of the
Fund Accounting
Department of Dreyfus and an officer of other investment
companies advised or
administered by Dreyfus.

MARK N. JACOBS, Secretary. Secretary and Deputy General Counsel
of Dreyfus and an
officer of other investment companies advised or
administered by Dreyfus.

ROBERT I. FRENKEL, Assistant Secretary. Senior Assistant General

Counsel of Dreyfus
and an officer of other investment companies advised or
administered by Dreyfus.

CHRISTINE PAVALOS, Assistant Secretary. Assistant Secretary of
Dreyfus, the
Distributor and other investment companies advised or
administered by Dreyfus.

The address of each officer of the Fund is 200 Park Avenue,
New York, New York 10166.

Trustees and officers of the Fund, as a group, owned less
than 1% of the Fund's shares of beneficial interest outstanding
on April 15, 1994.

MANAGEMENT AGREEMENT

The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Management of the Fund."

Management Agreement. The Manager provides management
services to the Fund pursuant to the Management Agreement (the
"Management Agreement") dated April 30, 1993 with the Fund, which
is subject to annual approval by (i) the Fund's Board of Trustees
or (ii) vote of a majority (as defined in the Act) of the
outstanding voting securities of the Fund, provided that in
either event the continuance also is approved by a majority of
the Trustees who are not "interested persons" (as defined in the
Act) of the Fund or the Manager, by vote cast in person at a
meeting called for the purpose of voting on such approval.
Shareholders last approved the Management Agreement on February
19, 1993 and the Board of Trustees, including a majority of the
Trustees who are not "interested persons" of any party to the
Management Agreement, last voted to renew the Management
Agreement at a meeting held on December 10, 1993. The Management
Agreement is terminable without penalty, on not more than 60
days' notice, by the Fund's Board of Trustees or by vote of the
holders of a majority of the Fund's shares or, upon not less than
90 days' notice, by the Manager. The Management Agreement will
terminate automatically in the event of its assignment (as
defined in the Act).

The Manager is responsible for the Fund's investment
decisions and manages the Fund's portfolio of investments in
accordance with the stated policies of the Fund, subject to the
approval of the Fund's Board of Trustees. All purchases and
sales are reported for the Trustees' review at the meeting
subsequent to such transactions.

The Manager has engaged Dreyfus to assist it in providing
certain administrative services to the Fund. Pursuant to its
agreement with the Manager, Dreyfus furnishes the Fund clerical
help and accounting, data processing, bookkeeping, internal
auditing and legal services and certain other services required
by the Fund, prepares reports to the Fund's shareholders, tax
returns, reports to and filings with the Securities and Exchange
Commission and state Blue Sky authorities, calculates the net
asset value of the Fund's shares and generally assists the
Manager in providing for all aspects of the Fund's operation,
other than providing investment advice. The fees payable to
Dreyfus for its services are paid by the Manager.

As compensation for the Manager's services to the Fund, the
Fund has agreed to pay the Manager a monthly management fee at
the annual rate of .55 of 1% of the value of the Fund's average
daily net assets. Prior to April 30, 1993, the Manager provided
investment advisory services to the Fund pursuant to an
Investment Advisory Agreement (the "Prior Advisory Agreement")
with the Fund dated December 16, 1985 and Dreyfus provided
administration services to the Fund pursuant to an Administration
Agreement (the "Prior Administration Agreement") with the Fund
dated December 16, 1985. Pursuant to the Prior Advisory
Agreement, the Fund agreed to pay the Manager an advisory fee at
the annual rate of .40 of 1% of the value of the Fund's average
daily net assets. Pursuant to the Prior Administration
Agreement, the Fund agreed to pay Dreyfus an administration fee
at the annual rate of .20 of 1% of the value of the Fund's
average daily net assets. Pursuant to the Prior Advisory
Agreement, the fees payable to the Manager for the fiscal years
ended December 31, 1991 and December 31, 1992 and for the period
January 1, 1993 through April 29, 1993 were $878,703, $914,834
and $266,582, respectively. For the period from April 30, 1993
(effective date of Management Agreement) through December 31,
1993, the fee payable to the Manager pursuant to the Management
Agreement was $699,072. For the fiscal years ended December 31,
1992 and 1993, the fees payable to the Manager were reduced
pursuant to undertakings in effect resulting in net fees paid of
$895,911 in fiscal 1992 and $647,661 in fiscal 1993. The fees
paid to Dreyfus pursuant to the Prior Administration Agreement
for the fiscal years ended December 31, 1991 and 1992 and for the
period January 1, 1993 through April 29, 1993 were $439,352,
$457,417 and $133,291, respectively.

The Manager has agreed that if in any fiscal year the
aggregate expenses of the Fund (including management fees, but
excluding taxes, brokerage, interest on borrowings and, with the
prior written consent of the necessary state securities
commissions, extraordinary expenses) exceed the expense
limitation of any state having jurisdiction over the Fund, the
Fund may deduct from the fees to be paid to the Manager, or the
Manager will bear, such excess expense, to the extent required by
state law. Such deduction or payment, if any, will be estimated
daily and reconciled and effected or paid, as the case may be, on
a monthly basis.

The fee payable to the Manager is not subject to reduction
as the value of the Fund's net assets increases.

Glass-Steagall Act. For an additional discussion of the
Glass-Steagall Act in connection with the Fund's operations, see
the Fund's Prospectus.

From time to time, legislation has been introduced and may
be reintroduced in Congress, which would permit a bank, a bank
holding company or a subsidiary thereof to organize, sponsor,
control and distribute shares of an investment company such as
the Fund, notwithstanding present restrictions under the
Glass-Steagall Act and the Federal Bank Holding Company Act of
1956. As described herein, the Fund is currently distributed by
the Distributor, and Dreyfus, its parent, sponsors the Fund and
provides it with administrative services. If current
restrictions preventing a bank from legally sponsoring,
organizing, controlling or distributing shares of an investment
company were relaxed, the Fund expects that the Manager would
consider the possibility of offering to perform some or all of
the services now provided by Dreyfus or the Distributor. It is
not possible, of course, to predict whether or in what form such
legislation might be enacted or the terms upon which the Manager
might offer to provide services.

PURCHASE OF FUND SHARES

The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"How to Buy Fund Shares."

The Distributor. The Distributor serves as the Fund's
distributor pursuant to an agreement which is renewable annually.

The Distributor also acts as distributor for the other funds in
the First Prairie Family of Funds, the funds in the Dreyfus
Family of Funds and certain other investment companies.

TeleTransfer Privilege. TeleTransfer purchase orders may
be
made between the hours of 8:00 a.m. and 4:00 p.m., New York time,
on any business day that the Transfer Agent and the New York
Stock Exchange are open, except Martin Luther King, Jr. Day,
Columbus Day and Veterans Day. Such purchases will be credited
to the shareholder's Fund account on the next bank business day.
To qualify to use the TeleTransfer Privilege, the initial payment
for purchase of Fund shares must be drawn on, and redemption
proceeds paid to, the same bank and account as are designated on
the Account Application or Shareholder Services Form on file. If
the proceeds of a particular redemption are to be wired to an
account at any other bank, the request must be in writing and
signature-guaranteed. See "Redemption of Fund
Shares--TeleTransfer Privilege."

SERVICE PLAN

The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Service Plan."

Rule 12b-1 (the "Rule") adopted by the Securities and
Exchange Commission under the Act, provides, among other things,
that an investment company may bear expenses of distributing its
shares only pursuant to a plan adopted in accordance with the
Rule. Because some or all of the fees paid for advertising or
marketing the Fund's shares and the fees paid to certain
financial institutions (which may include banks), securities
dealers and other industry professionals (collectively, "Service
Agents") could be deemed to be payment of distribution expenses,
the Fund's Board of Trustees has adopted such a plan (the
"Plan"). The Fund's Board of Trustees believes that there is a
reasonable likelihood that the Plan will benefit the Fund and its
shareholders. In some states, banks or other financial
institutions effecting transactions in Fund shares may be
required to register as dealers pursuant to state law.

A quarterly report of the amounts expended under the Plan,
and the purposes for which such expenditures were incurred, must
be made to the Board of Trustees for its review. In addition,
the Plan provides that it may not be amended to increase
materially the costs which the Fund may bear for distribution
pursuant to the Plan without shareholder approval and that other
material amendments of the Plan must be approved by the Board of
Trustees, and by the Trustees who are not "interested persons"
(as defined in the Act) of the Fund and have no direct or
indirect financial interest in the operation of the Plan or in
the related service agreements, by vote cast in person at a
meeting called for the purpose of considering such amendments.
The Plan and the related service agreements are subject to annual
approval by such vote of the Trustees cast in person at a meeting
called for the purpose of voting on the Plan. The Plan was so
approved by the Board of Trustees at a meeting held on
December 10, 1993. The Plan may be terminated at any time by
vote of a majority of the Trustees who are not "interested
persons" and have no direct or indirect financial interest in the
operation of the Plan or in any of the related service agreements
or by vote of a majority of the Fund's shares. Any service
agreement may be terminated without penalty, at any time, by such
vote of the Trustees or, upon not more than 60 days' written
notice to the Service Agent, by vote of the holders of a majority
of the Fund's shares. Each service agreement will terminate
automatically in the event of its assignment (as defined in the
Act).

During the fiscal year ended December 31, 1993, an
aggregate
of $484,374 was charged to the Fund under the Plan, of which
$387,499 was paid to the Manager and its affiliates, $9,092 was
paid for preparing, printing and distributing prospectuses and
operating the Plan, and $96,875 was charged for advertising,
marketing and Servicing the Fund's shares.

REDEMPTION OF FUND SHARES

The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"How to Redeem Fund Shares."

Check Redemption Privilege. An investor may indicate on
the
Account Application or by later written request that the Fund
provide Redemption Checks ("Checks") drawn on the Fund's account.

If the amount of the Check is greater than the value of the
shares in an investor's account, the Check will be returned
marked insufficient funds. Checks should not be used to close an
account.

Wire Redemption Privilege. By using this Privilege, the
investor authorizes the Transfer Agent to act on wire or
telephone redemption instructions from any person representing
himself or herself to be the investor, or a representative of the
investor's Service Agent, and reasonably believed by the Transfer
Agent to be genuine. Ordinarily, the Fund will initiate payment
for shares redeemed pursuant to this Privilege on the same
business day if the Transfer Agent receives the redemption
request in proper form prior to Noon on such day; otherwise the
Fund will initiate payment on the next business day. Redemption
proceeds will be transferred by Federal Reserve wire only to the
commercial bank account specified by the investor on the Account
Application or Shareholder Services Form. Redemption proceeds,
if wired, must be in the amount of $1,000 or more and will be
wired to the investor's account at the bank of record designated
in the investor's file at the Transfer Agent, if the investor's
bank is a member of the Federal Reserve System, or to a
correspondent bank if the investor's bank is not a member. Fees
ordinarily are imposed by such bank and usually are borne by the
investor. Immediate notification by the correspondent bank to
the investor's bank is necessary to avoid a delay in crediting
the funds to the investor's bank account.

Investors with access to telegraphic equipment may wire
redemption requests to the Transfer Agent by employing the
following transmittal code which may be used for domestic or
overseas transmission:

Transfer Agent's
Transmittal Code Answer Back Sign

144295 144295 TSSG PREP

Signatures. Written redemption requests must be signed by
the individual shareholder, including each owner of a joint
account, and each signature must be guaranteed. The Transfer
Agent has adopted standards and procedures pursuant to which
signature-guarantees in proper form generally will be accepted
from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations,
clearing agencies and savings associations, as well as from
participants in the New York Stock Exchange Medallion Signature
Program, the Securities Transfer Agents Medallion Program
("STAMP") and the Stock Exchanges Medallion Program. Guarantees
must be signed by an authorized signatory of the guarantor and
"Signature-Guaranteed" must appear with the signature. The
Transfer Agent may request additional documentation from
corporations, executors, administrators, trustees or guardians,
and may accept other suitable verification arrangements from
foreign investors, such as consular verification. For more
information with respect to signature-guarantees, please call the
telephone number listed on the cover.

Redemption Commitment. The Fund has committed itself to
pay
in cash all redemption requests by any shareholder of record,
limited in amount during any 90-day period to the lesser of
$250,000 or 1% of the value of the Fund's net assets at the
beginning of such period. Such commitment is irrevocable without
the prior approval of the Securities and Exchange Commission. In
the case of requests for redemption in excess of such amount, the
Board of Trustees reserves the right to make payments in whole or
in part in securities or other assets of the Fund in case of an
emergency or any time a cash distribution would impair the
liquidity of the Fund to the detriment of the existing
shareholders. In such event, the securities would be valued in
the same manner as the Fund's portfolio is valued. If the
recipient sold such securities, brokerage charges would be
incurred.

Suspension of Redemptions. The right of redemption may be
suspended or the date of payment postponed (a) during any period
when the New York Stock Exchange is closed (other than customary
weekend and holiday closings), (b) when trading in the markets
the Fund ordinarily utilizes is restricted, or when an emergency
exists as determined by the Securities and Exchange Commission so
that disposal of the Fund's investments or determination of its
net asset value is not reasonably practicable, or (c) for such
other periods as the Securities and Exchange Commission by order
may permit to protect the Fund's shareholders.

SHAREHOLDER SERVICES

The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Shareholder Services."

Exchange Privilege. The Exchange Privilege permits
investors to purchase, in exchange for all or part of their
shares of the Fund, shares of certain other funds advised by the
Manager or shares of certain funds advised by Dreyfus, on the
basis of relative net asset value per share at the time of the
exchange, as follows:

A. Exchanges for shares of any funds that are offered
without a sales load will be made without a sales
load.

B. Shares of funds purchased without a sales load may be
exchanged for shares of other funds sold with a sales
load, and the applicable sales load will be deducted.

C. Shares of funds purchased with a sales load may be
exchanged without a sales load for shares of other
funds sold without a sales load.

D. Shares of funds purchased with a sales load, shares of
funds acquired by a previous exchange from shares
purchased with a sales load and additional shares
acquired through reinvestment of dividends or
distributions of any such funds (collectively referred
to herein as "Purchased Shares") may be exchanged for
shares of other funds sold with a sales load (referred
to herein as "Offered Shares"), provided that, if the
sales load applicable to the Offered Shares exceeds
the
maximum sales load that could have been imposed in
connection with the Purchased Shares (at the time the
Purchased Shares were acquired), without giving effect
to any reduced loads, the difference will be deducted.

To accomplish an exchange under item D above, an investor
must notify the Transfer Agent of his prior ownership of fund
shares and his account number.

To use this Privilege, an investor or the investor's
Service
Agent acting on the investor's behalf must give exchange
instructions to the Transfer Agent in writing, by wire or by
telephone. Telephone exchanges may be made only if the
appropriate "YES" box has been checked on the Account
Application, or a separate signed Shareholder Services Form is on
file with the Transfer Agent. By using this Privilege, the
investor authorizes the Transfer Agent to act on telephonic,
telegraphic or written exchange instructions from any person
representing himself or herself to be the investor or a
representative of the investor's Service Agent, and reasonably
believed by the Transfer Agent to be genuine. Telephone
exchanges may be subject to limitations as to the amount involved
or the number of telephone exchanges permitted.

Auto-Exchange Privilege. The Auto-Exchange Privilege
permits an investor to purchase, in exchange for shares of the
Fund, shares of certain other funds in the First Prairie Family
of Funds or certain other funds advised by Dreyfus. This
Privilege is available only for existing accounts. Shares will
be exchanged on the basis of relative net asset value as
described above under "Exchange Privilege." Enrollment in or
modification or cancellation of this Privilege is effective three
business days following notification by the investor. An
investor will be notified if his account falls below the amount
designated to be exchanged under this Privilege. In this case,
an investor's account will fall to zero unless additional
investments are made in excess of the designated amount prior to
the next Auto-Exchange transaction. Shares held under IRA and
other retirement plans are eligible for this Privilege.
Exchanges of IRA shares may be made between IRA accounts and from
regular accounts to IRA accounts, but not from IRA accounts to
regular accounts. With respect to all other retirement accounts,
exchanges may be made only among those accounts.

Shareholder Services Forms and prospectuses of the other
funds may be obtained from the Distributor, 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144. The Fund reserves the
right to reject any exchange request in whole or in part. The
Exchange Privilege or Auto-Exchange Privilege may be modified or
terminated at any time upon notice to shareholders.

Dividend Sweep. Dividend Sweep enables investors to invest
automatically dividends or dividends and capital gain
distributions, if any, paid by the Fund in shares of another fund
in the First Prairie Family of Funds or certain other funds
advised or administered by Dreyfus of which the investor is a
shareholder. Shares of other funds purchased pursuant to this
Privilege will be purchased on the basis of relative net asset
value per share as follows:

A. Dividends and distributions paid by a fund may be
invested without imposition of a sales load in
shares of other funds that are offered without a
sales load.

B. Dividends and distributions paid by a fund
which does not charge a sales load may be
invested in shares of other funds sold with a
sales load, and the applicable sales load
will be deducted.

C. Dividends and distributions paid by a fund
which charges a sales load may be invested in
shares of other funds sold with a sales load
(referred to herein as "Offered Shares"),
provided that, if the sales load applicable
to the Offered Shares exceeds the maximum
sales load charged by the fund from which
dividends or distributions are being swept,
without giving effect to any reduced loads,
the difference will be deducted.

Automatic Withdrawal Plan. The Automatic Withdrawal Plan
permits an investor with a $5,000 minimum account to request
withdrawal of a specified dollar amount (minimum of $50) on
either a monthly or quarterly basis. Withdrawal payments are the
proceeds from sales of Fund shares, not the yield on the shares.
If withdrawal payments exceed reinvested dividends and
distributions, the investor's shares will be reduced and
eventually may be depleted. An Automatic Withdrawal Plan may be
established by completing the appropriate application available
from the Distributor, the Manager, certain affiliates of the
Manager or certain Service Agents. Automatic Withdrawal may be
terminated at any time by the investor, the Fund or the Transfer
Agent.

DETERMINATION OF NET ASSET VALUE

The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"How to Buy Fund Shares."

Amortized Cost Pricing. The valuation of the Fund's
portfolio securities is based upon their amortized cost, which
does not take into account unrealized capital gains or losses.
This involves valuing an instrument at its cost and thereafter
assuming a constant amortization to maturity of any discount or
premium, regardless of the impact of fluctuating interest rates
on the market value of the instrument. While this method
provides certainty in valuation, it may result in periods during
which value, as determined by amortized cost, is higher or lower
than the price the Fund would receive if it sold the instrument.

The Board of Trustees has established, as a particular
responsibility within the overall duty of care owed to the Fund's
investors, procedures reasonably designed to stabilize the Fund's
price per share as computed for the purpose of sales and
redemptions at $1.00. Such procedures include review of the
Fund's portfolio holdings by the Board of Trustees, at such
intervals as it deems appropriate, to determine whether the
Fund's net asset value calculated by using available market
quotations or market equivalents deviates from $1.00 per share
based on amortized cost. Market quotations and market
equivalents used in such review are obtained from an independent
pricing service (the "Service") approved by the Board of
Trustees. The Service values the Fund's investments based on
methods which include consideration of: yields or prices of
municipal obligations of comparable quality, coupon, maturity and
type; indications of values from dealers; and general market
conditions. The Service also may employ electronic data
processing techniques and/or a matrix system to determine
valuations.

The extent of any deviation between the Fund's net asset
value based upon available market quotations or market
equivalents and $1.00 per share based on amortized cost will be
examined by the Board of Trustees. If such deviation exceeds 1/2
of 1%, the Board of Trustees promptly will consider what action,
if any, will be initiated. In the event the Board of Trustees
determines that a deviation exists which may result in material
dilution or other unfair results to investors or existing
shareholders, it has agreed to take such corrective action as it
deems necessary and appropriate, including: selling portfolio
instruments prior to maturity to realize capital gains or losses
or to shorten average portfolio maturity; withholding dividends
or paying distributions from capital or capital gains; redeeming
shares in kind; or establishing a net asset value per share by
using available market quotations or market equivalents.

New York Stock Exchange Closings. The holidays (as
observed) on which the New York Stock Exchange is closed
currently are: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas.

DIVIDENDS, DISTRIBUTIONS AND TAXES

The following information supplements and should be read in
conjunction with the section in Fund's Prospectus entitled
"Dividends, Distributions and Taxes."

Ordinarily, gains and losses realized from portfolio
transactions will be treated as capital gain or loss. However,
all or a portion of any gain realized from the sale or other
disposition of certain market discount bonds will be treated as
ordinary income under Section 1276 of the Internal Revenue Code
of 1986, as amended.

YIELD INFORMATION

The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Yield Information."

For the seven-day period ended December 31, 1993, the
Fund's
yield was 2.09% and its effective yield was 2.11%. These yields
reflect the waiver of a portion of the management fee, without
which the Fund's yield and effective yield for the seven-day
period ended December 31, 1993 would have been 1.82% and 1.84%,
respectively. Yield is computed in accordance with a
standardized method which involves determining the net change in
the value of a hypothetical pre-existing Fund account having a
balance of one share at the beginning of a seven calendar day
period for which yield is to be quoted, dividing the net change
by the value of the account at the beginning of the period to
obtain the base period return, and annualizing the results (i.e.,
multiplying the base period return by 365/7). The net change in
the value of the account reflects the value of additional shares
purchased with dividends declared on the original share and any
such additional shares and fees that may be charged to
shareholder accounts, in proportion to the length of the base
period and the Fund's average account size, but does not include
realized gains and losses or unrealized appreciation and
depreciation. Effective yield is computed by adding 1 to the
base period return (calculated as described above), raising that
sum to a power equal to 365 divided by 7, and subtracting 1 from
the result.

Based upon a 1993 Federal tax rate of 39.60% and a yield of
2.09% for the seven-day period ended December 31, 1993 the Fund's
tax equivalent yield for this period was 3.46%. Without the
management fee waiver then in effect, the Fund's tax equivalent
for the seven-day period ended December 31, 1993 would have been
3.01%. Tax equivalent yield is computed by dividing that portion
of the yield or effective yield (calculated as described above)
which is tax exempt by 1 minus a stated tax rate and adding the
quotient to that portion, if any, of the yield of the Fund that
is not tax exempt.

The tax equivalent yield noted above represents the
application of the highest Federal marginal personal income tax
rate presently in effect. The tax equivalent figure, however,
does not include the potential effect of any state or local
(including, but not limited to, county, district or city) taxes,
including applicable surcharges. In addition, there may be
pending legislation which could affect such stated tax rates or
yields. Each investor should consult its tax adviser, and
consider its own factual circumstances and applicable tax laws,
in order to ascertain the relevant tax equivalent yield.

Yields will fluctuate and are not necessarily
representative
of future results. Each investor should remember that yield is a
function of the type and quality of the instruments in the
portfolio, portfolio maturity and operating expenses. An
investor's principal in the Fund is not guaranteed. See
"Determination of Net Asset Value" for a discussion of the manner
in which the Fund's price per share is determined.

From time to time, the Fund may use hypothetical tax
equivalent yields or charts in its advertising. These
hypothetical yields or charts will be used for illustrative
purposes only and not as representative of the Fund's past or
future performance.

From time to time, advertising for the Fund may describe
the
costs of a college education at public or private institutions;
how such costs may increase over time, based on an assumed rate
of growth; and how investments in the Fund can be used to help
pay for such costs. Advertisements for the Fund also may refer
to how an investment in the Fund may be used as a savings vehicle
for various purposes such as a down payment on the purchase price
of a home or to fund retirement or medical costs. Advertisements
for the Fund may also refer to comparisons of the Fund's
performance with historical rates of inflation.

PORTFOLIO TRANSACTIONS

Portfolio securities ordinarily are purchased from and sold
to parties acting as either principal or agent. Newly-issued
securities are purchased directly from the issuer or from an
underwriter; other purchases and sales usually are placed with
those dealers from which it appears that the best price or
execution will be obtained. Ordinarily, no brokerage
commissions, as such, are paid by the Fund for such purchases and
sales, although the price paid usually includes an undisclosed
compensation to the dealer acting as agent. The prices paid to
underwriters of newly-issued securities usually include a
concession paid by the issuer to the underwriter, and purchases
of after-market securities from dealers ordinarily are executed
at a price between the bid and asked price. No brokerage
commissions have been paid by the Fund to date.

Transactions are allocated to various dealers by the Fund's
investment personnel in their best judgment. The primary
consideration is prompt and effective execution of orders at the
most favorable price. Subject to that primary consideration,
dealers may be selected for research, statistical or other
services to enable the Manager to supplement its own research and
analysis with the views and information of other securities firms
and may be selected based upon their sales of Fund shares.

INFORMATION ABOUT THE FUND

The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"General Information."

Each Fund share has one vote and, when issued and paid for
in accordance with the terms of the offering, is fully paid and
non-assessable. Fund shares are of one class and have equal
rights as to dividends and in liquidation. Shares have no
preemptive, subscription or conversion rights and are freely
transferable.

The Fund sends annual and semi-annual financial statements
to all its shareholders and sends statements concerning
shareholder accounts monthly.

On March 15, 1989, the Fund's name was changed from First
Lakeshore Tax Exempt Money Market Fund to First Prairie Tax
Exempt Money Market Fund. On February 1, 1994, the Fund changed
its name from First Prairie Tax Exempt Money Market Fund to First
Prairie Municipal Money Market Fund.

CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT,
COUNSEL AND INDEPENDENT AUDITORS

The Bank of New York, 110 Washington Street, New York, New
York 10286, is the Fund's custodian. The Shareholder Services
Group, Inc., a subsidiary of First Data Corporation, P.O. Box
9671, Providence, Rhode Island 02940-9671, is the Fund's transfer
and dividend disbursing agent. Neither The Bank of New York nor
The Shareholder Services Group, Inc. has any part in determining
the investment policies of the Fund or which securities are to be
purchased or sold by the Fund.

Stroock & Stroock & Lavan, 7 Hanover Square, New York, New
York 10004-2696, as counsel for the Fund, has rendered its
opinion as to certain legal matters regarding the due
authorization and valid issuance of the shares of beneficial
interest being sold pursuant to the Fund's Prospectus.

Ernst & Young, 787 Seventh Avenue, New York, New York
10019,
independent auditors, have been selected as auditors of the Fund.

APPENDIX

Description of S&P, Moody's and Fitch ratings:

S&P

Municipal Bond Ratings

An S&P municipal bond rating is a current assessment of the
creditworthiness of an obligor with respect to a specific
obligation.

The ratings are based on current information furnished by
the issuer or obtained by S&P from other sources it considers
reliable, and will include: (1) likelihood of default-capacity
and willingness of the obligor as to the timely payment of
interest and repayment of principal in accordance with the terms
of the obligation; (2) nature and provisions of the obligation;
and (3) protection afforded by, and relative position of, the
obligation in the event of bankruptcy, reorganization or other
arrangement under the laws of bankruptcy and other laws affecting
creditors' rights.

AAA

Debt rated AAA has the highest rating assigned by S&P.
Capacity to pay interest and repay principal is extremely strong.

Debt rated AA has a very strong capacity to pay interest
and
repay principal and differs from the highest rated issues only in
a small degree.

The AA rating may be modified by the addition of a plus (+)
or minus (-) sign to show relative standing within the category.

Municipal Note Ratings

SP-1

The issuers of these municipal notes exhibit very strong or
strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics are
given a plus (+) designation.

SP-2

The issuers of these municipal notes exhibit satisfactory
capacity to pay principal and interest.

Commercial Paper Ratings

The designation A-1 by S&P indicates that the degree of
safety regarding timely payment is either overwhelming or very
strong. Those issues determined to possess overwhelming safety
characteristics are denoted with a plus sign (+) designation.
Capacity for timely payment on issues with an A-2 designation is
strong. However, the relative degree of safety is not as high as
for issues designated A-1.

Moody's

Municipal Bond Ratings

Aaa

Bonds which are rated Aaa are judged to be of the best
quality. They 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.

Bonds which are rated Aa are judged to be of high quality
by
all standards. Together with the Aaa group they comprise what
generally are known as high-grade bonds. They are rated lower
than the best bonds because margins of protection may not be as
large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger
than in Aaa securities. Moody's applies the numerical modifiers
1, 2 and 3 to show relative standing within the rating category.
The modifier 1 indicates a ranking for the security in the higher
end of a rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates a ranking in the lower end
of a rating category.

Municipal Note Ratings

Moody's ratings for state and municipal notes and other
short-term loans are designated Moody's Investment Grade (MIG).
Such ratings recognize the difference between short-term credit
risk and long-term risk. Factors affecting the liquidity of the
borrower and short-term cyclical elements are critical in short-
term ratings, while other factors of major importance in bond
risk, long term secular trends for example, may be less important
over the short run.

A short-term rating may also be assigned on an issue having
a demand feature. Such ratings will be designated VMIG, or, if
the demand feature is not rated, as NR. Short-term ratings on
issues with demand features are differentiated by the use of the
VMIG symbol to reflect such characteristics as payment upon
periodic demand rather than fixed maturity dates and payment
relying on external liquidity. Additionally, investors should be
alert to the fact that the source of payment may be limited to
the external liquidity with no or limited legal recourse to the
issuer in the event the demand is not met.

Moody's short-term ratings are designated Moody's
Investment
Grade as MIG 1 or VMIG 1 through MIG 4 or VMIG 4. As the name
implies, when Moody's assigns a MIG or VMIG rating, all
categories define an investment grade situation.

MIG 1/VMIG 1

This designation denotes best quality. There is present
strong protection by established cash flows, superior liquidity
support or demonstrated broad-based access to the market for
refinancing.

MIG 2/VMIG 2

This designation denotes high quality. Margins of
protection are ample although not so large as in the preceding
group.

Commercial Paper Rating

Issues (or related supporting institutions) rated Prime-2
(P-2) have a strong capacity for repayment of senior short-term
promissory obligations. This ordinarily will be evidenced by
many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while
still appropriate, may be more affected by external conditions.
Ample alternate liquidity is maintained.

Fitch

Municipal Bond Ratings

The ratings represent Fitch's assessment of the issuer's
ability to meet the obligations of a specific debt issue or class
of debt. The ratings take into consideration special features of
the issue, its relationship to other obligations of the issuer,
the current financial condition and operative performance of the
issuer and of any guarantor, as well as the political and
economic environment that might affect the issuer's financial
strength and credit quality.

AAA

Bonds rated AAA are considered to be investment grade and
of
the highest credit quality. The obligor has an exceptionally
strong ability to pay interest and repay principal, which is
unlikely to be affected by reasonably foreseeable events.

Bonds rated AA are considered to be investment grade and of
very high credit quality. The obligor's ability to pay interest
and repay principal is very strong, although not quite as strong
as bonds rated AAA. Because bonds rated in the AAA and AA
categories are not significantly vulnerable to foreseeable future
developments, short-term debt of these issuers is generally rated
F-1+.

Plus (+) and minus (-) signs are used with a rating symbol
to indicate the relative position of a credit within the rating
category.

Short-Term Ratings

Fitch's short-term ratings apply to debt obligations that
are payable on demand or have original maturities of up to three
years, including commercial paper, certificates of deposit,
medium-term notes, and municipal and investment notes.

Although the credit analysis is similar to Fitch's bond
rating analysis, the short-term rating places greater emphasis
than bond ratings on the existence of liquidity necessary to meet
the issuer's obligations in a timely manner.

Fitch short-term ratings are as follows:

F-1+

Exceptionally Strong Credit Quality. Issues assigned this
rating are regarded as having the strongest degree of assurance
for timely payment.

F-1

Very Strong Credit Quality. Issues assigned this rating
reflect an assurance of timely payment only slightly less in
degree than issues rated F-1+.

F-2

Good Credit Quality. Issues carrying this rating have a
satisfactory degree of assurance for timely payments, but the
margin of safety is not as great as the F-1+ and F-1 categories.

Demand Bond or Notes Ratings

Certain demand securities empower the holder at his option
to require the issuer, usually through a remarketing agent, to
repurchase the security upon notice at par with accrued interest.

This is also referred to as a put option. The ratings of the
demand provision may be changed or withdrawn at any time if, in
Fitch's judgment, changing circumstances warrant such action.

Fitch demand provision ratings carry the same symbols and
related definitions as its short-term ratings.

IBCA

Corporate Ratings

An IBCA corporate rating represents IBCA's current
assessment of the business and financial risks of the company,
including the economic environment, industry characteristics,
nature of operations, market position, ownership, accounting
policies, earnings trends and sensitivities, cash flow, capital
and debt structure, liquidity position and contingent risks.

The corporate ratings consist of Long- and Short-Term
Ratings. The Short-Term Ratings relate to debt which has a
maturity of less than one year. The Long-Term Ratings relate to
debt instruments with maturity of one year or longer.

Long-Term Ratings

AAA

Obligations for which there is the lowest expectation of
investment risk. Capacity for timely repayment of principal and
interest is substantial, such that adverse changes in business,
economic or financial conditions are unlikely to increase
investment risk significantly.

Obligations for which there is a very low expectation of
investment risk. Capacity for timely repayment of principal and
interest is substantial. Adverse changes in business, economic
or financial conditions may increase investment risk, albeit not
very significantly.

Note: A plus (+) or minus (-) sign may be appended to a rating
to denote relative status within major rating categories.

Short-Term Ratings

A1+

Obligations supported by the highest capacity for timely
repayment.

Obligations supported by a very strong capacity for timely
repayment.

Obligations supported by a strong capacity for timely
repayment, although such capacity may be susceptible to adverse
changes in business, economic or financial conditions.

International and U.S. Bank Ratings

An IBCA bank rating represents IBCA's current assessment of
the strength of the bank and whether such bank would receive
support should it experience difficulties. In assigning a bank
rating, IBCA considers the bank's results, asset quality and
contingencies, liquidity and funding, capital and management.

In its assessment of a bank, IBCA uses a dual rating system
comprised of Legal Ratings and Individual Ratings. In addition,
IBCA assigns banks Long- and Short-Term Ratings as used in the
corporate ratings discussed above. Legal Ratings address the
question of whether the bank would receive support provided by
central banks or shareholders if it experienced difficulties, and
such ratings are considered by IBCA to be a prime factor in its
assessment of credit risk. Individual Ratings represent IBCA's
assessment of a bank's economic merits and address the question
of how the bank would be viewed if it were entirely independent
and could not rely on support from state authorities or its
owners.

Legal Ratings

A bank for which there is a clear legal guarantee on the
part of its home state to provide any necessary support or a bank
of such importance both internationally and domestically that
support from the state would be forthcoming, if necessary. The
state in question must be a major developed country which is
clearly prepared to support its principal banks.

A bank for which there is no legal obligation on the part
of
a sovereign entity to provide support but for which state support
would be forthcoming, for example, because of its importance to
the total economy or its historic relationship with the
government or Central Bank. The country in question must clearly
have sufficient resources to provide such support.

A bank which has owners who are of sufficient reputation
and
possess such resources that shareholder support would be
forthcoming, if necessary.

A bank for which support from owners or outside authorities
is likely but not certain. In the case of owners, their limited
size may preclude assurance of support or, where there is a large
number of owners, it may be that they consider the bank an
investment rather than a long-term commitment.

A bank which cannot rely on outside assistance.

Individual Ratings

A bank with a strong balance sheet, favorable credit
profile
and a consistent record of above-average profitability.

A bank with a sound credit profile and without significant
problems. The bank's performance generally has been in line with
or better than that of its peers.

A bank which has an adequate credit profile but possesses
one or more troublesome aspects, giving rise to the modest
possibility of risk developing, or which has generally failed to
perform in line with its peers.

A bank which is currently underperforming in some notable
manner. The balance sheet is likely to be below average and
profitability poor. The bank has the capability of recovering
using its own resources, but this is likely to take some time.

A bank with very serious problems which either requires or
is likely to require external support.

Note: In addition, gradations are used between these five
ratings (i.e., A/B, B/C, C/D and D/E.

<TABLE>

FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND

STATEMENT OF INVESTMENTS

DECEMBER 31, 1993

PRINCIPAL
TAX EXEMPT INVESTMENTS-100.0% AMOUNT VALUE

<S> <C> <C>
ALABAMA-2.0% Phoenix Industrial
Development Board, EIR, Refunding,
VRDN (Mead Coated Board Project)
4.75% (LOC; Sumitomo Bank) (a,b) $ 1,500,000 $ 1,500,000

Port City Medical Clinic Board of
Mobile, HR, CP 2.40%, 2/1/94
(LOC: Fuji Bank and Mitsubishi
Bank) (b) 2,075,000 2,075,000

ARIZONA-2.8% Maricopa County
Pollution Control Corp., PCR,
CP (Southern California Edison
Paloverdi) 2.50%, 1/27/94
(Guaranteed by; Southern
California Edison Co.) 4,000,000 4,000,000

City of Mesa Municipal Development,
Special Tax, CP 2.60%, 1/12/94
(LOC; Union Bank of Switzerland)(b) 1,000,000 1,000,000

CALIFORNIA-3.0%State of California,
GO, RAN 3.50%, 6/28/94 1,600,000 1,604,302

Orange County, TRAN 3%, 6/30/94 3,750,000 3,759,012

COLORADO-1.9% Regional Transportation
District, Special Passenger Fare
Revenue, VRDN: 3.20% (LOC;
Banque Nationale de Paris) (a,b) 2,000,000 2,000,000

3.30% (LOC; Bank of Tokyo) (a,b) 1,400,000 1,400,000

CONNECTICUT-1.7% Connecticut
Development Authority, PCR,
VRDN (Connecticut Light and Power)
3.10% (LOC; Deutsche Bank) (a,b) 3,000,000 3,000,000

DELAWARE-1.1% Delaware Economic
Development Authority, IDR, CP
(WL Gore and Associates-Barksdale)
2.60%, 2/24/94 (LOC; Morgan Guaranty
Trust Co.) (b) 2,000,000 2,000,000

DISTRICT OF COLUMBIA-2.9%
District of Columbia, Revenue
Bonds (Supplemental Student
Loan-Consern) 2.80%, 7/1/94 (LOC;
Mitsubishi Bank) (b) 5,065,000 5,065,000

FLORIDA-5.0% Palm Beach County Health
Facilities Authority, Revenue,
Refunding, CP (Pooled Hospital
Loan Program) 2.20%, 2/15/94
(Insured; MBIA and Liquidity;
Credit Suisse) 2,000,000 2,000,000

Sarasota County Public Hospital District,
HR, CP (Sarasota Memorial Hospital Project)
2.60%, 1/26/94 (LOC; Sumitomo Bank) (b) 2,080,000 2,080,000

West Orange Memorial Hospital Tax
District, Revenue, CP:
2.60%, Series A-1, 1/5/94 (LOC;
Societe Generale) (b) 1,100,000 1,100,000
2.35%, Series A-2, 1/6/94 (LOC;
Societe Generale) (b) 1,700,000 1,700,000
2.45%, Series A-2, 3/22/94 (LOC;
Societe Generale) (b) 2,000,000 2,000,000

GEORGIA-1.9% Peachtree City Development
Authority, Revenue, VRDN (Hoshizaki
American Inc.) 3.05% (LOC; Bank of
Tokyo) (a,b) 3,300,000 3,300,000

ILLINOIS-3.4% Decatur, Water Revenue,
CP (Newsouth Water Treatment) 2.30%,
3/7/94 (LOC; Sumitomo Bank) 1,000,000 1,000,000

State of Illinois, GO, Notes:
3.25%, 5/16/94 2,000,000 2,002,540
3.50%, 6/15/94 3,000,000 3,007,277

FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND

STATEMENT OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1993

TAX EXEMPT INVESTMENTS (CONTINUED) PRINCIPAL
AMOUNT VALUE

INDIANA-2.9%
Indiana Development Finance Authority,
Solid Waste Disposal Revenue, CP
(Pure Air On Lake Project) 2.50%, 1/5/94
(LOC; Fuji Bank) (b) $ 1,100,000 $ 1,100,000

Jasper County, PCR, Refunding,
CP (Northern Indiana Public Service)
2.40%, 3/8/94 (LOC; Barclays Bank) (b) 4,000,000 4,000,000

KANSAS-2.8% Burlington, PCR,
Refunding, CP (Kansas City
Power and Light Project)
2.30%, 2/16/94 (LOC; Deutsche Bank) (b) 4,900,000 4,900,000

KENTUCKY-1.7% Trimble County, PCR,
CP 2.55%, 1/25/94 (LOC; Louisville Gas
and Electric Co.) (b) 3,000,000 3,000,000

LOUISIANA-.6% East Baton Rouge
Parish, PCR, VRDN (Georgia-Pacific Corp.)
2.85% (LOC; Toronto-Dominion Bank) (a,b) 1,000,000 1,000,000

MINNESOTA-1.1% City of Rochester,
Health Care Facilities, Revenue,
CP (Mayo Foundation Project)
2.45%, 3/2/94 (Guaranteed by;
Mayo Foundation) 2,000,000 2,000,000

MISSOURI-3.7%City of Columbia,
Special Obligation, VRDN 3.20%
(LOC; Toronto-Dominion Bank) (a,b) 1,500,00 1,500,000

Missouri Environmental Improvement
and Energy Resource Authority, PCR, CP
(Union Electric Co. Project):
2.60%, 1/5/94 (LOC; Union Bank of
Switzerland) (b) 1,000,000 1,000,000

2.55%, 3/10/94 (LOC; Union Bank of
Switzerland) (b) 4,000,000 4,000,000

MONTANA-3%City of Forsyth, PCR, VRDN
(Portland General Electric)
3.40% (LOC; Banque Nationale de
Paris) (a,b) 5,200,000 5,200,000

NEBRASKA-.9% Nebraska Public
Power District, Revenue, CP
2.75%, 1/11/94 (LOC; Morgan
Guaranty Trust)(b) 1,500,000 1,500,000

NEW HAMPSHIRE-.6% New Hampshire
Business Finance Authority,
PCR, Refunding, VRDN (Connecticut
Power and Light Co. Project)
3.40% (LOC; Canadian Imperial
Bank of Commerce) (a,b) 1,000,000 1,000,000

NEW JERSEY-2.8% State of
New Jersey, TRAN 3%, 6/15/94 5,000,000 5,023,521

NEW MEXICO-3.8% Hurley, PCR, CP
(Kennecott Sante Fe): 2.35%,
1/11/94 (Guaranteed by; British
Petroleum) 3,000,000 3,000,000

2.40%, 3/9/94 (Guaranteed by; British
Petroleum) 3,700,000 3,700.000

NEW YORK-1.1% New York State
Energy, Research and Development
Authority, PCR Bonds (Electric
and Gas Co.) 2.85%, 10/15/94 (LOC;
Union Bank of Switzerland) (b) 2,000,000 2,000,000

NORTH CAROLINA-4.7% North Carolina
Municipal Power Agency,
Power System Revenue 2.50%, 2/9/94
(LOC; Industrial Bank of Japan) (b) 5,000,000 5,000,000

Wake County Industrial Facilities
and Pollution Control Financing
Authority, Revenue, VRDN (Carolina
Power and Light Co.) 4.40% (LOC;
Sumitomo Bank) (a,b) 3,200,000 3,200,000

FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1993

PRINCIPAL
TAX EXEMPT INVESTMENTS (CONTINUED) AMOUNT VALUE

Allen County, IDR, VRDN
(Nickles Bakery) 3% (LOC;
Society National Bank) (a,b) $ 4,200,000 $ 4,200,000

City of Bedford Heights, IDR,
VRDN (Olympic Steel Inc. Project)
3% (LOC; Society National Bank) (a,b) 900,000 900,000

Village of Brooklyn Heights,
IDR, VRDN (Keynote Office Centre
Limited Project) 3% (LOC; Society
National Bank) (a,b) 3,500,000 3,500,000

Cuyahoga County, IDR, VRDN:
(Puritas Association Project)
3% (LOC; Society National Bank)
(a,b) 2,125,000 2,125,000

(Suburban Pavillion) 3%
(LOC; Society National Bank) (a,b) 4,450,000 4,450,000
Hancock County, EDR, VRDN
(Quality Material Equipment) 3%
(LOC; Society National Bank) (a,b) 2,300,000 2,300,000

Village of Oakwood, IDR, VRDN
(Oakleaf Industrial Mall Project)
3% (LOC; Society National Bank) (a,b) 1,800,000 1,800,000

Ohio Air Quality Development
Authority, PCR, CP (Cleveland
Electric) 2.70%, 2/1/94
(Insured; FGIC) 4,000,000 4,000,000

OKLAHOMA-1.6% Oklahoma Industries
Authority, Health Revenue, CP
(Saint Anthony's Hospital Project)
2.60% 1/3/94 (LOC; Mitsubishi Bank) (a,b) 2,900,000 2,900,000

OREGON-.6% State of Oregon,
EDR, VRDN (Stagg Foods Inc.
Project) 3.50% (LOC; Bank of America) (a,b) 1,050,000 1,050,000

PENNSYLVANIA-7.9% Beaver County
Industrial Development Authority,
PCR, Refunding, VRDN (Duquesne-Beaver
UV) 3.40% (LOC; Barclays Bank) (a,b) 700,000 700,000

Carbon County Industrial Development
Authority, RRR, CP (Panther Creek
Partners Project) 2.30%, 2/2/94
(LOC; National Westminster Bank) (b) 4,000,000 4,000,000

Emmaus General Authority, Local
Government Revenue, VRDN:
3.40% (LOC; Canadian Imperial Bank
of Commerce) (a,b) 2,000,000 2,000,000

3.45% (LOC; Hong Kong Shanghai
Banking Corp.) (a,b) 3,700,000 3,700,000

Montgomery County Industrial
Development Authority, IDR,
VRDN (Valley Square Association)
3.30% (LOC: Banca Nazionale del
Lavoro and Mellon Bank) (a,b) 2,500,000 2,500,000

City of Philadelphia, TRAN 3.25%,
6/15/94 (LOC; Canadian Imperial
Bank of Commerce) (b) 1,000,000 1,002,200

SOUTH CAROLINA-1.1% York County,
PCR, Refunding, CP
(Duke Power Co. Project)
2.40%, 1/11/94 (Guaranteed by; Duke
Power Co. Project) 2,000,000 2,000,000

TEXAS-15.8% Austin County
Industrial Corp., IDR, CP
(Travis and Williamson Counties
Combined Utilities) 2.60%,
1/24/94 (LOC; Swiss Bank Corp.) (b) 4,050,000 4,050,000

Capital Industrial Development Corp.,
PCR, VRDN (Motorola Inc. Project)
3.10% (Guaranteed by; Motorola Inc.) (a 2,100,000 2,100,000

Grapevine Industrial Development
Corp., Revenue, VRDN
(Multiple Mode-American Airlines):
4.75%, Series A-3 (LOC; Sanwa Bank) (a,b) 1,500,000 1,500,000
4.75%, Series A-4 (LOC; Sanwa Bank) (a,b) 2,900,000 2,900,000

4.75%, Series B-2 (LOC; Sanwa Bank) (a,b) 800,000 800,000

FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND

STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1993

PRINCIPAL
TAX EXEMPT INVESTMENTS (CONTINUED) AMOUNT VALUE

TEXAS (CONTINUED)

Harris County Industrial
Development Corp., IDR, VRDN
(Zeon Chemicals Project) 3.30%
(LOC; Industrial Bank of Japan) (a,b) $ 4,100,000 $ 4,100,000

North Central Health Facility
Development Corp., HR, VRDN
(Presbyterian Medical Center)
4.30% (Insured; MBIA and
BPA; Nations Bank) (a) 4,100,000 4,100,000

State of Texas, TRAN 3.25%,
8/31/94 4,000,000 4,013,849

Texas Health Facilities Development,
Revenue, VRDN (Aces North Texas
Pooled Health) 3.50% (LOC;
Banque Paribas) (a,b) 4,200,000 4,200,000

UTAH-2.3% Intermountain Power
Agency, Power Supply Revenue
Bonds 2.70%, 6/15/94 (SBPA; Bank
of America) (b) 4,000,000 4,000,000

WASHINGTON-.9% Student Loan Finance
Association of Washington,
Guaranteed Student Loan Program
Revenue, VRDN (Second Series)
2.90% (LOC; Sanwa Bank) (a,b) 1,500,000 1,500,000

WEST VIRGINIA-.6% Marshall County,
PCR, CP (Mountaineer Carbon Co.)
2.40%, 3/9/94 (Guaranteed by; British
Petroleum) 1,000,000 1,000,000

WYOMING-.6% Lincoln County, PCR,
Refunding, CP (Pacificorp Project)
2.20%, 1/27/94 (LOC; Union Bank of
Switzerland) (b) 1,000,000 1,000,000

TOTAL INVESTMENTS (cost $176,107,701) $176,107,701
</TABLE>

SUMMARY OF ABBREVIATIONS

BPA Bond Purchase Agreement
LOC Letter of Credit
CP Commercial Paper
MBIA Municipal Bond Insurance Association
EDR Economic Development Revenue
PCR Pollution Control Revenue
EIR Environmental Improvement Revenue
RAN Revenue Anticipation Notes
FGIC Financial Guaranty Insurance Corporation
RRR Resources Recovery Revenue
GO General Obligation
SBPA Standby Bond Purchase Agreement
HR Hospital Revenue
TRAN Tax and Revenue Anticipation Notes
IDR Industrial Development Revenue
VRDN Variable Rate Demand Notes

<TABLE>

SUMMARY OF COMBINED RATINGS (UNAUDITED)

FITCH (C) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE

F1+/F1 VMIG1/MIG1, P1 (d) SP1+/SP1, A1+/A1 (d) 88.0%

AAA/AA (e) Aaa/Aa (e) AAA/AA (e) 1.1
Not Rated (f) Not Rated (f) Not Rated (f) 10.9

100.0%
</TABLE>

NOTES TO STATEMENT OF INVESTMENTS:
(a) Securities payable on demand. The interest rate, which is
subject to change, is based upon bank prime rates or an index of
market interest rates.

(b) Secured by letters of credit. At December 31, 1993, 70.2% of
the Fund's net assets are backed by letters of credit issued by
domestic banks, foreign banks and corporations, of which
Society National Bank provided letters of credit to 10.9% of
the Fund's net assets.

(d) P1 and A1 are the highest ratings assigned
tax-exempt commercial paper by Moody's and Standard &
Poor's, respectively.

(e) Notes which are not F, MIG or SP rated
are represented by bond ratings of the issuers.

(f) Securities which, while not rated by Fitch, Moody's or
Standard & Poor's have been determined by the Fund's Board of
Directors to be of comparable quality to those rated
securities in which the Fund may invest. See notes to financial
statements.

<TABLE>

FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND

STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1993

<S> <C> <C>
ASSETS:
Investments in securities,
at value-Note 1(a) $176,107,701

Cash 1,077,961
Interest receivable 704,194
Prepaid expenses 60,072
177,949,928

LIABILITIES:
Due to The First National Bank
of Chicago $ 88,169
Due to The Dreyfus Corporation 96,875
Accrued expenses 66,950 251,994
NET ASSETS $177,697,934

REPRESENTED BY:
Paid-in capital $177,715,005
Accumulated net realized
(loss) on investments (17,071)

NET ASSETS at value applicable
to 177,715,005 shares
outstanding (unlimited
number of $.01 par value shares of
Beneficial Interest authorized) $177,697,934

NET ASSET VALUE, offering and
redemption price per share
($177,697,934 / 177,715,005
shares) $1.00

STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1993

INVESTMENT INCOME:

INTEREST INCOME $ 4,883,738

EXPENSES:
Management fee-Note 2(a) $1,098,945
Shareholder servicing costs-Note 2(b) 562,984
Professional fees 82,390
Custodian fees 36,925
Prospectus and shareholders'
reports-Note 2(b) 22,225
Registration fees 18,465
Trustees' fees and expenses-
Note 2(c) 9,247
Miscellaneous 8,116

1,839,297
Less-reduction in investment advisory
ee due to undertakings-Note 2(a) 317,993

TOTAL EXPENSES 1,521,304

INVESTMENT INCOME-NET 3,362,434
NET REALIZED (LOSS) ON
INVESTMENTS-Note 1(b) (2,293)

NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 3,360,141

See notes to financial statements.

FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS

YEAR ENDED DECEMBER 31,
1992 1993
OPERATIONS:
Investment income-net $ 5,443,268 $ 3,362,434
Net realized (loss) on
investments (2,293)

NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS 5,443,268 3,360,141

DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net (5,443,268) (3,362,434)

BENEFICIAL INTEREST TRANSACTIONS
($1.00 per share):
Net proceeds from shares sold 562,179,580 409,972,617

Dividends reinvested 2,618,570 1,647,251
Cost of shares redeemed (588,473,031) (443,919,511)

(DECREASE) IN NET ASSETS FROM BENEFICIAL
INTEREST TRANSACTIONS (23,674,881) (32,299,643)

TOTAL (DECREASE) IN NET ASSETS (23,674,881) (32,301,936)

NET ASSETS:
Beginning of year 233,674,751 209,999,870
End of year $209,999,870 $177,697,934

</TABLE>

CONDENSED FINANCIAL INFORMATION

Reference is made to pages 4 and 5 of the Prospectus dated April
29, 1994.

See notes to financial statements.

FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND

NOTES TO FINANCIAL STATEMENTS

NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:

The Fund is registered under the Investment Company Act of
1940("Act") as a diversified open-end management investment
company. The First National Bank of Chicago ("Manager") serves as
the Fund's investment adviser. The Dreyfus Corporation
("Dreyfus") provides certain administrative services to the
Fund-see Note 2(a). Dreyfus Service Corporation
("Distributor"), a wholly-owned subsidiary of Dreyfus, acts as
the distributor of the Fund's shares, which are sold without a
sales load. It is the Fund's policy to maintain a continuous
net asset value per share of $1.00; the Fund has adopted certain
investment, portfolio valuation and dividend and distribution
policies to enable it to do so. Effective February 1, 1994 the
Fund
changed its name from "First Prairie Tax Exempt Money Market" to
"First Prairie Municipal Money Market."

(A) PORTFOLIO VALUATION: Investments are valued at amortized
cost,which has
been determined by the Fund's Board of Trustees to represent the
fair value of the Fund's investments.

(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are
recorded on a trade date basis. Interest income, adjusted for
amortization of premiums and, when appropriate, discounts
on investments, is earned from settlement date and recognized on
the accrual basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis.

(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to
declare dividends daily from investment income-net. Such
dividends are paid monthly. Dividends from net realized capital
gain, if any, are normally declared and paid annually, but the
Fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code.
To the extent that net realized capital gain can be offset by
capital loss carryovers, it is the policy of the Fund not
to distribute such gain.

(D) FEDERAL INCOME TAXES: It is the
policy of the Fund to continue to qualify as a regulated
investment company, which can distribute tax exempt dividends,
by complying with the provisions available to certain investment
companies, as defined in applicable sections of the
Internal Revenue Code, and to make distributions of income and
net realized capital gain sufficient to relieve it from all, or
substantially all, Federal income taxes. The Fund has an
unused capital loss carryover of approximately $17,000 available
for Federal income tax purposes to be applied against future
net securities profits, if any, realized subsequent to December
31, 1993. If not applied, $14,000 of the carryover expires in
1994, $1,000 expires in 1999, and $2,000 expires in 2001. At
December 31, 1993, the cost of investments for Federal income
tax purposes was substantially the same as the cost for
financial
reporting purposes (see the Statement of Investments).

NOTE 2-INVESTMENT ADVISORY FEE, ADMINISTRATION FEE AND OTHER
TRANSACTIONS WITH AFFILIATES:

(A) Pursuant to a
management agreement ("Agreement") with the Manager, the
management fee is computed at the annual rate of .55 of 1%of the
average daily value of the Fund's net assets and is payable
monthly.The Agreement further provides that if in any full
fiscal year the aggregate expenses of the Fund exclusive of
taxes, brokerage, interest on borrowings and extraordinary
expenses, exceed the expense limitation of any state having
jurisdiction over the Fund, the Fund may deduct from the
payments
to be made to the Manager, or the Manager will bear such
excess to the extent required by state law. The most stringent
state expense limitation applicable to the Fund presently
requires reimbursement of expenses in any full year that such
expenses (exclusive of distribution expenses and certain
expenses
as described above) exceed 2 1/2% of the first $30 million, 2%
of
the next $70 million and 1 1/2% of the excess over $100 million
of the average value of the Fund's net assets in accordance with
California "blue sky" regulations. However,the Manager has
undertaken from January 1, 1993 through December 19, 1993

FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND NOTES TO FINANCIAL
STATEMENTS (CONTINUED)

to reduce the management fee paid by the
Fund to the extent that the Fund's aggregate expenses (excluding
certain expenses as described above)exceeded specified annual
percentages of the Fund's average daily net assets. The Manager
has currently undertaken from December 20, 1993 to assume all
expenses of the Fund in excess of an annual rate of .65 of 1%
of the Fund's average daily net assets. The reduction in
management fee,pursuant to the undertakings, amounted to
$317,993 for the year ended December 31, 1993. The undertaking
may be modified by the Manager from time to time,provided that
the resulting expense reimbursement would not be less than the
amount required pursuant to the Agreement. Effective April 30,
1993 the Manager has engaged Dreyfus to assist it in providing
certain administrative services for the Fund pursuant to a
Master
Administration Agreement between the Manager and
Dreyfus. Pursuant to its agreement with Dreyfus, the Manager
has
agreed to pay Dreyfus for Dreyfus' services. Prior to April
30, 1993, pursuant to an Investment Advisory Agreement with the
Manager and an Administration Agreement with Dreyfus,
the Investment Advisory Fee and the Administration Fee were
computed at annual rates of .40 of 1% and .20 of 1%,
respectively, of the average daily value of the Fund's net
assets. The agreements provided that if in any full year the
aggregate expenses of the Fund (excluding certain expenses
as described above), exceeded the expense limitation of any
state
having jurisdiction over the Fund, the Fund could deduct from
the
payments to be made to the Manager and Dreyfus, or the Manager
and Dreyfus would bear their proportionate share of such excess
to the extent required by state law.

(B) The Fund has adopted a Service Plan (the "Plan") pursuant to
which it has agreed to
pay costs and expenses in connection with advertising
and marketing shares of the Fund and payments made to one or
more
Service Agents (which may include the Manager, Dreyfus and the
Distributor) based on the value of the Fund's shares owned by
clients of the Service Agent.These advertising and marketing
expenses and fees of the Service Agents may not exceed an annual
rate of .25 of 1% of the Fund's average daily net assets. The
Plan also separately provides for the Fund to bear the costs
of preparing, printing and distributing certain of the Fund's
prospectuses and statements of additional information and costs
associated with implementing and operating the Plan, not to
exceed the greater of$100,000 or .005 of 1% of the Fund's
average daily net assets for any full year. For the year ended
December 31, 1993, the Fund was charged $493,466 pursuant to the
Plan, substantially all of which was retained by the Manager and
Dreyfus.

(C) Certain officers and trustees of the Fund are
"affiliated persons,"as defined in the Act, of the Manager or
Dreyfus. Each trustee who is not an "affiliated person" receives
an annual fee of $2,500 and an attendance fee of $500 per
meeting.

(D) On December 5, 1993, Dreyfus entered into an
Agreement and Plan of Merger providing for the merger of Dreyfus
with a subsidiary of MellonBank Corporation ("Mellon").
Following the merger, it is planned that Dreyfus will be a
direct subsidiary of Mellon Bank, N.A. Closing of this merger is
subject to a number of contingencies, including the receipt of
certain regulatory approvals and the approvals of the
stockholders of the Manager and of Mellon. The merger is
expected
to occur in mid-1994, but could occur significantly later.

FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND

REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND

We have audited the accompanying statement of assets and
liabilities of First Prairie
Tax Exempt Money Market Fund, including the statement
of investments, as of December 31, 1993, and the related
statement of operations for the year then ended, the statement
of
changes in net assets for each of the two years in the period
then ended, and financial highlights for each of the years
indicated therein. These financial statements and financial
highlights are the responsibility of the Fund's management.
Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements and financial highlights are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of
securities owned as of December 31, 1993 by correspondence with
the custodian. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for
our opinion. In our opinion, the financial statements and
financial highlights referred to above present fairly, in all
material respects, the financial position of First Prairie Tax
Exempt Money Market Fund at December 31,1993, the results of its
operations for the year then ended, the changes in its net
assets
for each of the two years in the period then ended, and
the financial highlights for each of the indicated years, in
conformity with generally accepted accounting principles.

(Ernst & Young Signature Logo)

New York, New York

February 4, 1994

<PAGE>
PRAIRIE FUNDS
PART C

OTHER INFORMATION

Item 15. Indemnification.

The response to this item is incorporated by reference
to Item 27 of Part C of the Registrant's Registration Statement
on Form N-1A as filed on October 28, 1994.
Item 16. Exhibits - All references are to the Registrant's
Registration Statement on Form N-1A, filed on October
28, 1994 (File No. 33-56217) (the "Registration
Statement") unless otherwise noted.

(1) Registrant's Agreement and Declaration of
Trust is incorporated by reference to
Exhibit (1) to the Registration Statement.

(2) Registrant's Bylaws are incorporated by
reference to Exhibit (2) to the Registration
Statement.

(3) Not Applicable.

<F1> (4) Form of Agreement and Plan of Exchange.

(5) Not Applicable.

(6) Registrant's Investment Advisory Agreement is
incorporated by reference to Exhibit (5) to the
Registration Statement.

(7) Registrant's Distribution Agreement is
incorporated by reference to Exhibit (6) to the
Registration Statement.

(8) Not Applicable.

(9) Registrant's Custody Agreement is incorporated by
reference to Exhibit (8) to the Registration
Statement.

(10) Registrant's Distribution Plan, entered into
pursuant to Rule 12b-1 under the Investment
Company Act of 1940, as amended, is incorporated
by reference to Exhibit 15 to the Registration
Statement.
[FN] Filed herewith as Exhibit A to the Proxy
Statement/Prospectus.

<PAGE>
<F2>(11) Opinion and consent of Stroock & Stroock & Lavan
regarding legality of issuance of shares and
other matters.

(12) Opinion and consent of Stroock & Stroock & Lavan
regarding tax matters.

(13) Not Applicable.

(14) Consents of Independent Accountants.

(15) Not Applicable.

<F3>(16) Powers of Attorney.

(17) Form of Proxy.

Item 17. Undertakings.

(1) The undersigned Registrant agrees that prior to
any public reoffering of the securities
registered through the use of a prospectus which
is a part of this registration statement by any
person or party who is deemed to be an
underwriter within the meaning of Rule 145(c) of
the Securities Act of 1933, as amended, the
reoffering prospectus will contain the
information called for by the applicable
registration form for reofferings by persons who
may be deemed underwriters, in addition to the
information called for by the other items of the
applicable form.

(2) The undersigned registrant agrees that every
prospectus that is filed under paragraph (1)
above will be filed as a part of an amendment to
the registration statement and will not be used
until the amendment is effective, and that, in
determining any liability under the Securities
Act of 1933, as amended, each post-effective
amendment shall be deemed to be a new
registration statement for the securities offered
therein, and the offering of the securities at
that time shall be deemed to be the initial bona
fide offering of them.

[FN] To be filed by Amendment.
[FN] Incorporated by reference to the signature page hereto.

<PAGE>

SIGNATURES

As required by the Securities Act of 1933, this
Registration Statement has been signed on behalf of the
Registrant, in the City of Chicago, State of Illinois, on the
18th day of November, 1994.

PRAIRIE FUNDS
(Registrant)

By:/s/Joseph F. Kissel
---------------------
Joseph F. Kissel, President

Each person whose signature appears below on this
Registration Statement hereby constitutes and appoints Joseph F.
Kissel, Richard A. Fabietti, Martin G. Flanigan, James W.
Bernaiche, Ann E. Bergin and Steven A. Smith, and each of them,
with full power to act without the other, his true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities (until revoked in writing) to sign any and all
amendments to this Registration Statement (including post-
effective amendments and amendments thereto), and to file the
same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and
every act and thing ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

Pursuant to the requirements of the Securities
Act of 1933, this Registration Statement has been signed below by
the following persons in the capacities and on the dates
indicated.

/s/Joseph F. Kissel President (Principal November 18, 1994
- --------------------- Executive Officer
Joseph F. Kissel

/s/Richard A. Fabietti Treasurer November 18, 1994
- ---------------------- (Principal Financial
Richard A. Fabietti and Accounting Officer)

/s/John P. Gould Trustee November 18, 1994
- ----------------------
John P. Gould

/s/Marilyn McCoy Trustee November 18, 1994
- ----------------------
Marilyn McCoy

/s/Raymond D. Oddi Trustee November 18, 1994
- ----------------------
Raymond D. Oddi

PRAIRIE FUNDS

Registration Statement on Form N-14 under

the Securities Act of 1933

EXHIBITS

<PAGE>
INDEX TO EXHIBITS

Page

(11) Opinion (including consent) of
Stroock & Stroock & Lavan . . . . . . . .

(12) Tax Opinions (including consents) of
Stroock & Stroock & Lavan . . . . . . . .
<PAGE>
STROOCK & STROOCK & LAVAN

EXHIBIT 11

_______________, 1994

Prairie Funds
Three First National Plaza
Chicago, Illinois 60670

Gentlemen:

We have acted as counsel to Prairie Funds (the "Fund") in
connection with (i) the transfer of all or substantially all of
the assets of First Prairie Diversified Asset Fund, a
Massachusetts business trust, to the Fund's Managed Assets Income
Series, the related issuance of shares of beneficial interest of
the Fund's Managed Assets Income Series, par value $.001 per
share, and the assumption of stated liabilities of First Prairie
Diversified Asset Fund by the Fund's Managed Assets Income
Series, (ii) the transfer of all or substantially all of the
assets of the Intermediate Series of First Prairie Municipal Bond
Fund, a Maryland corporation, to the Fund's Intermediate
Municipal Bond Series, the related issuance of shares of
beneficial interest of the Fund's Intermediate Municipal Bond
Series, par value $.001 per share, and the assumption of stated
liabilities of the Intermediate Series of First Prairie Municipal
Bond Fund by the Fund's Intermediate Municipal Bond Series,
(iii) the transfer of all or substantially all of the assets of
First Prairie Municipal Money Market Fund, a Massachusetts
business trust, to the Fund's Municipal Money Market Series, the
related issuance of shares of beneficial interest of the Fund's
Municipal Money Market Series, par value $.001 per share, and the
assumption of stated liabilities of First Prairie Municipal Money
Market Fund by the Fund's Municipal Money Market Series and
(iv) the transfer of all or substantially all of the assets of
the Money Market Series of First Prairie Money Market Fund, a
Massachusetts business trust, to the Fund's Money Market Series,
the related issuance of shares of beneficial interest of the
Fund's Money Market Series, par value $.001 per share, and the
assumption of stated liabilities of the Money Market Series of
First Prairie Money Market Fund by the Fund's Money Market
Series, in each case pursuant to a separate Agreement and Plan of
Reorganization (each, an "Agreement"), all as more fully
described in the Fund's Registration Statement on Form N-14,
Registration No. 33-_____ (the "Registration Statement").

We have examined copies of the Amended and Restated Agreement and
Declaration of Trust and By-Laws of the Fund, the Registration
Statement, each Agreement and such other documents, records,
papers, statutes and authorities as we deemed necessary to form a
basis for the opinion hereinafter expressed. In our examination
of such material, we have assumed the genuineness of all
signatures and the conformity to original documents of all copies
submitted to us. As to various questions of fact material to
such opinion, we have relied upon statements and certificates of
officers and representatives of the Fund and others.

Attorneys involved in the preparation of this opinion are
admitted only to the bar of the State of New York. As to various
questions arising under the laws of the Commonwealth of
Massachusetts, we have relied on the opinion of Messrs. Ropes &
Gray, a copy of which is attached hereto. Qualifications set
forth in their opinion are deemed incorporated herein.

Based upon the foregoing, we are of the opinion that the shares
to be issued in accordance with the terms of each Agreement, when
so issued, will constitute validly issued shares, fully paid and
nonassessable, under the laws of the Commonwealth of
Massachusetts.

We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the reference to us in each
Proxy Statement/Prospectus included in the Registration
Statement, and to the filing of this opinion as an exhibit to any
application made by or on behalf of the Fund or any distributor
or dealer in connection with the registration and qualification
of the Fund or shares of its Series under the securities laws of
any state or jurisdiction. In giving such permission, we do not
admit hereby that we come within the category of persons whose
consent is required under Section 7 of the Securities Act of 1933
or the rules and regulations of the Securities and Exchange
Commission thereunder.

Very truly yours,

STROOCK & STROOCK & LAVAN
<PAGE>

EXHIBIT 12(i)

November 18, 1994

First Prairie Diversified Asset Fund
Three First National Plaza
Chicago, Illinois 60670

Prairie Funds
Three First National Plaza
Chicago, Illinois 60670

Re: Registration Statement on Form N-14
(Registration No. 33- )

Ladies and Gentlemen:

You have requested our opinion as to certain Federal income tax
consequences of the reorganization contemplated by the Agreement
and Plan of Exchange, substantially in the form included
as Exhibit
A to the Registration Statement on Form N-14 of Prairie Funds
(Reg. No. 33-_____) (the "Registration Statement"), between First
Prairie Diversified Asset Fund, a Massachusetts business trust
(the
"Existing Fund"), and Managed Assets Income Series (the
"Series"),
a series of Prairie Funds, a Massachusetts business trust (the
"Trust"). You have advised us that the Existing Fund
has qualified
and will qualify as a "regulated investment company" within the
meaning of Subchapter M of Chapter 1 of the Internal Revenue Code
of 1986, as amended (the "Code"), for each of its taxable years
ending on or before or including the Closing Date. You have
further advised us that the Series intends to meet the
requirements
for qualification and treatment as a regulated investment company
within the meaning of Subchapter M of Chapter 1 of the Code for
the
taxable year in which the Exchange will occur and for each of its
taxable years thereafter.

In rendering this opinion, we have examined the Agreement and
Plan
of Exchange, Registration Statement, the Agreement and
Declaration
of Trust of the Existing Fund, the Agreement and Declaration of
Trust of the Trust, the Prospectus and Statement of Additional
Information of each of the Existing Fund and the Series,
incorporated by reference in the Registration Statement, and such
other documents as we have deemed necessary or relevant for the
purpose of this opinion. In issuing our opinion, we have relied
upon the representation of the Existing Fund that its Agreement
and
Declaration of Trust is the document pursuant to which it has
operated to date and that it has operated in accordance with all
laws applicable to such entity and the statements and
representations made herein and in the Registration Statement.
We
also have relied upon the representation of the Trust that its
Agreement and Declaration of Trust is the document pursuant to
which it has operated to date and will operate following the
reorganization and that it has operated and will operate
following
the reorganization in accordance with all laws applicable to such
entity and the statements and representations made herein and in
the Registration Statement. As to various questions of fact
material to this opinion, where relevant facts were not
independently established by us, we have relied upon statements
of,
and written information provided by, representatives of both the
Existing Fund and the Trust. We have also examined such matters
of
law as we have deemed necessary or appropriate for the purpose of
this opinion. We note that our opinion is based on our
examination
of such law, our review of the documents described above, the
statements and representations referred to above and in the
Registration Statement and the Agreement and Plan of Exchange,
the
provisions of the Code, the regulations, published rulings and
announcements thereunder, and the judicial interpretations
thereof
currently in effect. Any change in applicable law or any of the
facts and circumstances described in the Registration Statement,
or
inaccuracy of any statements or representations on which we have
relied, may affect the continuing validity of our opinion.

Capitalized terms not defined herein have the respective meanings
given such terms in the Agreement and Plan of Exchange.

Based on the foregoing, it is our opinion that for Federal income
tax purposes:

(a) The transfer of all or substantially all of the
Existing
Fund's assets in exchange for Series Shares and the assumption by
the Series of certain identified liabilities of the Existing Fund
will constitute a "reorganization" within the meaning of Section
368(a)(1)(F) of the Code;

(b) No gain or loss will be recognized by the Series upon
the
receipt of the assets of the Existing Fund solely in exchange for
Series Shares and the assumption by the Series of certain
identified liabilities of the Existing Fund;

(c) No gain or loss will be recognized by the Existing Fund
upon the transfer of the Existing Fund's assets to the Series in
exchange for Series Shares and the assumption by the Series of
certain identified liabilities of the Existing Fund or upon the
distribution of the Series Shares to Existing Fund Shareholders
in
exchange for their shares of the Existing Fund;

(d) No gain or loss will be recognized by the Existing Fund
Shareholders upon the exchange of their Existing Fund shares for
Series Shares;

(e) The aggregate tax basis for the Series Shares received
by
each of the Existing Fund Shareholders pursuant to the
reorganization will be the same as the aggregate tax basis of the
Existing Fund shares held by such shareholder immediately prior
to
the reorganization, and the holding period of the Series Shares
to
be received by each Existing Fund Shareholder will include the
period during which the Existing Fund shares exchanged therefor
were held by such shareholder (provided the Existing Fund shares
were held as capital assets on the date of the reorganization);
and

(f) The tax basis of the Existing Fund assets acquired by
the
Series will be the same as the tax basis of such assets to the
Existing Fund immediately prior to the reorganization, and the
holding period of the assets of the Existing Fund in the hands of
the Series will include the period during which those assets were
held by the Existing Fund.

We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the reference to us in the
Proxy
Statement/Prospectus included in the Registration Statement, and
to
the filing of this opinion as an exhibit to any Registration
Statement, and to the filing of this opinion as an exhibit to any
application made by or on behalf of the Trust or any distributor
or
dealer in connection with the registration and qualification of
the
Trust or its Shares under the securities laws of any state or
jurisdiction. In giving such permission, we do not admit hereby
that we come within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933 or the
rules
and regulations of the Securities and Exchange Commission
thereunder.

Very truly yours,

STROOCK & STROOCK & LAVAN

<PAGE>

EXHIBIT 12(ii)

November 18, 1994

First Prairie Municipal Bond Fund
Three First National Plaza
Chicago, Illinois 60670

Prairie Funds
Three First National Plaza
Chicago, Illinois 60670

Re: Registration Statement on Form N-14
(Registration No. 33- )

Ladies and Gentlemen:

You have requested our opinion as to certain Federal income tax
consequences of the reorganization contemplated by the Agreement
and Plan of Exchange, substantially in the form included as
Exhibit
A to the Registration Statement on Form N-14 of Prairie Funds
(Reg. No. 33-_____) (the "Registration Statement"), between the
Intermediate Series of First Prairie Municipal Bond Fund, a
Maryland corporation (the "Existing Fund"), and Intermediate
Municipal Bond Series (the "Series"), a series of Prairie Funds,
a
Massachusetts business trust (the "Trust"). You have advised us
that the Existing Fund has qualified and will qualify as a
"regulated investment company" within the meaning of Subchapter M
of Chapter 1 of the Internal Revenue Code of 1986, as amended
(the
"Code"), for each of its taxable years ending on or before or
including the Closing Date. You have further advised us that the
Series intends to meet the requirements for qualification and
treatment as a regulated investment company within the meaning of
Subchapter M of Chapter 1 of the Code for the taxable year in
which
the Exchange will occur and for each of its taxable years
thereafter.

In rendering this opinion, we have examined the Agreement and
Plan
of Exchange, Registration Statement, the Charter of the Existing
Fund, the Agreement and Declaration of Trust of the Trust, the
Prospectus and Statement of Additional Information of each of the
Existing Fund and the Series, incorporated by reference in the
Registration Statement, and such other documents as we have
deemed
necessary or relevant for the purpose of this opinion. In
issuing
our opinion, we have relied upon the representation of the
Existing
Fund that its Charter is the document pursuant to which it has
operated to date and that it has operated in accordance with all
laws applicable to such entity and the statements and
representations made herein and in the Registration Statement.
We
also have relied upon the representation of the Trust that its
Agreement and Declaration of Trust is the document pursuant to
which it has operated to date and will operate following the
reorganization and that it has operated and will operate
following
the reorganization in accordance with all laws applicable to such
entity and the statements and representations made herein and in
the Registration Statement. As to various questions of fact
material to this opinion, where relevant facts were not
independently established by us, we have relied upon statements
of,
and written information provided by, representatives of both the
Existing Fund and the Trust. We have also examined such matters
of
law as we have deemed necessary or appropriate for the purpose of
this opinion. We note that our opinion is based on our
examination
of such law, our review of the documents described above, the
statements and representations referred to above and in the
Registration Statement and the Agreement and Plan of Exchange,
the
provisions of the Code, the regulations, published rulings and
announcements thereunder, and the judicial interpretations
thereof
currently in effect. Any change in applicable law or any of the
facts and circumstances described in the Registration Statement,
or
inaccuracy of any statements or representations on which we have
relied, may affect the continuing validity of our opinion.

Capitalized terms not defined herein have the respective meanings
given such terms in the Agreement and Plan of Exchange.

Based on the foregoing, it is our opinion that for Federal income
tax purposes:

(d) No gain or loss will be recognized by the Existing Fund
Shareholders upon the exchange of their Existing Fund shares for
Series Shares;

Very truly yours,

STROOCK & STROOCK & LAVAN

<PAGE>

EXHIBIT 12(iii)

November 18, 1994

First Prairie Money Market Fund
Three First National Plaza
Chicago, Illinois 60670

Prairie Funds
Three First National Plaza
Chicago, Illinois 60670

Re: Registration Statement on Form N-14
(Registration No. 33- )

Ladies and Gentlemen:

You have requested our opinion as to certain Federal income tax
consequences of the reorganization contemplated by the Agreement
and Plan of Exchange, substantially in the form included as
Exhibit
A to the Registration Statement on Form N-14 of Prairie Funds
(Reg. No. 33-_____) (the "Registration Statement"), between the
Money Market Series of First Prairie Money Market Fund, a
Massachusetts business trust (the "Existing Fund"), and Money
Market Series (the "Series"), a series of Prairie Funds, a
Massachusetts business trust (the "Trust"). You have advised us
that the Existing Fund has qualified and will qualify as a
"regulated investment company" within the meaning of Subchapter M
of Chapter 1 of the Internal Revenue Code of 1986, as amended
(the
"Code"), for each of its taxable years ending on or before or
including the Closing Date. You have further advised us that the
Series intends to meet the requirements for qualification and
treatment as a regulated investment company within the meaning of
Subchapter M of Chapter 1 of the Code for the taxable year in
which
the Exchange will occur and for each of its taxable years
thereafter.

Capitalized terms not defined herein have the respective meanings
given such terms in the Agreement and Plan of Exchange.

Based on the foregoing, it is our opinion that for Federal income
tax purposes:

(d) No gain or loss will be recognized by the Existing Fund
Shareholders upon the exchange of their Existing Fund shares for
Series Shares;

We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the reference to us in the
Proxy
Statement/Prospectus included in the Registration Statement, and
to
the filing of this opinion as an exhibit to any Registration
Statement, and to the filing of this opinion as an exhibit to any
application made by or on behalf of the Trust or any distributor
or
dealer in connection with the registration and qualification of
the
Trust or its Shares under the securities laws of any state or
jurisdiction. In giving such permission, we do not admit hereby
that we come within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933 or
the rules
and regulations of the Securities and Exchange Commission
thereunder.

Very truly yours,

STROOCK & STROOCK & LAVAN

<PAGE>

EXHIBIT 12(iv)

November 18, 1994

First Prairie Municipal Money Market Fund
Three First National Plaza
Chicago, Illinois 60670

Prairie Funds
Three First National Plaza
Chicago, Illinois 60670

Re: Registration Statement on Form N-14
(Registration No. 33- )

Ladies and Gentlemen:

You have requested our opinion as to certain Federal income tax
consequences of the reorganization contemplated by the Agreement
and Plan of Exchange, substantially in the form included as
Exhibit
A to the Registration Statement on Form N-14 of Prairie Funds
(Reg. No. 33-_____) (the "Registration Statement"), between First
Prairie Municipal Money Market Fund, a Massachusetts business
trust
(the "Existing Fund"), and Municipal Money Market Series (the
"Series"), a series of Prairie Funds, a Massachusetts business
trust (the "Trust"). You have advised us that the Existing Fund
has qualified and will qualify as a "regulated investment
company"
within the meaning of Subchapter M of Chapter 1 of the Internal
Revenue Code of 1986, as amended (the "Code"), for each of its
taxable years ending on or before or including the Closing Date.
You have further advised us that the Series intends to meet the
requirements for qualification and treatment as a regulated
investment company within the meaning of Subchapter M of Chapter
1
of the Code for the taxable year in which the Exchange will occur
and for each of its taxable years thereafter.

Capitalized terms not defined herein have the respective meanings
given such terms in the Agreement and Plan of Exchange.

Based on the foregoing, it is our opinion that for Federal income
tax purposes:

(d) No gain or loss will be recognized by the Existing Fund
Shareholders upon the exchange of their Existing Fund shares for
Series Shares;

We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the reference to us in the
Proxy
Statement/Prospectus included in the Registration Statement, and
to
the filing of this opinion as an exhibit to any Registration
Statement, and to the filing of this opinion as an exhibit to any
application made by or on behalf of the Trust or any distributor
or
dealer in connection with the registration and qualification of
the
Trust or its Shares under the securities laws of any state or
jurisdiction. In giving such permission, we do not admit hereby
that we come within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933 or
the rules
and regulations of the Securities and Exchange Commission
thereunder.

Very truly yours,

STROOCK & STROOCK & LAVAN