Independent Accountants' Report
                       on Applying Agreed-Upon Procedures


March 19, 1999


Direct Merchants Credit Card Bank, N.A.
Paul Runice, Senior Vice President, Treasurer
Interchange Tower, Suite 300
600 South Highway 169
St. Louis Park, Minnesota  55426

Bank of New York (Delaware)
Cheryl Laser
101 Barclay Street
New York, New York  10286

MBIA Insurance Corporation
William Cody
113 King Street
Armonk, New York  10504

Moody's Investors Services
Compliance Department
99 Church Street
New York, New York  10007

Standard & Poor's Ratings Group
Compliance Department
25 Broadway
New York, New York  10004-1064

Fitch IBCA
Nancy Stroker, Executive VP Corporate Finance
One State Street Plaza
New York, New York  10004

Ladies and Gentlemen:

Pursuant to Section  3.6(a) and 3.6(b) of the Amended and  Restated  Pooling and
Servicing  Agreement dated as of July 30, 1998 among Metris Receivables Inc., as
Transferor;  Direct Merchants Credit Card Bank, N.A. (DMCCB, N.A.), as Servicer;
Bank  of New  York  (Delaware),  as  Trustee;  MBIA  Insurance  Corporation,  as
Enhancement Provider; and Moody's Investors Services,  Standard & Poor's Ratings
Group,  and Fitch IBCA,  as the Rating  Agencies;  (collectively,  the Specified
Users) we have applied the agreed-upon  procedures enumerated below, to selected
Metris Master Trust (the Master Trust) Daily Reports and  Settlement  Statements
prepared by DMCCB,  N.A.  during the period from January 1, 1998 to December 31,
1998  (the  Period).  We  understand  that  the  Daily  Reports  and  Settlement
Statements  are  prepared  in  accordance  with  requirements  described  in the
Agreement  and  the  relevant  Series  Supplements.   We  have  performed  these
procedures  solely to assist the Specified  Users in evaluating  the  Servicer's
compliance with these requirements.

This  agreed-upon   procedures  engagement  was  performed  in  accordance  with
standards established by the American Institute of Certified Public Accountants.
The  sufficiency  of  these  procedures  is  solely  the  responsibility  of the
Specified Users of the report. Consequently, we make no representation regarding
the  sufficiency  of the procedures  described  below either for the purpose for
which this report has been requested or for any other purpose. Capitalized terms
used  herein  without  definition  will have  meanings  ascribed  to them in the
Pooling and Servicing Agreement.

Unless  otherwise  indicated,  the  following  conventions  have been adopted in
presenting our procedures and findings:

      The term  "compared"  means compared to and found to be in agreement with,
      unless otherwise  noted.  Such compared amounts and percentages are deemed
      to be in  agreement  if  differences  are  attributable  to rounding or if
      differences are less than $1,000.

      The term "recomputed"  means calculated and found the amount so calculated
      to be in agreement with, unless otherwise noted.  Such recomputed  amounts
      and  percentages  are  deemed  to  be  in  agreement  if  differences  are
      attributable to rounding or if differences are less than $1,000.

We have performed the following procedures:

Section 3.6 (a)

1.   For five  haphazardly  selected days (the Five Days) within the Period,  we
     obtained the Daily  Report and compared  sales,  cash  advances,  payments,
     interest income, charge-offs, miscellaneous charges and adjustments amounts
     set forth on the Daily Report with  corresponding  amounts set forth in the
     Servicer's  accounts  receivable  reports and recomputed  the  mathematical
     accuracy of the amounts and percentages within the Daily Report.

2.   For the Five Days,  we compared the cash  transfers  indicated on the Daily
     Reports to entries on the relevant Master Trust bank statements.

3.   For three haphazardly  selected fiscal month ends (the Three Months) in the
     Period,  we  compared  the  aggregate  customer  balances in the "30-59 day
     delinquent"  and "90-119 day  delinquent"  categories  as  reflected on the
     monthly  Settlement  Statements  for the Three Months to the  corresponding
     amounts set forth in the Servicer's  accounts  receivable aging reports for
     such month ends.

4.   For five haphazardly  selected weekly periods (the Five Weeks), we compared
     beginning  and end of week total  receivables  balances  on the  Servicer's
     accounts  receivable  reports  with  the  corresponding   balances  on  the
     corresponding  Daily Reports and recomputed  each Daily Report's  beginning
     and ending Principal  Receivables  balances and Finance Charge  Receivables
     balances,  based on the  information  contained in such Daily Reports,  for
     each of the days within the Five Weeks.

5.   For the Five Days,  we  recomputed  the daily  allocation  of Principal and
     Finance Charge  Collections to each series issued under the Agreement based
     upon information appearing on the Daily Report.

6.   For one monthly Settlement Statement in the period, we compared the amounts
     and  percentages  appearing  therein to the  information  appearing  in the
     corresponding  Daily  Reports or the  reports  which are the source of such
     amounts and percentages or recomputed  such  percentages to the extent they
     were derived from such information.

Section 3.6 (b)

7.   For four haphazardly selected monthly Settlement  Statements in the Period,
     we compared  amounts and percentages  appearing  therein to the information
     appearing in the corresponding Daily Reports or other reports which are the
     source of such amounts and  percentages or recomputed  such  percentages to
     the extent they were derived from such information.


The above stated agreed-upon  procedures were performed with no exceptions other
than those noted at Exhibit I, except to the extent a noted exception has caused
additional related amounts or percentages to be incorrect.  We have not included
such amounts or percentages in Exhibit I.

Management of DMCCB, N.A. has represented to us that the Daily and Monthly
Reports provided to us are the same as those provided to the Trustee.

We were not engaged to, and did not,  perform an  examination,  the objective of
which  would  be  the  expression  of  an  opinion  on  the  servicing  records.
Accordingly,  we do not express  such an opinion.  Had we  performed  additional
procedures,  other matters might have come to our attention that would have been
reported to you.

This report is  intended  solely for the use of the  Specified  Users and is not
intended  to be and  should not be used by anyone  other  than  these  Specified
Users.

                                   (continued)

                                   Exhibit I

                                Exception Report

1.   Series 1996-1 sum of Class A, Class B, Class C and Class D Total
     Collections per the July 21, 1998 Daily Report does not agree to
     the recomputation performed by us as follows:

          Amount per Daily Report                Amount as recomputed

               $ 381,936.66                         $ 1,356,667.93


2.   Series 1996-1, 1997-1 and 1997-2 Class D beginning invested amounts per the
     September 8, 1998 Daily Report do not agree to the Class D ending  invested
     balance on the September 4, 1998 Daily Report as follows:

                         September 8,           September 4,
                       1998 Daily Report      1998 Daily Report
                       -----------------      -----------------

     1996-1             $ 43,412,956.76        $ 43,646,743.94
     1997-1             $ 53,853,866.17        $ 54,154,128.55
     1997-2             $ 43,995,729.61        $ 44,351,386.07


3.   Series 1998-1 Class A Invested Amount During CI A-Paydown reported on the
     September 8, 1998 Daily report does not agree to the internal Daily
     Allocation Worksheet as follows:

                                                         Amount per
             Amount per Daily Report             Daily Allocation Worksheet

                $ 570,000,000.00                      $ 580,000,000.00


4.   Finance Charge  Collections on the Series  1998-1,  August 1998  Settlement
     Statements for Class A, Class B, Class C, Class D and in total do not agree
     to the internal Daily Allocation Worksheet as follows:

                        Amount per                     Amount per
                   Settlement Statement        Daily Allocation Worksheet

     Class A          $ 12,595,659.85                  12,270,716.81
     Class B           $ 1,245,777.05                   1,213,638.48
     Class C           $ 2,135,627.27                   2,080,532.33
     Class D           $ 1,110,694.13                   1,082,040.42
     Total            $ 17,087,758.30                  16,646,928.03




<PAGE>


                                    Exhibit I


5.   Series 1996-1 Class A Certificate Amount on the August 1998 Settlement
     Statement does not agree to the August 31, 1998 Daily Report as follows:

             Certificate Amount                    Certificate Amount
          per Settlement Statement                  per Daily Report

              $ 483,466,666.67                      $ 518,000,000.00


6.   Series 1995-1,  1996-1,  1997-1 and 1997-2 Receivable  Delinquencies on the
     April 1998 Settlement Statements do not agree to the recomputation from the
     internal Accounts Receivable reports as follows:

                               Amount per                    Amount per
                          Settlement Statement       Accounts Receivable reports

     Current               $ 2,595,852,072.74             $ 2,595,643,072.72
     90 Days and Over        $ 157,578,079.71               $ 157,787,079.73


7.   Series 1996-1 Class A Pool Factor on the August 1998 Settlement Statement
     does not agree to recomputation as follows:

                       Amount per
                  Settlement Statement           Amount as recomputed

                         1.0000%                        0.9333%


8.   Series 1997-1 Specified Class C Reserve Amount on the August 1998
     Settlement Statement does not agree to recomputation as follows:

                     Amount per
                Settlement Statement                  Amount as recomputed

                         $ 0                             $ 21,250,000.00


9.   Series 1997-1 Class C Reserve Account Balance on the August 1998 Settlement
     Statement does not agree to the internal Cascade report as follows:

                    Amount per
               Settlement Statement                Amount per Cascade report

                        $ 0                             $ 21,250,000.00


<PAGE>





                                    Exhibit I


10.  Series 1997-2 Class B Invested Amount (beginning) on the September 1998
     Settlement Statement did agree to the Daily Report as follows:

                   Amount per                            Amount per
              Settlement Statement                      Daily Report

                     `blank'                          $ 101,500,000.00