SECURITIES AND EXCHANGE COMMISSION
                       Washington, D.C.  20549

                              FORM 10-K

X           ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
               OF THE SECURITIES EXCHANGE ACT OF 1934

             For the fiscal year ended December 31, 1997
                                or
         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
              OF THE SECURITIES EXCHANGE ACT OF 1934

                   Commission file number 1-8186

                     Dain Rauscher Corporation
      (Exact name of registrant as specified in its charter)

              DELAWARE                       41-1228350
   (State or other jurisdiction of          (IRS Employer
    incorporation of organization)       Identification Number)

  Dain Rauscher Plaza, 60 South Sixth Street,
           Minneapolis, Minnesota                55402-4422
 (Address of principal executive offices)        (Zip Code)

Registrant's telephone number, including area code (612) 371-7750
   Securities registered pursuant to Section 12(b) of the Act:

                                         Name of each exchange
   Title of each class                    on which registered
   -------------------                    -------------------
 Common Stock, par value $.125                New York Stock
         per share                            Exchange, Inc.

Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
and (2) has been subject to such filing requirements for the past
90 days.

                    Yes       X             No

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (Section 229.405 of this
chapter) is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K.  [ X]

As of  March 3, 1998, 12,332,322 shares of common stock were
outstanding, and the aggregate market value of the common shares
(based upon the closing price at March 3, 1998, on the New
York Stock Exchange) of Dain Rauscher Corporation,
held by non-affiliates was approximately $500,359,174.

               Documents Incorporated by Reference

       Portions of the Proxy Statement of Registrant to be
          filed within 120 days of December 31, 1997 are
            incorporated in Part III of this report.

PART I

ITEM 1. BUSINESS:

  (a)  General Development of Business.

Dain Rauscher Corporation (the "Company"), a Minneapolis,
Minnesota based holding company formed in 1973, provides
investment advice and services to individual investors in the
western United States and investment banking services to
corporate and governmental clients nationwide through its
principal subsidiary, Dain Rauscher Incorporated ("Dain
Rauscher").  Dain Rauscher also clears and settles securities
trades on a fully disclosed basis for 173 correspondent brokerage
firms through the Company's RPR Correspondent Clearing unit ("RPR
Clearing"), which is based in St. Louis, Missouri.  Another
subsidiary,  Insight Investment Management, Inc. ("Insight
Management"), serves as the investment advisor to the Great Hall
Investment Funds (four open-end money market mutual funds) and
provides fixed income portfolio management services to a variety
of private accounts.  Dain Rauscher Lending Services Inc. was
formed in 1997 to make certain types of loans to customers that
are collateralized by customers' control and restricted
securities. At December 31, 1997, the Company had approximately
3,600 employees located in 26 states.  The Company is a Delaware
corporation with its executive offices located at Dain Rauscher
Plaza, 60 South Sixth Street, Minneapolis, Minnesota  55402-4422.
Its telephone number is  (612) 371-7750.

Effective January 2, 1998, the Company's name was changed to Dain
Rauscher Corporation from Interra Financial Incorporated and two
of the Company's broker-dealer subsidiaries, Dain Bosworth
Incorporated ("Dain Bosworth") and Rauscher Pierce Refsnes, Inc.
("Rauscher Pierce Refsnes") were merged and renamed Dain Rauscher
Incorporated.  The Company's third broker-dealer, Interra
Clearing Services Inc. ("Clearing"), was also merged with Dain
Rauscher on March 2, 1998. Between the time of its formation in
1973 and February 1997, the Company was known as Inter-Regional
Financial Group, Inc.

On February 9, 1998, the Company announced that it had entered
into an agreement to acquire Wessels, Arnold & Henderson, LLC, a
privately held investment banking and institutional equity sales
and trading firm based in Minneapolis. The transaction will be
accounted for as a purchase and is expected to be completed on
March 31, 1998, pending regulatory approval.  The transaction is
expected to significantly increase Dain Rauscher's equity capital
markets capabilities (see Management's Discussion and Analysis of
Financial Condition and Results of Operations).

  (b)  Financial Information About Industry Segments

  The Company, as of January 1, 1998, operates in a single
segment, the securities broker-dealer and investment banking
business.

The following table lists the Company's revenues by source for
the last three years.  Because these classes of services use the
same distribution personnel, facilities and support services, it
is impractical to identify the cost, expenses and profitability
of each class of service.

<TABLE>
                    Dain Rauscher Corporation
                       Revenues by Source
                     (Dollars in thousands)

<CAPTION>
                                            Year Ended December 31,
                         -----------------------------------------------------------
                                1997               1996              1995
                         ------------------- ------------------- -------------------
                          Amount Percentage   Amount Percentage   Amount Percentage
                         ------- ----------- ------- ----------- ------- -----------
<S>                      <C>        <C>      <C>        <C>      <C>       <C>
Commissions:
 Listed securities       $113,426   15.1%   $ 87,862    12.9%    $ 79,634  13.1%
 Mutual funds              81,160   10.8      62,679     9.2       45,198   7.4
 Over-the-counter
  securities               47,958    6.4      46,845     6.8       29,507   4.9
 Insurance and annuity
  products                 20,782    2.8      15,399     2.2       12,703   2.1
 Options                    8,383    1.1       7,065     1.0        5,845   1.0
 Commodities and other      3,138    0.4       3,234     0.5        3,100   0.5
                          -------   ----     -------    ----      -------  ----
  Total                   274,847   36.6     223,084    32.6      175,987  29.0
                          -------   ----     -------    ----      -------  ----
Principal Transactions:
 Equity securities         75,699   10.1      89,251    13.1       87,381  14.4
 Municipal securities      32,100    4.3      29,451     4.3       33,245   5.5
 Government securities     19,289    2.6      20,826     3.0       27,021   4.4
 Corporate fixed income
  securities               15,483    2.1      20,371     3.0       20,025   3.3
 Mortgage-backed and other  9,579    1.2       9,141     1.3       11,508   1.9
                          -------   ----     -------    ----      -------  ----
  Total                   152,150   20.3     169,040    24.7      179,180  29.5
                          -------   ----     -------    ----      -------  ----

Investment Banking and
 Underwriting:
 Corporate                 69,532    9.3      67,749     9.9       44,432   7.3
 Municipal                 40,377    5.4      41,211     6.0       42,262   7.0
 Other                      1,371    0.1       2,431     0.4        3,069   0.5
                          -------   ----     -------    ----       ------  ----
  Total                   111,280   14.8     111,391    16.3       89,763  14.8
                          -------   ----     -------    ----       ------  ----
Interest:
 Customer margin accounts  78,945   10.5      66,770     9.8       55,603   9.2
 Trading inventories and
  other                    28,705    3.8      28,250     4.1       30,596   5.0
 Deposits and short-term
  investments              14,842    2.0      15,531     2.3       23,194   3.8
                          -------   ----     -------    ----      -------  ----
  Total                   122,492   16.3     110,551    16.2      109,393  18.0
                          -------   ----     -------    ----      -------  ----
Asset Management:
 Individual and
 institutional accounts    28,763    3.8      21,697     3.2       16,521   2.7
 Money market funds        17,466    2.4      13,821     2.0        9,972   1.7
 Other mutual funds            75    0.0         372     0.1          595   0.1
  Total                    46,304    6.2      35,890     5.3       27,088   4.5
                          -------   ----     -------    ----      -------  ----
Correspondent Clearing     19,827    2.6      15,806     2.3       12,484   2.1

Other                      23,775    3.2      17,554     2.6       12,852   2.1
                          -------  -----     -------   -----      ------- -----
  Total revenues         $750,675  100.0%   $683,316   100.0%    $606,747 100.0%
                          =======  =====     =======   =====      ======= =====
</TABLE>

(c)  Narrative Description of Business

Securities Business

  General.  The securities broker-dealer and investment banking
activities of the Company are conducted through Dain Rauscher
Incorporated.  Dain Rauscher deals in securities of and is a
market-maker for entities based throughout the United States.  In
general research and investment banking activities are
concentrated on entities based in the regions in which the
Company does business, though equity research and investment
banking activities, in the last two years, have been increasingly
industry, rather than geographically, focused.  At December 31,
1997, Dain Bosworth had 835 retail sales representatives and 87
institutional sales representatives in 68 offices located in 19
states and Rauscher Pierce Refsnes had 317 retail sales
representatives and 31 institutional sales representatives in 28
offices located in 10 states.  The firm is a member firm of the
New York Stock Exchange, Inc. ("NYSE") and is registered in the
NASDAQ system as a market maker.  At December 31, 1997, Dain
Bosworth was registered as a market maker for 290 companies and
Rauscher Pierce Refsnes was registered as a market maker for 236
companies.

  Dain Rauscher's operating results are sensitive to many factors
outside the control of the Company, including the general
volatility of securities prices and interest rates, trading
volume of securities, income and capital gains tax legislation
and demand for investment banking services.  Economic conditions
in the regions in which Dain Rauscher operates also affect
operating results.

  Commissions.  As a securities broker, Dain Rauscher acts as an
agent in the purchase and sale of securities, options,
commodities and futures contracts traded on various securities
and commodities exchanges or in the over-the-counter ("OTC")
market.  Dain Rauscher charges a brokerage commission when acting
as an agent for the purchaser or seller of a security.  If the
security is listed on an exchange, the transaction is generally
effected through Dain Rauscher's own floor broker.  If the
security is traded in the OTC market, transactions are generally
effected with a market maker in the security.  In addition, Dain
Rauscher also earns commissions from transactions involving many
other financial products including mutual funds.  Dain Rauscher's
commissions are derived primarily from individual investors.
However, commission revenues from institutional investors have
increased in recent years and the Company is investing resources
to more fully develop its institutional business, including the
pending March 31, 1998, acquisition of Wessels, Arnold &
Henderson, LLC.

  Principal Transactions.  Dain Rauscher is a dealer in
corporate, tax-exempt and governmental fixed income securities
and equity securities and recognizes profits or losses on
transactions in, or fluctuations in the value of, such securities
held in inventory.  While most of the Company's principal
transactions are executed to facilitate retail and institutional
customer trades, Dain Rauscher also maintains certain inventory
positions for its own account.  These positions typically include
U. S. government or U. S. government agency securities and are
usually hedged with a combination of short sales of similar
securities, financial futures or option contracts in order to
mitigate market and interest rate risk.

  These inventories require the commitment of substantial capital
and expose the Company to the risk of a loss if market prices of
the securities held in inventory decrease.  General market
conditions, interest rates and the financial prospects for
issuers of such securities may affect the market prices of
securities held in inventory.  Internal guidelines intended to
limit the size and risk of inventories maintained have been
established and are reviewed periodically.

  Investment Banking and Underwriting Activities.  Dain Rauscher
earns investment banking revenues by assisting clients in
planning to meet their financial needs and advising them on the
most advantageous means of raising capital.  Such plans are
sometimes implemented by managing or co-managing public offerings
of securities or by arranging private placements of securities
with institutional or individual investors.  The syndicate
department coordinates the distribution of managed and co-managed
corporate equity underwritings, accepts invitations to
participate in competitive or negotiated underwritings managed by
other investment banking firms, and allocates and merchandises
Dain Rauscher's selling allotments to its branch office system,
to institutional clients and to other broker-dealers.  The
Company is also among the leaders in its geographic regions in
the origination, syndication and distribution of securities of
municipalities, state and local agencies, health care
organizations and financial institutions.  Participation in
underwritings can expose the Company to material risk, since the
possibility exists that securities it has committed to purchase
cannot be sold at the initial offering price.  Federal and state
securities laws and regulations also affect the activities of
underwriters and impose substantial potential liabilities for
violations in connection with sales of securities by underwriters
to the public.  In addition to public offerings and private
placements, Dain Rauscher provides other consulting services,
including providing valuations of securities and companies,
arranging and evaluating mergers and acquisitions and advising
clients with respect to financing plans and related matters.

Customer Financing.  A significant portion of Dain Rauscher's'
profitability is derived from net interest income, the major
portion of which relates to customer balances.  Customer
transactions are effected on either a cash or margin basis.
Purchases on a cash basis require full payment by the designated
settlement date, generally the third business day following the
transaction date.  Dain Rauscher carries all customer balances
including those of the introducing correspondent firms serviced
by RPR Clearing and allocates interest income and expense related
to customers, as well as uncollectible amounts due from
customers, back to Dain Rauscher and to such introducing
correspondent firms.  Dain Rauscher is at risk in the event a
customer fails to settle a trade and the value of the securities
declines subsequent to the transaction date. When a purchase is
made on a margin basis, Dain Rauscher extends credit to the
customer for a portion of the purchase price.  The amount of the
loan is subject to margin regulations of the Federal Reserve
Board, the NYSE and the internal policies of Dain Rauscher, which
are generally more stringent than applicable rules and
regulations.  In permitting customers to purchase on margin, Dain
Rauscher takes the risk that a market decline could reduce the
value of the collateral securing the margin loan below the amount
of the customer's indebtedness and that the customer might be
unable to repay.  Interest is charged at a floating rate based on
amounts borrowed by customers to finance purchases on margin.
The rate charged is dependent on the average net debit balance in
the customer's accounts, the activity level in the accounts and
the applicable cost of funds.

Customers will at times accumulate credit balances in their
accounts.  Such balances result from payment of dividends,
interest or principal on securities held for such customers, from
funds received in connection with sales of a customer's
securities and from cash deposits made by customers pending
investment.  Pending investment of such funds or reimbursement
upon the customer's request, Dain Rauscher pays interest on those
credit balances.  Available credit balances are used to lend
funds to Dain Rauscher  customers purchasing securities on
margin.  Excess customer credit balances are invested in short-
term securities in accordance with applicable regulations and are
segregated for the exclusive benefit of customers.  Dain Rauscher
generates net interest income from the positive interest rate
spread between the rate earned from margin lending and
alternative short-term investments and the rate paid on customer
credit balances.

Dain Rauscher is a member of the Securities Investor Protection
Corporation ("SIPC"), which insures customer accounts up to
specified limits in the event of liquidation.  Also, the Company
maintains additional coverage in order to protect customer
accounts to specified amounts in excess of SIPC coverage.

Security Repurchase Activities.  Dain Rauscher acts as principal
in the purchase and sale to its customers of securities of the
United States government and its agencies, including repurchase
agreements in such securities and certain other money market
instruments.  Dain Rauscher may match purchases and sales of
these securities and is at risk to the extent that it does not
properly match the contracts or its customers are unable to meet
their obligations, especially during periods of rapidly changing
interest rates and fluctuations in market conditions.  All
positions are collateralized.  Dain Rauscher generally takes
physical possession of securities purchased under agreements to
resell.  Such agreements provide Dain Rauscher with the right to
maintain the relationship between the market value of the
collateral and the receivable.  Typically, these contracts are
entered into only with clients of substantial size and who are
believed to be credit-worthy.  Dain Rauscher also utilizes
securities sold under repurchase agreements as a means of
financing portions of its trading inventories.

Securities Lending and Borrowing Activities.  Securities brokers
and dealers, including Dain Rauscher, borrow securities from and
lend securities to other brokers and dealers to facilitate short
sales and clearance and delivery of securities sold by customers
when such customers fail to deliver securities prior to
settlement date.  Dain Rauscher also will act as a conduit by
arranging securities lending transactions between brokers and
utilize available securities as collateral for short-term loans.
When such transactions occur, the lending broker provides excess
customer margin securities to the borrowing broker in return for
a cash deposit that is generally equivalent to 102 percent of the
market value of the securities loaned.  Both the lending and
borrowing brokers have the right to mark the securities to market
in order to maintain the relationship between the market value of
the securities loaned and the cash collateral deposited.  When
the securities are no longer needed by the borrowing firm, they
are returned to the lending broker, which returns the cash
deposit held, plus interest, to the borrowing broker.  When
engaging in such securities lending and borrowing activities,
Dain Rauscher collects cash deposits from brokers that
collateralize the securities loaned, invests the cash deposit and
profits from the spread between the interest rate paid to the
borrowing broker on the cash deposit and the rate earned by Dain
Rauscher.  In all securities lending transactions, Dain Rauscher
is at risk to the extent that it does not maintain the
relationship between the market value of securities loaned and
the value of the cash deposit held.  Dain Rauscher is also at
risk to the extent that securities it borrows decline in value
and the lending broker fails to return Dain Rauscher's cash
deposit.

Research Activities.  Dain Rauscher  has a research department
which provides analysis, investment recommendations and market
information with an emphasis on companies located in its regions.
At December 31, 1997, Dain Bosworth had 23 securities analysts
and Rauscher Pierce Refsnes had 16.  The Company also purchases
certain research products from independent research organizations
to supplement its internal research activities.

Regulation.  The securities industry is subject to comprehensive
regulation by federal and state governments, the various
securities and commodities exchanges and other self-regulatory
bodies.  The regulations cover all aspects of the securities
business including sales practices, registration and distribution
of securities, trade practices among broker-dealers, transactions
with affiliates, conflicts of interest, uses and safekeeping of
customers' funds and securities, capital levels of securities
firms, record keeping and the conduct of employees.  Violations
of these rules and regulations can result in censure, fines,
suspensions, revocation of the right to do business and private
rights of action for damages.  Dain Rauscher believes it has
operated in compliance with applicable rules and regulations in
all material respects.

Uniform Net Capital Rule.  As a broker-dealer and member firm of
the NYSE, Dain Rauscher is subject to the Uniform Net Capital
Rule (the "Rule") promulgated by the Securities and Exchange
Commission ("SEC").  The Rule is designed to measure the general
financial integrity and liquidity of a broker-dealer and the
minimum net capital deemed necessary to meet the broker-dealer's
continuing commitments to its customers.  The Rule provides for
two methods of computing net capital.  Dain Rauscher currently
uses what is generally referred to as the alternative method.
Minimum net capital is defined under this method to be equal to 2
percent of customer debit balances, as defined.  The NYSE may
also require a member organization to reduce its business if net
capital is less than 4 percent of such aggregate debit items and
may prohibit a member firm from expanding its business and
declaring cash dividends if its regulatory net capital is less
than 5 percent of such aggregate debit items.  In computing net
capital, various adjustments are made to exclude assets which are
not readily convertible into cash and to provide a conservative
valuation of other assets such as trading securities.  Failure to
maintain the required net capital may subject a firm to
suspension or expulsion by the NYSE, the SEC and other regulatory
bodies and may ultimately require its liquidation.  At all times,
Dain Rauscher has maintained its net capital above the required
levels.  See Note K to "Consolidated Financial Statements."

Clearing Services

  RPR Clearing is in the business of marketing correspondent
clearing services provided on a fully disclosed basis by Dain
Rauscher.  As of December 31, 1997, the Company provided clearing
services to 173 correspondent firms introduced through RPR
Clearing and one correspondent firm introduced through Dain
Bosworth.  Correspondent firms are charged fees based on their
use of services.

Money Management and Other Services

Insight Management is a registered investment advisor that was
restructured in January 1998 to provide solely fixed income
portfolio management services to the Great Hall Investment Funds,
Inc. ("Great Hall") and to individual and institutional clients.
Great Hall is an open-end investment company that currently
offers shares in four series, each of which is, in essence, a
separate money market mutual fund.  In 1996 and 1997, this
business unit supported all mutual fund, cash management and
externally managed products and services.  Such functions, along
with data processing, technology services, and trade clearance
and settlement were transferred in 1998 to Dain Rauscher's newly
formed Business Services Group.

Competition

Dain Rauscher encounters intense competition in its business and
competes directly with numerous firms, many of which have
substantially greater capital and other resources.  The Company
also encounters competition from banks, insurance companies and
financial institutions in many elements of its business.  For
example, with the prior approval of the Federal Reserve Board,
securities subsidiaries of bank holding companies may now
underwrite and deal in corporate debt and equity securities,
provided that they comply with certain "firewalls" and that the
revenues from such activities do not exceed 25 percent of the
securities subsidiary's total revenues.  Legislative proposals
also under consideration would eliminate this limit on such
activities and would permit commercial banks, bank holding
companies and their subsidiaries and affiliates to offer
additional services which have traditionally been provided only
by securities and money management firms.

During 1997, a number of banks acquired securities firms and, in
so doing, gained unprecedented entry into the securities
industry.  While the effect of such acquisitions cannot yet be
determined, they have brought entirely new sources of capital
into the securities industry, resulting in more formidable
competitors for the Company.

Additionally, competition among securities firms and other
competitors for successful sales representatives, securities
traders, securities analysts and investment bankers is intense
and continuous.

Dain Rauscher competes with other securities firms and with
banks, insurance companies and other financial institutions
principally on the basis of service, product selection, price,
location and reputation in local markets.  Dain Rauscher operates
at a price disadvantage to discount brokerage firms that do not
offer equivalent services.

RPR Clearing competes for the business of introducing
correspondent brokers on the basis of service, price, technology,
product selection and reputation.

Insight Management competes with other fixed income portfolio
managers principally on the basis of portfolio performance, price
and service.

Employees

At December 31, 1997, the Company had approximately 3,600 full-
time employees.  None of the Company's employees is represented
by a collective bargaining unit.

ITEM 2. PROPERTIES:

The headquarters and administrative offices of the Company are
presently located in three buildings in downtown Minneapolis,
Minnesota, including the Dain Rauscher Plaza.  Two of those
locations contain its back office and data processing operations.
The Company also occupies significant space under lease in
Dallas, Texas.  Dain Rauscher has an extensive branch office
system utilizing leased office space in various locations
throughout its regions. The Company believes that its facilities
are suitable and adequate to meet its needs and that such
facilities have sufficient productive capacity and are
appropriately utilized.

Further information about the lease obligations of the Company is
provided in Note I to the "Consolidated Financial Statements."

ITEM 3. LEGAL PROCEEDINGS:

  The Company and/or its securities subsidiaries are or have been
threatened to be made defendants in various actions, suits and
proceedings before a court or arbitrator or by a governmental
agency.  Such matters involve alleged violations of federal and
state securities laws and other laws.  Certain of these actions,
including certain of the actions described in more detail below,
claim substantial damages and, if determined adversely to the
Company and/or its subsidiaries, could have a material adverse
effect on the consolidated financial condition or results of
operations of the Company.   While the outcome of any litigation
is uncertain, management, based in part upon consultation with
legal counsel, believes that the resolution of all matters
pending or threatened against the Company and its subsidiaries
will not have a material adverse effect on the consolidated
financial condition or results of operations of the Company as
set forth in the consolidated financial statements contained
herein.

Midwest Life Insurance Litigation

  The Company and Dain Bosworth have been named as defendants in
eleven actions brought in connection with losses suffered under
single premium deferred annuities issued by Midwest Life
Insurance Company ("MWL"), a former subsidiary acquired by the
Company in 1980 and sold by it in early 1986.  Such annuities
were sold primarily through the private client sales force of
Dain Bosworth.  MWL, which was sold two times subsequent to its
sale by the Company in 1986 and was relocated from Nebraska to
Louisiana by the final owners, Southshore Holding Corp., was
declared insolvent and ordered liquidated by the State of
Louisiana in August 1991.  Generally, MWL policyholders have been
reimbursed for their losses up to $100,000 per holder by the
state guaranty associations, and the policyholders and state
guaranty associations, between them, have received approximately
$.30 for each $1.00 of loss in liquidation payments from the
liquidator of MWL's estate.

  The plaintiffs (or real parties in interest) in the first ten
of these cases are the Life and Health Guaranty Associations of
each of Colorado, Iowa, Minnesota, Montana, Nebraska, North
Dakota, Oregon, South Dakota, Washington and Wyoming, which claim
to have succeeded to the rights of policyholders they reimbursed
for MWL losses, and/or certain individual policyholders.  The
plaintiff in the eleventh action is the liquidator of MWL's
estate.  The plaintiff guaranty associations and individuals seek
to recover in excess of $64 million in compensatory damages, as
well as punitive damages, interest, costs, attorneys' fees and
other relief.  The liquidator of MWL's estate also seeks to
recover treble damages.

  Colorado Action

    The first of these actions,  Karsian, et al. v. Inter-
Regional Financial Group, Inc., and Dain Bosworth Incorporated,
is pending in the United States District Court for the District
of Colorado.  This action was initially brought in August 1993 as
a purported class action, but the court has since held that there
are no proper class claims.  The 232 individual plaintiffs in
this action seek approximately $10.7 million in compensatory
damages, as well as punitive damages, damages for emotional
distress, costs, prejudgment interest and attorneys' fees.  In
Colorado, unlike other states, no guaranty association coverage
was in place at the time MWL became insolvent.  Although such
coverage was adopted in 1994 as a result of Dain Bosworth's
lobbying efforts and each of the policyholders was reimbursed for
his or her losses up to $100,000 plus accrued interest,  many of
the policyholders had already filed suit.  The plaintiffs in this
case allege common law fraud, breach of fiduciary duty,
negligence and negligent misrepresentation.

    In July 1997, a Colorado jury returned a verdict awarding 12
of the 232 plaintiffs damages of $4.75 million, including $1.3
million in compensatory damages, $1.65 million in emotional
distress damages and $1.8 million in punitive damages, for breach
of fiduciary duty, negligent performance of an assumed duty to
monitor and advise as to the safety of their MWL annuity
contracts, negligent misrepresentation, deceit based on
fraudulent misrepresentation and fraudulent concealment.  In
addition, the court entered judgment for prejudgment interest of
approximately $1.5 million.

    The Company and Dain Bosworth filed post-trial motions
seeking to have the judgment in favor of these plaintiffs set
aside; such motions were denied.  The Company and Dain Bosworth
have appealed.  The Company believes that the trial court erred
by, among other things, withholding key evidence from the jury,
including evidence concerning Dain Bosworth's efforts to obtain
guaranty association coverage for plaintiffs' losses and evidence
concerning the reimbursements plaintiffs received for their
losses.

  Washington Action

    A second of these actions, Washington Life and Health
Insurance Guaranty Ass'n v. Inter-Regional Financial Group, Inc.
and Dain Bosworth Incorporated,  brought in April 1995, was tried
in the Washington Superior Court for King County in October and
November 1997.  Plaintiffs in this action allege similar claims
to the Colorado action.  A mistrial was declared when the jury
was unable to reach a verdict.  Retrial is scheduled for April
1998.  Plaintiffs in this action seek approximately $2.1 million
in compensatory damages, in addition to prejudgment interest,
costs and attorneys' fees.

  Other Guarantee Association Cases

    The other eight guarantee association and individual actions
were also brought in April and May of 1995 and allege similar
claims to the Colorado action.  In certain states, the plaintiffs
also allege intentional infliction of economic harm, interference
with contractual relations and/or aiding and abetting the
breaches of duty by the final sets of owners of MWL.  Seven of
such actions are captioned and pending as follows, and the
plaintiffs in each action seek the amount of compensatory damages
indicated in parentheses:

Iowa Life and Health Insurance Guaranty Ass'n v. Inter-Regional
Financial Group, Inc. and Dain Bosworth Incorporated  (Iowa Dist.
Ct., Polk County) ($5.7 million)

C. Randolph, L. Schnobrich, V. Troumbly, P. Dumke, E. Davis and
Minnesota Life and Health Insurance Guaranty Ass'n v. Inter-
Regional Financial Group, Inc. and Dain Bosworth Incorporated
(Hennepin County, Minnesota Dist. Ct.) ($23.4 million)

Montana Life and Health Insurance Guaranty Ass'n v. Inter-
Regional Financial Group, Inc. and Dain Bosworth Incorporated,
(Montana First Judicial Court, Lewis & Clark County) ($3.4
million)

Nebraska Life and Health Insurance Guaranty Ass'n v. Inter-
Regional Financial Group, Inc. and Dain Bosworth Incorporated,
(Nebraska Dist. Ct., Lancaster County) ($2.8 million)

North Dakota Life and Health Insurance Guaranty Ass'n v. Inter-
Regional Financial Group, Inc. and Dain Bosworth Incorporated,
(District Court, Cass County, North Dakota) ($2.1 million)

South Dakota Life and Health Insurance Guaranty Ass'n v. Inter-
Regional Financial Group, Inc. and Dain Bosworth Incorporated,
(South Dakota Second Judicial Circuit, Minnehaha County) ($1.5
million)

Wyoming Life and Health Insurance Guaranty Ass'n v. Inter-
Regional Financial Group, Inc. and Dain Bosworth Incorporated,
(Wyoming District Court for Laramie County) ($2.7 million)

The eighth such guarantee association action, Oregon Life and
Health Insurance Guaranty Ass'n v. Inter-Regional Financial
Group, Inc. and Dain Bosworth Incorporated, was filed in the
Oregon Circuit Court of Multnomah County and sought approximately
$500,000 in damages.  Such action was dismissed in October 1996
following a partial summary judgment ruling in favor of the
Company on statute of limitations grounds.  Plaintiff  has
appealed such ruling.

  MWL Liquidator Action

    The eleventh action, captioned John A. Dixon, Jr., as
Commissioner of Insurance Ad Hoc, for the State of Louisiana v.
The Midwest Life Insurance Company/Midwest Life Insurance
Company, in Liquidation v. Interra Financial Incorporated, Dain
Bosworth Incorporated and the Central National Life Insurance
Company of Omaha, was brought in June 1997 in the Nineteenth
Judicial District Court of the State of Louisiana.  The case has
since been removed to the United States District Court for the
Middle District of Louisiana.  In this action, the liquidator of
the MWL estate alleges RICO violations, breach of fiduciary duty
and conspiracy to breach fiduciary duty, and is seeking to
recover in excess of $59 million in compensatory damages, treble
damages, interest, costs, attorneys' fees and other relief.  The
plaintiff challenges certain coinsurance transactions entered
into by MWL and Central National Life Insurance Company beginning
in 1980.  By Louisiana statute, the compensatory damages sought
in this case would in large part be distributed to the insurance
guaranty associations and individual policyholders who are
plaintiffs or real parties in interest in the ten actions
described above.

  The Company and Dain Rauscher, as successor to Dain Bosworth,
believe that they have substantial and meritorious defenses
available in all of the foregoing actions and they are defending
themselves vigorously in such actions.

Federal Deposit Insurance Corporation Litigation

  Rauscher Pierce Refsnes and one of its executives were named as
defendants in an action captioned Federal Deposit Insurance
Corporation, as receiver for Western Savings & Loan Association,
F.A. vs. Express America Holdings Corporation; Smith Barney
Harris Upham & Co.; Rauscher Pierce Refsnes, Inc., et al.   This
action was brought in the U.S. District Court in Phoenix, Arizona
in December 1995 by The Resolution Trust Corporation (the "RTC")
and arose out of the RTC's sale through an auction process
conducted in the fall of 1990 of the stock of WESAV Mortgage
Corporation ("WESAV"), a subsidiary of Western Savings & Loan
Association, F.A.   Rauscher Pierce Refsnes acted as broker for
the sale and Smith Barney Harris Upham & Co. ("Smith Barney")
acted as the RTC's financial advisor.  WESAV was eventually sold
to First Western Partners, the predecessor to Express America
Holdings Corporation ("Express America"),  in May 1991 for a
gross acquisition price of approximately $45 million, including
the assumption of approximately $19 million in liabilities. The
RTC alleged that Rauscher Pierce Refsnes, as broker, improperly
favored Express America over other allegedly higher bidders, and
that Rauscher Pierce Refsnes and Smith Barney committed fraud in
connection with the auction and sale, were negligent in their
analysis and communication of bids to the RTC, and breached their
contracts with and fiduciary duties to the RTC.  The RTC also
named as defendants in the action Express America's chief
executive officer and chief financial officer, the former chief
executive officer and former chief financial officer of WESAV,
and certain other individuals.  It alleged such officers of
Express America and WESAV were guilty of mismanagement between
the conclusion of the auction process and closing of the sale.
The Federal Deposit Insurance Corporation ("FDIC"), which became
the plaintiff in this action when the RTC was merged into it
effective January 1, 1996, has settled  with Smith Barney and the
Express America and WESAV defendants.  The FDIC seeks
compensatory damages of approximately $15 million and punitive
damages of $60 million, along with interest, costs and other
relief.  Defendants' motions to dismiss the case on the face of
the complaint were denied in August 1996.  Dain Rauscher, as
successor to Rauscher Pierce Refsnes, believes that it has
substantial and meritorious defenses available, and is defending
itself vigorously in this action.

Orange County Related Claims

Orange County Bankruptcy Litigation

  Rauscher Pierce Refsnes was also named in an adversary
proceeding commenced by the County of Orange (the "County"),
captioned County of Orange, a political subdivision of the State
of California v. Rauscher Pierce Refsnes, Inc., a corporation and
filed in the Chapter 9 proceeding entitled In re County of
Orange, a political subdivision of the State of California in the
United States Bankruptcy Court for the Central District of
California.  The case was filed in June 1996 simultaneously with
the filing of adversary proceedings against Morgan Stanley & Co.,
Inc., Student Loan Marketing Association ("Sallie Mae"), LeBouef,
Lamb, Greene & MacRae, and McGraw-Hill Companies, Inc. d/b/a
Standard & Poors.  Previously, the County had filed adversary
proceedings against Merrill Lynch & Co., Inc. and KPMG Peat
Marwick LLP, and in September 1996 the county filed an adversary
proceeding against Fuji Securities Inc.  In each of these
proceedings, the County seeks at least $500 million in losses
allegedly incurred in the Orange County Investment Pool ("OCIP")
except that it seeks a lesser amount (approximately $120 million)
from Fuji.  All of the foregoing proceedings have been
transferred from the bankruptcy court to the United States
District Court for the Central District of California upon the
request of Rauscher Pierce Refsnes and other defendants.  The
County has brought similar proceedings against over 30 other
defendants which are subject to a stay.

  The County alleges that Rauscher Pierce Refsnes was a financial
advisor on five note offerings by the County that took place in
June through August of 1994, for an aggregate of $975 million,
including an offering of $600 million in taxable one-year notes
in July 1994.  The County alleges that by failing to apprise the
County of the risks involved in the OCIP and in the County's 1994
note offering program, and by failing to prevent the issuance of
allegedly inaccurate official statements, Rauscher Pierce Refsnes
became liable for breach of contract, professional negligence,
breach of fiduciary duty and aiding and abetting breaches of
fiduciary duty committed by the County Treasurer and Assistant
Treasurer.  Dain Rauscher, as successor to Rauscher Pierce
Refsnes, denies these allegations, including those relating to
Rauscher's role in connection with these transactions.  In each
of the five transactions in question, Rauscher Pierce Refsnes was
retained solely to determine whether the underwriter's spread
(including the portion to be received by the financial and
marketing specialist) and proposed interest rate were
appropriate.  Dain Rauscher, as successor to Rauscher Pierce
Refsnes, believes it has substantial and meritorious defenses
available and is defending itself vigorously in this action.

    Threatened SEC Proceeding

  During second quarter 1997, the SEC authorized an action
against Rauscher Pierce Refsnes and one current and one former
employee for alleged violation of certain antifraud provisions
under the Securities Act of 1933 and the Securities Exchange Act
of 1934 in connection with an additional 12 taxable one-year note
offerings for an aggregate of $580 million and one pooled Tax and
Revenue Anticipation Note offering for $300 million.  The
offerings were made by certain school districts and cities during
1993 and 1994 and the proceeds were invested in the OCIP.
Rauscher Pierce Refsnes acted either as underwriter or financial
advisor in connection with each of these transactions.  The SEC
has indicated that it intends to file this action in the United
States District Court for the Central District of California and
to seek injunctive and other ancillary relief.  It is not clear
at this time when the SEC will file this threatened action.  Dain
Rauscher, as successor to Rauscher Pierce Refsnes, is engaged in
discussions with the SEC in a effort to resolve this matter on
satisfactory terms prior to or in lieu of the filing of a federal
complaint.  If an action is brought,  Dain Rauscher believes that
it has substantial and meritorious defenses available and intends
to defend itself vigorously in such action.

SEC Proceeding Concerning State of Arizona Refunding Transaction

  In January 1998, the SEC filed a proceeding captioned,
Securities and Exchange Commission v. Rauscher Pierce Refsnes,
Inc. and James Feltham, in United States District Court in
Phoenix, Arizona, against Rauscher Pierce Refsnes and a former
employee seeking injunctive and other ancillary relief.  The
complaint alleges violation of the antifraud provisions under the
Securities Act of 1933, the Securities Exchange Act of 1934 and
the Investment Advisors Act of 1940 in connection with a $130
million refunding issue by the State of Arizona in 1992, on which
Rauscher Pierce Refsnes served as financial advisor.   Rauscher
Pierce Refsnes purchased government securities and sold them to
the escrow trustee in the transaction at a markup of
approximately 0.55 percent of their cost to Rauscher Pierce
Refsnes.  The SEC alleges that Rauscher Pierce Refsnes had an
obligation to disclose, but failed to disclose, that it purchased
and sold the government securities as a principal, that it
expected to make a profit, and the amount of the profit.  The SEC
also alleges that the markup was excessive and that Rauscher
Pierce Refsnes falsely represented that the securities were sold
to the trustee at fair market value.  Dain Rauscher, as successor
to Rauscher Pierce Refsnes, believes that it has substantial and
meritorious defenses available and intends to defend itself
vigorously in this action.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:

  No matters were submitted to a vote of security holders during
the fourth quarter ended December 31, 1997.

EXECUTIVE OFFICERS OF THE REGISTRANT

  The following officers have been designated by the Board of
Directors of the Company as its current "executive officers" for
SEC reporting purposes.  All officers are generally elected
annually at the Board meeting held in conjunction with the
Company's annual stockholders meeting and hold such offices until
the following year, subject to their earlier death, resignation
or removal.

<TABLE>
<CAPTION>
                               Principal Occupation and
                                 Business Experience
Name              Age          for the Past Five Years
----              ---         ------------------------
<S>               <C>  <C>
John C. Appel     49   Vice Chairman and Chief Financial Officer,
                       Dain Rauscher Corporation, since October
                       1997.  Vice Chairman and Chief Financial
                       Officer, Dain Rauscher Incorporated, since
                       January 1998.  Chief Executive Officer,
                       Dain Bosworth, February 1997 to December
                       1997; President, Dain Bosworth, 1994 to
                       December 1997.  Executive Vice President,
                       Dain Rauscher Corporation, 1990 to
                       December 1997; Director, Dain Rauscher
                       Corporation, since 1995.  Executive Vice
                       President and Chief Financial Officer,
                       Dain Bosworth, 1990 to 1994.  Senior Vice
                       President, Dain Rauscher Corporation, 1986
                       to 1990; Chief Financial Officer, Dain
                       Rauscher Corporation, 1986 to 1994.
                       Member of Dain Rauscher Corporation
                       Executive Committee.

Nelson D.         52   Senior Executive Vice President, Fixed
 Civello               Income Capital Markets, Dain Rauscher
                       Incorporated, since October 1997.  Senior
                       Executive Vice President, Dain Rauscher
                       Corporation, since October 1997.
                       Executive Vice President, Fixed Income
                       Group, Dain Bosworth, 1990 to December
                       1997.  Prior to 1990, Executive Vice
                       President, Capital Markets Group, US
                       Bancorp.  Member of the Dain Rauscher
                       Corporation Executive Committee.

B.J. French       61   Senior Vice President, Dain Rauscher
                       Corporation, since May 1996.  Senior Vice
                       President, Dain Rauscher Incorporated,
                       since January  1998.  Director of
                       Corporate and Investor Communications,
                       Dain Rauscher Corporation, since 1991;
                       Vice President, Dain Rauscher Corporation,
                       1991 to May 1996.  Director of Corporate
                       Communications and Investor Relations,
                       Tonka Corporation, 1989 to 1991.

William A.        53   Vice Chairman, Dain Rauscher Corporation,
 Johnstone             since October 1997.  Vice Chairman, Equity
                       Capital Markets, Dain Rauscher
                       Incorporated, since January 1998.
                       President and Chief Executive Officer,
                       Rauscher Pierce Refsnes, June 1996 to
                       December 1997.  Executive Vice President,
                       Dain Rauscher Corporation, 1996 to
                       October 1997; Director, Dain Rauscher
                       Corporation, since June 1996.  Partner,
                       Dorsey & Whitney, LLP, 1975 to 1996;
                       Member, Dorsey & Whitney, LLP, Management
                       Committee from 1988 to 1996.  Member of
                       Dain Rauscher Corporation Executive
                       Committee.

Carla J. Smith    40   Senior Vice President, Dain Rauscher
                       Corporation, since 1994; General Counsel
                       and Secretary, Dain Rauscher Corporation,
                       since 1991.  Senior Vice President,
                       General Counsel and Secretary, Dain
                       Rauscher Incorporated, since January 1998.
                       Prior to 1991, Partner, Dorsey & Whitney,
                       LLP.

J. Scott Spiker   42   Senior Executive Vice President, Business
                       Services Group, Dain Rauscher
                       Incorporated, since January 1998.  Senior
                       Executive Vice President, Dain Rauscher
                       Corporation, since October 1997.
                       Chairman of the Board and Chief Executive
                       Officer, Insight Investment Management,
                       Inc., since January 1998.  President and
                       Chief Executive Officer, Interra Advisory
                       Services Inc., 1995 to December 1997.
                       Executive Vice President, Dain Rauscher
                       Corporation, May 1996 to October 1997;
                       Senior Vice President, Director of
                       Strategic Planning and Corporate
                       Development, Dain Rauscher Corporation,
                       1994 and 1995.  Senior Vice President,
                       Manager Employee Benefit Services, Norwest
                       Bank Minnesota, N.A., 1989 to 1994.  Vice
                       President, Strategic Planning and
                       Acquisitions, Norwest Corporation, 1987 to
                       1989.  Member of Dain Rauscher Corporation
                       Executive Committee.

Douglas J.        52   Senior Vice President, Dain Rauscher
 Strachan              Corporation, since 1997.  Chief
                       Information Officer, Dain Rauscher
                       Corporation, since 1996.  Senior Vice
                       President and Director, Information
                       Sytems, Dain Rauscher Corporation, since
                       1993.  Prior to 1993, Senior Vice
                       President, Business Technology, US
                       Bancorp.

Ronald A.         56   Senior Executive Vice President, Private
 Tschetter             Client Group, Dain Rauscher Incorporated,
                       since October 1997.  Senior Executive Vice
                       President, Dain Rauscher Corporation,
                       since October 1997.  Executive Vice
                       President, Private Client Group, Dain
                       Bosworth, 1991 to December 1997.  Member
                       of the Dain Rauscher Corporation Executive
                       Committee.

Irving Weiser     50   Chairman of the Board, Dain Rauscher
                       Corporation, since 1995; Chief Executive
                       Officer, Dain Rauscher Corporation, since
                       1990; President and Director, Dain
                       Rauscher Corporation, since 1985.
                       Chairman of the Board and Chief Executive
                       Officer, Dain Rauscher Incorporated, since
                       January 1998.  Chairman of the Board, Dain
                       Bosworth, 1990 to December 1997; Chief
                       Executive Officer, Dain Bosworth, 1990 to
                       February 1997.  Chairman of the Board,
                       Rauscher Pierce Refsnes, 1995 to December
                       1997; Acting President and Chief Executive
                       Officer, Rauscher Pierce Refsnes, 1995 to
                       June 1996.  President, Dain Bosworth, 1990
                       to 1994.  Member of Dain Rauscher
                       Corporation Executive Committee.

</TABLE>

PART II
ITEM 5. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS:

  (a) Market Information.

The Company's common stock trades on the NYSE under the symbol
"DRC."  Prior to January 1, 1998, the Company's NYSE trading
symbol was "IFI" and prior to February 10, 1997, the Company's
NYSE trading symbol was "IFG."  The high and low sales prices per
share of the Company's common stock by quarter for the last two
years were as follows:

<TABLE>
<CAPTION>
                              1997                 1996
                     --------------------   -------------------
QUARTER                HIGH         LOW       HIGH        LOW
                     --------------------   -------------------
<S>                  <C>         <C>         <C>        <C>
First                $42-5/8     $34-3/4     $25-1/4    $20-1/2
Second                45-5/8      41-15/16    26-7/8     20-3/4
Third                 60-1/16     43-1/2      33-1/2     22
Fourth                69-3/16     56-15/16    36-7/8     31-1/4

</TABLE>

  (b) Holders.

  At February 28, 1998, there were approximately 6,500 holders of
the Company's common stock.  The number of shareholders was
determined by adding the number of recordholders to the estimated
number of proxies to be sent to street name holders.

  (c) Dividends.

  Cash dividends per common share paid by the Company by quarter
for the last two years were as follows:

<TABLE>
<CAPTION>

Quarter                1997        1996
---------              ----        ----
<S>                    <C>         <C>
First                  $.18        $.11
Second                  .18         .15
Third                   .18         .15
Fourth                  .18         .15

</TABLE>

The Company increased its regular quarterly cash dividend to $.22
per share in February 1998 payable in March 1998.  The
determination of the amount of future cash dividends, if any, to
be declared and paid will depend on the Company's future
financial condition, earnings and available funds.

ITEM 6. SELECTED FINANCIAL DATA:
<TABLE>
<CAPTION>
                                 Year Ended December 31,
(Dollars in          ------------------------------------------------
 thousands, except
 per-share amounts)    1997      1996      1995      1994      1993
                     --------  --------  --------  --------  --------
<S>                  <C>       <C>        <C>        <C>        <C>
Net revenues (A)     $692,102   $625,756   $541,970   $457,351   $482,960
                    =========  =========  =========  =========  =========
Revenues             $750,675   $683,316   $606,747   $496,289   $511,615
                    =========  =========  =========  =========  =========
Earnings before
 income taxes (B)     $76,755    $87,402    $56,271    $39,795    $77,353
                    =========  =========  =========  =========  =========
Net earnings (B)      $49,275    $56,811    $35,873    $25,453    $47,649
                    =========  =========  =========  =========  =========
Earnings per share
 (B):
   Basic               $ 4.01     $ 4.68     $ 2.96     $ 2.09     $ 3.92
                    =========  =========  =========  =========  =========
   Diluted             $ 3.77     $ 4.49     $ 2.85     $ 2.03     $ 3.78
                    =========  =========  =========  =========  =========
Total assets       $2,304,401 $1,827,425 $2,021,908 $1,952,611 $1,786,022
                    =========  =========  =========  =========  =========
Long-term debt        $15,659    $27,290    $41,410    $47,023    $22,166
                    =========  =========  =========  =========  =========
Shareholders'
 equity              $319,091   $275,886   $222,494   $195,420   $177,683
                    =========  =========  =========  =========  =========
Other information:
Equity per common
 share                $ 26.00    $ 22.66    $ 18.44    $ 16.20    $ 14.57

Cash dividends per
 common share           $ .72      $ .56  $ .42-2/3  $ .37-1/3  $ .18-2/3

Common shares
 outstanding at
 year-end, in
 thousands             12,275     12,175     12,065     12,062     12,197

Pretax margin -
 based onnet revenues    11.1%      14.0%      10.4%       8.7%      16.0%

Net return on average
 equity                  16.5%      22.8%      17.3%      13.5%      31.0%

Long-term debt-to-
 equity ratio             4.9%       9.9%      18.6%      24.1%      12.5%

Average number of
 employees              3,525      3,379       3,285      3,133     2,806

Average number of
 investment executives  1,267      1,263       1,271      1,205     1,084

Operating office
 locations at year end     96         91          91         95        81

<FN>

(A) Net revenues equal total revenues less interest expense.

(B) 1997 amounts include the effect of a $15 million pretax
restructuring charge ($9.6 million after tax and $.74 per-share
diluted).

</TABLE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS:

Business Environment

The Company is primarily engaged in securities brokerage,
investment banking and trading as a principal in equity and fixed
income securities.  All of these activities are highly
competitive and sensitive to many factors outside the control of
the Company, including volatility of securities prices and
interest rates; trading volume of securities; economic
conditions, including economic conditions in the regions where
the Company does business; income tax legislation; and demand for
investment banking and securities brokerage services. While
revenues are dependent upon the level of trading and underwriting
volume, which may fluctuate significantly, a large portion of the
Company's expenses remain fixed.  Consequently, net earnings can
vary significantly from period to period.

Three Years Ended December 31, 1997

  Summary of Operating Results

  During 1997, net earnings totaled $49.3 million, a decrease of
$7.5 million or 13 percent from 1996.  Excluding the effect of
the $15.0 million pretax restructuring charge in the 1997 third
quarter ($9.6 million after-tax or $.74 per share diluted), net
earnings for 1997 would have been a Company record (see "October
1997 Restructuring Announcement" below).   The Company's Private
Client Group was the primary driver of the Company's strong
operating results for 1997 as this business unit took advantage
of market conditions that were favorable to individual investors
and sold increased quantities of mutual funds, listed securities,
and insurance and annuity products.  The Company generated
increased net interest income during 1997, primarily due to
higher levels of margin borrowing by individual investors, and
also benefited from increased account and transaction fees from
individual investors.  The Company's Equity Capital Markets Group
generated similar revenue levels in 1997 as in 1996 as increases
in corporate underwriting and institutional equity sales activity
were offset by declines in over-the-counter equity trading,
mergers and acquisitions and syndicate activity.  Profitability
of the Equity Capital Markets Group dropped sharply in 1997 from
1996 due to increased expenses incurred in attempting to grow
this business.  The Company believes that its scheduled March 31,
1998, acquisition of Wessels, Arnold & Henderson, LLC (subject to
regulatory approval) will increase the productivity and market
share of this business unit (see "1998 Acquisition of Wessels,
Arnold & Henderson").  Finally, the Company's Fixed Income Group
posted improved revenues and profits in 1997 versus 1996 due, in
part, to the downsizing performed in this business unit during
1996 as well as from increased tax-exempt fixed income sales,
trading and underwriting revenues.

  In 1996 net earnings totaled $56.8 million, a Company record
and an increase of $21.0 million or 58 percent over 1995.  Net
revenues (revenues less interest expense) also reached a record
$625.8 million, $83.8 million or 15 percent more than the prior
year.  The Company, along with the rest of the securities
industry, benefited from relatively low interest rates, as well
as steadily increasing security prices and trade volumes.  While
1996 growth in the size of the Company's business units was
modest compared with 1995 and 1994,  the Company was prepared to
take advantage of favorable equity securities market conditions
with a larger, more productive organization.  Additionally, the
Company contracted the size of its fixed income business amid
difficult fixed income market conditions.  Accordingly, in 1996
the Company was able to increase its revenues at a greater rate
than its expenses and to better concentrate its resources in its
higher-margin businesses, primarily corporate investment banking
and institutional equity sales.

  October 1997 Restructuring Announcement

  On October 14, 1997, the Company announced that it would
combine Dain Bosworth, Rauscher Pierce Refsnes and its operations
subsidiary into a new firm, Dain Rauscher Incorporated, during
the first quarter of 1998.  The Company changed its name to Dain
Rauscher Corporation on January 2, 1998, and the Company's
trading symbol on the New York Stock Exchange changed to "DRC" on
that date.  Upon completion of the combination on March 2, 1998,
Dain Rauscher Incorporated became the largest regional brokerage
firm in the western half of the United States with more than
1,200 private client and institutional investment executives and
1997 net revenues of almost $700 million.

  The restructuring represents a strategic change made necessary
by the dramatic changes in the competitive environment in which
the Company operates.  These changes were triggered in February
1997 by Federal Reserve Board rulings that effectively permitted
bank holding companies to acquire investment banks.  Such
acquisitions and mergers by commercial banks increased the price
of securities firms in 1997 such that acquisitions of major
additional firms as contemplated by the Company under its
previous strategy no longer appeared to be possible.  The
restructuring, management believes, allows the Company to combine
its two regional firms into a single, more powerful brand and
will enable it  to simplify its management structure and become
more responsive to competitive changes.  The Company may continue
to acquire smaller securities firms in or near its current
markets and to expand its correspondent clearing business, and
expects to continue to explore new business opportunities in
other securities-related businesses.

  The Company, which employs 3,600 people, expects to eliminate
approximately 120 management, business-line and staff positions
by March 31, 1998, in connection with the restructuring.  The
Company does not expect that such job eliminations will
materially affect future revenues.  Overall, the restructuring is
expected to reduce non-interest expense levels by approximately
$10 million annually.

  The Company recorded a one-time, after-tax charge of $9.6
million ($15.0 million before taxes), or 74 cents per share
diluted, against third-quarter 1997 earnings to cover severance
and other restructuring costs.  Substantially all of the $15.0
million of the restructuring costs will result in cash outflows,
primarily during the fourth quarter of 1997 and first quarter of
1998.  The composition of the $15.0 million charge was as
follows:  $12.0 million for severance and short-term retention
payments to terminated employees; $0.7 million for space
consolidation expenditures; and the remaining $2.2 million for
other expenditures including costs of changing the Company's
name, relocation, outplacement services and professional fees
related to the restructuring.  The Company believes that the
$15.0 million charge will be adequate to cover the costs of the
restructuring

1998 Acquisition of Wessels, Arnold & Henderson

On February 9, 1998, the Company announced that it had entered
into an agreement to acquire Wessels, Arnold & Henderson, LLC, a
privately held investment banking, institutional equity sales and
trading firm based in Minneapolis.  The approximate purchase
price of $150 million includes $120 million in cash, up to $30
million face amount in five-year, subordinated debentures and
other direct costs of the acquisition.  The cash portion of the
purchase price is expected to be paid from available cash and a
new subordinated credit facility.  The transaction will be
accounted for as a purchase and is expected to be completed on
March 31, 1998, pending regulatory approval, and is expected to
significantly increase Dain Rauscher's equity capital markets
capabilities.  The acquisition is expected to slightly dilute
1998 earnings before consideration of a restructuring charge of
$10 million to $15 million to be recorded in the first quarter of
1998.  Management expects the acquisition to be accretive to
earnings in the first full calendar year of operation.
Comparative Net Revenues and Expenses Summary.  The following is
a summary of the year-to-year increases (decreases) in categories
of net revenues and operating expenses:

<TABLE>
<CAPTION>
                                     1997 vs. 1996  1996 vs. 1995
                                    --------------- --------------
(Dollars in thousands)              Amount  Percent Amount Percent
                                    ------  ------- ------  ------
<S>                                 <C>       <C>    <C>     <C>
Net Revenues:
 Commissions                        $51,763    23%   $47,097  27%
 Principal transactions             (16,890)  (10)   (10,140) (6)
 Investment banking and
  underwriting                         (111)    -     21,628  24
 Net interest                        10,928    21      8,375  19
 Asset management                    10,414    29      8,802  32
 Correspondent clearing               4,021    25      3,322  27
 Other                                6,221    35      4,702  37
                                    -------   ---     ------ ---
                                     66,346    11     83,786  15
                                    -------   ---     ------ ---
Expenses excluding interest:
 Compensation and benefits           41,694    11     40,071  12
 Communications                       3,149     7      2,677   7
 Occupancy and equipment rental       5,642    16      2,851   9
 Travel and promotional               5,997    25      3,631  18
 Floor brokerage and clearing fees    2,057    20        557   6
 Other                                3,454     9      2,868   8
 Restructuring charge                15,000     -          -   -
                                    -------   ---     ------ ---
                                     76,993    14     52,655  11
                                    -------   ---     ------ ---
Earnings before income taxes       $(10,647)  (12)%  $31,131  55%
                                    =======   ===     ====== ===
</TABLE>

Commissions

Commission revenues increased $51.8 million or 23 percent from
1996 to 1997, principally as a result of higher sales to
individual and institutional investors of:  (1) mutual funds; (2)
listed equity securities; and (3) insurance and annuity products.
While the average number of investment executives remained
constant in 1997 relative to 1996, Private Client Group
investment executive productivity (commissions per investment
executive) improved approximately 13 percent.  A 25-percent rise
in the New York Stock Exchange's average daily trading volume
also contributed to the productivity increase.

The $47.1 million or 27-percent increase in commission revenues
during 1996 was due principally to increased sales to individual
and institutional investors of:  (1) mutual funds; (2) over-the-
counter equity securities sold on an agency basis; (3) listed
equity securities; and (4) insurance and annuity products.  While
the average number of investment executives declined slightly in
1996 from 1995, investment executive productivity improved
approximately 15 percent, aided by a 19-percent rise in the New
York Stock Exchange's average daily trading volume.

Principal Transactions

Principal transactions revenues declined $16.9 million or 10
percent from 1996 to 1997.  The largest component of the revenue
decrease was lower sales and trading results in over-the-counter
equity securities, which became less popular investments for
individual and institutional investors beginning with the Federal
Reserve Board's increase in short-term interest rates in March
1997.  This action led to lower volumes, prices and spreads
earned trading such securities.  Spreads earned trading over-the-
counter equity securities were also negatively impacted in 1997
by new order-handling regulations, increased liquidity provided
to facilitate institutional trading and smaller fractions used in
share price posting. Also contributing to the decline in
principal transactions revenues were declines in sales and
trading results of taxable fixed income securities.  Partially
offsetting this decline were increases in sales and trading of
tax-exempt fixed income securities.

Principal transaction revenues declined $10.1 million or 6
percent from 1995 to 1996.  The decline resulted from reduced
trading revenues on taxable and tax-exempt fixed income products
and was partially offset by increases in over-the-counter equity
trading revenues.  The reductions in fixed income trading
revenues were due primarily to the existence of a difficult 1996
fixed income trading environment and the relatively low level of
individual investor demand for fixed income products due to the
comparatively larger returns experienced by investors in equity
instruments in 1996.

Investment Banking and Underwriting

Investment banking and underwriting revenue levels were flat in
1997 to 1996 as increases in corporate underwriting activity were
roughly offset by declines in corporate mergers and acquisitions
and municipal underwriting activity.

Investment banking and underwriting revenues increased $21.6
million or 24 percent during 1996 primarily due to increased
corporate underwriting activity.   In addition to the strong
corporate underwriting markets that existed in 1996, management
believes that the 1995 reorganization and refocusing of its
Equity Capital Markets groups around specialized industry
segments enabled Dain Bosworth and Rauscher Pierce Refsnes to
attract and underwrite higher levels of corporate securities.
Additionally, financial advisory service fees earned from
corporate clients increased in 1996 relative to 1995.

Beginning in 1995 and continuing into 1996 and 1997, regulatory
requirements and scrutiny related to municipal underwriting
activities throughout the securities industry increased (see also
Item 3, Legal Proceedings).  Uncertainty caused by such
heightened regulation and scrutiny could negatively impact future
levels of municipal underwriting-related activities and could
also increase costs related to such activities for both the
Company and the securities industry as a whole.

Net Interest Income

The major sources of interest revenues and expenses for the past
three years are:

<TABLE>
<CAPTION>
                                        Year ended December 31,
                                     ----------------------------
(In thousands)                          1997     1996      1995
                                     --------  --------  --------
<S>                                  <C>       <C>       <C>
Revenues:
 Customer margin accounts            $ 78,945  $ 66,770  $ 55,603
 Trading inventories and other         28,705    28,250    30,596
 Deposits and short-term investments   14,842    15,531    23,194
                                      -------   -------   -------
                                      122,492   110,551   109,393
                                      -------   -------   -------
Expenses:
 Customer funds on deposit             23,577    29,067    35,922
 Short-term bank loans and other       32,943    25,526    25,154
 Subordinated and other long-term
  debt                                  2,053     2,967     3,701
                                      -------   -------   -------
                                       58,573    57,560    64,777
                                      -------   -------   -------
Net interest income                  $ 63,919  $ 52,991  $ 44,616
                                      =======   =======   =======
</TABLE>

Margin loans to customers, financed primarily by credit balances
in customer accounts, comprise the majority of the Company's
interest-earning assets.  Fixed income trading inventories, which
are generally financed with short-term bank borrowings,
repurchase agreements or deposits from securities loaned, also
generated significant net interest income.  The Company's net
interest income is dependent upon the level of customer balances
and trading inventories, as well as the spread between the rate
it earns on those assets compared with its cost of funds.

Beginning in 1996 and continuing through 1997, a growing
proportion of the Company's net interest income was earned from
customer margin loans as favorable market conditions coupled with
comparatively low interest rates made margin borrowing popular.

Net interest income accounted for approximately 9 percent of the
Company's net revenues in 1997 versus 8 percent in 1996 and 1995.
In 1997 the 21-percent increase in net interest income resulted
primarily from the 16-percent increase in average margin loan
balances as well as a third-quarter increase in margin interest
rates charged to certain customers.  In 1996 the 19-percent
increase in net interest income resulted primarily from the 29-
percent rise in average margin loan balances.  The 1996 margin
loan increase was due principally to the transfer of several
large customer accounts from competitors during the 1996 third
quarter.  The resulting increase in net interest income was
partially offset by the effects of a 10-percent decline in
customer credit balances from 1995, along with the corresponding
decline in short-term investments segregated for regulatory
purposes precipitated by the 1996 second-half transfer of
approximately $340 million of customer credit balances to
Company-sponsored money market funds.  The transfers occurred as
a result of the Company offering new cash management products to
certain segments of its customers.

As long as favorable interest-rate spreads are maintained and the
level of interest-bearing accounts remains stable, the Company
expects net interest income to continue to be a significant
component of its earnings. Management believes that the 1996
introduction of new cash management products and services
resulted in increased asset management revenues, but was offset
by lower net interest income derived from customer balances and,
accordingly, did not have a material effect on net earnings.
Average balances and interest rates for 1995 through 1997 are:

<TABLE>
<CAPTION>
                                       Year ended December 31,
                                    ----------------------------
(In thousands)                         1997     1996      1995
                                    --------  --------  --------
<S>                                 <C>       <C>       <C>
Interest revenues:
Margin loans to customers
   Average balance                  $934,833  $810,693  $628,392
   Average interest rate                 8.4%      8.2%      8.8%
                                     -------   -------   -------
                                     $78,945   $66,770   $55,603
                                     =======   =======   =======
Deposits and short-term investments:
   Average balance                  $279,888  $293,081  $398,027
   Average interest rate                 5.3%      5.3%      5.8%
                                     -------   -------   -------
                                     $14,842   $15,531   $23,194
                                     =======   =======   =======
Interest expense:
Interest-bearing customer funds
 on deposit
   Average balance                  $524,201  $649,443  $723,803
   Average interest rate                 4.5%      4.5%      5.0%
                                     -------   -------   -------
                                     $23,577   $29,067   $35,922
                                     =======   =======   =======
</TABLE>

Asset Management

Asset management revenues increased 29 percent from 1996 to 1997
and 32 percent in 1996 from 1995 due to increased revenues from
larger volumes of assets in fee-based, managed account programs
at Dain Rauscher and, to a lesser degree, 17- and 41-percent
increases in assets under management at Insight Management.

Correspondent Clearing

Revenues from correspondent clearing rose $4.0 million or 25
percent in 1997 from 1996 as RPR Clearing, the Dain Rauscher unit
that markets and coordinates correspondent clearing services,
benefited from a 33-percent increase in correspondent firm trade
volumes.  The positive effects of such increased trade volumes,
however, were partially offset by a 9-percent reduction in per-
trade revenues caused primarily by competitive pricing pressures.
Correspondent clearing revenues increased $3.3 million or 27
percent in 1996 from the previous year as RPR Clearing benefited
from a 49-percent increase in correspondent firm trade volumes.
Additionally, RPR Clearing benefited from a 5-percent increase to
178 in the number of correspondent brokerage firms for which it
does business.

Other Revenues

Other revenues increased by approximately $6.2 million or 35
percent in 1997 and $4.7 million or 37 percent in 1996 versus
previous years principally due to increased transaction and
account fee revenues.  The increased transaction fees resulted
from larger trade volumes in 1997 versus 1996, and the increased
account fees stem from increased numbers of Individual Retirement
Accounts, cash management accounts, account transfer fees and the
like.  Additionally, in each of 1997 and 1995, other revenues
included approximately $1.8 million in gains related to the sale
of securities previously obtained as a portion of compensation
for certain corporate underwriting activity.  In 1996 other
revenues include approximately $1.1 million in gains associated
with the fourth-quarter sale of two tax-exempt mutual funds.

Compensation and Benefits

Compensation and benefits expense is generally affected by the
level of operating revenues, earnings and the number of
employees.  During 1997 and 1996 compensation and benefits
expense increased 11 percent and 12 percent, respectively, from
the previous years.  The 1997 increase was primarily the result
of:  (1) increased commissions and benefits paid to revenue-
producing employees generating higher levels of operating
revenues; (2) the effects of a 4-percent increase in the average
number of employees; (3) increased incentive compensation
accruals; and (4) general salary increases. The 1996 increase was
largely the result of increased commissions, incentive
compensation and related benefits that rose in conjunction with
operating revenues and earnings.  Also contributing to the 1996
increase was a 3-percent increase in the average number of
employees and general salary increases.

Other Expenses

Expenses other than compensation and benefits and the
restructuring charge increased $20.3 million or 13 percent from
1996 to 1997 principally due to: (1) increased travel and
promotional costs associated with the generation of new business
and the upcoming merger of the Company's broker-dealer
subsidiaries in January 1998; (2) increased occupancy costs
associated with office expansions and office operating costs,
including real estate taxes, and equipment upgrades; (3) costs
associated with information system upgrades; (4) volume-driven
increases in communications, market-data and clearing services;
and (5) bad debt expenses.

During 1996, expenses other than compensation and benefits
increased $12.5 million or 9 percent primarily due to:  (1)
increased travel and promotional costs associated with the
generation of new business; (2) increased occupancy costs
stemming from expansion of several operating office locations,
including operating costs and real estate taxes associated with
such locations; (3) increased communications costs resulting from
the 1996 rollout of improved investment executive workstations;
and (4) increased professional services fees.

Effect of Recent Accounting Standards

Recent Accounting Pronouncements:  In June 1996 the Financial
Accounting Standards Board issued SFAS 125, "Transfers and
Servicing of Financial Assets and Extinguishments of
Liabilities."  The Company adopted the provisions of SFAS 125 on
January 1, 1998.  The adoption of SFAS 125 did not have a
material effect on the Company's consolidated financial
statements.

Inflation

Since the Company's assets are primarily liquid in nature and
experience a high rate of turnover, they are not significantly
affected by inflation. However, the rate of inflation does affect
many of the Company's operating costs, which may not be readily
recoverable through price increases on services offered by the
Company.

Year 2000 Issue & Technology

The Company's business is highly dependent on communications,
trading, information and data processing systems.  The Company
has outsourced certain of its communications and quotations and
trading systems services, and currently maintains its own back-
office processing system.  Although the Company and its vendors
have in place tested disaster recovery systems, any failure or
interruption of the Company's or a vendor's systems could cause
delays in the Company's securities trading and processing
activities and an inability to execute client transactions, which
could have a material adverse effect on the Company's operating
results.

It has become widely known that certain technological problems
may arise in connection with reaching the year 2000.  Beginning
with the Company's consolidation of the back-office brokerage
operations of Dain Bosworth and Rauscher Pierce Refsnes in 1993,
the Company has upgraded and/or replaced the bulk of its mission-
critical data processing systems.  Such upgrade and replacement
projects were performed primarily for competitive reasons, though
they included the added benefit of making such systems Year 2000
compliant.  Upgrades or replacements necessary to achieve Year
2000 compliance for the Company's remaining mission-critical
systems are expected to be completed in 1998, and the costs
related to such upgrades or replacements are not expected to have
a material effect on the Company's consolidated financial
statements.  During 1999, the Company, along with the rest of the
securities industry, expects to test systems interdependencies
with outside parties.  While there can be no assurance, the
Company believes that its internal systems will not experience
significant disruption in connection with the Year 2000.  If the
Company's internal systems or if the Company's vendors and other
information providers or the securities exchanges, clearing
agencies and other securities firms or financial institutions
with which the Company transacts business experience any
significant disruption in connection with the Year 2000, such
disruption could affect the Company's ability to conduct business
and may have a material adverse effect on the Company's results
of operations.

Though the Company currently maintains its own back-office
processing system, it has made a commitment to internally develop
an upgraded system between 1998 and 2002.  This project is
expected to cost approximately $17 million and yield increased
productivity and technological competitiveness by improving
investment executives' and correspondents' ability to serve
clients, and enhance investment executive and correspondent
recruiting and retention.

Liquidity and Capital Resources

The Company's assets are substantially liquid in nature and
consist mainly of cash or assets readily convertible into cash.
These assets are financed primarily by interest-bearing and non-
interest-bearing customer credit balances, repurchase agreements,
deposits for securities loaned, other payables, short-term and
subordinated bank borrowings and equity capital. Changes in the
amount of trading and underwriting securities owned by the
Company, customer and broker receivables and securities purchased
under agreements to resell directly affect the amount of the
Company's financing requirements.

The Company has various sources of capital for operations and
growth.  In addition to capital provided by earnings, Dain
Rauscher maintains uncommitted lines of credit from a number of
banks to finance transactions (principally trading and
underwriting positions) when internally generated capital is not
sufficient.  The majority of these uncommitted lines of credit
are collateralized by trading securities and customers' margin
securities. On February 28, 1998, approximately $414 million of a
total of $600 million in uncommitted lines of credit was unused.
Also, the Company has a $50 million, committed, unsecured
revolving credit facility that is used for advances to its
subsidiaries, irrevocable letters of credit and general corporate
purposes. On February 28, 1998, all of this revolving credit
facility was unused. The facility expires June 25, 1998, and may
be extended for up to three additional one-year periods.

Dain Rauscher has a commitment with a bank whereby the Company
will borrow $80 million on a subordinated basis over four years
to fund a portion of the purchase price for the pending March 31,
1998, acquisition of Wessels, Arnold & Henderson, LLC.  (See also
"1998 Acquisition of Wessels, Arnold & Henderson, LLC.")

On April 30, 1997, the Company's Board of Directors also approved
the filing of a universal "shelf registration" statement with the
Securities and Exchange Commission permitting the Company to sell
at its discretion up to $200 million in secured or unsecured
debt, or equity securities.  Management intends to file the shelf
registration statement during the second quarter of 1998.

The Company's securities subsidiaries are subject to the
Securities and Exchange Commission's Uniform Net Capital Rule
measuring capitalization and liquidity and restricting amounts of
capital that may be transferred to affiliates.  Interra Clearing
("Clearing"), the Company's operations subsidiary until March 1,
1998, cleared and settled trades for Dain Rauscher and, prior to
December 31, 1997, cleared and settled trades for Dain Bosworth
and Rauscher Pierce Refsnes.  Clearing carried all customer
accounts, extended margin credit to customers, paid interest on
credit balances of customers and invested any excess customer
balances.  During 1997, Dain Bosworth, Rauscher Pierce Refsnes
and Clearing all operated above the minimum net capital
standards.  At December 31, 1997, regulatory net capital was
$89.4 million at Clearing, which was 7.2 percent of aggregate
debit balances and $27.1 million in excess of the 5-percent
requirement.  At December 31, 1997, Dain Bosworth and Rauscher
Pierce Refsnes had net capital requirements of $1.0 million each
as neither firm carried customer balances on its balance sheet.
At December 31, 1997, Dain Bosworth and Rauscher Pierce Refsnes
had net capital of $33.9 million and $23.3 million, respectively,
in excess of their minimum requirements.  Beginning in March
1998, only Dain Rauscher, the Company's single remaining broker-
dealer, is subject to the Uniform Net Capital Rule.

Dain Rauscher is a dealer in corporate, tax-exempt and
governmental fixed income securities.  While many of the
Company's principal transactions are executed to facilitate
customer trades, Dain Rauscher also maintains certain inventory
positions for its own account.  These positions typically include
U. S. government or U. S. government agency securities and are
usually hedged with a combination of short sales of similar
securities, financial futures contracts or option contracts in
order to mitigate market and interest rate risk.  Holdings of
high-yield securities are not material.  Dain Rauscher maintains
comprehensive risk management policies including position limits,
aging, duration and credit requirements.  These policies are
intended to limit the size of and risk in the Company's trading
inventories.

The Company periodically hedges its fixed income trading
inventories with financial futures or option contracts.  At
December 31, 1997, the Company had open commitments to sell under
financial futures contracts with notional amounts of $20.6
million.  The Company had no written option contracts at December
31, 1997.  The fair market values of these contracts was not
material at December 31, 1997.  In addition, the average fair
market value and trading revenues associated with these contracts
during 1997 was not material.  Such option and financial futures
contracts expose the Company to off-balance-sheet market risk in
the event that the changes in interest rates do not closely
correlate with the change in the security price.  Transactions in
futures contracts are conducted through regulated exchanges which
guarantee performance of counterparties and are settled in cash
on a daily basis, thereby minimizing credit risk.   Maintaining
futures contracts typically requires the Company to deposit cash
or securities with an exchange or other financial intermediary as
security for its obligations.  Additional cash or securities may
be required to be deposited thereafter due to fluctuations in the
market value of the futures contract.  In writing option
contracts, the Company receives a premium from the purchaser in
exchange for incurring an obligation to purchase or sell
securities upon exercise of the option.   These obligations may
require the Company to purchase securities at prices higher than
prevailing market prices or sell securities at prices below
prevailing market prices in order to fulfill its obligations
under the contracts.  Other than as described, the Company does
not enter into other derivative financial instruments with off-
balance-sheet risk.  Derivative financial instruments held or
issued for trading purposes were immaterial to the consolidated
financial statements.  The Company's exposure to credit risk is
represented by the fair value of trading securities owned.

In 1996, the Company completed the repurchase of 600,000 shares
of common stock at a total cost of $11.8 million under a program
that was initiated in 1994.  In August 1996 and December 1997,
respectively, the Company's Board of Directors authorized
additional programs to repurchase up to 100,000 and 600,000
shares of the Company's common stock.  Purchases of the common
stock may be made from time to time at prevailing prices in the
open market, by block purchases, or in privately negotiated
transactions.  The repurchased shares will be held as treasury
stock and used for the Company's employee stock option and other
benefit plans, or for other corporate purposes.  During 1996, no
shares were repurchased pursuant to the 100,000 share program.
During 1997, the Company repurchased 87,568 shares at a total
cost of $4.8 million pursuant to the 100,000 share program and no
shares pursuant to the 600,000 share program.

In conjunction with the pending March 31, 1998, acquisition of
Wessels, Arnold & Henderson, LLC, the Company expects to issue
options for approximately 500,000 shares of the Company's stock.
The options will be priced at fair market value and will vest
over a three-year period.

The Company paid a regular quarterly cash dividend of $.18 per
share in each quarter of 1997.  The Company increased its regular
quarterly cash dividend to $.22 per share in February 1998
payable in March 1998.  The determination of the amount of future
cash dividends, if any, to be declared and paid will depend on
the Company's future financial condition, earnings and available
funds.

On April 30, 1997, the Company's Board of Directors adopted a
Shareholder Rights Plan ("the Plan").  Under the Plan, the Board
declared a dividend of one preferred share purchase right
("Right") for each outstanding share of common stock of the
Company.  The dividend was payable to the shareholders of record
as of May 12, 1997.  The Rights are attached to and automatically
trade with the outstanding shares of the Company's common stock
until they are distributed and become exercisable under the terms
of the Plan.

Private Securities Litigation Reform Act of 1995 "Safe Harbor"

The Company desires to take advantage of the "safe harbor"
provisions of the Private Securities Litigation Reform Act of
1995.  This Form 10-K may include forward-looking statements
which reflect the Company's current views with respect to future
events and financial performance.  The words "believe," "expect,"
"anticipate," "intends," "estimate," "forecast," "project,"
"should" and similar expressions are intended to identify
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995.

The Company wishes to caution investors that any forward-looking
statements made by or on behalf of the Company are subject to
uncertainties and other factors that could cause actual results
to differ materially from such statements.  These uncertainties
and other factors include, but are not limited to, the "Risk
Factors" identified in Exhibit 99 to this Form 10-K.  Though the
Company has attempted to list comprehensively the important
factors in such Exhibit, the Company wishes to caution investors
that other factors may in the future prove to be important in
affecting the Company's results of operations.  New factors
emerge from time to time, and it is not possible for management
to predict all such factors, nor can it assess the impact of each
such factor on the business or the extent to which any factor, or
a combination of factors, may cause actual results to differ
materially from those contained in any forward-looking
statements.

Investors are further cautioned not to place undue reliance on
such forward-looking statements as they speak only to the
Company's views as of the date the statement is made.  The
Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new
information, future events or otherwise.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

           Index to Consolidated Financial Statements
        As of December 31, 1997 and 1996, and for each of
   the years in the three-year period ended December 31, 1997
                     and Supplementary Data

                                                           Page
                                                           ----
Independent Auditors' Report                                24
Consolidated Financial Statements:
     Consolidated statements of operations                  25
     Consolidated balance sheets                            26
     Consolidated statements of shareholders' equity        27
     Consolidated statements of cash flows                  28
     Notes to consolidated financial statements             29
Quarterly Financial Information (unaudited)                 40

                  INDEPENDENT AUDITORS' REPORT

Board of Directors and Shareholders
Dain Rauscher Corporation:

  We have audited the accompanying consolidated balance sheets of
Dain Rauscher Corporation (formerly Interra Financial
Incorporated) as of December 31, 1997 and 1996 and the related
consolidated statements of operations, shareholders' equity and
cash flows for each of the years in the three-year period ended
December 31, 1997.  In connection with our audits of the
consolidated financial statements, we have also audited the
financial statement schedule listed in the table of contents on
page 45 hereof.  These consolidated financial statements and
financial statement schedule are the responsibility of the
Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements and financial
statement schedule 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 are free of material misstatement.  An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  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 consolidated financial statements referred
to above present fairly, in all material respects, the financial
position of Dain Rauscher Corporation as of December 31, 1997 and
1996, and the results of its operations and its cash flows for
each of the years in the three-year period ended December 31,
1997, in conformity with generally accepted accounting
principles.  Also, in our opinion, the related financial
statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, presents
fairly, in all material respects, the information set forth
therein.

                                     KPMG Peat Marwick LLP

Minneapolis, Minnesota
February 5, 1998

<TABLE>
                    DAIN RAUSCHER CORPORATION
              Consolidated Statements of Operations
            (In thousands, except per-share amounts)

<CAPTION>
                                       Year ended December 31,
                                    ----------------------------
                                       1997     1996      1995
                                    --------  --------  --------
<S>                                 <C>       <C>       <C>
Revenues:
  Commissions                       $274,847  $223,084  $175,987
  Principal transactions             152,150   169,040   179,180
  Investment banking and
   underwriting                      111,280   111,391    89,763
  Interest                           122,492   110,551   109,393
  Asset management                    46,304    35,890    27,088
  Correspondent clearing              19,827    15,806    12,484
  Other                               23,775    17,554    12,852
                                     -------   -------   -------
Total revenues                       750,675   683,316   606,747

Interest expense                     (58,573)  (57,560)  (64,777)
                                     -------   -------   -------

Net revenues                         692,102   625,756   541,970
                                     -------   -------   -------
Expenses excluding interest:
  Compensation and benefits          427,599   385,905   345,834
  Communications                      46,450    43,301    40,624
  Occupancy and equipment rental      41,512    35,870    33,019
  Travel and promotional              30,293    24,296    20,665
  Floor brokerage and clearing fees   12,328    10,271     9,714
  Other                               42,165    38,711    35,843
  Restructuring charge                15,000         -         -
                                     -------   -------   -------

Total expenses excluding interest    615,347   538,354   485,699
                                     -------   -------   -------
Earnings:
  Earnings before income taxes        76,755    87,402    56,271
  Income tax expense                 (27,480)  (30,591)  (20,398)
                                     -------   -------   -------

Net earnings                         $49,275   $56,811   $35,873
                                     =======   =======   =======
Earnings per share:
  Basic                               $ 4.01    $ 4.68    $ 2.96
                                     =======   =======   =======

  Diluted                             $ 3.77    $ 4.49    $ 2.85
                                     =======   =======   =======
<FN>
See accompanying notes to consolidated financial statements.

</TABLE>
<TABLE>
                    DAIN RAUSCHER CORPORATION
                   Consolidated Balance Sheets
                     (Dollars in thousands)
<CAPTION>
                                                December 31,
                                         ----------------------
                                             1997        1996
                                         -----------  ---------
<S>                                      <C>          <C>
Assets:
 Cash and cash equivalents               $   35,909  $   34,387
 Cash and short-term investments
  segregated for regulatory purposes              -      15,000
 Receivable from customers                1,170,160   1,035,847
 Receivable from brokers and dealers        229,421     202,040
 Securities purchased under agreements
  to resell                                 135,777      81,631
 Trading securities owned                   541,511     288,824
 Equipment, leasehold improvements and
  buildings, at cost, less accumulated
  depreciation of $42,800 and $31,330,
  respectively                               42,376      32,946
 Other receivables                           80,867      75,685
 Deferred income taxes                       44,868      39,704
 Other assets                                23,512      21,361
                                          ---------   ---------
                                         $2,304,401  $1,827,425
                                          =========   =========
Liabilities and Shareholders' Equity:
Liabilities:
 Short-term borrowings                   $  179,000  $   25,000
 Drafts payable                              83,499      69,989
 Payable to customers                       601,949     869,641
 Payable to brokers and dealers             580,970     229,852
 Securities sold under repurchase
  agreements                                170,906      57,967
 Trading securities sold, but not yet
  purchased                                 127,364      58,805
 Accrued compensation                       128,463     119,244
 Other accrued expenses and accounts
  payable                                    97,500      93,751
 Subordinated and other debt                 15,659      27,290
                                          ---------   ---------
                                          1,985,310   1,551,539
                                          ---------   ---------
Shareholders' equity:
 Common stock (1997:  issued 12,367,447
  and outstanding 12,275,104 shares; 1996:
  issued and outstanding 12,174,968
  shares)                                     1,546       1,522
 Additional paid-in capital                  89,321      81,316
 Retained earnings                          233,419     193,048
 Treasury stock, at cost                     (5,195)          -
                                          ---------   ---------
                                            319,091     275,886
                                          ---------   ---------
                                         $2,304,401  $1,827,425
                                          =========   =========
<FN>
See accompanying notes to consolidated financial statements.

</TABLE>
<TABLE>
                    DAIN RAUSCHER CORPORATION
         Consolidated Statements of Shareholders' Equity
            (In thousands, except per-share amounts)

                          Common Stock   Additional
                      Shares               Paid-In    Retained    Treasury  Shareholders'
                    Outstanding  Amount    Capital    Earnings      Stock     Equity
                    -----------  ------    -------    --------      -----     ------
<S>                   <C>       <C>       <C>        <C>           <C>       <C>
Balances at
 December 31, 1994    12,062    $1,508    $73,434    $120,478      $     -   $195,420
                      ------     -----     ------     -------       ------    -------
Net earnings               -         -          -      35,873            -     35,873
Repurchase of
 common stock           (297)      (38)         -      (6,811)           -     (6,849)

Common stock issued
 upon exercise of
 stock options           280        36      2,277           -            -      2,313

Restricted common
 stock issued and
 amortized                20         2         53           -            -         55

Stock credited to
 deferred
 compensation plan
 participants              -         -        859           -            -        859

Cash dividends on
 common stock
 ($.42-2/3 per share)      -         -          -      (5,177)           -     (5,177)
                      ------     -----     ------     -------        -----    -------
Balances at
 December 31, 1995    12,065     1,508     76,623     144,363            -    222,494
                      ------     -----     ------     -------        -----    -------
Net earnings               -        -           -      56,811            -     56,811

Repurchase of
 common stock            (59)      (7)          -      (1,334)           -     (1,341)

Common stock
 issued upon exercise
 of stock options        136       17        1,217          -            -      1,234

Restricted common
 stock issued and
 amortized                33        4          342          -            -        346

Stock credited
 to deferred
 compensation plan
 participants              -        -        3,134          -            -      3,134

Cash dividends on
 common stock
 ($.56 per share)          -        -            -     (6,792)          -     (6,792)
                      ------    -----       ------    -------       -----    ------
Balances at
 December 31, 1996    12,175    1,522       81,316    193,048           -     275,886
                      ------    -----       ------    -------       -----     -------

Net earnings               -        -            -     49,275           -      49,275

Treasury stock
 purchased               (92)       -            -          -      (5,195)     (5,195)

Common stock issued
 upon exercise
 of stock options        146       18        1,761          -           -       1,779

Restricted common
 stock issued and
 amortized                46        6          393          -           -         399

Stock credited to
 deferred
 compensation plan
 participants              -        -        4,941          -           -       4,941

Cash dividends on
 common stock
 ($.72 per share)          -        -            -     (8,904)          -      (8,904)

Tax benefits from
 stock incentive plans     -        -          910          -           -         910
                      ------    -----       ------    -------       ------    -------
Balances at
 December 31, 1997    12,275   $1,546      $89,321   $233,419      $(5,195)  $319,091
                      ======    =====       ======    =======       ======    =======
<FN>

See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
                    DAIN RAUSCHER CORPORATION
              Consolidated Statements of Cash Flows
                         (In thousands)

                                       Year ended December 31,
                                    ----------------------------
                                       1997     1996      1995
                                    --------  --------  --------
<S>                                 <C>       <C>       <C>
Cash flows from operating
 activities:
 Net earnings                     $ 49,275  $ 56,811  $ 35,873
 Adjustments to reconcile net
  earnings to cash provided by
  operating activities:
   Depreciation and amortization    11,764     9,563     8,973

   Deferred income taxes            (5,164)   (7,711)   (2,992)
   Other non-cash items             16,200     8,626    10,486
   Cash and short-term investments
    segregated for regulatory
    purposes                        15,000   396,000   (73,000)
   Securities purchased under
    agreements to resell           (54,146)   (1,398)  118,328
   Net trading securities owned
    and trading securities sold,
    but not yet purchased         (184,128)   31,823   (59,503)
   Other receivables                (5,182)    5,153    (2,051)
   Drafts payable and short-term
    borrowings of securities
    companies                      117,510   (52,442)  (22,783)
   Net receivable from/payable
    to customers                  (402,005) (384,511)   60,411
   Net receivable from/payable
    to brokers and dealers         323,737    30,987    (8,617)
   Securities sold under
    repurchase agreements          112,939   (62,841)  (53,164)
   Accrued compensation              9,219    23,256    27,233
   Other                            (8,331)   (9,809)    3,412
                                   -------   -------  -------
Cash provided (used) by operating
 activities                         (3,312)   43,507    42,606
                                   -------   -------  -------

Cash flows from financing activities:
 Proceeds from:
  Revolving credit agreement, net   50,000         -         -
  Issuance of common stock           1,779     1,580     2,368
 Payments for:
  Subordinated and other debt      (11,631)  (14,120)  (5,613)
  Dividends on common stock         (8,904)   (6,792)  (5,177)
  Purchase of common stock          (5,195)   (1,341)  (6,849)
  Revolving credit agreement, net        -         -  (15,000)
                                   -------   -------  -------
Cash provided (used) by financing
 activities                         26,049   (20,673) (30,271)
                                   -------   -------  -------
Cash flows from investing
 activities:
 Proceeds from investment dividends
  and sales                          1,768     1,227    1,826
 Payments for equipment,
  leasehold improvements and other (22,983)  (15,841) (10,758)
                                   -------   -------  -------
Cash (used) by investing
 activities                        (21,215)  (14,614)  (8,932)
                                   -------   -------  -------
Increase in cash and cash
 equivalents                         1,522     8,220    3,403
Cash and cash equivalents:
   At beginning of year             34,387    26,167   22,764
                                   -------   -------  -------
   At end of year                  $35,909   $34,387  $26,167
                                   =======   =======  =======
<FN>
Cash income tax payments totaled $32,110,000 in 1997, $32,841,000
in 1996, and $18,884,000 in 1995.  Cash interest payments totaled
$57,396,000, $56,901,000, and $64,592,000 in 1997,1996 and 1995,
respectively.

During the years ended December 31, 1997, 1996 and 1995,
respectively, the Company had non-cash financing activity of
$4,941,000, $3,134,000 and $859,000 associated with the crediting
of common stock to deferred compensation plan participants.

See accompanying notes to consolidated financial statements.
</TABLE>

           Notes to Consolidated Financial Statements
          Years ended December 31, 1997, 1996 and 1995

Dain Rauscher Corporation

A.  Summary of Significant Accounting Policies

  Nature of Business:  Dain Rauscher Corporation (the "Company")
is a Minneapolis, Minnesota-based holding company that provides
advice and services to individual investors in the western United
States and investment banking services to corporate and
governmental clients nationwide through its principal subsidiary,
Dain Rauscher Incorporated ("Dain Rauscher").  The Company is
also parent to Insight Investment Management, Inc., which manages
the Great Hall money market funds and institutional fixed income
accounts, and Dain Rauscher Lending Services Inc., which was
formed in 1997 to make certain types of loans that are
collateralized by customers' control and restricted securities.
On January 2, 1998, the Company's name was changed to Dain
Rauscher Corporation from Interra Financial Incorporated, and two
of the Company's broker-dealer subsidiaries, Dain Bosworth
Incorporated ("Dain Bosworth") and Rauscher Pierce Refsnes, Inc.
("Rauscher Pierce Refsnes"), were merged and renamed Dain
Rauscher.  The Company's third broker-dealer, Interra Clearing
Services Inc. ("Clearing"), will be merged with Dain Rauscher on
March 2, 1998.

  Basis of Presentation:  The consolidated financial statements
include the Company and its subsidiaries as of December 31, 1997:
Dain Bosworth, Rauscher Pierce Refsnes, Clearing, Interra
Advisory Services Inc. and Interra Lending Services Inc.  All
subsidiaries are wholly owned and all inter-company balances and
transactions have been eliminated in consolidation.  Certain
prior-year amounts in the consolidated financial statements have
been reclassified to conform to the 1997 presentation.

  Cash and Cash Equivalents:  Cash and cash equivalents include
cash on hand, cash in depository accounts with other financial
institutions and money market investments with original
maturities of 90 days or less.

  Securities:  Securities transactions and the related commission
revenues and expenses are recorded on settlement date, which is
not materially different than if transactions were recorded on
trade date.

  Trading securities owned, trading securities sold, but not yet
purchased, and derivative financial instruments are stated at
market value.  Unrealized gains and losses on such securities are
recognized currently in revenues from principal transactions.
Market value is determined by using public market quotations,
quoted prices from dealers or recent market transactions,
depending upon the underlying security.

  The Company may, from time to time, receive equity instruments
as a portion of its compensation for certain underwriting
activity.  Such instruments are accounted for as investments and
are recorded at the lower of cost or market, which is generally
zero.  The Company also owns certain non-marketable investments
accounted for at lower of cost or market, which are included in
other assets.

  Repurchase Transactions:  Securities purchased under agreements
to resell (reverse repurchase agreements) and securities sold
under repurchase agreements are accounted for as financing
transactions and are recorded at the contract amount at which the
securities will subsequently be resold or reacquired, plus
accrued interest.  Generally, these transactions may be
terminated on short notice by the Company or its counterparies.

  Other Receivables:  Included in other receivables are
forgivable loans made to investment executives and other revenue-
producing employees, typically in connection with their
recruitment.  Such loans are forgivable based on continued
employment and are amortized over the life of the loan, which is
generally three to five years, using the straight-line method.

  Treasury Stock:  Treasury stock is recorded at cost and
includes common shares repurchased by the Company subsequent to
December 31, 1996, as well as shares purchased from stock
incentive plan participants.

  Depreciation and Amortization:  Equipment is depreciated using
the straight-line method over estimated useful lives of two to
eight years. Leasehold improvements are amortized over the lesser
of the estimated useful life of the improvement or the term of
the lease.

  Income Taxes:  The Company accounts for income taxes in
accordance with Statement of Financial Accounting Standards
(SFAS) No. 109, "Accounting for Income Taxes." Under this method,
deferred tax liabilities and assets and the resultant provision
for income taxes are determined based on the differences between
the financial statement and tax bases of assets and liabilities
using enacted tax rates in effect for the year in which the
differences are expected to reverse.

  Fair Values of Financial Instruments:  Substantially all of the
Company's financial assets and liabilities are carried at market
value or at amounts which, because of their short-term nature,
approximate current fair value. The fair value of the Company's
borrowings, if recalculated based on current interest rates,
would not differ significantly from the amounts recorded at
December 31, 1997.

  Stock-Based Compensation:  The Company accounts for stock
option grants under APB Opinion No. 25 (APB 25) and, accordingly,
does not recognize compensation expense related to option grants.
The Company applies the disclosure provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation."  For grants of
restricted stock, the Company amortizes the value of such shares
as determined on grant date to compensation expense and equity
over the vesting period.

  Recent Accounting Pronouncements:  In June 1996, the Financial
Accounting Standards Board issued SFAS 125, "Transfers and
Servicing of Financial Assets and Extinguishments of
Liabilities."  The Company adopted the provisions of SFAS 125 on
January 1, 1998.  The adoption of SFAS 125 did not have a
material effect on the Company's consolidated financial
statements.

  Use of Estimates:  Management of the Company has made certain
estimates and assumptions relating to the reporting of assets and
liabilities and the disclosure of contingent liabilities in
preparing these financial statements in conformity with generally
accepted accounting principles.  Actual results could differ from
those estimates.

  Earnings Per Share:  The Company adopted SFAS 128, "Earnings
per Share," during the fourth quarter of 1997 and has restated
prior-year amounts.  SFAS 128 requires the reporting of basic and
diluted earnings per share amounts.  Basic earnings per share are
based upon the weighted average number of common shares
outstanding during the reporting period.  Diluted earnings per
share take into account the dilutive effect, if any, of stock
options and other dilutive potential common shares outstanding
during the period.

The following  reconciliation illustrates the computation of
basic and diluted earnings per share as prescribed under SFAS
128:

<TABLE>
                                        Year ended December 31,
(In thousands, except per-share     -----------------------------
 data)                                1997      1996        1995
                                    -------    ------     -------
<S>                                 <C>        <C>        <C>
Net earnings                        $49,275    $56,811    $35,873
                                     ======     ======     ======
Weighted average common shares
 outstanding                         12,277     12,132     12,115

Dilutive effect of stock options
 (net of tax benefits)                  579        435        470
Shares credited to deferred
 compensation plan participants         204         98          -
                                     ------     ------     ------
                                     13,060     12,665     12,585
                                     ======     ======     ======
Basic earnings per
share                                 $4.01      $4.68      $2.96
                                     ======     ======     ======
Diluted earnings per share            $3.77      $4.49      $2.85
                                     ======     ======     ======
</TABLE>

Options to purchase 186,400, 50,500, and 0 shares for 1997, 1996,
and 1995, respectively, were not included in the computation of
diluted earnings per share because options' exercise prices were
greater than the average market price of the common shares for
the period.

B.  Restructuring Reserve

  In conjunction with the adoption of a formal restructuring plan
to combine Dain Bosworth, Rauscher Pierce Refsnes and Clearing
into a single broker-dealer during the first quarter of 1998, the
Company recorded a one-time, after-tax charge of $9.6 million
($15.0 million before taxes), or 74 cents per share diluted,
against third-quarter 1997 earnings to cover severance and other
restructuring costs.  Substantially all of the $15.0 million of
the restructuring costs will result in cash outflows, primarily
during the fourth quarter of 1997 and first quarter of 1998.  The
Company expects that the restructuring will result in the
elimination of approximately 120 positions, of which 87 had been
eliminated by December 31, 1997.  The composition of the $15.0
million charge was as follows:  $12.0 million for severance and
short-term retention payments to terminated employees; $0.8
million for space consolidation expenditures, and the remaining
$2.2 million for other expenditures including costs of changing
the Company's name, relocation, outplacement services and
professional fees related to the restructuring.  As of December
31, 1997, $4.1 million in expenditures had been charged to the
reserve, with approximately $3.1 million relating to severance
costs and the remaining $1.0 million relating to the name change,
relocation, outplacement services and professional fees.  The
Company believes this charge will be adequate to cover all
restructuring expenditures.

C.  Receivable From and Payable to Customers

  The amounts receivable from customers primarily represent
margin balances.  Other customer receivables and payables result
from cash transactions.  Securities owned by customers and held
as collateral for receivables and securities sold short by
customers are not reflected in the consolidated financial
statements.

D.  Receivable From and Payable to Brokers and Dealers

<TABLE>
<CAPTION>
                                                December 31,
                                           --------------------
(In thousands)                               1997       1996
                                           --------   ---------
<S>                                        <C>        <C>
Receivable from brokers and dealers:
  Deposits for securities borrowed         $164,917   $158,246
  Securities failed to deliver               58,673     35,570
  Clearing organizations, correspondent
   brokers and other                          5,831      8,224
                                            -------    -------
                                           $229,421   $202,040
                                            =======    =======
Payable to brokers and dealers:
  Deposits for securities loaned           $538,588   $178,900
  Securities failed to receive               34,627     34,384
  Clearing organizations, correspondent
   brokers and other                          7,755     16,568
                                            -------    -------
                                           $580,970   $229,852
                                            =======    =======
</TABLE>

Securities failed to deliver and receive represent the contract
value of securities which have not been delivered or received
subsequent to settlement date.  Securities borrowed and
securities loaned are recorded at the amount of cash collateral
advanced or received in connection with the transaction.
Generally, these transactions may be terminated on short notice
by the Company or its counterparties.  Securities borrowed
transactions require the Company to deposit cash or other
collateral with the lender.  With respect to securities loaned,
the Company receives cash or other collateral.  The initial
collateral advanced or received has a market value equal to or
greater than the market value of the securities borrowed or
loaned.  The Company monitors the market value of the securities
borrowed and loaned on a daily basis and requests additional
collateral or returns excess collateral, as appropriate.

E.  Trading Securities

The market values of trading securities are summarized as
follows:
<TABLE>
<CAPTION>
                                                December 31,
                                           --------------------
(In thousands)                               1997       1996
                                           --------   ---------
<S>                                        <C>        <C>
Owned:
  U.S. government and government agency
    securities                             $320,646   $154,801
  Municipal securities                      157,336     67,474
  Corporate fixed income and other
    securities                               42,957     53,597
  Equity securities                          20,572     12,952
                                            -------    -------
                                           $541,511   $288,824
                                            =======    =======
Sold, but not yet purchased:
  U.S. government, government agency and
    municipal securities                   $122,265    $52,328
  Corporate and other securities              5,099      6,477
                                           $127,364    $58,805
                                            =======    =======
</TABLE>

F.  Short-Term Borrowings

  Short-term borrowings of the securities subsidiaries at
December 31, 1997 and 1996, consist of $129.0 million and $25.0
million, respectively,  in bank loans on uncommitted lines of
credit.  The majority of these borrowings are collateralized by
trading securities owned and customers' margin securities, and
have a floating rate of interest approximately 50 basis points
above the Federal Funds rate which was 6.5 percent at December
31, 1997.  The market value of trading securities pledged as
collateral at December 31, 1997, was $151.4 million.  At December
31, 1997, approximately $396 million of additional credit was
available under uncommitted credit lines.

  Revolving credit loan borrowings and irrevocable letters of
credit are available under a commitment totaling $50 million.
The facility expires June 25, 1998, and may be extended for up to
three additional one-year periods.  Loans under this facility are
unsecured and bear interest at a floating rate of Federal Funds
plus 85 basis points.  Amounts outstanding under the revolving
credit facility at December 31, 1997, were $50.0 million and the
applicable interest rate was 7.0 percent.  No amounts were
outstanding as of December 31, 1996.  The Company must maintain
certain levels of net worth and regulatory net capital under the
agreement.

The Company also has a $50 million uncommitted credit facility
available to finance loans made to customers through Dain
Rauscher Lending Services Inc.  Such customer loans are
collateralized by customers' securities.  The facility bears
interest at a floating rate approximating 75 basis points over
the Federal Funds rate.  No amounts related to this facility were
outstanding at December 31, 1997.

G.  Subordinated and Other Debt   December 31,

<TABLE>
<CAPTION>
                                                December 31,
                                           --------------------
(In thousands)                               1997       1996
                                           --------   ---------
<S>                                        <C>        <C>
Subordinated debt of securities
 subsidiaries                              $ 9,000    $20,667
Other debt:
  Capital lease obligations (Note I)         6,659      5,794

Other                                            -        829
                                            ------     ------
                                           $15,659    $27,290
                                            ======     ======
</TABLE>

  The four-year subordinated bank loans of the securities
subsidiaries qualify as regulatory capital.  The loans require
monthly, interest-only payments throughout the four-year terms,
with equal quarterly principal payments during years two through
four.  The outstanding subordinated debt bears a floating rate of
interest of approximately 2.5 percent to 2.75 percent above the
London Interbank Offered Rates.  At December 31, 1997, the
weighted average interest rate on all of the Company's
subordinated debt was 8.4 percent.

  The subordinated bank loans and other debt are payable in 1998.

H.  Shareholders' Equity

  Common Stock:  The common stock has a par value of $.125 per
share; 30,000,000 shares are authorized.  In 1996 the Company
completed the repurchase of 600,000 shares of common stock at a
total cost of $11.8 million under a program that was initiated in
1994.  Under this program the Company repurchased and
subsequently retired 59,000 and 297,000 shares in 1996 and 1995,
respectively.  In August 1996 and December 1997, respectively,
the Company's Board of Directors authorized additional programs
to repurchase up to 100,000 and 600,000 shares of the Company's
common stock.  Purchases of the common stock may be made from
time to time at prevailing prices in the open market, by block
purchases, or in privately negotiated transactions.  The
repurchased shares will be held as treasury stock and used for
the Company's employee stock option and other benefit plans, or
for other corporate purposes.  During 1996 no shares were
repurchased pursuant to the 100,000 share program.  During 1997,
the Company repurchased 87,568 shares at a total cost of $4.8
million pursuant to the 100,000 share program and no shares
pursuant to the 600,000 share program.

  On October 31, 1995, the Company's Board of Directors declared
a three-for-two stock split effected in the form of a 50-percent
stock dividend payable on December 20, 1995, to shareholders of
record at the close of business on December 6. All references in
the consolidated financial statements to numbers of shares
outstanding and related prices and per-share amounts have been
restated to reflect the split.

  At December 31, 1997, 2,924,000 shares of the Company's common
stock were reserved for  issuance under the 1996 Stock Incentive
Plan; 1,930,212 shares were reserved for issuance under the 1986
Stock Option Plan; and 159,000 shares were reserved for issuance
to the Company's retirement plan.

  Stock Compensation Plans:  The Company maintains two fixed
stock compensation plans, the 1986 Stock Option Plan (1986 Plan)
and the 1996 Stock Incentive Plan (1996 Plan), which are used to
provide stock incentives to key employees and outside directors.
Each plan authorizes the grant of incentive and non-qualified
options and the 1996 Plan also authorizes the grant of restricted
and other stock awards.  The Company made its final grants under
the 1986 Plan in February 1996.  The 1996 Plan requires and the
Company under the 1986 Plan made, but did not require, all option
grants at 100 percent of the fair market value of the shares at
the date of grant.  Options generally become exercisable at rates
of 20, 50 and 100 percent as of two, three and four years,
respectively, after the date of grant and expire 10 years from
date of grant.  Options granted to outside directors become
exercisable six months after grant date and expire five years
after grant date. At December 31, 1997, 2,523,100 shares of
common stock were available for grant under the 1996 Plan.

The Company applies APB 25 and its interpretations in accounting
for its stock incentive plans.  Accordingly, no compensation
expense has been recognized in the consolidated financial
statements for stock option grants.  Had compensation expense
been determined based on the fair value of the options at the
grant date for 1997, 1996 and 1995 awards consistent with SFAS
123, the Company's net earnings and earnings per share would have
been reduced to the pro forma amounts indicated below:

<TABLE>
<CAPTION>
                                       Year ended December 31,
(In thousands, except per-share    -----------------------------
  amounts)                           1997       1996      1995
                                   -----------------------------
<S>                                <C>       <C>        <C>
Net earnings:
  As reported                      $49,275   $56,811    $35,873
  Pro forma                         47,914    56,392     35,681

Earnings per share:
Basic:
  As reported                        $4.01     $4.68      $2.96
  Pro forma                           3.90      4.65       2.95
Diluted:
  As reported                         3.77      4.49       2.85
  Pro forma                           3.67      4.45       2.84

</TABLE>

The weighted average per-share fair value of options granted
during 1997, 1996 and 1995, was $17.55, $7.96 and $4.51,
respectively.  The fair value of each option granted is estimated
on the date of grant using the Black-Scholes option-pricing model
with the following weighted average assumptions used for grants
in 1997, 1996 and 1995, respectively:  dividend yields of 1.5
percent, 2.3 percent and 2.7 percent; expected volatility of 36.6
percent in 1997 and 30.2 percent for 1996 and 1995; risk-free
interest rates of 4.8 percent, 5.0 percent and 5.9 percent; and
expected lives of five years.  Pro forma amounts may not be
indicative of future results.

The following table summarizes the activity related to the
Company's stock option plans for each of the last three years:

<TABLE>
<CAPTION>
                        1997            1996            1995
                  ----------------- --------------- ---------------
                           Weighted        Weighted        Weighted
                           Average         Average         Average
                           Exercise        Exercise        Exercise
                   Shares   Price   Shares   Price   Shares   Price
                   ------   -----   ------   -----   ------   -----
<S>             <C>        <C>    <C>       <C>    <C>       <C>
Options
outstanding at
beginning of
 year           1,304,045  $17.14 1,243,987 $14.71 1,303,500 $13.11
Granted           419,800   49.90   260,600  24.86   357,900  16.38
Exercised        (155,955)  12.90  (140,492)  9.66  (298,493)  8.73
Canceled          (98,565)  24.87   (60,050) 17.86  (118,920) 17.19
                ---------   ----- ---------  ----- ---------  -----
Options
outstanding at
end of year     1,469,325  $26.51 1,304,045 $17.14 1,243,987 $14.71
                =========   ===== =========  ===== =========  =====
Options
exercisable at
end of year       551,700           405,980          268,837
                =========         =========        =========
Price range of
outstanding
options        $4.58-$59.44      $4.58-$33.38     $4.58-$20.83
Price range
of exercised
options        $4.67-$20.83      $4.58-$20.83     $4.33-$20.83

Weighted-average
fair value of
options granted
during the year    $17.55             $7.96            $4.51

</TABLE>

The following table summarizes currently outstanding and
exercisable options at December 31, 1997:

<TABLE>
<CAPTION>
                      Options Outstanding     Options Exercisable
                      Weighted
           Number      Average   Weighted                Weighted
 Range of   Out-      Remaining  Average     Number       Average
 Exercise  standin   Contractual Exercise  Exercisable   Exercise
  Prices  at 12/31/97   Life      Price    at 12/31/97     Price
--------- ----------- ---------- -------- ------------  ---------
<S>          <C>        <C>       <C>       <C>          <C>
$ 4.58-$ 4.67   69,250  2.6 years $ 4.61     69,250      $ 4.63
$10.00-$15.83  489,125  5.9        14.33    319,525       13.53
$16.83-$22.38  446,050  6.9        21.23    162,925       20.50
$25.38-$33.38   68,000  8.7        30.44          0           0
$42.75-$59.44  396,900  9.4        50.59          0           0
             ---------             -----    -------       -----
             1,469,325            $26.51    551,700      $14.47
             =========             =====    =======       =====
</TABLE>

The Company's closing stock price on December 31, 1997, was
$69.00.

Net of cancellations, the Company issued 42,770, 33,131 and
19,743 shares of common stock to key employees and outside
directors in 1997, 1996 and 1995, respectively, which are
restricted in that such shares are subject to certain vesting
provisions.  The restricted shares awarded had weighted average
per-share fair values at grant date of $58.80, $25.07 and $20.18
in 1997, 1996 and 1995, respectively, and resulted in
compensation expense of $399,000, $355,000 and $20,000 being
recorded in the consolidated financial statements in 1997, 1996
and 1995, respectively.

I.  Commitments and Contingent Liabilities

  Leases: The Company and its subsidiaries lease office space,
furniture and communications and data processing equipment under
several noncancelable leases. Most office space leases are
subject to escalation and provide for the payment of real estate
taxes, insurance and other expenses of occupancy, in addition to
rent.

  Aggregate minimum rental commitments as of December 31, 1997,
are as follows:

<TABLE>
<CAPTION>
                                         Capital    Operating
(In thousands)                            leases      leases
                                         -------    ---------
<S>                                       <C>       <C>
1998                                      $7,052     $19,000
1999                                           -      16,725
2000                                           -      13,370
2001                                           -      11,272
2002                                           -       9,720
Thereafter                                     -      50,550
                                           -----     -------
Total minimum lease payments               7,052    $120,637
Less amount representing interest           (393)    =======
                                           -----
Present value of minimum lease payments   $6,659
                                           =====
</TABLE>

  Rental expense for operating leases was $27,679,000,
$25,558,000, and $25,771,000, for the years ended December 31,
1997, 1996 and 1995, respectively. Included in net equipment,
leasehold improvements and buildings at December 31, 1997 and
1996, is $2,230,000 and $3,837,000, respectively, for leases
which have been capitalized.

Litigation:   The Company and/or its securities subsidiaries are
defendants in various actions, suits and proceedings before a
court or arbitrator or by a governmental agency.  Such matters
involve alleged violations of federal and state securities laws
and other laws.  Certain of these actions, including certain of
the actions described in more detail below, claim substantial
damages and, if determined adversely to the Company and/or its
subsidiaries, could have a material adverse effect on the
consolidated financial condition or results of operations of the
Company.

  The Company and Dain Bosworth have been named as defendants in
eleven actions brought in connection with losses suffered under
single premium deferred annuities issued by Midwest Life
Insurance Company ("MWL"), a former subsidiary acquired by the
Company in 1980 and sold by it in early 1986.  Such annuities
were sold primarily through the private client sales force of
Dain Bosworth.  MWL, which was sold by the Company in 1986 and
was sold twice thereafter, was declared insolvent and ordered
liquidated in August 1991 by the State of Louisiana, the
jurisdiction to which its final owners relocated it.  Generally,
MWL policyholders have been reimbursed for their losses up to
$100,000  per holder by the state guaranty associations, and the
policyholders and state guaranty associations, between them, have
received approximately $.30 for each $1.00 of loss in liquidation
payments from the liquidator of MWL's estate.  The plaintiffs (or
real parties in interest) in the first ten of these cases are the
Life and Health Guaranty Associations of each of Colorado, Iowa,
Minnesota, Montana, Nebraska, North Dakota, Oregon, South Dakota,
Washington and Wyoming, which claim to have succeeded to the
rights of policyholders they reimbursed for MWL losses, and/or
certain individual policyholders.  They allege common law fraud,
breach of fiduciary duty, negligence and negligent
misrepresentation.  The plaintiff in the eleventh action is the
liquidator of MWL's estate.  It alleges RICO violations, breach
of fiduciary duty and conspiracy to breach fiduciary duty.  The
plaintiff guaranty associations and individuals seek to recover
in excess of $64 million in compensatory damages, as well as
punitive damages, interest, costs, attorneys' fees and other
relief.  The liquidator of MWL's estate also seeks to recover
treble damages.   By Louisiana statute, the compensatory damages
sought by the liquidator would in large part be distributed to
the insurance guaranty association and individual policyholders
who are plaintiffs in the first ten actions.  The Company and
Dain Rauscher, as successor to Dain Bosworth, believe they have
substantial and meritorious defenses available and are defending
themselves vigorously in these actions.

  Rauscher Pierce Refsnes and one of its officers are named as
defendants in an action by the Federal Deposit Insurance
Corporation ("FDIC"), as successor to The Resolution Trust
Corporation ("RTC"), alleging negligence, breach of contract,
breach of fiduciary duty and fraud in connection with the May
1991 sale by the RTC of the stock of WESAV Mortgage Corporation
("WESAV").  Rauscher Pierce Refsnes acted as the broker for the
sale.  Smith Barney, which acted as the RTC's financial advisor,
Express America Holdings Corporation, the successor to the
winning bidder and certain individual officers of Express America
and WESAV were also named as defendants in this action but have
since reached settlement agreements with the FDIC.  The plaintiff
seeks alleged compensatory damages of approximately $15 million
and punitive damages of $60 million.  Dain Rauscher, as successor
to Rauscher Pierce Refsnes,  and its officer believe they have
substantial and meritorious defenses available and are defending
themselves vigorously in this action.

  Rauscher Pierce Refsnes has also been named as a defendant in
an action brought by Orange County, California, in connection
with five note offerings for an aggregate of $975 million by the
County in June through August of 1994.  The County alleges that
Rauscher Pierce Refsnes acted as its financial advisor in
connection with these offerings and that, by failing to apprise
it of the alleged risks involved in the Orange County Investment
Pool (the "OCIP") and prevent the issuance of allegedly
inaccurate official statements, Rauscher Pierce Refsnes became
liable for breach of contract, professional negligence, breach of
fiduciary duty and aiding and abetting breaches of fiduciary duty
committed by the County's Treasurer and Assistant Treasurer.
Rauscher Pierce Refsnes denies the County's allegations,
including those relating to Rauscher's role in connection with
these transactions.  The County seeks to recover at least $500
million in damages for losses it allegedly suffered in the OCIP
from Rauscher Pierce Refsnes and defendants in other actions.
Dain Rauscher, as the successor of Rauscher Pierce Refsnes,
believes it has substantial and meritorious defenses available
and is defending itself  vigorously in this action.

  While the outcome of any litigation is uncertain, management,
based in part upon consultation with legal counsel as to certain
of the actions pending against the Company and/or its
subsidiaries, believes that the resolution of all such matters
will not have a material adverse effect on the Company's
consolidated financial condition or results of operations of the
Company as set forth in the consolidated financial statements
contained herein.

J.  Trading Activities and Financial Instruments with Off-
Balance-Sheet Risk

  Dain Rauscher is a dealer in corporate, tax-exempt and
governmental fixed income securities and corporate equity
securities and may recognize profits or losses on transactions
in, or fluctuations in the value of, such securities held in
inventory.  Internal guidelines intended to limit the size and
risk of inventories maintained have been established and are
periodically reviewed.  These inventories are held primarily for
distribution to Dain Rauscher's individual and institutional
clients in order to meet those clients' needs.  Revenues from
principal transactions for the two years ended December 31, 1997,
originate from the following:

<TABLE>
<CATPION>
                                           December 31,
                                   ---------------------------
(In thousands)                           1997        1996
                                   ------------  -------------
<S>                                 <C>            <C>
Equity securities                     $75,699       $89,251
Municipal securities                   32,100        29,451
Government securities                  19,289        20,826
Corporate fixed income securities      15,483        20,371
Mortgage-backed and other securities    9,579         9,141
                                      -------       -------
                                     $152,150      $169,040
                                      =======       =======
</TABLE>

  Dain Rauscher sells securities not yet purchased (short sales)
for its own account, primarily to hedge its fixed income trading
securities.  The establishment of short positions exposes the
Company to off-balance-sheet market risk in the event prices
increase, as the Company may be obligated to acquire the
securities at prevailing market prices.

  The Company periodically hedges its fixed income trading
inventories with financial futures or option contracts.  At
December 31, 1997 and 1996, respectively, the Company had open
commitments to sell under financial futures contracts with
notional amounts of $20.6 million and $6.9 million.  The Company
had no written option contracts at December 31, 1997 or 1996.
The fair market values of these contracts was not material at
December 31, 1997 or 1996.  In addition, the average fair market
values of these contracts during 1997 and 1996 were not material.
Such option and financial futures contracts expose the Company to
off-balance-sheet market risk in the event that the changes in
interest rates do not closely correlate with the change in the
security price.  Transactions in futures contracts are conducted
through regulated exchanges which guarantee performance of
counterparties and are settled in cash on a daily basis, thereby
minimizing credit risk.   Maintaining futures contracts typically
requires the Company to deposit cash or securities with an
exchange or other financial intermediary as security for its
obligations.  Additional cash or securities may be required to be
deposited thereafter due to fluctuations in the market value of
the futures contract.  In writing option contracts, the Company
receives a premium from the purchaser in exchange for incurring
an obligation to purchase or sell securities upon exercise of the
option.   These obligations may require the Company to purchase
securities at prices higher than prevailing market prices or sell
securities at prices below prevailing market prices in order to
fulfill its obligations under the contracts.  Other than as
described, the Company does not enter into other derivative
financial instruments with off-balance-sheet risk.  Derivative
financial instruments held or issued for trading purposes were
immaterial to the consolidated financial statements.  The
Company's exposure to credit risk is represented by the fair
value of trading securities owned.

  In the normal course of business, the Company's activities
involve the execution, settlement and financing of various
securities transactions.  These activities may expose the Company
to off-balance-sheet credit and market risks in the event the
customer or counterparty is unable to fulfill its contractual
obligations.  Such risks may be increased by volatile trading
markets.

  In the normal course of business, the Company enters into when-
issued underwriting and purchase commitments.  Transactions
relating to such commitments open at year end and subsequently
settled had no material effect on the consolidated financial
statements.

  The Company seeks to control the risks associated with its
customer activities by requiring customers to maintain margin
collateral in compliance with various regulatory and internal
guidelines.  The Company monitors required margin levels daily
and, pursuant to such guidelines, requires customers to deposit
additional collateral or to reduce positions when necessary.
Market declines could, however, reduce the value of collateral
below the amount loaned, plus accrued interest, before the
collateral could be sold.

  A portion of the Company's customer activity involves the sale
of securities not yet purchased (short sales) and the writing of
option contracts. Such transactions may require the Company to
purchase or sell financial instruments at prevailing market
prices in order to fulfill the customer's obligations.

  The Company lends money subject to reverse repurchase
agreements. All positions are collateralized, primarily with U.S.
government or U.S. government agency securities.  The Company
generally takes physical possession of securities purchased under
agreements to resell. Such transactions may expose the Company to
risk in the event such borrowers do not repay the loans and the
value of collateral held is less than that of the underlying
receivable.  These agreements provide the Company with the right
to maintain the relationship between market value of the
collateral and the receivable.

The Company may pledge firm or customer margin securities for
bank loans, repurchase agreements, securities loaned or to
satisfy margin deposits of clearing organizations.  All
repurchase agreements are collateralized by cash or securities
delivered by the Company.  In the event the counterparty is
unable to return such securities pledged, the Company may be
exposed to the risks of acquiring the securities at prevailing
market prices or holding collateral possessing a market value
less than that of the related pledged securities.  The Company
seeks to control these risks by monitoring the market value of
securities pledged and requiring adjustments of collateral levels
where necessary.  At December 31, 1997, the market value of such
securities pledged approximated the borrowings outstanding.

K.  Regulatory Requirements

  The Company's securities subsidiaries are subject to the
Securities and Exchange Commission's Uniform Net Capital Rule.
Clearing, the Company's operations subsidiary until February 28,
1998, cleared and settled trades for Dain Rauscher.  Clearing
carried all customer accounts, extended margin credit to
customers, paid interest on credit balances of customers and
invested any excess customer balances.  As a result, Clearing was
subject to the Uniform Net Capital Rule whereby net capital of
not less than 2 percent of aggregate debit items must be
maintained.  The New York Stock Exchange, Inc. also may require a
member organization to reduce its business if regulatory net
capital is less than 4 percent of such aggregate debit items, and
may prohibit a member firm from expanding its business and
declaring cash dividends if its regulatory net capital is less
than 5 percent of such aggregate debit items.  At December 31,
1997, net capital was $89.4 million at Clearing, which was 7.2
percent of aggregate debit balances and $27.1 million in excess
of the 5-percent requirement.  At December 31, 1997, Dain
Bosworth and Rauscher Pierce Refsnes had net capital requirements
of $1.0 million each as neither firm carried customer balances on
its balance sheet.  At December 31, 1997, Dain Bosworth and
Rauscher Pierce Refsnes had net capital of $33.9 million and
$23.3 million, respectively, in excess of their minimum
requirements.  Beginning in March 1998, only Dain Rauscher, the
Company's single remaining broker-dealer, is subject to the
Uniform Net Capital Rule and, accordingly, must maintain net
capital of at least 2 percent of aggregate debit items.

  Rule 15c3-3 of the Securities Exchange Act of 1934 specifies
certain conditions under which brokers and dealers carrying
customer accounts may be required to maintain cash or qualified
securities in a special reserve account for the exclusive benefit
of customers.  Amounts to be maintained are computed in
accordance with a formula defined in the Rule. At December 31,
1997, the Company was not required to have any amounts segregated
in special reserve accounts.

L.  Employee Benefit Plans

  The Company sponsors a retirement plan which covers
substantially all full-time employees who are at least 21 years
of age and have been employed for at least six months.    Partici
pants may contribute on a pretax basis up to 12 percent of
eligible compensation to the plan subject to certain aggregate
limitations; the Company then matches up to 5 percent of eligible
compensation at a 40-percent rate.  Matching contributions are
limited to $3,000 per employee annually and are paid to the stock
fund within the plan.  Also, at the end of each year, a
profitability-based contribution, as determined by the Company's
Board of Directors, is made to the plan.  The minimum required
contribution is 3 percent of eligible compensation.

  The Company's policy is to fund plan costs currently.  Earnings
have been charged for contributions, net of forfeitures, to the
plan as follows:  $15,759,000, $18,901,000 and $16,880,000 for
1997, 1996 and 1995, respectively.

M.  Income Taxes

  Income tax expense consists of the following:

<TABLE>
<CAPTION>
                                      Year ended December 31,
                                     --------------------------
(In thousands)                         1997     1996     1995
                                     -------  -------  --------
<S>                                  <C>      <C>      <C>
Current:
   Federal                           $27,561  $32,896  $20,183
   State                               5,083    5,534    3,207
Deferred:
   Federal                            (4,360)  (6,710)  (2,410)
   State                                (804)  (1,129)    (582)
                                      ------   ------   ------
                                     $27,480  $30,591  $20,398
                                      ======   ======   ======
</TABLE>

  A reconciliation of ordinary federal income taxes (based on a
rate of 35 percent) with the actual tax expense provided on
earnings is as follows:

<TABLE>
<CAPTION>
                                      Year ended December 31,
                                     --------------------------
(Dollars In thousands)                1997     1996     1995
                                     -------  -------  --------
<S>                                  <C>      <C>       <C>

Ordinary federal income tax expense  $26,864  $30,590  $19,695
State income taxes, net of federal
 tax benefit                           3,229    3,249    1,599
Tax-exempt interest, net of related
 interest expense                     (1,428)    (872)  (1,324)
Other                                 (1,185)  (2,376)     428
                                      ------   ------   ------
                                     $27,480  $30,591  $20,398
                                      ======   ======   ======

Effective tax rate                      35.8%    35.0%    36.3%
                                      ======   ======   ======
</TABLE>

  The tax effects of temporary differences that give rise to the
deferred tax assets and deferred tax liabilities are:

<TABLE>
<CAPTION>
                                           December 31,
                                        -------------------
(In thousands)                           1997        1996
                                        -------     -------
<S>                                     <C>         <C>
Deferred tax assets:
  Accruals not currently deductible     $40,873     $36,025
  Tax attributes acquired                 1,120       1,632
  Fixed assets                            2,506       1,573
  Other                                     597         514
                                         ------      ------
                                         45,096      39,744
                                         ------      ------
Deferred tax liabilities:
  Other                                    (228)        (40)
                                         ------      ------
                                        $44,868     $39,704
                                         ======      ======
</TABLE>

  The Company has determined that it is not required to establish
a valuation allowance for the deferred tax asset since it is more
likely than not that the deferred tax asset will be realized
principally through carryback to taxable income in prior years,
future reversals of existing taxable temporary differences, and,
to a lesser extent, future taxable income.   The Company's
conclusion that it is more likely than not that the deferred tax
asset will be realized is based on federal taxable income of over
$184 million in the carryback period, substantial state taxable
income in the carryback period, as well as prospects for
continued earnings.

N.  Subsequent Event

On February 9, 1998, the Company announced that it had entered
into an agreement to acquire Wessels, Arnold & Henderson, LLC, a
privately held investment banking and institutional equity sales
and trading firm based in Minneapolis.  The approximate purchase
price of $150 million includes $120 million in cash, up to $30
million face amount in five-year, subordinated debentures and
other direct costs of the acquisition.  The cash portion of the
purchase price is expected to be paid from available cash and a
new subordinated credit facility.  The transaction will be
accounted for as a purchase and is expected to be completed on
March 31, 1998, pending regulatory approval.

<TABLE>
                    DAIN RAUSCHER CORPORATION
                 QUARTERLY FINANCIAL INFORMATION
       (Unaudited, in thousands, except per-share amounts)

<CAPTION>

                       First      Second     Third     Fourth
                      Quarter    Quarter    Quarter    Quarter
                      -------    -------    -------    -------
<S>                  <C>        <C>        <C>       <C>
1997
Net revenues         $165,962   $156,131   $181,368   $188,641
                      =======    =======    =======    =======
Earnings before
 income taxes         $24,389    $17,499    $10,991    $23,876
                      =======    =======    =======    =======
Net earnings          $15,755    $11,137     $7,056    $15,327
                      =======    =======    =======    =======
Per-share data:
 Basic net earnings     $1.29       $.91       $.57      $1.24
                      =======    =======    =======    =======
 Diluted net earnings   $1.22       $.86       $.54      $1.16
                      =======    =======    =======    =======
 Dividends               $.18       $.18       $.18       $.18
                      =======    =======    =======    =======

1996
Net revenues         $156,034   $153,843   $151,035   $164,844
                      =======    =======    =======    =======
Earnings before
 income taxes         $23,289    $19,954    $19,984    $24,175
                      =======    =======    =======    =======
Net earnings          $15,080    $13,028    $12,990    $15,713
                      =======    =======    =======    =======
Per-share data:
 Basic net earnings     $1.25      $1.07      $1.07      $1.29
                      =======    =======    =======    =======
 Diluted net earnings   $1.21      $1.04      $1.02      $1.23
                      =======    =======    =======    =======
 Dividends               $.11       $.15       $.15       $.15
                      =======    =======    =======    =======

</TABLE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE:

  None.

                            PART III
                                
ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT:
See Part I, Item 4 of this Annual Report for information with
respect to executive officers of the Company.  Other information
required in Item 10 will be contained in the Company's definitive
Proxy Statement to be filed pursuant to Regulation 14A within 120
days after the close of the fiscal year for which this Report is
filed and is incorporated herein by reference.

ITEM 11.  EXECUTIVE COMPENSATION:

The information required in Item 11 will be contained in the
Company's definitive Proxy Statement to be filed pursuant to
Regulation 14A within 120 days after the close of the fiscal year
for which this Report is filed and is incorporated herein by
reference, except that, pursuant to Item 402(a)(8) of Regulation
S-K, the information to be contained in the Company's definitive
Proxy Statement in response to paragraphs (k) and (l) of Item 402
is not incorporated by reference herein.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT:

The information required in Item 12 will be contained in the
Company's definitive Proxy Statement to be filed pursuant to
Regulation 14A within 120 days after the close of the fiscal year
for which this Report is filed and is incorporated herein by
reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:

The information required in Item 13 will be contained in the
Company's definitive Proxy Statement to be filed pursuant to
Regulation 14A within 120 days after the close of the fiscal year
for which this Report is filed and is incorporated herein by
reference.

                             PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON
FORM 8-K:

(a) Documents filed as part of this Report:
                                                             Page
                                                             ----
1.  Financial statements:
    Reference is made to the table of contents to financial
    statements and financial statement schedule hereinafter
    contained                                                  45

2.  Financial statement schedules:
    Reference is made to the table of contents to financial
    statements and financial statement schedule hereinafter
    contained for all other financial statement schedules      45

3.  Exhibits:

Item No.        Item                         Method of Filing
------- -----------------------------  --------------------------
  3.1   Restated Certificate of        Incorporated by reference
        Incorporation of the Company.  to Exhibit 4.1 to the
                                       Company's Registration
                                       Statement on Form S-8
                                       dated May 13, 1997, File
                                       No. 333-26947.

  3.2   Amended and Restated Bylaws    Incorporated by reference
        of the Company.                to Exhibit 3.1 to the
                                       Company's Quarterly Report
                                       on Form 10-Q dated
                                       September 30, 1996.

  4.1   Rights Agreement dated         Incorporated by reference
        April 30, 1997.                to the Company's
                                       Registration Statement on
                                       Form 8 dated May 1, 1997.

  4.2   Credit Agreement dated         Incorporated by reference
        June 27, 1997.                 to Exhibit 4.1 to the
                                       Company's Quarterly Report
                                       on Form 10-Q dated June
                                       30, 1997.

  4.3   First Amendment to Credit      Filed herewith.
        Agreement dated December 22,
        1997.

 10.1*  1986 Stock Option Plan, as     Incorporated by reference
        amended on April 24, 1987,     to Exhibit 10(b) to the
        May 9, 1990, March 3, 1993     Company's Current Report
        and April 27, 1993.            on Form 8-K dated July 15,
                                       1993.

 10.2   Form of Indemnity Agreement    Incorporated by reference
        with Directors and Officers    to Exhibit 10(c) to the
        of the Company.                Company's Annual Report on
                                       Form 10-K for the year
                                       ended December 31, 1990.

 10.3*  Form of Non-Employee           Incorporated by reference
        Director Retirement            to Exhibit 10(g) to the
        Compensation Agreement.        Company's Annual Report on
                                       Form 10-K for the year
                                       ended December 31, 1992.

 10.4*  IFG Executive Deferred         Incorporated by reference
        Compensation Plan dated        to Exhibit 10(a) to the
        March 31, 1993.                Company's Current Report
                                       on Form 8-K dated July 15,
                                       1993.

 10.5   Trust Agreement for IFG        Incorporated by reference
        Executive Deferred             to Exhibit 10.5 to the
        Compensation Plan dated        Company's Annual Report on
        February 11, 1994.             Form 10-K dated December
                                       31, 1994.

 10.7*  1996 Stock Incentive Plan.     Incorporated by reference
                                       to Exhibit 10 to the
                                       Company's Quarterly Report
                                       on Form 10-Q dated March
                                       31, 1996.

 10.8*  Offer of Employment and        Filed herewith.
        Amended Offer of Employment
        Agreements between the
        Company and William A.
        Johnstone dated May 28, 1996,
        and October 9, 1997,
        respectively.

 11     Computation of net earnings    Filed herewith.
        per share.

 21     List of subsidiaries.          Filed herewith.

 23     Independent Auditors' consent. Filed herewith.

 27     Financial Data Schedule.       Filed herewith.

 99     Cautionary Statements for      Filed herewith.
        Purposes of the "Safe Harbor"
        Provisions of the Private
        Securities Litigation Reform
        Act of 1995.

* Management contract or compensatory plan or arrangement
required to be filed as an exhibit pursuant to Item 14(c) of this
report.

(b) Two reports on Form 8-K were filed during the fourth quarter
 of 1997.

(1)  Items Reported

     Item 5 - Other events (Combining Dain Bosworth and Rauscher
Pierce Refsnes; name change of registrant; restructuring of
management team; and 1997 third quarter restructuring charge)

     Item 7 - Financial Statement and Exhibits

     Exhibit 99 - Press release including the combining of Dain
Bosworth and Rauscher Pierce Refsnes, the name change of
registrant, the restructuring of registrant's management team and
the 1997 third quarter restructuring charge.

     Date of earliest event reported - October 14, 1997.

     Financial Statements Filed - None

(2)  Items Reported

     Item 5 - Other events (Registrant's Board of Directors
authorizing 600,000 share repurchase plan)

     Item 7 - Financial Statements and Exhibits

     Exhibit 99 - Press release regarding Board authorization of
600,000 share repurchase plan.

     Date of earliest event reported - December 9, 1997.

     Financial Statements Filed - None

REPORT FOR EMPLOYEE STOCK PURCHASE PLAN:

  The financial statements required by Form 11-K with respect to
the Company's Retirement Plan will be filed by amendment hereto
within 180 days of such plan's fiscal year end as permitted by
Rule 15d-21.

                           SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the Registrant in the capacities indicated:

Signature                Title


Irving Weiser            Chairman of the Board, President, Chief
---------------------    Executive Officer
Irving Weiser            (Principal Executive Officer)
                         and Director

John C. Appel            Vice Chairman, Chief Financial Officer
---------------------    (Principal Financial and Accounting
John C. Appel            Officer) and Director

William A. Johnstone     Vice Chairman and Director
---------------------
William A. Johnstone

J. Evans Attwell         Director
---------------------
J. Evans Attwell

Susan S. Boren           Director
---------------------
Susan S. Boren

F. Gregory Fitz-Gerald   Director
---------------------
F. Gregory Fitz-Gerald

Walter F. Mondale        Director
---------------------
Walter F. Mondale

C.A. Rundell, Jr.        Director
---------------------
C.A. Rundell, Jr.

Robert L. Ryan           Director
---------------------
Robert L. Ryan

Arthur R. Schulze, Jr.   Director
---------------------
Arthur R. Schulze, Jr.


                    DAIN RAUSCHER CORPORATION
      FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
          As of December 31, 1997 and 1996 and for each
              of the years in the three-year period
                     ended December 31, 1997

                        TABLE OF CONTENTS
                                
                                                          Page
                                                          ----
Independent Auditors' Report                               24
Consolidated Financial Statements:
  Consolidated statements of operations                    25
  Consolidated balance sheets                              26
  Consolidated statements of shareholders' equity          27
  Consolidated statements of cash flows                    28
  Notes to consolidated financial statements               29

Financial Statement Schedule:

  Schedule III - Condensed financial information of the
  registrant                                               46

Schedules not listed above have been omitted because they are
either not applicable or the required information has been
provided in the consolidated financial statements or notes
thereto.

<TABLE>
         SCHEDULE III __ CONDENSED FINANCIAL INFORMATION
                        OF THE REGISTRANT
                                
                    DAIN RAUSCHER CORPORATION
                        (Parent Company)
                                
                    STATEMENTS OF OPERATIONS
                         (In thousands)

<CAPTION>
                                      Year ended December 31,
                                      -----------------------
                                        1997    1996    1995
                                      -------  ------  ------
<S>                                   <C>      <C>     <C>
Revenues:
 Management fees                      $18,941  $9,373  $5,980
 Facilities rental                        964   1,058   1,057
 Interest                               2,043   1,743   1,365
                                       ------  ------  ------
                                       21,948  12,174   8,402
                                       ------  ------  ------
Expenses:
 Compensation and benefits             12,475   8,010   4,988
 Interest                               2,218   2,011   1,947
 Other operating expenses              12,823   8,619   5,960
 Restructuring charge                  15,000       -       -
                                       ------  ------  ------
                                       42,516  18,640  12,895
                                       ------  ------  ------
Loss before income taxes and equity
 in subsidiaries' earnings            (20,568) (6,466) (4,493)
Income tax benefit                      7,851   2,520   1,929
                                       ------  ------  ------
Loss before equity in subsidiaries'
  earnings                            (12,717) (3,946) (2,564)
Equity in subsidiaries' earnings       61,992  60,757  38,437
                                       ------  ------  ------
Net earnings                          $49,275 $56,811 $35,873
                                       ======  ======  ======
<FN>
See accompanying notes to condensed financial information.
</TABLE>

<TABLE>
         SCHEDULE III __ CONDENSED FINANCIAL INFORMATION
                OF THE REGISTRANT __ (Continued)
                    DAIN RAUSCHER CORPORATION
                        (Parent Company)
                         BALANCE SHEETS
                         (In thousands)
<CAPTION>
                                               December 31,
                                            -----------------
                                              1997     1996
                                            -------- --------
<S>                                         <C>      <C>
Assets:
 Cash                                       $    974 $  1,070
 Advances to subsidiaries (eliminated in
  consolidation)                              70,119   28,419
 Equipment, leasehold improvements and
  building, at cost, less accumulated
  depreciation of $13,489 and $12,498,
  respectively                                18,360   16,428
 Investment in subsidiaries, at cost, plus
  equity in undistributed earnings
  (eliminated in consolidation)              414,736  348,894
 Other assets                                  7,870    5,446
                                             -------  -------
                                            $512,059 $400,257
                                             =======  =======

Liabilities and Shareholders' Equity:
Liabilities:
 Short-term borrowings                      $ 50,000 $      -
 Advances from subsidiaries (eliminated
  in consolidation)                          102,300   87,630
 Accounts payable and accrued expenses        34,027   30,137
 Capital lease obligations and other debt      6,641    6,604
                                             -------  -------
                                             192,968  124,371
                                             -------  -------
Shareholders' equity:
 Common stock                                  1,546    1,522
 Additional paid-in capital                   89,321   81,316
 Retained earnings                           233,419  193,048
 Treasury stock                               (5,195)       -
                                             -------  -------
                                             319,091  275,886
                                             -------  -------
                                            $512,059 $400,257
                                             =======  =======
<FN>
See accompanying notes to condensed financial information.
</TABLE>

<TABLE>

         SCHEDULE III __ CONDENSED FINANCIAL INFORMATION
                OF THE REGISTRANT __ (Continued)
                    DAIN RAUSCHER CORPORATION
                        (Parent Company)
                    STATEMENTS OF CASH FLOWS
                         (In thousands)

<CAPTION>
                                        Year ended December 31,
                                      --------------------------
                                        1997      1996     1995
                                      -------    ------   ------
<S>                                  <C>       <C>       <C>
Cash flows from operating activities:
Net earnings                         $ 49,275  $ 56,811  $35,873
Non-cash items included in earnings:
 Equity in net earnings of
 subsidiaries                         (61,992)  (60,788) (38,437)
 Depreciation, amortization and other   7,899     4,014    3,299
                                      -------   -------  -------
                                       (4,818)       37      735
Change in operating assets and
 liabilities                            9,917     7,054    4,423
                                      -------   -------  -------
Cash provided by operating activities   5,099     7,091    5,158
                                      -------   -------  -------
Cash flows from financing activities:
 Proceeds from:
  Revolving credit agreement           50,000         -        -
  Issuance of common stock              1,779     1,580    2,368
  Advances from subsidiaries, net           -    15,197   15,829
Payments for:
  Advances to subsidiaries, net       (27,030)        -        -
  Dividends on common stock            (8,904)   (6,792)  (5,177)
  Capital leases and other  debt       (1,288)   (2,454)  (2,473)
  Purchases of common stock            (5,195)   (1,341)  (6,849)
  Revolving credit agreement                -         -  (15,000)
                                      -------   -------  -------
Cash provided (used) by financing
 activities                             9,362     6,190  (11,302)
                                      -------   -------  -------
Cash flows from investing activities:
  Dividends from subsidiaries          10,648    13,170   18,700
  Investment in subsidiaries          (14,500)  (18,000)  (9,000)
  Purchases of fixed assets           (10,705)   (8,299)  (3,513)
                                      -------   -------  -------
Cash provided (used) by investing
 activities                           (14,557)  (13,129)   6,187
                                      -------   -------  -------
Increase (decrease) in cash               (96)      152       43
Cash at beginning of year               1,070       918      875
                                      -------   -------  -------
Cash at end of year                  $    974  $  1,070  $   918
                                      =======   =======   ======
<FN>
See accompanying notes to condensed financial information.
</TABLE>

         SCHEDULE III __ CONDENSED FINANCIAL INFORMATION
                OF THE REGISTRANT __ (Continued)
                    DAIN RAUSCHER CORPORATION
                        (Parent Company)
            NOTES TO CONDENSED FINANCIAL INFORMATION

A.  The condensed financial statements of Dain Rauscher
Corporation (Parent Company), should be read in conjunction with
the consolidated financial statements of Dain Rauscher
Corporation, and the notes thereto beginning on Page 25.

B.  Investments in subsidiaries are carried at cost plus equity
in undistributed earnings.  See Note K to consolidated financial
statements for information regarding net capital requirements of
the broker-dealer subsidiaries which could result in restriction
on the ability of the subsidiaries to transfer funds to the
parent in the form of loans, advances or cash dividends.

  The Parent Company utilized loans from its subsidiary, Dain
Rauscher Incorporated, in order to capitalize Clearing prior to
its March 2, 1998 merger with Dain Rauscher Incorporated.  During
1997 and 1996, respectively, the Parent received loans totaling
$14 million and $17 million from Dain Bosworth and Rauscher
Pierce Refsnes in order to add to Clearing's capital.  See Item
1(c) "Securities Business - Customer Financing" and "Securities
Business - Uniform Net Capital Rule."

C.  Commitments:

  At December 31, 1997, the Parent Company has guaranteed the
$9.0 million outstanding balance of four-year subordinated bank
debt incurred by Dain Bosworth and Rauscher Pierce Refsnes in
September and October 1994.  See Note G to the consolidated
financial statements.

  The Parent Company has also guaranteed the repayment of any
advances to Dain Rauscher Lending Services Inc. from a $50
million uncommitted credit facility available to finance certain
loans made to customers collateralized by securities.  No amounts
were outstanding on this credit line on December 31, 1997.

  Aggregate minimum rental commitments as of December 31, 1997,
are as follows:
<TABLE>
<CAPTION>

(In thousands)                 Capital leases    Operating leases
                               --------------    ----------------
<S>                                <C>                <C>
1998                               $7,034             $4,496
1999                                    -              3,605
2000                                    -              3,520
2001                                    -              3,690
2002                                    -              3,745
Thereafter                              -             17,233
                                      -----           ------
                                      7,034          $36,289
Less amount representing interest      (393)          ======
                                      -----
Present value of minimum lease
  payments                           $6,641
                                      =====
</TABLE>