U.S. SECURITIES AND EXCHANGE COMMISSION
                           Washington, DC 20549

                              FORM 10-KSB

  [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                         EXCHANGE ACT OF 1934
             For the fiscal year ended December 31, 2000
                                  OR
[  ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File No.:  0-25958

ND HOLDINGS, INC.
(exact name of Registrant as specified in its charter)

North Dakota                                     45-0404061
(State or other jurisdiction of                (IRS Employer
incorporation or organization               Identification Number)

1 North Main
Minot, North Dakota 58703
(Address of principal executive offices)

Registrant's telephone number, including area code:  (701) 852-5292

Securities registered pursuant to Section 12(d) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:  Common
Stock, no par value

Check whether the issuer:  (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
YES [X]    NO [ ]

Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B contained in this form, and no disclosure will 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-KSB or any
amendment to this Form 10-KSB.  [  ]

The issuer's revenues for the year ended December 31, 2000 were $7,329,008.

On February 16, 2001, there were 6,642,240 shares of the Registrant's common
stock, outstanding.

Aggregate market value of voting stock held by nonaffiliates of the registrant
as of February 16, 2001: $5,144,975.

Documents Incorporated by Reference

Portions of the Company's definitive Proxy Statement for the Annual Meeting of
Shareholders to be held on May 18, 2001 are incorporated by reference in
certain sections of Part III.

Transitional Small Business Disclosure Format:    YES  _____    NO __X__

                                 PART I

ITEM 1.  DESCRIPTION OF BUSINESS

DEVELOPMENT OF BUSINESS

ND Holdings, Inc. ("the Company") is a holding company primarily engaged,
through various subsidiaries, in providing investment management, distribution,
shareholder services, fund accounting and other related administrative services
to the open-end investment companies known as "Integrity Mutual Funds" and
"Ranson Managed Portfolios," hereinafter collectively referred to as "the
Funds."  Integrity Mutual Funds currently consists of five (5) open-end
investment companies including ND Tax-Free Fund, Inc.("ND Tax-Free Fund"),
Montana Tax-Free Fund, Inc.("Montana Tax-Free Fund"), South Dakota Tax-Free
Fund, Inc. ("South Dakota Tax-Free Fund"), Integrity Fund of Funds, Inc.
("Integrity Fund of Funds") and Integrity Small-Cap Fund of Funds, Inc.
("Integrity Small-Cap Fund of Funds").  Ranson Managed Portfolios consists
of one open-end investment company containing four (4) separate portfolios
including The Kansas Municipal Fund, The Kansas Insured Intermediate Fund, The
Nebraska Municipal Fund, and The Oklahoma Municipal Fund. Sales of Fund shares
are marketed principally in Montana, Kansas, Oklahoma, North Dakota, Nebraska
and South Dakota.  The Company also sells mutual funds and insurance products
through another wholly-owned subsidiary, ARM Securities Corporation ("ARM
Securities").  The Company has also become involved as an internet provider
with a majority ownership in Magic Internet Services, Inc. ("Magic Internet").
The Company continues to review acquisition opportunities in other industries
involving management services and information processing.

As of December 31, 2000, total assets under management/service in the Funds was
approximately $336.9 million, compared to approximately $364.1 million as of
December 31, 1999 and approximately $374.6 million as of December 31, 1998.

The Company has been engaged in the financial services business since 1987.
The Company was incorporated September 22, 1987 as a North Dakota corporation
by Robert E. Walstad, current President of the Company.  The Company's offices
are at 1 North Main Street, Minot, North Dakota 58703.  As of December 31,
2000, the Company had 36 full-time employees and 7 part-time employees,
consisting of officers, investment management, securities distribution,
shareholder services, data processing, law, accounting and clerical support
staff.

On January 5, 1996, the Company consummated the acquisition (the "Ranson
Acquisition") of substantially all of the assets and liabilities of The
Ranson Company, Inc., a corporation organized under the laws of the state
of Kansas and based in Wichita, Kansas.  The Ranson Company, Inc. provided
investment management and related services to the Ranson Managed Portfolios
through its subsidiary, Ranson Capital Corporation ("Ranson"), a registered
investment advisor and registered broker/dealer.  Ranson Managed Portfolios
is an open-end investment company registered with the Securities and Exchange
Commission (the "SEC").  At the time of the Ranson Acquisition, Ranson Managed
Portfolios consisted of three funds:  The Kansas Municipal Fund, The Kansas
Insured Intermediate Fund and The Nebraska Municipal Fund, totaling
approximately $184 million in assets under management.  Subsequent to the
Ranson Acquisition, the Company has managed Ranson Managed Portfolios on a
unified basis with its other business.  The purchase price paid at the closing
of the Ranson Acquisition was $6.2 million and was funded through a
combination of existing cash on hand and bank debt in the amount of
approximately $1.5 million. The bank debt was paid in full as of March 1998.

On December 6, 1996, the Company acquired the accounts of the Heartland
Nebraska Tax-Free Fund for cash and merged them into the Ranson Managed
Portfolios, The Nebraska Municipal Fund, through an exchange of shares. The
Heartland Portfolio was $10,299,543 in size at the time of the transaction.

The Company also acquired the accounts of Lancaster Nebraska Tax-Free Fund on
May 21, 1999 for cash. Shares were exchanged in a similar fashion and the
Ranson Managed Portfolios, The Nebraska Municipal Fund was $12,877,367 in size
at the time of the transaction.

On October 1, 1999, the Company acquired for cash and common stock 51% control
of Magic Internet Services, Inc.  Magic Internet operates as an internet
service provider to individuals and businesses in the local calling area.

On May 25, 2000, the Company acquired for cash, ARM Securities Corporation, a
broker-dealer engaged primarily in the sales of mutual funds and insurance
products. The broker/dealer supports approximately 60 registered
representatives operating as independent contractors with 23 representatives
in a single office in Fresno, CA and the remainder in scattered locations in
Minnesota, Iowa and South Dakota.

THE COMPANY'S SUBSIDIARIES

The Company derives most of its income from two lines of business. One being
the providing of investment management, distribution, shareholder services,
accounting and related services to the Funds and other clients. The other
provides order processing, regulatory oversight, concession processing, and
other related services to registered securities representatives transacting
securities business for their clients. As a result, the Company is
economically dependent on the Funds, the representatives and others for
substantially all of its revenue and income. These businesses are conducted
through the wholly-owned subsidiary companies described below. Revenues
generated by the subsidiaries supporting activities surrounding the Funds are
derived primarily from fees based on the level of assets under management.
Revenues generated by the support of securities sales are derived primarily
through a sharing of sales concessions paid by the products being sold to
clients. Other business opportunities have been considered.

ND Money  Management, Inc.

ND Money Management, Inc. ("ND Money Management") is registered as an
investment advisor with the SEC under the Investment Advisers Act of 1940
(the "Advisers Act").  ND Money Management provides investment advisory
services under investment advisory agreements with ND Tax-Free Fund, Montana
Tax-Free Fund, South Dakota Tax-Free Fund, Integrity Fund of Funds, and
Integrity Small-Cap Fund of Funds.  As of December 31, 2000, ND Money
Management managed approximately $140.5 million, representing approximately
42% of the Company's total assets under management/service.

ND Capital, Inc.

ND Capital, Inc. ("ND Capital") is registered with the SEC as a broker-dealer
and is a member of the National Association of Securities Dealers, Inc. (the
"NASD") and serves as principal underwriter and distributor for ND Tax-Free
Fund, Montana Tax-Free Fund and South Dakota Tax-Free Fund and Integrity Small-
Cap Fund of Funds.  ND Capital earns Rule 12b-1 fees pursuant to Rule 12b-1
plans adopted by each such Fund and contingent deferred sales charges
("CDSCs") from shareholders of such Funds if they redeem their shares within
5 years after their purchase.  ND Capital began as principal underwriter for
Investors Research Fund of Santa Barbara, California on December 1, 1998.  ND
Capital earned underwriting fees in connection with sales of such Investors
Research Fund shares effected by ND Capital's sales representatives and the
underwriter's portion of front-end sales load ("FESLs") in connection with
sales of such shares effected by other broker-dealers.  ND Capital earned Rule
12b-1 fees pursuant to Rule 12b-1 plans adopted by Investors Research Fund.
On December 31, 1999, ND Capital terminated the underwriting agreement with
Investors Research Fund due to significant changes in the Funds structure.
As principal underwriter for Integrity Fund of Funds, ND Capital earns CDSCs
from shareholders of such Funds if they redeem their shares within 5 years
after their purchase.  ND Capital also earns commission revenue in connection
with sales of shares of outside mutual funds and in connection with effecting
other securities transactions.

Ranson Capital Corporation

Ranson Capital Corporation ("Ranson") is registered with the SEC as an
investment advisor and a broker-dealer.  It is also a member of the NASD.
Ranson provides investment advisory services to the Ranson Managed Portfolios
under an investment advisory agreement.  As of December 31, 2000, Ranson
managed approximately $180.1 million in assets, representing approximately 53%
of the Company's total assets under management/service.  Ranson also serves as
principal underwriter for the Ranson Managed Portfolios and earns Rule 12b-1
fees pursuant to Rule 12b-1 plans adopted by certain of the Ranson Managed
Portfolios and the underwriter's portion of FESLs in connection with sales of
shares of the Ranson Managed Portfolios effected by other broker-dealers.

ND Resources, Inc.

ND Resources, Inc. ("ND Resources") is registered with the SEC as a transfer
agent under the Securities Exchange Act of 1934.  ND Resources provides
shareholder recordkeeping services and acts as transfer agent and dividend-
paying agent for the Funds and Investors Research Fund.  ND Resources also
provides business management services, including fund accounting, compliance
and other related administrative activities for the Funds and Investors
Research Fund.  ND Resources is compensated for providing these services under
agreements with each Fund, and is reimbursed for out-of-pocket expenses. ND
Resources has provided services to one other fund group. As of February 16,
2001, that relationship was terminated due to a reorganization of the fund
group.

Magic Internet Services, Inc.

Magic Internet Services, Inc. ("Magic Internet") operates as an internet
service provider to individuals and businesses in the local calling area.
Magic Internet provides subscribers with full support including servicing
hardware and technical support for software problems. Magic Internet also
provides DSL, wireless and website building and hosting services.

ARM Securities Corporation

ARM Securities Corporation ("ARM Securities") is registered with the SEC as a
broker-dealer and is registered with the NASD. Acquired from ARM Financial
Group, Inc., a Louisville, Kentucky corporation in May of 2000, the broker-
dealer offers mutual funds and insurance products to the public through
approximately 60 registered representatives. ARM Securities earns commission
revenue in connection with sales of these products and also 12b-1 fees paid
by the distributors of these products.

DESCRIPTION OF BUSINESS

Investment Advisory Services

ND Money Management and Ranson act as the investment advisor to the Integrity
Mutual Funds and Ranson Managed Portfolios, respectively, pursuant to
investment advisory agreements with such Funds.  ND Money Management and Ranson
generally supervise and implement the Funds' investment activities, including
deciding which securities to buy and sell. They also decide which broker-
dealers through, or with which, to effect Fund securities transactions.

Generally, each Fund pays ND Money Management or Ranson an investment advisory
fee payable monthly based on the Fund's net assets.  Annual investment advisory
fees under the various investment advisory agreements are 0.50% of assets under
management in the case of Ranson Managed Portfolios, 0.90% of assets under
management in the case of Integrity Fund of Funds and Integrity Small-Cap Fund
of Funds and 0.60% of assets under management for the remaining Funds managed
by ND Money Management. Investment advisory fees are generally voluntarily
waived or reduced, and other Fund expenses may be absorbed by the investment
advisor for a period of time to ensure that the Funds have competitive fee
structures.

The investment advisory agreements pursuant to which ND Money Management and
Ranson provide investment advisory services continue in effect for successive
annual periods as long as such continuance is approved annually by (a) either
(i) a majority vote cast in person at a meeting of the relevant Fund's Board
of Directors or Trustees called for that purpose, or (ii) a vote of the holders
of a majority of the relevant Fund's outstanding voting securities, and (b) a
majority of the relevant Fund's directors or trustees who are not parties to
the investment advisory agreement or interested persons of the Funds or the
Company within the meaning of the Advisers Act.

Either party may terminate the investment advisory agreement without penalty
after specified written notice.  Each investment advisory  agreement also
automatically terminates in the event of its "assignment" as defined in the
Advisers Act. The termination of one or more investment advisory agreements
between ND Money Management or Ranson and the Funds would have a material
adverse impact on the Company.  To date, no such investment advisory
agreements have been terminated.

Investment advisory fees constituted 23% of the Company's consolidated
revenues in 2000.

Transfer Agency, Dividend Disbursement and Administrative Services

Transfer agency, dividend disbursement and other shareholder administrative
services are provided to the Funds and other clients by ND Resources.  ND
Resources receives fees from the Funds and others for providing such services.
As of December 31, 2000 such fees ranged from 0.09% to 0.16% per annum of
assets under management/service, depending on the size of the Fund.  In
addition, ND Resources provides accounting services to the Funds for which it
charges a base fee and an asset based charge ranging from 0.01% to 0.05% per
annum of assets under management/service depending on the size of the Fund.
Transfer agency, dividend disbursement, and administrative services fees
constituted 11% of the Company's consolidated revenues in 2000.


Distribution of Fund Shares

ND Capital acts as the principal underwriter and distributor of shares of ND
Tax-Free Fund, Montana Tax-Free Fund, South Dakota Tax-Free Fund, Integrity
Fund of Funds, and Integrity Small-Cap Fund of Funds pursuant to distribution
agreements with such Funds.  Pursuant to distribution agreements, Ranson acts
as the principal underwriter and distributor of shares of the Ranson Managed
Portfolios.  The distribution agreements generally provide that ND Capital and
Ranson shall distribute Fund shares and pay the expenses thereof.  Fund shares
are sold primarily by broker-dealers with whom ND Capital and Ranson Capital
have entered into dealer sales agreements.  ND Capital also sells a limited
number of Fund shares directly to investors.  The Company markets its Funds
primarily to the residents of the rural states in which the Company's Funds
invest in local bond issues.

Shares of Ranson Managed Portfolios are sold subject to FESLs ranging from
maximums of 2.75% (with respect to Kansas Insured Intermediate Fund) to 4.25%
(with respect to each of the other Ranson Managed Portfolios) of the public
offering price.  The applicable FESL is reduced as the amount invested
increases and is waived for certain categories of investors.  ND Capital or
Ranson (as applicable) earns the underwriter's portion of the FESL in
connection with sales of such Funds' shares effected by other broker-dealers.

Shares of ND Tax-Free Fund, Montana Tax-Free Fund, and South Dakota Tax-Free
Fund purchased as Class A shares, which were introduced in January 2000, are
subject to a maximum FESL of 4.25% of the public offering price. Shares of ND
Tax-Free Fund, Montana Tax-Free Fund, South Dakota Tax-Free Fund, Integrity
Fund of Funds, and Integrity Small-Cap Fund of Funds purchased as Class B
shares are not subject to a FESL at the time of purchase but are subject to
a maximum CDSC of 4%, with respect to all of such Funds (except for Integrity
Fund of Funds and Integrity Small-Cap Fund of Funds) and 1.5%, with respect to
Integrity Fund of Funds and Integrity Small-Cap Fund of Funds, of the amount
redeemed if shares are redeemed within 5 years after their purchase.  The CDSC
is not imposed on shares redeemed after such 5 year period.  The CDSC imposed
by ND Tax-Free Fund, Montana Tax-Free Fund and South Dakota Tax-Free Fund
ranges in steps from 4% during the first 2 years to 1% during the 5th year
after the purchase date.  The entire CDSC is earned by ND Capital in connection
with redemptions subject to the CDSC.

Shares subject to the CDSC (Class B shares) would automatically convert to
Class A shares (and would no longer be subject to the higher Rule 12b-1 fees)
approximately 8 years after the date on which such Class B shares were
purchased. The conversion would be made based on the relative net asset values
of Class A and Class B shares, without imposing any load, fee or other charge.
The fact that the new shares earn a lower 12b-1 fee could have an adverse
effect on revenues.

Each of the Funds (other than Kansas Insured Intermediate Fund and Integrity
Fund of Funds) has adopted a Rule 12b-1 plan pursuant to which ND Capital or
Ranson (as applicable) earns Rule 12b-1 fees in connection with its
distribution of Fund shares.  Rule 12b-1 fees are .25% per annum of the Fund's
average net assets (with respect to the applicable Ranson Managed Portfolios),
and .75% per annum of the Fund's average net assets (with respect to ND
Tax-Free Fund, Montana Tax-Free Fund, South Dakota Tax- Free Fund and Integrity
Small-Cap Fund of Funds.). ND Capital previously through 2000 waived Rule
12b-1 fees for ND Tax-Free Fund, Montana Tax-Free Fund and South Dakota
Tax-Free Fund in excess of .50% per annum.  ND Capital and Ranson (as
applicable) currently pay other broker-dealers 12b-1 shareholder servicing
fees of between .10% and .20% per annum on shareholder accounts of such
broker-dealers.  ND Capital retains Rule 12b-1 fees in excess of such amounts.

The 12b-1 Plans are established for an initial term of one year.  Thereafter,
they must be approved annually by the Board of Directors or trustees,
including a majority of the disinterested directors or trustees of each Fund.
Each Plan is subject to termination at any time by a majority of the Fund's
disinterested directors or trustees or by the Fund's shareholders.

FESL, CDSC and Rule 12b-1 plan revenues constituted 14% of the Company's
consolidated revenues in 2000.

Brokerage Commissions

ARM Securities' primary source of revenue is commission revenue in connection
with sales of shares of mutual funds and insurance products.

ND Capital and Ranson Capital also earn commission revenue in connection with
sales of shares of outside mutual funds and when acting as a broker in
effecting other securities transactions. Commission revenues constitute 43%
of the Company's consolidated revenues in 2000.

Internet Revenues

Magic Internet operates as an internet service provider to individuals and
businesses in the local calling area. Magic Internet provides subscribers
with full support including servicing hardware and technical support for
software problems. Magic Internet also provides DSL, wireless and website
building and hosting services. Internet revenues constitute 9% of the Company's
consolidated revenues in 2000.

REGULATION

Virtually all aspects of the Company's businesses are subject to various
complex and extensive federal and state laws and regulations.  Regulated
areas include, but are not limited to, the effecting of securities
transactions, the financial condition of the Company's subsidiaries,
recordkeeping and reporting procedures, relationships with clients, and
experience and training requirements for certain employees.  The Company's
subsidiaries are registered with various federal and state government agencies,
including the Securities and Exchange Commission (the "SEC"), as well as the
National Association of Securities Dealers (the "NASD"), a self-regulatory
industry organization.

ND Capital, Ranson and ARM Securities are registered broker-dealers, subject
to extensive regulation by the SEC, the NASD and state agencies in those states
in which ND Capital, Ranson and ARM Securities conduct business.  As broker-
dealers, ND Capital, Ranson and ARM Securities are subject to the Uniform Net
Capital Rule promulgated by the SEC under the Securities Exchange Act of 1934.
This rule requires that a broker-dealer must maintain certain minimum net
capital and that its aggregate indebtedness may not exceed specified
limitations.  ND Money Management and Ranson are registered with the SEC as
investment advisors under the Investment Advisers Act of 1940 and are subject
to regulation thereunder and certain state laws.  The Funds are also subject
to extensive regulation under the Investment Company Act of 1940 and, along
with ND Money Management, ND Capital, Ranson and ARM Securities, are subject to
periodic examinations by the SEC and NASD.

Federal and state laws and regulations, and the rules of the NASD, grant broad
powers to such regulatory agencies and organizations.  These include the power
to limit, restrict or prevent the Company from carrying on its business if it
fails to comply with such laws, regulations and rules.  Other possible
sanctions that may be imposed include the suspension of individual employees,
restrictions on the Company expanding its business or paying cash dividends,
the revocation of the investment advisor, broker dealer or transfer agent
registrations, expulsions, censures and/or fines.

Following routine books and records examinations by the SEC in 1997, ND Money
Management, Ranson Capital, and the Funds received deficiency letters from the
SEC staff that outlined various compliance issues. ND Money Management, Ranson
Capital, and the Funds responded to the letters and have implemented additional
procedures designed to ensure future compliance with applicable laws and
regulations. In late 1999, ND Money Management, Ranson Capital, and the Funds
were notified that the Central Regional Office of the SEC had commenced a
formal investigation regarding the few remaining issues raised in the
aforementioned letters. Recently, following further document production and
correspondence with the SEC, ND Money Management, Ranson Capital, and the Funds
have been notified that the SEC has completed their investigation. ND Money
Management, Ranson Capital, and the Funds are now in the process of reaching a
suitable resolution with the SEC. The Company has incurred and anticipates that
it will continue to incur additional legal and other expenses in the future to
ensure compliance. The extent of such expenses, however, is not presently
determinable.

To the extent that existing or future regulations affecting the sale of Fund
shares or their investment strategies cause or contribute to reduced sales of
Fund shares or impair the investment performance of the Funds, the Company's
aggregate assets under management and its revenues might be adversely affected.

Since 1993, the NASD rules have limited the amount of aggregate sales charges
which may be paid in connection with the purchase and holding of investment
company shares sold through broker-dealers.  The effect of the rule might be to
limit the amount of fees that could be paid pursuant to a Fund's 12b-1 Plan in
a situation where a Fund has no, or limited, new sales for a prolonged period
of time.

The officers, directors and employees of the Company may from time to time own
securities that are also owned by one or more of the Funds.  The Company's
internal policies with respect to individual investments by employees,
including officers and directors who are employed by the Company, require prior
clearance and reporting of some transactions and restrict certain transactions
so as to reduce the possibility of conflicts of interest.

COMPETITION

The financial services industry is highly competitive.  Industry sources
indicate that there are approximately 8,000 open-end investment companies of
varying sizes, investment objectives and policies which offer their  shares to
the investing public in the United States.  Since its inception, the Company
has competed with numerous larger, more established mutual fund management
organizations.  The Company is also in competition with the financial services
and investment alternatives offered by stock brokerage firms, insurance
companies, banks, savings and loans associations  and other financial
institutions, as well as investment advisory firms.  The Company sells Fund
shares principally through third party broker-dealers.  The Company competes
for the services of such third party broker-dealers with other sponsors of
mutual funds who generally have substantially greater resources than the
Company.  Banks in particular have increased, and continue to increase, their
sponsorship of proprietary mutual funds distributed through third party
distributors.  Many broker-dealer firms also sponsor their own proprietary
mutual funds which may limit the Company's ability to secure the distribution
services of such broker-dealer firms.  In seeking to sell Fund shares, the
Company also competes with increasing numbers of mutual funds which sell their
shares without the imposition of sales loads.  No-load mutual funds are
attractive to investors because they do not have to pay sales charges on the
purchase or redemption of such mutual funds' shares. This competition may
place pressure on the Company to reduce the FESLs and CDSCs charged upon the
sale or redemption of Fund shares.  However, reduced sales loads would make
the sale of Fund shares less attractive to the broker-dealers upon whom the
Company depends for the distribution of Fund shares. In the alternative, the
Company might itself be required to pay additional fees, expenses, commissions
or charges in connection with the distribution of Fund shares which could have
a material adverse effect on the Company's earnings.

The Company also participates in another highly competitive sector of the
financial services industry, retail brokerage. The Company competes directly
with full-service stock brokerage firms, banks, regional broker-dealers and
other independent broker-dealers. Each of these competitors offer to the public
many of the same investment products offered by the Company. Further, other
broker-dealers providing the same services heavily recruit the representatives
transacting business through the Company. This competition forces the Company
to maintain high levels of support services and commission payouts for these
representatives. These high levels of service and payouts could have a material
adverse effect on the Company's earnings.


OTHER MATTERS

The Company's board of directors has approved an employee stock ownership plan
("ESOP") whereby up to 800,000 shares of the Company's stock would be granted.
The ESOP was effective January 1, 1999. Refer to Employee Benefit Plans in Note
10 of the Audited Statements. The board has directed the Company to loan the
ESOP $100,000 to purchase future shares for distribution by the ESOP.

ITEM 2    DESCRIPTION OF PROPERTY

The Company operates all of its business, except ARM Securities, out of its
location at 1 North Main, Minot, North Dakota in which it occupies
approximately 14,200 square feet of office space in a 28,000 square foot
building with an adjacent 100'x140' parking lot. The Company had leased the
office space until December 31, 1998 when it purchased the office building for
$700,000. As of December 31, 2000 the Company owed $482,851 on the 5 year loan.
The Company also leases two locations, 1,110 square feet at One South
Minnesota, New Ulm, Minnesota and 5,292 square feet at 1550 East Shaw Avenue,
Suite 120, Fresno, California for the ARM Securities broker-dealer operations.


ITEM 3    LEGAL PROCEEDINGS

None.

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, 2000.

                              PART II

ITEM 5    MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Information About the Company's Common Stock

The Company's Common Stock is traded on the OTC Bulletin Board under the symbol
NDHI.  The Company's stock began trading on the OTC Bulletin Board on November
7, 1997.  On December 31, 2000, the closing price of the Company's Common Stock
on the OTC Bulletin Board was $.81 per share. At February 16, 2000, there were
approximately 833 shareholders of record. In addition, the Company estimates
that there are approximately 381 beneficial shareholders whose shares are held
in street name and 452 registered shareholders.


The following table sets forth the high and low bid prices for the Company's
Common Stock provided by The NASDAQ Stock Market, Inc.

<TABLE>
<CAPTION>
                                             2000                  1999
                                          Fiscal Year          Fiscal Year
                                      -------------------------------------
        Quarter                          High       Low        High       Low
        ---------------------------------------------------------------------
        <S>                               <C>       <C>        <C>        <C>
        First Quarter                    .812      .438       1.062      .562
        Second Quarter                   .938      .594       1.031      .812
        Third Quarter                    .938      .656       1.000      .688
        Fourth Quarter                   .875      .512        .969      .531
</TABLE>

The quotations reflect interdealer prices, without retail mark-up, mark-down or
commission, and may not represent actual transactions.  The Company has not
paid a dividend with respect to its Common Stock nor does the Company
anticipate paying dividends in the foreseeable future.

ITEM 6    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

GENERAL
ND Holdings derives the majority of its revenues and net income from providing
investment management, distribution, shareholder services, accounting and
related services to the Funds and others.  ARM Securities provides another
substantial portion of revenue through its sales of mutual fund, variable
insurance products and fixed insurance products.  The majority of the Company's
assets under management consist of single-state municipal bond funds for the
states of North Dakota, South Dakota, Montana, Kansas, Nebraska, and Oklahoma.

ND Holdings, Inc. is a holding company which operates in three business
segments, 1) as an investment adviser, distributor and provider of
administrative service to sponsored and non-proprietary mutual funds, 2) as an
internet service provider for Minot and surrounding area and 3) as a broker-
dealer. Refer to Segment Information in Note 12 of the Audited Statements.


ASSETS UNDER MANAGEMENT/SERVICE
By Investment Objective
In Millions

<TABLE>
<CAPTION>
As of December 31,                           2000      1999      1998
----------------------------------------------------------------------
<S>                                          <C>        <C>       <C>
FIXED-INCOME
Tax-Free                                   $ 301.0   $ 319.2   $ 330.2
Taxable (Corporate/Government)                 0.0       0.0       0.0
----------------------------------------------------------------------

TOTAL FIXED-INCOME                         $ 301.0   $ 319.2   $ 330.2
----------------------------------------------------------------------

EQUITY
Fund of Funds                              $  19.6   $  22.1   $  20.0
----------------------------------------------------------------------

TOTAL SPONSORED MUTUAL FUNDS               $ 320.6   $ 341.3   $ 350.2
----------------------------------------------------------------------
Investors Research Fund                    $  16.3   $  22.8   $  24.4
----------------------------------------------------------------------
TOTAL ASSETS UNDER MANAGEMENT/SERVICE      $ 336.9   $ 364.1   $ 374.6
======================================================================
</TABLE>


A substantial portion of the Company's revenues depend upon the amount of
assets under its management/service.  Assets under management/service can
be affected by the addition of new funds to the group, the acquisition of
another investment management company, purchases and redemptions of mutual
fund shares and investment performance, which may depend on general market
conditions.  Assets under the Company's management/service decreased by $27.2
million (7.5%) in 2000 and decreased by $10.5 million (2.8%) in 1999.  Fixed
income assets decreased by 5.7% in 2000 compared to the 1999 decrease of 3.3%.
Fixed income assets account for 89.3% of the total assets under management/
service in 2000 and 87.7% in 1999.  Equity assets decreased by 11.3% in 2000
compared to the 1999 increase of 10.5%. Equity assets account for 5.8% of total
assets under management/service in 2000 and 6.1% in 1999.  Investors Research
Fund represents 4.8% in 2000 and 6.3% in 1999 of total assets under
management/service.


RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, amounts included in
the Consolidated Statements of Operations of ND Holdings, Inc. and the
percentage change in those amounts from period to period.

<TABLE>
<CAPTION>
                                                                                       Variance  Variance
                                                                                        2000 to   1999 to
                                        2000              1999               1998         1999      1998
                                      --------------------------------------------------------------------
<S>                                      <C>               <C>                <C>          <C>       <C>
OPERATING REVENUES
   Fee income                        $ 3,144,428        $ 3,610,959        $ 3,504,684   (12.9)%     3.0%
   Commissions                         3,515,600            991,063            934,224   254.7%      6.1%
   Internet revenues                     668,980            159,037                      320.6%
                                     ---------------------------------------------------------------------
        Total revenue                $ 7,329,008        $ 4,761,059        $ 4,438,908    53.9%      7.3%
                                     ---------------------------------------------------------------------

OPERATING EXPENSES
   Compensation and benefits         $ 1,464,483        $ 1,159,985        $   825,195    26.3%     40.6%
   Commission Expense                  2,796,545            817,055            716,794   242.3%     14.0%
   General and administration exp      1,592,669          1,120,331          1,142,487    42.2%     (2.0)%
   Sales commissions amortized           587,740            599,263            630,603    (1.9)%    (5.0)%
   Depreciation and amortization         601,824            477,967            440,386    25.9%      8.5%
                                     --------------------------------------------------------------------
        Total operating expenses     $ 7,043,261        $ 4,174,601        $ 3,755,465    68.7%     11.2%
                                     --------------------------------------------------------------------

OPERATING INCOME                     $   285,747        $   586,458        $   683,443   (51.3)%   (14.2)%
                                     --------------------------------------------------------------------

OPERATING INCOME (EXPENSES)
   Interest and other income         $   206,888        $   127,983        $    79,043    61.7%     61.9%
   Interest expense                     (251,068)          (192,862)          (104,527)   30.2%     84.5%
                                     --------------------------------------------------------------------
         Net other income(expense)   $   (44,180)       $   (64,879)       $   (25,484)  (31.9)%   154.6%

INCOME BEFORE INCOME
TAX EXPENSE                          $   241,567        $   521,579        $   657,959   (53.7)%   (20.7)%

INCOME TAX EXPENSE                      (232,830)          (326,833)          (405,240)  (28.8)%   (19.3)%
                                     --------------------------------------------------------------------

NET INCOME BEFORE MINORITY
INTEREST AND CUMULATIVE EFFECT
OF AN ACCOUNTING CHANGE              $     8,737        $   194,746        $   252,719   (95.5)%   (22.9)%

MINORITY INTEREST, NET OF TAX             31,667             11,329                  0   179.5%

CUMULATIVE EFFECT OF AN ACCOUNTING
CHANGE, NET OF TAX                             0           (373,455)                 0
                                     --------------------------------------------------------------------

NET INCOME (LOSS) AFTER MINORITY
INTEREST AND CUMULATIVE EFFECT
OF AN ACCOUNTING CHANGE               $   40,404         $  (167,380)       $   252,719 (124.1)%  (166.2)%
                                     ====================================================================
Earnings (Loss) per share                    .01                (.02)               .03
</TABLE>


OPERATING REVENUES

Total operating revenues for 2000 were $7.3 million, an increase of 53.9% from
$4.8 million for 1999. The increase in operating revenues is primarily
attributable to the commission revenues of $3.0 million from ARM Securities
acquired effective May 1, 2000.

Total operating revenues for 1999 were $4.8 million, an increase of 7.3% from
$4.4 million for 1998. 1999 fee income increased over 1998 by 3.0%. The
increase in fee income is due to the phase in of fees charged to The Nebraska
Municipal Fund and The Oklahoma Municipal Fund.

Fee income for 2000 is $3.1 million a 12.9% decrease from $3.6 million for
1999. The decrease in fee income is due to the decrease in assets under
management/service and to a lesser extent from the reduction in fees charged
to Class A shares converted from Class B shares. Beginning January 2000, ND
Tax-Free Fund, Inc., Montana Tax-Free Fund, Inc., and South Dakota Tax-Free
Fund, Inc. issued another class of shares, Class A shares with FESLs. These
shares are subject to a maximum front-end sales load of 4.25% scaled down to
 .75% minimum as the investment amount increases. Shares subject to the CDSC
(Class B shares) automatically convert to Class A shares (and would no longer
be subject to the higher Rule 12b-1 fees) approximately 8 years after the date
on which such Class B shares were purchased. The conversion would be made based
on the relative net asset values of Class A and Class B shares, without
imposing any load, fee or other charge. This trend will continue as more
Class B shares are converted to Class A shares. 1999 fee income increased over
1998 by 3.0%. The increase in fee income is due to the phase in of fees charged
to The Nebraska Municipal Fund and The Oklahoma Municipal Fund.

Commission income includes, ARM Securities commissions and 12b-1 fees
associated with the sale of mutual funds and insurance products, ND Capital and
Ranson underwriting fees associated with sales of the FESL funds, commissions
earned by registered representatives of ND Capital, and commissions earned by
ND Capital acting as agent to the Funds for the purchase of certain investment
securities.  Commission income for December 31, 2000 was $3.5 million, a 254.7%
increase from the $1.0 million for 1999. $3.0 million of the 2000 commission
income comes from the May 1, 2000 acquisition of ARM Securities Corporation.
Commission income earned by ND Capital and Ranson Capital are down 49.8% for
2000 compared to 1999. This decrease is related to an extraordinary 1999
commission sale and to a lesser extent a continuing shift by investors from
tax-free fixed income funds to equity funds.  1999 commission income is a 6.1%
increase over 1998 due to increased commissions earned by ND Capital.

Internet revenues increased 320.6% for 2000 compared to 1999.  On October 1,
1999, the Company formed a corporation called Magic Internet Services, Inc.
At the same time, the newly formed subsidiary of the Company acquired all the
assets of Magic Internet Services (a North Dakota partnership). The
corporation provides internet services to several businesses as well as the
general public for a fee. The acquisition of Magic Internet allows for
additional revenues, provides another source for internet service in case of
disruption of service (redundancy), assists in providing information over the
internet and provides a potential new delivery system of mutual fund shares.
In 1999, internet revenues accounted for almost half of the increase in
operating revenues.

OPERATING EXPENSES

Total operating expenses increased 68.7% for 2000 compared to 1999. 1999
operating expenses were an increase of 11.2% compared to 1998.  The variances
relate to several of the major expense categories as described in the
paragraphs that follow.

Compensation and benefits increased 26.3% in 2000 compared to 1999.
Compensation and benefits related to the ARM Securities acquisition are 18.9%
of the increase. The balance of the increase relates to Magic Internet
Services, acquired October 1, 1999, having a complete year of expense.

Compensation and benefits increased 40.6% in 1999 compared to 1998. Salaries
and taxes account for 51% of the increase due in part to the Magic Internet
Services, Inc. employees and an increase in employees for the transfer agent
and accounting services department. An ESOP contribution of $138,608 accounted
for another 41% of the 1999 increase. Health insurance expense accounts for the
balance of the 1999 increase where by the Company is incurring higher costs for
1999.

Commission expense for December 31, 2000 is a 242.3% increase over 1999.
Commission expense for December 31, 1999 is a 14.0% increase over 1998. The
commission expense increase for 2000 and 1999 is directly related to the
increase in commission income.

General and administrative expense for 2000 is an increase of 42.2% over 1999.
General and administrative expense related to the ARM Securities acquisition
are 15.3% of the increase over 1999. The balance of the increase relates to
Magic Internet Services, acquired October 1, 1999, having a complete year of
expense. Total general and administration expense for 1999 decreased 2.0%
compared to 1998.

Sales commissions paid to brokers and dealers in connection with the sale of
shares of the Funds sold without a FESL are capitalized and amortized on a
straight line basis over a period not exceeding nine years, which approximates
the period of time during which deferred sales commissions are expected to be
recovered from distribution plan payments received from various Funds and
management's estimate of the average life of investors' accounts in the
Integrity Mutual Funds. Contingent deferred sales charges ("CDSC") CDSCs
received by the Company are recorded as a reduction of unamortized deferred
sales commissions.  Amortization of deferred sales commissions decreased 1.9%
and 5.0% in 2000 and 1999 respectively.  The 2000 decrease is related to a
reduction of new sales charges to amortize for 2000. The 1999 decrease is
directly related to the Integrity Fund of Funds, Inc. discontinuing
amortization of their sales commissions and expensing them as incurred.  In
1998, the Financial Accounting Standards Board (FASB) ruled that costs
incurred by an investment advisor for the distribution of shares of a fund
that did not have a 12b-1 plan and CDSC had to be expensed rather than
capitalized. The ruling was effective for costs incurred after July 23, 1998.

Depreciation and amortization increased 25.9% and 8.5% in 2000 and 1999,
respectively.  The increase for 2000 is for the ARM Securities acquisition and
the result of management's commitment to technology and systems to better serve
its funds. The 1999 increase is for equipment, goodwill and a covenant not to
compete related to Magic Internet Services.

OTHER INCOME (EXPENSES)

2000 interest and other income increased 61.7% over 1999 due to the increased
interest income earned from cash on hand and the ARM Securities acquisition.

1999 interest and other income increased 61.9% over 1998 due to rental income
earned as a result of the building purchase in December 1998.

Interest expense for 2000 is a 30.2% increase over 1999 due to interest owed on
Subordinate Debentures sold July through December 2000.

Interest expense for 1999 is a 84.5% increase over 1998 due to interest owed on
Corporate Notes sold April through November 1999.

INCOME TAX (EXPENSE) BENEFIT

The Company's effective tax rate differs from the U.S. Statutory rate primarily
due to nondeductible amortization expenses incurred as a result of the Ranson
acquisition. The Company's effective tax rates for 2000, 1999 and 1998 were
96%, 63% and 62% respectively. The effective rate will continue to reflect the
nondeductible amortization associated with the investment adviser's agreement
acquired in the Ranson acquisition, which has a remaining life of 16 years.
Amortization of the non-compete agreement was complete at December 31, 1998.

Effective for 1998, the Company is expensing deferred sales commissions as
incurred for income tax purposes. The Company will continue to capitalize and
amortize the commissions for financial reporting purposes. The effect of the
change will create timing differences between when the commissions are deducted
for income tax purposes and expenses as amortization for financial reporting
purposes. Deferred tax assets or deferred tax liabilities will result from
these timing differences.

FINANCIAL CONDITION

At December 31, 2000, the Company's assets aggregated $12.8 million, an
increase of 5.6% from $12.1 million in 1999, due to an increase in cash and
cash equivalents, cash segregated for the exclusive benefit of customers,
securities available-for-sale, accounts receivable, prepaids and property and
equipment. Stockholders equity was relatively unchanged from December 31, 2000
compared to December 31, 1999.

Cash provided by operating activities was $1,189,867 in 2000, an 18.8% decrease
from $1,465,030 in 1999. During the year ended December 31, 2000, the Company
used net cash of $785,496 for investing activities. $364,761 was for the
purchase of ARM Securities, $232,605 for remodeling of the second floor of the
building for Magic Internet, $132,820 for purchase of equipment, and $55,310
for investment in Class A shares of the Montana Tax-Free Fund, South Dakota
Tax-Free Fund and Integrity Small-Cap Fund of Funds. Net cash flow provided by
financing activities during the year was $261,047, the net effect of $525,000
in proceeds received from a subordinate debenture offering and $100,890 in
proceeds received from repayment of an ESOP receivable, less $223,488 for
repayment of debt and $141,355 for the purchase of the Company's common stock,
pursuant to a program approved by its Board of Directors in November 1997 to
repurchase up to $2,000,000 of its Common Stock from time to time in the open
market.

At December 31, 1999, the Company's assets aggregated $12.1 million, an
increase of 10.9% from $10.9 million in 1998, due to an increase in cash and
cash equivalents, property and equipment, and goodwill.  Stockholders' equity
decreased to $8.4 million at December 31, 1999 compared to $9.1 million at the
end of 1998, the result of the net loss of $167,380, the net purchase of
$394,937 of the company stock and the receivable of unearned ESOP shares of
$100,890.

Cash provided by operating activities was $1,465,030 in 1999, an increase of
34.8% from $1,086,908 in 1998.  During the year ended December 31, 1999, the
Company used net cash of $665,624 for investing activities for the purchase of
the Magic Internet Services, Inc. equipment, non compete covenant and goodwill
and the purchase of an investment advisory agreement.  Net cash flow provided
by financing activities during the year was $93,154, the net effect of
$962,000 in proceeds received from a corporate note offering and $500,000 from
bank proceeds, less the purchase of $657,435 of the Company's common stock,
pursuant to a program approved by its Board of Directors in November 1997 to
repurchase up to $2,000,000 of its Common Stock from time to time in the open
market and $711,411 repayment of debt.


LIQUIDITY AND CAPITAL RESOURCES

At December 31, 2000, the Company's liquid assets totaled $2,744,999,
including $2,600,157 of cash and cash equivalents, as compared to $2,034,739
of which $1,934,739 represented cash and cash equivalents, at December 31,
1999. On January 29, 2001 the Company paid out $999,934 for 799,947 shares of
the Company's common stock, pursuant to its self tender offer that commenced
on December 21, 2000.

At December 31, 1999, the Company's liquid assets totaled $2,034,739, including
$1,934,739 of cash and cash equivalents, as compared to $1,143,179 of which
$1,042,179 represented cash and cash equivalents, at December 31, 1998.

Although the Company has historically relied upon sales of its Common Stock
and debt instruments for liquidity and growth, management believes that the
Company's existing liquid assets, together with the expected continuing cash
flow from operations will provide the Company with sufficient resources to meet
its cash requirements during the next twelve months.  Management expects that
the principal needs for cash will be to advance sales commissions on Funds
subject to CDSCs, acquire additional investment management firms, repurchase
shares of the Company's Common Stock and service debt. The Company is required
under the terms of its debentures, which mature September 1, 2002, to make
semi-annual interest payments of approximately $47,500 in March and September.
The Company also is required under the terms of its corporate notes, which
mature June 30, 2004, to make annual interest payments of approximately $96,200
in July.  In addition, the Company is required under the terms of its
subordinate debentures, which mature June 30, 2005, to make semi-annual
interest payments of approximately $63,000 in January and July.


FORWARD-LOOKING STATEMENTS

When used herein, in future filings by the Company with the Securities and
Exchange Commission, in the Company's press releases and in other Company-
authorized written or oral statements, the words and phrases "can be",
"expects," "anticipates," "may affect," "may depend," "believes," "estimates"
or similar expressions are intended to identify "forward-looking-statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
The Company cautions readers not to place undue reliance on any such forward-
looking statements, which speak only as of the date made.  Such statements are
subject to certain risks and uncertainties, including those set forth in this
"Forward-Looking Statements" section, that could cause actual results for
future periods to differ materially from those presently anticipated or
projected.  The Company does not undertake and specifically disclaims any
obligation to update any forward-looking statement to reflect events or
circumstances after the date of such statements.

The Company derives substantially all of its revenues from two sources,
commission revenue earned in connection with sales of shares of mutual funds,
variable insurance products and fixed insurance products, fees relating to the
management of, and provision of services to, the Funds and other clients. The
fees earned by the Company are generally calculated as a percentage of assets
under management/service.  If the Company's assets under management/service
decline, or do not grow in accordance with the Company's plans, fee revenues
and earnings would be materially adversely affected.  Assets under management/
service may decline because redemptions of Fund shares exceed sales of Fund
shares, or because of a decline in the market value of securities held by the
Funds, or a combination of both.

In seeking to sell Fund shares, and market its other services, the Company
operates in the highly competitive financial services industry.  The Company
competes with approximately 8,000 open-end investment companies which offer
their shares to the investing public in the United States.  In addition, the
Company also competes with the financial services and other investment
alternatives offered by stock brokerage and investment banking firms, insurance
companies, banks, savings and loans associations and other financial
institutions, as well as investment advisory firms.  Most of these competitors
have substantially greater resources than the Company.  The Company sells Fund
shares principally through third party broker-dealers.  The Company competes
for the services of such third party broker-dealers with other sponsors of
mutual funds who generally have substantially greater resources than the
Company.  Banks in particular have increased, and continue to increase, their
sponsorship of proprietary mutual funds distributed through third party
distributors.  Many broker-dealer firms also sponsor their own proprietary
mutual funds which may limit the Company's ability to secure the distribution
services of such broker-dealer firms.  In seeking to sell Fund shares, the
Company also competes with increasing numbers of mutual funds which sell their
shares without the imposition of sales loads.  No-load mutual funds are
attractive to investors because they do not have to pay sales charges on the
purchase or redemption of such mutual funds' shares.  This competition may
place pressure on the Company to reduce the FESLs and CDSCs charged upon the
sale or redemption of Fund shares.  However, reduced sales loads would make the
sale of Fund shares less attractive to the broker-dealers upon whom the Company
depends for the distribution of Fund shares.  In the alternative, the Company
might itself be required to pay additional fees, expenses, commissions or
charges in connection with the distribution of Fund shares which could have a
material adverse effect on the Company's earnings.  The ability of the Company
to sell Fund shares may also be affected by general economic conditions
including, amongst other factors, changes in interest rates and the inflation
rate. Interest and inflation rate changes may particularly impact the flow of
money into mutual funds which invest in fixed-income securities. Each of the
Funds except Integrity Fund of Funds and Integrity Small-Cap Fund of Funds
invests substantially all of its assets in fixed-income securities.

General economic conditions, including interest and inflation rate changes,
may also adversely affect the market value of the securities held by the
Funds, thus negatively impacting the value of assets under management, and
hence the fees earned by the Company.  The fact that the investments of each
Fund (except Integrity Fund of Funds and Integrity Small-Cap Fund of Funds) are
geographically concentrated within a single state makes the market value of
such investments particularly vulnerable to economic conditions within such
state.  In addition, the states in which the investments of the Funds as a
group are concentrated are themselves concentrated in certain regions of the
United States.  The Company's fee revenues may therefore be adversely affected
by economic conditions within such regions.

Sales of Fund shares with FESLs provide current distribution revenue to the
Company in the form of the Company's share of the FESLs and distribution
revenue over time in the form of 12b-1 payments.  Sales of Fund shares with
CDSCs provide distribution revenue over time in the form of 12b-1 payments
and, if shares are redeemed within 5 years, CDSCs.  However, the Company pays
commissions on sales of Fund shares with CDSCs, reflects such commissions as a
deferred expense on its balance sheet and amortizes such commissions over a
period of up to nine years, thereby recognizing distribution expenses.
Therefore, to the extent that sales of Fund shares with CDSCs increases over
time relative to sales of shares with FESLs, current distribution expenses may
increase relative to current distribution revenues in certain periods, which
would negatively impact the Company's earnings in such periods.  In addition,
the Company may need to find additional sources of funding if existing cash
flow and debt facilities are insufficient to fund commissions payable to
selling broker-dealers on CDSC shares.



ITEM 7    FINANCIAL STATEMENTS










                     ND HOLDINGS, INC. AND SUBSIDIARIES

                            MINOT, NORTH DAKOTA











                    CONSOLIDATED FINANCIAL STATEMENTS

                                  AS OF

                    DECEMBER 31, 2000, 1999 AND 1998

                                  AND

                     INDEPENDENT AUDITOR'S REPORT





                  ND HOLDINGS, INC. AND SUBSIDIARIES
                         TABLE OF CONTENTS



                                                                   Pages

INDEPENDENT AUDITOR'S REPORT                                         1


CONSOLIDATED FINANCIAL STATEMENTS

  Consolidated Balance Sheets                                       2-3

  Consolidated Statements of Operations                              4

  Consolidated Statements of Stockholders' Equity                    5

  Consolidated Statements of Cash Flows                             6-7

  Notes to Consolidated Financial Statements                        8-18


ADDITIONAL INFORMATION

  Independent Auditor's Report on Additional Information             19

  Selected Financial Data                                            20

  Quarterly Results of Consolidated Operations (Unaudited)           21








                      INDEPENDENT AUDITOR'S REPORT




To the Stockholders and Directors of
ND Holdings, Inc. and Subsidiaries
Minot, North Dakota 58701

We have audited the accompanying consolidated balance sheets of ND Holdings,
Inc. and Subsidiaries (a North Dakota Corporation) as of December 31, 2000 and
1999 and the related consolidated statements of operations, stockholders'
equity and cash flows for the years ended December 31, 2000, 1999 and 1998.
These consolidated financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these consolidated
financial statements 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 consolidated financial
statements are free of material misstatement.  An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
consolidated financial statements.  An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall consolidated 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 consolidated financial position of ND
Holdings, Inc. and Subsidiaries as of December 31, 2000 and 1999, and the
consolidated results of their operations and their cash flows for the years
ended December 31, 2000, 1999 and 1998 in conformity with generally accepted
accounting principles.




BRADY, MARTZ & ASSOCIATES, P.C.
Minot, North Dakota USA

February 14, 2001


                                  1




                 ND HOLDINGS, INC. AND SUBSIDIARIES
                    CONSOLIDATED BALANCE SHEETS
                    DECEMBER 31, 2000 AND 1999



                                ASSETS


<TABLE>
<CAPTION>

                                                                      2000            1999
                                                                      ----            ----
<S>                                                                   <C>              <C>
CURRENT ASSETS
    Cash and cash equivalents                                    $   2,600,157   $   1,934,739
    Cash segregated for the exclusive
      benefit of customers                                             215,570               0
    Securities available-for-sale                                      144,842         100,000
    Accounts receivable                                                584,822         350,266
    Prepaids                                                            72,468          46,127
                                                                 -------------   --------------
    Total current assets                                         $   3,617,859   $   2,431,132
                                                                 -------------   --------------
PROPERTY AND EQUIPMENT                                           $   2,055,612   $   1,690,186
    Less accumulated depreciation                                      597,185         421,853
                                                                 -------------   --------------
    Net property and equipment                                   $   1,458,427   $   1,268,333
                                                                 -------------   --------------
OTHER ASSETS
    Deferred sales commissions                                   $   1,887,684   $   2,500,616
    Covenant not to compete (net of accumulated
      amortization of $368,124 for 2000 and
      $313,624 for 1999)                                               149,876         204,376
    Investment adviser's agreements (net of
      accumulated amortization of $1,449,689 for
      2000 and $1,142,210 for 1999)                                  4,660,772       5,007,371
    Other                                                              978,741         661,145
                                                                 -------------   --------------
    Total other assets                                           $   7,677,073   $   8,373,508
                                                                 -------------   --------------
TOTAL ASSETS                                                     $  12,753,359   $  12,072,973
                                                                 =============   ==============
</TABLE>

                                  2

                 CONSOLIDATED BALANCE SHEETS (CONTINUED)


                  LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                       2000            1999
                                                                       ----            ----
<S>                                                                     <C>             <C>
CURRENT LIABILITIES
  Service fees payable                                             $    87,087     $   105,951
  Accounts payable                                                      36,375          47,921
  Other current liabilities                                            476,804         219,258
  Short-term borrowings                                                      0         200,000
  Deferred tax liability                                               318,582          85,752
  Current portion of long-term debt                                     89,948          11,082
                                                                   -----------     -----------
  Total current liabilities                                        $ 1,008,796     $   669,964
                                                                   -----------     -----------
LONG-TERM LIABILITIES
  Note payable                                                     $   560,661     $   613,047
  Subordinate debentures                                               525,000               0
  Debentures                                                           940,000         950,000
  Corporate notes                                                      962,000         962,000
  Less current portion shown above                                     (89,948)        (11,082)
                                                                   -----------     -----------
  Total long-term liabilities                                      $ 2,897,713     $ 2,513,965
                                                                   -----------     -----------
TOTAL LIABILITIES                                                  $ 3,906,509     $ 3,183,929
                                                                   -----------     -----------
MINORITY INTEREST IN SUBSIDIARY                                    $   437,396     $   469,063
                                                                   -----------     -----------
STOCKHOLDERS' EQUITY
  Common stock - 20,000,000 shares
     authorized, no par value; 7,444,687 and
     7,615,187 shares issued and
     outstanding, respectively                                     $ 9,716,956     $ 9,858,309
  Receivable - unearned ESOP shares                                          0        (100,890)
  Accumulated deficit                                               (1,297,034)     (1,337,438)
  Accumulated other comprehensive income (loss)                        (10,468)              0
                                                                   -----------     -----------
  Total stockholders' equity                                       $ 8,409,454     $ 8,419,981
                                                                   -----------     -----------
TOTAL LIABILITIES AND
  STOCKHOLDERS' EQUITY                                             $12,753,359     $12,072,973
                                                                   ===========     ===========
</TABLE>



           THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
                       CONSOLIDATED FINANCIAL STATEMENTS





                                    3


                     ND HOLDINGS, INC. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF OPERATIONS
            FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

<TABLE>
<CAPTION>
                                                                        2000             1999             1998
                                                                        ----             ----             ----
<S>                                                                      <C>              <C>              <C>
REVENUES
    Fee Income                                                     $   3,144,428    $   3,610,959    $   3,504,684
    Commissions                                                        3,515,600          991,063          934,224
    Internet revenues                                                    668,980          159,037                0
                                                                   -------------    -------------    -------------
    Total revenue                                                  $   7,329,008    $   4,761,059    $   4,438,908
                                                                   -------------    -------------    -------------

OPERATING EXPENSES
    Compensation and benefits                                      $   1,464,483    $   1,159,985    $     825,195
    General and administrative expenses                                1,592,669        1,120,331        1,142,487
    Commission expense                                                 2,796,545          817,055          716,794
    Sales commissions amortized                                          587,740          599,263          630,603
    Depreciation and amortization                                        601,824          477,967          440,386
                                                                   -------------    -------------    -------------
    Total operating expenses                                       $   7,043,261    $   4,174,601    $   3,755,465
                                                                   -------------    -------------    -------------
OPERATING INCOME                                                   $     285,747    $     586,458    $     683,443
                                                                   -------------    -------------    -------------
OTHER INCOME (EXPENSES)
    Interest and other income                                      $     206,888    $     127,983    $      79,043
    Interest expense                                                    (251,068)        (192,862)        (104,527)
                                                                   -------------    -------------    -------------
    Net other expense                                              $     (44,180)   $     (64,879)   $     (25,484)
                                                                   -------------    -------------    -------------
INCOME BEFORE INCOME
    TAX EXPENSE                                                    $     241,567    $     521,579    $     657,959

INCOME TAX EXPENSE                                                      (232,830)        (326,833)        (405,240)
                                                                   -------------    -------------    -------------
INCOME BEFORE MINORITY INTEREST
    AND CUMULATIVE EFFECT OF AN
    ACCOUNTING CHANGE                                              $       8,737    $     194,746    $     252,719

Minority interest, net of income taxes                                    31,667           11,329                0
Cumulative effect of an
  accounting change, net of income taxes                                       0         (373,455)               0
                                                                   -------------    -------------    -------------
NET INCOME (LOSS) AFTER
    MINORITY INTEREST AND
    CUMULATIVE EFFECT OF AN
    ACCOUNTING CHANGE                                              $      40,404    $    (167,380)   $     252,719
                                                                   =============    =============    =============
EARNINGS (LOSS) PER COMMON SHARE:
    Basic                                                          $         .01    $        (.02)   $         .03
    Diluted                                                        $         .01    $        (.02)   $         .03

SHARES USED IN COMPUTING
    EARNINGS (LOSS) PER COMMON SHARE:
    Basic                                                              7,507,145        7,571,062        8,094,062
    Diluted                                                            7,507,145        7,571,062        8,094,062
</TABLE>


            THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
                      CONSOLIDATED FINANCIAL STATEMENTS




                                  4


                    ND HOLDINGS, INC. AND SUBSIDIARIES
             CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
           FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

<TABLE>
<CAPTION>
                                                                                                  Accumulated
                                       Number of       Common                                        Other
                                        Common         Stock       Accumulated       ESOP        Comprehensive
                                        Shares         Amount        Deficit      Receivable         Income          Total
                                       ---------       ------      -----------    ----------     -------------       ------
<S>                                     <C>            <C>             <C>            <C>             <C>             <C>
BALANCE,
JANUARY 1, 1998                      8,153,187    $  10,460,130    $ (1,422,777)   $         0   $      1,329   $  9,038,682

Net income                                   0                0         252,719              0              0        252,719
Change in unrealized gain
    (loss) on securities
     available-for-sale                      0                0               0              0         (1,329)        (1,329)
                                                                                                                ------------
Comprehensive income                                                                                            $    251,390
                                                                                                                ------------
Purchase of common stock              (202,000)        (206,884)              0              0              0       (206,884)
                                    ----------    -------------    ------------    -----------    -----------   ------------
BALANCE
DECEMBER 31, 1998                    7,951,187    $  10,253,246    $ (1,170,058)   $         0   $          0   $  9,083,188

Net loss                                     0                0        (167,380)             0              0       (167,380)
Change in unrealized gain
    (loss) on securities
     available-for-sale                      0                0               0              0              0              0
                                                                                                                ------------
Comprehensive loss                                                                                              $   (167,380)
                                                                                                                ------------
Common stock issued                    358,000          262,498               0              0              0        262,498

Purchase of common stock              (694,000)        (657,435)              0              0              0       (657,435)

Receivable - unearned
    ESOP shares                              0                0               0       (100,890)             0       (100,890)
                                    ----------    -------------    ------------    -----------    -----------   ------------
BALANCE,
DECEMBER 31, 1999                    7,615,187    $   9,858,309    $ (1,337,438)   $  (100,890)   $         0   $  8,419,981

Net income                                   0                0          40,404              0              0         40,404
Change in unrealized gain
    (loss) on securities
     available-for-sale                      0                0               0              0        (10,468)       (10,468)
                                                                                                                ------------
Comprehensive income                                                                                            $     29,936
                                                                                                                ------------
Purchase of common stock              (170,500)        (141,353)              0              0              0       (141,353)
Repayments from ESOP                         0                0               0        100,890              0        100,890
                                    ----------    -------------    ------------    -----------    -----------   ------------
BALANCE,
DECEMBER 31, 2000                    7,444,687    $   9,716,956    $ (1,297,034)   $         0    $   (10,468)  $  8,409,454
                                    ==========    =============    ============    ===========    ===========   ============
</TABLE>


            THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
                   CONSOLIDATED FINANCIAL STATEMENTS



                                  5


                  ND HOLDINGS, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS
         FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

<TABLE>
<CAPTION>
                                                                      2000            1999             1998
                                                                      ----            ----             ----
<S>                                                                   <C>             <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net income (loss)                                             $     40,404   $    (167,380)    $    252,719
    Adjustments to reconcile net income (loss) to
      net cash provided by operating activities:
      Depreciation and amortization                                    601,824         477,967          440,386
      Sales commissions amortized/charged off                          587,740       1,177,911          630,603
      ESOP contribution                                                      0          61,608                0
      Minority interest                                                (31,667)        (11,329)               0
      (Increase) decrease in:
        Cash segregated for customers                                 (215,570)              0                0
        Accounts receivable                                           (234,556)         13,450           18,059
        Prepaids                                                       (26,342)          2,681          (20,983)
        Deferred sales commissions capitalized                          25,192        (349,894)        (617,379)
        Deferred tax                                                   232,830          85,890          405,205
        Other assets                                                   (17,127)        (48,881)         (17,416)
      Increase (decrease) in:
        Service fees payable                                           (18,861)          6,703           (2,241)
        Accounts payable                                               (11,546)         39,265           (7,552)
        Other liabilities                                              257,546         177,039            5,507
                                                                  ------------   -------------    -------------
    Net cash provided by operating activities                     $  1,189,867   $   1,465,030    $   1,086,908
                                                                  ------------   -------------    -------------
CASH FLOWS FROM INVESTING ACTIVITIES
    Purchase of property and equipment                            $   (365,425)  $    (172,091)   $    (733,128)
    Purchase of available-for-sale securities                          (55,310)              0         (100,000)
    Proceeds from sale of
      available-for-sale securities                                          0           1,000           99,000
    Business acquisitions (net of cash acquired)                      (364,761)       (494,533)               0
                                                                  ------------   -------------    -------------
    Net cash used by investing activities                         $   (785,496)  $    (665,624)   $    (734,128)
                                                                  ------------   -------------    -------------
</TABLE>


                                   6
            CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
<TABLE>
<CAPTION>
                                                                      2000             1999             1998
                                                                      ----             ----             ----
<S>                                                                   <C>              <C>              <C>
CASH FLOWS FROM FINANCING ACTIVITIES
    Reduction of short term debt                                 $    (200,000)   $           0    $           0
    Redemption of common stock                                        (141,355)        (657,435)        (206,884)
    Subordinate debentures issued                                      525,000                0                0
    Increase in notes payable                                                0          500,000          650,000
    Reduction of notes payable                                         (13,488)        (681,411)        (428,220)
    Redemption of investment certificates                                    0          (30,000)         (75,100)
    Redemption of debentures                                           (10,000)               0                0
    Debentures issued                                                        0                0          398,000
    Corporate notes issued                                                   0          962,000                0
    Repayments from ESOP                                               100,890                0                0
                                                                 -------------    -------------    -------------
    Net cash provided (used) by
      financing activities                                       $     261,047    $      93,154    $     337,796
                                                                 -------------    -------------    -------------
NET INCREASE IN CASH AND CASH
    EQUIVALENTS                                                  $     665,418    $     892,560    $     690,576

CASH AND CASH EQUIVALENTS
    AT BEGINNING OF YEAR                                             1,934,739        1,042,179          351,603
                                                                 -------------    -------------    -------------
CASH AND CASH EQUIVALENTS
    AT END OF YEAR                                               $   2,600,157    $   1,934,739    $   1,042,179
                                                                 =============    =============    =============
SUPPLEMENTARY DISCLOSURE OF
    CASH FLOW INFORMATION
    Cash paid during the year for:
      Interest                                                   $     217,273    $     151,872    $      88,022
      Income taxes                                               $           0    $           0    $      20,800

SUPPLEMENTAL SCHEDULE OF NONCASH
    INVESTING AND FINANCING ACTIVITIES
    Change in unrealized gain (loss) on
      securities available-for-sale                              $     (10,468)   $           0    $      (1,329)
    Business acquisitions with debt and stock                    $           0    $     455,369    $           0
    Shares transferred to ESOP                                   $           0    $     100,890    $           0
    Minority interest in property and equipment
      and other assets                                           $           0    $     480,392    $           0
    Reduction of investment advisory agreement
      and notes payable                                          $      38,899    $           0    $           0
</TABLE>



           THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
                   CONSOLIDATED FINANCIAL STATEMENTS



                                  7


                  ND HOLDINGS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  DECEMBER 31, 2000, 1999 AND 1998



NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

         The nature of operations and significant accounting policies of ND
         Holdings, Inc. and Subsidiaries are presented to assist in
         understanding the Company's consolidated financial statements.

         NATURE OF OPERATIONS - ND Holdings, Inc. and Subsidiaries (the
         Company) was established in September 1987 as a North Dakota
         corporation.  The Company derives its revenue primarily from
         investment advisory, asset management, underwriting, and transfer
         agent services to sponsored mutual funds, and commissions earned as
         distributor for various mutual funds and insurance products.
         Headquartered in Minot, North Dakota, the Company is marketing its
         services throughout the Midwestern United States and California.

         PRINCIPLES OF CONSOLIDATION - The consolidated financial statements
         include the accounts of ND Holdings, Inc. and its wholly-owned
         subsidiaries, ND Money Management, Inc., ND Capital, Inc., ND
         Resources, Inc., Ranson Capital Corporation, ARM Securities
         Corporation, and its majority owned subsidiary Magic Internet
         Services, Inc.  All significant intercompany transactions and
         balances have been eliminated in the accompanying consolidated
         financial statements.

         CONCENTRATIONS - The Company derives its revenue primarily from
         investment advisory and administrative services provided to sponsored
         mutual funds, a majority of which are state-specific municipal bond
         funds.  Company revenues are largely dependent on the total value and
         composition of assets under management, which include state-specific
         municipal bonds.  Accordingly, fluctuations in financial markets and
         the composition of assets under management impact revenues and results
         of operations.

         USE OF ESTIMATES - The preparation of consolidated financial
         statements in conformity with generally accepted accounting principles
         requires management to make estimates and assumptions that affect the
         reported amounts of assets and liabilities and disclosure of
         contingent assets and liabilities at the date of the consolidated
         financial statements and the reported amounts of revenues and expenses
         during the reporting period.  Actual results could differ from those
         estimates.

         REVENUE RECOGNITION - Investment advisory fees, transfer agent fees
         and service fees are recorded as revenues as the related services are
         provided by the Company  to sponsored mutual funds. Commission income
         is also received for the sale of investments in other mutual funds and
         for variable annuities. Internet fees are recorded as revenues as the
         related services are provided.

         CASH AND CASH EQUIVALENTS - The Company's policy is to record all
         liquid investments with original maturities of three months or less as
         cash equivalents.  Liquid investments with maturities greater than
         three months are recorded as investments.

         INVESTMENTS - Investment securities that are held for short-term
         resale are classified as trading securities and carried at fair
         value.  All other marketable securities are classified as available-
         for-sale and are carried at fair value.  Realized and unrealized gains
         and losses on trading securities are included in net income.
         Unrealized gains and losses on securities available-for-sale are
         recognized as direct increases or decreases in stockholders' equity.
         Cost of securities sold is recognized using the specific
         identification method.

                                   8

NOTE 1 - (CONTINUED)

         PROPERTY AND EQUIPMENT is stated at cost less accumulated depreciation
         computed on straight-line and accelerated methods over estimated
         useful lives as follows:

                         Equipment             5-7 years
                         Building              40 years

         DEFERRED SALES COMMISSIONS - Sales commissions paid to brokers and
         dealers in connection with the sale of shares of the sponsored mutual
         funds sold without  a front-end sales charge(B shares), are
         capitalized and amortized on a straight line basis over a period not
         exceeding nine years, which approximates the period of time during
         which deferred sales commissions are expected to be recovered from
         distribution plan payments received from various sponsored mutual
         funds and potential contingent deferred sales charges received from
         shareholders of the various sponsored mutual funds.  Contingent
         deferred sales charges received by the Company are recorded as a
         reduction of unamortized deferred sales commissions. In accordance
         with Statement of Position 98-5, the commissions paid for the sale of
         Integrity Fund of Funds, Inc.'s shares since July 1998, have been
         expensed as incurred.  In 1999, the remaining unamortized cost of the
         Integrity Fund of Funds, Inc. capitalized prior to July 1998, was
         charged off as a cumulative effect adjustment for a change in an
         accounting principle.  The contingent deferred sales charges received
         since this date from early redemption's from Integrity Fund of Funds,
         Inc. have been recorded as revenue.  The Company is expensing sales
         commissions as incurred for tax purposes.

         ADVERTISING - Costs of advertising and promotion of sponsored mutual
         funds are expensed as incurred.

         EARNINGS PER COMMON SHARE - Basic earnings per common share was
         computed using the weighted average number of shares outstanding of
         7,507,145 in 2000, 7,571,062 in 1999 and 8,094,062 in 1998.  Diluted
         earnings per common share is computed using the weighted average
         number of shares outstanding adjusted for share equivalents arising
         from unexercised stock warrants.  The weighted average shares
         outstanding used in computing diluted earnings per common share was
         7,507,145 in 2000, 7,571,062 in 1999 and 8,094,062 in 1998.

         COVENANT NOT TO COMPETE is carried on the books at cost less
         accumulated amortization computed using the straight-line method over
         the life of the covenant, which is four years.

         INVESTMENT ADVISER'S AGREEMENTS are amortized using the straight-line
         method over a period of twenty years.  The Company has evaluated
         potential impairments on the basis of the expected future operating
         cash flows to be derived from these intangible assets in relation to
         the Company's carrying value and has determined that there is no
         impairment.

         INCOME TAXES - The Company files a consolidated income tax return with
         its wholly-owned subsidiaries.  The amount of deferred tax benefit or
         expense is recognized as of the date of the consolidated financial
         statements, utilizing currently enacted tax laws and rates.  Deferred
         tax benefits are recognized in the financial statements for the
         changes in deferred tax assets between years.

         RECLASSIFICATION - Certain amounts from 1999 and 1998 have been
         reclassified to conform with the 2000 presentation.

                                    9


NOTE 2 - CASH AND CASH EQUIVALENTS

         Cash and cash equivalents at December 31, 2000 and 1999 consist of
         the following:
<TABLE>
<CAPTION>
                                                                 Current
                                              Current           Interest               Amount
                                             Maturity             Rate           2000            1999
                                             --------           --------         ----            ----
<S>                                             <C>               <C>            <C>             <C>
         Cash in checking                     Demand               -         $   17,975      $    2,691
         Dean Witter Money
           Market Accounts                    Demand              6.03%       2,797,752       1,932,048
         Less cash segregated for
           the exclusive benefit
           of customers                                                        (215,570)              0
                                                                             ----------      ----------
                                                                             $2,600,157      $1,934,739
                                                                             ==========      ==========
</TABLE>


NOTE 3 - INVESTMENTS IN AND TRANSACTIONS WITH SPONSORED MUTUAL FUNDS

         The Company's investments in sponsored mutual funds held as available-
         for-sale at December 31, 2000 and 1999:

<TABLE>
<CAPTION>
                                                                    Gross
                                           Aggregate              Unrealized            Aggregate Fair
                                             Cost               Holding Losses               Value
                                           ---------            --------------          --------------
<S>                                           <C>                   <C>                      <C>
         2000 - Mutual Funds              $    155,310         $   (10,468)             $    144,842
         ----                             ============         ===========              ============
         1999 - Mutual Funds              $    100,000         $         0              $    100,000
         ----                             ============         ===========              ============
</TABLE>


         Dividends earned on the Company's investments in sponsored mutual
         funds aggregated $8,310 in 2000, $0  in 1999 and $0 in 1998.

         The Company provides services to the Integrity Mutual Funds and Ranson
         Managed Portfolios which had aggregate net assets under management at
         December 31, 2000 of approximately $321 million.  All services
         rendered by the Company are provided under contracts that definitively
         set forth the services to be provided and the fees

         to be charged.  The majority of these contracts are subject to
         periodic review and approval by each of the fund's Board of
         Directors, Trustees and Shareholders.  Revenues derived from services
         rendered to the sponsored mutual funds were $3,088,928 in 2000,
         $3,511,983 in 1999 and $3,501,881 in 1998.

         Accounts receivable from the sponsored mutual funds aggregated
         $258,000 and $292,000 at December 31, 2000 and 1999, respectively.

NOTE 4 - PROPERTY AND EQUIPMENT

         Property and equipment at December 31 consists of:


<TABLE>
<CAPTION>
                                                       2000               1999
                                                       ----               ----
<S>                                                    <C>                 <C>
         Office furniture and equipment            $    890,930         $   750,242
         Leased equipment                                     0               9,735
         Building and land                            1,164,682             930,209
                                                   ------------         -----------
                                                   $  2,055,612         $ 1,690,186
         Accumulated depreciation and
           Amortization                                 597,185             421,853
                                                   ------------         -----------
                                                   $  1,458,427         $ 1,268,333
                                                   ============         ===========
</TABLE>


         Depreciation expense totaled $175,332, $142,455 and $45,269 in 2000,
         1999 and 1998, respectively.

                                   10

NOTE 5 - BUSINESS ACQUISITIONS

         PURCHASE COMBINATIONS - On May 25, 2000, the company acquired all the
         assets of ARM Securities Corporation (ARM).  The purchase price was
         $896,000, of which $566,000 was for cash, and the remaining $330,000
         was for goodwill which is being amortized on a straight line basis
         over 40 years.  The consolidated financial statements include the
         operating results of the business from May 1, 2000.

         The following unaudited pro forma summary presents the consolidated
         results of operations of the Company as if the business combination
         had occurred on January 1, 1998.

<TABLE>
<CAPTION>
                                  (Unaudited)                     (Unaudited)                 (Unaudited)
                                   Year ended                      Year ended                  Year Ended
                                December 31, 2000               December 31, 1999           December 31, 1998
                                -----------------               -----------------           -----------------
<S>                                   <C>                              <C>                         <C>
         Revenues                 $    8,621,103                   $    9,105,920              $    8,881,585
         Net income (loss)                20,443                         (180,687)                    239,012
         Income (loss)
           per share                         .00                             (.02)                        .03
</TABLE>

         The above amounts are based upon certain assumptions and estimates
         which the Company believes are reasonable.  The pro forma results do
         not necessarily represent results which would have occurred if the
         business combination had taken place at the date indicated or what the
         results of operations may be in any future period.

         October 1, 1999, the Company formed a corporation called Magic
         Internet Services, Inc.  At the same time, the newly formed subsidiary
         of the Company acquired all the assets of Magic Internet Services (a
         North Dakota partnership).  The purchase price was $980,392, of which
         $260,000 was allocated to equipment, $218,000 was for a covenant not
         to compete, which is being amortized over 4 years, and the remaining
         balance of $502,392 was for goodwill, which is being amortized over 15
         years.  The purchase price was funded by issuing a 49% ownership of
         the newly formed subsidiary to the partners of the acquired
         partnership (hereinafter referred to as the Minority Interest).  The
         parent received 51% of the stock of the newly formed corporation for
         its $500,000 payment to the partners of Magic Internet Services.  The
         $500,000 consisted of $400,000 cash and 100,000 shares of ND Holdings,
         Inc. stock at $1 share price.  The consolidated financial statements
         include the operating results of the business from the date of
         acquisition.  Pro forma results of operations have not been presented
         because the effects of this acquisition were not significant to
         operations.

         OTHER ACQUISITIONS - In May, 1999, the Company acquired the rights to
         the investment advisors agreement to manage the "Lancaster Nebraska
         Fund".  The costs associated with this acquisition totaling $404,202,
         are amortized using the straight-line method over a period of 20
         years.


NOTE 6 - SHORT-TERM BORROWINGS

         Short-term borrowings at December 31, 2000 and 1999, consisted of
         the following:

<TABLE>
<CAPTION>
                                                                 2000            1999
                                                                 ----            ----
<S>                                                              <C>              <C>
         Liability owed to Magic Internet
            Service partners, interest at 0%
            and payable in full January 15, 2000               $       0      $ 200,000
                                                               =========      =========
</TABLE>

                                  11


NOTE 7 - LONG-TERM DEBT

         Long-term debt at December 31, 2000 and 1999 was as follows:
<TABLE>
<CAPTION>
                                                                     Current
                                                    Rate             Portion             2000             1999
                                                    ----             --------            ----             ----
<S>                                                 <C>                <C>               <C>              <C>
    Long-term debt:
    Smith Hayes Financial
      Services                                      0.00%          $    77,810       $    77,810     $   116,709
    Debentures                                     10.00%                    0           940,000         950,000
    Corporate notes                                10.00%                    0           962,000         962,000
    First Western Bank                              7.75%               12,138           482,851         496,338
    Subordinate debentures                         12.00%                    0           525,000               0
                                                                   -----------       -----------     -----------
    Totals                                                         $    89,948       $ 2,987,661     $ 2,525,047
                                                                   ===========       ===========     ===========
</TABLE>


         A summary of the terms of the current long-term debt agreements follow:


         SMITH HAYES FINANCIAL SERVICES -  As part of the acquisition of the
         investment advisors agreement of the Lancaster Nebraska Funds (See
         Note 5) the Company was allowed to hold back a portion of the total
         purchase price.  This is to provide relief to the Company in the event
         there is a reduction of fund investors' assets which were acquired.
         This liability is reduced proportionately for the investors who
         liquidate their shares in the fund prior to May 2001.  At that date,
         the remaining liability will be paid in full.


         DEBENTURES - The Company approved a $1 million intra-state debenture
         offering limiting the sale in North Dakota to North Dakota residents
         only.  The debentures do not represent ownership in the Company.
         As of December 31, 2000, $940,000 in debentures are outstanding.
         The debentures carry an interest rate of 10% per annum, payable semi-
         annually, and mature September 1, 2002.  The Company can call the
         debentures at 2% over par.


         CORPORATE NOTES - The Company had an intra-state offering of corporate
         notes limiting the sale to North Dakota residents only.  The notes do
         not represent ownership of the Company.  As of December 31, 2000,
         $962,000 in notes are outstanding.  The notes carry an interest rate
         of 10% per annum, payable annually, and mature  June 30, 2004.  The
         Company can call the notes at par anytime after January 1, 2001.


         FIRST WESTERN BANK - In June of 1999, the Company converted its
         outstanding balance of $500,000 borrowed on its bank line-of-credit
         to long-term debt.  The debt carries an interest rate of 7.75%, with
         monthly payments of $4,105.  On July 1, 2004, the remaining balance
         will be due in full.


         SUBORDINATE DEBENTURES - The company approved a $1 million intra-state
         subordinated debenture offering limiting the sale in North Dakota to
         North Dakota residents only.  The subordinated debentures do not
         represent ownership in the Company.  As of December 31, 2000,
         $525,000 in subordinate debentures are outstanding.  The subordinate
         debentures carry an interest rate of 12% per annum, payable semi-
         annually, and mature June 30, 2005.  The company can call the
         subordinate debentures at par anytime after July 1, 2001.





                                   12


NOTE 7 - (CONTINUED)
         The aggregate amount of required future payments on the above long-
         term debt at December 31, 2000, is as follows:


                       Year ending December 31,
                                2001           $    89,948
                                2002               952,899
                                2003                13,934
                                2004             1,405,880
                                2005               525,000
                                               -----------
                                Total due      $ 2,987,661
                                               ===========



NOTE 8 - INCOME TAXES

         The current and deferred portions of the income tax expense included
         in the statements of operations as determined in accordance with FASB
         Statement No.  109, Accounting for Income Taxes, are as follows:

<TABLE>
<CAPTION>
                                                  2000             1999             1998
                                                  ----             ----             ----
<S>                                               <C>              <C>              <C>
         Current income taxes
            Federal                           $         0       $         0       $         0
            State                                       0                 0                 0

         Deferred income
            Taxes                                 232,830           326,833           405,240
                                              -----------       -----------       -----------
                                              $   232,830       $   326,833       $   405,240
                                              ===========       ===========       ===========
</TABLE>


         Deferred income taxes reflect the impact of temporary differences
         between the amount of assets and liabilities recognized for
         financial reporting purposes and such amounts recognized for tax
         purposes, measured by applying currently enacted tax rates. Such taxes
         relate principally to the recording of sales commissions paid to
         brokers and dealers, and the benefits associated with the Company's
         net operating loss carry forwards.  The  treatment of sales
         commissions for tax and financial purposes is explained fully in
         Note 1.  As of December 31, 2000 and 1999, the Company had
         unamortized deferred sales commissions for tax purposes of $0 and
         $2,165,000, respectively.  As a result of this treatment of sales
         commissions, a deferred tax liability has been created as well as a
         deferred tax benefit from the net operating loss for tax purposes.
         For financial statement presentation, they have been netted as a
         current deferred tax benefit or liability.  The net operating loss
         carry forward of approximately $1,600,000 may be used to offset
         taxable income through the year 2015.



                                  13


         A reconciliation of the difference between the expected income tax
         expense is computed at the U.S. Statutory income tax rate of 35% and
         the Company's income tax expense is shown in the following table:

<TABLE>
<CAPTION>
                                                          2000                     1999                        1998
                                                          ----                     ----                        ----
<S>                                                       <C>                      <C>                         <C>
        Federal taxes at statutory rates             $    111,000             $    200,000                $    230,000

        State taxes, net of federal tax effect             17,500                   31,500                      43,000

        Taxes on nondeductible amortization
          at federal statutory rates                      106,000                   95,000                     133,000

        Net tax benefit on cumulative effect
          of accounting change, and on
          minority interest                                     0                 (237,000)                          0

        Other                                              (1,670)                     333                        (760)
                                                      -----------             ------------                ------------
        Actual tax expense                            $   232,830             $     89,833                $    405,240
                                                      ===========             ============                ============
</TABLE>



NOTE 9 - STOCK WARRANTS AND SPLITS

         The Company has authorized 1,050,000 perpetual warrants to certain
         organizers, directors, officers, employees and shareholders of the
         Company.  All warrants were issued between 1987 and 1990 and were
         accounted for in accordance with the provisions of Accounting
         Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued
         to Employees.  No compensation expense was recorded for these warrants
         as the exercise price exceeded the market price of the stock at the
         date of issue.  The Company plans to continue to apply APB Opinion
         No. 25 in accounting for its warrants.  In the event additional
         warrants are issued, appropriate results will be disclosed in
         accordance with the provisions of Statement of Financial Accounting
         Standard, No.  123.  These warrants, at the date of issue, allowed for
         the purchase of shares of stock at $2.00 per share.  The exercise
         price of the warrants will be adjusted to reflect stock splits of 11
         for 10 in 1990 and 1989.  1,000 warrants were exercised in 1997
         leaving an outstanding balance of 1,049,000 warrants as of December
         31, 2000.

NOTE 10 -EMPLOYEE BENEFIT PLANS

         The Company sponsors a 401(K) plan for all its employees.  This plan
         is solely funded by employee elective deferrals.  The only expenses
         of the plan paid for by the Company are the trustees fees, which
         were insignificant in 2000, 1999 and 1998.

         The Company established an employee stock ownership plan ("ESOP")
         effective January 1, 1999.  Pursuant to the ESOP, each year the
         Company will determine the amount to contribute to the plan.
         Contributions are made at the discretion of the Board of Directors.
         To be eligible to participate in the plan, an employee must have
         completed one year of service and have attained age 21.

         In December 1999, the ESOP borrowed $100,980 from the Company and
         used the proceeds to purchase 190,000 shares of the Company's common
         stock.  The Company makes contributions to the plan that are used, in
         part,  by the ESOP to make loan and interest payments.  ESOP expense
         is determined by debt service requirements.  Shares of common stock
         acquired by the plan are allocated to each employee based on the
         relationship of their total compensation to the total compensation of
         all participants.  At December 31, 2000 and 1999, cumulative allocated
         shares remaining in the trust were 68,000 and 0 respectively, and

                                  14


NOTE 10 -(CONTINUED)
         unallocated shares were 190,000 and 258,000 respectively, of which
         190,000 and 68,000, respectively, were committed-to-be allocated.
         Unallocated shares are released based on the ratio of current debt
         service to total remaining principal and interest.  The loan from the
         Company to the ESOP was repaid during the year 2000.  The receivable
         from the ESOP was recorded as a reduction of the Company's
         shareholders' equity, and allocated and unallocated shares of the
         ESOP are treated as outstanding common stock in the computation of
         earnings per share.

         Total ESOP contribution expense recognized was $25,427, and $138,608
         for the years ended December 31, 2000 and 1999, respectively.

NOTE 11 -NET CAPITAL REQUIREMENTS

         The Company's broker/dealer subsidiaries (ND Capital, Inc. Ranson
         Capital Corporation and ARM Securities Corporation) are member firms
         of the National Association of Securities Dealers, Inc. and are
         registered with the Securities and Exchange Commission (SEC) as
         brokers/dealers.  Under the Uniform Net Capital Rule (Rule 15c3-1
         under the Securities Exchange Act of 1934), the subsidiaries are
         required to maintain a minimum net capital and a ratio of aggregate
         indebtedness to net capital, as defined, of not more than 15 to 1.  At
         December 31, 2000, these subsidiaries had net capital of $194,277,
         $276,103 and $616,777; minimum net capital requirements of $25,000,
         $5,000, and $39,556; excess net capital of $169,277, $271,103 and
         $577,221 and ratios of aggregate indebtedness to net capital of .
         15 to 1, .25 to 1 and .96 to 1, respectively.  The subsidiaries are
         exempt from the reserve requirements of Rule 15c3-3.

NOTE 12 -OPERATING SEGMENTS

         ND Holdings and Subsidiaries, Inc., organizes its business units into
         three reportable segments: mutual fund services, Internet services,
         and broker dealer services. The mutual fund services segment acts as
         investment adviser, distributor and provider of administrative service
         to sponsored and nonproprietary mutual funds. The Internet services
         segment provides Internet service for the Minot and surrounding area.
         The broker dealer segment distributes shares of nonproprietary mutual
         funds, and insurance products.

         The company's reportable segments are strategic business units that
         offer different products and services. They are managed separately
         because each business requires different technology and marketing
         strategies. Most of the businesses were acquired as a unit, and the
         management at the time of the acquisition was retained.  The
         accounting policies are the same as those described in the summary
         of significant accounting policies.

         As of, and for the year ended, December 31, 2000


<TABLE>
<CAPTION>
                                                Mutual Fund            Internet          Broker Dealer           Total
                                                  Services             Services             Services             -----
                                                -----------            --------          -------------
<S>                                                <C>                    <C>                 <C>                  <C>
Revenues from
   external customers                           $  3,687,000           $    669,000       $  2,973,000         $  7,329,000
Intersegment
   Revenues                                            7,900                  1,300                  0                9,200
Interest revenue                                       2,150                      0             43,100               45,250
Interest expense                                     251,000                      0                  0              251,000
Depreciation and
   Amortization                                      425,400                172,000             4,400               601,800
Segment profit (loss)                                (68,250)               (82,500)          190,750                40,000
Segment assets                                    11,731,750                943,000         1,346,000            14,020,750
Expenditures for
   segment assets                                    293,300                 46,800            25,300               365,400
</TABLE>


                                   15

NOTE 12 -(CONTINUED)

RECONCILIATION OF SEGMENT INFORMATION
<TABLE>
<CAPTION>
<S>                                                  <C>
Revenues
--------
Total revenues for reportable segments          $   7,338,200
Elimination of intersegment revenues                   (9,200)
                                                -------------
    Consolidated total revenue                  $   7,329,000
                                                =============
Profit
------
Total reportable segment profit                 $      40,000
                                                =============
Assets
------
Total assets for reportable segments            $  14,021,000
Elimination of intercompany  receivables           (1,268,000)
                                                -------------
    Consolidated Assets                         $  12,753,000
                                                =============
</TABLE>


NOTE 13 -COMMITMENTS AND CONTINGENCIES

         The company entered into leases for office space as a result of
         purchasing ARM Securities Corporation (Note 5) in Minnesota and
         California.  The monthly lease payments are $900 and $7,409
         respectively.  The leases will expire March 31, 2003 and January 31,
         2004, respectively.   Total rent expense for the two leases in the
         current year was $59,725.

         The company has several leases for various office equipment that
         expire over the next several years through 2004.  The total rent
         expense for these leases was $22,000, $11,500, and $7,500 for
         December 31, 2000, 1999, and 1998 respectively.

         The following is a schedule by years of future minimum rental
         payments on operating leases as of December 31, 2000.

<TABLE>
<CAPTION>
<S>                                                                           <C>
                      Years ending December 31,
                                 2001                                    $   129,752
                                 2001                                        125,935
                                 2003                                        105,077
                                 2004                                         15,795
                                                                         -----------
                                 Total minimum future rentals            $   376,559
                                                                         ===========
</TABLE>

         In January 2001, the Company was named as a defendant in a lawsuit.
         The Company believes that it is reasonably possible that it will
         obtain a favorable judgment in the case.  However, the ultimate
         outcome of the litigation is unknown at the present time.
         Accordingly, no provision for any liability that might result has
         been made in the accompanying financial statements.  The Company
         believes that it has a meritorious defense against the claim and
         intends to vigorously contest it.  While it is not possible to predict
         the outcome of these actions, the Company believes that costs
         associated with them will not have a material adverse impact on the
         Company's financial position or liquidity, but could possibly be
         material to the consolidated results of operations of any one
         period.  The estimated claim for this case is approximately $130,000.

NOTE 14 -SUBSEQUENT EVENTS

         On December 21, 2000, the company offered to purchase up to 750,000
         shares of its common stock from existing shareholders.  The purchase
         price offered was $1.25 per share. The offer remained open until
         January 22, 2001.  The results of this offer was 750,000 shares have
         been accepted for purchase at a price of $1.25 per share.  The Company
         exercised a portion of its option to purchase up to an additional 2%
         of its outstanding shares resulting in an increase in the number of
         shares to be purchased by an additional 49,947 shares.  In January
         2001, the company paid out $999,934 for the purchase of these 799,947
         shares.

                                   16



NOTE 14 -(CONTINUED)
         On February 20, 2001 the company announced tentative plans to offer
         its shareholders the opportunity to exchange common shares for
         interest bearing securities to be issued by the company.  The
         planned self tender offer anticipates that common shares may be
         exchanged at a premium over the current common share price for a
         security to be offered by the company.  The timing of the intended
         self tender offer is subject to completion of registration and
         filing requirements.



                                  17




                        ADDITIONAL INFORMATION






                                   18


        INDEPENDENT AUDITOR'S REPORT ON ADDITIONAL INFORMATION






To the Stockholders and Directors of
ND Holdings, Inc. and Subsidiaries
Minot, North Dakota


Our report on our audit of the basic consolidated financial statements of ND
Holdings, Inc. and Subsidiaries for the years ended December 31, 2000, 1999
and 1998, appears on page 1.  Those audits were made for the purpose of
forming an opinion on such consolidated financial statements taken as a
whole.  The information on pages 20 and 21 related  to the 2000, 1999 and
1998 consolidated financial statements is presented for purposes of additional
analysis and is not a required part of the basic consolidated financial
statements.  Such information, except for that portion marked "unaudited", on
which we express no opinion, has been subjected to the auditing procedures
applied in the audits of the basic consolidated financial statements, and, in
our opinion, the information is fairly stated in all material respects in
relation to the basic consolidated financial statements for the years ended
December 31, 2000, 1999 and 1998, taken as a whole.

We also have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheets of ND Holdings, Inc. and
Subsidiaries as of December 31, 1997 and 1996, and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of the
two years in the period ended December 31, 1997, none of which is presented
herein, and we expressed unqualified opinions on those consolidated financial
statements.  In our opinion, the information on page 18 relating to the 1997
and 1996 consolidated financial statements is fairly stated in all material
respects in relation to the basic consolidated financial statements from which
it has been derived.




BRADY, MARTZ & ASSOCIATES, P.C.
Minot, North Dakota USA


February 14, 2001





                                    19


                    ND HOLDINGS, INC. AND SUBSIDIARIES
                          SELECTED FINANCIAL DATA
                FOR THE YEARS ENDED DECEMBER 31, AS INDICATED



<TABLE>
<CAPTION>
                                                                                                  1997
                                                                                               (Restated)            1996
                                                 2000           1999           1998              (a)(b)         (Restated)(b)
                                                 ----           ----           ----            ----------       -------------
<S>                                              <C>            <C>            <C>                 <C>              <C>
Operating revenue                           $  7,329,008   $  4,761,059   $  4,438,908        $  4,590,716     $  3,417,614

Income (loss) from
  Operations                                $    285,747   $    586,458   $    683,443        $    738,890     $    261,002

Income tax (expense) benefit                $   (232,830)  $   (326,833)  $   (405,240)       $   (415,042)    $   (216,029)

Earnings (loss) per share                   $        .01   $       (.02)  $        .03        $        .03     $        .01

Total assets                                $ 12,753,359   $ 12,072,973   $ 10,891,060        $ 10,306,160     $ 10,724,285

Long-term obligations                       $  2,987,661   $  2,525,047   $  1,307,750        $  1,113,070     $  1,433,062

Shareholders' equity                        $  8,409,454   $  8,419,984   $  9,083,188        $  9,038,682     $  8,981,190

Dividends paid                              $          0   $          0   $          0        $          0     $          0


<FN>
(a)   The 1997 statement of operations has been restated to reflect the
      Company's current practice of recording commission income and
      commission expense separately.  Prior to 1998 these amounts were
      reported as net commission income.  The 1997 commission income and
      general and administrative expenses have been increased by
      approximately $544,000 so as to conform with the subsequent years'
      presentation.

(b)   During the audit of the 1998 financial statements, an error was
      discovered that resulted in an understatement of reported liabilities
      and overstated net income as of December 31, 1995.  All balances
      affected by this $25,000 error have been restated.
</FN>
</TABLE>


                                    20


                  ND HOLDINGS, INC. AND SUBSIDIARIES
       QUARTERLY RESULTS OF CONSOLIDATED OPERATIONS (UNAUDITED)


<TABLE>
<CAPTION>
                                                           QUARTER ENDED
                                                           -------------
<S>                                    <C>              <C>              <C>               <C>
                                     3-31-00          6-30-00          9-30-00          12-31-00
                                     -------          -------          -------          --------
Revenues                            $  1,084,761     $  2,004,073     $  2,158,754     $  2,081,420
Operating income                          63,444           94,913           78,905           48,485
Other income (expense)                   (15,969)          (2,640)         (13,026)         (12,545)
Income tax expense                       (60,347)         (52,794)         (69,194)         (50,495)
Net income (loss)                         (1,810)          37,428            9,037           (4,251)

Per Share(1)
    Operating income                        0.01             0.02             0.01             0.01
    Other income (expense)                 (0.00)           (0.00)           (0.00)           (0.00)
    Income tax expense                     (0.01)           (0.01)           (0.01)           (0.01)

                                                            QUARTER ENDED
                                                            -------------
                                     3-31-99          6-30-99          9-30-99          12-31-99
                                     -------          -------          -------          --------
Revenues                            $  1,152,721     $  1,151,101     $  1,329,665     $  1,127,572
Operating income                         162,173          173,170          269,825          (18,710)
Other income (expense)                    (5,644)         (15,646)         (21,641)         (21,948)
Income tax expense                       (89,660)         (91,166)        (126,108)         (19,899)
Cumulative effect of an
    accounting change                   (373,455)               0                0                0
Net income (loss)                       (306,586)          66,358          122,076          (49,228)

Per Share(1)
    Operating income                         .02              .02              .03              .00
    Other income (expense)                   .00              .00              .00              .00
    Income tax expense                      (.01)            (.01)            (.02)             .00
    Cumulative effect of an
     accounting change                      (.05)             .00               .0              .00


                                                            QUARTER ENDED
                                                            -------------
                                     3-31-98          6-30-98          9-30-98          12-31-98
                                     -------          -------          -------          --------
Revenues                            $  1,131,861     $  1,076,591     $  1,089,255     $  1,141,201
Operating income                         250,643           29,070          192,021          211,708
Other income (expense)                   (18,459)         (12,654)         (13,940)          19,569
Income tax expense                      (123,404)         (38,057)        (121,518)        (122,261)
Net income (loss)                        108,750          (21,609)          56,563          109,015

Per Share(1)
    Operating income                         .03              .00              .03              .03
    Other income (expense)                   .00              .00              .00              .00
    Income tax expense                      (.02)             .00             (.02)            (.02)

<FN>
(1) The Company adopted FAS 128 in 1997.  For calculating per share amounts,
basic and diluted earnings per common share are not materially different.
</FN>
</TABLE>


The above financial information is unaudited.  In the opinion of management,
all adjustments (which are of a normal recurring nature) have been included
for a fair presentation.


                                   21

Item 8    Changes In and Disagreements with Accountants on Accounting
and Financial Disclosure

None.


                               PART III

ITEM 9    DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Incorporated herein by reference is the information under the heading
"Directors and Executive Officers", in the Registrant's Proxy Statement to
be filed on or about March 30, 2001


ITEM 10    EXECUTIVE COMPENSATION

Incorporated herein by reference is the information appearing in the
Registrant's Proxy Statement which the Registrant anticipates filing on or
about March 30, 2001 under the headings "Directors and Executive Officers."

ITEM 11    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

Incorporated herein by reference is the information appearing under the heading
"Security Ownership of Principal Shareholders and Management", in the
Registrant's Proxy Statement which the Registrant anticipates filing on or
about March 30, 2001.

ITEM 12    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Incorporated herein by reference is the information appearing under the heading
"Directors and Executive Officers", in the Registrant's Proxy Statement which
the Registrant anticipates filing on or about March 30, 2001.


ITEM 13    EXHIBITS AND REPORTS ON FORM 8-K

(a)      The following exhibits are filed herewith or incorporated herein by
         reference as set forth below:

         3.1    Articles of Incorporation of the Company (incorporated by
                reference to Exhibit 3.1 contained in the Company's
                Registration Statement on Form S-1, as amended (File No. 33-
                96824), filed with the Commission on September 12, 1995).

         3.2    Bylaws of the Company (incorporated by reference to Exhibit
                3.2 contained in the Company's Registration Statement on Form
                S-1, as amended (File No. 33-96824), filed with the Commission
                on September 12, 1995).

         4.1    Specimen form of Common Stock Certificate (incorporated by
                reference to Exhibit 4.1 contained in the Company's
                Registration Statement on Form S-1, as amended (File No.
                33-96824), filed with the Commission on September 12, 1995).

         4.2    Instruments defining rights of holders of securities: See
                Exhibit 3.1

         10.1   Management Advisory Contract - ND Tax-Free Fund, Inc.
                (incorporated by reference to Exhibit 10.1 contained in the
                Registration Statement on Form N-1A, as amended on Post-
                Effective Amendment 11 (File No. 33-63306), filed with the
                Commission on February 28, 1997).

         10.2   Management Advisory Contract - Montana Tax-Free Fund, Inc.
                (incorporated by reference to Exhibit 10.2 contained in the
                Registration Statement on Form N-1A, as amended on Post-
                Effective Amendment 6 (File No. 33-63306), filed with the
                Commission on February 28, 1997).

         10.3   Management Advisory Contract - South Dakota Tax-Free Fund,
                Inc. (incorporated by reference to Exhibit 10.3 contained in
                the Registration Statement on Form N-1A, as amended on Post-
                Effective Amendment 5 (File No. 33-63306), filed with the
                Commission on February 28, 1997).

         10.4   Management Advisory Contract - Integrity Fund of Funds, Inc.
                (incorporated by reference to Exhibit 10.4 contained in the
                Registration Statement on Form N-1A, as amended on Post-
                Effective Amendment 4 (File No. 33-85332), filed with the
                Commission on February 28, 1997).

         10.5   Transfer Agency Agreement - ND Tax-Free Fund, Inc.
                (incorporated by reference to Exhibit 10.5 contained in the
                Registration Statement on Form N-1A, as amended on Post-
                Effective Amendment 11 (File No. 33-63306), filed with the
                Commission on February 28, 1997).

         10.6   Transfer Agency Agreement - Montana Tax-Free Fund, Inc.
                (incorporated by reference to Exhibit 10.6 contained in the
                Registration Statement on Form N-1A, as amended on Post-
                Effective Amendment 6 (File No. 33-63306), filed with the
                Commission on February 28, 1997).

         10.7   Transfer Agency Agreement - South Dakota Tax-Free Fund, Inc.
                (incorporated by reference to Exhibit 10.7 contained in the
                Registration Statement on Form N-1A, as amended on Post-
                Effective Amendment 5 (File No. 33-63306), filed with the
                Commission on February 28, 1997).

         10.8   Transfer Agency Agreement - Integrity Fund of Funds, Inc.
                (incorporated by reference to Exhibit 10.8 contained in the
                Registration Statement on Form N-1A, as amended on Post-
                Effective Amendment 4 (File No. 33-85332), filed with the
                Commission on February 28, 1997).

         10.9  Distribution Agreement - ND Tax-Free Fund, Inc.
                (incorporated by reference to Exhibit 10.9 contained in the
                Registration Statement on Form N-1A, as amended on Post-
                Effective Amendment 11 (File No. 33-63306), filed with the
                Commission on February 28, 1997).

         10.10  Distribution Agreement - Montana Tax-Free Fund, Inc.
                (incorporated by reference to Exhibit 10.10 contained in the
                Registration Statement on Form N-1A, as amended on Post-
                Effective Amendment 6 (File No. 33-63306), filed with the
                Commission on February 28, 1997).

         10.11  Distribution Agreement - South Dakota Tax-Free Fund, Inc.
                (incorporated by reference to Exhibit 10.11 contained in the
                Registration Statement on Form N-1A, as amended on Post-
                Effective Amendment 5 (File No. 33-63306), filed with the
                Commission on February 28, 1997).

         10.12  Distribution Agreement - Integrity Fund of Funds, Inc.
                (incorporated by reference to Exhibit 10.12 contained in the
                Registration Statement on Form N-1A, as amended on Post-
                Effective Amendment 4 (File No. 33-85332), filed with the
                Commission on February 28, 1997).

         10.13  Stock Purchase Agreement - ND Holdings, Inc. and
                Shareholders of Ranson Company, Inc. (incorporated by
                reference to Exhibit 10.13 contained in the Company's
                Registration Statement on Form S-1, as amended
                (File No. 33-96824), filed with the Commission on September
                12, 1995).

         10.14  Transfer Agency Agreement - Ranson Managed Portfolios
                (incorporated by reference in the Company's form 10KSB/A
                as amended(Commission File No. 0-25958), filed with the
                Commission on May 20, 1998).

         10.15  Transfer Agent Agreement - Investors Research Fund
                (incorporated by reference to Exhibit 10.15 contained in the
                Company's Registration Statement Form N-1A as amended
                (File No. 2-14675) filed with the Commission on January 22
                1999).

         10.16  Distribution Agreement - Investors Research Fund
                (incorporated by reference to Exhibit 10.16 contained in the
                Company's Registration Statement Form N-1A as amended
                (File No. 2-14675) filed with the Commission on January 22
                1999).

         10.17  Accounting Services Agreement - Investors Research Fund
                (incorporated by reference to Exhibit 10.17 contained in the
                Company's Registration Statement Form N-1A as amended
                (File No. 2-14675) filed with the Commission on January 22
                1999).

         10.18  Management and Investment Advisory Agreement - Ranson Managed
                Portfolios (incorporated by reference to Exhibit 10.18
                contained in the Portfolios' Registration Statement on Form
                N-1A, as amended on Post-Effective Amendment 43 (File No.
                33-36324),filed with the Commission on November 30, 1999).

         10.19  Distribution and Services Agreement - Ranson Managed
                Portfolios (incorporated by reference to Exhibit 10.19
                contained in the Portfolios' Registration Statement on
                Form N-1A, as amended on Post-Effective Amendment 43 (File
                No. 33-36324), filed with the Commission on November 30, 1999).

         10.20  Management Advisory Contract - Integrity Small-Cap Fund of
                Funds, Inc. (incorporated by reference to Exhibit 10.20
                contained in the Registration Statement on Form N-1A,
                (File No. 333-64917), filed with the Commission on
                September 30, 1998).

         10.21  Transfer Agency Agreement - Integrity Small-Cap Fund of Funds,
                Inc. (incorporated by reference to Exhibit 10.21 contained in
                the Registration Statement on Form N-1A (File No. 333-64917),
                filed with the Commission on September 30, 1998).

         10.22  Distribution Agreement - Integrity Small-Cap Fund of Funds,
                Inc. (incorporated by reference to Exhibit 10.22 contained in
                the Registration Statement on Form N-1A, as amended on Post-
                Effective Amendment 3 (File No. 333-64917), filed with the
                Commission on June 14, 2000).

         21.1   Subsidiaries of the Company: (incorporated by reference to
                Exhibit 21.1 contained in the Company's Registration Statement
                on Form S-1 as amended (File No. 33-96824), filed with the
                Commission on December 7, 1995).



 (b)      Reports on Form 8-K/A.

During the fourth quarter of the Fiscal Year ended December 31, 2000, Form
8-K/A filed on November 9, 2000.

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized on this 30th day of March.

                                                    ND HOLDINGS, INC.


Date:  March 26, 2001                              By /s/ Robert E. Walstad
                                                   ------------------------
                                                   Robert E. Walstad
                                                   Chief Executive Officer and
                                                   President and Director
                                                  (Acting Chief Financial
                                                      Officer)

     In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.

Date: March 26, 2001                               By /s/ Robert E. Walstad
                                                   ------------------------
                                                   Robert E. Walstad
                                                   Chief Executive Officer,
                                                   President and Director
                                                  (Principal Executive Officer)
                                                  (Acting Chief Financial
                                                      Officer)

Date: March 26, 2001                               By /s/ Peter A. Quist
                                                   ------------------------
                                                   Peter A. Quist
                                                   Vice President and Director

Date: March 26, 2001                               By /s/ Vance A. Castleman
                                                   ------------------------
                                                   Vance A. Castleman
                                                   Director

Date: March 26, 2001                               By /s/ Myron D. Thompson
                                                   ------------------------
                                                   Myron D. Thompson
                                                   Director

Date: March 26, 2001                               By /s/ Richard H. Walstad
                                                   ------------------------
                                                   Richard H. Walstad
                                                   Director

Date: March 26, 2001                               By /s/ Daniel L. Feist
                                                   ------------------------
                                                   Daniel L. Feist
                                                   Director