SECURITIES AND EXCHANGE COMMISSION
                                         Washington, DC 20549

FORM 10-KSB/A
for Annual Report Under Section 13
or 15(d) of the Securities Exchange Act of 1934

[X]      ANNUAL REPORT PURSUANT TO SECTION 12 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 [FEE REQUIRED]

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

       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 58701
                  (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, 1997 were
$4,046,322.

On March 31, 1998, there were 8,139,187 shares of the Registrant's common
stock, outstanding.

Documents Incorporated by Reference

Portions of the Company's definitive Proxy Statement for the Annual Meeting
of Shareholders to be held on May 22, 1998 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 Insured Income Fund, Inc., Montana Tax-Free Fund, Inc.,
South Dakota Tax-Free Fund and Integrity Fund of Funds, Inc.  Ranson
Managed Portfolios consists of one open-end investment company containing
five (5) separate portfolios including The Kansas Municipal Fund, The Kansas
Insured Intermediate Fund, The Nebraska Municipal Fund, The Oklahoma Municipal
Fund and The Illinois Municipal Fund. Sales of Fund shares are marketed
principally in Montana, Kansas, Oklahoma, North Dakota, Nebraska and South
Dakota.  In addition, the Company has commenced marketing of shareholder
services, fund accounting and other administrative services offered by ND
Resources, Inc. ("ND Resources") to fund groups in the United States.

As of December 31, 1997, total assets under management in the
Funds was approximately $350 million, compared to approximately $334 million
as of December 31, 1996 and approximately $131 million as of December 31, 1995.

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, 1997, the Company had 23 full-time employees and 1 part-time
employee, consisting of officers, investment management, distribution,
shareholder services, data processing, 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 COMPANY'S SUBSIDIARIES

The Company's principal line of business is providing investment management,
distribution, shareholder services, accounting and related services to
the Funds.  As a result, the Company is economically dependent on the Funds 
for substantially all of its revenue and income.  The business is conducted
through the wholly-owned subsidiary companies described below.  Revenues
generated by the subsidiaries are derived primarily from fees based on the
level of assets under management.

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, ND
Insured Income Fund, Montana Tax-Free Fund, South Dakota Tax-Free Fund and
Integrity Fund of Funds.  As of December 31, 1997, ND Money Management managed
approximately $ 163.2 million, representing approximately 47% of the Company's
total assets under management.

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").  As principal underwriter and distributor for ND Tax-Free Fund,
Montana Tax-Free Fund and South Dakota Tax-Free Fund, 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.  As principal
underwriter for ND Insured Income Fund, ND Capital earns front-end sales loads
("FESLs") in connection with sales of such Fund's shares effected by ND
Capital's sales representatives and the underwriter's portion of FESLs in
connection with sales of such Fund's shares effected by other broker-dealers.
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, 1997, Ranson 
managed approximately $186.7 million in assets, representing approximately
53% of the Company's total assets under management.  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 record keeping services and acts as transfer agent and
dividend-paying agent for the Funds.  ND Resources also
provides business management services, including fund accounting, compliance
and other related administrative activities for the Funds.
ND Resources is compensated for providing these services under agreements
with each Fund, and is reimbursed for out-of-pocket expenses.

Over the last 12 months, ND Resources has been investing in technology,
systems and personnel to enable it to offer its services to outside fund
groups. ND Resources recently commenced marketing these services to other
fund groups in the United States and expects to continue to do so in 1998.
As of February 28, 1998, ND Resources was not providing any services to
outside fund groups.

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 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 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 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 46% of the Company's consolidated
revenues in 1997.

Transfer Agency, Dividend Disbursement and Administrative Services

Additional transfer agency, dividend disbursement and other shareholder
administrative services are provided to the Funds by ND Resources.
ND Resources receives fees from the Funds for providing such services.  As
of December 31, 1997 such fees ranged from 0.09% per annum of assets under
management to 0.16% per annum of assets under management, 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 depending on the
size of the Fund.

Distribution of Fund Shares

ND Capital acts as the principal underwriter and distributor of shares of
ND Tax-Free Fund, ND Insured Income Fund, Montana Tax-Free Fund, South Dakota
Tax-Free Fund and Integrity 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
to the residents of the rural states in which the Company's Funds invest in
local bond issues.

Shares of ND Insured Income Fund and of the 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) to 4.5% (with respect to ND Insured Income Fund) 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, South Dakota Tax-Free Fund
and Integrity Fund of Funds 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 1.5% with respect to Integrity 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.

Each of the Funds (other than Kansas Insured Intermediate Fund, ND Insured
Income 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 range from
 .25% per annum of the Fund's average net assets (with respect to the applicable
Ranson Managed Portfolios) to .75% per annum of the Fund's average net assets
(with respect to Montana Tax-Free Fund and South Dakota Tax-Free Fund) to .85%
per annum of average net assets (with respect to ND Tax-Free Fund).  ND Capital
currently waives 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 Plans are established for an initial term of
one year.  Thereafter, they must be approved annually by the Board of
Directors, including a majority of the disinterested directors, of each Fund.
Each Plan is subject to termination at any time by a majority of the Fund's
disinterested directors or by the Fund's shareholders.

FESL, CDSC and Rule 12b-1 revenues constituted 26% of the Company's
consolidated revenues in 1997.

Brokerage Commissions

ND Capital also earns commission revenue in connection with sales of shares
of outside mutual funds and when acting as a broker in effecting other
securities transactions.  Commission revenue constituted 11% of the Company's
consolidated revenues in fiscal 1997.

GENERAL FUND DESCRIPTION

Set forth in the table below is a description of each of the Funds
including its name, inception date and investment objective.
<TABLE>
<CAPTION>
Name of Fund                         Inception Date                     Investment Objective
---------------------------------------------------------------------------------------------------------------
<S>                                  <C>                 <C>
ND Tax-Free Fund                     January 3, 1989     Provide as high a level of current income exempt from
                                                         federal and North Dakota income taxes as is consistent
                                                         with the preservation of capital.

ND Insured Income Fund               March 19, 1991      Provide as high a level of current income as is consistent
                                                         with prudent investment management, preservation of
                                                         capital, and ready marketability of its portfolio.

Montana Tax-Free Fund                August 12, 1993     Provide as high a level of current income exempt from
                                                         federal and Montana income taxes as is consistent
                                                         with the preservation of capital.

South Dakota Tax-Free Fund           April 5, 1994       Provide as high a level of current income exempt from
                                                         federal and South Dakota income taxes as is consistent
                                                         with the preservation of capital.

Integrity Fund of Funds              January 1, 1995     Provide long-term capital appreciation and growth of income.

Ranson Managed Portfolios            November 15, 1990   Provide as high a level of current income exempt from
The Kansas Municipal Fund                                federal and Kansas income taxes as is consistent
                                                         with the preservation of capital
          .
Ranson Managed Portfolios            November 23, 1992   Provide as high a level of current income exempt from
The Kansas Insured                                       federal and Kansas income taxes as is consistent
 Intermediate Fund                                       with the preservation of capital.
     
Ranson Managed Portfolios            November 17, 1993   Provide as high a level of current income exempt from
The Nebraska Municipal Fund                              federal and Nebraska income taxes as is consistent
                                                         with the preservation of capital.

Ranson Managed Portfolios            September 25, 1996  Provide as high a level of current income that is exempt 
The Oklahoma Municipal Fund                              from both federal income tax and, to the extent indicated,
                                                         Oklahoma income tax as is consistent with preservation
                                                         of capital.

Ranson Managed Portfolios            October 11, 1997    Provide as high a level of current income that is exempt 
The Illinois Municipal Fund                              from both federal income tax and, to the extent indicated,
                                                         Illinois income tax as is consistent with preservation
                                                         of capital.
</TABLE>
Recent Fund Developments

ND Insured Income Fund commenced operations on March 19, 1991.  As of
December 31, 1997, the Fund had $2.2 million in assets under management.
For the period from inception through January 31, 1997, ND Money Management
voluntarily agreed to waive investment advisory fees and/or absorb Fund
expenses so as to ensure that annual Fund expenses, including the investment
advisory fee, did not exceed certain levels.  Effective February 1, 1998,
the Company, the Fund's sponsor and parent company of ND Money Management,
the Fund's investment advisor, determined to no longer waive investment
advisory fees and/or absorb Fund expenses.  Shareholders of the Fund were
informed of this decision.  Only a nominal amount of assets remains in the
Fund.  The Company expects that the Fund will complete a plan of liquidation
and close.  This is expected to have a favorable, though immaterial, effect
on the net income of the Company as the Company will no longer be absorbing
expenses in excess of fee revenue collected from the Fund.

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, record
-keeping 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 and Ranson are registered broker-dealers, subject to extensive
regulation by the SEC, the NASD and state agencies in those states in which
ND Capital and Ranson conduct business.  As broker-dealers, ND Capital and
Ranson 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, with ND Money Management and Ranson, are subject to
periodic examinations by the SEC.

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 and the Funds received comment letters from the SEC staff
that outlined various compliance issues.  ND Money Management, Ranson and the
Funds, which must respond to the SEC's comments by June 1, 1998, are currently
reviewing and working to resolve such comments.  There can be no assurance at
this time that the resolution of one or more of the SEC's comments would not
have a material adverse effect on the business or financial condition of the
Company.  The Company is already incurring, and anticipates that it will
continue to incur, additional legal and compliance costs in the future to
ensure ongoing compliance with applicable regulatory requirements, although
the extent of such additional costs 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 6,800 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 FESCs 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.

Item 2    Description of Property

The offices for the Company and each of its subsidiaries are located at
1 North Main, Minot, North Dakota in approximately 10,000 square
feet of office space leased by the Company pursuant to a written lease
agreement which expires on approximately May 31, 2001 with an option to
renew for an additional five years.  The Company also has an option to
purchase the building at any time during the term of the lease.

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, 1997.


                               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, 1997, the closing price of the
Company's Common Stock on the OTC Bulletin Board was $1.97 per share.
At March 25, 1998, there were approximately 589 shareholders of record.
In addition, the Company estimates that there are approximately 394
beneficial shareholders whose shares are held in street name.

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


                                    1997 Fiscal Year
                                  -------------------
Quarter                           High            Low
--------------------------------------------------------
November 7 (Commencement of
  trading) - December 31, 1997    $ 2.50         $ 1.19   

The quotations reflect interdealer prices, without retail mark-up, mark-down
or commission, and may not represent actual transactions.  Prior to December
9, 1997, there was only one market maker for the Company's Common Stock.
The Company has not paid a dividend with respect to its Common Stock nor does
the Company anticipate paying dividends in the foreseeable future.

Use of Proceeds

On February 4, 1997 the Securities and Exchange Commission declared effective
the Company's Registration Statement on Form S-1 (Commission file number
333-11509) and on May 1, 1997 declared effective the Company's post effective
amendment 1 to the registration statement on Form S-1 relating to the initial
public offering of 3,000,000 shares at $3.50 per share.  On August 3, 1997,
the Company terminated this offering.  As of August 3, 1997, 78,204 shares
were sold of which 39,102 were sold by the Company and 39,102 were sold by
certain shareholders of the Company.  The Company's net proceeds from the
offering totaled $123,171.  Financial Advantage Brokerage Services, Inc.
served as managing underwriter for the offering.

The Company incurred the following actual expenses in connection with the
issuance and distribution of the 39,102 shares as discussed above:

Underwriter's discount     $   10,949
Underwriter's expenses          2,737
Other expenses                278,093
                           ----------
     Total expenses        $  291,779

No direct or indirect payments of the proceeds received from the offering
were made to directors, officers, stockholders or affiliates of the 
Company.

The Company used the net proceeds to pay for a portion of the expenses of
the offering.

Item 6    Management's Discussion and Analysis of Financial Condition
and Results of Operations

GENERAL

ND Holdings derives substantially all of its revenues and net income from
providing investment management, distribution, shareholder services,
accounting and related services to the Funds.  The majority of the Company's
assets under management consist of single-state municipal funds for the
states of North Dakota, South Dakota, Montana, Kansas, Nebraska, and Oklahoma.

The Ranson Acquisition, which was completed on January 5, 1996, was accounted
for using the purchase method of accounting. To finance the Ranson Acquisition,
the Company incurred debt of $1,500,000 under a bank loan
from First Western Bank and Trust (the "Loan"), utilized
available cash and sold investment assets.
Under the purchase method, the purchase resulted in the recording of
approximately $5.6 million in intangible assets, $300,000 of which, was
allocated to a covenant not to compete.  The Ranson Acquisition significantly
affected the comparability of prior year results of operations and financial
condition of the Company beginning in 1996.  As a result of the Ranson
Acquisition, the Company experienced a significant increase in assets under
management in 1996 and, correspondingly, revenue and expense from these
operations.  Interest expense and amortization of intangible assets associated
with the acquisition also increased significantly.  As amortization of a
significant portion of these intangibles is not deductible for tax purposes,
income tax expense also increased significantly as a result of the Ranson
Acquisition.  

Commencing in 1996, the Company changed the period over which it amortizes
deferred sales commissions on sales of Fund shares subject to CDSCs from five
to nine years.  This accounting change had a material positive impact on the
Company's net income and financial condition for 1996 and further
affected the comparability of results of operations and financial condition
of the Company beginning in 1996.

ASSETS UNDER MANAGEMENT
By Investment Objective
In Millions

As of December 31,                           1997      1996      1995
----------------------------------------------------------------------

FIXED-INCOME
Tax-Free                                   $ 330.3   $ 320.1   $ 123.7
Taxable (Corporate/Government)                 2.2       2.7       3.0
----------------------------------------------------------------------

TOTAL FIXED-INCOME                         $ 332.5   $ 322.8   $ 126.7
----------------------------------------------------------------------

EQUITY
Fund of Funds                              $  17.4   $  11.4   $   4.4
----------------------------------------------------------------------

TOTAL EQUITY                               $  17.4   $  11.4   $   4.4
----------------------------------------------------------------------

TOTAL INTEGRITY MUTUAL FUNDS               $ 349.9   $ 334.2   $ 131.1
----------------------------------------------------------------------

The Company's revenues depend primarily upon the amount of assets under
its management.  Assets under management 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 grew by $15.7 million (4.7%) and $203.1 million (154.9%)
in 1997 and 1996, respectively during these years. Fixed-income assets grew by
3.0% and 154.8%, respectively, during these years, and represented 96.6% and
95.0% of total assets under management at the respective year ends. The
addition of the Ranson Managed Portfolios due to the Ranson Acquisition
contributed $184.0 million to the 1996 growth in this category. Equity
assets grew 159.1% and 52.6% in 1997 and 1996, respectively, and represented
3.4% and 5.0% of total assets under management at the end of 1997 and 1996,
respectively.

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>
                                                                                               Percent Increase
                                                                                                  (Decrease)
                                                                                               ----------------
                                             1997              1996              1995           1997     1996
                                        -----------------------------------------------------------------------
<S>                                     <C>               <C>               <C>                 <C>      <C>
OPERATING REVENUES
   Fee income                           $   3,604,334     $   3,114,995     $   1,327,302       16%      135%
   Commissions                                441,988           302,619            78,014       46%      288%
                                        -----------------------------------------------------------------------
   Total operating revenue              $   4,046,322     $   3,417,614     $   1,405,316       18%      143%
                                        -----------------------------------------------------------------------
OPERATING EXPENSES
   Compensation and benefits            $     943,481     $     758,864     $     589,399       24%       29%
   General and administrative expenses      1,365,845         1,514,300           664,084      (10)%     128%
   Sales commissions amortized                546,675           464,050           808,286       18%      (43)%
   Depreciation and amortization              451,431           419,398            27,729        8%    1,412%
                                        -----------------------------------------------------------------------
   Total operating expenses             $   3,307,432     $   3,156,612     $   2,089,498        5%      (51)%
                                        -----------------------------------------------------------------------
OPERATING INCOME (LOSS)                 $     738,890     $     261,002     $    (684,182)     183%       138%
                                        -----------------------------------------------------------------------
OTHER INCOME (EXPENSES)
   Investment and other income          $      23,863     $     160,595     $     176,669      (85)%      (9)%
   Interest expense                          (118,311)         (161,197)          (27,948)     (27)%      477%
                                        -----------------------------------------------------------------------
   Total other income (expense)         $     (94,448)    $        (602)    $     148,721  (15,589)%    (100)%
                                        -----------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME
   TAX (EXPENSE) BENEFIT                $     644,442     $     260,400     $    (535,461)     147%       149%

INCOME TAX (EXPENSE) BENEFIT
                                             (415,042)         (216,029)          162,400       92%     (233)%
                                        -----------------------------------------------------------------------
NET INCOME (LOSS)                       $     229,400     $      44,371     $    (373,061)     417%      112%
                                        =======================================================================
NET INCOME (LOSS) PER SHARE             $        0.03     $        0.01     $       (0.05)     200%      120%
</TABLE>

Net income and earnings per share for 1997 increased by 417% and 200%,
respectively, primarily as a result of increased fee revenues.  Net income and
earnings per share turned positive in 1996 primarily due to the combined effect
of increased fee revenues as a result of the large increase in assets under
management following the Ranson Acquisition and the change in accounting
estimate of the period for amortization of deferred sales commissions from five
to nine years.

For the years presented, ND Money Management, ND Capital and Ranson waived or
reimbursed fund fees and expenses pursuant to voluntary fee waiver and expense
reimbursement arrangements.  The Company incurred and paid each fund's expenses
(with such expenses being reflected as expenses on the Company's consolidated
income statement).  Each fund's expenses were periodically paid by the
applicable fund in an amount equal to the fund's gross expenses net of expenses
voluntarily absorbed by the Company (with the net payments being reflected as
income on the Company's consolidated income statement).  Commencing in 1998,
fund expenses will be incurred and paid directly by the funds. ND Money
Management, Ranson and ND Capital will fulfill their voluntary waiver and
reimbursement arrangements through voluntary waivers of investment advisory
and/or Rule 12b-1 fees and reimbursement of expenses.  While these accounting
changes will not have any impact on the Company's consolidated net income, they
will cause consolidated revenues and expenses to be lower than they otherwise
would have been in the absence of such accounting changes.  Had these changes
been adopted in 1995, operating revenues would have been $3,379,358, $2,903,250
and $1,192,626 for 1997, 1996 and 1995 respectively, a decrease of $666,964,
$514,364 and $212,690, for 1997, 1996 and 1995, respectively and general and
administrative expenses would have been $698,881 , $999,936 and $451,394 for
1997, 1996 and 1995 respectively, a decrease of $666,964, $514,364 and
$212,690, for 1997, 1996 and 1995, respectively.

OPERATING REVENUES

Total operating revenues at December 31, 1997 were $4 million, an increase
of 18% from $3.4 million at December 31, 1996.  Fee revenues increased 16%
and 135% respectively, in 1997 and 1996.  The increase in 1997 resulted
primarily from reduced fee waivers, reductions in voluntary fee waivers and
expense reimbursements and, to a lesser extent from increased assets under
management.  The 1996 increase was principally due to an increase in assets
under management from the Ranson Acquisition.


Commission income includes underwriting fees associated with sales of the
FESL funds, commissions earned by registered representatives of ND Capital,
the Company's broker-dealer subsidiary, and commissions earned by ND Capital
acting as agent to the Funds for the purchase of certain investment
securities.  ND Capital may cease acting as agent to the Funds for the
purchase of investment securities in fiscal 1998.  Commission income increased
46% and 288% in 1997 and 1996, respectively.  The increase in 1997 was due to
an increase in underwriting fees from higher sales of the FESL Funds as well
as increases in commissions earned by ND Capital when acting as agent for the
purchaser or seller of a security.  The increase in 1996 was due primarily to
a large increase in underwriting fees as a result of the addition of Ranson
Managed Portfolios.

OPERATING EXPENSES

Total operating expenses increased 5% and 51% in 1997 and 1996, respectively.

Compensation and benefits increased 24% and 29% in 1997 and 1996,
respectively.  The increase in 1997 resulted primarily from an increase in the
number of Fund marketing representatives in an effort to increase Fund growth,
as well as from an increase in employees in preparation of offering transfer
agent and accounting services to outside fund groups.  The increase in 1996
was largely due to the expansion of operations as a result of the Ranson
Acquisition.

General and administrative expenses decreased 10% in 1997 and increased 128%
in 1996.  The decrease in 1997 occurred as a result of transfer agent services
for Ranson Managed Portfolios (which were paid by the Company on behalf of
Ranson Managed Portfolios) being provided in-house by ND Resources for the
entire year, while during part of 1996, a third party provided the services.
The increase in 1996 was largely due to the expansion of operations as
a result of the Ranson Acquisition. The Company anticipates that it will
incur additional legal and compliance costs in future years to ensure ongoing
compliance with applicable regulatory requirements, although the extent of such
additional costs is not presently determinable.

The Company has assessed the impact of year 2000 issues on its computer
systems and applications and believes that its systems are year 2000 compliant.
Currently, the Company is in the process of evaluating the readiness of vendors
upon which it relies, such as custodian banks and the National Securities
Clearing Corporation.  As a result, management is not in a position to fully
estimate the costs associated with year 2000 issues and their impact on the
Company's business or financial condition.

Sales commissions paid to brokers and dealers in connection with the sale of
shares of the Funds sold without a FESL (primarily the Integrity Mutual Funds)
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.  CDSCs
received by the Company are recorded as a reduction of unamortized deferred
sales commissions.  Amortization of deferred sales commissions increased 18%
in 1997 and decreased 43% in 1996.  The increase in 1997 is due to an increase
in capitalized sales commissions paid on Funds subject to CDSCs.  The decrease
in 1996 is accounted for by a change in accounting estimate.  In 1996, the
Company changed its period for amortizing capitalized sales commissions paid
on Funds subject to CDSCs from five years to nine years.  The net effect of
the change in income before income tax on 1996 was an increase of $356,243.

Depreciation and amortization increased 8% and 1,412% in 1997 and 1996,
respectively.  The increase in 1997 was due to an increase in equipment
purchases as a result of management's commitment to technology and systems
to better service its funds and position itself to provide services
to potential outside fund clients.  The large increase in 1996 reflected the
addition of the amortizable intangible assets of approximately $5.6 million
as a result of the Ranson Acquisition, of which $300,000 was allocated to a
covenant not to compete and the balance was allocated to the investment
adviser's agreement.

OTHER INCOME (EXPENSES)

Investment and other income declined in 1997 due to a decline in interest
income as a result of the sale of investments in early 1996 to finance the
Ranson Acquisition.  Investments and other income also declined in 1996
compared with 1995 as a result of the decline in interest income due to
the Ranson Acquisition related sale of investments. This decline was offset
somewhat by capital gains realized in 1996 versus capital losses realized
in 1995.

Cash flows of $585,654 from operating activities were used to reduce the
Company's debt of $1,500,000 under the Loan.  As a result interest
expense decreased by $42,886 in 1997.  Interest expense increased
by $133,249 in 1996 as a result of borrowings under the Line of Credit.

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.  In 1997 the Company's effective tax rate was 64% and
in 1996 it was 83%.  The effective tax 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 18 years
and the non-compete agreement which has a remaining life of one year. The
Company is currently reviewing the effects of the Taxpayer Relief Act of 1997.
This Act may cause a change in the effective tax rate for future periods.

FINANCIAL CONDITION

At December 31, 1997, the Company's assets aggregated $10.3 million, a
decrease of 4% from $10.7 million in 1996, primarily due to the
utilization in 1997 of $400,000 of the deferred tax benefit.  Stockholders'
equity increased to $9.1 million at December 31, 1997 compared to $9.0
million at the end of 1996, primarily as a result of net
income of $229,400.  Outstanding debt (long-term and short -term) was reduced
by $320,000 during 1997, primarily due to payments from operating cash
flows and resulted in a reduction of the Loan  The Company's interest coverage
ratio (pretax income before interest expense divided by interest expense) is
6.4 for 1997 as compared to 2.6 for 1996.

Cash provided by operating activities increased to $585,654 in 1997, an
increase of $137,798 or 31% from $447,856 in 1996.  During the year ended
December 31, 1997, the Company used net cash of $150,398 for investing
activities of which $100,000 was for the purchase of shares in an affiliated
mutual fund and the majority of the remainder was used to purchase new
equipment.  Net cash flow used by financing activities during the year was
$251,565, primarily as a result of the reduction in notes payable and
outstanding investment certificates totaling $871,992 offset partially by
proceeds (net of selling shareholders and issue costs) of a best efforts
offering the Company's Common Stock totaling $124,788 and proceeds of
$552,000 from an intrastate debenture offering.  During 1997, the Company
also purchased $19,932 of its 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.

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 1997, the Company's liquid assets totaled 452,932,
including $351,603 of cash and cash equivalents, as compared to 167,912
all of which represented cash and cash equivalents, at December 31, 1996.

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 and its borrowing capacity under its line
of credit, which at March 30, 1998 had $600,000 in available borrowings, 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, purchase property currently
being leased, repurchase shares of the Company's Common Stock and service debt.
In addition, the Company is required under the terms of its debentures, which
mature September 1, 2002, to make annual interest payments of approximately
$47,000 in March and September.

FORWARD-LOOKING STATEMENTS

When used in 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,"
"estimate" 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 fees relating to
the management of, and provision of services to, the Funds.  The fees earned
by the Company are generally calculated as a percentage of assets under
management.  If the Company's assets under management decline, or do not
grow in accordance with the Company's plans, fee revenues and earnings would
be materially adversely affected.  Assets under management 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 6,800 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 FESCs 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 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) 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.

The Company also operates in a heavily-regulated environment. Following routine
books and records examinations by the SEC in 1997, ND Money Management, Ranson
Capital, two of the Company's subsidiaries and the Funds received comment 
letters from the SEC staff that outlined various compliance issues.  ND Money 
Management, Ranson and the Funds, which must respond to the SEC's comments by 
June 1, 1998, are currently reviewing and working to resolve such comments.
The Company is already incurring additional costs in order to comply with 
existing regulatory requirements.  The need to comply with any future 
regulatory requirements may place further regulatory burdens on the Company 
and require the Company to incur additional costs.  These additional costs may
have a material adverse effect on the Company's earnings. 

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, 1997, 1996 AND 1995

                                                  AND

                                       INDEPENDENT AUDITOR'S REPORT







                       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, 1997 and
1996 and the related consolidated statements of operations, stockholders'
equity and cash flows for the years ended December 31, 1997, 1996 and 1995.
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 financial position of ND
Holdings, Inc. and Subsidiaries as of December 31, 1997 and 1996, and the
results of their operations and their cash flows for the years ended December
31, 1997, 1996 and 1995 in conformity with generally accepted accounting
principles.

As discussed in Note 10 to the consolidated financial statements, in 1996,
the Company changed its period for amortizing deferred sales commissions.
The change in the amortizable life of the deferred sales commission is based
on the period of time during which deferred sales commissions are expected to
be recovered from distribution plan payments and management's estimate of the
average life of investors' accounts in sponsored mutual funds.



BRADY, MARTZ & ASSOCIATES, P.C.

February 20, 1998

                              ND HOLDINGS, INC. AND SUBSIDIARIES
                                 CONSOLIDATED BALANCE SHEETS
                                 DECEMBER 31, 1997 AND 1996




                                       ASSETS
<TABLE>
<CAPTION>
                                                       1997                 1996
                                                  ----------------------------------
<S>                                               <C>                  <C>
CURRENT ASSETS
  Cash and cash equivalents                       $     351,603        $     167,912
  Securities available-for-sale                         101,329                    0
  Accounts receivable
    - Fees from sponsored mutual funds                  342,134              316,740
    - Other                                                   0               15,909
  Prepaids                                               27,825               22,655
  Deferred tax benefit                                  405,343              440,000
                                                  ----------------------------------
  Total current assets                            $   1,228,234        $     963,216
                                                  ----------------------------------

PROPERTY AND EQUIPMENT                            $     562,776        $     517,316
  Less accumulated depreciation                         239,337              175,981
                                                  ----------------------------------
  Net property and equipment                      $     323,439        $     341,335
                                                  ----------------------------------

OTHER ASSETS
  Deferred sales commissions                      $   3,341,858        $   3,059,344
  Deferred tax benefit                                        0              363,142
  Covenant not to compete (net of accumulated
    amortization of $200,000 for 1997 
    and $100,000 for 1996)                              100,000              200,000
  Investment advisory agreements (net of
    accumulated amortization of $554,668 for 
    1997 and $267,751 for 1996)                       5,183,671            5,466,559
  Public registration costs                                   0              241,664
  Other                                                 128,958               89,025
                                                  ----------------------------------
  Total other assets                              $   8,754,487        $   9,419,734
                                                  ----------------------------------

TOTAL ASSETS                                      $  10,306,160        $  10,724,285
                                                  ==================================



                           LIABILITIES AND STOCKHOLDERS' EQUITY



                                                       1997                1996
                                                  ----------------------------------

CURRENT LIABILITIES
  Service fees payable                            $     101,486        $     108,556
  Accounts payable                                       16,208              184,642
  Other current liabilities                              36,714               16,835
  Current portion of long-term debt                      78,192              132,881
                                                  ----------------------------------
  Total current liabilities                       $     232,600        $     442,914
                                                  ----------------------------------

LONG-TERM LIABILITIES
  Note payable                                    $     430,970        $   1,172,962
  Investment certificates                               105,100              235,100
  Debentures                                            552,000                    0
  Less current portion shown above                      (78,192)            (132,881)
                                                  ----------------------------------
  Total long-term liabilities                     $   1,009,878        $   1,275,181
                                                  ----------------------------------
TOTAL LIABILITIES                                 $   1,242,478        $   1,718,095
                                                  ----------------------------------
STOCKHOLDERS' EQUITY
  Common Stock - 20,000,000 shares
    authorized, no par value; 8,153,187 and 
    8,123,586 shares issued and
    outstanding, respectively                     $  10,460,130        $  10,633,367
  Accumulated deficit                                (1,397,777)          (1,627,177)
  Unrealized gain on securities available-
    for-sale                                              1,329                    0
                                                  ----------------------------------
  Total stockholders' equity                      $   9,063,682        $   9,006,190
                                                  ----------------------------------
TOTAL LIABILITIES AND
  STOCKHOLDERS' EQUITY                            $  10,306,160        $  10,724,285
                                                  ==================================
</TABLE>



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

                            ND HOLDINGS, INC. AND SUBSIDIARIES
                          CONSOLIDATED STATEMENTS OF OPERATIONS
                   FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995



<TABLE>
<CAPTION>
                                              1997            1996            1995
                                        ---------------------------------------------
<S>                                     <C>             <C>             <C>
REVENUES
  Fee income                            $   3,604,334   $   3,114,995   $   1,327,302
  Commissions                                 441,988         302,619          78,014
                                        ---------------------------------------------
  Total revenue                         $   4,046,322   $   3,417,614   $   1,405,316
                                        ---------------------------------------------

OPERATING EXPENSES
  Compensation and benefits             $     943,481   $     758,864   $     589,399
  General and administrative expenses       1,365,845       1,514,300         664,084
  Sales commissions amortized                 546,675         464,050         808,286
  Depreciation and amortization               451,431         419,398          27,729
                                        ---------------------------------------------
  Total operating expenses              $   3,307,432   $   3,156,612   $   2,089,498
                                        ---------------------------------------------

OPERATING INCOME (LOSS)                 $     738,890   $     261,002   $    (684,182)
                                        ---------------------------------------------
OTHER INCOME (EXPENSES)
  Investment and other income           $      23,863   $     160,595   $     176,669
  Interest expense                           (118,311)       (161,197)        (27,948)
                                        ---------------------------------------------
  Net other income (expense)            $     (94,448)  $        (602)  $     148,721
                                        ---------------------------------------------

INCOME (LOSS) BEFORE INCOME
  TAX (EXPENSE) BENEFIT                 $     644,442   $     260,400   $    (535,461)

INCOME TAX (EXPENSE) BENEFIT                 (415,042)       (216,029)        162,400
                                        ---------------------------------------------
NET INCOME (LOSS)                       $    229,400    $      44,371   $    (373,061)
                                        =============================================
EARNINGS (LOSS) PER  COMMON SHARE:
  Basic                                 $        .03    $         .01   $        (.05)
  Diluted                               $        .03    $         .01   $        (.04)

SHARES USED IN COMPUTING
  EARNINGS (LOSS) PER COMMON SHARE:
  Basic                                    8,142,820        8,163,140       8,186,437
  Diluted                                  8,533,702        8,475,906       8,499,203
</TABLE>



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

<TABLE>
<CAPTION>

                                            ND HOLDINGS, INC. AND SUBSIDIARIES
                                     CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                   FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995



                                                                                     Unrealized
                                                                                     Gain (Loss)
                               Number of           Common                           on Securities
                                Common             Stock          Accumulated        Available-
                                Shares             Amount            Deficit          For-Sale             Total
                              --------------------------------------------------------------------------------------
<S>                           <C>            <C>                <C>                <C>                 <C>
BALANCE,
 JANUARY 1, 1995              7,997,313      $  10,322,387      $  (1,298,487)     $     (125,272)     $   8,898,628

  Common Stock issued           302,085            663,746                  0                   0            663,746

  Purchase of Common Stock     (107,647)          (226,059)                 0                   0           (226,059)

  Net loss                            0                  0           (373,061)                  0           (373,061)

  Change in unrealized
    gain (loss) on securities
    available-for-sale                0                  0                  0             147,172            147,172
                              --------------------------------------------------------------------------------------

BALANCE,
 DECEMBER 31, 1995            8,191,751      $  10,760,074      $  (1,671,548)     $       21,900      $   9,110,426

  Purchase of Common Stock      (68,165)          (126,707)                 0                   0           (126,707)

  Net income                          0                  0             44,371                   0             44,371

  Change in unrealized
    gain (loss) on securities
    available-for-sale                0                  0                  0             (21,900)           (21,900)
                              ---------------------------------------------------------------------------------------

BALANCE,
 DECEMBER 31, 1996            8,123,586      $  10,633,367      $  (1,627,177)     $            0      $   9,006,190

  Common Stock issued            40,101            124,788                  0                   0            247,959

  Purchase of Common Stock      (10,500)           (19,932)                 0                   0           (143,103)

  Registration costs                  0           (278,093)                 0                   0           (278,093)

  Net income                          0                  0            229,400                   0            229,400

  Change in unrealized gain
     (loss) on securities
      available-for-sale              0                  0                  0               1,329              1,329
                              --------------------------------------------------------------------------------------

BALANCE 
  DECEMBER 31, 1997           8,153,187      $  10,460,130      $  (1,397,777)     $        1,329      $   9,063,682
                              ======================================================================================



                                   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
                                            CONSOLIDATED FINANCIAL STATEMENTS
</TABLE>

                              ND HOLDINGS, INC. AND SUBSIDIARIES
                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                    FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995



<TABLE>
<CAPTION>
                                                       1997           1996           1995
                                                    -----------------------------------------
<S>                                                 <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income (loss)                                 $   229,400    $    44,371    $  (373,061)
  Adjustments to reconcile net income (loss) to
    net cash provided by operating activities:
     Depreciation and amortization                      451,431        419,398         27,729
     Sales commissions amortized                        546,675        464,050        808,286
     Net realized (gain) loss on securities 
       available-for-sale                                     0        (23,801)        90,084
     Loss (gain) on sale of equipment                      (249)           230              0
     Net decrease in trading securities                       0              0      2,674,000
     (Increase) decrease in:
       Accounts receivable                               (9,485)      (170,742)       (58,880)
       Accrued interest receivable                            0              0         76,052
       Prepaids                                          (5,170)        22,655)             0
       Deferred sales commissions capitalized          (829,189)      (683,155)      (826,131)
       Deferred tax benefit                             397,799        239,258       (162,400)
       Other assets                                     (39,933)       (39,071)       (44,235)
     Increase (decrease) in:
      Service fees payable                               (7,070)       108,556              0
      Accounts payable                                 (168,434)       120,573         29,438
      Other liabilities                                  19,879         (9,156)         8,352
                                                    -----------------------------------------
  Net cash provided by operating activities         $   585,654    $   447,856    $ 2,249,234
                                                    -----------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of property and equipment                $   (46,768)   $  (347,727)   $   (33,035)
  Proceeds from sale of equipment                           400            800              0
  Purchase of available-for-sale securities            (100,000)             0     (1,421,000)
  Proceeds from sale of
    available-for-sale securities                             0        325,564      2,622,786
  Purchase of covenant not to compete                         0       (300,000)             0
  Purchase of investment adviser's agreements            (4,030)     5,705,220)       (29,090)
  Return of capital from limited partnership unit             0            467            936
                                                    -----------------------------------------
  Net cash provided (used)
     by investing activities                        $  (150,398)   $(6,026,116)   $ 1,140,597
                                                    -----------------------------------------



                       CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)




                                                       1997           1996           1995
                                                    -----------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from issuing Common Stock
    (net of stock issue costs of  $13,686, 
     $-0- and $46,183, respectively)                $   124,788    $         0    $   663,746
  Redemption of Common Stock                            (19,932)      (126,707)      (226,059)
  Public registration costs                             (36,429)      (159,921)       (81,743)
  Increase in notes payable                                   0      1,748,975              0
  Reduction of notes payable                           (741,992)      (576,013)             0
  Redemption of investment certificates                (130,000)       (35,000)       (11,000)
  Debentures issued                                     552,000              0              0
                                                    -----------------------------------------
  Net cash provided (used) by financing activities  $  (251,565)   $   851,334    $   344,944
                                                    -----------------------------------------

NET INCREASE (DECREASE) IN CASH
 AND CASH EQUIVALENTS                               $   183,691    $(4,726,926)   $ 3,734,775

CASH AND CASH EQUIVALENTS
 AT BEGINNING OF YEAR                                   167,912      4,894,838      1,160,063
                                                    -----------------------------------------

CASH AND CASH EQUIVALENTS
 AT END OF YEAR                                     $   351,603    $   167,912    $ 4,894,838
                                                    =========================================

SUPPLEMENTARY DISCLOSURE OF
 CASH FLOW INFORMATION
  Cash paid during the year for: 
    Interest                                        $   107,682    $   161,578    $    25,235
    Income taxes                                    $     8,876    $         0    $         0

SUPPLEMENTAL SCHEDULE OF NONCASH
  INVESTING ACTIVITIES
 Change in unrealized gain (loss) on
    securities available-for-sale                   $     1,329    $   (21,900)   $   147,172
</TABLE>




                      THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
                                 CONSOLIDATED FINANCIAL STATEMENTS
                  ND HOLDINGS, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  DECEMBER 31, 1997, 1996 AND 1995




NOTE 1 -     NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

The nature of operations and significant accounting policies of ND
Holdings, Inc. and Subsidiaries is 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.  Located
in Minot, North Dakota, the Company is marketing its services throughout the
Midwestern United States.

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., and Ranson
Capital Corporation.  The acquired Ranson Capital Corporation's operations
are included from the acquisition date, January 6, 1996.  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.

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.

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
          Leasehold improvements     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, 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.

Advertising - Costs of advertising and promotion of sponsored mutual
funds are expensed the first time that the advertising takes place.

Earnings per common share - The Company adopted Statement of Financial
Accounting Standard No.  128 ("FAS 128"),      Earnings Per Share in 1997.
Restating the prior years earnings per common share to conform to the
provisions of this statement resulted in no changes to previous amounts
reported as the number of outstanding shares used to calculate both basic
and diluted earnings per common share are substantially identical to those
used in the prior years.  Basic earnings per common share is computed using
the weighted average number of shares outstanding.  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 aggregate weighted average shares outstanding used in computing
diluted earnings per common share was 8,533,702 in 1997, 8,475,906 in 1996
and 8,499,203 in 1995.

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 three 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.

Public registration costs - The Company's costs for registration of its
common shares were capitalized until the initial public offering commenced.
At that time, the costs were charged to the Common Stock account. 

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 1996 and 1995 have been reclassified
to conform with the 1997 presentation.
     
NOTE 2 -  CASH AND CASH EQUIVALENTS

Cash and cash equivalents at December 31, 1997 and 1996 consist of the
following:
                                         Current   
                           Current       Interest             Amount
                           Maturity        Rate          1997         1996
                           --------------------------------------------------
     Cash in checking      Demand           -         $   12,735   $    2,820
     Dean Witter Money
      Market Accounts      Demand          5.32 %        338,868      165,092
                                                      -----------------------
                                                      $  351,603   $  167,912
                                                      =======================

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, 1997 include:
                                       Gross
                     Aggregate       Unrealized        Aggregate Fair
     1997              Cost         Holding Gains          Value
---------------------------------------------------------------------
     Bond funds     $  100,000     $     1,329           $  101,329
                    ===============================================

Dividends earned on the Company's investments in sponsored mutual funds
aggregated $537 in 1997, $3,007 in 1996, and $59,244 in 1995.  The Company
recognized a net gain of $23,801 in 1996, and a net loss of $90,084 in 1995
from dispositions and write-downs of fund investments, all of which are
reported in the other income (expenses) section of the consolidated statement
of operations. 

The Company provides services to the Integrity Mutual Funds family of funds
which had aggregate net assets under management at December 31, 1997 of
approximately $350 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 $3,604,334 in 1997, $3,114,995 in 1996, and
$1,327,302 in 1995.

Accounts receivable from the sponsored mutual funds aggregated $342,134 and
$316,740 at December 31, 1997 and 1996, respectively.


NOTE 4 -  PROPERTY AND EQUIPMENT

Property and equipment at December 31 consists of:

                                                1997             1996
                                             ----------------------------
          Office furniture and equipment     $   369,471      $   340,355
          Leased equipment                         9,735            9,735
          Leasehold improvements                 183,570          167,226
                                             ----------------------------
                                             $   562,776      $   517,316
          Accumulated depreciation and
            amortization                         239,337          175,981
                                             ----------------------------
                                             $   323,439      $   341,335
                                             ============================

Depreciation expense totaled $60,437, $50,161 and $19,592 in 1997, 1996
and 1995, respectively.


NOTE 5 -  ACQUISITIONS

On January 5, 1996, the Company completed its acquisition of The Ranson
Company, Inc. and its subsidiary (Ranson Capital Corporation), an investment
adviser and distributor for Ranson Managed Portfolios.  The offices of The
Ranson Company, Inc. and its subsidiary have been closed and the operations
have been integrated into the Company's subsidiaries.  Because The Ranson
Company, Inc. was strictly a holding company for its subsidiary with no
material assets, liabilities, or operations, other than those involving its
investment in its subsidiary, it was dissolved in November, 1996 leaving its
subsidiary, Ranson Capital Corporation, wholly-owned by the Company.  The
acquisition was accounted for as a purchase in which the Company paid
$4,696,403 in cash and $1,500,000 from bank borrowings.  The operations and
financial position of The Ranson Company, Inc. and subsidiary were accounted
for in the consolidated financial statements of the Company beginning January
6, 1996.  The excess purchase price over the estimated fair value of the
assets was $5,565,646 of which $300,000 is for a covenant not to compete,
being amortized using the straight-line method over 3 years.  The remaining
balance represents the value of the investment adviser's agreement, and is
being amortized using the straight-line method over 20 years.  In addition,
the Company paid various other costs totaling $178,750 to complete the
acquisition.  These costs are also being amortized using the straight-line
method over 20 years.

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, 1995.  Pro forma results for the year ended December 31, 1996, as
if the acquisition had been made on January 1, 1996, are not presented as
they would not be materially different from the reported results which
include the operations of The Ranson Company, Inc. and subsidiary for the
period from January 6, 1996 to December 31, 1996.
                                   (Unaudited)
                                   Year ended
                                December 31, 1995
                                -----------------
          Revenues              $      2,176,973
          Net loss              $       (575,707)
          Loss per share        $           (.07)

     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.

     During December, 1996, the Company acquired the rights to the investment
adviser's agreement to manage the "Heartland Nebraska Tax Free Fund".  The
costs associated with this acquisition, totaling $293,943, are amortized using
the straight-line method over a period of twenty years.

NOTE 6 -  LONG-TERM DEBT

Debt at December 31, 1997 and 1996 was as follows:
<TABLE>
<CAPTION>
                                               Current
                                   Rate        Portion         1997            1996
                                  ----------------------------------------------------
<S>                               <C>        <C>           <C>             <C>
     Long-term debt:
       Revolving loan              9.50%     $       0     $   425,128     $ 1,164,240
       Investment certificates    10.00%        75,000         105,100         235,100
       Capital lease obligations   7.11%         3,192           5,842           8,722
       Debentures                 10.00%             0         552,000               0
                                             -----------------------------------------
       Totals                                $  78,192     $ 1,088,070     $ 1,408,062
                                             =========================================
</TABLE>
A summary of the terms of the current long-term debt agreements follow:

Revolving loan - Effective January 5, 1996, the Company obtained a $1,500,000
loan from First Western Bank and Trust.  Interest is charged on outstanding
amounts at the prime rate (8.50% at December 31, 1997) plus 1% per year,
payable monthly.  The principal is due in full in January 1999.

NOTE 6 - (CONTINUED)

Investment certificates - The Company had an intra-state offering of
investment certificates.  The certificates are debt obligations and do not
represent ownership in the Company.  The total offering was $500,000 of which
only $281,100 in certificates were issued.  As of December 31, 1997, $105,100
in certificates are still outstanding.  The certificates bear interest at a
rate of 10% per annum, payable semi-annually, and mature 5 years from the date
of issuance.  The Company has the option of redeeming the certificates early,
but has no obligation to do so except in the case of death of the registered
holder.

Capital lease obligations - In October 1996, the Company entered into a
capital lease obligation for office equipment.  The term of the lease is for
3 years with monthly payments of $284 at an interest rate of 7.11%.

Debentures - The Company approved a $10 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, 1997,
$552,000 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 any time after September 1,
1999.

The aggregate amount of required future payments on the above long-term debt
at December 31, 1997, is as follows:

          Year ending December 31,
                  1998                       $     179,170
                  1999                             513,455
                  2000                              55,200
                  2001                              55,200
                  2002                             594,146
                                             -------------
                  Total                      $   1,397,171
          Less amount representing
            interest                              (309,101)
                                             -------------
          Total due                          $   1,088,070
                                             =============

NOTE 7 -  INCOME TAXES

The provision for income taxes consists of:

                                      1997            1996           1995
          Current income taxes
             Federal               $    12,605     $        0     $        0
             State                           0              0              0

          Deferred income
             taxes (tax benefit)       402,437        216,029       (162,400)
                                   -----------------------------------------
                                   $   415,042     $  216,029     $ (162,400)
                                   ==========================================

Deferred income taxes arise from temporary differences between taxable income
for financial statement and income tax return purposes.  The only significant
differences the Company has are net operating loss carryforwards totaling
$988,735 that expire between 2005 and 2010.  Each year's deferred income taxes
(tax benefit) above is based on that year's decrease or increase in the net
operating loss carryforwards multiplied by the applicable statutory tax rates.

The current and noncurrent deferred tax asset totaling $405,343 is made up
entirely of the unused net operating loss carryforwards described above
multiplied by the applicable statutory tax rates.  The measurement of the
deferred tax asset is based on provisions of the enacted tax law.  The effects
of future changes in tax laws or rates are not anticipated.

The tax expense (benefit) reconciled to the amount computed by applying the
statutory federal rate of 35% to income before taxes as follows:

NOTE 7 - (CONTINUED)
<TABLE>
<CAPTION>
                                                   1997            1996            1995
                                                -------------------------------------------
<S>                                             <C>             <C>             <C>
          Federal taxes (benefits) at
            statutory rates                     $   225,555     $    91,140     $  (187,411)

          State taxes (benefits), net of
            federal tax effect                       42,320          16,100         (34,880)

          Taxes on nondeductible amort-
            ization at federal statutory rates      130,275         128,712               0

          Other                                      16,892         (19,923)         59,891
                                                -------------------------------------------

          Actual tax expense (benefit)          $   415,042     $   216,029     $  (162,400)
                                                ===========================================
</TABLE>
NOTE 8 -  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 SFAS 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 as of December 31, 1997.  

NOTE 9 -  EMPLOYEE RETIREMENT PLAN

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 1997, 1996
and 1995.


NOTE 10 -  CHANGE IN ACCOUNTING ESTIMATE

In 1996, the Company changed its period for amortizing deferred sales
commissions from the contingent deferred sales charge period of five years
to nine years.  The change in the amortizable life of the deferred sales
commissions is based on the period of time during which deferred sales
commissions are expected to be recovered from distribution plan payments and
management's estimate of the average life of investors' accounts in the
Company's sponsored mutual funds.  Contingent deferred sales charges received
by the Company directly reduce the value of the deferred sales commissions
asset.  The net affect of the change on the net income for the year ended
December 31, 1996 before income tax is an increase of $356,243, which will
decrease future earnings by the same amount.

NOTE 11 -  COMMITMENTS

The Company leases office space under a five year lease agreement which
commenced on June 1, 1996.  Lease payments are $3,000 per month for the term
of the lease.  The lease carries an option to renew for an additional five
years after expiration of the initial term.  In addition, a provision of
the lease allows the Company to purchase the building, in which its offices
are located, at any time during the term of the lease.  Rent expense for 1997
and 1996 was $36,000 and $21,000, respectively.

At December 31, 1997, remaining operating lease commitments are as follows:

NOTE 11 - (CONTINUED)

          Year ending December 31,
               1998                      $     36,000
               1999                            36,000
               2000                            36,000
               2001                            15,000
                                         ------------
                                         $    123,000
                                         ============

NOTE 12 - NET CAPITAL REQUIREMENTS

The Company's broker/dealer subsidiaries (ND Capital, Inc. and Ranson
Capital 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, 1997, these
subsidiaries had net capital of $194,735 and $240,478; minimum net capital
requirements of $25,000 and $5,667; excess net capital of $169,735 and
$234,811; and ratios of aggregate indebtedness to net capital of .19 to 1 and
 .29 to 1, respectively.  Both subsidiaries are exempt from the reserve
requirements of Rule 15c3-3.


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 April 17, 1998


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 April 17, 1998 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 April 17, 1998.

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 April 17, 1998.

PART IV

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).

          5.0   Management and Investment Advisory Agreement - Ranson Managed
                Portfolios (incorporated by reference to Exhibit 5.0 contained
                in the Portfolios' Registration Statement on Form N-1A
                (File No. 33-36324), filed with the Commission on August 13,
                1990.

          5.1   Management and Investment Advisory Agreement - Ranson Managed
                Portfolios (incorporated by reference to Exhibit 5.0 contained
                in the Portfolios' Registration Statement on Form N-1A, as
                amended on Post-Effective Amendment 7 (File No. 33-36324),
                filed with the Commission on November 13, 1991.

          5.2   Management and Investment Advisory Agreement - Ranson Managed
                Portfolios (incorporated by reference to Exhibit 5.0 contained
                in the Portfolios' Registration Statement on Form N-1A, as
                amended on Post-Effective Amendment 11 (File No. 33-36324),
                filed with the Commission on November 27, 1993.

          6.0   Distribution and Services Agreement - Ranson Managed
                Portfolios (incorporated by reference to Exhibit 6.0 contained
                in the Portfolios' Registration Statement on Form N-1A, as
                amended on Post-Effective Amendment 2 (File No. 33-36324),
                filed with the Commission on November 13, 1991.

          6.1   Distribution and Services Agreement - Ranson Managed
                Portfolios (incorporated by reference to Exhibit 6.0 contained
                in the Portfolios' Registration Statement on Form N-1A, as
                amended on Post-Effective Amendment 7 (File No. 33-36324),
                filed with the Commission on November 29, 1993.

          6.2   Distribution and Services Agreement - Ranson Managed
                Portfolios (incorporated by reference to Exhibit 6.0 contained
                in the Portfolios' Registration Statement on Form N-1A, as
                amended on Post-Effective Amendment 7 (File No. 33-36324),
                filed with the Commission on November 27, 1993.

         10.1   Management Advisory Contract - ND Tax-Free Fund, Inc.
                (incorporated by reference to Exhibit 10.1 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)

         10.2   Management Advisory Contract - Montana Tax-Free Fund, Inc.
                (incorporated by reference to Exhibit 10.2 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)

         10.3   Management Advisory Contract - South Dakota Tax-Free Fund,
                Inc. (incorporated by reference to Exhibit 10.3 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)

         10.4   Management Advisory Contract - ND Insured Income Fund, Inc.
                (incorporated by reference to Exhibit 10.4 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)

         10.5   Management Advisory Contract - Integrity Fund of Funds, Inc.
                (incorporated by reference to Exhibit 10.5 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)

         10.6   Transfer Agency Agreement - ND Tax-Free Fund, Inc.
                (incorporated by reference to Exhibit 10.6 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)

         10.7   Transfer Agency Agreement - Montana Tax-Free Fund, Inc.
                (incorporated by reference to Exhibit 10.7 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)

         10.8   Transfer Agency Agreement - South Dakota Tax-Free Fund, Inc.
                (incorporated by reference to Exhibit 10.8 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)

         10.9   Transfer Agency Agreement - ND Insured Income Fund, Inc.
                (incorporated by reference to Exhibit 10.9 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)

         10.10  Transfer Agency Agreement - Integrity Fund of Funds, Inc.
                (incorporated by reference to Exhibit 10.10 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)

         10.11  Distribution Agreement - ND Tax-Free Fund, Inc.
                (incorporated by reference to Exhibit 10.11 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)

         10.12  Distribution Agreement - Montana Tax-Free Fund, Inc.
                (incorporated by reference to Exhibit 10.12 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)

         10.13  Distribution Agreement - South Dakota Tax-Free Fund, 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  Distribution Agreement - ND Insured Income Fund, Inc.
                (incorporated by reference to Exhibit 10.14 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)

         10.15  Distribution Agreement - Integrity Fund of Funds, Inc.
                (incorporated by reference to Exhibit 10.15 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)

         10.16  Stock Purchase Agreement - ND Holdings, Inc. and
                Shareholders of Ranson Company, Inc. (incorporated by
                reference to Exhibit 10.15 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)

         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)

         27.1   Financial Data Schedule

                Transfer Agency Agreement - Ranson Managed Portfolios

                    TRANSFER AGENCY AGREEMENT 
 
     AGREEMENT dated as of November 15, 1996, between Ranson Managed Portfolios
(the "Fund"), a Massachusetts business trust, ahving its principal office and
place of business at #1 North Main, Minot, North Dakota 58703, and ND
Resources, Inc. (the "Transfer Agent"), a corporation organized under the
laws of the State of North Dakota with its principal place of business at #1
North Main, Minot, North Dakota 58703.

W I T N E S S E T H:

     That for and in consideration of the mutual promises hereinafter set
forth, the Fund and the Transfer Agent agree as follows:

     1.      Definitions.

     Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
 
(a)     "Authorized Person" shall be deemed to include the President, the Vice
President, the Secretary, and the Treasurer of the Fund, the persons listed in
Appendix A hereto, and any other person, whether or not such person is an
officer of the Fund, duly authorized to give Oral Instructions or Written
Instructions on behalf of the Fund as indicated in a certificate furnished to
the Transfer Agent pursuant to Section 5(d) or 5(e) hereof as may be received
by the Transfer Agent from time to time.

(b)     "Commission" shall have the meaning given it in the 1940 Act. 

(c)     "Custodian" refers to the custodian and any sub-custodian of all
securities and other property which the Fund may from time to time deposit or
cause to be deposited or held under the name or account of such custodian.

(d)     "Articles of Incorporation" shall mean the Fund's Articles of
Incorporation as now in effect and as the same may be amended from time to
time.
 
(e)     "Officer" shall mean the President, Vice President, Secretary, and
Treasurer of the parties hereto.

(f)     "Oral Instructions" shall mean instructions, other than written
instructions, actually received by the Transfer Agent from a person reasonably
believed by the Transfer Agent to be an Authorized Person.
 
(g)     "Prospectus" shall mean any current prospectus and statement of
additional information relating to the registration of the Fund's shares
under the Securities Act of 1933, as amended, and the 1940 Act.

(h)     "Shares" refers to the units into which the shareholders' proprietary
interests in the Fund are divided.
(i)     "Shareholder" means a record owner of Shares;

(j)     "Directors" or "Board of Directors" refers to the duly elected
Directors of the Fund.

(k)     "Written Instructions" shall mean a written or electronic communication
actually received by the Transfer Agent from an Authorized Person or from a
person reasonably believed by the Transfer Agent to be an Authorized Person by
telex or any other such system whereby the receiver of such communication is
able to verify through codes or otherwise with a reasonable degree of
certainty the authenticity of the sender of such communications.

(1)     The "1940 Act" refers to the Investment Company Act of 1940, and the
Rules and Regulations promulgated thereunder, all as amended from time to time.

2.      Appointment of the Transfer Agent.

     The Fund hereby appoints and constitutes the Transfer Agent as transfer
agent for its Shares and as Shareholder servicing agent, and the Transfer
Agent accepts such appointment and agrees to perform the duties hereinafter
set forth.

     3.      Compensation.

(a)     The Fund will compensate the Transfer Agent for the performance of its
obligations hereunder in accordance with the fees set forth in the written
schedule of fees annexed hereto as Schedule A and incorporated herein.

     The Transfer Agent will bill the Fund as soon as practicable after the end
of each calendar month, and said billings will be detailed in accordance with
the Schedule A. The Fund will promptly pay to the Transfer Agent the amount of
such billing.

(b)     Any compensation agreed to hereunder may be adjusted from time to time
upon mutual agreement by both parties hereto by attaching to Schedule A of
this Agreement a revised Fee Schedule, dated and signed by an Officer of each
party hereto.

     4.      Documents.

     In connection with the appointment of the Transfer Agent, the Fund shall,
on or before the date this Agreement goes into effect, but in any case, within
a reasonable period of time for the Transfer Agent to prepare to perform its
duties hereunder, furnish the Transfer Agent with the following documents:

(a)     A certified copy of the Fund's Articles of Incorporation, as amended.

(b)     A certified copy of the Fund's Bylaws, as amended. 

(c)     A copy of the resolution of the Directors authorizing execution and
delivery of this Agreement.

(d)     If applicable, a specimen of the certificate for Shares of the Fund in
the form approved by the Directors, with a certificate of the Secretary of the
Fund as to such approval.

(e)     All account application forms and other documents relating to
Shareholder accounts or to any plan, program, or service offered by the Fund.

5.     Further Documentation.

     The Fund will also furnish from time to time the following documents:

(a)     The Fund's Registration Statement and each subsequent amendment to the
Fund's Registration Statement that is filed with the Commission.

(b)     Certificates as to any change in any Officer, Director, or Investment
Adviser of the Fund.

(c)     Such other certificates, documents, or opinions as the Transfer Agent
deems to be appropriate or necessary for the proper performance of its duties
hereunder.

6.      Representations of the Fund.

     The Fund represents to the Transfer Agent that Shares will be issued in
accordance with the terms of the Articles of Incorporation and the Prospectus
and that such Shares shall be validly issued, fully paid, and non-assessable
by the Fund.

     In the event that the Directors shall declare a distribution payable in
Shares, the Fund shall deliver to the Transfer Agent written notice of such
declaration signed on behalf of the Fund by an Officer of the Fund, upon which
the Transfer Agent shall be entitled to rely for all purposes, certifying (i)
the number of Shares involved, (ii) that all appropriate action has been
taken, and (iii) that any amendment to the Articles of Incorporation which
may be required has been filed and is effective.  Such notice shall be
accompanied by an opinion of counsel for the Fund relating to the legal
adequacy and effect of the transaction. This provision shall not apply to
Shares to be issued in the normal course of reinvestment of any distributions
or dividends in accordance with the Fund's Prospectus.

7.     Duties of the Transfer Agent.

     The Transfer Agent shall be responsible for administering and/or
performing transfer agent functions; for acting as service agent in connection
with dividend and distribution functions; and for performing Shareholder
account and administrative agent functions in connection with the issuance,
transfer, and redemption or repurchase (including coordination with the
Custodian) of Shares. The operating standards and procedures to be followed
shall be determined from time to time by agreement between the Transfer Agent
and the Fund and shall be expressed in a written schedule of duties of the
Transfer Agent annexed hereto as Schedule B and incorporated herein.

8.      Recordkeeping and Other Information.

     The Transfer Agent shall create and maintain all necessary records in
accordance with all applicable laws, rules and regulations, including, but not
limited to, records required by Section 31(a) of the 1940 Act and those records
pertaining to the various functions performed by it hereunder which are set
forth in Schedule B hereto. All records shall be available during regular
business hours for inspection and use by the Fund. Where applicable, such
records shall be maintained by the Transfer Agent for the periods and in the
places required by Rule 3la-2 under the 1940 Act.

     Upon reasonable notice by the Fund, the Transfer Agent shall make
available during regular business hours its facilities and premises employed
in connection with the performance of its duties under this Agreement for
reasonable visitation by the Fund or any person retained by the Fund.

     To the extent required by said Section 31 and the rules and regulations
thereunder, the Transfer Agent agrees that all such records prepared and
maintained by the Transfer Agent relating to the services to be performed by
the Transfer Agent hereunder are the property of the Fund.

     The Transfer Agent and the Fund agree that all books, records,
information, and data pertaining to the business of the other party which
are exchanged or received in connection with this Agreement shall remain
confidential and shall not be voluntarily disclosed to any person, except
as may be required by law. In the case of any requests or demands for any
inspection of the Shareholder records of the Fund, the Transfer Agent will
endeavor to notify the Fund and to secure instructions from an authorized
Officer of the Fund as to such inspection.

9.      Other Duties.

     In addition to the duties expressly set forth in Schedule B to this
Agreement, the Transfer Agent shall perform such other duties and functions,
and shall be paid such amounts therefor, as may from time to time be agreed
upon in writing between the Fund and the Transfer Agent. Such other duties and
functions shall be reflected in a written amendment to Schedule B, dated and
signed by an Officer of each party hereto.

10.      Reliance by Transfer Agent; Instructions.

(a)     The Transfer Agent will be protected in acting upon Written or Oral
Instructions, as appropriate, believed to have been executed or orally
communicated by an Authorized Person and will not be held to have any notice
of any change of authority of any person until receipt of a Written Instruction
thereof from the Fund. The Transfer Agent will also be protected in processing
Share certificates which it reasonably believes to bear the proper manual or
facsimile signatures of the Officers of the Fund and the proper
countersignature of the Transfer Agent.


(b)     At any time the Transfer Agent may apply to any Authorized Person of
the Fund for Written Instructions and may seek advice from legal counsel for
the Fund, or its own legal counsel, with respect to any matter arising in
connection with this Agreement, and it shall not be liable for any action
taken or not taken or suffered by it in good faith in accordance with such
Written Instructions or in accordance with the opinion of counsel for the Fund
or for the Transfer Agent; provided, however, that if such reliance involves a
potential material loss to the Fund, the Transfer Agent will advise the Fund of
any such action(s) to be taken in accordance with the opinion of counsel to the
Transfer Agent. Written Instructions requested by the Transfer Agent will be
provided by the Fund within a reasonable period of time. In addition, the
Transfer Agent, its officers, agents, or employees, shall accept Oral
Instructions or Written Instructions given to them by any person representing
or acting on behalf of the Fund only if said representative is known by the
Transfer Agent, or its officers, agents, or employees, to be an Authorized
Person. The Transfer Agent shall have no duty or obligation to inquire into,
nor shall the Transfer Agent be responsible for, the legality of any act done
by it upon the request or direction of an Authorized Person.

(c)     Notwithstanding any of the foregoing provisions of this Agreement,
the Transfer Agent shall be under no duty or obligation to inquire into, and
shall not be liable for:

(1) the legality of the issuance or sale of any Shares or the sufficiency of
the amount to be received therefor;

(2) the legality of the redemption of any Shares, or the propriety of the
amount to be paid therefor;

(3) the legality of the declaration of any dividend by the Directors, or the
legality of the issuance of any Shares in payment of any dividend; or

(4) the legality of any recapitalization or readjustment of the Shares.

11.      Acts of God, Etc.

     Neither the Transfer Agent nor the Fund will be liable or responsible for
delays or errors by reason of circumstances beyond its reasonable control,
including acts of civil or military authority, national emergencies, fire,
mechanical breakdown beyond its control, flood or catastrophe, acts of God,
insurrection, war, riots, or failure beyond its control of transportation,
communication, or power supply.

12.      Duty of Care and Indemnification.

     The Fund and the Transfer Agent will indemnify each other against and hold
the other party harmless from any and all losses, claims, damages, liabilities,
or expenses (including reasonable counsel fees and expenses) resulting from any
claim, demand, action, or suit not resulting from the bad faith or negligence
of the other party, and arising out of, or in connection with, the duties and
responsibilities described hereunder. In addition, the Fund will indemnify the
Transfer Agent against and hold it harmless from any and all losses, claims,
damages, liabilities, or expenses (including reasonable counsel fees and
expenses) resulting from any claim demand, action, or suit as a result of:
(1) any action taken in accordance with Written or Oral Instructions, or any
other instructions, or Share certificates reasonably believed by the Transfer
Agent to be genuine and to be signed, countersigned or executed, or orally
communicated by an Authorized Person;

(2) any action taken in accordance with written or oral advice reasonably
believed by the Transfer Agent to have been given by counsel for the Fund or
its own counsel; or

(3) any action taken as a result of any error or omission in any record
(including but not limited to magnetic tapes, computer printouts, hard copies,
and microfilm copies) delivered or caused to be delivered by the Fund to the
Transfer Agent in connection with this Agreement. 
 
      In any case in which the Fund or the Transfer Agent may be asked to
indemnify or hold the other party harmless, the requesting party will provide
the other party with all pertinent facts concerning the situation in question
and will use reasonable care to identify and provide notice of any situation
which presents or appears likely to present a claim for indemnification. Each
party shall have the option to defend the other party against any claim which
may be the subject of this indemnification, and in the event that a party so
elects, such defense shall be conducted by counsel chosen by the party making
such election; and such counsel shall be satisfactory to the other party, and
thereupon such electing party shall take over complete defense of the claim,
and the requesting party shall sustain no further legal or other expenses in
such situation for which it seeks indemnification under this Section 12.
Neither party will confess any claim or make any compromise in any case in
which the other party will be asked to provide indemnification, except with
the other party's prior written consent. The obligations of the parties hereto
under this Section shall survive the termination of this Agreement.

13.      Term and Termination.

     This Agreement shall become effective on the date first set forth above
(the "Effective Date") and shall continue in effect from year to year
thereafter as the parties may mutually agree; provided, that either party
hereto may terminate this Agreement by giving to the other party a notice in
writing specifying the date of such termination, which shall be not less than
60 days after the date of receipt of such notice. In the event such notice is
given by the Fund, it shall be accompanied by a resolution of the Board of
Directors of the Fund, certified by the Secretary, electing to terminate this
Agreement and designating a successor transfer agent or transfer agents. Upon
such termination and at the expense of the Fund, the Transfer Agent will
deliver to such successor a certified list of Shareholders of the Fund (with
names, addresses, and taxpayer identification or Social Security numbers), an
historical record of the account of each Shareholder and the status thereof,
and all other relevant books, records, correspondence, and other data
established or maintained by the Transfer Agent under this Agreement in the
form reasonably acceptable to the Fund, and will cooperate in the transfer of
such duties and responsibilities, including provisions for assistance from the
Transfer Agent's personnel in the establishment of books, records, and other
data by such successor or successors.  


14.     Amendment.

     This Agreement may not be amended or modified in any manner except by
a written agreement executed by both parties.

15.      Subcontracting.

     Except as otherwise provided below, neither this Agreement nor any rights
or obligations hereunder may be assigned by either party without the express
written consent of the other party. The Transfer Agent may, in its sole
discretion and without further approval from the Fund, subcontract, in whole
or in part, for the performance of its obligations and duties hereunder with
any person or entity including, but not limited to, any affiliate or
subsidiary; provided, however, that (a) the Transfer Agent shall remain fully
responsible to the Fund for the acts and omissions of any agent or
subcontractor as it is for its own acts and omissions, and (b) to the extent
that the Transfer Agent subcontracts any functions or activities required or
performed by a registered transfer agent, the subcontracting party shall be
a duly registered transfer agent with the appropriate regulatory agency as
required under Section 17A of the Securities Exchange Act of 1934 and the
rules and regulations thereunder, as amended.

16.      Use of Transfer Agent's Name.

     The Fund shall not use the name of the Transfer Agent in any Prospectus,
Statement of Additional Information, Shareholders' report, sales literature,
or other material relating to the Fund for other than internal use, in a
manner not approved prior thereto; provided, that the Transfer Agent shall
approve all reasonable uses of its name which merely refer in accurate terms
to its appointment hereunder or which are required by the Commission or a
state securities administrator.

17.      Use of the Fund's Name.

     The Transfer Agent shall not use the name of the Fund or material
relating to the Fund on any documents or forms for other than internal use
in a manner not approved prior thereto in writing; provided, that the Fund
shall approve all reasonable uses of its name which merely refer in accurate
terms to the appointment of the Transfer Agent or which are required by the
Commission or a state securities administrator.

18.     Security.

     The Transfer Agent represents and warrants that, to the best of its
knowledge, the various procedures and systems which the Transfer Agent has
implemented or will implement with regard to safeguarding from loss or damage
attributable to fire, theft, or any other cause (including provision for 24
hours-a-day restricted access) of the Fund's records and other data and the
Transfer Agent's records, data, equipment, facilities, and other property
used in the performance of its obligations hereunder are adequate and that
it will make such changes therein from time to time as in its judgment are
required for the secure performance of its obligations hereunder. The parties
shall review such systems and procedures on a periodic basis.
19.      Miscellaneous.

(a)     Any notice or other instrument authorized or required by this
Agreement to be given in writing to the Fund or the Transfer Agent shall
be sufficiently given if addressed to that party and received by it at its
office set forth below or at such other place as it may from time to time
designate in writing.

To the Fund:

Ranson Managed Portfolios.
#1 North Main
Minot, ND 58703

To the Transfer Agent:

ND Resources, Inc.
#1 North Main
Minot, ND 58703

(b)     This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however, that
this Agreement shall not be assignable by the Fund without the written consent
of the other party.

(c)     This Agreement shall be construed in accordance with the laws of the
State of North Dakota.

(d)     This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original; but such counterparts shall,
together, constitute only one instrument.

(e)     The captions of this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect.

20.      Liability of Directors, Officers, and Shareholders.

     The execution and delivery of this Agreement have been authorized by
the Directors of the Fund and signed by an authorized Officer of the Fund,
acting as such, and neither such authorization by such Directors nor such
execution and delivery by such Officer shall be deemed to have been made
by any of them individually or to impose any liability on any of them
personally, and the obligations of this Agreement are not binding upon any
of the Directors or Shareholders of the Fund, but bind only the property of
the Fund.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective corporate officers thereunder duly authorized as
of the day and year first above written.

RANSON MANAGED PORTFOLIOS

  /s/ Robert E. Walstad
By--------------------------------

Date: November 15, 1996

Agreed and Accepted by:


ND RESOURCES, INC.

  /s/ Robert E. Walstad
By--------------------------------

Date: November 15, 1996

APPENDIX A

     We, Robert E. Walstad and Peter A. Quist, President and Secretary,
respectively, of Ranson Managed Portfolios (the "Fund"), a Massachusetts
business trust, do hereby certify that the following individuals have been
duly authorized as Authorized Persons to give Oral Instructions and Written
Instructions on behalf of the Fund, and the signatures set forth opposite
their respective names are their true and correct signatures:

       Name                              Signature

Robert E. Walstad                        /s/ Robert E. Walstad
                                         -----------------------

W. Dan Korgel                            /s/ W. Dan Korgel
                                         -----------------------

                         /s/ Robert E. Walstad
                         ---------------------------------------
                         Robert E. Walstad

                         /s/ Peter A. Quist
                         ---------------------------------------
                         Peter A. Quist

                                SCHEDULE A*
                               FEE SCHEDULE
                          TRANSFER AGENT CHARGES
                             ND RESOURCES, INC.
 
 
                                                   PERCENTAGE
FUND SIZE (NET ASSET VALUE)                          OF 1%
-------------------------------------------------------------
$         0  TO   $10,000,000                        .16

 10,000,001  TO    25,000,000                        .13

 25,000,001  TO    40,000,000                        .11

 40,000,001  TO    50,000,000                        .10

 50,000,001  AND LARGER                              .09
 
 
*Amounts due under the above Fee Schedule are payable monthly and shall be
calculated as follows:  The net asset value of all outstanding Fund shares
within each category (e. g., $0 to $10,000,000 is one category, $10,000,001
to $25,000,000 is another, etc.) shall be multiplied by the percentage of 1%
applicable to such category and the product thereof divided by 12.  The same
procedure shall be followed for each category in which the Fund has net asset
values.  The amounts derived by multiplying the net asset value of each
category by the applicable percentages shall then be added together to
determine the amount payable for that month.  By way of example only, if
the Fund had net assets of $10,500,000 for the month in question, the
computation would be as follows:

               $10,000,000 x .0016 = 12= $1,333.33
                   500,000 x .0013 = 12=     54.17
                                         ---------
                                         $1,387.50


                              SCHEDULE B

                     DUTIES OF THE TRANSFER AGENT
                ----------------------------------------
                (See Exhibit 1 for Summary of Services.)

1.      Shareholder Information.

     The Transfer Agent shall maintain a record of the number of Shares
held by each holder of record which shall include his address and taxpayer
identification number and which shall indicate whether such Shares are held
in certificated or uncertificated form.

2.      Shareholder Services.

     The Transfer Agent will investigate all Shareholder inquiries relating
to Shareholder accounts and will answer all correspondence from Shareholders
and others relating to its duties hereunder and such other correspondence as
may from time to time be mutually agreed upon between the Transfer Agent and
the Fund. The Transfer Agent shall keep records of Shareholder correspondence
and replies thereto and of the lapse of time between the receipt of such
correspondence and the mailing of such replies.

3.      State Registration Reports.

     The Transfer Agent shall furnish on a state-by-state basis sales reports
and such periodic and special reports as the Fund may reasonably request and
such other information, including Shareholder lists and statistical information
concerning accounts, as may be agreed upon from time to time between the Fund
and the Transfer Agent.

4.      Mailing Communications to Shareholders; Proxy Materials.

     The Transfer Agent will address and mail to Shareholders of the Fund all
reports to Shareholders, dividend and distribution notices, and proxy material
for the Fund's meetings of Shareholders. In connection with meetings of
Shareholders, the Transfer Agent will report on proxies voted prior to
meetings, act as inspector of election at meetings, if so requested by the
Fund, and certify Shares voted at meetings.

5.      Sales of Shares.

(a)     Processing of Investment Checks or Other Investments. Upon receipt of
any check or other instrument drawn or endorsed to it as agent for, or
identified as being for the account of the Fund for the purchase of Shares,
the Transfer Agent shall stamp the check with the date of receipt, shall
forthwith process the same for collection, and shall record the number of
Shares sold, the trade date, the price per Share, and the amount of money
to be delivered to the Custodian of the Fund for the sale of such Shares.

       (b)     Issuance of Shares. Upon receipt of notification that the
Custodian has received the amount of money specified in the immediately
preceding paragraph, the Transfer Agent shall issue to and hold in the
account of the purchaser/Shareholder, or if no account is specified therein,
in a new account established in the name of the purchaser, the number of
Shares such purchaser is entitled to receive, as determined in accordance with
applicable federal law or regulation.

(c)     Statements. On a quarterly basis, the Transfer Agent shall send to the
purchaser/Shareholder a statement of purchases which will show the new Share
balance, the Shares held under a particular plan, if any, for withdrawing
investments, the amount invested and the price paid for the newly purchased
Shares, or will be in such other form of statement as the Fund and the Transfer
Agent may agree from time to time.

(d)     Suspension of Sale of Shares. The Transfer Agent shall not be required
to issue any Shares where it has received a Written Instruction from the Fund
or written notice from any appropriate federal or state authority that the sale
of the Shares of the Fund has been suspended or discontinued, and the Transfer
Agent shall be entitled to rely upon such Written Instructions or written
notification.

(e)     Taxes in Connection with Issuance of Shares. Upon the issuance of any
Shares in accordance with the foregoing provisions of this Section, the
Transfer Agent shall not be responsible for the payment of any original issue
or other taxes required to be paid in connection with such issuance.

(f)     Returned Checks. In the event that any check or other order for the
payment of money is returned unpaid for any reason, the Transfer Agent will:

(1) give prompt notice of such return to the Fund or its designee;

(2) place a stop transfer order against all Shares issued as a result of such
check or order; and

(3) take such actions as the Transfer Agent may from time to time deem
appropriate.

6.      Redemptions.

(a)     Requirements for Transfer or Redemption of Shares. The Transfer Agent
shall process all requests from Shareholders to transfer or redeem Shares in
accordance with the procedures set forth in the Prospectus and all
determinations of the number of Shares required to be redeemed to fund
designated monthly payments, automatic payments, or any other such distribution
or withdrawal plan.

     The Transfer Agent will transfer or redeem Shares upon receipt of Written
Instructions and Share certificates, if any, properly endorsed for transfer or
redemption, accompanied by such documents as the Transfer Agent reasonably may
deem necessary to evidence the authority of the person making such transfer or
redemption, and bearing satisfactory evidence of the payment of stock transfer
taxes, if any.

     Except to the extent inconsistent with the procedures set forth in the
Prospectus, the Transfer Agent reserves the right to refuse to transfer or
redeem Shares until it is satisfied that the endorsement on the instructions
is valid and genuine, and for that purpose it will require a guarantee of
signature by a member firm of a national securities exchange, by any national
bank or trust company, or by any member bank of the Federal Reserve system. The
Transfer Agent also reserves the right to refuse to transfer or redeem Shares
until it is satisfied that the requested transfer or redemption is legally
authorized, and it shall incur no liability for the refusal, in good faith,
to make transfers or redemptions which the Transfer Agent, in its good
judgment, deems improper or unauthorized, or until it is reasonably satisfied
that there is no basis to any claims adverse to such transfer or redemption.

     The Transfer Agent may, in effecting transactions, rely upon the
provisions of the Uniform Act for the Simplification of Fiduciary Security
Transfers or the provisions of Article 8 of the Uniform Commercial Code, as
the same may be amended from time to time in the State of North Dakota, which
in the opinion of legal counsel for the Fund or of its own legal counsel
protect it in not requiring certain documents in connection with the transfer
or redemption of Shares. The Fund may authorize the Transfer Agent to waive the
signature guarantee in certain cases by Written Instructions.

     For the purpose of the redemption of Shares which have been purchased
within 15 days of a redemption request, the Transfer Agent may refuse to redeem
such Shares until the Transfer Agent has received fed funds for the purchase
of such Shares.

(b)     Notice to Custodian and Fund. When Shares are redeemed, the Transfer
Agent shall, upon receipt of the instructions and documents in proper form,
deliver to the Custodian and the Fund a notification setting forth the number
of Shares to be redeemed. Such redemptions shall be reflected on appropriate
accounts maintained by the Transfer Agent reflecting outstanding Shares and
Shares attributed to individual accounts and, if applicable, any individual
withdrawal or distribution plan.

(c)     Payment of Redemption Proceeds. The Transfer Agent shall, upon receipt
of the moneys paid to it by the Custodian for the redemption of Shares, pay to
the Shareholder, or his authorized agent or legal representative, such moneys
as are received from the Custodian, all in accordance with the redemption
procedures described in the Prospectus; provided, however, that the Transfer
Agent shall pay the proceeds of any redemption of Shares purchased within 15
days of a redemption request to the Transfer Agent upon a determination that
good funds have been collected for the purchase of such Shares. The Fund shall
indemnify the Transfer Agent for any payment of redemption proceeds or refusal
to make such payment if the payment or refusal to pay is in accordance with
this Section. 

     The Transfer Agent shall not process or effect any redemptions pursuant
to a plan of distribution or redemption or in accordance with any other
Shareholder request upon the receipt by the Transfer Agent of notification of
the suspension of the determination of the Fund net asset value.

7.     Dividends.

(a)     Notice to Transfer Agent and Custodian. Upon the declaration of each
dividend and each capital gains distribution by the Board of Directors of the
Fund with respect to Shares, the Fund shall furnish to the Transfer Agent a
copy of a resolution of its Board of Directors certified by the Secretary
setting forth with respect to the Shares the date of the declaration of such
dividend or distribution, the ex-dividend date, the date of payment thereof,
the record date as of which Shareholders entitled to payment shall be
determined, the amount payable per Share to the Shareholders of record as of
that date, the total amount payable to the Transfer Agent on the payment date,
and whether such dividend or distribution is to be paid in Shares at net asset
value.

     On or before the payment date specified in such resolution of the Board
of Directors, the Fund will cause the Custodian of the Fund to pay to the
Transfer Agent sufficient cash to make payment to the Shareholders of record
as of such payment date.

(b)     Payment of Dividends by the Transfer Agent. The Transfer Agent will,
on the designated monthly payment date, automatically reinvest all dividends
in additional Shares at net asset value (determined on such date) and mail to
each Shareholder on a quarterly basis at his address of record, or such other
address as the Shareholder may have designated, a statement showing the number
of full and fractional Shares (rounded to three decimal places) then currently
owned by the Shareholder and the net asset value of the Shares so credited to
the Shareholder's account; provided, however, that if the Transfer Agent has
on file a direction by the Shareholder to pay income dividends or capital gains
dividends, or both, in cash, such dividends shall be paid in accordance with
such instructions; and provided further, that in the event of the return of
two consecutive dividend checks as undeliverable, Transfer Agent shall change
such Shareholder account to a reinvestment account if so provided in the
Prospectus.

(c)     Insufficient Funds for Payments. If the Transfer Agent does not receive
sufficient cash from the Custodian to make total dividend and/or distribution
payments to all Shareholders of the Fund as of the record date, the Transfer
Agent will, upon notifying the Fund, withhold payment to all Shareholders of
record as of the record date until such sufficient cash is provided to the
Transfer Agent.

(d)     Information Returns. It is understood that the Transfer Agent shall
file such appropriate information returns concerning the payment of dividends,
return of capital, and capital gain distributions with the proper federal,
state, and local authorities as are required by law to be filed and shall
be responsible for the withholding of taxes, if any, due on such dividends
or distributions to Shareholders when required to withhold taxes under
applicable law.


(b)      Reports on Form 8-K.

No reports were filed on Form 8-K during the fourth quarter of the Fiscal Year
ended December 31, 1997

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:  May 15, 1998                              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: May 15, 1998                               By /s/ Robert E. Walstad
                                                 ------------------------
                                                 Robert E. Walstad
                                                 Chief Executive Officer,
                                                 President and Director
                                                (Principal Executive Officer)
                                                (Acting Chief Financial 
                                                    Officer)

Date: May 15, 1998                               By /s/ Peter A. Quist
                                                 ------------------------
                                                 Peter A. Quist
                                                 Vice President and Director

Date: May 15, 1998                               By /s/ Lyle E. Mclain
                                                 ------------------------
                                                 Lyle E. McLain
                                                 Director

Date: May 15, 1998                               By /s/ Vance A. Castleman
                                                 ------------------------
                                                 Vance A. Castleman
                                                 Director

Date: May 15, 1998                               By /s/ Myron D. Thompson
                                                 ------------------------
                                                 Myron D. Thompson
                                                 Director

Date: May 15, 1998                               By /s/ Richard H. Walstad
                                                 ------------------------
                                                 Richard H. Walstad
                                                 Director

Date: May 15, 1998                               By /s/ Daniel L. Feist
                                                 ------------------------
                                                 Daniel L. Feist
                                                 Director