PRUDENT BEAR FUNDS Inc c/o US Bancorp Fund Services, LLC – ‘N-30D’ for 3/31/03

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Annual or Semi-Annual Report Mailed to Shareholders   —   Rule 30d-1
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: N-30D       Annual or Semi-Annual Report Mailed to                53±   261K 
                          Shareholders                                           


SEMI-ANNUAL REPORT                                               MARCH 31, 2003 

PRUDENT BEAR FUND 
NO LOAD SHARES
CLASS C SHARES

PRUDENT SAFE HARBOR FUND

PRUDENT BEAR
FUNDS, INC. 

PRUDENT BEAR FUNDS, INC.                                                        

                                                                    May 23, 2003

Dear Shareholder,                                                               

The Prudent Bear Fund No-Load shares returned -7.72% for the six months ending  
March 31, 2003 while the S&P 500 gained 5.02% and the NASDAQ advanced by 14.43%.
Consistent with our investment philosophy, the fund held more short than long   
equity positions throughout the period. Although the fund maintains a more      
conservative posture as we approach summertime, the fund remains far more short 
than long as we are convinced that the secular bear market has further to run.  
We will increase exposure to the market in general, and to the most overvalued  
sectors in particular, once we believe the risk of continued sharp rallies has  
been reduced.                                                                   

The Prudent Safe Harbor Fund returned 7.17% for the six months. The fund        
benefited from a weakening dollar, but was hurt somewhat by the decline in gold 
stocks in the first quarter.  Although gold held steady throughout most of the  
period in review, gold stocks largely remained in a consolidation phase. In     
part, this reflects industry specific problems.  But the relatively poor        
performance of gold shares in the first quarter of 2003 reflects a prevailing   
skepticism in regard to the underlying sustainability of today's gold price     
rise. We tend to view such skepticism positively, as it is the reciprocal of the
prevailing optimism for equities in general.  If equities as a whole still have 
to fall down a "slope of hope," we suspect that gold shares are still climbing  
the proverbial "wall of worry" characteristic of the early stages of a new bull 
market. Consequently, we expect this anomaly to be resolved in favor of our gold
holdings in the months ahead.                                                   

We have chosen to change the name of the Prudent Safe Harbor Fund to the Prudent
Global Income Fund, effective May 30, 2003. We are making this name change      
because it more accurately describes the Fund. Our philosophy and tactics have  
not changed.                                                                    

DANGEROUS BUBBLES                                                               

Our economy and financial system are now in the midst of a gigantic             
"reliquification" that is similar to the period following the Russia/LTCM       
collapse in the autumn of 1998.  The financial sector is expanding recklessly,  
with extraordinary credit growth, credit market speculation, and consequent     
financial system over-liquidity.  The 1998/99 reliquification provided the      
necessary fuel to propel the technology and stock markets into the precarious   
"blow-off" stage of terminal excess.  And, importantly, these inflationary      
manifestations were magnets for global speculative finance, inciting a run up in
the dollar as well. We believe that we're now in a similar reliquification      
period in an effort to sustain three unsustainable bubbles as Doug Noland our   
strategist has defined them.  First, there remains an unprecedented speculative 
bubble in the U.S. Credit Market (as evidenced by leveraged holdings of         
agencies, mortgage-backs, corporates, Treasuries, etc.). Second, there is an    
unparalleled Mortgage Finance Bubble, which is fueling destabilizing housing    
inflation, over-consumption, and severe distortions to the nature of lending,   
spending and investing.  And, third, we are in the midst of an historic         
"Structured Finance" Risk Intermediation Bubble facilitated by the Government   
Sponsored Enterprises (GSEs), credit insurers, derivatives markets, Wall Street 
firms, and hedge funds.  These are categorically bubbles because we feel they   
will implode the day additional credit and speculative excess is no longer      
forthcoming.                                                                    

Today, the Fed's egregiously inflationary monetary policy can only exacerbate - 
and in no way rectify - these historic bubbles.  As the governor of monetary    
stability, the Fed remains hopelessly lost nurturing disastrous credit and      
speculative excess. There is no mystery surrounding dollar weakness and ongoing 
vulnerability.  However, the Fed obstinately refuses to admit its mistakes or   
cut its losses, and we fully expect the sinking dollar to incite unpredictable  
inflationary manifestations.                                                    

GASOLINE ON THE FIRE                                                            

Looking back, HSBC's acquisition of troubled Household International in October 
2002 was a seminal event with respect to tranquilizing acute financial          
fragility.  More recently, the market witnessed faltering subprime auto lender  
AmeriCredit attain $1 billion of desperately needed funding.  AmeriCredit's     
stock subsequently rose five-fold from its March 2003 low. Desperate subprime   
credit card company Metris then received an $850 million funding arrangement    
from its bankers. These events signaled that the corporate bond liquidity spigot
remained wide open for both stable and troubled companies. This was confirmed by
the flood of money into high-yield bonds, with more than $10.5 billion of       
inflows in the this year's first quarter, only about $1.1 billion short of the  
total for all of 2002. Bloomberg's tally of total U.S. domestic debt sales      
through April is up 24% from last year at $745 billion and junk bond issuance is
strong.  U.S. asset-backed issuance in the first quarter of 2003 surged to      
$127.2 billion, up more than 20% from the previous year.  Dow Jones reported    
that emerging-market bond funds posted record inflows recently, with year-to-   
date flows already double the amount for all of 2002.                           

We have also witnessed an all-encompassing collapse in global risk premiums, and
the riskier the asset class the more dramatic has been the market's revaluation.
Emerging market spreads have collapsed. Credit default swap prices remain in    
retreat virtually across the board.                                             

MORTGAGE DEBT EXCESS                                                            

However, the truly extraordinary growth in credit is taking place in the        
mortgage area.  We're in the midst of record mortgage credit creation and record
asset-backed issuance.  The household sector remains captivated by housing as a 
"risk free" investment, while inflating home equity is recognized as the        
preferred source for permanent wealth creation to be tapped at will.  Certainly 
the mortgage industry has stood ready to extend credit to homeowners as if there
was never a risk of a decline in home prices.                                   

The household sector has fully discovered the "wealth creating" power ("homes   
for the long-term") of aggressive mortgage borrowing.  Correspondingly,         
virtually the entire U.S. financial sector has recognized that there is one     
special sector that affords easy profit growth and minimal risk.  There are     
"nonprofit" groups springing up all over to provide down payment assistance to  
those with no savings, while lending standards could not be easier for those    
wishing to use inflated home equity to trade up.  Franklin Raines endeavors to  
grow Fannie Mae by more than double-digits through the end of the decade.  And, 
importantly, the expanding national homebuilders have unlimited access to cheap 
finance, in one more extraordinary development that we can credit to            
contemporary structured finance.                                                

In short, these are exceedingly powerful forces, with the mortgage finance arena
retaining a strong inflationary bias.  Mortgage finance has definitely been the 
"epicenter" for credit growth, as well as a sector quite susceptible to lending 
and speculative excess.                                                         

This extraordinary credit growth has led to a trade deficit of 5% of GDP,       
sending these funds to export-driven nations, which recycle them back into U.S. 
securities, often agency and mortgage-backs.  Only this "virtuous circle" has   
permitted the headlong expansion of GSE balance sheets and guarantees over the  
last several years. That expansion, driven by a series of rate cuts, has been   
the driving force for reliquification in the economy, including the bubble in   
housing prices that has permitted massive equity extraction via refinancings.   
These "cash-outs" have been the KEY force in sustaining consumer spending.      
Michael Williams, president of Fannie Mae's eBusiness division, recently told   
American Banker magazine1<F1>: "Last year, close to 10 million homeowners       
refinanced their mortgages.  They cashed out almost $200 billion of their       
accumulated home equity, far exceeding any previous record.  Low mortgage rates 
and rising home values made cash-out refinancing attractive.  _originations in  
2002 topped $2.6 trillion - more than two and a half times the 1993 level." For 
2003, mortgage originations are now expected to exceed $3 trillion.  It is      
estimated that approximately 65% of that total will be due to mortgage          
refinancings.                                                                   

Fannie Mae's phenomenal growth rates over the last few months are indicative of 
the extreme excesses throughout mortgage finance.  Total business volume        
(mortgage purchases) rose to a record high of $139 billion, or almost $1.7      
trillion annualized, during the month of April. Outstanding mortgage-back       
securities grew at the highest rate in a decade, at a compound annual rate of   
67.6%, with year-to-date growth through April of 41.7%.  Fannie's total book of 
business (mortgages held and guaranteed mortgage-backs in the marketplace) has  
expanded at a 27.6% annualized rate over four months to $1.974 trillion.        

These credit excesses continue to inflate the housing market. According to first
quarter data from National Association of Realtors, median prices nationally    
were up 7% year-over-year to $161,500 (up 15.6% over two years).  Median Prices 
rose 16.7% in the Northeast, Philadelphia 25.7%, Providence, RI 25.7%, Orange   
County, CA 20.5%, San Diego, CA 19.5%, Nassau/Suffolk, NY 17.6%, and Los Angeles
16.2%.  Of the more than 120 metropolitan areas, only eight showed year-over-   
year declines.  Only three had price drops of more than 2%, with the worst      
performer (Chattanooga, TN) down just 4.4%.                                     

However, there are potential problems on the horizon for housing. Home ownership
is at record levels; the inventory of unsold homes is expanding, there are      
rising foreclosures and delinquencies nationally, and there are clear signs of  
problems in some markets (Denver, Dallas and, increasingly, the Midwest).  And  
with stagnant job growth, there is reason to question the strength of future    
housing demand.  Some even go so far as to claim that "deflation" is already    
impacting the housing sector but we don't see that yet with the recent housing  
price data above, and certainly not in lending data.                            

WHERE'S THE BEEF?                                                               

So, why is the economy not performing well with interest rates at 40-year lows  
and with such aggressive credit accommodationo We are seeing private payrolls   
declining steadily and sharply, durable goods orders continuing to slump, the   
unfilled orders decline accelerating, nominal shipments of capital goods        
sagging, and nominal retail sales at chain stores stagnant year-over-year. We   
believe the simple answer is well explained by the enormous debt weighing down  
the corporate and household sectors.  Yet, as risk aversion has all but         
evaporated, credit availability could not be easier for most households, the    
vast majority of businesses, and all financial speculators. We may ask, is the  
economy's recent poor performance then somewhat of a lagging indicator, with    
previous tightened credit conditions still weighing on confidence and pressuring
the economy?  More likely, the economy and financial markets simply are         
requiring greater and greater credit excess to keep humming.                    

As a result, we face the anomaly of an extraordinarily energized financial      
sphere, on the one hand, and a despondent economic sphere on the other.  A      
veritable boom in corporate debt issuance does little to incite a bounce in     
capital spending.  And for the American consumer, it appears that each new leg  
of refinancing activity is yielding correspondingly less economic bang for the  
buck. This is despite the fact that consumer confidence measures have recovered 
a significant part of their earlier decline in response to the positive outcome 
of the war in Iraq. The "Baghdad bounce" appears to have confirmed the view of  
many economic commentators (including the Fed Chairman) that winning the Iraq   
war handily would buoy the sentiments of U.S. consumers, corporations and       
investors.  This would then lead to a 2-3 month window (at a minimum) where     
consumer and corporate spending would surge and stock prices would rally.  While
the markets have thus far cooperated, the economy remains unexciting and        
unimpressive in terms of recent performance.                                    

It is today difficult to imagine that the economy will not respond somewhat to  
the accommodative financial environment.  However, such is the state of our     
debt-addled economy that it requires increasingly extreme monetary and fiscal   
stimulus to generate even a tepid economic response. There's no good news here, 
only a postponement of the day of reckoning.  And while we can envision a       
scenario where a faltering consumer sector leads the economy into recession, we 
can just as easily imagine the abundant financial fuel sparking the economy.    
The latter could actually prove the most problematic scenario.  After all, the  
markets have come to discount easy money and abundant liquidity forever.  In our
view, the credit market is today hostage to unprecedented speculating,          
leveraging and hedging excess.  In addition, we would not expect the distorted  
economy to react to extreme financial stimulation in a balanced and sustainable 
manner, but rather quite to the contrary.                                       

The bottom line is that the credit system remains extraordinarily over-         
liquefied, with investors and the momentous speculating community chasing       
performance and desperate for yield.  What we view as a precarious mortgage     
finance bubble blow-off continues.  And despite the recent fixation on          
"deflation," an inflationary bias is sustained throughout some key sectors of   
the economy including defense, government, healthcare, home construction, and   
financial services.  Yes, there are factors supporting an economic bounce, yet  
there is this nagging and critical issue of the vulnerable American consumer.   
We have reached the point where a hardy consumer sector demands a continuation  
of declining mortgage rates, housing inflation and, perhaps, a boost of         
confidence that only rising stock prices can provide.  A lot has to go right,   
but the financial markets do for now appear accommodative.                      

POSTPONING THE INEVITABLE                                                       

Under the guise of fighting the evil of "deflation," the Fed has signaled to the
marketplace that they are doing and will do everything in their power to        
bankroll the continued credit and speculative excesses required to sustain the  
U.S. Bubble.  The Greenspan Fed is determined to nurture leveraged speculation, 
they will buttress any cracks in the frail foundation of the structured finance 
bubble, and they will stand fully behind the daisy chain of institutions        
comprising our contemporary credit system.  They will disregard all excesses and
ignore escalating financial and economic imbalances and distortions.  And, in a 
seminal departure from established and prudent central banking, they have       
intimated that they will in no way move to assuage credit, speculative, or      
liquidity excesses to defend a sinking dollar.  In short, the Fed this past     
autumn initiated a guarantee that it would not allow the runaway U.S. credit    
boom to wane, let alone go bust.  This is a truly historic decision, but it is  
one that we believe will eventually end in disaster. We are not witnessing a    
replay of 1991's commencement of an historic financial and economic bubble, but 
2003's desperate and ill-advised efforts to sustain it.                         

Sustaining the bubble requires enormous, continuous credit growth.  As mentioned
before, the epicenter for this credit growth has come in the mortgage area      
recently.  Inflated housing prices, especially the conspicuous bubbles in       
California and the East coast, now demand unrelenting lending excess.           
Nationally, free-flowing mortgage credit is necessary to sustain boom-time      
consumption.  And, importantly, mortgage credit has become the key liquidity    
source for the speculative financial markets.  For now, "reflation" appears to  
be working, at least sufficiently to prolong the great credit bubble.  But there
is no escape afforded through the massive inflation of non-productive credit.   
There is no escaping the damage inflicted upon the real economy.  And there is  
no possibility for miraculously circumventing acute financial fragility. The    
dollar remains the obvious weak link, but the highly over-leveraged and         
speculation-rife credit market bears watching.                                  

And while today's historic bubble has been near death on several occasions (this
past autumn the latest, and perhaps most serious), today it appears more        
impervious than ever.  And yet this is perfectly consistent with speculative    
market dynamics.  Recall how surviving the late-1998 crisis emboldened "animal  
spirits" sufficiently to set the stage for the NASDAQ/technology blow-off which 
ended in disaster for many.  Clearly, credit market speculators are today       
thoroughly emboldened, and never before has a central bank so explicitly        
conveyed the convergence of mutual interests they share with the speculating    
community.  It does appear that the Fed has set the stage for one final period  
of parabolic credit excess.                                                     

But this scenario appears to have set the course for a DOLLAR DISASTER. This    
unrelenting mortgage credit excess is fueling dreadful trade deficits, and it is
today difficult to see this circumstance changing any time soon.  March's trade 
deficit of $43.5 billion was up 33% from the year earlier.  Goods imports were  
81% larger than exports during the month.  Crude oil imports were up 77% year-  
over-year.  Year-to-date, our trade deficit with China is up 30%.  Incredible   
credit growth is causing the inflation of American dollar financial claims to   
accelerate, underpinned by little in the way of true economic wealth creation.  
ASSET INFLATION IS NOT WEALTH CREATION, BUT ONLY A SEDUCTIVE AND ADDICTIVE      
NARCOTIC.  For the first time ever in the history of economic thinking,         
economists - that is, American economists - are claiming that growing asset     
prices represent valid wealth creation.                                         

We have again witnessed what at times appears a return to endless liquidity,    
while last year's acute financial fragility has slipped into hibernation.       
Meanwhile, the non-dollar world has seemingly become the oyster for an energized
and emboldened speculator community.  The torrent of liquidity emanating from   
the U.S. credit system in the thick of historic excess sees growing flows       
exiting the dollar in an endless pursuit of higher returns.  Dollar selling     
begets dollar asset underperformance that begets even more dollar selling.  And 
the more liquidity that flows to markets such as gold and basic commodities, or 
economies such as Brazil and Russia, the better these asset classes appear in   
comparison to dollar instruments.                                               

And with the Fed's current deflation-fighting mandate stoking over-liquefied    
markets globally, we believe that dollar weakness will only exacerbate credit   
excess and self-reinforcing dollar devaluation.  If our authorities believe that
the sinking dollar will settle at some level of "fair value," they surely don't 
appreciate the dynamics of runaway credit inflation, consequent currency        
debasement, and speculative bubbles.  Perhaps Washington actually believes that 
a weakening dollar is a good thing and that it will help us get out of our mess.
It's not and it won't.                                                          

All the Greenspan Fed can do today is postpone the day of reckoning and hope for
a miracle. The unconventional policy options publicly floated by the Fed moves  
the central bank further in the direction of perpetuating a financial horror    
show; a central bank trapped in a credit bubble of their own creation.  Mr.     
Greenspan would undoubtedly like to buy the economy some time as another refi   
wave works its way through the economy for a quarter or two, perhaps on the hope
that this is all the time required to bridge the economy over to robust capital 
spending. But the reality is that the U.S. central bank's egregious policies, no
matter how unorthodox, can only exacerbate, not rectify, the extreme stresses   
now apparent in every aspect of the American financial system.                  

INFLATION VS. DEFLATION                                                         

Many capable analysts take a careful look at the world and see unmistakable and 
broadening downward pricing pressures, especially in the goods sector.  They    
also correctly see great price risk associated with inflated asset markets,     
especially real estate.  But at the same time, diligent credit analysis brings  
to light today's unprecedented household debt growth, enormous government       
deficits, unparalleled credit market speculation, and the resulting inflationary
manifestations - asset bubbles, endemic trade deficits and extreme divergences  
in relative prices throughout the economy.                                      

Certainly, there is a strong inflationary bias in the government sector and     
throughout healthcare and energy, which we expect to continue.  And while a     
deranged credit system runs completely out of control, it is suggested that the 
Fed's primary responsibility is to fight some phantom "deflation" risk and      
soundly beat it like they are said to have whipped inflation.                   

It would be a strange deflation, however, that would give rise to today's       
rampant credit excess, the faltering dollar, rising energy and import prices,   
surging insurance and healthcare costs and generally rising consumer prices.    
Rather, we would normally expect such signals of heightened inflation to push   
interest rates higher and pose heightened risk to Wall Street.  Yet rising rates
would immediately place the leveraged speculators and Wall Street's momentous   
credit market (and derivative) bubble in serious jeopardy.  So, propaganda and  
disinformation have become the order of the day.  We should expect to read a lot
more about the nebulous deflation risk from Wall Street and listen to increased 
chatter from the Fed about how they could move to "peg" long-term interest rates
if necessary.  And we expect credit and speculative excess to run absolutely    
wild, with additional deleterious effects on the real economy.  Mortgage finance
and housing markets could go to even greater levels of excess.  Financial sector
expansion could become even more extreme and dangerous, and our trade and fiscal
deficits could continue to balloon. The Fed will likely find such a scenario    
acceptable as long as the core PCE deflator stays below a few percent.          

Many, apparently including Mr. Greenspan, believe that the Great Depression's   
devastating deflation could have been avoided simply by creating additional     
money supply.  After all, why would it not have been possible for the Fed to    
simply create new money and recapitalize the faltering banking system and       
reliquefy the economyo Certainly, our contemporary financial system retains the 
will and capacity to inflate money and credit.                                  

But what about the reasons that inflation will not prove to be the magic elixiro
We are today witnessing how even alarming quantities of new credit have only had
a muted impact on the aged bubble economy (Credit growth vs. GDP growth).  We   
are witnessing how this newly created finance is spread quite unevenly over the 
real economy (housing vs. manufacturing).  We are witnessing irregular effects  
on "investment" (millions of new residences while our goods-producing capacity  
is gutted).  We are witnessing how credit inflation has disparate influences on 
prices (oil vs. semiconductors).  We are witnessing how credit inflation has a  
quite uneven influence on income (mortgage brokers/attorneys/real estate agents 
vs. manufacturers).  We are witnessing how continued ultra-easy money has its   
greatest impact on inflating the size and destabilizing influence of the        
leveraged speculating community ("money" continues to flood into the hedge fund 
community).  We are witnessing how continued rampant credit inflation has a much
greater impact on the animated financial sphere (inciting speculation) than it  
does on the despondent economic sphere (spurring sound investment).  We are     
witnessing how this newly created finance gravitates specifically to inflating  
asset classes (real estate, mortgage-backs, agencies, and Treasuries),          
exacerbating distortions.  Whereas credit inflation once resulted in rising     
stock and bond prices, we are today witnessing how credit inflation exacerbates 
dollar weakness.  We are witnessing how money and credit excess is the problem  
and definitely not the solution.                                                

Japan's bubble could have survived to this day had they only continued inflating
already exorbitant real estate and stock prices to the moon.  But inescapable   
financial and economic crisis would wait patiently and confidently.  Faltering  
asset prices would have at some point stymied credit growth, and the house of   
cards would have still come tumbling down. Unfortunately, in the U.S. today, we 
have the same problem that cannot be avoided.                                   

PRUDENT BEAR AND MARKET RALLIES                                                 

The last two months have been an extraordinarily difficult period to be short   
U.S. common stocks.  As such, I felt this was an opportune time to share our    
approach to managing the Prudent Bear Fund in market rallies.  As you know, it's
our charter to structure the fund with far more short than long exposure while  
we believe we are in a secular bear market.  That view is unlikely to change for
some time.  In fact, we have chosen not to make even short-term market timing   
decisions There exists too much of a chance that we would "zig" when we should  
have "zagged." For example, we could be playing for a rally with no short       
exposure and have the market fall dramatically.                                 

We know many of our clients purchase the Prudent Bear Fund as a hedge against   
market declines.  At the same time, we want to protect against substantial      
losses in bear market rallies as they can make for a difficult recovery. Almost 
by definition, there will be phases in a secular bear market where monetary     
conditions become extraordinarily accommodative.  As we have witnessed over the 
past few months, efforts to stimulate the economy (and markets) will make       
financing readily available for even troubled companies, credit spreads will    
fall, and stocks will temporarily benefit from heightened liquidity conditions. 
In these market rallies, stocks with significant short interest often rally the 
most, as do high volatility stocks. It is not uncommon to see companies with the
worst fundamentals significantly outperform the general market.  During our     
years of experience managing money on the short side we have witnessed many of  
these "short-squeeze rallies." As a result, we realize that "playing defense"   
during these difficult market environments is of supreme importance. We strive  
to manage losses prudently, while remaining more short than long. To accomplish 
these objectives we may reduce overall short exposure, reduce exposure to the   
stocks most susceptible to a short squeeze rally, or short fewer volatile       
stocks. Or we may attempt to reduce volatility by increasing short exposure in  
liquid market-index related products such as S&P futures contracts, and reducing
short exposure to individual stocks generally. Regardless of the specific       
adjustments, we will remain positioned to potentially make significant profits  
for our shareholders should the market fall dramatically. The ability to make   
such adjustments enabled the fund to survive the phenomenal rally in 1999 when  
the NASDAQ advanced by 86.13%, while the Prudent Bear Fund lost 23.40% for the  
year ending 12/31/99.We continue to believe management tactics can enhance      
results.                                                                        

I hope this explanation helped investors understand more about Prudent Bear     
Fund. We will continue to manage the Prudent Bear Funds under the premise that  
the secular bear market in stocks, the bear market in the dollar, and the bull  
market in gold is not yet over.                                                 

Sincerely,                                                                      

/s/ David W. Tice                                                               

David W. Tice                                                                   

As of March 31, 2003, the Prudent Bear Fund returned 46.63%, 6.55% and -0.89%   
for the 1-year, 5-year and since inception (12/28/95) periods, respectively. As 
of March 31, 2003, the Prudent Safe Harbor Fund returned 21.49% and 7.53% for   
the 1-year and since inception (2/2/00) periods, respectively. As of March 31,  
2003, the S&P 500 Index returned -24.76%, -3.77% and 6.19% for the 1-year, 5-   
year and since inception (12/28/95) periods, respectively. As of March 31, 2003,
the NASDAQ returned -27.32%, -6.08% and 3.78% for the 1-year, 5-year and since  
inception (12/28/95) periods, respectively.                                     

Past performance is not indicative of future results.  The investment return and
principal value of an investment will fluctuate so that an investor's shares,   
when redeemed, may be worth more or less than their original cost. Prior to     
9/30/02 the Prudent Safe Harbor Fund's investment performance reflects voluntary
fee waivers in effect.  In the absence of such waivers, total return would be   
reduced. The S&P 500 and NASDAQ Indices are unmanaged indices commonly used to  
measure performance of U.S. stocks.  One cannot invest directly in an index.    

Opinions expressed in the letter are those of the fund manager and are subject  
to change, are not guaranteed and should not be considered a recommendation to  
buy or sell any security.                                                       

1<F1>  American Banker, Technology and Other Keys To the Boom in Refinancing    
April 2, 2003, by Michael Williams                                

The Prudent Bear Fund regularly makes short sales of securities, which involves 
unlimited risk including the possibility that losses may exceed the original    
amount invested. The fund may also use options and future contracts, which have 
risks associated with unlimited losses of the underlying holdings due to        
unanticipated market movements and failure to correctly predict the direction of
securities prices, interest rates and currency exchange rates. The fund may also
hold restricted securities purchased through private placements.  Such          
securities may be difficult to sell without experiencing delays or additional   
costs.                                                                          

The Prudent Safe Harbor Fund invests in foreign securities which may involve    
greater volatility and political, economic and currency risks and differences in
accounting methods. The fund may also invest in gold, which involves additional 
risks, such as the possibility for substantial price fluctuations over a short  
period of time.                                                                 

Must be preceded or accompanied by a prospectus.  Please read it carefully      
before investing.  While the Prudent Bear Fund is no-load, there are management 
and distribution fees that do apply.  Please see the prospectus for further     
details.  Please refer to the schedule of investments on pages 19-42 of the     
report for holdings information.  Fund holdings are subject to change at any    
time and should not be considered a recommendation to buy or sell any security. 

Quasar Distributors, LLC, Distributor.  05/03                                   

STATEMENTS OF ASSETS AND LIABILITIES                                            
MARCH 31, 2003                                                                  
(UNAUDITED)                                                                     

                                                        [Enlarge/Download Table]
                                                                           PRUDENT BEAR   PRUDENT SAFE  
                                                                               FUND        HARBOR FUND  
                                                                           ------------   ------------  
                                                                                                        
ASSETS:                                                                                                 
   Investments, at value (cost $493,817,384                                                             
     and $289,087,330, respectively)                                       $491,338,906    $301,962,462 
   Cash                                                                       1,879,578              -- 
   Deposit at brokers for short sales                                         9,923,752                 
   Receivable from broker for proceeds on securities sold short             156,471,636              -- 
   Receivable for investments sold                                           43,882,600              -- 
   Receivable for futures contracts                                             742,125              -- 
   Capital shares sold                                                        7,225,038       6,299,404 
   Dividends receivable                                                           1,396          12,708 
   Interest receivable                                                        2,264,349       4,798,065 
   Other assets                                                                  86,574          45,267 
                                                                           ------------    ------------ 
   Total Assets                                                             713,815,954     313,117,906 
                                                                           ------------    ------------ 

LIABILITIES:                                                                                            
   Securities sold short, at value (Proceeds of $197,520,295                                            
     and $0, respectively)                                                  188,482,885              -- 
   Payable for securities purchased                                           6,104,290          38,955 
   Capital shares redeemed                                                    2,944,590       1,951,050 
   Payable to Adviser                                                           636,859         207,471 
   Dividends payable on short positions                                         126,280              -- 
   Income distribution payable                                                       --         106,628 
   Accrued expenses and other liabilities                                       894,868         436,842 
                                                                           ------------    ------------ 
   Total Liabilities                                                        199,189,772       2,740,946 
                                                                           ------------    ------------ 
NET ASSETS                                                                 $514,626,182    $310,376,960 
                                                                           ------------    ------------ 
                                                                           ------------    ------------ 

NET ASSETS CONSIST OF:                                                                                  
   Capital stock                                                           $530,831,835    $297,899,175 
   Accumulated undistributed (overdistributed) net investment income          1,951,850      (1,665,302)
   Accumulated undistributed net realized gain (loss) on investments                                    
     sold, securities sold short, option contracts expired or closed,                                   
     and foreign currencies                                                 (23,753,374)      1,063,841 
   Net unrealized appreciation / depreciation on:                                                       
        Investments                                                          (2,478,478)     12,875,132 
        Foreign currencies                                                        2,314         204,114 
        Short positions                                                       9,037,410              -- 
        Futures contracts                                                      (965,375)             -- 
                                                                           ------------    ------------ 
TOTAL NET ASSETS                                                           $514,626,182    $310,376,960 
                                                                           ------------    ------------ 
                                                                           ------------    ------------ 

NO LOAD SHARES:                                                                                         
   Net Assets                                                              $502,973,098    $310,376,960 
   Shares outstanding (250,000,000 shares of $.0001 par value authorized)    69,698,978      26,606,844 
   Net Asset Value, Redemption Price and Offering Price Per Share          $       7.22   $      11.67  
                                                                           ------------    ------------ 
                                                                           ------------    ------------ 
CLASS C SHARES:                                                                                         
   Net Assets                                                              $ 11,653,084                 
   Shares outstanding (250,000,000 shares of $.0001 par value authorized)     1,648,761                 
   Net Asset Value, Redemption Price and Offering Price Per Share          $       7.07                 
                                                                           ------------                 
                                                                           ------------                 

See notes to the financial statements.

STATEMENTS OF OPERATIONS                                                        
YEAR ENDED MARCH 31, 2003                                                       
(UNAUDITED)                                                                     

                                                        [Enlarge/Download Table]
                                                                          PRUDENT BEAR    PRUDENT SAFE
                                                                              FUND         HARBOR FUND
                                                                          ------------    ------------
                                                                                                      
INVESTMENT INCOME:                                                                                    
   Interest income                                                         $ 15,142,132    $2,254,241 
   Dividend income on long positions                                                                  
     (net of foreign taxes withheld of $18,244 and $3,191, respectively)        207,257       197,039 
                                                                           ------------    ---------- 
   Total investment income                                                   15,349,389     2,451,280 
                                                                           ------------    ---------- 

EXPENSES:                                                                                             
   Investment advisory fee                                                    3,191,118       828,436 
   Administration fee                                                           234,401        88,371 
   Shareholder servicing and accounting costs                                   384,756       166,282 
   Custody fees                                                                  95,490        43,880 
   Federal and state registration                                                54,086        41,536 
   Professional fees                                                             50,358        35,692 
   Distribution expense - No Load shares                                        628,145       276,145 
   Distribution expense - Class C shares                                         40,314            -- 
   Reports to shareholders                                                       64,206        21,954 
   Directors' fees and expenses                                                   3,132         1,528 
   Insurance expense                                                             22,842         8,590 
                                                                           ------------    ---------- 
   Total operating expenses before expense reductions,                                                
     expense reimbursements and dividends on short positions                  4,768,848     1,512,414 
   Expense reductions (See Note 5)                                              (69,284)           -- 
   Expense reimbursement from Advisor                                                --            -- 
   Dividends on short positions                                               1,329,223            -- 
                                                                           ------------    ---------- 
   Total expenses                                                             6,028,787     1,512,414 
                                                                           ------------    ---------- 
NET INVESTMENT INCOME                                                         9,320,602       938,866 
                                                                           ------------    ---------- 

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:                                                   
   Realized gain (loss) on:                                                                           
       Long transactions                                                      4,952,639     1,144,999 
       Short transactions                                                     4,544,223            -- 
       Option contracts expired or closed                                   (19,297,581)           -- 
       Futures contracts closed                                               1,053,068            -- 
       Foreign currency translation                                               5,338        11,489 
                                                                           ------------    ---------- 
       Net realized gain (loss)                                              (8,742,313)    1,156,488 
   Change in unrealized appreciation / depreciation on:                                               
       Investments                                                          (18,320,805)    7,427,604 
       Short positions                                                      (25,046,148)           -- 
       Futures contracts                                                     (4,423,875)           -- 
       Foreign currency                                                            (333)      117,819 
                                                                           ------------    ---------- 
       Net unrealized gain (loss)                                           (47,791,161)    7,545,423 
                                                                           ------------    ---------- 
   Net realized and unrealized gain (loss) on investments                   (56,533,474)    8,701,911 
                                                                           ------------    ---------- 
NET INCREASE (DECREASE) IN NET ASSETS                                                                 
  RESULTING FROM OPERATIONS                                                $(47,212,872)   $9,640,777 
                                                                           ------------    ---------- 
                                                                           ------------    ---------- 

See notes to the financial statements.

STATEMENT OF CHANGES IN NET ASSETS                                              

                                                                [Download Table]
                                                     PRUDENT BEAR FUND          
                                           -------------------------------------
                                           SIX MONTHS ENDED       YEAR ENDED    
                                            MARCH 31, 2003    SEPTEMBER 30, 2002
                                           ----------------   ------------------
                                             (UNAUDITED)                        
                                                                                
OPERATIONS:                                                                     
   Net investment income                     $  9,320,602        $  2,299,602   
   Net realized gain (loss) on:                                                 
       Long transactions                        4,952,639           8,005,306   
       Short transactions                       4,544,223          26,079,387   
       Option contracts expired or closed     (19,297,581)         16,921,641   
       Futures contracts closed                 1,053,068          10,806,269   
       Foreign currency translation                 5,338              (1,304)  
   Change in unrealized appreciation /                                          
     depreciation on:                                                           
       Investments                            (18,320,805)         23,382,873   
       Short positions                        (25,046,148)         12,662,853   
       Futures contracts                       (4,423,875)          3,495,500   
       Foreign currency                              (333)              1,757   
                                             ------------        ------------   
   Net increase (decrease) in net assets                                        
     resulting from operations                (47,212,872)        103,653,884   
                                             ------------        ------------   

DISTRIBUTIONS TO                                                                
  NO LOAD SHAREHOLDERS:                                                         
   FROM NET INVESTMENT INCOME                 (12,757,348)         (4,724,707)  
   FROM NET REALIZED GAINS                    (14,446,178)                 --   
                                             ------------        ------------   
   TOTAL DISTRIBUTIONS                        (27,203,526)         (4,724,707)  
                                             ------------        ------------   

DISTRIBUTIONS TO                                                                
  CLASS C SHAREHOLDERS:                                                         
   FROM NET INVESTMENT INCOME                    (143,520)            (64,110)  
   FROM NET REALIZED GAINS                       (200,739)                 --   
                                             ------------        ------------   
   TOTAL DISTRIBUTIONS                           (344,259)            (64,110)  
                                             ------------        ------------   

CAPITAL SHARE TRANSACTIONS:                                                     
   Proceeds from shares sold                  710,074,757         877,245,442   
   Shares issued to holders in                                                  
     reinvestment of dividends                 23,620,270           4,142,068   
   Cost of shares redeemed                   (673,179,899)       (636,587,023)  
                                             ------------        ------------   
   Net increase in net assets resulting                                         
     from capital share transactions           60,515,128         244,800,487   
                                             ------------        ------------   
TOTAL INCREASE (DECREASE)                                                       
  IN NET ASSETS                               (14,245,529)        343,665,554   

NET ASSETS:                                                                     
   Beginning of period                        528,871,711         185,206,157   
                                             ------------        ------------   
   End of period (including undistributed                                       
     net investment income of $1,951,850                                        
     and $5,532,116, respectively)           $514,626,182        $528,871,711   
                                             ------------        ------------   
                                             ------------        ------------   

                                                        [Enlarge/Download Table]
                                                                PRUDENT SAFE HARBOR FUND      
                                                         -------------------------------------
                                                         SIX MONTHS ENDED       YEAR ENDED    
                                                          MARCH 31, 2003    SEPTEMBER 30, 2002
                                                         ----------------   ------------------
                                                           (UNAUDITED)                        
                                                                                              
OPERATIONS:                                                                                   
   Net investment income                                   $    938,866        $    754,489   
   Net realized gain on:                                                                      
       Long transactions                                      1,144,999           3,543,962   
       Foreign currency translation                              11,489              54,738   
   Change in unrealized appreciation / depreciation on:                                       
       Investments                                            7,427,604           4,964,260   
       Foreign currency                                         117,819              74,643   
                                                           ------------        ------------   
   Net increase in net assets                                                                 
     resulting from operations                                9,640,777           9,392,092   
                                                           ------------        ------------   

DISTRIBUTIONS TO                                                                              
  NO LOAD SHAREHOLDERS:                                                                       
   FROM NET INVESTMENT INCOME                                (2,986,281)         (1,849,472)  
   FROM NET REALIZED GAINS                                   (2,187,334)            (12,167)  
                                                           ------------        ------------   
   TOTAL DISTRIBUTIONS                                       (5,173,615)         (1,861,639)  
                                                           ------------        ------------   

CAPITAL SHARE TRANSACTIONS:                                                                   
   Proceeds from shares sold                                453,683,470         226,790,135   
   Shares issued to holders in                                                                
     reinvestment of dividends                                4,829,642           1,673,306   
   Cost of shares redeemed                                 (278,794,533)       (134,136,115)  
                                                           ------------        ------------   
   Net increase in net assets resulting                                                       
     from capital share transactions                        179,718,579          94,327,326   
                                                           ------------        ------------   
TOTAL INCREASE                                                                                
  IN NET ASSETS                                             184,185,741         101,857,779   

NET ASSETS:                                                                                   
   Beginning of period                                      126,191,219          24,333,440   
                                                           ------------        ------------   
   End of period (including undistributed                                                     
    (overdistributed) net investment income                                                   
     of $(1,665,302), and $382,114, respectively)          $310,376,960        $126,191,219   
                                                           ------------        ------------   
                                                           ------------        ------------   

See notes to the financial statements.

PRUDENT BEAR FUND                                                               
FINANCIAL HIGHLIGHTS                                                            

Selected per share data is based on a share of beneficial interest outstanding  
throughout each period.                                                         

                                                        [Enlarge/Download Table]
                                            NO LOAD       NO LOAD       NO LOAD     NO LOAD       NO LOAD                
                                             SHARES       SHARES        SHARES       SHARES        SHARES                
                                           SIX MONTHS      YEAR          YEAR         YEAR          YEAR         YEAR    
                                             ENDED         ENDED         ENDED       ENDED         ENDED         ENDED   
                                           MARCH 31,     SEPT. 30,     SEPT. 30,   SEPT. 30,     SEPT. 30,     SEPT. 30, 
                                              2003         2002          2001         2000          1999         1998    
                                              ----         ----          ----         ----          ----         ----    
                                          (UNAUDITED)                                                                    
                                                                                                                         
Per Share Data:                                                                                                          

   Net asset value, beginning of period       $8.31        $6.31         $3.93        $4.51         $7.34        $7.29   
                                              -----        -----         -----        -----         -----        -----   

Income from investment operations:                                                                                       
   Net investment income(1)<F2>                0.16(3)      0.06(2)       0.17(2)      0.18(2)       0.19(2)      0.29(2)
                                                  <F4>         <F3>          <F3>         <F3>          <F3>         <F3>
   Net realized and unrealized                                                                                           
     gains (losses) on investments            (0.79)        2.08          2.44        (0.62)        (2.82)       (0.01)  
                                              -----        -----         -----        -----         -----        -----   
   Total from investment operations           (0.63)        2.14          2.61        (0.44)        (2.63)        0.28   
                                              -----        -----         -----        -----         -----        -----   

Less Distributions:                                                                                                      
   Dividends from net investment income       (0.22)       (0.14)        (0.23)       (0.14)        (0.20)       (0.23)  
   Distributions from net realized gains      (0.24)          --            --           --            --           --   
                                              -----        -----         -----        -----         -----        -----   
Total distributions                           (0.46)       (0.14)        (0.23)       (0.14)        (0.20)       (0.23)  
                                              -----        -----         -----        -----         -----        -----   
Net asset value, end of period                $7.22        $8.31         $6.31        $3.93         $4.51        $7.34   
                                              -----        -----         -----        -----         -----        -----   
                                              -----        -----         -----        -----         -----        -----   

Total return                                  -7.72%(8)<F9>35.47%        68.78%       -9.55%       -36.17%        3.66%  

Supplemental data and ratios:                                                                                            
   Net assets, end of period (000's)       $502,973     $521,030      $183,797     $153,336      $220,462     $173,691   

   Ratio of net operating expenses                                                                                       
     to average net assets(4)<F5>              1.83%(5)(7)  1.84%(5)      1.97%        1.83%(5)      1.97%        2.08%  
                                                   <F6><F8>     <F6>                       <F6>                          

   Ratio of dividends on short positions                                                                                 
     to average net assets                     0.52%(7)     0.40%         0.33%        0.28%         0.28%        0.28%  
                                                   <F8>                                                                  

   Ratio of net investment income                                                                                        
     to average net assets                     3.66%(7)     0.93%         3.68%        4.48%         4.09%        4.34%  
                                                   <F8>                                                                  

   Portfolio turnover rate(6)<F7>            110.51%      266.15%       386.40%      417.53%       536.56%      480.25%  

(1)<F2>   Net investment income per share before dividends on short positions   
          for the No Load Shares for the six months ended March 31, 2003 and the
       periods ended September 30, 2002, September 30, 2001, September 30,
     2000, September 30, 1999 and September 30, 1998 was $0.17, $0.08,
$0.19, $0.19, $0.21 and $0.30, respectively.                
(2)<F3>   Net investment income per share represents net investment income      
    divided by the average shares outstanding throughout the period.
(3)<F4>   Net investment income per share is calculated using ending balances   
    prior to consideration of adjustments for permanent book and tax
differences.                                                
(4)<F5>   The net operating expense ratio excludes dividends on short positions.
    The ratio including dividends on short positions for the No Load
        Shares for the six months ended March 31, 2003 and the periods ended
         September 30, 2002, September 30, 2001, September 30, 2000, September
          30, 1999 and September 30, 1998  was 2.35%, 2.24%, 2.30%, 2.11%, 2.25%
and 2.36%, respectively.                                    
(5)<F6>   The net operating expense ratio includes expense reductions for soft  
      dollar credits.  The ratio excluding expense reductions for the No
       Load Shares for the six months ended March 31, 2003 and the periods
         ended September 30, 2002 and September 30, 2000 were 1.86%, 1.89% and
1.93%, respectively.                                        
(6)<F7>   Portfolio turnover is calculated on the basis of the Fund as a whole  
without distinguishing between the classes of shares issued.
(7)<F8>   Annualized.                                                           
(8)<F9>   Not Annualized.                                                       

See notes to the financial statements.

PRUDENT BEAR FUND                                                               
FINANCIAL HIGHLIGHTS                                                            

Selected per share data is based on a share of beneficial interest outstanding  
throughout each period.                                                         

                                                        [Enlarge/Download Table]
                                            CLASS C        CLASS C       CLASS C      CLASS C           CLASS C       
                                             SHARES         SHARES        SHARES       SHARES           SHARES        
                                           SIX MONTHS        YEAR          YEAR         YEAR     FEB. 8, 1999 (1)<F10>
                                             ENDED          ENDED         ENDED        ENDED            THROUGH       
                                           MARCH 31,      SEPT. 30,     SEPT. 30,    SEPT. 30,         SEPT. 30,      
                                              2003           2002          2001         2000             1999         
                                            --------       --------      --------     --------         --------       
                                          (UNAUDITED)                                                                 
                                                                                                                      
Per Share Data:                                                                                                       

   Net asset value, beginning of period       $8.14          $6.23         $3.88        $4.49            $4.78        
                                              -----          -----         -----        -----            -----        

Income from investment operations:                                                                                    
   Net investment income(2)<F11>               0.12(4)        0.01(3)       0.14(3)      0.15(3)          0.09(3)     
                                                 <F13>          <F12>         <F12>        <F12>            <F12>     
   Net realized and unrealized                                                                                        
     gains (losses) on investments            (0.77)          2.03          2.40        (0.62)           (0.38)       
                                              -----          -----         -----        -----            -----        
Total from investment operations              (0.65)          2.04          2.54        (0.47)           (0.29)       
                                              -----          -----         -----        -----            -----        

Less Distributions:                                                                                                   
   Dividends from net investment income       (0.22)         (0.13)        (0.19)       (0.14)              --        
   Distributions from net realized gains      (0.24)            --            --           --               --        
                                              -----          -----         -----        -----            -----        
   Total distributions                        (0.46)         (0.13)        (0.19)       (0.14)            0.00        
                                              -----          -----         -----        -----            -----        
Net asset value, end of period                $7.03          $8.14         $6.23        $3.88            $4.49        
                                              -----          -----         -----        -----            -----        
                                              -----          -----         -----        -----            -----        

Total return                                  -8.14%(5)      34.18%        67.41%      -10.33%           -6.07%(5)    
                                                  <F14>                                                      <F14>    

Supplemental data and ratios:                                                                                         
   Net assets, end of period (000's)        $11,653         $7,842        $1,409         $868             $207        

   Ratio of net operating expenses                                                                                    
     to average net assets(6)<F15>             2.58%(7)(8)    2.59%(7)      2.72%        2.58%(7)         2.74%(8)    
                                                  <F16><F17>     <F16>                      <F16>            <F17>    
   Ratio of dividends on short positions                                                                              
     to average net assets                     0.52%(8)       0.40%         0.33%        0.28%            0.32%(8)    
                                                  <F17>                                                      <F17>    
   Ratio of net investment income                                                                                     
     to average net assets                     2.91%(8)       0.18%         2.93%        3.73%            3.25%(8)    
                                                  <F17>                                                      <F17>    

   Portfolio turnover rate(9)<F18>           110.51%        266.15%       386.40%      417.53%          536.56%       

(1)<F10>   Commencement of operations.                                          
(2)<F11>   Net investment income per share before dividends on short positions  
        for the Class C Shares for the six months ended March 31, 2003 and
         the periods ended September 30, 2002, September 30, 2001, September
        30, 2000 and September 30, 1999 was $0.13, $0.04, $0.16, $0.15 and
$0.09, respectively.                                      
(3)<F12>   Net investment income per share represents net investment income     
      divided by the average shares outstanding throughout the period.
(4)<F13>   Net investment income per share is calculated using ending balances  
      prior to consideration of adjustments for permanent book and tax
differences.                                              
(5)<F14>   Not annualized.                                                      
(6)<F15>   The net operating expense ratio excludes dividends on short          
          positions.  The ratio including dividends on short positions for the
    Class C Shares for the six months ended March 31, 2003 and the
         periods ended September 30, 2002, September 30, 2001, September 30,
    2000 and September 30, 1999 was 3.10%, 2.99%, 3.05%, 2.86% and
3.06%, respectively.                                      
(7)<F16>   The net operating expense ratio includes expense reductions for soft 
     dollar credits.  The ratio excluding expense reductions for the
    Class C Shares for the six months ended March 31, 2003 and the
         periods ended September 30, 2002 and September 30, 2000 were 2.61%,
2.64% and 2.68%, respectively.                            
(8)<F17>   Annualized.                                                          
(9)<F18>   Portfolio turnover is calculated on the basis of the Fund as a whole 
  without distinguishing between the classes of shares issued.

See notes to the financial statements.

PRUDENT SAFE HARBOR FUND                                                        
FINANCIAL HIGHLIGHTS                                                            

Selected per share data is based on a share of beneficial interest outstanding  
throughout each period.                                                         

                                                        [Enlarge/Download Table]
                                           SIX MONTHS                              FEBRUARY 2, 2000(1)<F19>
                                             ENDED       YEAR ENDED     YEAR ENDED          THROUGH        
                                           MARCH 31,     SEPT. 30,      SEPT. 30,          SEPT. 30,       
                                              2003          2002           2001              2000          
                                           ---------     ---------      ---------          ---------       
                                          (UNAUDITED)                                                      
                                                                                                           
Per Share Data:                                                                                            

   Net asset value, beginning of period      $11.15        $ 9.31          $9.19            $10.00         
                                             ------        ------         ------            ------         

Income from investment operations:                                                                         
   Net investment income                       0.04(2)       0.14(2)        0.20(3)           0.24(3)      
                                                  <F20>         <F20>          <F21>             <F21>     
   Net realized and unrealized                                                                             
     gains (losses) on investments             0.76          1.94           0.03             (0.90)        
                                             ------        ------         ------            ------         
   Total from investment operations            0.80          2.08           0.23             (0.66)        
                                             ------        ------         ------            ------         

Less distributions:                                                                                        
   Dividends from net investment income       (0.14)        (0.23)         (0.11)            (0.15)        
   Distributions from net realized gains      (0.14)        (0.01)            --                --         
                                             ------        ------         ------            ------         
   Total distributions                        (0.28)        (0.24)         (0.11)            (0.15)        
                                             ------        ------         ------            ------         
Net asset value, end of period               $11.67        $11.15          $9.31            $ 9.19         
                                             ------        ------         ------            ------         
                                             ------        ------         ------            ------         

Total return                                   7.17%(4)     22.54%          2.54%            -6.60%(4)     
                                                  <F22>                                          <F22>     

Supplemental data and ratios:                                                                              
   Net assets, end of period (000's)       $310,377      $126,191        $24,333            $1,422         

   Ratio of net operating expenses                                                                         
     to average net assets                     1.37%(5)      1.50%(6)(7)    1.50%(6)          1.80%(5)(6)  
                                                  <F23>         <F24><F25>     <F24>             <F23><F24>

   Ratio of net investment income                                                                          
     to average net assets                     0.85%(5)      1.34%          2.26%             3.77%(5)     
                                                  <F23>                                          <F23>     

   Portfolio turnover rate                    93.44%        81.58%        133.50%           180.29%        

(1)<F19>   Commencement of operations.                                          
(2)<F20>   Net investment income per share is calculated using ending balances  
      prior to consideration of adjustments for permanent book and tax
differences.                                              
(3)<F21>   Net investment income per share represents net investment income     
      divided by the average shares outstanding throughout the period.
(4)<F22>   Not annualized.                                                      
(5)<F23>   Annualized.                                                          
(6)<F24>   Without expense reimbursements of $30,867, $150,320 and $116,925 for 
   the periods ended September 30, 2002, September 30, 2001, and
        September 30, 2000, the ratio of operating expenses to average net
    assets would have been 1.55%, 2.87%, and 25.91%, respectively.
(7)<F25>   The net operating expense ratio includes expense reductions for soft 
     dollar credits.  The ratio excluding expense reductions for the
period ended September 30, 2002 was 1.50%.                

See notes to the financial statements.

PRUDENT BEAR FUND                                                               
SCHEDULE OF INVESTMENTS                                                         
MARCH 31, 2003                                                                  
(UNAUDITED)                                                                     

                                                        [Enlarge/Download Table]
   SHARES                                                                                                      VALUE    
   ------                                                                                                      -----    
                                                                                                                        
                COMMON STOCKS -- 22.7%*<F26>                                                                            

                AGRICULTURAL -- 0.1%*<F26>                                                                              
     189,600    Agricore United(3)<F31>                                                                     $    515,603
                                                                                                            ------------

                BASIC MATERIALS -- 17.9%*<F26>                                                                          
   1,933,334    Alamos Gold Inc. (Acquired 2/21/2003,                                                                   
                  Cost $535,856)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                              1,441,227
     230,000    Almaden Minerals Ltd. (Acquired 4/02/2002,                                                              
                  Cost $61,850)**<F27>(2)<F30> (3)<F31> (4)<F32> r<F28>                                           99,684
     800,000    Altius Minerals Corporation**<F27>(3)<F31>                                                       913,726
     222,225    Atacama Minerals Corp. (Acquired 5/22/2002,                                                             
                  Cost $128,889)**<F27>(2)<F30> (3)<F31> (4)<F32> r<F28>                                          83,472
   1,306,600    Aurizon Mines Ltd.**<F27>(3)<F31>                                                              1,048,194
     100,000    Aurora Platinum Corp. (Acquired 9/03/2002,                                                              
                  Cost $234,484)**<F27>(2)<F30> (3)<F31> (4)<F32> r<F28>                                         136,379
     663,600    Banro Corporation**<F27>(3)<F31> (7)<F35>                                                      1,015,093
     140,000    Banro Corporation (Acquired 3/18/2002,                                                                  
                  Cost $114,465)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                                182,031
      80,000    Banro Corporation (Acquired 5/10/2002,                                                                  
                  Cost $185,822)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                                104,018
     884,874    Black Hawk Mining Inc.**<F27>(3)<F31>                                                             72,190
   9,002,000    Canarc Resource Corp.**<F27>(3)<F31> (7)<F35>                                                  3,060,031
     500,000    Canarc Resource Corp. (Acquired 9/30/2002,                                                              
                  Cost $125,394)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                                144,469
   1,148,550    Candente Resource Corp.                                                                                 
                  (Acquired 5/2001 - 10/2002,                                                                           
                  Cost $156,692)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                                571,191
   3,140,000    Candente Resource Corp.                                                                                 
                  (Acquired 1/2002 - 2/2003,                                                                            
                  Cost $350,752)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                              1,561,568
     270,000    Candente Resource Corp. (Acquired 5/16/2002,                                                            
                  Cost $58,950)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                                 120,141
     110,976    Canyon Resources Corporation**<F27>                                                              129,842
     960,500    Cardero Resource Corp.**<F27>(3)<F31> (7)<F35>                                                 1,110,103
   1,500,000    Cardero Resource Corp.                                                                                  
                  (Acquired 12/27/2002,                                                                                 
                  Cost $1,250,565)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                            1,473,588
   1,502,200    Chesapeake Gold Corp.**<F27>(3)<F31> (7)<F35>                                                  3,656,181
     396,500    Claude Resources, Inc.**<F27>(3)<F31>                                                            380,084
     500,000    Claude Resources, Inc. (Acquired 1/31/2003,                                                             
                  Cost $490,615)**<F27>(2)<F30> (3)<F31> (4)<F32> r<F28>                                         407,404
     180,300    Cumberland Resources Ltd.**<F27>(3)<F31>                                                         301,101
   1,500,000    Cusac Gold Mines Limited (Acquired 10/24/2002,                                                          
                  Cost $317,970)**<F27>(2)<F30> (3)<F31> (4)<F32> r<F28>                                         338,058
   1,000,000    Desert Sun Mining Corp. (Acquired 2/05/2003,                                                            
                  Cost $251,500)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                                543,205
   1,500,000    Desert Sun Mining Corp. (Acquired 2/18/2003,                                                            
                  Cost $986,620)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                                814,807
     310,000    Donner Minerals Ltd.**<F27>(3)<F31>                                                               37,936
      73,700    Dundee Precious Metals, Inc. - Class A**<F27>(3)<F31> (7)<F35>                                   969,539
      67,500    Durban Roodepoort Deep Limited - ADR**<F27>(3)<F31>                                              172,125
   7,202,800    Dynatec Corporation**<F27>(3)<F31> (7)<F35>                                                    3,231,931
     500,000    East West Resource Corporation                                                                          
                  (Acquired 5/13/2002, Cost $27,250)**<F27>(2)<F30> (3)<F31> (4)<F32> r<F28>                      23,115
         560    ECU Silver Mining Inc.**<F27>(3)<F31>                                                                 30
   2,135,500    Eldorado Gold Corporation**<F27>(3)<F31>                                                       2,816,554
   1,375,500    European Minerals Corporation**<F27>(3)<F31> (4)<F32>                                            522,690
   2,000,000    Excellon Resources, Inc. (Acquired 5/15/2002,                                                           
                  Cost $165,776)**<F27>(2)<F30> (3)<F31> (4)<F32> r<F28>                                         115,575
          33    Exploration Capital Partners, LP (Acquired 10/14/1998, Cost $660,000)(4)<F32> r<F28>           2,055,891
          15    Exploration Capital Partners, LP (Acquired 12/20/2000, Cost $300,020)(4)<F32> r<F28>             931,328
     670,000    Farallon Resources Ltd. (Acquired 4/12/2002,                                                            
                  Cost $119,715)**<F27>(2)<F30> (3)<F31> (4)<F32> r<F28>                                         116,153
     857,143    Franklin Lake Resources Inc.                                                                            
                  (Acquired 11/04/2002, Cost $291,429)**<F27>(2)<F30> (4)<F32> (7)<F35> r<F28>                   437,143
     317,040    Glamis Gold Ltd.**<F27>(3)<F31>                                                                3,265,454
     236,800    Glamis Gold Stock Purchase Rights (Acquired 7/17/2002, Cost $0**<F27>(3)<F31> (4)<F32>                 0
     322,000    Glencairn Gold Corporation**<F27>(3)<F31>                                                         93,038
      70,800    Golden Cycle Gold Corporation**<F27>                                                           1,203,954
     800,000    Golden Goliath Resources Ltd.                                                                           
                  (Acquired 10/06/2000,                                                                                 
                  Cost $260,777)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                                 92,460
   1,388,888    Golden Goliath Resources Ltd.                                                                           
                  (Acquired 12/13/2002, Cost $154,056)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>          160,521
   3,200,000    Golden Phoenix Minerals, Inc.                                                                           
                  (Acquired 3/01/2002 & 3/19/2003, Cost $320,000)**<F27>(2)<F30> (4)<F32> r<F28>                 496,320
      33,500    Golden Queen Mining Co. Ltd.**<F27>(3)<F31>                                                       14,348
   1,512,500    Golden Star Resources Ltd.**<F27>(3)<F31>                                                      2,722,500
     500,000    Golden Star Resources Ltd. (Acquired 12/19/2001,                                                        
                  Cost $242,500)**<F27>(2)<F30> (3)<F31> (4)<F32> r<F28>                                         765,000
   1,000,000    Golden Star Resources Ltd.                                                                              
                  (Acquired 12/11/2002, Cost $1,247,500)**<F27>(2)<F30> (3)<F31> (4)<F32> r<F28>               1,530,000
     800,000    Goldrea Resources Corp. (Acquired 12/31/2002,                                                           
                  Cost $97,000)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                                 134,068
     514,400    Great Basin Gold Ltd.**<F27>(3)<F31>                                                             462,960
   1,300,000    Great Basin Gold Ltd. (Acquired 1/30/2003,                                                              
                  Cost $1,529,135)**<F27>(2)<F30> (3)<F31> (4)<F32> r<F28>                                     1,036,712
     630,080    IAMGOLD Corporation(3)<F31>                                                                    2,741,527
   1,500,000    IMA Exploration Inc.                                                                                    
                  (Acquired 12/2001 - 3/2003,                                                                           
                  Cost $400,750)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                                858,148
     955,500    IMA Exploration Inc.                                                                                    
                  (Acquired 1/2002 - 3/2003,                                                                            
                  Cost $253,761)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                                546,640
     222,222    IMA Exploration Inc. (Acquired 5/23/2002,                                                               
                  Cost $61,473)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                                 127,133
     531,915    IMA Exploration Inc. (Acquired 9/23/2002,                                                               
                  Cost $153,371)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                                304,308
   1,300,000    International KRL Resources Corp.                                                                       
                  (Acquired 10/08/2002, Cost $116,490)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>          112,686
   3,315,000    International Uranium Corporation**<F27>(3)<F31> (7)<F35>                                        704,288
     375,000    Intrepid Minerals Corporation                                                                           
                  (Acquired 11/29/2002, Cost $92,250)**<F27>(2)<F30> (3)<F31> (4)<F32> r<F28>                    153,860
   4,941,000    Kenor ASA**<F27>(3)<F31>                                                                       3,472,529
          37    Kinross Gold Corporation**<F27>(3)<F31>                                                              228
     150,000    Kirkland Lake Gold Inc. (Acquired 12/14/2001,                                                           
                  Cost $124,050)**<F27>(2)<F30> (3)<F31> (4)<F32> r<F28>                                         195,034
   3,500,000    Madison Enterprises Corp.                                                                               
                  (Acquired 3/21/2002, Cost $204,500)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>           444,966
   2,000,000    Madison Enterprises Corp.                                                                               
                  (Acquired 11/05/2002, Cost $185,000)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>          254,266
     813,500    Mansfield Minerals, Inc.**<F27>(3)<F31>                                                          215,694
     990,738    Maxam Gold Corporation**<F27>(4)<F32> (6)<F34>                                                    39,630
     600,000    Maximus Ventures Ltd. (Acquired 3/04/2003,                                                              
                  Cost $153,088)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                                149,092
   9,268,500    McWatters Mining Inc.**<F27>(3)<F31>                                                           1,260,249
      20,000    Meridian Gold Inc.**<F27>(1)<F29> (3)<F31> (5)<F33>                                              189,000
   1,900,000    Metallica Resources, Inc.                                                                               
                  (Acquired 3/11/2003, Cost $1,908,205)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>       1,427,357
     350,000    Metalline Mining Co. Inc.**<F27>(7)<F35>                                                         451,500
     100,000    Metalline Mining Co. Inc. (Acquired 6/28/2000,                                                          
                  Cost $325,000)**<F27>(2)<F30> (4)<F32> (7)<F35> r<F28>                                         104,400
     250,000    Metalline Mining Co. Inc. (Acquired 6/29/2001,                                                          
                  Cost $498,750)**<F27>(2)<F30> (4)<F32> (7)<F35> r<F28>                                         246,500
      66,667    Metalline Mining Co. Inc. (Acquired 10/08/2002,                                                         
                  Cost $99,778)**<F27>(2)<F30> (4)<F32> (7)<F35> r<F28>                                           65,734
      52,909    Minefinders Corporation Ltd.**<F27>(3)<F31>                                                      269,779
     150,000    Minefinders Corporation Ltd. (Acquired 3/21/2002,                                                       
                  Cost $217,665)**<F27>(2)<F30> (3)<F31> (4)<F32> r<F28>                                         650,112
     335,755    Minefinders Corporation Ltd.                                                                            
                  (Acquired 12/11/2002, Cost $249,176)**<F27>(2)<F30> (3)<F31> (4)<F32> r<F28>                 1,455,189
     833,333    Minera Andes Inc. (Acquired 6/21/2002,                                                                  
                  Cost $78,209)**<F27>(2)<F30> (3)<F31> (4)<F32> r<F28>                                          139,654
     696,300    Miramar Mining Corporation**<F27>(3)<F31>                                                        675,411
     281,500    Nevada Pacific Gold Ltd.**<F27>(3)<F31> (7)<F35>                                                  76,552
   1,000,000    Nevada Pacific Gold Ltd. (Acquired 12/04/2001,                                                          
                  Cost $154,600)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                                231,151
     500,000    Nevada Pacific Gold Ltd. (Acquired 5/23/2002,                                                           
                  Cost $175,500)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                                115,575
     500,000    Nevada Pacific Gold Ltd. (Acquired 1/15/2003,                                                           
                  Cost $100,300)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                                115,575
   2,707,500    Nevsun Resources Ltd.**<F27>(3)<F31>                                                           6,902,662
  14,364,500    Northern Orion Explorations Ltd.**<F27>(3)<F31> (7)<F35>                                       1,904,329
   2,006,000    Orezone Resources Inc.**<F27>(3)<F31> (7)<F35>                                                   750,085
   1,919,450    Orezone Resources Inc. (Acquired 7/19/2002,                                                             
                  Cost $245,353)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                                610,064
   3,750,000    Orezone Resources Inc. (Acquired 7/19/2002,                                                             
                  Cost $490,500)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                              1,191,872
   1,000,000    Orezone Resources Inc. (Acquired 2/27/2003,                                                             
                  Cost $260,000)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                                317,833
     542,500    Pelangio Mines Inc.**<F27>(3)<F31> (7)<F35>                                                       47,947
   3,000,000    Pelangio Mines Inc. (Acquired 2/08/2002,                                                                
                  Cost $253,100)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                                225,372
   1,500,000    Pelangio Mines Inc. (Acquired 5/15/2002,                                                                
                  Cost $193,635)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                                112,686
   1,000,000    Pillar Resources Inc. (Acquired 2/18/2003,                                                              
                  Cost $320,797)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                                548,984
   1,647,500    Platinum Group Metals Ltd.**<F27>(3)<F31> (7)<F35>                                               504,028
     937,500    Platinum Group Metals Ltd.                                                                              
                  (Acquired 12/23/2002, Cost $295,313)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>          243,792
     500,000    Radius Explorations Ltd.**<F27>(3)<F31> (7)<F35>                                                 350,126
   1,000,000    Radius Explorations Ltd. (Acquired 1/06/2003,                                                           
                  Cost $311,676)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                                595,214
   1,000,000    Redstar Gold Corp. (Acquired 5/31/2002,                                                                 
                  Cost $77,550)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                                  75,124
   3,442,000    Riddarhyttan Resources AB**<F27>(3)<F31>                                                       1,786,154
     220,000    Rimfire Minerals Corporation.**<F27>(3)<F31> (7)<F35>                                             89,741
   1,000,000    Rimfire Minerals Corporation                                                                            
                  (Acquired 4/15/2002, Cost $244,120)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>           346,726
     421,400    Rio Narcea Gold Mines Ltd.**<F27>(3)<F31>                                                        601,632
     170,100    River Gold Mines Ltd.**<F27>(3)<F31>                                                             313,394
     625,000    Ross River Minerals Inc. (Acquired 5/21/2002,                                                           
                  Cost $93,750)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                                  75,846
   1,000,000    St. Jude Resources Ltd.**<F27>(3)<F31> (7)<F35>                                                  849,820
     666,667    St. Jude Resources Ltd. (Acquired 12/03/2002,                                                           
                  Cost $314,632)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                                481,565
      70,000    SAMEX Mining Corp.**<F27>(3)<F31>                                                                  9,994
   2,000,000    SAMEX Mining Corp. (Acquired 3/05/2002, Cost $170,000)**<F27>(2)<F30> (3)<F31> (4)<F32> r<F28>   242,709
      75,000    Silver Standard Resources Inc.                                                                          
                  (Acquired 5/10/2002, Cost $187,500)**<F27>(2)<F30> (3)<F31> (4)<F32> r<F28>                    303,386
   1,000,000    Silverado Gold Mines Ltd. (Acquired 5/06/2002,                                                          
                  Cost $90,000)**<F27>(2)<F30> (3)<F31> (4)<F32> r<F28>                                          134,300
   6,000,000    South American Gold and Copper Company Limited                                                          
                  (Acquired 6/15/2001 & 7/12/2002, Cost $293,974)**<F27>(2)<F30> (3)<F31> (4)<F32> r<F28>        225,576
   3,500,000    South American Gold and Copper Company Limited                                                          
                  (Acquired 3/28/2002, Cost $115,875)**<F27>(2)<F30> (3)<F31> (4)<F32> r<F28>                    131,586
     906,263    Starfield Resources Inc.**<F27>(3)<F31>                                                          184,838
     762,025    Starfield Resources Inc. (Acquired 6/22/2001,                                                           
                  Cost $296,190)**<F27>(2)<F30> (3)<F31> (4)<F32> r<F28>                                         132,107
   1,001,000    Starfield Resources Inc. (Acquired 10/10/2001,                                                          
                  Cost 314,995)**<F27>(2)<F30> (3)<F31> (4)<F32> r<F28>                                          173,537
   1,333,333    Sultan Minerals Inc. (Acquired 8/13/2001,                                                               
                  Cost $128,333)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                                161,806
   1,000,000    Sultan Minerals Inc. (Acquired 1/18/2002,                                                               
                  Cost $174,500)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                                121,354
     500,000    Tumi Resources Limited (Acquired 12/13/2002,                                                            
                  Cost $92,000)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                                 216,704
   1,300,000    Tyhee Development Corp.                                                                                 
                  (Acquired 5/01/2002 & 1/30/2003,                                                                      
                  Cost $242,500)**<F27>(2)<F30> (3)<F31> (4)<F32> (7)<F35> r<F28>                                375,620
     749,500    Virginia Gold Mines, Inc.**<F27>(3)<F31>                                                         550,316
   2,502,000    Western Silver Corporation**<F27>(3)<F31> (7)<F35>                                             6,505,200
   1,000,000    Wheaton River Minerals Ltd.**<F27>(3)<F31>                                                       843,021
     125,000    Wheaton River Minerals Ltd. (Acquired 5/30/2002,                                                        
                  Cost $93,163)**<F27>(2)<F30> (3)<F31> (4)<F32> r<F28>                                           89,571
   1,225,300    Wolfden Resources Inc.**<F27>(3)<F31>                                                          1,691,046
     835,000    Xenolix Technologies, Inc.**<F27>(4)<F32>                                                          8,350
   1,000,000    Xenolix Technologies, Inc. (Acquired 3/07/2000,                                                         
                  Cost $749,600)**<F27>(2)<F30> (4)<F32> r<F28>                                                    9,500
   1,000,000    Xenolix Technologies, Inc. (Acquired 3/30/2001,                                                         
                  Cost $499,200)**<F27>(2)<F30> (4)<F32> r<F28>                                                    8,500
     400,000    Xenolix Technologies, Inc. (Acquired 2/04/2002,                                                         
                  Cost $98,000)**<F27>(2)<F30> (4)<F32> r<F28>                                                     3,400
                                                                                                            ------------
                                                                                                              91,956,316
                                                                                                            ------------

                CHEMICALS -- 0.2%*<F26>                                                                                 
     117,900    Methanex Corporation(3)<F31>                                                                   1,096,470
      89,250    Pioneer Companies, Inc.**<F27>                                                                         9
                                                                                                            ------------
                                                                                                               1,096,479
                                                                                                            ------------

                CONSUMER -- 0.0%*<F26>                                                                                  
       7,500    Enesco Group, Inc.**<F27>(1)<F29> (5)<F33>                                                        53,775
                                                                                                            ------------

                HEALTH CARE -- 2.5%*<F26>                                                                               
       5,300    Amylin Pharmaceuticals, Inc.**<F27>(1)<F29> (5)<F33>                                              85,860
     212,500    AP Pharma, Inc.**<F27>                                                                           223,125
     455,169    Avigen, Inc.**<F27>                                                                            1,333,645
   1,250,000    Biokeys Pharmaceuticals Inc. (Acquired 2/07/2003,                                                       
                  Cost $500,000)**<F27>(2)<F30> (4)<F32> r<F28>                                                  520,625
   1,390,966    Cardima, Inc.**<F27>(7)<F35>                                                                   1,390,966
   2,187,931    Cardima, Inc. (Acquired 5/02/2001, Cost $1,159,603)**<F27>(2)<F30> (4)<F32> (7)<F35> r<F28>    1,859,741
     393,701    Cardima, Inc. (Acquired 8/09/2001, Cost $480,315)**<F27>(2)<F30> (4)<F32> (7)<F35> r<F28>        334,646
   1,041,666    Cardima, Inc. (Acquired 8/05/2002, Cost $746,875)**<F27>(2)<F30> (4)<F32> (7)<F35> r<F28>        885,416
     870,000    Generex Biotechnology Corporation**<F27>                                                         930,900
     290,780    InSite Vision Incorporated**<F27>                                                                186,099
     143,712    InSite Vision Incorporated (Acquired 4/28/2000, Cost $599,947)**<F27>(2)<F30> (4)<F32> r<F28>     87,377
      10,000    InterMune Inc.**<F27>(1)<F29> (5)<F33>                                                           214,500
     422,541    IRIDEX Corporation**<F27>(7)<F35>                                                              1,550,725
     346,500    Neurobiological Technologies, Inc.**<F27>                                                      2,162,160
     289,299    NexMed, Inc.**<F27>                                                                              352,945
      75,000    Onyx Pharmaceuticals, Inc.**<F27>                                                                624,750
      11,300    TriPath Imaging, Inc.**<F27>                                                                      48,025
          50    VIVUS, Inc.**<F27>                                                                                   174
                                                                                                            ------------
                                                                                                              12,791,679
                                                                                                            ------------

                INSURANCE -- 0.0%*<F26>                                                                                 
       1,000    American Independence Corporation**<F27>                                                           8,030
                                                                                                            ------------

                MACHINERY -- 0.4%*<F26>                                                                                 
     320,900    Lancer Corporation**<F27>                                                                      2,175,702
                                                                                                            ------------

                OIL AND GAS -- 0.1%*<F26>                                                                               
      60,000    Compton Petroleum Corporation**<F27>(3)<F31>                                                     199,878
       5,700    KCS Energy, Inc.**<F27>(1)<F29> (5)<F33>                                                          16,530
     100,000    The Meridian Resource Corporation**<F27>                                                         115,000
     581,000    Rio Alto Resources International Inc.**<F27>(3)<F31>                                             315,997
           1    Viking Energy Royalty Trust(3)<F31>                                                                    5
                                                                                                            ------------
                                                                                                                 647,410
                                                                                                            ------------

                PAPER & FOREST PRODUCTS -- 0.1%*<F26>                                                                   
      36,500    Canfor Corporation(3)<F31>                                                                       215,392
      75,000    Slocan Forest Products Ltd.**<F27>(3)<F31>                                                       390,067
                                                                                                            ------------
                                                                                                                 605,459
                                                                                                            ------------

                POLLUTION CONTROL -- 0.2%*<F26>                                                                         
     686,500    KleenAir Systems, Inc.**<F27>(7)<F35>                                                            157,895
   1,000,000    KleenAir Systems, Inc.                                                                                  
                  (Acquired 1/25/2002 & 2/12/2002,                                                                      
                  Cost $900,000)**<F27>(2)<F30> (4)<F32> (7)<F35> r<F28>                                         195,500
   1,000,000    KleenAir Systems, Inc. (Acquired 7/19/2002,                                                             
                  Cost $500,000)**<F27>(2)<F30> (4)<F32> (7)<F35> r<F28>                                         195,500
     454,545    KleenAir Systems, Inc. (Acquired 10/09/2002,                                                            
                  Cost $250,000)**<F27>(2)<F30> (4)<F32> (7)<F35> r<F28>                                          88,864
     371,800    Sonic Environmental Solutions Inc.**<F27>(3)<F31>                                                379,156
                                                                                                            ------------
                                                                                                               1,016,915
                                                                                                            ------------

                TECHNOLOGY -- 0.8%*<F26>                                                                                
  10,104,200    Aura Systems, Inc.**<F27>(7)<F35>                                                                959,899
  12,500,000    Aura Systems, Inc. (Acquired 5/02/2002,                                                                 
                  Cost $2,500,000)**<F27>(2)<F30> (4)<F32> (7)<F35> r<F28>                                     1,010,000
       6,300    Cree, Inc.**<F27>(1)<F29> (5)<F33>                                                               116,676
      85,000    ESS Technology, Inc.**<F27>(1)<F29> (5)<F33>                                                     506,600
      56,000    OmniVision Technologies, Inc.**<F27>(1)<F29> (5)<F33>                                          1,160,320
      14,000    RF Micro Devices, Inc.**<F27>(1)<F29> (5)<F33>                                                    84,406
       3,000    VeriSign, Inc.**<F27>(1)<F29> (5)<F33>                                                            26,220
                                                                                                            ------------
                                                                                                               3,864,121
                                                                                                            ------------

                TELECOMMUNICATIONS -- 0.0%*<F26>                                                                        
       3,000    LightPath Technologies,  Inc. - Class A**<F27>(1)<F29> (5)<F33>                                    3,840
      75,000    WorldQuest Networks, Inc.**<F27>                                                                 165,000
                                                                                                            ------------
                                                                                                                 168,840
                                                                                                            ------------

                TEXTILE -- 0.2%*<F26>                                                                                   
     644,800    Cone Mills Corporation**<F27>                                                                  1,231,568
                                                                                                            ------------

                TRANSPORTATION -- 0.1%*<F26>                                                                            
         250    Crowley Maritime Corporation**<F27>(4)<F32>                                                      312,500
                                                                                                            ------------

                UTILITIES -- 0.1%*<F26>                                                                                 
      10,700    California Water Service Group                                                                   275,525
                                                                                                            ------------

                TOTAL COMMON STOCKS (Cost $104,031,943)                                                      116,719,922
                                                                                                            ------------

CONTRACTS (100 SHARES PER CONTRACT)                                                                                     
-----------------------------------                                                                                     
                CALL OPTIONS PURCHASED -- 0.2%*<F26>                                                                    
                Lockheed Martin Corporation:                                                                            
         500      Expiration September 2003, Exercise Price $50.00                                               185,000
                Standard and Poor's 500 Index:                                                                          
       1,700      Expiration April 2003, Exercise Price $900.00                                                  612,000
         800      Expiration April 2003, Exercise Price $925.00                                                  106,000
                                                                                                            ------------
                TOTAL CALL OPTIONS (Cost $4,100,000)                                                             903,000
                                                                                                            ------------

                PUT OPTIONS PURCHASED -- 3.5%*<F26>                                                                     
                ADTRAN, Inc.:                                                                                           
         400      Expiration May 2003, Exercise Price $30.00                                                      35,000
                Advanced Fibre Communications, Inc:                                                                     
         600      Expiration April 2003, Exercise Price $17.50                                                   147,000
                Alaska Air Group, Inc.:                                                                                 
         400      Expiration July 2003, Exercise Price $17.50                                                    123,000
                American Express Company:                                                                               
         300      Expiration April 2003, Exercise Price $32.50                                                    27,750
                Bank of America Corporation:                                                                            
       1,200      Expiration May 2003, Exercise Price $65.00                                                     237,000
                The Bank of New York Company, Inc.:                                                                     
         300      Expiration April 2003, Exercise Price $25.00                                                   141,000
                Best Buy Co., Inc.:                                                                                     
         600      Expiration June 2003, Exercise Price $22.50                                                     72,000
         500      Expiration June 2003, Exercise Price $25.00                                                     98,750
         200      Expiration September 2003, Exercise Price $25.00                                                60,500
                The Boeing Company:                                                                                     
         400      Expiration May 2003, Exercise Price $25.00                                                      61,000
                Cablevision Systems, New York Group - Class A:                                                          
         500      Expiration June 2003, Exercise Price $15.00                                                     35,000
                Cal Dive International, Inc:                                                                            
         200      Expiration June 2003, Exercise Price $17.50                                                     25,500
                Cardinal Health, Inc.:                                                                                  
         300      Expiration April 2003, Exercise Price $50.00                                                    12,750
                Caterpillar Inc.:                                                                                       
         200      Expiration May 2003, Exercise Price $45.00                                                      25,500
         200      Expiration August 2003, Exercise Price $40.00                                                   25,500
                CDW Computer Centers, Inc.:                                                                             
         450      Expiration April 2003, Exercise Price $45.00                                                   209,250
                Centex Corporation:                                                                                     
         150      Expiration April 2003, Exercise Price $50.00                                                    10,500
         300      Expiration July 2003, Exercise Price $45.00                                                     54,750
                Cisco Systems, Inc.:                                                                                    
         400      Expiration April 2003, Exercise Price $12.50                                                    14,000
       1,600      Expiration April 2003, Exercise Price $15.00                                                   332,000
                Clear Channel Communications, Inc.:                                                                     
         300      Expiration April 2003, Exercise Price $35.00                                                    67,500
                The Clorox Company:                                                                                     
         400      Expiration July 2003, Exercise Price $40.00                                                     26,000
         200      Expiration October 2003, Exercise Price $40.00                                                  27,500
                Coach, Inc.:                                                                                            
         200      Expiration August 2003, Exercise Price $30.00                                                   24,500
                Countrywide Financial Corporation:                                                                      
         700      Expiration April 2003, Exercise Price $50.00                                                    14,000
         200      Expiration July 2003, Exercise Price $50.00                                                     27,000
                Cox Communications, Inc. - Class A:                                                                     
         400      Expiration June 2003, Exercise Price $25.00                                                     26,000
                CTI Molecular Imaging, Inc.:                                                                            
         500      Expiration June 2003, Exercise Price $20.00                                                    110,000
                Cymer, Inc.:                                                                                            
         500      Expiration May 2003, Exercise Price $22.50                                                      92,500
         400      Expiration May 2003, Exercise Price $25.00                                                     123,000
         500      Expiration May 2003, Exercise Price $30.00                                                     332,500
                Dell Computer Corporation:                                                                              
         500      Expiration April 2003, Exercise Price $27.50                                                    52,500
                Dow Jones & Company, Inc.:                                                                              
         350      Expiration June 2003, Exercise Price $35.00                                                     92,750
                Dow Jones Industrial Average CBOE:                                                                      
       1,100      Expiration April 2003, Exercise Price $76.00                                                    90,750
                eBay Inc.:                                                                                              
         300      Expiration April 2003, Exercise Price $60.00                                                       750
                Electronic Arts Inc.:                                                                                   
         200      Expiration June 2003, Exercise Price $45.00                                                     14,500
                Fannie Mae:                                                                                             
         200      Expiration April 2003, Exercise Price $55.00                                                     2,500
         500      Expiration June 2003, Exercise Price $55.00                                                     58,750
         500      Expiration June 2003, Exercise Price $60.00                                                    107,500
                Fifth Third Bancorp:                                                                                    
         300      Expiration May 2003, Exercise Price $50.00                                                      75,750
                FleetBoston Financial Corporation:                                                                      
         500      Expiration April 2003, Exercise Price $27.50                                                   185,000
                Freddie Mac:                                                                                            
       1,000      Expiration April 2003, Exercise Price $50.00                                                    57,500
       1,000      Expiration July 2003, Exercise Price $50.00                                                    250,000
                General Electric Company:                                                                               
       2,000      Expiration June 2003, Exercise Price $22.50                                                    135,000
                General Mills, Inc.:                                                                                    
         300      Expiration April 2003, Exercise Price $40.00                                                     3,000
         500      Expiration July 2003, Exercise Price $40.00                                                     42,500
         300      Expiration July 2003, Exercise Price $45.00                                                     67,500
                General Motors Corporation:                                                                             
         300      Expiration June 2003, Exercise Price $32.50                                                     69,000
                Golden West Financial Corporation:                                                                      
         400      Expiration May 2003, Exercise Price $70.00                                                      73,000
                The Goldman Sachs Group, Inc.:                                                                          
         600      Expiration April 2003, Exercise Price $65.00                                                    67,500
                GreenPoint Financial Corp.:                                                                             
         700      Expiration April 2003, Exercise Price $40.00                                                     8,750
                Harman International Industries, Incorporated:                                                          
         200      Expiration July 2003, Exercise Price $55.00                                                     66,000
         100      Expiration July 2003, Exercise Price $60.00                                                     54,500
                H&R Block, Inc.:                                                                                        
         300      Expiration July 2003, Exercise Price $35.00                                                     33,750
                Imation Corp.:                                                                                          
          25      Expiration April 2003, Exercise Price $30.00                                                       313
          95      Expiration April 2003, Exercise Price $35.00                                                     4,513
          35      Expiration July 2003, Exercise Price $30.00                                                      3,063
                Intel Corporation:                                                                                      
         200      Expiration April 2003, Exercise Price $17.50                                                    30,000
       1,000      Expiration July 2003, Exercise Price $15.00                                                    115,000
                Iron Mountain Incorporated:                                                                             
         450      Expiration April 2003, Exercise Price $30.00                                                     5,625
         300      Expiration July 2003, Exercise Price $30.00                                                     12,750
                iShares Dow Jones U.S. Financial Sector Index Fund:                                                     
         750      Expiration May 2003, Exercise Price $60.00                                                      69,375
         300      Expiration May 2003, Exercise Price $65.00                                                      78,000
                JetBlue Airways Corporation:                                                                            
         300      Expiration June 2003, Exercise Price $25.00                                                     46,500
                KB HOME:                                                                                                
         400      Expiration July 2003, Exercise Price $40.00                                                     75,000
                KLA-Tencor Corporation:                                                                                 
         350      Expiration June 2003, Exercise Price $30.00                                                     54,250
                Kohl's Corporation:                                                                                     
         100      Expiration April 2003, Exercise Price $55.00                                                    14,250
                L-3 Communications Holdings, Inc.:                                                                      
       1,900      Expiration April 2003, Exercise Price $35.00                                                    38,000
                Lear Corporation:                                                                                       
         200      Expiration June 2003, Exercise Price $35.00                                                     49,000
                Lennar Corporation:                                                                                     
         400      Expiration May 2003, Exercise Price $50.00                                                      60,000
                Lexmark International, Inc.:                                                                            
         300      Expiration April 2003, Exercise Price $55.00                                                     5,250
         200      Expiration July 2003, Exercise Price $55.00                                                     26,000
                Maxim Integrated Products, Inc.:                                                                        
         300      Expiration May 2003, Exercise Price $30.00                                                      30,750
                M.D.C. Holdings, Inc.:                                                                                  
         400      Expiration June 2003, Exercise Price $35.00                                                     60,000
                Mentor Corporation:                                                                                     
       1,000      Expiration April 2003, Exercise Price $17.50                                                    95,000
                Molex Incorporated:                                                                                     
         300      Expiration August 2003, Exercise Price $20.00                                                   51,750
                Moody's Corporation:                                                                                    
         200      Expiration May 2003, Exercise Price $40.00                                                       5,500
                The NASDAQ Composite Index:                                                                             
         300      Expiration May 2003, Exercise Price $45.00                                                     163,500
                NetScreen Technologies, Inc.:                                                                           
         500      Expiration June 2003, Exercise Price $15.00                                                     78,750
         500      Expiration June 2003, Exercise Price $17.50                                                    135,000
         500      Expiration September 2003, Exercise Price $17.50                                               180,000
                New Century Financial Corporation:                                                                      
         200      Expiration May 2003, Exercise Price $25.00                                                      11,000
                Nokia Oyj -- ADR:                                                                                       
         500      Expiration April 2003, Exercise Price $15.00                                                    62,500
         500      Expiration July 2003, Exercise Price $15.00                                                    105,000
                Nordstrom, Inc.:                                                                                        
         765      Expiration July 2003, Exercise Price $17.50                                                    174,038
                North Fork Bancorporation, Inc.:                                                                        
         200      Expiration May 2003, Exercise Price $32.50                                                      70,000
                Novellus Systems, Inc.:                                                                                 
         300      Expiration June 2003, Exercise Price $30.00                                                    141,000
                OmniVision Technologies, Inc.:                                                                          
         400      Expiration June 2003, Exercise Price $22.50                                                    180,000
                PG&E Corporation:                                                                                       
         400      Expiration June 2003, Exercise Price $12.50                                                     30,000
         350      Expiration June 2003, Exercise Price $15.00                                                     69,125
                PNC Financial Services Group:                                                                           
         300      Expiration May 2003, Exercise Price $40.00                                                      37,500
                PolyMedica Corporation:                                                                                 
         300      Expiration June 2003, Exercise Price $30.00                                                    111,000
                PPG Industries, Inc.:                                                                                   
         300      Expiration April 2003, Exercise Price $40.00                                                     9,750
                Pulte Homes, Inc.:                                                                                      
         400      Expiration July 2003, Exercise Price $45.00                                                     93,000
                QUALCOMM Inc:                                                                                           
         500      Expiration April 2003, Exercise Price $32.50                                                    20,000
         500      Expiration April 2003, Exercise Price $35.00                                                    51,250
         700      Expiration July 2003, Exercise Price $30.00                                                    117,250
                Radian Group Inc.:                                                                                      
         200      Expiration April 2003, Exercise Price $35.00                                                    44,000
                Rent-A-Center, Inc.:                                                                                    
         200      Expiration September 2003, Exercise Price $45.00                                                49,000
                Retail HOLDRs Trust:                                                                                    
       1,600      Expiration April 2003, Exercise Price $70.00                                                   308,000
                Ruby Tuesday, Inc.:                                                                                     
         120      Expiration April 2003, Exercise Price $20.00                                                     7,200
         120      Expiration October 2003, Exercise Price $17.50                                                  10,800
                The Ryland Group, Inc.:                                                                                 
         700      Expiration July 2003, Exercise Price $35.00                                                     73,500
                SAP AG - ADR:                                                                                           
         300      Expiration June 2003, Exercise Price $17.50                                                     45,000
                Sears, Roebuck and Co.:                                                                                 
         300      Expiration April 2003, Exercise Price $25.00                                                    44,250
                Semiconductor HOLDRs Trust:                                                                             
       1,000      Expiration August 2003, Exercise Price $22.50                                                  230,000
                The Shaw Group Inc.:                                                                                    
         650      Expiration April 2003, Exercise Price $17.50                                                   484,250
                Silicon Laboratories Inc.:                                                                              
         300      Expiration July 2003, Exercise Price $20.00                                                     42,750
                Software HOLDRs Trust:                                                                                  
         500      Expiration August 2003, Exercise Price $25.00                                                  122,500
                Sprint Corporation                                                                                      
         500      Expiration May 2003, Exercise Price $15.00                                                     165,000
                The Standard & Poor's 100 Index:                                                                        
         200      Expiration April 2003, Exercise Price $410.00                                                  109,000
       1,200      Expiration May 2003, Exercise Price $400.00                                                    996,000
                Standard and Poor's 500 Index:                                                                          
       3,000      Expiration April 2003, Exercise Price $800.00                                                2,100,000
       1,000      Expiration April 2003, Exercise Price $850.00                                                2,325,000
         200      Expiration May 2003, Exercise Price $800.00                                                    339,000
         800      Expiration May 2003, Exercise Price $825.00                                                  1,980,000
                Starbucks Corporation:                                                                                  
       1,400      Expiration July 2003, Exercise Price $20.00                                                     52,500
                STMicroelectronics N.V. - NYS:                                                                          
         400      Expiration April 2003, Exercise Price $20.00                                                    63,000
                SunTrust Banks, Inc.:                                                                                   
         800      Expiration April 2003, Exercise Price $55.00                                                   224,000
                Synopsys, Inc.:                                                                                         
         200      Expiration April 2003, Exercise Price $40.00                                                    13,000
                TECO Energy, Inc.:                                                                                      
         500      Expiration May 2003, Exercise Price $12.50                                                     118,750
                Texas Instruments Incorporated:                                                                         
         900      Expiration April 2003, Exercise Price $15.00                                                    31,500
                3M Co.:                                                                                                 
         300      Expiration April 2003, Exercise Price $120.00                                                   24,000
                Toll Brothers, Inc.:                                                                                    
         440      Expiration June 2003, Exercise Price $17.50                                                     44,000
         300      Expiration June 2003, Exercise Price $20.00                                                     57,750
                Trimeris, Inc.:                                                                                         
         600      Expiration October 2003, Exercise Price $35.00                                                 204,000
                United Rentals, Inc.:                                                                                   
         350      Expiration June 2003, Exercise Price $10.00                                                     53,375
                U.S. Bancorp:                                                                                           
         500      Expiration June 2003, Exercise Price $20.00                                                     85,000
                VERITAS Software Corporation:                                                                           
         400      Expiration May 2003, Exercise Price $17.50                                                      60,000
                Verizon Communications Inc.:                                                                            
         500      Expiration April 2003, Exercise Price $32.50                                                    22,500
                Washington Mutual, Inc.:                                                                                
         500      Expiration April 2003, Exercise Price $35.00                                                    40,000
                Waste Connections, Inc.:                                                                                
         125      Expiration April 2003, Exercise Price $35.00                                                    15,938
                Wells Fargo & Company:                                                                                  
         700      Expiration April 2003, Exercise Price $45.00                                                    82,250
         500      Expiration April 2003, Exercise Price $47.50                                                   140,000
                Western Digital Corporation:                                                                            
       1,000      Expiration April 2003, Exercise Price $7.50                                                      7,500
                Whirlpool Corporation:                                                                                  
         300      Expiration June 2003, Exercise Price $45.00                                                     59,250
                Xilinx, Inc.:                                                                                           
         200      Expiration June 2003, Exercise Price $22.50                                                     45,000
                                                                                                            ------------
                TOTAL PUT OPTIONS (Cost $23,918,462)                                                          17,915,115
                                                                                                            ------------

      SHARES                                                                                                            
      ------                                                                                                            
                PREFERRED STOCK -- 1.2%*<F26>                                                                           
     252,300    Aura Systems, Inc. (Acquired 3/31/2003, Cost $2,275,000)**<F27>(4)<F32> (7)<F35> r<F28>        2,275,000
      28,200    Freeport-McMoRan Copper & Gold, Inc. - Series Gold**<F27>                                        933,420
     109,900    Freeport-McMoRan Copper & Gold, Inc. - Series Silver**<F27>                                      978,110
      57,000    Freeport-McMoRan Copper & Gold, Inc. - Series II**<F27>                                        1,858,200
         200    KCS Energy, Inc. (Acquired 2/20/2001, Cost $200,000)**<F27>(4)<F32> r<F28>                       200,000
                                                                                                            ------------
                TOTAL PREFERRED STOCK (Cost $5,477,487)                                                        6,244,730
                                                                                                            ------------

                WARRANTS -- 0.7%*<F26>                                                                                  
     250,000    Alamos Gold Inc.                                                                                        
                  Expiration July 2003, Exercise Price $0.90 CN                                                         
                  (Acquired 2/21/2003, Cost $5,000)(4)<F32> r<F28>                                               109,882
     350,000    Alamos Gold Inc.                                                                                        
                  Expiration July 2004, Exercise Price $0.56 CN                                                         
                  (Acquired 2/21/2003, Cost $7,000)(4)<F32> r<F28>                                               194,286
     115,000    Almaden Minerals Ltd.                                                                                   
                  Expiration April 2004, Exercise Price $0.51 CN                                                        
                  (Acquired 4/02/2002, Cost $1,150)(4)<F32> r<F28>                                                 9,968
      93,750    Apollo Gold Corporation                                                                                 
                  Expiration March 2004, Exercise Price $1.60                                                           
                  (Acquired 7/12/2002, Cost $938)(4)<F32> r<F28>                                                 102,188
      66,666    Ashanti Goldfields Company Ltd.                                                                         
                  Expiration April 2004, Exercise Price $3.00                                                           
                  (Acquired 4/29/2002, Cost $147,332)(4)<F32> r<F28>                                             121,865
      66,667    Ashanti Goldfields Company Ltd.                                                                         
                  Expiration October 2004, Exercise Price $3.00                                                         
                  (Acquired 4/29/2002, Cost $147,334)(4)<F32> r<F28>                                             121,867
      66,667    Ashanti Goldfields Company Ltd.                                                                         
                  Expiration April 2005, Exercise Price $3.00                                                           
                  (Acquired 4/29/2002, Cost $147,334)(4)<F32> r<F28>                                             121,867
     111,112    Atacama Minerals Corp.                                                                                  
                  Expiration May 2003, Exercise Price $1.10 CN                                                          
                  (Acquired 5/22/2002, Cost $1,111)(4)<F32> r<F28>                                                   755
     100,000    Aurora Platinum Corp.                                                                                   
                  Expiration September 2003, Exercise Price $4.75 CN                                                    
                  (Acquired 9/03/2002, Cost $1,000)(4)<F32> r<F28>                                                   680
       1,785    Avigen, Inc.                                                                                            
                  Expiration November 2004, Exercise Price $28.00                                                       
                  (Acquired 11/11/1999, Cost $223)(4)<F32> r<F28>                                                      2
     250,000    Canarc Resource Corp.                                                                                   
                  Expiration September 2004, Exercise Price $0.50 CN                                                    
                  (Acquired 9/30/2002, Cost $2,500)(4)<F32> r<F28>                                                 1,700
     135,000    Candente Resource Corp.                                                                                 
                  Expiration May 2003, Exercise Price $0.44 CN                                                          
                  (Acquired 5/16/2002, Cost $1,350)(4)<F32> r<F28>                                                19,687
     750,000    Cardero Resource Corp.                                                                                  
                  Expiration December 2003, Exercise Price $1.60 CN                                                     
                  (Acquired 12/27/2002, Cost $7,500)(4)<F32> r<F28>                                                5,099
     196,850    Cardima, Inc.                                                                                           
                  Expiration August 2005, Exercise Price $1.91                                                          
                  (Acquired 8/09/2001, Cost $19,685)(4)<F32> r<F28>                                               19,685
     312,499    Cardima, Inc.                                                                                           
                  Expiration August 2006, Exercise Price $0.90                                                          
                  (Acquired 8/05/2002, Cost $3,125)(4)<F32> r<F28>                                                 3,125
     250,000    Claude Resources, Inc.                                                                                  
                  Expiration January 2004, Exercise Price $1.85 CN                                                      
                  (Acquired 1/31/2003, Cost $2,500)(4)<F32> r<F28>                                                 1,700
   1,500,000    Cusac Gold Mines Limited                                                                                
                  Expiration October 2004, Exercise Price $0.40 CN                                                      
                  (Acquired 10/24/2002, Cost $15,000)(4)<F32> r<F28>                                              10,198
     600,000    Desert Sun Mining Corp.                                                                                 
                  Expiration August 2004, Exercise Price $0.50 CN                                                       
                  (Acquired 2/05/2003, Cost $6,000)(4)<F32> r<F28>                                               121,966
     750,000    Desert Sun Mining Corp.                                                                                 
                  Expiration August 2004, Exercise Price $1.25 CN                                                       
                  (Acquired 2/18/2003, Cost $7,500)(4)<F32> r<F28>                                                 5,099
     500,000    East West Resource Corporation                                                                          
                  Expiration May 2004, Exercise Price $0.13 CN                                                          
                  (Acquired 5/13/2002, Cost $5,000)(4)<F32> r<F28>                                                 3,399
     670,000    Farallon Resources Ltd.                                                                                 
                  Expiration April 2004, Exercise Price $0.40 CN                                                        
                  (Acquired 4/12/2002, Cost $6,700)(4)<F32> r<F28>                                                 4,555
     857,143    Franklin Lake Resources Inc.                                                                            
                  Expiration November 2004, Exercise Price $0.50                                                        
                  (Acquired 11/04/2002, Cost $8,571)(4)<F32> r<F28>                                                8,571
     694,444    Golden Goliath Resources Ltd.                                                                           
                  Expiration December 2004, Exercise Price $0.22 CN                                                     
                  (Acquired 12/13/2002, Cost $6,944)(4)<F32> r<F28>                                                4,721
     250,000    Golden Star Resources Ltd.                                                                              
                  Expiration December 2003, Exercise Price $0.70                                                        
                  (Acquired 12/19/2001, Cost $2,500)(4)<F32> r<F28>                                              233,750
     250,000    Golden Star Resources Ltd.                                                                              
                  Expiration December 2004, Exercise Price $1.50                                                        
                  (Acquired 12/11/2002, Cost $2,500)(4)<F32> r<F28>                                               63,750
     800,000    Goldrea Resources Corp.                                                                                 
                  Expiration June 2004, Exercise Price $0.24 CN                                                         
                  (Acquired 12/31/2002, Cost $8,000)(4)<F32> r<F28>                                               23,115
     650,000    Great Basin Gold Ltd.                                                                                   
                  Expiration January 2004, Exercise Price $1.80 CN                                                      
                  (Acquired 1/30/2003, Cost $6,500)(4)<F32> r<F28>                                                 4,419
     222,222    IMA Exploration Inc.                                                                                    
                  Expiration May 2004, Exercise Price $0.53 CN                                                          
                  (Acquired 5/23/2002, Cost $2,222)(4)<F32> r<F28>                                                47,061
     531,915    IMA Exploration Inc.                                                                                    
                  Expiration September 2004, Exercise Price $0.55 CN                                                    
                  (Acquired 9/23/2002, Cost $5,319)(4)<F32> r<F28>                                               105,414
      50,299    InSite Vision Incorporated                                                                              
                  Expiration April 2004, Exercise Price $5.64                                                           
                  (Acquired 4/28/2000, Cost $50)(4)<F32> r<F28>                                                       50
     650,000    International KRL Resources Corp.                                                                       
                  Expiration October 2004, Exercise Price $0.20 CN                                                      
                  (Acquired 10/08/2002, Cost $6,500)(4)<F32> r<F28>                                                4,419
     375,000    Intrepid Minerals Corporation                                                                           
                  Expiration May 2004, Exercise Price $0.55 CN                                                          
                  (Acquired 11/29/2002, Cost $3,750)(4)<F32> r<F28>                                               34,673
      75,000    Kirkland Lake Gold Inc.                                                                                 
                  Expiration December 2003, Exercise Price $1.30 CN                                                     
                  (Acquired 12/14/2001, Cost $750)(4)<F32> r<F28>                                                 48,440
   1,750,000    Madison Enterprises Corp.                                                                               
                  Expiration September 2003, Exercise Price $0.12 CN                                                    
                  (Acquired 3/21/2002, Cost $17,500)(4)<F32> r<F28>                                               79,713
   1,000,000    Madison Enterprises Corp.                                                                               
                  Expiration November 2004, Exercise Price $0.18 CN                                                     
                  (Acquired 11/05/2002, Cost $10,000)(4)<F32> r<F28>                                               6,799
     600,000    Maximus Ventures Ltd.                                                                                   
                  Expiration March 2005, Exercise Price $0.45 CN                                                        
                  (Acquired 3/04/2003, Cost $6,000)(4)<F32> r<F28>                                                 4,079
     950,000    Metallica Resources, Inc.                                                                               
                  Expiration March 2005, Exercise Price $2.00 CN                                                        
                  (Acquired 3/11/2003, Cost $9,500)(4)<F32> r<F28>                                                 6,459
     125,000    Metalline Mining Co. Inc.                                                                               
                  Expiration June 2006, Exercise Price $5.00                                                            
                  (Acquired 6/29/2001, Cost $1,250)(4)<F32> r<F28>                                                 1,250
      22,220    Metalline Mining Co. Inc.                                                                               
                  Expiration June 2006, Exercise Price $5.00                                                            
                  (Acquired 10/08/2002, Cost $222)(4)<F32> r<F28>                                                    222
     133,896    Minefinders Corporation Ltd.                                                                            
                  Expiration July 2003, Exercise Price $1.40 CN                                                         
                  (Acquired 6/22/2001, Cost $1,339)(4)<F32> r<F28>                                               471,990
     110,514    Minefinders Corporation Ltd.                                                                            
                  Expiration September 2003, Exercise Price $1.40 CN                                                    
                  (Acquired 9/26/2001, Cost $1,105)(4)<F32> r<F28>                                               389,568
     416,666    Minera Andes Inc.                                                                                       
                  Expiration June 2003, Exercise Price $0.25 CN                                                         
                  (Acquired 6/21/2002, Cost $4,167)(4)<F32> r<F28>                                                 2,833
      87,500    Neurobiological Technologies, Inc.                                                                      
                  Expiration February 2004, Exercise Price $1.38                                                        
                  (Acquired 11/05/1999, Cost $88)(4)<F32> r<F28>                                                 392,875
     250,000    Nevada Pacific Gold Ltd.                                                                                
                  Expiration May 2003, Exercise Price $0.70 CN                                                          
                  (Acquired 5/23/2002, Cost $2,500)(4)<F32> r<F28>                                                 1,700
     464,699    Orezone Resources Inc.                                                                                  
                  Expiration July 2004, Exercise Price $0.30 CN                                                         
                  (Acquired 7/19/2002, Cost $4,647)(4)<F32> r<F28>                                                52,918
     500,000    Orezone Resources Inc.                                                                                  
                  Expiration August 2004, Exercise Price $0.60 CN                                                       
                  (Acquired 2/27/2003, Cost $5,000)(4)<F32> r<F28>                                                 3,399
     500,000    Pillar Resources Inc.                                                                                   
                  Expiration February 2004, Exercise Price $0.55 CN                                                     
                  (Acquired 2/18/2003, Cost $5,000)(4)<F32> r<F28>                                                87,531
     468,750    Platinum Group Metals Ltd.                                                                              
                  Expiration December 2004, Exercise Price $0.75 CN                                                     
                  (Acquired 12/23/2002, Cost $4,688)(4)<F32> r<F28>                                                3,187
     500,000    Radius Explorations Ltd.                                                                                
                  Expiration January 2004, Exercise Price $0.55 CN                                                      
                  (Acquired 1/06/2003, Cost $5,000)(4)<F32> r<F28>                                               110,647
   1,000,000    Redstar Gold Corp.                                                                                      
                  Expiration May 2004, Exercise Price $0.15 CN                                                          
                  (Acquired 5/31/2002, Cost $10,000)(4)<F32> r<F28>                                                6,799
   1,000,000    Rimfire Minerals Corporation                                                                            
                  Expiration April 2004, Exercise Price $0.45 CN                                                        
                  (Acquired 4/15/2002, Cost $10,000)(4)<F32> r<F28>                                               40,791
     625,000    Ross River Minerals Inc.                                                                                
                  Expiration November 2003, Exercise Price $0.35 CN                                                     
                  (Acquired 5/21/2002, Cost $6,250)(4)<F32> r<F28>                                                 4,249
     333,334    St. Jude Resources Ltd.                                                                                 
                  Expiration June 2004, Exercise Price $0.90 CN                                                         
                  (Acquired 12/03/2002, Cost $3,333)(4)<F32> r<F28>                                               36,826
   2,000,000    SAMEX Mining Corp.                                                                                      
                  Expiration March 2004, Exercise Price $0.20 CN                                                        
                  (Acquired 3/05/2002, Cost $20,000)(4)<F32> r<F28>                                               13,597
     125,000    Silver Standard Resources Inc.                                                                          
                  Expiration October 2003, Exercise Price $3.00 CN                                                      
                  (Acquired 10/29/2001, Cost $1,250)(4)<F32> r<F28>                                              339,928
      75,000    Silver Standard Resources Inc.                                                                          
                  Expiration May 2004, Exercise Price $4.80 CN                                                          
                  (Acquired 5/10/2002, Cost $750)(4)<F32> r<F28>                                                  58,638
   1,000,000    Silverado Gold Mines Ltd.                                                                               
                  Expiration May 2003, Exercise Price $0.20                                                             
                  (Acquired 5/06/2002, Cost $10,000)(4)<F32> r<F28>                                               10,000
   1,750,000    South American Gold and Copper Company Limited                                                          
                  Expiration March 2004, Exercise Price $0.08 CN                                                        
                  (Acquired 3/28/2002, Cost $17,500)(4)<F32> r<F28>                                               11,897
     500,500    Starfield Resources Inc.                                                                                
                  Expiration October 2003, Exercise Price $0.55 CN                                                      
                  (Acquired 10/10/2001, Cost $5,005)(4)<F32> r<F28>                                                3,403
     666,667    Sultan Minerals Inc.                                                                                    
                  Expiration August 2003, Exercise Price $0.25 CN                                                       
                  (Acquired 8/13/2001, Cost $6,667)(4)<F32> r<F28>                                                 4,532
     500,000    Sultan Minerals Inc.                                                                                    
                  Expiration January 2004, Exercise Price $0.32 CN                                                      
                  (Acquired 1/18/2002, Cost $5,000)(4)<F32> r<F28>                                                 3,399
     500,000    Tumi Resources Limited                                                                                  
                  Expiration December 2004, Exercise Price $0.35 CN                                                     
                  (Acquired 12/13/2002, Cost $5,000)(4)<F32> r<F28>                                               97,729
      62,500    Wheaton River Minerals Ltd.                                                                             
                  Expiration May 2007, Exercise Price $1.65 CN                                                          
                  (Acquired 5/30/2002, Cost $625)(4)<F32> r<F28>                                                     425
     200,000    Xenolix Technologies, Inc.                                                                              
                  Expiration February 2004, Exercise Price $2.00                                                        
                  (Acquired 2/04/2002, Cost $2,000)(4)<F32> r<F28>                                                   200
                                                                                                            ------------
                TOTAL WARRANTS (Cost $770,274)                                                                 3,805,539
                                                                                                            ------------

   PRINCIPAL                                                                                                            
     AMOUNT                                                                                                             
   ---------                                                                                                            
                CONVERTIBLE DEBENTURES -- 0.1%*<F26>                                                                    
 $   300,000    Golden Phoenix Minerals, Inc. (Acquired 1/14/2000, Cost $300,000)(4)<F32> r<F28>                 421,478
                                                                                                            ------------

                CORPORATE NOTES -- 2.3%*<F26>                                                                           
                Canyon Resources Corporation                                                                            
     549,000      6.000%, 3/01/2005 (Acquired 3/03/2003, Cost $549,000)(4)<F32> r<F28>                           422,702
                Globalstar LP/Capital:                                                                                  
  62,414,000      11.375%, 2/15/2004(8)<F36>                                                                   3,432,770
  39,299,000      11.250%, 6/15/2004(8)<F36>                                                                   2,161,445
  53,090,000      10.750%, 11/01/2004(8)<F36>                                                                  2,919,950
  36,930,000      11.500%, 6/01/2005(8)<F36>                                                                   2,031,150
                Itronics Inc.:                                                                                          
     250,000      12.000%, 5/14/2004 (Acquired 5/14/2001, Cost $250,000)(4)<F32> (8)<F36> r<F28>                 250,000
     380,000      12.000%, 10/24/2004 (Acquired 10/24/2001, Cost $380,000)(4)<F32> (8)<F36> r<F28>               380,000
     100,000      12.000%, 3/15/2005 (Acquired 3/15/2002, Cost $100,000)(4)<F32> (8)<F36> r<F28>                 100,000
                                                                                                            ------------
                TOTAL CORPORATE NOTES: (Cost $24,376,543)                                                     11,698,017
                                                                                                            ------------

                U.S. TREASURY OBLIGATIONS -- 57.2%*<F26>                                                                
                U.S. Treasury Notes:                                                                                    
  12,300,000    4.250%, 5/31/2003(5)<F33>                                                                     12,362,459
  13,600,000    3.875%, 6/30/2003(5)<F33>                                                                     13,692,970
   4,800,000    3.875%, 7/31/2003(5)<F33>                                                                      4,844,064
   4,200,000    3.625%, 8/31/2003(5)<F33>                                                                      4,242,983
   7,560,000    3.625%, 3/31/2004(5)<F33>                                                                      7,744,275
  33,700,000    3.375%, 4/30/2004(5)<F33>                                                                     34,487,198
  15,900,000    3.250%, 5/31/2004(5)<F33>                                                                     16,273,284
  28,000,000    2.875%, 6/30/2004(5)<F33>                                                                     28,564,368
  35,700,000    2.250%, 7/31/2004(5)<F33>                                                                     36,158,816
   1,400,000    6.000%, 8/15/2004(5)<F33>                                                                      1,490,125
  37,100,000    2.125%, 8/31/2004(5)<F33>                                                                     37,528,950
  13,800,000    2.125%, 10/31/2004(5)<F33>                                                                    13,967,104
  46,100,000    2.000%, 11/30/2004(5)<F33>                                                                    46,562,798
  13,600,000    1.750%, 12/31/2004                                                                            13,678,091
  22,500,000    1.625%, 1/31/2005                                                                             22,570,313
                                                                                                            ------------
                TOTAL U.S. TREASURY OBLIGATIONS (Cost $291,379,368)                                          294,167,798
                                                                                                            ------------

                SHORT TERM INVESTMENTS -- 7.7%*<F26>                                                                    

                Mutual Funds -- 1.1%*<F26>                                                                              
   5,477,316    Treasury Cash Series II                                                                        5,477,316

                U.S. Treasury Obligations -- 6.6%*<F26>                                                                 
                U.S. Treasury Bills:                                                                                    
   9,500,000      1.03%, 4/03/2003                                                                             9,499,455
   6,500,000      1.00%, 4/10/2003                                                                             6,498,375
  18,000,000      1.03%, 4/24/2003                                                                            17,988,161
                                                                                                            ------------
                                                                                                              33,985,991
                                                                                                            ------------
                TOTAL SHORT-TERM INVESTMENTS                                                                            
                  (Cost $39,463,307)                                                                          39,463,307
                                                                                                            ------------
                TOTAL INVESTMENTS                                                                                       
                  (Cost $493,817,384) (see note 1)                                                          $491,338,906
                                                                                                            ------------
                                                                                                            ------------

CN   - Canadian Dollars                                             
ADR   - American Depository Receipt                                   
NYS   - New York Shares                                               
*<F26>   Calculated as a percentage of net assets.                          
**<F27>   Non-income producing security.                                      
R<F28>   Restricted security.                                               
(1)<F29>   Shares are held to cover all or a portion of a corresponding short   
position.                                                 
(2)<F30>   Private placement issue (trades at a discount to market value).      
(3)<F31>   Foreign security.                                                    
(4)<F32>   Fair valued security.                                                
(5)<F33>   All or a portion of the securities have been committed as collateral 
for open short positions.                                 
(6)<F34>   Holding entitles Fund to 525,738 voting rights for Maxam Gold        
   Corporation Preferred and 52,574 voting rights for MCM Custom
Milling Corporation.                                      
(7)<F35>   Affiliated company.  See Note 8 in Notes to the Financial            
Statements.                                               
(8)<F36>   Security in default.                                                 

See notes to the financial statements.

PRUDENT BEAR FUND                                                               
SCHEDULE OF SECURITIES SOLD SHORT                                               
MARCH 31, 2003                                                                  
(UNAUDITED)                                                                     

SHARES                                                              VALUE   
------                                                              -----   
  10,000   ADTRAN, Inc.                                         $    359,100
 150,000   Advanced Energy Industries, Inc.                        1,288,500
 195,000   Advanced Fibre Communications, Inc.                     2,952,300
 100,000   Advanced Micro Devices, Inc.                              618,000
  38,000   Ambac Financial Group, Inc.                             1,919,760
  15,000   American Capital Strategies, Ltd.                         336,000
  10,000   American Express Company                                  332,300
  40,000   American International Group, Inc.                      1,978,000
  20,000   American Pharmaceutical Partners, Inc.                    383,000
  35,100   Amylin Pharmaceuticals, Inc.                              568,620
  25,000   AutoNation, Inc.                                          318,750
 100,000   BEA Systems, Inc.                                       1,019,000
  45,000   Belden Inc.                                               483,750
  60,000   Best Buy Co., Inc.                                      1,618,200
  95,000   The Boeing Company                                      2,380,700
  30,000   Broadcom Corporation - Class A                            370,500
 116,000   Brunswick Corporation                                   2,204,000
  43,800   Cal Dive International, Inc.                              788,838
  42,000   Capital One Financial Corporation                       1,260,420
  10,000   CDW Computer Centers, Inc.                                408,000
 150,000   Cisco Systems, Inc.                                     1,947,000
  60,000   Citigroup Inc.                                          2,067,000
 142,000   Clayton Homes, Inc.                                     1,567,680
  35,000   Clear Channel Communications, Inc.                      1,187,200
  40,000   Cleco Corporation                                         502,000
  49,000   The Coca-Cola Company                                   1,983,520
  17,400   Convergys Corporation                                     229,680
  74,000   Cree, Inc.                                              1,370,480
 235,000   DIAMONDS Trust, Series I                               18,757,700
  65,000   Dillard's, Inc. - Class A                                 839,800
 117,500   D.R. Horton, Inc.                                       2,256,000
  85,000   Duke Energy Corporation                                 1,235,900
   7,500   Enesco Group, Inc.                                         53,775
  85,000   ESS Technology, Inc.                                      506,600
  70,000   Ethan Allen Interiors Inc.                              2,060,100
  58,000   Fannie Mae                                              3,790,300
  52,500   Federated Department Stores, Inc.                       1,471,050
  35,000   Fifth Third Bancorp                                     1,754,900
  68,000   Freddie Mac                                             3,610,800
 125,500   GATX Corporation                                        1,817,240
  75,000   General Electric Company                                1,912,500
 130,000   General Motors Corporation                              4,370,600
  66,000   GreenPoint Financial Corp.                              2,957,460
  68,000   Harley-Davidson, Inc.                                   2,700,280
 122,000   Hewlett-Packard Company                                 1,897,100
  80,000   The Home Depot, Inc.                                    1,948,800
  10,000   InterMune Inc.                                            214,500
  25,000   International Business Machines Corporation             1,960,750
  55,000   Intersil Corporation - Class A                            855,800
  23,500   Iron Mountain Incorporated                                898,875
  35,500   Irwin Financial Corporation                               691,895
  30,000   iShares Dow Jones U.S. Financial Sector Index Fund      1,946,700
  55,000   J.P. Morgan Chase & Co.                                 1,304,050
  30,000   Juniper Networks, Inc.                                    245,100
   5,700   KCS Energy, Inc.                                           16,530
  45,000   Kohl's Corporation                                      2,546,100
  64,500   Lamar Advertising Company                               1,893,075
   3,000   LightPath Technologies, Inc. - Class A                      3,840
  73,000   MBIA Inc.                                               2,820,720
 109,000   MBNA Corporation                                        1,640,450
  60,000   McKesson Corporation                                    1,495,800
  15,000   MedImmune, Inc.                                           492,450
  95,000   Mentor Corporation                                      1,625,450
  10,000   Mercury Interactive Corporation                           296,800
  20,000   Meridian Gold Inc.                                        189,000
  37,800   MGIC Investment Corporation                             1,484,406
  35,000   Micrel, Incorporated                                      322,700
  60,000   Moody's Corporation                                     2,773,800
  10,000   National City Corporation                                 278,500
  40,000   NetScreen Technologies, Inc.                              671,200
  95,000   Newell Rubbermaid Inc.                                  2,693,250
  20,000   Nextel Communications - Class A                           267,800
  30,000   Nokia Oyj - ADR                                           420,300
 144,500   Nordstrom, Inc.                                         2,340,900
  35,000   NorthWestern Corporation                                   73,500
  10,300   Novellus Systems, Inc.                                    280,881
  71,000   OmniVision Technologies, Inc.                           1,471,120
  30,000   The PMI Group, Inc.                                       766,500
  43,000   Polaris Industries Inc.                                 2,137,960
   5,000   PolyMedica Corporation                                    152,250
  45,000   Precision Castparts Corp.                               1,072,350
  41,000   Radian Group Inc.                                       1,368,580
  14,700   Regions Financial Corporation                             476,280
  40,000   Rent-A-Center, Inc.                                     2,188,400
  74,000   RF Micro Devices, Inc.                                    446,146
  63,000   Ruby Tuesday, Inc.                                      1,285,200
  20,000   SAP AG - ADR                                              379,200
  95,000   SBC Communications Inc.                                 1,905,700
 110,000   Scientific-Atlanta, Inc.                                1,511,400
  37,500   Sears, Roebuck and Co.                                    905,625
 200,000   The Shaw Group Inc.                                     2,010,000
  19,300   Silicon Valley Bancshares                                 351,067
  43,300   Sola International Inc.                                   535,188
 265,000   SPDR Trust Series 1                                    22,456,100
 200,000   Sprint Corporation                                      2,350,000
  18,000   Stage Stores, Inc.                                        381,240
  75,000   Starwood Hotels & Resorts Worldwide, Inc.               1,784,250
  55,000   Synovus Financial Corp.                                   983,950
 150,000   TECO Energy, Inc.                                       1,594,500
 260,000   Tellabs, Inc.                                           1,505,400
 120,000   Terex Corporation                                       1,483,200
  90,000   Toll Brothers, Inc.                                     1,737,000
  15,000   The Toronto-Dominion Bank                                 332,400
 109,000   Tyco International Ltd.                                 1,401,740
 162,300   United Rentals, Inc.                                    1,561,326
  26,300   United States Cellular Corporation                        620,943
  45,000   Univision Communications Inc. - Class A                 1,102,950
   3,000   VeriSign, Inc.                                             26,220
  37,000   Wal-Mart Stores, Inc.                                   1,925,110
  75,000   Waste Connections, Inc.                                 2,587,500
 160,000   Western Digital Corporation                             1,449,600
  50,000   Western Wireless Corporation - Class A                    281,000
  88,000   Whirlpool Corporation                                   4,314,640
  15,000   Xilinx, Inc.                                              351,150
  12,500   Zoran Corporation                                         161,375
                                                                ------------
TOTAL SECURITIES SOLD SHORT                           
             (Proceeds $197,520,295)                            $188,482,885
                                                                ------------
                                                                ------------

See notes to the financial statements.

PRUDENT SAFE HARBOR FUND                                                        
SCHEDULE OF INVESTMENTS                                                         
MARCH 31, 2003                                                                  
(UNAUDITED)                                                                     

SHARES                                                             VALUE  
------                                                             -----  
COMMON STOCKS -- 11.7%                        

CANADA -- 4.8%                                
     98,000    Central Fund of Canada Limited - Class A         $    454,720
445,000    Central Fund of Canada Limited - Class A                 
(Acquired 2/14/2003,                      
                 Cost $1,998,050) r<F37> (1)<F38>(3)<F40>          1,762,512
    542,800    Chesapeake Gold Corp.(2)<F39>                       1,321,112
    310,000    Goldcorp Inc.                                       3,289,100
     85,000    Glamis Gold Ltd.(2)<F39>                              878,900
    458,000    IAMGOLD Corporation                                 1,992,794
    299,000    Placer Dome Inc.                                    2,930,200
    843,400    Western Silver Corporation(2)<F39>                  2,192,840
                                                                ------------
                                                                  14,822,178
                                                                ------------

CHANNEL ISLANDS -- 0.5%                       
    130,000    Randgold Resources Limited - ADR(2)<F39>            1,697,800
                                                                ------------

NORWAY -- 0.5%                                
  2,250,000    Kenor ASA(2)<F39>                                   1,581,297
                                                                ------------

SOUTH AFRICA -- 3.6%                          
     95,000    AngloGold Limited - ADR                             2,867,100
     75,500    ASA Ltd.                                            2,619,850
    350,000    Durban Roodepoort Deep Limited - ADR(2)<F39>          892,500
    207,000    Gold Fields Limited - ADR                           2,173,500
    210,000    Harmony Gold Mining Company Limited - ADR           2,568,300
                                                                ------------
                                                                  11,121,250
                                                                ------------

SWEDEN -- 0.4%                                
  2,073,500    Riddarhyttan Resources AB(2)<F39>                   1,076,000
                                                                ------------

UNITED STATES -- 1.9%                         
    225,000    Newmont Mining Corporation                          5,883,750
                                                                ------------
               TOTAL COMMON STOCK (Cost $35,805,787)              36,182,275
                                                                ------------

OUNCES                                                                    
------                                                                    
COMMODITIES -- 1.1%                           
     10,096    Gold Bullion(1)<F38> (2)<F39>                       3,318,557
                                                                ------------
               TOTAL COMMODITIES (Cost $3,094,451)                 3,318,557
                                                                ------------
PRINCIPAL                                                                     
AMOUNT                                                                    
---------                                                                     
U.S. TREASURY OBLIGATIONS -- 9.9%             
U.S. Treasury Notes:                          
$30,500,000    2.00%, 11/30/2004                                  30,806,190
                                                                ------------
TOTAL U.S. TREASURY OBLIGATIONS               
                 (Cost $30,644,384)                               30,806,190
                                                                ------------

FOREIGN TREASURY OBLIGATIONS -- 61.5%         

CANADA -- 3.0%                                
Canadian Government Bonds:                    
  2,290,000    5.00%, 12/01/2003                                   1,574,774
 11,530,000    4.25%, 12/01/2004                                   7,899,880
                                                                ------------
                                                                   9,474,654
                                                                ------------

DENMARK -- 5.0%                               
Kingdom of Denmark Bonds:                     
  7,250,000    5.00%, 11/15/2003                                   1,081,385
 61,835,000    4.00%, 11/15/2004                                   9,275,795
 33,425,000    5.00%, 8/15/2005                                    5,146,264
                                                                ------------
                                                                  15,503,444
                                                                ------------

FINLAND -- 0.7%                               
Finnish Government Bond:                      
  1,970,000    9.50%, 3/15/2004                                    2,292,672
                                                                ------------

FRANCE -- 7.7%                                
French Treasury Notes:                        
  1,825,000    4.50%, 7/12/2003                                    2,002,079
  2,110,000    4.00%, 1/12/2004                                    2,331,073
 12,312,000    3.50%, 7/12/2004                                   13,617,147
  1,200,000    6.75%, 10/25/2004                                   1,392,931
  3,727,000    7.50%, 4/25/2005                                    4,465,079
                                                                ------------
                                                                  23,808,309
                                                                ------------

GERMANY -- 10.9%                              
12,730,000    Bundesschatzanweisungen:                                    
               4.25%, 3/12/2004                                   14,140,691
Bundesrepub.Deutschland:                      
  5,720,000    7.50%, 11/11/2004                                   6,730,001
 10,913,000    7.38%, 1/03/2005                                   12,893,119
                                                                ------------
                                                                  33,763,811
                                                                ------------

NORWAY -- 5.1%                                
Norwegian Government Bond:                    
112,813,000    5.75%, 11/30/2004                                  15,707,726
                                                                ------------
                                                                  15,707,726
                                                                ------------

SWEDEN -- 5.4%                                
Swedish Government Bonds:                     
 15,950,000    10.25%, 5/05/2003                                   1,891,799
  5,000,000    5.00%, 1/15/2004                                      596,533
114,740,000    6.00%, 2/09/2005                                   14,110,084
                                                                ------------
                                                                  16,598,416
                                                                ------------

SWITZERLAND -- 23.7%                          
Swiss Government Bonds:                       
  9,485,000    6.50%, 4/10/2004                                    7,444,265
 48,398,000    4.50%, 10/07/2004                                  37,901,106
 35,300,000    5.50%, 1/06/2005                                   28,325,677
                                                                ------------
                                                                  73,671,048
                                                                ------------
TOTAL FOREIGN TREASURY OBLIGATIONS            
                 (Cost $178,707,348)                             190,820,080
                                                                ------------

SHORT-TERM INVESTMENTS -- 13.1%               

U.S. TREASURIES -- 11.6%                      
U.S. Treasury Bills:                          
  8,000,000    1.00%, 4/10/2003                                    7,998,000
 28,000,000    1.03%, 4/24/2003                                   27,981,504
                                                                ------------
                                                                  35,979,504
                                                                ------------

SHARES                                                                    
------                                                                    
MUTUAL FUNDS -- 1.5%                          
  4,855,856    Treasury Cash Series II                             4,855,856
                                                                ------------
TOTAL SHORT-TERM INVESTMENTS                  
                 (Cost $40,835,360)                               40,835,360
                                                                ------------
TOTAL INVESTMENTS                             
                 (Cost $289,087,330) -- 97.3%                    301,962,462
               Other Assets less Liabilities -- 2.7%               8,414,498
                                                                ------------
               Total Net Assets -- 100.0%                       $310,376,960
                                                                ------------
                                                                ------------

ADR  - American Depository Receipt                                  
R<F37>  Restricted security.                                              
(1)<F38>  Fair valued investment.                                             
(2)<F39>  Non-income producing security.                                      
(3)<F40>  Private placement issue (trades at a discount to market value).     

See notes to the financial statements.

NOTES TO THE FINANCIAL STATEMENTS                                               
MARCH 31, 2003                                                                  
(UNAUDITED)                                                                     

1.   ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES                           

  Prudent Bear Funds, Inc. (the "Company") was incorporated on October 25,
     1995, as a Maryland Corporation and is registered as a diversified open-end
management investment company under the Investment Company Act of 1940
  ("1940 Act"). The Company currently consists of three series: thePrudent
     Bear Fund, the Prudent Safe Harbor Fund and the Prudent Bear Large Cap Fund
 (each a "Fund" and collectively the "Funds"). As of March 31, 2003, the
  Prudent Bear Large Cap Fund had not commenced operations. The investment
objectives of the Funds are set forth below.                          

    The investment objective of the Prudent Bear Fund is capital appreciation,
     which it seeks to obtain primarily through short sales of equity securities
when overall market valuations are high, and through long positions in
  value-oriented equity securities when overall market valuations are low.
The Prudent Bear Fund commenced operations on December 28, 1995.      

     The Prudent Bear Fund has issued two classes of shares: No Load and Class C
shares. The No Load shares are subject to a 0.25% 12b-1 fee, while the
     Class C shares are subject to a 1.00% 12b-1 fee, as described in accordance
     with the Fund's prospectuses. Each class of shares has identical rights and
   privileges except with respect to 12b-1 fees and voting rights on matters
affecting a single class of shares.                                   

    The investment objective of the Prudent Safe Harbor Fund is current income
     and capital appreciation through investments primarily in liquid securities
    issued by major industrialized nations, and equity securities of companies
 that mine gold and gold bullion. The Prudent Safe Harbor Fund commenced
operations on February 2, 2000.                                       

The investment objective of the Prudent Bear Large Cap Fund is capital
appreciation in declining equity markets, which it seeks to obtain    
primarily through short sales of equity securities as well as selling 
     futures contracts and purchasing put options on stock indices.  The Prudent
Bear Large Cap Fund had not commenced operations as of March 31, 2003.

    The following is a summary of significant accounting policies consistently
followed by the Funds.                                                

    a)   Investment Valuation - Common stocks, preferred stocks and securities
        sold short that are listed on a securities exchange or quoted on the
        NASDAQ Stock Market are valued at the last quoted sales price on the
          day the valuation is made. Price information on listed stocks is taken
    from the exchange where the security is primarily traded. Common
       stocks and securities sold short which are listed on an exchange or
          the NASDAQ Stock Market but which are not traded on the valuation date
          are valued at the average of the current bid and asked price. Unlisted
       equity securities for which market quotations are readily available
         are valued at the latest quoted bid price. Debt securities are valued
          at the latest bid price. Mutual fund investments are valued at the net
  asset value on the day the valuation is made. Other assets and
          securities for which no quotations are readily available are valued at
      fair value as determined in good faith by management in accordance
          with procedures approved by the Board of Directors. At March 31, 2003,
        such investments represent 8.7% and 1.6% of net assets, at value, in
         the Prudent Bear Fund and the Prudent Safe Harbor Fund, respectively.
      Short-term debt instruments (those with remaining maturities of 60
         days or less) are valued at amortized cost, which approximates market
value.                                                      

     b)   Short Positions - The Funds may engage in short sale transactions. For
          financial statement purposes, an amount equal to the settlement amount
          is included in the Statement of Assets and Liabilities as an asset and
        an equivalent liability. The amount of the liability is subsequently
        marked-to-market to reflect the current value of the short position.
        Subsequent fluctuations in the market prices of securities sold, but
      not yet purchased, may require purchasing the securities at prices
        which may differ from the market value reflected on the Statement of
          Assets and Liabilities. The Funds are liable for any dividends paid on
   securities sold short. The Prudent Bear Fund's receivables from
    brokers for proceeds on securities sold short are with two major
      security dealers. The Funds do not require the brokers to maintain
collateral in support of these receivables.                 

c)   Written Option Accounting - The Funds write (sell) put and call  
          options. When the Funds write (sell) an option, an amount equal to the
        premium received by the Funds is included in the Statement of Assets
          and Liabilities as an asset and an equivalent liability. The amount of
         the liability is subsequently marked-to-market to reflect the current
    value of the option written. By writing an option, the Funds may
   become obligated during the term of the option to deliver (with
        respect to a call option) or purchase (with respect to a put option)
     the securities underlying the option at the exercise price if the
          option is exercised. Option contracts are valued at the average of the
         current bid and asked price reported on the day of valuation. When an
        option expires on its stipulated expiration date the Funds realize a
       gain. When the Funds enter into a closing purchase transaction, the
    Funds realize a gain or loss if the cost of the closing purchase
          transaction differs from the premium received when the option was sold
   without regard to any unrealized gain or loss on the underlying
          security, and the liability related to such option is eliminated. If a
        call option written by a Fund is exercised, the proceeds of the sale
          of the underlying security will be increased by the premium originally
        received and the Fund will realize a gain or loss on the sale of the
        security. If a put option written by a Fund is exercised, the Fund's
   basis in the underlying security will be reduced by the premium
originally received.                                        

    d)   Collateral on Short Sales, Written Options and Futures Contracts - As
          collateral for short positions, written options and futures contracts,
the Funds are required under the 1940 Act to maintain assets
      consisting of cash or liquid securities. For short positions, this
        collateral must equal the market value of the securities sold short.
       For written options, this collateral must equal the market value of
      the purchase obligation for put options or the market value of the
    instrument underlying the contract for call options. For futures
          contracts, this collateral must equal the market value of the purchase
    obligation for long futures contracts or the market value of the
       instrument underlying the contract for short futures contracts. All
collateral is required to be adjusted daily.                

    e)   Federal Income Taxes - No provision for federal income taxes has been
    made since the Funds intend to comply with the provisions of the
          Internal Revenue Code applicable to regulated investment companies and
       to distribute investment company net taxable income and net capital
     gains to shareholders. Additionally, the Funds intend to make all
          required distributions to avoid being liable for federal excise taxes.

f)   Purchased Option Accounting - Premiums paid for option contracts 
        purchased are included in the Statement of Assets and Liabilities as
       an asset. Option contracts are valued at the average of the current
     bid and asked price reported on the day of valuation. When option
contracts expire or are closed, realized gains or losses are
      recognized without regard to any unrealized gains or losses on the
         underlying securities. Put option contracts are held by the Funds for
        trading purposes and call option contracts are held by the Funds for
trading and hedging purposes.                               

   g)   Distributions to Shareholders - Dividends from net investment income
          are declared and paid annually for the Prudent Bear Fund and quarterly
   for the Prudent Safe Harbor Fund. Distributions of net realized
          capital gains, if any, will be declared and paid at least annually for
both Funds.                                                 

h)   Use of Estimates - The preparation of financial statements in    
          conformity with accounting principles generally accepted in the United
          States of America require 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
          financial statements and the reported amounts of revenues and expenses
       during the reporting period. Actual results could differ from those
estimates.                                                  

    i)   Other - Investment and shareholder transactions are recorded on trade
       date. The Funds determine the gain or loss realized from investment
        transactions by comparing the original cost of the security lot sold
         with the net sales proceeds. Dividend income is recognized on the ex-
         dividend date or as soon as information is available to the Fund, and
        interest income is recognized on an accrual basis. Investment income
     for the Prudent Bear Fund includes $547,846 of interest earned on
         receivables from brokers for proceeds on securities sold short. There
      was no interest earned on receivables from brokers for proceeds on
      securities sold short for the Prudent Safe Harbor Fund. Accounting
         principles generally accepted in the United States of America require
          that permanent financial reporting and tax differences be reclassified
in the capital accounts.                                    

    j)   Futures Contracts and Options on Futures Contracts - The Prudent Bear
        Fund may purchase and sell stock index futures contracts and options
     on such futures contracts, while the Prudent Safe Harbor Fund may
        purchase and sell debt futures contracts and options on such futures
   contracts. Upon entering into a contract, the Funds deposit and
          maintain as collateral such initial margin as required by the exchange
       on which the transaction is effected. Pursuant to the contract, the
         Funds agree to receive from or pay to the futures commission merchant
        an amount of cash equal to the daily fluctuation in the value of the
         contract. Such receipts or payments are known as variation margin and
      are recorded by the Funds as unrealized gains and losses. When the
         contract is closed, the Funds record a realized gain or loss equal to
       the difference between the value of the contract at the time it was
opened and the value at the time it was closed.             

     k)   Risks of Options, Futures Contracts and Options on Futures Contracts -
    The risks inherent in the use of options, futures contracts, and
         options on futures contracts include: 1) adverse changes in the value
      of such instruments; 2) imperfect correlation between the price of
          options and futures contracts and options thereon and movements in the
          price of the underlying securities, index or futures contracts; 3) the
    possible absence of a liquid secondary market for any particular
     instrument at any time; 4) the possible need to defer closing out
   certain positions to avoid adverse tax consequences; and 5) the
      possible nonperformance by the counterparty under the terms of the
contract.                                                   

 l)   Restricted Securities - The Prudent Bear Fund and the Prudent Safe
         Harbor Fund own investment securities which are unregistered and thus
     restricted as to resale. These securities are valued by the Funds
        after giving due consideration to pertinent factors including recent
private sales, market conditions and the issuer's financial 
      performance. Where future disposition of these securities requires
     registration under the Securities Act of 1933, the Funds have the
     right to include these securities in such registration, generally
 without cost to the Funds. The Funds have no right to require
   registration of unregistered securities. At March 31, 2003, the
     Prudent Bear Fund and the Prudent Safe Harbor Fund had restricted
securities with an aggregate market value of $42,326,463 and
          $1,762,512, respectively, representing 8.6% and 0.6% of the net assets
of the Prudent Bear Fund and the Prudent Safe Harbor Fund,  
respectively.                                               

    m)   Foreign Securities - Investing in securities of foreign companies and
    foreign governments involves special risks and consideration not
      typically associated with investing in U.S. companies and the U.S.
        government. These risks include revaluation of currencies and future
        adverse political and economic developments. Moreover, securities of
        many foreign companies and foreign governments and their markets may
          be less liquid and their prices more volatile than those of securities
of comparable U.S. companies and the U.S. government.       

     n)   Foreign Currency Translations - The books and records of the Funds are
 maintained in U.S. dollars. Foreign currency transactions are
         translated into U.S. dollars on the following basis: (i) market value
          of investment securities, assets and liabilities at the daily rates of
    exchange, and (ii) purchases and sales of investment securities,
     dividend and interest income and certain expenses at the rates of
         exchange prevailing on the respective dates of such transactions. For
         financial reporting purposes, the Funds do not isolate changes in the
        exchange rate of investment securities from the fluctuations arising
     from changes in the market price of such securities. However, for
          federal income tax purposes the Funds do isolate and treat as ordinary
      income the effect of changes in foreign exchange rates on realized
  gain or loss from the sale of debt securities and payables and
        receivables arising from trade date and settlement date differences.

2.   CAPITAL SHARE TRANSACTIONS                                                 

Transactions in shares of the Funds were as follows:                  

Prudent Bear Fund                                                               

                                                        [Enlarge/Download Table]
No Load Shares:                                                                               
                                                                    Six Months Ended          
                                                                     March 31, 2003           
                                                            --------------------------------- 
                                                                  $                 Shares    
                                                            ------------         ------------ 
                                                                                              
     Shares sold                                             $700,205,412          92,538,388 
     Shares issued to holders in reinvestment of dividends     23,322,996           3,151,756 
     Shares redeemed                                         (668,180,841)        (88,701,764)
                                                             ------------         ----------- 
     Net increase                                            $ 55,347,567           6,988,380 
                                                             ------------                     
                                                             ------------                     
     Shares Outstanding:                                                                      
          Beginning of period                                                      62,710,598 
                                                                                  ----------- 
          End of period                                                            69,698,978 
                                                                                  ----------- 
                                                                                  ----------- 

                                                        [Enlarge/Download Table]
                                                               Six Months Ended          
                                                                March 31, 2003           
                                                       --------------------------------- 
                                                             $                 Shares    
                                                       ------------         ------------ 
                                                                                         
Shares sold                                             $  9,869,345           1,331,243 
Shares issued to holders in reinvestment of dividends        297,274              40,890 
Shares redeemed                                           (4,999,058)           (686,293)
                                                        ------------         ----------- 
Net increase                                            $  5,167,561             685,840 
                                                        ------------                     
                                                        ------------                     
Shares Outstanding:                                                                      
     Beginning of period                                                         962,921 
                                                                             ----------- 
     End of period                                                             1,648,761 
                                                                             ----------- 
                                                                             ----------- 

                                                        [Enlarge/Download Table]
No Load Shares:                                                                               
                                                                       Year Ended             
                                                                   September 30, 2002         
                                                            --------------------------------- 
                                                                  $                 Shares    
                                                            ------------         ------------ 
                                                                                              
     Shares sold                                             $868,787,535         129,021,398 
     Shares issued to holders in reinvestment of dividends      4,078,790             853,303 
     Shares redeemed                                         (632,946,808)        (96,269,651)
                                                             ------------         ----------- 
     Net increase                                            $239,919,517          33,605,050 
                                                             ------------                     
                                                             ------------                     
     Shares Outstanding:                                                                      
          Beginning of period                                                      29,105,548 
                                                                                  ----------- 
          End of period                                                            62,710,598 
                                                                                  ----------- 
                                                                                  ----------- 

                                                        [Enlarge/Download Table]
Class C Shares:                                                                               
                                                                       Year Ended             
                                                                   September 30, 2002         
                                                            --------------------------------- 
                                                                  $                 Shares    
                                                            ------------         ------------ 
                                                                                              
     Shares sold                                             $  8,457,907           1,333,601 
     Shares issued to holders in reinvestment of dividends         63,278              13,435 
     Shares redeemed                                           (3,640,215)           (610,467)
                                                             ------------         ----------- 
     Net increase                                            $  4,880,970             736,569 
                                                             ------------                     
                                                             ------------                     
     Shares Outstanding:                                                                      
          Beginning of period                                                         226,352 
                                                                                  ----------- 
          End of period                                                               962,921 
                                                                                  ----------- 
                                                                                  ----------- 

Prudent Safe Harbor Fund                                                        

                                                        [Enlarge/Download Table]
                                                               Six Months Ended          
                                                                March 31, 2003           
                                                       --------------------------------- 
                                                             $                 Shares    
                                                       ------------         ------------ 
                                                                                         
Shares sold                                             $453,683,470          39,217,290 
Shares issued to holders in reinvestment of dividends      4,829,642             414,075 
Shares redeemed                                         (278,794,533)        (24,339,585)
                                                        ------------         ----------- 
Net increase                                            $179,718,579          15,291,780 
                                                        ------------                     
                                                        ------------                     
Shares Outstanding:                                                                      
     Beginning of period                                                      11,315,064 
                                                                             ----------- 
     End of period                                                            26,606,844 
                                                                             ----------- 
                                                                             ----------- 

                                                        [Enlarge/Download Table]
                                                                  Year Ended             
                                                              September 30, 2002         
                                                       --------------------------------- 
                                                             $                 Shares    
                                                       ------------         ------------ 
                                                                                         
Shares sold                                             $226,790,135          20,888,291 
Shares issued to holders in reinvestment of dividends      1,673,306             156,127 
Shares redeemed                                         (134,136,115)        (12,341,915)
                                                        ------------         ----------- 
Net increase                                            $ 94,327,326           8,702,503 
                                                        ------------                     
                                                        ------------                     
Shares Outstanding:                                                                      
     Beginning of period                                                       2,612,561 
                                                                             ----------- 
     End of period                                                            11,315,064 
                                                                             ----------- 
                                                                             ----------- 

3.   INVESTMENT TRANSACTIONS                                                    

The aggregate purchases and sales of investments, excluding short-term
investments, options and short positions, by the Funds for the periods
ended March 31, 2003, were as follows:                                

                 Prudent Bear Fund      Prudent Safe Harbor Fund
                 -----------------      ------------------------
Purchases              $375,878,276              $320,136,134         
Sales                  $344,798,630              $186,681,146         

Included in these amounts were purchases and sales of long-term U.S.  
  government securities, for the periods ended March 31, 2003, as follows:

                 Prudent Bear Fund      Prudent Safe Harbor Fund
                 -----------------      ------------------------
Purchases              $313,119,044              $166,736,000         
Sales                  $304,662,831              $165,746,018         

At March 31, 2003, gross unrealized appreciation and depreciation of  
investments for tax purposes were as follows:                         

Prudent Bear Fund                                                     
Appreciation                                              $ 35,970,083
 (Depreciation)                                             (49,138,705)
                                                          ------------
 Net depreciation on investments                           $(13,168,622)
                                                          ------------
                                                          ------------

Prudent Safe Harbor Fund                                              
Appreciation                                              $ 16,551,991
 (Depreciation)                                              (4,065,214)
                                                          ------------
Net appreciation on investments                           $ 12,486,777
                                                          ------------
                                                          ------------

    At March 31, 2003, the cost of investments for federal income tax purposes
for the Prudent Bear Fund and the Prudent Safe Harbor Fund were       
$504,507,528 and $289,475,685, respectively.                          

The tax character of distributions paid during 2002 and 2001 was as   
follows:                                                              

Prudent Bear Fund                     2002                2001        
                              ----                ----
Ordinary income                    $4,788,817          $7,742,215     
Long-term capital gain                      0                   0     
                              ----------          ----------
                              $4,788,817          $7,742,215
                              ----------          ----------
                              ----------          ----------

Prudent Safe Harbor Fund              2002                2001        
                              ----                ----
Ordinary income                    $1,861,639            $190,263     
Long-term capital gain                      0                   0     
                              ----------          ----------
                              $1,861,639            $190,263
                              ----------          ----------
                              ----------          ----------

     As of September 30, 2002, the components of distributable earnings on a tax
basis were as follows:                                                

                                  Prudent Bear Fund   Prudent Safe Harbor Fund
                                  -----------------   ------------------------
Undistributed ordinary income       $14,391,140             $1,300,642      
Undistributed long-term gain        $12,688,038             $1,564,513      

     The Prudent Bear Fund realized, on a tax basis, post October losses through
September 30, 2002 of $2,251 which are not recognized for tax purposes
until the first day of the following fiscal year.                     

4.   INVESTMENT ADVISORY AND OTHER AGREEMENTS                                   

  The Funds have entered into Investment Advisory Agreements with David W.
     Tice & Associates, Inc. Pursuant to its advisory agreements with the Funds,
   the Investment Adviser is entitled to receive a fee, calculated daily and
     payable monthly, at the annual rate of 1.25% and 0.75% for the Prudent Bear
Fund and the Prudent Safe Harbor Fund, respectively, as applied to the
    Funds' daily net assets. Certain officers of the Adviser are also officers
of the Funds.                                                         

   U.S. BancorpFund Services, LLC ("U.S. Bancorp") serves as transfer agent,
    administrator and accounting services agent for the Funds. U.S. Bank, N.A.
serves as custodian for the Funds.                                    

5.   EXPENSE REDUCTIONS                                                         

    The Adviser had directed certain of the Funds' portfolio trades to brokers
     at best price and execution and has generated directed brokerage credits to
 reduce certain U.S. Bancorp service provider fees. Shareholders benefit
     under this arrangement as the net expenses of the Funds do not include such
 service provider fees. For the period ended March 31, 2003, the Prudent
Bear Fund's expenses were reduced by $69,284 by utilizing directed    
  brokerage credits resulting in an expense ratio of 1.83% and 2.58% being
     charged to Prudent Bear Fund No Load shareholders and Class C shareholders,
respectively. In accordance with Securities and Exchange Commission   
 requirements, such amount, when incurred, is required to be shown as an
expense and will be included in each of the U.S. Bancorp fees in the  
Statement of Operations.                                              

6.   FUTURES CONTRACTS                                                          

At March 31, 2003, the Prudent Bear Fund had entered into stock index 
futures contracts. The net unrealized depreciation of $(965,375) is   
 included in the net unrealized appreciation/depreciation section of the
   accompanying financial statements. The terms of the open contracts are as
follows:                                                              

                                                        [Enlarge/Download Table]
Number of Contracts  Underlying Instrument  Market Value of Underlying Instrument  Unrealized Depreciation
-------------------  ---------------------  -------------------------------------  -----------------------
                                                                                                          
       (195)         S&P 500 Index Futures              $(41,291,250)                     $(965,375)      
                     June 2003                                                                            

7.   OPTION CONTRACTS WRITTEN                                                   

The premium amount and the number of option contracts written for the 
    Prudent Bear Fund during the period ended March 31, 2003, were as follows:

                                           Premium Amount  Number of Contracts
                                           --------------  -------------------
Options outstanding at September 30, 2002    $      --              --      
Options written                                368,015           5,400      
Options closed                                (155,876)           (300)     
Options exercised                                   --              --      
Options expired                               (212,139)         (5,100)     
                                       ---------          ------
Options outstanding at March 31, 2003        $      --              --      
                                       ---------          ------
                                       ---------          ------

8.   TRANSACTIONS WITH AFFILIATES                                               

     The following companies are affiliated with the Prudent Bear Fund; that is,
  the Fund held 5% or more of the outstanding voting securities during the
 period from October 1, 2002 through March 31, 2003.  Such companies are
defined in Section (2)(a)(3) of the Investment Company Act of 1940:   

                                                        [Enlarge/Download Table]
                                 SHARE                             SHARE                         
                              BALANCE AT                         BALANCE AT              REALIZED
                              OCTOBER 1,                         MARCH 31,                GAINS  
SECURITY NAME                    2002      PURCHASES    SALES       2003     DIVIDENDS   (LOSSES)
-------------                 ----------   ---------    -----    ----------  ---------   --------
                                                                                                 
Alamos Gold Inc.               2,533,334   3,266,668  3,866,668   1,933,334      --           -- 
Aura Systems, Inc.            22,604,200          --         --  22,604,200      --           -- 
Banro Corporation                883,600          --         --     883,600      --           -- 
Canarc Resource Corp.          5,362,000   4,140,000         --   9,502,000      --           -- 
Candente Resource Corp.        2,605,700   1,952,850         --   4,558,550      --           -- 
Cardero Resource Corp.                --   2,460,500         --   2,460,500      --           -- 
Cardima, Inc.                  5,014,264          --         --   5,014,264      --           -- 
Chesapeake Gold Corp.          1,502,200          --         --   1,502,200      --           -- 
Desert Sun Mining Corp.               --   2,500,000         --   2,500,000      --           -- 
Dundee Precious Metals, Inc.      73,700          --         --      73,700      --           -- 
Dynatec Corporation            8,378,800     368,000  1,544,000   7,202,800      --     $309,322 
Franklin Lake Resources Inc.          --     857,143         --     857,143      --           -- 
Golden Goliath Resources Ltd.    800,000   1,388,888         --   2,188,888      --           -- 
Goldrea Resources Corp.               --     800,000         --     800,000      --           -- 
IMA Exploration Inc.           2,391,137     818,500         --   3,209,637      --           -- 
International KRL                                                                                
  Resources Corp.                     --   1,300,000         --   1,300,000      --           -- 
International Uranium                                                                            
  Corporation                  3,315,000          --         --   3,315,000      --           -- 
IRIDEX Corporation               389,741      32,800         --     422,541      --           -- 
KleenAir Systems, Inc.         2,686,500     454,545         --   3,141,045      --           -- 
Madison Enterprises Corp.      3,500,000   2,000,000         --   5,500,000      --           -- 
Maximus Ventures Ltd.                 --     600,000         --     600,000      --           -- 
Metallica Resources, Inc.             --   1,900,000         --   1,900,000      --           -- 
Metalline Mining Co. Inc.        700,000      66,667         --     766,667      --           -- 
Nevada Pacific Gold Ltd.       2,001,000     500,000    219,500   2,281,500      --       21,285 
Northern Orion                                                                                   
  Explorations Ltd.                   --  14,364,500         --  14,364,500      --           -- 
Orezone Resources Inc.         5,669,450   3,006,000         --   8,675,450      --           -- 
Pelangio Mines Inc.            5,042,500          --         --   5,042,500      --           -- 
Pillar Resources Inc.                 --   1,000,000         --   1,000,000      --           -- 
Platinum Group Metals Ltd.     1,514,500   1,070,500         --   2,585,000      --           -- 
Radius Explorations Ltd.              --   1,500,000         --   1,500,000      --           -- 
Redstar Gold Corp.             1,000,000          --         --   1,000,000      --           -- 
Rimfire Minerals Corporation   1,220,000          --         --   1,220,000      --           -- 
Ross River Minerals Inc.         625,000          --         --     625,000      --           -- 
St. Jude Resources Ltd.               --   1,666,667         --   1,666,667      --           -- 
Sultan Minerals Inc.           2,333,333          --         --   2,333,333      --           -- 
Tumi Resources Limited                --     500,000         --     500,000      --           -- 
Tyhee Development Corp.          650,000     650,000         --   1,300,000      --           -- 
Western Silver Corporation     2,432,800      69,200         --   2,502,000      --           -- 
                                                                               ----     -------- 
                                                                                 --     $330,607 
                                                                               ----     -------- 
                                                                               ----     -------- 

9.   SERVICE AND DISTRIBUTION PLAN                                              

The Funds have adopted Service and Distribution Plans (the "Plans")   
    pursuant to Rule 12b-1 under the 1940 Act. The Plans authorize payments by
    the Funds in connection with the distribution of their shares at an annual
   rate, as determined from time to time by the Board of Directors, of up to
   0.25% of the Funds' average daily net assets for the Prudent Bear No Load
  shares and Prudent Safe Harbor Fund and up to 1.00% for the Prudent Bear
  Class C shares. The currently approved rate for the Prudent Bear No Load
shares and the Prudent Safe Harbor Fund is 0.25% of average daily net 
    assets. The currently approved rate for the Prudent Bear Class C shares is
    1.00% of average daily net assets. Payments made pursuant to the Plans may
 only be used to pay distribution expenses in the year incurred. Amounts
paid under the Plans by the Funds may be spent by the Funds on any    
   activities or expenses primarily intended to result in the sale of shares
   of the Funds, including but not limited to, advertising, compensation for
     sales and marketing activities of financial institutions and others such as
   dealers and distributors, shareholder account servicing, the printing and
     mailing of prospectuses to other than current shareholders and the printing
  and mailing of sales literature. The Prudent Bear Fund incurred $628,145
   for the No Load Shares and $40,314 for the Class C Shares pursuant to the
 Plans for the period ended March 31, 2003. The Prudent Safe Harbor Fund
     incurred $276,145 pursuant to the Plan for the period ended March 31, 2003.

10.  SUBSEQUENT EVENT                                                           

  Effective May 30, 2003, the Prudent Safe Harbor Fund filed to change its
name to the Prudent Global Income Fund.                               

PRUDENT BEAR FUNDS, INC.                                                        

INVESTMENT ADVISER                                                              
DAVID W. TICE & ASSOCIATES, INC.                                          
8140 WALNUT HILL LANE, SUITE 300                                          
DALLAS, TEXAS  75231                                                      
HTTP://WWW.PRUDENTBEAR.COM                                                

ADMINISTRATOR, TRANSFER AGENT,                                                  
DIVIDEND PAYING AGENT &                                                         
SHAREHOLDER SERVICING AGENT                                                     
U.S. BANCORP FUND SERVICES, LLC                                           
615 EAST MICHIGAN STREET                                                  
P.O. BOX 701                                                              
MILWAUKEE, WISCONSIN  53201                                               
1-800-711-1848                                                            

CUSTODIAN                                                                       
U.S. BANK, N.A.                                                           
P.O. BOX 701                                                              
MILWAUKEE, WISCONSIN  53201                                               

INDEPENDENT ACCOUNTANTS                                                         
PRICEWATERHOUSECOOPERS LLP                                                
MILWAUKEE, WISCONSIN                                                      

LEGAL COUNSEL                                                                   
FOLEY & LARDNER                                                           
MILWAUKEE, WISCONSIN                                                      

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘N-30D’ Filing		Date		Other Filings
Filed on / Effective on:		6/3/03
		5/30/03		NSAR-A
		5/23/03
		4/2/03
For Period End:		3/31/03		NSAR-A
		10/1/02
		9/30/02		24F-2NT,  N-30D,  NSAR-B
		9/30/01		24F-2NT,  N-30D,  NSAR-B
		9/30/00		24F-2NT,  N-30D,  NSAR-B
		2/2/00
		9/30/99		24F-2NT,  N-30D,  NSAR-B
		2/8/99
		9/30/98		24F-2NT,  N-30D,  NSAR-B
		12/28/95
		10/25/95
				List all Filings