CLASS Y SHAREHOLDER SERVICE AGREEMENT

 This agreement, dated as of April 9, 2003, is by and between AXP Discovery
 Series, Inc., (the "Corporation"), a Minnesota corporation, on behalf of its
 underlying series AXP Core Bond Fund, AXP Income Opportunities Fund and AXP
 Limited Duration Bond Fund (individually a "Fund" and collectively the
 "Funds"), and American Express Financial Advisors Inc. ("AEFA"), the principal
 underwriter of the Funds, for services to be provided to shareholders of Class
 Y of the Funds by AEFA and other servicing agents.

 AEFA represents that shareholders consider personal service a significant
 factor in their satisfaction with their investment. AEFA represents that fees
 paid by the Funds will be used to help shareholders thoughtfully consider their
 investment goals and objectively monitor how well the goals are being achieved.

 Each Fund agrees to pay AEFA a fee equal to 0.10 percent of the net asset value
 of Class Y shares. The Funds agree to pay the fee to AEFA in cash within five
 (5) business days after the last day of each month.

 AEFA agrees to provide the Funds annually with a budget covering its expected
 costs and a quarterly report of its actual expenditures. AEFA agrees to meet
 with representatives of the Funds at their request to provide information as
 may be reasonably necessary to evaluate its performance under the terms of this
 agreement.

 This agreement shall continue in effect for a period of more than one year so
 long as it is reapproved at least annually by a vote of the members of the
 Board who are not interested persons of the Funds and have no financial
 interest in the operation of the agreement, and of all the members of the
 Board.

 This agreement may be terminated at any time without payment of any penalty by
 a vote of a majority of the members of the Board who are not interested persons
 of the Funds and have no financial interest in the operation of the agreement,
 or by AEFA. The agreement will terminate automatically in the event of its
 assignment, as that term is defined in the Investment Company Act of 1940. This
 agreement may be amended at any time provided the amendment is approved in the
 same manner the agreement was initially approved and the amendment is agreed to
 by AEFA.

 This agreement shall be governed by the laws of the State of Minnesota.

 AXP DISCOVERY SERIES, INC.                  AMERICAN EXPRESS
     AXP Core Bond Fund                      FINANCIAL ADVISORS INC.
     AXP Income Opportunities Fund
     AXP Limited Duration Bond Fund

/s/ Leslie L. Ogg                            /s/ Ward D. Armstrong
-----------------------                      ------------------------
    Leslie L. Ogg                                Ward D. Armstrong
    Vice President                               Senior Vice President--
                                                 Retirement Services and
                                                 Asset
                                                 Management