PLAN AND AGREEMENT OF DISTRIBUTION

This plan and agreement, dated as of November 13, 2003, is between AXP Discovery
Series, Inc., (the "Corporation"), a Minnesota corporation, on behalf of its
underlying series AXP Inflation Protected Securities Fund (the "Fund"), and
American Express Financial Advisors Inc. ("AEFA"), the principal underwriter of
the Fund, for distribution services to the Fund.

The plan and agreement has been approved by members of the Board of Directors
(the "Board") of the Fund who are not interested persons of the Fund and have no
direct or indirect financial interest in the operation of the plan or any
related agreement, and all of the members of the Board, in person, at a meeting
called for the purpose of voting on the plan and agreement.

The plan and agreement provides that:

1.   The Fund will reimburse AEFA for expenses incurred in connection with
     distributing the Fund' shares and providing personal service to
     shareholders. These expenses include sales commissions; business, employee
     and financial advisor expenses charged to distribution of shares; and
     overhead appropriately allocated to the sale of shares.

2.   A portion of the fee under the agreement will be used to compensate AEFA,
     financial advisors and other servicing agents for personal service to
     shareholders. Fees paid will be used to help shareholders thoughtfully
     consider their investment goals and objectively monitor how well the goals
     are being achieved.

3.   AEFA agrees to monitor the services it provides, to measure the level and
     quality of services and to provide training and support to financial
     advisors and servicing agents. AEFA will use its best efforts to assure
     that other distributors provide comparable services to shareholders.

4.   The fee under this agreement will be equal as shown in Schedule A. The
     amount so determined shall be paid to AEFA in cash within five (5) business
     days after the last day of each month.

5.   For each purchase of Class B shares, the Class B shares will be converted
     to Class A shares in the ninth year of ownership.

6.   The Fund understand that if a shareholder redeems Class B shares before
     they are converted to Class A shares, AEFA will impose a sales charge
     directly on the redemption proceeds to cover those expenses it has
     previously incurred on the sale of those shares.

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7.   The Fund understand that if a shareholder redeems Class C shares in the
     first year of ownership, AEFA will impose a sales charge directly on the
     redemption proceeds to cover those expenses it has previously incurred on
     the sale of those shares.

8.   AEFA agrees to provide at least quarterly an analysis of expenses under
     this agreement and to meet with representatives of the Fund as reasonably
     requested to provide additional information.

9.   The plan and agreement shall continue in effect for a period of more than
     one year provided it is reapproved at least annually in the same manner in
     which it was initially approved.

10.  The plan and agreement may not be amended to increase materially the amount
     that may be paid by the Fund without the approval of a least a majority of
     the outstanding shares of the relevant class. Any other amendment must be
     approved in the manner in which the plan and agreement was initially
     approved.

11.  This agreement may be terminated as to any class of the Fund 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 Fund and have no financial
     interest in the operation of the plan and agreement, or by vote of a
     majority of the outstanding shares of the relevant class, or by AEFA. The
     plan and agreement will terminate automatically in the event of its
     assignment as that term is defined in the Investment Company Act of 1940.

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



AXP DISCOVERY SERIES, INC.
         AXP Inflation Protected Securities Fund

/s/ Leslie L. Ogg
---------------------------
    Leslie L. Ogg
    Vice President




                                                                          Page 3


AMERICAN EXPRESS FINANCIAL ADVISORS INC.


/s/ Paula R. Meyer
--------------------------
    Paula R. Meyer
    Senior Vice President and General Manager - Mutual Funds




                                                                          Page 4


Schedule A


                           AXP DISCOVERY SERIES, INC.
                     AXP Inflation Protected Securities Fund

                                  Fee Schedule


The fee for services under this Agreement is equal on an annual basis to the
following percentage of the average daily net assets of the Fund attributable to
a particular class:

                   Class A        Class B      Class C

                    0.25%          1.00%        1.00%


For Class B and Class C shares, 0.75% shall be reimbursed for distribution
expenses. The additional 0.25% shall be paid to AEFA to compensate AEFA,
financial advisors and servicing agents for personal service to shareholders and
maintenance of shareholder accounts.