SEC FILE NO. 02-91302
                                                           SEC FILE NO. 02-48906
                                                           SEC FILE NO. 33-56094
                                                           SEC FILE NO. 02-34552
                                                           SEC FILE NO. 33-67852

                                  PILGRIM FUNDS

                      Supplement dated January 22, 2001 to
                  the Class A, B, C, M and T Income Prospectus
                             dated November 1, 2000

1. PROPOSED FUND REORGANIZATIONS

     On November 2, 2000, the Board of  Directors/Trustees  of the Pilgrim Funds
approved  proposals to  reorganize  the  following  Disappearing  Funds into the
following Surviving Funds (the "Reorganizations"):

                DISAPPEARING FUND                           SURVIVING FUND
                -----------------                           --------------
     Pilgrim Government Securities Income Fund       Pilgrim GNMA Income Fund
     Pilgrim High Total Return Fund                  Pilgrim High Yield Fund II
     Pilgrim High Total Return Fund II               Pilgrim High Yield Fund II

     The proposed Reorganizations are subject to the approval of shareholders of
the Disappearing Funds. If shareholder approval is obtained, it is expected that
the Reorganizations will take place in the first quarter of 2001.

2. EXCHANGES

     Effective  November  6, 2000,  the  following  disclosure  supplements  the
disclosure  under  "Shareholder  Guide -- Transaction  Policies -- Exchanges" on
pages 29-30 of the Prospectus:

     You may also exchange  shares of a Fund for shares of the same class of any
     ING Fund,  without paying any additional sales charge.  Shares subject to a
     CDSC will  continue  to age from the date  that the  original  shares  were
     purchased.

3. CHANGE IN DESCRIPTION OF INVESTMENT STRATEGIES FOR PILGRIM GNMA INCOME FUND

     Effective January 16, the following  disclosure will replace the disclosure
under  "Pilgrim  GNMA  Income  Fund  --  Investment  Strategy"  on page 6 of the
Prospectus:

     Under normal conditions,  the Fund will invest at least 80% of the value of
     its total assets in GNMA (Ginnie Mae) Certificates. The remaining assets of
     the Fund will be invested in other  securities  issued or guaranteed by the
     U.S.  Government,  including U.S.  Treasury  securities,  and in securities
     issued  by  the  following  agencies  and  instrumentalities  of  the  U.S.
     Government:  the Federal  National  Mortgage  Association  (FNMA),  and the
     Federal Home Loan Mortgage Corporation (FHLMC). The Fund may invest in debt
     securities  of any  maturity,  although the  portfolio  manager  expects to
     invest in long-term debt instruments.

     Although  FNMA  and  FHLMC  are  government-sponsored   enterprises,  their
     securities  are not  backed  by the full  faith and  credit  of the  United
     States. Consequently, there are somewhat greater credit risks involved with
     investing in securities  issued by those entities than in securities backed
     by the full faith and credit of the U.S. Government.

               PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE