EX-99.77.B

                                                                   Exhibit 77(b)

The Board of Directors
Pilgrim Investment Funds, Inc.:

In planning and  performing  our audit of the  financial  statements  of Pilgrim
Magna Cap Fund (the Fund) of the Pilgrim  Investment  Funds Inc., for the eleven
month period ended May 31, 2001,  we  considered  the Fund's  internal  control,
including control activities for safeguarding securities,  in order to determine
our  auditing  procedures  for the  purpose  of  expressing  our  opinion on the
financial  statements and to comply with the  requirements of Form N-SAR, not to
provide assurance on internal control.

The  management of the Fund is  responsible  for  establishing  and  maintaining
internal control. In fulfilling this responsibility,  estimates and judgments by
management  are  required to assess the expected  benefits and related  costs of
controls.  Generally,  controls  that are  relevant  to an audit  pertain to the
entity's objective of preparing financial  statements for external purposes that
are fairly presented in conformity with accounting principles generally accepted
in the United States of America.  Those  controls  include the  safeguarding  of
assets against unauthorized acquisition, use, or disposition.

Because of inherent  limitations in internal  control,  error or fraud may occur
and not be detected.  Also,  projection of any evaluation of internal control to
future periods is subject to the risk that it may become  inadequate  because of
changes in conditions or that the  effectiveness of the design and operation may
deteriorate.

Our consideration of internal control would not necessarily disclose all matters
in  internal   control  that  might  be  material   weaknesses  under  standards
established  by the  American  Institute  of  Certified  Public  Accountants.  A
material  weakness  is a  condition  in which  the  design or  operation  of the
specific  internal control  components does not reduce to a relatively low level
the risk that  misstatements  caused by error or fraud in amounts  that would be
material in relation to the financial statements being audited may occur and not
be  detected  within a timely  period  by  employees  in the  normal  course  of
performing  their assigned  functions.  However,  we noted no matters  involving
internal  control,  including  controls  for  safeguarding  securities,  that we
consider to be material weaknesses as defined above as of May 31, 2001.

This report is intended solely for the information and use of management and the
Board of Directors of Pilgrim  Investment  Funds,  Inc. and the  Securities  and
Exchange  Commission  and is not intended to be and should not be used by anyone
other than these specified parties.

/s/ KPMG LLP

July 9, 2001

EX-99.77.M

                                                                    Exhibit 77-M

MERGERS

(1) The Board of Directors of the Registrant, on behalf of the Fund (on November
2, 2000), and the Board of Directors of Pilgrim Advisory Funds,  Inc., on behalf
of Pilgrim  LargeCap Leaders Fund (on November 2, 2000), and Shareholders of the
Pilgrim  LargeCap  Leaders Fund (on March 15,  2001),  approved an Agreement and
Plan of  Reorganization  under  which the Fund  acquired  all of the  assets and
liabilities of Pilgrim  LargeCap Leaders Fund in exchange for Classes A, B, C, M
and  Q  shares,  as  applicable,   of  the  Fund  (the  "Reorganization").   The
Reorganization concluded on March 23, 2001.

(2) The Board of Directors of the Registrant, on behalf of the Fund (on November
2, 2000), and the Board of Directors of Pilgrim Advisory Funds,  Inc., on behalf
of Pilgrim  MidCap Value Fund (on  November 2, 2000),  and  Shareholders  of the
Pilgrim MidCap Value Fund (on February 23, 2001), approved an Agreement and Plan
of  Reorganization  under  which  the  Fund  acquired  all  of  the  assets  and
liabilities  of Pilgrim MidCap Value Fund in exchange for Classes A, B, C, M and
Q shares, as applicable, of the Fund (the "Reorganization").  The Reorganization
concluded on February 23, 2001.

EX-99.77.Q1

                                                                   Exhibit 77-Q1

EXHIBITS

(g)(1) Form of Agreement and Plan of Reorganization  between the Registrant,  on
behalf of the Fund,  and  Pilgrim  Advisory  Funds,  Inc.,  on behalf of Pilgrim
LargeCap  Leaders  Fund,  is  incorporated  by  reference  to  the  Registration
Statement on Form N-14 as filed on November 28, 2000.

(g)(2) Form of Agreement and Plan of Reorganization  between the Registrant,  on
behalf of the Fund,  and  Pilgrim  Advisory  Funds,  Inc.,  on behalf of Pilgrim
MidCap Value Fund, is incorporated by reference to the Registration Statement on
Form N-14 as filed on November 28, 2000.