Room 4561
						  May 24, 2006

Thomas A. McDonnell
Chief Executive Officer
DST Systems, Inc.
333 West 11th Street
Kansas City, Missouri 64105

Re:	DST Systems, Inc.
	Form 10-K for the Fiscal Year Ended December 31, 2005
	Filed March 7, 2006
	Form 8-K Filed April 26, 2006
	File no. 1-14036

Dear Mr. McDonnell:

      We have reviewed the above referenced filings and have the
following comments.  Please note that we have limited our review
to
the matters addressed in the comments below.  Where indicated, we
think you should revise your document in response to these
comments.
If you disagree, we will consider your explanation as to why our
comment is inapplicable or a revision is unnecessary.  Please be
as
detailed as necessary in your explanation.  In some of our
comments,
we may ask you to provide us with supplemental information so we
may
better understand your disclosure.  After reviewing this
information,
we may or may not raise additional comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

Form 10-K for the Fiscal Year Ended December 31, 2005

Consolidated Balance Sheet, page 78
1. We note your presentation of Transfer agency investments in
current assets.  Tell us whether transfer agency investments are
restricted assets, and if so, why they are not identified as
restricted assets.

Consolidated Statement of Income, page 77
2. It appears from disclosures throughout your filing that you
sell
hardware, software, services and receive rental income.  Tell us
how
you considered separately disclosing your product, service and
rental
revenues and their respective costs.  In your response address the
nature and types of hardware, software and services you provide
and
the approximate amount of revenue generated from each. Rule 5-
03(b)(1) and (2) of Regulation S-X.
3. We also note that you do not separately disclose the cost of
revenues and selling, general and administrative expense.  Tell us
why you believe all "costs and expenses" relate to revenue
producing
activities.  For example why would marketing, advertising,
selling,
accounting and finance expenses and executives salaries, for
example,
relate to revenue producing activities?  Further tell us the
amount
of selling, general and administrative expenses and what expenses
you
include in these categories for each year presented and how your
current presentation complies with Rule 5-03(b)(2), (3) and (4) of
Regulation S-X.

Note 2 - Significant Accounting Policies

Principles of consolidation, page 82
4. We note from your disclosures that the Company`s analyses of
its
real estate joint ventures indicate that a large portion of the
real
estate joint ventures are variable interest entities; however, the
real estate joint venture does not need to be consolidated because
the Company is not the primary beneficiary.  Tell us how you
considered disclosing information relating to the Company`s
variable
interests pursuant to paragraph 24 of FIN 46R.  Further provide
this
information supplementally.

Revenue Recognition, page 83
5. You disclose that allowances for billing adjustments are
estimated
as revenues are recognized and recorded as reductions in revenues.
Provide us the activity allowances for billing adjustments and
doubtful accounts for all periods presented and how you considered
disclosing this information this activity within the notes to your
financial statements or providing this information in Schedule II
(Valuation of qualifying accounts) to your filing.  We refer you
to
Rule 5-04 of Regulation S-X.
6. We note that the Company enters into arrangements to sell
software, hardware and services.  With regards to these multiple
element arrangements, please explain the following:

* Tell us the nature of the units of account and how you have
determined the units of account.
* Tell us how you account for arrangements that include product
and
technical support services (post contract customer support).  For
instance, tell us if the product licenses are term licenses or
perpetual licenses and tell us your accounting treatment for each.
* Tell us how you determined you have established vendor specific
objective evidence of fair value for each element (software,
hardware
and services).
* Tell how you considered the provisions of EITF 03-5 in
determining
the literature to apply to multiple element arrangements that
include
software and non-software deliverables.
7. We note from disclosures throughout your fling that the Company
provides a number of different services (billing services, design
services, distribution services, etc.) for which the nature and
terms
of the arrangements appear to differ.  Tell us the nature and
billing
terms of the arrangements, the timing of revenue recognition and
the
authoritative literature that is generally applied in recognizing
revenue for your different services.
8. We note from disclosures within your filing that you have an
insurance company (Vermont Western Assurance, Inc.).  Tell us the
authoritative guidance you follow in accounting for the operations
of
this insurance company and how your financial reporting for
insurance
related activities complies with this guidance.  In your response
tell us the significance of this operation to your financial
condition, results of operations and cash flows.

Software development and maintenance, page 84
9. We note from your disclosure that non-capitalizable software
development and maintenance costs are included in operating costs.
Tell us under what circumstances that maintenance costs would be
capitalized and the authoritative literature that provides for
capitalization of maintenance costs.  Further tell us the amount
of
software development and maintenance costs, as disclosed in your
notes, relates to research and development as opposed to
maintenance.
Revise future filings to disclose the amount that relates to
research
and development.   We refer you to SFAS 2.

Earnings per share, page 86
10. You disclose that under EITF 04-8, the Company can still
utilize
the "net share settlement method" of calculation shares for the
conversion premiums if it intends to settle the principal amount
of
the bonds in cash and any excess value with shares of its common
stock.  Tell us the provisions of EITF 04-8 that provide for "net
share settlement" based on "intent" as opposed to a contractual
arrangement which requires the settlement of principal amounts in
cash.  Further explain why the shares to be issued upon conversion
of
debt (principal, accrued interest and premium value), should not
be
included in the computation of diluted EPS.

Note 7 - Long-Term Debt, page 99
11. We note from your schedule of long-term debt it appears that
your
revolving credit facilities are classified as long-term debt.
Tell
us how you considered the provisions of EITF 95-22 in determining
that your revolving credit facilities should be classified as
long-
term.
12. We note that the Company has approximately $840 million of
convertible debentures outstanding.  Tell us how you considered
the
guidance in EITF Issue 00-19 in evaluating whether the debt
conversion features of the debentures are embedded derivatives
that
you should separate from the debt host and account for at fair
value
under SFAS 133 prior to conversion/redemption.  In your response
address the relevant information in Section II B of Current
Accounting and Disclosure Issues in the Division of Corporation
Finance which is available on our website at
http://www.sec.gov/divisions/corpfin/acctdis120105.pdf.

Form 8-K Filed April 26, 2006

13. In view of the nature, content and format of your Condensed
Consolidated Statement of Income Adjusted for Non-GAAP Amounts and
we
to believe that your current presentation of a full non-GAAP
Statement of Income creates a number of unique non-GAAP measures
(costs and expenses, depreciation and amortization, income from
operations, income taxes, net income etc.).  In this regard we
note
your presentation of a full non-GAAP Statement of Operations could
be
reasonably interpreted to imply that the presentation is based on
a
comprehensive set of accounting rules or principles when, in fact,
that is not the case.  Please revise your presentation in future
filings to eliminate this presentation or provide disclosures for
each unique non-GAAP measure included in  this presentation as
noted
in Question 8 of the Frequently Asked Questions Regarding the Use
of
Non-GAAP Financial Measures, Regulation G and Item 10 (e) (1) (i)
of
Regulation S-K.  Further discuss the nature of each income or
expense
items excluded from your Non-GAAP measures, their recurring or
non-
recurring nature, their significance to and investor in evaluating
the company`s financial condition and/or results of operations and
whether they related to material known trends, events or
uncertainties that must be disclosed.

	As appropriate, please amend your filing and respond to these
comments within 10 business days or tell us when you will provide
us
with a response.  Please submit all correspondence and
supplemental
materials on EDGAR as required by Rule 101 of Regulation S-T.  You
may wish to provide us with marked copies of any amendment to
expedite our review.  Please furnish a cover letter with any
amendment that keys your responses to our comments and provides
any
requested information.  Detailed cover letters greatly facilitate
our
review.  Please understand that we may have additional comments
after
reviewing any amendment and your responses to our comments.

	 We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision.  Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.

	In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

      In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.

      You may contact Kari Jin, Staff Accountant, at (202) 551-
3481,
Tom Ferraro, Senior Staff Accountant at (202) 551-3225 or me at
(202)
551-3730 if you have questions regarding these comments.



Sincerely,


      Kathleen Collins
      Accounting Branch Chief
Mr. Thomas A. McDonnell
DST Systems, Inc.
May 24, 2006
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