FIRST AMENDMENT TO THE
                         PRINCIPAL INVESTORS FUND, INC.
                             SUB-ADVISORY AGREEMENT

Agreement executed as of the 12th day of December, 2000, to amend the
Sub-Advisory Agreement executed as of September 15, 2000 (and including any
subsequent amendments thereafter) by and between Principal Management
Corporation (hereinafter called the "Manager") and Principal Capital Income
Investors, LLC (hereinafter called "PCII").

WHEREAS, in the Sub-Advisory Agreement, Manager retained PCII to furnish it with
portfolio selection and related research and statistical services in connection
with the investment advisory services which the Manager has agreed to provide to
the Principal Investors Fund, Inc. (hereinafter called the "Fund"); and

WHEREAS, the Manager and PCII now wish to amend the Sub-Advisory Agreement;

NOW, THEREFORE, in consideration of the terms and conditions set forth
hereinafter, the parties agree that effective January 1, 2001 Schedule A will
read as follows:


                                   SCHEDULE A

         Balanced (Fixed-Income Securities Only).......................0.086%
         Bond & Mortgage Securities....................................0.106%
         Government Securities.........................................0.06%
         High Quality Intermediate Term Bond...........................0.06%
         High Quality Short-Term Bond..................................0.055%
         High Quality Long-Term Bond...................................0.06%
         Money Market..................................................0.05%


                                    Principal Management Corporation


                                    By:  /s/ A. S. Filean
                                       --------------------------------------
                                         A. S. Filean


                                    Principal Capital Income Investors, LLC


                                    By:  /s/ Randall C. Mundt
                                       --------------------------------------
                                         Randall C. Mundt