PRELIMINARY PROXY


                          DG INVESTOR SERIES
                DG LIMITED TERM GOVERNMENT INCOME FUND


               NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
                      TO BE HELD JANUARY 12, 1998

         A special meeting of the shareholders of DG Limited Term
Government Income Fund, a portfolio of DG Investor Series, will be
held at Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh,
Pennsylvania 15222-3779, at 2:00 p.m. (Eastern time), on January 12,
1998, for the following purposes:

(1)  APPROVAL OR DISAPPROVAL OF A CHANGE TO THE INVESTMENT OBJECTIVE
     OF DG LIMITED TERM GOVERNMENT INCOME FUND; AND

(2)  TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
     MEETING OR ANY ADJOURNMENT THEREOF.

         The Board of Trustees has fixed November 17, 1997, as the
record date for determination of shareholders entitled to vote at the
meeting.

                                                     By Order of the Trustees



                                                     John W. McGonigle
                                                     Secretary


November 26, 1997


     SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY TO AVOID ADDITIONAL
     EXPENSE.

     YOU  CAN HELP THE TRUST AVOID THE NECESSITY AND EXPENSE OF SENDING
     FOLLOW-UP LETTERS TO ENSURE A QUORUM BY PROMPTLY RETURNING THE
     ENCLOSED PROXY. IF YOU ARE UNABLE TO ATTEND THE MEETING, PLEASE
     MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY SO THAT THE
     NECESSARY QUORUM MAY BE REPRESENTED AT THE SPECIAL MEETING. THE
     ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED
     STATES.






3

                          DG INVESTOR SERIES
                       Federated Investors Tower
                       Pittsburgh, PA 15222-3779

                            PROXY STATEMENT

     The enclosed proxy is solicited on behalf of the Board of
Trustees of DG Investor Series (the "Trust") with respect to DG
Limited Term Government Income Fund (the "Fund"). The proxies will be
voted at the special meeting of shareholders of the Fund to be held on
January 12, 1998, at the offices of the Trust, Federated Investors
Tower, Pittsburgh, Pennsylvania 15222-3779 (such special meeting and
any adjournment or postponement thereof are referred to as the
"Special Meeting"). The proxy is revocable at any time before it is
voted by sending written notice of the revocation to the Trust or by
appearing personally at the Special Meeting.

The cost of preparing and mailing the notice of meeting, this proxy
statement, proxy card and any additional proxy material has been or is
to be borne by the Fund. Proxy solicitations will be made primarily by
mail, but may also be made by telephone, telegraph, or personal
interview conducted by certain officers or employees of the Trust, of
Federated Shareholder Services Company (the Trust's transfer agent) or
of Federated Administrative Services (the Trust's administrator). In
the event that a shareholder signs, dates, and returns the proxy
ballot but does not indicate a choice as to the item on the proxy
ballot, the proxy attorneys will vote those shares in favor of such
proposal.

The purposes of the Special Meeting are set forth in the accompanying
Notice of Special Meeting of Shareholders. The Trustees know of no
business other than that mentioned in the Notice that will be
presented for consideration at the Special Meeting. Should other
business properly be brought before the Special Meeting, proxies will
be voted in accordance with the best judgment of the persons named as
proxies. This Proxy Statement and the enclosed proxy card are expected
to be mailed on or about November 26, 1997, to shareholders of record
at the close of business on November 17, 1997 (the "Record Date").

 Only shareholders of record on the Record Date will be entitled to
vote at the Special Meeting. On the Record Date, the Fund had
outstanding x,xxx,xxx shares of beneficial interest. Holders of more
than fifty percent of the total number of outstanding shares of the
Fund, present in person or by proxy, shall be required to constitute a
quorum at the Special Meeting for the purpose of voting on the
proposal offered.

Each share of the Fund is entitled to one vote, and fractional shares
are entitled to proportionate shares of one vote. At the close of
business on the Record Date, the following persons owned, to the
knowledge of management, more than 5% of the outstanding shares of the
Fund: Deposit Guaranty National Bank, Jackson, Mississippi, acting in
various capacities for numerous accounts, was owner of record of
x,xxx,xxx shares (xx.xx%).

The favorable vote of a majority, as defined in the Investment Company
Act of 1940 (the "1940 Act"), of the outstanding voting securities of
the Fund is required for approval of the proposal to approve a change
to the investment objective of the Fund. The vote of shareholders of a
majority (as so defined in the 1940 Act) of outstanding securities
means (a) the vote of the holders of 67% or more of the shares present
at the meeting, if the holders of 50% or more of the outstanding
voting securities of the Fund are present or represented by proxy, or
(b) the vote of the holders of more than 50% of the outstanding
shares, whichever is less.

For purposes of determining the presence of a quorum and counting
votes on the matters presented, shares represented by abstentions and
"broker non-votes" will be counted as present, but not as votes cast,
at the Special Meeting. Under the Trust's Declaration of Trust, the
vote will be determined on the basis of a percentage of votes cast at
the Special Meeting. Under the 1940 Act, the affirmative vote
necessary to approve a change to the investment objective of the Fund
is determined with reference to a percentage of votes present at the
Special Meeting, which would have the effect of treating abstentions
and non-votes as if they were votes against the proposal.

         The Trust will furnish, without charge, a copy of the annual
report, which includes audited financial statements for the fiscal
year ended February 28, 1997, and a copy of the semi-annual report for
the period ended August 31, 1997, to any shareholder of record upon
request. Requests for an annual report and/or semi-annual report
should be directed to the Trust's principal executive offices located
at Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779 or
by calling toll-free 1-800-530-7377.

              APPROVAL OR DISAPPROVAL OF A CHANGE TO THE
    INVESTMENT OBJECTIVE OF DG LIMITED TERM GOVERNMENT INCOME FUND

     The Board of Trustees of the Fund, at its meeting on November 17,
1997, approved an amendment to the investment objective of the Fund.
It is proposed that the present investment objective of the
Fund, which cannot be changed without shareholder approval, stated as:

         "The investment objective of DG Limited Term Government
Income Fund is current income, the weighted-average duration of which
will at all times be limited to between one and six years."

be changed to read as follows:

         "The investment objective of DG Limited Term Government
Income Fund is current income, the weighted-average duration of which
will at all times be limited to between one and three years."

         The change is being submitted for shareholder approval at the
Special Meeting. Management of the Fund is recommending that the
proposed change in the investment objective (which would shorten the
maximum weighted-average duration of the Fund to three years from six
years) be approved in order to decrease the potential magnitude of
fluctuations in the Fund's net asset value. Portfolios composed of
securities with short durations generally have less volatile net asset
values than those composed of securities of with longer durations.

         The proposed change in investment objective would not result
in a change in the management of the Fund, because ParkSouth
Corporation, the Fund's investment adviser, has, as a matter of past
operating policy, limited the Fund's duration to three years in order
to attempt to minimize fluctuation of the Fund's net asset value. The
investment adviser believes that the recommended change in stated
investment objective may promote the growth of Fund assets by
attracting investors whose investment goals are to achieve current
income consistent with capital preservation.


         THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS APPROVAL BY
SHAREHOLDERS OF THE FUND OF THE PROPOSED CHANGE TO THE INVESTMENT
OBJECTIVE OF THE FUND.




     OTHER MATTERS AND DISCRETION OF ATTORNEYS NAMED IN THE PROXY

         The Trust is not required, and does not intend, to hold
annual meetings of shareholders. Shareholders wishing to submit
proposals for consideration for inclusion in a proxy statement for the
next meeting of shareholders should send their written proposals to DG
Investor Series, Federated Investors Tower, Pittsburgh, Pennsylvania
15222-3779, so that they are received within a reasonable time before
any such meeting.

         No business other than the matter described above is expected
to come before the Special Meeting, but should any other matter
requiring a vote of shareholders arise, including any question as to
an adjournment or postponement of the Special Meeting, the persons
named on the enclosed proxy card will vote on such matters according
to their best judgment in the interests of the Fund.

           PROXIES, QUORUM AND VOTING AT THE SPECIAL MEETING

         Any person giving a proxy has the power to revoke it any time
prior to its exercise by executing a superseding proxy or by
submitting a written notice of revocation to the Secretary of the
Trust. In addition, although mere attendance at the Special Meeting
will not revoke a proxy, a shareholder present at the Special Meeting
may withdraw his or her proxy and vote in person. All properly
executed and unrevoked proxies received in time for the Special
Meeting will be voted in accordance with the instructions contained in
the proxies. If no instruction is given, the persons named as proxies
will vote the shares represented thereby in favor of the matters set
forth in the attached Notice.

         In the event that, at the time any session of the Special
Meeting is called to order, a quorum is not present at the Special
Meeting, or in the event that a quorum is present at the Special
Meeting but sufficient votes to approve the proposal are not received,
the persons named as proxies may propose one or more adjournments of
the Special Meeting to permit further solicitation of proxies. Any
such adjournment will require the affirmative vote of a majority of
those shares affected by the adjournment represented at the Special
Meeting in person or by proxy. If a quorum is present, the persons
named as proxies will vote those proxies which they are entitled to
vote FOR the proposal in favor of such an adjournment, and will vote
those proxies required to be voted AGAINST the proposal against any
adjournment. A shareholder vote may be taken on the proposal in this
Proxy Statement prior to any such adjournment if sufficient votes have
been received for approval. Under the Declaration of Trust of the
Trust, a quorum is constituted by the presence in person or by proxy
of the holders of a majority of the issued and outstanding shares of
the Fund entitled to vote at the Special Meeting.


                    SHAREHOLDERS ARE REQUESTED TO COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE,
WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES.


                       By Order of the Trustees


                           JOHN W. McGONIGLE
                               Secretary
                          November 26, 1997








                          DG INVESTOR SERIES
                DG LIMITED TERM GOVERNMENT INCOME FUND

INVESTMENT ADVISER
PARKSOUTH CORPORATION
P.O. Box 1200
Jackson, Mississippi 39215-1200

DISTRIBUTOR
FEDERATED SECURITIES CORP.
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779

ADMINISTRATOR
FEDERATED ADMINISTRATIVE SERVICES
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779

Cusip 23321N509
GO(11/97)





KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders
of DG Limited Term Government Income Fund hereby appoint C. Grant
Anderson, Patricia F. Conner, Marie M. Hamm, Suzanne W. Land, and
Susan M. Jones, or any one of them, true and lawful attorneys, with
the power of substitution of each, to vote all shares of DG Limited
Term Government Income Fund which the undersigned is entitled to vote
at the Special Meeting of Shareholders to be held on January 12, 1998,
at Federated Investors Tower, Pittsburgh, Pennsylvania, at 2:00 p.m.,
and at any adjournment thereof.

The attorneys named will vote the shares represented by this proxy in
accordance with the choice made on this ballot. If no choice is
indicated as to the item, this proxy will be voted affirmatively on
the matter. Discretionary authority is hereby conferred as to all
other matters as may properly come before the Special Meeting or any
adjournment thereof.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF DG
INVESTOR SERIES. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN
THE MANNER DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED "FOR" PROPOSAL 1.

PROPOSAL 1. APPROVAL OR DISAPPROVAL OF A CHANGE TO THE INVESTMENT
OBJECTIVE OF DG LIMITED TERM GOVERNMENT INCOME FUND.

                                    FOR              [   ]
                                    AGAINST [   ]
                                    ABSTAIN [   ]


YOUR VOTE IS IMPORTANT
Please complete, sign and return     _____________________
this card as soon as possible.                               Date
Mark with an X in the box.           _____________________
                                                             Signature

                                              ------------------------
                                              Signature (Joint Owners)



Please sign this proxy exactly as your name appears on the books of
the Fund. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign, and where
more than one name appears, a majority must sign. If a corporation,
this signature should be that of an authorized officer who should
state his or her title.


DO YOU HAVE ANY COMMENTS?
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HAS YOUR ADDRESS CHANGED?
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                          DG INVESTOR SERIES
                DG LIMITED TERM GOVERNMENT INCOME FUND


Dear Shareholder:


     Please take note of the important information enclosed with the
Proxy Ballot. There is an issue related to the management and
operation of your Fund that requires your immediate attention and
approval. It is discussed in detail in the enclosed proxy materials.

Your vote counts, and you are strongly encouraged to exercise your
right to vote your shares.

Please mark the box on the proxy card to indicate how your shares
shall be voted. Then sign the card, detach it and return your proxy
card in the enclosed postage paid envelope.

Your vote must be received prior to the Special Meeting of
Shareholders, January 12, 1998.

Thank you in advance for your prompt consideration of this matter.


Sincerely,


DG Investor Series





                       SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

Filed by the Registrant [ ] Filed by a Party other than the Registrant
[ X ]

Check the appropriate box:

[ X ]    Preliminary Proxy Statement
[  ]  Confidential, for Use of the Commission Only (as permitted by
      Rule 14a-6(e)(2))
[  ]     Definitive Proxy Statement
[  ]     Definitive Additional Materials
[  ]     Soliciting Material Pursuant to Sec. 240.14a-11(c) or
         Sec. 240.14a-12


DG Investor Series

(Name of Registrant as Specified In Its Charter)


Federated Investors

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)


Payment of Filing Fee (Check the appropriate box):

 [ X ] No fee required.
 [       ] Fee computed on table below per Exchange Act Rules
         14a-6(i)(4) and 0-11.

         1. Title of each class of securities to which transaction
applies:

         2. Aggregate number of securities to which transaction
applies:

         3.   Per unit price or other underlying value of transaction computed
              pursuant to Exchange Act Rule 0-11 (set forth the amount on which
              the filing fee is calculated and state how it was determined):

         4. Proposed maximum aggregate value of transaction:

         5. Total fee paid:


[  ]     Fee paid previously with preliminary proxy materials.






[    ]    Check box if any part of the fee is offset as provided by
          Exchange Act Rule 0-11(a)(2) and identify the filing for which
          the offsetting fee was paid previously. Identify the previous
          filing by registration statement number, or the Form or Schedule
          and the date of its filing.

         1)   Amount Previously Paid:
              ---------------------------------------------------------------

         2)   Form, Schedule or Registration Statement No.:
              ---------------------------------------------------------------

         3)   Filing Party:
              ---------------------------------------------------------------

         4)   Date Filed:
              ---------------------------------------------------------------