I.       General Identifying Information

1. Reason fund is applying to deregister (check only one; for descriptions, see
Instruction 1 above):

         [X]      Merger

         [  ]     Liquidation

         [  ]     Abandonment of Registration
                  (Note:  Abandonments of Registration answer only questions
                  1 through 15, 24 and 25 of this form
                  and complete verification at the end of the form.)

         [  ]     Election of status as a Business Development Company
                  (Note:  Business Development Companies answer only questions
                  1 through 10 of this form and
                  complete verification at the end of the form.)

2. Name of fund:

                  Principal Equity Income Fund, Inc.

3. Securities and Exchange Commission File No.: 811-07266

4. Is this an initial Form N-8F or an amendment to a previously filed Form N-8F?

         [X] Initial Application [ ] Amendment

5.   Address of Principal  Executive Office (include No. & Street,  City, State,
     Zip Code):

                  711 High Street
                  Des Moines, Iowa  50392-2080

6.       Name, address and telephone number of individual the Commission staff
         should contact with any questions regarding this form:

              Michael D. Roughton, Senior Securities Counsel   (515) 248-3842

7.       Name, address and telephone number of individual or entity responsible
         for maintenance and preservation of fund records in accordance with
         rules 31a-1 and 31a-2 under the Act [17 CFR 270.31a-1, 31a-2]:

         NOTE:      Once deregistered, a fund is still required to maintain and
                    preserve the records described in rules 31a-1 and 31a-2 for
                    the periods specified in those rules.

8.   Classification of fund (check only one):

         [X] Management company;

         [  ]     Unit investment trust; or

         [  ]     Face-amount certificate company.

9.   Subclassification if the fund is a management company (check only one):

         [X] Open-end [ ] Closed-end

10.  State law under which the fund was  organized  or formed  (e.g.,  Delaware,
     Massachusetts):

                                    Maryland

11.      Provide the name and address of each investment adviser of the fund
         (including sub-advisers) during the last five years, even if the fund's
         contracts with those advisers have been terminated:

           Adviser: Principal Management Corporation
                             711 High Street, Des Moines, Iowa  50392-2080

           Sub-Adviser:      Principal Global Investors
                             711 High Street, Des Moines, Iowa  50392

12.      Provide the name and address of each principal underwriter of the fund
         during the last five years, even if the fund's contracts with those
         underwriters have been terminated:

          Principal Underwriter:  Princor Financial Services Corporation
                                  711 High Street, Des Moines, Iowa  50392-2080

13.      If the fund is a unit investment trust ("UIT") provide:

         (a) Depositor's name(s) and address(es):

         (b) Trustee's name(s) and address(es):

14.      Is there a UIT registered under the Act that served as a vehicle for
         investment in the fund (e.g., an insurance company separate account)?

         [  ]     Yes               [X]     No

         If Yes, for each UIT state:
                                    Name(s):

                                 File No.: 811-

                                Business Address:

15.      a)       Did the fund obtain approval from the board of directors
                  concerning the decision to engage in a Merger, Liquidation or
                  Abandonment of Registration?

                  [X] Yes [ ] No

                  If Yes, state the date on which the board vote took
                  place:     February 24, 2005

                                 If No, explain:

         (b)      Did the fund obtain approval from the shareholders concerning
                  the decision to engage in a Merger, Liquidation or Abandonment
                  of Registration?

                  [X] Yes [ ] No

                  If Yes, state the date on which the shareholder vote took
                  place:  June 16, 2005

                                 If No, explain:


II.      Distributions to Shareholders

16. Has the fund distributed any assets to its shareholders in connection with
    the Merger or Liquidation?

         [  ]     Yes               [  ]    No

         (a) If Yes, list the date(s) on which the fund made those
             distributions:

         (b) Were the distributions made on the basis of net assets?

                  [  ]     Yes              [  ]     No

         (c) Were the distributions made pro rata based on share ownership?

                  [  ]     Yes              [  ]     No

         (d) If no to (b) or (c) above, describe the method of
             distributions to shareholders. For Mergers, provide the
             exchange ratio(s) used and explain how it was calculated:

         (e) Liquidations only:
             Were any distributions to shareholders made in kind?

                  [  ]     Yes              [  ]     No

                  If Yes, indicate the percentage of fund shares owned by
                  affiliates, or any other affiliation of shareholders:

17.      Closed-end funds only: Has the fund issued senior securities?

         [  ]     Yes               [  ]    No

         If Yes, describe the method of calculating payments to senior
         securityholders and distributions to other shareholders:

18. Has the fund distributed all of its assets to the fund's shareholders?

         [X] Yes [ ] No

         If No,

         (a)  How many shareholders does the fund have as of the date this form
              is filed?

         (b)  Describe the  relationship  of each remaining  shareholder to the
              fund:

19.      Are there any shareholders who have not yet received distributions in
         complete liquidation of their interests?

         [  ]     Yes               [X]     No

         If Yes, describe briefly the plans (if any) for distributing to, or
         preserving the interests of, those shareholders:

III.     Assets and Liabilities

20.      Does the fund have any assets as of the date this form is filed? (See
         question 18 above)

         [  ]     Yes               [X]     No

         If Yes,
         (a)      Describe the type and amount of each asset retained by the
                  fund as of the date this form is filed.

         (b)      Why has the fund retained the remaining assets?

         (c)      Will the remaining assets be invested in securities?

                  [  ]     Yes              [  ]     No

21.      Does the fund have any outstanding debts (other than face-amount
         certificates if the fund is a face-amount certificate company) or any
         other liabilities?

         [  ]     Yes               [X]     No

          If Yes,
          (a)  Describe the type and amount of each debt or other liability:

          (b)  How does the fund intend to pay these  outstanding debts or other
               liabilities?

IV.      Information About Event(s) Leading to Request For Deregistration

22. (a) List the expenses incurred in connection with the Merger or Liquidation:

                  (i) Legal expenses: $2,008

                  (ii) Accounting expenses: $456

                  (iii)Other expenses (list and identify separately): $36,565
                       Solicitor & Tabulator $32,277
                       Consultant $240
                       PFPC Support $ 2,575
                       Board of Directors $ 32
                       Prospectus $ 1,441

                  (iv) Total expenses (sum of lines (i)-(iii) above): $39,029

     (b)  How were those expenses  allocated?  The Solicitor and Tabulator costs
          were  allocated  based on the  number of open  accounts  as of date of
          record for the  shareholder  proxy vote.  The remaining  expenses were
          allocated on an "ability to pay" approach, determined by the projected
          decrease in the post merger expense ratio.

     (c)  Who paid those expenses? Shareholders of Class A and Class B

     (d)  How did the fund pay for unamortized expenses (if any)? None

23.      Has the fund previously filed an application for an order of the
         Commission regarding the Merger or Liquidation?

         [  ]     Yes               [X]     No

         If Yes, cite the release numbers of the Commission's notice and order
         or, if no notice or order has been issued, the file number and date the
         application was filed:

V.       Conclusion of Fund Business

24. Is the fund a party to any litigation or administrative proceeding?

         [  ]     Yes               [X]     No

         If Yes, describe the nature of any litigation or proceeding and the
         position taken by the fund in that litigation:

25.      Is the fund now engaged, or intending to engage, in any business
         activities other than those necessary for winding up its affairs?

         [  ]     Yes               [X]     No

         If Yes, describe the nature and extent of those activities:

VI.      Mergers Only

26.  (a) State the name of the fund surviving the Merger:

         Principal Investors Fund, Inc. - Equity Income Fund


     (b)  State the Investment Company Act file number of the fund surviving the
          Merger:          811-07572

     (c)  If the  merger or  reorganization  agreement  has been  filed with the
          Commission,  state  the file  number(s),  form  type used and date the
          agreement was filed:

          File No. 333-123268, Form Type N-14, filed on March 11, 2005

     (d)  If the merger or reorganization  agreement has not been filed with the
          Commission,  provide a copy of the  agreement  as an  exhibit  to this
          form.

                                  VERIFICATION

The  undersigned  states  that  (i)  he or  she  has  executed  this  Form  N-8F
application  for an order under  section 8(f) of the  Investment  Company Act of
1940 on behalf of Principal Equity Income Fund, Inc., (ii) he or she is the Vice
President and Chief Financial Officer of Principal Equity Income Fund, Inc., and
(iii) all actions by  shareholders,  directors,  and any other body necessary to
authorize the  undersigned to execute and file this Form N-8F  application  have
been taken.  The  undersigned  also states that the facts set forth in this Form
N-8F  application are true to the best of his or her knowledge,  information and
belief.


                                                 /s/ Jill R. Brown
                                                 ----------------------------
                                                 Jill R. Brown
                                                 Vice President and
                                                   Chief Financial Officer