DILLARD'S, INC.
                          ("Company")

                        Debt Securities

                        TERMS AGREEMENT


                                                    July 30, 1998

Dillard's, Inc.
1600 Cantrell Road
Little Rock, Arkansas 72201
Attention:  Vice President and Treasurer

Dear Sirs:

          On behalf of the several Underwriters named in Schedule
A hereto and for their respective accounts, we offer to purchase,
on and subject to the terms and conditions of the Underwriting
Agreement Basic Provisions filed as an exhibit to the Company's
registration statement on Form S-3 (No. 333-59183) ("Underwriting
Agreement"), the following securities ("Securities") to be issued
under an indenture, dated as of May 15, 1988, as supplemented by
a First Supplemental Indenture dated as of December 16, 1988, a
Second Supplemental Indenture dated as of September 14, 1990, and
a Third Supplemental Indenture dated as of August 3, 1998,
between the Company and The Chase Manhattan Bank, as Trustee, on
the following terms:

     Title:    7.13% Debentures Due 2018

     Aggregate Principal Amount:  $200,000,000

     Interest:  7.13% per annum, from August 7, 1998, payable
semiannually on February 1 and August 1 and commencing February
1, 1999, to holders of record on the preceding January 15 or July
15, as the case may be.

     Maturity:  August 1, 2018.

     Redemption:  No provisions for redemption except for upon
the occurrence of a Merger Termination Event, as such term is
described in the Prospectus.

     Purchase Price:  99.125% of the principal amount of the
Securities, plus accrued interest from August 7, 1998, if any.

          Expected Reoffering Price:   100% of the principal
          amount of the Securities, plus accrued interest from
          August 7, 1998, if any.

     Specified Funds for Payment of Purchase Price:  Federal
(same-day) funds.

     Closing Date:  10:00 A.M. on August 7, 1998, at the offices
of Simpson Thacher & Bartlett, 425 Lexington Avenue, New York,
New York 10017.

     Name and Address of Representatives:

     Morgan Stanley & Co. Incorporated
     1585 Broadway, Second Floor
     New York, New York 10036

The respective principal amounts of the Securities to be
purchased by each of the Underwriters are set forth opposite
their names in Schedule A hereto.

It is understood that we may, with your consent, amend this offer
to add additional Underwriters and reduce the aggregate principal
amount to be purchased by the Underwriters listed in Schedule A
hereto by the aggregate principal amount to be purchased by such
additional Underwriters.

          The provisions of the Underwriting Agreement are
incorporated herein by reference.

          The Securities will be made available for checking and
packaging at the office of Morgan Stanley & Co. Incorporated at
least 24 hours prior to the Closing Date.

          Please signify your acceptance of our offer by signing
the enclosed response to us in the space provided and returning
it to us.

                           Very truly yours,
                           
                           MORGAN STANLEY & CO. INCORPORATED
                           On behalf of themselves and as
                           Representatives of the Several
                           Underwriters
                           
                           By Morgan Stanley & Co. Incorporated
                           
                           
                           
                                By /s/ Harold J. Hendershott III
                                  Name: Harold J. Hendershott III
                                  Title: Vice President


                          SCHEDULE A


                                                  Principal
     Underwriter                                    Amount


     Morgan Stanley & Co. Incorporated            $100,000,000
     Chase Securities Inc.                        $100,000,000


Total. . . . . . . . . . . . . . . . . . . . . .  $200,000,000
                                                  =========
To:  Morgan Stanley & Co. Incorporated
           As Representatives of the Several
               Underwriters,
              c/o   Morgan Stanley & Co. Incorporated
                    1585 Broadway, Second Floor
                    New York, New York 10036

          We accept the offer contained in your letter dated
July 30, 1998, relating to $200,000,000 principal amount of our
7.13% Debentures Due 2018.  We also confirm that, to the best
of our knowledge after reasonable investigation, the
representations and warranties of the undersigned in the
Underwriting Agreement filed as an exhibit to the undersigned's
registration statement on Form S-3 (No. 333-59183)
("Underwriting Agreement") are true and correct, no stop order
suspending the effectiveness of the Registration Statement (as
defined in the Underwriting Agreement) or of any part thereof
has been issued and no proceedings for that purpose have been
instituted or, to the knowledge of the undersigned, are
contemplated by the Securities and Exchange Commission and,
subsequent to the respective dates of the most recent financial
statements in the Prospectus (as defined in the Underwriting
Agreement), there has been (or in the case of a form of
prospectus filed pursuant to Rule 424(b)(1) or (4) there will
be, as of the date of such prospectus) no material adverse
change in the financial position or results of operations of
the undersigned and its subsidiaries except as set forth in or
contemplated by the Prospectus.


                              Very truly yours,


                              DILLARD'S, INC.


                              By /s/ James I. Freeman
                                Name: James I. Freeman
                                Title: Senior Vice President and
                                       Chief Financial Officer