As filed with the Securities and Exchange Commission on September 15, 1998
                                                       Registration No. 33-79570

--------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM S-8
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933

                              --------------------

                               FSF Financial Corp.
             (Exact name of registrant as specified in its charter)

             Minnesota                                       41-1783064
-------------------------------                          -------------------
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                           Identification No.)
                              201 Main Street South
                        Hutchinson, Minnesota 55350-2573
                                 (320) 234-4500
                    ----------------------------------------
                    (Address of principal executive offices)

                               FSF Financial Corp.
                    ----------------------------------------
                          1998 Stock Compensation Plan
                            (Full Title of the Plan)

                               Richard Fisch, Esq.
                               Ruel B. Pile, Esq.
                             Linda Delivorias, Esq.
                      Malizia, Spidi, Sloane & Fisch, P.C.
                               1301 K Street, N.W.
                                 Suite 700 East
                             Washington, D.C. 20005
                                 (202) 434-4660
                    ----------------------------------------
            (Name, address and telephone number of agent for service)

<TABLE>
<CAPTION>
                         CALCULATION OF REGISTRATION FEE
================================================================================================================================
Title of                                                Proposed Maximum          Proposed Maximum             Amount of
Securities to                     Amount to                 Offering             Aggregate Offering          Registration
be Registered                   be Registered            Price Per Unit               Price (2)                 Fee (2)
-------------                   -------------            --------------               ----------               --------

Common Stock
<S>                           <C>                             <C>                   <C>                       <C>      
$.10 par value                300,000 shares (1)               (2)                   $4,933,816                $1,455.48
================================================================================================================================
</TABLE>

(1)      The maximum  number of shares of common stock issuable upon exercise of
         options  granted or to be granted  under the FSF Financial  Corp.  1998
         Stock  Compensation  Plan  consists of 300,000  shares  which are being
         registered   under  this   Registration   Statement  and  for  which  a
         registration fee is being paid.  Additionally,  an indeterminate number
         of  additional  shares  which may be  offered  and  issued  to  prevent
         dilution  resulting  from  stock  splits,  stock  dividends  or similar
         transactions are being registered hereunder for which no additional fee
         is required.

(2)      Under  Rule  457(h)  of the  1933  Act,  the  registration  fee  may be
         calculated, inter alia, based upon the price at which the stock options
         may be exercised.  300,000 shares are being registered hereby, of which
         116,301  shares are under  option at an  exercise  price of $19.125 per
         share  ($2,224,256  in the  aggregate).  The  remainder of such shares,
         which are not presently subject to options (183,699 shares),  are being
         registered  based upon the  closing  price of the  common  stock of FSF
         Financial Corp. as reported on the NASDAQ System on September 10, 1998,
         of $14.75 per share  ($2,709,560 in the aggregate) for a total offering
         of $4,933,816.

         Under Rule 462 of the 1933 Act, the Registration  Statement on Form S-8
         shall be effective upon filing with the Commission.


<PAGE>



** THIS DOCUMENT CONSTITUTES THE PROSPECTUS COVERING SECURITIES THAT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.**

PROSPECTUS
----------

                                 300,000 Shares

                               ------------------

                               FSF FINANCIAL CORP.
                                  COMMON STOCK
                           (Par Value $.10 Per Share)

                               ------------------

                               FSF Financial Corp.
                          1998 Stock Compensation Plan


         This  Prospectus  relates to 300,000 shares of common stock,  par value
$.10 per share (the "Common Stock"),  of FSF Financial Corp. (the "Company"),  a
Minnesota  corporation  which is the parent savings and loan holding  company of
FSF Federal fsb, Hutchinson,  Minnesota (the "Savings Bank") which may be issued
from time to time by the Company to holders of options  granted or to be granted
by the Company to selected officers, directors, key employees, and other persons
of the Company and any  subsidiary of the Company  pursuant to the FSF Financial
Corp. 1998 Stock  Compensation Plan (the "Plan").  Holders of options granted or
to be  granted  under  the Plan  (the  "Options")  are  referred  to  herein  as
"Optionees."  Each offer made under the Plan pursuant to this Prospectus is made
at the  price  and on the terms and  conditions  contained  in the stock  option
agreements entered into between the Company and each Optionee.

         This  Prospectus  is for use as of the date  hereof  and in  subsequent
years.  Information which is likely to change from year to year will be included
in appendices to this Prospectus.

         The issued and outstanding Common Stock of the Company is traded in the
over-the-counter   market,   and  transactions  are  reported  on  the  National
Association of Securities  Dealers,  Inc. Automated  Quotation System ("Nasdaq")
National Market System under the symbol "FFHH." Shares of Common Stock which may
be issued upon exercise of options granted or to be granted under the Plan, will
also be traded in the over-the-counter market. On September 10, 1998 the closing
price of the common stock on Nasdaq was $14.75 per share.

--------------------------------------------------------------------------------
THESE  SECURITIES  HAVE NOT BEEN APPROVED OR  DISAPPROVED  BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------------------------------------------------------------------------

                The date of this Prospectus is September 15, 1998


<PAGE>



         No person has been  authorized to give any  information  or to make any
representation  not contained in this  Prospectus,  and, if given or made,  such
information or representation  must not be relied upon as having been authorized
by the  Company.  This  Prospectus  does  not  constitute  an offer to sell or a
solicitation  of an offer to buy any  securities  other  than the  Common  Stock
offered by this  Prospectus or an offer to sell or a solicitation of an offer to
buy such Common Stock in any  jurisdiction  to any person to whom it is unlawful
to make such offer or solicitation in such jurisdiction. Neither the delivery of
this  Prospectus nor any sale made  hereunder  shall,  under any  circumstances,
create  any  implication  that  there has been no change in the  affairs  of the
Company  or that the  information  contained  herein is  correct  as of any time
subsequent to the date hereof.




<PAGE>



                                TABLE OF CONTENTS

                               FSF Financial Corp.
                          1998 Stock Compensation Plan

                                                                         Page
                                                                         ----

General Plan Information...............................................    1

Administration.........................................................    1

Purpose................................................................    2

Securities to be Offered...............................................    2

Eligibility to Participate in Plan.....................................    2

Purchases of Securities Pursuant to the Plan
 and Payment for Securities Offered....................................    3

  Term of the Plan.....................................................    3
  Stock Option Agreements..............................................    3
  Option Price.........................................................    3
  Limitations on Grant of Options......................................    3
  Option Period........................................................    4
  Non-transferability..................................................    4
  Conditions of Exercise...............................................    4
  Payment for Options..................................................    4
  Cashless Exercise....................................................    5
  Issuance of Common Stock.............................................    5
  Options Granted to Directors.........................................    5

Recapitalization, Merger, Consolidation, Change in
 Control and Similar Transactions......................................    6

Amendment and Termination of the Plan..................................    6

Restrictions on Resale.................................................    7

Federal Income Tax Consequences........................................    7

Annual Report to Shareholders..........................................    8

Additional Information.................................................    8

Legal Opinion..........................................................    9





<PAGE>



                               FSF Financial Corp.
                          1998 Stock Compensation Plan


Item 1. Plan Information
------------------------

General Plan Information

         This Prospectus  relates to 300,000 shares of the common stock ("Common
Stock"), par value $.10 per share, of FSF Financial Corp. (the "Company"), which
will be offered upon exercise of options  granted or to be granted under the FSF
Financial Corp. 1998 Stock Compensation Plan (the "Plan").

         The Board of Directors  of the Company  adopted the Plan at its meeting
on November 18, 1997. The Plan was approved by the  stockholders  of the Company
at a Special Meeting of Stockholders on January 20, 1998 (the "Effective Date").
The Plan is to continue  in effect for a period of ten years from the  Effective
Date (i.e.,  January 20,  2008),  unless  earlier  terminated or extended by the
Company.

         Pursuant to the Plan,  300,000 shares of Common Stock were reserved for
issuance by the Company upon  exercise of stock options  ("Options")  awarded to
officers,  directors,  key  employees  and other  persons of the Company and any
parent  and  subsidiary  corporations.  Options  granted  under  the Plan may be
Incentive  Stock  Options  within the  meaning of  Section  422 of the  Internal
Revenue  Code of 1986,  as amended  (the  "Code") or options  not so  qualifying
("Non-Incentive Stock Options").

         Subject  to  certain  limitations,  no gain or loss is  recognized  for
federal income tax purposes by the recipient of Options (the  "Optionee")  under
the Plan upon the exercise of an Incentive Stock Option, and no tax deduction is
available  to the Company as a result of the  exercise.  Upon the  exercise of a
Non-Incentive Stock Option, the Optionee generally recognizes ordinary income to
the extent that the  exercise  price is less than the fair  market  value of the
Common  Stock on the date of  exercise.  The  Company is  entitled  to a federal
income tax deduction  equal to the amount of ordinary  income  recognized by the
Optionee  at the  time of such  income  recognition.  See  "Federal  Income  Tax
Consequences."

         The Plan is not qualified  under  Section  401(a) of the Code and it is
exempt from the  provisions of the Employee  Retirement  Income  Security Act of
1974, as amended.

         The statements  herein  concerning the terms and provisions of the Plan
are  summaries  and do not  purport  to be  complete.  All such  statements  are
qualified in their  entirety by reference to the full text of the Plan  document
as filed as Exhibit 4.1 to the  Registration  Statement of which this Prospectus
is a part.  Additional  updating and other  information with respect to the Plan
and the Common Stock  offered  hereby may be provided in the future to Optionees
by means of one or more supplements or appendices to this Prospectus. Additional
information about the Plan (including a copy of the Plan), plan  administration,
and the Company may be obtained at the Company's  principal  offices,  which are
located at 201 Main Street South,  Hutchinson,  Minnesota  55350.  The Company's
telephone number is (320) 234-4500.

Administration

         The Plan is  administered  by a  committee  of the  Company's  Board of
Directors (the  "Committee").  The Plan provides that the Committee will consist
of not less than two non-employee

                                        1

<PAGE>



directors  of the Company.  The members of the  Committee  are  appointed by the
Board and serve at the pleasure of the Board.  Members of the Committee shall be
"Non-employee Directors" within the meaning of Rule 16b-3 promulgated under Rule
16(b) of the  Securities  Exchange Act of 1934,  as amended (the "1934 Act").  A
majority of the entire Committee shall constitute a quorum,  and the action of a
majority  of the  members  present  at any  meeting at which a quorum is present
shall be deemed the action of the Committee.

         Subject to the express  provisions of the Plan and resolutions  adopted
by the Board,  the  Committee has authority to interpret the Plan, to prescribe,
amend,  and  rescind  the rules and  regulations  relating  to the Plan,  and to
determine  the form and  content  of  Options  to be issued  under the Plan.  In
addition,  the Committee is authorized to make all other  determinations  deemed
necessary or advisable for the administration of the Plan and shall have and may
exercise  such other power and such  authority  as may be delegated to it by the
Board from time to time. All decisions,  determinations,  and interpretations of
the Committee shall be final and conclusive to all persons affected thereby.

         Additional information about the Plan and the Committee may be obtained
from the  Company at the  address of the  Company  listed  under  "General  Plan
Information."

Purpose

         The purpose of the Plan is to promote the  interests  of the Company by
attracting  and  retaining  the  best  available   personnel  for  positions  of
substantial responsibility to serve as officers, directors, and key employees of
the Company and to provide additional incentive to such officers, directors, and
key employees of the Company to promote the success of the Company's business.

Securities to be Offered

         The  aggregate  number of shares  of Common  Stock  which may be issued
pursuant to Options  granted or to be granted under the Plan is 300,000  shares,
subject to certain  adjustments  for  changes in the  capital  structure  of the
Company,  as described  below.  See  "Recapitalization,  Merger,  Consolidation,
Change in Control and  Similar  Transactions."  Any shares  subject to an Option
under  the  Plan  which  expire  or are  terminated  unexercised  will  again be
available for issuance under the Plan.

Eligibility to Participate in Plan

         Options  to  purchase  Common  Stock  under the Plan may be  awarded to
officers,  directors,  key  employees,  and other  persons of the  Company,  FSF
Federal fsb,  Hutchinson,  Minnesota  (the "Savings  Bank"),  and any present or
future parent or subsidiary  corporations.  Incentive  Stock Options may only be
granted to employees of the Company,  the Savings Bank,  and any of their parent
or  subsidiary  corporations.  In  selecting  participants  under  the Plan (the
"Participants")  and in determining  the number of Options to be granted to each
Participant,  the Committee may consider the nature of the services  rendered by
each Participant,  each Participant's current and potential  contribution to the
Company, and such other factors as the Committee, in its sole discretion,  shall
deem  relevant.  In  no  event  shall  shares  subject  to  Options  granted  to
non-employee  directors in the aggregate  under the Plan exceed  100,000  shares
authorized for delivery under the Plan. See "Purchases of Securities Pursuant to
the Plan and Payment for Securities Offered - Options Granted to Directors."


                                        2

<PAGE>



Purchases of Securities Pursuant to the Plan and Payment for Securities Offered

         Term of the Plan.  The Plan was effective  January 20, 1998, and unless
previously  terminated,  the Plan  shall  continue  in effect  for a term of ten
years,  after which no further awards may be granted.  The future  expiration of
the Plan, or its termination by the Board, will not affect any Option previously
granted.

         Stock  Option  Agreements.  The  Options  granted  under  the  Plan are
evidenced by stock option agreements (the "Option Agreements")  substantially in
the  form  filed  as  exhibits  to the  Registration  Statement  of  which  this
Prospectus is a part. Each Option  Agreement,  and any amendment  thereto,  will
contain terms and conditions consistent with the requirements of the Plan as the
Committee shall determine.  The Option Agreements shall constitute the only form
of reports which  Participants  shall  receive  related to the status of Options
granted or which are exercisable under the Plan.

         The Plan  provides  that the  Board of  Directors  of the  Company  may
authorize the  Committee to direct the execution of an instrument  providing for
the modification of any outstanding Option,  provided that no such modification,
extension or renewal  shall  confer on the  Optionee any right or benefit  which
could not be conferred by the grant of a new Option at such time,  and shall not
materially  decrease  the  Optionee's  benefits  under the  Option  without  the
Optionee's  consent,  except as  provided  under  Section 18 of the Plan,  which
permits modification of the Plan. See "Amendment and Termination of the Plan."

         Option Price.  The exercise price for the purchase of shares subject to
an Incentive  Stock Option at the date of grant may not be less than 100 percent
(100%) of the Fair Market  Value of the shares  covered by the  Incentive  Stock
Option on that date. If an Optionee owns Common Stock representing more than ten
percent of the outstanding Common Stock at the time an Incentive Stock Option is
granted,  then the Option Price shall not be less than 110 percent (110%) of the
Fair Market Value of the Common Stock at the time the Incentive  Stock Option is
granted. No more than $100,000 of Incentive Stock Options can become exercisable
for the first time in any one year for any one person. Pursuant to the Plan, the
exercise price per share for  Non-Incentive  Stock Options shall be the price as
determined by the Committee,  but in no event less than the Fair Market Value of
the Common Stock on the date of grant. See "Options Granted to Directors" below.
The  exercise  price of  Options  must be paid for in full in cash or  shares of
Common Stock, or a combination of both.

         If the Common Stock is listed on a national  securities exchange at the
time of granting an Option awarded pursuant to the Plan, then the exercise price
per share shall be not less than the  average of the highest and lowest  selling
price on such  exchange on the date such Option is granted;  or if there were no
sales on said date,  then the price shall be not less than the mean  between the
bid and ask price on such date. If the Common Stock is traded  otherwise than on
a national  securities  exchange at the time of the granting of an Option,  then
the exercise price per share shall be not less than the mean between the bid and
ask price on the date the Option is granted or, if there is no bid and ask price
on said date,  then on the next prior  business day on which there was a bid and
ask price.  If no such bid and ask price is available,  then the exercise  price
per share shall be determined by the Committee in good faith.

         Limitations on Grant of Options. Except as may be specifically provided
by the terms of the Plan, the granting of Options is made at the sole discretion
of the Committee.  Further,  the aggregate Fair Market Value of the Common Stock
for which an employee may be granted  Options which become first  exercisable in
any  calendar  year  may not  exceed  $100,000.  Notwithstanding  the  foregoing
limitation,

                                        3

<PAGE>



the  Committee  may grant  Options in excess of this  limitation,  provided said
Options are clearly and  specifically  designated as not being  Incentive  Stock
Options, as defined in Section 422 of the Code.

         Option Period.  The term of  exercisability  of an Option granted under
the Plan shall be established by the Committee, but may not be for more than ten
years from the date of grant of the  Option,  except in the case of an  Optionee
who owns stock representing more than 10% of the Common Stock outstanding at the
time an  Incentive  Stock  Option is granted,  the term of the  Incentive  Stock
Option  shall not exceed  five years  from the date of the  grant.  In  general,
Options will not be exercisable  after the expiration of their term as set forth
in the Plan and/or the Option Agreement.

         In the event that an  Optionee  ceases to serve as an  employee  of the
Company for any reason other than  permanent and total  disability or death,  an
exercisable Incentive Stock Option will generally continue to be exercisable for
three  months but in no event after the  expiration  date of the Option.  In the
event of the permanent and total  disability or death of an Optionee during such
service,  an exercisable  Incentive Stock Option will continue to be exercisable
for one year in the case of  disability  and two years in the case of death,  to
the extent exercisable by the Optionee immediately prior to his or her permanent
and total disability or death, but in no event after the expiration date of such
Options. The terms and conditions of Non-Incentive Stock Options relating to the
impact of an Optionee's  termination  of  employment  or service,  permanent and
total  disability  or death  shall be such terms as the  Committee,  in its sole
discretion,  shall  determine  at the time of the grant of such  Options  in the
Option Agreement or upon termination, permanent and total disability, or death.

         Under the Plan,  the  Committee's  determination  regarding  whether an
Optionee's  employment  or service has ceased,  and the  effective  date thereof
shall be final and conclusive on all persons affected thereby.

         Non-transferability.  No  Option granted under the Plan is transferable
other than by will or the laws of descent and distribution.

         Conditions  of  Exercise.  Options  may be  exercised  only  during the
periods specified in the Plan or the Option Agreement, certain information as to
which is provided above (see "Option Period").  Except as described above and as
may be limited by an Option Agreement, there is no limitation upon the number of
Options that may be exercised in any one year,  and Options not exercised in any
one year may be exercised in subsequent  years over the term of the Option.  The
Committee  may impose  additional  conditions  upon the rights of an Optionee to
exercise any Option which are not  inconsistent  with the terms of the Plan, and
in the case of Incentive Stock Options,  not inconsistent  with the requirements
for qualification under Section 422 of the Code. Incentive Stock Options will be
first  exercisable  at the  rate of 20% on the date of  grant  and 20%  annually
thereafter;  however, the exercisability of such Options shall be accelerated in
the event of the death or permanent and total  disability of the Optionee,  or a
change  in  control  in  accordance  with the Plan.  Such  Options  will  remain
exercisable for up to ten years from the date of grant.

         Payment for  Options.  Under the Plan,  full  payment for each share of
Common Stock purchased upon the exercise of any Option shall be made at the time
of exercise of such Option and shall be paid in cash (in United States dollars),
Common Stock,  or a combination of cash and Common Stock.  Common Stock utilized
in full or partial  payment of the  exercise  price  shall be valued at its fair
market value at the date of exercise.  The Company  shall accept full or partial
payment in Common  Stock only to the extent  permitted  by  applicable  law.  No
shares of Common Stock shall be issued until full payment

                                        4

<PAGE>



has been received by the Company,  and no Optionee  shall have any of the rights
of a  shareholder  of the Company until the shares of Common Stock are issued to
him or her.

         Cashless Exercise.  An Optionee who has held an Option for at least six
months  may  engage in the  "cashless  exercise"  of the  Option.  In a cashless
exercise,  an Optionee  gives the Company  written notice of the exercise of the
Option together with an order to a registered  broker-dealer or equivalent third
party,  to sell part or all of the Optioned  Stock and to deliver  enough of the
proceeds  to the  Company to pay the Option  exercise  price and any  applicable
withholding  taxes.  If the Optionee does not sell the Optioned  Stock through a
registered  broker-dealer  or  equivalent  third party,  he can give the Company
written  notice of the  exercise of the Option and the third party  purchaser of
the  Optioned  Stock  shall pay the Option  exercise  price plus any  applicable
withholding taxes to the Company.

         Issuance of Common Stock.  Shares issued to Optionees  upon exercise of
Options shall be either newly issued shares of the Company,  treasury  shares or
shares purchased in the market, at the Company's discretion. In either case, the
Optionee shall not pay any fees,  commissions,  or other charges for such Common
Stock  other than the  exercise  price as stated in the Option  Agreement.  Cash
proceeds  from the sale of Common  Stock  issued  pursuant  to the  exercise  of
Options will be added to the general funds of the Company to be used for general
corporate  purposes.  Shares of Common Stock shall not be issued with respect to
any Option  granted  under the Plan  unless the  issuance  and  delivery of such
Common  Stock  shall  comply with all  relevant  provisions  of law,  including,
without limitation, the Securities Act of 1933, as amended (the "1933 Act"), the
rules and regulations  promulgated  thereunder,  any applicable state securities
law, and the  requirements of any stock exchange upon which the Common Stock may
then be listed.

         Inability of the Company to obtain approval from any regulatory body or
authority  deemed by the  Company or counsel  thereto  to be  necessary  for the
lawful issuance and sale of any Common Stock hereunder shall relieve the Company
of any liability with respect to the  non-issuance or sale of such Common Stock.
As a condition to the exercise of an Option,  the Company may require the person
exercising  the Option to make such  representations  and  warranties  as may be
necessary  to  assure  the  availability  of an  exemption  from any  additional
registration requirements of federal or state securities laws.

         Options Granted to Directors.  Non-Incentive  Stock Options to purchase
1,500  shares of Common Stock will be granted to each  non-employee  director of
the Company as of the  Effective  Date,  at an exercise  price equal to the fair
market  value of the Common  Stock on such date of grant.  The  Options  will be
first  exercisable  at the  rate of 20% on the date of  grant  and 20%  annually
thereafter,  during  periods of  continued  service as a  director  or  director
emeritus.  Thereafter, such Options shall remain exercisable for up to ten years
following death, disability, or termination of service as a director or director
emeritus,  but in no  event  beyond  ten  years  from  the  date of  grant.  The
exercisability  of such Options shall be accelerated  only in the event of death
or the permanent and total disability of the Optionee, or a change in control in
accordance  with the Plan. In the event of such directors'  death,  such Options
may be exercised by the  personal  representative  of his estate or person(s) to
whom his rights  under  such  Options  shall  have  passed by will or by laws of
descent and distribution.  Unless otherwise  inapplicable,  or inconsistent with
the  provisions  of this  paragraph,  the  Options to be  granted  to  directors
hereunder shall be subject to all other provisions of the Plan.


                                        5

<PAGE>



Recapitalization,   Merger,  Consolidation,   Change  in  Control,  and  Similar
Transactions

         Subject to any  required  action by the  shareholders  of the  Company,
within the sole discretion of the Committee,  the aggregate  number of shares of
Common  Stock for which  Options  may be granted  under the Plan,  the number of
shares of Common Stock covered by each outstanding Option and the exercise price
per share of Common Stock of each Option shall be  proportionately  adjusted for
any  increase  or  decrease  in the number of issued and  outstanding  shares of
Common Stock  resulting  from a subdivision  or  consolidation  of shares or the
payment  of a stock  dividend  on the  Common  Stock or any  other  increase  or
decrease in the number of such shares of Common Stock effected without a receipt
of  consideration  by the  Company  (other  than by  shares  held by  dissenting
stockholders).

         In the  event  of any  change  in  control,  recapitalization,  merger,
consolidation,  exchange  of shares,  spin-off,  reorganization,  tender  offer,
liquidation, or other extraordinary corporate action, the Committee, in its sole
discretion,  shall  have the power,  prior to or  subsequent  to such  action or
events, to (i) appropriately adjust the number of shares of Common Stock subject
to  each  Option,  the  exercise  price  per  share  of  Common  Stock,  and the
consideration  to be given or received by the Company  upon the  exercise of any
outstanding  Options;  (ii)  cancel  any  or  all  previously  granted  Options,
providing that  appropriate  consideration is paid to the Optionee in connection
therewith;  and/or (iii) make such other adjustments in connection with the Plan
as  the  Committee,  in  its  sole  discretion,   deems  necessary,   desirable,
appropriate,  or  advisable.  However,  no action may be taken by the  Committee
which would cause Incentive  Stock Options granted  pursuant to the Plan to fail
to meet the requirements of Section 422 of the Code.

         The  Committee  has at all times the power to  accelerate  the exercise
date  of  all  Options   granted  under  the  Plan;   provided,   however,   the
exercisability  of such Options may be  accelerated  only in the event of death,
permanent  and total  disability,  or change in control in  accordance  with the
Plan.  In the case of any change in control of the Company as  determined by the
Committee,  all  outstanding  options shall become  immediately  exercisable.  A
change in control is defined in the Plan as: (i) the  execution  of an agreement
for the sale of all, or a material portion,  of the assets of the Company;  (ii)
the  execution of an  agreement  for merger or  recapitalization  of the Company
whereby the Company is not the  surviving  entity;  (iii) a change of control of
the Company as otherwise defined by the Office of Thrift Supervision  ("OTS") or
its  regulations;  and (iv) the  acquisition,  directly  or  indirectly,  of the
beneficial  ownership  (within the meaning of Section  13(d) of the 1934 Act and
rules and regulations  promulgated thereunder) of 25% or more of the outstanding
voting  securities of the Company by any person,  trust,  entity or group.  This
limitation  shall not apply to a transaction  in which the purchase of shares by
underwriters  in  connection  with a public  offering  of Common  Stock,  or the
purchase of shares of up to 25% of any class of  securities  of the Company by a
tax-qualified employee stock benefit plan. The determination of the Committee as
to whether a change in control has occurred shall be conclusive and binding.

Amendment and Termination of the Plan

         The Board of Directors may alter,  suspend,  or  discontinue  the Plan,
except that no action of the Board may  increase  the  maximum  number of shares
permitted  to be  optioned  under the Plan,  materially  increase  the  benefits
accruing to Participants  under the Plan or materially  modify the  requirements
for  eligibility for  participation  in the Plan unless such action of the Board
shall be subject to approval or ratification by the shareholders of the Company.
Unless otherwise  terminated by the Board of Directors,  the Plan shall continue
in effect for a term of ten years from the Effective Date, after which no future
awards of Options may be granted.

                                        6

<PAGE>




Restrictions on Resale

         Unless  specifically  included as a term and  condition  of any Option,
there  are no  restrictions  on the  resale of Common  Stock  acquired  upon the
exercise of Options. The Plan permits the Committee to provide as a condition to
the  exercise of an Option that the shares  acquired  upon the  exercise of such
Options may be subject to a "Right of Repurchase" by the Company.  At this time,
the  Company  has no  intention  to grant  Options  subject  to such  "Right  of
Repurchase."  Such  shares  of Common  Stock,  however,  may be  resold  only in
compliance  with the  registration  requirements of the 1933 Act, and applicable
state securities laws.

         Under the 1933 Act,  affiliates  of the  Company  generally  may resell
shares of Common  Stock  purchased  pursuant to the Plan only (i) in  accordance
with the  provisions  of Rule 144  under the 1933 Act,  or (ii)  pursuant  to an
applicable current and effective registration statement under the 1933 Act.

         As defined in Rule 405 under the 1933 Act, an  affiliate of the Company
is a person who  directly,  or  indirectly  through one or more  intermediaries,
controls,  or is controlled by, or is under common control with the Company. The
determination  of whether a person is an affiliate of the Company is primarily a
factual  one  based  upon  whether  he   possesses,   directly  or   indirectly,
individually  or in  concert  with  others,  the  power to  direct  or cause the
direction  of the  management  or policies of the Company,  whether  through the
ownership of voting stock, by executive position, by membership on the Board, by
contract or  otherwise.  Therefore,  each  Optionee  should  consult his counsel
concerning  whether  he is  an  affiliate  of  the  Company  and  the  attendant
restrictions on the resale under the 1933 Act of Common Stock acquired  pursuant
to the Plan.

         In  addition,  the receipt of an Option to purchase  Common Stock by an
officer or director of the Company,  or the  beneficial  owner of 10% or more of
the outstanding  Common Stock, is a reportable  transaction  under Section 16 of
the 1934 Act, and Forms 3, 4, or 5 are required to be filed with the  Securities
and Exchange  Commission in  connection  with such  transaction.  The sale by an
officer,  director,  or 10% holder of Common Stock issued upon an exercise of an
Option  within six months after the receipt of such Option may create  liability
of such persons to the Company  under the  "short-swing  profit"  provisions  of
Section 16(b) of the 1934 Act.

Federal Income Tax Consequences

         Under  present  federal tax laws,  awards  under the Plan will have the
following consequences:

         1. The grant of an Option will not by itself result in the  recognition
            of taxable  income to the  Optionee  nor  entitle  the  Company to a
            deduction at the time of such grant.

         2. The  exercise  of an Option  which is an  "Incentive  Stock  Option"
            within the meaning of Section 422 of the Code generally will not, by
            itself,  result in the recognition of taxable income to the Optionee
            nor entitle the Company to a deduction at the time of such exercise.
            However,  the  difference  between the  exercise  price and the fair
            market value of the Option shares on the date of exercise is an item
            of tax  preference  which may,  in certain  situations,  trigger the
            alternative  minimum  tax  for  the  Optionee.   The  Optionee  will
            recognize  capital  gain or loss upon resale of the shares  received
            upon such exercise,  provided that such shares are held for at least
            one year after the Option  exercise  or two years after the grant of
            the Option, whichever is later. Generally, if the shares are not

                                        7

<PAGE>



            held for that period,  the Optionee will recognize  ordinary  income
            upon  disposition in an amount equal to the  difference  between the
            exercise  price and the fair market  value on the date of  exercise,
            or, if less, the sales proceeds of the shares  acquired  pursuant to
            the exercise of such Option.

         3. The  exercise  of a  Non-Incentive  Stock  Option will result in the
            recognition  of  ordinary  income  by the  Optionee  on the  date of
            exercise in an amount equal to the  difference  between the exercise
            price and the fair market  value,  on the date of  exercise,  of the
            shares acquired pursuant to the exercise of such Option.

         4. The Company will be allowed a tax deduction for federal tax purposes
            equal to the amount of ordinary income  recognized by an Optionee at
            the time the Optionee  recognizes  such ordinary income under either
            an Incentive Stock Option or a Non- Incentive Stock Option .

         The  foregoing  provides a general  summary of the  federal  income tax
consequences  applicable to Optionees  under the Plan. Each Optionee is urged to
consult his or her own tax advisor for information  regarding applicable federal
and state tax consequences.

Item 2.  Registrant Information and Employee Plan Annual Information
--------------------------------------------------------------------

Annual Report to Shareholders

         The Company's  consolidated  financial  statements for the period ended
September 30, 1997, as contained in the Company's Form 10-K are  incorporated by
reference in the  Registration  Statement to which this Prospectus is a part. In
addition,  the Company's  Quarterly  Reports on Form 10-Q for the quarters ended
December 31,  1997,  March 31, 1998 and June 30, 1998 are also  incorporated  by
reference in the  Registration  Statement to which this Prospectus is a part. In
the future,  the  Company's  latest  Annual  Report to  Stockholders,  including
consolidated financial statements,  will be mailed to all stockholders of record
as of the close of business on such record date. Any person wishing to receive a
copy of the Annual  Report to  Stockholders  may  obtain a copy by  writing  the
Company at the address set forth below under "Additional Information."

Additional Information

         Additional  updating  information  with respect to the Common Stock and
the Plan covered herein may be provided in the future to Participants  under the
Plan by means of appendices to this Prospectus.  The nature and frequency of any
reports to be made to Participants as to their participation in the Plan will be
determined by the Committee.

         The Company upon written or oral request,  will provide  without charge
to any person to whom this  Prospectus is delivered:  a copy of the Plan, a copy
of its latest Annual Report to Stockholders  (when  available) and a copy of any
and all of the documents that have been  incorporated  by reference in Item 3 of
Part II of the  Registration  Statement of which this  Prospectus is a part, and
that such  documents  are  deemed  incorporated  by  reference  in this 1933 Act
Section 10(a) Prospectus.  Further,  other documents required to be delivered to
Participants as specified in Item 9 of Part II of the Registration Statement are
available upon request. Any such request can be oral or in writing and should be
addressed to the

                                        8

<PAGE>



Corporate  Secretary,  201 Main Street South,  Hutchinson,  Minnesota 55350. The
Registrant's telephone number is (320) 234-4500.

Legal Opinion

         The validity of the Common Stock offered  hereby has been passed on for
the Company by Malizia,  Spidi, Sloane & Fisch, P.C., 1301 K Street, N.W., Suite
700 East, Washington, D.C. 20005.






                                        9

<PAGE>



                                     PART II

                 INFORMATION REQUIRED IN REGISTRATION STATEMENT


Item 3.  Incorporation of Documents by Reference
------------------------------------------------

         The  Company  is  subject  to  the  informational  requirements  of the
Securities  Exchange  Act of 1934  (the  "1934  Act")  and,  accordingly,  files
periodic  reports  and  other  information  with  the  Securities  and  Exchange
Commission (the "Commission").  Reports, proxy statements, and other information
concerning the Company filed with the Commission may be inspected and copies may
be obtained (at present rates) at the  Commission's  Public  Reference  Section,
Room 1024, 450 Fifth Street, N.W., Washington, DC 20549.

         The following  documents filed with the Commission are  incorporated by
reference in this Registration Statement and the Prospectus  constituting Part I
of this Registration Statement:

         (a)     The Company's Registration Statement on Form S-1 (No. 33-79570)
as filed with the Commission and any amendments thereto;

         (b) The Company's  Annual Report on Form 10-K for the fiscal year ended
September 30, 1997, as filed with the Commission pursuant to Rule 15d-13;

         (c) The Company's  Quarterly Report on Form 10-Q for the quarters ended
December  31,  1997,  March  31,  1998  and  June 30,  1998,  as filed  with the
Commission;

         (d) all other reports  filed  pursuant to Section 13(a) or 15(d) of the
Securities and Exchange Act of 1934, as amended (the  "Exchange  Act") since the
end of the fiscal  year  covered by audited  consolidated  financial  statements
contained in the Form S-1 referred to in Item 3(a) above; and

         (e) the  description  of the Common  Stock,  contained in the Company's
Registration  Statement  on Form 8-A as filed with the  Commission  on August 8,
1994 and all  amendments  thereto or reports  filed for the  purpose of updating
such description.

         All  documents  filed by the Company  pursuant  to Sections  13, 14, or
15(d) of the 1934 Act after the date hereof and prior to the  termination of the
offering  of the shares of Common  Stock shall be deemed to be  incorporated  by
reference into this Registration Statement and to be a part hereof from the date
of filing of such documents.

Item 4.  Description of Securities.
----------------------------------

         Not applicable.

Item 5.  Interests of Named Experts and Counsel.
-----------------------------------------------

         Not applicable.


                                      II-1

<PAGE>



Item 6.  Indemnification of Directors and Officers.
--------------------------------------------------

         Sections 302A.521 of the Minnesota Business  Corporation Act authorizes
a corporation such as the registrant to indemnify officers, directors, employees
and agents under certain circumstances. Section 302A.521, subdivision 2 requires
indemnification  of  directors,  officers,  employees  and  agents who have been
successful  on the merits or  otherwise  in defense of certain  actions,  suits,
proceedings claims,  issues and matters.  Article 8 of the Registrant's Articles
of Incorporation provides for indemnification.

         Section  308A.325  of the  Minnesota  Statutes,  1971  allows  for  the
limitation of liability of directors.

         The registrant believes that these provisions assist the registrant in,
among other  things,  attracting  and retaining  qualified  persons to serve the
registrant and its subsidiary.  However, a result of such provisions could be to
increase the expenses of the  registrant and  effectively  reduce the ability of
stockholders  to sue on behalf of the  registrant  since  certain suits could be
barred or amounts that might  otherwise be obtained on behalf of the  registrant
could be required to be repaid by the registrant to an indemnified party.

         Additionally,  the  Company  has in  force  a  Directors  and  Officers
Liability Policy underwritten by St. Paul Insurance Companies,  Inc. with a $2.0
million aggregate limit of liability and an aggregate  deductible of $40,000 per
loss both for claims  directly  against  officers and  directors  and for claims
where the Company is required to indemnify directors and officers.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 ("1933  Act") may be permitted to  directors,  officers,  or persons
controlling the Company  pursuant to the foregoing  provisions,  the Company has
been informed that in the opinion of the Securities and Exchange Commission such
indemnification  is against  public  policy as  expressed in the 1933 Act and is
therefore unenforceable.

Item 7.  Exemption from Registration Claimed.
--------------------------------------------

         Not applicable.

Item 8.  Exhibits
-----------------

         For a  list  of  all  exhibits  filed  or  included  as  part  of  this
Registration Statement,  see "Index to Exhibits" at the end of this Registration
Statement.

Item 9.  Undertakings
---------------------

         (a)      The undersigned registrant hereby undertakes:

                  (1) To file,  during any  period in which  offers or sales are
                  being made, a  post-effective  amendment to this  registration
                  statement;

                  (i) To include any prospectus required by Section 10(a)(3)  of
                  the Securities Act of 1933;


                                      II-2

<PAGE>



                  (ii) To reflect in the  prospectus any facts or events arising
                  after the effective date of the registration statement (or the
                  most   recent   post-effective   amendment   thereof)   which,
                  individually  or in the  aggregate,  represent  a  fundamental
                  change  in the  information  set  forth  in  the  registration
                  statement;

                  (iii) To include any material  information with respect to the
                  plan  of   distribution   not  previously   disclosed  in  the
                  registration   statement  or  any  material   change  to  such
                  information in the registration statement;

provided  however,  that paragraphs  (a)(1)(i) and (a)(1)(ii) do no apply if the
registration  statement  is on Form S-3,  Form S-8 or F-3,  and the  information
required to be included in a  post-effective  amendment by those  paragraphs  is
contained in periodic reports filed by the registrant  pursuant to Section 13 or
15(d) of the Securities  Exchange Act of 1934 that are incorporated by reference
in the registration statement.

                  (2) That, for the purpose of determining  any liability  under
the Securities Act of 1933, each such  post-effective  amendment shall be deemed
to be a new registration  statement  relating to the securities offered therein,
and the  offering  of such  securities  at that  time  shall be deemed to be the
initial bona fide offering thereof.

                  (3) To remove from  registration by means of a  post-effective
amendment  any of the  securities  being  registered  which remain unsold at the
termination of the offering.

         (b) The undersigned  registrant hereby undertakes that, for purposes of
determining  any liability  under the Securities Act of 1933, each filing of the
registrant's  annual  report  pursuant to section  13(a) or section 15(d) of the
Securities  Exchange  Act of 1934  (and,  where  applicable,  each  filing of an
employee  benefit  plan's  annual  report  pursuant  to  section  15(d)  of  the
Securities  Exchange  Act of 1934)  that is  incorporated  by  reference  in the
registration  statement  shall  be  deemed  to be a new  registration  statement
relating to the securities offered therein,  and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

         (c) The undersigned registrant hereby undertakes to deliver or cause to
be delivered with the prospectus,  to each person to whom the prospectus is sent
or given, the latest annual report,  to security holders that is incorporated by
reference  in  the  prospectus  and  furnished   pursuant  to  and  meeting  the
requirements  of Rule 14a-3 or Rule 14c-3 under the  Securities  Exchange Act of
1934;  and,  where  interim  financial  information  required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus,  to deliver,  or
cause to be  delivered to each person to whom the  prospectus  is sent or given,
the latest  quarterly  report that is specifically  incorporated by reference in
the prospectus to provide such interim financial information.

         (d)  Insofar  as  indemnification  for  liabilities  arising  under the
Securities Act of 1933 may be permitted to directors,  officers, and controlling
persons of the registrant  pursuant to the foregoing  provisions,  or otherwise,
the  registrant  has been  advised  that in the  opinion of the  Securities  and
Exchange  Commission such  indemnification is against public policy as expressed
in the Securities  Act of 1933 and is,  therefore,  unenforceable.  In the event
that a claim  for  indemnification  against  such  liabilities  (other  than the
payment by the registrant of expenses  incurred or paid by a director,  officer,
or controlling person of the registrant in the successful defense of any action,
suit, or  proceeding)  is asserted by such  director,  officer,  or  controlling
person in connection with the securities being registered,  the registrant will,
unless in the opinion of its counsel the matter has been settled by  controlling
precedent,  submit to a court of appropriate  jurisdiction  the question whether
such  indemnification by it is against public policy expressed in the Securities
Act of 1933 Act and will be governed by the final adjudication of such issue.

                                      II-3

<PAGE>



                                   SIGNATURES

         Pursuant  to the  requirements  of the  Securities  Act  of  1933,  the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in the City of Hutchinson in the State of Minnesota, on the 24th day
of August, 1998.

                               FSF FINANCIAL CORP


                           By: /s/ Donald A. Glas
                               -------------------------------------------------
                               Donald A. Glas
                               Chief Executive Officer and Co-Chair of the Board
                               (Duly Authorized Representative)

                                POWER OF ATTORNEY

         We, the undersigned  directors and officers of FSF Financial  Corp., do
hereby  severally  constitute  and appoint Donald A. Glas as our true and lawful
attorney  and  agent,  to do any and all  things  and  acts in our  names in the
capacities  indicated below and to execute any and all instruments for us and in
our names in the capacities  indicated  below which said Donald A. Glas may deem
necessary  or  advisable  to enable  FSF  Financial  Corp.  to  comply  with the
Securities Act of 1933, as amended, and any rules,  regulations and requirements
of the Securities and Exchange  Commission,  in connection with the Registration
Statement on Form S-8 relating to the offering of the  Company's  Common  Stock,
including specifically, but not limited to, power and authority to sign, for any
of us in our names in the capacities indicated below, the Registration Statement
and any and all amendments (including post-effective amendments) thereto; and we
hereby  ratify and  confirm all that said Donald A. Glas shall do or cause to be
done by virtue hereof.

         Pursuant  to the  requirements  of the  Securities  Act of  1933,  this
registration  statement  has been signed below by the  following  persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
<S>                                                           <C>
/s/ Donald A. Glas                                            /s/ George B. Loban
--------------------------------------------------            ------------------------------------
Donald A. Glas                                                George B. Loban
Chief Executive Officer and Co-Chair of the Board             President and Co-Chair of the Board
(Principal Executive Officer)


/s/ Richard H. Burgart                                        /s/ Roger R. Stearns
--------------------------------------------------            ------------------------------------
Richard H. Burgart                                            Roger R. Stearns
Secretary                                                     Director


/s/ James J. Caturia                                          /s/ Jerome J. Dempsey
--------------------------------------------------            ------------------------------------
James J. Caturia                                              Jerome J. Dempsey
Director                                                      Director


/s/ Sever B. Knustson
--------------------------------------------------         
Director
</TABLE>


<PAGE>





                                INDEX TO EXHIBITS


Exhibit               Description                                          Page
-------               -----------                                          ----

  4.1       FSF Financial Corp.                                              18
            1998 Stock Compensation Plan

  4.2       Form of Stock Option Agreement to be entered into                31
            with respect to Incentive Stock Options

  4.3       Form of Stock Option Agreement to be entered into with           36
            respect to Non-Incentive Stock Options

  5.1       Opinion of Malizia, Spidi, Sloane & Fisch, P.C. as to the        41
            validity of the Common Stock being registered

  23.1      Consent of Malizia, Spidi, Sloane & Fisch, P.C. (appears         --
            in their opinion filed as Exhibit 5.1)

  23.2      Consent of Independent Accountants                               43
[{"type": "S-8", "sequence": "1", "description": "FORM S-8", "secsgml_size_bytes": 57138}]
{"company-data": {"conformed-name": "FSF FINANCIAL CORP", "cik": "0000924370", "assigned-sic": "6035", "irs-number": "411783064", "state-of-incorporation": "MN", "fiscal-year-end": "0930"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-63457", "film-number": "98709970"}, "business-address": {"street1": "201 MAIN ST SOUTH", "city": "HUTCHINSON", "state": "MN", "zip": "55350", "phone": "6122344500"}, "mail-address": {"street1": "201 MAIN STREET SOUTH", "city": "HUTCHINSON", "state": "MN", "zip": "55350"}}
As filed with the Securities and Exchange Commission on September 15, 1998
                                                       Registration No. 33-79570

--------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM S-8
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933

                              --------------------

                               FSF Financial Corp.
             (Exact name of registrant as specified in its charter)

             Minnesota                                       41-1783064
-------------------------------                          -------------------
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                           Identification No.)
                              201 Main Street South
                        Hutchinson, Minnesota 55350-2573
                                 (320) 234-4500
                    ----------------------------------------
                    (Address of principal executive offices)

                               FSF Financial Corp.
                    ----------------------------------------
                          1998 Stock Compensation Plan
                            (Full Title of the Plan)

                               Richard Fisch, Esq.
                               Ruel B. Pile, Esq.
                             Linda Delivorias, Esq.
                      Malizia, Spidi, Sloane & Fisch, P.C.
                               1301 K Street, N.W.
                                 Suite 700 East
                             Washington, D.C. 20005
                                 (202) 434-4660
                    ----------------------------------------
            (Name, address and telephone number of agent for service)
CALCULATION OF REGISTRATION FEE
================================================================================================================================
Title of                                                Proposed Maximum          Proposed Maximum             Amount of
Securities to                     Amount to                 Offering             Aggregate Offering          Registration
be Registered                   be Registered            Price Per Unit               Price (2)                 Fee (2)
-------------                   -------------            --------------               ----------               --------

Common Stock
$.10 par value                300,000 shares (1)               (2)                   $4,933,816                $1,455.48
================================================================================================================================
(1)      The maximum  number of shares of common stock issuable upon exercise of
         options  granted or to be granted  under the FSF Financial  Corp.  1998
         Stock  Compensation  Plan  consists of 300,000  shares  which are being
         registered   under  this   Registration   Statement  and  for  which  a
         registration fee is being paid.  Additionally,  an indeterminate number
         of  additional  shares  which may be  offered  and  issued  to  prevent
         dilution  resulting  from  stock  splits,  stock  dividends  or similar
         transactions are being registered hereunder for which no additional fee
         is required.

(2)      Under  Rule  457(h)  of the  1933  Act,  the  registration  fee  may be
         calculated, inter alia, based upon the price at which the stock options
         may be exercised.  300,000 shares are being registered hereby, of which
         116,301  shares are under  option at an  exercise  price of $19.125 per
         share  ($2,224,256  in the  aggregate).  The  remainder of such shares,
         which are not presently subject to options (183,699 shares),  are being
         registered  based upon the  closing  price of the  common  stock of FSF
         Financial Corp. as reported on the NASDAQ System on September 10, 1998,
         of $14.75 per share  ($2,709,560 in the aggregate) for a total offering
         of $4,933,816.

         Under Rule 462 of the 1933 Act, the Registration  Statement on Form S-8
         shall be effective upon filing with the Commission.
** THIS DOCUMENT CONSTITUTES THE PROSPECTUS COVERING SECURITIES THAT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.**

PROSPECTUS
----------

                                 300,000 Shares

                               ------------------

                               FSF FINANCIAL CORP.
                                  COMMON STOCK
                           (Par Value $.10 Per Share)

                               ------------------

                               FSF Financial Corp.
                          1998 Stock Compensation Plan

         This  Prospectus  relates to 300,000 shares of common stock,  par value
$.10 per share (the "Common Stock"),  of FSF Financial Corp. (the "Company"),  a
Minnesota  corporation  which is the parent savings and loan holding  company of
FSF Federal fsb, Hutchinson,  Minnesota (the "Savings Bank") which may be issued
from time to time by the Company to holders of options  granted or to be granted
by the Company to selected officers, directors, key employees, and other persons
of the Company and any  subsidiary of the Company  pursuant to the FSF Financial
Corp. 1998 Stock  Compensation Plan (the "Plan").  Holders of options granted or
to be  granted  under  the Plan  (the  "Options")  are  referred  to  herein  as
"Optionees."  Each offer made under the Plan pursuant to this Prospectus is made
at the  price  and on the terms and  conditions  contained  in the stock  option
agreements entered into between the Company and each Optionee.

         This  Prospectus  is for use as of the date  hereof  and in  subsequent
years.  Information which is likely to change from year to year will be included
in appendices to this Prospectus.

         The issued and outstanding Common Stock of the Company is traded in the
over-the-counter   market,   and  transactions  are  reported  on  the  National
Association of Securities  Dealers,  Inc. Automated  Quotation System ("Nasdaq")
National Market System under the symbol "FFHH." Shares of Common Stock which may
be issued upon exercise of options granted or to be granted under the Plan, will
also be traded in the over-the-counter market. On September 10, 1998 the closing
price of the common stock on Nasdaq was $14.75 per share.

--------------------------------------------------------------------------------
THESE  SECURITIES  HAVE NOT BEEN APPROVED OR  DISAPPROVED  BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------------------------------------------------------------------------

                The date of this Prospectus is September 15, 1998
No person has been  authorized to give any  information  or to make any
representation  not contained in this  Prospectus,  and, if given or made,  such
information or representation  must not be relied upon as having been authorized
by the  Company.  This  Prospectus  does  not  constitute  an offer to sell or a
solicitation  of an offer to buy any  securities  other  than the  Common  Stock
offered by this  Prospectus or an offer to sell or a solicitation of an offer to
buy such Common Stock in any  jurisdiction  to any person to whom it is unlawful
to make such offer or solicitation in such jurisdiction. Neither the delivery of
this  Prospectus nor any sale made  hereunder  shall,  under any  circumstances,
create  any  implication  that  there has been no change in the  affairs  of the
Company  or that the  information  contained  herein is  correct  as of any time
subsequent to the date hereof.
TABLE OF CONTENTS

                               FSF Financial Corp.
                          1998 Stock Compensation Plan

                                                                         Page
                                                                         ----

General Plan Information...............................................    1

Administration.........................................................    1

Purpose................................................................    2

Securities to be Offered...............................................    2

Eligibility to Participate in Plan.....................................    2

Purchases of Securities Pursuant to the Plan
 and Payment for Securities Offered....................................    3

  Term of the Plan.....................................................    3
  Stock Option Agreements..............................................    3
  Option Price.........................................................    3
  Limitations on Grant of Options......................................    3
  Option Period........................................................    4
  Non-transferability..................................................    4
  Conditions of Exercise...............................................    4
  Payment for Options..................................................    4
  Cashless Exercise....................................................    5
  Issuance of Common Stock.............................................    5
  Options Granted to Directors.........................................    5

Recapitalization, Merger, Consolidation, Change in
 Control and Similar Transactions......................................    6

Amendment and Termination of the Plan..................................    6

Restrictions on Resale.................................................    7

Federal Income Tax Consequences........................................    7

Annual Report to Shareholders..........................................    8

Additional Information.................................................    8

Legal Opinion..........................................................    9
FSF Financial Corp.
                          1998 Stock Compensation Plan

Item 1. Plan Information
------------------------

General Plan Information

         This Prospectus  relates to 300,000 shares of the common stock ("Common
Stock"), par value $.10 per share, of FSF Financial Corp. (the "Company"), which
will be offered upon exercise of options  granted or to be granted under the FSF
Financial Corp. 1998 Stock Compensation Plan (the "Plan").

         The Board of Directors  of the Company  adopted the Plan at its meeting
on November 18, 1997. The Plan was approved by the  stockholders  of the Company
at a Special Meeting of Stockholders on January 20, 1998 (the "Effective Date").
The Plan is to continue  in effect for a period of ten years from the  Effective
Date (i.e.,  January 20,  2008),  unless  earlier  terminated or extended by the
Company.

         Pursuant to the Plan,  300,000 shares of Common Stock were reserved for
issuance by the Company upon  exercise of stock options  ("Options")  awarded to
officers,  directors,  key  employees  and other  persons of the Company and any
parent  and  subsidiary  corporations.  Options  granted  under  the Plan may be
Incentive  Stock  Options  within the  meaning of  Section  422 of the  Internal
Revenue  Code of 1986,  as amended  (the  "Code") or options  not so  qualifying
("Non-Incentive Stock Options").

         Subject  to  certain  limitations,  no gain or loss is  recognized  for
federal income tax purposes by the recipient of Options (the  "Optionee")  under
the Plan upon the exercise of an Incentive Stock Option, and no tax deduction is
available  to the Company as a result of the  exercise.  Upon the  exercise of a
Non-Incentive Stock Option, the Optionee generally recognizes ordinary income to
the extent that the  exercise  price is less than the fair  market  value of the
Common  Stock on the date of  exercise.  The  Company is  entitled  to a federal
income tax deduction  equal to the amount of ordinary  income  recognized by the
Optionee  at the  time of such  income  recognition.  See  "Federal  Income  Tax
Consequences."

         The Plan is not qualified  under  Section  401(a) of the Code and it is
exempt from the  provisions of the Employee  Retirement  Income  Security Act of
1974, as amended.

         The statements  herein  concerning the terms and provisions of the Plan
are  summaries  and do not  purport  to be  complete.  All such  statements  are
qualified in their  entirety by reference to the full text of the Plan  document
as filed as Exhibit 4.1 to the  Registration  Statement of which this Prospectus
is a part.  Additional  updating and other  information with respect to the Plan
and the Common Stock  offered  hereby may be provided in the future to Optionees
by means of one or more supplements or appendices to this Prospectus. Additional
information about the Plan (including a copy of the Plan), plan  administration,
and the Company may be obtained at the Company's  principal  offices,  which are
located at 201 Main Street South,  Hutchinson,  Minnesota  55350.  The Company's
telephone number is (320) 234-4500.

Administration

         The Plan is  administered  by a  committee  of the  Company's  Board of
Directors (the  "Committee").  The Plan provides that the Committee will consist
of not less than two non-employee

                                        1
directors  of the Company.  The members of the  Committee  are  appointed by the
Board and serve at the pleasure of the Board.  Members of the Committee shall be
"Non-employee Directors" within the meaning of Rule 16b-3 promulgated under Rule
16(b) of the  Securities  Exchange Act of 1934,  as amended (the "1934 Act").  A
majority of the entire Committee shall constitute a quorum,  and the action of a
majority  of the  members  present  at any  meeting at which a quorum is present
shall be deemed the action of the Committee.

         Subject to the express  provisions of the Plan and resolutions  adopted
by the Board,  the  Committee has authority to interpret the Plan, to prescribe,
amend,  and  rescind  the rules and  regulations  relating  to the Plan,  and to
determine  the form and  content  of  Options  to be issued  under the Plan.  In
addition,  the Committee is authorized to make all other  determinations  deemed
necessary or advisable for the administration of the Plan and shall have and may
exercise  such other power and such  authority  as may be delegated to it by the
Board from time to time. All decisions,  determinations,  and interpretations of
the Committee shall be final and conclusive to all persons affected thereby.

         Additional information about the Plan and the Committee may be obtained
from the  Company at the  address of the  Company  listed  under  "General  Plan
Information."

Purpose

         The purpose of the Plan is to promote the  interests  of the Company by
attracting  and  retaining  the  best  available   personnel  for  positions  of
substantial responsibility to serve as officers, directors, and key employees of
the Company and to provide additional incentive to such officers, directors, and
key employees of the Company to promote the success of the Company's business.

Securities to be Offered

         The  aggregate  number of shares  of Common  Stock  which may be issued
pursuant to Options  granted or to be granted under the Plan is 300,000  shares,
subject to certain  adjustments  for  changes in the  capital  structure  of the
Company,  as described  below.  See  "Recapitalization,  Merger,  Consolidation,
Change in Control and  Similar  Transactions."  Any shares  subject to an Option
under  the  Plan  which  expire  or are  terminated  unexercised  will  again be
available for issuance under the Plan.

Eligibility to Participate in Plan

         Options  to  purchase  Common  Stock  under the Plan may be  awarded to
officers,  directors,  key  employees,  and other  persons of the  Company,  FSF
Federal fsb,  Hutchinson,  Minnesota  (the "Savings  Bank"),  and any present or
future parent or subsidiary  corporations.  Incentive  Stock Options may only be
granted to employees of the Company,  the Savings Bank,  and any of their parent
or  subsidiary  corporations.  In  selecting  participants  under  the Plan (the
"Participants")  and in determining  the number of Options to be granted to each
Participant,  the Committee may consider the nature of the services  rendered by
each Participant,  each Participant's current and potential  contribution to the
Company, and such other factors as the Committee, in its sole discretion,  shall
deem  relevant.  In  no  event  shall  shares  subject  to  Options  granted  to
non-employee  directors in the aggregate  under the Plan exceed  100,000  shares
authorized for delivery under the Plan. See "Purchases of Securities Pursuant to
the Plan and Payment for Securities Offered - Options Granted to Directors."

                                        2
Purchases of Securities Pursuant to the Plan and Payment for Securities Offered

         Term of the Plan.  The Plan was effective  January 20, 1998, and unless
previously  terminated,  the Plan  shall  continue  in effect  for a term of ten
years,  after which no further awards may be granted.  The future  expiration of
the Plan, or its termination by the Board, will not affect any Option previously
granted.

         Stock  Option  Agreements.  The  Options  granted  under  the  Plan are
evidenced by stock option agreements (the "Option Agreements")  substantially in
the  form  filed  as  exhibits  to the  Registration  Statement  of  which  this
Prospectus is a part. Each Option  Agreement,  and any amendment  thereto,  will
contain terms and conditions consistent with the requirements of the Plan as the
Committee shall determine.  The Option Agreements shall constitute the only form
of reports which  Participants  shall  receive  related to the status of Options
granted or which are exercisable under the Plan.

         The Plan  provides  that the  Board of  Directors  of the  Company  may
authorize the  Committee to direct the execution of an instrument  providing for
the modification of any outstanding Option,  provided that no such modification,
extension or renewal  shall  confer on the  Optionee any right or benefit  which
could not be conferred by the grant of a new Option at such time,  and shall not
materially  decrease  the  Optionee's  benefits  under the  Option  without  the
Optionee's  consent,  except as  provided  under  Section 18 of the Plan,  which
permits modification of the Plan. See "Amendment and Termination of the Plan."

         Option Price.  The exercise price for the purchase of shares subject to
an Incentive  Stock Option at the date of grant may not be less than 100 percent
(100%) of the Fair Market  Value of the shares  covered by the  Incentive  Stock
Option on that date. If an Optionee owns Common Stock representing more than ten
percent of the outstanding Common Stock at the time an Incentive Stock Option is
granted,  then the Option Price shall not be less than 110 percent (110%) of the
Fair Market Value of the Common Stock at the time the Incentive  Stock Option is
granted. No more than $100,000 of Incentive Stock Options can become exercisable
for the first time in any one year for any one person. Pursuant to the Plan, the
exercise price per share for  Non-Incentive  Stock Options shall be the price as
determined by the Committee,  but in no event less than the Fair Market Value of
the Common Stock on the date of grant. See "Options Granted to Directors" below.
The  exercise  price of  Options  must be paid for in full in cash or  shares of
Common Stock, or a combination of both.

         If the Common Stock is listed on a national  securities exchange at the
time of granting an Option awarded pursuant to the Plan, then the exercise price
per share shall be not less than the  average of the highest and lowest  selling
price on such  exchange on the date such Option is granted;  or if there were no
sales on said date,  then the price shall be not less than the mean  between the
bid and ask price on such date. If the Common Stock is traded  otherwise than on
a national  securities  exchange at the time of the granting of an Option,  then
the exercise price per share shall be not less than the mean between the bid and
ask price on the date the Option is granted or, if there is no bid and ask price
on said date,  then on the next prior  business day on which there was a bid and
ask price.  If no such bid and ask price is available,  then the exercise  price
per share shall be determined by the Committee in good faith.

         Limitations on Grant of Options. Except as may be specifically provided
by the terms of the Plan, the granting of Options is made at the sole discretion
of the Committee.  Further,  the aggregate Fair Market Value of the Common Stock
for which an employee may be granted  Options which become first  exercisable in
any  calendar  year  may not  exceed  $100,000.  Notwithstanding  the  foregoing
limitation,

                                        3
the  Committee  may grant  Options in excess of this  limitation,  provided said
Options are clearly and  specifically  designated as not being  Incentive  Stock
Options, as defined in Section 422 of the Code.

         Option Period.  The term of  exercisability  of an Option granted under
the Plan shall be established by the Committee, but may not be for more than ten
years from the date of grant of the  Option,  except in the case of an  Optionee
who owns stock representing more than 10% of the Common Stock outstanding at the
time an  Incentive  Stock  Option is granted,  the term of the  Incentive  Stock
Option  shall not exceed  five years  from the date of the  grant.  In  general,
Options will not be exercisable  after the expiration of their term as set forth
in the Plan and/or the Option Agreement.

         In the event that an  Optionee  ceases to serve as an  employee  of the
Company for any reason other than  permanent and total  disability or death,  an
exercisable Incentive Stock Option will generally continue to be exercisable for
three  months but in no event after the  expiration  date of the Option.  In the
event of the permanent and total  disability or death of an Optionee during such
service,  an exercisable  Incentive Stock Option will continue to be exercisable
for one year in the case of  disability  and two years in the case of death,  to
the extent exercisable by the Optionee immediately prior to his or her permanent
and total disability or death, but in no event after the expiration date of such
Options. The terms and conditions of Non-Incentive Stock Options relating to the
impact of an Optionee's  termination  of  employment  or service,  permanent and
total  disability  or death  shall be such terms as the  Committee,  in its sole
discretion,  shall  determine  at the time of the grant of such  Options  in the
Option Agreement or upon termination, permanent and total disability, or death.

         Under the Plan,  the  Committee's  determination  regarding  whether an
Optionee's  employment  or service has ceased,  and the  effective  date thereof
shall be final and conclusive on all persons affected thereby.

         Non-transferability.  No  Option granted under the Plan is transferable
other than by will or the laws of descent and distribution.

         Conditions  of  Exercise.  Options  may be  exercised  only  during the
periods specified in the Plan or the Option Agreement, certain information as to
which is provided above (see "Option Period").  Except as described above and as
may be limited by an Option Agreement, there is no limitation upon the number of
Options that may be exercised in any one year,  and Options not exercised in any
one year may be exercised in subsequent  years over the term of the Option.  The
Committee  may impose  additional  conditions  upon the rights of an Optionee to
exercise any Option which are not  inconsistent  with the terms of the Plan, and
in the case of Incentive Stock Options,  not inconsistent  with the requirements
for qualification under Section 422 of the Code. Incentive Stock Options will be
first  exercisable  at the  rate of 20% on the date of  grant  and 20%  annually
thereafter;  however, the exercisability of such Options shall be accelerated in
the event of the death or permanent and total  disability of the Optionee,  or a
change  in  control  in  accordance  with the Plan.  Such  Options  will  remain
exercisable for up to ten years from the date of grant.

         Payment for  Options.  Under the Plan,  full  payment for each share of
Common Stock purchased upon the exercise of any Option shall be made at the time
of exercise of such Option and shall be paid in cash (in United States dollars),
Common Stock,  or a combination of cash and Common Stock.  Common Stock utilized
in full or partial  payment of the  exercise  price  shall be valued at its fair
market value at the date of exercise.  The Company  shall accept full or partial
payment in Common  Stock only to the extent  permitted  by  applicable  law.  No
shares of Common Stock shall be issued until full payment

                                        4
has been received by the Company,  and no Optionee  shall have any of the rights
of a  shareholder  of the Company until the shares of Common Stock are issued to
him or her.

         Cashless Exercise.  An Optionee who has held an Option for at least six
months  may  engage in the  "cashless  exercise"  of the  Option.  In a cashless
exercise,  an Optionee  gives the Company  written notice of the exercise of the
Option together with an order to a registered  broker-dealer or equivalent third
party,  to sell part or all of the Optioned  Stock and to deliver  enough of the
proceeds  to the  Company to pay the Option  exercise  price and any  applicable
withholding  taxes.  If the Optionee does not sell the Optioned  Stock through a
registered  broker-dealer  or  equivalent  third party,  he can give the Company
written  notice of the  exercise of the Option and the third party  purchaser of
the  Optioned  Stock  shall pay the Option  exercise  price plus any  applicable
withholding taxes to the Company.

         Issuance of Common Stock.  Shares issued to Optionees  upon exercise of
Options shall be either newly issued shares of the Company,  treasury  shares or
shares purchased in the market, at the Company's discretion. In either case, the
Optionee shall not pay any fees,  commissions,  or other charges for such Common
Stock  other than the  exercise  price as stated in the Option  Agreement.  Cash
proceeds  from the sale of Common  Stock  issued  pursuant  to the  exercise  of
Options will be added to the general funds of the Company to be used for general
corporate  purposes.  Shares of Common Stock shall not be issued with respect to
any Option  granted  under the Plan  unless the  issuance  and  delivery of such
Common  Stock  shall  comply with all  relevant  provisions  of law,  including,
without limitation, the Securities Act of 1933, as amended (the "1933 Act"), the
rules and regulations  promulgated  thereunder,  any applicable state securities
law, and the  requirements of any stock exchange upon which the Common Stock may
then be listed.

         Inability of the Company to obtain approval from any regulatory body or
authority  deemed by the  Company or counsel  thereto  to be  necessary  for the
lawful issuance and sale of any Common Stock hereunder shall relieve the Company
of any liability with respect to the  non-issuance or sale of such Common Stock.
As a condition to the exercise of an Option,  the Company may require the person
exercising  the Option to make such  representations  and  warranties  as may be
necessary  to  assure  the  availability  of an  exemption  from any  additional
registration requirements of federal or state securities laws.

         Options Granted to Directors.  Non-Incentive  Stock Options to purchase
1,500  shares of Common Stock will be granted to each  non-employee  director of
the Company as of the  Effective  Date,  at an exercise  price equal to the fair
market  value of the Common  Stock on such date of grant.  The  Options  will be
first  exercisable  at the  rate of 20% on the date of  grant  and 20%  annually
thereafter,  during  periods of  continued  service as a  director  or  director
emeritus.  Thereafter, such Options shall remain exercisable for up to ten years
following death, disability, or termination of service as a director or director
emeritus,  but in no  event  beyond  ten  years  from  the  date of  grant.  The
exercisability  of such Options shall be accelerated  only in the event of death
or the permanent and total disability of the Optionee, or a change in control in
accordance  with the Plan. In the event of such directors'  death,  such Options
may be exercised by the  personal  representative  of his estate or person(s) to
whom his rights  under  such  Options  shall  have  passed by will or by laws of
descent and distribution.  Unless otherwise  inapplicable,  or inconsistent with
the  provisions  of this  paragraph,  the  Options to be  granted  to  directors
hereunder shall be subject to all other provisions of the Plan.

                                        5
Recapitalization,   Merger,  Consolidation,   Change  in  Control,  and  Similar
Transactions

         Subject to any  required  action by the  shareholders  of the  Company,
within the sole discretion of the Committee,  the aggregate  number of shares of
Common  Stock for which  Options  may be granted  under the Plan,  the number of
shares of Common Stock covered by each outstanding Option and the exercise price
per share of Common Stock of each Option shall be  proportionately  adjusted for
any  increase  or  decrease  in the number of issued and  outstanding  shares of
Common Stock  resulting  from a subdivision  or  consolidation  of shares or the
payment  of a stock  dividend  on the  Common  Stock or any  other  increase  or
decrease in the number of such shares of Common Stock effected without a receipt
of  consideration  by the  Company  (other  than by  shares  held by  dissenting
stockholders).

         In the  event  of any  change  in  control,  recapitalization,  merger,
consolidation,  exchange  of shares,  spin-off,  reorganization,  tender  offer,
liquidation, or other extraordinary corporate action, the Committee, in its sole
discretion,  shall  have the power,  prior to or  subsequent  to such  action or
events, to (i) appropriately adjust the number of shares of Common Stock subject
to  each  Option,  the  exercise  price  per  share  of  Common  Stock,  and the
consideration  to be given or received by the Company  upon the  exercise of any
outstanding  Options;  (ii)  cancel  any  or  all  previously  granted  Options,
providing that  appropriate  consideration is paid to the Optionee in connection
therewith;  and/or (iii) make such other adjustments in connection with the Plan
as  the  Committee,  in  its  sole  discretion,   deems  necessary,   desirable,
appropriate,  or  advisable.  However,  no action may be taken by the  Committee
which would cause Incentive  Stock Options granted  pursuant to the Plan to fail
to meet the requirements of Section 422 of the Code.

         The  Committee  has at all times the power to  accelerate  the exercise
date  of  all  Options   granted  under  the  Plan;   provided,   however,   the
exercisability  of such Options may be  accelerated  only in the event of death,
permanent  and total  disability,  or change in control in  accordance  with the
Plan.  In the case of any change in control of the Company as  determined by the
Committee,  all  outstanding  options shall become  immediately  exercisable.  A
change in control is defined in the Plan as: (i) the  execution  of an agreement
for the sale of all, or a material portion,  of the assets of the Company;  (ii)
the  execution of an  agreement  for merger or  recapitalization  of the Company
whereby the Company is not the  surviving  entity;  (iii) a change of control of
the Company as otherwise defined by the Office of Thrift Supervision  ("OTS") or
its  regulations;  and (iv) the  acquisition,  directly  or  indirectly,  of the
beneficial  ownership  (within the meaning of Section  13(d) of the 1934 Act and
rules and regulations  promulgated thereunder) of 25% or more of the outstanding
voting  securities of the Company by any person,  trust,  entity or group.  This
limitation  shall not apply to a transaction  in which the purchase of shares by
underwriters  in  connection  with a public  offering  of Common  Stock,  or the
purchase of shares of up to 25% of any class of  securities  of the Company by a
tax-qualified employee stock benefit plan. The determination of the Committee as
to whether a change in control has occurred shall be conclusive and binding.

Amendment and Termination of the Plan

         The Board of Directors may alter,  suspend,  or  discontinue  the Plan,
except that no action of the Board may  increase  the  maximum  number of shares
permitted  to be  optioned  under the Plan,  materially  increase  the  benefits
accruing to Participants  under the Plan or materially  modify the  requirements
for  eligibility for  participation  in the Plan unless such action of the Board
shall be subject to approval or ratification by the shareholders of the Company.
Unless otherwise  terminated by the Board of Directors,  the Plan shall continue
in effect for a term of ten years from the Effective Date, after which no future
awards of Options may be granted.

                                        6
Restrictions on Resale

         Unless  specifically  included as a term and  condition  of any Option,
there  are no  restrictions  on the  resale of Common  Stock  acquired  upon the
exercise of Options. The Plan permits the Committee to provide as a condition to
the  exercise of an Option that the shares  acquired  upon the  exercise of such
Options may be subject to a "Right of Repurchase" by the Company.  At this time,
the  Company  has no  intention  to grant  Options  subject  to such  "Right  of
Repurchase."  Such  shares  of Common  Stock,  however,  may be  resold  only in
compliance  with the  registration  requirements of the 1933 Act, and applicable
state securities laws.

         Under the 1933 Act,  affiliates  of the  Company  generally  may resell
shares of Common  Stock  purchased  pursuant to the Plan only (i) in  accordance
with the  provisions  of Rule 144  under the 1933 Act,  or (ii)  pursuant  to an
applicable current and effective registration statement under the 1933 Act.

         As defined in Rule 405 under the 1933 Act, an  affiliate of the Company
is a person who  directly,  or  indirectly  through one or more  intermediaries,
controls,  or is controlled by, or is under common control with the Company. The
determination  of whether a person is an affiliate of the Company is primarily a
factual  one  based  upon  whether  he   possesses,   directly  or   indirectly,
individually  or in  concert  with  others,  the  power to  direct  or cause the
direction  of the  management  or policies of the Company,  whether  through the
ownership of voting stock, by executive position, by membership on the Board, by
contract or  otherwise.  Therefore,  each  Optionee  should  consult his counsel
concerning  whether  he is  an  affiliate  of  the  Company  and  the  attendant
restrictions on the resale under the 1933 Act of Common Stock acquired  pursuant
to the Plan.

         In  addition,  the receipt of an Option to purchase  Common Stock by an
officer or director of the Company,  or the  beneficial  owner of 10% or more of
the outstanding  Common Stock, is a reportable  transaction  under Section 16 of
the 1934 Act, and Forms 3, 4, or 5 are required to be filed with the  Securities
and Exchange  Commission in  connection  with such  transaction.  The sale by an
officer,  director,  or 10% holder of Common Stock issued upon an exercise of an
Option  within six months after the receipt of such Option may create  liability
of such persons to the Company  under the  "short-swing  profit"  provisions  of
Section 16(b) of the 1934 Act.

Federal Income Tax Consequences

         Under  present  federal tax laws,  awards  under the Plan will have the
following consequences:

         1. The grant of an Option will not by itself result in the  recognition
            of taxable  income to the  Optionee  nor  entitle  the  Company to a
            deduction at the time of such grant.

         2. The  exercise  of an Option  which is an  "Incentive  Stock  Option"
            within the meaning of Section 422 of the Code generally will not, by
            itself,  result in the recognition of taxable income to the Optionee
            nor entitle the Company to a deduction at the time of such exercise.
            However,  the  difference  between the  exercise  price and the fair
            market value of the Option shares on the date of exercise is an item
            of tax  preference  which may,  in certain  situations,  trigger the
            alternative  minimum  tax  for  the  Optionee.   The  Optionee  will
            recognize  capital  gain or loss upon resale of the shares  received
            upon such exercise,  provided that such shares are held for at least
            one year after the Option  exercise  or two years after the grant of
            the Option, whichever is later. Generally, if the shares are not

                                        7
held for that period,  the Optionee will recognize  ordinary  income
            upon  disposition in an amount equal to the  difference  between the
            exercise  price and the fair market  value on the date of  exercise,
            or, if less, the sales proceeds of the shares  acquired  pursuant to
            the exercise of such Option.

         3. The  exercise  of a  Non-Incentive  Stock  Option will result in the
            recognition  of  ordinary  income  by the  Optionee  on the  date of
            exercise in an amount equal to the  difference  between the exercise
            price and the fair market  value,  on the date of  exercise,  of the
            shares acquired pursuant to the exercise of such Option.

         4. The Company will be allowed a tax deduction for federal tax purposes
            equal to the amount of ordinary income  recognized by an Optionee at
            the time the Optionee  recognizes  such ordinary income under either
            an Incentive Stock Option or a Non- Incentive Stock Option .

         The  foregoing  provides a general  summary of the  federal  income tax
consequences  applicable to Optionees  under the Plan. Each Optionee is urged to
consult his or her own tax advisor for information  regarding applicable federal
and state tax consequences.

Item 2.  Registrant Information and Employee Plan Annual Information
--------------------------------------------------------------------

Annual Report to Shareholders

         The Company's  consolidated  financial  statements for the period ended
September 30, 1997, as contained in the Company's Form 10-K are  incorporated by
reference in the  Registration  Statement to which this Prospectus is a part. In
addition,  the Company's  Quarterly  Reports on Form 10-Q for the quarters ended
December 31,  1997,  March 31, 1998 and June 30, 1998 are also  incorporated  by
reference in the  Registration  Statement to which this Prospectus is a part. In
the future,  the  Company's  latest  Annual  Report to  Stockholders,  including
consolidated financial statements,  will be mailed to all stockholders of record
as of the close of business on such record date. Any person wishing to receive a
copy of the Annual  Report to  Stockholders  may  obtain a copy by  writing  the
Company at the address set forth below under "Additional Information."

Additional Information

         Additional  updating  information  with respect to the Common Stock and
the Plan covered herein may be provided in the future to Participants  under the
Plan by means of appendices to this Prospectus.  The nature and frequency of any
reports to be made to Participants as to their participation in the Plan will be
determined by the Committee.

         The Company upon written or oral request,  will provide  without charge
to any person to whom this  Prospectus is delivered:  a copy of the Plan, a copy
of its latest Annual Report to Stockholders  (when  available) and a copy of any
and all of the documents that have been  incorporated  by reference in Item 3 of
Part II of the  Registration  Statement of which this  Prospectus is a part, and
that such  documents  are  deemed  incorporated  by  reference  in this 1933 Act
Section 10(a) Prospectus.  Further,  other documents required to be delivered to
Participants as specified in Item 9 of Part II of the Registration Statement are
available upon request. Any such request can be oral or in writing and should be
addressed to the

                                        8
Corporate  Secretary,  201 Main Street South,  Hutchinson,  Minnesota 55350. The
Registrant's telephone number is (320) 234-4500.

Legal Opinion

         The validity of the Common Stock offered  hereby has been passed on for
the Company by Malizia,  Spidi, Sloane & Fisch, P.C., 1301 K Street, N.W., Suite
700 East, Washington, D.C. 20005.

                                        9
PART II

                 INFORMATION REQUIRED IN REGISTRATION STATEMENT

Item 3.  Incorporation of Documents by Reference
------------------------------------------------

         The  Company  is  subject  to  the  informational  requirements  of the
Securities  Exchange  Act of 1934  (the  "1934  Act")  and,  accordingly,  files
periodic  reports  and  other  information  with  the  Securities  and  Exchange
Commission (the "Commission").  Reports, proxy statements, and other information
concerning the Company filed with the Commission may be inspected and copies may
be obtained (at present rates) at the  Commission's  Public  Reference  Section,
Room 1024, 450 Fifth Street, N.W., Washington, DC 20549.

         The following  documents filed with the Commission are  incorporated by
reference in this Registration Statement and the Prospectus  constituting Part I
of this Registration Statement:

         (a)     The Company's Registration Statement on Form S-1 (No. 33-79570)
as filed with the Commission and any amendments thereto;

         (b) The Company's  Annual Report on Form 10-K for the fiscal year ended
September 30, 1997, as filed with the Commission pursuant to Rule 15d-13;

         (c) The Company's  Quarterly Report on Form 10-Q for the quarters ended
December  31,  1997,  March  31,  1998  and  June 30,  1998,  as filed  with the
Commission;

         (d) all other reports  filed  pursuant to Section 13(a) or 15(d) of the
Securities and Exchange Act of 1934, as amended (the  "Exchange  Act") since the
end of the fiscal  year  covered by audited  consolidated  financial  statements
contained in the Form S-1 referred to in Item 3(a) above; and

         (e) the  description  of the Common  Stock,  contained in the Company's
Registration  Statement  on Form 8-A as filed with the  Commission  on August 8,
1994 and all  amendments  thereto or reports  filed for the  purpose of updating
such description.

         All  documents  filed by the Company  pursuant  to Sections  13, 14, or
15(d) of the 1934 Act after the date hereof and prior to the  termination of the
offering  of the shares of Common  Stock shall be deemed to be  incorporated  by
reference into this Registration Statement and to be a part hereof from the date
of filing of such documents.

Item 4.  Description of Securities.
----------------------------------

         Not applicable.

Item 5.  Interests of Named Experts and Counsel.
-----------------------------------------------

         Not applicable.

                                      II-1
Item 6.  Indemnification of Directors and Officers.
--------------------------------------------------

         Sections 302A.521 of the Minnesota Business  Corporation Act authorizes
a corporation such as the registrant to indemnify officers, directors, employees
and agents under certain circumstances. Section 302A.521, subdivision 2 requires
indemnification  of  directors,  officers,  employees  and  agents who have been
successful  on the merits or  otherwise  in defense of certain  actions,  suits,
proceedings claims,  issues and matters.  Article 8 of the Registrant's Articles
of Incorporation provides for indemnification.

         Section  308A.325  of the  Minnesota  Statutes,  1971  allows  for  the
limitation of liability of directors.

         The registrant believes that these provisions assist the registrant in,
among other  things,  attracting  and retaining  qualified  persons to serve the
registrant and its subsidiary.  However, a result of such provisions could be to
increase the expenses of the  registrant and  effectively  reduce the ability of
stockholders  to sue on behalf of the  registrant  since  certain suits could be
barred or amounts that might  otherwise be obtained on behalf of the  registrant
could be required to be repaid by the registrant to an indemnified party.

         Additionally,  the  Company  has in  force  a  Directors  and  Officers
Liability Policy underwritten by St. Paul Insurance Companies,  Inc. with a $2.0
million aggregate limit of liability and an aggregate  deductible of $40,000 per
loss both for claims  directly  against  officers and  directors  and for claims
where the Company is required to indemnify directors and officers.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 ("1933  Act") may be permitted to  directors,  officers,  or persons
controlling the Company  pursuant to the foregoing  provisions,  the Company has
been informed that in the opinion of the Securities and Exchange Commission such
indemnification  is against  public  policy as  expressed in the 1933 Act and is
therefore unenforceable.

Item 7.  Exemption from Registration Claimed.
--------------------------------------------

         Not applicable.

Item 8.  Exhibits
-----------------

         For a  list  of  all  exhibits  filed  or  included  as  part  of  this
Registration Statement,  see "Index to Exhibits" at the end of this Registration
Statement.

Item 9.  Undertakings
---------------------

         (a)      The undersigned registrant hereby undertakes:

                  (1) To file,  during any  period in which  offers or sales are
                  being made, a  post-effective  amendment to this  registration
                  statement;

                  (i) To include any prospectus required by Section 10(a)(3)  of
                  the Securities Act of 1933;

                                      II-2
(ii) To reflect in the  prospectus any facts or events arising
                  after the effective date of the registration statement (or the
                  most   recent   post-effective   amendment   thereof)   which,
                  individually  or in the  aggregate,  represent  a  fundamental
                  change  in the  information  set  forth  in  the  registration
                  statement;

                  (iii) To include any material  information with respect to the
                  plan  of   distribution   not  previously   disclosed  in  the
                  registration   statement  or  any  material   change  to  such
                  information in the registration statement;

provided  however,  that paragraphs  (a)(1)(i) and (a)(1)(ii) do no apply if the
registration  statement  is on Form S-3,  Form S-8 or F-3,  and the  information
required to be included in a  post-effective  amendment by those  paragraphs  is
contained in periodic reports filed by the registrant  pursuant to Section 13 or
15(d) of the Securities  Exchange Act of 1934 that are incorporated by reference
in the registration statement.

                  (2) That, for the purpose of determining  any liability  under
the Securities Act of 1933, each such  post-effective  amendment shall be deemed
to be a new registration  statement  relating to the securities offered therein,
and the  offering  of such  securities  at that  time  shall be deemed to be the
initial bona fide offering thereof.

                  (3) To remove from  registration by means of a  post-effective
amendment  any of the  securities  being  registered  which remain unsold at the
termination of the offering.

         (b) The undersigned  registrant hereby undertakes that, for purposes of
determining  any liability  under the Securities Act of 1933, each filing of the
registrant's  annual  report  pursuant to section  13(a) or section 15(d) of the
Securities  Exchange  Act of 1934  (and,  where  applicable,  each  filing of an
employee  benefit  plan's  annual  report  pursuant  to  section  15(d)  of  the
Securities  Exchange  Act of 1934)  that is  incorporated  by  reference  in the
registration  statement  shall  be  deemed  to be a new  registration  statement
relating to the securities offered therein,  and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

         (c) The undersigned registrant hereby undertakes to deliver or cause to
be delivered with the prospectus,  to each person to whom the prospectus is sent
or given, the latest annual report,  to security holders that is incorporated by
reference  in  the  prospectus  and  furnished   pursuant  to  and  meeting  the
requirements  of Rule 14a-3 or Rule 14c-3 under the  Securities  Exchange Act of
1934;  and,  where  interim  financial  information  required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus,  to deliver,  or
cause to be  delivered to each person to whom the  prospectus  is sent or given,
the latest  quarterly  report that is specifically  incorporated by reference in
the prospectus to provide such interim financial information.

         (d)  Insofar  as  indemnification  for  liabilities  arising  under the
Securities Act of 1933 may be permitted to directors,  officers, and controlling
persons of the registrant  pursuant to the foregoing  provisions,  or otherwise,
the  registrant  has been  advised  that in the  opinion of the  Securities  and
Exchange  Commission such  indemnification is against public policy as expressed
in the Securities  Act of 1933 and is,  therefore,  unenforceable.  In the event
that a claim  for  indemnification  against  such  liabilities  (other  than the
payment by the registrant of expenses  incurred or paid by a director,  officer,
or controlling person of the registrant in the successful defense of any action,
suit, or  proceeding)  is asserted by such  director,  officer,  or  controlling
person in connection with the securities being registered,  the registrant will,
unless in the opinion of its counsel the matter has been settled by  controlling
precedent,  submit to a court of appropriate  jurisdiction  the question whether
such  indemnification by it is against public policy expressed in the Securities
Act of 1933 Act and will be governed by the final adjudication of such issue.

                                      II-3
SIGNATURES

         Pursuant  to the  requirements  of the  Securities  Act  of  1933,  the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in the City of Hutchinson in the State of Minnesota, on the 24th day
of August, 1998.

                               FSF FINANCIAL CORP

                           By: /s/ Donald A. Glas
                               -------------------------------------------------
                               Donald A. Glas
                               Chief Executive Officer and Co-Chair of the Board
                               (Duly Authorized Representative)

                                POWER OF ATTORNEY

         We, the undersigned  directors and officers of FSF Financial  Corp., do
hereby  severally  constitute  and appoint Donald A. Glas as our true and lawful
attorney  and  agent,  to do any and all  things  and  acts in our  names in the
capacities  indicated below and to execute any and all instruments for us and in
our names in the capacities  indicated  below which said Donald A. Glas may deem
necessary  or  advisable  to enable  FSF  Financial  Corp.  to  comply  with the
Securities Act of 1933, as amended, and any rules,  regulations and requirements
of the Securities and Exchange  Commission,  in connection with the Registration
Statement on Form S-8 relating to the offering of the  Company's  Common  Stock,
including specifically, but not limited to, power and authority to sign, for any
of us in our names in the capacities indicated below, the Registration Statement
and any and all amendments (including post-effective amendments) thereto; and we
hereby  ratify and  confirm all that said Donald A. Glas shall do or cause to be
done by virtue hereof.

         Pursuant  to the  requirements  of the  Securities  Act of  1933,  this
registration  statement  has been signed below by the  following  persons in the
capacities and on the date indicated.
/s/ Donald A. Glas                                            /s/ George B. Loban
--------------------------------------------------            ------------------------------------
Donald A. Glas                                                George B. Loban
Chief Executive Officer and Co-Chair of the Board             President and Co-Chair of the Board
(Principal Executive Officer)

/s/ Richard H. Burgart                                        /s/ Roger R. Stearns
--------------------------------------------------            ------------------------------------
Richard H. Burgart                                            Roger R. Stearns
Secretary                                                     Director

/s/ James J. Caturia                                          /s/ Jerome J. Dempsey
--------------------------------------------------            ------------------------------------
James J. Caturia                                              Jerome J. Dempsey
Director                                                      Director

/s/ Sever B. Knustson
--------------------------------------------------         
Director
INDEX TO EXHIBITS

Exhibit               Description                                          Page
-------               -----------                                          ----

  4.1       FSF Financial Corp.                                              18
            1998 Stock Compensation Plan

  4.2       Form of Stock Option Agreement to be entered into                31
            with respect to Incentive Stock Options

  4.3       Form of Stock Option Agreement to be entered into with           36
            respect to Non-Incentive Stock Options

  5.1       Opinion of Malizia, Spidi, Sloane & Fisch, P.C. as to the        41
            validity of the Common Stock being registered

  23.1      Consent of Malizia, Spidi, Sloane & Fisch, P.C. (appears         --
            in their opinion filed as Exhibit 5.1)

  23.2      Consent of Independent Accountants                               43