This report to Congress details activities of the National Advisory Council on Indian Education (NACIE) during fiscal year (FY) 1986 and offers recommendations for continuing educational services for Indian youth. Part I includes an introduction to NACIE, identifies members, committees and staff and reviews its legislative history including NACIE's opposition to a congressional proposal combining Indian educational programs into a block grant. Part II details NACIE functions and activities for FY 1986 and includes field comments on the block grant issue. Part III summarizes nine recommendations for strengthened funding and improved representation of Indians in government decisionmaking. Part IV describes major components of Title IV of the Indian Education Act of 1972. Part V profiles programs funded by Title IV grants and individuals receiving fellowships in 1986. Part VI contains a glossary, tables showing state-by-state distribution of funds awarded to Title IV grantees, and a map showing locations and dates of NACIE meetings from 1973 through September 1986. (TES)