The National Weather Service in Rapid City says an employee in the Black Hills National Forest spotted the funnel cloud touch ground about 1:15 p.m. MDT.
The storm system also has produced hail up to the size of golf balls near Keystone, Hill City, Pactola Reservoir and Sheridan Lake.
The weather service says a severe thunderstorm was moving south from the Custer State Park Game Lodge south at about 15 mph Tuesday afternoon.
(Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)