  The photometric data for a short-period (0.1984 day) eclipsing binary V38
discovered by the OGLE micro-lensing team in Baade's W indow field BW3 have
been analyzed. The de-reddened color (V-I_C)_0=2.3 and the light-curve
synthesis solution of the I-filter light curve suggest a pair of
strongly-distorted M-dwarfs, with parameters between those of YY Gem and CM
Dra, revolving on a tightest known orbit among binaries consisting of Main
Sequence stars. The primary, more massive and hotter, component maybe filling
its Roche lobe. The very small amount of angular momentum in the orbital motion
makes the system particularly important for studies of angular momentum loss at
the faint end of the Main Sequence. Spectroscopic observations of the orbital
radial velocity variations as well as of activity indicators are urgently
needed for a better understanding of the angular-momentum and
internal-structure evolutionary state of the system.
