DUPREE MUTUAL FUNDS

December 31, 2001
SEMI ANNUAL REPORT
TO SHAREHOLDERS

ABOUT DUPREE MUTUAL FUNDS

In 1941, Dupree & Company, Inc., began business in Harlan, Kentucky as a small securities brokerage firm specializing in tax-exempt municipal bonds.

Over the years the firm, which in 1963 moved its offices to Lexington, Kentucky, grew to become a regional leader in public finance, helping to structure complex and innovative municipal bond financing for some of the largest public projects in the state of Kentucky.

In 1979, Dupree & Company began what is now Dupree Mutual Funds with the Kentucky Tax-Free Income Series and became the fund's investment advisor. The fund was one of the first single-state municipal bond funds in the country, and the first mutual fund to invest solely in Kentucky municipal bonds. Since then, several new offerings have been added to the Dupree Mutual Funds family:

Kentucky Tax-Free Short-to-Medium Series in 1987;
Intermediate Government Bond Series in 1992;
Tennessee Tax-Free Income Series in 1993;
Tennessee Tax-Free Short-to-Medium Series in 1994;
North Carolina Tax-Free Income Series in 1995;
North Carolina Tax-Free Short-to-Medium Series in 1995;
Alabama Tax-Free Income Series in 2000, and
Mississippi Tax-Free Income Series in 2000.

Today, after more than 50 years in business, Dupree continues to be a pioneer in the industry. Our Kentucky, Tennessee, and Mississippi Series are currently the ONLY 100% "no-load" municipal bond funds available in those states. No-load means simply that shares of the funds are offered directly to investors with no front or back-end sales charges, as opposed to load funds which are sold through brokerage firms or other institutions.

At Dupree Mutual Funds, our goal is a simple one: to offer investors a high-quality, low-cost way to invest in municipal and government bonds while providing superior service to our shareholders. We encourage you to let us know how we're doing.

TABLE OF CONTENTS

President's letter	i
Financial Statements
Alabama Tax-Free Income Series	1
Kentucky Tax-Free Income Series	5
Kentucky Tax-Free Short-to-Medium Series	11
Mississippi Tax-Free Income Series	15
North Carolina Tax-Free Income Series	19
North Carolina Tax-Free Short-to-Medium Series	23
Tennessee Tax-Free Income Series	27
Tennessee Tax-Free Short-to-Medium Series	32
Intermediate Government Bond Series	36
Notes to Financial Statements	39

To the Shareholders of
Dupree Mutual Funds
ALABAMA TAX-FREE INCOME SERIES
KENTUCKY TAX-FREE INCOME SERIES
KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES
MISSISSIPPI TAX-FREE INCOME SERIES
NORTH CAROLINA TAX-FREE INCOME SERIES
NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES
TENNESSEE TAX-FREE INCOME SERIES
TENNESSEE TAX-FREE SHORT-TO-MEDIUM SERIES
INTERMEDIATE GOVERNMENT BOND SERIES

July 1, 2001 - December 31, 2001

Investment Performance:

                This last half of the calendar year was one of moderately declining interest rates and rising municipal bond prices.

                The Alabama Tax-Free Income Series began the period at a price of $10.99 per share with total assets of $1,296,884. At the period's end its price per share was $11.04 and total assets were $2,190,955. There was no capital gains distribution during the period.

                The Kentucky Tax-Free Income Series began the period at a price of $7.41 per share with total assets of $467,235,702. At the period's end its price per share was $7.43 and total assets were $498,204,336. There was no capital gains distribution during the period.

                The Kentucky Tax-Free Short-to-Medium Series began the period at $5.22 per share with total assets of $55,554,647. On December 31^st the price per share was $5.24 and total assets were $77,373,207. There was no capital gains distribution during the period.

                The Mississippi Tax-Free Income Series began the period at a price of $10.83 per share with total assets of $816,120. At the period's end its price per share was $10.85 and total assets were $1,454,331. There was no capital gains distribution during the period.

                The North Carolina Tax-Free Income Series began the period at a price of $10.63 per share with total assets of $25,945,400. On December 31st the Income Series had assets of $10.58 and a price of $28,770,218. There was no capital gains distribution during the period.

                The North Carolina Tax-Free Short-to-Medium Series began the period at $10.25 per share with total assets of $4,874,918. On December 31^st this series had assets of $10.28 and a price of $6,486,346. There was no capital gains distribution.

                The Tennessee Tax-Free Income Series began the period at $10.72 with total assets of $45,034,953. On December 31^st price per share was $10.72 and total assets were $47,368,339. There was no capital gains distribution.

                The Tennessee Tax-Free Short-to-Medium Series began the period at a price of $10.35 per share with total assets of $7,216,251. At year end price per share was $10.36 with total assets of $7,453,682. There was no capital gains distribution.

                The Intermediate Government Bond Series began the period at $9.83 per share and ended December 31st at $9.95. Total assets at the beginning of the period were $11,056,717 and at the end of the period were $11,783,217. There was no capital gains distribution during the period.

Overview:

                During this six month period the Federal Reserve has lowered the Fed rate at every meeting of the Committee. As a result, very short term interest rates have declined much more than longer interest rates. The 90 day Treasury Bill had a yield of 3.52% at the beginning of the period and a yield of 1.73% at year end, a sharp drop. On the other hand, the 30 year Treasury had a yield of 5.61% at the beginning of the period and a yield of 5.56% at the end; a very small decline.

                The Dow Jones Industrials are down about 400 points in the six months and the S&P 500 is down about 50 points.

                I am pleased to report that our Morningstar ratings continue to be among the very best for all our funds. At the period's end six of our series were five star and one was four star.

                The loyalty of shareholders has had much to do with our growth during this period. If you have questions or suggestions feel free to call us at (800) 866-0614 or, in Lexington, at 254-7741. In North Carolina you can also call Carolina Financial Group, Inc. at (800) 284-2562.

Yours truly,

Thomas P. Dupree, Sr.
President

DUPREE MUTUAL FUNDS – ALABAMA TAX-FREE INCOME SERIES					UNAUDITED
SCHEDULE OF PORTFOLIO INVESTMENTS
Alabama Municipal Bonds — 100%
December 31, 2001
Bond Description	Coupon	Maturity Date	Rating#	Par Value	Market Value
INSURED MUNICIPAL REVENUE BONDS
70.68% of Net Assets
AL Agricultural & Mechanical University Revenue	5.250	11/01/2013	Aaa/AAA*	$   75,000	$                       78,127
AL Housing Financial Authority Single Family Mortgage	5.050	10/01/2013	Aaa	15,000	15,293
Alabama Private Colleges & University Facilities Authority	5.900	09/01/2016	Aaa/AAA*	10,000	10,688
Alabama State Docks Department Docks Facilities Revenue	5.500	10/01/2022	Aaa/AAA*	35,000	35,727
AL State Public School & College Capital Improvement	5.125	11/01/2016	Aaa/AAA*	90,000	91,418
AL State Public School & College Capital Improvement	5.125	11/01/2015	Aaa/AAA*	20,000	20,393
Alabama Water Pollution Control Authority	5.500	08/15/2016	Aaa/AAA*	10,000	10,232
Birmingham AL Airport Authority Airport Revenue	5.250	07/01/2020	Aaa/AAA*	10,000	10,044
Birmingham AL Multifamily Housing Revenue - Beaconview	5.600	07/01/2020	Aaa/AAA*	20,000	20,756
Blount County AL Water Authority Revenue	5.750	08/01/2019	Aaa/AAA*	125,000	132,845
Colbert County Northwest AL Health Care Facility	5.750	06/01/2015	Aaa/AAA*	10,000	10,531
Colbert County-Northwest AL Healthcare Authority	5.750	06/01/2020	Aaa/AAA*	20,000	20,828
DCH Health Care Authority AL Health Care Facility Revenue	5.500	06/01/2013	Aaa/AAA*	10,000	10,285
DCH Health Care Authority AL Health Care Facilities Revenue	5.250	06/01/2017	Aaa/AAA*	20,000	20,275
East AL Health Care Authority Facilities Revenue	5.250	09/01/2023	Aaa/AAA*	50,000	50,195
Fort Payne Warrants	5.500	05/01/2016	Aaa/AAA*	10,000	10,467
Helena AL Utilities Board Water & Sewer Revenue	5.750	09/01/2025	Aaa/AAA*	25,000	25,978
Hoover AL Board of Education Capital Outlay Warrants	5.250	02/15/2026	Aaa/AAA*	35,000	35,048
Houston County AL Warrants	5.650	10/15/2015	Aaa/AAA*	25,000	26,723
Houston County AL Health Care - SE Alabama Medical Center	5.750	10/01/2022	Aaa/AAA*	10,000	10,192
Huntsville AL Health Care Authority Series A	5.000	06/01/2023	Aaa/AAA*	30,000	28,670
Huntsville AL Public Educational Building - A&M	5.600	06/01/2014	A*	20,000	20,571
Huntsville AL Public Educational Building	6.050	06/01/2020	A*	100,000	103,509
Jasper AL Waterworks & Sewer Board Water & Sewer Revenue	5.100	06/01/2018	Aaa/AAA*	30,000	30,167
Jasper AL Waterworks & Sewer Board Water & Sewer Revenue	5.200	06/01/2021	Aaa/AAA*	50,000	50,157
Jefferson County AL Board of Education Capital Outlay	5.800	02/15/2020	AAA/AAA	10,000	10,517
Jefferson County AL Sewer Revenue Capital Improvement	5.000	02/01/2021	Aaa/AAA*	30,000	29,384
Lauderdale County & Florence AL Health Care Authority	5.250	07/01/2019	Aaa/AAA*	30,000	29,966
Lee County AL Warrants	5.500	02/01/2021	Aaa/AAA*	15,000	15,343
Limestone County AL Water Authority Water Revenue	5.250	12/01/2020	Aaa/AAA*	45,000	45,234
Linden AL Warrants	5.250	06/01/2023	AA*	25,000	25,039
Northeast AL Water Sewer & Fire Protection District Water	5.700	05/01/2023	Aaa/AAA*	20,000	20,330
Nortwest AL Gas District Gas System Revenue	5.900	05/01/2020	Aaa	35,000	37,220
Opelika AL Waterworks Board Utilities Revenue	5.000	06/01/2017	Aaa/AAA*	50,000	50,199
Oxford AL Public Parks & Recreation Board Revenue	6.000	12/01/2021	A*	115,000	117,019
Phenix City AL School Warrants	5.450	08/01/2016	Aaa/AAA*	10,000	10,475
St Clair County Board of Education School Tax Anticipation	5.500	02/01/2016	Aaa/AAA*	10,000	10,481
Southeast AL Gas District System Revenue Series A	5.500	06/01/2020	Aaa	10,000	10,320
Sylacauga AL Warrants	5.500	06/01/2025	Aaa	25,000	25,515
Tuskegee AL Utilities Board Utilities Revenue	5.500	02/01/2022	Aaa/AAA*	70,000	71,853
University of Alabama Revenue - Birmingham	6.000	10/01/2020	Aaa/AAA*	25,000	26,837
University of Alabama University Revenue-Huntsville	5.750	12/01/2016	Aaa/AAA*	10,000	10,624
University of Alabama Hospital - Birmingham	5.000	10/01/2014	Aaa/AAA*	20,000	20,073
University AL University Revenue Hospital-Series A	5.400	09/01/2013	Aaa/AAA*	50,000	52,850
University AL University Revenues General Fee	5.000	12/01/2017	Aaa/AAA*	50,000	50,087
					1,548,483
GENERAL OBLIGATION BONDS
10.36% of Net Assets
Alabama State Series A	5.000	06/01/2019	Aa3/AA*	30,000	29,451
Alabama State Series B	5.000	06/01/2021	Aa3/AA*	30,000	29,414
Alabama 21st Century Authority Tobacco Settlement Revenue	5.750	12/01/2020	Aa1/A**	50,000	51,418
Alabama 21st Century Authority Tobacco Settlement Revenue	5.850	12/01/2013	Aa1/A*	15,000	16,100
Birmingham AL Referral Warrants - Series A	5.250	05/01/2018	Aa3/AA*	50,000	50,573
Homewood AL Warrants	5.000	09/01/2018	Aa3/AA-*	50,000	49,941
					226,897
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
5.49% of Net Assets
Mobile AL Spring Hill College Educational Building	5.100	09/01/2019	Aa3	120,000	120,187
					120,187
INDUSTRIAL REVENUE AND POLLUTION CONTROL REVENUE BONDS
4.77% of Net Assets
Auburn AL Industrial Development Board Facilities Revenue	5.800	11/01/2011	BBB*	75,000	78,718
Auburn AL Industrial Development Board Facilities Revenue	6.200	11/01/2020	BBB*	25,000	25,758
					104,476

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS – ALABAMA TAX-FREE INCOME SERIES						UNAUDITED
SCHEDULE OF PORTFOLIO INVESTMENTS
Alabama Municipal Bonds — 100%
December 31, 2001
Bond Description	Coupon	Maturity Date	Rating#	Par Value		Market Value
HOSPITAL AND HEALTHCARE REVENUE BONDS
3.06% of Net Assets
Blount County AL Health Care Authority Tax Anticipation Warrants	5.750	02/15/2019	BBB+	$ 25,000		$     25,304
Montgomery AL Baptist Medical Center Special Care	5.375	09/01/2022	Aaa/AAA*	30,000		30,573
Oneonta Eastern Health System Special	7.750	07/01/2021	A3/BBB+*	10,000		11,058
						66,935
STATE AND LOCAL MORTGAGE REVENUE BONDS
1.66% of Net Assets
Alabama Housing Financial Authority Single Family Housing	6.000	04/01/2016	Aaa	35,000		36,474
						36,474
MUNICIPAL UTILITY REVENUE BONDS
1.39% of Net Assets
Birmingham AL Water & Sewer Revenue Warrants - Series A	5.125	01/01/2017	Aa3/AA-*	20,000		20,229
Douglas AL Water & Fire Protection Authority Water Revenue	5.600	06/01/2015	NR	10,000		10,222
						30,450
PUBLIC FACILITIES REVENUE BONDS
.96% of Net Assets
Hoover AL Warrants - Series A	5.650	01/01/2014	Aa3/AA-*	10,000		10,691
Rockford AL Public Building Authority Building Revenue	5.750	09/01/2015	NR	10,000		10,471
						21,162
RENTALS/MUNICIPAL LEASE BONDS
.91% of Net Assets
Mountain Brook AL City Board Education Capital Outlay	5.200	02/15/2021	Aa2	20,000		20,115
						20,115
PREREFUNDED BONDS
.51% of Net Assets
Montevallo AL American	6.000	06/01/2013	NR	10,000		11,215
						11,215
Total Investments (cost $2,151,384)(a) - 99.79% of Net Assets						$ 2,186,393
* Standard and Poor's Corporation                    All other ratings by Moody's Investors Service, Inc.                 NR  Not Rated                 # Bond ratings are unaudited.
(a) Represents cost for financial reporting and federal income tax purposes and differs from market value by net unrealized       appreciation of securities as follows:
	Unrealized appreciation			$ 43,204
	Unrealized depreciation			(8,194	)
	Net unrealized appreciation			$ 35,010

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS – ALABAMA TAX-FREE INCOME SERIES
			UNAUDITED
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2001
ASSETS:
Investments in securities, at value (Cost: $2,151,384)			$	2,186,393
Cash				3,100
Interest receivable				27,473
Receivable from Advisor				921
Total assets				2,217,887
LIABILITIES:
Payable for:
Distributions	$	25,510
Transfer agent		1,331
Other fees		91
Total liabilities				26,932
NET ASSETS:
Capital				2,157,261
Net accumulated realized loss on investment transactions				(1,316	)
Net unrealized appreciation in value of investments				35,010
Net assets at value			$	2,190,955
NET ASSET VALUE,   offering price and redemption price per share                                  ($2,190,955/198,460 shares outstanding)			$	11.04
STATEMENT OF OPERATIONS
For the six month period ended December 31, 2001
Net investment income:
Interest income			$	47,123
Expenses:
Investment advisory fees				4,437
Transfer agent				1,330
Professional fees				957
Trustee fees				74
Other expenses				610
Total expenses				7,408
Expenses reimbursed by Investment Advisor				(5,358	)
Net investment income				45,073
Realized and unrealized gain/(loss) on investments
Net realized loss				(63	)
Net decrease in unrealized appreciation				(2,039	)
Net realized and unrealized loss on investments				(2,102	)
Net increase in net assets resulting from operations			$	42,971

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS – ALABAMA TAX-FREE INCOME SERIES
STATEMENTS OF CHANGES IN NET ASSETS					UNAUDITED
For the six month period ended December 31, 2001 and the year ended June 30, 2001
		Six months			One year
Increase in net assets:		12/31/2001			06/30/2001
Operations:
Net investment income	$	45,073		$	35,210
Net realized loss on investments		(63	)		(1,253	)
Net increase/(decrease) in unrealized appreciation		(2,039	)		30,988
Net increase in net assets resulting from operations		42,970			64,945
Distributions to shareholders from net investment income		(45,073	)		(35,210	)
Net fund share transactions		896,174			1,045,285
Total increase		894,071			1,075,020
Net assets:
Beginning of year		1,296,884			221,864
End of period	$	2,190,955		$	1,296,884

FINANCIAL HIGHLIGHTS
Selected data for a share outstanding:
		For the six months			For the year			For the period
		6/30/2001			ended			1/1/2000
		to 12/31/2001			June 30, 2001			to 6/30/2000 (a)
Net Asset Value, beginning of period	$	10.99		$	10.31		$	10.00
Income From Investment Operations:
Net investment income		0.29			0.56			0.26
Net gains (losses) on securities
(both realized and unrealized)		0.05			0.68			0.31
Total from investment operations		0.34			1.24			0.57
Less Distributions:
Distributions (from net investment income)		(0.29	)		(0.56	)		(0.26	)
Net asset value, end of period	$	11.04		$	10.99		$	10.31
Total return(c)		3.05	%		12.33	%		5.79	%(c)
Net assets, end of period (in thousands):	$	2,191		$	1,297		$	222
Ratio of expenses to average net assets		0.17	%		0.21	%		0.50	%(b)
Before expense reimbursement		0.39	%		1.01	%		3.26	%(b)
Ratio of net investment income to
average net assets		3.81	%		4.47	%		2.46	%(b)
After expenses reimbursement		3.60	%		5.27	%		5.23	%(b)
Portfolio turnover		0.24	%		15.28	%		0.00	%
(a) Commencement of Operations January 1, 2000
(b) Annualized
(c) Total return is not annualized.

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS – KENTUCKY TAX-FREE INCOME SERIES					UNAUDITED
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds — 100%
December 31, 2001
Bond Description	Coupon	Maturity Date	Rating#	Par Value	Market Value
INSURED MUNICIPAL REVENUE BONDS
43.33% of Net Assets
Bardstown KY Combined Utilities Revenue	5.000	12/01/2018	Aaa/A2*	$   1,510,000	$      1,503,099
Boone-Florence KY Water Supply System Revenue	5.000	12/01/2017	Aaa/A2*	1,805,000	1,777,672
Boone-Florence KY Water Supply System Revenue	5.000	12/01/2018	Aaa/A2*	1,900,000	1,853,317
Boyle County KY Hospital Revenue-Ephraim McDowell Regional	5.800	04/01/2014	Aaa/AA*	1,000,000	1,042,900
Carrollton & Henderson KY Public Energy Authority Gas Revenue	5.000	01/01/2007	Aaa/AA*	1,000,000	1,017,680
Danville KY Multi-City Lease Revenue-Shelbyville	6.550	07/01/2006	Aaa/AA*	495,000	511,340
Fayette County KY School District Finance Corporation	5.250	04/01/2021	Aaa/AA*	2,285,000	2,302,183
Greater KY Housing Assistance Corporation	5.350	07/01/2022	Aaa/AA*	920,000	919,991
Greater KY Housing-Tug Fork Apartments	5.600	01/01/2007	Aaa/AA*	225,000	226,886
Greater KY Housing-Tug Fork Apartments	6.350	01/01/2022	Aaa/AA*	2,105,000	2,132,576
Greater KY Housing Assistance Corporation-Brownsville Manor	6.050	07/01/2022	Aaa/AA*	1,435,000	1,434,986
Greater KY Housing Assistance Corporation-Chenowith Woods	6.100	01/01/2024	Aaa/AA*	3,615,000	3,648,728
Greater Ky Housing Assistance Corporation-Northside Apartments	6.200	02/01/2025	AAA*	8,735,000	8,817,983
Hopkins County KY Hospital Revenue-Trover Clinic Foundation	6.625	11/15/2011	Aaa/AA*	2,000,000	2,063,340
Jefferson County KY Health Facilities Services - Alliant Health	5.125	10/01/2018	Aaa/AA*	33,000,000	33,922,680
Jefferson County KY Health Facilities-Jewish Hospital	6.500	05/01/2015	Aaa/AA*	6,380,000	6,583,650
Jefferson County KY Health Facilities-Jewish Hospital	5.650	01/01/2017	Aaa/AA*	3,450,000	3,601,766
Jefferson County KY Health Facilities Jewish Hospital	5.700	01/01/2021	Aaa/AA*	3,520,000	3,670,339
Jefferson County KY Health Facilities University Medical Center	5.500	07/01/2017	Aaa/AA*	8,675,000	8,972,813
Jefferson County KY School District Finance Corporation	5.125	11/01/2016	Aaa/AA*	1,000,000	1,007,660
Jefferson County KY School District Finance Corporation	5.250	01/01/2016	Aaa/AA*	1,000,000	1,022,510
Jefferson County KY Health Facilities-Alliant Health System	5.125	10/01/2017	Aaa/AA*	2,940,000	2,999,094
Jefferson County KY Capital Projects Corporation Revenue	5.375	06/01/2018	Aaa/AA*	1,500,000	1,536,300
Jefferson County KY Capital Projects Corporation Revenue	5.600	04/01/2014	Aaa/AA*	1,000,000	1,048,720
Jefferson County KY Hospital Revenue	6.436	10/01/2014	Aaa/AA*	1,500,000	1,557,210
Kentucky Economic Development Finance Authority-Ashland Hospital	6.125	02/01/2012	Aaa/AA*	4,000,000	4,209,120
Kentucky Development Finance Authority-St Claire Medical	5.875	09/01/2013	Aaa	2,000,000	2,104,780
Kentucky Development Finance Authority-St Claire Medical	5.625	09/01/2021	AAA*	2,500,000	2,539,175
Kentucky Development Finance Authority-St Elizabeth Hospital	5.900	12/01/2015	Aaa/AA*	2,500,000	2,654,575
Kentucky Development Finance Authority-Methodist Hospital	5.625	02/01/2017	AAA*	6,500,000	6,751,290
Kentucky Development Finance Authority-Appalachian Regional	5.850	10/01/2017	A/A*	1,000,000	987,750
Kentucky Development Finance Authority-South Central Nursing	6.000	07/01/2011	Aaa/AA*	3,505,000	3,948,908
Kentucky Development Finance Authority-Baptist Hospital	5.000	08/15/2015	Aaa/AA*	3,250,000	3,243,468
Kentucky Housing Corporation	4.750	07/01/2017	Aaa/AA*	1,335,000	1,297,887
Kentucky Housing Corporation	5.950	07/01/2017	Aaa/AA*	1,500,000	1,565,580
Kentucky Housing Corporation	5.400	07/01/2014	Aaa/AA*	4,700,000	4,789,535
Kentucky Housing Corporation	6.600	07/01/2011	Aaa/AA*	165,000	170,095
Kentucky Housing Corporation	6.600	07/01/2011	Aaa/AA*	4,500,000	4,638,960
Kentucky Housing Corporation	6.625	07/01/2014	Aaa/AA*	1,000,000	1,031,000
Kentucky Housing Corporation	5.800	01/01/2019	Aaa/AA*	6,755,000	6,874,496
Kentucky Housing Corporation	6.500	07/01/2017	Aaa/AA*	4,560,000	4,825,894
Kentucky Housing Corporation	5.700	07/01/2017	Aaa/AA*	500,000	514,040
Kentucky Housing Corporation	6.400	01/01/2017	Aaa/AA*	8,925,000	9,483,616
Kentucky Housing Corporation	5.500	01/01/2015	Aaa/AA*	1,000,000	1,032,000
Kentucky State Property & Building Commission Project #64	5.500	05/01/2017	Aaa/AA*	8,000,000	8,404,080
Kentucky State Property & Building Commission Project #72	5.000	10/01/2020	Aaa/AA*	11,305,000	11,141,756
KY State Turnpike Authority Economic Development Road Revenue	5.150	07/01/2019	Aaa/AA*	1,000,000	1,005,220
Lexington Fayette Urban County Government Public Facilities	5.125	10/01/2015	Aaa/AA*	1,770,000	1,819,489
Lexington Fayette Urban County Government Public Facilities	5.125	10/01/2017	Aaa/AA*	1,830,000	1,860,177
Lexington Fayette Urban County Government Public Facilities	5.125	10/01/2018	Aaa/AA*	2,135,000	2,152,037
Lexington Fayette Urban County Government Public Facilities	5.125	10/01/2019	Aaa/AA*	2,415,000	2,422,390
Louisville & Jefferson County KY Metropolitan Sewer District	5.300	05/15/2019	Aaa/AA*	6,500,000	6,577,480
Louisville & Jefferson County KY Metropolitan Sewer District	5.500	05/15/2021	Aaa/AA*	1,000,000	1,011,570
Louisville & Jefferson County KY Metropolitan Sewer District	5.000	05/15/2019	Aaa/AA*	2,500,000	2,479,800
Louisville & Jefferson County KY Regional Airport Authority	5.500	07/01/2017	Aaa/AA*	2,655,000	2,771,236
Louisville KY Parking Authority-River City First Mortgage	5.000	12/01/2017	Aaa/AA*	1,000,000	1,000,530
Madison County School District Finance Corporation	4.500	04/01/2016	Aaa/AA*	695,000	670,828
McCreary County Courthouse & Public Square Corporation Revenue	5.400	09/01/2020	AAA*	1,550,000	1,595,880
Pike County KY Mortgage Revenue-Phelps Regional Health	5.350	09/20/2012	AAA*	260,000	269,792
Radcliff KY Mortgage Revenue-Lincoln Trail Care	5.650	01/20/2019	AAA*	3,110,000	3,206,192
Shelbyville KY Certificate of Participation	5.150	07/01/2018	Aaa	4,165,000	4,202,069
University of Kentucky Consolidated Educational Buildings	5.750	05/01/2015	Aa/AAA*	1,850,000	1,947,884

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS – KENTUCKY TAX-FREE INCOME SERIES					UNAUDITED
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds — 100%
December 31, 2001
Bond Description	Coupon	Maturity Date	Rating#	Par Value	Market Value
Warren County Ky Hospital Facility Revenue	4.625	04/01/2012	Aaa/AA*	$ 1,500,000	$       1,498,080
Warren County KY Hospital Facility Revenue	5.000	04/01/2016	Aaa/AA*	1,000,000	993,880
Warren County KY Hospital Facility Revenue	5.000	04/01/2017	Aaa/AA*	1,000,000	985,240
					215,853,202
RENTALS/MUNICIPAL LEASE BONDS
16.26% of Net Assets
Boone County KY School District Finance Corporation	6.000	02/01/2018	Aa3	1,000,000	1,032,650
Boone County KY School District Finance Corporation	5.700	05/01/2018	Aa3	2,500,000	2,596,250
Boone County Ky School District Finance Corporation	5.500	09/01/2019	Aa3	1,860,000	1,932,410
Boone County KY School District Finance Corporation	5.750	02/01/2020	Aa3	1,200,000	1,272,984
Boone County KY School District Finance Corporation	5.000	08/01/2019	Aa3	1,040,000	1,035,133
Bullitt County KY School District Finance Corporation	6.000	08/01/2014	Aa3	1,100,000	1,159,653
Bullitt County KY School District Finance Corporation	5.000	07/01/2021	Aa3	1,000,000	976,870
Christian County KY Public Courthouse Lease Revenue	5.125	08/01/2017	Aa3	1,090,000	1,101,042
Christian County KY Public Courthouse Lease Revenue	5.125	08/01/2018	Aa3	1,145,000	1,153,782
Covington Independent School District Finance Corporation	5.250	06/02/2019	Aa3	1,225,000	1,250,480
Estill County KY School District Finance Corporation	5.875	08/01/2016	A	1,780,000	1,899,349
Fayette County KY School District Financial Corporation	5.375	01/01/2017	AA3/AA*	1,300,000	1,336,985
Floyd County KY School District Finance Corporation	6.000	06/01/2014	Aa3	1,000,000	1,055,680
Green County Ky School District Finance Corporation	5.000	04/01/2021	Aa3	1,085,000	1,063,886
Greenup County KY School District Finance Corporation	6.100	09/01/2014	Aa3	1,105,000	1,164,781
Hardin County KY School District Finance Corporation	6.000	07/01/2016	Aa3	1,025,000	1,102,470
Harlan KY Independent School District Finance Corporation	6.000	05/01/2015	Aa3	275,000	292,886
Hopkins County School District Finance Corporation	5.125	06/01/2019	Aa3	4,120,000	4,143,855
Jessamine County KY School District Finance Corporation	5.375	01/01/2017	Aa3/A+*	1,500,000	1,551,420
Junction City KY College Revenue-Center College Project	5.875	04/01/2017	A2	1,000,000	1,060,050
Kenton County School District Finance Corporation	5.375	03/01/2017	A+*	4,300,000	4,487,007
KY Area Development Districts Financing Trailer Lease Program	6.150	12/01/2022	AA*	1,020,000	1,106,649
KY Area Development Districts Lease City of Ewing	5.700	06/01/2015	AA*	1,500,000	1,613,400
Kentucky Area Development Districts Financing Lease-Ewing	5.600	06/01/2022	AA*	1,055,000	1,100,629
KY Area Development Districts Financing Trust Lease	5.350	12/01/2022	AA*	2,560,000	2,615,245
Kentucky Area Development Districts Financing Lease Program	5.400	12/01/2021	AA*	710,000	714,175
KY Interlocal Transportation Equipment Lease Revenue	6.000	12/01/2020	A	400,000	405,608
Kentucky Infrastructure Authority Series A	5.000	06/01/2019	Aa3/AA*	1,000,000	986,230
Kentucky Infrastructure Authority	5.750	08/01/2013	Aa3/A*	900,000	934,866
Kentucky Infrastructure Authority	5.750	08/01/2018	Aa3/A*	1,500,000	1,545,825
Kentucky Infrastructure Authority	6.375	08/01/2014	Aa3/A*	700,000	758,772
Kentucky Infrastructure Authority	5.375	02/01/2018	Aa3/A*	2,000,000	2,017,100
Kentucky Infrasturcture Authority	5.000	06/01/2017	Aa3/A*	1,035,000	1,029,452
KY State Property & Buildings Commission Revenue #67	5.375	09/01/2019	Aa3/AA*	3,475,000	3,563,022
Laurel County KY School District Finance Corporation	5.600	03/01/2017	Aa3	1,000,000	1,056,040
Laurel County School District School Building Revenue	5.750	06/01/2020	Aa3	1,250,000	1,317,813
Martin County KY School District Finance Corporation	5.375	09/01/2020	Aa3	1,100,000	1,120,031
McLean County KY School District Finance Corporation	6.000	06/01/2014	Aa3	1,405,000	1,482,556
Oldham County KY School District Finance Corporation	5.000	12/01/2021	Aa3	2,090,000	2,033,382
Pendleton County KY School District Finance Corporation	5.125	06/01/2019	Aa3	1,140,000	1,148,812
Pendleton County KY Multi-County Lease Revenue	6.500	03/01/2019	A*	16,000,000	16,623,040
Pike County School District Finance Corporation	5.000	09/01/2016	Aa3	1,850,000	1,862,044
Pike County KY School District Finance Corporation	5.100	09/01/2020	Aa3	1,000,000	995,160
Powell County KY School District Finance Corporation	5.900	08/01/2016	Aa3	1,185,000	1,254,631
Richmond KY Court Facilities Corporation Revenue	5.250	02/01/2019	AA*	1,035,000	1,042,245
					80,996,350
HOSPITAL AND HEALTHCARE REVENUE BONDS
10.54% of Net Assets
Christian County KY Hospital Revenue-Jennie Stuart Medical	5.800	07/01/2011	A-*	270,000	286,867
Christian County KY Hospital Revenue-Jennie Stuart Medical	6.000	07/01/2017	A-*	5,000,000	5,168,150
Christian County KY Hospital Revenue-Jennie Stuart Medical	6.000	07/01/2013	A-*	2,870,000	3,042,257
Jefferson County KY Health Facilities Jewish Hospital	5.700	01/01/2011	A1/AA-*	1,200,000	1,284,156
Jefferson County KY Medical Center Services Revenue	7.300	05/01/2009	A	400,000	411,900
Kentucky Development Finance Authority Green River	6.000	11/01/2010	Aa3	1,000,000	1,094,290
Kentucky Development Finance Authority Catholic Health	5.750	12/01/2015	Aa3/AA*	2,000,000	2,091,580
Kentucky Development Finance Authority Hospital-Appalachian Regional	5.850	10/01/2017	BB	1,000,000	851,310
Kentucky Development Finance Authority Hospital-Appalachian Regional	5.875	10/01/2022	BB	3,500,000	2,821,420
Kentucky Development Finance Authority-Catholic Health	5.000	12/01/2018	Aa2/AA*	6,950,000	6,673,599

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS – KENTUCKY TAX-FREE INCOME SERIES					UNAUDITED
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds — 100%
December 31, 2001
Bond Description	Coupon	Maturity Date	Rating#	Par Value	Market Value
Kentucky Development Finance Authority-Catholic Health	5.000	12/01/2027	Aa2/AA*	$8,000,000	$ 7,419,360
Kentucky Economic Development Finance Authority Revenue	5.250	09/01/2021	Aa3/AA*	2,000,000	1,940,200
Kentucky Economic Development Finance Authority-Norton Health	6.125	10/01/2010	A-*	7,000,000	7,319,690
Kentucky Economic Development Finance Authority-Norton Health	6.250	10/01/2012	A-*	6,500,000	6,783,595
Kentucky Economic Development Finance Authority - Catholic Health	5.125	10/01/2021	A1/AA-*	1,000,000	975,060
Madison County Ky Industrial Building Revenue - McCready Manor	5.500	06/01/2020	AA*	1,785,000	1,848,582
Pike County KY Mortgage Revenue Phelps Regional Health	5.650	09/20/2027	AAA*	2,435,000	2,497,482
					52,509,498
PUBLIC FACILITIES REVENUE BONDS
9.23% of Net Assets
Boone County KY Public Property Corporation - Judicial Facilities	5.125	09/01/2022	Aa3	1,750,000	1,752,293
Calloway County Public Property Corporation-Courthouse	5.625	03/01/2018	A	1,000,000	1,041,240
Danville KY Multi-City Lease Revenue-Mt Sterling	5.000	09/01/2011	NR	545,000	552,979
Danville KY Multi-City Lease Revenue-Cambellsville	7.000	04/01/2002	NR	85,000	85,000
Danville KY Multi-City Lease Revenue Housing Authority	6.500	02/01/2012	A1	1,170,000	1,206,691
Danville KY Multi-City Lease Revenue Paducah Public Property	7.200	06/01/2011	A	500,000	512,025
Florence KY Public Property Corporation Revenue	5.250	03/01/2017	A	1,060,000	1,072,148
Kenton County KY Public Property Corporation Revenue	5.700	12/01/2015	A	1,305,000	1,364,130
Kenton County KY Public Property Corporation Revenue	5.700	12/01/2016	A	1,380,000	1,433,171
Kentucky League of Cities-Middlesboro Series	6.200	08/01/2017	A-*	555,000	582,905
Kentucky State Property & Building Commission Project #63	5.100	11/01/2018	Aa3/A*	2,000,000	2,007,540
Kentucky State Property & Building Commission Revenue #67	5.125	09/01/2017	Aa3/AA*	1,000,000	1,003,740
Mt. Sterling KY Lease Revenue-Kentucky League of Cities	6.100	03/01/2008	Aa	1,500,000	1,583,070
Mt. Sterling KY Lease Revenue-Kentucky League of Cities	6.150	03/01/2013	Aa	17,860,000	18,859,267
Mt. Sterling KY Lease Revenue-Kentucky League of Cities	6.200	03/01/2018	Aa	9,500,000	10,025,540
Oldham County KY Public Facilities Construction Corporation	5.250	06/01/2017	A*	1,060,000	1,076,197
Union County KY Public Property Corporation	6.125	09/01/2015	NR	700,000	731,227
Woodford County KY Public Property Corporation Revenue	5.600	11/01/2017	A	1,065,000	1,086,215
					45,975,378
INDUSTRIAL REVENUE AND POLLUTION CONTROL REVENUE BONDS
6.47% of Net Assets
Ashland KY Pollution Control Revenue-Ashland Oil Project	6.650	08/01/2009	Baa1	8,835,000	9,104,998
Campbellsville KY Industrial Revenue-Campbellsville College	6.950	03/01/2015	NR	1,150,000	1,218,264
Campbellsville KY Industrial Revenue-Campbellsville College	6.000	03/01/2017	NR	1,920,000	2,005,421
Carroll County KY Collateralized Pollution Control Revenue	6.250	02/01/2018	Aa2/AA*	1,000,000	1,021,500
Jefferson County KY Pollution Control Revenue-E I DuPont	6.300	07/01/2012	Aa3/AA*	3,500,000	3,695,965
Jefferson County KY Pollution Control-Louisville Gas	5.625	08/15/2019	Aa2/AA*	9,150,000	9,216,338
Kentucky League of Cities-Ashland Series	6.250	08/01/2017	A-*	1,550,000	1,631,716
Meade County KY Pollution Control Revenue-Olin Corporation	6.000	07/01/2007	NR	535,000	547,626
Mercer County KY Collateralized Pollution Control Revenue	6.250	02/01/2018	A1/A*	2,500,000	2,552,925
Middlesboro KY Industrial Building Revenue-Fern Lake Project	6.200	12/01/2002	NR	225,000	231,750
Muhlenberg County KY Collateralized Pollution Control Revenue	6.250	02/01/2018	A/A*	1,000,000	1,021,270
					32,247,773
PREREFUNDED BONDS
5.05% of Net Assets
Boone County KY Public Property	6.250	12/15/2012	A1	960,000	1,009,315
Campbell County KY Public Property	6.250	12/01/2015	A	810,000	850,573
Clark County KY School District Finance Corporation	6.000	05/01/2012	Aa3	320,000	329,722
Danville KY Multi-City Lease Revenue-Shelbyville	6.700	07/01/2011	Aaa/AA*	2,500,000	2,598,525
Daviess County KY Hospital Revenue	6.250	08/01/2012	Aaa/AA*	3,000,000	3,129,540
Daviess County Ky Hospital Revenue	6.250	08/01/2022	Aaa/AA*	1,000,000	1,043,180
Elsmere KY Industrial Development Revenue-Courtaulds plc	6.750	04/01/2010	NR	2,000,000	2,262,100
Jefferson County KY Hospital Revenue	6.436	10/01/2014	Aaa/AA*	2,500,000	2,668,250
Jessamine County KY School District Finance Corporation	6.125	06/01/2015	Aaa/AA*	1,000,000	1,084,030
Kentucky State Property & Buildings Commission Project #54	6.000	09/01/2012	Aaa/AA*	1,210,000	1,259,913
Letcher County KY School District Finance Corporation	6.700	10/01/2014	Aa3	1,490,000	1,669,441
Lexington Fayette Urban County Government KY Sewer System	6.350	07/01/2007	Aaa/AA*	400,000	415,052
Lexington Fayette Urban County Government KY Sewer System	6.375	07/01/2010	Aa/AAA*	2,900,000	3,017,537
Lexington Fayette Urban County Government KY Sewer System	6.375	07/01/2012	Aa/AAA*	2,500,000	2,601,325
Richmond KY Public Recreation Corporation Revenue	6.750	08/01/2013	NR	575,000	607,482
Shelbyville KY Public Property Recreational Corporation	6.900	10/01/2012	NR	400,000	422,100
Wurtland KY Sewer System Revenue	7.700	10/01/2004	A+*	200,000	205,794
					25,173,879

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS – KENTUCKY TAX-FREE INCOME SERIES					UNAUDITED
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds — 100%
December 31, 2001
Bond Description	Coupon	Maturity Date	Rating#	Par Value	Market Value
GENERAL OBLIGATION BONDS
1.99% of Net Assets
Bowling Green KY General Obligation	5.300	06/01/2018	Aa3	$   1,000,000	$      1,024,080
Hardin County KY General Obligation	5.125	06/01/2019	A2	2,255,000	2,259,059
Jefferson County KY Improvement	6.000	04/01/2020	Aa2/AA*	1,985,000	2,120,456
Kentucky State Property & Buildings Commission Project #62	4.625	09/01/2013	Aa3/A*	2,750,000	2,785,145
Louisville KY General Obligation	5.000	11/01/2019	Aa3/AA*	1,775,000	1,727,892
					9,916,632
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
1.72% of Net Assets
Georgetown College Project Series A	6.000	11/15/2016	A	1,000,000	1,056,350
Georgetown College Project Series A	6.250	11/15/2020	A	4,000,000	4,292,040
Jefferson County KY College Project Bellarmine College	5.250	05/01/2019	Baa2	2,000,000	1,968,560
University of Louisville Health & Education	6.000	11/01/2013	A2	1,180,000	1,245,372
					8,562,322
ESCROWED TO MATURITY BONDS
1.54% of Net Assets
Danville KY Multi-City Lease Revenue-Hopkinsville	6.875	06/01/2012	Baa1	2,170,000	2,643,255
Jefferson County KY Health Facilities Alliant Health Services	5.125	10/01/2017	Aaa/AA*	4,980,000	5,047,927
					7,691,182
MUNICIPAL UTILITY REVENUE BONDS
1.16% of Net Assets
Cynthiana KY Waterworks & Sewer Revenue	6.400	01/01/2007	BBB-*	575,000	598,408
Danville KY Multi-City Lease Revenue-Ashland Utilities	6.750	04/01/2012	BBB+*	915,000	948,178
Franklin KY Water & Sewer Revenue Refunding	6.200	12/01/2011	A3	1,000,000	1,034,520
KY Rural Water Financial Corporation Public Project Revenue	5.375	02/01/2020	AA*	1,140,000	1,165,262
Logan/Todd Regional Water	5.500	08/01/2003	NR	2,000,000	2,028,280
					5,774,648
CERTIFICATE OF PARTICIPATION BONDS
1.01% of Net Assets
Jeffersontown KY Certificate of Participation	6.500	09/01/2009	A	1,400,000	1,499,498
Jeffersontown KY Certificate of Participation	5.750	11/01/2015	A	1,095,000	1,144,527
Shelbyville KY Certificate of Participation	5.350	10/01/2013	NR	1,295,000	1,276,028
Shelbyville KY Certificate of Participation	5.450	10/01/2017	NR	1,130,000	1,122,813
					5,042,866
STATE AND LOCAL MORTGAGE REVENUE BONDS
.96% of Net Assets
Florence KY Housing Facility Revenue	6.300	08/15/2019	A/A*	2,615,000	2,825,324
Floyd County KY Public Property Revenue-Justice Center	6.125	09/01/2018	A	1,240,000	1,320,178
Louisville Housing Assistance Mortgage Corporation Rivertown Project	5.100	07/01/2024	Aa2	655,000	622,224
					4,767,726
Total Investments (cost $482,113,874)(a) - 99.25% of Net Assets					$ 494,511,456
*     Standard and Poor's Corporation
**   Fitch Rating Service
All other ratings by Moody's Investors Service, Inc.
#      Bond ratings are unaudited.
(a)   Represents cost for financial reporting and federal income tax purposes and differs from market value by net unrealized
depreciation of securities as follows:
	Unrealized appreciation				$   14,472,245
	Unrealized depreciation				(2,074,673	)
	Net unrealized appreciation				$   12,397,572

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS – KENTUCKY TAX-FREE INCOME SERIES
STATEMENT OF ASSETS AND LIABILITIES				UNAUDITED
December 31, 2001
ASSETS:
Investment in securities, at value (Cost: $482,113,874)			$	494,511,446
Cash				654,372
Interest receivable				8,730,980
Receivable for investments sold				845,000
Total assets				504,741,798
LIABILITIES:
Payable for:
Distributions	$	5,950,019
Fund shares redeemed		265,163
Management fee		179,735
Transfer agent		51,245
Other fees		91,300
Total liabilities				6,537,462
NET ASSETS:
Net assets consist of:
Capital			$	488,426,687
Net accumulated realized losses on investment transactions				(2,619,923	)
Net unrealized appreciation in value of investments				12,397,572
Net assets at value			$	498,204,336
NET ASSET VALUE, offering price and redemption price per share
($498,204,336/67,052,890 shares outstanding)			$	7.43
STATEMENT OF OPERATIONS
For the six months ended December 31, 2000
Net investment income:
Interest income			$	12,428,762
Expenses:
Investment advisory fees				934,179
Transfer agent				264,374
Professional fees				35,192
Trustee fees				21,450
Other expenses				58,774
Total expenses				1,313,969
Net investment income				11,114,793
Realized and unrealized gain/loss on investments
Net realized loss				(699,138	)
Net increase in unrealized appreciation				12,982,389
Net realized and unrealized gain on investments				12,283,251
Net increase in net assets resulting from operations			$	23,398,044

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS – KENTUCKY TAX-FREE INCOME SERIES
					UNAUDITED
STATEMENTS OF CHANGES IN NET ASSETS
For the year ended June 30, 2001 and the six months ended December 31, 2001
		Six Months			One Year
		12/31/01			2001
Increase in net assets:
Operations:
Net investment income	$	11,889,371		$	22,515,431
Net realized gain/(loss) on investments		554,306			(102,207	)
Net increase in unrealized appreciation		242,879			11,607,543
Net increase in net assets resulting from operations		12,686,556			34,020,767
Distributions to shareholders		(11,889,371	)		(22,515,431	)
Net fund share transactions		30,171,449			38,772,921
Total increase		30,968,634			50,278,257
Net assets:
Beginning of year		467,235,702			416,957,445
End of period	$	498,204,336		$	467,235,702

FINANCIAL HIGHLIGHTS
Selected data for a share outstanding:
	Six months		For the years ended June 30,
	12/31/2001		2001			2000			1999			1998
Net asset value, beginning of year	$      7.41		$	7.22		$	7.47		$	7.65		$      7.47
Income from investment operations:
Net investment income	0.18			0.37			0.38			0.37		0.39
Net gains/(losses) on securities,
both realized and unrealized	0.21			0.19			(0.25	)		(0.18	)	0.18
Total from investment operations	0.39			0.56			0.13			0.19		0.57
Less distributions:
Distributions from net investment income	(0.18	)		(0.37	)		(0.38	)		(0.37	)	(0.39	)
Net asset value, end of period	$      7.43		$	7.41		$	7.22		$	7.47		$      7.65
Total return	2.73	%		7.94	%		1.78	%		2.52	%	7.77	%
Net assets, end of period (in thousands)	$498,204		$	467,236		$	416,957		$	422,996		$373,153
Ratio of expenses to average net assets	0.30	%		0.60	%		0.61	%		0.61	%	0.62	%
Ratio of net investment income to
average net assets	2.43	%		5.05	%		5.17	%		4.88	%	5.14	%
Portfolio turnover	4.20	%		9.06	%		15.74	%		10.69	%	11.80	%

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS – KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES					UNAUDITED
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds — 100%
December 31, 2001
Bond Description	Coupon	Maturity Date	Rating#	Par Value	Market Value
INSURED MUNICIPAL REVENUE BONDS
47.56% of Net Assets
Carrollton & Henderson KY Public Energy Authority Gas Revenue	4.500	01/01/2003	Aaa/AAA*	$     620,000	$     621,618
Carrollton & Henderson KY Public Energy Authority Gas Revenue	5.000	01/01/2006	Aaa/AAA*	1,000,000	1,051,720
Carrollton & Henderson Ky Public Energy Authority Gas Revenue A	5.000	01/01/2009	Aaa/AAA*	2,650,000	2,744,897
Carrollton & Henderson KY Public Energy Authority Gas Revenue	4.200	01/01/2006	Aaa/AAA*	750,000	766,620
Eastern KY University Consolidated Education Building	4.300	05/01/2009	Aaa/AAA*	500,000	503,415
Greater KY Housing Assistance Corporation Mortgage Revenue	6.250	01/01/2005	Aaa/AAA*	340,000	339,997
Jefferson County KY Health Facility University Medical Center	5.000	07/01/2008	Aaa/AAA*	300,000	314,397
Jefferson County KY Capital Project Corporation Lease Revenue A	5.500	04/01/2005	Aaa/AAA*	365,000	389,532
KY Economic Development Finance Authority Baptist Health System	4.750	08/15/2005	Aaa/AAA*	4,000,000	4,174,080
KY Economic Development Finance Authority Ashland Hospital	5.000	02/01/2005	Aaa/AAA*	500,000	523,065
KY Economic Development Finance Authority Appalachian Hospital	5.500	10/01/2007	A/A*	1,000,000	1,047,510
KY Economic Development Finance Authority Appalachian Hospital	5.700	10/01/2010	A*	1,000,000	1,063,430
KY Housing Corporation Housing Revenue	4.850	07/01/2004	Aaa/AAA*	1,700,000	1,759,840
KY Housing Corporation Housing Revenue	5.150	07/01/2007	Aaa/AAA*	3,225,000	3,339,133
KY Housing Corporation Housing Revenue	5.300	01/01/2004	Aaa/AAA*	2,250,000	2,324,475
KY State Property & Building Commission Project #69-Series B	5.000	08/01/2009	Aaa/AAA*	1,620,000	1,702,280
KY State Property & Building Community Project #65	5.750	02/01/2009	Aaa/AAA*	750,000	824,408
KY State Turnpike Authority Economic Development Road Revenue	5.400	07/01/2005	Aaa/AAA*	1,250,000	1,343,375
KY Turnpike Authority Economic Development Road Revenue	5.500	07/01/2007	Aaa/AAA*	3,000,000	3,257,160
Louisville & Jefferson County Metro Sewer District Revenue	5.000	05/15/2006	Aaa/AAA*	2,505,000	2,609,809
Louisville & Jefferson County Airport Authority System Revenue	5.600	07/01/2013	Aaa/AAA*	2,000,000	2,072,240
Northern KY University Certificate of Participation Housing Facility	4.500	12/01/2004	Aaa/AAA*	1,000,000	1,042,700
Northern KY University Certificates of Participation Student Housing	5.000	12/01/2007	Aaa/AAA*	1,190,000	1,263,697
Northern KY Water Services District Water District Revenue	4.750	02/01/2011	Aaa	1,025,000	1,054,131
University Of Kentucky Consolidated Education Building	4.600	05/01/2011	Aaa/AAA*	650,000	668,844
					36,802,370
RENTALS/MUNICIPAL LEASE BONDS
24.84% of Net Assets
Kenton County KY School District Finance Corporation	5.200	03/01/2005	Aa3/AA*	500,000	528,780
KY Area Development District Financing City of Ewing	5.100	06/01/2010	AA*	1,300,000	1,377,493
KY Infractructure Authority Series A	5.000	06/01/2010	Aa3/AA-*	2,000,000	2,090,720
KY Infrastructure Authority Revolving Fund Program Series:L	5.000	06/01/2006	A2/A*	415,000	439,385
KY Interlocal School Transportation Equipment Lease	4.800	03/01/2003	Aa3	500,000	513,880
KY Interlocal School Transportation Equipment Lease	4.900	03/01/2004	Aa3	500,000	521,155
KY State Property & Building Community Revenue Project #55	4.700	09/01/2004	Aa3/AA-*	2,030,000	2,121,431
Kentucky State Property & Building Authority Project #71	5.500	08/01/2008	Aa3/AA*	450,000	491,706
KY State Property & Building Commission Revenue Project #59	5.600	11/01/2007	Aa3/AA*	1,550,000	1,682,944
KY State Property & Building Community Revenue Project #60	5.500	10/01/2008	Aa3/AA-*	500,000	543,025
KY State Property & Building Commission Road Fund Project #73	3.700	11/01/2008	Aa3/AA-*	1,000,000	979,240
KY State Property & Building Commission Road Fund Project #69	5.000	08/01/2003	Aa3/AA-*	1,500,000	1,558,770
Mt Sterling KY Lease Revenue KY League of Cities Series:A	5.625	03/01/2003	Aa	6,150,000	6,370,785
					19,219,314
HOSPITAL AND HEALTHCARE REVENUE BONDS
7.27% of Net Assets
Christian County KY Hospital Jennie Stuart Medical Center	5.250	07/01/2003	A-*	135,000	138,055
KY Economic Development Finance Authority Catholic Health	4.250	10/01/2009	A1/AA-*	255,000	255,653
KY Economic Development Finance Authority Catholic Health	4.500	10/01/2011	A1/AA-*	1,000,000	1,004,640
KY Economic Development Finance Authority Catholic Health	5.500	12/01/2006	Aa2/AA*	1,790,000	1,941,094
KY Economic Development Finance Authority Catholic Health	5.500	12/01/2010	Aa3/AA-*	2,100,000	2,286,543
					5,625,985
MUNICIPAL UTILITIES REVENUE BONDS
5.72% of Net Assets
Lexington-Fayette Urban County Government KY Sewer System B	5.000	07/01/2007	Aa3/AA*	1,290,000	1,368,148
Logan/Todd Regional Water Community Revenue	5.500	08/01/2003	NR	2,000,000	2,034,480
Louisville KY Waterworks Board Water System Revenue Refunding	4.250	11/15/2007	Aa1/AA*	1,000,000	1,023,440
					4,426,068
GENERAL OBLIGATION BONDS
3.72% of Net Assets
Jefferson County General Obligation	5.500	08/15/2010	Aa2/AA*	2,635,000	2,876,524
					2,876,524
ESCROWED TO MATURITY BONDS
2.80% of Net Assets
Jefferson County KY Capital Projects Corporation Revenue	6.375	12/01/2007	NR	1,500,000	1,702,875
Owensboro KY Electric Light & Power Revenue	10.500	01/01/2004	AAA*	435,000	464,093
					2,166,968
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
2.71% of Net Assets
Murray State University Revenue Series G Second Series	5.600	05/01/2006	A3/A*	1,000,000	1,045,090
University Of Louisville KY Consolidated Education Building	5.200	05/01/2004	A1/AA-*	1,000,000	1,048,800
					2,093,890

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS – KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES						UNAUDITED
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds — 100%
December 31, 2001
Bond Description	Coupon	Maturity Date	Rating#	Par Value		Market Value
INDUSTRIAL REVENUE AND POLLUTION CONTROL REVENUE BONDS
2.07% of Net Assets
Carroll County KY Pollution Control Revenue KY Ulitilies Project	7.450	09/15/2016	A2/A-*	$ 1,000,000		$   1,044,780
Meade County KY Pollution Control Revenue-Olin Corporation	6.000	07/01/2007	NR	540,000		557,280
						1,602,060
CERTIFICATES OF PARTICIPATION BONDS
1.26% of Net Assets
Shelbyville Certificates of Participation Refinancing	4.900	10/01/2007	NR	950,000		976,800
						976,800
PREREFUNDED BONDS
.99% of Net Assets
University Of KY Consolidated Education Building Series:N	5.900	05/01/2003	Aa3/AA-*	725,000		765,557
						765,557
Total Investments (cost $75,149,800)(a) -98.94% of Net Assets						$ 76,555,535
*   Standard and Poor's Corporation
All other ratings by Moody's Investors Service, Inc.
NR Not Rated
#   Bond ratings are unaudited.
(a) Represents cost for financial reporting and federal income tax purposes and differs from market       value by net unrealized appreciation of securities as follows:
	Unrealized appreciation			$ 1,683,549
	Unrealized depreciation			(277815	)
	Net unrealized appreciation			$ 1,405,734

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS - KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES
			UNAUDITED
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2001
ASSETS:
Investments in securities, at value (Cost: $75,149,800)			$	76,555,535
Cash				37,897
Receivable for investments sold				1,045,000
Interest receivable				1,322,928
Total assets				78,961,360
LIABILITIES:
Payable for:
Investments purchased	$	1,040,386
Distributions		248,391
Fund shares redeemed		248,119
Investment advisor		32,871
Transfer agent		8,396
Other fees		9,991
Total liabilities				1,588,154
NET ASSETS:
Capital				77,066,940
Net accumulated realized losses on investment transactions				(1,099,468	)
Net unrealized appreciation in value of investments				1,405,734
Net assets at value			$	77,373,206
NET ASSET VALUE, offering price and redemption price per share                                         ($77,373,206 / 14,754,246 shares outstanding)
			$	5.24
STATEMENT OF OPERATIONS
For the year ended December 31, 2001
Net investment income:
Interest income			$	1,537,590
Expenses:
Investment advisory fees				166,802
Transfer agent				43,057
Professional fees				4,400
Trustee fees				2,888
Other expenses				18,118
Total expenses				235,265
Net investment income				1,302,325
Realized and unrealized gain/(loss) on investments
Net realized loss				(2,423	)
Net increase in unrealized appreciation				67,153
Net realized and unrealized gain on investments				64,730
Net increase in net assets resulting from operations			$	1,367,055

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS - KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES

UNAUDITED

STATEMENTS OF CHANGES IN NET ASSETS
For the year ended June 30, 2001 and the six months ended December 31, 2001

	Six Months 12/31/01			One Year 2001
Increase in net assets:
Operations:
Net investment income	$	1,302,325		$	2,270,041
Net realized loss on investments		(2,423	)		(65,578	)
Net increase in unrealized appreciation		67,153			1,335,231
Net increase in net assets resulting from operations		1,367,055			3,539,694
Distributions to shareholders from net investment income		(1,302,325	)		(2,270,041	)
Net fund share transactions		21,753,829			3,079,499
Total increase		21,818,559			4,349,152
Net assets:
Beginning of year		55,554,647			51,205,495
End of period	$	77,373,206		$	55,554,647

FINANCAIL HIGHLIGHTS
Selected data for a share outstanding:
	6 months			For the years ended June 30,
	12/31/2001			2001			2000			1999			1998
Net Asset Value, beginning of year	$	5.22		$	5.09		$	5.20		$	5.27		$	5.22
Income From investment Operations:
Net investment income		0.10			0.23			0.21			0.21			0.21
Net gains (losses) on securities
(both realized and unrealized)		0.02			0.13			(0.11	)		(0.07	)		0.05
Total from investment operations		0.12			0.36			0.10			0.14			0.26
Less Distributions:
Distributions (from net investment income)		(0.10	)		(0.23	)		(0.21	)		(0.21	)		(0.21	)
Net asset value, end of period	$	5.24		$	5.22		$	5.09		$	5.20		$	5.27
Total return		2.38	%		7.18	%		1.95	%		258	%		5.12	%
Net assets, end of period (in thousands)	$	77,373		$	55,555		$	51,205		$	58,630		$	54,124
Ratio of expenses to average net assets		0.36	%		0.70	%		0.69	%		0.72	%		0.74	%
Ratio of net investment income to
average net assets		1.97	%		4.42	%		4.06	%		3.89	%		4.05	%
Portfolio turnover		4.00	%		22.40	%		30.57	%		27.38	%		20.98	%

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS – MISSISSIPPI TAX-FREE INCOME SERIES SCHEDULE OF PORTFOLIO INVESTMENTS Mississippi Municipal Bonds — 100% December 31, 2001				UNAUDITED
Bond Description	Coupon	Maturity Date	Rating#		Par Value	Market Value
INSURED MUNICIPAL REVENUE BONDS
82.26% of Net Assets
Region IV Financial Corporation MS Greentree Apartments-Series A	5.550	08/01/2010	Aa2		$    10,000	$    10,007
Gautier Mississippi Utilities District	6.375	03/01/2019	Aaa/AAA*		10,000	10,259
Gautier MS Utility District Utility System Revenue	5.125	03/01/2018	Aaa		75,000	73,901
Hinds County MS Revenue Refunding-MS Methodist Hospital	5.600	05/01/2012	Aaa/AAA*		5,000	5,474
Jackson County MS Pollution Control Revenue	5.650	11/01/2023	Aaa/AAA*		30,000	30,037
Jackson MS Public School District Limited Tax Notes	5.375	10/01/2020	Aaa		20,000	20,326
Jackson MS Water & Sewer System Revenue	5.250	09/01/2020	Aaa/AAA*		50,000	50,153
Madison County MS School District - Series A	5.250	09/01/2020	Aaa/AAA*		25,000	25,076
Medical Center Educational Building Corporation MS Revenue	5.500	12/01/2023	AAA*		10,000	10,267
MS Business Financial Corporation MS Water Pollution Control	5.650	11/01/2023	Aaa/AAA*		10,000	10,001
MS Business Financial Corporation Pollution Control Revenue	5.500	02/01/2026	Aaa/AAA*		10,000	10,036
MS Development - Madison County Road & Bridge Project	5.250	06/01/2023	Aaa		50,000	49,743
MS Development Bank Special Obligation Madison County	5.250	06/01/2024	Aaa		50,000	49,802
MS Development Bank Special Obligation Flowood Revenue Project	5.625	11/01/2019	Aaa/AAA*		10,000	10,307
MS Development Bank Special Obligation Natchez Convention Center	5.800	07/01/2019	Aaa/AAA*		25,000	26,989
MS Development Bank Special Obligation Gulfport Water Sewer	5.625	07/01/2024	Aaa/AAA*		55,000	56,568
MS Development Bank Special Obligation Gulfport Combined Water	5.500	07/01/2015	Aaa/AAA*		10,000	10,701
MS Development Bank Special Obligation Desoto County	5.900	07/01/2021	AAA		5,000	5,329
MS Development Bank Special Obligation Rankin County	5.400	07/01/2014	Aaa/AAA*		10,000	10,457
MS Development Bank Special Obligation Meridian Community	5.500	07/01/2016	AAA*		30,000	31,093
MS Development Bank Special Obligation Multi-Purpose	5.000	07/01/2021	AAA*		50,000	48,367
MS Development Bank Special Obligation Horn Lake	5.000	10/01/2020	AAA*		50,000	48,749
MS Development Bank Special Obligation Combination	5.000	07/01/2018	Aaa/AAA*		100,000	100,173
MS Hospital Equipment & Facilities Singing River Hospital	5.500	03/01/2023	Aaa/AAA*		110,000	111,905
MS Hospital Equipment and Facilities Forrest County	5.500	01/01/2024	Aaa/AAA*		20,000	20,184
Ms Development Bank Special Obligation Culkin Water District	5.800	07/01/2018	Aaa/AAA*		25,000	26,414
MS State University Educational Building Corporate Revenue	5.500	08/01/2014	Aaa		75,000	79,169
Natchez MS Water & Sewer System Revenue	5.700	08/01/2017	Aaa/AAA*		150,000	157,019
Olive Branch MS Water & Sewer Revenue	4.500	03/01/2014	Aaa		30,000	29,776
Southern MS University Educational Building Corporation	5.750	03/01/2021	Aaa		10,000	10,591
Tupelo MS Public School District	5.375	11/01/2015	Aaa/AAA*		20,000	20,638
University MS Educational Building - Stadium A	5.500	12/01/2017	Aaa/AAA*		5,000	5,444
Walnut Grove Correctional Authority Certificates of Participation	6.000	11/01/2019	Aaa/AAA*		15,000	16,277
Winston County MS Urban Renewal Revenue	5.150	12/01/2017	AAA*		15,000	15,136
						1,196,364
GENERAL OBLIGATION BONDS
12.20% of Net Assets
Biloxi MS Tax Increment - Limited Obligation - Series A	5.900	10/01/2019	A*		35,000	36,048
Horn Lake Special Assessment Improvement Bonds-Desoto	5.400	04/15/2020	A-*		25,000	25,250
Jackson MS Redevelopment Authority Urban Renewal Revenue	5.600	11/01/2021	A2		20,000	20,559
MS Development Bank Special Obligation Adams County Juvenile	5.900	07/01/2017	A*		10,000	10,544
MS State Capital Improvements	5.000	11/01/2018	AA*		75,000	74,657
Richland MS Tax Increment	5.600	06/01/2013	NR		10,000	10,324
						177,382
MUNICIPAL UTILITY REVENUE BONDS
4.14% of Net Assets
MS Development Bank Special Obligation-Bay St Louis	5.375	07/01/2014	A*		10,000	10,251
MS Development Bank Special Obligation Okolona Electric	5.350	07/01/2021	A*		50,000	50,000
						60,250
PUBLIC FACILITIES REVENUE BONDS
3.40% of Net Assets
Mississippi Development Bank Special Obligation - Southaven	6.200	03/01/2020	A*		10,000	10,512
Vicksburg Warren MS School District	4.700	02/01/2017	AA-*		40,000	38,986
						49,497
ESCROWED TO MATURITY BONDS
1.80% of Net Assets
Harrison County MS Wastewater Management District	5.000	02/01/2015	AAA/Aaa*		25,000	26,178
						26,178

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS – MISSISSIPPI TAX-FREE INCOME SERIES SCHEDULE OF PORTFOLIO INVESTMENTS Mississippi Municipal Bonds — 100% December 31, 2001									UNAUDITED
Bond Description		Coupon	Maturity Date	Rating#		Par Value			Market Value
STATE AND LOCAL MORTGAGE REVENUE BONDS
.71% of Net Assets
MS Home Corporation Single Family Revenue Mortgage Series A		5.350	12/01/2014	Aaa	$	10,000		$	10,334
									10,334
Total Investments (cost $1,496,407)(a) -104.52% of Net Assets								$	1,520,006
	*     Standard and Poor's Corporation
	All other ratings by Moody's Investors Service, Inc.
	NR Not Rated
	#     Bond ratings are unaudited.
(a)	Represents cost for financial reporting and federal income tax purposes and differs from market
	value by net unrealized appreciation of securities as follows:
		Unrealized appreciation			$	28,156
		Unrealized depreciation				(4557	)
		Net unrealized appreciation			$	23,599

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS - MISSISSIPPI TAX-FREE INCOME SERIES
			UNAUDITED
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2001
ASSETS:
Investments in securities, at value (Cost: $1,496,407)			$	1,520,006
Cash				128,361
Bonds sold reveivable				20,082
Interest receivable				28,797
Receivable from Advisor				1,032
Total assets				1,698,278
LIABILITIES:
Payable for:
Investments purchased	$	229,743
Distributions		13,007
Transfer agent		731
Other fees		467
Total liabilities				243,948
NET ASSETS:
Capital				1,430,794
Net accumulated realized gain/(loss) on investment transactions				(63	)
Net unrealized appreciation in value of investments				23,599
Net assets at value			$	1,454,330
NET ASSET VALUE,        offering price and redemption price per share                                                      ($1,454,330 / 134,008 shares outstanding)
			$	10.85
STATEMENT OF OPERATIONS
For the six month period ended December 31, 2001
Net investment income:
Interest income			$	25,456
Expenses:
Investment advisory fees				2,438
Transfer agent				731
Professional fees				913
Trustee fees				41
Other expenses				474
Total expenses				4,597
Expenses reimbursed by Investment Advisor			(3,470		)
Net investment income				24,329
Realized and unrealized gain/(loss) on investments
Net realized loss				(62	)
Net increase in unrealized appreciation				1,129
Net realized and unrealized gain on investments				1,067
Net increase in net assets resulting from operations			$	25,396

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS – MISSISSIPPI TAX-FREE INCOME SERIES
STATEMENTS OF CHANGES IN NET ASSETS					UNAUDITED
For the six month period ended December 31, 2001 and the year ended June 30, 2001
	Six months 12/31/01			One year 2001
Operations:
Net investment income	$	24,329		$	24,163
Net realized loss on investments		(62	)		—
Net increase in unrealized appreciation		1,129			15,611
Net increase in net assets resulting from operations		25,396			39,774
Distributions to shareholders from net investment income		(24,329	)		(24,163	)
Net fund share transactions		637,144			562,198
Total increase		638,211			577,808
Net assets:
Beginning of year		816,119			238,311
End of period	$	1,454,330		$	816,119

FINANCIAL HIGHLIGHTS
Selected data for a share outstanding:
	For the six months 6/30/2001 to 12/31/01			For the year ended June 30, 2001			For the period 1/1/2000 to 6/30/2000 (a)
Net Asset Value, beginning of period	$	10.83		$	10.35		$	10.00
Income From Investment Operations:
Net investment income		0.14			0.55			0.27
Net gains (losses) on securities
(both realized and unrealized)		0.02			0.48			0.35
Total from investment operations		0.16			1.03			0.62
Less Distributions:
Distributions (from net investment income)		(0.14	)		(0.55	)		(0.27	)
Net asset value, end of period	$	10.85		$	10.83		$	10.35
Total return		2.75	%		10.19	%		6.24	%     (c)
Net assets, end of period (in thousands):	$	1,454		$	816		$	238
Ratio of expenses to average net assets		0.17	%		0.21	%		0.50	%     (b)
Before expense reimbursement		0.71	%		1.13	%		3.35	%     (b)
Ratio of net investment income to
average net assets		3.21	%		4.26	%		5.31	%     (b)
After expenses reimbursement		3.75	%		5.18	%		2.45	%     (b)
Portfolio turnover		0.00	%		0.00	%		0.00	%
(a) Commencement of operations January 1, 2000.
(b) Annualized
(c) Total return is not annualized.

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS – NORTH CAROLINA TAX-FREE INCOME SERIES						UNAUDITED
SCHEDULE OF PORTFOLIO INVESTMENTS
North Carolina Municipal Bonds — 100%
December 31, 2001
Bond Description	Coupon	Maturity Date	Rating#	Par Value		Market Value
INSURED MUNICIPAL BONDS
56.68% of Net Assets
Catawba County NC Catawba Memorial Hospital Revenue	5.000	10/1/2017	Aaa/AAA*	$               500,000	$	499,420
Craven NC Regional Medical Authortiy Health Care Facilities	5.625	10/1/2017	Aaa/AAA*	10,000		10,245
Cumberland County NC Certificates of Participation Civic Center	5.000	12/1/2018	Aaa/AAA*	500,000		500,335
Cumberland County Hospital Facilities Revenue	5.250	10/1/2019	A3/AA*	1,000,000		1,001,850
Dare County NC Utility System Revenue	5.250	6/1/2018	Aaa/AAA*	250,000		255,790
Dare County NC Certificates of Participation	5.125	6/1/2018	Aaa/AAA*	500,000		506,230
Elizabeth City NC Housing Development Mortgage Revenue	6.125	4/1/2023	Aa	140,000		144,959
Fayetteville NC Public Works Community Revenue	5.100	3/1/2015	Aaa/AAA*	400,000		408,636
Gaston County NC Certificates of Participation Public Facilities	5.250	12/1/2016	Aaa/AAA*	850,000		878,815
Gastonia NC Combined Utilities Systems Revenue	5.625	5/1/2019	Aaa/AAA*	500,000		526,855
Greenville NC Housing Developement Corporation Series A	5.800	7/1/2024	Aaa/AAA*	35,000		35,700
Lenoir NC Housing Authority Mortgage Revenue	5.700	8/20/2024	AAA*	100,000		101,599
New Hanover County NC Certificates of Participation	5.000	12/1/2017	Aaa/AAA*	250,000		250,960
New Hanover County NC Hospital Revenue	5.750	10/1/2026	Aaa/AAA*	100,000		103,663
New Hanover County NC Hospital Revenue	5.000	10/1/2019	Aaa/AAA*	1,110,000		1,097,046
New Hanover County NC Certificates of Participation	5.000	12/1/2022	Aaa/AAA*	1,000,000		972,150
NC Educational Facilities Finance Agency St Augustines	5.250	10/1/2018	AA*	600,000		620,790
NC Educational Facilities Finance Agency St Augustines	5.250	10/1/2028	AA*	630,000		620,153
NC Eastern Municipal Power Agency Power System Revenue	5.500	1/1/2017	Aaa/AAA*	150,000		151,728
NC Eastern Municipal Power Agency Power System Revenue	5.750	1/1/2019	Aaa/AAA*	100,000		99,999
NC Eastern Municipal Power Agency Power System Revenue	5.700	1/1/2015	Aaa/AAA*	345,000		366,956
NC Eastern Municipal Power Agency Power System Refunding	5.375	1/1/2024	Aaa/AAA*	1,000,000		1,008,730
NC Central University Housing System Revenue	5.800	11/1/2018	Aaa/AAA*	50,000		53,029
NC Central University Housing System Revenue	5.800	11/1/2020	Aaa/AAA*	60,000		63,349
North Carolina Public Improvement	5.250	3/1/2016	Aaa/AAA*	1,000,000		1,035,620
NC Medical Care Community Hospital Revenue-High Point	5.000	10/1/2019	Aaa/AAA*	500,000		493,015
NC Medical Care Community Hospital Revenue-Rex Hospital	5.000	6/1/2017	Aaa/AAA*	500,000		497,850
NC Medical Care Community Hospital Revenue-St Joseph	5.100	10/1/2014	Aaa/AAA*	5,000		5,198
NC Medical Care Community Hospital Revenue-Stanly Hospital	5.375	10/1/2014	Aaa/AAA*	50,000		51,754
NC Medical Care Community Hospital Revenue-Wilson Memorial	5.625	11/1/2018	Aaa/AAA*	80,000		82,701
NC Municipal Power Agency No. 1 Catawba Electric Revenue	5.000	1/1/2015	Aaa/AAA*	5,000		5,033
NC Municipal Power Agency No. 1 Catawba Electric Revenue	5.750	1/1/2020	Aaa/AAA*	50,000		50,923
NC Municipal Power Agency No. 1 Catawba Electric Revenue	5.125	1/1/2017	Aaa/AAA*	500,000		506,890
NC Municipal Power Agency No. 1 Catawba Electric Revenue	5.500	1/1/2014	Aaa/AAA*	250,000		268,183
Pitt County NC Certificates of Participation Public Facilities	5.850	4/1/2017	Aaa/AAA*	100,000		107,874
Pitt County NC Certificates of Participation School Facilities	5.500	4/1/2020	Aaa/AAA*	500,000		521,040
Raleigh Durham NC Airport Revenue	5.000	11/1/2020	Aaa	1,000,000		983,160
Randolph County NC Certificates of Participation	5.750	6/1/2022	Aaa/AAA*	500,000		525,130
Union County NC Enterprise System Revenue	5.500	6/1/2021	Aaa/AAA*	245,000		251,911
University of NC at Chapel Hill Hospital Revenue	5.250	2/15/2017	Aaa/AAA*	500,000		507,935
University of NC at Wilmington Dorm & Dining System Revenue	5.400	1/1/2018	Aaa/AAA*	120,000		124,598
Winston Salem NC State University Revenue Student Services	5.400	6/1/2012	Aaa/AAA*	10,000		10,433
						16,308,234
HOSPITAL AND HEALTHCARE REVENUE BONDS
19.06% of Net Assets
Charlotte/Mecklenburg NC Health Care System	5.750	1/15/2021	Aa3/AA*	250,000		255,873
Charlotte/Mecklenburg NC Health Care System	5.875	1/15/2026	Aa3/AA*	50,000		51,260
Cumberland County NC Hospital Facilities Revenue	5.250	10/1/2019	A3/A-*	1,000,000		955,440
NC Medical Care Community Hospital Revenue-Baptist Hospital	6.375	6/1/2014	Aa3/AA*	45,000		46,265
NC Medical Care Community Hospital Revenue-Baptist Hospital	6.000	6/1/2022	Aa/AA*	45,000		46,083
NC Medical Care Community Hospital Revenue-Carolina Medicorp	5.500	5/1/2015	Aa3/AA*	70,000		70,634
NC Medical Care Community Hospital Revenue-Duke University Hospital	5.000	6/1/2018	Aa3/AA*	300,000		292,446
NC Medical Care Community Hospital Revenue-Duke University Hospital	5.250	6/1/2017	Aa3/AA*	900,000		903,114
NC Medical Care Community Hospital Revenue-Duke University Hospital	5.250	6/1/2021	Aa3/AA*	150,000		150,227
NC Medical Care Community Hospital Revenue-Gaston Memorial	5.500	2/15/2019	A1/A+*	150,000		150,762
NC Medical Care Community Hospital Revenue-Pitt County	5.250	12/1/2013	Aa3/AA*	800,000		822,320

The accompanying notes are an intregal part of the financial statements.

DUPREE MUTUAL FUNDS – NORTH CAROLINA TAX-FREE INCOME SERIES SCHEDULE OF PORTFOLIO INVESTMENTS North Carolina Municipal Bonds — 100% December 31, 2001							UNAUDITED
Bond Description		Coupon	Maturity Date	Rating#	Par Value		Market Value
NC Medical Care Community Hospital Revenue-Pitt County		5.000	12/1/2018	Aa3/AA-*	$       500,000	$	491,020
NC Medical Care Community Hospital Revenue-Presbyterian		5.500	10/1/2014	A1/AA-*	35,000		35,589
NC Medical Care Community Hospital Revenue-Presbyterian		5.500	10/1/2020	A1/AA-*	1,100,000		1,109,152
University of NC at Chapel Hill Hospital Revenue		5.250	2/15/2019	A1/AA*	105,000		103,825
							5,484,009
CERTIFICATES OF PARTICIPATION BONDS
8.30% of Net Assets
Cabarrus County NC Certificates of Participation		5.000	4/1/2021	Aa3/AA-*	650,000		644,397
Charlotte NC Certificates of Participation Law Project		5.375	6/1/2013	Aa1/AA*	100,000		102,834
Charlotte NC Certificates of Participation Convention Facilities		5.500	12/1/2020	Aa2/AA+*	700,000		728,735
Forsyth County NC Certificates of Participation		5.000	10/1/2018	Aa2/AA*	400,000		402,504
Forsyth County NC Certificate of Participation Facilities & Equipment		5.125	10/1/2017	Aa/AA*	500,000		508,575
							2,387,045
STATE AND LOCAL MORTGAGE REVENUE BONDS
6.96% of Net Assets
NC Housing Finance Agency Single Family Revenue Series Y		6.300	9/1/2015	Aa/AA*	115,000		123,446
NC Housing Finance Agency Single Family Revenue Series II		6.200	3/1/2016	Aa2/AA*	75,000		78,907
NC Housing Finance Agency Single Family Revenue Series KK		5.875	9/1/2017	Aa2/AA+*	90,000		93,307
NC Housing Finance Agency Home Ownership Revenue		5.125	7/1/2013	Aa2/AA*	100,000		102,316
Raleigh NC Housing Authority Multifamily Cedar Point Apartments		5.800	11/1/2019	BB*	2,000,000		1,502,980
Vance County NC Housing Mortgage Revenue Henderson Project		6.150	3/1/2022	Aa2	100,000		101,489
							2,002,444
MUNICIPAL UTILITY REVENUE BONDS
4.60% of Net Assets
Greenville NC Enterprise System Revenue		6.000	9/1/2010	A1/A+*	100,000		106,305
Orange NC Water and Sewer Revenue		5.200	7/1/2016	Aa2/AA*	210,000		213,555
Winston Salem NC Water & Sewer System Revenue		5.125	6/1/2020	Aa2/AAA*	1,000,000		1,002,750
							1,322,610
PUBLIC FACILITIES REVENUE BONDS
2.57% of Net Assets
Cary NC Combined Enterprise System Revenue		5.000	12/1/2022	Aa/AA*	700,000		676,186
Shelby NC Combined Enterprise System Revenue		5.625	5/1/2014	Baa1/A-*	20,000		20,436
Shelby NC Combined Enterprise System Revenue		5.625	5/1/2014	Baa1/A-*	40,000		41,686
							738,309
PREREFUNDED BONDS
1.85% of Net Assets
Forsyth County NC General Obligation Public Improvement		5.600	8/1/2009	Aa1/AAA*	5,000		5,194
Greensboro NC Coliseum Complex Improvement		5.700	12/1/2010	A1/AA*	55,000		61,881
NC Eastern Municipal Power Agency Power System		6.000	1/1/2026	AAA/BBB*	15,000		16,822
Pitt County NC Memorial Hospital Revenue		5.500	12/1/2015	Aaa/AAA*	325,000		346,720
University of NC at Chapel Hill Hospital Revenue		6.000	2/15/2024	Aa/AA*	100,000		102,469
							533,084
Total Investments (cost $28,824,769)(a) - 100.02% of Net Assets						$	28,775,736
	*     Standard and Poor's Corporation
	**   Fitch Rating Service
	All other ratings by Moody's Investors Service, Inc.
	#     Bond ratings are unaudited.
(a)	Represents cost for financial reporting and federal income tax purposes and differs from market value by net unrealized
	depreciation of securities as follows:
		Unrealized appreciation				$	481,981
		Unrealized depreciation					(531,015	)
		Net unrealized depreciation				$	(49,033	)

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS – NORTH CAROLINA TAX-FREE INCOME SERIES		UNAUDITED
STATEMENT OF ASSETS AND LIABILITIES December 31, 2001
ASSETS:
Investments in securities, at value (Cost $28,824,769)		$	28,775,736
Cash			195,471
Interest receivable			349,835
Expense receivable			936
Total assets			29,321,978
LIABILITIES:
Payable for:
Distributions	333,197
Fund shares redeemed	206,810
Management fee	8,307
Transfer agent	3,446
Total liabilities			551,760
NET ASSETS:
Net assets consist of:
Capital		$	28,985,317
Net accumulated realized losses on investment transactions			(166,066	)
Net unrealized depreciation in value of investments			(49,033	)
Net assets at value		$	28,770,218
NET ASSET VALUE, offering price and redemption price per share                         ($28,770,218/2,718,217 shares outstanding)		$	10.58
STATEMENT OF OPERATIONS
For the six months ended December 31, 2001
Net investment income:
Interest income		$	731,094
Expenses:
Investment advisory fees			70,922
Transfer agent			20,046
Professional fees			2,233
Trustee fees			1,280
Other expenses			6,951
Total expenses			101,432
Expenses reimbursed by Investment Advisor			(23,418	)
Net investment income			653,080
Realized and unrealized loss on investments
Net realized loss			(35,900	)
Net decrease in unrealized appreciation			(112,654	)
Net realized and unrealized loss on investments			(148,554	)
Net increase in net assets resulting from operations		$	504,526

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS – NORTH CAROLINA TAX-FREE INCOME SERIES			UNAUDITED
STATEMENTS OF CHANGES IN NET ASSETS
For the year ended June 30, 2001 and the six months ended December 31, 2001
	Six Months 12/31/2001		One Year 2001
Increase in net assets:
Operations:
Net investment income	$      653,080		$   1,111,632
Net realized gain/(loss) on investments	(35,900	)	18,383
Net increase/(decrease) in unrealized appreciation	(112,654	)	853,455
Net increase in net assets resulting from operations	504,526		1,983,470
Distributions to shareholders from:
Net investment income	(653,080	)	(1,111,632	)
Net fund share transactions	2,973,372		3,413,383
Total increase	2,824,818		4,285,221
Net assets:
Beginning of year	25,945,400		21,660,179
End of year	$ 28,770,218		$ 25,945,400

FINANCIAL HIGHLIGHTS
Selected data for a share outstanding:			For the years ended June 30,
	12/31/2001		2001		2000		1999		1998
Net asset value, beginning of year	$  10.63		$  10.21		$  10.61		$  10.82		$10.33
Income from investment operations:
Net investment income	0.25		0.50		0.51		0.50		0.53
Net gains/(losses) on securities,
both realized and unrealized	0.05		0.42		(0.40	)	(0.20	)	0.49
Total from investment operations	0.30		0.92		0.11		0.30		1.02
Less distributions:
Distributions from capital gains	0.00		0.00		(0.01	)	(0.01	)	0.00
Distributions from net investment income	(0.13	)	(0.50	)	(0.50	)	(0.50	)	(0.53	)
Net asset value, end of period	$  10.58		$  10.63		$  10.21		$  10.61		$10.82
Total return	1.86	%	9.09	%	1.07	%	2.71	%	9.99	%
Net assets, end of period (in thousands)	$28,770		$25,945		$21,660		$19,456		$9,911
Ratio of expenses to average net assets	0.28	%	0.55	%	0.55	%	0.45	%	0.33	%
Before expense reimbursement	0.36	%	0.71	%	0.72	%	0.77	%	0.76	%
Ratio of net investment income to
average net assets	2.24	%	4.55	%	4.76	%	4.43	%	4.47	%
After expense reimbursement	2.32	%	4.71	%	4.92	%	4.74	%	4.90	%
Portfolio turnover	4.43	%	19.71	%	16.14	%	11.70	%	16.77	%

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS – NORTH CAROLINA SHORT-TO-MEDIUM SERIES					UNAUDITED
SCHEDULE OF PORTFOLIO INVESTMENTS
North Carolina Municipal Bonds — 100%
December 31, 2001
Bond Description	Coupon	Maturity Date	Rating#	Par Value	Market Value
INSURED MUNICIPAL BONDS
42.05% of Net Assets
Asheville NC Certificates of Participation Series:A	4.600	06/01/2005	Aaa/AAA*	$      50,000	$        52,116
Asheville NC Certificates of Participation Series B	4.300	06/01/2002	Aaa/AAA*	25,000	25,265
Carteret County NC General Obligation	5.400	05/01/2009	Aaa/AAA*	100,000	106,447
Catawba County NC Hospital Revenue Catawba Memorial Hospital	4.000	10/01/2003	Aaa	110,000	112,900
Coastal Regualtion Solid Waste Management Authority NC	4.250	06/01/2005	Aaa/AAA*	125,000	129,090
Cumberland County NC Hospital Facility Revenue	5.000	10/01/2006	A3/AA*	150,000	156,884
Elizabeth City NC Housing Mortgage Corp Virginia Dare Apartments	6.500	01/01/2005	Aaa/AAA*	70,000	74,670
Greenville NC Certificates of Participation Public Facilities	4.600	06/01/2011	Aaa/AAA*	100,000	101,376
Johnston County NC Finance Corporation School & Museum Project	4.650	08/01/2008	Aaa/AAA*	200,000	207,218
New Hanover County NC Certificates of Participation	3.150	12/01/2006	Aaa/AAA*	275,000	270,314
New Hanover County NC Regional Medical Center Hospital Revenue	4.250	10/01/2009	Aaa/AAA*	100,000	100,256
NC Education Facility Finance Agency (St Augustine College)	4.450	10/01/2002	AA*	100,000	101,623
NC Medical Care Community Hospital-High Point Health System	4.400	10/01/2003	Aaa/AAA*	50,000	51,650
North Carolina Medical Care Community Hospital-Scotland Memorial	5.375	10/01/2011	AA*	60,000	61,804
NC Medical Care Community Hospital Wilson Memorial Hospital	4.900	11/01/2007	Aaa/AAA*	75,000	78,477
North Carolina Medical Care Community Hospital Wayne Memorial	4.250	10/01/2006	Aaa	100,000	102,854
NC Municipal Power Agency No 1 Catawba Electric	5.100	01/01/2007	Aaa/AAA*	125,000	132,278
North Carolina Municipal Power Agency Catawba Electric	6.000	01/01/2007	Aaa/AAA*	200,000	219,768
Pitt County NC Certificates of Participation	5.500	04/01/2002	Aaa/AAA*	70,000	70,628
Pitt County NC Certificates of Participation School Facilities	4.750	04/01/2010	Aaa/AAA*	100,000	103,091
University NC System Pool Revenue Series B	5.000	10/01/2009	Aaa/AAA*	200,000	208,996
Wilkes County NC Refinancing	5.250	06/01/2006	Aaa/AAA*	250,000	260,053
					2,727,755
HOSPITAL AND HEALTHCARE REVENUE BONDS
25.01% of Net Assets
Charlotte-Mecklenburg Hospital Authority NC Health Care System	5.400	01/15/2007	Aa3/AA*	200,000	211,912
Cumberland County NC Hospital Facility Revenue	4.100	10/01/2003	A3/A-*	175,000	176,404
Cumberland County NC Hospital Facility Revenue	4.500	10/01/2007	A3/A-*	200,000	204,048
NC Community Health Care Facility Duke Hospital	4.100	06/01/2005	Aa3/AA*	100,000	101,430
NC Medical Care Community Health Care Facility Duke University	4.500	06/01/2007	Aa3/AA*	200,000	203,844
NC Medical Care Community Hospital-Presbyterian Health	5.000	10/01/2002	A1/AA-*	40,000	40,921
North Carolina Medical Care Community Hospital Pitt Memorial	4.400	12/01/2011	Aa3/AA-*	275,000	273,460
North Carolina Medical Care Community Hospital Gaston Memorial	4.900	02/15/2003	A1/A+*	150,000	153,753
North Carolina Medical Care Community Hospital Gaston Memorial	5.250	02/15/2007	A1/A+*	50,000	52,914
North Carolina Medical Care Community Hospital – Southeastern	5.000	06/01/2003	A*/A**	200,000	203,604
					1,622,289
GENERAL OBLIGATION BONDS
14.28% of Net Assets
Caldwell County NC General Obligation	6.000	02/01/2005	A1/A*	50,000	51,108
Cary NC General Obligation	4.250	03/01/2008	Aaa/AAA*	400,000	408,248
NC State General Obligation	5.000	06/01/2003	Aaa/AAA*	50,000	51,842
NC State General Obligation Series A	4.750	04/01/2006	Aaa/AAA*	200,000	210,670
Wake County NC General Obligation	4.600	03/01/2011	Aaa/AAA*	200,000	204,646
					926,513
CERTIFICATES OF PARTICIPATION BONDS
9.68% of Net Assets
Charlotte Mecklenburg NC Certificate of Participation PJ-D	3.750	12/01/2007	Aa1/AA+*	205,000	205,318
Winston Salem NC Certificates of Participation Series A	3.950	06/01/2009	Aa1/AA+*	100,000	99,109
Charlotte NC Certificates of Participation Series D	5.750	06/01/2006	Aa1/AA+*	100,000	108,576
Charlotte NC Certificates of Participation Series D	5.750	06/01/2007	Aa1/AA+*	100,000	108,798
Durham NC Certificates of Participation	5.100	06/01/2005	Aa1/AA+*	100,000	105,768
					627,569

The accompanying notes are an integral part of the financial statement.

DUPREE MUTUAL FUNDS – NORTH CAROLINA SHORT-TO-MEDIUM SERIES						UNAUDITED
SCHEDULE OF PORTFOLIO INVESTMENTS
North Carolina Municipal Bonds — 100%
December 31, 2001
Bond Description	Coupon	Maturity Date	Rating#	Par Value		Market Value
PREREFUNDED BONDS
1.84% of Net Assets
Charlotte NC Water & Sewer General Obligation	6.200	06/01/2016	Aaa/AAA*	$   10,000		$     103,961
Franklin County NC Certificates of Participation Jail & School	6.000	06/01/2002	Aaa/AAA*	15,000		15,278
						119,239
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
.80% of Net Assets
University of NC Utility System Revenue	4.900	08/01/2003	Aa1/AA*	50,000		51,858
						51,858
STATE AND LOCAL MORTGAGE REVENUE BONDS
.46% of Net Assets
NC Housing Finance Agency Single Family	4.750	03/01/2002	Aa/AA*	30,000		30,111
						30,111
Total Investments (cost $6,021,697)(a) - 94.12% of Net Assets						$ 6,105,335
*    Standard and Poor's Corporation        **    Fitch Rating Service                All other ratings by Moody's Investors Service, Inc.       NR    Not Rated          #    Bond ratings are unaudited.
(a) Represents cost for financial reporting and federal income tax purposes and differs from market       value by net unrealized appreciation of securities as follows:
	Unrealized appreciation			$   103,172
	Unrealized depreciation			(19,535	)
	Net unrealized appreciation			$      83,637

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS – NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES
			UNAUDITED
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2001
ASSETS:
Investments in securities,at value (Cost: $6,021,697)			$	6,105,335
Cash				161,429
Receivable from investments sold				173,000
Interest receivable				72,581
Total assets				6,512,345
LIABILITIES:
Payable for:
Distributions	$	19,848
Investment advisor		1,002
Transfer agent		799
Other fees		4,350
Total liabilities				25,999
NET ASSETS:
Capital				6,433,944
Net accumulated realized losses on investment transactions				(31,235	)
Net unrealized appreciation in value of investments				83,637
Net assets at value			$	6,486,346
NET ASSET VALUE,     offering price and redemption price per share                                         ($6,486,346 / 630,681 shares outstanding)
			$	10.28
STATEMENT OF OPERATIONS
For the year ended December 31, 2001
Net investment income:
Interest income			$	119,675
Expenses:
Investment advisory fees				14,068
Transfer agent				4,220
Professional fees				1,090
Trustee fees				247
Other expenses				3,196
Total expenses				22,821
Expenses reimbursed by Investment Advisor				(9,341	)
Net investment income				106,195
Realized and unrealized gain on investments
Net realized gain				1,444
Net increase in unrealized appreciation				5,587
Net realized and unrealized gain on investments				7,031
Net increase in net assets resulting from operations			$	113,226

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS – NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES
STATEMENT OF CHANGES IN NET ASSETS				UNAUDITED
For the year ended June 30, 2001 and the six months ended December 31, 2001
	Six Months			One Year
	12/31/01			2001
Increase in net assets:
Operations:
Net investment income	$	106,195		$	179,169
Net realized gain/(loss) on investments		1,444			(341	)
Net increase in unrealized appreciation		5,587			139,820
Net increase in net assets resulting from operations		113,226			318,648
Distributions to shareholders from net investment income		(106,195	)		(179,169	)
Net fund share transactions		1,604,397			489,089
Total increase		1,611,428			628,568
Net assets:
Beginning of year		4,874,918			4,246,350
End of year	$	6,486,346		$	4,874,918

 

FINANCIAL HIGHLIGHTS
Selected data for a share outstanding:
	6 months					For the years ended June 30,
	12/31/2001			2001			2000			1999			1998
Net Asset Value, beginning of year	$	10.25		$	9.94		$	10.09		$	10.24		$	10.12
Income From Investment Operations:
Net investment income		0.20			0.40			0.39			0.39			0.40
Net gains (losses) on securities
(both realized and unrealized)		0.03			0.31			(0.15	)		(0.15	)		0.12
Total from investment operations		0.23			0.71			0.24			0.24			0.52
Less Distributions:
Distributions (from net investment income)		(0.20	)		(0.40	)		(0.39	)		(0.39	)		(0.40	)
Net Asset Value, end of period	$	10.28		$	10.25		$	9.94		$	10.09		$	10.24
Total return		2.22	%		7.24	%		2.47	%		2.35	%		5.20	%
Net assets, end of year (in thousands)	$	6,486		$	4,875		$	4,246		$	3,938		$	2,194
Ratio of expenses to average net assets		0.24	%		0.48	%		0.48	%		0.44	%		0.41	%
Before expense reimbursement		0.41	%		0.78	%		0.80	%		0.78	%		0.86	%
Ratio of net investment income to average net assets		1.74	%		3.63	%		3.62	%		3.44	%		3.44	%
After expense reimbursement		1.90	%		3.93	%		3.94	%		3.78	%		3.89	%
Portfolio turnover		11.67	%		7.29	%		25.85	%		25.54	%		14.89	%

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS – TENNESSEE TAX-FREE INCOME SERIES SCHEDULE OF PORTFOLIO INVESTMENTS Tennessee Municipal Bonds — 100% December 31, 2001					UNAUDITED
Bond Description	Coupon	Maturity Date	Rating#	Par Value	Market Value
INSURED MUNICIPAL REVENUE BONDS
24.10% of Net Assets
Chattanooga/Hamilton County TN Hospital Revenue Erlanger	5.625	10/01/2018	Aaa/AAA*	$       30,000	$           31,099
Clarksville TN Water Sewer & Gas Refunding & Improvement	6.250	02/01/2018	Aaa/AAA*	200,000	204,248
Clarksville TN Water Sewer & Gas Revenue	5.650	02/01/2017	Aaa	200,000	209,852
Franklin TN Industrial Development Board Landings Apartment	5.550	10/01/2008	Aaa/AAA*	50,000	53,944
Franklin TN Industrial Development Board Landings Apartment	5.900	10/01/2016	Aaa/AAA*	800,000	838,408
Greater Tennessee Housing Assistance Refunding	7.250	07/01/2024	Aaa/AAA*	5,000	5,312
Jackson TN Hospital Revenue Refunding & Improvement	5.625	04/01/2015	Aaa/AAA*	310,000	319,688
Johnson City TN Health & Educational Revenue	5.000	07/01/2018	AAA*	1,000,000	1,002,870
Knox County/Chapman TN Utility District Water & Sewer	6.000	01/01/2014	Aaa/AAA*	40,000	42,001
Knox County TN Health Educational & Housing Facilities Baptist Hospital	5.500	04/15/2017	AAA*	1,315,000	1,361,525
Knox County TN Health Educational & Housing Facilities Ft Sanders	5.650	01/01/2008	Aaa/AAA*	20,000	20,400
Knox County TN Health Educational & Housing Facilities Ft Sanders	6.250	01/01/2013	Aaa/AAA*	10,000	11,265
Knox County TN Health Educational & Housing Facilities Mercy Health	5.875	09/01/2015	Aaa/AAA*	15,000	16,031
Knox County TN Health Educational & Housing Facilities Mercy Health	6.000	09/01/2019	Aaa/AAA*	100,000	106,553
Knox County TN Utility District Water & Sewer	5.625	12/01/2019	Aaa	400,000	413,764
Knoxville TN Development Corporation Housing Revenue Morningside	6.100	07/20/2020	AAA*	500,000	513,715
Lawrence County TN Public Improvements General Obligation	6.300	03/01/2008	Aaa/AAA*	50,000	51,291
Memphis/Shelby County TN Airport Revenue Refunding	5.650	09/01/2015	Aaa/AAA*	55,000	57,348
Metropolitan Nashville & Davidson County TN Adventist System	5.750	11/15/2025	Aaa/AAA*	1,150,000	1,190,388
Metropolitan Nashville & Davidson County TN Stadium Project	5.750	07/01/2014	Aaa/AAA*	100,000	106,405
Metropolitan Nashville & Davidson County TN Stadium Project	5.875	07/01/2021	Aaa/AAA*	350,000	365,582
North Anderson TN Utility District Waterworks Revenue	5.600	01/01/2015	Aaa/AAA*	100,000	104,805
Oak Ridge TN Industrial Development Board Gardens Refunding Revenue	5.250	08/20/2018	Aaa	655,000	664,917
Sevier County TN Public Buildings Authority Solid Waste Facility	5.600	09/01/2015	Aaa/AAA*	100,000	103,745
Shelby County TN Health Educational & Housing Heritage Place	6.900	07/01/2014	Aaa/AAA*	150,000	160,482
Shelby County TN Health Educational & Housing Methodist Health Systems	5.300	08/01/2015	Aaa/AAA*	710,000	730,945
Shelby County TN Health Educational & Housing Methodist Health Systems	5.375	04/01/2013	Aaa/AAA*	690,000	716,655
Shelby County TN Health Educational & Housing Methodist Health Systems	5.000	04/01/2018	Aaa/AAA*	500,000	492,310
Shelby County TN Health Educational & Housing Windsor Apartments	6.750	10/01/2017	AA*	355,000	367,390
Sullivan County TN Health Educational & Housing Holston Valley	5.750	02/15/2013	Aaa/AAA*	130,000	135,775
TN Housing Development Agency Homeownership Program	5.900	07/01/2017	Aaa/AAA*	35,000	35,831
TN Housing Development Agency Mortgage Finance Program	5.900	07/01/2018	Aaa/AAA*	90,000	91,963
TN Housing Development Agency Mortgage Finance Program	5.850	07/01/2013	Aaa/AAA*	95,000	97,594
TN Housing Development Agency Mortgage Finance Program	6.200	07/01/2018	Aaa/AAA*	755,000	791,444
					11,415,541
STATE AND LOCAL MORTGAGE REVENUE
23.85% of Net Assets
Hamilton County TN Multifamily Housing Revenue	6.700	03/01/2021	A*	450,000	464,571
Knoxville TN Development Corporation Housing Revenue Clinton Tower	6.600	10/15/2007	A*	350,000	360,535
Knoxville TN Development Corporation Housing Revenue Clinton Tower	6.650	10/15/2010	A*	285,000	293,262
Memphis TN Health Education & Housing Board Riverdale Plaza	6.350	07/20/2028	AAA*	295,000	306,045
Memphis TN Health Education & Housing Board River Trace II	6.250	10/01/2013	Aaa	50,000	52,522
Metropolitan Nashville & Davidson County TN Dandridge Tower	6.375	01/01/2011	A*	200,000	213,742
Metropolitan Nashville & Davidson County TN Hermitage Apartments	5.900	02/01/2019	A*	645,000	653,811
Murfreesboro TN Housing Authority Westbrooks Towers Project	5.875	01/15/2010	BBB*	310,000	314,848
Shelby County TN Health Educational & Housing Cameron Kirby	5.900	07/01/2018	A*	3,800,000	3,825,118
Shelby County TN Health Educational & Housing Cameron Kirby	6.000	07/01/2028	A*	500,000	490,895
Shelby County TN Health Educational & Housing Harbour Apts	6.000	04/15/2018	A*	125,000	127,378
Shelby County TN Health Educational & Housing Harbour Apts	6.000	04/15/2024	A*	50,000	50,781
Shelby County TN Health Educational & Housing Harbour Apts	5.750	04/15/2011	A*	100,000	102,187
TN Housing Development Agency Homeownership Program	6.700	07/01/2012	Aa2/AA*	85,000	87,452
TN Housing Development Agency Homeownership Program	5.850	01/01/2011	Aa2/AA*	200,000	212,058
TN Housing Development Agency Homeownership Program	5.500	07/01/2020	Aa2/AA*	1,920,000	1,952,563
TN Housing Development Agency Mortgage Finance Program	5.700	01/01/2008	AA*	100,000	103,651
TN Housing Development Agency Mortgage Finance Program	5.850	07/01/2013	A1/A+*	125,000	128,858
TN Housing Development Agency Mortgage Finance Program	5.900	07/01/2018	A1/A+*	785,000	802,623
TN Housing Development Agency Series 2001 - 3B	5.250	01/01/2020	Aa2/AA*	750,000	754,455
					11,297,354

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS – TENNESSEE TAX-FREE INCOME SERIES SCHEDULE OF PORTFOLIO INVESTMENTS Tennessee Municipal Bonds — 100% December 31, 2001						UNAUDITED
Bond Description	Coupon	Maturity Date	Rating#	Par Value		Market Value
HOSPITAL AND HEALTHCARE REVENUE BONDS
16.04% of Net Assets
Anderson County TN Health & Educational Facilities Revenue	5.650	07/01/2007	A1	$         155,000	$	158,098
Chattanooga TN Health Educational & Housing Revenue	5.000	12/01/2018	Aa2/AA*	1,000,000		974,340
Knox County TN Health Educational & Housing Facilities University	5.750	04/01/2019	Baa1	1,000,000		971,160
Metropolitan Nashville & Davidson County TN Adventist System	6.250	11/15/2015	Baa1/A-*	1,100,000		1,112,881
Metropolitan Nashville & Davidson County TN Modal	5.500	05/01/2023	AA*	1,675,000		1,700,008
Metropolitan Nashville & Davidson County TN Open Arms	5.100	08/01/2016	AA*	1,000,000		993,850
Metropolitan Nashville & Davidson County TN Open Arms	5.100	08/01/2019	AA*	1,660,000		1,603,826
Sumner County TN Health Educational & Housing Sumner Health	7.500	11/01/2014	A-*	75,000		82,049
						7,596,211
MUNICIPAL UTILITIES REVENUE BONDS
11.92% of Net Assets
Chattanooga TN Electric System Revenue	5.250	09/01/2021	AA*	1,500,000		1,513,395
Clarksville TN Water Sewer & Gas Revenue	5.250	02/01/2018	Aaa	1,000,000		1,018,290
Knoxville TN Gas System Revenue Bond Series J	5.000	03/01/2017	Aa3/AA*	700,000		697,004
Knoxville TN Waste Water System Revenue	5.100	04/01/2018	Aa3/AA*	435,000		437,040
Metropoliton Nashville & Davidson County TN Electric System	5.125	05/15/2016	Aa3/AA*	700,000		713,076
Metropolitan Nashville & Davidson County TN Electric System	5.125	05/15/2021	Aa/AA*	1,085,000		1,080,313
Metropolitan Nashville & Davidson County TN Water & Sewer	5.500	01/01/2016	Aa3/A+*	185,000		185,000
						5,644,118
GENERAL OBLIGATION BONDS
10.58% of Net Assets
Collierville TN General Obligation Improvement	5.900	05/01/2012	Aa2	30,000		31,466
Johnson City TN General Obligation	5.500	05/01/2020	Aaa/AAA*	300,000		307,488
Marion County TN General Obligation	6.000	04/01/2018	Aaa	950,000		1,023,236
Metropolitan Nashville & Davidson County TN General Obligation	5.125	11/15/2019	Aa2/AA*	500,000		499,675
Metropolitan Nashville & Davidson County TN General Obligation	5.875	05/15/2026	Aa/AA*	100,000		105,081
Metropolitan Nashville & Davidson County TN Limited Obligation	7.000	09/01/2011	A1*/A	180,000		184,514
Putnam County TN General Obligation	5.250	04/01/2019	Aaa/A2*	1,000,000		1,021,600
Shelby County TN General Obligation	5.625	04/01/2014	Aa3/AA+*	60,000		62,134
Williamson County TN General Obligation	5.375	03/01/2019	Aa1	1,000,000		1,020,110
Wilson County TN General Obligation Refunding	5.100	05/01/2016	AAA*	745,000		754,998
					5,010,301
PREREFUNDED BONDS
4.12% of Net Assets
Chattanooga TN General Obligation	6.000	08/01/2011	Aa2/AA-*	110,000		114,659
Franklin TN Industrial Development Board Sussex Downs LTD	6.250	06/01/2007	NR	30,000		33,145
Jackson TN Water & Sewer Revenue	7.200	07/01/2012	Aaa/AAA*	10,000		10,000
Knoxville TN Gas System Revenue	5.400	03/01/2015	Aa3/AA*	100,000		106,213
Lauderdale County TN General Obligation	6.000	04/01/2013	Aaa/AAA*	20,000		20,594
Memphis TN Sanitary Sewer System Revenue	5.750	10/01/2014	Aa/AA*	100,000		103,845
Memphis TN Water Revenue	6.000	01/01/2012	Aa/AA*	140,000		142,799
Metropolitan Nashville & Davidson County TN General Obligation	5.625	05/15/2017	Aa/AA*	250,000		265,015
Metropolitan Nashville & Davidson County TN Electric System	6.000	05/15/2012	Aa/AA*	30,000		31,040
Metropolitan Nashville & Davidson County TN Vanderbilt	6.000	10/01/2016	Aa3/AA*	130,000		136,711
Metropolitan Nashville & Davidson County TN Water & Sewer	6.500	12/01/2014	Aaa/AAA*	60,000		68,547
Milan TN Special School District	6.750	04/01/2013	Aaa/AAA*	60,000		66,299
Shelby County TN General Obligation Public Improvement Series A	6.000	03/01/2013	Aa/AA+*	30,000		30,519
Shelby County TN General Obligation	5.625	04/01/2014	AA+*	20,000		21,639
Shelby County TN School Building Revenue Series A	5.800	04/01/2019	Aa/AA+*	100,000		106,202
Shelby County TN School Building Revenue Series A	5.900	03/01/2012	Aa/AA+*	10,000		10,170
Shelby County TN School Building Revenue Series A	5.900	03/01/2016	Aa/AA+*	50,000		50,852
Shelby County TN School Building Revenue Series A	5.950	03/01/2017	Aa/AA+*	100,000		101,712
Shelby County TN School Building Revenue Series A	5.950	03/01/2019	Aa/AA+*	40,000		40,685
Shelby County TN School Building Revenue Series B	5.875	03/01/2012	Aa/AA+*	150,000		152,550
Shelby County TN School Building Revenue Series B	6.000	03/01/2013	Aa/AA+*	35,000		35,605
TN Local Development Authority Community Provider Pooled Loan Program	6.250	10/01/2009	A-*	30,000		33,233
TN Local Development Authority Community Provider Pooled Loan Program	6.450	10/01/2014	A-*	40,000		44,408
TN Local Development Authority Community Provider Pooled Loan Program	7.000	10/01/2011	A-*	5,000		5,299
Tennessee School Building Authority Revenue	6.250	05/01/2017	Aa2/AA*	35,000		36,072
Tipton County TN General Obligation High School	6.650	04/01/2014	Aaa/AAA*	30,000		30,977
Williamson County TN Rural School Building Revenue	5.800	03/01/2012	Aa	100,000		106,161

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS – TENNESSEE TAX-FREE INCOME SERIES SCHEDULE OF PORTFOLIO INVESTMENTS Tennessee Municipal Bonds — 100% December 31, 2001									UNAUDITED
Bond Description		Coupon	Maturity Date	Rating#		Par Value			Market Value
Williamson County TN General Obligation		5.600	09/01/2010	Aa	$	45,000		$	48,988
ESCROWED TO MATURITY BONDS									1,953,938
4.11% of Net Assets
Johnson County Health & Educational Facilities		5.125	07/01/2025	AAA*		2,000,000			1,948,020
									1,948,020
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
3.61% of Net Assets
Metropolitan Nashville & Davidson County TN Belmont University		6.300	12/01/2014	Baa3		10,000			10,589
Metropolitan Nashville & Davidson County TN McKendree		5.125	01/01/2020	AA*		1,700,000			1,698,997
									1,709,586
INDUSTRIAL REVENUE AND POLLUTION CONTROL REVENUE BONDS
1.09% of Net Assets
Chattanooga TN Industrial Development Board F L Haney Co		7.200	08/15/2010	AAA*		20,000			24,253
Chattanooga TN Industrial Development Board F L Haney Co		7.200	02/15/2009	AAA*		25,000			29,659
Chattanooga TN Industrial Development Board F L Haney Co		7.200	08/15/2009	AAA*		25,000			29,937
Chattanooga TN Industrial Development Board F L Haney Co		7.200	02/15/2010	AAA*		100,000			120,230
Cookeville TN Industrial Development Board General Hospital		5.625	10/01/2016	A*		200,000			206,838
Maury County TN Pollution Control Revenue Saturn Corporation Project		6.500	09/01/2024	A2/A*		100,000		104,550
									515,467
RENTALS / MUNICIPAL LEASE BONDS
.78% of Net Assets		6.750	09/01/2012	Baa/BBB*		155,000			160,115
Memphis/Shelby County TN Airport Revenue Refunding FedEx		5.750	03/01/2011	AA/AA-*		200,00			209,284
TN Local Development Authority Student Loan Program
									369,399
Total Investments (cost $46,915,098)(a) - 100.19% of Net Assets								$	47,459,934
	*      Standard and Poor's Corporation
	**    Fitch Rating Service
	All other ratings by Moody's Investors Service, Inc.
	#      Bond ratings are unaudited.
(a)	Represents cost for financial reporting and federal income tax purposes and differs from market
	value by net unrealized appreciation of securities as follows:
		Unrealized appreciation			$	810,035
		Unrealized depreciation				(265,198	)
		Net unrealized appreciation			$	544,837

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS – TENNESSEE TAX-FREE INCOME SERIES
			UNAUDITED
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2001
ASSETS:
Investments in securities, at value (Cost: $46,915,098)			$	47,459,934
Receivable from investments sold				136,750
Interest receivable				879,408
Total assets				48,476,092
LIABILITIES:
Cash overdraft	$	342,609
Payable for:
Distributions		498,823
Fund shares redeemed		245,261
Management fee		13,793
Transfer agent		5,333
Other fees		1,934
Total liabilities				1,107,753
NET ASSETS:
Net assets consist of:
Capital			$	47,701,911
Net accumulated realized losses on investment transactions				(878,409	)
Net unrealized appreciation in value of investments				544,837
Net assets at value			$	47,368,339
NET ASSET VALUE, offering price and redemption price per share            ($47,368,339/4,418,503 shares outstanding)			$	10.72
STATEMENT OF OPERATIONS
For the six months ended December 31, 2001
Net investment income:
Interest income			$	1,236,593
Expenses:
Investment advisory fees				116,357
Transfer agent				30,951
Professional fees				3,870
Trustee fees				2,116
Other expenses				9,356
Total expenses				162,650
Expenses reimbursed by Investment Advisor				(36,984	)
Net investment income				1,110,927
Realized and unrealized gain/loss on investments
Net realized gain				155,617
Net decrease in unrealized appreciation				(191,562	)
Net realized and unrealized loss on investments				(35,945	)
Net increase in net assets resulting from operations			$	1,074,982

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS – TENNESSEE TAX-FREE INCOME SERIES			UNAUDITED
STATEMENTS OF CHANGES IN NET ASSETS
For the year ended June 30, 2001 and the six months ended December 31, 2001
	Six Months		One Year
	12/31/01		2001
Increase in net assets:
Operations:
Net investment income	$   1,110,927		$    2,084,256
Net realized gain/(loss) on investments	155,617		(353,798	)
Net increase/(decrease) in unrealized appreciation	(191,562	)	1,920,848
Net increase in net assets resulting from operations	1,074,982		3,651,306
Distributions to shareholders from:
Net investment income	(1,110,927	)	(2,084,256	)
Net fund share transactions	2,369,331		2,943,602
Total increase	2,333,386		4,510,652
Net assets:
Beginning of year	45,034,953		40,524,301
End of period	$ 47,368,339		$ 45,034,953

FINANCIAL HIGHLIGHTS
Selected data for a share outstanding:	6 months		For the years ended June 30,
	12/31/2001		2001		2000		1999		1998
Net asset value, beginning of year	$  10.72		$  10.32		$  10.77		$  10.97		$  10.53
Income from investment operations:
Net investment income	0.13		0.52		0.53		0.54		0.54
Net gains/(losses) on securities,
both realized and unrealized	0.00		0.40		(0.45	)	(0.19	)	0.45
Total from investment operations	0.13		0.92		0.08		0.35		0.99
Less distributions:
Distributions from capital gains	0.00		0.00		0.00		(0.01	)	(0.01	)
Distributions from net investment income	(0.13	)	(0.52	)	(0.53	)	(0.54	)	(0.54	)
Net asset value, end of period	$  10.72		$  10.72		$  10.32		$  10.77		$  10.97
Total return	2.43	%	9.08	%	0.84	%	3.03	%	9.57	%
Net assets, end of period (in thousands)	$47,368		$45,035		$40,524		$46,086		$29,172
Ratio of expenses to average net assets	0.27	%	0.54	%	0.54	%	0.48	%	0.44	%
Before expense reimbursement	0.35	%	0.69	%	0.67	%	0.69	%	0.74	%
Ratio of net investment income to
average net assets	2.33	%	4.75	%	4.97	%	4.50	%	4.64	%
After expense reimbursement	2.41	%	4.90	%	5.09	%	4.71	%	4.84	%
Portfolio turnover	1.65	%	22.31	%	8.80	%	14.76	%	12.62	%

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS – TENNESSEE TAX-FREE SHORT-TO-MEDIUM SERIES					UNAUDITED
SCHEDULE OF PORTFOLIO INVESTMENTS
Tennessee Municipal Bonds — 100%
December 31, 2001
		Maturity		Par	Market
Bond Description	Coupon	Date	Rating#	Value	Value
INSURED MUNICIPAL REVENUE BONDS
32.67% of Net Assets
Chattanooga-Hamilton TN Hospital Authority-Erlanger Medical	5.125	10/01/2002	Aaa/AAA*	$        50,000	$           51,073
Hamilton County TN Industrial Development Lease Revenue	5.500	09/01/2002	AAA/AAA*	100,000	102,229
Johnson City TN General Obligation	5.250	06/01/2008	AAA/AAA*	125,000	134,054
Knox County TN Health Education & Housing Facilities Board	5.500	04/15/2011	Baa/AAA*	300,000	318,825
Knox County Utility District Water & Sewer Revenue	5.250	12/01/2006	Aaa/AAA*	220,000	231,187
Metropolitan Nashville & Davidson Counties TN Stadium Project	5.000	07/01/2003	Aaa/AAA*	110,000	114,205
Montgomery County TN General Obligation	5.250	05/01/2007	Aaa	400,000	427,540
Municipal Energy Acquisition Corporation TN Gas Revenue	4.125	03/01/2008	Aaa/AAA*	250,000	245,383
Oak Ridge TN General Obligation Unlimited	4.500	04/01/2007	Aaa/AAA*	220,000	227,361
Shelby County TN Methodist Hospital Healthcare Revenue	5.500	04/01/2008	Aaa/AAA*	250,000	268,538
Tennessee Energy Acquisition Corporation Gas Revenue	5.000	09/01/2007	Aaa/AAA*	300,000	314,748
					2,435,142
HOSPITAL AND HEALTHCARE REVENUE BONDS
13.57% of Net Assets
Chattanooga TN Catholic Health Initiatives Series A	5.500	12/01/2006	Aa2/AA*	700,000	748,671
Jackson TN Hospital Refunding & Improvement Revenue	4.800	04/01/2002	A1/A+*	60,000	60,356
Knox County TN Hospital Facility Revenue Catholic Healthcare	4.500	10/01/2011	A1/AA-*	100,000	99,759
Metropolitan Government Nashville & Davidson Counties TN	4.300	08/01/2004	AA*	100,000	102,729
					1,011,515
GENERAL OBLIGATION BONDS
27.74% of Net Assets
Knox County TN Public Improvement General Obligation	5.000	05/01/2006	Aa2/AA*	175,000	185,822
Memphins TN General Obligation Capital Outlay Notes	5.375	06/01/2003	Aa2/AA*	350,000	363,762
Metropolitan Government Nashville & Davidson County TN General Obligation	5.125	11/15/2006	Aa2/AA*	100,000	107,449
Metropolitan Government Nashville & Davidson County TN General Obligation	5.125	11/15/2013	Aa2/AA*	300,000	310,248
Rutherford County TN Capital Outlay Notes General Obligation	4.700	04/01/2002	Aa/AA-*	45,000	45,350
Rutherford County TN General Obligation	5.000	04/01/2009	Aa2/AA*	250,000	263,650
Shelby County Tn Public Improvement General Obligation	5.625	06/01/2004	Aa3/AA+*	250,000	265,720
Shelby County TN Public Improvement General Obligation S:A	5.500	04/01/2009	Aa3/AA+*	100,000	108,566
Tennessee State General Obligation Series B	5.000	05/01/2009	Aa2/AA*	300,000	314,415
TN State General Obligation	5.000	03/01/2003	Aaa/AA+*	100,000	102,958
					2,067,940
STATE AND LOCAL MORTGAGE REVENUE
8.99% of Net Assets
Shelby County TN Multi-Family Housing Memphis Series A	5.000	01/01/2009	NR	240,000	161,690
Shelby County Mutli-Family Housing Cameron Kibry-A	4.700	07/01/2002	A*	200,000	202,322
TN Housing Development Agency Mortgage Finance	5.300	01/01/2003	A1/AA*	100,000	102,408
TN Housing Development Mortgage Agency Series A	5.500	01/01/2005	A1/AA*	195,000	203,533
					669,954
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS
5.01% of Net Assets
Metropolitan Government Nashville & Davidson County Vanderbuilt	5.750	01/01/2008	Aa3/AA*	250,000	272,993
Tennessee State School Board Authority Higher Education Facilities	4.800	05/01/2014	Aa2/AA*	100,000	100,699
					373,692
PREREFUNDED BONDS
4.32% of Net Assets
Memphis TN General Obligation	5.600	08/01/2012	Aaa/AAA*	100,000	103,284
Unicoi County TN General Obligation Unlimited	5.400	04/01/2010	Aaa/AAA*	200,000	218,908
					322,192
PUBLIC FACILITIES REVENUE BONDS
3.55% of Net Assets
Hardeman County TN Corrctional Facility Revenue	7.000	08/01/2005	A/A*	240,000	264,307
					264,307
RENTALS / MUNICIPAL LEASE BONDS
3.34% of Net Assets
Memphis-Shelby County Airport Special Facilities-Federal Ex	5.000	09/01/2009	Baa2/BBB*	250,000	248,725
					248,725

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS – TENNESSEE TAX-FREE SHORT-TO-MEDIUM SERIES						UNAUDITED
SCHEDULE OF PORTFOLIO INVESTMENTS
Tennessee Municipal Bonds — 100%
December 31, 2001
Bond Description	Coupon	Maturity Date	Rating#	Par Value		Market Value
ESCROWED TO MATURITY BONDS
1.38% of Net Assets
Metro Government Nashville/Davidson County TN Meharry Medical	7.875	12/01/2004	AAA	$ 95,000		$    103,075
						103,075
Total Investments (cost $7,439,575)(a) - 100.57% of Net Assets						$ 7,496,541
*  Standard and Poor's Corporation
All other ratings by Moody's Investors Service, Inc.
NR  Not Rated
#  Bond ratings are unaudited.
(a) Represents cost for financial reporting and federal income tax purposes and differs from market value by net unrealized      appreciation of securities as follows:
	Unrealized appreciation			$ 130,660
	Unrealized depreciation			(73,694	)
	Net unrealized appreciation			$   56,966

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS - TENNESSEE TAX-FREE SHORT-TO-MEDIUM SERIES
				UNAUDITED
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2001
ASSETS:
Investments in securities, at value (Cost: $7,439,575)			$	7,496,541
Cash				9,769
Interest receivable			91,239
Total assets				7,597,549
LIABILITIES:
Payable for:
Distributions	$	26,026
Fund shares redeemed		112,000
Investment Advisor		1,525
Transfer agent		983
Other fees	3,332
Total liabilities				143,866
NET ASSETS:
Capital				7,457,796
Net accumulated realized losses on investment transactions				(61,079	)
Net unrealized appreciation in value of investments			56,966
Net assets at value			$	7,453,683
NET ASSET VALUE,       offering price and redemption price per share
($7,453,683 / 719,291 shares outstanding)			$	10.36
STATEMENT OF OPERATIONS
For the six months ended December 31, 2001
Net investment income:
Interest income			$	158,448
Expenses:
Investment advisory fees				17,901
Transfer agent				5,370
Professional fees				1,189
Trustee fees				320
Other expenses			2,197
Total expenses				26,977
Expenses reimbursed by Investment Advisor			(9,219		)
Net investment income			140,690
Realized and unrealized loss on investments
Net realized gain				3,294
Net decrease in unrealized appreciation				(7,379	)
Net realized and unrealized loss on investments				(4,085	)
Net increase in net assets resulting from operations			$	136,605

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS – TENNESSEE TAX -FREE SHORT-TO-MEDIUM SERIES

UNAUDITED

UNAUDITED STATEMENTS OF CHANGES IN NET ASSETS
For the year ended June 30, 2001 and the six months ended December 31, 2001

	Six Months			One Year
	12/31/01			2001
Increase in net assets:
Operations:
Net investment income	$	140,690		$	268,949
Net realized loss on investments		3,294			(7,806	)
Net increase/(decrease) in unrealized appreciation		(7,379	)		113,407
Net increase in net assets resulting from operations		136,605			374,550
Dividends to shareholders from net investment income		(140,690	)		(268,949	)
Net fund share transactions		241,517			695,170
Total increase		237,432			800,771
Net assets:
Beginning of year		7,216,251			6,415,480
End of year	$	7,453,683		$	7,216,251

FINANCIAL HIGHLIGHTS
Selected data for a share outstanding:
	6 months		For the years ended June 30,
	12/31/2001		2001		2000		1999		1998
Net AssetValue, beginning of year	$10.35		$10.18		$10.33		$10.44		$10.32
Income From Investment Operations:
Net investment income	0.21		0.42		0.41		0.39		0.41
Net gains or losses on securities
(both realized and unrealized)	0.01		0.17		(0.15	)	(0.11	)	0.12
Total from investment operations	0.22		0.59		0.26		0.28		0.53
Less Distributions:
Distributions (from net investment income)	(0.21	)	(0.42	)	(0.41	)	(0.39	)	(0.41	)
Net Asset Value, end of period	$10.36		$10.35		$10.18		$  10.33		$10.44
Total return	2.10	%	5.85	%	2.53	%	2.67	%	5.26	%
Net assets, end of period (in thousands)	$7,454		$7,216		$6,415		$5,819		$4,745
Ratio of expenses to average net assets	0.25	%	0.59	%	0.60	%	0.56	%	0.51	%
Before expense reimbursement	0.38	%	0.76	%	0.78	%	0.73	%	0.81	%
Ratio of net investment income to average net assets	1.85	%	3.86	%	3.78	%	3.52	%	3.67	%
After expense reimbursement	1.98	%	4.03	%	3.96	%	3.69	%	3.97	%
Portfolio turnover	15.59	%	48.90	%	28.67	%	81.81	%	67.59	%

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS – INTERMEDIATE GOVERNMENT BOND SERIES SCHEDULE OF PORTFOLIO INVESTMENTS Government Securities and Agencies — 100% December 31, 2001									UNAUDITED
Bond Description		Coupon	Maturity Date	Rating#		Par Value			Market Value
FEDERAL HOME LOAN BANK
49.33% of Net Assets
Medium Term Note		7.000	08/15/2014	Aaa/AAA*	$	500,000		$	536,163
Medium Term Note		7.560	09/01/2004	Aaa/AAA*		150,000			164,148
Medium Term Note		8.170	12/16/2004	Aaa/AAA*		2,000,000			2,220,805
Medium Term Note		6.184	09/20/2011	Aaa/AAA*		1,100,000			1,105,103
Medium Term Note		5.700	10/24/2011	Aaa/AAA*		600,000			587,880
Medium Term Note		7.000	01/29/2016	Aaa/AAA*		1,195,000			1,198,836
									5,812,935
FEDERAL NATIONAL MORTGAGE ASSOCIATION
38.71% of Net Assets
Medium Term Note		6.150	03/15/2011	Aaa/AAA*		1,250,000			1,247,251
Medium Term Note		7.280	05/23/2007	Aaa/AAA*		1,000,000			1,021,233
Medium Term Note		5.640	12/10/2008	Aaa/AAA*		300,000			298,169
Medium Term Note		6.160	03/02/2009	Aaa/AAA*		1,000,000			1,006,461
Medium Term Note		5.850	10/18/2011	Aaa/AAA*		1,000,000			987,841
									4,560,955
STUDENT LOAN MARKETING ASSOCIATION
9.36% of Net Assets
Medium Term Note		7.300	08/01/2012	Aaa/AAA*		1,000,000			1,102,705
									1,102,705
Total Investments (cost $11,089,400)(a) - 97.40% of Net Assets								$	11,476,594
	*      Standard and Poor's Corporation
	All other ratings by Moody's Investors Service, Inc.
	#      Bond ratings are unaudited.
(a)	Represents cost for financial reporting and federal income tax purposes and differs from market
	value by net unrealized appreciation of securities as follows:
		Unrealized appreciation			$	412,725
		Unrealized depreciation				(25,531	)
		Net unrealized appreciation			$	387,194

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS - INTERMEDIATE GOVERNMENT BOND SERIES
				UNAUDITED
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2001
ASSETS:
Investments in securities, at value (Cost: $11,089,400)			$	11,476,594
Cash				184,278
Interest receivable				182,538
Expense receivable				2,112
Total assets				11,845,522
LIABILITIES:
Payable for:
Distributions	$	58,800
Management fee		2,003
Transfer agent		1,502
Total liabilities				62,305
NET ASSETS:
Net assets consist of:
Capital				12,399,545
Net accumulated realized losses on investment transactions				(1,003,522	)
Net unrealized appreciation in value of investments				387,194
Net assets at value			$	11,783,217
NET ASSET VALUE, offering price and redemption price per share
($11,783,217 / 1,184,290 shares outstanding			$	9.95
STATEMENT OF OPERATIONS
For the six months ended December 31, 2001
Net investment income:
Interest income			$	375,804
Expenses:
Investment advisory fees				11,603
Transfer agent				8,703
Professional fees				966
Trustee fees				528
Other expenses				6,252
Total expenses				28,052
Net investment income				347,752
Realized and unrealized gain on investments
Net realized gain				5,179
Net increase in unrealized appreciation				120,097
Net realized and unrealized gain on investments				125,276
Net increase in net assets resulting from operations			$	473,028

The accompanying notes are an integral part of the financial statements.                

DUPREE MUTUAL FUNDS – INTERMEDIATE GOVERNMENT BOND SERIES

UNAUDITED

STATEMENTS OF CHANGES IN NET ASSETS
For the year ended June 30, 2001 and the six months ended December 31, 2001

	Six Months 12/31/01			One Year 2001
Increase in net assets:
Operations:
Net investment income	$	347,752		$	709,237
Net realized gain/(loss) on investments		5,179			(8,314	)
Net increase in unrealized appreciation		120,097			444,852
Net increase in net assets resulting from operations		473,028			1,145,775
Distributions to shareholders		(347,752	)		(709,237	)
Net fund share transactions		601,224			452,887
Total increase		726,500			889,425
Net assets:
Beginning of year		10,056,717			10,167,292
End of period	$	10,783,217		$	11,056,717

FINANCAIL HIGHLIGHTS
Selected data for a share outstanding:
	Six months			For the years ended June 30,
	12/31/01			2001			2000			1999			1998
Net asset value, beginning of year	$	9.83		$	9.43		$	9.73		$	10.14		$	9.89
Income from investment operations:
Net investment income		0.16			0.64			0.65			0.64			0.66
Net gains/(losses) on securities,
both realized and unrealized		0.12			0.40			(0.30	)		(0.41	)		0.25
Total from investment operations		0.28			1.04			0.35			0.23			0.91
Less distributions:
Distributions from net investment income		(0.16	)		(0.64	)		(0.65	)		(0.64	)		(0.66	)
Net asset value, end of period	$	9.95		$	9.83		$	9.43		$	9.73		$	10.14
Total return		4.31	%		11.29	%		3.76	%		2.21	%		9.47	%
Net assets, end of period (in thousands)	$	11,783		$	11,057		$	10,167		$	10,778		$	9,596
Ratio of expenses to average net assets		0.24	%		0.42	%		0.41	%		0.49	%		0.53	%
Ratio of net investment income to
average net assets		3.02	%		6.56	%		6.83	%		6.32	%		6.57	%
Portfolio turnover		28.10	%		24.94	%		33.35	%		24.04	%		23.49	%

The accompanying notes are an integral part of the financial statements.

DUPREE MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
December 31, 2001 UNAUDITED

1.	Significant Accounting Policies
	Dupree Mutual Funds is registered under the Investment Company Act of 1940, as amended, as a no-load, open-end investment company. The Declaration of Trust of Dupree Mutual Funds (the "Trust") permits the Trustees to create an unlimited number of series of investment portfolios (each a "Fund" and collectively the "Funds") and with respect to each series to issue an unlimited number of full or fractional shares of a single class. The Trust currently offers nine series:
		the Alabama Tax-Free Income Series, a non-diversified portfolio,
		the Kentucky Tax-Free Income Series, a diversified portfolio, the Kentucky Tax-Free Short-to-Medium Series, a non-diversified portfolio,
		the Mississippi Tax-Free Income Series, a non-diversified portfolio,
		the North Carolina Tax-Free Income Series, a non-diversified portfolio, the North Carolina Tax-Free Short-to-Medium Series, a non-diversified portfolio,
		the Tennessee Tax-Free Income Series, a diversified portfolio, the Tennessee Tax-Free Short-to-Medium Series, a non-diversified portfolio, and
		the Intermediate Government Bond Series, a non-diversified portfolio.
	The investment strategy of the eight state tax-free funds is to maintain 100% of their investments in Alabama, Kentucky, Mississippi, North Carolina or Tennessee municipal securities.
	The Intermediate Government Bond Series' investment strategy is to invest only in obligations of the U.S. Treasury and Agencies of the U.S. Government. The Intermediate Government Bond Series will buy bonds and notes that will maintain an average maturity of no more than ten years.
	The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements. The policies are in conformity with generally accepted accounting principles.
	A.	Security Valuation
		Securities are valued by using market quotation or obtained from yield data relating to instruments or securities with similar characteristics as determined in good faith under the direction of the Funds' Board of Trustees.
	B.	Security Transactions
		Security transactions are accounted for on a trade date basis. Gains and losses on securities sold are determined on an identified cost basis.
	C.	Security Income
		Interest income, which includes the amortization of premiums and the accretion of original issue discounts for financial and tax reporting purposes, is recorded on the accrual basis.

DUPREE MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS December 31, 2001				UNAUDITED
1.	Significant Accounting Policies, continued:
	D.	Federal Income Taxes
		Each of the Funds is a separate entity for federal income tax purposes. It is each Fund's policy to qualify as a regulated investment company by complying with the requirements of the Internal Revenue Code (the "code") applicable to regulated investment companies, including the distribution of all taxable income to their shareholders. The Funds have met the requirements of the code applicable to regulated investment companies for the year ended June 30, 2001. Therefore, no federal income tax provision is required.
	E.	Distributions
		All of the net investment income of the Funds is declared as a dividend to shareholders of record as of the close of business each day. Distributions to be paid are payable in cash or in additional shares at the net asset value on the payable date. Distributions are payable:
		Monthly for:	the Kentucky Tax-Free Short-to-Medium Series, and the North Carolina Tax-Free Short-to-Medium Series, and the Tennessee Tax-Free Short-to-Medium Series, and the Intermediate Government Bond Series, and
		Quarterly for:	the Alabama Tax-Free Income Series, and the Kentucky Tax-Free Income Series, and the Mississippi Tax-Free Income Series, and the North Carolina Tax-Free Income Series, and the Tennessee Tax-Free Income Series
		Timing differences relating to shareholder distributions are reflected in the components of net assets and permanent book and tax basis differences relating to shareholder distributions have been reclassified to capital.
	F.	Estimates
		The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures. Actual amounts could differ from those estimates.
2.	Investment Advisory Fee and Other Transactions with Affiliates
	The Trustees of the Trust consist of six individuals, four of whom are not "interested persons" of the Trust as defined in the Investment Company Act of 1940. Two of the Trust's trustees are "interested persons" of the Trust's Investment Advisor and of the Trust within the meaning of Section 2(a)(19) of the Investment Company Act of 1940 by virtue of their officership, directorship and/or employment with Dupree & Company, Inc.
	The Funds have a contractual agreement with Firstar Bank & Trust whereby the bank will provide certain custodial services for $1.00 per year.
	Subject to the direction of the Trustees, Dupree & Company, Inc. is responsible for the management of the Funds' portfolios. The compensation paid to Dupree & Company, Inc. pursuant to the Investment Advisory Agreements is a percentage of the daily net assets of each series (determined separately) as follows:

DUPREE MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS December 31, 2001					UNAUDITED
2.	Investment Advisory Fee and Other Transactions with Affiliates, continued:
		Range of Net Assets	$0-$100,000,000	$100,000,001- $150,000,000	$150,000,001+
		Alabama Tax-Free Income Series	.50 of 1%	.45 of 1%	.40 of 1%
		Kentucky Tax-Free Income Series	.50 of 1%	.45 of 1%	.40 of 1%
		Kentucky Tax-Free Short-to-Medium Series	.50 of 1%	.45 of 1%	.40 of 1%
		Mississippi Tax-Free Income Series	.50 of 1%	.45 of 1%	.40 of 1%
		North Carolina Tax-Free Income Series	.50 of 1%	.45 of 1%	.40 of 1%
		North Carolina Tax-Free Short-to-Medium Series	.50 of 1%	.45 of 1%	.40 of 1%
		Tennessee Tax-Free Income Series	.50 of 1%	.45 of 1%	.40 of 1%
		Tennessee Tax-Free Short-to-Medium Series	.50 of 1%	.45 of 1%	.40 of 1%
		Intermediate Government Bond Series	.20 of 1%	.20 of 1%	.40 of 1%

However, the advisor may voluntarily waive or refund investment advisory fees payable to it under the Investment Advisory Agreement with each Fund, and assume and pay other operating expenses.

For the period ended December 31, 2001 investment advisory fees for:

the Alabama Tax-Free Income Series totaled $4,437; however, Dupree & Company, Inc. voluntarily refunded fees and reimbursed expenses totaling $5,358 in accordance with the investment advisory agreement,

the Mississippi Tax-Free Income Series totaled $2,438; however, Dupree & Company, Inc. voluntarily refunded fees and reimbursed expenses totaling $3,470 in accordance with the investment advisory agreement,

the North Carolina Tax-Free Income Series totaled $70,922; however, Dupree & Company, Inc. voluntarily refunded fees and reimbursed expenses totaling $23,418 in accordance with the investment advisory agreement,

the North Carolina Tax-Free Short-to-Medium Series totaled $14,067; however, Dupree & Company, Inc. voluntarily refunded fees and reimbursed expenses totaling $9,341 in accordance with the investment advisory agreement,

the Tennessee Tax-Free Income Series totaled $116,357; however, Dupree & Company, Inc. voluntarily refunded fees and reimbursed expenses totaling $36,984 in accordance with the investment advisory agreement,

the Tennessee Tax-Free Short-to-Medium Series totaled $17,901; however, Dupree & Company, Inc. voluntarily refunded fees and reimbursed expenses totaling $9,219 in accordance with the investment advisory agreement, and

In addition, each Fund has entered into a shareholder service agreement with Dupree & Company, Inc., the Funds' Transfer Agent. The agreement provides for a fee computed on the average daily net asset value at the annual rate of .15% on the first $20,000,000 of average net assets and .12% of all amounts in excess of $20,000,000 of average net assets.

DUPREE MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
December 31, 2001 UNAUDITED

3.	Purchases and Sales of Securities
	During the period, the cost of purchases and the proceeds from sales of securities for each Series were as follows:
			Purchases		Sales/Calls
	Alabama Tax-Free Income Series	$	904,524	$	5,000
	Kentucky Tax-Free Income Series		60,295,313		20,098,374
	Kentucky Tax-Free Short-to-Medium Series		24,946,659		2,603,348
	Mississippi Tax-Free Income Series		738,572		25,000
	North Carolina Tax-Free Income Series		4,849,312		1,219,420
	North Carolina Tax-Free Short-to-Medium Series		2,047,835		631,200
	Tennessee Tax-Free Income Series		7,200,210		3,014,470
	Tennessee Tax-Free Short-to-Medium Series		1,530,383		1,086,744
	Intermediate Government Bond Series		3,797,662		3,209,375
4.	Capital Shares
	At December 31, 2001, there were an unlimited number of shares of beneficial interest authorized. Transactions in capital shares were as follows:

ALABAMA TAX-FREE INCOME SERIES	Six Months Ended December 31, 2001			Year ended June 30, 2001
	SHARES		AMOUNT		SHARES		AMOUNT
Shares sold	110,152		$1,249,077		137,419		$1,489,033
Shares issued for reinvestment from net investment income	2,639		29,249		2,020		21,717
Shares redeemed	(24,296	)	(382,152	)	(42,990	)	(465,465	)
Net increase	88,495		$896,174		96,449		$1,045,285

KENTUCKY TAX-FREE INCOME SERIES	Six Months Ended December 31, 2001			Year ended June 30, 2001
	SHARES		AMOUNT		SHARES		AMOUNT
Shares sold	5,587,179		$41,755,451		8,390,504		$61,897,104
Shares issued for reinvestment from net investment income	888,877		6,613,285		1,736,121		12,748,290
Shares redeemed	(2,439,351	)	(18,197,287	)	(4,871,764	)	(35,872,473	)
Net increase	4,036,705		$30,171,449		5,254,861		$38,772,921

KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES	Six Months Ended December 31, 2001			Year ended June 30, 2001
	SHARES		AMOUNT		SHARES		AMOUNT
Shares sold	5,881,073		$31,046,887		3,759,209		$19,479,511
Shares issued for reinvestment from net investment income	160,105		843,396		284,925		1,470,484
Shares redeemed	(1,924,041	)	(10,136,454	)	(3,458,472	)	(17,870,496	)
Net decrease	(4,117,137	)	($21,753,829	)	585,662		$3,079,499

DUPREE MUTUAL FUNDS							UNAUDITED
NOTES TO FINANCIAL STATEMENTS December 31, 2001
4. Capital Shares, continued:
MISSISSIPPI TAX-FREE INCOME SERIES	Six Months Ended December 31, 2001			Year ended June 30, 2001
	SHARES		AMOUNT		SHARES		AMOUNT
Shares sold	79,866		$ 869,096		89,978		$ 963,788
Shares issued for reinvestment from net investment income	1,601		17,453		1,461		15,656
Shares redeemed	(22,809	)	(249,405	)	(39,124	)	(417,246	)
Net increase	58,658		$ 637,144		52,315		$ 562,198

NORTH CAROLINA TAX-FREE INCOME SERIES	Six Months Ended December 31, 2001			Year ended June 30, 2001
	SHARES		AMOUNT		SHARES		AMOUNT
Shares sold	407,784		$   4,374,096		536,809		$   5,711,390
Shares issued for reinvestment from net investment income	40,778		435,376		71,982		759,194
Shares redeemed	(171,793	)	(1,836,100	)	(288,669	)	(3,057,201	)
Net increase	276,769		$   2,973,372		320,122		$   3,413,383

NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES	Six Months Ended December 31, 2001			Year ended June 30, 2001
	SHARES		AMOUNT		SHARES		AMOUNT
Shares sold	252,824		$ 2,615,756		261,482		$ 2,643,903
Shares issued for reinvestment from net investment income	8,834		91,293		15,698		158,404
Shares redeemed	(106,778	)	(1,102,652	)	(228,651	)	(2,313,219	)
Net increase	154,880		$ 1,604,397		48,529		$    489,088

TENNESSEE TAX-FREE INCOME SERIES	Six Months Ended December 31, 2001			Year ended June 30, 2001
	SHARES		AMOUNT		SHARES		AMOUNT
Shares sold	465,507		$5,046,508		727,200		$  7,772,225
Shares issued for reinvestment from net investment income	49,236		530,526		98,186		1,039,289
Shares redeemed	(297,405	)	(3,207,703	)	(552,558	)	(5,867,912	)
Net decrease	(217,338	)	($2,369,331	)	272,828		$  2,943,602

DUPREE MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS December 31, 2001						UNAUDITED
4. Capital Shares, continued:
TENNESSEE TAX-FREE SHORT-TO-MEDIUM SERIES	Six Months Ended December 31, 2001			Year ended June 30, 2001
	SHARES		AMOUNT		SHARES		AMOUNT
Shares sold	217,904		$ 2,274,770		479,704		$ 4,966,908
Shares issued for reinvestment from net investment income	8,976		93,557		17,579		181,108
Shares redeemed	(204,551	)	(2,126,810	)	(430,468	)	(4,452,846	)
Net increase	22,329		$    241,517		66,815		$    695,170

INTERMEDIATE GOVERNMENT BOND SERIES	Six Months Ended December 31, 2001			Year ended June 30, 2001
	SHARES		AMOUNT		SHARES		AMOUNT
Shares sold	124,605		$1,254,720		148,115		$  1,437,753
Shares issued for reinvestment from net investment income	21,756		218,416		45,162		438,627
Shares redeemed	(87,124	)	(871,912	)	(146,179	)	(1,423,493	)
Net increase(decrease)	59,237		$   601,224		47,098		$     452,887

DUPREE MUTUAL FUNDS														UNAUDITED
NOTES TO FINANCIAL STATEMENTS
December 31, 2001
5.	Federal Income Taxes
	At June 30, 2001 the Kentucky Tax-Free Income Series, the Kentucky Tax-Free Short-to-Medium Series, the North Carolina Tax-Free Income Series, the North Carolina Tax-Free Short-to-Medium Series, the Tennessee Tax-Free Short-to-Medium Series and the Intermediate Government Bond Series have capital loss carry forwards which are available to offset future capital gains, if any. The capital loss carry forwards expire as follows:
		KY Tax-Free Income Series		KY Tax-Free Short-to Medium Series		NC Tax-Free Income Series		NC Tax-Free Short-to Medium Series		TN Tax-Free Income Series		TN Tax-Free Short-to Medium Series		Intermediate Government Bond Series
	2003	$	131,372	$	344,195	$	—	$		$	—	$	—	$  664,593
	2004		—		10,144		—		1,436		—		807	87,381
	2005		—		188,198		—		1,015		—		1,660	—
	2006		—		73,155		—		804		—		2,666	—
	2007		—		—		—		—		—		—	—
	2008		686,889		135,232		112,544		6858		276,976		21,890	209,853
	2009		2,355,968		312,672		—		22,226		523,414		37,349	46,873
Net accumulated
realized losses		$	3,174,229	$	1,063,596	$	112,544	$	32,339	$	800,390	$	64,372	$ 1,008,700
	For the year ended June 30, 2001, all of the distributions made from net investment income of the Dupree municipal bond funds are tax-exempt for federal income tax purposes.

Capital losses incurred after October 31 ("Post-October" losses) within the taxable year are deemed to arise on the first business day of the Funds' next taxable year. The Funds incurred and will elect to defer net capital losses during fiscal 2001 as follows:

KY Tax-Free Short-to-Medium Series	NC Tax-Free Income Series	NC Tax-Free Short-to-Medium Series	TN Tax-Free Income Series
$33,449	$17,626	$340	$233,638

Shareholder Meeting

A meeting of Shareholders was held on October 30, 2001. The purpose of the meeting was (I) to elect Messrs. Thomas P. Dupree Sr., William T. Griggs II, William Combs, J. William Howerton, William Patterson and Ms. Lucy A. Breathitt as Trustees; (ii) to ratify the selection of Ernst & Young LLP as the Trust's independent auditors for the fiscal year ending June 30, 2002 (iii) to amend the fundamental investment restrictions of the Intermediate Government Bond Series to allow investment in money market mutual funds.

DUPREE MUTUAL FUNDS	UNAUDITED
NOTES TO FINANCIAL STATEMENTS
December 31, 2001

The results of all matters voted on by shareholders at the Shareholder Meeting held October 30, 2001 were as follows:

2 A. Election of Trustees:

	FOR	AGAINST	ABSTAIN	WITHHELD	TOTAL
Thomas P. Dupree, Sr.	50,145,945.420	110.810	194,109.867	0.00	50,181,340.866
William T. Griggs II	50,048,742.010	110.810	194,109.867	0.00	50,084,137.456
Lucy A. Breathitt	50.122.923.950	110.810	194,109.867	0.00	50,158,319.396
William A. Combs	50,160,475.791	110.810	194,109.867	0.00	50,195,871.237
J. William Howerton	49,678,646.643	110.810	194,109.867	0.00	49,714,042.089
William S. Patterson	50,029,304.261	110.810	194,109.867	0.00	50,064,699.707

Cumulative voting rights were exercised in the election of Trustees. The total proxy votes are distributed among those individuals selected.

B. Ratification of Ernst & Young LLP for the fiscal year 2001:

	FOR	AGAINST	ABSTAIN	TOTAL
Ernst & Young LLP	49,725,546.756	33,536.997	466,143.270	50,066,401.792

C. Amend fundamental investment restrictions of the Intermediate Government Bond Series:

	FOR	AGAINST	ABSTAIN	TOTAL
Intermediate Government Bond Series Amendment	589,064.942	53,498.603	49,313.794	691,877.339

D. Other business:

	FOR	AGAINST	ABSTAIN	TOTAL
Other business	46,497,714.252	801,172.947	2,926,339.824	50,066,401.792

INVESTMENT ADVISER
TRANSFER AGENT and
DISBURSING AGENT
Dupree & Company, Inc.
P.O. Box 1149
Lexington, Kentucky 40588-1149

CUSTODIAN
Firstar
425 Walnut Street, ML 6118
P.O. Box 1118
Cincinnati, Ohio 45201-1118

INDEPENDENT ACCOUNTANTS
Ernst & Young LLP
1300 Chiquita Center
Cincinnati, Ohio 45202

LEGAL COUNSEL
Darsie & Elste
P.O. Box 22219
Lexington, Kentucky 45022

HOW TO REACH US
Dupree Mutual Funds
P.O. Box 1149
Lexington, Kentucky 40588-1149

BY PHONE:
800 866 0614

E-MAIL
INQUIRY@DUPREE-FUNDS.COM
WWW.Dupree-Funds.Com

IN NORTH CAROLINA
Carolina Financial Investments, LLC
P. O. Box 1466
Brevard, NC 28712
Phone: 800 284 2562
E-Mail cfg@carofin.com

BOARD OF TRUSTEES
Thomas P. Dupree, Sr.
Chairman
Dupree & Company, Inc.

William A. Combs, Jr.
Chairman, Dupree Mutual Funds
Secretary, Treasurer, Director, Freedom
Dodge, Lexington, Kentucky Dana
Motor Company, Cincinnati, Ohio;
Secretary, Treasurer, Director, Ellerslie
Reality, Inc., Lexington, KY; Partner,
Forkland Development Company,
Lexington, KY; Partner, Lexland,
Lexington, KY; Director, First Security
Bank, Lexington, KY

William T. Griggs II
President
Dupree & Company, Inc.

Lucy A. Breathitt
Alexander Farms, farming: KY Horse
Park Foundation Board; KY Horse Park
Museum Board

J. William Howerton
Judge (retired November 1996) KY
Court of Appeals; Lifetime Trustee
Paducah Junior College, Vice Chairman
Paducah McCraken Co. Joint Sewer
Agency; Self-Employed Mediator,
Arbitrator and Special Judge

William S. Patterson
President and CEO
Cumberland Surety Insurance Co., Inc.
Lexington, Kentucky