N-CSRS 1 main.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-1352

Fidelity Devonshire Trust
 (Exact name of registrant as specified in charter)

82 Devonshire St., Boston, Massachusetts 02109
 (Address of principal executive offices) (Zip code)

Eric D. Roiter, Secretary

82 Devonshire St.

Boston, Massachusetts 02109
(Name and address of agent for service)

Registrant's telephone number, including area code: 617-563-7000

Date of fiscal year end:

July 31

Date of reporting period:

January 31, 2008

Item 1. Reports to Stockholders

Fidelity®
Real Estate Investment
Portfolio

Semiannual Report

January 31, 2008

(2_fidelity_logos) (Registered_Trademark)

Contents

Chairman's Message

<Click Here>

Ned Johnson's message to shareholders.

Shareholder Expense Example

<Click Here>

An example of shareholder expenses.

Investment Changes

<Click Here>

A summary of major shifts in the fund's investments over the past six months.

Investments

<Click Here>

A complete list of the fund's investments with their market values.

Financial Statements

<Click Here>

Statements of assets and liabilities, operations, and changes in net assets,
as well as financial highlights.

Notes

<Click Here>

Notes to the financial statements.

Report of Independent Registered Public Accounting Firm

<Click Here>

To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third party marks appearing herein are the property of their respective owners.

All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.

NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE

Neither the fund nor Fidelity Distributors Corporation is a bank.

Semiannual Report

Chairman's Message

(photo_of_Edward_C_Johnson_3d)

Dear Shareholder:

Stocks got off to a poor start in 2008, while investment-grade bonds and money markets showed positive returns, once again underscoring the importance of a diversified portfolio. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.

One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.

You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).

A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.

We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.

Sincerely,

/s/Edward C. Johnson 3d

Edward C. Johnson 3d

Semiannual Report

Shareholder Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including redemption fees, and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2007 to January 31, 2008).

Actual Expenses

The first line of the accompanying table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a share-holder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.

Hypothetical Example for Comparison Purposes

The second line of the accompanying table provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.

Semiannual Report

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Beginning
Account Value
August 1, 2007

Ending
Account Value
January 31, 2008

Expenses Paid
During Period*
August 1, 2007 to January 31, 2008

Actual

$ 1,000.00

$ 926.80

$ 4.17

Hypothetical (5% return per year before expenses)

$ 1,000.00

$ 1,020.81

$ 4.37

* Expenses are equal to the Fund's annualized expense ratio of .86%; multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).

Semiannual Report

Investment Changes

Top Ten Stocks as of January 31, 2008

% of fund's
net assets

% of fund's net assets
6 months ago

Simon Property Group, Inc.

10.1

9.0

ProLogis Trust

8.4

9.4

Public Storage

7.2

5.5

Starwood Hotels & Resorts Worldwide, Inc.

7.0

10.4

Kimco Realty Corp.

4.8

4.4

General Growth Properties, Inc.

4.6

5.5

Vornado Realty Trust

4.6

5.0

Developers Diversified Realty Corp.

4.2

4.8

Equity Residential (SBI)

4.2

5.8

UDR, Inc.

4.1

4.6

59.2

Top Five REIT Sectors as of January 31, 2008

% of fund's
net assets

% of fund's net assets
6 months ago

REITs - Industrial Buildings

19.2

19.9

REITs - Apartments

16.2

17.8

REITs - Shopping Centers

15.2

16.1

REITs - Malls

14.7

15.4

REITs - Office Buildings

14.2

10.3

Asset Allocation (% of fund's net assets)

As of January 31, 2008 *

As of July 31, 2007 **

Stocks 97.8%

Stocks 99.4%

Short-Term
Investments and
Net Other Assets 2.2%

Short-Term
Investments and
Net Other Assets 0.6%

* Foreign investments

3.7%

** Foreign investments

4.2%

Semiannual Report

Investments January 31, 2008

Showing Percentage of Net Assets

Common Stocks - 97.8%

Shares

Value (000s)

HOTELS, RESTAURANTS & LEISURE - 7.0%

Hotels, Resorts & Cruise Lines - 7.0%

Starwood Hotels & Resorts Worldwide, Inc.

6,985,400

$ 316,089

REAL ESTATE INVESTMENT TRUSTS - 87.1%

REITs - Apartments - 16.2%

Apartment Investment & Management Co. Class A (c)

3,910,530

155,013

AvalonBay Communities, Inc.

1,129,000

106,070

Equity Residential (SBI) (c)

5,004,500

187,218

GMH Communities Trust (d)

3,165,000

16,711

Home Properties, Inc. (c)

1,595,100

76,549

UDR, Inc. (c)(d)

8,181,860

186,792

TOTAL REITS - APARTMENTS

728,353

REITs - Factory Outlets - 1.7%

Tanger Factory Outlet Centers, Inc. (c)(d)

2,063,700

77,533

REITs - Health Care Facilities - 4.6%

HCP, Inc. (c)

4,285,000

130,307

Healthcare Realty Trust, Inc. (c)

2,060,200

53,215

Ventas, Inc.

483,000

21,349

TOTAL REITS - HEALTH CARE FACILITIES

204,871

REITs - Hotels - 0.7%

Strategic Hotel & Resorts, Inc.

2,328,100

33,408

REITs - Industrial Buildings - 19.2%

DCT Industrial Trust, Inc. (c)

8,420,765

79,745

Duke Realty LP (c)

3,400,000

80,376

ProLogis Trust

6,369,100

378,006

Public Storage

4,140,300

323,978

TOTAL REITS - INDUSTRIAL BUILDINGS

862,105

REITs - Malls - 14.7%

General Growth Properties, Inc.

5,707,300

208,431

Simon Property Group, Inc. (c)

5,064,560

452,671

TOTAL REITS - MALLS

661,102

REITs - Management/Investment - 0.6%

Digital Realty Trust, Inc. (c)

708,000

25,297

Common Stocks - continued

Shares

Value (000s)

REAL ESTATE INVESTMENT TRUSTS - CONTINUED

REITs - Office Buildings - 14.2%

Alexandria Real Estate Equities, Inc. (c)

1,501,100

$ 147,453

Boston Properties, Inc. (c)

1,724,715

158,536

Corporate Office Properties Trust (SBI) (d)

2,432,500

77,913

Highwoods Properties, Inc. (SBI)

1,512,900

45,281

Kilroy Realty Corp.

572,800

28,084

SL Green Realty Corp. (c)

1,230,106

114,166

Sovran Self Storage, Inc. (d)

1,647,122

65,259

TOTAL REITS - OFFICE BUILDINGS

636,692

REITs - Shopping Centers - 15.2%

Cedar Shopping Centers, Inc.

885,200

9,852

Developers Diversified Realty Corp.

4,555,000

187,438

Inland Real Estate Corp. (d)

4,852,700

64,929

Kimco Realty Corp. (c)

6,003,200

214,975

Vornado Realty Trust (c)

2,265,500

204,801

TOTAL REITS - SHOPPING CENTERS

681,995

TOTAL REAL ESTATE INVESTMENT TRUSTS

3,911,356

REAL ESTATE MANAGEMENT & DEVELOPMENT - 3.7%

Real Estate Management & Development - 3.7%

Brookfield Properties Corp.

7,062,900

143,448

Capital & Regional PLC

2,239,700

20,865

Patrizia Immobilien AG (c)

560,000

3,675

TOTAL REAL ESTATE MANAGEMENT & DEVELOPMENT

167,988

TOTAL COMMON STOCKS

(Cost $3,916,989)

4,395,433

Money Market Funds - 11.3%

Shares

Value (000s)

Fidelity Cash Central Fund, 3.79% (a)

89,133,885

$ 89,134

Fidelity Securities Lending Cash Central Fund, 3.84% (a)(b)

419,061,700

419,062

TOTAL MONEY MARKET FUNDS

(Cost $508,196)

508,196

TOTAL INVESTMENT PORTFOLIO - 109.1%

(Cost $4,425,185)

4,903,629

NET OTHER ASSETS - (9.1)%

(410,039)

NET ASSETS - 100%

$ 4,493,590

Legend

(a) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request.

(b) Investment made with cash collateral received from securities on loan.

(c) Security or a portion of the security is on loan at period end.

(d) Affiliated company.

Affiliated Central Funds

Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:

Fund

Income earned
(Amounts in thousands)

Fidelity Cash Central Fund

$ 1,041

Fidelity Securities Lending Cash Central Fund

545

Total

$ 1,586

Other Affiliated Issuers

An affiliated company is a company in which the fund has ownership of at least 5% of the voting securities. Fiscal year to date transactions with companies which are or were affiliates are as follows:

Affiliates
(Amounts in thousands)

Value, beginning of period

Purchases

Sales Proceeds

Dividend Income

Value,
end of
period

Alexandria Real Estate Equities, Inc.

$ 145,792

$ -

$ 18,545

$ 2,050

$ -

Corporate Office Properties Trust (SBI)

94,131

972

3,802

976

77,913

DCT Industrial Trust, Inc.

94,386

-

12,159

1,444

-

GMH Communities Trust

32,402

-

5,013

33

16,711

HomeBanc Mortgage Corp.

2,578

-

399

-

-

Inland Real Estate Corp.

87,524

-

13,720

2,429

64,929

Sovran Self Storage, Inc.

75,430

79

4,670

1,744

65,259

Tanger Factory Outlet Centers, Inc.

69,324

-

371

1,381

77,533

UDR, Inc.

271,043

-

80,018

981

186,792

Total

$ 872,610

$ 1,051

$ 138,697

$ 11,038

$ 489,137

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements

Statement of Assets and Liabilities

Amounts in thousands (except per-share amount)

January 31, 2008

Assets

Investment in securities, at value (including securities loaned of $419,206) - See accompanying schedule:

Unaffiliated issuers (cost $3,376,022)

$ 3,906,296

Fidelity Central Funds (cost $508,196)

508,196

Other affiliated issuers (cost $540,967)

489,137

Total Investments (cost $4,425,185)

$ 4,903,629

Receivable for investments sold

54,659

Receivable for fund shares sold

9,759

Dividends receivable

9,136

Distributions receivable from Fidelity Central Funds

203

Prepaid expenses

17

Other receivables

64

Total assets

4,977,467

Liabilities

Payable to custodian bank

$ 5,944

Payable for investments purchased

47,173

Payable for fund shares redeemed

8,310

Accrued management fee

1,976

Other affiliated payables

1,249

Other payables and accrued expenses

163

Collateral on securities loaned, at value

419,062

Total liabilities

483,877

Net Assets

$ 4,493,590

Net Assets consist of:

Paid in capital

$ 4,026,280

Undistributed net investment income

3,171

Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions

(14,306)

Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies

478,445

Net Assets, for 171,896 shares outstanding

$ 4,493,590

Net Asset Value, offering price and redemption price per share ($4,493,590 ÷ 171,896 shares)

$ 26.14

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Operations

Amounts in thousands

Six months ended January 31, 2008

Investment Income

Dividends (including $11,038 earned from other affiliated issuers)

$ 77,306

Interest

6

Income from Fidelity Central Funds

1,586

Total income

78,898

Expenses

Management fee

$ 14,708

Transfer agent fees

7,290

Accounting and security lending fees

567

Custodian fees and expenses

53

Independent trustees' compensation

12

Registration fees

39

Audit

65

Legal

25

Interest

54

Miscellaneous

120

Total expenses before reductions

22,933

Expense reductions

(131)

22,802

Net investment income (loss)

56,096

Realized and Unrealized Gain (Loss)

Net realized gain (loss) on:

Investment securities:

Unaffiliated issuers

61,549

Other affiliated issuers

(47,750)

Foreign currency transactions

43

Total net realized gain (loss)

13,842

Change in net unrealized appreciation (depreciation) on:

Investment securities

(410,898)

Assets and liabilities in foreign currencies

(30)

Total change in net unrealized appreciation (depreciation)

(410,928)

Net gain (loss)

(397,086)

Net increase (decrease) in net assets resulting from operations

$ (340,990)

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Changes in Net Assets

Amounts in thousands

Six months ended January 31,
2008

Year ended
July 31,
2007

Increase (Decrease) in Net Assets

Operations

Net investment income (loss)

$ 56,096

$ 95,305

Net realized gain (loss)

13,842

748,098

Change in net unrealized appreciation (depreciation)

(410,928)

(823,290)

Net increase (decrease) in net assets resulting
from operations

(340,990)

20,113

Distributions to shareholders from net investment income

(65,682)

(94,827)

Distributions to shareholders from net realized gain

(437,711)

(831,302)

Total distributions

(503,393)

(926,129)

Share transactions
Proceeds from sales of shares

690,005

2,944,760

Reinvestment of distributions

478,809

879,543

Cost of shares redeemed

(1,753,517)

(3,853,230)

Net increase (decrease) in net assets resulting from share transactions

(584,703)

(28,927)

Redemption fees

561

2,482

Total increase (decrease) in net assets

(1,428,525)

(932,461)

Net Assets

Beginning of period

5,922,115

6,854,576

End of period (including undistributed net investment income of $3,171 and undistributed net investment income of $12,757, respectively)

$ 4,493,590

$ 5,922,115

Other Information

Shares

Sold

24,287

79,299

Issued in reinvestment of distributions

16,670

25,652

Redeemed

(60,399)

(106,933)

Net increase (decrease)

(19,442)

(1,982)

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights

Six months ended
January 31,

Years ended July 31,

2008

2007

2006

2005

2004 I

2004 H

2003 H

Selected Per-Share Data

Net asset value, beginning of period

$ 30.95

$ 35.46

$ 33.68

$ 24.74

$ 24.75

$ 17.88

$ 18.47

Income from Investment
Operations

Net investment income (loss) D

.31

.43

.66

.72

.28

.71

.60

Net realized and unrealized gain (loss)

(2.36)

(.33)

3.69

9.89

.28

6.96

- J

Total from investment operations

(2.05)

.10

4.35

10.61

.56

7.67

.60

Distributions from net investment income

(.37)

(.44)

(.59)

(.63)

(.29)

(.54)

(.77)

Distributions from net realized gain

(2.39)

(4.18)

(1.99)

(1.05)

(.29)

(.26)

(.43)

Total distributions

(2.76)

(4.62)

(2.58)

(1.68)

(.58)

(.80)

(1.20)

Redemption fees added to paid in capital D

- J

.01

.01

.01

.01

- J

.01

Net asset value, end of period

$ 26.14

$ 30.95

$ 35.46

$ 33.68

$ 24.74

$ 24.75

$ 17.88

Total Return B,C

(7.32)%

(.64)%

14.06%

44.49%

2.27%

43.63%

3.11%

Ratios to Average Net Assets E,G

Expenses before reductions

.86% A

.83%

.83%

.84%

.86% A

.85%

.87%

Expenses net of fee waivers, if any

.86% A

.83%

.83%

.84%

.86% A

.85%

.87%

Expenses net of all reductions

.86% A

.82%

.82%

.82%

.83% A

.83%

.84%

Net investment income (loss)

2.12% A

1.18%

2.02%

2.52%

2.32% A

3.38%

3.21%

Supplemental Data

Net assets, end of period (in millions)

$ 4,494

$ 5,922

$ 6,855

$ 5,925

$ 3,180

$ 2,869

$ 1,718

Portfolio turnover rate F

26% A

47%

61%

33%

54% A

48%

32%

A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. G Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund. H For the year ended January 31. I Six months ended July 31. J Amount represents less than $.01 per share.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Notes to Financial Statements

For the period ended January 31, 2008

(Amounts in thousands except ratios)

1. Organization.

Fidelity Real Estate Investment Portfolio (the Fund) is a non-diversified fund of Fidelity Devonshire Trust (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust.

2. Investments in Fidelity Central Funds.

The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.

The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR.

A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's web site or upon request.

3. Significant Accounting Policies.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:

Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.

Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds,

Semiannual Report

Notes to Financial Statements - continued

(Amounts in thousands except ratios)

3. Significant Accounting Policies - continued

Security Valuation - continued

including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.

When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued.

Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.

Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.

Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.

The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.

Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain

Semiannual Report

3. Significant Accounting Policies - continued

Investment Transactions and Income - continued

dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.

Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.

Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year, the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.

Distributions are recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.

Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.

Semiannual Report

Notes to Financial Statements - continued

(Amounts in thousands except ratios)

3. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders - continued

Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), deferred trustees compensation and losses deferred due to wash sales.

The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:

Unrealized appreciation

$ 867,883

Unrealized depreciation

(402,598)

Net unrealized appreciation (depreciation)

$ 465,285

Cost for federal income tax purposes

$ 4,438,344

Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 90 days are subject to a redemption fee equal to .75% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.

New Accounting Pronouncement. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.

4. Operating Policies.

Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.

Semiannual Report

5. Purchases and Sales of Investments.

Purchases and sales of securities, other than short-term securities, aggregated $677,831 and $1,721,732, respectively.

6. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and a group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .55% of the Fund's average net assets.

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the Fund's transfer, dividend disbursing and shareholder servicing agent. FIIOC receives account fees and asset-based fees that vary according to account size and type of account. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the transfer agent fees were equivalent to an annualized rate of .27% of average net assets. Prior to January 1, 2008, Fidelity Service Company, Inc. (FSC), also an affiliate of FMR was the Fund's transfer agent.

Accounting and Security Lending Fees. FSC maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.

Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $1 for the period.

Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:

Borrower or Lender

Average Daily Loan Balance

Weighted Average Interest Rate

Interest
Expense

Borrower

$ 17,177

5.08%

$ 53

Semiannual Report

Notes to Financial Statements - continued

(Amounts in thousands except ratios)

7. Committed Line of Credit.

The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounted to $9 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.

8. Security Lending.

The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $545.

9. Bank Borrowings.

The Fund is permitted to have bank borrowings for temporary or emergency purposes to fund shareholder redemptions. The Fund has established borrowing arrangements with certain banks. The interest rate on the borrowings is the bank's base rate, as revised from time to time. The average daily loan balance during the period for which loans were outstanding amounted to $7,504. The weighted average interest rate was 5.38%. The interest expense amounted to $1 under the bank borrowing program. At period end, there were no bank borrowings outstanding.

10. Expense Reductions.

Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of

Semiannual Report

10. Expense Reductions - continued

certain expenses on behalf of the Fund totaling $6 for the period. In addition, through arrangements with the Fund's custodian and transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody and transfer agent expenses by $1 and $124, respectively.

11. Other.

The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.

Subsequent to period end, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $279.

In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.

Semiannual Report

Report of Independent Registered Public Accounting Firm

To the Trustees of Fidelity Devonshire Trust and the Shareholders of Fidelity Real Estate Investment Portfolio:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Fidelity Real Estate Investment Portfolio (a fund of Fidelity Devonshire Trust) at January 31, 2008, the results of its operations, the changes in its net assets and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fidelity Real Estate Investment Portfolio's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at January 31, 2008 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Boston, Massachusetts

March 24, 2008

Semiannual Report

Managing Your Investments

Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.

By Phone

Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.

(phone_graphic)

Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555

Press

1   For mutual fund and brokerage trading.

2   For quotes.*

3   For account balances and holdings.

4   To review orders and mutual
fund activity.

5   To change your PIN.

*0   To speak to a Fidelity representative.

By PC

Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.

(computer_graphic)

Fidelity's Web Site
www.fidelity.com

* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.

Semiannual Report

Investment Adviser

Fidelity Management & Research Company

Boston, MA

Investment Sub-Advisers

FMR Co., Inc.

Fidelity Research & Analysis Company
Fidelity Management & Research
(U.K.) Inc.

Fidelity Investments Japan Limited

Fidelity International Investment
Advisers

Fidelity International Investment
Advisers (U.K.) Limited

General Distributor

Fidelity Distributors Corporation

Boston, MA

Transfer and Service Agents

Fidelity Investments Institutional
Operations Company, Inc.

Boston, MA

Fidelity Service Company, Inc.

Boston, MA

Custodian

Brown Brothers Harriman & Co.

Boston, MA

The Fidelity Telephone Connection

Mutual Fund 24-Hour Service

Exchanges/Redemptions
and Account Assistance 1-800-544-6666

Product Information 1-800-544-6666

Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)

TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)

Fidelity Automated Service
Telephone (FAST®) (automated graphic)    1-800-544-5555

(automated graphic)    Automated line for quickest service

REA-USAN-0308
1.789292.104

(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com

Item 2. Code of Ethics

Not applicable.

Item 3. Audit Committee Financial Expert

Not applicable.

Item 4. Principal Accountant Fees and Services

Not applicable.

Item 5. Audit Committee of Listed Registrants

Not applicable.

Item 6. Schedule of Investments

Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies

Not applicable.

Item 8. Portfolio Managers of Closed-End Management Investment Companies

Not applicable.

Item 9. Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers

Not applicable.

Item 10. Submission of Matters to a Vote of Security Holders

There were no material changes to the procedures by which shareholders may recommend nominees to the Fidelity Devonshire Trust: Fidelity Real Estate Investment Portfolio's Board of Trustees.

Item 11. Controls and Procedures

(a)(i) The President and Treasurer and the Chief Financial Officer have concluded that the Fidelity Devonshire Trust: Fidelity Real Estate Investment Portfolio's (the "Fund") disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act) provide reasonable assurances that material information relating to the Fund is made known to them by the appropriate persons, based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.

(a)(ii) There was no change in the Fund's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Fund's internal control over financial reporting.

Item 12. Exhibits

(a)

(1)

Not applicable.

(a)

(2)

Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT.

(a)

(3)

Not applicable.

(b)

Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Fidelity Devonshire Trust

By:

/s/Kimberley Monasterio

Kimberley Monasterio

President and Treasurer

Date:

April 1, 2008

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:

/s/Kimberley Monasterio

Kimberley Monasterio

President and Treasurer

Date:

April 1, 2008

By:

/s/Joseph B. Hollis

Joseph B. Hollis

Chief Financial Officer

Date:

April 1, 2008