485BPOS 1 a05-16793_1485bpos.htm 485BPOS

As filed with the Securities And Exchange Commission
on October 28, 2005

Securities Act Registration No. 2-91215
Investment Company Act Registration No. 811-4024

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 o

PRE-EFFECTIVE AMENDMENT NO. o

POST-EFFECTIVE AMENDMENT NO. 34 x

and/or

REGISTRATION STATEMENT UNDER THE

INVESTMENT COMPANY ACT OF 1940 o

Amendment No. 35 x

(Check appropriate box or boxes)

DRYDEN CALIFORNIA MUNICIPAL FUND

(Exact name of registrant as specified in charter)

GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NEW JERSEY 07102

(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (973) 802-6469

Jonathan D. Shain, Esq.
Gateway Center Three
100 Mulberry Street
Newark, New Jersey 07102

(Name and Address of Agent for Service)

Approximate date of proposed public offering:

As soon as practicable after the effective
date of the Registration Statement.

It is proposed that this filing will become effective
(check appropriate box):

x immediately upon filing pursuant to paragraph (b)

o on (date) pursuant to paragraph (b)

o 60 days after filing pursuant to paragraph (a)(1)

o on (date) pursuant to paragraph (a)(1)

o 75 days after filing pursuant to paragraph (a)(2)

o on (date) pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box:

o this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.

Dryden California Municipal Fund
California Series

OCTOBER 28, 2005

PROSPECTUS

FUND TYPE

Muncipal bond

OBJECTIVE

Maximize current income that is exempt from California state and federal income taxes consistent with the preservation of capital

As with all mutual funds, the Securities and Exchange Commission has not approved or disapproved the Series' shares nor has the SEC determined that this prospectus is complete or accurate. It is a criminal offense to state otherwise.

JennisonDryden is a service mark of The Prudential Insurance Company of America, Newark, NJ and its affiliates.

Table of Contents

	1			Risk/Return Summary

	1			Investment Objective and Principal Strategies

	1			Principal Risks

	3			Evaluating Performance

	5			Fees and Expenses

	7			How the Series Invests

	7			Investment Objective and Policies

	9			Other Investments and Strategies

	12			Investment Risks

	18			How the Series is Managed

	18			Board of Trustees

	18			Manager

	19			Subadviser

	20			Distributor

	20			Disclosure of Portfolio Holdings

	21			Series Distributions and Tax Issues

	21			Distributions

	22			Tax Issues

	23			If You Sell or Exchange Your Shares

	25			How to Buy, Sell and Exchange Shares of the Series

	25			How to Buy Shares

	35			How to Sell Your Shares

	38			How to Exchange Your Shares

	42			Telephone Redemptions or Exchanges

	42			Expedited Redemption Privilege

	43			Financial Highlights

	44			Class A Shares

	45			Class B Shares

	46			Class C Shares

	47			Class Z Shares

	A-1			Description of Security Ratings

				For More Information (Back Cover)

Risk/Return Summary

This section highlights key information about California Series (the Series) of the Dryden California Municipal Fund (the Fund). Additional information follows this summary.

INVESTMENT OBJECTIVE AND PRINCIPAL STRATEGIES

Our investment objective is to maximize current income that is exempt from California state and federal income taxes, consistent with the preservation of capital. This means we invest primarily in California state and local municipal bonds, which are debt obligations or fixed income securities, including notes, commercial paper and other securities, as well as obligations of other issuers (such as issuers located in Puerto Rico, the Virgin Islands and Guam) that pay interest income that is exempt from those taxes (collectively called "California obligations"). In conjunction with our investment objective, we may invest in debt obligations with the potential for capital gain.

As a fundamental policy of the Series, we invest, under normal circumstances, so that at least 80% of the income from the Series' investments will be exempt from California state and federal income taxes or the Series will invest at least 80% of the Series' investable assets in California obligations. The Series' investments permitted by this policy may include certain municipal bonds, the interest on which is subject to the federal alternative minimum tax (AMT). The term "investable assets" in this prospectus refers to the Series' net assets plus any borrowings for investment purposes. The Series' investable assets will be less than its total assets to the extent that it has borrowed money for non-investment purposes, such as to meet anticipated redemptions. We normally invest the Series' assets in "investment grade" debt obligations, which are debt obligations rated at least BBB by Standard & Poor's Ratings Group (S&P), Baa by Moody's Investors Service (Moody's), or comparably rated by another major rating service, and unrated debt obligations that we believe are comparable in quality. Debt obligations rated in the lowest of the "investment grade" quality grades (BBB/Baa) have certain speculative characteristics. The Series may invest in California obligations the interest and/or principal payments on which are insured by the bond issuers or other parties. The dollar-weighted average maturity of the Series will normally be between 10 and 20 years. As of August 31, 2005, the Series' weighted average maturity was 13.20 years.

While we make every effort to achieve our objective, we can't guarantee success.

PRINCIPAL RISKS

Risk/Return Summary

confidence in the issuer or in the bond's insurer. Bonds with longer maturity dates typically produce higher yields and are subject to greater price fluctuations as a result of changes in interest rates than bonds with shorter maturity dates.

The Series may purchase municipal bonds that are insured to reduce credit risks. Although insurance coverage reduces credit risks by providing that the insurer will make timely payment of interest and/or principal, it does not provide protection against market fluctuations of insured bonds or fluctuations in the price of the shares of the Series. An insured municipal bond fluctuates in value largely based on factors relating to the insurer's creditworthiness or ability to satisfy its obligations.

Bond prices and the Series' net asset value (NAV) generally move in opposite directions from interest rates - if interest rates go up, the prices of the bonds in the Series' portfolio may fall because the bonds the Series holds won't, as a rule, yield as much as the newer bonds issued. Bonds that are issued when interest rates are high generally increase in value when interest rates fall.

Municipal bonds and, in particular, municipal leases may be subject to the risk that the state or municipality may not set aside funds in future budgets to make the bond or lease payments.

Because the Series will concentrate its investments in California obligations, the Series is more susceptible to economic, political and other developments that may adversely affect issuers of California obligations than a municipal bond fund that is not as geographically concentrated. These developments may include state or local legislation or policy changes, voter-passed initiatives, erosion of the tax base or reduction in revenues of the State or one or more local governments, the effects of terrorist acts or the threat of terrorist acts, the effects of possible natural disasters, or other economic or credit problems affecting the State generally or any individual locality (which may directly or indirectly affect the State as a whole). By way of illustration, although California has a relatively diversified economy, California has concentrations in the computer services, software design, motion pictures and high technology manufacturing industries. The Series, therefore, may be more susceptible to developments affecting those industries than a municipal bond fund that invests in obligations of several states. This example illustrates just one of the risks of investing in California obligations. For more detailed information on the risks of investing in California obligations, see "Description of the Fund, Its Investments and Risks" in the Statement of Additional Information.

Like any mutual fund, an investment in the Series could lose value, and you could lose money. For more detailed information about the risks associated with the Series, see "How the Series Invests - Investment Risks."

An investment in the Series is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.

EVALUATING PERFORMANCE

A number of factors - including risk - can affect how the Series performs. The following bar chart shows the Series' performance for each full calendar year of operation for the last 10 years. The bar chart and Average Annual Total Returns table below demonstrate the risk of investing in the Series by showing how returns can change from year to year and by showing how the Series' average annual total returns compare with a broad-based securities market index and a group of similar mutual funds. Past performance (before and after taxes) does not mean that the Series will achieve similar results in the future.

Annual Returns* (Class B shares)

BEST QUARTER: 6.77% (1st quarter of 1995) WORST QUARTER: –2.98% (2nd quarter of 2004)

* These annual total returns do not include sales charges. If the sales charges were included, the annual total returns would be lower than those shown. Without the management fee waiver, the annual total returns would have been lower, too. The return of the Class B shares from 1-1-05 to 9-30-05 was 2.26%.

Risk/Return Summary

Average Annual Total Returns¹ (as of 12-31-04)

Return Before Taxes	One Year			Five Years			Ten Years					Since Inception
Class A shares		–1.03	%		5.82	%		6.07	%	(6.05	)		6.17	%	(6.16	)	(since 1-22-90)
Class C shares		1.61			6.14			5.91		(5.89	)		5.36		(5.35	)	(since 8-1-94)
Class Z shares		3.34			6.93			N/A					6.01		(6.00	)	(since 9-18-96)
Class B Shares
Return Before Taxes		–1.99			6.25			6.17		(6.15	)		6.95		(6.72	)	(since 9-19-84)
Return After Taxes on Distributions²		–2.55			6.00			6.04		(6.03	)		6.81		(6.58	)	(since 9-19-84)
Return After Taxes on Distributions and Sale of Series Shares^2,3		.40			5.91			5.95		(5.93	)		6.75		(6.52	)	(since 9-19-84)
Index and Average
Lehman Muni Bond Index		4.48			7.20			7.06							-	⁴
Lipper Average		4.34			6.51			6.42							-	⁵

1 The Series' returns are after deduction of current sales charges and expenses. Without the management fee waiver for each class and the distribution and service (12b-1) fee waiver of 0.05% and 0.25% for Class A and Class C shares, respectively, the returns would have been lower. Without waiver of fees and/or expense subsidization, the Series' returns would have been lower, as indicated in parenthesis.

2 After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Series shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown only for Class B shares. After-tax returns for other classes will vary due to differing sales charges and expenses. Past performance, before and after taxes, does not mean that the Series will achieve similar results in the future.

3 The "Return After Taxes on Distributions and Sale of Series Shares" may be higher than certain return figures because when a capital loss occurs upon the redemption of Series shares, a tax deduction is provided that benefits the investor.

4 The Lehman Brothers Municipal Bond Index (Lehman Muni Bond Index) - an unmanaged index of over 39,000 long-term investment-grade municipal bonds - gives a broad look at how long-term investment-grade municipal bonds have performed. Index returns do not include the effect of any sales charges, mutual fund operating expenses or taxes. These returns would be lower if they included the effect of sales charges, mutual fund operating expenses or taxes. The Lehman Muni Bond Index returns since the inception of each class are 7.07% for Class A, 8.40% for Class B, 6.50% for Class C and 6.29% for Class Z shares. Source: Lehman Brothers.

5 The Lipper Average is based on the average return of all mutual funds in the Lipper California Municipal Debt Funds Category. It reflects deductions for mutual fund operating expenses, but does not include the effect of sales charges or taxes. These returns would be lower if they included the effect of sales charges or taxes. Lipper returns since the inception of each class are 6.57% for Class A, 7.66% for Class B, 5.80% for Class C and 5.47% for Class Z shares. Source: Lipper Inc.

FEES AND EXPENSES

This table shows the sales charges, fees, and expenses that you may pay if you buy and hold shares of each class of the Series - Classes A, B, C and Z. Each share class has different (or no) sales charges - known as loads - and expenses, but represents an investment in the same fund. Class Z shares are available only to a limited group of investors. For more information about which share class may be right for you, see "How to Buy, Sell and Exchange Shares of the Series."

Shareholder Fees¹ (paid directly from your investment)

Class A

Class B

Class C

Class Z

Maximum sales charge (load) imposed on
purchases (as a percentage of offering price)

4.00

None

Maximum deferred sales charge (load) (as a
percentage of the lower of original purchase
price or sale proceeds)

%²

%³

%⁴

None

Maximum sales charge (load) imposed on
reinvested dividends and other distributions

None

Redemption fees

None

Exchange fee

None

Annual Series Operating Expenses (deducted from Series assets)

	Class A			Class B			Class C			Class Z
Management fees		.50	%		.50	%		.50	%		.50	%
+ Distribution and service (12b-1) fees		.30	%⁵		.50	%		1.00	%⁵		None
+ Other expenses		.31	%		.31	%		.31	%		.31	%
= Total annual Series operating expenses		1.11	%		1.31	%		1.81	%		.81	%
– Fee waiver or expense reimbursement		.05	%⁵		None			.25	%⁵		None
= Net annual Series operating expenses		1.06	%		1.31	%		1.56	%		.81	%

1 Your broker may charge you a separate or additional fee for purchases and sales of shares.

2 Investors who purchase $1 million or more of Class A shares are not subject to an initial sales charge but are subject to a CDSC of 1% if they sell these shares within 12 months of purchase (except for purchases by certain retirement and/or benefit plans affiliated with Prudential Financial, Inc. (Prudential)).

3 The Contingent Deferred Sales Charge (CDSC) for Class B shares decreases by 1% annually to 1% in the fifth and sixth years and 0% in the seventh year. Class B shares automatically convert to Class A shares approximately seven years after purchase.

4 The CDSC for Class C shares is 1% for shares redeemed within 12 months of purchase.

5 For the fiscal year ending August 31, 2006, the Distributor has contractually agreed to reduce its distribution and service (12b-1) fees for Class A and Class C shares to .25 of 1% and .75 of 1% of the average daily net assets of Class A and Class C shares, respectively.

Risk/Return Summary

Example

This example is intended to help you compare the fees and expenses of the Series' different share classes and compare the cost of investing in the Series with the cost of investing in other mutual funds.

The example assumes that you invest $10,000 in the Series for the time periods indicated and then sell all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Series' operating expenses remain the same except for the Distributor's reduction of distribution and service (12b-1) fees for Class A and Class C shares during the first year. Approximately seven years after purchase, Class B shares will automatically convert to Class A shares on a quarterly basis. The information in the ten years column reflects this conversion. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

	One Year		Three Years		Five Years		Ten Years
Class A shares	$	504	$	734	$	982	$	1,693
Class B shares		633		715		818		1,499
Class C shares		259		545		957		2,106
Class Z shares		83		259		450		1,002

You would pay the following expenses on the same investment if you did not sell your shares:

	One Year		Three Years		Five Years		Ten Years
Class A shares	$	504	$	734	$	982	$	1,693
Class B shares		133		415		718		1,499
Class C shares		159		545		957		2,106
Class Z shares		83		259		450		1,002

How the Series Invests

INVESTMENT OBJECTIVE AND POLICIES

The Series' investment objective is to maximize current income that is exempt from California state and federal income taxes, consistent with the preservation of capital. In conjunction with its investment objective, the Series may invest in debt obligations with the potential for capital gain. While we make every effort to achieve our objective, we can't guarantee success.

In pursuing the Series' objective, we invest primarily in California obligations, including California state and local municipal bonds as well as obligations of other issuers (such as issuers located in Puerto Rico, the Virgin Islands and Guam) that pay interest income that is exempt from California and federal income taxes. As a fundamental policy of the Series, we invest, under normal circumstances, so that at least 80% of the income from the Series' investments will be exempt from those taxes or the Series will have at least 80% of its investable assets invested in California obligations. The Series, however, may hold certain private activity bonds, which are municipal bonds, the interest on which is subject to the federal alternative minimum tax (AMT). See "Series Distributions and Tax Issues - Distributions."

Municipal bonds include general obligation bonds and revenue bonds. General obligation bonds are obligations supported by the credit of an issuer that has the power to tax and are payable from that issuer's general revenues and not from any specific source. Revenue bonds, on the other hand, are payable from revenues derived from a particular source or project.

We normally invest the Series' investable assets in "investment grade" debt obligations, which are obligations rated at least BBB by S&P, Baa by Moody's, or comparably rated by another major rating service, and unrated debt obligations that we believe are comparable in quality. Bonds rated Baa and higher by Moody's or BBB and higher by S&P are considered investment grade, with a range of adequate to very strong capacity for meeting their financial obligations, although debt obligations rated in the lowest of the "investment grade" quality grades (BBB/Baa) have certain speculative characteristics and are riskier than higher-rated debt obligations. We may also invest in municipal bonds the interest and/or principal payments on which are insured by bond issuers or other parties. Generally, the yields on insured bonds are lower than the yields on uninsured bonds of comparable quality. Insurance reduces the insured bond's credit risk and may increase the bond's value. Lower-rated bonds

Municipal Bonds

States and municipalities issue bonds in order to borrow money to finance a project. You can think of bonds as loans that investors make to the state, local government or other issuer. The issuer gets the cash needed to complete the project and investors earn income on their investment.

How the Series Invests

tend to offer higher yields, but also offer greater risks, than higher-rated bonds. If the rating of a debt obligation is downgraded after the Series purchases it (or if the debt obligation is no longer rated), the Series will not have to sell the obligation, but we will take this into consideration in deciding whether the Series should continue to hold the obligation.

A rating is an assessment of the likelihood of the timely payment of debt (with respect to a municipal bond) or claims (with respect to an insurer of a municipal bond), and can be useful when comparing different municipal bonds. These ratings are not a guarantee of quality. The opinions of the rating agencies do not reflect market risk and they may, at times, lag behind the current financial condition of an issuer or insurer. An investor can evaluate the expected likelihood of default by an issuer or an insurer by looking at its ratings as compared to another similar issuer or insurer. A description of bond ratings is contained in Appendix A.

During the fiscal year ended August 31, 2005, the monthly dollar-weighted average ratings of the debt obligations held by the Series, expressed as a percentage of the Series' net assets, were as follows:

Ratings	Percentages of Net Assets
AAA/Aaa		63.2	%
AA/Aa		12.9	%
A/A		15.2	%
BBB/Baa		3.6	%
Unrated		4.5	%
Other assets in excess of liabilities		0.6	%

In determining which securities to buy and sell, the investment adviser will consider, among other things, yield, maturity, issue, quality characteristics and expectations regarding economic and political developments, including movements in interest rates and demand for municipal bonds. The investment adviser will attempt to anticipate interest rate movements and will purchase and sell municipal bonds accordingly. The investment adviser will also consider the claims-paying ability with respect to insurers of municipal bonds. The investment adviser will also seek to take advantage of differentials in yields with respect to securities with similar credit ratings and maturities, but which vary according to the purpose for which they were issued, as well as securities issued for similar purposes with similar maturities, but which vary according to ratings.

The dollar-weighted average maturity of the obligations held by the Series generally ranges between 10 and 20 years.

For more information, see "Investment Risks" below and the Fund's Statement of Additional Information, "Description of the Fund, Its Investments and Risks." The Statement of Additional Information - which we refer to as the SAI - contains additional information about the Series. To obtain a copy, see the back cover page of this prospectus.

The Series' investment objective and policy of investing so that at least 80% of the income from the Series' investments will be exempt from California state and federal income taxes or investing at least 80% of its investable assets in California obligations are fundamental policies that cannot be changed without shareholder approval. The Fund's Board can change investment policies of the Series that are not fundamental without shareholder approval.

OTHER INVESTMENTS AND STRATEGIES

In addition to the principal strategies, we also may use the following investment strategies to increase the Series' returns or protect its assets if market conditions warrant.

Municipal Lease Obligations

The Series may invest in municipal lease obligations. Municipal lease obligations are obligations where the interest and principal are paid out of lease payments made by the party leasing the equipment or facilities that were acquired or built with the bonds. Typically, municipal lease obligations are issued by states or financing authorities to provide money for construction projects such as schools, offices or stadiums. The entity that leases the building or facility would be responsible for paying the interest and principal on the obligation.

Municipal Asset-Backed Securities

The Series may invest in municipal asset-backed securities. A municipal asset-backed security is a type of pass-through instrument that pays interest which is eligible for exclusion from federal and state income taxation based upon the income from an underlying municipal bond or pool of municipal bonds.

Floating Rate Bonds, Variable Rate Bonds, Inverse Floaters, Secondary Inverse Floaters and Zero Coupon Municipal Bonds

The Series may invest in floating rate bonds, variable rate bonds, inverse floaters, secondary inverse floaters and zero coupon municipal bonds. Floating rate bonds are municipal bonds that have an interest rate that is set as a specific percentage of a designated rate, such as the rate on Treasury bonds. The interest rate on floating rate bonds changes when there is a change in the designated rate. Variable rate bonds are municipal bonds that have an interest rate that is adjusted periodically based on the market rate at a specified time. They generally allow the Series to demand full payment of the bond on short notice. At times the Series may receive an amount that may be more or

How the Series Invests

less than the amount paid for the bond. Inverse floaters are municipal bonds with a floating or variable interest rate that moves in the opposite direction of the interest rate on another security or the value of an index. Secondary inverse floaters are municipal asset-backed securities with a floating or variable interest rate that moves in the opposite direction of the interest rate on another security or the value of an index. Zero coupon municipal bonds do not pay interest during the life of the bond. An investor makes money by purchasing the bond at a price that is less than the money the investor will receive when the municipality repays the amount borrowed (face value).

When-Issued and Delayed-Delivery Securities

The Series may purchase municipal bonds on a when-issued or delayed-delivery basis, without limit. When the Series makes this type of purchase, the price and interest rate are fixed at the time of purchase, but delivery and payment for the bonds take place at a later time. The Series does not earn interest income until the date the bonds are expected to be delivered.

Derivative Strategies

We may use various derivative strategies to try to improve the Series' returns. We may also use hedging techniques to try to protect the Series' assets. We cannot guarantee that these strategies and techniques will work, that the instruments necessary to implement these strategies and techniques will be available, or that the Series will not lose money. Derivatives - such as futures contracts, options on futures and various types of swaps - involve costs and can be volatile. With derivatives, the investment adviser tries to predict if the underlying investment, whether a security, market index, interest rate or some other investment, will go up or down at some future date. We may use derivatives to try to reduce risk or to increase return consistent with the Series' overall investment objective. The investment adviser will consider other factors (such as cost) in deciding whether to employ any particular strategy or technique, or use any particular instrument. Any derivatives we may use may not match or offset the Series' underlying positions and this could result in losses to the Series that would not otherwise have occurred. Derivatives that involve leverage (borrowing to take advantage of investment opportunities) could magnify losses. If the Series borrows money to purchase securities and those securities decline in value, then the value of the Series' shares will decline faster than if the Series were not leveraged. In addition, interest costs and investment fees relating to leverage may exceed potential investment gains.

Futures Contracts and Related Options

The Series may purchase and sell financial futures contracts and related options on financial futures. A futures contract is an exchange-traded agreement to buy or sell a set

quantity of an underlying asset at a future date, or to make or receive a cash payment based on the value of a securities index, or some other asset, on a stipulated future date. The Series may also invest in futures contracts on 10-year interest rate swaps for hedging purposes only. The terms of futures contracts are standardized. In the case of a financial futures contract based upon a broad index, there is no delivery of the securities comprising the underlying index, margin is uniform, a clearing corporation or an exchange is the counterparty and the Series makes daily margin payments based on price movements in the index. An option gives the purchaser the right to buy or sell securities or, in the case of an option on a futures contract, the right to buy or sell a futures contract, in exchange for a premium.

Swap Transactions

The Series may enter into swap transactions. Swap agreements are two-party contracts entered into primarily by institutional investors for periods typically ranging from a few weeks to more than one year. In a standard "swap" transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on particular predetermined investments or instruments, which may be adjusted for an interest factor. There are various types of swaps, including but not limited to, interest rate swaps, total return swaps and index swaps.

For more information about these strategies, see the SAI, "Description of the Fund, Its Investments and Risks - Risks of Hedging and Return Enhancement Strategies."

Temporary Defensive Investments

In response to adverse market, economic or political conditions, the Series may hold up to 100% of its assets in cash, cash equivalents or investment-grade bonds, including bonds that are not exempt from state, local and federal income taxation. Investing heavily in these securities limits our ability to achieve the Series' investment objective, but can help to preserve the Series' assets.

For more information about these strategies, see the SAI, "Description of the Fund, Its Investments and Risks."

ADDITIONAL STRATEGIES

The Series also follows certain policies when it borrows money (the Series can currently borrow up to 331/3% of the value of its total assets) and holds illiquid securities (the Series may hold up to 15% of its net assets in illiquid securities, including securities with legal or contractual restrictions on resale, those without a readily available market and repurchase agreements with maturities longer than seven days). The Series is subject to certain other investment restrictions that are fundamental policies, which means they cannot be changed without shareholder approval. For more information about these restrictions, see the SAI, "Investment Restrictions."

How the Series Invests

INVESTMENT RISKS

As noted previously, all investments involve risk, and investing in the Series is no exception. Since the Series' holdings can vary significantly from broad market indexes, performance of the Series can deviate from performance of the indexes. This chart outlines the key risks and potential rewards of the Series' principal strategies and certain of the Series' other non-principal strategies. The investment types are listed in the order in which they normally will be used by the investment adviser. Unless otherwise noted, the Series' ability to engage in a particular type of investment is expressed as a percentage of investable assets. See, too, "Description of the Fund, Its Investments and Risks" in the SAI.

Investment Type

*% of Series' Assets*	Risks	Potential Rewards
Municipal bonds Provide at least 80% of Series' income or comprise at least 80% of its assets under normal circumstances	n Concentration risk - the risk that bonds may lose value because of political, economic or other events affecting issuers of California obligations n Credit risk - the risk that the borrower can't pay back the money borrowed or make interest payments (lower for insured and higher rated bonds). The lower a bond's quality, the higher its potential volatility n Market risk - the risk that bonds will lose value in the market, sometimes rapidly or unpredictably, because interest rates rise or there is a lack of confidence in the borrower or the bond's insurer n Illiquidity risk - the risk that bonds may be difficult to value precisely and sell at the time or price desired, in which case valuation would depend more on the investment adviser's judgment than is generally the case with other types of municipal bonds n Nonappropriation risk - the risk that the state or municipality may not include the bond obligations in future budgets n Tax risk - the risk that federal, state or local income tax rates may decrease, which could decrease demand for municipal bonds, or that a change in law may limit or eliminate exemption of interest on municipal bonds from such taxes	n A source of tax-exempt interest income, except with respect to certain bonds, such as private activity bonds, which are subject to the federal alternative minimum tax (AMT) n If interest rates decline, long-term yields should be higher than money market yields n Bonds have generally outperformed money market investments over the long term n Most bonds rise in value when interest rates fall

How the Series Invests

Investment Type (cont'd)

*% of Series' Assets*	Risks	Potential Rewards
Zero coupon municipal bonds Percentage varies; usually less than 40%	n See credit risk, market risk, concentration risk and tax risk n Typically subject to greater volatility and less liquidity in adverse markets than other municipal bonds	n A source of tax-exempt interest income, except with respect to certain bonds, such as private activity bonds, which are subject to the AMT n Value rises faster when interest rates fall

Municipal lease obligations Percentage varies; usually less than 25%	n See concentration risk, credit risk, market risk, illiquidity risk, nonappropriation risk and tax risk n Abatement risk - the risk that the entity leasing the equipment or facility will not be required to make lease payments because it does not have full use of the equipment or facility	n A source of tax-exempt interest income, except with respect to certain bonds, such as private activity bonds, which are subject to the AMT n If interest rates decline, long-term yields should be higher than money market yields

Investment Type (cont'd)

*% of Series' Assets*	Risks	Potential Rewards
Derivatives (including swaps) Percentage varies; usually less than 20%; up to 15% for swaps (other than interest rate swaps)	n The value of derivatives (such as futures, options on futures and various types of swaps) that are used to hedge a portfolio security is determined independently from that security and could result in a loss to the Series when the price movement of a derivative does not correlate with a change in the value of the Series security n Derivatives may not have the intended effects and may result in losses or missed opportunities n The counterparty to a derivatives contract could default n Derivatives can increase share price volatility and derivatives that involve leverage could magnify losses n Certain types of derivatives involve costs to the Series that can reduce returns n May be difficult to value precisely or sell at the time or price desired	n Derivatives could make money and protect against losses if the investment analysis proves correct n One way to manage the Series' risk/return balance is to lock in the value of an investment ahead of time n Derivatives used for return enhancement purposes involve a type of leverage and could generate substantial gains at low cost n Hedges that correlate well with an underlying position can increase or enhance investment income or capital gains at low cost

When-issued and delayed-delivery securities Percentage varies; usually less than 20%	n Value of securities may decrease before delivery occurs n Broker/dealer may become insolvent prior to delivery n Investment losses may exceed potential underlying investment gains n See tax risk	n May magnify underlying investment gains

How the Series Invests

Investment Type (cont'd)

*% of Series' Assets*	Risks	Potential Rewards
Municipal asset-backed securities Percentage varies; usually less than 15%	n Prepayment risk - the risk that the underlying bonds may be prepaid, partially or completely, generally during periods of falling interest rates, which could adversely affect yield to maturity and could require the Series to reinvest in lower yielding bonds n Credit risk - the risk that the underlying municipal bonds will not be paid by issuers or by credit insurers or guarantors of such instruments. Some municipal asset-backed securities are unsecured or secured by lower-rated insurers or guarantors and thus may involve greater risk n See market risk and tax risk	n Pass-through instruments provide greater diversification than direct ownership of municipal bonds n May offer higher yield due to their structure n A source of tax-exempt interest income, except with respect to certain bonds, such as private activity bonds, which are subject to the AMT

Inverse floaters/secondary inverse floaters Percentage varies; usually less than 15%	n High market risk - risk that inverse floaters will fluctuate in value more dramatically than other debt securities when interest rates change n See credit risk, illiquidity risk and tax risk n Secondary inverse floaters are subject to additional risks of municipal asset-backed securities	n Income generally will increase when interest rates decrease

Investment Type (cont'd)

*% of Series' Assets*	Risks	Potential Rewards
Illiquid securities Up to 15% of net assets	n See illiquidity risk	n May offer a more attractive yield or potential for growth than more widely traded securities

Variable/floating rate bonds Percentage varies; usually less than 10%	n Value lags value of fixed-rate securities when interest rates change n See tax risk	n May offer protection against interest rate increases

How the Series is Managed

BOARD OF TRUSTEES

The Fund's Board of Trustees (the Board) oversees the actions of the Manager, investment adviser and Distributor and decides on general policies. The Board also oversees the Fund's officers, who conduct and supervise the daily business operations of the Fund.

MANAGER

Prudential Investments LLC (PI or the Manager)
Gateway Center Three, 100 Mulberry Street
Newark, NJ 07102

Under a Management Agreement with the Fund, Pl manages the Series' investment operations and administers its business affairs and is responsible for supervising the Fund's subadviser. For the fiscal year ended August 31, 2005, the Series paid PI management fees of .50 of 1% of the Series' average daily net assets.

PI and its predecessors have served as manager or administrator to investment companies since 1987. As of September 30, 2005, PI, a wholly owned subsidiary of Prudential Financial, Inc. (Prudential), served as the investment manager to all of the Prudential U.S. and offshore open-end investment companies, and as the administrator to closed-end investment companies, with aggregate assets of approximately $93.8 billion.

Subject to the supervision of the Board of the Fund, Pl is responsible for conducting the initial review of prospective investment advisers for the Series. In evaluating a prospective subadviser, Pl considers many factors, including the firm's experience, investment philosophy and historical performance. Pl is also responsible for monitoring the performance of the Series' subadviser.

Pl and the Fund operate under an exemptive order (the Order) from the Securities and Exchange Commission (SEC or the Commission) that generally permits Pl to enter into or amend agreements with subadvisers without obtaining shareholder approval each time. This authority is subject to certain conditions, including the requirement that the Board must approve any new or amended agreements with an subadviser. Shareholders of the Series still have the right to terminate these agreements at any time by a vote of the majority of outstanding shares of the Series. The Fund will notify shareholders of any new subadvisers or material amendments to subadvisory agreements pursuant to the Order.

SUBADVISER

Prudential Investment Management, Inc. (PIM) is the Series' subadviser and has served as an investment adviser to investment companies since 1984. Its address is Gateway Center Two, 100 Mulberry Street, Newark, NJ 07102. PI has responsibility for all investment advisory services, supervises PIM and pays PIM for its services.

A discussion regarding the basis for the Board's approval of the Fund's investment advisory agreements is available in the Fund's annual report (for any agreements approved during the six-month period ended August 31, 2005) and will be available in the Fund's semi-annual report (for any agreements approved during the six-month period ended February 28, 2006).

Robert Tipp and Susan Courtney of PIM's Fixed Income Group (PIM Fixed Income Group) are responsible for the management of the Series.

Robert Tipp, CFA, is Chief Investment Strategist of PIM Fixed Income Group. He has supervisory responsibility for PIM Fixed Income Group's portfolio managers who manage mutual funds and institutional client accounts in the Municipal Bond, U.S. Liquidity (U.S. government and mortgages), Money Market, and Global Bond sectors. He is also portfolio manager for asset liability strategies and co-portfolio manager of Core Plus, Government, and Global Bond strategies. Previously, Mr. Tipp served as co-head of Prudential Financial's institutional fixed income business. Before joining Prudential Financial in 1991, Mr. Tipp was a Director in the Portfolio Strategies Group at First Boston Corporation. Prior to that, he was a Senior Analyst at Allstate Research & Planning Center, and managed fixed income and equity derivative strategies at Wells Fargo Investment Advisors. Mr. Tipp has 22 years of investment experience. Mr. Tipp has managed the Series since October 2004.

Susan Courtney is a Principal and Head of the Municipal Bond Team at PIM Fixed Income Group. She is responsible for developing, directing, and executing investment strategy for all municipal bond assets, including the Dryden municipal bond mutual funds. Ms. Courtney joined Prudential Financial in 2005 from GE Asset Management (GE), where for the prior 10 years she was a municipal bond portfolio manager responsible for $4.7 billion in tax-exempt assets for insurance companies. Prior to her career at GE, Ms. Courtney was Assistant Vice President of the Global Power Group at Fitch Investors Services, Inc., and a Senior Analyst in the Unit Investment Trust Department of Dean Witter Reynolds. Ms. Courtney has 21 years of investment experience. Ms. Courtney has managed the Series since March 2005.

Dennis Hepworth is a Principal and municipal bond portfolio manager for PIM Fixed Income. He is also Head of Municipal Bond Research, where he covers real estate, housing, public power, cogeneration and unrated corporate backed bonds. Prior to joining PIM Fixed Income in 1997, Mr. Hepworth was a sell side municipal research analyst at Prudential Securities, and a senior analyst in the Capital Markets Credit and

How the Series is Managed

Private Client areas of Merrill Lynch. Mr. Hepworth is a member of the Municipal Analysts Group of New York and the National Federation of Municipal Analysts. He has 20 years of investment experience. Mr. Hepworth has managed the Fund since November 2004.

Additional information about the portfolio managers concerning their compensation, other accounts that they manage and ownership of securities in the Series may be found in the SAI under "Investment Advisory and Other Services - Portfolio Managers".

DISTRIBUTOR

Prudential Investment Management Services LLC (PIMS or the Distributor) distributes the Series' shares under a Distribution Agreement with the Fund. The Fund also has a Distribution and Service Plan (the Plan) under Rule 12b-1 of the Investment Company Act of 1940, as amended, (the 1940 Act) with respect to each of the Class A, Class B and Class C Shares. Under the Plans and the Distribution Agreement, PIMS pays the expenses of distributing the Series' Class A, B, C, and Z shares and provides certain shareholder support services. The Fund pays distribution and other fees to PIMS as compensation for its services for each class of shares other than Class Z. These fees - known as 12b-1 fees - are shown in the "Fees and Expenses" tables.

DISCLOSURE OF PORTFOLIO HOLDINGS

A description of the Fund's policies and procedures with respect to the disclosure of the Series' portfolio securities is described in the Fund's SAI and on the Fund's website at www.jennisondryden.com. The Series will provide a full list of its portfolio holdings as of the end of each month on its website within approximately 30 days after the end of the month. In addition, the Series may release its top ten holdings, sector and country breakdowns, and largest industries on a monthly basis. Such information will be posted to the Fund's website no earlier than 15 days after the end of each month and will be available on the Fund's website for at least six months from the posting date. These postings can be located at www.jennisondryden.com.

Series Distributions and Tax Issues

Investors who buy shares of the Series should be aware of some important tax issues. For example, the Series distributes dividends of net investment income monthly and capital gains, if any, at least annually to shareholders. Dividends generally will be exempt from federal and California state income taxes. If, however, the Series invests in taxable obligations, it will pay dividends that are not exempt from these income taxes. Also, if you sell shares of the Series for a profit, you may have to pay capital gains taxes on the amount of your profit.

The following briefly discusses some of the important state and federal income tax issues you should be aware of, but is not meant to be tax advice. For tax advice and information concerning state or local taxes, please speak with your tax adviser.

DISTRIBUTIONS

The Series distributes dividends out of any net investment income, plus short-term capital gains, to shareholders, typically every month. For example, if the Series owns a City XYZ bond and the bond pays interest, the Series will pay out a portion of this interest as a dividend to its shareholders, assuming the Series' income is more than its costs and expenses. These dividends (paid out of tax-exempt interest) generally will be exempt from federal income taxes, as long as 50% or more of the value of the Series' assets at the end of each quarter is invested in state, municipal and other obligations, the interest on which is excluded from gross income for federal income tax purposes. Corporate shareholders will not be eligible for the 70% dividends-received deduction in respect of dividends paid by the Series. In addition, dividends from the Series will not qualify for the preferential rates of U.S. federal income tax applicable to certain dividends paid to non-corporate shareholders.

As we mentioned before, the Series will concentrate its investments in California obligations. In addition to being exempt from federal income taxes, Series' dividends are exempt from California state income taxes (but not from California franchise taxes) for California residents if the dividends are excluded from federal income taxes, are derived from interest payments on California obligations and as long as 50% or more of the value of its total assets are obligations the interest on which (when held by an individual) is exempt from taxation under California law. Dividends attributable to the interest on taxable bonds held by the Series, market discount on taxable and tax-exempt obligations and short-term capital gains, however, will be subject to federal, state and local income tax at ordinary income tax rates. With respect to non-corporate shareholders, California does not treat tax-exempt interest as a tax preference item for purposes of its alternative minimum tax. To the extent a corporate shareholder receives dividends which are exempt from California taxation, a portion of such dividends may be subject to the alternative minimum tax.

Series Distributions and Tax Issues

Some shareholders may be subject to federal alternative minimum tax (AMT) liability. Tax-exempt interest from certain bonds is treated as an item of tax preference, and may be attributed to shareholders. A portion of all tax-exempt interest is includable as an upward adjustment in determining a corporation's alternative minimum taxable income. These rules could make you liable for the AMT.

The Series also distributes long-term capital gains to shareholders - typically once a year. Long-term capital gains are generated when the Series sells for a profit capital assets that it held for more than 1 year. For non-corporate shareholders (including individuals), the maximum long-term federal capital gains rate generally is 15%. The maximum capital gains rate for corporate shareholders currently is the same as the maximum tax rate for ordinary income.

For your convenience, distributions of dividends and net capital gains are automatically reinvested in the Series without any sales charges. If you ask us to pay the distributions in cash, we will send you a check if your account is with the Transfer Agent. Otherwise, if your account is with a broker you will receive a credit to your account. Either way, the distributions may be subject to income taxes. For more information about automatic reinvestment and other shareholder services, see "Step 4: Additional Shareholder Services" in the next section.

TAX ISSUES
Form 1099

Every year, you will receive a Form 1099, which reports the amount of taxable dividends and capital gains we distributed to you during the prior year.

Series taxable distributions are generally taxable to you in the calendar year in which they are received, except when we declare certain dividends in the fourth quarter, and actually pay them in January of the following year. In such cases, the dividends are treated as if they were paid on December 31 of the prior year.

Withholding Taxes

If federal law requires you to provide the Series with your taxpayer identification number and certifications as to your tax status, and you fail to do this, or if you are otherwise subject to backup withholding, we will withhold and pay to the U.S. Treasury a portion (currently 28%) of your taxable distributions and gross sale proceeds. Dividends of taxable net investment income and net short-term capital gains paid to a nonresident foreign shareholder generally will be subject to a U.S. withholding tax of 30%. This rate may be lower, depending on any tax treaty the U.S. may have with the shareholder's country.

If You Purchase Just Before Record Date

If you buy shares of the Series just before the record date for a distribution (the date that determines who receives the distribution), we will pay that distribution to you. As explained above, the distribution may be subject to ordinary income or capital gains taxes. You may think you've done well, since you bought shares one day and soon thereafter received a distribution. That is not so because, when dividends are paid out, the value of each share of the Series decreases by the amount of the dividend to reflect the payout although this may not be apparent because the value of each share of the Series also will be affected by market changes, if any. The distribution you receive makes up for the decrease in share value. However, if the distribution is taxable, the timing of your purchase does mean that part of your investment came back to you as taxable income.

IF YOU SELL OR EXCHANGE YOUR SHARES

If you sell any shares of the Series for a profit, you will have realized a capital gain which is subject to federal income tax. For individuals, the maximum capital gains tax rate is generally 15% for shares held for more than 1 year. If you sell shares of the Series for a loss, you may have a capital loss, which you may use to offset capital gains you have, plus, in the case of non-corporate taxpayers, ordinary income of up to $3,000.

If you sell shares and realize a loss, you will not be permitted to use the loss to the extent you replace the shares (including pursuant to the reinvestment of a dividend) within a 61-day period (beginning 30 days before and ending 30 days after the sale of the shares). Under certain circumstances, if you acquire shares of the Series and sell or exchange your shares within 90 days, you may not be allowed to include certain charges incurred in acquiring the shares for purposes of calculating gain or loss realized upon the sale of the shares.

Exchanging your shares of the Series for the shares of another JennisonDryden or Strategic Partners mutual fund is considered a sale for federal income tax purposes. In other words, it's a taxable event. Therefore, if the shares you exchanged have increased in value since you purchased them, you will have capital gains, which are subject to the federal income taxes described above.

Any gain or loss you may have from selling or exchanging Series shares will not be reported on Form 1099; however, proceeds from the sale or exchange will be reported on Form 1099-B. Therefore, you or your financial adviser should keep track of the dates on which you buy and sell - or exchange - Series shares, as well as the

Series Distributions and Tax Issues

amount of any gain or loss on each transaction. For tax advice, please see your tax adviser.

Automatic Conversion of Class B Shares

The conversion of Class B shares into Class A shares - which happens automatically approximately seven years after purchase - is not a taxable event for federal income tax purposes. For more information about the automatic conversion of Class B shares, see "Class B Shares Convert to Class A Shares After Approximately Seven Years," in the next section.

How to Buy, Sell and
Exchange Shares of the Series

HOW TO BUY SHARES

In order to buy shares of the Series, the following steps need to be taken: Step 1: Open an Account; Step 2: Choose a Share Class; Step 3: Understanding the Price You'll Pay; Step 4: Additional Shareholder Services. Each of these steps is described below.

Step 1: Open an Account

If you don't have an account with us or a securities firm that is permitted to buy or sell shares of the Series for you, call Prudential Mutual Fund Services LLC (PMFS) at (800) 225-1852 or contact:

Prudential Mutual Fund Services LLC
Attn: Investment Services
P.O. Box 8179
Philadelphia, PA 19176

You may purchase shares by check or wire. We do not accept cash or money orders. To purchase by wire, call the number above to obtain an application. After PMFS receives your completed application, you will receive an account number. For additional information, see the back cover page of this prospectus. We have the right to reject any purchase order (including an exchange into the Series) or suspend or modify the Series' sale of its shares, including due to failure by you to provide additional information, such as information needed to verify the source of funds used to purchase shares and your identity or the identity of any underlying beneficial owners of your shares.

With certain limited exceptions, the Series is available only to U.S. citizens or residents.

Step 2: Choose a Share Class

Individual investors can choose among Class A, Class B, Class C and Class Z shares of the Series, although Class Z shares are available only to a limited group of investors.

Multiple share classes let you choose a cost structure that meets your needs:

n Class A shares purchased in amounts of less than $1 million require you to pay a sales charge at the time of purchase, but the operating expenses of Class A shares are lower than the operating expenses of Class B and Class C shares. Investors who purchase $1 million or more of Class A shares are not subject to an initial sales charge but are subject to a CDSC of 1% if they sell these shares within 12 months of purchase. (The CDSC is waived for purchases by certain retirement and/or benefit plans affiliated with Prudential).

How to Buy, Sell and
Exchange Shares of the Series

n Class B shares do not require you to pay a sales charge at the time of purchase, but do require you to pay a sales charge if you sell your shares within six years (that is why it is called a CDSC). The operating expenses of Class B shares are higher than the operating expenses of Class A shares.

n Class C shares do not require you to pay a sales charge at the time of purchase, but do require you to pay a sales charge if you sell your shares within 12 months of purchase. The operating expenses of Class C shares are higher than the operating expenses of Class A shares.

When choosing a share class, you should consider the following factors:

n The amount of your investment and any previous or planned future investments, which may qualify you for reduced sales charges for Class A shares under Rights of Accumulation or a Letter of Intent.

n The length of time you expect to hold the shares and the impact of varying distribution fees. Over time, these fees will increase the cost of your investment and may cost you more than paying other types of sales charges. For this reason, Class C shares may not be appropriate for investors who plan to hold their shares for more than 4 years.

n The different sales charges that apply to each share class - Class A's front-end sales charge vs. Class B's CDSC vs. Class C's low CDSC.

n The fact that Class B shares automatically convert to Class A shares approximately seven years after purchase.

n Class B shares purchased in amounts greater than $100,000 for equity funds, $100,000 for taxable fixed income funds, and $250,000 for municipal bond funds are generally less advantageous than purchasing Class A shares. Purchase orders for Class B shares exceeding these amounts generally will not be accepted.

n Class C shares purchased in amounts greater than $1 million are generally less advantageous than purchasing Class A shares. Purchase orders for Class C shares above these amounts generally will not be accepted.

n Because Class Z shares have lower operating expenses than Class A, Class B or Class C shares, you should consider whether you are eligible to purchase Class Z shares.

See "How to Sell Your Shares" for a description of the impact of CDSCs.

Some investors purchase or sell shares of the Series through financial intermediaries and broker-dealers who maintain omnibus accounts that aggregate the orders of multiple investors and forward the aggregate orders to the Series. Although the Series is unable to monitor or enforce the above limitations for underlying shareholders submitting orders through omnibus accounts, the Series has advised the financial intermediaries and broker-dealers who maintain such accounts of these limitations. You should consult

your financial intermediary or broker for assistance in choosing a share class.

Share Class Comparison. Use this chart to help you compare the Series' different share classes. The discussion following this chart will tell you whether you are entitled to a reduction or waiver of any sales charges.

Class A

Class B

Class C

Class Z

Minimum purchase amount¹

1,000

2,500

None

Minimum amount for
subsequent purchases¹

100

None

Maximum initial sales charge

4.00% of the
public
offering price

None

Contingent Deferred
Sales Charge (CDSC)²

%³

If sold during:
Year 1
Year 2
Year 3
Year 4
Years 5/6
Year 7

5%
4%
3%
2%
1%
0%

1% on sales
made within
12 months of
purchase

None

Annual distribution and service (12b-1)
fees (shown as a percentage of
average daily net assets)⁴

.30 of 1%
(.25 of 1%
currently)⁵

.50

of 1%

1%
(.75 of 1%
currently)⁵

None

1 The minimum investment requirements do not apply to certain custodial accounts for minors. The minimum initial and subsequent investment for purchases made through the Automatic Investment Plan is $50. For more information, see "Step 4: Additional Shareholder Services - Automatic Investment Plan."

2 For more information about the CDSC and how it is calculated, see "How to Sell Your Shares - Contingent Deferred Sales Charge (CDSC)."

3 Investors who purchase $1 million or more of Class A shares are not subject to an initial sales charge but are subject to a CDSC of 1% if they sell these shares within 12 months of purchase. (The CDSC is waived for purchases by certain retirement and/or benefit plans affiliated with Prudential).

4 These distribution and service (12b-1) fees are paid from the Series' assets on a continuous basis. Class A and Class B shares may pay a service fee of up to .25 of 1%. Class C shares will pay a service fee of .25 of 1%. The distribution fee for Class A shares is limited to .30 of 1% (including up to .25 of 1% as a service fee), and for Class B shares, is limited to .50 of 1% (including up to .25 of 1% as a service fee). Class C shares pay a distribution fee (in addition to the service fee), of .75 of 1%.

How to Buy, Sell and
Exchange Shares of the Series

Reducing or Waiving Class A's Initial Sales Charge

The following describes the different ways investors can reduce or avoid paying Class A's initial sales charge.

Increase the Amount of Your Investment. You can reduce Class A's initial sales charge by increasing the amount of your investment. This table shows how the sales charge decreases as the amount of your investment increases.

Amount of Purchase	Sales Charge as % of Offering Price			Sales Charge as % of Amount Invested			Dealer Reallowance
Less than $100,000		4.00	%		4.17	%		4.00	%
$100,000 to $249,999		3.50			3.63			3.00
$250,000 to $499,999		2.50			2.56			2.00
$500,000 to $999,999		2.00			2.04			1.75
$1 million to $4,999,999¹		None			None			0.70²

1 If you invest $1 million or more, you can buy only Class A shares, unless you qualify to buy Class Z shares. If you purchase $1 million or more of Class A shares, you will not be subject to an initial sales charge but you will be subject to a 1% CDSC if you sell these shares within 12 months of purchase. (The CDSC is waived for purchases by certain retirement and/or benefit plans affiliated with Prudential).

2 For investments of $5 million to $9,999,999, the dealer allowance is 0.50%. For investments of $10 million and over, the dealer allowance is 0.25%.

To satisfy the purchase amounts above, you can:

n Use your Rights of Accumulation, which allow you and, if applicable, an eligible group of related investors (as defined below) to combine (1) the current value of JennisonDryden and/or Strategic Partners mutual fund shares you and, if applicable, the group, already own, (2) the value of money market shares you and, if applicable, an eligible group of related investors have received for shares of other JennisonDryden and/or Strategic Partners mutual funds in an exchange transaction and (3) the value of the shares you and, if applicable, an eligible group of related investors are purchasing, or

n Sign a Letter of Intent, stating in writing that you and, if applicable, an eligible group of related investors will purchase a certain amount of shares in the Series and other JennisonDryden and/ Strategic Partners mutual funds within 13 months.

Note: Class Z shares cannot be aggregated with any other share class for purposes of reducing or waiving Class A's initial sales charge.

Eligible Group of Related Investors

n All accounts held in your name (alone or with other account holders) and taxpayer identification number (TIN)

n Accounts held in your spouse's name (alone or with other account holders) and TIN (see definition of spouse below)

n Accounts for your children or your spouse's children including children for whom you and/or your spouse are legal guardian (e.g., UGMAs and UTMAs)

n Accounts in the name and TINs of your parents

n Trusts with you, your spouse, your children, your spouse's children, and/or your parents as the beneficiaries

n With limited exclusions, accounts with the same address

n Exclusions include, but are not limited to:

n Addresses for brokerage firms and other intermediaries

n Post Office Boxes

n Accounts held in the name of a company controlled by you (a person, entity or group that holds 25% or more of the outstanding voting securities of a company will be deemed to control the company, and a partnership will be deemed to be controlled by each of its general partners), including employee benefit plans of the company where the accounts are held in the plan's TIN.

Definition of Spouse:

The person to whom you are legally married.

We also consider your spouse to include the following:

n An individual of the same gender with whom you have been joined in a civil union, or legal contract similar to marriage;

n A domestic partner, who is an individual (including one of the same gender) with whom you have shared a primary residence for at least six months, in a relationship as a couple where you, your domestic partner or both provide personal or financial welfare of the other without a fee, to whom you are not related by blood; or

n An individual with whom you have a common law marriage, which is a marriage in a state where such marriages are recognized between a man and a women arising from the fact that the two live together and hold themselves out as being married.

The value of shares held by you or an eligible group of related investors will be determined as follows:

n for Class A and L shares, the value of existing shares is determined by the maximum offering price net asset value per share (NAV) plus maximum sales charge as of the previous business day; and

n for Class B, C, M, and X shares , the value of existing shares is determined by the NAV as of the previous business day.

If your shares are held directly by the Transfer Agent, and you believe you qualify for a reduction or waiver of Class A's initial sales charge, you must notify the Transfer Agent at the time of the qualifying share purchase in order to receive the applicable reduction or waiver. If your shares are held through a broker or other financial intermediary, and you believe you qualify for a reduction or waiver of Class A's initial

How to Buy, Sell and
Exchange Shares of the Series

sales charge, you must notify your broker or financial intermediary at the time of the qualifying purchase in order to receive the applicable reduction or waiver. Shares held through a broker or other financial intermediary will not be systematically aggregated with shares held directly by the Transfer Agent for purposes of receiving a reduction or waiver of Class A's initial sales charge. The reduced or waived sales charge will be granted subject to confirmation of account holdings.

If your shares are held directly by the Transfer Agent, you must identify the eligible group of related investors. Although the Transfer Agent does not require any specific form of documentation in order to establish your eligibility to receive a waiver or reduction of Class A's initial sales charge, you may be required to provide appropriate documentation if the Transfer Agent is unable to establish your eligibility.

If your shares are held through a broker or other financial intermediary, the broker or intermediary is responsible for determining the specific documentation, if any, that you may need in order to establish your eligibility to receive a waiver or reduction of Class A's initial sales charge. Your broker or financial intermediary is also responsible for notifying the Transfer Agent if your share purchase qualifies for a reduction or waiver of Class A's initial sales charge.

Purchases of $1 million or more. If you purchase $1 million or more of Class A shares, you will not be subject to an initial sales charge, although a CDSC may apply as previously noted.

Benefit Plans. Certain group retirement and savings plans may purchase Class A shares without paying the initial sales charge if they meet the required minimum for amount of assets, average account balance or number of eligible employees. For more information about these requirements, call us at (800) 353-2847.

Mutual Fund Programs. The initial sales charge will be waived for investors in certain programs sponsored by broker-dealers, investment advisers and financial planners who have agreements with the Distributor relating to:

n Mutual fund "wrap" or asset allocation programs; where the sponsor places fund trades, links its clients' accounts to a master account in the sponsor's name and charges its clients a management, consulting or other fee for its services, or

n Mutual fund "supermarket" programs; where the sponsor links its clients' accounts to a master account in the sponsor's name and the sponsor charges a fee for its services.

Broker-dealers, investment advisers or financial planners sponsoring these mutual fund programs may offer their clients more than one class of shares in the Series in connection with different pricing options for their programs. Investors should consider carefully any separate transaction and other fees charged by these programs in connection with investing in each available share class before selecting a share class.

Other Types of Investors. Certain other types of investors may purchase Class A shares without paying the initial sales charge, including:

n certain directors, officers, employees (and certain members of their families) of Prudential and its affiliates, the JennisonDryden or Strategic Partners mutual funds, and the investment advisers of the JennisonDryden or Strategic Partners mutual funds

n persons who have retired directly from active service with Prudential or one of its subsidiaries

n certain real estate brokers, agents and employees of real estate brokerage companies affiliated with the Prudential Real Estate Affiliates

n registered representatives and employees of brokers that have entered into dealer agreements with the Distributor

To qualify for a waiver of the Class A sales charge at the time of purchase, you must notify the Transfer Agent or the Distributor must be notified by the broker facilitating the purchase that the transaction qualifies for a waiver of the Class A sales charge. The waiver will be granted subject to confirmation of your account holdings.

Additional Information About Reducing or Waiving Class A's Sales Charge. The Series makes available free of charge, on its website at www.jennisondryden.com, in a clear and prominent format, information relating to the Series' Class A initial sales charge, and the different ways that investors can reduce or avoid paying the initial sales charge. The Series' website includes hyperlinks that facilitate access to this information.

You may need to provide your broker-dealer or other financial intermediary through which you hold Fund shares with the information necessary to take full advantage of reduced or waived Class A sales charges.

The Distributor may reallow Class A's sales charge to dealers.

Qualifying for Class Z Shares

Mutual Fund Programs. Class Z shares also can be purchased by participants in any fee-based program or trust program sponsored by Prudential or an affiliate that includes the Series as an available option. Class Z shares also can be purchased by investors in certain programs sponsored by broker-dealers, investment advisers and financial planners who have agreements with Prudential Investments Advisory Group relating to:

n Mutual fund "wrap" or asset allocation programs, where the sponsor places Series trades, links its clients' accounts to a master account in the sponsor's name and charges its clients a management, consulting or other fee for its services, or

How to Buy, Sell and
Exchange Shares of the Series

n Mutual fund "supermarket" programs, where the sponsor links its clients' accounts to a master account in the sponsor's name and the sponsor charges a fee for its services.

Other Types of Investors. Class Z shares also can be purchased by any of the following:

n Certain participants in the MEDLEY Program (group variable annuity contracts) sponsored by Prudential for whom Class Z shares of the JennisonDryden or Strategic Partners mutual funds are an available option;

n Current and former Directors/Trustees of the JennisonDryden or Strategic Partners mutual funds (including the Fund);

n Prudential, with an investment of $10 million or more; and

n Qualified state tuition programs (529 Plans).

Class B Shares Convert to Class A Shares After Approximately Seven Years

If you buy Class B shares and hold them for approximately seven years, we will automatically convert them into Class A shares without charge. At that time, we will also convert any Class B shares that you purchased with reinvested dividends and other distributions. Since the distribution and service (12b-1) fees for Class A shares are lower than for Class B shares, converting to Class A shares lowers your Series expenses. Class B shares acquired through the reinvestment of dividends or distributions will be converted to Class A shares according to the procedures utilized by the broker-dealer through which the Class B shares were purchased, if the shares are carried on the books of that broker-dealer and the broker-dealer provides subaccounting services to the Series. Otherwise, the procedures utilized by PMFS, or its affiliates, will be used. The use of different procedures may result in a timing differential in the conversion of Class B shares acquired through the reinvestment of dividends and distributions.

When we do the conversion, you will get fewer Class A shares than the number of Class B shares converted if the price of the Class A shares is higher than the price of Class B shares. The total dollar value will be the same, so you will not have lost any money by getting fewer Class A shares. We do the conversions quarterly, not on the anniversary date of your purchase. For more information, see the SAI, "Purchase, Redemption and Pricing of Fund Shares - Conversion Feature - Class B Shares."

Step 3: Understanding the Price You'll Pay

The price you pay for each share of the Series is based on the share value. The share value of a mutual fund - known as the net asset value or NAV - is determined by a simple calculation: it's the total value of the Series (assets minus liabilities) divided by the total number of shares outstanding. For example, if the value of the investments held by Fund XYZ (minus its liabilities) is $1,000 and there are 100 shares of Fund XYZ owned by shareholders, the value of one share of the fund - or the NAV - is $10 ($1,000 divided by 100).

Portfolio securities are valued based upon market quotations or, if not readily available, at fair value as determined in good faith under procedures established by the Board. With respect to any portion of the Series' assets that are invested in one or more open-end investment companies, the Series' net asset value will be calculated based upon the net asset value per share of the investment company in which the Series invests.

The Series may also use fair value pricing if it determines that a market quotation is not reliably based, among other things, on events or market conditions that occur after the quotation is derived or after the closing of the primary market on which the security is traded, but before the time that the Series' NAV is determined. This use of fair value pricing most commonly occurs with securities that are primarily traded outside the U.S. because such securities present time-zone arbitrage opportunities when events or conditions affecting the prices of specific securities or the prices of securities traded in such markets generally occur after the close of the foreign markets but prior to the time the Series determines its NAV. The Series may also use fair value pricing with respect to U.S.-traded securities if, for example, trading in a particular security is halted and does not resume before the Series calculates its NAV or the exchange on which a security is traded closes early. In addition, fair value pricing is used for securities where the pricing agent or principal market maker does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of the Manager (or Adviser) does not represent fair value. Different valuation methods may result in differing values for the same security. The fair value of a portfolio security that the Series uses to determine its NAV may differ from the security's quoted or published price. If the Series needs to implement fair value pricing after the NAV publishing deadline but before shares of the Series are processed, the NAV you receive or pay may differ from the published NAV price. For purposes of computing the Series' NAV, we will value the Series' futures contracts 15 minutes after the close of regular trading on the NYSE. Except when we fair value securities, we normally value each foreign security held by the Series as of the close of the security's primary market. Fair value pricing procedures are designed to result in prices for the Series' securities and its net asset value that are reasonable in light of the circumstances which make or have made market quotations unavailable or unreliable, and may have the effect of reducing arbitrage opportunities available to short-term

Mutual Fund Shares

The NAV of mutual fund shares changes every day because the value of a fund's portfolio changes constantly. For example, if Fund XYZ holds City ABC bonds in its portfolio and the price of City ABC bonds goes up while the value of the fund's other holdings remains the same and expenses don't change, the NAV of Fund XYZ will increase.

How to Buy, Sell and
Exchange Shares of the Series

traders. There is no assurance, however, that fair value pricing will more accurately reflect the market value of a security than the market price of such security on that day or that it will prevent dilution of the Series' NAV by short-term traders.

We determine the Series' NAV once each business day at the close of regular trading on the NYSE, usually 4:00 p.m. New York time. The NYSE is closed on most national holidays and Good Friday. We may not determine the NAV on days when we have not received any orders to purchase, sell, or exchange the Series' shares, or when changes in the value of the Series' portfolio do not materially affect its NAV.

Most national newspapers report the NAVs of larger mutual funds, which allows investors to check the prices of those funds daily.

What Price Will You Pay For Shares of the Series?

For Class A shares, you'll pay the public offering price, which is the NAV next determined after we receive your order to purchase, plus an initial sales charge (unless you're entitled to a waiver). For Class B, Class C and Class Z shares, you will pay the NAV next determined after we receive your order to purchase (remember, there are no up-front sales charges for these share classes). Your broker may charge you a separate or additional fee for purchases of shares.

Unless regular trading on the NYSE closes before 4:00 p.m. New York time, your order to purchase must be received by the Transfer Agent by 4:00 p.m. New York time in order to receive that day's NAV. In the event that regular trading on the NYSE closes before 4:00 p.m. New York time, you will receive the following day's NAV if your order to purchase is received by the Transfer Agent after the close of regular trading on the NYSE.

Step 4: Additional Shareholder Services

As a Series shareholder, you can take advantage of the following services and privileges:

Automatic Reinvestment. As we explained in the "Series Distributions and Tax Issues" section, the Series pays out - or distributes - its net investment income and capital gains to all shareholders. For your convenience, we will automatically reinvest your distributions in the Series at NAV, without any sales charge. If you want your distributions paid in cash, you can indicate this preference on your application or you can either notify your broker or notify the Transfer Agent, in writing (at the address below) at least five business days before the date we determine who receives dividends.

Prudential Mutual Fund Services LLC
Attn: Account Maintenance
P.O. Box 8159
Philadelphia, PA 19176

Automatic Investment Plan. You can make regular purchases of the Series for as little as $50 by having the money automatically withdrawn from your bank or brokerage account at specified intervals.

Systematic Withdrawal Plan. A Systematic Withdrawal Plan is available that will provide you with monthly, quarterly, semi-annual or annual redemption checks. Remember, the sale of Class A (in certain cases), Class B and Class C shares may be subject to a CDSC. The Systematic Withdrawal Plan is not available to participants in certain retirement plans. Please contact PMFS at (800) 225-1852 for more details.

Reports to Shareholders. Every year we will send you an annual report (along with an updated prospectus) and a semi-annual report, which contain important financial information about your Series. To reduce the Series' expenses, we may send one annual shareholder report, one semi-annual shareholder report and one annual prospectus per household, unless you instruct us or your broker otherwise. If each Series shareholder in your household would like to receive a copy of the Series' prospectus, shareholder report and proxy statement, please call us toll free at (800) 225-1852. We will begin sending additional copies of these documents within 30 days of receipt of your request.

HOW TO SELL YOUR SHARES

You can sell your shares of the Series for cash (in the form of a check) at any time, subject to certain restrictions. For more information about these restrictions, see "Restrictions on Sales" below.

When you sell shares of the Series - also known as redeeming your shares - the price you will receive will be the NAV next determined after the Transfer Agent, the Distributor or your broker receives your order to sell (less any applicable CDSC). If your broker holds your shares, your broker must receive your order to sell by 4:00 p.m. New York time, to process the sale on that day. In the event that regular trading on the NYSE closes before 4:00 p.m. New York time, you will receive the following day's NAV if your order to sell is received after the close of regular trading on the NYSE. Otherwise, contact:

Prudential Mutual Fund Services LLC
Attn: Redemption Services
P.O. Box 8149
Philadelphia, PA 19176

How to Buy, Sell and
Exchange Shares of the Series

Generally, we will pay you for the shares that you sell within seven days after the Transfer Agent, the Distributor or your broker receives your sell order. If you hold shares through a broker, payment will be credited to your account. If you are selling shares you recently purchased with a check, we may delay sending you the proceeds until your check clears, which can take up to 10 days from the purchase date. You can avoid delay if you purchase shares by wire, certified check or cashier's check. Your broker may charge a separate or additional fee for sales of shares.

Restrictions on Sales

There are certain times when you may not be able to sell shares of the Series, or when we may delay paying you the proceeds from a sale. As permitted by the SEC, this may happen only during unusual market conditions or emergencies when the Series can't determine the value of its assets or sell its holdings. For more information, see the SAI, "Purchase, Redemption and Pricing of Fund Shares - Sale of Shares."

If you hold your shares directly with the Transfer Agent, you will need to have the signature on your sell order signature guaranteed by an "eligible guarantor institution" if:

n You are selling more than $100,000 of shares,

n You want the redemption proceeds made payable to someone that is not in our records,

n You want the redemption proceeds sent to some place that is not in our records, or

n You are a business or a trust.

An "eligible guarantor institution" includes any bank, broker-dealer, savings association or credit union. For more information, see the SAI, "Purchase, Redemption and Pricing of Fund Shares - Sale of Shares - Signature Guarantee."

Contingent Deferred Sales Charge (CDSC)

If you sell Class B shares within six years of purchase or Class C shares within 12 months of purchase, you will have to pay a CDSC. In addition, if you purchase $1 million or more of Class A shares, although you are not subject to an initial sales charge, you are subject to a 1% CDSC for any such shares redeemed within 12 months of purchase. (The CDSC is waived for purchases by certain retirement or benefit plans affiliated with Prudential).

To keep the CDSC as low as possible, we will sell amounts representing shares in the following order:

n Amounts representing shares you purchased with reinvested dividends and distributions,

n Amounts representing the increase in NAV above the total amount of payments for shares (Class A, Class B and Class C shares, only), and

n Amounts representing the cost of shares held beyond the applicable CDSC period.

Since shares that fall into any of the categories listed above are not subject to the CDSC, selling them first helps you to avoid - or at least minimize - the CDSC.

Having sold the exempt shares first, if there are any remaining shares that are subject to the CDSC, we will apply the CDSC to amounts representing the cost of shares held for the longest period of time within the applicable CDSC period.

Waiver of the CDSC - Class B Shares

The CDSC will be waived if the Class B shares are sold:

n After a shareholder is deceased or disabled (or, in the case of a trust account, the death or disability of the grantor). This waiver applies to individual shareholders, as well as shares held in joint tenancy, provided the shares were purchased before the death or disability, and

n On certain sales effected through the Systematic Withdrawal Plan.

For more information on the above and other waivers, see the SAI, "Purchase, Redemption and Pricing of Fund Shares - Contingent Deferred Sales Charge - Waiver of Contingent Deferred Sales Charge - Class B Shares."

Redemption In Kind

If the sales of Series shares you make during any 90-day period reach the lesser of $250,000 or 1% of the value of the Series' net assets, we can then give you securities from the Series' portfolio instead of cash. If you want to sell the securities for cash, you would have to pay the costs charged by a broker.

Small Accounts

If you make a sale that reduces your account value to less than $500, we may sell the rest of your shares (without charging any CDSC) and close your account. We would do this to minimize the Series' expenses paid by other shareholders. We will give you 60 days' notice, during which time you can purchase additional shares to avoid this action.

90-Day Repurchase Privilege

After you redeem your shares, you have a 90-day period during which you may reinvest back into your account any of the redemption proceeds in shares of the same Series without paying an initial sales charge. Also, if you paid a CDSC when you redeemed your shares, we will credit your account with the appropriate number of shares to reflect the amount of the CDSC you paid on that reinvested portion of your redemption proceeds. In order to take advantage of this one-time privilege, you must notify the Transfer Agent or your broker at the time of the repurchase. See the SAI, "Purchase, Redemption and Pricing of Fund Shares - Sale of Shares."

How to Buy, Sell and
Exchange Shares of the Series

HOW TO EXCHANGE YOUR SHARES

You can exchange your shares of the Series for shares of the same class in certain other JennisonDryden or Strategic Partners mutual funds - including certain money market funds - if you satisfy the minimum investment requirements. For example, you can exchange Class A shares of the Series for Class A shares of another JennisonDryden mutual fund or Class A shares of certain of the Strategic Partners mutual funds, but you can't exchange Class A shares for Class B, Class C or Class Z shares. Class B and Class C shares may not be exchanged into money market funds other than MoneyMart Assets, Inc. (MoneyMart Assets). After an exchange, at redemption the CDSC will be calculated from the first day of the month after initial purchase, excluding any time shares were held in a money market fund. We may change the terms of any exchange privilege after giving you 60 days' notice.

If you hold shares through a broker, you must exchange shares through your broker. Otherwise contact:

Prudential Mutual Fund Services LLC
Attn: Exchange Processing
P.O. Box 8157
Philadelphia, PA 19176

There is no sales charge for exchanges. If, however, you exchange - and then sell - Class A shares within 12 months of your original purchase (in certain circumstances), Class B shares within approximately 6 years of your original purchase or Class C shares within 12 months of your original purchase, you must still pay the applicable CDSC. If you have exchanged Class A, Class B or Class C shares into Special Money Fund, the time you hold the shares in the money market account will not be counted in calculating the required holding periods for CDSC liability.

Remember, as we explained in the section entitled "Series Distributions and Tax Issues - If You Sell or Exchange Your Shares," exchanging shares is considered a sale for federal income tax purposes. Therefore, if the shares you exchange are worth more than the amount that you paid for them, you may have to pay capital gains tax. For additional information about exchanging shares, see the SAI, "Shareholder Investment Account - Exchange Privilege."

Frequent Purchases and Redemptions of Series Shares

shareholder engages in frequent or short-term trading, the Series may have to sell portfolio securities to have the cash necessary to redeem the shareholder's shares. This can happen when it is not advantageous to sell any securities, so the Series' performance may be hurt. When large dollar amounts are involved, frequent trading can also make it difficult to use long-term investment strategies because the Series cannot predict how much cash it will have available to invest. In addition, if a Series is forced to liquidate investments due to short-term trading activity, it may incur increased brokerage and tax costs. Similarly, the Series may bear increased administrative costs as a result of the asset level and investment volatility that accompanies patterns of short-term trading. Moreover, frequent or short-term trading by certain shareholders may cause dilution in the value of Series shares held by other shareholders. Funds, including the Series, that invest in foreign securities may be particularly susceptible to frequent trading because time zone differences among international stock markets can allow a shareholder engaging in frequent trading to exploit fund share prices that may be based on closing prices of foreign securities established some time before the fund calculates its own share price. Funds, including the Series, that invest in certain fixed-income securities, such as high-yield bonds or certain asset-backed securities, may also constitute an effective vehicle for a shareholder's frequent trading strategy.

The Board has adopted policies and procedures designed to discourage or prevent frequent trading activities by Series shareholders. In an effort to prevent such practices, the Series' Transfer Agent monitors trading activity on a daily basis. The Series has implemented a trading policy that limits the number of times a shareholder may purchase Series shares or exchange into the Series and then sell those shares within a specified period of time (a "round-trip transaction") as established by the Series' Chief Compliance Officer (CCO). The CCO is authorized to set and modify the parameters of the trading policy at any time as required to prevent the adverse impact of frequent trading on Series shareholders. The CCO has defined frequent trading as one or more round-trip transactions in shares of the Series within a 30-day period. A second round-trip within 60 days will begin a warning period that will remain in effect for 90 days. If additional purchase activity is initiated during the warning period, the purchase activity will be cancelled. In addition, if two round-trips have already been completed within the past 90 days, a trading suspension will be placed on the account and will remain in effect for 90 days. Exceptions to the trading policy will not normally be granted. Transactions in the Prudential money market funds and the Dryden Ultra Short Bond Fund are excluded from this policy.

The Series reserves the right to reject or cancel, without prior notice, all additional purchases or exchanges into the Series by a shareholder who has violated this policy. Moreover, the Series may direct a broker-dealer or other intermediary to block a shareholder account from future trading in the Series. The Transfer Agent will monitor trading activity over $25,000 per account on a daily basis for a rolling 30-day period. If

How to Buy, Sell and
Exchange Shares of the Series

a purchase into the Series is rejected or cancelled for violations of the trading policy, the shareholder will receive a return of the purchase amount.

If the Series is offered to qualified plans on an omnibus basis or if Series shares may be purchased through other omnibus arrangements ("Intermediaries"), Intermediaries maintain the individual beneficial owner records and submit to the Series only aggregate orders combining the transactions of many beneficial owners. The Series itself generally cannot monitor trading by particular beneficial owners. The Series communicates to Intermediaries in writing that it expects the Intermediaries to handle orders consistently with the Series' policies as set forth in the Series' prospectus and SAI on transfers by beneficial owners. Intermediaries may impose different or stricter restrictions on transfers by beneficial owners. Consistent with the restrictions described above, investments in the Series through retirement programs administered by Prudential Retirement will be similarly identified for frequent purchases and redemptions and appropriately restricted.

The Transfer Agent also reviews the aggregate net flows in excess of one million dollars. In those cases, the trade detail is reviewed to determine if any of the activity relates to previously identified policy offenders. In cases of omnibus orders, the Intermediary may be contacted by the Transfer Agent to obtain additional information. The Transfer Agent has the authority to cancel all or a portion of the trade if the information reveals that the activity relates to previously identified policy offenders. In that case, the shareholder will receive a return of the purchase amount. Where appropriate, the Transfer Agent may request that the Intermediary block a financial adviser or client from accessing the Series. If necessary, the Series may be removed from a particular Intermediary's platform.

Shareholders seeking to engage in frequent trading activities may use a variety of strategies to avoid detection and, despite the efforts of the Series to prevent such trading, there is no guarantee that the Series, the Transfer Agent or Intermediaries will be able to identify these shareholders or curtail their trading practices. The Series does not have any arrangements intended to permit trading of its shares in contravention of the policies described above.

Payments to Financial Services Firms

activities in connection with the sale of Series shares. Revenue sharing payments may be used by financial services firms in a variety of ways, including defraying costs incurred by the firms to educate their registered representatives about the Series, as well as defraying costs incurred by the firms in providing or facilitating shareholder recordkeeping as well as the servicing or maintenance of shareholder accounts.

In exchange for revenue sharing payments, the Series may receive placement on a financial service firm's preferred or recommended product list. Financial services firms and registered representatives participating in a revenue sharing program may receive greater compensation for selling shares of the Series than for selling other mutual funds, and your individual registered representative may receive some or all of the revenue sharing amounts paid to the firm that employs him or her. Revenue sharing payments may provide an incentive for financial services firms and their registered representatives to recommend or sell shares of the Series to you and in doing so may create conflicts of interest between the firms' financial interests and their duties to customers. In exchange for revenue sharing payments, the Series also may receive preferred access to registered representatives of a financial services firm (for example, the ability to make presentations in branch offices or at conferences) or preferred access to customers of the financial services firm (for example, the ability to advertise to the firm's customers).

Payments under revenue sharing arrangements are made out of the Manager's or Distributor's own resources and without additional direct cost to the Series or its shareholders. Revenue sharing payments may be in addition to the sales charges (including Rule 12b-1 fees) or other amounts paid by the Series, which are also used to compensate financial services firms and their registered representatives for the marketing and distribution of the Series.

Revenue sharing payments are usually calculated based on a percentage of Series sales and/or Series assets attributable to a particular financial services firm. Revenue sharing payments may also be based on other criteria or factors, such as a percentage of a registered representative's charges applicable to the sale of Series shares, a networking fee based on the number of accounts at the firm holding shares of the Series, a periodic flat fee for set-up and maintenance of the Series on the computer systems of a financial services firm, or a flat fee for marketing services, such as access to registered representatives. Specific payment formulas are negotiated based on a number of factors including, but not limited to, reputation in the industry, ability to attract and retain assets, target markets, customer relationships and scope and quality of services provided. The amount of revenue sharing also may vary based on the class of shares purchased.

No one factor is determinative of the type or amount of additional compensation to be provided. Please contact your financial services provider for details about any revenue sharing payments it may receive.

How to Buy, Sell and
Exchange Shares of the Series

TELEPHONE REDEMPTIONS OR EXCHANGES

You may redeem your shares of the Fund if the proceeds of the redemption do not exceed $100,000 or exchange your shares in any amount by calling the Fund at (800) 225-1852 before 4:00 p.m. New York time. You will receive a redemption or exchange amount based on that day's NAV. Certain restrictions apply; please see the section entitled "How to Sell Your Shares - Restrictions on Sales" for additional information. In the event that regular trading on the NYSE closes before 4:00 p.m. New York time, you will receive the following day's NAV if your order to sell or exchange is received after the close of regular trading on the NYSE.

The Transfer Agent will record your telephone instructions and request specific account information before redeeming or exchanging shares. The Fund will not be liable for losses due to unauthorized or fraudulent telephone instructions if it follows instructions that it reasonably believes are made by the shareholder. If the Fund does not follow reasonable procedures, it may be liable.

In the event of drastic economic or market changes, you may have difficulty in redeeming or exchanging your shares by telephone. If this occurs, you should consider redeeming or exchanging your shares by mail or through your broker.

The telephone redemption and exchange procedures may be modified or terminated at any time. If this occurs, you will receive a written notice from the Fund.

EXPEDITED REDEMPTION PRIVILEGE

If you have selected the Expedited Redemption Privilege, you may have your redemption proceeds sent directly to your bank account. Expedited redemption requests may be made by telephone or letter, must be received by the Fund prior to 4:00 p.m. New York time, to receive a redemption amount based on that day's NAV and are subject to the terms and conditions regarding the redemption of shares. In the event that regular trading on the NYSE closes before 4:00 p.m. New York time, you will receive the following day's NAV if your order to sell is received after the close of regular trading on the NYSE. For more information, see "Purchase, Redemption and Pricing of Fund Shares - Sale of Shares - Expedited Redemption Privilege," in the SAI. The Expedited Redemption Privilege may be modified or terminated at any time without notice.

Financial Highlights

The financial highlights below are intended to help you evaluate the financial performance of the Series for the past five fiscal years. The total return in each chart represents the rate that a shareholder would have earned (or lost) on an investment in that share class of the Series, assuming investment at the start of the period and reinvestment of all dividends and other distributions. The information is for each share class for the periods indicated.

A copy of the Series' annual report, along with the Series' audited financial statements and the report of the independent registered public accounting firm, is available, upon request, at no charge, as described on the back cover of this prospectus.

The financial highlights for the fiscal years ended August 31, 2005 and 2004 were derived from the financial statements audited by KPMG LLP, an independent registered public accounting firm, whose reports on those financial statements were unqualified. The financial highlights for the periods ending prior to August 31, 2004 were audited by another independent registered public accounting firm whose reports on those financial statements were unqualified.

Financial Highlights

Class A Shares (fiscal years ended 8-31)

Per Share Operating Performance	2005			2004			2003			2002^(b)			2001
Net asset value, beginning of year	$	11.97		$	11.95		$	12.30		$	12.36		$	11.78
Income from investment operations:
Net investment income		.46			.47			.51			.53			.56
Net realized and unrealized gain (loss) on investment transactions		.12			.20			(.27	)		.05			.58
Total from investment operations		.58			.67			.24			.58			1.14
Less Distributions:
Dividends from net investment income		(.46	)		(.47	)		(.51	)		(.53	)		(.56	)
Distributions from net realized gains		(.33	)		(.18	)		(.08	)		(.11	)		-
Total distributions		(.79	)		(.65	)		(.59	)		(.64	)		(.56	)
Net asset value, end of year	$	11.76		$	11.97		$	11.95		$	12.30		$	12.36
Total return^(a)		5.05	%		5.75	%		2.02	%		4.92	%		9.91	%
Ratios/Supplemental Data
Net assets, end of year (000)	$	82,726		$	89,239		$	96,409		$	102,729		$	103,368
Average net assets (000)	$	85,811		$	94,033		$	103,428		$	102,429		$	99,324
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees^(c)		1.06	%		1.04	%		.97	%		.97	%		.98	%
Expenses, excluding distribution and service (12b-1) fees		.81	%		.79	%		.72	%		.72	%		.73	%
Net investment income		3.94	%		3.94	%		4.22	%		4.38	%		4.66	%
For Class A, B, C and Z shares:
Portfolio turnover rate		13	%		74	%		63	%		30	%		48	%

(a) Total return does not consider the effect of sales loads. Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each year reported, and includes reinvestment of dividends and distributions.

(b) Effective September 1, 2001, the Series has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended August 31, 2002 was to increase net investment income and decrease net realized and unrealized gain (loss) per share by less than $.005 and increase the ratio of net investment income from 4.37% to 4.38%. Per share amounts and ratios for the years ended prior to August 31, 2002 have not been restated to reflect this change in presentation.

(c) The distributor of the Fund contractually agreed to limit its distribution and service (12b-1) fees to .25 of 1% on the average daily net assets of the Class A shares.

Class B Shares (fiscal years ended 8-31)

Per Share Operating Performance	2005			2004			2003			2002^(b)			2001
Net asset value, beginning of year	$	11.97		$	11.95		$	12.30		$	12.36		$	11.78
Income from investment operations:
Net investment income		.43			.44			.48			.50			.53
Net realized and unrealized gain (loss) on investment transactions		.12			.20			(.27	)		.05			.58
Total from investment operations		.55			.64			.21			.55			1.11
Less Distributions:
Dividends from net investment income		(.43	)		(.44	)		(.48	)		(.50	)		(.53	)
Distributions from net realized gains		(.33	)		(.18	)		(.08	)		(.11	)		-
Total distributions		(.76	)		(.62	)		(.56	)		(.61	)		(.53	)
Net asset value, end of year	$	11.76		$	11.97		$	11.95		$	12.30		$	12.36
Total return^(a)		4.79	%		5.48	%		1.76	%		4.67	%		9.63	%
Ratios/Supplemental Data
Net assets, end of year (000)	$	12,689		$	17,666		$	21,157		$	25,787		$	27,554
Average net assets (000)	$	15,020		$	19,723		$	23,862		$	26,110		$	28,540
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees		1.31	%		1.29	%		1.22	%		1.22	%		1.23	%
Expenses, excluding distribution and service (12b-1) fees		.81	%		.79	%		.72	%		.72	%		.73	%
Net investment income		3.69	%		3.69	%		3.97	%		4.13	%		4.41	%

(a) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each year reported, and includes reinvestment of dividends and distributions.

(b) Effective September 1, 2001, the Series has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended August 31, 2002 was to increase net investment income and decrease net realized and unrealized gain (loss) per share by less than $.005 and no effect on the ratio of net investment income. Per share amounts and ratios for the years ended prior to August 31, 2002 have not been restated to reflect this change in presentation.

Financial Highlights

Class C Shares (fiscal years ended 8-31)

Per Share Operating Performance	2005			2004			2003			2002^(b)			2001
Net asset value, beginning of year	$	11.97		$	11.95		$	12.30		$	12.36		$	11.78
Income from investment operations:
Net investment income		.40			.41			.45			.47			.50
Net realized and unrealized gain (loss) on investment transactions		.12			.20			(.27	)		.05			.58
Total from investment operations		.52			.61			.18			.52			1.08
Less Distributions:
Dividends from net investment income		(.40	)		(.41	)		(.45	)		(.47	)		(.50	)
Distributions from net realized gains		(.33	)		(.18	)		(.08	)		(.11	)		-
Total distributions		(.73	)		(.59	)		(.53	)		(.58	)		(.50	)
Net asset value, end of year	$	11.76		$	11.97		$	11.95		$	12.30		$	12.36
Total return^(a)		4.53	%		5.22	%		1.51	%		4.41	%		9.36	%
Ratios/Supplemental Data
Net assets, end of year (000)	$	1,447		$	1,736		$	2,518		$	2,098		$	1,519
Average net assets (000)	$	1,544		$	2,148		$	2,271		$	1,778		$	1,226
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees^(c)		1.56	%		1.54	%		1.47	%		1.47	%		1.48	%
Expenses, excluding distribution and service (12b-1) fees		.81	%		.79	%		.72	%		.72	%		.73	%
Net investment income		3.44	%		3.45	%		3.74	%		3.89	%		4.14	%

(b) Effective September 1, 2001, the Series has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended August 31, 2002 was to increase net investment income and decrease net realized and unrealized gain (loss) per share by less than $.005 and no effect on the ratio of net investment income. Per share amounts and ratios for the years ended prior to August 31, 2002 have not been restated to reflect this change in presentation.

(c) The distributor of the Fund contractually agreed to limit its distribution and service (12b-1) fees to .75 of 1% of the average daily net assets of the Class C shares.

Class Z Shares (fiscal years ended 8-31)

Per Share Operating Performance	2005			2004			2003			2002^(b)			2001
Net asset value, beginning of year	$	11.97		$	11.95		$	12.30		$	12.37		$	11.79
Income from investment operations:
Net investment income		.49			.50			.54			.56			.59
Net realized and unrealized gain (loss) on investment transactions		.12			.20			(.27	)		.04			.58
Total from investment operations		.61			.70			.27			.60			1.17
Less Distributions:
Dividends from net investment income		(.49	)		(.50	)		(.54	)		(.56	)		(.59	)
Distributions from net realized gains		(.33	)		(.18	)		(.08	)		(.11	)		-
Total distributions		(.82	)		(.68	)		(.62	)		(.67	)		(.59	)
Net asset value, end of year	$	11.76		$	11.97		$	11.95		$	12.30		$	12.37
Total return^(a)		5.30	%		6.01	%		2.27	%		5.09	%		10.17	%
Ratios/Supplemental Data
Net assets, end of year (000)	$	1,990		$	4,517		$	5,087		$	3,832		$	2,298
Average net assets (000)	$	3,118		$	4,805		$	4,300		$	2,778		$	1,708
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees		.81	%		.79	%		.72	%		.72	%		.73	%
Expenses, excluding distribution and service (12b-1) fees		.81	%		.79	%		.72	%		.72	%		.73	%
Net investment income		4.18	%		4.19	%		4.49	%		4.64	%		4.90	%

(a) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase on the first day and a sale on the last day of each year reported, and includes reinvestment of dividends and distributions.

(b) Effective September 1, 2001, the Series has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended August 31, 2002 was to increase net investment income and decrease net realized and unrealized gains per share by $.005 and no effect on the ratio of net investment income. Per share amounts and ratios for the years ended prior to August 31, 2002 have not been restated to reflect this change in presentation.

(This page has been left blank intentionally.)

Appendix A: Description of Security Ratings

MOODY'S INVESTORS SERVICE, INC. (MOODY'S)

Long-Term Ratings

Aaa: Obligations rated Aaa are judged to be of the highest quality, with minimal credit risk.

Aa: Obligations rated Aa are judged to be of high quality and are subject to very low credit risk.

A: Obligations rated A are considered upper-medium grade and are subject to low credit risk.

Baa: Obligations rated Baa are subject to moderate credit risk. They are considered medium-grade and as such may possess certain speculative characteristics.

Ba: Obligations rated Ba are judged to have speculative elements and are subject to substantial credit risk.

B: Obligations rated B are considered speculative and are subject to high credit risk.

Caa: Obligations rated Caa are judged to be of poor standing and are subject to very high credit risk.

Ca: Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest.

C: Obligations rated C are the lowest rated class of bonds and are typically in default, with little prospect for recovery of principal or interest.

Moody's appends numerical modifiers 1, 2 and 3 to each generic rating classification from Aa through Baa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category.

Short-Term Debt Ratings

Moody's short-term ratings are opinions of the ability of issuers to honor short-term financial obligations. Those obligations have an original maturity not exceeding thirteen months, unless explicitly noted.

P-1: Issuers (or supporting institutions) rated Prime-1 have a superior ability to repay short-term debt obligations.

A-1

Appendix A: Description of Security Ratings

P-2: Issuers (or supporting institutions) rated Prime-2 have a strong ability to repay short-term debt obligations.

P-3: Issuers (or supporting institutions) rated Prime-3 have an acceptable ability to repay short-term obligations.

NP: Issuers (or supporting institutions) rated Not Prime do not fall within any of the Prime rating categories.

Canadian issuers rated P-1 or P-2 have their short-term ratings enhanced by the senior-most long-term rating of the issuer, its guarantor or support-provider.

STANDARD & POOR'S RATINGS SERVICES (S&P)

Long-Term Issue Credit Ratings

AAA: An obligation rated AAA has the highest rating assigned by S&P . The obligor's capacity to meet its financial commitment on the obligation is extremely strong.

AA: An obligation rated AA differs from the highest rated obligations only in small degree. The obligor's capacity to meet its financial commitment on the obligation is very strong.

A: An obligation rated A is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rated categories. However, the obligor's capacity to meet its financial commitment on the obligation is still strong.

BBB: An obligation rated BBB exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet the financial commitment on the obligation.

Obligations rated BB, B, CCC, CC, and C are regarded as having significant speculative characteristics. BB indicates the least degree of speculation and C the highest. While such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions.

BB: An obligation rated BB is less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation.

A-2

B: An obligation rated B is more vulnerable to nonpayment than obligations rated BB, but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor's capacity or willingness to meet its financial commitment on the obligation.

CCC: An obligation rated CCC is currently vulnerable to nonpayment, and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation.

CC: An obligation rated CC is currently highly vulnerable to nonpayment.

C: A subordinated debt or preferred stock obligation rated C is CURRENTLY HIGHLY VULNERABLE to nonpayment. The C rating may be used to cover a situation where a bankruptcy petition has been filed or similar action taken, but payments on this obligation are being continued. A C also will be assigned to a preferred stock issue in arrears on dividends or sinking fund payments, but that is currently paying.

D: An obligation rated D is in payment default. The D rating category is used when payments on an obligation are not made on the date due even if the applicable grace period has not expired, unless S&P believes that such payments will be made during such grace period. The D rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized.

Plus (+) or Minus (-): The ratings from AA to BBB may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.

r: This symbol is attached to the ratings of instruments with significant noncredit risks. It highlights risks to principal or volatility of expected returns which are not addressed in the credit rating.

N.R: This indicates that no rating has been requested, that there is insufficient information on which to base a rating, or that S&P does not rate a particular obligation as a matter of policy.

Short-Term Issue Credit Paper Ratings

A S&P short-term issue credit rating is a current assessment of the likelihood of timely payment of debt having an original maturity of no more than three years.

A-1: A short-term obligation rated A-1 is rated in the highest category by S&P. The obligor's capacity to meet its financial commitment on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates

A-3

Appendix A: Description of Security Ratings

that the obligor's capacity to meet its financial commitment on these obligations is extremely strong.

A-2: A short-term obligation rated A-2 is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor's capacity to meet its financial commitment on the obligation is satisfactory.

A-3: A short-term obligation rated A-3 exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.

B: A short-term obligation rated B is regarded as having significant speculative characteristics. The obligor currently has the capacity to meet its financial commitment on the obligation; however, it faces major ongoing uncertainties which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation.

C: A short-term obligation rated C is currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation.

D: A short-term obligation rated D is in payment default. The D rating category is used when payments on an obligation are not made on the date due even if the applicable grace period has not expired, unless S&P believes that such payments will be made during such grace period. The D rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized.

FITCH RATINGS

International Long-Term Credit Ratings

Investment Grade

AAA: Highest credit quality. AAA ratings denote the lowest expectation of credit risk. They are assigned only in case of exceptionally strong capacity for timely payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events.

AA: Very high credit quality. AA ratings denote a very low expectation of credit risk. They indicate very strong capacity for timely payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events.

A-4

A: High credit quality. A ratings denote a low expectation of credit risk. The capacity for timely payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to changes in circumstances or in economic conditions that is the case for higher ratings.

BBB: Good credit quality. BBB ratings indicate that there is currently a low expectation of credit risk. The capacity for timely payment of financial commitments is considered adequate, but adverse changes in circumstances and in economic conditions are more likely to impair this capacity. This is the lowest investment-grade category.

Speculative Grade

BB: Speculative. BB ratings indicate that there is a possibility of credit risk developing, particularly as the result of adverse economic change over time; however, business or financial alternatives may be available to allow financial commitments to be met. Securities rated in this category are not investment grade.

B: Highly speculative. B ratings indicate that significant credit risk is present, but a limited margin of safety remains. Financial commitments are currently being met; however, capacity for continued payment is contingent upon a sustained, favorable business and economic environment.

CCC, CC, C: High default risk. Default is a real possibility. Capacity for meeting financial commitments is solely reliant upon sustained, favorable business or economic developments. A CC rating indicates that default of some kind appears probable. C ratings signal imminent default.

DDD, DD, D: Default. The ratings of obligations in this category are based on their prospects for achieving partial or full recovery in a reorganization or liquidation of the obligor. While expected recovery values are highly speculative and cannot be estimated with any precision, the following serve as general guidelines. DDD obligations have the highest potential for recovery, around 90%-100% of outstanding amounts and accrued interest. DD indicates potential recoveries in the range of 50%-90% and D the lowest recovery potential, i.e., below 50%. Entities rated in this category have defaulted on some or all of their obligations.

Entities rated DDD have the highest prospect for resumption of performance or continued operation with or without a formal reorganization process. Entities rated DD and D are generally undergoing a formal reorganization or liquidation process; those rated DD are likely to satisfy a higher portion of their outstanding obligations, while entities rated D have a poor prospect of repaying all obligations.

A-5

Appendix A: Description of Security Ratings

Notes: "+" or "-" may be appended to a rating to denote relative status within major rating categories. Such suffixes are not added to the AAA category or to categories below CCC.

Short-Term Debt Ratings

A short-term rating has a time horizon of less than 12 months for most obligations, or up to three years for U.S. public finance securities, and thus places greater emphasis on the liquidity necessary to meet financial commitments in a timely manner.

F1: Highest credit quality. Indicates the strongest capacity for timely payment of financial commitments: may have an added "+" to denote any exceptionally strong credit feature.

F2: Good credit quality. A satisfactory capacity for timely payment of financial commitments, but the margin of safety is not as great as in the case of the higher ratings.

F3: Fair credit quality. The capacity for timely payment of financial commitments is adequate; however, near-term adverse changes could result in a reduction to non-investment grade.

B: Speculative. Minimal capacity for timely payment of financial commitments, plus vulnerability to near-term adverse changes in financial and economic conditions.

C: High default risk. Default is a real possibility. Capacity for meeting financial commitments is solely reliant upon a sustained, favorable business and economic environment.

D: Default. Denotes actual or imminent payment default.

NR: Indicates that Fitch does not rate the specific issue.

Withdrawn: A rating is withdrawn when Fitch Ratings deems the amount of information available to be inadequate for rating purposes, or when an obligation matures, is called, or refinanced.

FitchAlert: Ratings are placed on FitchAlert to notify investors of an occurrence that is likely to result in a rating change and the likely direction of such change. These are designated as "Positive," indicating a potential upgrade, "Negative," for potential downgrade, or "Evolving," where ratings may be raised or lowered. FitchAlert is relatively short term, and should be resolved within 12 months.

A-6

Ratings Outlook: An outlook is used to describe the most likely direction of any rating change over the intermediate term. It is described as "Positive" or "Negative." The absence of a designation indicates a stable outlook.

Plus (+) or Minus (-): Plus and minus signs may be appended to a rating to denote relative status within major ratings categories. Such suffixes are not added to the AAA long-term rating category or to short-term ratings other than F1.

A-7

Notes

FOR MORE INFORMATION

Please read this prospectus before you invest in the Fund and keep it for future reference. For information or shareholder questions contact:

n MAIL

JennisonDryden Mutual
Fund Services LLC
PO Box 8098
Philadelphia, PA 19176

n TELEPHONE

(800) 225-1852
(973) 367-3529 (from
outside the U.S.)

n WEBSITE

www.jennisondryden.com

E-DELIVERY

To receive your mutual fund documents on-line, go to www.icsdelivery.com/prudential/funds and enroll. Instead of receiving printed documents by mail, you will receive notification via e-mail when new materials are available. You can cancel your enrollment or change your e-mail address at any time by clicking on the change/cancel enrollment option at the icsdelivery website address.

n OUTSIDE BROKERS SHOULD CONTACT:

Prudential Investment
Management Services LLC
PO Box 8310
Philadelphia, PA 19176

n TELEPHONE

(800) 778-8769

You can also obtain copies of Fund documents from the SEC as follows:

n MAIL

Securities and Exchange Commission
Public Reference Section
Washington, DC 20549-0102

n ELECTRONIC REQUEST

publicinfo@sec.gov
Note: The SEC charges a fee to copy documents

n IN PERSON

Public Reference Room in Washington, DC
For hours of operation and location,
call (202) 942-8090

n VIA THE INTERNET

on the EDGAR database at http://www.sec.gov

Additional information about the Series' investments is included in the Annual and Semiannual Reports. These reports and the Statement of Additional Information contain additional information. Shareholders may obtain free copies of the SAI, Annual Report and Semiannual Report as well as other information about the Series and may make other shareholder inquiries through the telephone number, address and website listed above.

n STATEMENT OF
ADDITIONAL INFORMATION (SAI)

(incorporated by reference into this prospectus)

n ANNUAL REPORT

(contains a discussion of the market conditions and investment strategies that significantly affected the Fund's performance during the last fiscal year)

n SEMIANNUAL REPORT

Dryden California Municipal Fund/California Series

Share Class

Nasdaq

PRMCX

PBCMX

PCCSX

PZCSX

CUSIP

262433881

262433873

262433865

262433857

MF116A The Investment Company Act File Number for the Dryden California Municipal Fund is 811-4024.

Dryden California Municipal Fund
California Income Series

OCTOBER 28, 2005

PROSPECTUS

FUND TYPE

Municipal bond

OBJECTIVE

Maximize current income that is exempt from California state and federal income taxes consistent with the preservation of capital

JennisonDryden is a service mark of The Prudential Insurance Company of America, Newark, NJ and its affiliates.

Table of Contents

	1			Risk/Return Summary

	1			Investment Objective and Principal Strategies

	2			Principal Risks

	4			Evaluating Performance

	6			Fees and Expenses

	8			How the Series Invests

	8			Investment Objective and Policies

	10			Other Investments and Strategies

	13			Investment Risks

	19			How the Series is Managed

	19			Board of Trustees

	19			Manager

	20			Subadviser

	21			Distributor

	21			Disclosure of Portfolio Holdings

	22			Series Distributions and Tax Issues

	22			Distributions

	23			Tax Issues

	24			If You Sell or Exchange Your Shares

	26			How to Buy, Sell and Exchange Shares of the Series

	26			How to Buy Shares

	36			How to Sell Your Shares

	38			How to Exchange Your Shares

	42			Telephone Redemptions or Exchanges

	43			Expedited Redemption Privilege

	44			Financial Highlights

	45			Class A Shares

	46			Class B Shares

	47			Class C Shares

	48			Class Z Shares

	A-1			Description of Security Ratings

				For More Information (Back Cover)

Risk/Return Summary

This section highlights key information about California Income Series (the Series) of the Dryden California Municipal Fund (the Fund). Additional information follows this summary.

INVESTMENT OBJECTIVE AND PRINCIPAL STRATEGIES

Our investment objective is to maximize current income that is exempt from California state and federal income taxes, consistent with the preservation of capital. This means we invest primarily in California state and local municipal bonds, which are debt obligations or fixed income securities, including notes, commercial paper and other securities, as well as obligations of other issuers (such as issuers located in Puerto Rico, the Virgin Islands and Guam) that pay interest income that is exempt from those taxes (collectively called "California obligations"). In conjunction with our investment objective, we may invest in debt obligations with the potential for capital gain.

As a fundamental policy of the Series, we invest, under normal circumstances, so that at least 80% of the income from the Series' investments will be exempt from California state and federal income taxes or the Series will invest at least 80% of its investable assets in California obligations. The Series' investments permitted by this policy may include certain municipal bonds, the interest on which is subject to the federal alternative minimum tax (AMT). The term "investable assets" in this prospectus refers to the Series' net assets plus any borrowings for investment purposes. The Series' investable assets will be less than its total assets to the extent that it has borrowed money for non-investment purposes, such as to meet anticipated redemptions. We normally invest at least 70% of the Series' investable assets in "investment grade" debt obligations, which are debt obligations rated at least BBB by Standard & Poor's Ratings Group (S&P), Baa by Moody's Investors Service (Moody's), or comparably rated by another major rating service, and unrated debt obligations that we believe are comparable in quality. Debt obligations rated in the lowest of the "investment grade" quality grades (BBB/Baa) have certain speculative characteristics. We may invest up to 30% of the Series' assets in "non-investment grade" or high-yield municipal debt obligations, commonly known as junk bonds. The Series may invest in California obligations the interest and/or principal payments on which are insured by the bond issuers or other parties. The dollar-weighted average maturity of the Series will normally be between 10 and 20 years. As of August 31, 2005, the Series' weighted average maturity was 14.8 years.

While we make every effort to achieve our objective, we can't guarantee success.

Risk/Return Summary

PRINCIPAL RISKS

Although we try to invest wisely, all investments involve risk. The securities in which the Series invests are generally subject to the risk that the issuer may be unable to make principal and interest payments when they are due, as well as the risk that the securities may lose value because interest rates rise or because there is a lack of confidence in the issuer or in the bond's insurer. Bonds with longer maturity dates typically produce higher yields and are subject to greater price fluctuations as a result of changes in interest rates than bonds with shorter maturity dates. Bonds rated Baa by Moody's or BBB by S&P have speculative characteristics and are subject to a greater degree of market fluctuation and greater risk that the issuer may be unable to make principal and interest payments when they are due than higher-quality securities. Since the Series may invest in lower-rated bonds, commonly known as junk bonds, there is a higher risk of default of payment of principal and interest. Furthermore, junk bonds tend to be less liquid than higher-rated securities. Therefore, an investment in the Series may not be appropriate for short-term investing.

Municipal bonds and, in particular, municipal leases may be subject to the risk that the state or municipality may not set aside funds in future budgets to make the bond or lease payments.

illustration, although California has a relatively diversified economy, California has concentrations in the computer services, software design, motion pictures and high technology manufacturing industries. The Series, therefore, may be more susceptible to developments affecting those industries than a municipal bond fund that invests in obligations of several states. This example illustrates just one of the risks of investing in California obligations. For more detailed information on the risks of investing in California obligations, see "Description of the Fund, Its Investments and Risks" in the Statement of Additional Information.

An investment in the Series is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.

Risk/Return Summary

EVALUATING PERFORMANCE

Annual Returns* (Class A shares)

BEST QUARTER: 6.72% (1st quarter of 1995) WORST QUARTER: –2.40% (2nd quarter of 2004)

* These annual total returns do not include sales charges. If the sales charges were included, the annual total returns would be lower than those shown. Without the distribution and service (12b-1) and management fee waivers, the annual total returns would have been lower, too. The return of the Class A shares from 1-1-05 to 9-30-05 was 3.28%.

Average Annual Total Returns¹ (as of 12/31/04)

Return Before Taxes	One Year			Five Years			Ten Years					Since Inception
Class B shares		–1.31	%		6.25	%		6.43	%	(6.35	)		5.49	%	(5.38	)	(since 12-7-93)
Class C shares		2.42			6.14			6.16		(6.08	)		5.60		(5.51	)	(since 8-1-94)
Class Z shares		4.30			6.95					N/A			6.12		(6.09	)	(since 9-18-96)
Class A Shares
Return Before Taxes		–0.22			5.80			6.32		(6.24	)		6.69		(6.48	)	(since 12-3-90)
Return After Taxes on Distributions²		–0.22			5.74			6.29		(6.21	)		6.63		(6.41	)	(since 12-3-90)
Return After Taxes on Distributions and Sale of Series Shares^2,3		1.23			5.59			6.16		(6.08	)		6.53		(6.31	)	(since 12-3-90)
Index and Average
Lehman Muni Bond Index		4.48			7.20			7.06										-	⁴
Lipper Average		4.34			6.51			6.42										-	⁵

2 After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Series shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown only for Class A shares. After-tax returns for other classes will vary due to differing sales charges and expenses. Past performance, before and after taxes, does not mean that the Series will achieve similar results in the future.

4 The Lehman Brothers Municipal Bond Index (Lehman Muni Bond Index) - an unmanaged index of over 39,000 long-term investment-grade municipal bonds - gives a broad look at how long-term investment-grade municipal bonds have performed. Index returns do not include the effect of any sales charges, mutual fund operating expenses or taxes. These returns would be lower if they included the effect of sales charges, mutual fund operating expenses or taxes. The Lehman Muni Bond Index returns since the inception of each class are 6.96% for Class A, 6.04% for Class B, 6.50% for Class C and 6.29% for Class Z shares. Source: Lehman Brothers.

5 The Lipper Average is based on the average return of all mutual funds in the Lipper California Municipal Debt Funds Category. It reflects deductions for mutual fund operating expenses, but does not include the effect of sales charges or taxes. These returns would be lower if they included the effect of sales charges or taxes. Lipper returns since the inception of each class are 6.44% for Class A, 5.38% for Class B, 5.80% for Class C and 5.47% for Class Z shares. Source: Lipper Inc.

Risk/Return Summary

FEES AND EXPENSES

Shareholder Fees¹ (paid directly from your investment)

Class A

Class B

Class C

Class Z

Maximum sales charge (load) imposed on
purchases (as a percentage of offering price)

4.00

None

Maximum deferred sales charge (load) (as a
percentage of the lower of original purchase
price or sale proceeds)

%²

%³

%⁴

None

Maximum sales charge (load) imposed on
reinvested dividends and other distributions

None

Redemption fees

None

Exchange fee

None

Annual Series Operating Expenses (deducted from Series assets)

	Class A			Class B			Class C			Class Z
Management fees		.50	%		.50	%		.50	%		.50	%
+ Distribution and service (12b-1) fees		.30	%⁵		.50	%		1.00	%⁵		None
+ Other expenses		.18	%		.18	%		.18	%		.18	%
= Total annual Series operating expenses		.98	%		1.18	%		1.68	%		.68	%
– Fee waiver or expense reimbursement		.05	%⁵		None			.25	%⁵		None
= Net annual Series operating expenses		.93	%		1.18	%		1.43	%		.68	%

1 Your broker may charge you a separate or additional fee for purchases and sales of shares.

4 The CDSC for Class C shares is 1% for shares redeemed within 12 months of purchase.

Example

	One Year		Three Years		Five Years		Ten Years
Class A shares	$	491	$	695	$	915	$	1,549
Class B shares		620		675		749		1,350
Class C shares		246		505		889		1,966
Class Z shares		69		218		379		847

You would pay the following expenses on the same investment if you did not sell your shares:

	One Year		Three Years		Five Years		Ten Years
Class A shares	$	491	$	695	$	915	$	1,549
Class B shares		120		375		649		1,350
Class C shares		146		505		889		1,966
Class Z shares		69		218		379		847

How the Series Invests

INVESTMENT OBJECTIVE AND POLICIES

The Series' investment objective is to maximize current income that is exempt from California state and federal income taxes, consistent with the preservation of capital. In conjunction with its investment objective, the Series may invest in debt obligations with the potential for capital gain. While we make every effort to achieve our objective, we can't guarantee success.

In pursuing the Series' objective, we invest primarily in California obligations, including California state and local municipal bonds as well as obligations of other issuers (such as issuers located in Puerto Rico, the Virgin Islands and Guam) that pay interest income that is exempt from California state and federal income taxes. As a fundamental policy of the Series, we invest, under normal circumstances, so that at least 80% of the income from the Series' investments will be exempt from those taxes or the Series will have at least 80% of its investable assets invested in California obligations. The Series, however, may hold certain private activity bonds, which are municipal bonds, the interest on which is subject to the federal alternative minimum tax (AMT). See "Series Distributions and Tax Issues - Distributions."

Municipal bonds include general obligation bonds and revenue bonds. General obligation bonds are obligations supported by the credit of an issuer that has the power to tax and are payable from that issuer's general revenues and not from any specific source. Revenue bonds, on the other hand, are payable from revenues derived from a particular source or project.

We normally invest at least 70% of the Series' investable assets in "investment grade" debt obligations, which are obligations rated at least BBB by S&P, Baa by Moody's, or comparably rated by another major rating service, and unrated debt obligations that we believe are comparable in quality. Bonds rated Baa and higher by Moody's or BBB and higher by S&P are considered investment grade, with a range of adequate to very strong capacity for meeting their financial obligations, although debt obligations rated in the lowest of the "investment grade" quality grades (BBB/Baa) have certain speculative characteristics and are riskier than higher-rated debt obligations. We may also invest in municipal bonds the interest and/or principal payments on which are insured by bond issuers or other parties. Generally, the yields on insured bonds are lower than the yields on uninsured bonds of comparable quality. Insurance reduces the insured bond's credit risk and may increase the bond's value. We may also invest

Municipal Bonds

up to 30% of the Series' assets in high-yield municipal debt obligations or junk bonds. Lower-rated bonds tend to offer higher yields, but also offer greater risks, than higher-rated bonds. If the rating of a debt obligation is downgraded after the Series purchases it (or if the debt obligation is no longer rated), the Series will not have to sell the obligation, but we will take this into consideration in deciding whether the Series should continue to hold the obligation.

Ratings	Percentages of Net Assets
AAA/Aaa		52.9	%
AA/Aa		3.6	%
A/A		10.9	%
BBB/Baa		7.1	%
BBB/Ba		1.4	%
B		0.5	%
Unrated		22.6	%
Other assets in excess of liabilities		1.0	%

The dollar-weighted average maturity of the obligations held by the Series generally ranges between 10 and 20 years.

How the Series Invests

OTHER INVESTMENTS AND STRATEGIES

In addition to the principal strategies, we also may use the following investment strategies to increase the Series' returns or protect its assets if market conditions warrant.

Municipal Lease Obligations

Municipal Asset-Backed Securities

Floating Rate Bonds, Variable Rate Bonds, Inverse Floaters, Secondary Inverse Floaters and Zero Coupon Municipal Bonds

bonds changes when there is a change in the designated rate. Variable rate bonds are municipal bonds that have an interest rate that is adjusted periodically based on the market rate at a specified time. They generally allow the Series to demand full payment of the bond on short notice. At times the Series may receive an amount that may be more or less than the amount paid for the bond. Inverse floaters are municipal bonds with a floating or variable interest rate that moves in the opposite direction of the interest rate on another security or the value of an index. Secondary inverse floaters are municipal asset-backed securities with a floating or variable interest rate that moves in the opposite direction of the interest rate on another security or the value of an index. Zero coupon municipal bonds do not pay interest during the life of the bond. An investor makes money by purchasing the bond at a price that is less than the money the investor will receive when the municipality repays the amount borrowed (face value).

When-Issued and Delayed-Delivery Securities

Derivative Strategies

We may use various derivative strategies to try to improve the Series' returns. We may also use hedging techniques to try to protect the Series' assets. We cannot guarantee that these strategies and techniques will work, that the instruments necessary to implement these strategies and techniques will be available, or that the Series will not lose money. Derivatives - such as futures contracts, options on futures and various types of swaps - involve costs and can be volatile. With derivatives, the investment adviser tries to predict if the underlying investment, whether a security, market index, interest rate, or some other investment, will go up or down at some future date. We may use derivatives to try to reduce risk or to increase return consistent with the Series' overall investment objective. The investment adviser will consider other factors (such as cost) in deciding whether to employ any particular strategy or technique, or use any particular instrument. Any derivatives we may use may not match or offset the Series' underlying positions and could result in losses to the Series that would not otherwise have occurred. Derivatives that involve leverage (borrowing to take advantage of investment opportunities) could magnify losses. If the Series borrows money to purchase securities and those securities decline in value, then the value of the Series' shares will decline faster than if the Series were not leveraged. In addition, interest costs and investment fees relating to leverage may exceed potential investment gains.

How the Series Invests

Futures Contracts and Related Options

The Series may purchase and sell financial futures contracts and related options on financial futures. A futures contract is an exchange-traded agreement to buy or sell a set quantity of an underlying asset at a future date, or to make or receive a cash payment based on the value of a securities index or some other asset on a stipulated future date. The Series may also invest in futures contracts on 10-year interest rate swaps for hedging purposes only. The terms of futures contracts are standardized. In the case of a financial futures contract based upon a broad index, there is no delivery of the securities comprising the underlying index, margin is uniform, a clearing corporation or an exchange is the counterparty and the Series makes daily margin payments based on price movements in the index. An option gives the purchaser the right to buy or sell securities or, in the case of an option on a futures contract, the right to buy or sell a futures contract, in exchange for a premium.

Swap Transactions

The Series may enter into swap transactions. Swap agreements are two-party contracts entered into primarily by institutional investors for periods typically ranging from a few weeks to more than one year. In a standard "swap" transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on particular predetermined investments or instruments, which may be adjusted for an interest factor. There are various types of swaps, including but not limited to, interest rate swaps, total return swaps and index swaps.

For more information about these strategies, see the SAI, "Description of the Fund, Its Investments and Risks - Risks of Hedging and Return Enhancement Strategies."

Temporary Defensive Investments

For more information about these strategies, see the SAI, "Description of the Fund, Its Investments and Risks."

Additional Strategies

The Series also follows certain policies when it borrows money (the Series can currently borrow up to 331/3% of the value of its total assets) and holds illiquid

securities (the Series may hold up to 15% of its net assets in illiquid securities, including securities with legal or contractual restrictions on resale, those without a readily available market and repurchase agreements with maturities longer than seven days). The Series is subject to certain other investment restrictions that are fundamental policies, which means they cannot be changed without shareholder approval. For more information about these restrictions, see the SAI, "Investment Restrictions."

INVESTMENT RISKS

How the Series Invests

Investment Type

*% of Series' Assets*	Risks	Potential Rewards
Municipal bonds Provide at least 80% of Series' income or comprise at least 80% of its assets under normal circumstances	n Concentration risk - the risk that bonds may lose value because of political, economic or other events affecting issuers of California obligations n Credit risk - the risk that the borrower can't pay back the money borrowed or make interest payments (lower for insured and higher rated bonds). The lower a bond's quality, the higher its potential volatility n Market risk - the risk that bonds will lose value in the market, sometimes rapidly or unpredictably, because interest rates rise or there is a lack of confidence in the borrower or the bond's insurer n Illiquidity risk - the risk that bonds may be difficult to value precisely and sell at the time or price desired, in which case valuation would depend more on the investment adviser's judgment than is generally the case with other types of municipal bonds n Nonappropriation risk - the risk that the state or municipality may not include the bond obligations in future budgets n Tax risk - the risk that federal, state or local income tax rates may decrease, which could decrease demand for municipal bonds, or that a change in law may limit or eliminate exemption of interest on municipal bonds from such taxes	n A source of tax-exempt interest income, except with respect to certain bonds, such as private activity bonds, which are subject to the federal alternative minimum tax (AMT) n If interest rates decline, long-term yields should be higher than money market yields n Bonds have generally outperformed money market instruments over the long term n Most bonds rise in value when interest rates fall

Investment Type (cont'd)

*% of Series' Assets*	Risks	Potential Rewards
Zero coupon municipal bonds Percentage varies; usually less than 40%	n See credit risk, market risk, concentration risk and tax risk n Typically subject to greater volatility and less liquidity in adverse markets than other municipal bonds	n A source of tax-exempt interest income, except with respect to certain bonds, such as private activity bonds, which are subject to the AMT n Value rises faster when interest rates fall

High-yield municipal debt obligations (junk bonds) Up to 30%	n See market risk (particularly high), credit risk (particularly high), illiquidity risk (particularly high) and tax risk n Are generally less secure than higher-quality debt securities	n May offer higher interest income and higher potential gains than higher-grade municipal bonds n Most bonds rise in value when interest rates fall

Municipal lease obligations Percentage varies; usually less than 25%	n See concentration risk, credit risk, market risk, illiquidity risk, nonappropriation risk and tax risk n Abatement risk - the risk that the entity leasing the equipment or facility will not be required to make lease payments because it does not have full use of the equipment or facility	n A source of tax-exempt interest income, except with respect to certain bonds, such as private activity bonds, which are subject to the AMT n If interest rates decline, long-term yields should be higher than money market yields

How the Series Invests

Investment Type (cont'd)

*% of Series' Assets*	Risks	Potential Rewards
Derivatives (including swaps) Percentage varies; usually less than 20%; up to 15% for swaps (other than interest rate swaps)	n The value of derivatives (such as futures, options on futures and various types of swaps) that are used to hedge a portfolio security is determined independently from that security and could result in a loss to the Series when the price movement of a derivative does not correlate with a change in the value of the Series security n Derivatives may not have the intended effects and may result in losses or missed opportunities n The counterparty to a derivatives contract could default n Derivatives can increase share price volatility and derivatives that involve leverage could magnify losses n Certain types of derivatives involve costs to the Series that can reduce returns n May be difficult to value precisely or sell at the time or price desired	n Derivatives could make money and protect against losses if the investment analysis proves correct n One way to manage the Series' risk/return balance is to lock in the value of an investment ahead of time n Derivatives used for return enhancement purposes involve a type of leverage and could generate substantial gains at low cost n Hedges that correlate well with an underlying position can increase or enhance investment income or capital gains at low cost

When-issued and delayed-delivery securities Percentage varies; usually less than 20%	n Value of securities may decrease before delivery occurs n Broker/dealer may become insolvent prior to delivery n Investment losses may exceed potential underlying investment gains n See tax risk	n May magnify underlying investment gains

Investment Type (cont'd)

*% of Series' Assets*	Risks	Potential Rewards
Municipal asset-backed securities Percentage varies; usually less than 15%	n Prepayment risk - the risk that the underlying bonds may be prepaid, partially or completely, generally during periods of falling interest rates, which could adversely affect yield to maturity and could require the Series to reinvest in lower yielding bonds n Credit risk - the risk that the underlying municipal bonds will not be paid by issuers or by credit insurers or guarantors of such instruments. Some municipal asset-backed securities are unsecured or secured by lower-rated insurers or guarantors and thus may involve greater risk n See market risk and tax risk	n A source of tax-exempt interest income, except with respect to certain bonds, such as private activity bonds, which are subject to the AMT n Pass-through instruments provide greater diversification than direct ownership of municipal bonds n May offer higher yield due to their structure

Inverse floaters/secondary inverse floaters Percentage varies; usually less than 15%	n High market risk - risk that inverse floaters will fluctuate in value more dramatically than other debt securities when interest rates change n See credit risk, illiquidity risk and tax risk n Secondary inverse floaters are subject to additional risks of municipal asset-backed securities	n Income generally will increase when interest rates decrease

How the Series Invests

Investment Type (cont'd)

*% of Series' Assets*	Risks	Potential Rewards
Illiquid securities Up to 15% of net assets	n See illiquidity risk	n May offer a more attractive yield or potential for growth than more widely traded securities

Variable/floating rate bonds Percentage varies; usually less than 10%	n Value lags value of fixed-rate securities when interest rates change n See tax risk	n May offer protection against interest rate increases

How the Series is Managed

BOARD OF TRUSTEES

MANAGER

Prudential Investments LLC (PI or the Manager)
Gateway Center Three, 100 Mulberry Street
Newark, NJ 07102

Under a Management Agreement with the Fund, PI manages the Series' investment operations and administers its business affairs and is responsible for supervising the Fund's subadviser. For the fiscal year ended August 31, 2005, the Series paid PI management fees of .50 of 1% of the Series' average daily net assets.

PI and its predecessors have served as manager or administrator to investment companies since 1987. As of September 30, 2005, PI, a wholly owned subsidiary of Prudential Financial Inc. (Prudential), served as the investment manager to all of the Prudential U.S. and offshore open-end investment companies, and as the administrator to closed-end investment companies, with aggregate assets of approximately $93.8 billion.

Subject to the supervision of the Board of the Fund, PI is responsible for conducting the initial review of prospective investment advisers for the Series. In evaluating a prospective subadviser, PI considers many factors, including the firm's experience, investment philosophy and historical performance. PI is also responsible for monitoring the performance of the Series' subadviser.

PI and the Fund operate under an exemptive order (the Order) from the Securities and Exchange Commission (SEC or the Commission) that generally permits PI to enter into or amend agreements with subadvisers without obtaining shareholder approval each time. This authority is subject to certain conditions, including the requirement that the Board must approve any new or amended agreements with an subadviser. Shareholders of the Series still have the right to terminate these agreements at any time by a vote of the majority of outstanding shares of the Series. The Fund will notify shareholders of any new subadvisers or material amendments to subadvisory agreements pursuant to the Order.

How the Series is Managed

SUBADVISER

Robert Tipp and Susan Courtney of PIM's Fixed Income Group (PIM Fixed Income Group) are responsible for the management of the Series.

Dennis Hepworth is a Principal and municipal bond portfolio manager for PIM Fixed Income. He is also Head of Municipal Bond Research, where he covers real estate,

housing, public power, cogeneration and unrated corporate backed bonds. Prior to joining PIM Fixed Income in 1997, Mr. Hepworth was a sell side municipal research analyst at Prudential Securities, and a senior analyst in the Capital Markets Credit and Private Client areas of Merrill Lynch. Mr. Hepworth is a member of the Municipal Analysts Group of New York and the National Federation of Municipal Analysts. He has 20 years of investment experience. Mr. Hepworth has managed the Fund since November 2004.

DISTRIBUTOR

Prudential Investment Management Services LLC (PIMS or the Distributor) distributes the Series' shares under a Distribution Agreement with the Fund. The Fund also has a Distribution and Service Plan (the Plan) under Rule 12b-1 of the Investment Company Act of 1940, as amended, (the 1940 Act) with respect to each of the Class A, Class B and Class C shares. Under the Plans and the Distribution Agreement, PIMS pays the expenses of distributing the Series' Class A, B, C, and Z shares and provides certain shareholder support services. The Fund pays distribution and other fees to PIMS as compensation for its services for each class of shares other than Class Z. These fees - known as 12b-1 fees - are shown in the "Fees and Expenses" tables.

DISCLOSURE OF PORTFOLIO HOLDINGS

Series Distributions and Tax Issues

DISTRIBUTIONS

The Series distributes dividends out of any net investment income, plus short-term capital gains, to shareholders, typically every month. For example, if the Series owns a City XYZ bond and the bond pays interest, the Series will pay out a portion of this interest as a dividend to its shareholders, assuming the Series' income is more than its costs and expenses. These dividends (paid out of tax-exempt interest) generally will be exempt from federal income taxes, as long as 50% or more of the value of the Series' assets at the end of each quarter is invested in state, municipal and other obligations, the interest on which is excluded from gross income for federal income tax purposes. Corporate shareholders will not be eligible for the 70% dividends-received deduction in respect of dividends paid by the Series. In addition, dividends from the Series will not qualify for the preferential rate of U.S. federal income tax applicable to certain dividends paid to non-corporate shareholders.

TAX ISSUES
Form 1099

Every year, you will receive a Form 1099, which reports the amount of taxable dividends and capital gains we distributed to you during the prior year.

Withholding Taxes

Series Distributions and Tax Issues

If You Purchase Just Before Record Date

IF YOU SELL OR EXCHANGE YOUR SHARES

Any gain or loss you may have from selling or exchanging Series shares will not be reported on Form 1099; however, proceeds from the sale or exchange will be

reported on Form 1099-B. Therefore, you or your financial adviser should keep track of the dates on which you buy and sell - or exchange - Series shares, as well as the amount of any gain or loss on each transaction. For tax advice, please see your tax adviser.

Automatic Conversion of Class B Shares

How to Buy, Sell and
Exchange Shares of the Series

HOW TO BUY SHARES

Step 1: Open an Account

Prudential Mutual Fund Services LLC
Attn: Investment Services
P.O. Box 8179
Philadelphia, PA 19176

With certain limited exceptions, the Series is available only to U.S. citizens or residents.

Step 2: Choose a Share Class

Individual investors can choose among Class A, Class B, Class C and Class Z shares of the Series, although Class Z shares are available only to a limited group of investors.

Multiple share classes let you choose a cost structure that meets your needs:

n Class B shares do not require you to pay a sales charge at the time of purchase, but do require you to pay a sales charge if you sell your shares within six years

(that is why it is called a CDSC). The operating expenses of Class B shares are higher than the operating expenses of Class A shares.

When choosing a share class, you should consider the following factors:

n The amount of your investment and any previous or planned future investments, which may qualify you for reduced sales charges for Class A shares under Rights of Accumulation or a Letter of Intent.

n The different sales charges that apply to each share class - Class A's front-end sales charge vs. Class B's CDSC vs. Class C's low CDSC.

n The fact that Class B shares automatically convert to Class A shares approximately seven years after purchase.

n Because Class Z shares have lower operating expenses than Class A, Class B or Class C shares, you should consider whether you are eligible to purchase Class Z shares.

See "How to Sell Your Shares" for a description of the impact of CDSCs.

How to Buy, Sell and
Exchange Shares of the Series

Share Class Comparison. Use this chart to help you compare the Series' different share classes. The discussion following this chart will tell you whether you are entitled to a reduction or waiver of any sales charges.

Class A

Class B

Class C

Class Z

Minimum purchase amount¹

1,000

2,500

None

Minimum amount for
subsequent purchases¹

100

None

Maximum initial sales charge

4.00% of the
public
offering price

None

Contingent Deferred
Sales Charge (CDSC)²

%³

If sold during:
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7

5%
4%
3%
2%
1%
1%
0%

1% on sales
made within
12 months of
purchase

None

Annual distribution and service (12b-1)
fees (shown as a percentage of
average daily net assets)⁴

.30 of 1%
(.25 of 1%
currently)⁵

.50

of 1%

1% (.75 of
1% currently)⁵

None

2 For more information about the CDSC and how it is calculated, see "How to Sell Your Shares - Contingent Deferred Sales Charge (CDSC)."

Reducing or Waiving Class A's Initial Sales Charge

The following describes the different ways investors can reduce or avoid paying Class A's initial sales charge.

Increase the Amount of Your Investment. You can reduce Class A's initial sales charge by increasing the amount of your investment. This table shows how the sales charge decreases as the amount of your investment increases.

Amount of Purchase	Sales Charge as % of Offering Price			Sales Charge as % of Amount Invested			Dealer Reallowance
Less than $100,000		4.00	%		4.17	%		4.00	%
$100,000 to $249,999		3.50			3.63			3.00
$250,000 to $499,999		2.50			2.56			2.00
$500,000 to $999,999		2.00			2.04			1.75
$1 million to $4,999,999¹		None			None			0.70²

2 For investments of $5 million to $9,999,999, the dealer allowance is 0.50%. For investments of $10 million and over, the dealer allowance is 0.25%.

To satisfy the purchase amounts above, you can:

n Use your Rights of Accumulation, which allow you and, if applicable, an eligible group of related investors (as defined below) to combine (1) the current value of JennisonDryden and/or Strategic Partners mutual fund shares you and, if applicable, the, group already own, (2) the value of money market shares you and, if applicable, an eligible group of related investors have received for shares of other JennisonDryden and/or Strategic Partners mutual funds in an exchange transaction and (3) the value of the shares you or an eligible group of related investors are purchasing, or

n Sign a Letter of Intent, stating in writing that you and, if applicable, an eligible group of related investors will purchase a certain amount of shares in the Series and other JennisonDryden and/or Strategic Partners mutual funds within 13 months.

Note: Class Z shares cannot be aggregated with any other share class for purposes of reducing or waiving Class A's initial sales charge.

Eligible Group of Related Investors

n All accounts held in your name (alone or with other account holders) and taxpayer identification number (TIN)

n Accounts held in your spouse's name (alone or with other account holders) and TIN (see definition of spouse below)

n Accounts for your children or your spouse's children including children for whom you and/or your spouse are legal guardian (e.g., UGMAs and UTMAs)

n Accounts in the name and TINs of your parents

How to Buy, Sell and
Exchange Shares of the Series

n Trusts with you, your spouse, your children, your spouse's children, and/or your parents as the beneficiaries

n With limited exclusions, accounts with the same address

n Exclusions include, but are not limited to:

n Addresses for brokerage firms and other intermediaries

n Post Office Boxes

Definition of Spouse:

The person to whom you are legally married.

We also consider your spouse to include the following:

n An individual of the same gender with whom you have been joined in a civil union, or legal contract similar to marriage;

The value of shares held by you or an eligible group of related investors will be determined as follows:

n for Class A and L shares, the value of existing shares is determined by the maximum offering price net asset value per share (NAV) plus maximum sales charge as of the previous business day; and

n for Class B, C, M, and X shares , the value of existing shares is determined by the NAV as of the previous business day.

qualifying purchase in order to receive the applicable reduction or waiver. Shares held through a broker or other financial intermediary will not be systematically aggregated with shares held directly by the Transfer Agent for purposes of receiving a reduction or waiver of Class A's initial sales charge. The reduced or waived sales charge will be granted subject to confirmation of account holdings.

If your shares are held through a broker or other intermediary, the broker or intermediary is responsible for determining the specific documentation, if any, that you may need in order to establish your eligibility to receive a waiver or reduction of Class A's initial sales charge. Your broker or financial intermediary is also responsible for notifying the Transfer Agent if your share purchase qualifies for a reduction or waiver of Class A's initial sales charge.

Purchases of $1 million or more. If you purchase $1 million or more of Class A shares, you will not be subject to an initial sales charge, although a CDSC may apply as previously noted.

n Mutual fund "supermarket" programs; where the sponsor links its clients' accounts to a master account in the sponsor's name and the sponsor charges a fee for its services.

Other Types of Investors. Certain other types of investors may purchase Class A shares without paying the initial sales charge, including:

How to Buy, Sell and
Exchange Shares of the Series

n persons who have retired directly from active service with Prudential or one of its subsidiaries

n certain real estate brokers, agents and employees of real estate brokerage companies affiliated with the Prudential Real Estate Affiliates

n registered representatives and employees of brokers that have entered into dealer agreements with the Distributor

Additional Information About Reducing or Waiving Class A's Sales Charge. The Series makes available free of charge, on its website at www.jennisondryden.com, in a clear and prominent format, information relating to the Series' Class A initial sales charge, and the different ways that investors can reduce or avoid paying the initial sales charge. The Series' website includes hyperlinks that facilitate access to this information.

The Distributor may reallow Class A's sales charge to dealers.

Qualifying for Class Z Shares

n Mutual fund "supermarket" programs, where the sponsor links its clients' accounts to a master account in the sponsor's name and the sponsor charges a fee for its services.

Other Types of Investors. Class Z shares also can be purchased by any of the following:

n Current and former Directors/Trustees of the JennisonDryden or Strategic Partners mutual funds (including the Fund);

n Prudential, with an investment of $10 million or more; and

n Qualified state tuition programs (529 Plans).

Class B Shares Convert to Class A Shares After Approximately Seven Years

Step 3: Understanding the Price You'll Pay

The price you pay for each share of the Series is based on the share value. The share value of a mutual fund - known as the net asset value or NAV - is determined by a simple calculation: it's the total value of the Series (assets minus liabilities) divided by the total number of shares outstanding. For example, if the value of the investments held by Fund XYZ (minus its liabilities) is $1,000 and there are 100 shares of Fund XYZ owned by shareholders, the value of one share of the fund - or the NAV - is $10 ($1,000 divided by 100).

Mutual Fund Shares

How to Buy, Sell and
Exchange Shares of the Series

investment companies, the Series' net asset value will be calculated based upon the net asset value per share of the investment company in which the Series invests.

Most national newspapers report the NAVs of larger mutual funds, which allows investors to check the prices of those funds daily.

What Price Will You Pay for Shares of the Series?

Step 4: Additional Shareholder Services

As a Series shareholder, you can take advantage of the following services and privileges:

Prudential Mutual Fund Services LLC
Attn: Account Maintenance
P.O. Box 8159
Philadelphia, PA 19176

Automatic Investment Plan. You can make regular purchases of the Series for as little as $50 by having the money automatically withdrawn from your bank or brokerage account at specified intervals.

How to Buy, Sell and
Exchange Shares of the Series

HOW TO SELL YOUR SHARES

Prudential Mutual Fund Services LLC
Attn: Redemption Services
P.O. Box 8149
Philadelphia, PA 19176

Restrictions on Sales

If you hold your shares directly with the Transfer Agent, you will need to have the signature on your sell order signature guaranteed by an "eligible guarantor institution" if:

n You are selling more than $100,000 of shares,

n You want the redemption proceeds made payable to someone that is not in our records,

n You want the redemption proceeds sent to some place that is not in our records, or

n You are a business or a trust.

Contingent Deferred Sales Charge (CDSC)

To keep the CDSC as low as possible, we will sell amounts representing shares in the following order:

n Amounts representing shares you purchased with reinvested dividends and distributions,

n Amounts representing the increase in NAV above the total amount of payments for shares (Class A, Class B and Class C shares, only), and

n Amounts representing the cost of shares held beyond the applicable CDSC period.

Since shares that fall into any of the categories listed above are not subject to the CDSC, selling them first helps you to avoid - or at least minimize - the CDSC.

How to Buy, Sell and
Exchange Shares of the Series

Waiver of the CDSC - Class B Shares

The CDSC will be waived if the Class B shares are sold:

n On certain sales effected through the Systematic Withdrawal Plan.

Redemption In Kind

Small Accounts

90-Day Repurchase Privilege

HOW TO EXCHANGE YOUR SHARES

You can exchange your shares of the Series for shares of the same class in certain other JennisonDryden or Strategic Partners mutual funds - including certain money

market funds - if you satisfy the minimum investment requirements. For example, you can exchange Class A shares of the Series for Class A shares of another JennisonDryden mutual fund or Class A shares of certain of the Strategic Partners mutual funds, but you can't exchange Class A shares for Class B, Class C or Class Z shares. Class B and Class C shares may not be exchanged into money market funds other than MoneyMart Assets, Inc. (MoneyMart Assets). After an exchange, at redemption the CDSC will be calculated from the first day of the month after initial purchase, excluding any time shares were held in a money market fund. We may change the terms of any exchange privilege after giving you 60 days' notice.

If you hold shares through a broker, you must exchange shares through your broker. Otherwise contact:

Prudential Mutual Fund Services LLC
Attn: Exchange Processing
P.O. Box 8157
Philadelphia, PA 19176

Frequent Purchases and Redemptions of Series Shares

The Series seeks to prevent patterns of frequent purchases and redemptions of Series shares by its shareholders. Frequent purchases and sales of shares of the Series may adversely affect Series performance and the interests of long-term investors. When a shareholder engages in frequent or short-term trading, the Series may have to sell portfolio securities to have the cash necessary to redeem the shareholder's shares. This can happen when it is not advantageous to sell any securities, so the Series' performance may be hurt. When large dollar amounts are involved, frequent trading can also make it difficult to use long-term investment strategies because the Series cannot predict how much cash it will have available to invest. In addition, if the Series is forced to liquidate investments due to short-term trading activity, it may incur

How to Buy, Sell and
Exchange Shares of the Series

increased brokerage and tax costs. Similarly, the Series may bear increased administrative costs as a result of the asset level and investment volatility that accompanies patterns of short-term trading. Moreover, frequent or short-term trading by certain shareholders may cause dilution in the value of Series shares held by other shareholders, including the Series, Funds that invest in foreign securities may be particularly susceptible to frequent trading because time zone differences among international stock markets can allow a shareholder engaging in frequent trading to exploit fund share prices that may be based on closing prices of foreign securities established some time before the fund calculates its own share price. Funds, including the Series, that invest in certain fixed-income securities, such as high-yield bonds or certain asset-backed securities, may also constitute an effective vehicle for a shareholder's frequent trading strategy.

aggregate orders combining the transactions of many beneficial owners. The Series itself generally cannot monitor trading by particular beneficial owners. The Series communicates to Intermediaries in writing that it expects the Intermediaries to handle orders consistently with the Series' policies as set forth in the Series' prospectus and SAI on transfers by beneficial owners. Intermediaries may impose different or stricter restrictions on transfers by beneficial owners. Consistent with the restrictions described above, investments in the Series through retirement programs administered by Prudential Retirement will be similarly identified for frequent purchases and redemptions and appropriately restricted.

Payments to Financial Services Firms

The Manager, Distributor or their affiliates have entered into revenue sharing or other similar arrangements with financial services firms, including affiliates of the Manager. These revenue sharing arrangements are intended to promote the sale of Series shares or to compensate the financial services firms for marketing or marketing support activities in connection with the sale of Series shares. Revenue sharing payments may be used by financial services firms in a variety of ways, including defraying costs incurred by the firms to educate their registered representatives about the Series, as well as defraying costs incurred by the firms in providing or facilitating shareholder recordkeeping as well as the servicing or maintenance of shareholder accounts.

How to Buy, Sell and
Exchange Shares of the Series

sharing payments may provide an incentive for financial services firms and their registered representatives to recommend or sell shares of the Series to you and in doing so may create conflicts of interest between the firms' financial interests and their duties to customers. In exchange for revenue sharing payments, the Series also may receive preferred access to registered representatives of a financial services firm (for example, the ability to make presentations in branch offices or at conferences) or preferred access to customers of the financial services firm (for example, the ability to advertise to the firm's customers).

TELEPHONE REDEMPTIONS OR EXCHANGES

The telephone redemption and exchange procedures may be modified or terminated at any time. If this occurs, you will receive a written notice from the Fund.

EXPEDITED REDEMPTION PRIVILEGE

If you have selected the Expedited Redemption Privilege, you may have your redemption proceeds sent directly to your bank account. Expedited redemption requests may be made by telephone or letter, must be received by the Fund prior to 4:00 p.m. New York time, to receive a redemption amount based on that day's NAV and are subject to the terms and conditions regarding the redemption of shares. In the event that regular trading on the NYSE closes before 4:00 p.m. New York time, you will receive the following day's NAV if your order to sell is received after the close of regular trading on the NYSE. For more information, see "Purchase, Redemption and Pricing of Fund Shares - Sale of Shares - Expedited Redemption Privilege" in the SAI. The Expedited Redemption Privilege may be modified or terminated at any time without notice.

Financial Highlights

The financial highlights below are intended to help you evaluate the financial performance of the Series for the past five fiscal years. The total return in each chart represents the rate that a shareholder would have earned (or lost) on an investment in that share class of the Series, assuming investment at the start of the period and reinvestment of all dividends and other distributions. The information is for each share class for the periods indicated.

Class A Shares (fiscal years ended 8-31)

Per Share Operating Performance	2005			2004			2003			2002^(d)			2001
Net asset value, beginning of year	$	10.95		$	10.86		$	11.09		$	11.11		$	10.66
Income from investment operations:
Net investment income		.46			.45			.47			.49			.52
Net realized and unrealized gain (loss) on investment transactions		.19			.25			(.23	)		(.01	)		.45
Total from investment operations		.65			.70			.24			.48			.97
Less Dividends and Distributions:
Dividends from net investment income		(.46	)		(.45	)		(.47	)		(.50	)		(.52	)
Distributions from net realized gains		-			(.16	)		-			-			-
Distributions in excess of net investment income		-			-			-			-			-	^(b)
Total dividends and distributions		(.46	)		(.61	)		(.47	)		(.50	)		(.52	)
Net asset value, end of year	$	11.14		$	10.95		$	10.86		$	11.09		$	11.11
Total return^(a)		6.02	%		6.55	%		2.20	%		4.54	%		9.35	%
Ratios/Supplemental Data
Net assets, end of year (000)	$	141,564		$	143,120		$	158,120		$	172,623		$	167,009
Average net assets (000)	$	141,287		$	151,980		$	171,193		$	169,196		$	164,424
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees^(c)		.93	%		.92	%		.90	%		.87	%		.87	%
Expenses, excluding distribution and service (12b-1) fees		.68	%		.67	%		.65	%		.62	%		.62	%
Net investment income		4.15	%		4.12	%		4.32	%		4.55	%		4.83	%
For Class A, B, C and Z shares:
Portfolio turnover rate		11	%		38	%		59	%		23	%		32	%

(a) Total return does not consider the effect of sales loads. Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions.

(b) Less than $.005 per share.

(c) The distributor of the Fund contractually agreed to limit its distribution and service (12b-1) fees to .25 of 1% of the average daily net assets of Class A shares.

(d) Effective September 1, 2001 the Series has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. There was no effect of this change for the year ended August 31, 2002 on net investment income per share, net realized and unrealized gain/(loss) per share or on the ratio of net investment income. Per share amounts and ratios for the years ended prior to August 31, 2002 have not been restated to reflect this change in presentation.

Financial Highlights

Class B Shares (fiscal years ended 8-31)

Per Share Operating Performance	2005			2004			2003			2002^(c)			2001
Net asset value, beginning of year	$	10.95		$	10.86		$	11.09		$	11.11		$	10.67
Income from investment operations:
Net investment income		.43			.42			.45			.47			.49
Net realized and unrealized gain (loss) on investment transactions		.19			.25			(.23	)		(.01	)		.44
Total from investment operations		.62			.67			.22			.46			.93
Less Dividends and Distributions:
Dividends from net investment income		(.43	)		(.42	)		(.45	)		(.48	)		(.49	)
Distributions from net realized gains		-			(.16	)		-			-			-
Distributions in excess of net investment income		-			-			-			-			-	^(b)
Total dividends and distributions		(.43	)		(.58	)		(.45	)		(.48	)		(.49	)
Net asset value, end of year	$	11.14		$	10.95		$	10.86		$	11.09		$	11.11
Total return^(a)		5.76	%		6.29	%		1.94	%		4.29	%		8.98	%
Ratios/Supplemental Data
Net assets, end of year (000)	$	35,061		$	47,536		$	57,234		$	70,308		$	78,237
Average net assets (000)	$	40,894		$	53,143		$	65,204		$	72,864		$	79,046
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees		1.18	%		1.17	%		1.15	%		1.12	%		1.12	%
Expenses, excluding distribution and service (12b-1) fees		.68	%		.67	%		.65	%		.62	%		.62	%
Net investment income		3.90	%		3.87	%		4.07	%		4.31	%		4.58	%

(a) Total return does not consider the effect of sales loads. Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions.

(b) Less than $.005 per share.

(c) Effective September 1, 2001 the Series has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. There was no effect of this change for the year ended August 31, 2002 on net investment income per share, net realized and unrealized gain/(loss) per share. The effect of this change on the ratio of the net investment income was an increase from 4.30% to 4.31%. Per share amounts and ratios for the years ended prior to August 31, 2002 have not been restated to reflect this change in presentation.

Class C Shares (fiscal years ended 8-31)

Per Share Operating Performance	2005			2004			2003			2002^(d)			2001
Net asset value, beginning of year	$	10.95		$	10.86		$	11.09		$	11.11		$	10.67
Income from investment operations:
Net investment income		.40			.40			.42			.44			.47
Net realized and unrealized gain (loss) on investment transactions		.19			.25			(.23	)		(.01	)		.44
Total from investment operations		.59			.65			.19			.43			.91
Less Dividends and Distributions:
Dividends from net investment income		(.40	)		(.40	)		(.42	)		(.45	)		(.47	)
Distributions from net realized gains		-			(.16	)		-			-			-
Distributions in excess of net investment income		-			-			-			-			-	^(b)
Total dividends and distributions		(.40	)		(.56	)		(.42	)		(.45	)		(.47	)
Net asset value, end of year	$	11.14		$	10.95		$	10.86		$	11.09		$	11.11
Total return^(a)		5.50	%		6.03	%		1.69	%		4.02	%		8.71	%
Ratios/Supplemental Data
Net assets, end of year (000)	$	8,251		$	8,986		$	9,332		$	10,071		$	9,394
Average net assets (000)	$	8,726		$	9,164		$	9,804		$	9,188		$	8,346
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees^(c)		1.43	%		1.42	%		1.40	%		1.37	%		1.37	%
Expenses, excluding distribution and service (12b-1) fees		.68	%		.67	%		.65	%		.62	%		.62	%
Net investment income		3.66	%		3.62	%		3.82	%		4.07	%		4.33	%

(a) Total return does not consider the effect of sales loads. Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions.

(b) Less than $.005 per share.

(c) The distributor of the Fund contractually agreed to limit its distribution and service (12b-1) fees to .75 of 1% on the average daily net assets of Class C shares.

(d) Effective September 1, 2001 the Series has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. There was no effect of this change for the year ended August 31, 2002 on net investment income per share, net realized and unrealized gain/(loss) per share. The effect of this change on the ratio of net investment income was an increase from 4.06% to 4.07%. Per share amounts and ratios for the years ended prior to August 31, 2002 have not been restated to reflect this change in presentation.

Financial Highlights

Class Z Shares (fiscal years ended 8-31)

Per Share Operating Performance	2005			2004			2003			2002^(c)			2001
Net asset value, beginning of year	$	10.95		$	10.86		$	11.09		$	11.11		$	10.65
Income from investment operations:
Net investment income		.49			.48			.50			.52			.55
Net realized and unrealized gain (loss) on investment transactions		.18			.25			(.23	)		(.01	)		.46
Total from investment operations		.67			.73			.27			.51			1.01
Less Dividends and Distributions:
Dividends from net investment income		(.48	)		(.48	)		(.50	)		(.53	)		(.55	)
Distributions from net realized gains		_-			(.16	)		-			-			-
Distributions in excess of net investment income		-			-			-			-			-	^(b)
Total dividends and distributions		(.48	)		(.64	)		(.50	)		(.53	)		(.55	)
Net asset value, end of year	$	11.14		$	10.95		$	10.86		$	11.09		$	11.11
Total return^(a)		6.29	%		6.82	%		2.45	%		4.80	%		9.72	%
Ratios/Supplemental Data
Net assets, end of year (000)	$	4,737		$	5,604		$	6,592		$	6,148		$	4,052
Average net assets (000)	$	5,101		$	6,958		$	6,118		$	4,712		$	4,292
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees		.68	%		.67	%		.65	%		.62	%		.62	%
Expenses, excluding distribution and service (12b-1) fees		.68	%		.67	%		.65	%		.62	%		.62	%
Net investment income		4.39	%		4.36	%		4.58	%		4.78	%		5.09	%

(a) Total return does not consider the effect of sales loads. Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions.

(b) Less than $.005 per share.

(c) Effective September 1, 2001 the Series has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. There was no effect of this change for the year ended August 31, 2002 on net investment income per share, net realized and unrealized gain/(loss) per share or on the ratio of net investment income. Per share amounts and ratios for the years ended prior to August 31, 2002 have not been restated to reflect this change in presentation.