Exhibit e.

                         PIMCO MUNICIPAL INCOME FUND II

             TERMS AND CONDITIONS OF THE DIVIDEND REINVESTMENT PLAN

     Registered holders ("Common Shareholders") of common shares of beneficial
interest (the "Common Shares") of PIMCO Municipal Income Fund II (the "Fund")
will automatically be enrolled (the "Participants") in its Dividend Reinvestment
Plan (the "Plan") and are advised as follows:

     1. THE PLAN AGENT. PFPC Inc. (the "Agent") will act as Agent for each
Participant. The Agent will open an account for each Participant under the Plan
in the same name in which his or her outstanding Common Shares are registered.

     2. CASH OPTION. The Fund will declare its income dividends and capital
gains distributions ("Distributions") payable in Common Shares, or, at the
option of Common Shareholders, in cash. Therefore, each Participant will have
all Distributions on his or her Common Shares automatically reinvested in
additional Common Shares, unless such Participant elects to receive such
Distributions in cash by contacting the Agent.

     3. MARKET PREMIUM ISSUANCES. If on the payment date for a Distribution, the
net asset value per Common Share is equal to or less than the market price per
Common Share plus estimated brokerage commissions, the Agent shall receive newly
issued Common Shares ("Additional Common Shares"), including fractions, from the
Fund for each Participant's account. The number of Additional Common Shares to
be credited shall be determined by dividing the dollar amount of the
Distribution by the greater of (i) the net asset value per Common Share on the
payment date, or (ii) 95% of the market price per Common Share on the payment
date.

     4. MARKET DISCOUNT PURCHASES. If the net asset value per Common Share
exceeds the market price plus estimated brokerage commissions on the payment
date for a Distribution, the Agent (or a broker-dealer selected by the Agent)
shall endeavor to apply the amount of such Distribution on each Participant's
Common Shares to purchase Common Shares on the open market. Such purchases will
be made on or shortly after the payment date for such Distribution but in no
event will purchases be made on or after the ex-dividend date for the next
Distribution. The weighted average price (including brokerage commissions) of
all Common Shares purchased by the Agent as Agent shall be the price per Common
Share allocable to each Participant. If, before the Agent has completed its
purchases, the market price plus estimated brokerage commissions exceeds the net
asset value of the Common Shares as of the payment date, the purchase price paid
by the Agent may exceed the net asset value of the Common Shares, resulting in
the acquisition of fewer Common Shares than if such Distribution had been paid
in Common Shares issued by the Fund. Participants should note that they will not
be able to instruct the Agent to purchase Common Shares at a specific time or at
a specific price. Open-market purchases may be made on any securities exchange
where Common Shares are traded, in the over-the-counter market or in negotiated
transactions, and may be on such terms as to price, delivery and otherwise as
the Agent shall determine.



     5. VALUATION. The market price of Common Shares on a particular date shall
be the last sales price on the securities exchange where the Common Shares are
listed on that date (the "Exchange"), or, if there is no sale on such Exchange
on that date, then the mean between the closing bid and asked quotations on such
Exchange on such date will be used. The net asset value per Common Share on a
particular date shall be the amount calculated on that date (or if not
calculated on such date, the amount most recently calculated) by or on behalf of
the Fund in accordance with the Fund's current prospectus.

     6. SAFEKEEPING. In order to protect against loss, theft or destruction,
Participants may deposit Common Shares registered in their own names and held in
certificate form into their Plan accounts. Certificates, along with a letter of
instruction, should be sent to the Agent by registered mail, insured for 2% of
their market value. Participants should not endorse their certificates. There
are no fees for this service.

     7. TAXATION. The automatic reinvestment of Distributions does not relieve
Participants of any taxes which may be payable on Distributions. Participants
will receive tax information annually for their personal records and to help
them prepare their federal income tax return. For further information as to tax
consequences of participation in the Plan, Participants should consult with
their own tax advisors.

     8. LIABILITY OF AGENT. The Agent shall at all times act in good faith and
agrees to use its best efforts within reasonable limits to ensure the accuracy
of all services performed under this Agreement and to comply with applicable
law, but assumes no responsibility and shall not be liable for loss or damage
due to errors unless such error is caused by the Agent's negligence, bad faith,
or willful misconduct or that of its employees. Each Participant's uninvested
funds held by the Agent will not bear interest. The Agent shall have no
liability in connection with any inability to purchase Common Shares within the
time provided, or with the timing of any purchases effected. The Agent shall
have no responsibility for the value of Common Shares acquired. The Agent may
commingle Participants' funds.

     9. RECORDKEEPING. The Agent may hold each Participant's Common Shares
acquired pursuant to the Plan together with the Common Shares of other Common
Shareholders of the Fund acquired pursuant to the Plan in non-certificated form
in the Agent's name or that of the Agent's nominee. Distributions on fractional
shares will be credited to each Participant's account. Each Participant will be
sent a confirmation by the Agent of each acquisition made for his or her account
as soon as practicable, but in no event later than 60 days, after the date
thereof. Upon a Participant's request, the Agent will deliver to the
Participant, without charge, a certificate or certificates for the full Common
Shares. Although each Participant may from time to time have an undivided
fractional interest (computed to four decimal places) in a Common Share of the
Fund, no certificates for a fractional share will be issued. Participants may
request a certificate by calling the Agent at (800) 331-1710, writing to the
Agent at P.O. Box 43027, Providence RI 02940-3027, or completing and returning
the transaction form attached to each Plan statement. The Agent will issue
certificates as soon as possible but in no event more than 5 business days after
receipt of a Participant's request. Similarly, Participants may request to sell
a portion of the Common Shares held by the Agent in their Plan accounts by
calling the Agent, writing to the Agent, or completing and returning the
transaction form attached to each Plan

                                      -2-



statement. The Agent will sell such Common Shares through a broker-dealer
selected by the Agent within 5 business days of receipt of the request. The sale
price will equal the weighted average price of all Common Shares sold through
the Plan on the day of the sale, less brokerage commissions. Participants should
note that the Agent is unable to accept instructions to sell on a specific date
or at a specific price. Any share dividends or split shares distributed by the
Fund on Common Shares held by the Agent for Participants will be credited to
their accounts. In the event that the Fund makes available to its Common
Shareholders rights to purchase additional Common Shares, the Common Shares held
for each Participant under the Plan will be added to other Common Shares held by
the Participant in calculating the number of rights to be issued to each
Participant.

     10. PROXY MATERIALS. The Agent will forward to each Participant any proxy
solicitation material. The Agent will vote any Common Shares held for a
Participant first in accordance with the instructions set forth on proxies
returned by such Participant to the Fund, and then with respect to any proxies
not returned by such Participant to the Fund, in the same proportion as the
Agent votes the proxies returned by the Participants to the Fund.

     11. BROKERS, NOMINEE HOLDERS, ETC. In the case of shareholders such as
banks, brokers or nominees that hold Common Shares for others who are the
beneficial owners, the Agent will administer the Plan on the basis of the number
of Common Shares certified by the record shareholder as representing the total
amount registered in such shareholder's name and held for the account of
beneficial owners who are to participate in the Plan.

     12. FEES. The Agent's service fee for handling Distributions will be paid
by the Fund. Each Participant will be charged his or her pro rata share of
brokerage commissions on all open-market purchases. If a Participant elects to
have the Agent sell part or all of his or her Common Shares and remit the
proceeds, such Participant will be charged his or her pro rata share of
brokerage commissions on the shares sold. The Participant will not be charged
any other fees for this service.

     13. TERMINATION IN THE PLAN. Each registered Participant may terminate his
or her account under the Plan by notifying the Agent in writing at P.O. Box
43027, Providence, RI 02940-3027, by calling the Agent at (800) 331-1710 or by
completing and returning the transaction form attached to each Plan statement.
Such termination will be effective with respect to a particular Distribution if
the Participant's notice is received by the Agent at least ten days prior to
such Distribution record date. The Plan may be terminated by the Agent or the
Fund upon notice in writing mailed to each Participant at least 60 days prior to
the effective date of the termination. Upon any termination, the Agent will
cause a certificate or certificates to be issued for the full shares held for
each Participant under the Plan and cash adjustment for any fraction of a Common
Share at the then current market value of the Common Shares to be delivered to
him or her without charge. If preferred, a Participant may request the sale of
all of the Common Shares held by the Agent in his or her Plan account in order
to terminate participation in the Plan. If a Participant has terminated his or
her participation in the Plan but continues to have Common Shares registered in
his or her name, he or she may re-enroll in the Plan at any time by calling the
Agent at (800) 331-1710.

                                       -3-



     14. AMENDMENT OF THE PLAN. These terms and conditions may be amended by the
Agent or the Fund at any time but, except when necessary or appropriate to
comply with applicable law or the rules or policies of the Securities and
Exchange Commission or any other regulatory authority, only by mailing to each
Participant appropriate written notice at least 30 days prior to the effective
date thereof. The amendment shall be deemed to be accepted by each Participant
unless, prior to the effective date thereof, the Agent receives notice of the
termination of the Participant's account under the Plan. Any such amendment may
include an appointment by the Agent of a successor Agent, subject to the prior
written approval of the successor Agent by the Fund.

     15. APPLICABLE LAW. These terms and conditions shall be governed by the
laws of The Commonwealth of Massachusetts.

                                       -4-