UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 2)

DTF TAX-FREE INCOME INC.

(Name of Issuer)

VARIABLE RATE MUNIFUND TERM PREFERRED SHARES

(Title of Class of Securities)

23334J305

23334J404

(CUSIP Number)

Willie J. White

Counsel

Wells Fargo & Company

301 South College Street, 22nd Floor

Charlotte, NC 28202-6000

(704) 410-5082

With a copy to:

Patrick Quill

Ashurst LLP

7 Times Square, 19th Floor

New York, NY 10036

(212) 205-7000

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

January 8, 2016

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box   ¨.

The information required in the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

SCHEDULE 13D

CUSIP No. 23334J305

CUSIP No. 23334J404

SCHEDULE 13D

CUSIP No. 23334J305

CUSIP No. 23334J404

This Amendment No. 2 (this “Amendment”) amends, as set forth below, the statement on Schedule 13D, dated August 22, 2013 and filed with the SEC on September 3, 2013 (the “Original Schedule 13D”), as amended by Amendment No. 1 dated July 6, 2015 and filed with the SEC on July 8, 2015 (“Amendment No. 1”), for Wells Fargo & Company (“Wells Fargo”) and Wells Fargo Municipal Capital Strategies, LLC (“Capital Strategies”) (collectively, the “Reporting Persons”) with respect to the variable rate munifund term preferred shares (“VMTP Shares”) of DTF Tax-Free Income Inc. (the “Issuer”). This Amendment is being filed as a result of the exchange (the “Exchange”) of the Reporting Persons’ 650 variable rate munifund term preferred shares (CUSIP No. 23334J305) for an equal number of variable rate munifund term preferred shares (CUSIP No. 23334J404) of the Issuer.

Item 2

Item 2 of the Original Schedule 13D is hereby amended by deleting Schedule I and Schedule II referenced therein and replacing them with Schedule I and Schedule II included with this Amendment.

Item 3

Item 3 of the Original Schedule 13D is hereby amended by adding the following paragraph at the end thereof:

“The Reporting Persons exchanged 650 variable rate munifund term preferred shares (CUSIP No. 23334J305) for an equal number of variable rate munifund term preferred shares (CUSIP No. 23334J404) of the Issuer.”

Item 6

Item 6 of the Original Schedule 13D is hereby amended and supplemented by adding the following at the end of the first paragraph thereof:

“The voting and consent rights on the 650 VMTP Shares received in the Exchange will be treated in the same manner as previously described in this Item 6.”

Item 7 Material to be Filed as Exhibits

Item 7 of the Original Schedule 13D is hereby amended by deleting Exhibit 99.3 thereto and inserting the following additional exhibits:

SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: January 11, 2016

LIST OF EXHIBITS

SCHEDULE I

EXECUTIVE OFFICERS AND DIRECTORS OF REPORTING PERSONS

The following sets forth the name and present principal occupation of each executive officer and director of Wells Fargo & Company. The business address of each of the executive officers and directors of Wells Fargo & Company is 420 Montgomery Street, San Francisco, CA 94104.

The following sets forth the name and present principal occupation of each executive officer and director of Wells Fargo Municipal Capital Strategies, LLC. The business address of each of the executive officers and directors of Wells Fargo Municipal Capital Strategies, LLC is 375 Park Avenue, New York, New York 10152.

SCHEDULE II

LITIGATION SCHEDULE

AUCTION RATE SECURITIES (LEGACY WACHOVIA) Beginning in August 2008, Wachovia Securities, LLC, n/k/a Wells Fargo Advisors LLC (Wachovia Securities) and Wachovia Capital Markets, LLC, n/k/a Wells Fargo Securities LLC (collectively with Wachovia Securities, the Wachovia Securities Affiliates) entered into settlements agreements with state regulatory agencies, including the Secretary of State for the State of Missouri (as the lead state in the North American Securities Administrators Association task force investigating the marketing and sale of auction rate securities), relating to investigations of sales practice and other issues related to the sales of auction rate securities (ARS). Wachovia Securities also announced a settlement in principle with the Securities and Exchange Commission (SEC) of its similar investigation. Without admitting or denying liability, the agreements required that the Wachovia Securities Affiliates purchase certain ARS sold to customers in accounts at the Wachovia Securities Affiliates, reimburse investors who sold ARS purchased at the Wachovia Securities Affiliates for less than par, provide liquidity loans to customers at no net interest until the ARS are repurchased, offer to participate in special arbitration procedures with customers who claim consequential damages from the lack of liquidity in ARS and refund refinancing fees to certain municipal issuers who issued ARS and later refinanced those securities through the Wachovia Securities Affiliates. Without admitting or denying liability, the Wachovia Securities Affiliates also agreed to pay a total fine of $50 million to the state regulatory agencies and agreed to the entry of consent orders and Wachovia Securities agreed to entry of an injunction by the SEC.

AUCTION RATE SECURITIES (LEGACY WELLS FARGO) Beginning in November 2009, three broker-dealer subsidiaries (the Broker-Dealer Subsidiaries), Wells Fargo Investments, LLC, Wells Fargo Securities, LLC (as successor to Wells Fargo Brokerage Services, LLC), and Wells Fargo Institutional Securities, LLC, of Wells Fargo & Company (“Wells Fargo”) entered into settlement agreements with state securities regulators regarding the Broker-Dealers Subsidiaries’ participation in the auction rate securities (ARS) market. Under the agreements, the Broker-Dealer Subsidiaries agreed to purchase Auction Rate Securities (ARS) from eligible investors that bought ARS through the Broker-Dealer Subsidiaries prior to February 13, 2008 and to cease and desist from certain activities. Without admitting or denying liability, Wells Fargo Investments, LLC, agreed to pay $1.9 million in fines and penalties and the Broker-Dealer Subsidiaries agreed to reimburse investigative expenses.

MUNICIPAL DERIVATIVES BID PRACTICES INVESTIGATION The Department of Justice (DOJ) and the SEC, beginning in November 2006, requested information from a number of financial institutions, including Wachovia Bank, N.A.’s (n/k/a Wells Fargo Bank, NA) municipal derivatives group, with regard to competitive bid practices in the municipal derivative markets. Other state and federal agencies subsequently also began investigations of the same practices. On December 8, 2011, a global resolution of the Wachovia Bank investigations was announced by DOJ, the Internal Revenue Service, the SEC, the Office of the Comptroller of the Currency and a group of State Attorneys General. The investigations were settled with Wachovia Bank agreeing to pay a total of approximately $148 million in penalties and remediation to the various agencies.

The SEC alleged that Wachovia Bank engaged in certain acts in connection with the bidding of certain municipal reinvestment instruments during a period prior to 2006, in violation of section 17(a) of the Securities Exchange Act of 1933. Without admitting or denying the allegations in the complaint, Wachovia Bank consented to the entry of an injunction in the matter, and to make some of the financial payments described above.

ASSET-BACKED COMMERCIAL PAPER INVESTIGATION On August 14, 2012, the SEC entered a settled administrative order against Wells Fargo Brokerage Services LLC (n/k/a Wells Fargo Securities, LLC) and a former sales representative concerning alleged sales practice and suitability issues related to certain 2007 sales of three asset-backed commercial paper products to institutional and municipal purchasers. Without admitting or denying the allegations, the firm agreed to a censure, a cease-and-desist order, disgorgement of $65,000 plus prejudgment interest, and a civil penalty of $6.5 million.

ABS CDO INVESTIGATION In April of 2011, Wells Fargo Securities, LLC (f/k/a Wachovia Capital Markets, LLC) entered into a settlement with the SEC in which the firm paid $11.2 million in disgorgement and penalties and agreed to cease and desist from violating Sections 17(a)(2) and (3) of the Securities Act, in order to resolve issues arising from an investigation into Wachovia Capital Markets, LLC’s ABS CDO underwriting, marketing and pricing practices.

FINRA SETTLEMENT On December 11, 2014, FINRA announced its settlement with ten firms, including Wells Fargo Securities, LLC, that had pitched for an investment banking role on a contemplated Toys “R” Us initial public offering in 2010. FINRA alleged that WFS violated NASD and FINRA rules by allowing its research analyst to participate in the solicitation of investment banking business and by offering favorable research coverage to induce investment banking business; and by failing to implement policies and procedures reasonably designed to prevent violations in connection with analyst public appearances. WFS neither admitted nor denied FINRA’s findings but consented to a censure and payment of a $4 million fine. The fine has been paid and the matter is fully resolved.

SEC ORDER On September 22, 2014, the SEC entered an order against Wells Fargo Advisors, LLC related to the firm’s policies and procedures to prevent the misuse of material nonpublic information. The firm admitted the SEC’s findings of fact, acknowledged that its conduct violated the federal securities laws and agreed to retain an independent compliance consultant to review relevant policies and procedures, as well as the making, keeping and preserving of certain required books and records. The firm agreed to a censure, a cease and desist order and a civil penalty of $5,000,000.

CLIENT IDENTIFICATION PROGRAM On December 18, 2014, FINRA announced a settlement with Wells Fargo Advisors, LLC and Wells Fargo Advisors Financial Network, LLC for an alleged violation of NASD and FINRA rules concerning the Client Identification Program and the effects of using recycled client account numbers. The use of recycled numbers was alleged to have resulted in certain accounts not having a complete review for Client Identification Purposes. WFA and WFA FiNet neither admitted nor denied FINRA’s findings and consented to a censure and the payment of a $1.5 million fine. The fine has been paid and the matter is fully resolved.

MUTUAL FUND SALES CHARGE WAIVERS On July 6, 2015, FINRA announced a settlement with Wells Fargo Advisors, LLC and Wells Fargo Advisors Financial Network, LLC for an alleged violation of NASD and FINRA rules concerning application of mutual fund sales charge waivers. FINRA alleged WFA and FiNet did not reasonably supervise the application of sales charge waivers for eligible mutual fund purchases in certain retirement and charitable organization accounts. WFA and FiNet neither admitted nor denied FINRA’s findings and agreed to censure and to provide remediation to eligible clients. Due to WFA and FiNet’s self-report of the issue and cooperation, FINRA assessed no fine. WFA and FiNet agreed to pay an estimated $15 million in restitution, including interest, to affected customers.

FINRA DATA SETTLEMENTS From time to time Wells Fargo broker-dealers resolve technical trade reporting issues relating to timing, records and other data elements with FINRA involving small numbers of trades processed by the firms. Resolutions of this type during the relevant period included fines of $300,000 each or less.

Exhibit 99.3

JOINT FILING AGREEMENT

This Statement is filed by Wells Fargo & Company on its own behalf and on behalf of Wells Fargo Municipal Capital Strategies, LLC. Aggregate beneficial ownership reported by Wells Fargo & Company under Item 11 on page 2 is on a consolidated basis and includes any beneficial ownership separately reported herein by Wells Fargo Municipal Capital Strategies, LLC.

Pursuant to and in accordance with the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations thereunder, each party hereto hereby agrees that the Statement to which this agreement is attached shall be filed by Wells Fargo & Company on its own behalf and on behalf of Wells Fargo Municipal Capital Strategies, LLC (including any amendment, restatement, supplement, and/or exhibit thereto) with the Securities and Exchange Commission (and, if such security is registered on a national securities exchange, also with the exchange), and further agrees to the filing, furnishing, and/or incorporation by reference of this agreement as an exhibit thereto. This agreement shall remain in full force and effect until revoked by any party hereto in a signed writing provided to each other party hereto, and then only with respect to such revoking party.

IN WITNESS WHEREOF, each party hereto, being duly authorized, has caused this agreement to be executed and effective as of the date set forth below.

Exhibit 99.5

POWER OF ATTORNEY

Know all by these present, that the undersigned hereby constitutes and appoints each of Bette F. Andrews, Michael J. Choquette, and Robert S. Prigge, acting alone, the undersigned’s true and lawful attorney-in-fact to:

(1) complete and sign, for and on behalf of the undersigned, all reports and filings required by Section 13 of the Securities Exchange Act of 1934 and the rules promulgated thereunder (the “Section 13 Reports”);

(2) do and perform any and all acts for and on behalf of the undersigned which may be necessary or desirable to file any such Section 13 Reports, or any amendment thereto, with the United States Securities and Exchange Commission and any other authority; and

(3) take any other action of any type whatsoever in connection with the foregoing which, in the opinion of such attorney-in-fact, may be of benefit to, in the best interest of or legally required of the undersigned, it being understood that the documents executed by such attorney-in-fact on behalf of the undersigned pursuant to this Power of Attorney shall be in such form and shall contain such terms and conditions as such attorney-in-fact may approve in his or her discretion.

The undersigned hereby grants to each such attorney-in-fact full power and authority to do and perform each and every act and thing whatsoever requisite, necessary or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or could do if personally present and acting, with full power of substitution or revocation, hereby ratifying and confirming all that such attorney-in-fact, or his or her substitute or substitutes, shall lawfully do or cause to be done by virtue of this Power of Attorney and the rights and powers herein granted. The undersigned acknowledges that the foregoing attorneys-in-fact, in serving in such capacity at the request of the undersigned, are not assuming any of the responsibilities of the undersigned to comply with Section 13 of the Securities Exchange Act of 1934, as amended.

This Power of Attorney shall not revoke any previous Power of Attorney granted by the undersigned with respect to the subject matter hereof, and shall remain in full force and effect until the undersigned is no longer required to file Section 13 Reports, unless earlier revoked by the undersigned in a subsequently executed Power of Attorney or a signed writing delivered to the foregoing attorneys-in-fact.

IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of this 12th day of March, 2015.

Exhibit 99.6

VMTP Exchange Agreement

DTF Tax-Free Income Inc.

and

Wells Fargo Municipal Capital Strategies, LLC

January 8, 2016

CONTENTS

VMTP EXCHANGE AGREEMENT, dated as of January 8, 2016, between DTF TAX-FREE INCOME INC., a closed-end management investment company organized as a Maryland corporation (the “Fund”) and WELLS FARGO MUNICIPAL CAPITAL STRATEGIES, LLC, a wholly owned subsidiary of Wells Fargo Bank, National Association, organized and existing under the laws of Delaware (the “Wells Fargo”).

WHEREAS, Wells Fargo desires to exchange 650 Variable Rate MuniFund Term Preferred Shares, Series 2018 of the Fund, with a liquidation preference of $100,000 per share (the “Old VMTP Shares”) for 650 newly issued Variable Rate MuniFund Term Preferred Shares, Series 2021, of the Fund, with a liquidation preference of $100,000 per share (the “New VMTP Shares”), such exchange to be conducted on the terms and subject to the conditions set forth in this Agreement (the “Exchange”), and the Fund desires to accept such Exchange;

WHEREAS, in connection with the Exchange, the Fund has authorized the (1) issuance to Wells Fargo of the New VMTP Shares, as set forth on Schedule 1 hereto, (2) acceptance of the Old VMTP Shares surrendered by Wells Fargo in exchange for the New VMTP Shares, and (3) cancellation of the Old VMTP Shares;

WHEREAS, in connection with the Exchange, Wells Fargo has authorized the (1) transfer to the Fund of the Old VMTP Shares for cancellation by the Fund, and (2) acceptance of the New VMTP Shares in exchange for the Old VMTP Shares so transferred;

WHEREAS, as an inducement to Wells Fargo to accept the New VMTP Shares in exchange for the transfer by Wells Fargo to the Fund of the Old VMTP Shares, the Fund now desires to enter into this Agreement to set forth certain representations, warranties, covenants and agreements regarding the Fund and the New VMTP Shares; and

WHEREAS, as an inducement to the Fund to issue to Wells Fargo the New VMTP Shares in exchange for the transfer by Wells Fargo to the Fund of the Old VMTP Shares, Wells Fargo desires to enter into this Agreement to set forth certain representations, warranties, covenants and agreements regarding Wells Fargo and the New VMTP Shares and the Old VMTP Shares, as applicable.

NOW, THEREFORE, in consideration of the respective agreements contained herein, the parties hereto agree as follows:

ARTICLE I

The following terms, as used herein, have the following meanings:

“1940 Act” means the Investment Company Act of 1940, as amended.

“Adviser” has the meaning set forth in the Articles Supplementary.

“Advisory Persons” has the meaning set forth in the Articles Supplementary.

“Agreement” means this VMTP Exchange Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms hereof.

“Articles Supplementary” means the Articles Supplementary Establishing and Fixing the Rights and Preferences of VMTP Shares, as the same may be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof and hereof.

1

“Asset Coverage” has the meaning set forth in the Articles Supplementary.

“Below Highly Speculative” means any obligation, the highest rating for which from any of Moody’s, S&P and Fitch is:

“Below Investment Grade” means any obligation, the highest rating for which from any of Moody’s, S&P and Fitch is:

“Beneficial Owner” has the meaning set forth in the Articles Supplementary.

“Board of Directors” has the meaning set forth in the Articles Supplementary.

“Business Day” has the meaning set forth in the Articles Supplementary.

“Bylaws” means the bylaws of the Fund as amended from time to time.

“Charter” has the meaning set forth in the Articles Supplementary.

“Closed-End Funds” has the meaning set forth in the Articles Supplementary.

“Code” has the meaning set forth in the Articles Supplementary.

“Common Stock” has the meaning set forth in the Articles Supplementary.

“Custodian” has the meaning set forth in the Articles Supplementary.

“Defeased Securities” means a security for which cash, cash equivalents or other eligible property has been pledged in an amount sufficient to make all required payments on such security to and including maturity (including any accelerated maturity pursuant to a permitted redemption), in accordance with the instrument governing the issuance of such security.

“Derivative Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, repurchase transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement, including any such obligations or liabilities under any such master agreement.

2

“Dividend Payment Date” has the meaning set forth in the Articles Supplementary.

“Dividend Rate” has the meaning set forth in the Articles Supplementary.

“Due Diligence Request” means the due diligence request letter from Ashurst LLP.

“Effective Date” means the date on which the Exchange is effected, subject to the satisfaction or waiver of the conditions specified in Section 3.

“Effective Leverage Ratio” has the meaning set forth in the Articles Supplementary.

“Electronic Means” has the meaning set forth in the Articles Supplementary.

“Eligible Assets” means the instruments listed in Exhibit B to this Agreement, which may be amended from time to time with the prior consent of Wells Fargo, in which the Fund may invest.

“Exchange” has the meaning set forth in the recitals to this Agreement.

“Fee Rate” means initially 0.25% per annum, which shall be subject to increase by 0.25% per annum for each Week in respect of which any Reporting Failure has occurred and is continuing.

“Fitch” means Fitch Ratings, Inc., a part of the Fitch Group, or any successor or successors thereto.

“Fitch Guidelines” means the guidelines, as may be amended from time to time, in connection with Fitch’s ratings of the New VMTP Shares.

“Force Majeure Exception” means any failure or delay in the performance of the Fund’s reporting obligation pursuant to Sections 2.5 and 6.1(o) arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including, without limitation, acts of God; earthquakes; flood; terrorism; wars and other military disturbances; sabotage; epidemics; riots; loss or malfunctions of utilities, computer (hardware or software) or communication services; accidents; acts of civil or military authority and governmental action. The Fund shall use commercially reasonable efforts to commence performance of its obligations during any of the foregoing circumstances.

“Fund” has the meaning set forth in the recitals to this Agreement.

“Holder” has the meaning set forth in the Articles Supplementary.

The word “including” means “including without limitation.”

3

“Indemnified Persons” means, Wells Fargo and its affiliates and directors, officers, partners, employees, agents, representatives and control persons, entitled to indemnification by the Fund under Section 7.3.

“Index Rate” has the meaning set forth in the Articles Supplementary.

“Information Memorandum” means the information memorandum of the Fund relating to the Exchange dated January 8, 2016, as may be amended, revised or supplemented from time to time.

“Investment Grade” means,

“Liquidation Preference” means, with respect to a given number of New VMTP Shares, $100,000 times that number.

“Low Investment Grade” means any obligation, the highest rating for which from any of Moody’s, S&P and Fitch is:

“Majority Participants” means the Holder(s) of more than 50% of the Outstanding New VMTP Shares.

“Managed Assets” means the Fund’s net assets, including assets attributable to any principal amount of any borrowings (including the issuance of commercial paper or notes) or preferred stock outstanding.

“Market Value” has the meaning set forth in the Articles Supplementary.

“Moody’s” means Moody’s Investors Service, Inc., or any successor or successors thereto.

“Moody’s Guidelines” means the guidelines, as may be amended from time to time, in connection with Moody’s ratings of the New VMTP Shares.

“New VMTP Shares” has the meaning set forth in the recitals to this Agreement.

4

“NRSRO” has the meaning set forth in the Articles Supplementary.

The word “or” is used in its inclusive sense.

“Old VMTP Purchase Agreement” means the Purchase Agreement dated as of August 23, 2013 between the Fund and Wells Fargo with respect to the Old VMTP Shares.

“Old VMTP Shares” has the meaning set forth in the recitals to this Agreement.

“Optional Redemption Price” has the meaning set forth in the Articles Supplementary.

“Optional Redemption Premium” has the meaning set forth in the Articles Supplementary.

“Other Rating Agency” means each NRSRO, if any, other than Fitch then providing a rating for the New VMTP Shares pursuant to the request of the Fund.

“Other Rating Agency Guidelines” means the guidelines provided by each Other Rating Agency, as may be amended from time to time, in connection with the Other Rating Agency’s ratings of the New VMTP Shares.

“Outstanding” has the meaning set forth in the Articles Supplementary.

“Overcollateralization Ratio” has the meaning set forth in the Articles Supplementary.

“Overconcentration Amount” means as of any date of calculation of the Effective Leverage Ratio for the Fund, an amount equal to the sum of: (i) the Market Value of the Fund’s total assets rated Low Investment Grade in excess of 50% of the Market Value of the Fund’s total assets; (ii) the Market Value of the Fund’s total assets rated Below Investment Grade in excess of 20% of the Market Value of the Fund’s total assets; (iii) the Market Value of the Fund’s total assets that are Unrated in excess of 10% of the Market Value of the Fund’s total assets; (iv) the Market Value of the Fund’s total assets that are obligations of a single issuer and that are rated Investment Grade in excess of 12% of the Market Value of the Fund’s total assets; (v) the Market Value of the Fund’s total assets that are obligations of a single issuer and that are rated Below Investment Grade in excess of 4% of the Market Value of the Fund’s total assets; (vi) the Market Value of the Fund’s assets that constitute exempt interest obligations backed primarily by payments from tobacco companies (excluding such tobacco securities that are Defeased Securities) in excess of 10% of the Fund’s total assets; and (vii) the Market Value of the Fund’s assets that constitute obligations of issuers within any single state or territory in excess of 25% of the Fund’s total assets.

“Person” has the meaning set forth in the Articles Supplementary.

“Preferred Stock” has the meaning set forth in the Articles Supplementary.

“QIB” means a “qualified institutional buyer” as defined in Rule 144A under the Securities Act.

“Rate Period” has the meaning set forth in the Articles Supplementary.

“Rating Agency” means Fitch (if Fitch is then rating New VMTP Shares) and any Other Rating Agency.

“Rating Agency Guidelines” means Fitch Guidelines and any Other Rating Agency Guidelines as they exist from time to time.

5

“Redemption and Paying Agent” means The Bank of New York Mellon, or with the prior written consent of Wells Fargo (which consent shall not be unreasonably withheld), any successor Person, which has entered into an agreement with the Fund to act in such capacity as the Fund’s tender agent, transfer agent, registrar, dividend disbursing agent, paying agent and redemption price disbursing agent and calculation agent in connection with the payment of regularly scheduled dividends with respect to New VMTP Shares.

“Reference Date” has the meaning set forth in Section 6.1(o).

“Related Documents” means this Agreement, the Charter, the Articles Supplementary, the New VMTP Shares and the Bylaws.

“Reporting Failure” has the meaning set forth in Section 2.5.

“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business, and any successor or successors thereto.

“Securities Act” means the U.S. Securities Act of 1933, as amended.

“Securities Depository” means The Depository Trust Company, New York, New York, and any substitute for or successor to such securities depository that shall maintain a book-entry system with respect to the New VMTP Shares.

“Term Redemption Date” has the meaning set forth in the Articles Supplementary.

“Unrated” means any obligation which is unrated or has had its rating withdrawn by each of Moody’s, S&P and Fitch.

“Week” means a period of seven consecutive calendar days.

“Wells Fargo” has the meaning set forth in the recitals to this Agreement.

“written” or “in writing” means any form of written communication, including communication by means of telex, telecopier or electronic mail.

Each capitalized term used herein and not otherwise defined herein shall have the meaning provided therefor (including by incorporation by reference) in the Related Documents.

ARTICLE II

6

Contemporaneous with the issuance of the New VMTP Shares upon consummation of the Exchange, the Fund shall, and shall cause the Securities Depository or its agent to, cancel all of the Old VMTP Shares, and the Old VMTP Purchase Agreement shall be terminated and shall no longer be in effect (other than any provisions thereof that by their express terms survive the repayment in full of all amounts owed to Wells Fargo under the Old VMTP Purchase Agreement and the Old VMTP Shares).

On the Effective Date, the Fund shall pay up to $40,000 of the fees and expenses of Wells Fargo’s outside counsel.

The Fund shall pay amounts due to be paid by it hereunder (including any incidental expenses but not including redemption or dividend payments on the Old VMTP Shares) as operating expenses.

If the Fund fails to comply with the reporting requirements set forth in Section 6.1(o) (except as a result of a Force Majeure Exception) and such failure is not cured within three Business Days after written notification to the Fund by Wells Fargo of such failure (a “Reporting Failure”), the Fund shall pay to Wells Fargo on the Dividend Payment Date occurring in the month immediately following a month in which such Reporting Failure occurs, a fee calculated in respect of each Week (or portion thereof) during such month in which such Reporting Failure continues to exist equal to the product of (a) the Fee Rate, times (b) the aggregate average daily Liquidation Preference of the New VMTP Shares held by Wells Fargo during such Week or portion thereof, times (c) the quotient of the number of days in such Week or portion thereof divided by the number of calendar days in such year. Notwithstanding the foregoing, in no event shall (i) the fee payable pursuant to this Section 2.5 for any Week plus the Dividend Rate for the New VMTP Shares for such Week exceed the Index Rate plus 5.00%, (ii) the fee payable pursuant to this Section 2.5 for any Week plus the Dividend Rate for the New VMTP Shares for such Week exceed 15% or (iii) the Fund be required to calculate or pay a fee in respect of more than one Reporting Failure in any Week.

7

ARTICLE III

It shall be a condition to the Effective Date that each of the following conditions shall have been satisfied or waived as of such date, and upon such satisfaction or waiver, this Agreement shall be effective:

The Fund and Wells Fargo agree that consummation of the Exchange pursuant to this Agreement shall constitute acknowledgment that the foregoing conditions have been satisfied or waived.

8

ARTICLE IV

The representations and warranties set out in this Article IV are given hereunder by the Fund to Wells Fargo on the Effective Date.

The Fund is validly existing and in good standing as a corporation under the laws of the State of Maryland, with full right and power to issue the New VMTP Shares in exchange for the Old VMTP Shares and to execute, deliver and perform its obligations under this Agreement and each Related Document.

The execution, delivery and performance by the Fund of this Agreement and each Related Document are within the Fund’s powers, have been duly authorized by all necessary action, require no action by or in respect of, or filing with, any governmental body, agency or official except such as have been taken or made and will not violate or contravene, or constitute a default under, any provision of applicable law, charter, ordinance or regulation or of any material agreement, judgment, injunction, order, decree or other instrument binding upon the Fund or result in the creation or imposition of any lien or encumbrance on any asset of the Fund.

This Agreement constitutes a valid and binding agreement of the Fund, enforceable in accordance with its terms except as (i) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors’ rights generally and (ii) the availability of equitable remedies may be limited by equitable or public policy principles of general applicability, it being understood that the enforceability of indemnification provisions may be subject to limitations imposed under applicable securities laws. The New VMTP Shares have been duly authorized and, when issued in connection with the Exchange as contemplated by this Agreement, will be validly issued by the Fund and will be fully paid and nonassessable and free of any pre-emptive or similar rights.

The financial statements of the Fund as of its most recent fiscal year-end, and the auditors’ report with respect thereto, copies of which have heretofore been furnished to Wells Fargo, fairly present in all material respects the financial condition of the Fund, at such date and for such period, and were prepared in accordance with accounting principles generally accepted in the United States, consistently applied (except as required or permitted and disclosed). Since the most recent fiscal year-end of the Fund, there has been no material adverse change in the condition (financial or otherwise) or operations of the Fund, except as disclosed in the Information Memorandum, other than changes in the general economy or changes affecting the market for municipal securities or investment companies generally. Any financial, budget and other projections furnished to Wells Fargo were prepared in good faith on the basis of the assumptions stated therein, which assumptions were fair and reasonable in light of conditions existing at the time of delivery of such financial, budget or other projections, and represented, and as of the date of this representation, represent, the Fund’s reasonable best estimate of the Fund’s future financial performance.

9

Except as disclosed in the Information Memorandum or in a schedule delivered to Wells Fargo prior to the Effective Date, no action, suit, proceeding or investigation is pending or (to the best knowledge of the Fund) overtly threatened in writing against the Fund in any court or before any governmental authority (i) in any way contesting or, if decided adversely, would affect the validity of any Related Document or this Agreement; or (ii) in which a final adverse decision would materially adversely affect provisions for or materially adversely affect the sources for payment of the Liquidation Preference of or dividends on the New VMTP Shares.

All consents, licenses, approvals, validations and authorizations of, and registrations, validations or declarations by or with, any court or any governmental agency, bureau or agency required to be obtained in connection with the execution, delivery, performance, validity or enforceability of this Agreement and the other Related Documents (including the New VMTP Shares) have been obtained and are in full force and effect.

As of the Effective Date, the Fund hereby makes to Wells Fargo the representations and warranties included in Annex A hereto, which representations and warranties are hereby incorporated by reference herein.

All information, reports and other papers and data with respect to the Fund furnished to Wells Fargo (other than financial information and financial statements, which are covered solely by Section 4.4 of this Agreement) were, at the time the same were so furnished, complete and correct in all material respects. No fact is known to the Fund that materially and adversely affects or in the future may (so far as it can reasonably foresee) materially and adversely affect the New VMTP Shares, or the Fund’s ability to pay when due its obligations under this Agreement, any of the New VMTP Shares and the Related Documents that has not been set forth in the Information Memorandum or in the financial information and other documents referred to in Section 4.4 or this Section 4.8 or in such information, reports, papers and data or otherwise made available or disclosed in writing to Wells Fargo. Taken as a whole, the documents furnished and statements made by the Fund in connection with the negotiation, preparation or execution of this Agreement and the Related Documents do not contain untrue statements of material facts or omit to state material facts necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading.

The Information Memorandum, true copies of which have heretofore been delivered to Wells Fargo, when considered together with this Agreement and the information made available pursuant to the Due Diligence Request or disclosed in writing to Wells Fargo prior to the Effective Date in connection with this Agreement, does not contain any untrue statement of a material fact and such Information Memorandum does not omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

10

The Fund is duly registered as a closed-end management investment company under the 1940 Act and such registration is in full force and effect.

As of the Effective Date, the Fund is in compliance with the Effective Leverage Ratio, the Asset Coverage and each Overcollateralization Ratio as required by Section 2.4 of the Articles Supplementary.

In connection with calculating the Effective Leverage Ratio, the Fund’s total assets and accrued liabilities reflect the positive or negative net obligations of the Fund under each Derivative Contract determined in accordance with the Fund’s valuation policies.

For purposes of calculating the Effective Leverage Ratio for purposes of the representation contained in the second preceding paragraph, any Overconcentration Amount has been subtracted from the sum determined pursuant to sub-section (ii) of the definition of Effective Leverage Ratio, set out in Section 2.4(d) of the Articles Supplementary.

As of the Effective Date, all of the Fund’s portfolio investments constitute Eligible Assets, as described in Exhibit B to this Agreement.

As of the Effective Date, the Fund (1) has invested at least 80% of its Managed Assets in securities that, at the time of investment, were rated Investment Grade or were unrated but judged to be of comparable quality by the Adviser; (2) has invested up to 20% of its Managed Assets in municipal securities that at the time of investment were rated Below Investment Grade or were unrated but judged to be of comparable quality by the Adviser, provided that the Fund has invested no more than 10% of its Managed Assets in municipal securities that, at the time of investment, were rated Below Highly Speculative or that were unrated but judged to be of comparable quality by the Adviser; and (3) has no investments in non-municipal securities that, at the time of investment, were rated Below Investment Grade.

The Fund understands that nothing in this Agreement, the Information Memorandum, or any other materials presented to the Fund in connection with the Exchange constitutes legal, tax or investment advice from Wells Fargo. The Fund has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with the Exchange.

The Fund acknowledges that, other than the fees and expenses payable pursuant to this Agreement, no brokerage or finder’s fees or commissions are or will be payable by the Fund or Wells Fargo to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by this Agreement.

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ARTICLE V

Wells Fargo represents and warrants with respect to itself, as of the date hereof and as of the Effective Date to the Fund as follows:

Wells Fargo is validly existing and in good standing as a limited liability company under the laws of the State of Delaware and Wells Fargo has full right and power to effect the Exchange and to execute, deliver and perform its obligations under this Agreement and each Related Document to which it is a party.

The execution, delivery and performance by Wells Fargo of this Agreement and each Related Document to which it is a party are within Wells Fargo’s powers, have been duly authorized by all necessary action, require no action by or in respect of, or filing with, any governmental body, agency or official except such as have been taken or made and will not violate or contravene, or constitute a default under, any provision of applicable law, charter, ordinance or regulation or of any material agreement, judgment, injunction, order, decree or other instrument binding upon Wells Fargo.

This Agreement constitutes a valid and binding agreement of Wells Fargo, enforceable in accordance with its terms except as (i) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors’ rights generally and (ii) the availability of equitable remedies may be limited by equitable or public policy principles of general applicability, it being understood that the enforceability of indemnification provisions may be subject to limitations imposed under applicable securities laws.

Wells Fargo understands that the New VMTP Shares are “restricted securities” and have not been registered under the Securities Act or any applicable state securities laws and Wells Fargo is acquiring the New VMTP Shares as principal for its own account and not with a view to or for the purpose of distributing or reselling such securities or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such New VMTP Shares in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such New VMTP Shares in violation of the Securities Act or any applicable state securities law (this representation and warranty not limiting Wells Fargo’s right to transfer New VMTP Shares in compliance with the transfer limitations of this Agreement and in compliance with applicable federal and state securities laws).

Except as disclosed in a schedule delivered to the Fund prior to the Effective Date, no action, suit, proceeding or investigation is pending or (to the best knowledge of Wells Fargo) overtly threatened in writing against Wells Fargo in any court or before any governmental authority in any way contesting or, if decided adversely, would affect the validity of this Agreement.

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All consents, licenses, approvals, validations and authorizations of, and registrations, validations or declarations by or with, any court or any governmental agency, bureau or agency required to be obtained by Wells Fargo in connection with the execution, delivery, performance, validity or enforceability of this Agreement by or against Wells Fargo and the Exchange have been obtained and are in full force and effect.

Wells Fargo is the sole beneficial owner of the Old VMTP Shares being delivered for exchange pursuant to this Agreement and such Old VMTP Shares are being transferred to the Fund or its duly authorized representative, free and clear of any liens or encumbrances of any kind.

At the time Wells Fargo was offered an opportunity to exchange the Old VMTP Shares for the New VMTP Shares, it was, and as of the Effective Date it is an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act.

Wells Fargo has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the Exchange and prospective investment in the New VMTP Shares, and has so evaluated the merits and risks of such investment. Wells Fargo is able to bear the economic risk of the Exchange and an investment in the New VMTP Shares and, at the present time, is able to afford a complete loss of such investment.

Wells Fargo acknowledges that, other than the fees and expenses payable pursuant to this Agreement, no brokerage or finder’s fees or commissions are or will be payable by the Fund or, to Wells Fargo’s knowledge, by the Fund to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by this Agreement. Wells Fargo is paying no fee or other consideration to any Person in connection with the solicitation of the Exchange.

ARTICLE VI

The Fund agrees that, so long as there is any amount payable hereunder or Wells Fargo owns any Outstanding New VMTP Shares:

Without limitation of the other provisions of this Agreement, the Fund will deliver, or direct the Redemption and Paying Agent to deliver, to Wells Fargo:

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All information, reports and other papers, documentation and data with respect to the Fund furnished to Wells Fargo pursuant to this Section 6.1 shall be, at the time the same are so furnished, complete and correct in all material respects and, when considered with all other material delivered to Wells Fargo under this Agreement or made available pursuant to the Due Diligence Request, will not contain untrue statements of material facts or omit to state material facts necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading.

To the extent that Wells Fargo is the Holder of 51% of the New VMTP Shares then outstanding, without the prior written consent of Wells Fargo, the Fund will not agree, consent to or permit any amendment, supplement, interpretation, modification or repeal of the Articles Supplementary or any provision therein, nor waive any provision thereof.

15

The Fund shall continue to maintain its existence as a corporation under the laws of the State of Maryland, with full right and power to effect the Exchange, issue the New VMTP Shares and to execute, deliver and perform its obligations under this Agreement and each Related Document.

The Fund will qualify as a “regulated investment company” within the meaning of Section 851(a) of the Code and the dividends made with respect to the New VMTP Shares will qualify as “exempt interest dividends” to the extent they are reported as such by the Fund and permitted by Section 852(b)(5)(A) of the Code.

The Fund shall promptly pay or cause to be paid all amounts payable by it hereunder and under the Related Documents, according to the terms hereof and thereof, shall take such actions as may be necessary to include all payments hereunder and thereunder which are subject to appropriation in its budget and make full appropriations related thereto, and shall duly perform each of its obligations under this Agreement and the Related Documents. All payments of any sums due hereunder shall be made in the amounts required hereunder without any reduction or setoff, notwithstanding the assertion of any right of recoupment or setoff or of any counterclaim by the Fund.

The Fund shall comply with all laws, ordinances, orders, rules and regulations that may be applicable to it if the failure to comply could have a material adverse effect on the Fund’s ability to pay when due its obligations under this Agreement, any of the New VMTP Shares, or any of the other Related Documents.

The Fund shall at all times maintain in effect, renew and comply with all the terms and conditions of all consents, filings, licenses, approvals and authorizations as may be necessary under any applicable law or regulation for its execution, delivery and performance of this Agreement and the other Related Documents to which it is a party.

The Fund shall, at any reasonable time and from time to time, upon reasonable notice, permit Wells Fargo or any agents or representatives thereof to examine and make copies of the records and books of account related to the transactions contemplated by this Agreement, to visit its properties and to discuss its affairs, finances and accounts with any of its officers and independent accountants, to the extent permitted by law. The Fund shall pay the reasonable expenses of Wells Fargo incurred in connection with up to one inspection pursuant to this Section 6.8 per fiscal year. The Fund will not unreasonably withhold its authorization for its independent accountants to discuss its affairs, finances and accounts with Wells Fargo.

All information, reports and other papers, documentation and data with respect to the Fund furnished to Wells Fargo pursuant to this Section 6.8 shall be, at the time the same are so furnished, complete and correct in all material respects and, when considered with all other material delivered to Wells Fargo under this Agreement or made available pursuant to the Due Diligence Request, will not contain untrue statements of material facts or omit to state material facts necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading.

16

The Fund shall give prompt notice in writing to Wells Fargo of any litigation, administrative proceeding or business development which is reasonably expected to materially adversely affect its business, properties or affairs or to impair the ability of the Fund to perform its obligations as set forth hereunder or under any of the Related Documents.

All information, reports and other papers, documentation and data with respect to the Fund furnished to Wells Fargo pursuant to this Section 6.9 shall be, at the time the same are so furnished, complete and correct in all material respects and, when considered with all other material delivered to Wells Fargo under this Agreement or made available pursuant to the Due Diligence Request, will not contain untrue statements of material facts or omit to state material facts necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading.

The Fund shall maintain its valid registration as a closed-end management investment company under the 1940 Act in full force and effect.

The Fund shall only make investments in the Eligible Assets listed on Exhibit B, as amended from time to time with the prior written consent of Wells Fargo, in accordance with the Fund’s investment objectives and the investment policies set forth in the Information Memorandum. For the avoidance of doubt, compliance with this Section 6.11 shall be tested as of the Effective Date and thereafter at the time an investment is made, and subsequent changes in asset values, credit quality or other circumstances shall not require the Fund to dispose of investments that were Eligible Assets at the time they were acquired by the Fund.

Unless the Fund receives the prior written consent of Wells Fargo (such consent to be determined in Wells Fargo’s good faith discretion), the Fund (1) will invest at least 80% of its Managed Assets in securities that, at the time of investment, are rated Investment Grade or are unrated but judged to be of comparable quality by the Adviser; (2) may invest up to 20% of its Managed Assets in municipal securities that, at the time of investment, are rated Below Investment Grade or are unrated but judged to be of comparable quality by the Adviser, provided that the Fund may invest no more than 10% of its Managed Assets in municipal securities that, at the time of investment, are rated Below Highly Speculative or that are unrated but judged to be of comparable quality by the Adviser; and (3) will not invest in any non-municipal securities that, at the time of investment, are rated Below Investment Grade.

For so long as the Fund fails to provide the information required under Section 6.1(o), Wells Fargo shall calculate the Effective Leverage Ratio using the most recently received information required to be delivered pursuant to Section 6.1(o) and the market values of securities determined by the third-party pricing service which provided the market values to the Fund on the most recent date that information was properly provided by the Fund pursuant to the requirements of Section 6.1(o). The Effective Leverage Ratio as calculated by Wells Fargo in such instances shall be binding on the Fund. If required, the Fund shall restore the Effective Leverage Ratio as provided in the Articles Supplementary. For purposes of calculating the Effective Leverage Ratio, any Overconcentration Amount shall be subtracted from the sum determined pursuant to sub-section (ii) of the definition of Effective Leverage Ratio set out in Section 2.4(d) of the Articles Supplementary.

17

In connection with calculating the Effective Leverage Ratio, the Fund’s total assets and accrued liabilities shall reflect the positive or negative net obligations of the Fund under each Derivative Contract determined in accordance with the Fund’s valuation policies.

The Fund shall use its commercially reasonable best efforts to engage at all times a Redemption and Paying Agent to perform the duties to be performed by the Redemption and Paying Agent specified herein and in the Articles Supplementary.

The Fund will comply with reasonable due diligence requests from Wells Fargo in connection with any proposed sale by Wells Fargo of New VMTP Shares in a transaction exempt from registration and otherwise permitted by this Agreement, provided that the Fund need not comply with any such request more than twice in any period of twelve consecutive months and any prospective purchaser of New VMTP Shares from Wells Fargo shall execute a confidentiality agreement substantially to the effect of Section 7.13 hereof prior to receiving any due diligence materials provided pursuant to such due diligence request.

All information, reports and other papers, documentation and data with respect to the Fund furnished to Wells Fargo pursuant to this Section 6.15 shall be, at the time the same are so furnished, complete and correct in all material respects and, when considered with all other material delivered to Wells Fargo under this Agreement or made available pursuant to the Due Diligence Request, will not contain untrue statements of material facts or omit to state material facts necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading.

The Fund agrees to maintain settlement of New VMTP Shares in global book entry form through the Securities Depository or such other clearance system acceptable to Wells Fargo.

The Fund shall promptly, at the request of Wells Fargo, enter into an agreement, on terms mutually satisfactory to the Fund and Wells Fargo, of the type specified in Section 12(d)(1)(E)(iii) of the 1940 Act, so as to permit Wells Fargo or any transferee satisfying the requirements set forth in Section 2.1 to rely on the provisions of Section 12(d)(1)(E)(iii) of the 1940 Act.

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ARTICLE VII

All notices, requests and other communications to any party hereunder shall be in writing (including telecopy, electronic mail or similar writing), except in the case of notices and other communications permitted to be given by telephone, and shall be given to such party at its address or telecopy number or email address set forth below or such other address or telecopy number or email address as such party may hereafter specify for the purpose by notice to the other parties. Each such notice, request or other communication shall be effective when delivered at the address specified in this Section; provided that notices to Wells Fargo under Section 6.1 shall not be effective until received in writing; except as otherwise specified, notices under Section 6.1 may be given by telephone to Wells Fargo at the telephone numbers listed below (or such other telephone numbers as may be designated by Wells Fargo, by written notice to the Fund, to receive such notice), immediately confirmed in writing, including by fax or electronic mail. The notice address for each party is specified below:

DTF Tax-Free Income Inc.

200 South Wacker Drive, Suite 500

Chicago, Illinois 60606

Wells Fargo Municipal Capital Strategies, LLC

c/o Wells Fargo Bank, National Association

375 Park Avenue New York, New York 10152

Wire Instructions:

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21

Each party further agrees that it will not, without the prior written consent of the other parties (the consent of a party shall not be required to the extent such party is neither requesting indemnification nor being requested to provide indemnification), settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action, suit or proceeding in respect of which indemnification may be sought hereunder (whether or not any Indemnified Person is an actual or potential party to such claim, action, suit or proceeding) unless such settlement, compromise or consent includes an unconditional release of each other Indemnified Person from all liability and obligations arising therefrom. The Fund further agrees that none of Wells Fargo, nor any of its affiliates, nor any directors, officers, partners, employees, agents, representatives or control persons of Wells Fargo or any of its affiliates shall have any liability to the Fund arising out of or in connection with the proposed transactions giving rise to or contemplated by this Agreement except for such liability for losses, claims, damages, liabilities or expenses to the extent they have resulted from Wells Fargo’s or its affiliates’ gross negligence or willful misconduct. No Indemnified Person shall be responsible or liable to the indemnifying party or any other person for consequential, special or punitive damages which may be alleged as a result of this Agreement.

Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by the Fund and Wells Fargo; provided, that the Fund shall not make or agree to any amendment or waiver that affects any preference, right or power of the New VMTP Shares or the Holders thereof except as permitted under the Charter, including the Articles Supplementary.

The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Notwithstanding the preceding sentence, neither the Fund nor Wells Fargo may assign or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of the other party (other than by operation of law), except that (1) any transferee satisfying the requirements set forth in Section 2.1 and which has executed and delivered to the Fund the transferee certificate attached as Exhibit C shall, prior to registration of any New VMTP Shares under the Securities Act, have the rights of Wells Fargo set forth in Section 6.18 and Section 7.15 and shall, so long as such transferee has provided a means for the Fund to transmit such information electronically to it, be entitled to receive the information delivered pursuant to Section 6.1(o) and such transferees shall be deemed a party to this Agreement for purposes of Section 6.1(o) and the confidentiality provisions herein as specified in the transferee certificate and (2) Wells Fargo may assign its rights or obligations to any affiliate of Wells Fargo or any tender option bond trust in which Wells Fargo retains the entire residual interest. Any purported assignment without such prior written consent shall be void.

This Agreement shall terminate upon payment in full of all amounts due and owing to Wells Fargo hereunder and under the New VMTP Shares; and notwithstanding any termination of this Agreement, Section 7.3, Section 7.7, Section 7.8, Section 7.10, Section 7.11, Section 7.12, and Section 7.13 (for a period of two years after the termination of this Agreement) shall remain in full force and effect.

22

This Agreement shall be construed in accordance with and governed by the domestic law of the State of New York.

THE PARTIES HERETO HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE FEDERAL AND NEW YORK STATE COURTS LOCATED IN THE CITY OF NEW YORK IN CONNECTION WITH ANY DISPUTE RELATED TO THIS AGREEMENT OR ANY MATTERS CONTEMPLATED HEREBY.

The Fund and Wells Fargo hereby waive trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against any other on any matters whatsoever arising out of or in any way connected with this Agreement.

This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Any counterpart or other signature delivered by facsimile or by electronic mail shall be deemed for all purposes as being a good and valid execution and delivery of this Agreement by that party.

This Agreement is not intended and shall not be construed to confer upon any Person other than the parties hereto and their successors and permitted assigns any rights or remedies hereunder.

This Agreement shall constitute the entire agreement and understanding between the parties hereto with respect to the matters set forth herein and shall supersede any and all prior agreements and understandings relating to the subject matter hereof.

The Fund and Wells Fargo agree that the representations, warranties, covenants and agreements contained in this Agreement are in addition to the terms and provisions set forth in the Articles Supplementary.

Any information delivered by a party to this Agreement to any other party pursuant to this Agreement, including, without limitation, pursuant to Section 6.1 in the case of the Fund (collectively, the “Information”), shall not be disclosed by such other party (or its employees, representatives or agents) to any person or entity (except as required by law or to such of its agents and advisors as need to know and agree to be bound by the provisions of this paragraph) without the prior written consent of the party delivering the Information.

23

The obligations of confidentiality set out in the preceding paragraph do not extend to Information that (a) is or becomes generally available to the public other than as a result of disclosure by a party in violation of this Agreement, (b) is independently acquired by the party receiving the Information from a third-party source not known to such party, after a good faith inquiry, to be in breach of a duty of confidentiality to the other party, or (c) is required or requested to be disclosed (i) by a regulatory agency or in connection with an examination of either party or its representatives by regulatory authorities, (ii) pursuant to subpoena or other court process, (iii) at the express direction of any other authorized government agency, (iv) to its independent attorneys or auditors, (v) as required by any NRSRO, (vi) as otherwise required by law or regulation, (vii) otherwise in connection with the enforcement of this Agreement, (viii) in connection with the exercise of any remedies hereunder or in any suit, action or proceeding relating to this Agreement and the enforcement of rights hereunder, (ix) by a prospective purchaser of the New VMTP Shares that is (A) a transferee that would be permitted pursuant to Section 2.1(b) of this Agreement and (B) aware of the confidentiality provisions of this Section 7.13 and is subject to an agreement with the transferor containing provisions substantially similar thereto and that states that the Fund is an express third party beneficiary thereof, (x) subject to an agreement containing provisions substantially similar to those of this Section 7.13, or (xi) subject to an agreement containing provisions substantially similar to those of this Section 7.13 and with the prior written consent of the other party to this Agreement, which consent shall not be unreasonably withheld, to any actual or prospective counterparty in any swap or derivative transactions. For the avoidance of doubt, references in this Section 7.13 to “regulatory agency”, “regulatory authorities”, “government agency” and “law or regulation” shall be deemed to include the Internal Revenue Service and state taxation authorities.

In case any provision of this Agreement shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby so long as the intent of the parties to this Agreement shall be preserved.

Without the affirmative vote or consent of the Majority Participants, neither the Fund nor the Board of Directors will take or authorize the taking of any of actions set forth under clauses (a) through (e) of this Section 7.15:

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In addition, if the Board of Directors shall designate a replacement to the S&P Weekly High Grade Municipal Index pursuant to the definition of SIFMA Municipal Swap Index contained in the Articles Supplementary, the Fund shall notify the Holders of the New VMTP Shares within five Business Days of such designation, and if within 30 days of such notice the Majority Participants shall have objected in writing to the designated replacement, the Board of Directors shall designate a replacement to such index as agreed to between the Fund and the Majority Participants. In such event, the replacement index initially approved by the Board of Directors shall be the index in effect for purposes of the Articles Supplementary until a new index has been approved by the Fund and the Majority Participants.

This Agreement shall constitute a “plan of reorganization” within the meaning of Treasury Regulation § 1.368-2(g).

[The remainder of this page has been intentionally left blank.]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

SCHEDULE 1

EXHIBIT A

FORMS OF OPINIONS OF COUNSEL FOR THE FUND

EXHIBIT A-1

FORM OF CORPORATE AND 1940 ACT OPINION

[ON FILE]

EXHIBIT A-2

FORM OF TAX OPINION

[ON FILE]

EXHIBIT A-3

FORM OF LOCAL COUNSEL OPINION

[ON FILE]

EXHIBIT B

ELIGIBLE ASSETS

On the Effective Date and at all times thereafter that the New VMTP Shares are Outstanding:

1. “Eligible Assets” are defined to consist only of assets that conform to the following requirements as of the time of investment:

A. Debt obligations. The following debt obligations which are not in payment default at the time of investment:

i. Debt obligations issued by a State, the District of Columbia or political subdivision thereof, including, but not limited to, limited obligation bonds, revenue bonds, and obligations that satisfy the requirements of Section 142(b)(1) of the Code issued by or on behalf of one or more States, or any public agency or authority of any State, or political subdivision of a State.

ii. Debt obligations issued by a U.S. Territory or political subdivision thereof, including limited obligation bonds, revenue bonds, and obligations that satisfy the requirements of section 142(b)(1) of the Code issued by or on behalf of one or more U.S. Territories, or any public agency or authority of any U.S. Territory, or political subdivision of a U.S. Territory, which are “investment grade” (as defined in Paragraph 1.A.x.(bb) below).

iii. Debt obligations of the United States.

iv. Debt obligations issued, insured, or guaranteed by a department or an agency of the government of the United States, if the obligation, insurance, or guarantee commits the full faith and credit of the United States for the repayment of the obligation.

v. Debt obligations of the Washington Metropolitan Area Transit Authority guaranteed by the U.S. Secretary of Transportation under Section 9 of the National Capital Transportation Act of 1969.

vi. Debt obligations of the Federal Home Loan Banks.

vii. Debt obligations, participations or other instruments of or issued by the Federal National Mortgage Association or the Government National Mortgage Association.

viii. Debt obligations which are or ever have been sold by the Federal Home Loan Mortgage Corporation pursuant to sections 305 or 306 of the Federal Home Loan Mortgage Corporation Act.

ix. Debt obligations of any agency named in 12 U.S.C. § 24 (Seventh) as eligible to issue obligations that a national bank may underwrite, deal in, purchase and sell for the bank’s own account, including qualified Canadian government obligations.

x. Debt obligations of issuers other than those specified in (i) through (ix) above that are “investment grade” and that are “marketable.” For these purposes, an obligation is:

(aa) “marketable” if:

B - 1

(bb) “investment grade” if:

xi. Certificates or other securities evidencing ownership interests in a municipal bond trust structure (generally referred to as a tender option bond structure) that invests in (a) debt obligations of the types described in (i) above or (b) depository receipts reflecting ownership interests in accounts holding debt obligations of the types described in (i) above.

xii. The bonds, notes and other debt securities referenced in (A) above shall be defined as Eligible Assets. An asset shall not lose its status as an Eligible Asset solely by virtue of the fact that:

B - 2

2. At any time that the New VMTP Shares are outstanding, for any investment company the securities of which are held by the Fund, the Fund will provide or make available the following information to the Holders within ten (10) days after the public quarterly release of such information and on the Effective Date (for the reporting period having ended most recently prior to the closing):

B - 3

EXHIBIT C

TRANSFEREE CERTIFICATE

DTF Tax-Free Income Inc.

200 South Wacker Drive, Suite 500

Chicago, IL 60606

Attention: Nathan I. Partain

Ladies and Gentlemen:

Reference is hereby made to the Exchange Agreement (the “Exchange Agreement”), dated as of January 8, 2016, between DTF Tax-Free Income Inc., a closed-end management investment company organized as a Maryland corporation (the “Fund”), Wells Fargo Municipal Capital Strategies, LLC, a wholly owned subsidiary of Wells Fargo Bank, National Association, organized and existing under the laws of Delaware, including its successors by merger or operation (the “Transferor”). Capitalized terms used but not defined herein shall have the meanings given them in the Exchange Agreement.

In connection with the proposed sale by the Transferor of                     Variable Rate MuniFund Term Preferred Shares, Series 2021 (“VMTP Shares”) of the Fund (the “Transferred Shares”) to the undersigned transferee (the “Transferee”), the undersigned agrees and acknowledges, on its own behalf, and makes the representations and warranties, on its own behalf, as set forth in this certificate (this “Transferee Certificate”) to the Fund and the Transferor:

1. The Transferee certifies to one of the following (check a box):

q it is a “qualified institutional buyer” (a “QIB”) (as defined in Rule 144A under the Securities Act or any successor provision) (“Rule 144A”) that is a registered closed-end management investment company the shares of which are traded on a national securities exchange (a “Closed-End Fund”), a bank (or an affiliate of a bank), insurance company or registered open-end management investment company, in each case, to which any offer and sale is being made pursuant to Rule 144A or another available exemption from registration under the U.S. Securities Act of 1933, as amended (the “Securities Act”), in a manner not involving any public offering within the meaning of Section 4(a)(2) of the Securities Act;

q it is a tender option bond trust in which all investors are QIBs that are Closed-End Funds, banks (or affiliates of banks), insurance companies, or registered open-end management investment companies; or

q is a person which the Fund has consented in writing to permit to be the holder of the Transferred Shares.

2. The Transferee certifies that it (check a box):

q is not an Advisory Person that after such sale and transfer, would own more than 20% of the Outstanding VMTP Shares; or

q has received the prior written consent of the Fund and the holder(s) of more than 50% of the Outstanding VMTP Shares.

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3. The Transferee understands and acknowledges that the Transferred Shares are “restricted securities” and have not been registered under the Securities Act or any other applicable securities law, are being offered for sale pursuant to Rule 144A or another available exemption from registration under the Securities Act, in a manner not involving any public offering with the meaning of Section 4(a)(2) of the Securities Act, and may not be offered, sold or otherwise transferred except in compliance with the registration requirements of the Securities Act or any other applicable securities law, pursuant to an exemption therefrom or in a transaction not subject thereto and in each case in compliance with the conditions for transfer set forth in this Transferee Certificate.

4. The Transferee is purchasing the Transferred Shares as principal for its own account and not with a view to or for the purpose of distributing or reselling such securities or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Transferred Shares in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Transferred Shares in violation of the Securities Act or any applicable state securities law, subject to any requirements of law that the disposition of its property be at all times within its control and subject to its ability to resell such securities pursuant to Rule 144A or another available exemption from registration under the Securities Act and any applicable state securities law.

5. The Transferee agrees, on its own behalf and on behalf of each subsequent holder or owner of the Transferred Shares who by its acceptance thereof will agree, to offer, sell or otherwise transfer the Transferred Shares only to Persons it reasonably believes are (A)(i) QIBs that are registered closed-end management investment companies, the shares of which are traded on a national securities exchange, banks (or affiliates of banks), insurance companies and registered open-end management investment companies, in each case, pursuant to Rule 144A or another available exemption from registration under the Securities Act, in a manner not involving any public offering within the meaning of Section 4(a)(2) of the Securities Act, (ii) tender option bond trusts in which all investors are QIBs that are registered closed-end management investment companies, the shares of which are traded on a national securities exchange, banks (or affiliates of banks), insurance companies, and registered open-end management investment companies, or (iii) other investors which the Fund has consented in writing to permit to be a holder of the Transferred Shares and (B) unless the prior written consent of the Fund and the holder(s) of more than 50% of the outstanding VMTP Shares has been obtained, is not an Advisory Person, if such Advisory Person would, after such sale and transfer, own more than 20% of the Outstanding VMTP Shares.

6. The Transferee acknowledges that the VMTP Shares were issued in book-entry form and are represented by one global certificate and that the global certificate representing the VMTP Shares (unless sold to the public in an underwritten offering of the VMTP Shares pursuant to a registration statement filed under the Securities Act) contains a legend substantially to the following effect:

THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAW. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.

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THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY ONLY TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS (1)(A) A “QUALIFIED INSTITUTIONAL BUYER” THAT IS A REGISTERED CLOSED-END MANAGEMENT INVESTMENT COMPANY, THE SHARES OF WHICH ARE TRADED ON A NATIONAL SECURITIES EXCHANGE, BANKS (OR AFFILIATES OF BANKS), INSURANCE COMPANIES AND REGISTERED OPEN-END MANAGEMENT INVESTMENT COMPANIES, IN EACH CASE, IN AN OFFER AND SALE MADE PURSUANT TO RULE 144A OR ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, IN A MANNER NOT INVOLVING ANY PUBLIC OFFERING WITHIN THE MEANING OF SECTION 4(a)(2) OF THE SECURITIES ACT; (B) A TENDER OPTION BOND TRUST IN WHICH ALL INVESTORS ARE QUALIFIED INSTITUTIONAL BUYERS THAT ARE REGISTERED CLOSED-END MANAGEMENT INVESTMENT COMPANIES, THE SHARES OF WHICH ARE TRADED ON A NATIONAL SECURITIES EXCHANGE, BANKS (OR AFFILIATES OF BANKS), INSURANCE COMPANIES, AND REGISTERED OPEN-END MANAGEMENT INVESTMENT COMPANIES; OR (C) A PERSON THAT THE ISSUER OF THE SECURITY HAS APPROVED IN WRITING TO BE THE HOLDER OF THE SECURITY AND (2) UNLESS THE PRIOR WRITTEN CONSENT OF THE ISSUER OF THE SECURITY AND HOLDERS OF MORE THAN 50% OF THE OUTSTANDING VMTP SHARES IS OBTAINED, NOT AN ADVISORY PERSON (AS DEFINED IN THE VMTP EXCHANGE AGREEMENT, DATED JANUARY 8, 2016, BETWEEN THE FUND, WELLS FARGO MUNICIPAL CAPITAL STRATEGIES, LLC), IF SUCH ADVISORY PERSON WOULD, AFTER SUCH SALE AND TRANSFER, OWN MORE THAN 20% OF THE OUTSTANDING VMTP SHARES.

7. The Transferee has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Transferred Shares, and has so evaluated the merits and risks of such investment. The Transferee is able to bear the economic risk of an investment in the Transferred Shares and, at the present time, is able to afford a complete loss of such investment.

8. The Transferee acknowledges that it has received a copy of the Exchange Agreement and Appendices thereto and agrees to be bound by any obligations therein binding on a transferee of the VMTP Shares and the confidentiality obligations therein with respect to information relating to the Fund as if it were the Transferor.

9. The Transferee acknowledges that it has been given the opportunity to obtain from the Fund the information referred to in Rule 144A(d)(4) under the Securities Act, and has either declined such opportunity or has received such information and has had access to and has reviewed all information, documents and records that it has deemed necessary in order to make an informed investment decision with respect to an investment in the Transferred Shares and that the Transferee understands the risk and other considerations relating to such investment.

10. The Transferee acknowledges that it has sole responsibility for its own due diligence investigation and its own investment decision relating to the Transferred Shares. The Transferee understands that any materials presented to the Transferee in connection with the purchase and sale of the Transferred Shares does not constitute legal, tax or investment advice from the Fund. The Transferee has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with the purchase of the Transferred Shares.

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11. The Transferee acknowledges that each of Transferor and the Fund and their respective affiliates and others will rely on the acknowledgments, representations and warranties contained in this Transferee’s Certificate as a basis for exemption of the sale of the Transferred Shares under the Securities Act, under the securities laws of all applicable states, and for other purposes. The Transferee agrees to promptly notify the Fund and the Transferor if any of the acknowledgments, representations or warranties set forth herein are no longer accurate.

12. This Transferee’s Certificate shall be governed by and construed in accordance with the laws of the State of New York.

13. The Transferee agrees to provide, together with this completed and signed Transferee’s Certificate, a completed and signed IRS Form W-9, Form W-8 or successor form, as applicable.

[The next page is the signature page.]

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The undersigned has provided a completed and signed IRS Form W-9, Form W-8 or successor form, as applicable, and has caused this Transferee’s Certificate to be executed by its duly authorized representative as of the date set forth below.

Date:                    

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EXHIBIT D

INFORMATION TO BE PROVIDED BY THE FUND

Reporting as of:                    

TOB Floaters: $                    

ANNEX A

ADDITIONAL REPRESENTATIONS AND WARRANTIES

(Given only as of the Effective Date)

Annex A - 1

Annex A - 2

Annex A - 3