ar53114shyt.htm

May 31, 2014

Annual Report

to Shareholders

DWS Strategic High Yield Tax-Free Fund

(On August 11, 2014, DWS Strategic High Yield Tax-Free Fund will be renamed Deutsche Strategic High Yield Tax-Free Fund.)

Contents

3 Letter to Shareholders

4 Portfolio Management Review

11 Performance Summary

14 Investment Portfolio

39 Statement of Assets and Liabilities

41 Statement of Operations

42 Statement of Cash Flows

43 Statement of Changes in Net Assets

44 Financial Highlights

49 Notes to Financial Statements

60 Report of Independent Registered Public Accounting Firm

61 Information About Your Fund's Expenses

62 Tax Information

63 Advisory Agreement Board Considerations and Fee Evaluation

68 Board Members and Officers

73 Account Management Resources

This report must be preceded or accompanied by a prospectus. To obtain a summary prospectus, if available, or prospectus for any of our funds, refer to the Account Management Resources information provided in the back of this booklet. We advise you to consider the fund's objectives, risks, charges and expenses carefully before investing. The summary prospectus and prospectus contain this and other important information about the fund. Please read the prospectus carefully before you invest.

Bond investments are subject to interest-rate and credit risks. When interest rates rise, bond prices generally fall. Credit risk refers to the ability of an issuer to make timely payments of principal and interest. Investments in lower-quality ("junk bonds") and non-rated securities present greater risk of loss than investments in higher-quality securities. The fund invests in inverse floaters, which are derivatives that involve leverage and could magnify the fund's gains or losses. Although the fund seeks income that is exempt from federal income taxes, a portion of the fund's distributions may be subject to federal, state and local taxes, including the alternative minimum tax. See the prospectus for details.

Deutsche Asset & Wealth Management represents the asset management and wealth management activities conducted by Deutsche Bank AG or any of its subsidiaries, including the Advisor and DWS Investments Distributors, Inc.

NOT FDIC/NCUA INSURED NO BANK GUARANTEE MAY LOSE VALUE NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY

Letter to Shareholders

Dear Shareholder:

The economic recovery appears to be gaining traction here in the United States and across much of the globe. Still, the data we see on television and the Internet provide a mixed message. Corporate profit growth may be decelerating, but manufacturing and the housing market are strengthening. Employment numbers are not as strong as one would expect, yet consumer confidence is resilient. All in all, economic growth has been sufficient for the Federal Reserve to taper its bond-buying program.

What lies ahead? Randy Brown, co-chief investment officer for Deutsche Asset & Wealth Management, suggests that "despite the slowdown in some emerging economies, global growth is likely to remain solid." And "as a result of stable economic growth and continued tapering, we expect the yields of long U.S. Treasuries to increase eventually."

Does this view suggest the need for a change in strategy? The answer will depend on your current asset allocation as well as whether a change has occurred in your personal circumstances, objectives or investment time horizon. A trusted financial advisor who fully understands your specific situation and goals can be the best resource when weighing any major decisions. In any case, we believe that some measure of diversification across a variety of securities and asset classes makes sense. Although it doesn't insure against loss or guarantee a profit, diversification can help your portfolio weather short-term market fluctuations. And that is a helpful strategy in any environment.

Best regards,

Brian Binder

President, DWS Funds

Portfolio Management Review (Unaudited)

Overview of Market and Fund Performance

All performance information below is historical and does not guarantee future results. Returns shown are for Class A shares, unadjusted for sales charges. Investment return and principal fluctuate, so your shares may be worth more or less when redeemed. Current performance may differ from performance data shown. Please visit dws-investments.com for the most recent month-end performance of all share classes. Fund performance includes reinvestment of all distributions. Unadjusted returns do not reflect sales charges and would have been lower if they had. Please refer to pages 11 through 13 for more complete performance information.

Investment Strategy

The fund invests in a wide variety of municipal bonds. These include general obligation bonds, for which payments of principal and interest are secured by the full faith and credit of the issuer and usually supported by the issuer’s taxing power. In addition, securities held may include revenue bonds, for which principal and interest are secured by revenues from tolls, rents or other fees gained from the facility that was built with the bond issue proceeds.

The fund’s management team seeks to hold municipal bonds that appear to offer the best opportunity to meet the fund’s objective of earning tax-exempt income. A number of factors influence the performance of municipal bonds. These include supply and demand for the asset class, the direction of overall interest rates, and the perceived credit risk associated with an individual municipal issuer. In selecting securities, the managers weigh the impact of the economic outlook and potential interest rate movements to characteristics of specific securities such as coupons, maturity dates and call dates, and changes in supply and demand within the municipal market. Finally, the managers may seek to take advantage if they believe the municipal yield curve presents an opportunity to gain incremental income with limited additional interest rate risk. Although portfolio management may adjust the fund’s duration (a measure of sensitivity to interest rates) over a wider range, they generally intend to keep it similar to that of the Barclays Municipal Bond Index, generally between five and nine years.

DWS Strategic High Yield Tax-Free Fund posted a return of 1.27% for the period ended May 31, 2014. The overall municipal bond market, as measured by the unmanaged Barclays Municipal Bond Index, delivered a total return of 3.05% for the same period. The average fund in the Morningstar High Yield Muni category returned 1.42% for the 12 months ended May 31, 2014.

Throughout the period, market interest rates reacted strongly to expectations regarding the economy and the potential for the U.S. Federal Reserve Board (the Fed) to begin unwinding its extremely accommodative monetary policy. Early in the period, municipal bond funds began to experience significant outflows as investors found the historically low yields on offer unappealing and sought to minimize exposure to rising interest rates. The negative sentiment intensified on comments from the Fed chair to the effect that the economy had stabilized sufficiently to consider a tapering of long-term bond purchases under its quantitative easing program. Overall bond market sentiment would soon stabilize to a degree on weaker data, including a downward revision in GDP growth that suggested the Fed had ample justification to keep its foot on the monetary pedal. This "stop and go" dynamic with respect to expectations for the Fed would repeat itself throughout much of the 12 months.

Municipal market sentiment was negatively impacted by Detroit’s July 2013 filing for bankruptcy and ongoing headline concerns over Puerto Rico’s economic and fiscal outlook. Treasury rates generally trended upward in the latter part of 2013, putting further pressure on all fixed-income prices, including those for municipals.

As the period progressed, municipals would find some support as favorable yields relative to Treasuries drew demand from both retail investors and from institutional investors traditionally more focused on the taxable market. Municipal prices were also supported to a degree by a drop-off in new issuance. Entering 2014, markets appeared to become more comfortable with the likely pace of Fed tightening and bond market rates generally began to drift downward. At the same time, the trend of strong outflows from tax-free mutual funds eased. The result was a strong recovery in municipals over the first few months of 2014 and positive returns for the full 12 months ended May 31, 2014.

"Entering 2014, markets appeared to become more comfortable with the likely pace of Fed tightening."

Throughout the period ended May 31, 2014, the Fed kept short-term rates anchored near zero. While municipal yields rose sharply in the middle part of the period (the 30-year AAA reached a high of 4.51% in September of 2013), they essentially conducted a round trip over the full 12 months. Along the municipal yield curve, the two-year bond yield started and finished the period at 0.29%, while the 10-year yield rose from 2.09% to 2.16%, the 20-year from 2.90% to 3.00%, and the 30-year from 3.24% to 3.26%. (See the graph below for municipal bond yield changes from the beginning to the end of the period.) For the 12 months, the story with municipal market credit spreads — the incremental yield offered by lower-quality issues vs. AAA-rated issues — was mixed, with issues rated BBB and below lagging in large part due to Puerto Rico, while spreads tightened for many issues in the A-quality range.

Municipal Bond Yield Curve (as of 5/31/14 and 5/31/13)

Source: Municipal Market Data, AAA-rated universe

This chart is for illustrative purposes only and is not intended to represent the yield of any DWS fund. Performance is historical and does not guarantee future results.

Positive and Negative Contributors to Fund Performance

With a relatively steep yield curve as the period began, we had a tilt in the portfolio towards longer-term issues in the 20-to-30-year maturity range. This exposure was a drag on relative performance for much of the period as the curve steepened further, driven by rising yields among issues on the longer end. This lost ground was regained as yields declined over the first several months of 2014.

The fund had a meaningful position in Puerto Rico issues relative to the benchmark index, which hurt performance as they were downgraded to below-investment-grade. We also held a number of challenged senior care bonds which detracted from overall performance. On the positive side, we had relatively light exposure to the volatile tobacco sector, which also experienced negative returns over the period.

Within the investment-grade portion of the fund, we have maintained significant exposure to issues in both the A- and BBB-quality segments. On the whole, our exposure to BBB issues acted as a constraint on relative performance, while our holdings in the A range were a positive contributor. With respect to specific sectors, the fund’s substantial exposure to health care, corporate-backed, airline and prepaid gas issues with attractive yields all performed well as the municipal market snapped back in 2014. In addition, the fund had a significant position in California bonds, which outperformed the broader market as sentiment with respect to the state’s overall budgetary balance continued to mend.

Outlook and Positioning

Municipal yields, while reasonably attractive relative to U.S. Treasuries, ended the period at relatively low levels by recent historical standards. At the end of May 2014, the 10-year municipal bond yield of 2.16% was 87% of the comparable-maturity U.S. Treasury bond yield before taking into account the tax advantage of municipals. The 30-year municipal yield of 3.26% was 98% of the comparable U.S. Treasury yield.

Given a relatively steep curve, longer-term issues continue to carry a substantial yield advantage. We are focusing purchases on bonds with maturities in the 20-to-25-year range, while seeking exposure to premium coupon issues that can provide a degree of protection against rising interest rates.

Municipal market credit sentiment appears to have stabilized following the negative headlines of 2013. With respect to the fund’s credit exposure, we continue to see the most attractive opportunities among bonds in the A-quality range, while viewing spreads for issues rated BBB as relatively tight. As always, the expertise we bring to researching municipal sectors and individual issues continues to be of critical importance.

Portfolio Management Team

Philip G. Condon, Managing Director

Lead Portfolio Manager of the fund. Began managing the fund in 1987.

— Joined Deutsche Asset & Wealth Management in 1983.

— Head of Municipal Bonds.

— BA and MBA, University of Massachusetts at Amherst.

Rebecca L. Flinn, Director

Portfolio Manager of the fund. Began managing the fund in 1998.

— Joined Deutsche Asset & Wealth Management in 1986.

— BA, University of Redlands, California.

A. Gene Caponi, CFA, Managing Director

Portfolio Manager of the fund. Began managing the fund in 2009.

— Joined Deutsche Asset & Wealth Management in 1998.

— BS, State University of New York, Oswego; MBA, State University of New York at Albany.

The views expressed reflect those of the portfolio management team only through the end of the period of the report as stated on the cover. The management team's views are subject to change at any time based on market and other conditions and should not be construed as a recommendation. Past performance is no guarantee of future results. Current and future portfolio holdings are subject to risk.

Terms to Know

The Barclays Municipal Bond Index is an unmanaged, market-value-weighted measure of municipal bonds issued across the United States. Index issues have a credit rating of at least Baa and a maturity of at least two years. Index returns do not reflect fees or expenses and it is not possible to invest directly into an index.

The Morningstar High Yield Muni category consists of funds that invest at least 50% of their assets in high-income municipal securities that are not rated or that are rated at a level of BBB and below.

Quantitative easing is a government monetary policy often used when interest rates are at or near zero. With this policy, government or other securities are purchased from the market, causing the price of the securities purchased to rise and the yield or interest rates on the securities purchased to fall. For the companies whose bonds the central banks are willing to purchase, it means having to pay lower interest rates on new bonds issued to replace existing bonds that have matured. With lower borrowing costs, the central banks hope consumers will be encouraged to spend more, thus helping the overall economy and improving the balance sheets for the companies providing the goods and services on which consumers are spending their money.

The yield curve is a graph with a left-to-right line that shows how high or low yields are, from the shortest to the longest maturities. Typically (and when the yield curve is characterized as –steep," this is especially true), the line rises from left to right as investors who are willing to tie up their money for a longer period are rewarded with higher yields.

Credit quality measures a bond issuer’s ability to repay interest and principal in a timely manner. Rating agencies assign letter designations, such as AAA, AA and so forth. The lower the rating the higher the probability of default. Credit quality does not remove market risk and is subject to change.

Credit spread is the additional yield provided by municipal bonds rated AA and below vs. municipals rated AAA with comparable effective maturity.

Duration, which is expressed in years, measures the sensitivity of the price of a bond or bond fund to a change in interest rates.

Performance Summary May 31, 2014 (Unaudited)

Class A	1-Year	5-Year	10-Year
Average Annual Total Returns as of 5/31/14
Unadjusted for Sales Charge	1.27%	7.25%	5.03%
Adjusted for the Maximum Sales Charge (max 2.75% load)	–1.52%	6.65%	4.74%
Barclays Municipal Bond Index†	3.05%	5.59%	5.00%
Class B	1-Year	5-Year	10-Year
Average Annual Total Returns as of 5/31/14
Unadjusted for Sales Charge	0.51%	6.44%	4.23%
Adjusted for the Maximum Sales Charge (max 4.00% CDSC)	–2.39%	6.29%	4.23%
Barclays Municipal Bond Index†	3.05%	5.59%	5.00%
Class C	1-Year	5-Year	10-Year
Average Annual Total Returns as of 5/31/14
Unadjusted for Sales Charge	0.52%	6.45%	4.25%
Adjusted for the Maximum Sales Charge (max 1.00% CDSC)	0.52%	6.45%	4.25%
Barclays Municipal Bond Index†	3.05%	5.59%	5.00%
Class S	1-Year	5-Year	10-Year
Average Annual Total Returns as of 5/31/14
No Sales Charges	1.53%	7.51%	5.26%
Barclays Municipal Bond Index†	3.05%	5.59%	5.00%
Institutional Class	1-Year	5-Year	10-Year
Average Annual Total Returns as of 5/31/14
No Sales Charges	1.45%	7.54%	5.30%
Barclays Municipal Bond Index†	3.05%	5.59%	5.00%

Performance in the Average Annual Total Returns table(s) above and the Growth of an Assumed $10,000 Investment line graph that follows is historical and does not guarantee future results. Investment return and principal fluctuate, so your shares may be worth more or less when redeemed. Current performance may differ from performance data shown. Please visit dws-investments.com for the Fund's most recent month-end performance. Fund performance includes reinvestment of all distributions. Unadjusted returns do not reflect sales charges and would have been lower if they had.

The gross expense ratios of the Fund, as stated in the fee table of the prospectus dated October 31, 2013 are 1.03%, 1.79%, 1.78%, 0.89% and 0.79% for Class A, Class B, Class C, Class S and Institutional Class shares, respectively, and may differ from the expense ratios disclosed in the Financial Highlights tables in this report.

Index returns do not reflect any fees or expenses and it is not possible to invest directly into an index.

Performance figures do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

A portion of the Fund's distributions may be subject to federal, state and local taxes and the alternative minimum tax.

Growth of an Assumed $10,000 Investment (Adjusted for Maximum Sales Charge)

Yearly periods ended May 31

The Fund's growth of an assumed $10,000 investment is adjusted for the maximum sales charge of 2.75%. This results in a net initial investment of $9,725.

The growth of $10,000 is cumulative.

Performance of other share classes will vary based on the sales charges and the fee structure of those classes.

† The Barclays Municipal Bond Index covers the U.S.-dollar-denominated long-term tax exempt bond market. The index has four main sectors: state and local general obligation bonds, revenue bonds, insured bonds and pre-refunded bonds.

	Class A			Class B			Class C			Class S			Institutional Class
Net Asset Value
5/31/14	$	12.49		$	12.49		$	12.50		$	12.50		$	12.50
5/31/13	$	12.95		$	12.95		$	12.96		$	12.96		$	12.97
Distribution Information as of 5/31/14
Income Dividends, Twelve Months	$	.59		$	.50		$	.50		$	.62		$	.62
May Income Dividend	$	.0466		$	.0386		$	.0387		$	.0493		$	.0493
SEC 30-day Yield‡‡		3.24	%		2.58	%		2.58	%		3.58	%		3.58	%
Tax Equivalent Yield‡‡		5.72	%		4.56	%		4.56	%		6.33	%		6.33	%
Current Annualized Distribution Rate‡‡		4.48	%		3.71	%		3.72	%		4.73	%		4.73	%

‡‡ The SEC yield is net investment income per share earned over the month ended May 31, 2014 shown as an annualized percentage of the maximum offering price per share on the last day of the period. The SEC yield is computed in accordance with a standardized method prescribed by the Securities and Exchange Commission. The SEC yield would have been 3.13%, 2.52%, 2.49% and 3.45% for Classes A, B, C and Institutional shares, respectively, had certain expenses not been reduced. Tax equivalent yield is based on the Fund's yield and a marginal federal income rate of 43.4%. Current annualized distribution rate is the latest monthly dividend shown as an annualized percentage of net asset value on May 31, 2014. Distribution rate simply measures the level of dividends and is not a complete measure of performance. The current annualized distribution rate would have been 4.37%, 3.65%, 3.63% and 4.60% for Classes A, B, C and Institutional shares, respectively, had certain expenses not been reduced. Yields and distribution rates are historical, not guaranteed and will fluctuate.

Investment Portfolio as of May 31, 2014

	Principal Amount ($)		Value ($)

Municipal Bonds and Notes 92.6%
Alabama 0.1%
Montgomery, AL, Medical Clinic Board, Health Care Facility Revenue, Jackson Hospital & Clinic, 5.25%, 3/1/2036		2,000,000		2,027,900
Arizona 1.1%
Arizona, Salt Verde Financial Corp., Gas Revenue, 5.25%, 12/1/2025, GTY: Citibank NA		4,000,000		4,658,160
Maricopa County, AZ, Pollution Control Corp. Revenue, El Paso Electric Co. Project, Series B, 7.25%, 4/1/2040		3,930,000		4,489,082
Pima County, AZ, Industrial Development Revenue, Tucson Electric Power, 5.75%, 9/1/2029		2,250,000		2,291,962
Tempe, AZ, Industrial Development Authority Revenue, Tempe Life Care Village, Inc.:
Series A, 6.25%, 12/1/2042		1,535,000		1,608,834
Series A, 6.25%, 12/1/2046		1,400,000		1,464,512
Yavapai County, AZ, Industrial Development Authority, Solid Waste Disposal Revenue, Waste Management, Inc. Project, Series A-1, AMT, 4.9%, 3/1/2028		5,000,000		5,166,500
				19,679,050
California 8.7%
California, Bay Area Toll Authority, Toll Bridge Revenue, San Francisco Bay Area:
Series F-1, 5.125%, 4/1/2039		10,000,000		11,263,200
Series F-1, 5.5%, 4/1/2043		10,000,000		11,197,100
California, M-S-R Energy Authority, Series B, 7.0%, 11/1/2034, GTY: Citigroup, Inc.		8,750,000		11,895,275
California, Morongo Band of Mission Indians, Enterprise Casino Revenue, Series B, 144A, 6.5%, 3/1/2028		5,000,000		5,464,900
California, State General Obligation:
5.0%, 8/1/2034		5,185,000		5,735,128
5.5%, 3/1/2040		5,130,000		5,924,380
California, State General Obligation, Various Purposes:
5.0%, 11/1/2032		10,000,000		11,037,200
5.0%, 11/1/2037		9,145,000		9,850,720
5.75%, 4/1/2031		23,360,000		27,692,112
California, State Public Works Board, Lease Revenue, Series B, 5.0%, 10/1/2039		5,500,000		6,086,795
California, State Public Works Board, Lease Revenue, Capital Projects:
Series A-1, 6.0%, 3/1/2035		10,175,000		12,207,558
Series I-1, 6.375%, 11/1/2034		5,000,000		6,027,650
California, Statewide Communities Development Authority Revenue, Terraces At San Joaquin Gardens Project:
Series A, 5.625%, 10/1/2032		500,000		518,550
Series A, 6.0%, 10/1/2042		1,000,000		1,050,030
Series A, 6.0%, 10/1/2047		1,000,000		1,047,660
Long Beach, CA, Bond Finance Authority, Natural Gas Purchase Revenue, Series A, 5.25%, 11/15/2023, GTY: Merrill Lynch & Co., Inc.		620,000		710,477
Riverside County, CA, Transportation Commission Toll Revenue, Series A, 5.75%, 6/1/2048		2,850,000		3,143,493
San Buenaventura, CA, Community Memorial Health Systems, 7.5%, 12/1/2041		3,250,000		3,767,465
San Diego, CA, Community College District, Election of 2006, 5.0%, 8/1/2036		2,050,000		2,278,391
San Francisco, CA, City & County Airports Commission, Series 36A, 0.03%**, 5/1/2026, LOC: U.S. Bank NA		2,000,000		2,000,000
San Francisco, CA, City & County Public Utilities Commission, Water Revenue, Series A, 5.125%, 11/1/2039		10,400,000		11,680,032
San Francisco, CA, City & County Redevelopment Financing Authority, Tax Allocation, Mission Bay South Redevelopment, Series D, 7.0%, 8/1/2041		1,400,000		1,566,684
Vernon, CA, Electric Systems Revenue, Series A, 5.5%, 8/1/2041		2,240,000		2,440,278
West Hills, CA, Community College District, 0.04%**, 7/1/2033, LOC: Union Bank of California NA		2,170,000		2,170,000
				156,755,078
Colorado 2.4%
Colorado, E-470 Public Highway Authority Revenue:
Series C, 5.375%, 9/1/2026		2,000,000		2,210,020
Series A-1, 5.5%, 9/1/2024, INS: NATL		3,500,000		3,686,410
Colorado, Health Facilities Authority Revenue, Christian Living Communities Project, Series A, 5.75%, 1/1/2037		1,000,000		1,018,780
Colorado, Health Facilities Authority Revenue, Covenant Retirement Communities, Inc., 5.0%, 12/1/2035		11,750,000		11,831,075
Colorado, Health Facilities Authority Revenue, Valley View Hospital Association, 5.75%, 5/15/2036		2,000,000		2,113,420
Colorado, Public Energy Authority, Natural Gas Purchased Revenue, 6.25%, 11/15/2028, GTY: Merrill Lynch & Co., Inc.		6,365,000		7,981,837
Colorado, Regional Transportation District, Private Activity Revenue, Denver Transit Partners, 6.0%, 1/15/2041		2,000,000		2,203,880
Colorado, State Educational & Cultural Facilities Authority Revenue, National Jewish Federation, Series D3, 0.07%**, 12/1/2037, GTY: Milwaukee Jewish Federation, Inc., LOC: JPMorgan Chase Bank NA		2,685,000		2,685,000
Colorado, State Health Facilities Authority Revenue, Christian Living Community, 6.375%, 1/1/2041		1,615,000		1,726,871
Colorado, State Health Facilities Authority Revenue, Covenant Retirement Communities, Series A, 5.0%, 12/1/2033		4,835,000		5,014,620
Montrose, CO, Memorial Hospital Revenue, 6.375%, 12/1/2023		2,355,000		2,400,475
				42,872,388
Connecticut 1.9%
Connecticut, Harbor Point Infrastructure Improvement District, Special Obligation Revenue, Harbor Point Project, Series A, 7.875%, 4/1/2039		20,000,000		23,387,000
Connecticut, Mashantucket Western Pequot Tribe Bond, 144A, 7.093%, 7/1/2031 (PIK)		14,791,793		7,424,593
Connecticut, Mohegan Tribe Indians Gaming Authority, Priority Distribution, 144A, 5.25%, 1/1/2033		3,000,000		2,996,310
Hamden, CT, Facility Revenue, Whitney Center Project, Series A, 7.625%, 1/1/2030		1,200,000		1,274,100
				35,082,003
District of Columbia 0.4%
Metropolitan Washington, DC, Airport Authority Dulles Toll Road Revenue, Dulles Metrorail & Capital Important Project, Series A, 5.0%, 10/1/2053		7,000,000		7,315,280
Florida 6.8%
Bayside, FL, Sales & Special Tax Revenue, Community Development District, Series A, 6.3%, 5/1/2018		210,000		210,040
Collier County, FL, Industrial Development Authority, Continuing Care Community Revenue, Arlington of Naples Project, Series A, 8.125%, 5/15/2044		4,000,000		4,324,600
Florida, Capital Region Community Development District, Capital Improvement Revenue, Series A, 7.0%, 5/1/2039		5,995,000		6,067,599
Florida, Harbourage at Braden River Community Development District, Capital Improvement Revenue, Series A, 6.125%, 5/1/2034		1,295,000		1,295,272
Florida, Middle Village Community Development District, Special Assessment, Series A, 6.0%, 5/1/2035		8,125,000		6,748,056
Florida, Tolomato Community Development District, Special Assessment, 5.4%, 5/1/2037		15,590,000		15,637,705
Florida, Village Community Development District No. 9, Special Assessment Revenue:
5.5%, 5/1/2042		1,490,000		1,611,614
7.0%, 5/1/2041		1,790,000		2,200,304
Greater Orlando, FL, Aviation Authority Airport Facilities Revenue, Jetblue Airways Corp. Project, AMT, 5.0%, 11/15/2026		1,500,000		1,492,410
Highlands County, FL, Health Facilities Authority Revenue, Adventist Health System:
Series G, 5.125%, 11/15/2020		970,000		1,073,732
Series G, Prerefunded, 5.125%, 11/15/2020		30,000		33,474
Series G, Prerefunded, 5.125%, 11/15/2021		70,000		78,106
Series G, Prerefunded, 5.125%, 11/15/2022		75,000		83,685
Series G, Prerefunded, 5.125%, 11/15/2023		180,000		200,844
Lee County, FL, Airport Revenue, Series A, AMT, 5.375%, 10/1/2032		1,750,000		1,917,650
Martin County, FL, Health Facilities Authority, Martin Memorial Medical Center, 5.5%, 11/15/2042		3,040,000		3,266,602
Miami Beach, FL, Health Facilities Authority, Mount Sinai Medical Center:
5.0%, 11/15/2029		1,000,000		1,080,090
6.75%, 11/15/2029		7,005,000		7,193,014
Prerefunded, 6.75%, 11/15/2029		1,095,000		1,127,697
Miami-Dade County, FL, Aviation Revenue, Miami International Airport:
Series A, AMT, 5.25%, 10/1/2033, INS: AGC		10,000,000		11,137,000
Series A-1, 5.5%, 10/1/2041		5,000,000		5,756,650
Miami-Dade County, FL, Double Barreled Aviation, 5.0%, 7/1/2041		5,000,000		5,437,750
Miami-Dade County, FL, Water & Sewer Systems Revenue, 5.0%, 10/1/2034		3,650,000		3,970,433
Orange County, FL, Health Facilities Authority Revenue, Orlando Regional Healthcare, Series C, 5.25%, 10/1/2035		5,000,000		5,338,600
Palm Beach County, FL, Health Facilities Authority Revenue, Waterford Project, 5.375%, 11/15/2022		2,600,000		2,825,134
Palm Beach County, FL, Health Facilities Authority, Retirement Community Revenue, Acts Retirement-Life Communities, Inc., 5.5%, 11/15/2033		9,000,000		9,577,170
Port St. Lucie, FL, Special Assessment Revenue, Southwest Annexation District 1, Series B, 5.0%, 7/1/2027, INS: NATL		2,500,000		2,602,400
Seminole Tribe, FL, Special Obligation Revenue:
Series A, 144A, 5.5%, 10/1/2024		8,000,000		8,712,160
Series A, 144A, 5.75%, 10/1/2022		9,500,000		10,419,695
				121,419,486
Georgia 3.5%
Americus-Sumter County, GA, Hospital Authority, Magnolia Manor Obligated Group, Series A, 6.375%, 5/15/2043		4,000,000		4,263,760
Atlanta, GA, Tax Allocation, Beltline Project,
Series B, 7.375%, 1/1/2031		4,915,000		5,807,810
Atlanta, GA, Tax Allocation, Princeton Lakes Project, 144A, 5.5%, 1/1/2031		1,045,000		1,059,024
Atlanta, GA, Water & Wastewater Revenue:
Series B, 5.375%, 11/1/2039, INS: AGMC		10,000,000		10,938,700
Series A, 6.25%, 11/1/2034		10,000,000		11,846,400
De Kalb County, GA, Hospital Authority Revenue, Anticipation Certificates, Dekalb Medical Center, Inc. Project, 6.125%, 9/1/2040		7,500,000		7,912,650
De Kalb County, GA, Water & Sewer Revenue, Series A, 5.25%, 10/1/2032		820,000		924,246
Georgia, Glynn-Brunswick Memorial Hospital Authority Revenue, Anticipation Certificates-Southeast Health, Series A, 5.625%, 8/1/2034		5,500,000		6,010,840
Georgia, Main Street Natural Gas, Inc., Gas Project Revenue:
Series A, 5.0%, 3/15/2019, GTY: JPMorgan Chase & Co. (a)		10,000,000		11,203,600
Series A, 5.5%, 9/15/2024, GTY: Merrill Lynch & Co., Inc.		2,440,000		2,867,781
				62,834,811
Guam 0.9%
Government of Guam, General Obligation, Series A, 7.0%, 11/15/2039		10,155,000		11,063,974
Guam, International Airport Authority, Series C, AMT, 6.375%, 10/1/2043		1,610,000		1,801,445
Guam, Power Authority Revenue, Series A, 5.5%, 10/1/2030		3,000,000		3,320,220
				16,185,639
Hawaii 1.9%
Hawaii, State Airports Systems Revenue, Series A, 5.0%, 7/1/2034		15,000,000		16,313,250
Hawaii, State Department of Budget & Finance, Special Purpose Revenue, 15 Craigside Project, Series A, 9.0%, 11/15/2044		2,000,000		2,347,740
Hawaii, State Department of Budget & Finance, Special Purpose Revenue, Hawaiian Electric Co., Inc.:
Series B, AMT, 4.6%, 5/1/2026, INS: FGIC		11,790,000		11,962,723
6.5%, 7/1/2039, GTY: Hawaiian Electric Co., Inc.		2,500,000		2,803,275
				33,426,988
Illinois 6.8%
Chicago, IL, Board of Education, Series A, 5.5%, 12/1/2039		10,000,000		10,568,900
Chicago, IL, General Obligation:
Series A, 5.0%, 1/1/2033		7,000,000		7,220,290
Series A, 5.25%, 1/1/2029, INS: AGMC		175,000		175,334
Series A, 5.25%, 1/1/2032		3,000,000		3,174,720
Series A, 5.25%, 1/1/2035		4,050,000		4,213,134
Chicago, IL, O'Hare International Airport Revenue, Third Lien:
Series A, 5.75%, 1/1/2039		9,955,000		11,271,449
Series B, 6.0%, 1/1/2041		12,095,000		13,901,630
Cook County, IL, Forest Preservation District, Series C, 5.0%, 12/15/2037		1,845,000		1,996,474
Illinois, Finance Authority Revenue, Elmhurst Memorial Healthcare, Series A, 5.625%, 1/1/2037		5,500,000		5,937,690
Illinois, Finance Authority Revenue, Friendship Village of Schaumburg:
Series A, 5.625%, 2/15/2037		5,000,000		4,791,000
7.25%, 2/15/2045		4,000,000		4,208,600
Illinois, Finance Authority Revenue, Park Place of Elmhurst, Series A, 8.125%, 5/15/2040		6,000,000		4,110,000
Illinois, Finance Authority Revenue, Rush University Medical Center, Series B, 5.75%, 11/1/2028, INS: NATL		1,250,000		1,383,075
Illinois, Finance Authority Revenue, Swedish Covenant Hospital, Series A, 6.0%, 8/15/2038		7,830,000		8,455,774
Illinois, Finance Authority Revenue, The Admiral at Lake Project:
Series A, 7.75%, 5/15/2030		1,675,000		1,678,451
Series A, 8.0%, 5/15/2040		1,000,000		1,001,340
Series A, 8.0%, 5/15/2046		3,500,000		3,495,415
Illinois, Finance Authority Revenue, Three Crowns Park Plaza:
Series A, 5.875%, 2/15/2026		1,225,000		1,242,934
Series A, 5.875%, 2/15/2038		500,000		502,305
Illinois, Metropolitan Pier & Exposition Authority, Dedicated State Tax Revenue, McCormick Place, Series B, 5.0%, 6/15/2050, INS: AGMC		8,000,000		8,281,920
Illinois, Railsplitter Tobacco Settlement Authority, 6.0%, 6/1/2028		6,405,000		7,511,208
Illinois, State Finance Authority Revenue, OSF Healthcare Systems, Series A, 5.0%, 5/15/2041		5,265,000		5,576,583
Illinois, State Finance Authority Revenue, Trinity Health Corp., Series L, 5.0%, 12/1/2030		1,500,000		1,665,630
Illinois, State General Obligation:
5.0%, 2/1/2039		2,400,000		2,503,632
5.0%, 5/1/2039		5,000,000		5,220,450
5.5%, 7/1/2038		1,280,000		1,403,046
				121,490,984
Indiana 1.3%
Indiana, Health & Educational Facility Financing Authority, Hospital Revenue, Community Foundation Northwest, 5.5%, 3/1/2037		1,750,000		1,847,825
Indiana, State Finance Authority Revenue, Greencroft Obligation Group, Series A, 7.0%, 11/15/2043		2,290,000		2,472,238
Indiana, State Finance Authority, Hospital Revenue, Indiana University Health, Series D, 0.06%**, 3/1/2033, LOC: Northern Trust Co.		5,000,000		5,000,000
North Manchester, IN, Economic Development Revenue, Peabody Retirement Community Project:
Series B, 1.0%, 12/1/2045*		1,341,246		14
Series A, 5.13%**, 12/1/2045		1,557,576		1,112,343
Valparaiso, IN, Exempt Facilities Revenue, Pratt Paper LLC Project, AMT, 7.0%, 1/1/2044, GTY: Pratt Industries (U.S.A.)		6,220,000		6,951,783
Vigo County, IN, Hospital Authority Revenue, Union Hospital, Inc.:
5.5%, 9/1/2027		1,000,000		1,008,190
8.0%, 9/1/2041		4,000,000		4,567,840
				22,960,233
Iowa 1.2%
Altoona, IA, Urban Renewal Tax Increment Revenue, Annual Appropriation:
6.0%, 6/1/2034		1,000,000		1,072,540
6.0%, 6/1/2039		2,000,000		2,132,140
Iowa, Finance Authority Retirement Community Revenue, Edgewater LLC Project, 6.5%, 11/15/2027		5,000,000		5,209,600
Iowa, State Finance Authority, Midwestern Disaster Area Revenue, Fertilizer Co. Project, 5.25%, 12/1/2025		6,665,000		6,969,324
Iowa, State Finance Authority, Wellness Facilities Revenue, Community Marshalltown Project, 0.07%**, 1/1/2031, LOC: Northern Trust Co.		6,000,000		6,000,000
				21,383,604
Kansas 0.4%
Lenexa, KS, Health Care Facility Revenue, 5.5%, 5/15/2039		6,340,000		6,399,976
Lenexa, KS, Health Care Facility Revenue, Lakeview Village, Inc. Project, 7.25%, 5/15/2039		1,200,000		1,328,328
				7,728,304
Kentucky 1.7%
Kentucky, Economic Development Finance Authority, Hospital Facilities Revenue, Owensboro Medical Health Systems, Series A, 6.5%, 3/1/2045		15,000,000		16,847,550
Kentucky, Economic Development Finance Authority, Louisville Arena Project Revenue, Series A-1, 6.0%, 12/1/2033, INS: AGC		3,635,000		3,860,697
Kentucky, Public Transportation Infrastructure Authority Toll Revenue, 1st Tier-Downtown Crossing, Series A, 6.0%, 7/1/2053		7,195,000		8,051,421
Louisville & Jefferson County, KY, Metropolitan Government Health Systems Revenue, Norton Healthcare, Inc., 5.0%, 10/1/2030		1,000,000		1,023,830
				29,783,498
Louisiana 2.6%
DeSoto Parish, LA, Environmental Improvement Revenue, International Paper Co. Project:
Series A, AMT, 5.0%, 11/1/2018		1,260,000		1,279,417
Series A, AMT, 5.75%, 9/1/2031		5,000,000		5,380,200
Louisiana, Local Government Environmental Facilities & Community Development, Westlake Chemical Corp., Series A, 6.5%, 8/1/2029		6,055,000		7,029,249
Louisiana, Local Government Environmental Facilities, Community Development Authority Revenue, 6.75%, 11/1/2032		6,000,000		6,762,300
Louisiana, Public Facilities Authority Revenue, Ochsner Clinic Foundation Project, 6.75%, 5/15/2041		2,500,000		2,897,500
Louisiana, Public Facilities Authority, Hospital Revenue, Lafayette General Medical Center, 5.5%, 11/1/2040		5,000,000		5,299,750
Louisiana, St. John Baptist Parish Revenue, Marathon Oil Corp., Series A, 5.125%, 6/1/2037		15,000,000		15,710,850
Louisiana, Tobacco Settlement Financing Corp. Revenue, Series A, 5.25%, 5/15/2035		1,820,000		1,948,783
				46,308,049
Maine 0.6%
Maine, Health & Higher Educational Facilities Authority Revenue, Maine General Medical Center, 6.75%, 7/1/2036		9,000,000		9,974,880
Maryland 1.9%
Anne Arundel County, MD, Special Obligation, National Business Park North Project, 6.1%, 7/1/2040		2,200,000		2,351,580
Maryland, State Economic Development Corp. Revenue, Senior Lien Project, Chesapeake Bay:
Series A, 5.0%, 12/1/2031		7,000,000		3,497,760
Series B, 5.25%, 12/1/2031		3,400,000		1,698,912
Maryland, State Health & Higher Educational Facilities Authority Revenue, Adventist Healthcare, Series A, 6.125%, 1/1/2036		3,250,000		3,648,222
Maryland, State Health & Higher Educational Facilities Authority Revenue, Doctors Community Hospital, Inc., 5.75%, 7/1/2038		6,250,000		6,458,312
Maryland, State Health & Higher Educational Facilities Authority Revenue, Mercy Medical Center:
Series A, 5.0%, 7/1/2037		5,005,000		5,145,841
6.25%, 7/1/2031		2,500,000		2,848,975
Maryland, State Health & Higher Educational Facilities Authority Revenue, Washington County Hospital:
5.75%, 1/1/2033		2,660,000		2,762,623
6.0%, 1/1/2028		6,100,000		6,495,158
				34,907,383
Massachusetts 3.2%
Boston, MA, Industrial Development Financing Authority Revenue, Crosstown Center Project:
AMT, 6.5%, 9/1/2035		8,805,000		6,577,247
AMT, 8.0%, 9/1/2035*		960,000		221,107
Massachusetts, Industrial Development Revenue, Development Finance Agency, Series A, 7.1%, 7/1/2032		3,355,000		3,356,241
Massachusetts, Project Revenue, Health & Educational Facilities Authority, Jordan Hospital, Series E, 6.75%, 10/1/2033		7,450,000		7,456,631
Massachusetts, State Central Artery, Series B, 0.07%**, 12/1/2030, SPA: U.S. Bank NA		3,070,000		3,070,000
Massachusetts, State Development Finance Agency Revenue, Linden Ponds, Inc. Facility:
Series A-2, 5.5%, 11/15/2046		86,572		62,549
Series A-1, 6.25%, 11/15/2039		1,621,881		1,364,148
Series B, 11/15/2056*		430,598		1,938
Massachusetts, State Development Finance Agency Revenue, Tufts Medical Center, Inc., Series I, 7.25%, 1/1/2032		2,250,000		2,739,420
Massachusetts, State Health & Educational Facilities Authority Revenue, Caregroup Healthcare System:
Series E-1, 5.0%, 7/1/2028		1,500,000		1,579,095
Series E-1, 5.125%, 7/1/2038		1,500,000		1,567,590
Massachusetts, State Health & Educational Facilities Authority Revenue, Jordan Hospital, Series B, 6.875%, 10/1/2015		1,705,000		1,710,865
Massachusetts, State Health & Educational Facilities Authority Revenue, Milford Regional Medical Center:
Series E, 5.0%, 7/15/2022		2,250,000		2,359,643
Series E, 5.0%, 7/15/2032		3,250,000		3,300,505
Series E, 5.0%, 7/15/2037		2,750,000		2,768,810
Massachusetts, State Health & Educational Facilities Authority Revenue, South Shore Hospital:
Series F, 5.625%, 7/1/2019		255,000		255,992
Series F, 5.75%, 7/1/2029		1,480,000		1,486,408
Massachusetts, State Health & Educational Facilities Authority Revenue, Suffolk University, Series A, 5.75%, 7/1/2039		7,145,000		7,761,256
Massachusetts, State Port Authority Special Facilities Revenue, Delta Air Lines, Inc. Project:
Series A, AMT, 5.5%, 1/1/2016, INS: AMBAC		5,000,000		5,005,400
Series A, AMT, 5.5%, 1/1/2018, INS: AMBAC		4,000,000		4,003,320
				56,648,165
Michigan 2.2%
Dearborn, MI, Economic Development Corp. Revenue, Limited Obligation, Henry Ford Village:
7.0%, 11/15/2038		4,500,000		4,594,410
7.125%, 11/15/2043		1,500,000		1,536,600
Detroit, MI, Water & Sewerage Department, Sewerage Disposal System Revenue, Series A, 5.25%, 7/1/2039		2,100,000		2,092,650
Detroit, MI, Water Supply Systems Revenue, Series A, 5.75%, 7/1/2037		7,590,000		7,575,124
Kalamazoo, MI, Economic Development Corp. Revenue, Limited Obligation, Heritage Community:
5.375%, 5/15/2027		1,000,000		999,050
5.5%, 5/15/2036		1,000,000		959,390
Kentwood, MI, Economic Development Corp., Limited Obligation, Holland Home, 5.625%, 11/15/2041		3,750,000		3,810,563
Michigan, State Finance Authority Revenue, Trinity Health Corp., 5.0%, 12/1/2031		10,910,000		12,008,091
Michigan, State Hospital Finance Authority Revenue, Henry Ford Health Hospital, 5.75%, 11/15/2039		6,315,000		6,861,626
				40,437,504
Mississippi 1.1%
Lowndes County, MS, Solid Waste Disposal & Pollution Control Revenue, Weyerhaeuser Co. Project, Series A, 6.8%, 4/1/2022		5,500,000		6,567,660
Warren County, MS, Gulf Opportunity Zone, International Paper Co.:
Series A, 5.375%, 12/1/2035		1,000,000		1,077,620
Series A, 5.5%, 9/1/2031		4,250,000		4,469,512
Series A, 5.8%, 5/1/2034, GTY: International Paper Co.		4,000,000		4,420,360
Series A, 6.5%, 9/1/2032		2,620,000		2,925,702
				19,460,854
Missouri 0.8%
Cass County, MO, Hospital Revenue, 5.5%, 5/1/2027		2,000,000		2,044,980
Kansas City, MO, Industrial Development Authority, Health Facilities Revenue, First Mortgage, Bishop Spencer, Series A, 6.5%, 1/1/2035		1,000,000		1,007,870
Kirkwood, MO, Industrial Development Authority, Retirement Community Revenue, Aberdeen Heights:
Series A, 8.25%, 5/15/2039		1,000,000		1,150,110
Series A, 8.25%, 5/15/2045		2,850,000		3,269,976
Missouri, State Health & Educational Facilities Authority, Lutheran Senior Services, 6.0%, 2/1/2041		2,250,000		2,473,695
St. Louis, MO, Lambert-St. Louis International Airport Revenue, Series A-1, 6.625%, 7/1/2034		4,085,000		4,711,884
				14,658,515
Nebraska 0.2%
Douglas County, NE, Hospital Authority No. 002 Revenue, Health Facilities, Immanuel Obligation Group, 5.625%, 1/1/2040		1,500,000		1,626,345
Lancaster County, NE, Hospital Authority No.1, Health Facilities Revenue, Immanuel Obligation Group, 5.625%, 1/1/2040		2,500,000		2,710,575
				4,336,920
Nevada 0.4%
Reno, NV, Hospital Revenue, Renown Regional Medical Center Project, Series A, 5.0%, 6/1/2027		5,000,000		5,184,550
Sparks, NV, Local Improvement Districts, Limited Obligation District No. 3, 6.75%, 9/1/2027		2,000,000		2,107,360
				7,291,910
New Hampshire 1.3%
New Hampshire, Health & Education Facilities Authority Revenue, Havenwood-Heritage Heights:
Series A, 5.35%, 1/1/2026		1,035,000		1,041,034
Series A, 5.4%, 1/1/2030		550,000		551,045
New Hampshire, Health & Education Facilities Authority Revenue, Wentworth-Douglas Hospital, Series A, 7.0%, 1/1/2038		5,325,000		6,168,267
New Hampshire, Senior Care Revenue, Health & Educational Facilities Authority, New Hampshire Catholic Charities, 5.8%, 8/1/2022		2,550,000		2,556,477
New Hampshire, State Business Finance Authority Revenue, Elliot Hospital Obligation Group, Series A, 6.125%, 10/1/2039		5,000,000		5,423,200
New Hampshire, State Business Finance Authority, Solid Waste Disposal Revenue, Waste Management, Inc. Project, AMT, 5.2%, 5/1/2027		4,000,000		4,206,760
New Hampshire, State Health & Education Facilities Authority Revenue, Rivermead Retirement Community:
Series A, 6.625%, 7/1/2031		700,000		771,631
Series A, 6.875%, 7/1/2041		2,825,000		3,121,230
				23,839,644
New Jersey 3.5%
New Jersey, Health Care Facilities Financing Authority Revenue, St. Joseph's Health Care System, 6.625%, 7/1/2038		5,785,000		6,265,791
New Jersey, Industrial Development Revenue, Economic Development Authority, Harrogate, Inc., Series A, 5.875%, 12/1/2026		1,425,000		1,425,627
New Jersey, State Economic Development Authority Revenue, 5.0%, 6/15/2028		450,000		488,570
New Jersey, State Economic Development Authority Revenue, The Goethals Bridge Replacement Project, AMT, 5.375%, 1/1/2043		2,275,000		2,439,323
New Jersey, State Economic Development Authority, Continental Airlines, Inc. Project, AMT, 4.875%, 9/15/2019		11,790,000		12,076,261
New Jersey, State Economic Development Authority, Special Facilities Revenue, Continental Airlines, Inc. Project, Series B, AMT, 5.625%, 11/15/2030		2,500,000		2,671,600
New Jersey, State Health Care Facilities Financing Authority Revenue, Saint Barnabas Health, Series A, 5.625%, 7/1/2032		3,500,000		3,861,410
New Jersey, State Transportation Trust Fund Authority, Transportation Systems, Series A, 5.5%, 6/15/2041		7,000,000		7,827,610
New Jersey, Tobacco Settlement Financing Corp.:
Series 1A, 4.75%, 6/1/2034		16,240,000		12,793,385
Series 1-A, 5.0%, 6/1/2029		15,965,000		13,815,951
				63,665,528
New Mexico 0.5%
Farmington, NM, Pollution Control Revenue, Public Service Co. of New Mexico, Series C, 5.9%, 6/1/2040		7,500,000		8,295,900
New York 3.4%
Albany, NY, Industrial Development Agency, Civic Facility Revenue, St. Peter's Hospital Project:
Series A, 5.25%, 11/15/2027		3,000,000		3,221,160
Series A, 5.75%, 11/15/2022		1,500,000		1,711,065
Hudson, NY, Yards Infrastructure Corp. Revenue:
Series A, 5.25%, 2/15/2047		5,000,000		5,377,100
Series A, 5.75%, 2/15/2047		7,000,000		8,006,950
New York, Metropolitan Transportation Authority, Dedicated Tax Fund, Series A-1, 0.03%**, 11/1/2031, LOC: Morgan Stanley Bank		3,900,000		3,900,000
New York, State Dormitory Authority Revenues, NYU Hospital Center, Series B, 5.25%, 7/1/2024		770,000		827,042
New York, State Dormitory Authority Revenues, Orange Regional Medical Center, 6.125%, 12/1/2029		2,000,000		2,081,540
New York, State Energy Research & Development Authority Facilties Revenue, Consolidated Edison Co., Inc. Project:
Series A-1, AMT, 0.05%**, 6/1/2036, LOC: Scotiabank		1,500,000		1,500,000
Series A-3, AMT, 0.05%**, 6/1/2036, LOC: Scotiabank		1,000,000		1,000,000
New York, State Housing Finance Agency, 100 Maiden Lane Properties, Series A, 0.06%**, 5/15/2037, LIQ: Fannie Mae		2,875,000		2,875,000
New York & New Jersey, Port Authority, Special Obligation Revenue, JFK International Air Terminal LLC, 6.0%, 12/1/2042		5,795,000		6,470,407
New York City, NY, Industrial Development Agency, Special Facility Revenue, American Airlines, JFK International Airport:
AMT, 7.625%, 8/1/2025, GTY: American Airlines Group		5,000,000		5,505,400
AMT, 7.75%, 8/1/2031, GTY: American Airlines Group		6,470,000		7,140,810
AMT, 8.0%, 8/1/2028, GTY: American Airlines Group		6,100,000		6,764,107
New York City, NY, Industrial Development Agency, Special Facility Revenue, British Airways PLC Project, AMT, 7.625%, 12/1/2032		1,500,000		1,507,890
New York, NY, General Obligation, Series E, 0.07%**, 8/1/2034, LOC: Bank of America NA		235,000		235,000
Orange County, NY, Senior Care Revenue, Industrial Development Agency, The Glen Arden Project, 5.7%, 1/1/2028		1,250,000		667,362
Triborough, NY, Bridge & Tunnel Authority Revenues, Series B-2, 0.06%**, 1/1/2033, LOC : California State Teacher's Retirement System		2,150,000		2,150,000
				60,940,833
North Carolina 0.3%
Charlotte, NC, Airport Revenue, Series A, 5.0%, 7/1/2039		1,450,000		1,553,066
North Carolina, Medical Care Commission, Retirement Facilities Revenue, First Mortgage, Southminster Project, Series A, 5.625%, 10/1/2027		2,500,000		2,548,900
North Carolina, State Educational Facilities Finance Agency, Duke University Project, Series A, 0.07%**, 12/1/2017		1,700,000		1,700,000
				5,801,966
North Dakota 0.1%
Grand Forks, ND, Health Care System Revenue, Altru Health System, 5.0%, 12/1/2032		2,000,000		2,113,920
Ohio 0.7%
Cleveland, OH, Airport Systems Revenue, Series A, 5.0%, 1/1/2030		1,000,000		1,091,840
Hamilton County, OH, Health Care Facilities Revenue, Christ Hospital Project, 5.5%, 6/1/2042		3,100,000		3,384,704
Hamilton County, OH, Health Care Revenue, Life Enriching Communities Project:
6.125%, 1/1/2031		2,030,000		2,265,947
6.625%, 1/1/2046		2,500,000		2,789,225
Ohio, State Higher Educational Facility Commission Revenue, Summa Health Systems Project, Series 2010, 5.75%, 11/15/2040		3,000,000		3,289,140
				12,820,856
Oklahoma 0.4%
Tulsa County, OK, Industrial Authority, Senior Living Community Revenue, Montereau, Inc. Project, Series A, 7.25%, 11/1/2045		6,500,000		7,119,190
Pennsylvania 2.9%
Cumberland County, PA, Municipal Authority Revenue, Asbury Obligation Group, 6.125%, 1/1/2045		4,350,000		4,535,180
Lancaster County, PA, Hospital Authority Revenue, Brethren Village Project, Series A, 6.375%, 7/1/2030		1,000,000		1,048,280
Montgomery County, PA, Industrial Development Authority Revenue, Whitemarsh Continuing Care, 6.25%, 2/1/2035		2,400,000		2,429,736
Northampton County, PA, Hospital Authority Revenue, St. Luke's Hospital Project:
Series A, 5.375%, 8/15/2028		3,500,000		3,727,745
Series A, 5.5%, 8/15/2035		6,500,000		6,827,535
Northeastern, PA, Hospital & Education Authority, Commonwealth Medical College Project, 0.05%**, 9/1/2034, LOC: PNC Bank NA		2,745,000		2,745,000
Pennsylvania, Economic Development Finance Authority, U.S. Airways Group, Series B, 8.0%, 5/1/2029, GTY: U.S. Airways, Inc.		985,000		1,167,984
Pennsylvania, Economic Development Financing Authority, Sewer Sludge Disposal Revenue, Philadelphia Biosolids Facility, 6.25%, 1/1/2032		1,500,000		1,614,510
Pennsylvania, State Turnpike Commission Revenue, Series A, 6.5%, 12/1/2036		6,385,000		7,537,173
Philadelphia, PA, Airport Revenue, Series A, 5.0%, 6/15/2035		7,085,000		7,506,628
Philadelphia, PA, Gas Works Revenue, 5.25%, 8/1/2040		3,000,000		3,364,020
Philadelphia, PA, Hospitals & Higher Education Facilities Authority Revenue, Temple University Health Systems, Series A, 5.0%, 7/1/2034		10,000,000		9,776,500
				52,280,291
Puerto Rico 4.9%
Commonwealth of Puerto Rico, Aqueduct & Sewer Authority Revenue, Series A, 6.0%, 7/1/2038		25,750,000		20,615,193
Commonwealth of Puerto Rico, General Obligation, Series A, 8.0%, 7/1/2035		3,280,000		2,932,910
Commonwealth of Puerto Rico, Public Improvement, Series B, 6.5%, 7/1/2037		10,000,000		8,101,400
Puerto Rico, Electric Power Authority Revenue:
Series TT, 5.0%, 7/1/2032		5,500,000		3,420,670
Series TT, 5.0%, 7/1/2037		4,000,000		2,457,520
Series XX, 5.25%, 7/1/2040		6,665,000		4,104,774
Puerto Rico, Electric Power Authority, Power Revenue, Series A, 6.75%, 7/1/2036		12,030,000		8,331,016
Puerto Rico, Public Buildings Authority Revenue, Government Facilities, Series M, 6.25%, 7/1/2022		5,000,000		4,183,500
Puerto Rico, Sales Tax Financing Corp., Sales Tax Revenue:
Series C, 5.25%, 8/1/2041		3,065,000		2,438,391
Series A, 5.5%, 8/1/2042		10,175,000		8,286,215
Series A, 5.75%, 8/1/2037		2,130,000		1,809,456
Series A, 6.0%, 8/1/2042		4,570,000		3,975,534
Series A, 6.375%, 8/1/2039		10,000,000		9,121,400
Puerto Rico, Sales Tax Financing Corp., Sales Tax Revenue, Convertible Capital Appreciation, Series A, Step-up Coupon, 0% to 8/1/2016, 6.75% to 8/1/2032		10,000,000		8,137,800
				87,915,779
South Carolina 1.1%
Greenwood County, SC, Hospital Revenue, Self Regional Healthcare, Series B, 5.0%, 10/1/2031		1,000,000		1,101,980
Hardeeville, SC, Assessment Revenue, Anderson Tract Municipal Improvement District:
Series B, 7.5%, 11/1/2015		652,000		649,183
Series A, 7.75%, 11/1/2039		4,679,000		4,347,353
South Carolina, Jobs Economic Development Authority, Hospital Facilities Revenue, Palmetto Health Alliance, 5.75%, 8/1/2039		3,595,000		3,887,705
South Carolina, State Public Service Authority Revenue, Santee Cooper, Series A, 5.75%, 12/1/2043		8,890,000		10,459,796
				20,446,017
South Dakota 0.5%
South Dakota, State Health & Educational Facilities Authority Revenue, Avera Health:
Series B, 5.25%, 7/1/2038		3,000,000		3,151,500
Series B, 5.5%, 7/1/2035		5,000,000		5,316,800
South Dakota, State Health & Educational Facilities Authority Revenue, Sanford Health, 5.0%, 11/1/2027		1,000,000		1,057,210
				9,525,510
Tennessee 2.7%
Clarksville, TN, Natural Gas Acquisition Corp., Gas Revenue:
5.0%, 12/15/2017, GTY: Merrill Lynch & Co., Inc.		2,500,000		2,793,450
5.0%, 12/15/2018, GTY: Merrill Lynch & Co., Inc.		2,160,000		2,423,304
Jackson, TN, Hospital Revenue, Jackson-Madison Project, 5.625%, 4/1/2038		3,000,000		3,240,270
Johnson City, TN, Health & Educational Facilities, Board Hospital Revenue, First Mortgage, Mountain States Health Alliance, Series A, 5.5%, 7/1/2036		18,795,000		19,574,992
Johnson City, TN, Health & Educational Facilities, Board Hospital Revenue, Mountain States Health Alliance, 6.5%, 7/1/2038		3,570,000		4,097,575
Tennessee, Energy Acquisition Corp., Gas Revenue:
Series C, 5.0%, 2/1/2027, GTY: The Goldman Sachs Group, Inc.		6,435,000		7,212,348
Series A, 5.25%, 9/1/2018, GTY: The Goldman Sachs Group, Inc.		8,000,000		9,061,680
				48,403,619
Texas 13.0%
Bexar County, TX, Health Facilities Development Corp. Revenue, Army Retirement Residence Project, 6.2%, 7/1/2045		6,000,000		6,580,980
Brazos River, TX, Harbor Navigation District, Brazoria County Environmental Health, Dow Chemical Co. Project:
Series B-2, 4.95%, 5/15/2033		4,000,000		4,267,680
Series A-3, AMT, 5.125%, 5/15/2033		9,000,000		9,514,980
Brazos River, TX, Pollution Control Authority Revenue, Series D-1, AMT, 8.25%, 5/1/2033*		7,000,000		367,500
Cass County, TX, Industrial Development Corp., Environmental Improvement Revenue, International Paper Co. Projects, Series A, 9.25%, 3/1/2024		2,000,000		2,484,460
Central Texas, Regional Mobility Authority Revenue, Capital Appreciation:
Zero Coupon, 1/1/2030		5,000,000		2,380,000
Zero Coupon, 1/1/2032		3,500,000		1,493,975
Central Texas, Regional Mobility Authority Revenue, Senior Lien:
Series A, 5.0%, 1/1/2043		1,000,000		1,056,390
6.0%, 1/1/2041		5,455,000		6,064,324
Harris County, TX, Cultural Education Facilities Finance Corp. Revenue, 1st Mortgage-Brazos Presbyterian Homes, Inc. Project:
Series B, 7.0%, 1/1/2043		3,000,000		3,378,840
Series B, 7.0%, 1/1/2048		4,000,000		4,475,680
Houston, TX, Airport System Revenue, United Airlines, Inc., Terminal E Project, AMT, 4.75%, 7/1/2024 (b)		3,385,000		3,446,269
Houston, TX, Airport Systems Revenue, Special Facilities Continental Airlines, Inc. Terminal Projects, AMT, 6.625%, 7/15/2038		2,000,000		2,199,560
Houston, TX, Transportation/Tolls Revenue, Special Facilities, Continental Airlines, Inc., Series E, AMT, 6.75%, 7/1/2029		10,100,000		10,130,805
La Vernia, TX, Higher Education Finance Corp. Revenue, Lifeschools of Dallas:
Series A, 7.25%, 8/15/2031		1,275,000		1,659,782
Series A, 7.5%, 8/15/2041		1,785,000		2,346,133
Lewisville, TX, Combination Contract Revenue, 6.75%, 10/1/2032		15,345,000		15,986,881
Matagorda County, TX, Navigation District No. 1, Pollution Control Revenue, AEP Texas Central Co. Project, Series A, 4.4%, 5/1/2030, INS: AMBAC		11,000,000		11,394,460
Matagorda County, TX, Navigation District No. 1, Pollution Control Revenue, Central Power & Light Co. Project, Series A, 6.3%, 11/1/2029		3,000,000		3,448,320
North Texas, Tollway Authority Revenue:
First Tier, Series A, 5.625%, 1/1/2033		1,000,000		1,111,430
Second Tier, Series F, 5.75%, 1/1/2038		17,500,000		19,365,850
First Tier, 6.0%, 1/1/2043		5,000,000		5,746,850
First Tier, Series A, 6.25%, 1/1/2039		9,525,000		10,923,175
Red River, TX, Health Facilities Development Corp., Retirement Facilities Revenue, MRC Crossings Project, Series A, 8.0%, 11/15/2049		1,715,000		1,796,548
Red River, TX, Health Facilities Development Corp., Retirement Facilities Revenue, Sears Methodist Retirement System Obligated Group Project:
Series A, 5.45%, 11/15/2038		2,411,000		1,763,333
Series A, 6.05%, 11/15/2046		2,565,000		1,995,852
Series D, 6.05%, 11/15/2046		445,000		346,259
Series B, 6.15%, 11/15/2049		4,852,000		3,790,043
Series C, 6.25%, 5/9/2053		226,000		176,712
San Antonio, TX, Convention Center Hotel Finance Corp., Contract Revenue, Empowerment Zone, Series A, AMT, 5.0%, 7/15/2039, INS: AMBAC		8,000,000		8,017,280
Tarrant County, TX, Cultural Education Facilities Finance Corp., Retirement Facility, Mirador Project:
Series A, 8.125%, 11/15/2039		1,000,000		993,030
Series A, 8.25%, 11/15/2044		3,430,000		3,431,269
Texas, Dallas/Fort Worth International Airport Revenue:
Series D, 5.0%, 11/1/2035		2,715,000		2,917,376
Series A, 5.25%, 11/1/2038		15,000,000		16,357,500
Texas, Love Field Airport Modernization Corp., Special Facilities Revenue, Southwest Airlines Co. Project, 5.25%, 11/1/2040		7,445,000		7,915,077
Texas, Municipal Gas Acquisition & Supply Corp. I, Gas Supply Revenue:
Series D, 5.625%, 12/15/2017, GTY: Merrill Lynch & Co., Inc.		8,875,000		9,768,180
Series D, 6.25%, 12/15/2026, GTY: Merrill Lynch & Co., Inc.		16,875,000		20,890,406
Texas, SA Energy Acquisition Public Facility Corp., Gas Supply Revenue, 5.5%, 8/1/2020, GTY: The Goldman Sachs Group, Inc.		10,000,000		11,624,200
Texas, State Municipal Gas Acquisition & Supply Corp., III Gas Supply Revenue, 5.0%, 12/15/2030		1,670,000		1,778,600
Texas, State Private Activity Bond, Surface Transportation Corp. Revenue, Senior Lien, North Tarrant Express Mobility Partners Segments LLC, AMT, 6.75%, 6/30/2043		2,220,000		2,697,677
Texas, Uptown Development Authority, Tax Increment Contract Revenue, Infrastructure Improvement Facilities, 5.5%, 9/1/2029		1,000,000		1,084,160
Travis County, TX, Health Facilities Development Corp. Revenue, Westminster Manor Health:
7.0%, 11/1/2030		1,530,000		1,741,599
7.125%, 11/1/2040		3,580,000		4,036,056
				232,945,481
Virginia 0.7%
Virginia, Marquis Community Development Authority Revenue:
Series C, Zero Coupon, 9/1/2041		7,906,000		1,106,761
Series B, 5.625%, 9/1/2041		5,332,000		5,005,682
Virginia, Mosaic District Community Development Authority Revenue, Series A, 6.875%, 3/1/2036		2,000,000		2,302,640
Virginia, Peninsula Ports Authority, Residential Care Facility Revenue, Virginia Baptist Homes, Series C, 5.4%, 12/1/2033		2,600,000		2,431,702
Virginia, State Small Business Financing Authority Revenue, Elizabeth River Crossings LLC Project, AMT, 6.0%, 1/1/2037		2,000,000		2,215,660
				13,062,445
Washington 2.8%
Klickitat County, WA, Public Hospital District No. 2 Revenue, Skyline Hospital, 6.5%, 12/1/2038		3,205,000		3,235,864
Washington, Port of Seattle, Industrial Development Corp., Special Facilities- Delta Airlines, AMT, 5.0%, 4/1/2030		2,000,000		2,012,500
Washington, State General Obligation, Series 2007A, 5.0%, 7/1/2023, INS: AGMC		10,000,000		10,986,600
Washington, State Health Care Facilities Authority Revenue, Series C, 5.375%, 8/15/2028, INS: Radian		2,970,000		3,071,723
Washington, State Health Care Facilities Authority Revenue, Virginia Mason Medical Center:
Series B, 5.75%, 8/15/2037, INS: ACA		6,675,000		6,973,906
Series A, 6.125%, 8/15/2037		16,000,000		16,899,520
Washington, State Housing Finance Commission, Rockwood Retirement Communities Project, Series A, 7.375%, 1/1/2044		6,000,000		6,510,120
				49,690,233
West Virginia 0.8%
West Virginia, State Hospital Finance Authority Revenue, Charleston Medical Center, Series A, 5.625%, 9/1/2032		3,080,000		3,311,770
West Virginia, State Hospital Finance Authority Revenue, Thomas Health Systems, 6.5%, 10/1/2038		10,000,000		10,407,080
				13,718,850
Wisconsin 0.8%
Wisconsin, Public Finance Authority, Apartment Facilities Revenue, Senior Obligation Group, AMT, 5.0%, 7/1/2042		3,500,000		3,550,995
Wisconsin, State Health & Educational Facilities Authority Revenue, Aurora Health Care, Inc., Series A, 5.625%, 4/15/2039		8,160,000		8,834,424
Wisconsin, State Health & Educational Facilities Authority Revenue, St. John's Communities, Inc., Series A, 7.625%, 9/15/2039		1,000,000		1,161,220
				13,546,639
Other Territories 0.1%
Non-Profit Preferred Funding Trust I, Series A1, 4.22%, 9/15/2037		2,041,105		2,082,193
Total Municipal Bonds and Notes (Cost $1,539,994,857)				1,663,184,320

Municipal Inverse Floating Rate Notes (c) 14.6%
California 0.3%
San Diego County, CA, Water Authority Revenue, Certificates of Participation, Series 2008-A, 5.0%, 5/1/2027, INS: AGMC (d)		2,126,587		2,409,159
San Diego County, CA, Water Authority Revenue, Certificates of Participation, Series 2008-A, 5.0%, 5/1/2028, INS: AGMC (d)		1,935,078		2,192,202
Trust: San Diego County, CA, Water Utility Improvements, Certificates of Participation, Series 2008-1104, 144A, 9.344%, 11/1/2015, Leverage Factor at purchase date: 2 to 1
				4,601,361
Hawaii 0.6%
Hawaii, State General Obligation, Series DK, 5.0%, 5/1/2027 (d)		10,000,000		11,351,400
Trust: Hawaii, State General Obligation, Series 2867, 144A, 18.14%, 5/1/2016, Leverage Factor at purchase date: 4 to 1
Louisiana 0.6%
Louisiana, State Gas & Fuels Tax Revenue, Series B, 5.0%, 5/1/2033 (d)		3,026,513		3,471,325
Louisiana, State Gas & Fuels Tax Revenue, Series B, 5.0%, 5/1/2034 (d)		3,304,152		3,789,769
Louisiana, State Gas & Fuels Tax Revenue, Series B, 5.0%, 5/1/2035 (d)		3,666,834		4,205,755
Trust: Louisiana, State Gas & Fuels Tax Revenue, Series 3806, 144A, 9.408%, 5/1/2018, Leverage Factor at purchase date: 2 to 1
				11,466,849
Nevada 2.5%
Clark County, NV, School District, Series C, 5.0%, 6/15/2021 (d)		7,851,481		8,799,873
Clark County, NV, School District, Series C, 5.0%, 6/15/2022 (d)		8,203,602		9,194,527
Clark County, NV, School District, Series C, 5.0%, 6/15/2023 (d)		5,298,193		5,938,170
Trust: Clark County, NV, School Improvements, Series 2008-1153, 144A, 9.171%, 6/15/2015, Leverage Factor at purchase date: 2 to 1
Las Vegas Valley, NV, General Obligation, Water District, Series A, 5.0%, 2/1/2035 (d)		9,150,000		9,974,955
Las Vegas Valley, NV, General Obligation, Water District, Series A, 5.0%, 2/1/2036 (d)		9,605,000		10,470,978
Trust: Las Vegas Valley, NV, General Obligation, Water District, 144A, 9.388%, 2/1/2016, Leverage Factor at purchase date: 2 to 1
				44,378,503
New York 2.2%
New York, State Dormitory Authority Revenues, Personal Income Tax Revenue, Series A, 5.0%, 3/15/2023 (d)		5,095,207		5,669,974
Trust: New York, State Dormitory Authority Revenues, Secondary Issues, Series 1955-2, 144A, 18.213%, 3/15/2015, Leverage Factor at purchase date: 4 to 1
New York, State Dormitory Authority, Personal Income Tax Revenue, Series F, 5.0%, 2/15/2035 (d)		10,000,000		11,157,200
Trust: New York, State Dormitory Authority Revenues, Series 4688, 144A, 9.48%, 3/15/2024, Leverage Factor at purchase date: 2 to 1
New York, State Environmental Facilities Corp., Clean Drinking Water, Series A, 5.0%, 6/15/2025 (d)		4,000,000		4,578,281
New York, State Environmental Facilities Corp., Clean Drinking Water, Series A, 5.0%, 6/15/2026 (d)		3,000,000		3,433,711
New York, State Environmental Facilities Corp., Clean Drinking Water, Series A, 5.0%, 6/15/2027 (d)		3,000,000		3,433,711
Trust: New York, State Environmental Facilities Corp., Clean Drinking Water, Series 2870, 144A, 16.547%, 12/15/2015, Leverage Factor at purchase date: 3.6 to 1
New York City, NY, Transitional Finance Authority Revenue, Series C-1, 5.0%, 11/1/2027 (d)		10,000,000		11,156,480
Trust: New York City, NY, Transitional Finance Authority Revenue, Series 2072, 144A, 11.45%, 11/1/2027, Leverage Factor at purchase date: 2.5 to 1
				39,429,357
Ohio 0.7%
Ohio, State Higher Educational Facilities Commission Revenue, Cleveland Clinic Health, Series A, 5.125%, 1/1/2028 (d)		4,522,767		5,008,290
Ohio, State Higher Educational Facilities Commission Revenue, Cleveland Clinic Health, Series A, 5.25%, 1/1/2033 (d)		7,712,913		8,540,901
Trust: Ohio, State Higher Educational Revenue, Series 3139, 144A, 14.619%, 1/1/2016, Leverage Factor at purchase date: 3 to 1
				13,549,191
Pennsylvania 2.3%
Pennsylvania, State General Obligation, Series A, 5.0%, 8/1/2023 (d)		21,790,000		24,453,742
Trust: Pennsylvania, State General Obligation, Series R-11505-1, 144A, 44.94%, 8/1/2015, Leverage Factor at purchase date: 10 to 1
Pennsylvania, State Revenue Bond, Series A, 5.0%, 8/1/2024 (d)		15,475,000		17,365,875
Trust: Pennsylvania, State Revenue Bond, Series 2720, 144A, 12.977%, 8/1/2015, Leverage Factor at purchase date: 3 to 1
				41,819,617
Tennessee 1.0%
Nashville & Davidson County, TN, Metropolitan Government, 5.0%, 1/1/2024 (d)		14,996,415		17,233,515
Trust: Nashville & Davidson County, TN, Metropolitan Government, Series 2631-1, 144A, 18.226%, 1/1/2016, Leverage Factor at purchase date: 4 to 1
Texas 3.2%
Conroe, TX, Independent School District, School Building, 5.0%, 2/15/2024 (d)		3,710,000		3,995,024
Conroe, TX, Independent School District, School Building, 5.0%, 2/15/2025 (d)		4,315,000		4,646,503
Trust: Conroe, TX, Independent School District, Series 2487, 144A, 18.107%, 8/15/2015, Leverage Factor at purchase date: 4 to 1
Harris County, TX, Flood Control District, Series A, 5.0%, 10/1/2034 (d)		5,500,000		6,178,480
Trust: Harris County, TX, Flood Control District, Series 4692, 144A, 9.58%, 10/11/2018, Leverage Factor at purchase date: 2 to 1
San Antonio, TX, Electric & Gas Revenue, 5.0%, 2/1/2024 (d)		15,000,000		17,000,700
Trust: San Antonio, TX, Electric & Gas Revenue, Series 2957, 144A, 13.76%, 2/1/2016, Leverage Factor at purchase date: 3 to 1
Texas, North East Independent School District, School Building, Series A, 5.0%, 8/1/2024 (d)		10,000,000		11,228,600
Trust: Texas, North East Independent School District, Series 2355, 144A, 22.64%, 8/1/2015, Leverage Factor at purchase date: 5 to 1
Texas, State Transportation Commission Revenue, 5.0%, 4/1/2026 (d)		12,500,000		13,946,125
Trust: Texas, State Transportation Commission Revenue, Series 2563, 144A, 22.52%, 4/1/2015, Leverage Factor at purchase date: 5 to 1
				56,995,432
Washington 1.2%
Washington, Energy Northwest Electric Revenue, Columbia Generating Station, Series A, 5.0%, 7/1/2024 (d)		10,000,000		10,939,000
Trust: Washington, Energy Northwest Electric Revenue, Series 2301, 144A, 22.64%, 7/1/2014, Leverage Factor at purchase date: 5 to 1
Washington, State General Obligation, Series A, 5.0%, 7/1/2025 (d)		10,000,000		11,222,700
Trust: Washington, State General Obligation, Series 2154, 144A, 22.64%, 7/1/2015, Leverage Factor at purchase date: 5 to 1
				22,161,700
Total Municipal Inverse Floating Rate Notes (Cost $238,853,453)				262,986,925

	% of Net Assets			Value ($)

Total Investment Portfolio (Cost $1,778,848,310)†		107.2			1,926,171,245
Other Assets and Liabilities, Net		(7.2	)		(129,509,593	)
Net Assets		100.0			1,796,661,652

The following table represents bonds that are in default:

Security	Coupon			Maturity Date	Principal Amount ($)		Cost ($)		Value ($)
Boston, MA, Industrial Development Financing Authority Revenue, Crosstown Center Project, AMT *		8.0	%	9/1/2035		960,000		960,000		221,107
Brazos River, TX, Pollution Control Authority Revenue, Series D–1, AMT*		8.25	%	5/1/2033		7,000,000		7,000,000		367,500
								7,960,000		588,607

* Non-income producing security.

** Variable rate demand notes are securities whose interest rates are reset periodically at market levels. These securities are often payable on demand and are shown at their current rates as of May 31, 2014.

† The cost for federal income tax purposes was $1,614,351,735. At May 31, 2014, net unrealized appreciation for all securities based on tax cost was $153,464,940. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $191,125,254 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $37,660,314.

(a) At May 31, 2014, this security has been pledged, in whole or in part, as collateral for tender option bond trust.

(b) When-issued security.

(d) Security forms part of the below tender option bond trust. The Fund accounts for these trusts as a form of secured borrowing, by reflecting the value of the underlying bond in the investments of the Fund and the amount owed to the floating rate note holder as a liability.

144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

ACA: ACA Financial Guaranty Corp.

AGC: Assured Guaranty Corp.

AGMC: Assured Guaranty Municipal Corp.

AMBAC: Ambac Financial Group, Inc.

AMT: Subject to alternative minimum tax.

FGIC: Financial Guaranty Insurance Co.

GTY: Guaranty Agreement

INS: Insured

LIQ: Liquidity Facility

LOC: Letter of Credit

NATL: National Public Finance Guarantee Corp.

PIK: Denotes that all or a portion of the income is paid in-kind in the form of additional principal.

Prerefunded: Bonds which are prerefunded are collateralized usually by U.S. Treasury securities which are held in escrow and used to pay principal and interest on tax-exempt issues and to retire the bonds in full at the earliest refunding date.

Radian: Radian Asset Assurance, Inc.

SPA: Standby Bond Purchase Agreement

Fair Value Measurements

Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities.

The following is a summary of the inputs used as of May 31, 2014 in valuing the Fund's investments. For information on the Fund's policy regarding the valuation of investments, please refer to the Security Valuation section of Note A in the accompanying Notes to Financial Statements.

Assets	Level 1		Level 2		Level 3		Total

Municipal Investments (e)	$	—	$	1,926,171,245	$	—	$	1,926,171,245
Total	$	—	$	1,926,171,245	$	—	$	1,926,171,245

There have been no transfers between fair value measurement levels during the year ended May 31, 2014.

(e) See Investment Portfolio for additional detailed categorizations.

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

Statement of Assets and Liabilities

as of May 31, 2014
Assets
Investments in non-affiliated securities, at value (cost $1,778,848,310)	$	1,926,171,245
Cash		260,314
Receivable for Fund shares sold		6,402,005
Interest receivable		29,197,863
Due from Advisor		107,637
Other assets		52,795
Total assets		1,962,191,859
Liabilities
Payable for investments purchased — when-issued security		3,344,854
Payable for Fund shares redeemed		866,763
Payable for floating rate notes issued		158,354,570
Distributions payable		1,071,063
Accrued management fee		709,894
Accrued Trustees' fees		15,691
Other accrued expenses and payables		1,167,372
Total liabilities		165,530,207
Net assets, at value	$	1,796,661,652
Net Assets Consist of
Undistributed net investment income		1,219,789
Net unrealized appreciation (depreciation) on investments		147,322,935
Accumulated net realized gain (loss)		(132,131,017	)
Paid-in capital		1,780,249,945
Net assets, at value	$	1,796,661,652

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

Statement of Assets and Liabilities as of May 31, 2014 (continued)
Net Asset Value
Class A Net Asset Value and redemption price per share ($447,395,002 ÷ 35,819,204 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized)	$	12.49
Maximum offering price per share (100 ÷ 97.25 of $12.49)	$	12.84
Class B Net Asset Value offering and redemption price (subject to contingent deferred sales charge) per share ($2,776,654 ÷ 222,288 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized)	$	12.49
Class C Net Asset Value offering and redemption price (subject to contingent deferred sales charge) per share ($147,792,770 ÷ 11,825,353 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized)	$	12.50
Class S Net Asset Value offering and redemption price per share ($883,753,486 ÷ 70,689,550 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized)	$	12.50
Institutional Class Net Asset Value offering and redemption price per share ($314,943,740 ÷ 25,185,807 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized)	$	12.50

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

Statement of Operations

for the year ended May 31, 2014
Investment Income
Income: Interest	$	104,874,599
Expenses: Management fee		8,843,510
Administration fee		1,780,534
Services to shareholders		2,911,794
Distribution and service fees		2,733,747
Custodian fee		24,264
Professional fees		121,686
Reports to shareholders		101,864
Registration fees		142,554
Trustees' fees and expenses		57,077
Interest expense and fees on floating rate notes issued		1,198,846
Other		148,407
Total expenses before expense reductions		18,064,283
Expense reductions		(2,905,006	)
Total expenses after expense reductions		15,159,277
Net investment income		89,715,322
Realized and Unrealized Gain (Loss)
Net realized gain (loss) from investments		(42,499,617	)
Change in net unrealized appreciation (depreciation) on investments		(51,529,060	)
Net gain (loss)		(94,028,677	)
Net increase (decrease) in net assets resulting from operations	$	(4,313,355	)

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

Statement of Cash Flows

for the year ended May 31, 2014
Increase (Decrease) in Cash: Cash Flows from Operating Activities
Net increase (decrease) in net assets resulting from operations	$	(4,313,355	)
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided (used) by operating activities: Purchases of long-term investments		(467,752,157	)
Net amortization of premium/(accretion of discount)		1,646,498
Proceeds from sales and maturities of long-term investments		847,368,077
(Increase) decrease in interest receivable		5,105,230
(Increase) decrease in other assets		100,058
Increase (decrease) in payable for investments purchased — when-issued security		(4,873,038	)
Increase (decrease) in other accrued expenses and payables		(630,272	)
Change in unrealized (appreciation) depreciation on investments		51,529,060
Net realized (gain) loss from investments		42,499,617
Cash provided (used) by operating activities		470,679,718
Cash Flows from Financing Activities
Proceeds from shares sold		538,522,417
Payments for shares redeemed		(985,092,872	)
Distributions paid (net of reinvestment of distributions)		(15,891,200	)
Increase (decrease) in payable for floating rate notes issued		(8,000,000	)
Cash provided (used) by financing activities		(470,461,655	)
Increase (decrease) in cash		218,063
Cash at beginning of period		42,251
Cash at end of period	$	260,314
Supplemental Disclosure of Non-Cash Activities
Reinvestment of distributions	$	72,575,930
Interest expense and fees on floating rate notes issued	$	(1,198,846	)

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

Statement of Changes in Net Assets

	Years Ended May 31,
Increase (Decrease) in Net Assets	2014			2013
Operations: Net investment income	$	89,715,322		$	93,051,448
Net realized gain (loss)		(42,499,617	)		(6,812,799	)
Change in net unrealized appreciation (depreciation)		(51,529,060	)		30,458,648
Net increase (decrease) in net assets resulting from operations		(4,313,355	)		116,697,297
Distributions to shareholders from: Net investment income: Class A		(22,616,899	)		(25,535,786	)
Class B		(167,191	)		(231,349	)
Class C		(6,413,208	)		(6,833,242	)
Class S		(45,173,908	)		(47,793,999	)
Institutional Class		(14,149,199	)		(11,066,955	)
Total distributions		(88,520,405	)		(91,461,331	)
Fund share transactions: Proceeds from shares sold		539,809,297			697,266,520
Reinvestment of distributions		72,575,930			72,190,350
Payments for shares redeemed		(977,314,742	)		(546,897,901	)
Net increase (decrease) in net assets from Fund share transactions		(364,929,515	)		222,558,969
Increase (decrease) in net assets		(457,763,275	)		247,794,935
Net assets at beginning of year		2,254,424,927			2,006,629,992
Net assets at end of year (including undistributed net investment income of $1,219,789 and $1,104,210, respectively)	$	1,796,661,652		$	2,254,424,927

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

Financial Highlights

	Years Ended May 31,
Class A		2014			2013			2012			2011			2010
Selected Per Share Data
Net asset value, beginning of period	$	12.95		$	12.78		$	11.78		$	12.23		$	11.21
Income from investment operations: Net investment income		.60			.55			.59			.61			.62
Net realized and unrealized gain (loss)		(.47	)		.16			1.00			(.45	)		1.02
Total from investment operations		.13			.71			1.59			.16			1.64
Less distributions from: Net investment income		(.59	)		(.54	)		(.59	)		(.61	)		(.62	)
Net realized gains		—			—			(.00	)*		—			—
Total distributions		(.59	)		(.54	)		(.59	)		(.61	)		(.62	)
Net asset value, end of period	$	12.49		$	12.95		$	12.78		$	11.78		$	12.23
Total Return (%)a,b		1.27			5.57			13.88			1.37			14.96
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		447			618			569			432			464
Ratio of expenses before expense reductions (including interest expense) (%)c		1.05			1.03			1.03			1.08			1.05
Ratio of expenses after expense reductions (including interest expense) (%)c		.95			.97			.99			1.03			1.03
Ratio of expenses after expense reductions (excluding interest expense) (%)		.88			.91			.92			.94			.93
Ratio of net investment income (%)		4.94			4.18			4.92			5.35			5.31
Portfolio turnover rate (%)		24			21			29			30			28
a Total return does not reflect the effect of any sales charges. b Total return would have been lower had certain expenses not been reduced. c Interest expense represents interest and fees on short-term floating rate notes issued in conjunction with inverse floating rate securities. Interest income from such transactions is included in income from investment operations. * Amount is less than $.005.

	Years Ended May 31,
Class B		2014			2013			2012			2011			2010
Selected Per Share Data
Net asset value, beginning of period	$	12.95		$	12.78		$	11.78		$	12.23		$	11.21
Income from investment operations: Net investment income		.51			.45			.50			.52			.53
Net realized and unrealized gain (loss)		(.47	)		.16			1.00			(.45	)		1.02
Total from investment operations		.04			.61			1.50			.07			1.55
Less distributions from: Net investment income		(.50	)		(.44	)		(.50	)		(.52	)		(.53	)
Net realized gains		—			—			(.00	)*		—			—
Total distributions		(.50	)		(.44	)		(.50	)		(.52	)		(.53	)
Net asset value, end of period	$	12.49		$	12.95		$	12.78		$	11.78		$	12.23
Total Return (%)a,b		.51			4.78			13.02			.61			14.10
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		3			6			8			9			12
Ratio of expenses before expense reductions (including interest expense) (%)c		1.82			1.79			1.80			1.87			1.82
Ratio of expenses after expense reductions (including interest expense) (%)c		1.70			1.72			1.74			1.78			1.77
Ratio of expenses after expense reductions (excluding interest expense) (%)		1.63			1.66			1.67			1.69			1.67
Ratio of net investment income (%)		4.18			3.42			4.19			4.59			4.57
Portfolio turnover rate (%)		24			21			29			30			28
a Total return does not reflect the effect of any sales charges. b Total return would have been lower had certain expenses not been reduced. c Interest expense represents interest and fees on short-term floating rate notes issued in conjunction with inverse floating rate securities. Interest income from such transactions is included in income from investment operations. * Amount is less than $.005.

	Years Ended May 31,
Class C		2014			2013			2012			2011			2010
Selected Per Share Data
Net asset value, beginning of period	$	12.96		$	12.79		$	11.79		$	12.24		$	11.22
Income from investment operations: Net investment income		.51			.45			.50			.52			.53
Net realized and unrealized gain (loss)		(.47	)		.16			1.00			(.45	)		1.02
Total from investment operations		.04			.61			1.50			.07			1.55
Less distributions from: Net investment income		(.50	)		(.44	)		(.50	)		(.52	)		(.53	)
Net realized gains		—			—			(.00	)*		—			—
Total distributions		(.50	)		(.44	)		(.50	)		(.52	)		(.53	)
Net asset value, end of period	$	12.50		$	12.96		$	12.79		$	11.79		$	12.24
Total Return (%)a,b		.52			4.78			13.03			.61			14.11
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		148			202			188			141			154
Ratio of expenses before expense reductions (including interest expense) (%)c		1.80			1.78			1.77			1.82			1.84
Ratio of expenses after expense reductions (including interest expense) (%)c		1.70			1.72			1.74			1.78			1.78
Ratio of expenses after expense reductions (excluding interest expense) (%)		1.63			1.66			1.67			1.69			1.68
Ratio of net investment income (%)		4.19			3.43			4.16			4.60			4.56
Portfolio turnover rate (%)		24			21			29			30			28
a Total return does not reflect the effect of any sales charges. b Total return would have been lower had certain expenses not been reduced. c Interest expense represents interest and fees on short-term floating rate notes issued in conjunction with inverse floating rate securities. Interest income from such transactions is included in income from investment operations. * Amount is less than $.005.

	Years Ended May 31,
Class S		2014			2013			2012			2011			2010
Selected Per Share Data
Net asset value, beginning of period	$	12.96		$	12.79		$	11.79		$	12.24		$	11.22
Income from investment operations: Net investment income		.63			.58			.62			.64			.65
Net realized and unrealized gain (loss)		(.47	)		.16			1.00			(.45	)		1.02
Total from investment operations		.16			.74			1.62			.19			1.67
Less distributions from: Net investment income		(.62	)		(.57	)		(.62	)		(.64	)		(.65	)
Net realized gains		—			—			(.00	)*		—			—
Total distributions		(.62	)		(.57	)		(.62	)		(.64	)		(.65	)
Net asset value, end of period	$	12.50		$	12.96		$	12.79		$	11.79		$	12.24
Total Return (%)a		1.53			5.83			14.15			1.63			15.22
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		884			1,128			1,023			832			858
Ratio of expenses before expense reductions (including interest expense) (%)b		.92			.89			.90			.94			.98
Ratio of expenses after expense reductions (including interest expense) (%)b		.70			.72			.74			.78			.78
Ratio of expenses after expense reductions (excluding interest expense) (%)		.63			.66			.67			.69			.68
Ratio of net investment income (%)		5.20			4.43			5.17			5.60			5.56
Portfolio turnover rate (%)		24			21			29			30			28
a Total return would have been lower had certain expenses not been reduced. b Interest expense represents interest and fees on short-term floating rate notes issued in conjunction with inverse floating rate securities. Interest income from such transactions is included in income from investment operations. * Amount is less than $.005.

	Years Ended May 31,
Institutional Class		2014			2013			2012			2011			2010
Selected Per Share Data
Net asset value, beginning of period	$	12.97		$	12.79		$	11.79		$	12.24		$	11.22
Income from investment operations: Net investment income		.63			.58			.63			.64			.66
Net realized and unrealized gain (loss)		(.48	)		.17			1.00			(.45	)		1.02
Total from investment operations		.15			.75			1.63			.19			1.68
Less distributions from: Net investment income		(.62	)		(.57	)		(.63	)		(.64	)		(.66	)
Net realized gains		—			—			(.00	)*		—			—
Total distributions		(.62	)		(.57	)		(.63	)		(.64	)		(.66	)
Net asset value, end of period	$	12.50		$	12.97		$	12.79		$	11.79		$	12.24
Total Return (%)a		1.45			5.93			14.17			1.66			15.33
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		315			301			220			143			147
Ratio of expenses before expense reductions (including interest expense) (%)b		.81			.79			.79			.82			.79
Ratio of expenses after expense reductions (including interest expense) (%)b		.70			.71			.74			.75			.76
Ratio of expenses after expense reductions (excluding interest expense) (%)		.63			.65			.67			.66			.66
Ratio of net investment income (%)		5.20			4.44			5.16			5.62			5.58
Portfolio turnover rate (%)		24			21			29			30			28
a Total return would have been lower had certain expenses not been reduced. b Interest expense represents interest and fees on short-term floating rate notes issued in conjunction with inverse floating rate securities. Interest income from such transactions is included in income from investment operations. * Amount is less than $.005.

Notes to Financial Statements

A. Organization and Significant Accounting Policies

DWS Strategic High Yield Tax-Free Fund (the "Fund") is a diversified series of DWS Municipal Trust (the "Series"), which is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company organized as a Massachusetts business trust.

The Fund offers multiple classes of shares which provide investors with different purchase options. Class A shares are offered to investors subject to an initial sales charge. Class B shares of the Fund are closed to new purchases, except exchanges or the reinvestment of dividends or other distributions. Class B shares were offered to investors without an initial sales charge and are subject to higher ongoing expenses than Class A shares and a contingent deferred sales charge payable upon certain redemptions. Class B shares automatically convert to Class A shares six years after issuance. Class C shares are offered to investors without an initial sales charge but are subject to higher ongoing expenses than Class A shares and a contingent deferred sales charge payable upon certain redemptions within one year of purchase. Class C shares do not automatically convert into another class. Institutional Class shares are generally available only to qualified institutions, are not subject to initial or contingent deferred sales charges and generally have lower ongoing expenses than other classes. Class S shares are not subject to initial or contingent deferred sales charges and are only available to a limited group of investors.

Investment income, realized and unrealized gains and losses, and certain fund-level expenses and expense reductions, if any, are borne pro rata on the basis of relative net assets by the holders of all classes of shares, except that each class bears certain expenses unique to that class such as distribution and service fees, services to shareholders and certain other class-specific expenses. Differences in class-level expenses may result in payment of different per share dividends by class. All shares of the Fund have equal rights with respect to voting subject to class-specific arrangements.

The Fund's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which require the use of management estimates. Actual results could differ from those estimates. The policies described below are followed consistently by the Fund in the preparation of its financial statements.

Security Valuation. Investments are stated at value determined as of the close of regular trading on the New York Stock Exchange on each day the exchange is open for trading.

Municipal debt securities are valued at prices supplied by independent pricing services approved by the Fund’s Board. Such services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics, prepayment speeds and other data, as well as broker quotes. If the pricing services are unable to provide valuations, debt securities are valued at the average of the most recent reliable bid quotation or evaluated prices, as applicable, obtained from broker-dealers. These securities are generally categorized as Level 2.

Securities and other assets for which market quotations are not readily available or for which the above valuation procedures are deemed not to reflect fair value are valued in a manner that is intended to reflect their fair value as determined in accordance with procedures approved by the Board and are generally categorized as Level 3. In accordance with the Fund's valuation procedures, factors considered in determining value may include, but are not limited to, the type of the security; the size of the holding; the initial cost of the security; the existence of any contractual restrictions on the security's disposition; the price and extent of public trading in similar securities of the issuer or of comparable companies; quotations or evaluated prices from broker-dealers and/or pricing services; information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities); an analysis of the company's or issuer's financial statements; an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold; and with respect to debt securities, the maturity, coupon, creditworthiness, currency denomination and the movement of the market in which the security is normally traded. The value determined under these procedures may differ from published values for the same securities.

Disclosure about the classification of fair value measurements is included in a table following the Fund's Investment Portfolio.

Inverse Floaters. The Fund invests in inverse floaters. Inverse floaters are debt instruments with a weekly floating rate of interest that bears an inverse relationship to changes in the short-term interest rate market. Inverse floaters are created by depositing a fixed-rate municipal bond into a special purpose trust (the "Trust"). In turn the Trust issues a short-term floating rate note and an inverse floater. The income stream from the underlying bond in the Trust is divided between the floating rate note and the inverse floater. The income provided by the inverse floater bears an inverse relationship with the short-term rate paid to the floating rate note holder. The short-term floating rate note is issued in a face amount equal to some fraction of the underlying bond's par amount and is paid to a third party, usually a tax-exempt money market fund, at rates that generally reset weekly. The inverse floater earns all of the interest from the underlying fixed-rate bond less the amount of interest paid on the floating rate note and the expenses of the Trust. The inverse floater represents an investment in the underlying bond on a leveraged basis; the Fund bears all of the price risk of the underlying bond in the Trust and receives all the benefits from any potential appreciation of the underlying bond's value.

By holding the inverse floater, the Fund has the right to collapse the Trust by causing the holders of the floating rate instrument to tender their notes at par and have the broker transfer the underlying bond to the Fund. The floating rate note holder can also elect to tender the note for redemption at par at each reset date. The Fund accounts for these transactions as a form of secured borrowing, by reflecting the value of the underlying bond in the investments of the Fund and the amount owed to the floating rate note holder as a liability under the caption "Payable for floating rate notes issued" in the Statement of Assets and Liabilities. The floating rate notes issued by the Trust are valued at cost, which approximates fair value. Income earned on the underlying bond is included in interest income, and interest paid on the floaters and the expenses of the Trust are included in "Interest expense and fees on floating rate notes issued" in the Statement of Operations.

The Fund may enter into shortfall and forbearance agreements by which the Fund agrees to reimburse the Trust, in certain circumstances, for the difference between the liquidation value of the underlying bond held by the Trust and the liquidation value of the floating rate notes plus any shortfalls in interest cash flows. This could potentially expose the Fund to losses in excess of the value of the Fund's inverse floater investments. In addition, the value of inverse floaters may decrease significantly when interest rates increase. The market for inverse floaters may be more volatile and less liquid than other municipal bonds of comparable maturity. The Trust could be terminated outside of the Fund's control, resulting in a reduction of leverage and disposal of portfolio investments at inopportune times and prices. Investments in inverse floaters generally involve greater risk than in an investment in fixed-rate bonds. In connection with these agreements, securities and or cash may be pledged as collateral.

The weighted average outstanding daily balance of the floating rate notes issued during the year ended May 31, 2014 was approximately $164,601,000, with a weighted average interest rate of 0.73%.

When-Issued/Delayed Delivery Securities. The Fund may purchase securities with delivery or payment to occur at a later date beyond the normal settlement period. At the time the Fund enters into a commitment to purchase a security, the transaction is recorded and the value of the transaction is reflected in the net asset value. The price of such security and the date when the security will be delivered and paid for are fixed at the time the transaction is negotiated. The value of the security may vary with market fluctuations. At the time the Fund enters into a purchase transaction it is required to segregate cash or other liquid assets at least equal to the amount of the commitment.

Certain risks may arise upon entering into when-issued or delayed delivery transaction from the potential inability of counterparties to meet the terms of their contracts or if the issuer does not issue the securities due to political, economic, or other factors. Additionally, losses may arise due to changes in the value of the underlying securities.

Federal Income Taxes. The Fund's policy is to comply with the requirements of the Internal Revenue Code, as amended, which are applicable to regulated investment companies and to distribute all of its taxable and tax-exempt income to its shareholders.

Under the Regulated Investment Company Modernization Act of 2010, net capital losses incurred post-enactment may be carried forward indefinitely, and their character is retained as short-term and/or long-term. Previously, net capital losses were carried forward for eight years and treated as short-term losses. As a transition rule, the Act requires that post-enactment net capital losses be used before pre-enactment net capital losses.

At May 31, 2014, the Fund had net tax basis capital loss carryforwards of approximately $138,272,000, including $26,645,000 of pre-enactment losses, which may be applied against any realized net taxable capital gains of each succeeding year until fully utilized or until May 31, 2015 ($234,000), May 31, 2017 ($3,436,000), May 31, 2018 ($19,507,000) and May 31, 2019 ($3,468,000), the respective expiration dates, whichever occurs first; and approximately $111,627,000 of post-enactment losses, which may be applied against realized net taxable capital gains indefinitely, including short-term losses ($64,289,000) and long-term losses ($47,338,000).

The Fund has reviewed the tax positions for the open tax years as of May 31, 2014 and has determined that no provision for income tax and/or uncertain tax provisions is required in the Fund's financial statements. The Fund's federal tax returns for the prior three fiscal years remain open subject to examination by the Internal Revenue Service.

Distribution of Income and Gains. Net investment income of the Fund is declared as a daily dividend and is distributed to shareholders monthly. Net realized gains from investment transactions, in excess of available capital loss carryforwards, would be taxable to the Fund if not distributed, and, therefore, will be distributed to shareholders at least annually. The Fund may also make additional distributions for tax purposes if necessary.

The timing and characterization of certain income and capital gain distributions are determined annually in accordance with federal tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences primarily relate to investments in inverse floaters transactions, certain securities sold at a loss and accretion of market discount on debt securities. As a result, net investment income (loss) and net realized gain (loss) on investment transactions for a reporting period may differ significantly from distributions during such period. Accordingly, the Fund may periodically make reclassifications among certain of its capital accounts without impacting the net asset value of the Fund.

At May 31, 2014, the Fund's components of distributable earnings (accumulated losses) on a tax basis were as follows:

Undistributed tax-exempt income	$	2,771,201
Capital loss carryforwards	$	(138,272,000	)
Net unrealized appreciation (depreciation) on investments	$	153,464,940

In addition, the tax character of distributions paid to shareholders by the Fund is summarized as follows:

	Years Ended May 31,
	2014		2013
Distributions from tax-exempt income	$	88,520,405	$	91,461,331

Expenses. Expenses of the Series arising in connection with a specific fund are allocated to that fund. Other Series expenses which cannot be directly attributed to a fund are apportioned among the funds in the Series based upon the relative net assets or other appropriate measures.

Contingencies. In the normal course of business, the Fund may enter into contracts with service providers that contain general indemnification clauses. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet been made. However, based on experience, the Fund expects the risk of loss to be remote.

Other. Investment transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Interest income is recorded on the accrual basis. Realized gains and losses from investment transactions are recorded on an identified cost basis. All premiums and discounts are amortized/accreted for financial reporting purposes, with the exception of securities in default of principal.

Statement of Cash Flows. Information on financial transactions which have been settled through the receipt and disbursement of cash is presented in the Statement of Cash Flows. The cash amount shown in the Statement of Cash Flows represents the cash position at the Fund's custodian bank at May 31, 2014.

B. Purchases and Sales of Securities

During the year ended May 31, 2014, purchases and sales of investment securities (excluding short-term investments) aggregated $467,752,157 and $847,368,077, respectively.

C. Related Parties

Management Agreement. Under the Investment Management Agreement with Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), an indirect, wholly owned subsidiary of Deutsche Bank AG, the Advisor directs the investments of the Fund in accordance with its investment objectives, policies and restrictions. The Advisor determines the securities, instruments and other contracts relating to investments to be purchased, sold or entered into by the Fund.

Under the Investment Management Agreement with the Advisor, the Fund pays a monthly management fee based on the Fund's average daily net assets, computed and accrued daily and payable monthly, at the following annual rates:

First $300 million of the Fund's average daily net assets	.565	%
Next $200 million of such net assets	.515	%
Next $500 million of such net assets	.490	%
Next $1 billion of such net assets	.470	%
Over $2 billion of such net assets	.450	%

For the period from June 1, 2013 through September 30, 2013, the Advisor had contractually agreed to waive its fees and/or reimburse

certain operating expenses of the Fund to the extent necessary to maintain the operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest) of each class as follows:

Class A	.91%
Class B	1.66%
Class C	1.66%
Class S	.66%
Institutional Class	.66%

Effective October 1, 2013 through September 30, 2014, the Advisor has contractually agreed to waive its fees and/or reimburse certain operating expenses of the Fund to the extent necessary to maintain the operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest) of each class as follows:

Class A	.86%
Class B	1.61%
Class C	1.61%
Class S	.61%
Institutional Class	.61%

Accordingly, for the year ended May 31, 2014, the Advisor waived a portion of its management fee aggregating $187,747, and the amount charged aggregated $8,655,763, which was equivalent to an annual effective rate of 0.49% of the Fund's average daily net assets.

Administration Fee. Pursuant to an Administrative Services Agreement, DIMA provides most administrative services to the Fund. For all services provided under the Administrative Services Agreement, the Fund pays the Advisor an annual fee ("Administration Fee") of 0.10% of the Fund's average daily net assets, computed and accrued daily and payable monthly. For the year ended May 31, 2014, the Administration Fee was $1,780,534, of which $150,318 is unpaid.

Service Provider Fees. DWS Investments Service Company ("DISC"), an affiliate of the Advisor, is the transfer agent, dividend-paying agent and shareholder service agent for the Fund. Pursuant to a sub-transfer agency agreement between DISC and DST Systems, Inc. ("DST"), DISC has delegated certain transfer agent, dividend-paying agent and shareholder service agent functions to DST. DISC compensates DST out of the shareholder servicing fee it receives from the Fund. For the year ended May 31, 2014, the amounts charged to the Fund by DISC were as follows:

Services to Shareholders	Total Aggregated		Waived
Class A	$	37,459	$	37,459
Class B		868		868
Class C		15,351		15,351
Class S		435,092		435,092
Institutional Class		8,389		8,389
	$	497,159	$	497,159

In addition, for the year ended May 31, 2014, the Advisor reimbursed the Fund $1,421,444 and $275,259 of non-affiliated sub-recordkeeping expenses for Class S and Institutional Class shares, respectively.

Distribution and Service Fees. Under the Fund's Class B and Class C 12b-1 Plans, DWS Investments Distributors, Inc. ("DIDI"), an affiliate of the Advisor, receives a fee ("Distribution Fee") of 0.75% of average daily net assets of each of Class B and C shares. In accordance with the Fund's Underwriting and Distribution Services Agreement, DIDI enters into related selling group agreements with various firms at various rates for sales of Class B and C shares. For the year ended May 31, 2014, the Distribution Fee was as follows:

Distribution Fee	Total Aggregated		Unpaid at May 31, 2014
Class B	$	30,485	$	1,772
Class C		1,166,514		92,916
	$	1,196,999	$	94,688

In addition, DIDI provides information and administrative services for a fee ("Service Fee") to Class A, B and C shareholders at an annual rate of up to 0.25% of average daily net assets for each such class. DIDI in turn has various agreements with financial services firms that provide these services and pay these fees based upon the assets of shareholder accounts the firms service. For the year ended May 31, 2014, the Service Fee was as follows:

Service Fee	Total Aggregated		Waived		Unpaid at May 31, 2014		Annual Effective Rate
Class A	$	1,138,112	$	385,599	$	156,625		.16	%
Class B		10,054		3,665		1,653		.16	%
Class C		388,582		134,133		46,599		.16	%
	$	1,536,748	$	523,397	$	204,877

Underwriting Agreement and Contingent Deferred Sales Charge. DIDI is the principal underwriter for the Fund. Underwriting commissions paid in connection with the distribution of Class A shares for the year ended May 31, 2014 aggregated $30,618.

In addition, DIDI receives any contingent deferred sales charge ("CDSC") from Class B share redemptions occurring within six years of purchase and Class C share redemptions occurring within one year of purchase. There is no such charge upon redemption of any share appreciation or reinvested dividends. The CDSC is based on declining rates, ranging from 4% to 1% for Class B and 1% for Class C, of the value of the shares redeemed. For the year ended May 31, 2014, the CDSC for Class B and Class C shares aggregated $8,423 and $33,364, respectively. A deferred sales charge of up to 0.50% is assessed on certain redemptions of Class A shares. For the year ended May 31, 2014, DIDI received $44,458 for Class A shares.

Typesetting and Filing Service Fees. Under an agreement with DIMA, DIMA is compensated for providing typesetting and certain regulatory filing services to the Fund. For the year ended May 31, 2014, the amount charged to the Fund by DIMA included in the Statement of Operations under "reports to shareholders" aggregated $22,708, of which $10,612 is unpaid.

Trustees' Fees and Expenses. The Fund paid retainer fees to each Trustee not affiliated with the Advisor, plus specified amounts to the Board Chairperson and Vice Chairperson and to each committee Chairperson.

D. Investing in High-Yield Securities

The Fund's performance could be hurt if a security declines in credit quality or goes into default, or if an issuer does not make timely payments of interest or principal. Because the issuers of high-yield debt securities or junk bonds (debt securities rated below the fourth-highest category) may be in uncertain financial health, the risk of loss from default by the issuer is significantly greater. Prices and yields of high-yield securities will fluctuate over time and, during periods of economic uncertainty, volatility of high-yield securities may adversely affect a fund's net asset value. Because the Fund may invest in securities not paying current interest or in securities already in default, these risks may be more pronounced.

E. Line of Credit

The Fund and other affiliated funds (the "Participants") share in a $400 million revolving credit facility provided by a syndication of banks. The Fund may borrow for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Participants are charged an annual commitment fee which is allocated based on net assets, among each of the Participants. Interest is calculated at a rate per annum equal to the sum of the Federal Funds Rate plus 1.25 percent plus if LIBOR exceeds the Federal Funds Rate the amount of such excess. The Fund may borrow up to a maximum of 33 percent of its net assets under the agreement. The Fund had no outstanding loans at May 31, 2014.

F. Share Transactions

The following table summarizes share and dollar activity in the Fund:

	Year Ended May 31, 2014						Year Ended May 31, 2013
	Shares			Dollars			Shares			Dollars
Shares sold
Class A		9,872,570		$	118,728,880			15,378,010		$	200,957,397
Class B		919			11,121			16,587			218,762
Class C		1,632,752			19,700,197			3,758,171			49,032,738
Class S		17,513,054			211,281,593			24,445,039			319,989,799
Institutional Class		15,819,363			190,087,506			9,695,490			127,067,824
				$	539,809,297					$	697,266,520
Shares issued to shareholders in reinvestment of distributions
Class A		1,613,898		$	19,382,410			1,674,245		$	21,860,370
Class B		11,183			134,106			12,743			166,321
Class C		409,772			4,924,524			386,528			5,049,783
Class S		2,862,057			34,448,675			2,638,167			34,478,200
Institutional Class		1,137,055			13,686,215			813,519			10,635,676
				$	72,575,930					$	72,190,350
Shares redeemed
Class A		(23,347,509	)	$	(280,136,772	)		(13,880,941	)	$	(181,608,426	)
Class B		(252,114	)		(3,026,191	)		(159,584	)		(2,084,636	)
Class C		(5,794,610	)		(69,549,032	)		(3,234,807	)		(42,287,044	)
Class S		(36,721,988	)		(445,763,068	)		(20,011,449	)		(261,842,971	)
Institutional Class		(14,961,224	)		(178,839,679	)		(4,509,602	)		(59,074,824	)
				$	(977,314,742	)				$	(546,897,901	)
Net increase (decrease)
Class A		(11,861,041	)	$	(142,025,482	)		3,171,314		$	41,209,341
Class B		(240,012	)		(2,880,964	)		(130,254	)		(1,699,553	)
Class C		(3,752,086	)		(44,924,311	)		909,892			11,795,477
Class S		(16,346,877	)		(200,032,800	)		7,071,757			92,625,028
Institutional Class		1,995,194			24,934,042			5,999,407			78,628,676
				$	(364,929,515	)				$	222,558,969

G. Fund Name Change

Effective August 11, 2014, the "DWS Funds" will be rebranded "Deutsche Funds." As a result, DWS Strategic High Yield Tax-Free Fund will be renamed Deutsche Strategic High Yield Tax-Free Fund.

Report of Independent Registered Public Accounting Firm

To the Trustees of DWS Municipal Trust and the Shareholders of DWS Strategic High Yield Tax-Free Fund:

In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, and the related statements of operations, of cash flows and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of DWS Strategic High Yield Tax-Free Fund (the "Fund") at May 31, 2014, and the results of its operations, its cash flows, the changes in its net assets and the financial highlights for each of the periods indicated therein, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at May 31, 2014 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

Boston, Massachusetts

July 25, 2014

PricewaterhouseCoopers LLP

Information About Your Fund's Expenses

As an investor of the Fund, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees, distribution and service (12b-1) fees and other Fund expenses. Examples of transaction costs include sales charges (loads) and account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. In the most recent six-month period, the Fund limited these expenses; had it not done so, expenses would have been higher. The example in the table is based on an investment of $1,000 invested at the beginning of the six-month period and held for the entire period (December 1, 2013 to May 31, 2014).

The tables illustrate your Fund's expenses in two ways:

—Actual Fund Return. This helps you estimate the actual dollar amount of ongoing expenses (but not transaction costs) paid on a $1,000 investment in the Fund using the Fund's actual return during the period. To estimate the expenses you paid over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the "Expenses Paid per $1,000" line under the share class you hold.

—Hypothetical 5% Fund Return. This helps you to compare your Fund's ongoing expenses (but not transaction costs) with those of other mutual funds using the Fund's actual expense ratio and a hypothetical rate of return of 5% per year before expenses. Examples using a 5% hypothetical fund return may be found in the shareholder reports of other mutual funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.

Please note that the expenses shown in these tables are meant to highlight your ongoing expenses only and do not reflect any transaction costs. The "Expenses Paid per $1,000" line of the tables is useful in comparing ongoing expenses only and will not help you determine the relative total expense of owning different funds. Subject to certain exceptions, an account maintenance fee of $20.00 assessed once per calendar year for Classes A, B, C and S shares may apply for accounts with balances less than $10,000. This fee is not included in these tables. If it was, the estimate of expenses paid for Classes A, B, C and S shares during the period would be higher, and account value during the period would be lower, by this amount.

Expenses and Value of a $1,000 Investment for the six months ended May 31, 2014 (Unaudited)
Actual Fund Return	Class A		Class B		Class C		Class S		Institutional Class
Beginning Account Value 12/1/13	$	1,000.00	$	1,000.00	$	1,000.00	$	1,000.00	$	1,000.00
Ending Account Value 5/31/14	$	1,077.50	$	1,073.40	$	1,074.30	$	1,078.80	$	1,078.80
Expenses Paid per $1,000*	$	4.87	$	8.79	$	8.74	$	3.58	$	3.58
Hypothetical 5% Fund Return	Class A		Class B		Class C		Class S		Institutional Class
Beginning Account Value 12/1/13	$	1,000.00	$	1,000.00	$	1,000.00	$	1,000.00	$	1,000.00
Ending Account Value 5/31/14	$	1,020.24	$	1,016.45	$	1,016.50	$	1,021.49	$	1,021.49
Expenses Paid per $1,000*	$	4.73	$	8.55	$	8.50	$	3.48	$	3.48

* Expenses are equal to the Fund's annualized expense ratio for each share class, multiplied by the average account value over the period, multiplied by 182 (the number of days in the most recent six-month period), then divided by 365.

Annualized Expense Ratios	Class A	Class B	Class C	Class S	Institutional Class
DWS Strategic High Yield Tax-Free Fund†	.94%	1.70%	1.69%	.69%	.69%

† Includes interest expense and fees on short-term floating rate notes issued in conjunction with inverse floating rate securities of 0.08% for each class.

For more information, please refer to the Fund's prospectus.

For an analysis of the fees associated with an investment in the Fund or similar funds, please refer to http://apps.finra.org/fundanalyzer/1/fa.aspx.

Tax Information (Unaudited)

Of the dividends paid from net investment income for the taxable year ended May 31, 2014, 100% are designated as exempt interest dividends for federal income tax purposes.

Please consult a tax advisor if you have questions about federal or state income tax laws, or on how to prepare your tax returns. If you have specific questions about your account, please call (800) 728-3337.

Advisory Agreement Board Considerations and Fee Evaluation

The Board of Trustees approved the renewal of DWS Strategic High Yield Tax-Free Fund's investment management agreement (the "Agreement") with Deutsche Investment Management Americas Inc. ("DIMA") in September 2013.

In terms of the process that the Board followed prior to approving the Agreement, shareholders should know that:

— In September 2013, all of the Fund's Trustees were independent of DIMA and its affiliates.

— The Trustees met frequently during the past year to discuss fund matters and dedicated a substantial amount of time to contract review matters. Over the course of several months, the Board's Contract Committee, in coordination with the Board's Fixed Income and Asset Allocation Oversight Committee, reviewed comprehensive materials received from DIMA, independent third parties and independent counsel. These materials included an analysis of the Fund's performance, fees and expenses, and profitability compiled by a fee consultant retained by the Fund's Independent Trustees (the "Fee Consultant"). The Board also received extensive information throughout the year regarding performance of the Fund.

— The Independent Trustees regularly meet privately with their independent counsel to discuss contract review and other matters. In addition, the Independent Trustees were also advised by the Fee Consultant in the course of their review of the Fund's contractual arrangements and considered a comprehensive report prepared by the Fee Consultant in connection with their deliberations.

— In connection with reviewing the Agreement, the Board also reviewed the terms of the Fund's Rule 12b-1 plan, distribution agreement, administrative services agreement, transfer agency agreement and other material service agreements.

— Based on its evaluation of the information provided, the Contract Committee presented its findings and recommendations to the Board. The Board then reviewed the Contract Committee's findings and recommendations.

In connection with the contract review process, the Contract Committee and the Board considered the factors discussed below, among others. The Board also considered that DIMA and its predecessors have managed the Fund since its inception, and the Board believes that a long-term relationship with a capable, conscientious advisor is in the best interests of the Fund. The Board considered, generally, that shareholders chose to invest or remain invested in the Fund knowing that DIMA managed the Fund, and that the Agreement was approved by the Fund's shareholders. DIMA is part of Deutsche Bank AG, a major global banking institution that is engaged in a wide range of financial services. The Board believes that there are advantages to being part of a global asset management business that offers a wide range of investing expertise and resources, including hundreds of portfolio managers and analysts with research capabilities in many countries throughout the world.

As part of the contract review process, the Board carefully considered the fees and expenses of each DWS fund overseen by the Board in light of the fund's performance. In many cases, this led to a negotiation with DIMA of lower expense caps as part of the 2012 and 2013 contract review processes than had previously been in place. As part of these negotiations, the Board indicated that it would consider relaxing these new lower caps in future years following sustained improvements in performance, among other considerations.

In June 2012, Deutsche Bank AG ("DB"), DIMA's parent company, announced that DB would combine its Asset Management (of which DIMA was a part) and Wealth Management divisions. DB has advised the Independent Trustees that the U.S. asset management business is a critical and integral part of DB, and that it has, and will continue to, reinvest a significant portion of the substantial savings it expects to realize by combining its Asset Management and Wealth Management divisions into the new Asset and Wealth Management ("AWM") division, including ongoing enhancements to its investment capabilities. DB also has confirmed its commitment to maintaining strong legal and compliance groups within the AWM division.

While shareholders may focus primarily on fund performance and fees, the Fund's Board considers these and many other factors, including the quality and integrity of DIMA's personnel and such other issues as back-office operations, fund valuations, and compliance policies and procedures.

Nature, Quality and Extent of Services. The Board considered the terms of the Agreement, including the scope of advisory services provided under the Agreement. The Board noted that, under the Agreement, DIMA provides portfolio management services to the Fund and that, pursuant to a separate administrative services agreement, DIMA provides administrative services to the Fund. The Board considered the experience and skills of senior management and investment personnel, the resources made available to such personnel, the ability of DIMA to attract and retain high-quality personnel, and the organizational depth and stability of DIMA. The Board reviewed the Fund's performance over short-term and long-term periods and compared those returns to various agreed-upon performance measures, including market indices and a peer universe compiled by the Fee Consultant using information supplied by Morningstar Direct ("Morningstar"), an independent fund data service. The Board also noted that it has put into place a process of identifying "Focus Funds" (e.g., funds performing poorly relative to their benchmark or a peer universe compiled by an independent fund data service), and receives more frequent reporting and information from DIMA regarding such funds, along with DIMA's remedial plans to address underperformance. The Board believes this process is an effective manner of identifying and addressing underperforming funds. Based on the information provided, the Board noted that for the one-, three- and five-year periods ended December 31, 2012, the Fund's performance (Class A shares) was in the 3rd quartile, 4th quartile and 2nd quartile, respectively, of the applicable Morningstar universe (the 1st quartile being the best performers and the 4th quartile being the worst performers). The Board also observed that the Fund has outperformed its benchmark in the one- and three-year periods and has underperformed its benchmark in the five-year period ended December 31, 2012. The Board noted the disappointing investment performance of the Fund in recent periods and continued to discuss with senior management of DIMA the factors contributing to such underperformance and actions being taken to improve performance. The Board recognized the efforts made by DIMA in recent years to enhance its investment platform and improve long-term performance across the DWS fund complex.

Fees and Expenses. The Board considered the Fund's investment management fee schedule, operating expenses and total expense ratios, and comparative information provided by Lipper Inc. ("Lipper") and the Fee Consultant regarding investment management fee rates paid to other investment advisors by similar funds (1st quartile being the most favorable and 4th quartile being the least favorable). With respect to management fees paid to other investment advisors by similar funds, the Board noted that the contractual fee rates paid by the Fund, which include a 0.10% fee paid to DIMA under the Fund's administrative services agreement, were higher than the median (4th quartile) of the applicable Lipper peer group (based on Lipper data provided as of December 31, 2012). The Board noted that the Fund's Class A shares total (net) operating expenses (excluding 12b-1 fees) were expected to be lower than the median (2nd quartile) of the applicable Lipper expense universe (based on Lipper data provided as of December 31, 2012, and analyzing Lipper expense universe Class A (net) expenses less any applicable 12b-1 fees) ("Lipper Universe Expenses"). The Board also reviewed data comparing each share class's total (net) operating expenses to the applicable Lipper Universe Expenses. The Board considered the Fund's management fee rate as compared to fees charged by DIMA to comparable funds and considered differences between the Fund and the comparable funds. The Board also considered how the Fund's total (net) operating expenses compared to the total (net) operating expenses of a more customized peer group selected by Lipper (based on such factors as asset size). The Board also noted that the expense limitations agreed to by DIMA helped to ensure that the Fund's total (net) operating expenses would remain competitive. The Board noted that, in connection with the 2013 contract renewal process, DIMA agreed to implement a new management fee breakpoint.

The information considered by the Board as part of its review of management fees included information regarding fees charged by DIMA and its affiliates to similar institutional accounts and to similar funds offered primarily to European investors ("DWS Europe funds"), in each case as applicable. The Board observed that advisory fee rates for institutional accounts generally were lower than the management fees charged by similarly managed DWS U.S. mutual funds ("DWS Funds"), but also took note of the differences in services provided to DWS Funds as compared to institutional accounts. In the case of DWS Europe funds, the Board observed that fee rates for DWS Europe funds generally were higher than for similarly managed DWS Funds, but noted that differences in the types of services provided to DWS Funds relative to DWS Europe funds made it difficult to compare such fees.

On the basis of the information provided, the Board concluded that management fees were reasonable and appropriate in light of the nature, quality and extent of services provided by DIMA.

Profitability. The Board reviewed detailed information regarding revenues received by DIMA under the Agreement. The Board considered the estimated costs and pre-tax profits realized by DIMA from advising the DWS Funds, as well as estimates of the pre-tax profits attributable to managing the Fund in particular. The Board also received information regarding the estimated enterprise-wide profitability of DWS and its affiliates with respect to all fund services in totality and by fund. The Board and the Fee Consultant reviewed DIMA's methodology in allocating its costs to the management of the Fund. Based on the information provided, the Board concluded that the pre-tax profits realized by DIMA in connection with the management of the Fund were not unreasonable. The Board also reviewed information regarding the profitability of certain similar investment management firms. The Board noted that while information regarding the profitability of such firms is limited (and in some cases is not necessarily prepared on a comparable basis), DIMA and its affiliates' overall profitability with respect to the DWS fund complex (after taking into account distribution and other services provided to the funds by DIMA and its affiliates) was lower than the overall profitability levels of many comparable firms for which such data was available.

Economies of Scale. The Board considered whether there are economies of scale with respect to the management of the Fund and whether the Fund benefits from any economies of scale. The Board noted that the Fund's management fee schedule includes fee breakpoints. The Board concluded that the Fund's fee schedule represents an appropriate sharing between the Fund and DIMA of such economies of scale as may exist in the management of the Fund at current asset levels.

Other Benefits to DIMA and Its Affiliates. The Board also considered the character and amount of other incidental benefits received by DIMA and its affiliates, including any fees received by DIMA for administrative services provided to the Fund and any fees received by an affiliate of DIMA for distribution services. The Board also considered benefits to DIMA related to brokerage and soft-dollar allocations, including allocating brokerage to pay for research generated by parties other than the executing broker dealers, which pertain primarily to funds investing in equity securities, along with the incidental public relations benefits to DIMA related to DWS Funds advertising and cross-selling opportunities among DIMA products and services. The Board concluded that management fees were reasonable in light of these fallout benefits.

Compliance. The Board considered the significant attention and resources dedicated by DIMA to documenting and enhancing its compliance processes in recent years. The Board noted in particular (i) the experience and seniority of both DIMA's chief compliance officer and the Fund's chief compliance officer; (ii) the large number of DIMA compliance personnel; and (iii) the substantial commitment of resources by DIMA and its affiliates to compliance matters.

Based on all of the information considered and the conclusions reached, the Board unanimously determined that the continuation of the Agreement is in the best interests of the Fund. In making this determination, the Board did not give particular weight to any single factor identified above. The Board considered these factors over the course of numerous meetings, certain of which were in executive session with only the Independent Trustees and their independent counsel present. It is possible that individual Trustees may have weighed these factors differently in reaching their individual decisions to approve the continuation of the Agreement.

Board Members and Officers

The following table presents certain information regarding the Board Members and Officers of the fund. Each Board Member's year of birth is set forth in parentheses after his or her name. Unless otherwise noted, (i) each Board Member has engaged in the principal occupation(s) noted in the table for at least the most recent five years, although not necessarily in the same capacity; and (ii) the address of each Independent Board Member is c/o Kenneth C. Froewiss, Chairman, DWS Mutual Funds, P.O. Box 390601, Cambridge, MA 02139. Except as otherwise noted below, the term of office for each Board Member is until the election and qualification of a successor, or until such Board Member sooner dies, resigns, is removed or as otherwise provided in the governing documents of the fund. Because the fund does not hold an annual meeting of shareholders, each Board Member will hold office for an indeterminate period. The Board Members may also serve in similar capacities with other funds in the fund complex.

Independent Board Members
Name, Year of Birth, Position with the Fund and Length of Time Served1	Business Experience and Directorships During the Past Five Years	Number of Funds in DWS Fund Complex Overseen	Other Directorships Held by Board Member
Kenneth C. Froewiss (1945) Chairperson since 2013, and Board Member since 2001	Adjunct Professor of Finance, NYU Stern School of Business (September 2009–present; Clinical Professor from 1997–September 2009); Member, Finance Committee, Association for Asian Studies (2002–present); Director, Mitsui Sumitomo Insurance Group (US) (2004–present); prior thereto, Managing Director, J.P. Morgan (investment banking firm) (until 1996)	104	—
William McClayton (1944) Vice Chairperson since 2013, and Board Member since 2004	Private equity investor (since October 2009); previously, Managing Director, Diamond Management & Technology Consultants, Inc. (global consulting firm) (2001–2009); Directorship: Board of Managers, YMCA of Metropolitan Chicago; formerly: Senior Partner, Arthur Andersen LLP (accounting) (1966–2001); Trustee, Ravinia Festival	104	—
John W. Ballantine (1946) Board Member since 1999	Retired; formerly, Executive Vice President and Chief Risk Management Officer, First Chicago NBD Corporation/The First National Bank of Chicago (1996–1998); Executive Vice President and Head of International Banking (1995–1996); former Directorships: Director and former Chairman of the Board, Healthways, Inc.2 (provider of disease and care management services) (2003–2014); Stockwell Capital Investments PLC (private equity); First Oak Brook Bancshares, Inc. and Oak Brook Bank; Prisma Energy International	104	Portland General Electric2 (utility company) (2003– present)
Henry P. Becton, Jr. (1943) Board Member since 1990	Vice Chair and former President, WGBH Educational Foundation. Directorships: Public Radio International; Public Radio Exchange (PRX); North Bennett Street School (Boston); former Directorships: Belo Corporation2 (media company); The PBS Foundation; Association of Public Television Stations; Boston Museum of Science; American Public Television; Concord Academy; New England Aquarium; Mass. Corporation for Educational Telecommunications; Committee for Economic Development; Public Broadcasting Service; Connecticut College	104	Lead Director, Becton Dickinson and Company2 (medical technology company)
Dawn-Marie Driscoll (1946) Board Member since 1987	Emeritus Executive Fellow, Center for Business Ethics, Bentley University; formerly, Partner, Palmer & Dodge (1988–1990); Vice President of Corporate Affairs and General Counsel, Filene's (1978–1988). Directorships: Director of ICI Mutual Insurance Company (since 2007); Advisory Board, Center for Business Ethics, Bentley University; Trustee and former Chairman of the Board, Southwest Florida Community Foundation (charitable organization); former Directorships: Sun Capital Advisers Trust (mutual funds) (2007–2012), Investment Company Institute (audit, executive, nominating committees) and Independent Directors Council (governance, executive committees)	104	—
Keith R. Fox, CFA (1954) Board Member since 1996	Managing General Partner, Exeter Capital Partners (a series of private investment funds) (since 1986). Directorships: Progressive International Corporation (kitchen goods importer and distributor); The Kennel Shop (retailer); former Chairman, National Association of Small Business Investment Companies; former Directorships: BoxTop Media Inc. (advertising); Sun Capital Advisers Trust (mutual funds) (2011–2012)	104	—
Paul K. Freeman (1950) Board Member since 1993	Consultant, World Bank/Inter-American Development Bank; Executive and Governing Council of the Independent Directors Council (Chairman of Education Committee); formerly: Project Leader, International Institute for Applied Systems Analysis (1998–2001); Chief Executive Officer, The Eric Group, Inc. (environmental insurance) (1986–1998); Directorships: Denver Zoo Foundation (December 2012–present); former Directorships: Prisma Energy International	104	—
Richard J. Herring (1946) Board Member since 1990	Jacob Safra Professor of International Banking and Professor, Finance Department, The Wharton School, University of Pennsylvania (since July 1972); Co-Director, Wharton Financial Institutions Center; Co-Chair, U.S. Shadow Financial Regulatory Committee; Executive Director, Financial Economists Roundtable; formerly: Vice Dean and Director, Wharton Undergraduate Division (July 1995–June 2000); Director, Lauder Institute of International Management Studies (July 2000–June 2006)	104	Director, Aberdeen Singapore and Japan Funds (since 2007); Independent Director of Barclays Bank Delaware (since September 2010)
Rebecca W. Rimel (1951) Board Member since 1995	President and Chief Executive Officer, The Pew Charitable Trusts (charitable organization) (1994 to present); formerly: Executive Vice President, The Glenmede Trust Company (investment trust and wealth management) (1983–2004); Board Member, Investor Education (charitable organization) (2004–2005); Trustee, Executive Committee, Philadelphia Chamber of Commerce (2001–2007); Director, Viasys Health Care2 (January 2007–June 2007); Trustee, Thomas Jefferson Foundation (charitable organization) (1994–2012)	104	Director, Becton Dickinson and Company2 (medical technology company) (2012– present); Director, BioTelemetry Inc.2 (health care) (2009– present)
William N. Searcy, Jr. (1946) Board Member since 1993	Private investor since October 2003; formerly: Pension & Savings Trust Officer, Sprint Corporation2 (telecommunications) (November 1989–September 2003); Trustee, Sun Capital Advisers Trust (mutual funds) (1998–2012)	104	—
Jean Gleason Stromberg (1943) Board Member since 1997	Retired. Formerly, Consultant (1997–2001); Director, Financial Markets U.S. Government Accountability Office (1996–1997); Partner, Norton Rose Fulbright, L.L.P. (law firm) (1978–1996). Directorships: The William and Flora Hewlett Foundation; former Directorships: Service Source, Inc., Mutual Fund Directors Forum (2002–2004), American Bar Retirement Association (funding vehicle for retirement plans) (1987–1990 and 1994–1996)	104	—
Robert H. Wadsworth (1940) Board Member since 1999	President, Robert H. Wadsworth & Associates, Inc. (consulting firm) (1983 to present); Director, The Phoenix Boys Choir Association	107	—

Officers4
Name, Year of Birth, Position with the Fund and Length of Time Served5		Business Experience and Directorships During the Past Five Years
Brian E. Binder8 (1972) President and Chief Executive Officer, 2013–present		Managing Director3 and Head of Fund Administration, Deutsche Asset & Wealth Management (2013–present); formerly: Head of Business Management and Consulting at Invesco, Ltd. (2010–2012); Chief Administrative Officer, Van Kampen Funds Inc. (2008–2010); and Chief Administrative Officer, Morgan Stanley Investment Management Americas Distribution (2003–2008)
John Millette7 (1962) Vice President and Secretary, 1999–present		Director,3 Deutsche Asset & Wealth Management
Paul H. Schubert6 (1963) Chief Financial Officer, 2004–present Treasurer, 2005–present		Managing Director,3 Deutsche Asset & Wealth Management (since July 2004); formerly: Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family of Funds (1998–2004); Vice President and Director of Mutual Fund Finance at UBS Global Asset Management (1994–1998)
Caroline Pearson7 (1962) Chief Legal Officer, 2010–present		Managing Director,3 Deutsche Asset & Wealth Management; formerly: Assistant Secretary for DWS family of funds (1997–2010)
Melinda Morrow6 (1970) Vice President, 2012–present		Director,3 Deutsche Asset & Wealth Management
Hepsen Uzcan7 (1974) Assistant Secretary, 2013–present		Director,3 Deutsche Asset & Wealth Management
Paul Antosca7 (1957) Assistant Treasurer, 2007–present		Director,3 Deutsche Asset & Wealth Management
Jack Clark7 (1967) Assistant Treasurer, 2007–present		Director,3 Deutsche Asset & Wealth Management
Diane Kenneally7 (1966) Assistant Treasurer, 2007–present		Director,3 Deutsche Asset & Wealth Management
Wayne Salit6,9 (1967) Anti-Money Laundering Compliance Officer, 2014–present		Director,3 Deutsche Asset & Wealth Management; formerly: Managing Director, AML Compliance Officer at BNY Mellon (2011–2014); and Director, AML Compliance Officer at Deutsche Bank (2004–2011)
Robert Kloby6 (1962) Chief Compliance Officer, 2006–present		Managing Director,3 Deutsche Asset & Wealth Management

1 The length of time served represents the year in which the Board Member joined the board of one or more DWS funds currently overseen by the Board.

2 A publicly held company with securities registered pursuant to Section 12 of the Securities Exchange Act of 1934.

3 Executive title, not a board directorship.

4 As a result of their respective positions held with the Advisor, these individuals are considered "interested persons" of the Advisor within the meaning of the 1940 Act. Interested persons receive no compensation from the fund.

5 The length of time served represents the year in which the officer was first elected in such capacity for one or more DWS funds.

6 Address: 60 Wall Street, New York, NY 10005.

7 Address: One Beacon Street, Boston, MA 02108.

8 Address: 222 South Riverside Plaza, Chicago, IL 60606.

9 Effective as of June 16, 2014.

The fund's Statement of Additional Information ("SAI") includes additional information about the Board Members. The SAI is available, without charge, upon request. If you would like to request a copy of the SAI, you may do so by calling the following toll-free number: (800) 728-3337.

Account Management Resources


For More Information		The automated telephone system allows you to access personalized account information and obtain information on other DWS funds using either your voice or your telephone keypad. Certain account types within Classes A, B, C and S also have the ability to purchase, exchange or redeem shares using this system. For more information, contact your financial advisor. You may also access our automated telephone system or speak with a Shareholder Service representative by calling: (800) 728-3337
Web Site		dws-investments.com View your account transactions and balances, trade shares, monitor your asset allocation, subscribe to fund and account updates by e-mail, and change your address, 24 hours a day. Obtain prospectuses and applications, blank forms, interactive worksheets, news about DWS funds, retirement planning information, and more.
Written Correspondence		Deutsche Asset & Wealth Management PO Box 219151 Kansas City, MO 64121-9151
Proxy Voting		The fund's policies and procedures for voting proxies for portfolio securities and information about how the fund voted proxies related to its portfolio securities during the 12-month period ended June 30 are available on our Web site — dws-investments.com (click on "proxy voting"at the bottom of the page) — or on the SEC's Web site — sec.gov. To obtain a written copy of the fund's policies and procedures without charge, upon request, call us toll free at (800) 728-3337.
Portfolio Holdings		Following the fund's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. This form will be available on the SEC's Web site at sec.gov, and it also may be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330. The fund's portfolio holdings are also posted on dws-investments.com from time to time. Please see the fund's current prospectus for more information.
Principal Underwriter		If you have questions, comments or complaints, contact: DWS Investments Distributors, Inc. 222 South Riverside Plaza Chicago, IL 60606-5808 (800) 621-1148
Investment Management		Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), which is part of Deutsche Asset & Wealth Management, is the investment advisor for the fund. DIMA and its predecessors have more than 80 years of experience managing mutual funds and DIMA provides a full range of investment advisory services to both institutional and retail clients. DIMA is an indirect, wholly owned subsidiary of Deutsche Bank AG. Deutsche Bank AG is a major global banking institution engaged in a wide variety of financial services, including investment management, retail, private and commercial banking, investment banking and insurance. Deutsche Asset & Wealth Management is the retail brand name in the U.S. for the wealth management and asset management activities of Deutsche Bank AG and DIMA. Deutsche Asset & Wealth Management is committed to delivering the investing expertise, insight and resources of this global investment platform to American investors.

	Class A	Class B	Class C	Class S	Institutional Class
Nasdaq Symbol	NOTAX	NOTBX	NOTCX	SHYTX	NOTIX
CUSIP Number	23337W-105	23337W-204	23337W-303	23337W-501	23337W-600
Fund Number	152	252	352	2008	512

Date of fiscal year end:	5/31

Date of reporting period:	5/31/2014


ITEM 2.	CODE OF ETHICS

	As of the end of the period covered by this report, the registrant has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its Principal Executive Officer and Principal Financial Officer. There have been no amendments to, or waivers from, a provision of the code of ethics during the period covered by this report that would require disclosure under Item 2. A copy of the code of ethics is filed as an exhibit to this Form N-CSR.

ITEM 3.	AUDIT COMMITTEE FINANCIAL EXPERT

	The fund’s audit committee is comprised solely of trustees who are "independent" (as such term has been defined by the Securities and Exchange Commission ("SEC") in regulations implementing Section 407 of the Sarbanes-Oxley Act (the "Regulations")). The fund’s Board of Trustees has determined that there are several "audit committee financial experts" (as such term has been defined by the Regulations) serving on the fund’s audit committee including Mr. Paul K. Freeman, the chair of the fund’s audit committee. An “audit committee financial expert” is not an “expert” for any purpose, including for purposes of Section 11 of the Securities Act of 1933 and the designation or identification of a person as an “audit committee financial expert” does not impose on such person any duties, obligations or liability that are greater than the duties, obligations and liability imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification.

ITEM 4.	PRINCIPAL ACCOUNTANT FEES AND SERVICES

Fiscal Year Ended May 31,	Audit Fees Billed to Fund		Audit-Related Fees Billed to Fund		Tax Fees Billed to Fund		All Other Fees Billed to Fund
2014	$	85,992	$	0	$	0	$	0
2013	$	85,460	$	0	$	0	$	0

Fiscal Year Ended May 31,	Audit-Related Fees Billed to Adviser and Affiliated Fund Service Providers		Tax Fees Billed to Adviser and Affiliated Fund Service Providers		All Other Fees Billed to Adviser and Affiliated Fund Service Providers
2014	$	0	$	66,535	$	0
2013	$	0	$	51,500	$	0

Fiscal Year Ended May 31,	Total Non-Audit Fees Billed to Fund (A)		Total Non-Audit Fees billed to Adviser and Affiliated Fund Service Providers (engagements related directly to the operations and financial reporting of the Fund) (B)		Total Non-Audit Fees billed to Adviser and Affiliated Fund Service Providers (all other engagements) (C)		Total of (A), (B) and (C)
2014	$	0	$	66,535	$	0	$	66,535
2013	$	0	$	51,500	$	0	$	51,500


ITEM 5.	AUDIT COMMITTEE OF LISTED REGISTRANTS

	Not applicable

ITEM 6.	SCHEDULE OF INVESTMENTS

	Not applicable

ITEM 7.	DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES

	Not applicable

ITEM 8.	PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES

	Not applicable

ITEM 9.	PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS

	Not applicable

ITEM 10.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

	There were no material changes to the procedures by which shareholders may recommend nominees to the Fund’s Board. The primary function of the Nominating and Governance Committee is to identify and recommend individuals for membership on the Board and oversee the administration of the Board Governance Guidelines. Shareholders may recommend candidates for Board positions by forwarding their correspondence by U.S. mail or courier service to Kenneth C. Froewiss, Independent Chairman, DWS Mutual Funds, P.O. Box 390601, Cambridge, MA 02139.

ITEM 11.	CONTROLS AND PROCEDURES

	(a)	The Chief Executive and Financial Officers concluded that the Registrant’s Disclosure Controls and Procedures are effective based on the evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report.

	(b)	There have been no changes in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal controls over financial reporting.

ITEM 12.	EXHIBITS

	(a)(1)	Code of Ethics pursuant to Item 2 of Form N-CSR is filed and attached hereto as EX-99.CODE ETH.

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

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

Registrant:	DWS Strategic High Yield Tax-Free Fund, a series of DWS Municipal Trust


By:	/s/Brian E. Binder Brian E. Binder President

Date:	July 30, 2014