Prudential Tax-Free Money Fund

                        Supplement dated May 12, 1995 to
                       Prospectus dated February 28, 1995

                              HOW THE FUND INVESTS

INVESTMENT OBJECTIVE AND POLICIES

    The Directors of the Fund have approved modifications to the Fund's
investment policies and restrictions. These changes, along with the
modifications proposed to the Fund's Distribution and Service Plan described
below under ``How the Fund is Managed--Distributor'', will be submitted to
shareholders for their approval at a special meeting scheduled to be held in or
about July 1995. The changes to the Fund's investment policies and restrictions
are summarized below and will be described in more detail in the proxy statement
which will be mailed to shareholders.

    A number of the Fund's investment policies and restrictions are proposed to
be eliminated or modified which would permit the Fund, among other things, (1)
consistent with the Investment Company Act rules applicable to money market
funds, to invest in securities with maturities of up to thirteen months
(currently one year); and (2) to enter into repurchase agreement transactions.
    In addition to the foregoing, the Directors approved a change in the Fund's
investment policies (which will not require shareholder approval) to permit it
to invest, without restriction, in Municipal Bonds and Notes the interest on
which would be preference items for purposes of the federal alternative minimum
tax (i.e., certain private activity bonds issued after August 8, 1986) (AMT
paper). Although the Fund is currently permitted to purchase AMT paper, the
Fund's prior policy was to avoid such purchases to the extent possible. See
``Taxes, Dividends and Distributions''.

                            HOW THE FUND IS MANAGED
DISTRIBUTOR

    The Directors of the Fund have also approved modifications to the Fund's
Distribution and Service Plan (the Plan) to change it from a reimbursement to a
compensation plan. Under the current Plan the Distributor is reimbursed for
certain ongoing costs actually incurred by it in connection with the services
and activities undertaken to distribute shares of the Fund and service
shareholder accounts (Distribution Activities). As proposed to be amended, the
Plan would authorize the Fund to pay the Distributor the same maximum annual fee
as under the current Plan as compensation for its Distribution Activities.

MF103C-1