<DOCUMENT>
<TYPE>N-30D
<SEQUENCE>1
<FILENAME>mf14973.txt
<DESCRIPTION>TAX-FREE MONEY -- PROSPECTUS -- JUNE 30, 2001
<TEXT>
<PAGE>
SEMIANNUAL REPORT JUNE 30, 2001
Prudential
Tax-Free Money Fund, Inc.
Fund Type Tax-free money market
Objective The highest level of current income that is exempt
from federal income taxes,consistent with liquidity and the
preservation of capital
(GRAPHIC)
This report is not authorized for distribution to prospective
investors unless preceded or accompanied by a current
prospectus.
The views expressed in this report and information about the
Fund's portfolio holdings are for the period covered by this
report and are subject to change thereafter.
Prudential Financial is a service mark of Prudential, Newark,
NJ, and its affiliates.
(LOGO)
<PAGE>
Build on the Rock
INVESTMENT GOALS AND STYLE
The Prudential Tax-Free Money Fund, Inc. (the Fund) seeks the
highest level of current income that is exempt from federal
income taxes, consistent with liquidity and the preservation
of capital. The Fund invests in a diversified portfolio of
high-quality, short-term municipal bonds issued by state and
local governments, territories and possessions of the United
States, and by the District of Columbia. Maturities can range
from one day to a maximum of 13 months. We purchase only
securities rated in one of the two highest rating categories
by at least two major rating agencies or, if not rated, deemed
to be of equivalent quality by the investment adviser's credit
research staff. There can be no assurance that the Fund will
achieve its investment objective.
Tax-Free Money Fund Yield Comparison
(GRAPH)
<PAGE>
www.prudential.com (800) 225-1852
Performance at a Glance
Fund Facts As of 6/30/01
<TABLE>
<CAPTION>
7-Day Net Asset Weighted Avg. Net Assets
Current Yield Value (NAV) Mat. (WAM) (Millions)
<S> <C> <C> <C> <C>
Prudential Tax-Free Money Fund, Inc. 2.41% $1.00 52 Days $183
iMoneyNet, Inc.
Tax-Free National Retail Avg.* 2.61% $1.00 35 Days N/A
</TABLE>
Taxable Equivalent Yield** As of 6/30/01
Tax Brackets
@31% @36% @39.1%
Prudential Tax-Free Money Fund, Inc. 3.49% 3.77% 3.96%
iMoneyNet, Inc. Tax-Free National Retail Avg.* 3.78% 4.08% 4.29%
Note: Yields will fluctuate from time to time, and past
performance is not indicative of future results. An investment
in the Fund is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency.
Although the Fund seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money by
investing in the Fund.
*iMoneyNet, Inc. reports a seven-day current yield, Net Asset
Value (NAV), and Weighted Average Maturity (WAM) on Mondays.
This is the data for all funds in the iMoneyNet, Inc. Tax-Free
National Retail Average category as of June 25, 2001, the
closest date to the end of our reporting period.
**Some investors may be subject to the federal alternative
minimum tax (AMT).
Weighted Average Maturity Comparison
(GRAPH)
1
<PAGE>
(LOGO) August 14, 2001
DEAR SHAREHOLDER,
Faced with a deteriorating U.S. economy and plunging corporate
earnings, the Federal Reserve (the Fed) acted decisively in
the first half of 2001. Fed officials implemented six short-
term rate cuts in an attempt to avert a recession, defined as
at least two consecutive quarters of decline in a nation's
gross domestic product. Although economic growth had not
turned negative by the end of our reporting period, it slowed
from 4.1% in 2000 to an annualized pace of 1.0% for the first
half of 2001.
As would be expected in an environment of aggressive Fed
easings, yields on municipal money market securities came down
substantially. The primary challenge for the Fund's management
team, therefore, was to try to lock in higher yields on securities
with longer maturities in advance of the Fed's easing moves. The
details of this effort will be explained in the discussion that
follows.
The Prudential Tax-Free Money Fund's seven-day current yield
on June 30, 2001, was 2.41%, the equivalent of a 3.96% taxable
yield for investors in the top 39.1% tax bracket. The Fund
maintained a $1 net asset value per share.
Thank you for your continued confidence in Prudential mutual funds.
Sincerely,
David R. Odenath, Jr., President
Prudential Tax-Free Money Fund, Inc.
2
<PAGE>
Prudential Tax-Free Money Fund, Inc.
Semiannual Report June 30, 2001
INVESTMENT ADVISER'S REPORT
FED CUTS RATES AGGRESSIVELY
As we entered 2001, we anticipated the "January effect," a
phenomenon that occurs as a result of investors having an
abundance of cash on hand to invest from coupon payments,
called bonds, and bonds maturing in the first week of January.
This surge of buying normally pushes yields down and prices
up, creating a relatively unattractive investment environment
until demand subsides. To cope with the "January effect", we
extended the Fund's weighted average maturity (WAM) before the
buying wave hit and thereby locked in favorable yields. (WAM
measures a portfolio's sensitivity to changes in the level of
interest rates. It considers the maturity and quantity of each
security held in a portfolio.)
January 2001 was a little different. Not only did the "January
effect" appear on schedule, but the Fed also had a little New
Year's surprise for investors. Acting between regularly
scheduled meetings of its Federal Open Market Committee, the
central bank cut the federal funds rate on January 3 by one
half of a percentage point, reducing the key rate from 6.50%
to 6.00%. (The federal funds rate is what banks charge each
other for overnight loans.)
The Fund's longer WAM was beneficial as yields, which were
falling as anticipated due to the "January effect", declined
even further when the Fed made its first move. The Fed
implemented another half-point rate cut on January 31. In this
widely expected second move, it lowered the federal funds rate
to 5.50%.
KEEPING THE FUND'S WAM LONG
The Fund's WAM drifted slightly shorter throughout January,
but by early February, we had extended it again. By then, it
was clear that the Fed would not be satisfied with the two
rate cuts that occurred in January. Indeed, Fed officials also
trimmed rates in March, April, May, and June. All were half-
point cuts except for the June 27 move. The quarter-point
reduction on June 27 left the federal funds rate at 3.75%. In an
environment of rapidly falling rates, it was advantageous to
maintain a longer-than-average WAM.
3
<PAGE>
Prudential Tax-Free Money Fund, Inc.
Semiannual Report June 30, 2001
We accomplished this by purchasing longer-term municipal money
market securities that kept the Fund's WAM roughly 15 to 25
days longer than its competitive average throughout the
period.
Accordingly, in February we purchased 90-day tax-exempt
commercial paper, as well as annual optional tenders and
prerefunded bonds with maturities extending up to one year.
(These prerefunded bonds are backed by direct obligations of
the U.S. Treasury.) In March, we purchased 120-day commercial
paper and escrow-to-maturity bonds maturing at the end of the
year.
In April, we encountered another seasonal phenomenon, the
spike in yields that occurs as a result of tax time
redemptions. This increase in yields occurs when shareholders
withdraw cash to pay their taxes. Our strategy for this part
of the year was to build up sufficient liquidity to meet tax-
time outflows. At the same time, higher liquidity provided us
with the buying power to take advantage of attractive
opportunities, as selling pressure caused yields to rise.
During late April and early May, we purchased attractive
180-day commercial paper as well as semiannual tender
securities.
Near the end of the reporting period, we began to anticipate
the "July effect", which typically produces a dip in yields
due to the buying of investors who are flush with cash from
mid-year coupon payments and maturing securities. As at the
beginning of the year, we planned for the "July effect" by
lengthening the Fund's WAM so as to avoid locking in the
temporarily lower yields.
LOOKING AHEAD
With the quarter-point rate cut in June, the Fed could be
signaling that it is near the end of its current easing cycle.
It may implement one or two more rate cuts before the end of
the year, but we believe the Fed's aggressive easing will soon
have its intended effect, and the economy will begin a new
growth cycle.
Prudential Tax-Free Money Fund Management Team
4
<PAGE>
<Page>
Prudential Tax-Free Money Fund, Inc.
Portfolio of Investments as of June 30, 2001 (Unaudited)
<Table>
<Caption>
Principal
Moody's Interest Maturity Amount Value
Description (a) Rating Rate Date (000) (Note 1)
<S> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------
Alaska 1.1%
Anchorage Alaska, G.O., Ser. 91 NR 8.00% 7/01/01 $ 2,000 $ 2,000,000
----------------------------------------------------------------------------------------
Arizona 0.5%
Pima Cnty. Ind. Dev. Auth. Sngl.
Fam. Mtge. SP1* 3.45 4/15/02 1,000 1,000,000
----------------------------------------------------------------------------------------
Colorado 1.1%
East Smoky Hill Metro. Dist.,
Number 2, Q.T.R.M.T. A1* 4.45 12/01/01 2,000 2,000,000
----------------------------------------------------------------------------------------
Connecticut 1.0%
Connecticut Spec. Assmt.,
Unemployment Comp. Rev. Bds.,
A.N.N.M.T., Ser 93C VMIG1 4.35 11/15/01 1,800 1,800,000
----------------------------------------------------------------------------------------
District of Columbia 1.6%
Bear, Stearns Muni. Secs. Trust
Cert., F.R.D.D., Ser. 92 A1* 3.35 7/02/01 1,300 1,300,000
Dist. Columbia Hsg. Fin. Agcy.
Rev. Sngl. Fam. Mtge., Series C SP1+* 3.50 3/25/02 1,600 1,600,000
--------------
2,900,000
----------------------------------------------------------------------------------------
Florida 8.9%
Florida Cap. Proj. Fin. Auth.
Rev. AAAE Airport Proj. NR 4.25 6/01/02 1,000 1,012,101
Florida Cap. Proj. Fin. Auth.
Rev., F.R.W.D. Ser. H VMIG1 2.85 7/05/01 4,425 4,425,000
Florida St. Bd. of Ed., Pub. Ed.
Cap. Outlay, F.R.D.D., Ser. 102 A1+* 3.35 7/02/01 600 600,000
Bear, Stearns Muni. Secs. Trust
Cert., San Antonio, F.R.D.D.,
Ser. 132 A1* 3.35 7/02/01 300 300,000
Orange Cnty. Hlth. Facs. Auth.
Rev., Adventist Hlth. Sys.,
F.R.W.D., Ser. 171 A1+* 2.93 7/05/01 8,125 8,125,000
Palm Beach Cnty., G.O., Ser. 91 NR 6.60 10/01/01 1,850(d) 1,901,397
--------------
16,363,498
</Table>
See Notes to Financial Statements 5
<Page>
Prudential Tax-Free Money Fund, Inc.
Portfolio of Investments as of June 30, 2001 (Unaudited) Cont'd.
<Table>
<Caption>
Principal
Moody's Interest Maturity Amount Value
Description (a) Rating Rate Date (000) (Note 1)
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Georgia 2.1%
De Kalb Cnty. Hsg. Auth. Multi
Fam. Hsg. Rev., F.R.W.D. A1* 2.98% 7/05/01 $ 1,310 $ 1,310,000
Stephens Cnty. Dev. Auth. Ind.
Dev. Rev., Caterpillar Inc.
Proj., F.R.W.D. P-1 2.98 7/05/01 1,000 1,000,000
Stephens Cnty. Dev. Auth. Solid
Waste, Disp. Facs. Rev.,
F.R.W.D. P-1 2.98 7/05/01 1,520 1,520,000
--------------
3,830,000
----------------------------------------------------------------------------------------
Idaho 1.1%
Boise Cnty. Hsg. Auth. Rev.,
B.A.N. NR 4.70 10/01/01 2,000 2,000,000
----------------------------------------------------------------------------------------
Illinois 8.9%
Chicago Pub. Bldg., Comm. Bldg.
Rev., Ser. C NR 5.00 2/01/02 1,000 1,009,404
Illinois Edl. Facs. Auth. Rev. P1 3.25 10/04/01 5,000 5,000,000
Illinois Hlth. Facs. Auth. Rev.,
Evanston Hosp. Corp. Prog.,
Ser. 95, A.N.N.M.T., VMIG1 3.40 8/15/01 5,000 5,000,000
Servant Cor. Falcon II,
F.R.W.D., Ser. 96A A-1* 2.80 7/05/01 3,100 3,100,000
Illinois, Ser. A43, F.R.W.D. VMIG1 2.80 7/05/01 2,295 2,295,000
--------------
16,404,404
----------------------------------------------------------------------------------------
Indiana 6.9%
Indiana Ed. Facs. Auth., Wesleyan
Univ., F.R.W.D., Ser. 93 NR 2.80 7/05/01 4,000 4,000,000
Indiana Hlth. Fac. Fin. Auth.
Hosp. Rev., Floyd Memorial Hosp.
Proj. NR 6.63 2/15/02 2,500(d) 2,604,281
Indiana Trans. Fin. Auth., Hwy.
Rev., Ser. 11, F.R.D.D. A1+* 3.35 7/02/01 3,200 3,200,000
Saint Joseph Cnty. Hosp. Auth.
Fac. Rev., St. Joseph Med. Ctr.,
Ser. 91 NR 6.60 12/01/01 1,750(d) 1,772,812
</Table>
6 See Notes to Financial Statements
<Page>
Prudential Tax-Free Money Fund, Inc.
Portfolio of Investments as of June 30, 2001 (Unaudited) Cont'd.
<Table>
<Caption>
Principal
Moody's Interest Maturity Amount Value
Description (a) Rating Rate Date (000) (Note 1)
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
South Bend Econ. Dev. Rev.,
Dynamic R.E.H.C., Inc. Proj.,
F.R.W.D. NR 2.95% 7/05/01 $ 1,165 $ 1,165,000
--------------
12,742,093
----------------------------------------------------------------------------------------
Iowa 0.6%
Iowa Great Lakes San Dist. NR 4.20 6/01/02 500 504,924
Sioux City Water Rev. Ref. NR 4.25 6/01/02 540 545,548
--------------
1,050,472
----------------------------------------------------------------------------------------
Kentucky 5.3%
Henderson Cnty. Rev., Kentucky
Hosp. Assoc. Hlth. Facs.,
F.R.W.D., Ser. A VMIG1 2.85 7/05/01 6,075 6,075,000
Leitchfield Ind. Bldg. Rev.,
Styline Inds. Inc. Proj.,
F.R.W.D., A.M.T., Ser. 99 A1+* 2.90 7/05/01 3,555 3,555,000
--------------
9,630,000
----------------------------------------------------------------------------------------
Louisiana 6.4%
Calcasieu Parish Ind. Dev. Brd.,
Citgo Corp., F.R.D.D., A.M.T.,
Ser. 96 VMIG1 3.45 7/02/01 500 500,000
Jefferson Parish Sch. Brd. Sales
and Use Tax Rev., F.R.W.D.,
Ser. A38 VMIG1 2.80 7/05/01 3,785 3,785,000
Louisiana Loc. Govt. Envir.
Facs.,
LCDA Ln. Fin. Proj., F.R.W.D.,
Ser. A VMIG1 2.85 7/05/01 7,500 7,500,000
--------------
11,785,000
----------------------------------------------------------------------------------------
Maine 2.8%
Lewiston Ind. Dev. Rev., Diamond
Tpke. Assoc., F.R.W.D. A1+* 2.95 7/05/01 4,200 4,200,000
York Maine Rev. Stonewall Realty,
F.R.W.D., Ser. 99 VMIG1 3.20 7/05/01 975 975,000
--------------
5,175,000
</Table>
See Notes to Financial Statements 7
<Page>
Prudential Tax-Free Money Fund, Inc.
Portfolio of Investments as of June 30, 2001 (Unaudited) Cont'd.
<Table>
<Caption>
Principal
Moody's Interest Maturity Amount Value
Description (a) Rating Rate Date (000) (Note 1)
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Massachusetts 7.9%
Mass. Bay Trans. Auth., Gen.
Trans. Sys., F.R.W.D., Ser. 220 VMIG1 2.83% 7/05/01 $ 5,380 $ 5,395,606
Mass. St. Hlth. and Ed. Fac.
Auth. Rev., SGA 97, F.R.W.D. A1+* 2.83 7/05/01 2,910 2,910,000
Mass. St. Consld. Ln., Ser. A VMIG1 3.45 7/19/01 2,170 2,170,000
Seekonk, B.A.N. NR 4.45 10/19/01 4,025 4,025,693
--------------
14,501,299
----------------------------------------------------------------------------------------
Michigan 6.9%
Detroit Sewage Disp. Rev.,
Merlots, F.R.W.D., Ser. I VMIG1 2.80 7/05/01 5,000 5,000,000
Michigan St. Bldg. Auth. Rev.,
Ser. 90 NR 6.25 10/01/01 1,000 1,008,456
Ser. 1200 NR 6.38 10/01/01 1,000(d) 1,027,647
Walled Lake Consld. Sch. Dist.
Muni. Trust Cert., F.R.W.D.,
Ser. 18 VMIG1 2.83 7/05/01 5,575 5,575,000
--------------
12,611,103
----------------------------------------------------------------------------------------
Minnesota 2.6%
Bloomington Comm. Dev. Rev., 94th
Str. Assoc. Proj., F.R.W.D.,
Ser. 85 A1+* 2.80 7/06/01 4,775 4,775,000
----------------------------------------------------------------------------------------
Mississipi 1.9%
Mississippi Hsg. Fin. Corp. Sngl.
Fam. Mtge., F.R.W.D., Ser. 88 A1+* 2.88 7/05/01 3,485 3,485,000
----------------------------------------------------------------------------------------
Nevada 0.8%
Clark Cnty. Trans. Impvt., Ser.
92A NR 6.00 6/01/02 1,500(d) 1,543,103
----------------------------------------------------------------------------------------
New Jersey 2.7%
Jersey City, G.O., B.A.N. SP1+* 4.60 9/14/01 5,000 5,001,968
</Table>
8 See Notes to Financial Statements
<Page>
Prudential Tax-Free Money Fund, Inc.
Portfolio of Investments as of June 30, 2001 (Unaudited) Cont'd.
<Table>
<Caption>
Principal
Moody's Interest Maturity Amount Value
Description (a) Rating Rate Date (000) (Note 1)
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ohio 1.4%
East Lake Ind. Dev. Rev., Astro
Model Dev. Corp., F.R.W.D.,
Ser. 96 NR 2.95% 7/05/01 $ 2,600 $ 2,600,000
----------------------------------------------------------------------------------------
Oklahoma 1.0%
Tulsa Pkg. Auth. Rev., Williams
Ctr. Proj., S.E.M.M.T.,
Ser. 87 A VMIG1 3.10 11/15/01 1,800 1,800,000
----------------------------------------------------------------------------------------
Rhode Island 0.4%
Rhode Island Desp. Econ.
Protection Corp. Spc. Oblig.,
Ser. 91A NR 7.10 8/01/01 700(d) 715,470
----------------------------------------------------------------------------------------
South Carolina 2.8%
South Carolina St. Pub. Svc.
Auth. Rev. Merlots, F.R.W.D.,
Ser. L VMIG1 2.80 7/05/01 5,090 5,090,000
----------------------------------------------------------------------------------------
South Dakota 1.9%
Grant Cnty. Poll. Cntrl. Rev.
Ref., Otter Tail Pwr. Co. Proj.,
F.R.W.D. VMIG1 2.95 7/06/01 2,400 2,400,000
South Dakota Stud. Ln. Fin. Corp.
Ln. Rev., Ser. 94A NR 6.45 8/01/01 1,000(d) 1,021,491
--------------
3,421,491
----------------------------------------------------------------------------------------
Tennessee 2.8%
Sevier Cnty. Pub. Bldg. Auth.
Local Gov., Pub. Imprv. Proj.,
F.R.D.D. VMIG1 3.35 7/02/01 3,200 3,200,000
Shelby Cnty. Hlth. Ed., Baptist
Mem. Hosp. A1+* 3.35 7/27/01 2,000 2,000,000
--------------
5,200,000
----------------------------------------------------------------------------------------
Texas 5.2%
Beaumont Texas Pub. Impv.,
Ser. 92 NR 6.25 3/01/02 1,000(d) 1,020,831
</Table>
See Notes to Financial Statements 9
<Page>
Prudential Tax-Free Money Fund, Inc.
Portfolio of Investments as of June 30, 2001 (Unaudited) Cont'd.
<Table>
<Caption>
Principal
Moody's Interest Maturity Amount Value
Description (a) Rating Rate Date (000) (Note 1)
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Brazos River Harbor Nav. Dist.,
Dow Chemical Co., F.R.D.D.,
Ser. 97 P-1 3.50% 7/02/01 $ 600 $ 600,000
Clipper Tax Exempt Cert. of
Part., A.M.T., Ser. 1 VMIG1 3.60 12/14/01 1,000 1,000,000
Baxter Cnty., A.M.T., Ser. 3 VMIG1 3.50 12/14/01 2,000 2,000,000
Gulf Coast Wste. Disp. Auth.
Facs. Rev., Bayer Corp.,
F.R.D.D.,
Ser. 97 P-1 3.45 7/02/01 500 500,000
Bear, Stearns Muni. Secs. Trust
Cert., Harris Co. Toll Rd. Sub.,
F.R.D.D., Ser. 126 A1* 3.35 7/02/01 1,100 1,100,000
Bear, Stearns Muni. Secs. Trust
Cert., F.R.D.D., Ser. 115 A1* 3.35 7/02/01 3,300 3,300,000
--------------
9,520,831
----------------------------------------------------------------------------------------
Vermont 1.2%
Vermont Ind. Dev. Auth. Rev.
Var., Burlington Pptys. Proj.,
F.R.W.D., Ser 88 A1+* 2.95 7/05/01 2,200 2,200,000
----------------------------------------------------------------------------------------
Virginia 0.8%
Fairfax Cnty. Ind. Dev. Auth.
Rev., Fairfax Hosp. Sys. Proj.,
Ser. A NR 6.50 8/15/01 550(d) 563,040
Richmond Met. Auth. Expwy.
Rev. Ref., Ser. A NR 5.85 7/15/02 850 876,787
--------------
1,439,827
----------------------------------------------------------------------------------------
Washington 2.1%
Bear, Stearns Muni. Secs. Trust
Cert., Cen., Puget Sound Reg.
Trans. Auth., F.R.D.D., Ser. 101 A1* 3.35 7/02/01 1,295 1,295,000
Port Pasco Econ. Dev. Var.,
Douglas Fruit Company, Inc.
Proj., F.R.W.D., Ser. 96 A1* 2.95 7/05/01 1,735 1,735,000
Washington St. Motor Vehicle Fuel A1* 5.00 7/01/01 500 500,000
</Table>
10 See Notes to Financial Statements
<Page>
Prudential Tax-Free Money Fund, Inc.
Portfolio of Investments as of June 30, 2001 (Unaudited) Cont'd.
<Table>
<Caption>
Principal
Moody's Interest Maturity Amount Value
Description (a) Rating Rate Date (000) (Note 1)
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Washington St. Hsg. Fin. Comm.
Multi. Fam. Rev., F.R.D.D.,
Ser. 99A A1* 3.45% 7/02/01 $ 400 $ 400,000
--------------
3,930,000
----------------------------------------------------------------------------------------
Wisconsin 9.8%
Dane Cnty. Ref. Prom. Note,
Ser. C NR 4.00 5/01/02 2,350 2,362,435
Madison Prom. Notes, Ser. A NR 4.05 5/01/02 400 402,599
Milton Ind. Dev. Rev. New England
Extrusion Proj., F.R.W.D., Ser
98 A1+* 3.00 7/05/01 2,000 2,000,000
New Berlin Sch. Dist., T.R.A.N. NR 4.50 9/14/01 1,850 1,850,361
West Allis, T.R.A.N. NR 4.50 9/21/01 2,000 2,000,427
Whitewater Ind. Dev. Rev., Trek
Bicycle, F.R.W.D., Ser. 95 NR 3.00 7/05/01 3,375 3,375,000
Wisconsin St. Muni. Trust Certf.,
F.R.W.D. VMIG1 2.88 7/05/01 4,245 4,245,000
Wisconsin St. Hlth. and Edl.
Facs. Auth. Rev. Auth. Rev., St.
Lukes Med. Ctr., Ser. 91 NR 6.60 8/15/01 1,745 1,749,556
--------------
17,985,378
--------------
Total Investments 100.5%
(cost $184,500,937)(c) 184,500,937
Liabilities in excess of other
assets (0.5)% (1,020,466)
--------------
Net Assets 100% $ 183,480,471
--------------
--------------
</Table>
See Notes to Financial Statements 11
<Page>
Prudential Tax-Free Money Fund, Inc.
Portfolio of Investments as of June 30, 2001 (Unaudited) Cont'd.
(a) The following abbreviations are used in portfolio descriptions:
A.M.T.--Alternate Minimum Tax
A.N.N.M.T.--Annual Mandatory Tender
B.A.N.--Bond Anticipation Notes
F.R.D.D.--Floating Rate (Daily) Demand Note(b)
F.R.W.D.--Floating Rate (Weekly) Demand Note(b)
G.O.--General Obligation
Q.T.R.M.T.--Quarterly Monthly Tender
S.E.M.M.T.--Semi-Annual Mandatory Tender
T.R.A.N.--Tax and Revenue Anticipation Note
(b) For purposes of amortized cost valuation, the maturity date of these
instruments is considered to be the later of the next date on which the
security can be redeemed at par, or the next date on which the rate of
interest is adjusted.
(c) The cost basis for federal income tax purposes is substantially the same as
that used for financial statement purposes.
(d) Prerefunded issues are secured by escrowed cash and direct U.S. government
guaranteed obligations.
* Standard & Poor's Rating.
NR--Not Rated by Moody's or Standard & Poor's.
The Fund's current Statement of Additional Information contains a description of
Moody's and Standard and Poor's ratings.
12 See Notes to Financial Statements
<Page>
Prudential Tax-Free Money Fund, Inc.
Statement of Assets and Liabilities (Unaudited)
<Table>
<Caption>
June 30, 2001
<S> <C> <C>
---------------------------------------------------------------------------------------
ASSETS
Investments, at amortized cost which approximates market value $ 184,500,937
Cash 23,141
Receivable for Fund shares sold 2,413,860
Interest receivable 1,881,267
Prepaid expenses and other assets 25,145
-------------
Total assets 188,844,350
-------------
LIABILITIES
Payable for Fund shares reacquired 5,117,143
Accrued expenses 81,552
Dividends payable 77,143
Management fee payable 70,433
Distribution fee payable 17,608
-------------
Total liabilities 5,363,879
-------------
NET ASSETS $ 183,480,471
-------------
-------------
Net assets were comprised of:
Common Stock, $.01 par value $ 1,835,759
Paid-in capital in excess of par 181,644,712
-------------
Net assets, June 30, 2001 $ 183,480,471
-------------
-------------
Net asset value, offering price and redemption price
per share ($183,480,471 / 183,575,940 shares) $1.00
-------------
-------------
</Table>
See Notes to Financial Statements 13
<Page>
Prudential Tax-Free Money Fund, Inc.
Statement of Operations (Unaudited)
<Table>
<Caption>
Six Months
Ended
June 30, 2001
<S> <C> <C>
----------------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest $ 3,181,397
-------------
Expenses
Management fee 436,487
Distribution fee 109,122
Transfer agent's fees and expenses 63,000
Reports to shareholders 34,000
Custodian's fees and expenses 27,000
Registration fees 26,000
Legal fees and expenses 25,000
Audit fee 13,000
Directors' fees and expenses 4,000
Miscellaneous 489
-------------
Total expenses 738,098
-------------
Net investment income 2,443,299
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 2,443,299
-------------
-------------
</Table>
14 See Notes to Financial Statements
<Page>
Prudential Tax-Free Money Fund, Inc.
Statement of Changes in Net Assets (Unaudited)
<Table>
<Caption>
Six Months Year
Ended Ended
June 30, 2001 December 31, 2000
<S> <C> <C> <C>
----------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income $ 2,443,299 $ 5,969,252
------------- -----------------
Net increase in net assets resulting from
operations 2,443,299 5,969,252
------------- -----------------
Dividends and distributions to shareholders (2,443,299) (5,969,252)
------------- -----------------
Fund share transactions (at $1 per share)
Proceeds from shares sold(a) 263,174,770 602,574,421
Net asset value of shares issued to
shareholders in reinvestment of
dividends and distributions 2,381,984 5,660,329
Cost of shares reacquired (248,602,541) (621,595,449)
------------- -----------------
Net increase (decrease) in net assets from
Fund share transactions 16,954,213 (13,360,699)
------------- -----------------
Total increase (decrease) 16,954,213 (13,360,699)
------------- -----------------
NET ASSETS
Beginning of period 166,526,258 179,886,957
------------- -----------------
End of period $ 183,480,471 $ 166,526,258
------------- -----------------
------------- -----------------
</Table>
------------------------------
(a) For the six months ending June 30, 2001, includes shares issued in
connection with acquisition of Connecticut Money Market Series (Note 4).
See Notes to Financial Statements 15
<Page>
Prudential Tax-Free Money Fund, Inc.
Notes to Financial Statements (Unaudited)
Prudential Tax-Free Money Fund, Inc. (the 'Fund') is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company. The investment objective of the Fund is to attain the highest level of
current income that is exempt from federal income taxes, consistent with
liquidity and preservation of capital. The Fund will invest in short-term
tax-exempt debt securities of state and local governments. The ability of the
issuers of the securities held by the Fund to meet their obligations may be
affected by economic or political developments in a specific state, industry or
region.
Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
Securities Valuation: Portfolio securities are valued at amortized
cost, which approximates market value. The amortized cost method involves
valuing a security at its cost on the date of purchase and thereafter assuming a
constant amortization to maturity of any discount or premium.
Securities Transactions and Net Investment Income: Securities
transactions are recorded on the trade date. Realized gains and losses on sales
of investments are calculated on an identified cost basis. Interest income is
recorded on an accrual basis. The cost of portfolio securities for federal
income tax purposes is substantially the same as for financial reporting
purposes. Expenses are recorded on the accrual basis which may require the use
of certain estimates by management.
Federal Income Taxes: It is the Fund's policy to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its net investment income to its
shareholders. For this reason, no federal income tax provision is required.
Dividends: The Fund declares dividends daily from net investment income
and net realized gains, if any. Payment of dividends is made monthly.
Custody Fee Credits: The Fund has an arrangement with its custodian
bank, whereby uninvested monies earn credits which reduce the fees charged by
the custodian.
Note 2. Agreements
The Fund has a management agreement with Prudential Investments Fund Management
LLC ('PIFM'). Pursuant to this agreement, PIFM has responsibility for all
investment advisory services and supervises the subadviser's performance of such
services. PIFM has entered into a subadvisory agreement with The Prudential
Investment Management, Inc. ('PIM'), formerly known as Prudential Investments
Corporation,
16
<Page>
Prudential Tax-Free Money Fund, Inc.
Notes to Financial Statements (Unaudited) Cont'd.
furnishes investment advisory services in connection with the management of the
Fund. PIFM pays for the services of PIM, the compensation of officers of the
Fund, occupancy and certain clerical and bookkeeping costs of the Fund. The Fund
bears all other costs and expenses.
The management fee paid to PIFM is computed daily and payable monthly, at
an annual rate of .50 of 1% of the Fund's average daily net assets up to $750
million, .425 of 1% of the next $750 million of average daily net assets and
.375 of 1% of average daily net assets in excess of $1.5 billion.
The Fund has a distribution agreement with Prudential Investment
Management Services LLC ('PIMS'). The Fund compensated PIMS for distributing and
servicing the Fund's shares pursuant to the plan of distribution at an annual
rate of .125 of 1% of the Fund's average daily net assets. The distribution fee
is accrued daily and payable monthly.
PIFM, PIM and PIMS are indirect, wholly owned subsidiaries of The
Prudential Insurance Company of America.
Note 3. Other Transactions With Affiliates
Prudential Mutual Fund Services LLC ('PMFS'), an affiliate of PIFM and an
indirect wholly owned subsidiary of Prudential, serves as the Fund's transfer
agent and during the six months ended June 30, 2001, the Fund incurred fees of
approximately $58,100 for the services of PMFS. As of June 30, 2001,
approximately $10,300 of such fees were due to PMFS. Transfer agent fees and
expenses in the Statement of Operations include certain out-of-pocket expenses
paid to nonaffiliates.
Note 4. Reorganization
On June 27, 2001, the Tax-Free Money Fund acquired all the net assets of
Prudential Municipal Series Fund Connecticut Money Market Series ('Connecticut
Money Market Series') pursuant to a plan of reorganization approved by
Connecticut Money Market Series shareholders on May 21, 2001. The acquisition
was accomplished by a tax-free exchange of 6,544,440 shares of the Tax-Free
Money Fund (valued at $6,544,440 in the aggregate for 6,544,440 shares of
Connecticut Money Market Series outstanding on June 27, 2001. Connecticut Money
Market Series net assets at that date $6,544,440 were combined with those of the
Tax-Free Money Fund. The aggregate net assets of the Tax-Free Money Fund and
Connecticut Money Market Series immediately before the acquisition were
$177,840,612 and $6,544,440, respectively.
17
<Page>
Prudential Tax-Free Money Fund, Inc.
Notes to Financial Statements (Unaudited) Cont'd.
Note 5. Subsequent Event
On July 19, 2001, the Tax-Free Money Fund acquired all the net assets of the
Prudential Municipal Series Fund Massachusetts Money Market Series
('Massachusetts Money Market Series') pursuant to a plan of reorganization
approved by Massachusetts Money Market Series shareholders on July 9, 2001. The
acquisition was accomplished by a tax-free exchange of 6,141,531 shares of the
Tax-Free Money Fund (valued at $6,141,531 in the aggregate for 6,141,531 shares
of Massachusetts Money Market Series outstanding on July 19, 2001. Massachusetts
Money Market Series net assets at that date $6,141,531, were combined with those
of the Tax-Free Money Fund. The aggregate net assets of the Tax-Free Money Fund
and Massachusetts Money Market Series immediately before the acquisition were
$197,861,339 and $6,141,531, respectively.
18
<Page>
Prudential Tax-Free Money Fund, Inc.
Financial
Highlights
<Page>
Prudential Tax-Free Money Fund, Inc.
Financial Highlights (Unaudited)
<Table>
<Caption>
Six Months
Ended
June 30, 2001
<S> <C> <C>
---------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 1.00
Net investment income and realized gains .014
Dividends and distributions to shareholders (.014)
-------------
Net asset value, end of period $ 1.00
-------------
-------------
TOTAL RETURN(a): 1.42%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 183,480
Average net assets (000) $ 176,042
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees .85%(b)
Expenses, excluding distribution and service (12b-1) fees .72%(b)
Net investment income 2.80%(b)
</Table>
------------------------------
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each period reported and includes reinvestment
of dividends and distributions. Total returns for less than a full year are
not annualized.
(b) Annualized.
20 See Notes to Financial Statements
<Page>
Prudential Tax-Free Money Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
<Table>
<Caption>
Year Ended December 31,
----------------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
.034 .025 .028 .030 .028
(.034) (.025) (.028) (.030) (.028)
---------------- ---------------- ---------------- ---------------- ----------------
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------------- ---------------- ---------------- ---------------- ----------------
---------------- ---------------- ---------------- ---------------- ----------------
3.42% 2.56% 2.83% 3.00% 2.84%
$166,526 $179,887 $199,165 $329,812 $333,808
$176,759 $202,718 $277,839 $339,825 $403,230
.80% .81% .80% .78% .80%
.68% .69% .68% .66% .67%
3.38% 2.51% 2.80% 2.97% 2.83%
</Table>
See Notes to Financial Statements 21
<PAGE>
Prudential Tax-Free Money Fund, Inc.
Prudential Mutual Funds
Prudential offers a broad range of mutual funds designed to
meet your individual needs. For information about these funds,
contact your financial professional or call us at (800) 225-1852.
Read the prospectus carefully before you invest or send money.
STOCK FUNDS
Large Capitalization Stock Funds
Prudential 20/20 Focus Fund
Prudential Equity Fund, Inc.
Prudential Stock Index Fund
Prudential Tax-Managed Funds
Prudential Tax-Managed Equity Fund
Prudential Value Fund
Target Funds
Large Capitalization Growth Fund
Large Capitalization Value Fund
The Prudential Investment Portfolios, Inc.
Prudential Jennison Growth Fund
Small- to Mid-Capitalization Stock Funds
Nicholas-Applegate Fund, Inc.
Nicholas-Applegate Growth Equity Fund
Prudential Small Company Fund, Inc.
Prudential Tax-Managed Small-Cap Fund, Inc.
Prudential U.S. Emerging Growth Fund, Inc.
Target Funds
Small Capitalization Growth Fund
Small Capitalization Value Fund
The Prudential Investment Portfolios, Inc.
Prudential Jennison Equity Opportunity Fund
Sector Stock Funds
Prudential Natural Resources Fund, Inc.
Prudential Real Estate Securities Fund
Prudential Sector Funds, Inc.
Prudential Financial Services Fund
Prudential Health Sciences Fund
Prudential Technology Fund
Prudential Utility Fund
Global/International Stock Funds
Global Utility Fund, Inc.
Prudential Europe Growth Fund, Inc.
Prudential Pacific Growth Fund, Inc.
Prudential World Fund, Inc.
Prudential Global Growth Fund
Prudential International Value Fund
Prudential Jennison International Growth Fund
Target Funds
International Equity Fund
Strategic Partners Series
Strategic Partners Focused Growth Fund*
Strategic Partners New Era Growth Fund*
Strategic Partners Focused Value Fund*
BALANCED/ALLOCATION FUNDS
Prudential Diversified Funds
Conservative Growth Fund
Moderate Growth Fund
High Growth Fund
The Prudential Investment Portfolios, Inc.
Prudential Active Balanced Fund
<PAGE>
www.prudential.com (800) 225-1852
BOND FUNDS
Taxable Bond Funds
Prudential Government Income Fund, Inc.
Prudential High Yield Fund, Inc.
Prudential High Yield Total Return Fund, Inc.
Prudential Short-Term Corporate Bond Fund, Inc.
Income Portfolio
Prudential Total Return Bond Fund, Inc.
Target Funds
Total Return Bond Fund
Tax-Free Bond Funds
Prudential California Municipal Fund
California Series
California Income Series
Prudential Municipal Bond Fund
High Income Series
Insured Series
Prudential Municipal Series Fund
Florida Series
New Jersey Series
New York Series
Pennsylvania Series
Prudential National Municipals Fund, Inc.
Global/International Bond Funds
Prudential Global Total Return Fund, Inc.
MONEY MARKET FUNDS
Taxable Money Market Funds
Cash Accumulation Trust
Liquid Assets Fund
National Money Market Fund
Prudential Government Securities Trust
Money Market Series
U.S. Treasury Money Market Series
Prudential Institutional Liquidity Portfolio, Inc.
Institutional Money Market Series
Prudential MoneyMart Assets, Inc.
Special Money Market Fund, Inc.
Tax-Free Money Market Funds
Prudential California Municipal Fund
California Money Market Series
Prudential Municipal Series Fund
New Jersey Money Market Series
New York Money Market Series
Prudential Tax-Free Money Fund, Inc.
Other Money Market Funds
COMMAND Government Fund
COMMAND Money Fund
COMMAND Tax-Free Fund
* Not currently exchangeable with the Prudential mutual funds.
<PAGE>
Prudential Tax-Free Money Fund, Inc.
Getting the Most from Your Prudential Mutual Fund
Some mutual fund shareholders won't ever read this--they don't
read annual and semiannual reports. It's quite understandable.
These annual and semiannual reports are prepared to comply
with federal regulations, and are often written in language
that is difficult to understand. So when most people run into
those particularly daunting sections of these reports, they
don't read them.
WE THINK THAT'S A MISTAKE
At Prudential, we've made some changes to our mutual funds
report to make it easier to understand and more pleasant to
read. We hope you'll find it profitable to spend a few minutes
familiarizing yourself with your investment. Here's what you'll
find in the report:
PERFORMANCE AT A GLANCE
Since an investment's performance is often a shareholder's
primary concern, we present performance information in two
different formats. You'll find it first on the "Performance at
a Glance" page where we compare the Fund and the comparable
average calculated by Lipper, Inc., a nationally recognized
mutual fund rating agency. We report both the cumulative total
returns and the average annual total returns. The cumulative
total return is the total amount of income and appreciation
the Fund has achieved in various time periods. The average
annual total return is an annualized representation of the
Fund's performance. It gives you an idea of how much the Fund
has earned in an average year for a given time period. Under
the performance box, you'll see legends that explain the
performance information, whether fees and sales charges have
been included in the returns, and the inception dates for the
Fund's share classes.
See the performance comparison charts at the back of the
report for more performance information. Please keep in mind
that past performance is not indicative of future results.
<PAGE>
www.prudential.com (800) 225-1852
INVESTMENT ADVISER'S REPORT
The portfolio manager, who invests your money for you, reports
on successful--and not-so-successful--strategies in this section of
your report. Look for recent purchases and sales here, as well
as information about the sectors the portfolio manager favors,
and any changes that are on the drawing board.
PORTFOLIO OF INVESTMENTS
This is where the report begins to appear technical, but it's
really just a listing of each security held at the end of the reporting
period, along with valuations and other information. Please
note that sometimes we discuss a security in the "Investment
Adviser's Report" section that doesn't appear in this listing,
because it was sold before the close of the reporting period.
STATEMENT OF ASSETS AND LIABILITIES
The balance sheet shows the assets (the value of the Fund's
holdings), liabilities (how much the Fund owes), and net assets (the
Fund's equity or holdings after the Fund pays its debts) as of the
end of the reporting period. It also shows how we calculate the net
asset value per share for each class of shares. The net asset value
is reduced by payment of your dividend, capital gain, or other
distribution--but remember that the money or new shares are
being paid or issued to you. The net asset value fluctuates
daily, along with the value of every security in the
portfolio.
STATEMENT OF OPERATIONS
This is the income statement, which details income (mostly
interest and dividends earned) and expenses (including what
you pay us to manage your money). You'll also see capital gains
here--both realized and unrealized.
<PAGE>
Prudential Tax-Free Money Fund, Inc.
Getting the Most from Your Prudential Mutual Fund
STATEMENT OF CHANGS IN NET ASSETS
This schedule shows how income and expenses translate into
changes in net assets. The Fund is required to pay out the bulk
of its income to shareholders every year, and this statement
shows you how we do it (through dividends and distributions)
and how that affects the net assets. This statement also shows
how money from investors flowed into and out of the Fund.
NOTES TO FINANCIAL STATEMENTS
This is the kind of technical material that can intimidate
readers, but it does contain useful information. The notes
provide a brief history and explanation of your Fund's
objectives. In addition, they outline how Prudential mutual
funds prices securities. The notes also explain who manages
and distributes the Fund's shares and, more important, how much
they are paid for doing so. Finally, the notes explain how
many shares are outstanding and the number issued and redeemed
over the period.
FINANCIAL HIGHLIGHTS
This information contains many elements from prior pages, but
on a per-share basis. It is designed to help you understand how the
Fund performed, and to compare this year's performance and expenses
to those of prior years.
INDEPENDENTt ACCOUNTANT'S REPORT
Once a year, an independent accountant looks over our books and
certifies that the financial statements are fairly presented in
accordance with generally accepted accounting principles.
TAX INFORMATION
This is information that we report annually about how much of
your total return is taxable. Should you have any questions,
you may want to consult a tax adviser.
<PAGE>
www.prudential.com (800) 225-1852
PERFORMANCE COMPARISON
These charts are included in the annual report and are
required by the Securities Exchange Commission. Performance is
presented here as the return on a hypothetical $10,000
investment in the Fund since its inception or for 10 years
(whichever is shorter). To help you put that return in
context, we are required to include the performance of an
unmanaged, broad-based securities index as well. The index
does not reflect the cost of buying the securities it contains
or the cost of managing a mutual fund. Of course, the index
holdings do not mirror those of the Fund--the index is a broad-
based reference point commonly used by investors to measure
how well they are doing. A definition of the selected index is
also provided. Investors cannot invest directly in an index.
<PAGE>
Prudential Tax-Free Money Fund, Inc.
Getting the Most from Your Prudential Mutual Fund
When you invest through Prudential Mutual Funds, you receive
financial advice from a Prudential Securities Financial
Advisor or Pruco Securities registered representative. Your
financial professional can provide you with the following
services:
THERE'S NO REWARD WITHOUT RISK; BUT IS THIS RISK WORTH IT?
Your financial professional can help you match the reward you
seek with the risk you can tolerate. Risk can be difficult to
gauge--sometimes even the simplest investments bear surprising
risks. The educated investor knows that markets seldom move in
just one direction. There are times when a market sector or asset
class will lose value or provide little in the way of total
return. Managing your own expectations is easier with help from
someone who understands the markets, and who knows you!
KEEPING UP WITH THR JONESES
A financial professional can help you wade through the
numerous available mutual funds to find the ones that fit your
individual investment profile and risk tolerance. While the
newspapers and popular magazines are full of advice about
investing, they are aimed at generic groups of people or
representative individuals--not at you personally. Your
financial professional will review your investment objectives
with you. This means you can make financial decisions based on
the assets and liabilities in your current portfolio and your
risk tolerance--not just based on the current investment fad.
BUY LOW, SELL HIGH
Buying at the top of a market cycle and selling at the bottom
are among the most common investor mistakes. But sometimes
it's difficult to hold on to an investment when it's losing
value every month. Your financial professional can answer
questions when you're confused or worried about your
investment, and should remind you that you're investing for
the long haul.
<page>
www.prudential.com (800) 225-1852
FOR MORE INFORMATION
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
---------------------------------------
Directors
Delayne Dedrick Gold
Robert F. Gunia
Robert E. LaBlanc
David R. Odenath, Jr.
Judy A. Rice
Robin B. Smith
Stephen Stoneburn
Nancy H. Teeters
Clay T. Whitehead
Officers
David R. Odenath, Jr., President
Robert F. Gunia, Vice President
Judy A. Rice, Vice President
Grace C. Torres, Treasurer
Jonathan D. Shain, Secretary
William V. Healey, Assistant Secretary
Manager
Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Investment Adviser
Prudential Investment Management, Inc.
Prudential Plaza
Newark, NJ 07102-3777
Distributor
Prudential Investment Management Services LLC
Gateway Center Three, 14th Floor
100 Mulberry Street
Newark, NJ 07102-4077
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services LLC
P.O. Box 8098
Philadelphia, PA 19101
Independent Accountants
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
---------------------------------------
Cusip Number 74436P103
---------------------------------------
The views expressed in this report and information about the
Fund's portfolio holdings are for the period covered by this
report and are subject to change thereafter.
The accompanying financial statements as
of June 30, 2001, were not audited and, accordingly, no
opinion is expressed on them.
<PAGE>
(LOGO)
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
MF103E2 74436P103
(LOGO) Printed on Recycled Paper
</TEXT>
</DOCUMENT>