N-CSRS 1 crf.htm SEMIANNUAL REPORT Scudder Investments 

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                   FORM N-CSRS

Investment Company Act file number 811-03196

                             CASH RESERVE FUND, INC.
                        --------------------------------
               (Exact Name of Registrant as Specified in Charter)

                   One South Street, Baltimore, Maryland 21202
                  --------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)

        Registrant's Telephone Number, including Area Code: (617) 295-2663
                                                            --------------

                               Salvatore Schiavone
                             Two International Place
                           Boston, Massachusetts 02110
                     ---------------------------------------
                     (Name and Address of Agent for Service)

Date of fiscal year end:        3/31

Date of reporting period:       9/30/2004



ITEM 1.  REPORT TO STOCKHOLDERS

[Scudder Investments logo]

Deutsche Bank Alex. Brown

Cash Reserve Fund, Inc.

Prime Series
Treasury Series
Tax-Free Series

Semiannual Report to Shareholders

September 30, 2004


Table of Contents


Portfolio Management Review <Click Here>

Cash Reserve Fund, Inc.

Information About Your Fund's Expenses <Click Here>

Investment Summary <Click Here>

Schedule of Investments <Click Here>

Statements of Assets and Liabilities <Click Here>

Statements of Operations <Click Here>

Statements of Changes in Net Assets <Click Here>

Financial Highlights <Click Here>

Notes to Financial Statements <Click Here>

Other Information <Click Here>


This report must be preceded or accompanied by a prospectus. To obtain a prospectus for any of our funds, talk to your financial representative or call Shareholder Services at (800) 730-1313. We advise you to consider the fund's objectives, risks, charges and expenses carefully before investing. The prospectus contains this and other important information about the fund. Please read the prospectus carefully before you invest.

Fund shares are not FDIC-insured and are not deposits or other obligations of, or guaranteed by, any bank. Fund shares involve investment risk, including possible loss of principal.


Portfolio Management Review


In the following interview, Portfolio Manager Geoffrey Gibbs discusses the market environment and the portfolio team's approach to managing Cash Reserve Fund during the fund's most recent semiannual period ended September 30, 2004.

Q: Will you discuss the market environment for the fund during the six-month period?

A: At the start of the second quarter, the nonfarm payroll figure surprised everyone as the government reported that the economy had created more than 300,000 new jobs in March. With this news, fixed-income markets experienced a dramatic turnaround, with one-year LIBOR rates spiking from 1.35% to 1.85% in anticipation of a potential rate hike as early as August.1 The April and May nonfarm payroll report was also strong, and the Fed now stated that it would begin to raise interest rates in the near future. The Fed was signaling its concerns over a possible resurgence in inflation and hinted that it would soon take steps to remove its accommodative posture on short-term interest rates. In anticipation of a change in the Fed's stance, we reduced average maturity. The markets reacted swiftly, with the yield curve steepening from April through June and the one-year LIBOR rate rising to 2.5%. Investors were anticipating that the fed funds rate would eventually rise to 2.25% in four to five increments by year end. As the Fed's June meeting drew closer, we continued to reduce average maturity, purchasing only shorter-term issues, as the market began to "price in" additional Fed rate hikes. When the Fed finally raised the federal funds rate by 25 basis points in late June, it stated that it would conduct its credit-tightening program at a "measured" pace. As the money market yield curve began to stabilize, market participants resumed purchasing longer-term issues.

1 LIBOR, or the London Interbank Offered Rate, is the most widely used benchmark or reference rate for short-term interest rates. LIBOR is the rate of interest at which banks borrow funds from other banks, in large volume, in the international market.

As we moved into the third quarter, US economic momentum hit a "soft patch" as consumer purchasing slackened, job creation dipped, oil prices rose to $45 per barrel and the geopolitical situation deteriorated. In reaction, investors began to question whether the number of Fed rate hikes that previously had been priced into the market would actually occur, and the yield curve flattened. Meanwhile, the Fed raised rates in increments of 25 basis points two times, at its August and September meetings. Because of the slackening in the economy, however, the market downgraded its forecast for Fed rate hikes during the remainder of 2004: It predicted one more 25-basis-point move in November, no action in December and a 2% fed funds rate by year end.

Q: How did the fund perform over its most recent semiannual period?

A: We were able to maintain a $1 share price and produce a competitive yield in the Cash Reserve Fund. (All performance is historical and does not guarantee future results. Yields fluctuate and are not guaranteed.)

Q: In light of market conditions during the period, what has been the strategy for the Prime Series and the Treasury Series?

A: In the second quarter, the yield curve steepened considerably in response to concerns that the Fed would raise short-term interest rates aggressively over the next 12 to 24 months. Our strategy was to sharply decrease the fund's average maturity, limiting our purchases to three months and shorter. As the employment picture moderated, we selectively purchased securities of slightly longer maturity, while maintaining a weighted average maturity of approximately 37 to 69 days for the Prime Series and 32 to 58 days for the Treasury Series during the period.

During this period, we increased the fund's allocation in floating-rate securities. The interest rate of floating-rate securities adjusts periodically based on indices such as LIBOR and the federal funds rate.

Our decision to increase our allocation in this sector helped performance during the period.

7-Day Current Yield2

(as of 9/30/04)

Prime Shares
iMoneyNet First Tier Retail Money Funds Average3

1.03%

0.90%
Treasury Shares
iMoneyNet Treasury Retail Money Funds Average3

0.79%

0.80%
Tax-Free Shares4
iMoneyNet National Retail Tax-Free Money Funds Average3

0.75%

0.78%

2 The 7-day current yield refers to the income paid by the fund over a 7-day period expressed as an annual percentage rate. Past performance is not indicative of future results. Yields are historical and will fluctuate.
3 Money Fund Report Averages, a service of iMoneyNet, Inc., are averages for categories of similar money market funds.
4 For certain investors a portion of the series' income may be subject to the federal alternative minimum tax. Distribution of the series' income may be subject to state and local taxes.

An investment in this 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. Please read this fund's prospectus for specific details regarding its risk profile.

Q: What has been the strategy for the Tax-Free Series?

A: Over the six-month period, we continued to focus on the highest-quality investments for the Tax-Free Series while seeking competitive yields across the municipal investment spectrum. During the period, the tax-free money markets were whipsawed by dramatic changes in supply, due to (1) the $15 billion of supply from California's Revenue Anticipation Notes and Revenue Anticipation Warrants that had entered the market in October 2003, followed by (2) the sudden withdrawal of this supply from the market in June as California refunded the $15 billion of short-term debt, issuing longer-term debt in its place. It took over a month for the markets, and tax-exempt interest rates, to adjust after this significant withdrawal of supply. Though we were invested in essential service credits from California agencies and counties over the period, we avoided state of California issues because of the state's unsettled financial situation.

During the reporting period, we maintained a cautious stance by targeting an average maturity similar to our peers. At the close of the period, the fund was positioned with an average maturity target of 22 to 36 days. The fund also has a targeted portfolio allocation of 70% of assets in floating-rate securities and 30% in fixed-rate instruments. Our decision to increase the fund's floating-rate position helped performance during the period. In addition, we continued to focus on the highest-quality investments while seeking competitive yields. In particular, we emphasized essential-services revenue issues and what is known as enhanced paper, i.e., securities guaranteed by a third party such as a bank or insurance company.

Q: What detracted from performance during the period?

A: As we moved into the third quarter, when the yield curve began to flatten, we waited to extend maturity until we were certain that one-year rates had peaked. We preferred to err on the side of caution, and missed the recent top of the LIBOR rate at 2.5%. Given the dramatic turns in economic data thus far this year, we feel it is prudent to keep maturity shorter - and forgo some yield pickup - when the direction of interest rates has been so variable.

Q: Do you foresee any change in your management strategies?

A: Going forward, we will continue our insistence on the highest credit quality within the funds. We also plan to maintain our conservative investment strategies and standards. We continue to apply a careful approach to investing on behalf of the funds and to seek competitive yields for our shareholders.

The views expressed in this report reflect those of the portfolio managers only through the end of the period of the report as stated on the cover. The managers' views are subject to change at any time based on market and other conditions and should not be construed as a recommendation.


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), redemption fees and account maintenance fees, which are not shown in this section. The following table is 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, Treasury Series limited these expenses; had they not done so, expenses would have been higher. The table is based on an investment of $1,000 made at the beginning of the six-month period ended September 30, 2004.

The table illustrates 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. If these transaction costs had been included, your costs would have been higher.

Prime Series

Expenses and Value of a $1,000 Investment
for the six months ended September 30, 2004

Actual Fund Return

Prime
Shares

Prime Institutional Shares

Beginning Account Value 4/1/04
 $ 1,000.00 $ 1,000.00
Ending Account Value 9/30/04
 $ 1,003.30 $ 1,005.20
Expenses Paid per $1,000*
 $ 3.50 $ 1.56
Hypothetical 5% Fund Return

Prime
Shares

Prime Institutional Shares

Beginning Account Value 4/1/04
 $ 1,000.00 $ 1,000.00
Ending Account Value 9/30/04
 $ 1,021.58 $ 1,023.44
Expenses Paid per $1,000*
 $ 3.53 $ 1.58

* 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 the number of days in the most recent six-month period, then divided by 365.
Annualized Expense Ratios

Prime Shares

.70%

Prime Institutional Shares

.31%


Treasury Series

Expenses and Value of a $1,000 Investment
for the six months ended September 30, 2004

Actual Fund Return

Treasury Shares

Treasury Institutional Shares

Beginning Account Value 4/1/04
 $ 1,000.00 $ 1,000.00
Ending Account Value 9/30/04
 $ 1,002.70 $ 1,004.70
Expenses Paid per $1,000*
 $ 3.37 $ 1.42
Hypothetical 5% Fund Return

Treasury Shares

Treasury Institutional Shares

Beginning Account Value 4/1/04
 $ 1,000.00 $ 1,000.00
Ending Account Value 9/30/04
 $ 1,021.70 $ 1,023.66
Expenses Paid per $1,000*
 $ 3.40 $ 1.43

* 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 the number of days in the most recent six-month period, then divided by 365.
Annualized Expense Ratios

Treasury Shares

.67%

Treasury Institutional Shares

.28%


Tax-Free Series

Expenses and Value of a $1,000 Investment
for the six months ended September 30, 2004

Actual Fund Return

Tax-Free Shares

Tax-Free Institutional Shares

Beginning Account Value 4/1/04
 $ 1,000.00 $ 1,000.00
Ending Account Value 9/30/04
 $ 1,002.40 $ 1,004.20
Expenses Paid per $1,000*
 $ 3.58 $ 1.65
Hypothetical 5% Fund Return

Tax-Free Shares

Tax-Free Institutional Shares

Beginning Account Value 4/1/04
 $ 1,000.00 $ 1,000.00
Ending Account Value 9/30/04
 $ 1,021.49 $ 1,023.43
Expenses Paid per $1,000*
 $ 3.62 $ 1.66

* 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 the number of days in the most recent six-month period, then divided by 365.
Annualized Expense Ratios

Tax-Free Shares

.71%

Tax-Free Institutional Shares

.33%


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


Investment Summary


Prime Series

Portfolio Composition

9/30/04

3/31/04


Commercial Paper
 32%
 32%
Floating Rate Notes
 23%
 11%
Repurchase Agreements
 12%
 20%
US Government Sponsored Agencies+
10%
 9%
Certificates of Deposit and Bank Notes
 9%
 16%
Promissory Notes
5%
 -
Funding Agreements
4%
 5%
Government National Mortgage
-
 1%
Short-Term Notes
4%
 6%
US Government Backed
1%
 -

100%
 100%

+ Not backed by the full faith and credit of the US Government

Weighted Average Maturity*



Cash Reserve Fund, Inc. - Prime Series
42 days
 54 days
First Tier Money Fund Average
43 days
 54 days

Treasury Series

Portfolio Composition

9/30/04

3/31/04


US Government Backed
100%
 100%

Weighted Average Maturity*



Cash Reserve Fund, Inc. - Treasury Series
43 days
 42 days
Government Money Fund Average
41 days
 55 days

Tax-Free Series

Portfolio Composition

9/30/04

3/31/04


Municipal Investments
 100%
 100%

Weighted Average Maturity*



Cash Reserve Fund, Inc. - Tax-Free Series
27 days
 30 days
Tax-Free Money Fund Average
36 days
 37 days

* The Funds are compared to their respective iMoneyNet category: the First Tier Money Fund Average consists of all non-institutional taxable money market funds investing in only first tier (highest rating) securities; Government Money Fund Average consists of all non-institutional government money market funds; Tax-Free Money Fund Average consists of all non-institutional tax-free money market funds.

Portfolio composition is subject to change. For more complete details about the Funds' holdings, see pages 9-18. A quarterly Fact Sheet will be available upon request. Information concerning portfolio holdings of the Fund as of month end is available upon request on the 16th of the following month. Please see the Other Information section for contact information.


Schedule of Investments as of September 30, 2004 (Unaudited)


Prime Series

Principal Amount ($)

Value ($)



Certificates of Deposit and Bank Notes 8.8%

BNP Paribas, 2.02%, 3/21/2005
20,000,000
 19,997,135
Citibank New York NA, 1.64%, 11/5/2004
25,000,000
 25,000,000
Fortis Bank NV, 1.435%, 11/16/2004
30,000,000
 29,999,434
HSBC Bank USA, 1.6%, 11/10/2004
25,000,000
 25,000,000
National Australia Bank Ltd., 1.45%, 12/13/2004
15,000,000
 15,005,324
Norddeutsche Landesbank Girozentrale, 1.91%, 3/29/2005
20,000,000
 19,997,884
Northern Rock PLC, 1.55%, 10/18/2004
50,000,000
 50,000,000
Societe Generale, 1.85%, 2/17/2005
25,000,000
 24,997,122
UniCredito Italiano SpA, 1.505%, 10/6/2004
25,000,000
 25,000,000
Total Certificates of Deposit and Bank Notes (Cost $234,996,899)

234,996,899


Commercial Paper 32.1%

Beta Finance, Inc., 1.54%**, 10/1/2004
20,000,000
 20,000,000
British Transco Cap, Inc.:


1.77%**, 10/15/2004

30,000,000
 29,979,350

1.78%**, 10/25/2004

10,327,000
 10,314,745

1.78%**, 11/4/2004

4,905,000
 4,896,754
Cancara Asset Securitization LLC, 1.78%**, 10/19/2004
25,000,000
 24,977,750
CIT Group, Inc.:


1.72%**, 12/1/2004

18,000,000
 17,947,540

1.88%**, 2/7/2005

25,000,000
 24,831,584

1.9%**, 1/18/2005

28,000,000
 27,838,922
Depfa Bank PLC, 1.18%**, 11/19/2004
50,000,000
 49,919,695
DNB Nor Bank ASA, 1.55%**, 11/5/2004
40,000,000
 39,939,722
Falcon Asset Securitization Corp., 1.79%**, 11/1/2004
30,000,000
 29,953,758
General Electric Capital Corp.:


1.49%**, 11/9/2004

22,000,000
 21,964,488

1.88%**, 2/1/2005

75,000,000
 74,518,250
Giro Funding US Corp.:


1.79%**, 10/21/2004

20,000,000
 19,980,111

1.8%**, 10/22/2004

15,000,000
 14,984,250
Grampian Funding Ltd.:


1.68%**, 12/13/2004

25,000,000
 24,914,834

2.04%**, 3/22/2005

40,000,000
 39,610,133
Hewlett Packard Co., 1.61%**, 10/28/2004
20,000,000
 19,975,850
International Lease Finance Corp., 1.78%**, 11/8/2004
6,500,000
 6,487,787
Irish Life & Permanent PLC, 1.76%**, 2/8/2005
20,000,000
 19,872,889
Jupiter Securitization Corp., 1.79%**, 10/22/2004
40,000,000
 39,958,233
K2 (USA) LLC:


1.87%**, 2/18/2005

22,500,000
 22,336,375

2.04%**, 3/23/2005

9,000,000
 8,911,770
Lake Constance Funding LLC, 1.91%**, 12/15/2004
10,000,000
 9,960,208
Park Avenue Receivables Corp., 1.7%**, 10/8/2004
20,000,000
 19,993,389
Province of Quebec, 1.47%**, 1/11/2005
23,000,000
 22,904,205
Prudential PLC:


1.5%**, 10/25/2004

35,000,000
 34,965,000

1.65%**, 10/29/2004

52,000,000
 51,933,267
RWE AG, 1.55%**, 11/5/2004
7,500,000
 7,488,698
Scaldis Capital LLC:


1.78%**, 10/19/2004

25,971,000
 25,947,886

1.92%**, 2/28/2005

20,000,000
 19,840,000
Sheffield Receivables Corp., 1.78%**, 10/8/2004
20,000,000
 19,993,078
Tango Finance Corp., 1.57%**, 11/3/2004
25,000,000
 24,964,021
WestPac Capital Corp., 1.17%**, 10/12/2004
20,000,000
 19,992,850
Total Commercial Paper (Cost $852,097,392)

852,097,392


Floating Rate Notes* 23.3%

American Express Centurion Bank, 1.84%, 9/1/2005
10,000,000
 10,003,485
American Honda Finance Corp.:


144A, 1.65%, 5/6/2005

25,000,000
 25,000,000

144A, 1.838%, 9/19/2005

20,000,000
 19,998,076
Beta Finance, Inc., 144A, 1.695%, 4/15/2005
30,000,000
 29,995,973
Lehman Brothers Holding, Inc., 1.81%, 3/10/2005
50,000,000
 50,000,000
Merrill Lynch & Co., Inc., 1.84%, 2/4/2005
15,000,000
 15,000,000
Morgan Stanley:


1.86%, 1/6/2005

40,000,000
 40,000,000

1.86%, 2/18/2005

27,000,000
 27,000,000

1.86%, 4/19/2005

60,000,000
 60,000,000
Natexis Banque Populaires:


1.678%, 6/9/2005

30,000,000
 29,994,801

1.783%, 10/20/2004

20,000,000
 19,999,790
National City Bank:


1.735%, 6/10/2005

20,000,000
 20,004,868

1.815%, 5/24/2005

20,000,000
 20,000,000
Permanent Financing PLC, "1A", Series 4, 1.69%, 3/10/2005
25,000,000
 25,000,000
Pfizer, Inc., 144A, 1.748%, 10/7/2005
40,000,000
 40,000,000
Societe Generale:


1.29%, 1/6/2005

20,000,000
 19,962,893

1.83%, 2/25/2005

25,000,000
 24,999,879
SunTrust Bank NA, 1.81%, 4/1/2005
40,000,000
 40,001,985
Toyota Motor Credit Corp., 1.895%, 3/31/2005
50,000,000
 50,000,000
Wells Fargo & Co., 2.001%, 10/1/2004
30,000,000
 30,130,252
Westpac Banking Corp., 1.79%, 9/9/2005
20,000,000
 19,994,362
Total Floating Rate Notes (Cost $617,086,364)

617,086,364


Short Term Notes 3.8%

Bear Stearns & Co., Inc.:


2.025%, 1/1/2044

75,000,000
 75,000,000

2.025%, 1/1/2049

25,000,000
 25,000,000
Total Short Term Notes (Cost $100,000,000)

100,000,000


US Government Sponsored Agencies 10.0%

Federal Home Loan Bank, 1.745%**, 9/12/2005
30,000,000
 29,982,897
Federal Home Loan Mortgage Corp.:


1.5%, 2/14/2005

15,000,000
 15,000,000

Series RB, 1.6%**, 11/9/2004

20,000,000
 19,965,333

1.64%**, 12/1/2004

40,000,000
 39,888,845

3.25%, 11/15/2004

15,000,000
 15,031,416
Federal National Mortgage Association:


1.51%**, 1/18/2005

40,000,000
 39,994,302

1.62%**, 11/3/2004

30,000,000
 29,955,450

1.751%**, 2/18/2005

40,000,000
 39,997,693

1.8%, 5/27/2005

15,000,000
 15,000,000

1.81%, 5/27/2005

20,000,000
 20,000,000
Total US Government Sponsored Agencies (Cost $264,815,936)

264,815,936


US Government Backed 0.7%

US Treasury Notes, 2.0%, 11/30/2004 (Cost $20,028,204)
20,000,000

20,028,204


Funding Agreements 4.3%

GE Capital Assurance Co.:


1.88%, 3/1/2005

20,000,000
 20,000,000

2.1%, 9/1/2005

45,000,000
 45,000,000
Travelers Insurance Co., 1.74%, 1/27/2005
50,000,000
 50,000,000
Total Funding Agreements (Cost $115,000,000)

115,000,000


Promissory Notes 5.0%

Goldman Sachs Group, Inc.:


1.26%, 11/8/2004

25,000,000
 25,000,000

1.27%, 11/8/2004

22,000,000
 22,000,000

1.94%, 5/26/2005

85,000,000
 85,000,000
Total Promissory Notes (Cost $132,000,000)

132,000,000


Repurchase Agreements 11.9%

Repurchase Agreement with Goldman Sachs Co., Inc., 1.81%, dated 9/27/2004, to be repurchased at $50,017,597 on 10/4/2004 (b)
50,000,000
 50,000,000
Repurchase Agreement with JPMorgan Chase, Inc., 1.91%, dated 9/30/2004, to be repurchased at $65,551,427 on 10/1/2004 (c)
65,547,949
 65,547,949
Repurchase Agreement with UBS Warburg, 1.90%, dated 9/30/2004, to be repurchased at $200,010,556 on 10/1/2004 (d)
200,000,000
 200,000,000
Total Repurchase Agreements (Cost $315,547,949)

315,547,949



% of Net Assets

Value ($)

Total Investment Portfolio (Cost $2,651,572,744) (a)
99.9

2,651,572,744

Other Assets and Liabilities, Net
0.1

1,487,609

Net Assets
100.0

2,653,060,353


* Floating rate notes are securities whose yields vary with a designated market index or market rate, such as the coupon-equivalent of the US Treasury bill rate. These securities are shown at their current rate as of September 30, 2004.
** Annualized yield at the time of purchase; not a coupon rate.
(a) Cost for federal income tax purpose was $2,651,572,744.
(b) Collateralized by:

Principal Amount ($)

Type

Rate (%)

Maturity
Date

Collateral
Value ($)


55,233,573
Federal National Mortgage Association
 5.00
 3/1/2034
 51,500,000
Total Collateral Value

51,500,000


(c) Collateralized by:

Principal Amount ($)

Type

Rate (%)

Maturity
Date

Collateral
Value ($)


28,032,143
Federal National Mortgage Association
 5.50
 12/1/2017
 29,220,205
37,558,140
Federal National Mortgage Association
 5.50
 9/1/2034
 38,295,803
Total Collateral Value

67,516,008


(d) Collateralized by:

Principal Amount ($)

Type

Rate (%)

Maturity
Date

Collateral
Value ($)


53,528,914
Federal Home Loan Mortgage Corporation
 -
 11/1/2027-12/1/2032
 55,310,815
145,569,656
Federal National Mortgage Association
 -
 9/1/2027-12/1/2033
 148,690,115
Total Collateral Value

204,000,930


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.

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


Schedule of Investments as of September 30, 2004 (Unaudited)


Treasury Series

Principal Amount ($)

Value ($)



US Government Backed 100.0%

US Treasury Bills, 1.3%*, 10/21/2004
50,000,000
 49,964,445
US Treasury Bills, 1.32%*, 10/7/2004
20,949,000
 20,944,461
US Treasury Bills, 1.38%*, 11/26/2004
13,000,000
 12,972,599
US Treasury Bills, 1.41%*, 10/21/2004
6,721,000
 6,715,829
US Treasury Bills, 1.48%*, 11/4/2004
20,000,000
 19,972,611
US Treasury Bills, 1.49%*, 11/18/2004
50,000,000
 49,902,333
US Treasury Bills, 1.52%*, 11/4/2004
25,000,000
 24,964,702
US Treasury Bills, 1.58%*, 10/7/2004
10,334,000
 10,331,313
US Treasury Bills, 1.58%*, 12/2/2004
40,000,000
 39,892,878
US Treasury Bills, 1.59%*, 10/28/2004
50,000,000
 49,941,125
US Treasury Bills, 1.63%*, 10/15/2004
100,000,000
 99,937,388
US Treasury Bills, 1.73%*, 1/6/2005
14,000,000
 13,935,872
US Treasury Bills, 1.74%*, 1/20/2005
7,000,000
 6,963,308
US Treasury Bills, 1.9%*, 3/3/2005
30,000,000
 29,762,531
US Treasury Note, 2.0%, 11/30/2004
14,000,000
 14,017,300
US Treasury Note, 5.875%, 11/15/2004
10,000,000
 10,057,757
Total US Government Backed (Cost $460,276,452)

460,276,452



% of Net Assets

Value ($)

Total Investment Portfolio (Cost $460,276,452) (a)
100.0

460,276,452

Other Assets and Liabilities, Net
0.0

(45,267)

Net Assets
100.0

460,231,185


* Annualized yield at time of purchase; not a coupon rate.
(a) Cost for federal income tax purposes was $460,276,452.

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


Schedule of Investments as of September 30, 2004 (Unaudited)


Tax-Free Series

Principal Amount ($)

Value ($)



Municipal Investments 99.8%

Alabama 3.1%
Alabama, Housing Finance Authority, Multi-family Housing Revenue, Heatherbrooke Project, Series C, 1.73%*, 6/15/2026
8,200,000
 8,200,000
Alabama, Housing Finance Authority, Multi-family Housing Revenue, Rime Village Hoover Project, Series A, 1.73%*, 6/15/2026
7,500,000
 7,500,000
Birmingham, AL, Waterworks and Sewer Revenue, Series 2003-A, 1.75%*, 1/1/2043 (c)
2,500,000
 2,500,000
Evergreen, AL, Industrial Development Authortity, Tenax Manufacturing Project, 1.69%*, 12/1/2012, Wachovia Bank NA (b)
2,700,000
 2,700,000
Jefferson County, AL, Sewer Revenue, Series A, 1.7%*, 2/1/2042 (c)
5,950,000
 5,950,000

26,850,000

Alaska 1.1%
Alaska, State General Obligation, Series 1825, 1.73%*, 2/1/2011 (c)
6,550,000
 6,550,000
Anchorage, AL, Core City, General Obligation, Series II-R, 1.7%*, 6/1/2019 (c)
2,975,000
 2,975,000

9,525,000

Arizona 1.4%
Apache County, AR, Industrial Development Authority, Series 83A, 1.75%*, 12/15/2018, Credit Suisse First Boston (b)
2,100,000
 2,100,000
Salt River, AZ, Agricultural Improvement and Power District, 1.3%*, 10/13/2004
10,000,000
 10,000,000

12,100,000

California 1.4%
California, Infrastructure & Economic Development Bank Revenue, J. Paul Getty Trust, Series B, 1.17%*, 4/1/2033
7,500,000
 7,500,000
Los Angeles County, CA, Tax & Revenue Anticipation Notes, Series A, 3.0%, 6/30/2005
3,600,000
 3,636,962
Los Angeles, CA, Unified School District, 144A, 1.78%*, 1/1/2028 (c)
700,000
 700,000

11,836,962

Colorado 1.3%
Colorado, General Fund Revenue, Tax & Revenue Anticipation Notes, 3.0%, 6/27/2005
1,000,000
 1,010,366
Colorado, State Education Loan Program, 144A, Series L48J, 1.2%*, 8/9/2005
7,100,000
 7,100,000
Colorado, Transportation/Tolls Revenue, Transportation Department, 1.75%*, 12/15/2016 (c)
3,330,000
 3,330,000

11,440,366

Delaware 0.2%
Delaware, Economic Development Authority, Series A, 1.68%*, 12/1/2015 (c)
1,700,000

1,700,000

District of Columbia 1.0%
District of Columbia, General Obligation, Series D, 1.71%*, 6/1/2029 (c)
4,225,000
 4,225,000
District of Columbia, The Washington Home, Inc., Revenue, 1.69%*, 8/1/2029, First Union National Bank (b)
3,985,000
 3,985,000

8,210,000

Florida 11.9%
Florida, Board of Education, Lottery Revenue, 144A, Series PT-1952, 1.7%*, 1/1/2009 (c)
10,400,000
 10,400,000
Florida, Capital Projects Finance Authority, Glenridge on Palmer Ranch, Series C, 1.72%*, 6/1/2012, Bank of Scotland (b)
10,500,000
 10,500,000
Florida, Transportation/Tolls Revenue, Turnpike Authority, Series R-4041, 1.75%*, 7/1/2020 (c)
12,540,000
 12,540,000
Gulf Breeze, FL, Florida Municipal Bond Revenue, Series A, 1.72%*, 3/31/2021, Bank of America (b)
8,015,000
 8,015,000
Highlands County, FL, Health Facilities Authority Revenue, Adventist Health, Series A, 1.7%*, 11/15/2032, Suntrust Bank (b)
4,500,000
 4,500,000
Highlands County, FL, Hospital and Health Care Revenue, Health Facilities Authority, Adventist Health Systems, Series B, 1.68%*, 11/15/2009, Suntrust Bank (b)
27,610,000
 27,610,000
Jacksonville, FL, Capital Project Revenue, Series 2, 1.7%*, 10/1/2022 (c)
6,700,000
 6,700,000
Miami-Dade County, FL, School Board Certificates of Partnership, Series R-4022, 1.75%*, 8/1/2021 (c)
3,620,000
 3,620,000
Orlando, FL, Utility Committee, 1.25%*, 12/10/2004
3,000,000
 3,000,000
Pasco County, FL, School Board Certificates of Participation, 1.7%*, 8/1/2026 (c)
10,675,000
 10,675,000
Pinellas County, FL, Health Facilities Authority Revenue, Hospital Facilities, Bayfront Projects, 1.76%*, 7/1/2034, Suntrust Bank (b)
4,200,000
 4,200,000

101,760,000

Georgia 7.0%
Atlanta, GA, Airport Revenue:


Series B-1, 1.71%*, 1/1/2030 (c)

15,000,000
 15,000,000

Series C-1, 1.71%*, 1/1/2030 (c)

1,000,000
 1,000,000
Cobb County, GA, Development Authority Revenue, MT Paran Christian School Project, 1.69%*, 7/1/2022, Wachovia Bank NA (b)
2,500,000
 2,500,000
De Kalb County, GA, Housing Authority, Multi-family Housing Revenue, Clairmont Crest Project, 1.7%*, 6/15/2025
2,000,000
 2,000,000
De Kalb County, GA, Housing Authority, Multi-family Housing Revenue, Post Asford Project, 1.69%*, 6/1/2025
6,245,000
 6,245,000
Fayette County, GA, Development Authority Educational Facilities Revenue, Catholic School Properties, Inc., Project, 1.69%*, 4/1/2024, Wachovia Bank (b)
3,500,000
 3,500,000
Fulco, GA, Hospital Authority Revenue, Piedmont Hospital Project, 1.69%*, 3/1/2024, Suntrust Bank, Atlanta (b)
2,705,000
 2,705,000
Fulton County, GA, Development Authority Revenue, Donnellan School Project, 1.69%*, 7/1/2020, Wachovia Bank NA (b)
1,850,000
 1,850,000
Fulton County, GA, Development Authority Revenue, Lovett School Project, 1.69%*, 7/1/2026, Suntrust Bank (b)
1,500,000
 1,500,000
Georgia, Medical Center Hospital Authority Revenue, Spring Harbor, Atlanta Green IS, 1.69%*, 7/1/2034, Bank of Scotland (b)
12,660,000
 12,660,000
La Grange, GA, Development Authority Revenue, LaGrange College Project, 1.74%*, 6/1/2031, Suntrust Bank (b)
2,930,000
 2,930,000
Macon-Bibb County, GA, Hospital Authority Revenue, Medical Center of Central Georgia, 1.69%*, 12/1/2018, Suntrust Bank (b)
2,525,000
 2,525,000
Roswell, GA, Housing Authority Revenue, Multi-family Revenue, Post Canyon Project, 1.69%*, 6/1/2025
5,700,000
 5,700,000

60,115,000

Hawaii 1.7%
Hawaii, General Obligation:


Series R-4545, 1.75%*, 8/1/2020 (c)

5,210,000
 5,210,000

144A, Series R-4553, 1.75%*, 5/1/2023 (c)

9,030,000
 9,030,000

14,240,000

Illinois 9.4%
Chicago, IL, General Obligation:


Series B, 1.7%*, 1/1/2037 (c)

3,900,000
 3,900,000

Series A, 1.75%*, 1/1/2042 (c)

2,690,000
 2,690,000
Chicago, IL, Sales Tax Revenue, 1.7%*, 1/1/2034 (c)
9,050,000
 9,050,000
Du Page County, IL, Benedictine University Building Project, 144A, 1.71%*, 7/1/2024, LaSalle Bank NA (b)
23,950,000
 23,950,000
Illinois, Certificates of Participation, 2.0%, 10/22/2004
13,800,000
 13,806,371
Illinois, Development Finance Authority Revenue, Chicago Symphony Project, 1.7%*, 12/1/2033, Bank One NA (b)
6,200,000
 6,200,000
Illinois, Development Finance Authority, Jewish Federation Projects, 1.7%*, 9/1/2024 (c)
1,425,000
 1,425,000
Illinois, Educational Facilities Authority Revenue, 1.37%*, 11/16/2004
7,500,000
 7,500,000
Illinois, Educational Facilities Authority Revenue, Elmhurst College, 1.7%*, 3/1/2033, Bank One NA (b)
1,300,000
 1,300,000
Illinois, Finance Authority Revenue, Northwestern University:


Series A, 1.69%*, 12/1/2034

9,700,000
 9,700,000

Series B, 1.7%*, 12/1/2034

600,000
 600,000

80,121,371

Indiana 2.6%
ABN Amro Munitops, Munitops Certificate Trust, 144A, Series 2003-32, 1.75%*, 1/15/2012 (c)
18,000,000
 18,000,000
Indiana, Municipal Power Agency, Power Supplies System Revenue, Refunding, Series A, 1.69%*, 1/1/2018, Toronto - Dominion Bank (b)
1,200,000
 1,200,000
Indiana, Transportation/Tolls Revenue, Series R-4528, 1.75%*, 6/1/2018 (c)
2,990,000
 2,990,000

22,190,000

Iowa 3.1%
Iowa, Finance Authority Hospital Facilities Revenue, Iowa Health Systems, Series B, 1.71%*, 7/1/2020 (c)
4,625,000
 4,625,000
Iowa, Finance Authority Hospital Facility Revenue, Iowa Health Systems, Series B, 1.71%*, 7/1/2015 (c)
3,300,000
 3,300,000
Iowa, Finance Authority Revenue, Miss VY Regional Blood Center, 1.71%*, 2/1/2023, Wells Fargo Bank NA (b)
2,200,000
 2,200,000
Iowa, School Cash Anticipation Program, Warrant Certificates, Series B, 2.0%, 1/28/2005 (c)
16,500,000
 16,552,000

26,677,000

Kansas 1.5%
Kansas, Development Finance Authority Hospital Revenue, Adventist Health, Sunbelt, Series C, 1.65%*, 11/15/2034, Suntrust Bank (b)
12,500,000

12,500,000

Kentucky 2.5%
Boone County, KY, Pollution Control Revenue, Cincinnati Gas & Electric Co., Series A, 1.35%*, 8/1/2013, Credit Lyonnais (b)
2,200,000
 2,200,000
Pendleton County, KY, Multi-County Lease Revenue, Kentucky Association Counties Leasing Program, 1.21%*, 10/8/2004, Commonwealth Bank Australia (b)
9,000,000
 9,000,000
Shelby County, KY, Industrial Improvement Project, Lease Revenue, Series A, 1.72%*, 9/1/2034, US Bank NA (b)
10,000,000
 10,000,000

21,200,000

Maryland 1.5%
Montgomery County, MD, Economic Development Revenue, Howard Hughes Medical Facilities, Series A, 1.71%*, 10/15/2020
12,500,000

12,500,000

Michigan 2.2%
ABN Amro Munitops, Certificate Trust, 144A, Series 2003-3, 1.74%*, 1/1/2011 (c)
6,650,000
 6,650,000
Flushing, MI, General Obligation, Community Schools, 144A, Series R-4517, 1.75%*, 5/1/2023
5,100,000
 5,100,000
Garden City, MI, Hospital Revenue, Series A, 1.73%*, 9/1/2026, First of America Bank (b)
875,000
 875,000
Michigan, Certificate of Participation, Series 350, 1.76%*, 9/1/2011 (c)
4,850,000
 4,850,000
Michigan, Hospital Finance Authority Revenue, Hospital Equipment Loan Program, Series A, 1.66%*, 12/1/2023, National City Bank (b)
1,430,000
 1,430,000

18,905,000

Missouri 0.4%
Missouri, Health & Educational Facilities Authority, Health Facilities Revenue, Barnes Hospital Project, 1.7%*, 12/1/2015, JP Morgan Chase Bank (b)
3,339,000

3,339,000

New Jersey 2.1%
New Jersey, Economic Development Authority, Economic Development Revenue, Foreign Trade Zone Project, 1.72%*, 12/1/2007, Bank of New York (b)
2,195,000
 2,195,000
New Jersey, Floating Rate Trust Receipts, 144A, Series L56J-D, 1.25%*, 6/24/2005
14,000,000
 14,000,000
New Jersey, Health Care Facilities Financing Authority Revenue, Hospital Capital Asset Financing, Series B, 1.7%*, 7/1/2035, Chase Manhattan Bank (b)
750,000
 750,000
Salem County, NJ, Industrial Pollution Control, Financing Authority Revenue, E.I. Du Pont de Nemours and Co., 1.3%*, 3/1/2012
1,300,000
 1,300,000

18,245,000

New Mexico 1.1%
Albuquerque, NM, Airport Facilities Revenue, Series A, 1.8%*, 7/1/2020 (c)
5,200,000
 5,200,000
Farmington, NM, Hospital Revenue, San Juan Regional Medical Center Project, Series B, 1.72%*, 6/1/2028, Bank of Nova Scotia (b)
4,500,000
 4,500,000

9,700,000

New York 3.3%
City of Rochester, NY, 1.25%, 1/13/2005
19,000,000
 19,000,000
New York, NY, City Municipal Water Finance Authority, Water & Sewer System Revenue, Series A, 1.77%*, 6/15/2025 (c)
300,000
 300,000
New York, NY, General Obligations, Series A-3, 1.69%*, 8/1/2031, BNP Paribas (b)
315,000
 315,000
New York, NY, State Local Government Assistance Corp., Series A-BV, 1.61%*, 4/1/2021 (c)
1,225,000
 1,225,000
New York, NY, Triborough Bridge & Tunnel Authority, Series A, 1.69%*, 1/1/2031 (c)
7,675,000
 7,675,000

28,515,000

North Carolina 0.8%
North Carolina, Medical Care Community Health Care Facilities Revenue, First Mortgage-Friends Homes, 1.68%*, 9/1/2033, Bank of America NA (b)
7,000,000

7,000,000

Ohio 5.0%
Akron, OH, Hospital Revenue District, Health Care Facilities Summer Project, 1.7%*, 12/1/2032, KBC Bank NV (b)
7,260,000
 7,260,000
Cleveland, OH, Waterworks Revenue, Series M, 1.72%*, 1/1/2033 (c)
13,800,000
 13,800,000
Franklin County, OH, Senior Care Revenue, Hospital Revenue, Sereis II-R-55, 1.75%*, 6/1/2017
12,000,000
 12,000,000
Hunron County, OH, Hospital Facilities Revenue, Fisher-Titus Medical Center:


Series A, 1.72%*, 12/1/2027, National City Bank (b)

8,100,000
 8,100,000

Series A, 1.72%*, 12/4/2027, National City Bank (b)

1,600,000
 1,600,000

42,760,000

Oklahoma 1.6%
Payne County, OK, Economic Development Authority, Student Housing Revenue, OSUF Phase III Project:


1.71%*, 6/1/2032 (c)

5,765,000
 5,765,000

1.71%*, 7/1/2032 (c)

7,930,000
 7,930,000

13,695,000

Oregon 3.7%
Oregon, Tax Anticipation Notes, 2.25%, 11/15/2004
17,900,000
 17,922,342
Portland, OR, Industrial Development Revenue, 1.7%*, 4/1/2035 (c)
4,500,000
 4,500,000
Salem, OR, Hospital Facility Authority Revenue, Capital Manor, Inc. Project, 1.74%*, 5/1/2034, Bank of America NA (b)
9,560,000
 9,560,000

31,982,342

Pennsylvania 3.1%
Allegheny County, PA, Hospital Development Authority Revenue, Presbyterian Hospital, Series D, 1.7%*, 3/1/2020 (c)
2,100,000
 2,100,000
Allegheny County, PA, Hospital Development Authority Revenue, UPMC Senior Living Corp., 1.7%*, 7/15/2028
2,450,000
 2,450,000
Dauphin County, PA, General Authority, Education & Health Loan Program, 1.74%*, 11/1/2017 (c)
70,000
 70,000
Delaware Valley, PA, Regional Finance Authority Revenue, Series PT-784, 1.74%*, 7/1/2026
6,200,000
 6,200,000
Delaware Valley, PA, Regional Finance Authority, Local Government Revenue, 1.69%*, 8/1/2016, Toronto - Dominion Bank (b)
1,065,000
 1,065,000
Pennsylvania, State Higher Educational Facilities Authority Revenue, Modal-Drexel University, Series B, 1.69%*, 5/1/2033, Allied Irish Bank PLC (b)
5,725,000
 5,725,000
Pennsylvania, State Higher Educational Facilities Authority Revenue, University Properties, Student Housing, Series A, 1.73%*, 8/1/2034, Citizens Bank of Pennsylvania (b)
3,000,000
 3,000,000
Pennsylvania, State School District (REV) Lease, Public School Building Authority, 144A, Series A42, 1.8%*, 6/1/2028 (c)
1,300,000
 1,300,000
Philadelphia, Redevelopment Authority Housing Revenue, Multi-family Courts Project, Series A, 1.74%*, 6/1/2025, First Union National Bank (b)
2,405,000
 2,405,000
Philadelphia, PA, Hospital & Higher Education Facilities Authority Revenue, Children's Hospital Project, Series B, 1.71%*, 7/1/2025
1,995,000
 1,995,000

26,310,000

South Carolina 3.5%
South Carolina, Jobs Economic Development Authority, Health Care Facilties Revenue, Baptist Ministries, Inc., 1.69%*, 7/1/2020, Wachovia Bank NA (b)
380,000
 380,000
South Carolina, Jobs Economic Development Authority, Heathwood Hall Episcopal, 1.69%*, 8/1/2029, Wachovia Bank NA (b)
8,600,000
 8,600,000
South Carolina, Project Revenue, Economic Development Authority, Sisters of Charity Hospitals, 1.73%*, 11/1/2032, Wachovia Bank NA (b)
10,000,000
 10,000,000
South Carolina, Public Service Authority:


1.4%, 10/4/2004

2,000,000
 2,000,000

1.4%, 10/5/2004

9,024,000
 9,024,000

30,004,000

Tennessee 1.1%
Clarksville, TN, Public Building Authority Revenue, Pooled Financing:


1.76%*, 7/1/2031, Bank of America NA (b)

1,500,000
 1,500,000

1.76%*, 1/1/2033, Bank of America NA (b)

3,805,000
 3,805,000

1.76%*, 7/1/2034, Bank of America NA (b)

1,800,000
 1,800,000
Memphis, TN, General Obligation, Series A, 1.73%*, 8/1/2007
2,180,000
 2,180,000

9,285,000

Texas 13.8%
Brownsville, TX, Utility Systems Revenue, Series B, 1.72%*, 9/1/2027 (c)
4,520,000
 4,520,000
Corpus Christi, TX, Electric Revenue, Utility Systems Revenue, 1.75%*, 7/15/2010 (c)
3,940,000
 3,940,000
Harris County, TX, Health Facilities Development Corp. Revenue, Methodist Hospital, 1.72%*, 12/1/2032
4,200,000
 4,200,000
Houston, TX, Airport System Revenue, Special Facilities, 1.74%*, 7/1/2032 (c)
10,000,000
 10,000,000
Houston, TX, General Obligation, Series C, 1.17%*, 11/9/2004
12,500,000
 12,500,000
Houston, TX, Health Facilities Development Corp., Retirement Facilities Revenue, Buckingham Senior Living Center, Series C, 1.69%*, 2/15/2034, LaSalle Bank NA (b)
18,190,000
 18,190,000
Houston, TX, Utility Systems Revenue, 1.2%*, 10/20/2004
5,000,000
 5,000,000
Houston, TX, Water & Sewer Revenue, Series 120, 1.73%*, 12/1/2023
4,900,000
 4,900,000
San Antonio, TX, Electric & Gas, Series A, 1.32%*, 10/14/2004
5,000,000
 5,000,000
Texas, Higher Education Revenue, University of Texas, Series B-14, 1.72%*, 8/15/2022
2,000,000
 2,000,000
Texas, Lower Colorado River Authority, 1.17%, 10/4/2004
20,000,000
 20,000,000
Texas, State (REV) Lease, Trust Certificates, Series 9056, 144A, 1.76%*, 7/21/2010 (c)
10,990,000
 10,990,000
Texas, State General Obligation, Series R-4020, 1.75%*, 10/1/2022
2,370,000
 2,370,000
Texas, Tax & Revenue Anticipation Notes, 3.0%, 8/31/2005
13,000,000
 13,163,807
Texas, Water & Sewer Revenue, Water Development Board Revenue, State Revolving Fund, 1.72%*, 7/15/2022
1,350,000
 1,350,000

118,123,807

Virginia 0.7%
Chesapeake Bay, VA, Transportation/Tolls Revenue, Bridge and Tunnel Commission, Series A-39, 1.74%*, 7/1/2025 (c)
4,180,000
 4,180,000
Spotsylvania County, VA, Industrial Development Authority Revenue, 1.74%*, 4/1/2023, Wachovia Bank NA (b)
1,500,000
 1,500,000

5,680,000

Washington 5.3%
King County, WA, State General Obligation, 5.25%, 12/1/2004 (c)
5,525,000
 5,562,704
Port Tacoma, WA, State General Obligation, Core City, Series R-4036, 1.75%*, 12/1/2025 (c)
5,365,000
 5,365,000
Washington, Electric Revenue, Northwest Energy, 1.75%*, 7/1/2017 (c)
9,925,000
 9,925,000
Washington, Energy Northwest Electric Revenue, Series R-4524, 1.75%*, 7/1/2018 (c)
5,470,000
 5,470,000
Washington, Housing Finance Community Nonprofit Housing Revenue, Emerald Heights Project, 1.67%*, 7/1/2033, Bank of America NA (b)
9,165,000
 9,165,000
Washington, Municipal Securities Trust Certificates, Series 9058, 144A, 1.76%*, 9/23/2010 (c)
9,990,000
 9,990,000

45,477,704

West Virginia 0.2%
Monongalia County, WV, Building Commission Hospital Revenue, Monongalia General Hospital, Series A, 1.72%*, 7/1/2017, Bank One of West Virginia (b)
1,820,000

1,820,000

Wisconsin 1.2%
Milwaukee, WI, Water & Sewer Revenue, 1.75%*, 6/1/2022 (c)
3,615,000
 3,615,000
Wisconsin, Transportation Authority Revenue, 1.4%*, 12/10/2004
6,400,000
 6,400,000

10,015,000

Total Municipal Investments (Cost $853,822,552)

853,822,552



% of Net Assets

Value ($)

Total Investment Portfolio (Cost $853,822,552) (a)
99.8

853,822,552

Other Assets and Liabilities, Net
0.2

1,476,176

Net Assets
100.0

855,298,728


* 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 rate as of September 30, 2004.
(a) The cost for federal income tax purposes was $853,822,552.
(b) Security includes a letter of credit from a major bank.
(c) Bond is insured by one of these companies:

Insurance Coverage

As a % of Total Investment Portfolio

AMBAC
 AMBAC Assurance Corp.
 8.6%
FGIC
 Financial Guaranty Insurance Company
 7.8%
FSA
 Financial Security Assurance
 8.6%
MBIA
 Municipal Bond Investors Assurance
 10.1%

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.

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


Financial Statements


Statements of Assets and Liabilities as of September 30, 2004 (Unaudited)

Assets

Prime Series

Treasury Series

Tax-Free Series

Investments:

Investments, at amortized cost

$ 2,336,024,795 $ 460,276,452 $ 853,822,552

Repurchase agreements, at amortized cost

315,547,949 - -

Total Investments, at amortized cost

2,651,572,744 460,276,452 853,822,552

Cash

30,130,075 911 -

Receivable for securities sold

- 99,901,750 235,022

Interest receivable

3,378,970 316,007 2,279,783

Receivable for Fund shares sold

- - 109,649

Other assets

37,982 7,068 43,985

Total assets

2,685,119,771 560,502,188 856,490,991
Liabilities

Due to custodian bank

- - 491,765

Dividends payable

244 1,386 -

Payable for Fund shares redeemed

9,085 - 109,650

Payable for investments purchased

30,130,122 99,937,388 -

Accrued management fee

688,240 91,945 210,583

Accrued distribution fees

481,494 69,465 157,675

Accrued shareholder servicing fees

135,366 20,041 38,785

Accrued custodian and accounting fees

23,678 11,469 17,024

Other accrued expenses and payables

591,189 139,309 166,781

Total liabilities

32,059,418 100,271,003 1,192,263
Net assets

$ 2,653,060,353

$ 460,231,185

$ 855,298,728

Composition of Net Assets

Accumulated distributions in excess of net investment income

(444,164) (90,854) (150,683)

Accumulated net realized gain (loss)

15,952 42,947 (36,992)

Paid-in capital

2,653,488,565 460,279,092 855,486,403
Net assets

$ 2,653,060,353

$ 460,231,185

$ 855,298,728



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



Statements of Assets and Liabilities as of September 30, 2004 (Unaudited) (continued)

Net Asset Value

Prime Series

Treasury Series

Tax-Free Series

Computation of Net Asset Value, Offering and Redemption Price Per Share
Prime Shares, Treasury Shares, and Tax-Free Shares, respectively

Net assets

$ 2,308,746,366

$ 347,943,174

$ 594,116,060

Shares of capital stock outstanding

2,308,751,034

347,907,989

594,210,714

Net Asset Value per share

$ 1.00

$ 1.00

$ 1.00

Prime Institutional Shares, Treasury Institutional Shares and Tax-Free Institutional Shares, respectively

Net assets

$ 337,288,145

$ 112,288,011

$ 261,182,668

Shares of capital stock outstanding

337,311,230

112,297,936

261,194,940

Net Asset Value per share

$ 1.00

$ 1.00

$ 1.00

Class A Shares

Net assets

$ 3,799,614

$ -

$ -

Shares of capital stock outstanding

3,804,102

-

-

Net Asset Value per share

$ 1.00

$ -

$ -

Class B Shares

Net assets

$ 3,102,542

$ -

$ -

Shares of capital stock outstanding

3,099,929

-

-

Net Asset Value per share

$ 1.00

$ -

$ -

Class C Shares

Net assets

$ 123,686

$ -

$ -

Shares of capital stock outstanding

123,810

-

-

Net Asset Value per share

$ 1.00

$ -

$ -



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



Statements of Operations for the six months ended September 30, 2004 (Unaudited)

Investment Income

Prime Series

Treasury Series

Tax-Free Series

Interest

$ 18,783,743 $ 2,730,957 $ 5,082,253
Expenses:

Management fee

3,816,279 583,181 1,229,561

Transfer agent fees

1,021,481 156,976 266,480

Custodian and accounting fees

136,714 67,108 85,448

Auditing

21,463 13,689 16,378

Legal

20,349 14,855 10,209

Directors' fees and expenses

48,055 9,666 19,621

Reports to shareholders

167,586 - 4,564

Registration fees

58,350 22,702 30,581

Distribution fees

3,134,562 450,935 793,038

Shareholder servicing fees

876,150 126,262 222,051

Other

48,322 13,930 24,205

Total expenses

9,349,311 1,459,304 2,702,136

Less: fee waivers and/or expense reimbursements

(32,231) (84,065) (6,233)

Net expenses

9,317,080 1,375,239 2,695,903

Net investment income

9,466,663 1,355,718 2,386,350
Net realized gain (loss) on investment transactions

2,623

17,349

5,851

Net increase (decrease) in net assets from operations

$ 9,469,286

$ 1,373,067

$ 2,392,201



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



Prime Series

Statement of Changes in Net Assets

Increase (Decrease) in Net Assets

Six Months
Ended
September 30, 2004
(Unaudited)

Year Ended
March 31,
2004

Operations:

Net investment income

$ 9,466,663 $ 18,440,390

Net realized gain (loss)

2,623 32,960

Net increase (decrease) in net assets resulting from operations

9,469,286 18,473,350
Distributions to shareholders from:

Net investment income:

Prime Shares

(8,126,592) (13,937,204)

Prime Institutional Shares

(1,894,994) (4,146,883)

Class A Shares

(6,383) (27,001)

Class B Shares

(878) (5,702)

Class C Shares

(31) (187)

Quality Shares

(1,264) (5,308)
Total distributions
 (10,030,142) (18,122,285)
Fund share transactions:

(at net asset value of $1.00 per share)

Proceeds from shares sold

1,490,249,323 3,778,478,261

Reinvestment of distributions

10,012,737 18,119,786

Cost of shares redeemed

(1,920,098,514) (4,170,034,415)

Net increase (decrease) in net assets from Fund share transactions

(419,836,454) (373,436,368)
Increase (decrease) in net assets
(420,397,310) (373,085,303)

Net assets at beginning of period

3,073,457,663 3,446,542,966

Net assets at end of period (including accumulated distributions in excess of net investment income and undistributed net investment income of $444,164 and $119,315, respectively)

$ 2,653,060,353

$ 3,073,457,663



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



Treasury Series

Statement of Changes in Net Assets

Increase (Decrease) in Net Assets

Six Months
Ended
September 30, 2004
(Unaudited)

Year Ended
March 31,
2004

Operations:

Net investment income

$ 1,355,718 $ 2,361,127

Net realized gain (loss)

17,349 25,598

Net increase (decrease) in net assets resulting from operations

1,373,067 2,386,725
Distributions to shareholders from:

Net investment income:

Treasury Shares

(945,946) (1,566,997)

Treasury Institutional Shares

(529,389) (801,414)
Total distributions
 (1,475,335) (2,368,411)
Fund share transactions:

(at net asset value of $1.00 per share)

Proceeds from shares sold

439,264,420 818,248,199

Reinvestment of distributions

1,467,141 2,355,582

Cost of shares redeemed

(456,556,163) (874,905,520)

Net increase (decrease) in net assets from Fund share transactions

(15,824,602) (54,301,739)
Increase (decrease) in net assets
(15,926,870) (54,283,425)

Net assets at beginning of period

476,158,055 530,441,480

Net assets at end of period (including accumulated distributions in excess of net investment income and undistributed net investment income of $90,854 and $28,763, respectively)

$ 460,231,185

$ 476,158,055



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



Tax-Free Series

Statement of Changes in Net Assets

Increase (Decrease) in Net Assets

Six Months
Ended
September 30, 2004
(Unaudited)

Year Ended
March 31,
2004

Operations:

Net investment income

$ 2,386,350 $ 4,009,761

Net realized gain (loss)

5,851 16,332

Net increase (decrease) in net assets resulting from operations

2,392,201 4,026,093
Distributions to shareholders from:

Net investment income:

Tax-Free Shares

(1,509,515) (2,209,091)

Tax-Free Institutional Shares

(1,087,009) (1,599,231)
Total distributions
 (2,596,524) (3,808,322)
Fund share transactions:

(at net asset value of $1.00 per share)

Proceeds from shares sold

708,989,283 1,472,948,677

Reinvestment of distributions

2,595,871 3,808,152

Cost of shares redeemed

(826,956,621) (1,404,230,862)

Net increase (decrease) in net assets from Fund share transactions

(115,371,467) 72,525,967
Increase (decrease) in net assets
(115,575,790) 72,743,738

Net assets at beginning of period

970,874,518 898,130,780

Net assets at end of period (including accumulated distributions in excess of net investment income and undistributed net investment income of $150,683 and $59,491, respectively)

$ 855,298,728

$ 970,874,518




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


Financial Highlights


Prime Shares

Years Ended March 31,

2004a

2004

2003

2002

2001

2000

Selected Per Share Data
Net asset value, beginning of period

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

Net investment income
.0033 .0050 .0108 .0270 .0578 .0480
Less: Distributions from net investment income
(.0033) (.0050) (.0108) (.0270) (.0578) (.0480)
Net asset value, end of period

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

Total Return (%)
 .33** .47 1.08 2.74 5.94 4.90
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ in thousands)
 2,308,746 2,665,759 2,879,253 4,320,764 5,735,781 5,772,616
Ratio of expenses (%)
 .70* .67 .70 .67 .66 .66
Ratio of net investment income (%)
 .61* .51 1.10 2.76 5.77 4.86


Prime Institutional Shares

Years Ended March 31,

2004a

2004

2003

2002

2001

2000

Selected Per Share Data
Net asset value, beginning of period

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

Net investment income
.0052 .0087 .0140 .0302 .0610 .0511
Less: Distributions from net investment income
(.0052) (.0087) (.0140) (.0302) (.0610) (.0511)
Net asset value, end of period

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

Total Return (%)
 .52** .88 1.40 3.06 6.28 5.24
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ in thousands)
 337,288 394,967 544,146 750,110 671,539 637,767
Ratio of expenses (%)
 .31* .30 .38 .36 .34 .34
Ratio of net investment income (%)
 1.00* .88 1.42 3.01 6.01 5.18
a For the six months ended September 30, 2004 (Unaudited).
* Annualized
** Not annualized

Treasury Shares

Years Ended March 31,

2004a

2004

2003

2002

2001

2000

Selected Per Share Data
Net asset value, beginning of period

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

Net investment income
.0027 .0039 .0098 .0250 .0539 .0431
Less: Distributions from net investment income
(.0027) (.0039) (.0098) (.0250) (.0539) (.0431)
Net asset value, end of period

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

Total Return (%)b
 .27** .40 .99 2.53 5.53 4.40
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ in thousands)
 347,943 376,821 390,982 745,638 866,508 790,443
Ratio of expenses before expense reductions (%)
 .71* .68 .67 .64 .61 .66
Ratio of expenses after expense reductions (%)
 .67* .63 .62 .59 .56 .61
Ratio of net investment income (%)
 .48* .39 1.01 2.47 5.36 4.31


Treasury Institutional Shares

Years Ended March 31,

2004a

2004

2003

2002

2001

2000

Selected Per Share Data
Net asset value, beginning of period

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

Net investment income
.0047 .0077 .0130 .0281 .0571 .0462
Less: Distributions from net investment income
(.0047) (.0077) (.0130) (.0281) (.0571) (.0462)
Net asset value, end of period

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

Total Return (%)b
 .47** .78 1.31 2.85 5.86 4.72
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ in thousands)
 112,288 99,337 139,460 199,932 137,520 98,668
Ratio of expenses before expense reductions (%)
 .32* .29 .35 .33 .31 .34
Ratio of expenses after expense reductions (%)
 .28* .24 .30 .28 .26 .29
Ratio of net investment income (%)
 .87* .78 1.33 2.71 5.66 4.62
a For the six months ended September 30, 2004 (Unaudited).
b Total return would have been lower had certain expenses not been reduced.
* Annualized
** Not annualized

Tax-Free Shares

Years Ended March 31,

2004a

2004

2003

2002

2001

2000

Selected Per Share Data
Net asset value, beginning of period

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

Net investment income
.0024 .0031 .0074 .0168 .0333 .0276
Less: Distributions from net investment income
(.0024) (.0031) (.0074) (.0168) (.0333) (.0276)
Net asset value, end of period

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

Total Return (%)
 .24** .32 .74 1.69 3.38 2.80
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ in thousands)
 594,116 650,986 699,983 1,006,613 1,701,940 1,664,370
Ratio of expenses (%)
 .71* .70 .67 .65 .64 .65
Ratio of net investment income (%)
 .42* .34 .74 1.76 3.31 2.78


Tax-Free Institutional Shares

Years Ended March 31,

2004a

2004

2003

2002

2001

2000

Selected Per Share Data
Net asset value, beginning of period

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

Net investment income
.0042 .0070 .0107 .0200 .0363 .0306
Less: Distributions from net investment income
(.0042) (.0070) (.0107) (.0200) (.0363) (.0306)
Net asset value, end of period

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

$ 1.00

Total Return (%)
 .42** .70 1.07 2.01 3.69 3.10
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ in thousands)
 261,183 319,888 198,148 168,137 173,956 117,446
Ratio of expenses (%)
 .33* .32 .35 .33 .34 .35
Ratio of net investment income (%)
 .81* .72 1.06 1.98 3.62 3.09
a For the six months ended September 30, 2004 (Unaudited).
* Annualized
** Not annualized


Notes to Financial Statements (Unaudited)


Note 1-Organization and Significant Accounting Policies

A. Organization

Cash Reserve Fund, Inc. (the `Fund') is registered under the Investment Company Act of 1940 (the `Act'), as amended, as a diversified, open-end management investment company. The Fund is organized as a corporation under the laws of the state of Maryland. The Prime Series, the Treasury Series and the Tax-Free Series (the "Series") are the three series the Fund offers to investors.

The Prime Series offers six classes of shares to investors: Cash Reserve Prime Shares (`Prime Shares'), Scudder Cash Reserve Prime Class A Shares (`Class A Shares'), Scudder Cash Reserve Prime Class B Shares (`Class B Shares'), Scudder Cash Reserve Prime Class C Shares (`Class C Shares'), and Cash Reserve Prime Institutional Shares (`Prime Institutional Shares'). Certain detailed information for the Class A Shares, Class B Shares and Class C Shares is provided separately and is available upon request. Effective May 28, 2004, the last shareholder redeemed their shares in Quality Cash Reserve Prime Shares.

The Treasury Series offers two classes of shares to investors: Cash Reserve Treasury Shares (`Treasury Shares') and Cash Reserve Treasury Institutional Shares (`Treasury Institutional Shares').

The Tax-Free Series offers two classes of shares to investors: Cash Reserve Tax-Free Shares (`Tax-Free Shares') and Cash Reserve Tax-Free Institutional Shares (`Tax-Free Institutional Shares').

All shares have equal rights with respect to voting except that shareholders vote separately on matters affecting their rights as holders of a particular series or class.

The investment objective of each Series is as follows: Prime Series and Treasury Series - to seek as high a level of current income as is consistent with preservation of capital and liquidity; Tax-Free Series - to seek as high a level of current income exempt from federal income tax as is consistent with preservation of capital and liquidity. Details concerning the Series' investment objectives and policies and the risk factors associated with the Series' investments are described in the Series' Prospectus and Statement of Additional Information.

B. Valuation of Securities

Portfolio securities are valued utilizing the amortized cost method permitted in accordance with Rule 2a-7 under the Act and certain conditions therein. Under this method, which does not take into account unrealized capital gains or losses on securities, an instrument is initially valued at its cost and thereafter assumes a constant accretion/amortization to maturity of any discount or premium.

C. Securities Transactions and Investment Income

Securities transactions are recorded on trade date. Realized gains and losses are determined by comparing the proceeds of a sale or the cost of a purchase with a specific offsetting transaction.

Interest income, including amortization of premiums and accretion of discounts, is accrued daily. Dividend income is recorded on the ex-dividend date. Estimated expenses are also accrued daily.

Distribution or service fees and transfer agent fees specifically attributable to a class are allocated to that class. All other expenses, income, gains and losses are allocated among the classes based upon their relative net assets.

D. Distributions

The Fund distributes its net investment income in the form of dividends, which are declared and recorded daily. Accumulated daily dividends are distributed to shareholders monthly.

E. Federal Income Taxes

It is the Fund's policy to continue to qualify as a regulated investment company under the Internal Revenue Code and to distribute substantially all of its taxable income to shareholders. Therefore, no federal income taxes have been accrued.

F. Repurchase Agreements

The Prime Series and Treasury Series may enter into repurchase agreements with certain banks and broker/dealers whereby the Series, through its custodian or sub-custodian bank, receives delivery of the underlying securities, the amount of which at the time of purchase and each subsequent business day is required to be maintained at such a level that the value is equal to at least the principal amount of the repurchase price plus accrued interest. The custodial bank holds the collateral in a separate account until the agreement matures. If the value of the securities falls below the principal amount of the repurchase agreement plus accrued interest, the financial institution deposits additional collateral by the following business day. If the financial institution either fails to deposit the required additional collateral or fails to repurchase the securities as agreed, the Series has the right to sell the securities and recover any resulting loss from the financial institution. If the financial institution enters into bankruptcy, the Series' claims on the collateral may be subject to legal proceedings.

G. Expenses

Expenses of the Fund arising in connection with a specific Series are allocated to that Series. Other Fund expenses which cannot be directly attributed to a Series are apportioned among the Series in the Fund.

H. Estimates

In preparing its financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions. Actual results may be different.

Note 2-Fees and Transactions with Affiliates

Investment Company Capital Corp. (`ICCC'), an indirect, wholly owned subsidiary of Deutsche Bank AG, is the Advisor for each Series. The Fund pays the Advisor an annual fee based on its aggregate average daily net assets which is calculated daily and paid monthly at the following annual rates: 0.30% of the first $500 million, 0.26% of the next $500 million, 0.25% of the next $500 million, 0.24% of the next $1 billion, 0.23% of the next $1 billion and 0.22% of the amount in excess of $3.5 billion.

In addition, the Advisor is entitled to receive an additional fee with respect to the Prime Series and the Tax-Free Series, calculated daily and payable monthly, at the annual rate of 0.02% of the Prime Series' average daily net assets and 0.03% of the Tax-Free Series' average daily net assets.

Accordingly, for the six months ended September 30, 2004, the fee pursuant to the management agreement was equivalent to an annual effective rate of 0.27%, 0.25% and 0.28% of the average daily net assets of the Prime Series, Treasury Series and Tax-Free Series, respectively.

For the period April 1, 2004 through August 2, 2004, the Advisor voluntarily waived 0.05% of average net assets on the Treasury Series. Accordingly, for the six months ended September 30, 2004, the Advisor waived $80,305 of operating expenses for the Treasury Series.

In addition, the Advisor has agreed to voluntarily waive expenses as necessary to maintain a positive yield. This waiver may be changed or terminated at any time without notice. Under these arrangements, the Advisor waived expenses on Class A, B and C shares of the Prime Series.

ICCC is the Fund's accounting agent. Each Series paid the accounting agent a fixed fee of $13,000 on assets up to $10 million. On assets greater than $10 million, each Series paid the accounting agent an annual fee based on its average daily net assets which was calculated daily and paid monthly. Scudder Fund Accounting Corporation (`SFAC'), an affiliate of the Advisor, is responsible for the general accounting records and determining the daily net asset value per share of the Fund. SFAC has retained State Street Bank and Trust Company (`State Street') as a sub-agent that performs fund accounting and administration services.

Scudder Investments Service Company (`SISC'), an affiliate of the Advisor, is the Fund's transfer agent. Each class paid the transfer agent a per account fee that is accrued daily and paid monthly. For the six months ended September 30, 2004, the amount charged to the Fund by SISC was as follows:

Total Aggregated

Transfer Agent Fees Waived

Unpaid at September 30, 2004

Prime Series:
Prime Shares
 $ 975,047 $ - $ 459,339
Prime Institutional Shares
 21,883 - 13,303
Class A Shares
 9,228 58 8,030
Class B Shares
 9,924 9,924 -
Class C Shares
 2,429 2,429 -
Quality Shares
 327 - -
Treasury Series:
Treasury Shares
 $ 149,783 $ - $ 101,858
Treasury Institutional Shares
 6,040 - 2,876
Tax-Free Series:
Tax-Free Shares
 $ 249,982 $ - $ 136,237
Tax-Free Institutional Shares
 14,628 - 7,942

Pursuant to a sub-transfer agency agreement between SISC and DST Systems, Inc. (`DST'), SISC has delegated certain transfer agent and dividend paying agent functions to DST. The cost and expenses of such delegations are borne by SISC, not by the Fund.

As compensation for his or her services, each Independent Director receives an aggregate annual fee, plus a fee for each meeting attended (plus reimbursement for reasonable out-of-pocket expenses incurred in connection with his or her attendance at board and committee meetings) from each Fund in the Fund Complex for which he or she serves. In addition, the Chairman of the Fund Complex's Audit Committee receives an annual fee for his services.

Note 3-Distribution and Service Fees

Scudder Distributors, Inc. (`SDI') is the Fund's Distributor. Each Series pays the Distributor an annual fee, pursuant to Rule 12b-1, based on its average daily net assets, which is calculated daily and paid monthly at the following annual rates: 0.25% of the Prime Shares, Class A Shares, Treasury Shares and Tax-Free Shares average daily net assets, 0.60% of the Quality Cash Shares average daily net assets and 0.75% of the Class B Shares and Class C Shares average daily net assets. The Fund does not pay fees on the Prime Institutional Shares, Treasury Institutional Shares and Tax-Free Institutional Shares. For the six months ended September 30, 2004, the Distribution Fee was as follows:

Total Aggregated

Unpaid at September 30, 2004

Prime Series:
Prime Shares
 $ 3,111,756 $ 478,850
Class A Shares
 5,221 817
Class B Shares
 14,043 1,755
Class C Shares
 506 72
Quality Shares
 3,036 -
Treasury Series:
Treasury Shares
 $ 450,935 $ 69,465
Tax-Free Series:
Tax-Free Shares
 $ 793,038 $ 157,675

Each Series pays the Distributor a shareholder servicing fee based on the average daily net assets which is calculated daily and paid monthly at the following rates of 0.07% of Prime Shares, Treasury Shares and Tax-Free Shares, and 0.25% of Class B and Class C Shares. The Distributor uses this fee to compensate third parties that provide shareholder services to their clients who own shares. For the six months ended September 30, 2004, the shareholder servicing fee was as follows:

Total Aggregated

Shareholder Servicing Fee Waived

Unpaid at September 30, 2004

Prime Series:
Prime Shares
 $ 871,301 $ - $ 134,066
Class B Shares
 4,681 1,137 1,253
Class C Shares
 168 28 47
Treasury Series: Treasury Shares
 $ 126,262 $ - $ 20,041
Tax-Free Series:
Tax-Free Shares
 $ 222,051 $ - $ 38,785

For the six months ended September 30, 2004, the Advisor has agreed to reimburse $17,434, $3,744 and $6,079 for expenses for the Prime Series, Treasury Series and Tax-Free Series, respectively.

Note 4-Expense Off-Set Arrangement

The Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances were used to reduce a portion of the Fund's custodian expenses. During the six months ended September 30, 2004, the Fund's custodian fees were reduced by $1,221, $16 and $154 for the Prime Series, the Treasury Series, and the Tax-Free Series, respectively, under this arrangement.

Note 5-Share Transactions

The Fund is authorized to issue up to 20.81 billion shares of $.001 par value capital stock (12.66 billion Prime Series, 3.55 billion Treasury Series, 4.25 billion Tax-Free Series and 350 million undesignated). Transactions in capital stock were as follows (at net asset value of $1.00 per share):


Six Months Ended
September 30, 2004

Year Ended
March 31, 2004

Prime Series:

Shares

Dollars

Shares

Dollars

Sold:
Prime Shares
 849,051,286 $ 849,051,286 2,192,158,383 $ 2,192,158,382
Prime Institutional Shares
 640,798,726 640,798,726 1,585,368,740 1,585,368,740
Class A Shares
 397,844 397,844 491,136 491,136
Class B Shares
 300 300 19,023 19,023
Class C Shares
 - - - -
Quality Cash Shares
 1,092 1,167 440,980 440,980

$ 1,490,249,323

$ 3,778,478,261

Reinvested:
Prime Shares
 8,110,863 $ 8,110,863 13,937,204 $ 13,937,204
Prime Institutional Shares
 1,895,044 1,895,044 4,144,719 4,144,719
Class A Shares
 5,557 5,557 27,001 27,001
Class B Shares
 807 807 5,327 5,327
Class C Shares
 30 30 155 155
Quality Cash Shares
 436 436 5,380 5,380

$ 10,012,737

$ 18,119,786

Redeemed:
Prime Shares
 (1,213,673,463) $ (1,213,673,463) (2,419,926,242) $ (2,419,925,662)
Prime Institutional Shares
 (700,317,984) (700,317,984) (1,738,713,361) (1,738,713,361)
Class A Shares
 (1,358,287) (1,358,287) (4,558,264) (4,558,264)
Class B Shares
 (1,487,434) (1,487,434) (6,331,370) (6,331,370)
Class C Shares
 (15,226) (15,226) (236,381) (236,381)
Quality Cash Shares
 (3,246,120) (3,246,120) (269,377) (269,377)

$ (1,920,098,514)

$ (4,170,034,415)

Net Decrease:

(419,836,529)

$ (419,836,454)

(373,436,947)

$ (373,436,368)



Six Months Ended
September 30, 2004

Year Ended
March 31, 2004

Treasury Series:

Shares

Dollars

Shares

Dollars

Sold:
Treasury Shares
 294,989,461 $ 294,989,462 647,805,963 $ 647,805,963
Treasury Institutional Shares
 144,274,958 144,274,958 170,442,236 170,442,236

$ 439,264,420

$ 818,248,199

Reinvested:
Treasury Shares
 937,752 $ 937,752 1,554,168 $ 1,554,168
Treasury Institutional Shares
 529,389 529,389 801,414 801,414

$ 1,467,141

$ 2,355,582

Redeemed:
Treasury Shares
 (324,728,632) $ (324,728,633) (663,529,340) $ (663,529,340)
Treasury Institutional Shares
 (131,827,530) (131,827,530) (211,376,180) (211,376,180)

$ (456,556,163)

$ (874,905,520)

Net decrease:

(15,824,602)

$ (15,824,602)

(54,301,739)

$ (54,301,739)



Six Months Ended
September 30, 2004

Year Ended
March 31, 2004

Tax-Free Series:

Shares

Dollars

Shares

Dollars

Sold:
Tax-Free Shares
 432,022,070 $ 432,022,070 987,484,261 $ 987,484,259
Tax-Free Institutional Shares
 276,967,213 276,967,213 485,464,418 485,464,418

$ 708,989,283

$ 1,472,948,677

Reinvested:
Tax-Free Shares
 1,508,861 $ 1,508,862 2,208,926 $ 2,208,926
Tax-Free Institutional Shares
 1,087,009 1,087,009 1,599,226 1,599,226

$ 2,595,871

$ 3,808,152

Redeemed:
Tax-Free Shares
 (490,233,414) $ (490,233,414) (1,038,868,940) $ (1,038,868,940)
Tax-Free Institutional Shares
 (336,723,207) (336,723,207) (365,361,922) (365,361,922)

$ (826,956,621)

$ (1,404,230,862)

Net increase/(decrease):

(115,371,468)

$ (115,371,467)

72,525,969

$ 72,525,967


Note 6-Tax Disclosures

The timing and characterization of certain income and capital gains 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 distribution reclassifications. 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 March 31, 2004, the Tax-Free Series had a net tax basis capital loss carryforward of approximately $41,000 which may be applied against any realized net taxable capital gains of each succeeding year until fully utilized or until March 31, 2008 ($21,000) and March 31, 2009 ($20,000), the respective expiration dates, whichever occurs first.

The tax character of current year distributions will be determined at the end of the current fiscal year.

Note 7.-Line of Credit

The Fund and several other affiliated funds (the "Participants") share in a $1.25 billion revolving credit facility administered by J.P. Morgan Chase Bank 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 upon net assets, among each of the Participants. Interest is calculated at the Federal Funds Rate plus 0.5 percent. The Fund may borrow up to a maximum of 33 percent of its net assets under the agreement.

Note 8-Regulatory Matters and Litigation

Since at least July 2003, federal, state and industry regulators have been conducting ongoing inquiries and investigations ("inquiries") into the mutual fund industry, and have requested information from numerous mutual fund companies, including Scudder Investments. It is not possible to determine what the outcome of these inquiries will be or what the effect, if any, would be on the funds or their advisors. Publicity about mutual fund practices arising from these industry-wide inquiries serves as the general basis of a number of private lawsuits against the Scudder funds. These lawsuits, which previously have been reported in the press, involve purported class action and derivative lawsuits, making various allegations and naming as defendants various persons, including certain Scudder funds, the funds' investment advisors and their affiliates, certain individuals, including in some cases fund Trustees/Directors, officers, and other parties. Each Scudder fund's investment advisor has agreed to indemnify the applicable Scudder funds in connection with these lawsuits, or other lawsuits or regulatory actions that may be filed making allegations similar to these lawsuits regarding market timing, revenue sharing, fund valuation or other subjects arising from or related to the pending inquiries. Based on currently available information, the funds' investment advisors believe the likelihood that the pending lawsuits will have a material adverse financial impact on a Scudder fund is remote and such actions are not likely to materially affect their ability to perform under their investment management agreements with the Scudder funds.


Other Information


Proxy Voting

A description of 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 is available on our Web site - scudder.com (type "proxy voting" in the search field) - or on the SEC's Web site - www.sec.gov. To obtain a written copy of the fund's policies and procedures without charge, upon request, call us toll free at (800) 621-1048.

Portfolio of Investments

Following the fund's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. The form will be available on the SEC's Web site at www.sec.gov, and it also may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330.


Notes



Notes



Notes



Notes



Notes


the six-month period ended September 30, 2002, and offer an outlook for the months ahead. crf_backcover0 


ITEM 2.         CODE OF ETHICS.

                        Not applicable.

ITEM 3.         AUDIT COMMITTEE FINANCIAL EXPERT.

                        Not applicable.

ITEM 4.         PRINCIPAL ACCOUNTANT FEES AND SERVICES.

                        Not applicable.

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

                Not Applicable.

ITEM 9.         SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

The Nominating and Governance Committee evaluates and nominates Board member
candidates. Fund shareholders may also submit nominees that will be considered
by the Committee when a Board vacancy occurs. Submissions should be mailed to
the attention of the Secretary of the Fund, One South Street, Baltimore, MD
21202.

ITEM 10.        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 registrant's last half-year (the
registrant's second fiscal half-year in the case of the annual report) that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal controls over financial reporting.

ITEM 11.        EXHIBITS.

(a)(1)   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.




Form N-CSR Item F

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

Registrant:                     Deutsche Bank Alex Brown Cash Reserves Portfolio


By:                             /s/Julian Sluyters
                                ---------------------------
                                Julian Sluyters
                                Chief Executive Officer

Date:                           December 6, 2004
                                ---------------------------


Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

Registrant:                     Deutsche Bank Alex Brown Cash Reserves Portfolio


By:                            /s/Julian Sluyters
                               ---------------------------
                               Julian Sluyters
                               Chief Executive Officer

Date:                          December 6, 2004
                               ---------------------------



By:                            /s/Paul Schubert
                               ---------------------------
                               Paul Schubert
                               Chief Financial Officer

Date:                          December 6, 2004
                               ---------------------------








Form N-CSR Item F

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

Registrant:            Deutsche Bank Alex Brown Cash Reserves Treasury Portfolio


By:                    /s/Julian Sluyters
                       ---------------------------
                       Julian Sluyters
                       Chief Executive Officer

Date:                  December 6, 2004
                       ---------------------------


Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

Registrant:            Deutsche Bank Alex Brown Cash Reserves Treasury Portfolio


By:                    /s/Julian Sluyters
                       ---------------------------
                       Julian Sluyters
                       Chief Executive Officer

Date:                  December 6, 2004
                       ---------------------------



By:                    /s/Paul Schubert
                       ---------------------------
                       Paul Schubert
                       Chief Financial Officer

Date:                  December 6, 2004
                       ---------------------------








Form N-CSR Item F

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

Registrant:            Deutsche Bank Alex Brown Cash Reserves Tax-Free Portfolio


By:                    /s/Julian Sluyters
                       ---------------------------
                       Julian Sluyters
                       Chief Executive Officer

Date:                  December 6, 2004
                       ---------------------------


Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

Registrant:            Deutsche Bank Alex Brown Cash Reserves Tax-Free Portfolio


By:                    /s/Julian Sluyters
                       ---------------------------
                       Julian Sluyters
                       Chief Executive Officer

Date:                  December 6, 2004
                       ---------------------------



By:                    /s/Paul Schubert
                       ---------------------------
                       Paul Schubert
                       Chief Financial Officer

Date:                  December 6, 2004
                       ---------------------------