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

Investments in mutual funds involve risk. Some funds have more risk than others. This fund invests in individual bonds whose yields and market values fluctuate so that your investment may be worth more or less than its original cost. Bond investments are subject to interest rate risk such that when interest rates rise, the prices of the bonds, and thus the value of the bond fund, can decline and the investor can lose principal value. Derivatives may be more volatile and less liquid than traditional securities, and the fund could suffer losses on its derivatives positions. The fund may focus on investments from a single state or sector of the municipal securities markets, which can increase risk because of the factors affecting the state or region, such as economic or fiscal problems. A portion of the fund's returns may be subject to federal, state and local taxes. Please read this fund's prospectus for specific details regarding its investments and risk profile.

DWS Scudder is part of Deutsche Asset Management, which is the marketing name in the US for the asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Investment Management Americas Inc. and DWS Trust Company.

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

All performance shown is historical, assumes reinvestment of all dividend and capital gain distributions, and does not guarantee future results. Investment return and principal value fluctuate with changing market conditions so that, when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Please visit www.dws-scudder.com for the Fund's most recent month-end performance.

The maximum sales charge for Class A shares is 2.75%. For Class B shares, the maximum contingent deferred sales charge (CDSC) is 4% within the first year after purchase, declining to 0% after six years. Class C shares have no adjustment for front-end sales charges but redemptions within one year of purchase may be subject to a CDSC of 1%. Unadjusted returns do not reflect sales charges and would have been lower if they had. Institutional Class shares are not subject to sales charges.

The total annual fund operating expense ratios, gross of any fee waivers or expense reimbursements, as stated in the fee table of the prospectus dated October 1, 2006 are 0.77%, 1.56%, 1.55% and 0.52% for Class A, Class B, Class C and Institutional Class shares, respectively. Please see the Information About Your Fund's Expenses, the Financial Highlights and Notes to the Financial Statements (Note C, Related Parties) sections of this report for gross and net expense related disclosure for the year ended May 31, 2007.

To discourage short-term trading, the Fund imposes a 2% redemption fee on shareholders redeeming shares held less than 15 days, which has the effect of lowering total return.

Returns and rankings for all periods shown for Class A, B and C shares reflect a fee waiver and/or expense reimbursement. Without this waiver/reimbursement, returns and rankings would have been lower.

Performance figures do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns and rankings may differ by share class.

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

Returns shown for Class A, B and C shares for the periods prior to their inception on June 11, 2001 are derived from the historical performance of Class S shares of DWS Intermediate Tax/AMT Free Fund during such periods and have been adjusted to reflect the higher gross total annual operating expenses. Any difference in expenses will affect performance.

Source: Lipper Inc. Rankings are historical and do not guarantee future results. Rankings are based on total return unadjusted for sales charges with distributions reinvested. If sales charges had been included, rankings might have been less favorable. Rankings are for Class A shares; other share classes may vary.

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

Class S shares are generally not available to new investors except under certain circumstances. (Please refer to the Fund's Statement of Additional Information.)

The total annual fund operating expense ratio, gross of any fee waivers or expense reimbursements, as stated in the fee table of the prospectus dated October 1, 2006 is 0.53% for Class S shares. Please see the Information About Your Fund's Expenses, the Financial Highlights and Notes to the Financial Statements (Note C, Related Parties) sections of this report for gross and net expense related disclosure for the year ended May 31, 2007.

To discourage short-term trading, the Fund imposes a 2% redemption fee on shareholders redeeming shares held less than 15 days, which has the effect of lowering total return.

Returns and rankings for all periods shown for Class S shares reflect a fee waiver and/or expense reimbursement. Without this waiver/reimbursement, returns and rankings would have been lower.

Performance figures do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns and rankings may differ by share class.

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

Source: Lipper Inc. Rankings are historical and do not guarantee future results. Rankings are based on total return with distributions reinvested. Rankings are for Class S shares; other share classes may vary.

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 tables are intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. In the most recent six-month period, Class A, B, C and S shares of the Fund limited these expenses; had they not done so, expenses would have been higher. The example in the table is based on an investment of $1,000 invested at the beginning of the six-month period and held for the entire period (December 1, 2006 to May 31, 2007).

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.

Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), which is part of Deutsche Asset Management, is the investment advisor for DWS Intermediate Tax/AMT Free Fund. DIMA and its predecessors have more than 80 years of experience managing mutual funds and DIMA provides a full range of investment advisory services to institutional and retail clients. DIMA is also responsible for selecting brokers and dealers and for negotiating brokerage commissions and dealer charges.

Deutsche Asset Management is a global asset management organization that offers a wide range of investing expertise and resources. This well-resourced global investment platform brings together a wide variety of experience and investment insight across industries, regions, asset classes and investing styles.

DIMA is an indirect, wholly owned subsidiary of Deutsche Bank AG. Deutsche Bank AG is a major global banking institution that is engaged in a wide range of financial services, including investment management, mutual funds, retail, private and commercial banking, investment banking and insurance.

Managing Director of Deutsche Asset Management and Co-Lead Portfolio Manager of the fund.

Philip G. Condon and Ashton P. Goodfield serve as co-lead portfolio managers of DWS Intermediate Tax/AMT Free Fund. Shelly Deitert is also a portfolio manager. In the following interview, the municipal bond team discusses the fund's performance for the period and the market environment for municipal bonds.

Q: Will you describe the general market environment during the annual period ended May 31, 2007?

A: Municipal bonds delivered solid positive results over the full year, with most of the return coming over the first half of the period. The municipal bond market, as measured by the Lehman Brothers Municipal Bond Index, delivered a total return of 4.84% for the 12 months ended May 31, 2007.¹ The broad taxable bond market, as measured by the Lehman Brothers Aggregate Bond Index, delivered a total return of 6.66% for the same period.²

After increasing short-term interest rates by a quarter point at seventeen consecutive meetings, the US Federal Reserve Board (the Fed) held rates steady beginning in August 2006. This left the federal funds rate — the overnight interbank lending rate and a benchmark for interest rates generally — at 5.25% at the end of May 2007. Municipal yields declined over the first part of the fiscal period, only to rise as the year progressed. The period ended with short rates slightly above and long rates somewhat below where they started. Since a bond's yield moves in the opposite direction of its price, this meant that performance of municipal bonds was generally better earlier in the period.

The relationship between supply of and demand for municipal issues can be an important factor in the performance of this market. High demand or low supply can drive municipal bond prices higher, while low demand or high supply can have the reverse effect. Supply nationally was heavy throughout the period. As long-term rates fell, supply accelerated, and issuance over the first five months of 2007 was 30 percent above last year's pace. On the demand side, the municipal market has continued to be influenced by institutional investors using nontraditional strategies to benefit in a leveraged fashion from disparities between the tax-free and taxable markets. In addition, there has been strong interest from foreign buyers due to attractive features of the municipal market such as a relatively steep yield curve and low volatility compared to other available markets. Positive flows into tax-free mutual funds have supported the market as well.

The municipal bond yield curve flattened during the fiscal year.³ The two-year bond yield increased 9 basis points from 3.59% to 3.68%, while the 30-year yield fell 28 basis points to 4.25% from 4.53%, resulting in a total flattening of 37 basis points. (See the graph below for municipal bond yield changes from the beginning to the end of the period.)

This chart is for illustrative purposes only and is not intended to represent the yield of any DWS fund.

Q: How did DWS Intermediate Tax/AMT Free Fund perform for the 12-month period ended May 31, 2007?

A: DWS Intermediate Tax/AMT Free Fund's Class A shares posted a return of 3.41% over the period. (Returns are unadjusted for sales charges. If sales charges had been included, returns would have been lower. Past performance is no guarantee of future results. Please see pages 4 through 10 for the performance of other share classes and more complete performance information.) The fund slightly lagged its average peer in the Lipper Intermediate Municipal Debt Funds category, which returned 3.57%.⁴ The unmanaged Lehman Brothers Municipal Bond Index returned 4.84%, while the Lehman Brothers 7-year Municipal Bond Index returned 4.10%.

Q: How was the fund positioned, and how did this positioning contribute to its performance for the 12-month period?

A: We do not focus on trying to predict the overall level of interest rates, and we attempt to keep the fund's duration and overall interest rate sensitivity similar to that of its peers and its benchmark.⁵ That said, we will shift the fund's relative exposure to shorter and longer maturities to reflect our view of where the best return opportunities lie. In this vein, the flattening of the yield curve that has occurred has significantly reduced the income advantage provided by longer-term issues. Because of this, our exposure to issues in the 15- to 20-year range has generally been light. The fund's performance was constrained to a degree by our underweighting of longer-maturity intermediate-term issues, as yield declines and corresponding price increases for the period were greater on the longer end of the curve.

Currently the fund is overweight in the six-to-eight year maturity area of the curve, as we seek to maintain a neutral stance with respect to duration and interest rate sensitivity.⁶ If the yield curve reverts to a more normal shape, we believe the intermediate segment of the market may provide stronger relative performance.

Performance was constrained to a degree by the fund's requirement to not invest in issues that are subject to the alternative minimum tax. This restricted exposure to lower-quality sectors such as industrial development revenue bonds, which outperformed over the period. While lower-quality bonds were supported by a favorable credit environment for much of the fiscal year, spreads began to show signs of widening as the period progressed, and the fund is well positioned should this trend continue.

While we have maintained a conservative posture with respect to credit quality, we have at the same time employed intensive research in order to identify opportunities to pick up yield as they arise in the marketplace.⁷ In this vein, we have purchased prepaid utility contract bonds and AA-rated hospital bonds, both of which we believed were priced favorably and which have contributed positively to the fund's total return. The fund's exposure to New York City and to tobacco-related issues also helped performance. Finally, performance benefited from holdings of zero coupon bonds which experienced spread tightening.⁸

At the end of the period, the 10-year municipal bond was yielding 80% of the comparable maturity Treasury bond, reflecting in our view a reasonably attractive valuation. We will continue to take a prudent approach to investing in the municipal market, while seeking to maintain an attractive dividend and minimize capital gains distributions.

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. Past performance is no guarantee of future results.

The quality ratings represent the lower of Moody's Investors Services, Inc. ("Moody's") or Standard & Poor's Corporation ("S&P") credit ratings. The ratings of Moody's and S&P represent their opinions as to the quality of the securities they rate. Ratings are relative and subjective and are not absolute standards of quality. The Fund's credit quality does not remove market risk.

For more complete details about the Fund's investment portfolio, see page 21. A quarterly Fact Sheet is available upon request. Information concerning portfolio holdings of the Fund as of month end will be posted to www.dws-scudder.com on or after the last day of the following month. Please see the Account Management Resources section for contact information.

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, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330.

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.

ETM: Bonds bearing the description ETM (escrow to maturity) are collateralized usually by US Treasury securities which are held in escrow and used to pay principal and interest on bonds so designated.

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

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

The Fund offers multiple classes of shares which provide investors with different purchase options. Class A shares are offered to investors subject to an initial sales charge. Class B shares are offered to investors without an initial sales charge but are subject to higher ongoing expenses than Class A shares and a contingent deferred sales charge payable upon certain redemptions. Class B shares automatically convert to Class A shares six years after issuance. Class C shares are offered to investors without an initial sales charge but are subject to higher ongoing expenses than Class A shares and a contingent deferred sales charge payable upon certain redemptions within one year of purchase. Class C shares do not convert into another class. Institutional Class shares are offered to a limited group of investors, are not subject to initial or contingent deferred sales charges and have lower ongoing expenses than other classes. Class S shares are not subject to initial or contingent deferred sales charges and are generally not available to new investors except under certain circumstances. Shares of Class AARP were designed for members of AARP (please see Note C, under the caption Other Related Parties). Class AARP shares were converted into Class S shares on July 14, 2006, and Investment Class shares were converted into Class S shares on October 20, 2006.

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

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

Security Valuation. Investments are stated at value determined as of the close of regular trading on the New York Stock Exchange on each day the exchange is open for trading. Debt securities are valued by independent pricing services approved by the Trustees of the Fund, whose valuations are intended to reflect the mean between the bid and asked prices. If the pricing services are unable to provide valuations, the securities are valued at the mean of the most recent bid and asked quotations or evaluated prices obtained from a broker-dealer. Such services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as broker quotes.

Securities and other assets for which market quotations are not readily available or for which the above valuation procedures are deemed not to reflect fair value are valued in a manner that is intended to reflect their fair value, as determined in accordance with procedures approved by the Trustees.

In September 2006, the Financial Accounting Standards Board ("FASB") released Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" ("FAS 157"). FAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. FAS 157 is effective for fiscal years beginning after November 15, 2007. As of May 31, 2007, management does not believe the adoption of FAS 157 will impact the amounts reported in the financial statements, however, additional disclosures will be required about the inputs used to develop the measurements of fair value and the effect of certain of the measurements reported in the statement of operations for a fiscal period.

When-Issued/Delayed Delivery Securities. The Fund may purchase securities with delivery or payment to occur at a later date beyond the normal settlement period. At the time the Fund enters into a commitment to purchase a security, the transaction is recorded and the value of the security is reflected in the net asset value. The price of such security and the date when the security will be delivered and paid for are fixed at the time the transaction is negotiated. The value of the security may vary with market fluctuations. No interest accrues to the Fund until payment takes place. At the time the Fund enters into this type of transaction it is required to segregate cash or other liquid assets at least equal to the amount of the commitment.

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

Federal Income Taxes. The Fund's policy is to comply with the requirements of the Internal Revenue Code, as amended, which are applicable to regulated investment companies, and to distribute all of its taxable and tax-exempt income to its shareholders. Accordingly, the Fund paid no federal income taxes and no federal income tax provision was required.

During the year ended May 31, 2007, the Fund utilized approximately $306,500 and lost, through expiration, approximately $3,252,500 of its prior year capital loss carryforward, which was subject to limitations under Sections 382-384 of the Internal Revenue Code.

In July 2006, FASB issued Interpretation No. 48 ("FIN 48"), "Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109" (the "Interpretation"). The Interpretation establishes for the Fund a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns (including whether the Fund is taxable in certain jurisdictions), and requires certain expanded tax disclosures. The Interpretation is effective for fiscal years beginning after December 15, 2006. On December 22, 2006, the SEC indicated that they would not object if a Fund implements FIN 48 in the first required financial statement reporting period for its fiscal year beginning after December 15, 2006. Management has begun to evaluate the application of the Interpretation to the Fund and is not in a position at this time to estimate the significance of its impact, if any, on the Fund's financial statements.

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

The 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 investments in futures contracts, securities sold at a loss and accretion of market discount on debt securities. As a result, net investment income (loss) and net realized gain (loss) on investment transactions for a reporting period may differ significantly from distributions during such period. Accordingly, the Fund may periodically make reclassifications among certain of its capital accounts without impacting the net asset value of the Fund.

At May 31, 2007, the Fund's components of distributable earnings (accumulated losses) on a tax basis were as follows:

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

Redemption Fees. The Fund imposes a redemption fee of 2% of the total redemption amount on the Fund shares redeemed or exchanged within 15 days of buying them, either by purchase or exchange. This fee is assessed and retained by the Fund for the benefit of the remaining shareholders. The redemption fee is accounted for as an addition to paid-in capital.

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

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

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

During the year ended May 31, 2007, purchases and sales of investment securities (excluding short-term investments) aggregated $301,361,179 and $360,608,984, respectively.

Management Agreement. Under the Investment Management Agreement with Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), an indirect, wholly owned subsidiary of Deutsche Bank AG, the Advisor directs the investments of the Fund in accordance with its investment objectives, policies and restrictions. The Advisor determines the securities, instruments and other contracts relating to investments to be purchased, sold or entered into by the Fund. The Investment Management Agreement was amended and restated effective June 1, 2006.

The management fee payable under the Amended and Restated Investment Management Agreement is at an annual rate of 0.315% of the Fund's average daily net assets, computed and accrued daily and payable monthly.

Effective June 1, 2006 through September 30, 2007, the Advisor has contractually agreed to waive all or a portion of its investment management fee and reimburse or pay certain operating expenses of the Fund (excluding certain expenses such as extraordinary expenses, taxes, brokerage, interest, proxy and organizational and offering expenses) to the extent necessary to maintain the operating expenses of each class as follows:

Administration Fee. Effective June 1, 2006, the Fund entered into an Administrative Services Agreement with DIMA, pursuant to which the Advisor provides most administrative services to the Fund. For all services provided under the Administrative Services Agreement, the Fund pays the Advisor an annual fee ("Administration Fee") of 0.10% of the Fund's average daily net assets, computed and accrued daily and payable monthly. For the year ended May 31, 2007, the Advisor received an Administration Fee of $668,436, of which $53,924 is unpaid.

Service Provider Fees. DWS Scudder Investments Service Company ("DWS-SISC"), an affiliate of the Advisor, is the transfer agent, dividend-paying agent and shareholder service agent for the Fund. Prior to April 1, 2007, DWS Scudder Service Corporation ("DWS-SSC"), an affiliate of the Advisor, was the Fund's transfer agent, dividend-paying agent and shareholder service agent for Class S shares of the Fund. Effective April 1, 2007, DWS-SSC merged with DWS-SISC. The Board of the Fund approved a new transfer agency agreement between the Fund and DWS-SISC. The new transfer agency agreement is identical in substance to the previous transfer agency agreement for the Fund, except for the named transfer agent. Pursuant to a sub-transfer agency agreement among DWS-SISC, DWS-SSC (through March 31, 2007) and DST Systems, Inc. ("DST"), DWS-SISC and DWS-SSC have delegated certain transfer agent and dividend-paying agent functions to DST. DWS-SISC and DWS-SSC compensate DST out of the shareholder servicing fee they receive from the Fund. For the year ended May 31, 2007, the amounts charged to the Fund by DWS-SISC and DWS-SSC (through March 31, 2007) were as follows:

Distribution Service Agreement. Under the Distribution Service Agreement, in accordance with Rule 12b-1 under the 1940 Act, DWS Scudder Distributors, Inc. ("DWS-SDI"), an affiliate of the Advisor, receives a fee ("Distribution Fee") of 0.75% of average daily net assets of Class B and C shares. Pursuant to the agreement, DWS-SDI enters into related selling group agreements with various firms at various rates for sales of Class B and C shares. For the year ended May 31, 2007 the Distribution Fee was as follows:

In addition DWS-SDI provides information and administrative services for a fee ("Service Fee") to Class A, B, C and Investment Class (through October 20, 2006) shareholders at an annual rate of up to 0.25% of average daily net assets for each such class. DWS-SDI in turn has various agreements with financial services firms that provide these services and pays these fees based upon the assets of shareholder accounts the firms service. For the year ended May 31, 2007, the Service Fee was as follows:

Underwriting Agreement and Contingent Deferred Sales Charge. DWS-SDI is the principal underwriter for the Fund. Underwriting commissions paid in connection with the distribution of Class A shares for the year ended May 31, 2007 aggregated $1,777.

In addition, DWS-SDI receives any contingent deferred sales charge ("CDSC") from Class B share redemptions occurring within six years of purchase and Class C share redemptions occurring within one year of purchase. There is no such charge upon redemption of any share appreciation or reinvested dividends. The CDSC is based on declining rates ranging from 4% to 1% for Class B and 1% for Class C, of the value of the shares redeemed. For the year ended May 31, 2007, the CDSC for Class B and C shares aggregated $24,668 and $575, respectively. A deferred sales charge of up to 0.85% is assessed on certain redemptions of Class A shares.

Typesetting and Filing Service Fees. Under an agreement with DIMA, DIMA is compensated for providing typesetting and certain regulatory filing services to the Fund. For the year ended May 31, 2007, the amount charged to the Fund by DIMA included in the Statement of Operations under "reports to shareholders and shareholder meeting" aggregated $44,845, of which $14,975 is unpaid.

Trustees' Fees and Expenses. As compensation for his or her services, each Independent Trustee receives an aggregated 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 Chairperson of the Board and the Chairperson of each committee of the Board receive additional compensation for their services. Payment of such fees and expenses is allocated among all such funds described above in direct proportion to their relative net assets.

Other Related Parties. Through December 31, 2005, AARP through its affiliate, AARP Services, Inc., monitored and approved the AARP Investment Program from DWS Scudder, but did not act as an investment advisor or recommend specific mutual funds. The contractual relationship between DWS Scudder and AARP ended on December 31, 2005. As a result, the funds are no longer part of the AARP Investment Program and the AARP name and logo were phased out in 2006.

The Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Fund's custodian expenses. During the year ended May 31, 2007, the Fund's custodian fees were reduced by $428 for custody credits earned.

The Fund and other affiliated funds (the "Participants") share in a $750 million revolving credit facility administered by JPMorgan Chase Bank N.A. 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 0.35 percent. The Fund may borrow up to a maximum of 33 percent of its net assets under the agreement.

Regulatory Settlements. On December 21, 2006, Deutsche Asset Management ("DeAM") settled proceedings with the Securities and Exchange Commission ("SEC") and the New York Attorney General on behalf of Deutsche Asset Management, Inc. ("DAMI") and Deutsche Investment Management Americas Inc. ("DIMA"), the investment advisors to many of the DWS Scudder funds, regarding allegations of improper trading of fund shares at DeAM and at the legacy Scudder and Kemper organizations prior to their acquisition by DeAM in April 2002. These regulators alleged that although the prospectuses for certain funds in the regulators' view indicated that the funds did not permit market timing, DAMI and DIMA breached their fiduciary duty to those funds in that their efforts to limit trading activity in the funds were not effective at certain times. The regulators also alleged that DAMI and DIMA breached their fiduciary duty to certain funds by entering into certain market timing arrangements with investors. These trading arrangements originated in businesses that existed prior to the currently constituted DeAM organization, which came together as a result of various mergers of the legacy Scudder, Kemper and Deutsche fund groups, and all of the arrangements were terminated prior to the start of the regulatory investigations that began in the summer of 2003. No current DeAM employee approved these trading arrangements. Under the terms of the settlements, DAMI and DIMA neither admitted nor denied any wrongdoing.

The terms of the SEC settlement, which identified improper trading in the legacy Deutsche and Kemper mutual funds only, provide for payment of disgorgement in the amount of $17.2 million. The terms of the settlement with the New York Attorney General provide for payment of disgorgement in the amount of $102.3 million, which is inclusive of the amount payable under the SEC settlement, plus a civil penalty in the amount of $20 million. The total amount payable by DeAM, approximately $122.3 million, would be distributed to funds in accordance with a distribution plan to be developed by a distribution consultant. The funds' investment advisors do not believe these amounts will have a material adverse financial impact on them or materially affect their ability to perform under their investment management agreements with the DWS funds. The above-described amounts are not material to Deutsche Bank, and have already been reserved.

Among the terms of the settled orders, DeAM is subject to certain undertakings regarding the conduct of its business in the future, including: formation of a Code of Ethics Oversight Committee to oversee all matters relating to issues arising under the advisors' Code of Ethics; establishment of an Internal Compliance Controls Committee having overall compliance oversight responsibility of the advisors; engagement of an Independent Compliance Consultant to conduct a comprehensive review of the advisors' supervisory compliance and other policies and procedures designed to prevent and detect breaches of fiduciary duty, breaches of the Code of Ethics and federal securities law violations by the advisors and their employees; and commencing in 2008, the advisors shall undergo a compliance review by an independent third party.

In addition, DeAM is subject to certain further undertakings relating to the governance of the mutual funds, including that: at least 75% of the members of the Boards of Trustees/Directors overseeing the DWS Funds continue to be independent of DeAM; the Chairmen of the DWS Funds' Boards of Trustees/Directors continue to be independent of DeAM; DeAM maintain existing management fee reductions for certain funds for a period of five years and not increase management fees for certain funds during this period; the funds retain a senior officer (or independent consultants) responsible for assisting in the review of fee arrangements and monitoring compliance by the funds and the investment advisors with securities laws, fiduciary duties, codes of ethics and other compliance policies, the expense of which shall be borne by DeAM; and periodic account statements, fund prospectuses and the mutual funds' web site contain additional disclosure and/or tools that assist investors in understanding the fees and costs associated with an investment in the funds and the impact of fees and expenses on fund returns.

DeAM has also settled proceedings with the Illinois Secretary of State regarding market timing matters. The terms of the Illinois settlement provide for investor education contributions totaling approximately $4 million and a payment in the amount of $2 million to the Securities Audit and Enforcement Fund.

On September 28, 2006, the SEC and the National Association of Securities Dealers ("NASD") announced final agreements in which Deutsche Investment Management Americas Inc. ("DIMA"), Deutsche Asset Management, Inc. ("DAMI") and Scudder Distributors, Inc. ("SDI") (now known as DWS Scudder Distributors, Inc.) settled administrative proceedings regarding disclosure of brokerage allocation practices in connection with sales of the Scudder Funds' (now known as the DWS Scudder Funds) shares during 2001-2003. The agreements with the SEC and NASD are reflected in orders which state, among other things, that DIMA and DAMI failed to disclose potential conflicts of interest to the fund Boards and to shareholders relating to SDI's use of certain funds' brokerage commissions to reduce revenue sharing costs to broker-dealer firms with whom it had arrangements to market and distribute Scudder Fund shares. These directed brokerage practices were discontinued in October 2003.

Under the terms of the settlements, in which DIMA, DAMI and SDI neither admitted nor denied any of the regulators' findings, DIMA, DAMI and SDI agreed to pay disgorgement, prejudgment interest and civil penalties in the total amount of $19.3 million. The portion of the settlements distributed to the funds was approximately $17.8 million and was paid to the funds as prescribed by the settlement orders based upon the amount of brokerage commissions from each fund used to satisfy revenue sharing agreements with broker-dealers who sold fund shares. Based on the prescribed settlement order, the Fund was not entitled to a portion of the settlement.

As part of the settlements, DIMA, DAMI and SDI also agreed to implement certain measures and undertakings relating to revenue sharing payments including making additional disclosures in the fund Prospectuses or Statements of Additional Information, adopting or modifying relevant policies and procedures and providing regular reporting to the fund Boards.

Private Litigation Matters. The matters alleged in the regulatory settlements described above also serve as the general basis of a number of private class action lawsuits involving the DWS funds. These lawsuits name as defendants various persons, including certain DWS funds, the funds' investment advisors and their affiliates, and certain individuals, including in some cases fund Trustees/Directors, officers, and other parties. Each DWS fund's investment advisor has agreed to indemnify the applicable DWS funds in connection with these lawsuits, or other lawsuits or regulatory actions that may be filed making similar allegations.

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 DWS fund is remote and such actions are not likely to materially affect their ability to perform under their investment management agreements with the DWS funds.

To the Trustees of DWS Tax-Free Trust and the Shareholders of DWS Intermediate Tax/AMT Free Fund:

In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of DWS Intermediate Tax/AMT Free Fund (the "Fund") at May 31, 2007, and the results of its operations, the changes in its net assets and the financial highlights for each of the periods indicated therein, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at May 31, 2007 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

The Fund paid distributions of $0.01 per share from net long-term capital gains during its year ended May 31, 2007, of which 100% represents 15% rate gains.

Pursuant to Section 852 of the Internal Revenue Code, the Fund designates $87,695 as capital gain dividends for its year ended May 31, 2007, of which 100% represents 15% rate gains.

Of the dividends paid from net investment income for the taxable year ended May 31, 2007, 100% are designated as exempt interest dividends for federal income tax purposes.

Please consult a tax advisor if you have questions about federal or state income tax laws, or on how to prepare your tax returns. If you have specific questions about your account, please call (800) 621-1048.

The following table presents certain information regarding the Board Members and Officers of the Trust as of May 31, 2007. Each Board Member's year of birth is set forth in parentheses after his or her name. Unless otherwise noted, (i) each Board Member has engaged in the principal occupation(s) noted in the table for at least the most recent five years, although not necessarily in the same capacity; and (ii) the address of each Independent Board Member is c/o Dawn-Marie Driscoll, PO Box 100176, Cape Coral, FL 33904. The term of office for each Board Member is until the election and qualification of a successor, or until such Board Member sooner dies, resigns, is removed or as otherwise provided in the governing documents of the fund. Because the fund does not hold an annual meeting of shareholders, each Board Member will hold office for an indeterminate period. The Board Members may also serve in similar capacities with other funds in the fund complex.

The fund's Statement of Additional Information ("SAI") includes additional information about the Board Members. The SAI is available, without charge, upon request. If you would like to request a copy of the SAI, you may do so by calling the following toll-free number: (800) 621-1048.

ITEM 2.	CODE OF ETHICS

	As of the end of the period, May 31, 2007, DWS Intermediate Tax/AMT Free Fund has a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its Principal Executive Officer and Principal Financial Officer. There have been no amendments to, or waivers from, a provision of the code of ethics during the period covered by this report that would require disclosure under Item 2. A copy of the code of ethics is filed as an exhibit to this Form N-CSR.

ITEM 3.	AUDIT COMMITTEE FINANCIAL EXPERT

	The Funds’ audit committee is comprised solely of trustees who are “independent” (as such term has been defined by the Securities and Exchange Commission (“SEC”) in regulations implementing Section 407 of the Sarbanes-Oxley Act (the “Regulations”)). The Funds’ Board of Trustees has determined that there are several “audit committee financial experts” serving on the Funds’ audit committee. The Board has determined that Keith R Fox, the chair of the Funds’ audit committee, qualifies as an “audit committee financial expert” (as such term has been defined by the Regulations) based on its review of Mr. Fox’s pertinent experience and education. The SEC has stated that the designation or identification of a person as an audit committee financial expert pursuant to this Item 3 of Form N-CSR does not impose on such person any duties, obligations or liability that are greater than the duties, obligations and liability imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification.

ITEM 4.	PRINCIPAL ACCOUNTANT FEES AND SERVICES

DWS INTERMEDIATE TAX/AMT FREE FUND

FORM N-CSR DISCLOSURE RE: AUDIT FEES

The following table shows the amount of fees that PricewaterhouseCoopers, LLP (“PWC”), the Fund’s independent registered public accounting firm, billed to the Fund during the Fund’s last two fiscal years. The Audit Committee approved in advance all audit services and non-audit services that PWC provided to the Fund.

The Audit Committee has delegated certain pre-approval responsibilities to its Chairman (or, in his absence, any other member of the Audit Committee).

Services that the Fund’s Independent Registered Public Accounting Firm Billed to the Fund

Fiscal Year Ended May 31,	Audit Fees Billed to Fund	Audit-Related Fees Billed to Fund	Tax Fees Billed to Fund	All Other Fees Billed to Fund
2007	$73,500	$128	$0	$0
2006	$93,800	$0	$0	$0

The above “Audit- Related Fees” were billed for agreed upon procedures performed.

Services that the Fund’s Independent Registered Public Accounting Firm Billed to the Adviser and Affiliated Fund Service Providers

The following table shows the amount of fees billed by PWC to Deutsche Investment Management Americas, Inc. (“DeIM” or the “Adviser”), and any entity controlling, controlled by or under common control with DeIM (“Control Affiliate”) that provides ongoing services to the Fund (“Affiliated Fund Service Provider”), for engagements directly related to the Fund’s operations and financial reporting, during the Fund’s last two fiscal years.

Fiscal Year May 31,	Audit-Related Fees Billedto Adviser and Affiliated Fund Service Providers	Tax Fees Billed to Adviser and Affiliated Fund Service Providers	All Other Fees Billed to Adviser and Affiliated Fund Service Providers
2007	$192,500	$11,930	$0
2006	$45,200	$197,605	$0

The “Audit-Related Fees” were billed for services in connection with the agreed-upon procedures related to fund mergers and additional costs related to annual audits and the above “Tax Fees” were billed in connection with tax consultation and agreed-upon procedures.

Non-Audit Services

The following table shows the amount of fees that PWC billed during the Fund’s last two fiscal years for non-audit services. The Audit Committee pre-approved all non-audit services that PWC provided to the Adviser and any Affiliated Fund Service Provider that related directly to the Fund’s operations and financial reporting. The Audit Committee requested and received information from PWC about any non-audit services that PWC rendered during the Fund’s last fiscal year to the Adviser and any Affiliated Fund Service Provider. The Committee considered this information in evaluating PWC’s independence.

Fiscal Year
Ended
May 31,

Total
Non-Audit Fees Billed to Fund

(A)

Total Non-Audit Fees billed to Adviser and Affiliated Fund Service Providers (engagements related directly to the operations and financial reporting of the Fund)

(B)

Total Non-Audit Fees billed to Adviser and Affiliated Fund Service Providers (all other engagements)

(C)

Total of (A), (B)

and (C)

2007

$11,930

2006

$197,605

$15,000

$212,605

All other engagement fees were billed for services in connection with industry updates and risk management initiatives for DeIM and other related entities that provide support for the operations of the fund.


ITEM 5.	AUDIT COMMITTEE OF LISTED REGISTRANTS

	Not Applicable

ITEM 6.	SCHEDULE OF INVESTMENTS

	Not Applicable

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

	Not applicable.

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

	Not applicable.

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

	Not Applicable.

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

	The Committee on Independent Trustees/Directors selects and nominates Independent Trustees/Directors. Fund shareholders may submit nominees that will be considered by the committee when a Board vacancy occurs. Submissions should be mailed to: c/o Dawn-Marie Driscoll, PO Box 100176, Cape Coral, FL 33910.

ITEM 11.	CONTROLS AND PROCEDURES

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

	(b) There have been no changes in the registrant’s internal control over financial reporting that occurred during the 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 12.	EXHIBITS

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

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

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

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:

DWS Intermediate Tax/AMT Free Fund, a series of DWS Tax Free Trust

By:	/s/Michael G. Clark

Michael G. Clark

President

Date:

July 30, 2007

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:

DWS Intermediate Tax/AMT Free Fund, a series of DWS Tax Free Trust

By:	/s/Michael G. Clark

Michael G. Clark

President

Date:

July 30, 2007

By:	/s/Paul Schubert

Paul Schubert

Chief Financial Officer and Treasurer

Date:

July 30, 2007

Average Annual Total Returns (Unadjusted for Sales Charge) as of 5/31/07
DWS Intermediate Tax/AMT Free Fund	1-Year	3-Year	5-Year	10-Year
Class A	3.41%	3.17%	3.41%	4.19%
Class B	2.62%	2.42%	2.62%	3.38%
Class C	2.62%	2.42%	2.62%	3.39%
Lehman Brothers Municipal Bond Index⁺	4.84%	4.87%	4.94%	5.60%
Lehman Brothers 7-Year Municipal Bond Index⁺⁺	4.10%	3.64%	4.19%	5.11%

Average Annual Total Returns as of 5/31/07
DWS Intermediate Tax/AMT Free Fund	1-Year	Life of Class^*
Institutional Class	3.61%	2.59%
Lehman Brothers Municipal Bond Index⁺	4.84%	3.73%
Lehman Brothers 7-Year Municipal Bond Index⁺⁺	4.10%	2.61%

Net Asset Value and Distribution Information
	Class A	Class B	Class C	Institutional Class
Net Asset Value: 5/31/07	$ 11.00	$ 11.01	$ 11.00	$ 11.00
5/31/06	$ 11.06	$ 11.07	$ 11.06	$ 11.07
Distribution Information: Twelve Months as of 5/31/07: Income Dividends	$ .43	$ .34	$ .34	$ .46
Capital Gains Distributions	$ .01	$ .01	$ .01	$ .01
May Income Dividend	$ .0352	$ .0279	$ .0280	$ .0380
SEC 30-day Yield^‡^‡ as of 5/31/07	3.42%	2.76%	2.76%	3.83%
Tax Equivalent Yield^‡^‡ as of 5/31/07	5.26%	4.25%	4.25%	5.89%
Current Annualized Distribution Rate^‡^‡ as of 5/31/07	3.77%	2.98%	3.00%	4.07%

Class A Lipper Rankings — Intermediate Municipal Debt Funds Category as of 5/31/07
Period	Rank		Number of Funds Tracked	Percentile Ranking (%)
1-Year	106	of	158	67
3-Year	73	of	142	52
5-Year	67	of	113	59

Comparative Results (Adjusted for Maximum Sales Charge) as of 5/31/07
DWS Intermediate Tax/AMT Free Fund		1-Year	3-Year	5-Year	10-Year
Class A	Growth of $10,000	$10,056	$10,680	$11,499	$14,660
Class A	Average annual total return	.56%	2.22%	2.83%	3.90%
Class B	Growth of $10,000	$9,964	$10,547	$11,284	$13,941
Class B	Average annual total return	-.36%	1.79%	2.45%	3.38%
Class C	Growth of $10,000	$10,262	$10,744	$11,380	$13,959
Class C	Average annual total return	2.62%	2.42%	2.62%	3.39%
Lehman Brothers Municipal Bond Index⁺	Growth of $10,000	$10,484	$11,534	$12,724	$17,251
Lehman Brothers Municipal Bond Index⁺	Average annual total return	4.84%	4.87%	4.94%	5.60%
Lehman Brothers 7-Year Municipal Bond Index⁺⁺	Growth of $10,000	$10,410	$11,132	$12,279	$16,465
Lehman Brothers 7-Year Municipal Bond Index⁺⁺	Average annual total return	4.10%	3.64%	4.19%	5.11%

Comparative Results as of 5/31/07
DWS Intermediate Tax/AMT Free Fund		1-Year	Life of Class^*
Institutional Class	Growth of $1,000,000	$1,036,100	$1,064,700
Institutional Class	Average annual total return	3.61%	2.59%
Lehman Brothers Municipal Bond Index⁺	Growth of $1,000,000	$1,048,400	$1,092,400
Lehman Brothers Municipal Bond Index⁺	Average annual total return	4.84%	3.73%
Lehman Brothers 7-Year Municipal Bond Index⁺⁺	Growth of $1,000,000	$1,041,000	$1,064,300
Lehman Brothers 7-Year Municipal Bond Index⁺⁺	Average annual total return	4.10%	2.61%

Net Asset Value and Distribution Information
	Class S
Net Asset Value: 5/31/07	$ 11.00
5/31/06	$ 11.06
Distribution Information: Twelve Months as of 5/31/07: Income Dividends	$ .45
Capital Gains Distributions	$ .01
May Income Dividend	$ .0373
SEC 30-day Yield^‡^‡ as of 5/31/07	3.76%
Tax Equivalent Yield^‡^‡ as of 5/31/07	5.78%
Current Annualized Distribution Rate^‡^‡ as of 5/31/07	3.99%

Class S Lipper Rankings — Intermediate Municipal Debt Funds Category as of 5/31/07
Period	Rank		Number of Funds Tracked	Percentile Ranking (%)
1-Year	78	of	158	50
3-Year	51	of	142	35
5-Year	50	of	113	43
10-Year	29	of	75	37

Expenses and Value of a $1,000 Investment for the six months ended May 31, 2007
Actual Fund Return	Class A	Class B	Class C	Class S	Institutional Class
Beginning Account Value 12/1/06	$ 1,000.00	$ 1,000.00	$ 1,000.00	$ 1,000.00	$ 1,000.00
Ending Account Value 5/31/07	$ 1,000.20	$ 996.40	$ 997.30	$ 1,001.40	$ 1,001.70
Expenses Paid per $1,000*	$ 3.99	$ 7.67	$ 7.67	$ 2.74	$ 2.40
Hypothetical 5% Fund Return	Class A	Class B	Class C	Class S	Institutional Class
Beginning Account Value 12/1/06	$ 1,000.00	$ 1,000.00	$ 1,000.00	$ 1,000.00	$ 1,000.00
Ending Account Value 5/31/07	$ 1,020.94	$ 1,017.25	$ 1,017.25	$ 1,022.19	$ 1,022.54
Expenses Paid per $1,000*	$ 4.03	$ 7.75	$ 7.75	$ 2.77	$ 2.42

Annualized Expense Ratios	Class A	Class B	Class C	Class S	Institutional Class
DWS Intermediate Tax/AMT Free Fund	.80%	1.54%	1.54%	.55%	.48%

Asset Allocation	5/31/07	5/31/06

Revenue Bonds	48%	46%
General Obligation Bonds	26%	23%
US Government Secured	20%	25%
Lease Obligations	6%	6%
	100%	100%

Quality	5/31/07	5/31/06

AAA	76%	74%
AA	11%	9%
A	10%	13%
BBB	1%	2%
BB	—	1%
Not Rated	2%	1%
	100%	100%

Effective Maturity	5/31/07	5/31/06

Less than 1 year	8%	6%
1-4.99 years	36%	33%
5-9.99 years	53%	59%
10-15 years	3%	2%
	100%	100%

Top Five State Allocations (% of Investment Portfolio)	5/31/07	5/31/06

California	16%	15%
Texas	14%	13%
New York	9%	11%
Illinois	7%	7%
Pennsylvania	4%	5%

	% of Net Assets	Value ($)

Total Investment Portfolio (Cost $615,834,937)⁺	99.9	632,587,471
Other Assets and Liabilities, Net	0.1	514,159
Net Assets	100.0	633,101,630

	Principal Amount ($)	Value ($)

Municipal Bonds and Notes 99.9%
Alabama 0.5%
Birmingham, AL, Special Care Facilities Financing Authority Revenue, Methodist Home for Aging, 5.0%, 3/1/2014, Colonial Bank (a)	2,920,000	2,955,887
Lauderdale & Florence Counties, AL, Public Hospital Board Revenue, ETM, 7.0%, 7/1/2007	40,000	40,101
		2,995,988
Alaska 0.9%
Anchorage, AK, General Obligation:
Series B, 5.0%, 9/1/2018 (b)	2,000,000	2,160,420
Series A, 5.5%, 6/1/2017 (b)	3,035,000	3,257,223
		5,417,643
Arizona 2.2%
Arizona, Health Facilities Authority Revenue, Banner Health System:
Series A, 5.0%, 1/1/2020	3,000,000	3,131,040
Series A, 5.0%, 1/1/2023	3,500,000	3,616,970
Arizona, Health Facilities, Authority Hospital System Revenue, ETM, 6.25%, 9/1/2011 (b)	180,000	184,988
Arizona, School District General Obligation, School Facilities Board Revenue, Series B, 5.25%, 9/1/2017 (b)	2,500,000	2,684,725
Maricopa County, AZ, Industrial Development Authority, Hospital Facility Revenue, Samaritan Health Services, Series B, ETM, 6.0%, 12/1/2019 (b)	3,590,000	4,058,674
		13,676,397
Arkansas 0.0%
Drew County, AR, Public Facilities Board, Single Family Mortgage, Series A-2, 7.9%, 8/1/2011	188	188
Jefferson County, AR, Health Care Facilities, 1978 Conventional Series, ETM, 7.4%, 12/1/2010 (b)	95,000	105,021
Stuttgart, AR, Public Facilities Board, Single Family Mortgage, Series B, 7.75%, 9/1/2011	14,429	14,650
		119,859
California 15.8%
California, Department of Water Resources Power Supply Revenue, Series A, 5.5%, 5/1/2015 (b)	10,000,000	10,832,500
California, Electric Revenue, Department of Water Resources and Power Supply, Series A, 5.875%, 5/1/2016	7,000,000	7,712,040
California, General Obligation, Economic Recovery, Series A, 5.25%, 7/1/2014 (b)	10,000,000	10,863,600
California, Health Facilities Financing Authority Revenue, Scripps Health, Series A, 3.71%*, 10/1/2023, Bank One NA (a)	1,010,000	1,010,000
California, Infrastructure & Economic Development Bank Revenue, Clean Water, State Revolving Fund, 5.0%, 10/1/2017	6,735,000	7,075,724
California, Infrastructure & Economic Development Bank Revenue, Workers Compensation Relief Fund, Series A, 5.0%, 10/1/2015 (b)	7,000,000	7,436,100
California, State General Obligation:
5.0%, 10/1/2016	3,000,000	3,138,540
5.25%, 2/1/2018	5,000,000	5,336,600
6.0%, 4/1/2018	1,700,000	1,968,039
7.2%, 5/1/2008	50,000	51,545
California, Water & Sewer Revenue, Series Y, 5.25%, 12/1/2016 (b)	3,000,000	3,219,780
Emeryville, CA, Redevelopment Agency, Residential Mortgage, ETM, 7.5%, 9/1/2011	90,000	95,849
Foothill, CA, Transportation/Tolls Revenue, Eastern Corridor Agency, Series A, ETM, 7.05%, 1/1/2009	7,275,000	7,656,792

Insurance Coverage	As a % of Total Investment Portfolio
Ambac Financial Group	13.2
American Capital Access (ACA)	1.1
Financial Guaranty Insurance Company	11.7
Financial Security Assurance Inc.	12.4
MBIA Corp.	14.0
Radian Asset Assurance	1.2

Class A Years Ended May 31,	2007	2006	2005	2004	2003
Selected Per Share Data
Net asset value, beginning of period	$ 11.06	$ 11.40	$ 11.26	$ 11.81	$ 11.34
Income from investment operations: Net investment income	.43	.42	.43	.43	.45
Net realized and unrealized gain (loss) on investment transactions	(.05)	(.32)	.15	(.55)	.52
Total from investment operations	.38	.10	.58	(.12)	.97
Less distributions from: Net investment income	(.43)	(.42)	(.43)	(.43)	(.45)
Net realized gain on investment transactions	(.01)	(.02)	(.01)	(.00)^*	(.05)
Total distributions	(.44)	(.44)	(.44)	(.43)	(.50)
Redemption fees	.00^*	.00^*	.00^*	—	—
Net asset value, end of period	$ 11.00	$ 11.06	$ 11.40	$ 11.26	$ 11.81
Total Return (%)^a	3.41^b	.90	5.25	(1.02)^b	8.78
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)	80	106	93	87	70
Ratio of expenses before expense reductions (%)	.79	.78	.85	.96	.93
Ratio of expenses after expense reductions (%)	.79	.78	.85	.94	.93
Ratio of net investment income (%)	3.87	3.80	3.82	3.71	3.96
Portfolio turnover rate (%)	45	41	45	21	13
^a Total return does not reflect the effect of any sales charges. ^b Total return would have been lower had certain expenses not been reduced. ^* Amount is less than $.005.

Class B Years Ended May 31,	2007	2006	2005	2004	2003
Selected Per Share Data
Net asset value, beginning of period	$ 11.07	$ 11.41	$ 11.26	$ 11.81	$ 11.35
Income from investment operations: Net investment income	.35	.34	.34	.34	.36
Net realized and unrealized gain (loss) on investment transactions	(.06)	(.32)	.16	(.55)	.51
Total from investment operations	.29	.02	.50	(.21)	.87
Less distributions from: Net investment income	(.34)	(.34)	(.34)	(.34)	(.36)
Net realized gain on investment transactions	(.01)	(.02)	(.01)	(.00)^*	(.05)
Total distributions	(.35)	(.36)	(.35)	(.34)	(.41)
Redemption fees	.00^*	.00^*	.00^*	—	—
Net asset value, end of period	$ 11.01	$ 11.07	$ 11.41	$ 11.26	$ 11.81
Total Return (%)^a	2.62^b	.13^b	4.54^b	(1.80)^b	7.88
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)	5	6	8	9	11
Ratio of expenses before expense reductions (%)	1.58	1.57	1.63	1.76	1.75
Ratio of expenses after expense reductions (%)	1.54	1.55	1.61	1.73	1.75
Ratio of net investment income (%)	3.12	3.03	3.06	2.92	3.14
Portfolio turnover rate (%)	45	41	45	21	13
^a Total return does not reflect the effect of any sales charges. ^b Total return would have been lower had certain expenses not been reduced. ^* Amount is less than $.005.

Statement of Assets and Liabilities as of May 31, 2007
Assets
Investments in securities, at value (cost $615,834,937)	$ 632,587,471
Receivable for investments sold	430,000
Interest receivable	8,732,650
Receivable for Fund shares sold	878,721
Other assets	59,994
Total assets	642,688,836
Liabilities
Cash overdraft	617,560
Payable for investments purchased	7,514,150
Dividends payable	479,365
Payable for Fund shares redeemed	489,396
Accrued management fee	175,345
Other accrued expenses and payables	311,390
Total liabilities	9,587,206
Net assets, at value	$ 633,101,630
Net Assets
Net assets consist of: Undistributed net investment income	333,889
Net unrealized appreciation (depreciation) on investments	16,752,534
Accumulated net realized gain (loss)	501,229
Paid-in capital	615,513,978
Net assets, at value	$ 633,101,630

Statement of Assets and Liabilities as of May 31, 2007 (continued)
Net Asset Value
Class A Net Asset Value and redemption price^(a) per share ($79,611,979 ÷ 7,238,611 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized)	$ 11.00
Maximum offering price per share (100 ÷ 97.25 of $11.00)	$ 11.31
Class B Net Asset Value, offering and redemption price^(a) (subject to contingent deferred sales charge) per share ($4,650,278 ÷ 422,515 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized)	$ 11.01
Class C Net Asset Value, offering and redemption price^(a) (subject to contingent deferred sales charge) per share ($9,445,742 ÷ 859,061 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized)	$ 11.00
Class S Net Asset Value, offering and redemption price^(a)per share ($388,926,592 ÷ 35,351,808 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized)	$ 11.00
Institutional Class Net Asset Value, offering and redemption price^(a)per share ($150,467,039 ÷ 13,674,992 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized)	$ 11.00

Statement of Operations for the year ended May 31, 2007
Investment Income
Income: Interest	$ 31,097,073
Other income	13,136
Total income	31,110,209
Expenses: Management fee	2,105,572
Administration fee	668,436
Services to shareholders	458,835
Custodian fee	9,057
Distribution service fees	390,503
Auditing	85,048
Legal	36,431
Trustees' fees and expenses	40,645
Reports to shareholders and shareholder meeting	109,630
Registration fees	100,901
Other	53,502
Total expenses before expense reductions	4,058,560
Expense reductions	(77,130)
Total expenses after expense reductions	3,981,430
Net investment income	27,128,779
Realized and Unrealized Gain (Loss) on Investment Transactions
Net realized gain (loss) from investments	311,474
Net unrealized appreciation (depreciation) during the period on investments	(3,534,082)
Net gain (loss) on investment transactions	(3,222,608)
Net increase (decrease) in net assets resulting from operations	$ 23,906,171

Statement of Changes in Net Assets
Increase (Decrease) in Net Assets	Years Ended May 31,
Increase (Decrease) in Net Assets	2007	2006
Operations: Net investment income	$ 27,128,779	$ 30,424,448
Net realized gain (loss) on investment transactions	311,474	1,465,747
Net unrealized appreciation (depreciation) during the period on investment transactions	(3,534,082)	(23,783,303)
Net increase (decrease) in net assets resulting from operations	23,906,171	8,106,892
Distributions to shareholders from: Net investment income: Class A	(3,529,224)	(3,689,530)
Class B	(156,141)	(200,902)
Class C	(302,776)	(351,869)
Investment Class	(377,347)	(958,232)
Class AARP	(35,638)	(314,776)
Class S	(16,176,153)	(17,937,126)
Institutional Class	(6,412,653)	(6,878,380)
Net realized gains: Class A	(42,050)	(144,694)
Class B	(2,500)	(9,888)
Class C	(4,717)	(17,484)
Investment Class	—	(38,936)
Class AARP	—	(11,867)
Class S	(200,211)	(662,016)
Institutional Class	(77,814)	(260,373)
Fund share transactions: Proceeds from shares sold	117,159,710	158,468,733
Reinvestment of distributions	18,089,414	20,887,115
Cost of shares redeemed	(198,859,146)	(265,221,824)
Redemption fees	12,185	8,328
Net increase (decrease) in net assets from Fund share transactions	(63,597,837)	(85,857,648)
Increase (decrease) in net assets	(67,008,890)	(109,226,829)
Net assets at beginning of period	700,110,520	809,337,349
Net assets at end of period (including undistributed net investment income of $333,889 and $253,982, respectively)	$ 633,101,630	$ 700,110,520

Class C Years Ended May 31,	2007	2006	2005	2004	2003
Selected Per Share Data
Net asset value, beginning of period	$ 11.06	$ 11.40	$ 11.25	$ 11.80	$ 11.34
Income from investment operations: Net investment income	.35	.34	.34	.34	.36
Net realized and unrealized gain (loss) on investment transactions	(.06)	(.32)	.16	(.55)	.51
Total from investment operations	.29	.02	.50	(.21)	.87
Less distributions from: Net investment income	(.34)	(.34)	(.34)	(.34)	(.36)
Net realized gain on investment transactions	(.01)	(.02)	(.01)	(.00)^*	(.05)
Total distributions	(.35)	(.36)	(.35)	(.34)	(.41)
Redemption fees	.00^*	.00^*	.00^*	—	—
Net asset value, end of period	$ 11.00	$ 11.06	$ 11.40	$ 11.25	$ 11.80
Total Return (%)^a	2.62^b	.14^b	4.54	(1.76)^b	7.82
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)	9	11	13	14	11
Ratio of expenses before expense reductions (%)	1.57	1.55	1.62	1.73	1.72
Ratio of expenses after expense reductions (%)	1.54	1.54	1.62	1.70	1.72
Ratio of net investment income (%)	3.12	3.04	3.05	2.95	3.17
Portfolio turnover rate (%)	45	41	45	21	13
^a Total return does not reflect the effect of any sales charges. ^b Total return would have been lower had certain expenses not been reduced. ^* Amount is less than $.005.

Class S Years Ended May 31,	2007	2006	2005	2004	2003
Selected Per Share Data
Net asset value, beginning of period	$ 11.06	$ 11.41	$ 11.26	$ 11.81	$ 11.35
Income from investment operations: Net investment income	.46	.45	.46	.46	.48
Net realized and unrealized gain (loss) on investment transactions	(.06)	(.33)	.16	(.55)	.51
Total from investment operations	.40	.12	.62	(.09)	.99
Less distributions from: Net investment income	(.45)	(.45)	(.46)	(.46)	(.48)
Net realized gain on investment transactions	(.01)	(.02)	(.01)	(.00)^*	(.05)
Total distributions	(.46)	(.47)	(.47)	(.46)	(.53)
Redemption fees	.00^*	.00^*	.00^*	—	—
Net asset value, end of period	$ 11.00	$ 11.06	$ 11.41	$ 11.26	$ 11.81
Total Return (%)	3.65^a	1.06	5.62	(.78)^a	8.92
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)	389	398	467	495	556
Ratio of expenses before expense reductions (%)	.57	.55	.59	.70	.69
Ratio of expenses after expense reductions (%)	.55	.55	.59	.69	.69
Ratio of net investment income (%)	4.11	4.03	4.08	3.95	4.20
Portfolio turnover rate (%)	45	41	45	21	13
^a Total return would have been lower had certain expenses not been reduced. ^* Amount is less than $.005.

Institutional Class Years Ended May 31,	2007	2006	2005^a
Selected Per Share Data
Net asset value, beginning of period	$ 11.07	$ 11.41	$ 11.45
Income (loss) from investment operations: Net investment income	.46	.45	.22
Net realized and unrealized gain (loss) on investment transactions	(.06)	(.32)	(.04)
Total from investment operations	.40	.13	.18
Less distributions from: Net investment income	(.46)	(.45)	(.22)
Net realized gain on investment transactions	(.01)	(.02)	—
Total distributions	(.47)	(.47)	(.22)
Redemption fees	.00^***	.00^***	.00^***
Net asset value, end of period	$ 11.00	$ 11.07	$ 11.41
Total Return (%)	3.61	1.16	1.58^**
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)	150	151	191
Ratio of expenses (%)	.50	.53	.45^*
Ratio of net investment income (%)	4.16	4.05	4.38^*
Portfolio turnover rate (%)	45	41	45
^a For the period from December 20, 2004 (commencement of operations of Institutional Class shares) to May 31, 2005. ^* Annualized ^** Not annualized ^*** Amount is less than $.005.

Undistributed tax-exempt income	$ 813,254
Undistributed net long-term capital gains	$ 66,284
Net unrealized appreciation (depreciation) on investments	$ 17,187,479

Class A	.79%
Class B	1.54%
Class C	1.54%
Class S	.55%
Institutional Class	.55%

Services to Shareholders	Total Aggregated	Waived	Unpaid at May 31, 2007
Class A	$ 19,851	$ 845	$ 1,514
Class B	3,243	1,683	254
Class C	3,287	2,610	562
Investment Class	2,594	—	—
Class AARP	1,315	—	—
Class S	152,673	71,564	—
Institutional Class	22,734	—	2,994
	$ 205,697	$ 76,702	$ 5,324

Annual Report to Shareholders

Annual Report
to Shareholders

Distribution Fee	Total Aggregated	Unpaid at May 31, 2007
Class B	$ 37,883	$ 3,042
Class C	73,453	6,027
	$ 111,336	$ 9,069

Service Fee	Total Aggregated	Unpaid at May 31, 2007	Annual Effective Rate
Class A	$ 220,248	$ 14,468	.24%
Class B	12,646	833	.25%
Class C	23,711	1,638	.24%
Investment Class	22,562	—	.23%
	$ 279,167	$ 16,939

	Year Ended May 31, 2007		Year Ended May 31, 2006
	Shares	Dollars	Shares	Dollars
Shares sold
Class A	2,932,020	$ 32,553,055	3,456,517	$ 38,663,050
Class B	16,611	184,802	49,527	555,734
Class C	127,094	1,413,625	168,129	1,890,676
Investment Class^*	753,637	8,381,207	768,826	8,609,557
Class AARP*	3,726	41,015	71,231	801,097
Class S	3,184,147	35,410,889	7,302,218	82,058,617
Institutional Class	3,525,979	39,175,117	2,309,111	25,890,002
		$ 117,159,710		$ 158,468,733
Shares issued to shareholders in reinvestment of distributions
Class A	150,213	$ 1,667,097	160,111	$ 1,795,729
Class B	6,781	75,305	8,910	100,127
Class C	10,901	120,936	12,568	141,058
Investment Class^*	27,914	309,523	86,296	969,042
Class AARP*	1,612	17,671	19,283	216,536
Class S	989,667	10,986,665	1,098,958	12,337,109
Institutional Class	442,371	4,912,217	474,361	5,327,514
		$ 18,089,414		$ 20,887,115
Shares redeemed
Class A	(5,390,681)	$ (59,930,133)	(2,245,307)	$ (25,137,579)
Class B	(98,211)	(1,091,003)	(265,926)	(2,983,714)
Class C	(235,315)	(2,615,492)	(406,322)	(4,571,389)
Investment Class*	(370,457)	(4,111,304)	(1,245,552)	(13,979,694)
Class AARP*	(25,620)	(283,982)	(181,762)	(2,031,173)
Class S	(7,886,557)	(87,584,930)	(13,386,067)	(149,902,599)
Institutional Class	(3,893,079)	(43,242,302)	(5,935,669)	(66,615,676)
		$ (198,859,146)		$ (265,221,824)
Shares converted*
Investment Class	(2,484,385)	$ (27,674,760)	—	$ —
Class AARP	(610,090)	(6,724,118)	—	—
Class S	3,094,475	34,398,878	—	—
		$ —		$ —
Redemption fees		$ 12,185		$ 8,328
Net increase (decrease)
Class A	(2,308,448)	$ (25,707,972)	1,371,321	$ 15,324,238
Class B	(74,819)	(830,894)	(207,489)	(2,327,022)
Class C	(97,320)	(1,080,770)	(225,625)	(2,539,494)
Investment Class*	(2,073,291)	(23,094,917)	(390,430)	(4,400,918)
Class AARP*	(630,372)	(6,949,414)	(91,248)	(1,013,386)
Class S	(618,268)	(6,785,456)	(4,984,891)	(55,503,358)
Institutional Class	75,271	851,586	(3,152,197)	(35,397,708)
		$ (63,597,837)		$ (85,857,648)

Independent Board Members
Name, Year of Birth, Position with the Fund and Length of Time Served	Business Experience and Directorships During the Past Five Years	Number of Funds in Fund Complex Overseen
Dawn-Marie Driscoll (1946) Chairperson since 2004 Board Member since 1987	President, Driscoll Associates (consulting firm); Executive Fellow, Center for Business Ethics, Bentley College; formerly, Partner, Palmer & Dodge (1988-1990); Vice President of Corporate Affairs and General Counsel, Filene's (1978-1988). Directorships: Advisory Board, Center for Business Ethics, Bentley College; Trustee, Southwest Florida Community Foundation (charitable organization). Former Directorships: Investment Company Institute (audit, executive, nominating committees) and Independent Directors Council (governance, executive committees)	79
Henry P. Becton, Jr. (1943) Board Member since 1990	President, WGBH Educational Foundation. Directorships: Association of Public Television Stations; Becton Dickinson and Company¹ (medical technology company); Belo Corporation¹ (media company); Boston Museum of Science; Public Radio International. Former Directorships: American Public Television; Concord Academy; New England Aquarium; Mass. Corporation for Educational Telecommunications; Committee for Economic Development; Public Broadcasting Service	77
Keith R. Fox (1954) Board Member since 1996	Managing General Partner, Exeter Capital Partners (a series of private equity funds). Directorships: Progressive Holding Corporation (kitchen goods importer and distributor); Natural History, Inc. (magazine publisher); Box Top Media Inc. (advertising). Former Directorships: The Kennel Shop (retailer)	79
Kenneth C. Froewiss (1945) Board Member since 2005	Clinical Professor of Finance, NYU Stern School of Business (1997-present); Member, Finance Committee, Association for Asian Studies (2002-present); Director, Mitsui Sumitomo Insurance Group (US) (2004-present); prior thereto, Managing Director, J.P. Morgan (investment banking firm) (until 1996)	79
Martin J. Gruber (1937) Board Member since 2006	Nomura Professor of Finance, Leonard N. Stern School of Business, New York University (since September 1965); Director, Japan Equity Fund, Inc. (since January 1992), Thai Capital Fund, Inc. (since January 2000), Singapore Fund, Inc. (since January 2000), National Bureau of Economic Research (since January 2006). Formerly, Trustee, TIAA (pension funds) (January 1996-January 2000); Trustee, CREF and CREF Mutual Funds (January 2000-March 2005); Chairman, CREF and CREF Mutual Funds (February 2004-March 2005); and Director, S.G. Cowen Mutual Funds (January 1985-January 2001)	79
Richard J. Herring (1946) Board Member since 2006	Jacob Safra Professor of International Banking and Professor, Finance Department, The Wharton School, University of Pennsylvania (since July 1972); Co-Director, Wharton Financial Institutions Center (since July 2000). Formerly, Vice Dean and Director, Wharton Undergraduate Division (July 1995-June 2000); Director, Lauder Institute of International Management Studies (since July 2000-June 2006)	79
Graham E. Jones (1933) Board Member since 2006	Senior Vice President, BGK Realty, Inc. (commercial real estate) (since 1995). Formerly, Trustee of various investment companies managed by Sun Capital Advisors, Inc. (1998-2005), Morgan Stanley Asset Management (1985-2001) and Weiss, Peck and Greer (1985-2005)	79
Rebecca W. Rimel (1951) Board Member since 2006	President and Chief Executive Officer, The Pew Charitable Trusts (charitable foundation) (1994 to present); Trustee, Thomas Jefferson Foundation (charitable organization) (1994 to present); Trustee, Executive Committee, Philadelphia Chamber of Commerce (2001 to present); Director, Viasys Health Care¹ (since January 2007). Formerly, Executive Vice President, The Glenmede Trust Company (investment trust and wealth management) (1983 to 2004); Board Member, Investor Education (charitable organization) (2004-2005)	79
Philip Saunders, Jr. (1935) Board Member since 2006	Principal, Philip Saunders Associates (economic and financial consulting) (since November 1988). Formerly, Director, Financial Industry Consulting, Wolf & Company (consulting) (1987-1988); President, John Hancock Home Mortgage Corporation (1984-1986); Senior Vice President of Treasury and Financial Services, John Hancock Mutual Life Insurance Company, Inc. (1982-1986)	79
William N. Searcy, Jr. (1946) Board Member since 2006	Private investor since October 2003; Trustee of eight open-end mutual funds managed by Sun Capital Advisers, Inc. (since October 1998). Formerly, Pension & Savings Trust Officer, Sprint Corporation¹ (telecommunications) (November 1989-September 2003)	79
Jean Gleason Stromberg (1943) Board Member since 1999	Retired. Formerly, Consultant (1997-2001); Director, US Government Accountability Office (1996-1997); Partner, Fulbright & Jaworski, L.L.P. (law firm) (1978-1996). Directorships: The William and Flora Hewlett Foundation; Service Source, Inc. Former Directorships: Mutual Fund Directors Forum (2002-2004), American Bar Retirement Association (funding vehicle for retirement plans) (1987-1990 and 1994-1996)	79
Carl W. Vogt (1936) Board Member since 2002	Retired Senior Partner, Fulbright & Jaworski, L.L.P. (law firm); formerly, President (interim) of Williams College (1999-2000); formerly, President of certain funds in the Deutsche Asset Management family of funds (formerly, Flag Investors family of funds) (registered investment companies) (1999-2000). Directorships: Yellow Corporation (trucking); American Science & Engineering (x-ray detection equipment). Former Directorships: ISI Family of Funds (registered investment companies, four funds overseen); National Railroad Passenger Corporation (Amtrak); Waste Management, Inc. (solid waste disposal). Formerly, Chairman and Member, National Transportation Safety Board	77

Interested Board Member
Name, Year of Birth, Position with the Fund and Length of Time Served	Business Experience and Directorships During the Past Five Years	Number of Funds in Fund Complex Overseen
Axel Schwarzer²(1958) Board Member since 2006	Managing Director⁴, Deutsche Asset Management; Head of Deutsche Asset Management Americas; CEO of DWS Scudder; formerly, board member of DWS Investments, Germany (1999-2005); formerly, Head of Sales and Product Management for the Retail and Private Banking Division of Deutsche Bank in Germany (1997-1999); formerly, various strategic and operational positions for Deutsche Bank Germany Retail and Private Banking Division in the field of investment funds, tax driven instruments and asset management for corporates (1989-1996)	78

Officers³
Name, Year of Birth, Position with the Fund and Length of Time Served	Principal Occupation(s) During Past 5 Years and Other Directorships Held
Michael G. Clark⁵ (1965) President, 2006-present	Managing Director⁴, Deutsche Asset Management (2006-present); President of DWS family of funds; formerly, Director of Fund Board Relations (2004-2006) and Director of Product Development (2000-2004), Merrill Lynch Investment Managers; Senior Vice President Operations, Merrill Lynch Asset Management (1999-2000)
John Millette⁶ (1962) Vice President and Secretary, 1999-present	Director⁴, Deutsche Asset Management
Paul H. Schubert⁵ (1963) Chief Financial Officer, 2004-present Treasurer, 2005-present	Managing Director⁴, Deutsche Asset Management (since July 2004); formerly, Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family of Funds (1998-2004); Vice President and Director of Mutual Fund Finance at UBS Global Asset Management (1994-1998)
Patricia DeFilippis⁵(1963) Assistant Secretary, 2005-present	Vice President, Deutsche Asset Management (since June 2005); formerly, Counsel, New York Life Investment Management LLC (2003-2005); legal associate, Lord, Abbett & Co. LLC (1998-2003)
Elisa D. Metzger⁵ (1962) Assistant Secretary 2005-present	Director⁴, Deutsche Asset Management (since September 2005); formerly, Counsel, Morrison and Foerster LLP (1999-2005)
Caroline Pearson⁶ (1962) Assistant Secretary, 1997-present	Managing Director⁴, Deutsche Asset Management
Paul Antosca⁶ (1957) Assistant Treasurer, 2007-present	Director⁴, Deutsche Asset Management (since 2006); Vice President, The Manufacturers Life Insurance Company (U.S.A.) (1990-2006)
Kathleen Sullivan D'Eramo⁶ (1957) Assistant Treasurer, 2003-present	Director⁴, Deutsche Asset Management
Jason Vazquez⁴ (1972) Anti-Money Laundering Compliance Officer, 2007-present	Vice President, Deutsche Asset Management (since 2006); formerly, AML Operations Manager for Bear Stearns (2004-2006), Supervising Compliance Principal and Operations Manager for AXA Financial (1999-2004)
Robert Kloby⁵ (1962) Chief Compliance Officer, 2006-present	Managing Director⁴, Deutsche Asset Management (2004-present); formerly, Chief Compliance Officer/Chief Risk Officer, Robeco USA (2000-2004); Vice President, The Prudential Insurance Company of America (1988-2000); E.F. Hutton and Company (1984-1988)
J. Christopher Jackson⁵ (1951) Chief Legal Officer, 2006-present	Director⁴, Deutsche Asset Management (2006-present); formerly, Director, Senior Vice President, General Counsel and Assistant Secretary, Hansberger Global Investors, Inc. (1996-2006); Director, National Society of Compliance Professionals (2002-2005)(2006-2009)

For shareholders of Classes A, B, C and Institutional Class
Automated Information Line	(800) 621-1048 Personalized account information, information on other DWS funds and services via touchtone telephone and for Classes A, B, and C only, the ability to exchange or redeem shares.
Web Site	www.dws-scudder.com View your account transactions and balances, trade shares, monitor your asset allocation, and change your address, 24 hours a day. Obtain prospectuses and applications, blank forms, interactive worksheets, news about DWS funds, subscription to fund updates by e-mail, retirement planning information, and more.
For More Information	(800) 621-1048 To speak with a DWS Scudder service representative.
Written Correspondence	DWS Scudder PO Box 219151 Kansas City, MO 64121-9151
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 — www.dws-scudder.com (click on "proxy voting"at the bottom of the page) — 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.
Principal Underwriter	If you have questions, comments or complaints, contact: DWS Scudder Distributors, Inc. 222 South Riverside Plaza Chicago, IL 60606-5808 (800) 621-1148

For shareholders of Class S
Automated Information Line	(800) 728-3337 Personalized account information, the ability to exchange or redeem shares, and information on other DWS funds and services via touchtone telephone.
Automated Information Line		Web Site	www.dws-scudder.com
	View your account transactions and balances, trade shares, monitor your asset allocation, and change your address, 24 hours a day. Obtain prospectuses and applications, blank forms, interactive worksheets, news about DWS funds, subscription to fund updates by e-mail, retirement planning information, and more.
For More Information	(800) 728-3337 To speak with a DWS Scudder service representative.
Written Correspondence	DWS Scudder PO Box 219151 Kansas City, MO 64121-9151
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 — www.dws-scudder.com (click on "proxy voting"at the bottom of the page) — 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.
Principal Underwriter	If you have questions, comments or complaints, contact: DWS Scudder Distributors, Inc. 222 South Riverside Plaza Chicago, IL 60606-5808 (800) 621-1148