N-CSRS

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number:	811-03712
Exact name of registrant as specified in charter:	Dryden Government Income Fund, Inc.
Address of principal executive offices:	Gateway Center 3,
	100 Mulberry Street,
	Newark, New Jersey 07102
Name and address of agent for service:	Deborah A. Docs
	Gateway Center 3,
	100 Mulberry Street,
	Newark, New Jersey 07102
Registrant’s telephone number, including area code:	800-225-1852
Date of fiscal year end:	2/28/2008
Date of reporting period:	8/31/2007

Item 1 – Reports to Stockholders

AUGUST 31, 2007 SEMIANNUAL REPORT

Dryden Government Income Fund, Inc.

FUND TYPE

Government securities

OBJECTIVE

High current return

This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.

The views expressed in this report and information about the Fund’s portfolio holdings are for the period covered by this report and are subject to change thereafter.

The accompanying financial statements as of August 31, 2007, were not audited, and accordingly, no auditor’s opinion is expressed on them.

JennisonDryden, Dryden, Prudential Financial and the Rock Prudential logo are registered service marks of The Prudential Insurance Company of America, Newark, NJ, and its affiliates.

October 15, 2007

Dear Shareholder:

On the following pages, you’ll find your Fund’s semiannual report, including a table showing fund performance over the first half of the fiscal year and for longer periods. The report also contains a listing of the Fund’s holdings at period-end. The semiannual report is an interim statement furnished between the Fund’s annual reports, which include an analysis of Fund performance over the fiscal year in addition to other data.

Mutual fund prices and returns will rise or fall over time, and asset managers tend to have periods when they perform better or worse than their long-term average. The best measures of a mutual fund’s quality are its return compared to that of similar investments and the variability of its return over the long term. We recommend that you review your portfolio regularly with your financial adviser.

Sincerely,

Judy A. Rice, President

Dryden Government Income Fund, Inc.

Dryden Government Income Fund, Inc. 1

Your Fund’s Performance

Fund objective

The investment objective of the Dryden Government Income Fund, Inc. is high current return. There can be no assurance that the Fund will achieve its investment objective.

Performance data quoted represent past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate, so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the past performance data quoted. An investor may obtain performance data as of the most recent month-end by visiting our website at www.jennisondryden.com or by calling (800) 225-1852. The maximum initial sales charge is 4.50% (Class A shares). Gross operating expenses: Class A, 1.03%; Class B, 1.73%; Class C, 1.73%; Class R, 1.48%; Class Z, 0.73%. Net operating expenses apply to: Class A, 0.98%; Class B, 1.73%; Class C, 1.48%; Class R, 1.23%; Class Z, 0.73%, after contractual reduction through 6/30/2008.

Cumulative Total Returns as of 8/31/07
	Six Months	One Year		Five Years	Ten Years	Since Inception1
Class A	1.11%	4.07%		16.18%	65.14%	—
Class B	0.85	3.41		12.17	54.73	—
Class C	0.86	3.65		13.43	57.06	—
Class R	1.10	3.93		N/A	N/A	11.25% (5/17/04)
Class Z	1.35	4.45		17.63	69.06	—
Lehman Brothers Government Bond Index2	2.64	5.90		20.72	78.58	**
Lehman Brothers U.S. Aggregate ex-Credit Index3	1.99	5.46		21.46	—	***
Lipper General U.S. Government Funds Avg.4	0.94	4.08		15.12	63.03	****
Average Annual Total Returns5 as of 9/30/07
		One Year		Five Years	Ten Years	Since Inception1
Class A		–0.47	%	1.88%	4.60%	—
Class B		–1.55		1.90	4.38	—
Class C		2.80		2.33	4.55	—
Class R		4.08		N/A	N/A	3.46%(5/17/04)
Class Z		4.48		3.07	5.30	—
Lehman Brothers Government Bond Index2		5.63		3.49	5.88	**
Lehman Brothers U.S. Aggregate ex-Credit Index3		5.39		3.80	—	***
Lipper General U.S. Government Funds Avg4		3.87		2.60	4.92	****

Distributions and Yields as of 8/31/07
	Total Distributions Paid for Six Months		30-Day SEC Yield
Class A	$	0.19	3.50	%
Class B	$	0.16	2.91
Class C	$	0.17	3.17
Class R	$	0.18	3.41
Class Z	$	0.20	3.92

2 Visit our website at www.jennisondryden.com

The cumulative total returns do not reflect the deduction of applicable sales charges. If reflected, the applicable sales charges would reduce the cumulative total returns performance quoted. Class A shares are subject to a maximum front-end sales charge of 4.50%. Under certain circumstances, Class A shares may be subject to a contingent deferred sales charge (CDSC) of 1%. Class B and Class C shares are subject to a maximum CDSC of 5% and 1%, respectively. Class R and Class Z shares are not subject to a sales charge.

Source: Prudential Investments LLC and Lipper Inc. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of such fee waivers and/or expense reimbursements, total returns would be lower.

¹ Inception date returns are provided for any share class with less than 10 calendar years of returns.

² The Lehman Brothers Government Bond Index is an unmanaged index of securities issued or backed by the U.S. government, its agencies, and instrumentalities with between one and 30 years remaining to maturity. It gives a broad look at how U.S. government bonds have performed.

³ The Lehman Brothers U.S. Aggregate ex-Credit Index represents securities that are SEC registered, taxable, and dollar denominated. The index covers the U.S. investment-grade fixed-rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. These major sectors are subdivided into more specific indexes that are calculated and reported on a regular basis.

⁴ The Lipper General U.S. Government Funds Average (Lipper Average) represents returns based on an average return of all funds in the Lipper General U.S. Government Funds category for the periods noted. Funds in the Lipper Average invest primarily in U.S. government and agency issues.

⁵ The average annual total returns take into account applicable sales charges. Class A, Class B, Class C, and Class R shares are subject to an annual distribution and service (12b-1) fee of up to 0.30%, 1.00%, 1.00%, and 0.75%, respectively. Approximately seven years after purchase, Class B shares will automatically convert to Class A shares on a quarterly basis. Class Z shares are not subject to a 12b-1 fee. The returns in the tables do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the redemption of Fund shares.

Investors cannot invest directly in an index. The returns for the Lehman Brothers Government Bond Index would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes. Returns for the Lipper Average reflect the deduction of operating expenses, but not sales charges or taxes.

**Lehman Brothers Government Bond Index Closest Month-End to Inception cumulative total return as of 8/31/07 is 15.02% for Class R. Lehman Brothers Government Bond Index Closest Month-End to Inception average annual total return as of 9/30/07 is 4.49% for Class R.

***Lehman Brothers U.S. Aggregate ex-Credit Index Closest Month-End to Inception cumulative total return as of 8/31/07 is 15.51% for Class R. Lehman U.S. Aggregate ex-Credit Index Closest Month-End to Inception average annual total return as of 9/30/07 is 4.65% for Class R.

****Lipper Average Closest Month-End to Inception cumulative total return as of 8/31/07 is 11.74% for Class R. Lipper Average Closest Month-End to Inception average annual total return as of 9/30/07 is 3.57% for Class R.

Dryden Government Income Fund, Inc. 3

Your Fund’s Performance (continued)

Five Largest Issues expressed as a percentage of net assets as of 8/31/07
Federal National Mortgage Association, 5.30%, 2/22/2011	6.1	%
Federal National Mortgage Association, 5.50%, TBA 30 YR	6.1
Federal Home Loan Mortgage Corp., 5.50%, TBA 30 YR	4.8
Federal National Mortgage Association, 6.00%, TBA 30 YR	3.8
Federal Home Loan Bank, 4.875%, 05/17/2017	3.5

Holdings reflect only long-term investments and are subject to change.

4 Visit our website at www.jennisondryden.com

Fees and Expenses (Unaudited)

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemptions, as applicable, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 invested on March 1, 2007, at the beginning of the period, and held through the six-month period ended August 31, 2007. The example is for illustrative purposes only; you should consult the Prospectus for information on initial and subsequent minimum investment requirements.

The Fund’s transfer agent may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to Individual Retirement Accounts (IRAs) and Section 403(b) accounts. As of the close of the six-month period covered by the table, IRA fees included an annual maintenance fee of $15 per account (subject to a maximum annual maintenance fee of $25 for all accounts held by the same shareholder). Section 403(b) accounts are charged an annual $25 fiduciary maintenance fee. Some of the fees may vary in amount, or may be waived, based on your total account balance or the number of JennisonDryden Funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information provided in the expense table. Additional fees have the effect of reducing investment returns.

Actual Expenses

The first line for each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line for each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on

Dryden Government Income Fund, Inc. 5

Fees and Expenses (Continued)

the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and

expenses should not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs such as sales charges (loads). Therefore the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Dryden Government Income Fund, Inc.		Beginning Account Value March 1, 2007		Ending Account Value August 31, 2007		Annualized Expense Ratio Based on the Six-Month Period		Expenses Paid During the Six-Month Period*
Class A	Actual	$	1,000.00	$	1,011.10	0.98	%	$	4.95
	Hypothetical	$	1,000.00	$	1,020.21	0.98	%	$	4.98
Class B	Actual	$	1,000.00	$	1,008.50	1.73	%	$	8.73
	Hypothetical	$	1,000.00	$	1,016.44	1.73	%	$	8.77
Class C	Actual	$	1,000.00	$	1,008.60	1.48	%	$	7.47
	Hypothetical	$	1,000.00	$	1,017.70	1.48	%	$	7.51
Class R	Actual	$	1,000.00	$	1,011.00	1.23	%	$	6.22
	Hypothetical	$	1,000.00	$	1,018.95	1.23	%	$	6.24
Class Z	Actual	$	1,000.00	$	1,013.50	0.73	%	$	3.69
	Hypothetical	$	1,000.00	$	1,021.47	0.73	%	$	3.71

* Fund expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 184 days in the six-month period ended August 31, 2007, and divided by the 366 days in the Fund’s fiscal year ending February 29, 2008 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.

6 Visit our website at www.jennisondryden.com

Portfolio of Investments

as of August 31, 2007 (Unaudited)

Principal Amount (000)			Description	Value (Note 1)
	LONG-TERM INVESTMENTS    98.8%
	Collateralized Mortgage Obligations    7.8%
			Federal Home Loan Mortgage Corp.,
$	9,000		Ser. 2496, Class PM, 5.50%, 9/15/17	$	8,941,663
	6,922		Ser. 2501, Class MC, 5.50%, 9/15/17		6,958,308
	6,650		Ser. 2513, Class HC, 5.00%, 10/15/17		6,427,360
	5,500		Ser. 2518, Class PV, 5.50%, 6/15/19		5,376,278
			Federal National Mortgage Association,
	11,050		Ser. 2002-18, Class PC, 5.50%, 4/25/17		11,149,551
	6,461		Ser. 2002-57, Class ND, 5.50%, 9/25/17		6,487,341
	18,000		Ser. 2002-94, Class HQ, 4.50%, 1/25/18		16,968,283
			Structured Adjustable Rate Mortgage Loan Trust,
	1,636		Ser. 2004-1, Class 4A3, 4.17%, 2/25/34		1,637,301
			Total collateralized mortgage obligations		63,946,085
	Commercial Mortgage Backed Securities    7.3%
			Bear Stearns Commercial Mortgage Securities, Inc.,
	234	(c)	Ser. 2000-WF1, Class A1, 7.64%, 2/15/32		236,149
	10,800		Ser. 2004-T16, Class A5, 4.60%, 2/13/46		10,301,261
	6,000		Ser. 2006-T22, Class A4, 5.632%, 4/12/38		5,987,095
			First Union National Bank Commercial Mortgage Trust,
	471		Ser. 2000-C1, Class A1, 7.739%, 5/17/32		472,036
			GS Mortgage Securities Corp. II,
	18,200		Ser. 2003-C1, Class A3, 4.608%, 1/10/40		17,469,931
	4,300		Ser. 2006-GG8, Class A4, 5.56%, 11/10/39		4,266,077

See Notes to Financial Statements.

Dryden Government Income Fund, Inc. 7

Portfolio of Investments

as of August 31, 2007 (Unaudited) continued

Principal Amount (000)			Description	Value (Note 1)
			Merrill Lynch Financial Corp. Services,
$	5,000		Ser. 2007-5, Class A4, 5.378%, 8/12/48	$	4,872,383
			Merrill Lynch Mortgage Trust,
	5,000		Ser. 2006-C1, Class ASB, 5.843%, 5/12/39		5,027,575
			Morgan Stanley Capital I,
	3,625		Ser. 2005-T19, Class AAB, 4.852%, 6/12/47		3,508,385
	7,200		Ser. 2006-IQ11, Class A4, 5.944%, 10/15/42		7,265,827
			Morgan Stanley Dean Witter Capital I,
	859		Ser. 2001-TOP1, Class A2, 6.32%, 2/15/33		856,133
			Total commercial mortgage backed securities		60,262,852
	Corporate Bond    0.3%
			Depfa ACS Bank, 144A(c)
	2,960		5.125%, 3/16/37		2,722,493
	Mortgage Backed Securities    62.7%
			Federal Home Loan Mortgage Corp.,
	4,566		3.533%, 5/1/34 FRN		4,511,114
	11,130		3.785%, 6/1/34 FRN		10,901,857
	35,026		5.00%, 6/1/33 - 5/1/34		33,399,252
	40,000	(f)	5.50%, TBA 30 YR		39,062,480
	2,595		6.00%, 8/1/32 - 9/1/34		2,601,811
	1,816		6.50%, 8/1/10 - 9/1/32		1,854,444
	1,315		7.00%, 8/1/11 - 9/1/32		1,334,945
	44	(a)	7.50%, 6/1/24		46
	235		8.00%, 3/1/22 - 5/1/23		247,425
	188		8.50%, 12/1/10 - 9/1/19		200,275
	204		9.00%, 1/1/20		215,666
	150		11.50%, 10/1/19		165,408
			Federal National Mortgage Association,
	3,192		3.495%, 6/1/34 FRN		3,162,670
	27,311		3.50%, 5/1/34 FRN		27,057,647
	15,037		3.595%, 7/1/33 FRN		15,117,170
	1,983		3.799%, 4/1/34 FRN		1,943,896

See Notes to Financial Statements.

8 Visit our website at www.jennisondryden.com

Principal Amount (000)			Description	Value (Note 1)
$	4,512		3.976%, 9/1/33 FRN	$	4,391,566
	5,174		4.243%, 4/1/34 FRN		5,135,812
	4,682		4.50%, 6/1/34 FRN		4,655,342
	12,000		4.50%, TBA 15 YR		11,512,500
	1,410		4.50%, 1/1/20		1,354,762
	7,141		4.873%, 10/1/34 FRN		7,042,462
	11,398		4.973%, 6/1/36 FRN		11,367,769
	16,838		5.00%, 7/1/18 - 12/1/31		16,472,349
	36,500	(f)	5.00%, TBA 15 YR		35,633,125
	4,000		5.00%, TBA 30 YR		3,801,248
	96,014		5.50%, 8/1/15 - 11/1/35		93,959,938
	51,000		5.50%, TBA 30 YR		49,804,661
	16,564		6.00%, 11/1/14 - 1/1/36		16,586,374
	31,000	(f)	6.00%, TBA 30 YR		30,951,577
	4,536		6.276%, 3/1/11		4,658,540
	14,070		6.50%, 4/1/09 - 10/1/32		14,369,589
	16,000		6.50%, TBA 30 YR		16,235,008
	11,362		7.00%, 4/1/11 - 2/1/36		11,744,137
	1,684		7.50%, 11/1/07 - 10/1/26		1,713,518
	20		8.50%, 6/1/17 - 3/1/25		20,880
	175		9.00%, 4/1/25		190,085
	52		9.50%, 1/1/25 - 2/1/25		57,265
			Government National Mortgage Association,
	12,366		5.00%, 7/15/33 - 4/15/34		11,934,163
	5,951		5.50%, 2/15/34 - 2/15/36		5,853,525
	8,670		7.00%, 2/15/09 - 2/15/29		9,046,514
	1,128		7.50%, 4/15/08 - 7/15/24		1,178,033
	902		8.50%, 4/15/25		974,330
	630		9.50%, 10/15/09 - 8/20/21		683,416
			Total mortgage backed securities		513,104,594
	Small Business Administration Agency    3.0%
			Small Business Administration Participation Certificates,
	1,727		Ser. 1995-20B, 8.15%, 2/1/15		1,789,828
	5,167		Ser. 1995-20L, 6.45%, 12/1/15		5,270,389
	5,832		Ser. 1996-20H, 7.25%, 8/1/16		6,021,206
	4,262		Ser. 1996-20K, 6.95%, 11/1/16		4,382,731

See Notes to Financial Statements.

Dryden Government Income Fund, Inc. 9

Portfolio of Investments

as of August 31, 2007 (Unaudited) continued

Principal Amount (000)			Description	Value (Note 1)
$	1,747		Ser. 1997-20A, 7.15%, 1/1/17	$	1,802,469
	4,839		Ser. 1998-20I, 6.00%, 9/1/18		4,923,958
			Total small business administration agency		24,190,581
	Sovereign Bonds    1.4%
			Buoni Poliennali Del Tes,
	EUR      1,405		4.00%, 2/1/37		1,664,648
			Deutsche Bundesrepublik,
	EUR      1,278		Ser. 05, 4.00%, 1/4/37		1,600,495
			Hungary Government,
	HUF  487,110		Ser. 15/A, 8.00%, 2/12/15		2,752,102
			Poland Government,
	PLN      6,480		Ser. 1015, 6.25%, 10/24/15		2,372,015
			Sweden Government,
	SEK    17,695		Ser. 1041, 6.75%, 5/5/14		2,934,908
			Total sovereign bonds		11,324,168
	U.S. Government Agency Securities    14.6%
			Federal Home Loan Bank,
$	29,340	(b)	4.875%, 5/17/17		28,843,861
			Federal Home Loan Mortgage Corp., M.T.N.,
	3,110	(c)	5.35%, 11/14/11		3,127,500
	8,600	(b)	5.50%, 8/23/17		8,865,568
			Federal National Mortgage Association,
	49,870		5.30%, 2/22/11		49,937,922
			Financing Corp. Fico,
	10,000		Zero Coupon, 5/11/18		5,862,420
			Tennessee Valley Authority,
	23,590		Ser. B, 4.375%, 6/15/15		22,702,639
			Total U.S. government agency securities		119,339,910
	U.S. Government Treasury Obligations    1.7%
			United States Treasury Bonds,
	890		6.625%, 2/15/27		1,083,506

See Notes to Financial Statements.

10 Visit our website at www.jennisondryden.com

Principal Amount (000)			Description	Value (Note 1)
$	765		8.875%, 8/15/17	$	1,021,275
			United States Treasury Inflation Indexed,
	3,921	(b)	2.00%, 4/15/12		3,860,530
			United States Treasury Notes,
	1,425		4.50%, 5/15/10		1,437,246
	105		4.75%, 8/15/17		106,723
			United States Treasury Strip,
	12,610		Zero Coupon, 5/15/21		6,418,919
			Total U.S. government treasury obligations		13,928,199
			Total long-term investments (cost $814,241,634)		808,818,882
Shares
	SHORT-TERM INVESTMENTS    28.5%
	Affiliated Mutual Funds    28.5%
	11,619,155		Dryden Core Investment Fund-Dryden Short-Term Core Bond Series (cost $115,422,726)(e)		113,635,334
	119,468,408		Dryden Core Investment Fund-Taxable Money Market Series (cost $119,468,408; includes $40,056,384 of cash collateral received for securities on loan)(d)(e)		119,468,408
			Total affiliated mutual funds (cost $234,891,134)		233,103,742
Contracts/Notional Amounts
	OUTSTANDING OPTIONS PURCHASED
	Call Options
	215		90 Day Euro, expiring 9/17/07 @ $94.625		24,188
	215		90 Day Euro, expiring 9/19/07 @ $95		4,031
	847,200		United States Dollar/Icelandic Krona, expiring 6/3/08 @ $66.25		30,686
	819,900		United States Dollar/Icelandic Krona, expiring 8/5/08 @ $67.75		38,150
					97,055
	Put Option
	832,500		United States Dollar/Polish Zloty, expiring 7/03/2008 @ $2.76		15,992
			Total outstanding options purchased (cost $204,267)		113,047
			Total short-term investments (cost $235,095,401)		233,216,789
			Total Investments, Before Outstanding Options Written 127.3% (cost $1,049,337,035; Note 5)		1,042,035,671

See Notes to Financial Statements.

Dryden Government Income Fund, Inc. 11

Portfolio of Investments

as of August 31, 2007 (Unaudited) continued

Contracts/Notional Amounts	Description	Value (Note 1)
OUTSTANDING OPTIONS WRITTEN
Call Options
215	90 Day Euro, expiring 9/17/07 @ $94.75	$	(13,437	)
215	90 Day Euro, expiring 9/17/07 @ $94.875		(8,063	)
	Total outstanding options written (premiums received $68,895)		(21,500	)
	Total Investments, Net of Outstanding Options Written    127.3% (cost $1,049,268,140)		1,042,014,171
	Other liabilities in excess of other assets(g)    (27.3%)		(223,596,881	)
	Net Assets    100.0%	$	818,417,290

144A—Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. Unless otherwise noted, 144A securities are deemed to be liquid.

EUR— Euro

FRN—Floating Rate Note

HUF— Hungarian Forint

M.T.N.— Medium Term Note

PLN— Polish Zloty

SEK—Swedish Krona

(a) Represents actual principal amount (not rounded to nearest thousand).

(b) All or portion of securities on loan with an aggregate market value of $39,403,091; cash collateral of $40,056,384 (included with liabilities) was received with which the Fund purchased highly liquid short-term investments.

(c) All or partial principal amount pledged as collateral for financial future contracts.

(d) Represents security, or portion thereof, purchased with cash collateral received for securities on loan.

(e) Prudential Investments LLC, the manager of the Fund, also serves as manager of the Dryden Core Investment Fund—Taxable Money Market Series and Short-Term Bond Series.

(f) All or partial principal amount of $52,000,000 represents to-be-announced (“TBA”) security acquired under mortgage dollar roll agreement.

(g) Other liabilities in excess of other assets include net unrealized appreciation (depreciation) on financial futures contracts, forward currency contracts and interest rate swap agreements as follows:

See Notes to Financial Statements.

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Open futures contracts outstanding at August 31, 2007:

Number of Contracts	Type	Expiration Date	Value at August 31, 2007		Value at Trade Date		Unrealized Appreciation (Depreciation)
	Long Positions:
76	10 Yr. U.S. T-Notes	Dec. 2007	$	8,287,563	$	8,288,893	$	(1,330	)
302	20 Yr. U.S. Long Bond	Dec. 2007		33,691,875		33,614,191		77,684
	Sovereign Bonds
72	3 Yr. Australian Note	Sept. 2007		5,527,786		5,517,048		10,738
13	10 Yr. Australian Bond	Sept. 2007		1,000,892		997,370		3,522
44	10 Yr. Euro Bund	Sept. 2007		6,194,992		6,145,266		49,726
3	10 Yr. U.K. Gilt	Dec. 2007		647,519		648,372		(853	)
2	10 Yr. Japanese Bond	Sept. 2007		2,337,853		2,275,778		62,075
	Short Positions:
169	2 Yr. U.S. T-Notes	Dec. 2007		34,840,406		34,858,514		18,108
307	5 Yr. U.S. T-Notes	Dec. 2007		32,757,859		32,632,563		(125,296	)
254	10 Yr. U.S. T-Notes	Sept. 2007		27,809,031		27,450,398		(358,633	)
	Sovereign Bonds
40	10 Yr. Euro Bund	Sept. 2007		6,199,324		6,136,967		(62,357	)
							$	(326,616	)

Forward foreign currency contracts outstanding at August 31, 2007:

Purchase Contracts	Value Payable at Settlement Date		Value at August 31, 2007		Unrealized Appreciation (Depreciation)
Euro, expiring 9/5/07	$	25,395	$	25,371	$	(24	)
Icelandic Krona, expiring 9/18/07		244,300		259,917		15,617
Japanese Yen, expiring 9/25/07		150,075		148,858		(1,217	)
New Zealand Dollar, expiring 9/21/07		1,967,018		1,965,878		(1,140	)
Norwegian Krone, expiring 9/24/07		402,030		409,999		7,969
Pound Sterling, expiring 9/25/07		646,614		650,349		3,735
Swedish Krona, expiring 9/24/07		408,913		408,913		—
	$	3,844,345	$	3,869,285	$	24,940

See Notes to Financial Statements.

Dryden Government Income Fund, Inc. 13

Portfolio of Investments

as of August 31, 2007 (Unaudited) continued

Sales Contracts	Value Receivable at Settlement Date		Value at August 31, 2007		Unrealized Appreciation (Depreciation)
Euros,
expiring 9/24/07	$	408,913	$	409,807	$	(894	)
expiring 9/25/07		1,870,999		1,886,280		(15,281	)
Hungarian Forint, expiring 9/24/07		2,384,136		2,459,656		(75,520	)
Icelandic Krona, expiring 9/18/07		245,700		250,536		(4,836	)
New Zealand Dollar, expiring 9/21/07		407,900		406,450		1,450
Polish Zloty, expiring 9/24/07		2,001,345		2,036,523		(35,178	)
Swedish Krona, expiring 9/24/07		2,830,257		2,855,148		(24,891	)
	$	10,149,250	$	10,304,400	$	(155,150	)

Interest rate swap agreements outstanding at August 31, 2007:

Counterparty	Termination Date	Notional Amount (000)		Fixed Rate	Floating Rate	Unrealized Appreciation (Depreciation)
Merrill Lynch Capital Services, Inc.(a)	7/3/12	$	20,000	5.50777%	3 month LIBOR	$	482,462
Merrill Lynch Capital Services, Inc.(a)	8/14/12		13,280	5.20857	3 month LIBOR		(152,509	)
Morgan Stanley Capital Services, Inc.(a)	12/22/16		3,855	6.8075	3 month NZD-BBR-FRA		(120,410	)
Morgan Stanley Capital Services, Inc.(a)	3/2/17		3,855	6.86	3 month NZD-BBR-FRA		(64,924	)
JPMorgan Chase Bank(b)	5/17/17		4,180	7.325	3 month NZD-BBR-FRA		(24,497	)
Merrill Lynch Capital Services, Inc.(a)	8/2/17		5,870	5.52959	3 month LIBOR		143,005
Merrill Lynch Capital Services, Inc.(b)	8/8/17		32,000	5.43443	3 month LIBOR		545,228
Morgan Stanley Capital Services, Inc.(a)	8/23/17		21,495	5.4445	3 month LIBOR		371,753
						$	1,180,108

LIBOR—London Interbank Offered Rate

NZD—New Zealand Dollar

BBR—Bank Bill Rate

FRA—Forward Rate Agreement

(a) The Fund pays the floating rate and receives the fixed rate.

(b) The Fund pays the fixed rate and receives the floating rate.

See Notes to Financial Statements.

14 Visit our website at www.jennisondryden.com

The industry classification of portfolio holdings and other liabilities in excess of other assets shown as a percentage of net assets as of August 31, 2007 were as follows:

Mortgage Backed Securities	62.7	%
Affiliated Mutual Funds (including 4.9% of collateral received for securities on loan)	28.5
U.S. Government Agency Securities	14.6
Collateralized Mortgage Obligations	7.8
Commercial Mortgage Backed Securities	7.3
Small Business Administration Agency	3.0
U.S. Government Treasury Obligations	1.7
Sovereign Bonds	1.4
Corporate Bond	0.3
	127.3
Other liabilities in excess of other assets	(27.3	)
	100.0	%

See Notes to Financial Statements.

Dryden Government Income Fund, Inc. 15

Statement of Assets and Liabilities

as of August 31, 2007 (Unaudited)

Assets
Investments at value, including securities on loan of $39,403,091:
Unaffiliated investments (cost $814,445,901)	$	808,931,929
Affiliated investments (cost $234,891,134)		233,103,742
Cash		808,732
Receivable for investments sold		341,456,231
Dividends and interest receivable		4,194,990
Unrealized appreciation on swaps		1,542,448
Receivable for Fund shares sold		488,093
Due from broker—variation margin		37,188
Unrealized appreciation on forward currency contracts		28,771
Receivable for securities lending, net		17,619
Prepaid expenses		16,041
Total assets		1,390,625,784
Liabilities
Payable for investments purchased		527,522,002
Payable to broker for collateral for securities on loan		40,056,384
Payable for Fund shares reacquired		2,303,261
Accrued expenses		630,410
Dividends payable		497,361
Unrealized depreciation on swaps		362,340
Management fee payable		341,392
Distribution fee payable		187,197
Unrealized depreciation on forward currency contracts		158,981
Transfer agent fee payable		64,536
Deferred Directors’ fees		58,881
Outstanding option written (premium received $68,895)		21,500
Foreign currency, at value (cost $4,249)		4,249
Total liabilities		572,208,494
Net Assets	$	818,417,290
Net assets were comprised of:
Common stock, at par	$	936,169
Paid-in-capital in excess of par		903,602,837
		904,539,006
Distribution in excess of net investment income		(867,064	)
Accumulated net realized loss on investments and foreign currency transactions		(78,723,573	)
Net unrealized depreciation on investments and foreign currencies		(6,531,079	)
Net assets, August 31, 2007	$	818,417,290

See Notes to Financial Statements.

16 Visit our website at www.jennisondryden.com

Class A
Net asset value and redemption price per share ($646,011,761 ÷ 73,888,312 shares of common stock issued and outstanding)	$	8.74
Maximum sales charge (4.50% of offering price)		.41
Maximum offering price to public	$	9.15
Class B
Net asset value, offering price and redemption price per share ($57,127,960 ÷ 6,522,443 shares of common stock issued and outstanding)	$	8.76
Class C
Net asset value, offering price and redemption price per share ($9,434,781 ÷ 1,077,169 shares of common stock issued and outstanding)	$	8.76
Class R
Net asset value, offering price and redemption price per share ($403,522 ÷ 46,065 shares of common stock issued and outstanding)	$	8.76
Class Z
Net asset value, offering price and redemption price per share ($105,439,266 ÷ 12,082,960 shares of common stock issued and outstanding)	$	8.73

See Notes to Financial Statements.

Dryden Government Income Fund, Inc. 17

Statement of Operations

Six Months Ended August 31, 2007 (Unaudited)

Net Investment Income
Income
Unaffiliated interest income (net of foreign withholding taxes of $1,860)	$	17,858,234
Affiliated dividend income		4,216,295
Affiliated income from securities loaned, net		77,364
Total income		22,151,893
Expenses
Management fee		2,135,371
Distribution fee—Class A		847,023
Distribution fee—Class B		302,031
Distribution fee—Class C		34,838
Distribution fee—Class R		1,347
Transfer agent’s fees and expenses (including affiliated expense of $347,100) (Note 3)		697,000
Custodian’s fees and expenses		131,000
Reports to shareholders		40,000
Interest expense		19,766
Directors’ fees		16,000
Registration fees		15,000
Audit fee		14,000
Legal fees and expenses		14,000
Insurance		12,000
Miscellaneous		8,344
Total expenses		4,287,720
Net investment income		17,864,173
Realized And Unrealized Gain (Loss) On Investments And Foreign Currency Transactions
Net realized gain (loss) on:
Investment transactions		(1,869,027	)
Foreign currency transactions		(23,951	)
Financial futures transactions		(335,772	)
Written option transactions		(10,142	)
Short sales		319,304
Swaps		(1,185,972	)
		(3,105,560	)
Net change in unrealized appreciation /depreciation on:
Investments		(5,810,706	)
Foreign currencies		35,113
Financial futures contracts		(416,205	)
Written options		(79,378	)
Short sales		(7,363	)
Swaps		703,085
		(5,575,454	)
Net loss on investments and foreign currency transactions		(8,681,014	)
Net Increase In Net Assets Resulting From Operations	$	9,183,159

See Notes to Financial Statements.

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Statement of Changes in Net Assets

(Unaudited)

	Six Months Ended August 31, 2007			Year Ended February 28, 2007
Increase (Decrease) In Net Assets
Operations
Net investment income	$	17,864,173		$	39,333,652
Net realized loss on investments and foreign currency transactions		(3,105,560	)		(11,317,178	)
Net change in unrealized appreciation /depreciation on investments and foreign currencies		(5,575,454	)		8,329,676
Net increase in net assets resulting from operations		9,183,159			36,346,150
Dividends from net investment income (Note 1)
Class A		(14,531,971	)		(33,841,193	)
Class B		(1,069,174	)		(2,797,382	)
Class C		(175,970	)		(427,319	)
Class R		(10,605	)		(9,559	)
Class Z		(2,393,721	)		(5,015,257	)
		(18,181,441	)		(42,090,710	)
Fund share transactions (net of share conversions) (Note 6)
Net proceeds from shares sold		60,265,486			166,956,928
Net asset value of shares issued in reinvestment of dividends		14,538,892			33,544,875
Cost of shares reacquired		(162,961,538	)		(267,603,742	)
Net decrease in net assets from Fund share transactions		(88,157,160	)		(67,101,939	)
Total decrease		(97,155,442	)		(72,846,499	)
Net Assets
Beginning of period		915,572,732			988,419,231
End of period	$	818,417,290		$	915,572,732

See Notes to Financial Statements.

Dryden Government Income Fund, Inc. 19

Notes to Financial Statements

(Unaudited)

Dryden Government Income Fund, Inc., (the “Fund”), is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. Investment operations commenced on April 22, 1985. The Fund’s investment objective is to seek high current return. The Fund will seek to achieve this objective by investing primarily in U.S. Government Securities, including U.S. Treasury bills, notes, bonds, strips and other debt securities issued by the U.S. Treasury, and obligations, including mortgage-related securities, issued or guaranteed by U.S. Government agencies or instrumentalities.

Note 1. Accounting Policies

The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.

Security Valuation: Securities listed on a securities exchange (other than options on securities and indices) are valued at the last sales price on such exchange on the day of valuation or, if there was no sale on such day, at the mean between the last reported bid and ask prices, or at the last bid price on such day in the absence of an asked price. Securities traded via NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”) on the day of valuation, or if there was no NOCP, at the last sale price. Securities that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed by Prudential Investments LLC (“PI” or “Manager”), in consultation with the subadviser, to be over-the-counter, are valued at market value using prices provided by an independent pricing agent or principal market maker.

U.S. government securities that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed by an Adviser in consultation with the Manager to be over-the-counter, are valued by an independent pricing agent or more than one principal market maker (if available, otherwise by a principal market maker or a primary market dealer). Options on securities and indices traded on an exchange are valued on their last sales price as of the close of trading on the applicable exchange or, if there was no sale, at the mean between the most recently quoted bid and asked prices on such exchange.

Securities for which market quotations are not readily available, or whose values have been affected by events occurring after the close of the security’s foreign market and before the Fund’s normal pricing time, are valued at fair value in accordance with the Board of Directors’ approved fair valuation procedures. When determining the fair

20 Visit our website at www.jennisondryden.com

valuation of securities some of the factors influencing the valuation include, the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the investment adviser regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the price used by other mutual funds to calculate their net asset values. As of August 31, 2007, there were no securities whose values were adjusted in accordance with procedures approved by the Board of Directors.

Futures contracts and options thereon traded on a commodities exchange or board of trade are valued at the last sale price at the close of trading on such exchange or board of trade or, if there was no sale on the applicable commodities exchange or board of trade on such day, at the mean between the most recently quoted prices on such exchange or board of trade or at the last bid price in the absence of an asked price.

Certain fixed income securities for which daily market daily quotations are not readily available may be valued with reference to fixed income securities whose prices are more readily available, pursuant to guidelines established by the Board of Directors. Prices may be obtained from independent pricing services which use information provided by market makers or estimates of market values obtained from yield data relating to investments or securities with similar characteristics.

Investments in mutual funds are valued at their net asset value as of the close of the New York Stock Exchange on the date of valuation.

Short-term debt securities which mature in sixty days or less are valued at amortized cost, which approximates market value. The amortized cost method involves valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of the difference between the principal amount due at maturity and cost. Short-term debt securities which mature in more than sixty days are valued at current market quotations.

Foreign Currency Translation: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on the following basis:

(i) market value of investment securities, other assets and liabilities-at the current daily rates of exchange;

Dryden Government Income Fund, Inc. 21

Notes to Financial Statements

(Unaudited) continued

(ii) purchases and sales of investment securities, income and expenses-at the rates of exchange prevailing on the respective dates of such transactions.

The Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at the end of the period. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of portfolio securities sold during the period. Accordingly, realized foreign currency gains or losses are included in the reported net realized gains or losses on investment transactions.

Net realized gains or losses on foreign currency transactions represent net foreign exchange gains or losses from the holdings of foreign currencies, currency gains or losses realized between the trade and settlement dates on security transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains or losses from valuing foreign currency denominated assets and liabilities (other than investments) at period end exchange rates are reflected as a component of net unrealized appreciation (depreciation) on foreign currencies. Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of domestic origin as a result of, among other factors, the possibility of political and economic instability and the level of governmental supervision and regulation of foreign securities markets.

Financial Futures Contracts: A financial futures contract is an agreement to purchase (long) or sell (short) an agreed amount of securities at a set price for delivery on a future date. Upon entering into a financial futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount. This amount is known as the “initial margin.” Subsequent payments, known as “variation margin,” are made or received by the Fund each day, depending on the daily fluctuations in the value of the underlying security. Such variation margin is recorded for financial statement purposes on a daily basis as unrealized gain or loss. When the contract expires or is closed, the gain or loss is realized and is presented in the Statement of Operations as net realized gain or loss on financial futures transactions.

22 Visit our website at www.jennisondryden.com

The Fund invests in financial futures contracts in order to hedge its existing portfolio securities, or securities the Fund intends to purchase, against fluctuations in value caused by changes in prevailing interest rates or market conditions. Should interest rates move unexpectedly, the Fund may not achieve the anticipated benefits of the financial futures contracts and may realize a loss. The use of futures transactions involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates and the underlying hedged assets.

Forward Currency Contracts: A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate. The Fund may enter into forward currency contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings or on specific receivables and payables denominated in a foreign currency. The contracts are valued daily at current exchange rates and any unrealized gain or loss is included in the Statement of Assets and Liabilities as unrealized appreciation and/or depreciation on forward foreign currency contracts. Gain or loss is realized on the settlement date of the contract equal to the difference between the settlement value of the original and renegotiated forward contracts. This gain or loss, if any, is included in net realized gain or loss on foreign currency transactions. Risks may arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts.

Options: The Fund may either purchase or write options in order to hedge against adverse market movements or fluctuations in value caused by changes in prevailing interest rates with respect to securities which the Fund currently owns or intends to purchase. The Fund’s principal reason for writing options is to realize, through receipt of premiums, a greater current return than would be realized on the underlying security alone. When the Fund purchases an option, it pays a premium and an amount equal to that premium is recorded as an asset. When the Fund writes an option, it receives a premium and an amount equal to that premium is recorded as a liability. The asset or liability is adjusted daily to reflect the current market value of the option. If an option expires unexercised, the Fund realizes a gain or loss to the extent of the premium received or paid. If an option is exercised, the premium received or paid is recorded as an adjustment to the proceeds from the sale or the cost of the purchase in determining whether the Fund has realized a gain or loss. The difference between the premium and the amount received or paid on effecting a closing purchase or sale transaction is also treated as a realized gain or loss. Gain or loss on purchased options is included in net realized gain or loss on investment transactions. Gain or loss on written options is presented separately as net realized gain or loss on option written.

Dryden Government Income Fund, Inc. 23

Notes to Financial Statements

(Unaudited) continued

The Fund, as writer of an option, may have no control over whether the underlying securities may be sold (called) or purchased (put). As a result, the Fund bears the market risk of an unfavorable change in the price of the security underlying the written option. The Fund, as purchaser of an option, bears the risk of the potential inability of the counterparties to meet the terms of their contracts.

Short Sales: The Fund may make short sales of securities as a method of hedging potential price declines in similar securities owned. The Fund may sell a security it does not own in anticipation of a decline in the market value of that security (short sale). When the Fund makes a short sale, it will borrow the security sold short and deliver it to the broker-dealer through which it made the short sale as collateral for its obligation to deliver the security upon conclusion of the sale. The Fund may have to pay a fee to borrow the particular securities and may be obligated to return any interest or dividends received on such borrowed securities. A gain, limited to the price at which the Fund sold the security short, or a loss, unlimited as to dollar amount, will be recognized upon the termination of a short sale if the market price is less or greater than the proceeds originally received, respectively, and is presented in the Statement of Operations as net realized gain or loss on short sales.

Swaps: The Fund may enter into swap agreements. A swap is an agreement to exchange the return generated by one instrument for the return generated by another instrument. The Fund enters into interest rate swap agreements to manage its exposure to interest rates and credit risk.

Interest rate swap agreements involve the exchange by the Fund with another party of their respective commitments to pay or receive interest and may involve payment/receipt of a premium at the time of initiation of the swap agreement. Dividends and interest on the securities in the swap are included in the value of the exchange. The swaps are valued daily at current market value and any unrealized gain or loss is included in the net unrealized appreciation or depreciation on investments. Gain or loss is realized on the termination date of the swap and is equal to the difference between the Fund’s basis in the swap and the proceeds of the closing transaction, including fees. During the period that the swap agreement is open, the Fund may be subject to risk from the potential inability of the counterparty to meet the terms of the agreement.

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Financial future contracts, swaps and written options involve elements of both market and credit risk in excess of the amounts reflected on the Statement of Assets and Liabilities.

Securities Lending: The Fund may lend its portfolio securities to broker-dealers. The loans are secured by collateral at least equal at all times to the market value of the securities loaned. Loans are subject to termination at the option of the borrower or the Fund. Upon termination of the loan, the borrower will return to the lender securities identical to the loaned securities. Should the borrower of the securities fail financially, the Fund has the right to repurchase the securities using the collateral in the open market. The Fund recognizes income, net of any rebate and securities lending agent fees, for lending its securities in the form of fees or interest on the investment of any cash received as collateral. The Fund also continues to receive interest and dividends or amounts equivalent thereto, on the securities loaned and recognizes any unrealized gain or loss in the market price of the securities loaned that may occur during the term of the loan.

Dollar Rolls: The Fund enters into mortgage dollar rolls in which the Fund sells mortgage securities for delivery in the current month, realizing a gain (loss), and simultaneously contracts to repurchase somewhat similar (same type, coupon and maturity) securities on a specified future date. During the roll period, the Fund forgoes principal and interest paid on the securities. The Fund is compensated by the interest earned on the cash proceeds of the initial sale and by the lower repurchase price at the future date. The difference between the sales proceeds and the lower repurchase price is recorded as a realized gain. The Fund maintains a segregated account, the dollar value of which is at least equal to its obligations, with respect to dollar rolls.

Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized and unrealized gains or loss from investment on sales of portfolio securities are calculated on the identified cost basis. Interest income is recorded on the accrual basis. The Fund amortizes premiums and accretes original issue discount on portfolio securities as adjustments to interest income. Expenses are recorded on the accrual basis.

Net investment income or loss (other than distribution fees which are charged directly to the respective class) and unrealized and realized gains or loss are allocated daily to each class of shares based upon the relative proportion of net assets of each class at the beginning of the day.

Dividends and Distributions: The Fund declares daily dividends from net investment income. Payment of dividends is made monthly. Distributions of net capital gains, if any, are made annually.

Dryden Government Income Fund, Inc. 25

Notes to Financial Statements

(Unaudited) continued

Dividends and distributions are determined in accordance with federal income tax regulations which may differ from generally accepted accounting principles, and are recorded on the ex-dividend date. Permanent book/tax differences relating to income and gains are reclassified amongst distributions in excess of net income, accumulated net realized gain or loss and paid-in-capital in excess of par, as appropriate.

Taxes: For federal income tax purposes it is the Fund’s policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required.

Estimates: The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

Note 2. Agreements

The Fund has a management agreement with PI. Pursuant to this agreement, PI has responsibility for all investment advisory services and supervises the subadviser’s performance of such services. PI has entered into a subadvisory agreement with Prudential Investment Management, Inc. (“PIM”). The subadvisory agreement provides that PIM will furnish investment advisory services in connection with the management of the Fund. In connection therewith, PIM is obligated to keep certain books and records of the Fund. PI pays for the services of PIM, the cost of compensation of officers and employees of the Fund, occupancy and certain clerical and bookkeeping costs of the Fund. The Fund bears all other costs and expenses.

The management fee paid to PI is accrued daily and payable monthly at an annual rate of .50 of 1% of the Fund’s average daily net assets up to and including $1 billion, .45 of 1% of the Fund’s average daily net assets of the next $1 billion, .35 of 1% of the Fund’s average daily net assets of the next $1 billion, and .30 of 1% of the average daily net assets of the Fund in excess of $3 billion. The effective management fee rate was .50 of 1% for the six months ended August 31, 2007.

The Fund has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”), which acts as the distributor of the Class A, Class B, Class C, Class R and Class Z shares of the Fund. The Fund compensates PIMS for distributing

26 Visit our website at www.jennisondryden.com

and servicing the Fund’s Class A, Class B, Class C and Class R shares pursuant to plans of distribution (the “Class A, B, C and R Plans”), regardless of expenses actually incurred by PIMS. The distribution fees are accrued daily and payable monthly. No distribution or service fees are paid to PIMS as distributor of the Class Z shares of the Fund.

Pursuant to the Class A, B, C and R Plans, the Fund compensates PIMS for distribution related activities at an annual rate of up to .30 of 1%, 1%, 1% and .75 of 1% of the average daily net assets of the Class A, B, C and R shares, respectively. For the six months ended August 31, 2007, PIMS contractually agreed to limit such fees to .25 of 1%, .75 of 1% and .50 of 1% of the average daily net assets of the Class A, Class C and Class R shares, respectively.

PIMS has advised the Fund that it has received approximately $53,600 in front-end sales charges resulting from sales of Class A share, during the six months ended August 31, 2007. From these fees, PIMS paid a substantial portion of such sales charges to affiliated broker-dealers, which in turn paid commissions to salespersons and incurred other distribution costs.

PIMS has advised the Fund that for the six months ended August 31, 2007, it received approximately $50,700 and $1,600 in contingent deferred sales charges imposed upon redemptions by certain Class B and Class C shareholders, respectively.

PI, PIM and PIMS are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).

Note 3. Other Transactions with Affiliates

Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PI and an indirect, wholly-owned subsidiary of Prudential, serves as the Fund’s transfer agent. Transfer agent’s fees and expenses in the Statement of Operations include certain out-of-pocket expenses paid to non-affiliates, where applicable.

The Fund pays networking fees to affiliated and unaffiliated broker/dealers, including fees related to the services of Wachovia Securities, LLC (“Wachovia”) and First Clearing, LLC (“First Clearing”) affiliates of PI. These networking fees are payments made to broker/dealers that clear mutual fund transactions through a national clearing system. For the six months ended August 31, 2007, the Fund incurred approximately $85,400 in total networking fees, of which approximately $45,100 was paid to First Clearing. The Fund did not pay any amounts to Wachovia during the six months

Dryden Government Income Fund, Inc. 27

Notes to Financial Statements

(Unaudited) continued

ended August 31, 2007. These amounts are included in transfer agent’s fees and expenses in the Statement of Operations.

PIM is the Fund’s security lending agent. For the six months ended August 31, 2007, PIM has been compensated approximately $33,200 for these services.

The Fund invests in the Taxable Money Market Series and the Short-Term Bond Series, separate portfolios of Dryden Core Investment Fund, pursuant to an exemptive order received from the Securities and Exchange Commission. Taxable Money Market Series and the Short-Term Bond Series are mutual funds registered under the Investment Company Act of 1940, as amended, and managed by PI.

Note 4. Portfolio Securities

Purchases and sales of portfolio securities, excluding short-term investments, for the six months ended August 31, 2007, aggregated $9,737,831,974 and $9,814,868,009, respectively.

Transactions in options written during the six months ended August 31, 2007, were as follows:

	Number of Contracts		Premiums Received
Options outstanding at February 28, 2007	168		$	145,148
Options written	654			148,603
Options terminated in closing purchase transactions	(246	)		(162,595	)
Options expired	(146	)		(62,261	)
Options outstanding at August 31, 2007	430		$	68,895

The average balance of dollar rolls outstanding during the six months ended August 31, 2007 was approximately $112,600,000. The amount of dollar rolls outstanding at August 31, 2007 was $50,877,326 (principal $52,000,000), which was 6.2% of total net assets.

Note 5. Distribution and Tax Information

As of February 28, 2007, the Fund had a capital loss carryforward for tax purposes of approximately $73,420,000 of which $20,444,000 expires in 2008, $21,641,000

28 Visit our website at www.jennisondryden.com

expires in 2009, $14,960,000 expires in 2013, $1,845,000 expires in 2014 and $14,530,000 expires in 2015. Approximately $1,537,000 of the Fund’s capital loss carryforward expired unused in the fiscal year ended February 28, 2007. Accordingly, no capital gains distribution is expected to be paid to shareholders until net gains have been realized in excess of such carryforward. The Fund elected to treat

post-October currency losses of approximately $283,000 and capital losses of approximately $1,851,000 as having incurred in the current fiscal year.

The United States federal income tax basis of the Fund’s investments and the net unrealized depreciation as of August 31, 2007 were as follows:

Tax Basis	Appreciation	Depreciation	Net Unrealized Depreciation
$1,049,757,561	$4,331,178	$(12,053,068)	$(7,721,890)

The difference between book basis and tax basis was primarily attributable to deferred losses on wash sales and differences in the treatment of premium amortization for book and tax purposes.

Note 6. Capital

The Fund offers Class A, Class B, Class C, Class R and Class Z shares. Class A shares are sold with a front-end sales charge of up to 4.50% and all investors who purchase Class A shares in an amount of $1 million or more and sell these shares within 12 months of purchase are subject to a contingent deferred sales charge (CDSC) of 1%, including investors who purchase their shares through broker-dealers affiliated with Prudential. Class B shares are sold with a contingent deferred sales charge which declines from 5% to zero depending on the period of time the shares are held. Class C shares purchased are subject to a CDSC of 1% for 12 months from the date of purchase. Class B shares automatically convert to Class A shares on a quarterly basis approximately seven years after purchase. A special exchange privilege is also available for shareholders who qualified to purchase Class A shares at net asset value. Class R and Class Z shares are not subject to any sales or redemption charge and are available exclusively for sale to a limited group of investors.

There are 2.5 billion shares of common stock, $.01 par value per share, divided into five classes, designated Class A, Class B, Class C, Class R and Class Z common stock, each of which consists of 500,000,000 authorized shares.

Dryden Government Income Fund, Inc. 29

Notes to Financial Statements

(Unaudited) continued

Transactions in shares of common stock were as follows:

Class A	Shares		Amount
Six months ended August 31, 2007:
Shares sold	3,646,467		$	31,887,088
Shares issued in reinvestment of dividends	1,282,884			11,196,660
Shares reacquired	(14,333,899	)		(125,425,884	)
Net increase (decrease) in shares outstanding before conversion	(9,404,548	)		(82,342,136	)
Shares issued upon conversion from Class B	274,451			2,401,495
Net increase (decrease) in shares outstanding	(9,130,097	)	$	(79,940,641	)
Year ended February 28, 2007:
Shares sold	12,237,291		$	107,053,974
Shares issued in reinvestment of dividends	2,984,127			26,080,781
Shares reacquired	(22,106,842	)		(193,418,570	)
Net increase (decrease) in shares outstanding before conversion	(6,885,424	)		(60,283,815	)
Shares issued upon conversion from Class B	997,398			8,741,433
Net increase (decrease) in shares outstanding	(5,888,026	)	$	(51,542,382	)
Class B
Six months ended August 31, 2007:
Shares sold	269,776		$	2,361,535
Shares issued in reinvestment of dividends	99,052			866,102
Shares reacquired	(912,394	)		(7,973,794	)
Net increase (decrease) in shares outstanding before conversion	(543,566	)		(4,746,157	)
Shares reacquired upon conversion into Class A	(273,845	)		(2,401,495	)
Net increase (decrease) in shares outstanding	(817,411	)	$	(7,147,652	)
Year ended February 28, 2007:
Shares sold	466,552		$	4,088,154
Shares issued in reinvestment of dividends	254,729			2,229,854
Shares reacquired	(2,461,178	)		(21,537,160	)
Net increase (decrease) in shares outstanding before conversion	(1,739,897	)		(15,219,152	)
Shares reacquired upon conversion into Class A	(995,127	)		(8,741,433	)
Net increase (decrease) in shares outstanding	(2,735,024	)	$	(23,960,585	)

30 Visit our website at www.jennisondryden.com

Class C	Shares		Amount
Six months ended August 31, 2007:
Shares sold	211,472		$	1,844,520
Shares issued in reinvestment of dividends	13,057			114,199
Shares reacquired	(250,451	)		(2,192,644	)
Net increase (decrease) in shares outstanding	(25,922	)	$	(233,925	)
Year ended February 28, 2007:
Shares sold	177,118		$	1,552,831
Shares issued in reinvestment of dividends	31,430			275,256
Shares reacquired	(409,602	)		(3,593,769	)
Net increase (decrease) in shares outstanding	(201,054	)	$	(1,765,682	)
Class R
Six months ended August 31, 2007:
Shares sold	24,490		$	213,880
Shares issued in reinvestment of dividends	146			1,271
Shares reacquired	(61,095	)		(534,028	)
Net increase (decrease) in shares outstanding	(36,459	)	$	(318,877	)
Year ended February 28, 2007:
Shares sold	94,922		$	838,839
Shares issued in reinvestment of dividends	15			130
Shares reacquired	(12,704	)		(112,213	)
Net increase (decrease) in shares outstanding	82,233		$	726,756
Class Z
Six months ended August 31, 2007:
Shares sold	2,749,094		$	23,958,463
Shares issued in reinvestment of dividends	271,021			2,360,660
Shares reacquired	(3,072,855	)		(26,835,188	)
Net increase (decrease) in shares outstanding	(52,740	)	$	(516,065	)
Year ended February 28, 2007:
Shares sold	6,107,502		$	53,423,130
Shares issued in reinvestment of dividends	568,336			4,958,854
Shares reacquired	(5,610,753	)		(48,942,030	)
Net increase (decrease) in shares outstanding	1,065,085		$	9,439,954

Note 7. Borrowings

The Fund, along with other affiliated registered investment companies (the ”Funds”), is a party to a Syndicated Credit Agreement (“SCA”) with two banks. The SCA which was renewed on October 27, 2006 provides for a commitment of $500 million. Interest on any borrowings under the SCA is incurred at contracted market rates and a commitment fee for the unused amount is accrued daily and paid quarterly. The

Dryden Government Income Fund, Inc. 31

Notes to Financial Statements

(Unaudited) continued

Funds pay a commitment fee of .07 of 1% of the unused portion of the SCA. The expiration date of the SCA will be October 26, 2007. The SCA is in the process of being renewed through October 24, 2008. The purpose of the SCA is to provide an alternative source of temporary funding for capital share redemptions. During the six months ended August 31, 2007, the Fund borrowed $675,000 pursuant to the SCA for one day at an interest rate of 5.725%.

Note 8. New Accounting Pronouncements

On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes” (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. The impact of the tax positions not deemed to meet the more-likely-than-not threshold would be recorded in the year in which they arise. On December 22, 2006, the Securities and Exchange Commission delayed the effective date until the last net asset value calculation in the first required financial reporting period for its fiscal year beginning after December 15, 2006. The Fund’s financial statements have not been impacted by the adoption of FIN 48. However, the conclusions regarding FIN 48 may be subject to review and adjustment at a later date based on factors including, but not limited to, further implementation guidance expected from FASB and on-going analysis of tax laws, regulations and interpretations thereof.

On September 20, 2006, the FASB released Statement of Financial Accounting Standards No. 157 “Fair Value Measurements” (FAS 157). FAS 157 establishes an authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair-value measurements. The application of FAS 157 is required for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The Fund’s financial statements have not been impacted by the adoption of FIN 48. However, the conclusions regarding FIN 48 may be subject to review and adjustment at a later date based on factors including, but not limited to, further implementation guidance expected from FASB, and on-going analysis of tax laws, regulations, and interpretations thereof.

32 Visit our website at www.jennisondryden.com

Financial Highlights

(Unaudited)

AUGUST 31, 2007 SEMIANNUAL REPORT

Dryden Government Income Fund, Inc.

Financial Highlights

(Unaudited)

	Class A
	Six Months Ended August 31, 2007
Per Share Operating Performance:
Net Asset Value, Beginning Of Period	$	8.83
Income from investment operations:
Net investment income		.18
Net realized and unrealized gain (loss) on investment transactions		(.08	)
Total from investment operations		.10
Less Distributions:
Dividends from net investment income		(.19	)
Net asset value, end of period	$	8.74
Total Return(a):		1.11	%
Ratios/Supplemental Data:
Net assets, end of period (000)	$	646,012
Average net assets (000)	$	673,936
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees(b)		.98	%(c)
Expenses, excluding distribution and service (12b-1) fees		.73	%(c)
Net investment income		4.22	%(c)
Portfolio turnover rate		1135	%(d)

(a) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported, and includes reinvestment of dividends and distributions. Total investment returns may reflect adjustments to conform to generally accepted accounting principles. Total return for periods less than one full year are not annualized.

(b) The distributor of the Fund contractually agreed to limit its distribution and service (12b-1) fees to .25 of 1% of the average daily net assets of the Class A shares.

(c) Annualized.

(d) Not annualized.

See Notes to Financial Statements.

34 Visit our website at www.jennisondryden.com

Class A
Year Ended February 28/29,
2007			2006			2005			2004			2003
$	8.88		$	9.04		$	9.30		$	9.47		$	9.09
	.37			.34			.34			.38			.46
	(.02	)		(.13	)		(.22	)		(.17	)		.38
	.35			.21			.12			.21			.84
	(.40	)		(.37	)		(.38	)		(.38	)		(.46	)
$	8.83		$	8.88		$	9.04		$	9.30		$	9.47
	4.03	%		2.33	%		1.29	%		2.34	%		9.51	%
$	733,190		$	789,162		$	830,603		$	909,360		$	1,046,220
$	745,577		$	811,520		$	854,446		$	973,773		$	990,018
	.98	%		.97	%		.95	%		.98	%		.94	%
	.73	%		.72	%		.70	%		.73	%		.69	%
	4.24	%		3.78	%		4.09	%		3.95	%		4.73	%
	837	%		597	%		611	%		646	%		479	%

See Notes to Financial Statements.

Dryden Government Income Fund, Inc. 35

Financial Highlights

(Unaudited) continued

	Class B
	Six Months Ended August 31, 2007
Per Share Operating Performance:
Net Asset Value, Beginning Of Period	$	8.84
Income from investment operations:
Net investment income		.15
Net realized and unrealized gain (loss) on investment transactions		(.07	)
Total from investment operations		.08
Less Distributions:
Dividends from net investment income		(.16	)
Net asset value, end of period	$	8.76
Total Return(a):		.85	%
Ratios/Supplemental Data:
Net assets, end of period (000)	$	57,128
Average net assets (000)	$	60,078
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees		1.73	%(b)
Expenses, excluding distribution and service (12b-1) fees		.73	%(b)
Net investment income		3.46	%(b)

(a) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported, and includes reinvestment of dividends and distributions. Total investment returns may reflect adjustments to conform to generally accepted accounting principles. Total return for periods less than one full year are not annualized.

(b) Annualized.

See Notes to Financial Statements.

36 Visit our website at www.jennisondryden.com

Class B
Year Ended February 28/29,
2007			2006			2005			2004			2003
$	8.89		$	9.06		$	9.31		$	9.49		$	9.09
	.30			.27			.27			.32			.41
	(.02	)		(.14	)		(.21	)		(.18	)		.40
	.28			.13			.06			.14			.81
	(.33	)		(.30	)		(.31	)		(.32	)		(.41	)
$	8.84		$	8.89		$	9.06		$	9.31		$	9.49
	3.25	%		1.46	%		.65	%		1.50	%		9.11	%
$	64,920		$	89,585		$	123,178		$	163,800		$	218,806
$	73,818		$	105,681		$	138,570		$	192,823		$	183,620
	1.73	%		1.72	%		1.70	%		1.70	%		1.52	%
	.73	%		.72	%		.70	%		.73	%		.69	%
	3.50	%		3.02	%		3.34	%		3.25	%		4.12	%

See Notes to Financial Statements.

Dryden Government Income Fund, Inc. 37

Financial Highlights

(Unaudited) continued

	Class C
	Six Months Ended August 31, 2007
Per Share Operating Performance:
Net Asset Value, Beginning Of Period	$	8.85
Income from investment operations:
Net investment income		.16
Net realized and unrealized gain (loss) on investment transactions		(.08	)
Total from investment operations		.08
Less Distributions:
Dividends from net investment income		(.17	)
Net asset value, end of period	$	8.76
Total Return(a):		.86	%
Ratios/Supplemental Data:
Net assets, end of period (000)	$	9,435
Average net assets (000)	$	9,240
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees(b)		1.48	%(c)
Expenses, excluding distribution and service (12b-1) fees		.73	%(c)
Net investment income		3.71	%(c)

(a) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported, and includes reinvestment of dividends and distributions. Total investment returns may reflect adjustments to conform to generally accepted accounting principles. Total return for periods less than one full year are not annualized.

(b) The distributor of the Fund contractually agreed to limit its distribution and service (12b-1) fees to .75 of 1% of the average daily net assets of the Class C shares.

(c) Annualized.

See Notes to Financial Statements.

38 Visit our website at www.jennisondryden.com

Class C
Year Ended February 28/29,
2007			2006			2005			2004			2003
$	8.89		$	9.06		$	9.31		$	9.49		$	9.09
	.32			.29			.29			.34			.41
	(.01	)		(.14	)		(.21	)		(.18	)		.40
	.31			.15			.08			.16			.81
	(.35	)		(.32	)		(.33	)		(.34	)		(.41	)
$	8.85		$	8.89		$	9.06		$	9.31		$	9.49
	3.62	%		1.71	%		.90	%		1.72	%		9.20	%
$	9,760		$	11,597		$	14,675		$	23,572		$	29,986
$	10,601		$	13,109		$	18,930		$	27,705		$	25,168
	1.48	%		1.47	%		1.45	%		1.48	%		1.44	%
	.73	%		.72	%		.70	%		.73	%		.69	%
	3.75	%		3.27	%		3.59	%		3.47	%		4.17	%

See Notes to Financial Statements.

Dryden Government Income Fund, Inc. 39

Financial Highlights

(Unaudited) continued

	Class R
	Six Months Ended August 31, 2007
Per Share Operating Performance:
Net Asset Value, Beginning Of Period	$	8.84
Income from investment operations:
Net investment income		.18
Net realized and unrealized gain (loss) on investment transactions		(.08	)
Total from investment operations		.10
Less Distributions:
Dividends from net investment income		(.18	)
Net asset value, end of period	$	8.76
Total Return(b):		1.10	%
Ratios/Supplemental Data:
Net assets, end of period (000)	$	403
Average net assets (000)	$	536
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees(c)		1.23	%(e)
Expenses, excluding distribution and service (12b-1) fees		.73	%(e)
Net investment income		3.86	%(e)

(a) Commencement of operations.

(b) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported, and includes reinvestment of dividends and distributions. Total investment returns may reflect adjustments to conform to generally accepted accounting principles. Total return for periods less than one full year are not annualized.

(c) During the period, the Distributor of the Fund contractually agreed to limit its distribution and service (12b-1) fees to .50 of 1% of the average daily net assets of the Class R shares.

(d) Figure is actual and not rounded to the nearest thousand.

(e) Annualized.

See Notes to Financial Statements.

40 Visit our website at www.jennisondryden.com

Class R
Year Ended February 28,						May 17, 2004(a) Through February 28, 2005
2007			2006
$	8.88		$	9.05		$	8.99
	.37			.32			.25
	(.04	)		(.15	)		.10
	.33			.17			.35
	(.37	)		(.34	)		(.29	)
$	8.84		$	8.88		$	9.05
	3.78	%		2.06	%		3.89	%
$	730		$	2,585	(d)	$	2,535	(d)
$	225		$	2,562	(d)	$	1,642	(d)
	1.23	%		1.22	%		1.20	%(e)
	.73	%		.72	%		.70	%(e)
	3.96	%		3.51	%		4.01	%(e)

See Notes to Financial Statements.

Dryden Government Income Fund, Inc. 41

Financial Highlights

(Unaudited) continued

	Class Z
	Six Months Ended August 31, 2007
Per Share Operating Performance:
Net Asset Value, Beginning Of Period	$	8.81
Income from investment operations:
Net investment income		.20
Net realized and unrealized gain (loss) on investment transactions		(.08	)
Total from investment operations		.12
Less Distributions:
Dividends from net investment income		(.20	)
Net asset value, end of period	$	8.73
Total Return(a):		1.35	%
Ratios/Supplemental Data:
Net assets, end of period (000)	$	105,439
Average net assets (000)	$	105,717
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees		.73	%(b)
Expenses, excluding distribution and service (12b-1) fees		.73	%(b)
Net investment income		4.43	%(b)

(a) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported, and includes reinvestment of dividends and distributions. Total investment returns may reflect adjustments to conform to generally accepted accounting principles. Total return for periods less than one full year are not annualized.

(b) Annualized.

See Notes to Financial Statements.

42 Visit our website at www.jennisondryden.com

Class Z
Year Ended February 28/29,
2007			2006			2005			2004			2003
$	8.86		$	9.02		$	9.28		$	9.46		$	9.07
	.39			.36			.36			.41			.48
	(.02	)		(.13	)		(.22	)		(.18	)		.39
	.37			.23			.14			.23			.87
	(.42	)		(.39	)		(.40	)		(.41	)		(.48	)
$	8.81		$	8.86		$	9.02		$	9.28		$	9.46
	4.29	%		2.58	%		1.54	%		2.48	%		9.79	%
$	106,972		$	98,073		$	91,618		$	78,619		$	103,816
$	104,606		$	92,789		$	85,837		$	97,237		$	86,453
	.73	%		.72	%		.70	%		.73	%		.69	%
	.73	%		.72	%		.70	%		.73	%		.69	%
	4.50	%		4.04	%		4.36	%		4.22	%		4.95	%

See Notes to Financial Statements.

Dryden Government Income Fund, Inc. 43

Approval of Advisory Agreements

The Board of Directors (the “Board”) of Dryden Government Income Fund, Inc. (the “Fund”) oversees the management of the Fund, and, as required by law, determines annually whether to renew the Fund’s management agreement with Prudential Investments LLC (“PI”) and the Fund’s subadvisory agreement with Prudential Investment Management, Inc. (“PIM”). In considering the renewal of the agreements, the Board, including all of the Independent Directors, met on June 6-7, 2007 and approved the renewal of the agreements through July 31, 2008, after concluding that renewal of the agreements was in the best interests of the Fund and its shareholders.

In advance of the meetings, the Board received materials relating to the agreements, and had the opportunity to ask questions and request further information in connection with their consideration. Among other things, the Board considered comparisons with other mutual funds in relevant Peer Universes and Peer Groups. The mutual funds included in each Peer Universe or Peer Group were objectively determined solely by Lipper Inc., an independent provider of mutual fund data. The comparisons placed the Fund in various quartiles over the one-, three- five- and ten-year periods ending December 31, 2006, with the first quartile being the best 25% of the mutual funds (for performance, the best performing mutual funds and, for expenses, the lowest cost mutual funds).

In approving the agreements, the Board, including the Independent Directors advised by independent legal counsel, considered the factors they deemed relevant, including the nature, quality and extent of services provided, the performance of the Fund, the profitability of PI and its affiliates, expenses and fees, and the potential for economies of scale that may be shared with the Fund and its shareholders. In their deliberations, the Directors did not identify any single factor which alone was responsible for the Board’s decision to approve the agreements with respect to the Fund. In connection with their deliberations, the Board considered information provided by PI throughout the year at regular Board meetings, presentations from portfolio managers and other information, as well as information furnished at or in advance of the meetings on June 6-7, 2007.

The Directors determined that the overall arrangements between the Fund and PI, which serves as the Fund’s investment manager pursuant to a management agreement, and between PI and PIM, which serves as the Fund’s subadviser pursuant to the terms of a subadvisory agreement with PI, are fair and reasonable in light of the services performed, fees charged and such other matters as the Directors considered relevant in the exercise of their business judgment.

Dryden Government Income Fund, Inc.

Approval of Advisory Agreements (continued)

The material factors and conclusions that formed the basis for the Directors reaching their determinations to approve the continuance of the agreements are separately discussed below.

Nature, quality and extent of services

The Board received and considered information regarding the nature and extent of services provided to the Fund by PI and PIM. The Board considered the services provided by PI, including but not limited to the oversight of the subadviser for the Fund, as well as the provision of fund recordkeeping, compliance, and other services to the Fund. With respect to PI’s oversight of the subadviser, the Board noted that PI’s Strategic Investment Research Group (“SIRG”), which is a business unit of PI, is responsible for monitoring and reporting to PI’s senior management on the performance and operations of the subadviser. The Board also considered that PI pays the salaries of all of the officers and non-independent Directors of the Fund. The Board also considered the investment subadvisory services provided by PIM, as well as adherence to the Fund’s investment restrictions and compliance with applicable Fund policies and procedures. The Board considered PI’s evaluation of the subadviser as well as PI’s recommendation, based on its review of the subadviser, to renew the subadvisory agreement.

The Board reviewed the qualifications, backgrounds and responsibilities of PI’s senior management responsible for the oversight of the Fund and PIM, and also reviewed the qualifications, backgrounds and responsibilities of PIM’s portfolio managers who are responsible for the day-to-day management of the Fund’s portfolio. The Board was provided with information pertaining to PI’s and PIM’s organizational structure, senior management, investment operations, and other relevant information pertaining to both PI and PIM. The Board also noted that it received favorable compliance reports from the Fund’s Chief Compliance Officer (CCO) as to both PI and PIM. The Board noted that PIM is affiliated with PI.

The Board concluded that it was satisfied with the nature, extent and quality of the investment management services provided by PI and the subadvisory services provided to the Fund by PIM, and that there was a reasonable basis on which to conclude that the Fund benefits from the services provided by PI and PIM under the management and subadvisory agreements.

Performance of Dryden Government Income Fund

The Board received and considered information about the Fund’s historical performance. The Board considered that the Fund’s gross performance in relation to its Peer Universe (the Lipper Retail and Institutional General U.S. Government Funds

Visit our website at www.jennisondryden.com

Performance Universe) was in the second quartile for the one-year period, and was in the third quartile for the three-, five- and ten-year periods. The Board also considered that the Fund’s net performance (which reflects the impact of any subsidies, waivers or expense caps) over the same periods was in the second quartile. The Board further noted that the Fund outperformed or performed competitively against its benchmark index for the one-, three-, five- and ten-year periods. The Board concluded that, in light of the Fund’s competitive performance, it would be in the best interest of the Fund and its shareholders to renew the agreements.

Fees and Expenses

The Board considered that the Fund’s contractual management fee and total expenses ranked in the Expense Group’s second quartile, though the Fund’s actual management fee (which reflects any subsidies, expense caps or waivers) ranked in the Expense Group’s third quartile. The Board concluded that the management and subadvisory fees are reasonable in light of the services provided.

Costs of Services and Profits Realized by PI

The Board was provided with information on the profitability of PI and its affiliates in serving as the Fund’s investment manager. The Board discussed with PI the methodology utilized in assembling the information regarding profitability and considered its reasonableness. The Board recognized that it is difficult to make comparisons of profitability from fund management contracts because comparative information is not generally publicly available and is affected by numerous factors, including the structure of the particular adviser, the types of funds it manages, its business mix, numerous assumptions regarding allocations and the adviser’s capital structure and cost of capital. The Board did not separately consider the profitability of the subadviser, an affiliate of PI, as its profitability was reflected in the profitability report for PI. Taking these factors into account, the Board concluded that the profitability of PI and its affiliates in relation to the services rendered was not unreasonable.

Economies of Scale

The Board noted that the management fee schedule for the Fund includes breakpoints, which have the effect of decreasing the fee rate as net assets increase, but at the current level of net assets the Fund does not realize the effect of those rate reductions. The Board received and discussed information concerning whether PI realizes economies of scale as the Fund’s net assets grow beyond current levels. The Board took note that the Fund’s fee structure would result in benefits to Fund shareholders when (and if) net assets reach the levels at which the fee rate is reduced. These benefits will accrue whether or not PI is then realizing any economies of scale.

Dryden Government Income Fund, Inc.

Approval of Advisory Agreements (continued)

Other Benefits to PI and PIM

The Board considered potential ancillary benefits that might be received by PI and PIM and their affiliates as a result of their relationship with the Fund. The Board concluded that potential benefits to be derived by PI included brokerage commissions received by affiliates of PI, transfer agency fees received by the Fund’s transfer agent (which is affiliated with PI), as well as reputational or other intangible benefits resulting from PI’s association with the Fund. The Board concluded that the potential benefits to be derived by PIM included its ability to use soft dollar credits, brokerage commissions received by affiliates of PIM, as well as the potential benefits consistent with those generally resulting from an increase in assets under management, specifically, potential access to additional research resources and reputational benefits. The Board concluded that the benefits derived by PI and PIM were consistent with the types of benefits generally derived by investment managers and subadvisers to mutual funds.

After full consideration of these factors, the Board concluded that the approval of the agreements was in the best interest of the Fund and its shareholders.

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n MAIL	n TELEPHONE	n WEBSITE
Gateway Center Three 100 Mulberry Street Newark, NJ 07102	(800) 225-1852	www.jennisondryden.com

PROXY VOTING

The Board of Directors of the Fund has delegated to the Fund’s investment subadviser the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Fund. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852 or by visiting the Securities and Exchange Commission’s website at www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund’s website and on the Commission’s website.

DIRECTORS

Linda W. Bynoe • David E.A. Carson • Robert F. Gunia • Robert E. La Blanc • Douglas H. McCorkindale • Richard A. Redeker • Judy A. Rice • Robin B. Smith • Stephen G. Stoneburn • Clay T. Whitehead

OFFICERS

Judy A. Rice, President • Robert F. Gunia, Vice President • Grace C. Torres, Treasurer and Principal Financial and Accounting Officer • Kathryn L. Quirk, Chief Legal Officer • Deborah A. Docs, Secretary • Timothy J. Knierim, Chief Compliance Officer • Valerie M. Simpson, Deputy Chief Compliance Officer • Noreen M. Fierro, Anti-Money Laundering Compliance
Officer • Jonathan D. Shain, Assistant Secretary • Claudia DiGiacomo, Assistant Secretary •
John P. Schwartz, Assistant Secretary • Andrew R. French, Assistant Secretary •
M. Sadiq Peshimam, Assistant Treasurer • Peter Parrella, Assistant Treasurer

MANAGER	Prudential Investments LLC	Gateway Center Three 100 Mulberry Street Newark, NJ 07102
INVESTMENT SUBADVISER	Prudential Investment Management, Inc.	Gateway Center Two 100 Mulberry Street Newark, NJ 07102
DISTRIBUTOR	Prudential Investment Management Services LLC	Gateway Center Three 100 Mulberry Street Newark, NJ 07102
CUSTODIAN	The Bank of New York Mellon Corp.	One Wall Street New York, NY 10286
TRANSFER AGENT	Prudential Mutual Fund Services LLC	P.O. Box 9658 Providence, RI 02940
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	KPMG LLP	345 Park Avenue New York, NY 10154
FUND COUNSEL	Willkie Farr & Gallagher LLP	787 Seventh Avenue New York, NY 10019

An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. The prospectus for the Fund contains this and other information about the Fund. An investor may obtain a prospectus by visiting our website at www.jennisondryden.com or by calling (800) 225-1852. The prospectus should be read carefully before investing.

E-DELIVERY

To receive your mutual fund documents on-line, go to www.icsdelivery.com/prudential/funds
and enroll. Instead of receiving printed documents by mail, you will receive notification via e-mail when new materials are available. You can cancel your enrollment or change your e-mail address at any time by clicking on the change/cancel enrollment option at the icsdelivery website address.

SHAREHOLDER COMMUNICATIONS WITH DIRECTORS

Shareholders can communicate directly with the Board of Directors by writing to the Chair of the Board, Dryden Government Income Fund, Inc., Prudential Investments, Attn: Board of Directors, 100 Mulberry Street, Gateway Center Three, Newark, NJ 07102. Shareholders can communicate directly with an individual Director by writing to the same address. Communications are not screened before being delivered to the addressee.

AVAILABILITY OF PORTFOLIO SCHEDULE

The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available on the Commission’s website at www.sec.gov. The Fund’s Forms N-Q may also be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation and location of the Public Reference Room may be obtained by calling (800) SEC-0330 (732-0330). The Fund’s schedule of portfolio holdings is also available on the Fund’s website as of the end of each fiscal quarter.

Mutual Funds:

ARE NOT INSURED BY THE FDIC OR ANY FEDERAL GOVERNMENT AGENCY MAY LOSE VALUE ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE

Dryden Government Income Fund, Inc.
	Share Class	A	B	C	R	Z
	NASDAQ	PGVAX	PBGPX	PRICX	PGVAX	PGVZX
	CUSIP	26243M103	26243M202	26243M301	26243M509	26243M400

MF128E2    IFS-A139682    Ed. 10/2007

Item 2 – Code of Ethics – Not required, as this is not an annual filing.

Item 3 – Audit Committee Financial Expert – Not required, as this is not an annual filing.

Item 4 – Principal Accountant Fees and Services – Not required, as this is not an annual filing.

Item 5 – Audit Committee of Listed Registrants – Not applicable.

Item 6 – Schedule of Investments – The schedule is included as part of the report to shareholders filed under Item 1 of this Form.

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 – Not applicable.

Item 11 – Controls and Procedures

(a) It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure.

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

Item 12 – Exhibits

(a)	(1)    Code of Ethics – Not required, as this is not an annual filing.
	(2)    Certifications pursuant to Section 302 of the Sarbanes-Oxley Act – Attached hereto as Exhibit EX-99.CERT.
	(3)    Any written solicitation to purchase securities under Rule 23c-1. – Not applicable.
(b)	Certifications pursuant to Section 906 of the Sarbanes-Oxley Act – Attached hereto as Exhibit EX-99.906CERT.

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) Dryden Government Income Fund, Inc.
By (Signature and Title)*	/s/ Deborah A. Docs
	Deborah A. Docs
	Secretary
Date October 24, 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.

By (Signature and Title)*	/s/ Judy A. Rice
	Judy A. Rice
	President and Principal Executive Officer
Date October 24, 2007

By (Signature and Title)*	/s/ Grace C. Torres
	Grace C. Torres
	Treasurer and Principal Financial Officer
Date October 24, 2007

* Print the name and title of each signing officer under his or her signature.

EX-99.CERT

Item 12

Dryden Government Income Fund, Inc.

Semi-Annual period ending 08/31/07

File No. 811-03712

CERTIFICATIONS

I, Judy A. Rice, certify that:

1. I have reviewed this report on Form N-CSR of Dryden Government Income Fund, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report.

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and;

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal controls which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 24, 2007

/s/ Judy A. Rice

Judy A. Rice

President and Principal Executive Officer

Item 12

Dryden Government Income Fund, Inc.

Semi-Annual period ending 08/31/07

File No. 811-03712

CERTIFICATIONS

I, Grace C. Torres, certify that:

1. I have reviewed this report on Form N-CSR of Dryden Government Income Fund, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report.

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and;

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal controls which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 24, 2007

/s/ Grace C. Torres

Grace C. Torres

Treasurer and Principal Financial Officer

EX-99.906CERT

Certification Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

Name of Issuer: Dryden Government Income Fund, Inc.

In connection with the Report on Form N-CSR of the above-named issuer that is accompanied by this certification, the undersigned hereby certifies, to his or her knowledge, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer.

Date: October 24, 2007	/s/ Judy A. Rice
	Judy A. Rice
	President and Principal Executive Officer
Date: October 24, 2007	/s/ Grace C. Torres
	Grace C. Torres
	Treasurer and Principal Financial Officer