-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J4Wv0+N8kzEXA97oGLE/AxO9wMDL9l17GSrI4AK2oWiDrGo3qXqWzCTunoasCvFR VZgs20dN4eBTpjX8PgLAog== 0001193125-06-139624.txt : 20060630 0001193125-06-139624.hdr.sgml : 20060630 20060629174608 ACCESSION NUMBER: 0001193125-06-139624 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 20060430 FILED AS OF DATE: 20060630 DATE AS OF CHANGE: 20060629 EFFECTIVENESS DATE: 20060630 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DRYDEN MUNICIPAL BOND FUND CENTRAL INDEX KEY: 0000807394 IRS NUMBER: 000000000 STATE OF INCORPORATION: MA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-04930 FILM NUMBER: 06935106 BUSINESS ADDRESS: STREET 1: GATEWAY CENTER THREE, 4TH FLOOR STREET 2: 100 MULBERRY STREET CITY: NEWARK STATE: NJ ZIP: 07102 BUSINESS PHONE: 9738026469 MAIL ADDRESS: STREET 1: GATEWAY CENTER THREE, 4TH FLOOR STREET 2: 100 MULBERRY STREET CITY: NEWARK STATE: NJ ZIP: 07102 FORMER COMPANY: FORMER CONFORMED NAME: PRUDENTIAL MUNICIPAL BOND FUND DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: PRUDENTIAL BACHE MUNICIPAL BOND FUND DATE OF NAME CHANGE: 19910527 0000807394 S000004642 INSURED SERIES C000012646 Class A PMIAX C000012647 Class B PMINX C000012648 Class C PMICX C000012649 Class Z PMIZX 0000807394 S000004643 HIGH INCOME SERIES C000012650 Class Z PHIZX C000012651 Class A PRHAX C000012652 Class B PMHYX C000012653 Class C PHICX N-CSR 1 dncsr.htm DRYDEN MUNICIPAL BOND FUND -- INSURED SERIES / HIGH INCOME SERIES Dryden Municipal Bond Fund -- Insured Series / High Income Series

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:

   811-04930

Exact name of registrant as specified in charter:

   Dryden Municipal Bond
  

Fund

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:

   973-367-7521

Date of fiscal year end:

   4/30/2006

Date of reporting period:

   4/30/2006


Item 1 – Reports to Stockholders


 

LOGO

Dryden Municipal Bond Fund/

High Income Series & Insured Series

 

APRIL 30, 2006   ANNUAL REPORT

 

LOGO

FUND TYPE

Municipal Bond

 

OBJECTIVE

High Income Series: Maximum amount of income that is eligible for exclusion from federal income taxes.

 

Insured Series: Maximum amount of income that is eligible for exclusion from federal income taxes, consistent with the preservation of capital.

 

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 Series’ portfolio holdings are for the period covered by this report and are subject to change thereafter.

 

JennisonDryden is a registered trademark of The Prudential Insurance Company of America.

LOGO


 

 

June 16, 2006

 

Dear Shareholder:

 

We hope you find the annual report for the Dryden Municipal Bond Fund/High Income Series and Insured Series informative and useful. As a JennisonDryden mutual fund shareholder, you may be thinking about where you can find additional growth opportunities. You could invest in last year’s top-performing asset class and hope history repeats itself or you could stay in cash while waiting for the “right moment” to invest.

 

Instead, we believe it is better to take advantage of developing domestic and global investment opportunities through a diversified portfolio of stock and bond mutual funds. A diversified asset allocation offers two potential advantages. It helps you manage downside risk by not being overly exposed to any particular asset class, plus it gives you a better opportunity to have at least some of your assets in the right place at the right time. Your financial professional can help you create a diversified investment plan that may include mutual funds covering all the basic asset classes and that reflects your personal investor profile and tolerance for risk.

 

JennisonDryden Mutual Funds gives you a wide range of choices that can help you make progress toward your financial goals. Our funds offer the experience, resources, and professional discipline of three leading asset managers. They are recognized and respected in the institutional market and by discerning investors for excellence in their respective strategies. JennisonDryden equity funds are advised by Jennison Associates LLC or Quantitative Management Associates LLC (QMA). Prudential Investment Management, Inc. (PIM) advises the JennisonDryden fixed income and money market funds. Jennison Associates, QMA, and PIM are registered investment advisors and Prudential Financial companies.

 

Thank you for choosing JennisonDryden Mutual Funds.

 

Sincerely,

 

LOGO

 

Judy A. Rice, President

Dryden Municipal Bond Fund

 

Dryden Municipal Bond Fund   1


Your Series’ Performance

 

High Income Series

 

Series objective

The investment objective of the Dryden Municipal Bond Fund/High Income Series (the Series) is to seek the maximum amount of income that is eligible for exclusion from federal income taxes. There can be no assurance that the Series 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 4.00% (Class A shares).

 

Cumulative Total Returns1 as of 4/30/06                         
       One Year       Five Years       Ten Years       Since Inception2  

Class A

   4.84%     33.06 %   69.61 %   165.41 %

Class B

   4.48     31.38     64.90     223.63  

Class C

   4.23     29.77     60.87       76.96  

Class Z

   5.08     34.74     N/A       67.14  

LB Muni Bond Index3

   2.16     30.07     77.30     ***  

LB Non-Investment-Grade Muni
Bond Index4, 5

   7.46     45.35     94.41     ****  

Lipper HY Muni Debt Funds Avg.6

   4.89     34.00     68.24     *****  
                          
Average Annual Total Returns1 as of 3/31/06                    
     One Year     Five Years     Ten Years     Since Inception2  

Class A

   1.94 %   4.85 %   4.891 %   5.931 %

Class B

   0.92     5.30     5.011     6.531  

Class C

   4.68     5.20     4.751     5.001  

Class Z

   6.43     5.97     N/A     5.511  

LB Muni Bond Index3

   3.81     5.18     5.87     ***  

LB Non-Investment-Grade Muni
Bond Index4, 5

   9.12     7.55     6.76     ****  

Lipper HY Muni Debt Funds Avg.6

   6.14     5.83     5.24     *****  

 

2   Visit our website at www.jennisondryden.com


 

 

Distribution and Yields1 as of 4/30/06  
     Total Distributions
Paid for 12 Months
   30-Day
SEC Yield
    Taxable Equivalent Yield7
at Tax Rates of
 
          33%     35%  

Class A

   $ 0.49    3.97 %   5.93 %   6.11 %

Class B

   $ 0.46    3.88     5.79     5.97  

Class C

   $ 0.44    3.63     5.42     5.58  

Class Z

   $ 0.51    4.39     6.55     6.75  

 

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 4.00%. 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 Z shares are not subject to a sales charge.

 

1Source: Prudential Investments LLC and Lipper Inc. The average annual total returns take into account applicable sales charges. During certain periods shown, fee waivers and/or expense reimbursements were in effect. Without such fee waivers and expense reimbursements, the returns for the share classes would have been lower. Class A, Class B, and Class C shares are subject to an annual distribution and service (12b-1) fee of up to 0.30%, 0.50%, and 1.00%, 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.

2Inception dates: Class A, 1/22/90; Class B, 9/17/87; Class C, 8/1/94; and Class Z, 9/16/96.

3The Lehman Brothers (LB) Municipal (Muni) Bond Index is an unmanaged index of over 39,000 long-term investment-grade municipal bonds. It gives a broad look at how long-term investment-grade municipal bonds have performed.

4The Lehman Brothers (LB) Non-Investment-Grade Municipal (Muni) Bond Index is an unmanaged index of non-rated or Ba1 below-rated municipal bonds. It gives a broad look at how non-investment-grade municipal bonds have performed. The bonds in this index must have an outstanding par value of at least $3 million and be issued as part of a transaction of at least $20 million. The bonds must also have a dated date after December 31, 1990, and must be at least one year from their maturity date.

5The inception date of the LB Non-Investment-Grade Muni Bond Index is October 1995.

6The Lipper High Yield (HY) Municipal (Muni) Debt Funds Average (Lipper Average) represents returns based on an average return of all funds in the Lipper HY Muni Debt Funds category for the periods noted. Funds in the Lipper Average invest at least 50% of their assets in lower-rated municipal debt issues.

7Some investors may be subject to the federal alternative minimum tax and/or state and local taxes. Taxable equivalent yields reflect federal taxes only.

 

Investors cannot invest directly in an index. The returns for the Lehman Brothers Indexes and the Lipper Average 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.

 

***LB Muni Bond Index Closest Month-End to Inception cumulative total returns as of 4/30/06 are 187.36% for Class A, 264.65% for Class B, 99.95% for Class C, and 71.53% for Class Z. LB Muni Bond Index Closest

 

Dryden Municipal Bond Fund   3


Your Series’ Performance (continued)

 

 

Month-End to Inception average annual total returns as of 3/31/06 are 6.75% for Class A, 7.25% for Class B, 6.12% for Class C, and 5.85% for Class Z.

****LB Non-Investment-Grade Muni Bond Index Closest Month-End to Inception cumulative total return as of 4/30/06 is 88.25% for Class Z. LB Non-Investment-Grade Muni Bond Index Closest Month-End to Inception average annual total return as of 3/31/06 is 6.83% for Class Z.

*****Lipper Average Closest Month-End to Inception cumulative total returns as of 4/30/06 are 162.38% for Class A, 228.30% for Class B, 87.10% for Class C, and 62.07% for Class Z. Lipper Average Closest Month-End to Inception average annual total returns as of 3/31/06 are 6.10% for Class A, 6.59% for Class B, 5.47% for Class C, and 5.17% for Class Z.

 

Five Largest Issues expressed as a percentage of net assets as of 4/30/06  

Memphis (TN) Ctr. City Rev., Fin. Corp., 6.50%, 09/01/28

   4.3 %

West Virginia (WV) St. Hosp. Fin., 6.75%, 09/01/10

   1.4  

Houston (TX) Util. Sys. Rev., 5.25%, 05/15/21

   1.3  

Orange Cnty. (CA) Cmnty. Loc. Trans. Auth., 6.20%, 02/14/11

   1.3  

Metro. (IL) Pier & Expo. Auth. Dedicated St. Tax Rev., 5.25%, 06/15/42

   1.1  

Issues are subject to change.

 

Credit Quality expressed as a percentage of net assets as of 4/30/06  

Aaa

   19.2 %

Aa

   5.5  

A

   11.3  

Baa

   21.5  

Ba

   6.4  

B

   4.2  

Caa

   2.1  

NR

   28.9  

Total Investments

   99.1  

Other assets in excess of other liabilities

   0.9  

Net Assets

   100.0 %
    

Source: Moody’s rating, defaulting to S&P when not rated.

Credit quality is subject to change.

 

 

4   Visit our website at www.jennisondryden.com


Investment Subadvisor’s Report—High Income Series

 

Prudential Investment Management, Inc.

 

 

Another solid year for lower-quality municipal bonds

Municipal bonds rated below investment grade performed considerably better than higher-quality municipal bonds even though prices of tax-exempt securities were frequently under pressure during the Series’ fiscal year that began May 1, 2005. A resilient U.S. economy strengthened by solid business and consumer spending as well as a search for bonds with attractive yields continued to encourage investment in lower-quality municipal bonds.

 

Under our “all weather” strategy, the Series maintained an allocation of roughly 60% in bonds of investment-grade quality and roughly 40% in bonds of below-investment-grade quality. For the fiscal year ended April 30, 2006, the Series performed better than the Lehman Brothers Municipal Bond Index, which consists entirely of investment-grade bonds. However, the Series underperformed the Lehman Brothers Non-Investment-Grade Municipal Bond Index, which includes bonds that are not-rated or rated below investment grade. The Series’ Class A shares posted a cumulative total return in line with the Lipper High Yield Municipal Debt Funds Average (the Lipper Average), while its Class Z shares’ cumulative total return exceeded the Lipper Average. Its Class B and Class C shares’ cumulative total returns lagged the Lipper Average.

 

Federal Reserve gradually withdrew monetary stimulus from economy

Municipal bond prices turned lower from time to time as the Federal Reserve (the Fed) gradually raised short-term interest rates to prevent the U.S. economy from overheating. In response to the trend toward higher short-term rates, investors often required bonds, particularly high quality bonds, to provide higher yields. This pressured bond prices as prices move inversely to yields.

 

When the Series’ fiscal year began, the latest round of short-term rate hikes was well underway. The target for the federal funds rate on overnight loans between banks had already been increased seven times in quarter-point increments, from 1.00% to 2.75%. During the reporting period, the benchmark rate was raised eight more times in quarter-point increments, from 2.75% to 4.75%. Despite slower economic growth in late 2005, the Fed continued to focus on removing monetary accommodation. The economic slowdown proved to be temporary as the economy rebounded sharply in the first quarter of 2006.

 

Increase in short-term bond yields a negative factor

The municipal bond market responded unevenly to the changes in monetary policy. Short-term municipal bond yields rose sharply along with the federal funds rate. By contrast, intermediate-term municipal bond yields rose moderately and long-term

 

Dryden Municipal Bond Fund   5


Investment Subadvisor’s Report—High Income Series

 

Prudential Investment Management, Inc. (continued)

 

municipal bond yields only edged higher, reflecting a widely held view that long-term inflationary pressures were largely contained. The different behavior of yields meant that the slope of the municipal bond yield curve flattened and long-term municipal bonds performed better than shorter maturities. The Series had a considerable exposure to prerefunded municipal bonds, which are essentially short-term debt securities because their respective issuers have set aside funds to retire the bonds early. Over the course of the reporting period, the Series saw more bonds in its portfolio become prerefunded. This unintentional increase in shorter-term municipal bonds hurt the Series’ returns.

 

Continued focus on healthcare aided High Income Series

From the perspective of sector allocation, healthcare remained the Series’ largest sector concentration and contributed positively to its performance. The sector is supported by favorable demographic trends in the United States and improving finances at many institutions. Among the Series’ holdings were bonds of the South Carolina Jobs Economic Development Authority for the Palmetto Health Alliance, which has a strong competitive position, several consecutive years of improved financial operations, and healthy cash balances. The bonds’ ratings were upgraded by major credit-rating agencies, and some of the bonds were prerefunded.

 

The Series also benefited from our timely sale of Mahoning County Ohio Hospital Facilities bonds issued on behalf of Forum Health, which includes several medical facilities. We sold the bonds in late 2005 before they were downgraded by major credit rating agencies in 2006 as financially troubled Forum Health took steps to put in place a plan to restore the system to profitability.

 

Tobacco-related municipal bonds aided High Income Series

The Series’ exposure to tobacco-related municipal bonds was another positive during the reporting period. The bonds are backed by payments of tobacco companies to state governments under the Master Settlement Agreement (MSA) signed in 1998. States have financed stop-smoking programs with the MSA revenues and helped balance their budgets, among other uses. The Series held bonds backed solely by MSA funds as well as bonds that are considered to be enhanced as bondholders would be paid from state funds in the event that the MSA revenues are insufficient to pay debt service. A dispute arose over how much money tobacco companies would have to pay under the MSA in 2006. Some tobacco firms made partial payments and put the remainder of the money aside pending resolution of the conflict. The tobacco-related sector performed well during the reporting period despite these recent developments.

 

6   Visit our website at www.jennisondryden.com


 

 

Our cautious approach to investing in airline-related bonds

Even though jet fuel costs surged, airline-related municipal bonds performed well during the reporting period. Some U.S. carriers experienced improved pricing power. They were able to raise fares by cutting back on the number of planes flying routes as the volume of passenger traffic rose. Though we added to the Series’ holdings by purchasing bonds such as New Jersey Economic Development Authority for Continental Airlines, it still had an underweight exposure to the sector that hurt its performance relative to the Lehman Brothers Non-Investment-Grade Municipal Bond Index. That said, we purposely limited the Series’ holdings of airline-related municipal bonds because of the heightened risks associated with investing in the volatile sector.

 

A bond that hurt the High Income Series and one that helped

The Series had a large position in Memphis Center City Financing Corp. Sports Facility bonds for the Memphis Redbirds, a minor league baseball team. The bonds performed poorly as the ballpark’s financial health deteriorated. Declining ticket sales weakened its financial liquidity. On the other hand, the Series benefited from holding Oconto Falls Wisconsin Community Development Authority bonds for Oconto Falls Tissue Inc. The bonds gained in value as Oconto Falls Tissue established a stronger contractual arrangement with one of its larger customers that led to continued improvement in its financial performance.

 

Dryden Municipal Bond Fund   7


Your Series’ Performance

 

Insured Series

 

Series objective

The investment objective of the Dryden Municipal Bond Fund/Insured Series (the Series) is to seek the maximum amount of income that is eligible for exclusion from federal income taxes, consistent with the preservation of capital. There can be no assurance that the Series 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 4.00% (Class A shares).

 

Cumulative Total Returns1 as of 4/30/06           
     One Year     Five Years     Ten Years    Since Inception2

Class A

   1.33 %   24.60 %   64.18%    156.13%

Class B

   1.18     23.12     59.58    204.15

Class C

   0.92     21.60     55.68    71.30

Class Z

   1.67     26.11     N/A    62.71

LB Muni Bond Index3

   2.16     30.07     77.30    ***

Lipper Insured Muni
Debt Funds Avg.4

   1.30     25.27     62.25    ****
                       
Average Annual Total Returns1 as of 3/31/06           
     One Year     Five Years     Ten Years    Since Inception2

Class A

   –0.90 %   3.31 %   4.631%    5.731%

Class B

   –1.96     3.74     4.761    6.201

Class C

   1.72     3.65     4.501    4.751

Class Z

   3.58     4.43     N/A    5.261

LB Muni Bond Index3

   3.81     5.18     5.87    ***

Lipper Insured Muni
Debt Funds Avg.4

   3.06     4.31     4.89    ****

 

Distribution and Yields1 as of 4/30/06  
     Total Distributions
Paid for 12 Months
   30-Day
SEC Yield
    Taxable Equivalent Yield5
at Tax Rates of
 
          33%     35%  

Class A

   $ 0.50    3.20 %   4.78 %   4.92 %

Class B

   $ 0.47    3.08     4.60     4.74  

Class C

   $ 0.44    2.83     4.22     4.35  

Class Z

   $ 0.52    3.59     5.36     5.52  

 

8   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 4.00%. 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 Z shares are not subject to a sales charge.

 

1Source: Prudential Investments LLC and Lipper Inc. The average annual total returns take into account applicable sales charges. During certain periods shown, fee waivers and/or expense reimbursements were in effect. Without such fee waivers and expense reimbursements, the returns for the share classes would have been lower. Class A, Class B, and Class C shares are subject to an annual distribution and service (12b-1) fee of up to 0.30%, 0.50%, and 1.00%, 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.

2Inception dates: Class A, 1/22/90; Class B, 9/17/87; Class C, 8/1/94; and Class Z, 9/16/96.

3The Lehman Brothers (LB) Municipal (Muni) Bond Index is an unmanaged index of over 39,000 long-term investment-grade municipal bonds. It gives a broad look at how long-term investment-grade municipal bonds have performed.

4The Lipper Insured Municipal (Muni) Debt Funds Average (Lipper Average) represents returns based on an average return of all funds in the Lipper Insured Muni Debt Funds category for the periods noted. Funds in the Lipper Average invest primarily in municipal debt issues insured as to timely payment.

5Some investors may be subject to the federal alternative minimum tax and/or state and local taxes. Taxable equivalent yields reflect federal taxes only.

 

Investors cannot invest directly in an index. The returns for the LB Muni Bond Index and the Lipper Average 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.

 

***LB Muni Bond Index Closest Month-End to Inception cumulative total returns as of 4/30/06 are 187.36% for Class A, 264.65% for Class B, 99.95% for Class C, and 71.53% for Class Z. LB Muni Bond Index Closest Month-End to Inception average annual total returns as of 3/31/06 are 6.75% for Class A, 7.25% for Class B, 6.12% for Class C, and 5.85% for Class Z.

****Lipper Average Closest Month-End to Inception cumulative total returns as of 4/30/06 are 156.72% for Class A, 228.00% for Class B, 81.96% for Class C, and 57.01% for Class Z. Lipper Average Closest Month-End to Inception average annual total returns as of 3/31/06 are 5.99% for Class A, 6.61% for Class B, 5.21% for Class C, and 4.86% for Class Z.

 

Dryden Municipal Bond Fund   9


Your Series’ Performance (continued)

 

Five Largest Issues expressed as a percentage of net assets as of 4/30/06  

Hawaii (HI) Dept. Budget & Fin., Hawaiian Elec. Co. Projs., Rev. Ser. C, A.M.B.A.C., A.M.T., 6.20%, 11/01/29

   3.6 %

Metro. (NY) Trans. Auth. N.Y. Svc. Contract, Rfdg. Rev., Ser. B, M.B.I.A., 5.50%, 07/01/23

   3.2  

California (CA) St., G.O., M.B.I.A., 5.25%, 02/01/27

   3.1  

Corpus Christi (TX) Util. Sys. Rev., Ser. A, F.S.A., 6.00%, 07/15/10

   3.0  

Detroit (MI) Wtr. Sup. Sys. Rev., Ser. B, M.B.I.A., 5.25%, 07/01/32

   2.4  

Issues are subject to change.

 

Credit Quality expressed as a percentage of net assets as of 4/30/06  

Aaa

   98.0 %

Aa

   2.1  

A

   0.9  

Total Investments

   101.0  

Liabilities in excess of other assets

   –1.0  

Net Assets

   100.0 %
    

Source: Moody’s rating, defaulting to S&P when not rated.

Credit quality is subject to change.

 

 

10   Visit our website at www.jennisondryden.com


Investment Subadvisor’s Report—Insured Series

 

Prudential Investment Management, Inc.

 

A challenging year for insured municipal bonds

Prices of municipal bonds, particularly high-quality bonds, were frequently under pressure during the Series’ fiscal year that began May 1, 2005. In response to repeated increases in short-term interest rates by the Federal Reserve (the Fed), investors often demanded that bonds provide higher yields, which weighed on their prices as bond prices move in the opposite direction of yields.

 

What with the periodic sell-offs in the tax-exempt market, the Lehman Brothers Municipal Bond Index (the Index) returned a modest 2.16% for the year ended April 30, 2006. For the 12-month period, the Series lagged the Index, which does not include the effect of mutual fund operating expenses. Compared to the Lipper Insured Municipal Debt Funds Average (the Lipper Average), the Series’ Class A and Class Z shares posted cumulative total returns that exceeded the Lipper Average, while its Class B and Class C shares’ cumulative total returns trailed the Lipper Average.

 

Fed gradually withdrew monetary stimulus from economy

Fed policymakers raised borrowing costs at a measured pace in an effort to prevent the U.S. economy from overheating and boosting inflationary pressures. By the time the Series’ fiscal year began, the latest round of short-term rate hikes were well underway. The target for the federal funds rate on overnight loans between banks had already been increased seven times in quarter-point increments, from 1.00% to 2.75%. During the reporting period, the benchmark rate was raised eight more times in quarter-point increments, from 2.75% to 4.75%. Despite slower economic growth in late 2005, the Fed continued to focus on removing monetary accommodation. The economic slowdown in the United States proved to be temporary as the economy rebounded sharply in the first quarter of 2006.

 

Shifting exposure along the municipal bond yield curve

The municipal bond market responded unevenly to the changes in monetary policy. Short-term municipal bond yields rose sharply along with the federal funds rate. By contrast, intermediate-term municipal bond yields rose moderately and long-term municipal bond yields only edged higher, reflecting a widely held view that long-term inflationary pressures were largely contained. The different behavior of yields meant that the slope of the municipal bond yield curve flattened and that long-term municipal bonds performed better than shorter maturities. We decreased the Series’ exposure to the short- and intermediate-term areas of the municipal bond yield curve and increased its exposure to the long-term area.

 

Tobacco-related bonds provided attractive yields

To enhance the Series’ yield, we maintained a modest exposure to municipal debt securities that are not insured, such as bonds backed by payments of tobacco

 

Dryden Municipal Bond Fund   11


Investment Subadvisor’s Report—Insured Series

 

Prudential Investment Management, Inc. (continued)

 

companies to state governments under the Master Settlement Agreement (MSA) signed in 1998. States have financed stop-smoking programs with the MSA revenues and helped balance their budgets, among other uses. The Series held bonds of the Golden State Tobacco Securitization Corp. of California and the Tobacco Settlement Financing Corp. of New York. These so-called enhanced tobacco-related bonds are also obligations of the state of California and the state of New York, respectively. In the event that the MSA revenues are insufficient to pay debt service on the bonds, bondholders would be paid from state funds. A dispute arose over how much money tobacco companies would have to pay under the MSA in 2006. Some tobacco firms made partial payments and put the remainder of the money aside pending resolution of the conflict. The tobacco-related sector performed well during the reporting period despite these recent developments.

 

Allocation to healthcare sector benefited Insured Series

The Series continued to benefit from its exposure to healthcare bonds. The sector is supported by favorable demographic trends in the United States and improving finances at many institutions. Among the Series’ holdings were insured bonds of Newman Hospital Authority of Georgia and the UCLA Medical Center, both of which performed relatively well.

 

New Orleans bonds detracted from Insured Series’ returns

Meanwhile the Series held insured general obligation (GO) bonds of New Orleans, which hurt its performance. The bonds declined in value in the aftermath of Hurricane Katrina. The underlying ratings of the insured New Orleans GO bonds were downgraded by major credit-rating agencies. However, the bonds remain rated AAA because their interest and principal payments are backed by MBIA, Inc.

 

12   Visit our website at www.jennisondryden.com


Fees and Expenses (Unaudited)

 

 

As a shareholder of a Series, 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 Series expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in each Series 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 November 1, 2005, at the beginning of the period, and held through the six-month period ended April 30, 2006.

 

Each Series’ 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 or Strategic Partners Funds, including the Series, that you own. You should consider the additional fees that were charged to your Series 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 the Series’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Series’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses

 

Dryden Municipal Bond Fund   13


Fees and Expenses (continued)

 

you paid for the period. You may use this information to compare the ongoing costs of investing in the Series 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 Municipal Bond
Fund/High Income
Series
  Beginning Account
Value
November 1, 2005
 

Ending Account
Value

April 30, 2006

  Annualized
Expense Ratio
Based on the
Six-Month Period
    Expenses Paid
During the
Six-Month
Period*
                             
Class A   Actual   $ 1,000.00   $ 1,026.00   0.88 %   $ 4.42
    Hypothetical   $ 1,000.00   $ 1,020.43   0.88 %   $ 4.41
                             
Class B   Actual   $ 1,000.00   $ 1,024.70   1.13 %   $ 5.67
    Hypothetical   $ 1,000.00   $ 1,019.19   1.13 %   $ 5.66
                             
Class C   Actual   $ 1,000.00   $ 1,023.50   1.38 %   $ 6.92
    Hypothetical   $ 1,000.00   $ 1,017.95   1.38 %   $ 6.90
                             
Class Z   Actual   $ 1,000.00   $ 1,027.20   0.63 %   $ 3.17
    Hypothetical   $ 1,000.00   $ 1,021.67   0.63 %   $ 3.16

 

14   Visit our website at www.jennisondryden.com


 

 

Dryden Municipal
Bond Fund/
Insured Series
  Beginning Account
Value
November 1, 2005
 

Ending Account
Value

April 30, 2006

  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   0.96 %   $ 4.79
    Hypothetical   $ 1,000.00   $ 1,020.03   0.96 %   $ 4.81
                             
Class B   Actual   $ 1,000.00   $ 1,009.90   1.21 %   $ 6.03
    Hypothetical   $ 1,000.00   $ 1,018.79   1.21 %   $ 6.06
                             
Class C   Actual   $ 1,000.00   $ 1,009.50   1.46 %   $ 7.27
    Hypothetical   $ 1,000.00   $ 1,017.55   1.46 %   $ 7.30
                             
Class Z   Actual   $ 1,000.00   $ 1,013.30   0.71 %   $ 3.54
    Hypothetical   $ 1,000.00   $ 1,021.27   0.71 %   $ 3.56

* 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 181 days in the six-month period ended April 30, 2006, and divided by the 365 days in the Fund’s fiscal year ended April 30, 2006 (to reflect the six-month period).

 

Dryden Municipal Bond Fund   15


Portfolio of Investments

 

as of April 30, 2006

 

Description (a)    Moody’s
Rating
(Unaudited)
   Interest
Rate
  Maturity
Date
   Principal
Amount (000)
     Value (Note 1)
                               

LONG-TERM INVESTMENTS    98.0%

                   

Alabama    1.1%

                             

Birmingham Baptist Medical Ctr. Spl. Rev.

   Baa1    5.00%   11/15/30    $ 3,000      $ 2,917,260

Butler Ind. Dev. Brd. Solid Wste. Disp. Rev., GA-Pacific Corp. Proj., A.M.T.

   B(b)    5.75   9/01/28      1,000        993,070

Camden Ind. Dev. Brd. Facs. Rev., Rfdg. Weyerhaeuser,

                             

Ser. A

   BBB(b)    6.125   12/01/24      1,000        1,099,560

Ser. B, A.M.T.

   BBB(b)    6.375   12/01/24      1,000        1,086,910
                           

                              6,096,800

Alaska    0.6%

                             

Northern Tobacco Secur. Corp., Rev. Asset Bkd. Bonds

   Baa3    6.50   6/01/31      3,500        3,682,665

Arizona    1.8%

                             

Coconino Cnty. Poll. Ctrl. Corp. Rev., Tuscon Elec. Pwr., Navajo,

                             

Ser. A, A.M.T.

   Ba1    7.125   10/01/32      5,000        5,240,150

Ser. B

   Ba1    7.00   10/01/32      1,700        1,779,492

Pinal Cnty Ariz Indl. Dev. Auth. Rev., Correct. Facs. Florence West Prison PJ-A

   NR    5.25   10/01/19      3,135        3,246,920
                           

                              10,266,562

California    11.3%

                             

Antelope Valley California Hlthcare. Dis. Rev.

                             

Rfdg., Ser. A, F.S.A.

   Aaa    5.20   1/01/17      1,005 (e)      1,044,034

California Poll. Ctrl. Fin. Auth. Solid Wste. Disp. Rev. Wste. Mgmt., Inc. PJ-Ser. B, A.M.T.

   BBB(b)    5.00   7/01/27      1,000        992,830

 

See Notes to Financial Statements.

 

Dryden Municipal Bond Fund/High Income Series   17


Portfolio of Investments

 

as of April 30, 2006 Cont’d.

 

Description (a)    Moody’s
Rating
(Unaudited)
     Interest
Rate
  Maturity
Date
   Principal
Amount (000)
     Value (Note 1)
                                 

California St. Pub. Wks. Brd. Lease Rev.,

                               

Dept. Mental Hlth., Coalinga, Ser. A

   A3      5.50%   6/01/19    $ 2,000      $ 2,163,900

Dept. Mental Hlth., Coalinga, Ser. A

   A3      5.50   6/01/20      2,000        2,162,480

Dept. Mental Hlth., Coalinga, Ser. A

   A3      5.50   6/01/22      2,000        2,159,640

California St., G.O., M.B.I.A.

   Aaa      5.25   2/01/27      4,905        5,151,378

California Statewide Cmntys. Dev. Auth. Rev., Kaiser Permanente, Ser. C

   A3      3.85   6/01/12      2,000        1,948,700

Capistrano Uni. Sch. Dist. Cmnty. Facs., Rev. Talega CFD#90-2

   NR      6.00   9/01/33      1,000        1,050,090

Central California Joint Pwr. Hlth. Fin. Auth., Cmnty. Hosp. of Central California, C.O.P.

   Baa2      6.00   2/01/30      2,550        2,642,259

City of Chula Vista Indl. Dev. Rev., San Diego

   A1      5.00   12/01/27      1,000        1,013,140

Foothill/Eastern Trans. Corridor Agcy. Toll Rd. Rev., C.A.B.S.

   Baa3      Zero   1/15/28      6,700        5,795,768

Lake Elsinore Spl. Tax Cmnty. Facs. Dist.-2-Area A

   NR      5.45   9/01/36      1,500        1,525,815

Lincoln Impvt. Bond Act 1915, Pub. Fin. Auth. Rev., Twelve Bridges

   NR      6.20   9/02/25      3,435        3,610,219

Los Angeles Regional Airports Impt. Corp. Lse. Rev., American Airlines, Inc., A.M.T.

   Caa2      7.50(f)   12/01/24      2,000        2,118,440

Los Angeles Dept. Wtr. & Pwr. Rev. Pwr. Sys., Ser. A, F.G.I.C.

   Aaa      5.125   7/01/40      3,660 (e)      3,756,112

Murrieta Cmnty. Facs. Dist. Spl. Tax, No. 2, The Oaks Impt. Area, Ser. A

   NR      5.90   9/01/27      1,000        1,057,900

 

See Notes to Financial Statements.

 

18   Visit our website at www.jennisondryden.com


 

Description (a)    Moody’s
Rating
(Unaudited)
   Interest
Rate
  Maturity
Date
   Principal
Amount (000)
     Value (Note 1)
                               

Orange Cnty, Loc. Trans. Auth. Sales Tax Rev., Linked, S.A.V.R.S., R.I.B.S.

   Aa2    6.20%   2/14/11    $ 7,000      $ 7,716,309

Perris Cmnty. Facs. Dist., Spec. Tax, No. 01-2, Avalon Ser. A

   NR    6.25   9/01/23      3,000        3,241,860

Rancho Cordova Cmnty. Facs. Dist., Spec. Tax No. 2003-1, Sunridge Anatolia

   NR    6.00   9/01/33      1,000        1,026,880

Sunridge Anatolia

   NR    6.10   9/01/37      2,000        2,053,740

Roseville Joint Unified High School Dist., Ser. B, G.O., F.G.I.C., C.A.B.S.

   Aaa    Zero   8/01/11      1,440        1,169,698

Saugus Uni. Sch. Dist. Spl. Tax Cmnty. Facs. Dist. No. 2002-1

   NR    6.00   9/01/33      1,800        1,890,162

University of Calif. Bd. of Regents Revs., Hosp. UCLA Med. Ctr., Ser. A, A.M.B.A.C.

   Aaa    5.50   5/15/23      1,330        1,432,477

Res. Facs., Ser. E, A.M.B.A.C.

   Aaa    5.00   9/01/18      2,115        2,202,815

Vallejo, Touro Univ., C.O.P.

   Ba2    7.375   6/01/29      3,500        3,742,165

Valley Hlth. Sys. Hosp. Rev., Rfdg. & Impvt. Proj., Ser. A

   B+(b)    6.50   5/15/25      1,000        1,000,900

Wm. S. Hart Unif. High Sch. Dist., Spl. Tax Cmnty Fac. Dist. No. 2005-1

   NR    5.30   9/01/36      1,000        1,007,400
                           

                              64,677,111

Colorado    3.2%

                             

Black Hawk Bus. Impvt. Dist. Utl.

   NR    7.75   12/01/09      5,285 (d)      6,015,863

Colorado Hlth. Facs. Auth. Rev., Rfdg. Hosp. Poudre Valley Hlthcare.

   Baa2    5.00   3/01/25      5,560        5,519,412

Colorado Springs Hosp. Rev.
Spr. Mem. Hosp.

   A3    6.375   12/15/10      1,240 (d)      1,378,731

 

See Notes to Financial Statements.

 

Dryden Municipal Bond Fund/High Income Series   19


Portfolio of Investments

 

as of April 30, 2006 Cont’d.

 

Description (a)    Moody’s
Rating
(Unaudited)
   Interest
Rate
  Maturity
Date
   Principal
Amount (000)
     Value (Note 1)
                               

Unrfdg. Spr. Mem. Hosp.

   A3    6.375%   12/15/30    $ 1,260      $ 1,355,899

Denver Urban Ren. Auth. Pavilions Tax, Inc., Rev., A.M.T.

   NR    7.75   9/01/16      3,680        3,789,480
                           

                              18,059,385

Connecticut    1.0%

                             

Connecticut St. 1060 R, G.O., R.I.T.E.S.

   AA(b)    5.986   11/15/09      5,000 (g)      5,602,600

Delaware    0.3%

                             

Delaware St. Health Facs. Auth. Rev., Beebe Med. Ctr. Proj., Ser. A

   Baa1    5.00   6/01/30      2,000        2,001,360

District of Columbia    0.5%

                        

Dist. of Columbia Rev., George Washington Univ., Ser. A, M.B.I.A.

   Aaa    5.125   9/15/31      3,000        3,066,270

Florida    4.2%

                             

Brevard Cnty. Health Facs. Auth. Rev. Health 1st

   A2    5.00   4/01/34      1,500        1,512,675

Broward Cnty. Res. Recov. Rev., Rfdg. Wheelabrator, Ser. A

   A3    5.50   12/01/08      4,000        4,156,160

Greater Orlando Aviation Auth., Orlando FL Arpt. Fac. Rev.,

                             

Jet Blue Airways Corp.

   NR    6.375   11/15/26      2,000        2,007,620

Jet Blue Airways Corp.

   NR    6.50   11/15/36      2,000        2,004,640

Highlands Cnty. Health Facs. Auth. Rev., Hosp. Adventist Hlth., Ser. D

   A2    5.00   11/15/35      1,500        1,504,590

Highlands Cmnty. Dev. Dist. Spl. Assmt.

   NR    5.55   5/01/36      500        503,875

Indigo Cmnty. Dev. Dist. Cap. Impvt. Rev.

   NR    5.75   5/01/36      2,000        2,034,620

 

See Notes to Financial Statements.

 

20   Visit our website at www.jennisondryden.com


 

Description (a)    Moody’s
Rating
(Unaudited)
   Interest
Rate
  Maturity
Date
   Principal
Amount (000)
     Value (Note 1)
                               

Miami Beach Hlth. Facs. Auth. Hosp. Rev., Mount Sinai Med. Ctr., Ser. A

   Ba1    6.70%   11/15/19    $ 1,000      $ 1,096,980

Orlando Util. Cmnty. Wtr. & Elec. Rev., Ser. D, E.T.M.

   Aa1    6.75   10/01/17      2,000 (d)      2,361,440

Palm Beach Cnty. Pub. Impvt. Rev., Convention Ctr. Proj., F.G.I.C.

   Aaa    5.00(f)   11/01/11      3,500        3,664,430

Paseo Cmnty. Dev. Dist. Cap. Impvt. Rev., Ser. A

   NR    5.40   5/01/36      1,400        1,401,064

Reunion West Cmnty. Dev. Dist. Spec. Assmt.

   NR    6.25   5/01/36      1,500        1,577,145

Stoneybrook West Cmnty. Dev. Dist., Spec. Assmt. Rev., Ser. B

   NR    6.45   5/01/10      340        341,125
                           

                              24,166,364

Georgia    0.4%

                             

Fulton Cnty. Residential Care Facs. Rev., Canterbury Court Proj., Ser. A

   NR    6.125   2/15/34      1,200        1,225,476

Henry Cnty. Wtr. & Swr. Auth. Rev., A.M.B.A.C.

   Aaa    6.15   2/01/20      1,000        1,181,380
                           

                              2,406,856

Hawaii    0.4%

                             

Hawaii St., Ser. DD, G.O., M.B.I.A.

   Aaa    5.25   5/01/24      2,000        2,123,400

Illinois    9.0%

                             

Cary Illinois Spec. Tax Svcs. Rev.,

                             

Area No. 1, Cambridge, Ser. A

   NR    7.625   3/01/30      3,800        4,212,870

Area No. 2, Foxford Hill

   NR    7.50   3/01/30      4,737        5,231,211

Chicago Illinois Util. Proj. & Rfdg., G.O., F.G.I.C.

   Aaa    5.25   1/01/28      4,375        4,552,363

Gilberts Illinois Spec. Svcs. Area No. 9, Spec. Tax, Big Timber Proj.

   AAA(b)    7.75   3/01/11      5,000 (d)      5,898,350

 

See Notes to Financial Statements.

 

Dryden Municipal Bond Fund/High Income Series   21


Portfolio of Investments

 

as of April 30, 2006 Cont’d.

 

Description (a)    Moody’s
Rating
(Unaudited)
   Interest
Rate
  Maturity
Date
   Principal
Amount (000)
     Value (Note 1)
                               

Illinois Edl. Facs. Auth. Student Hsg. Rev., Edl. Advnmt. Fdg. Univ. Ctr. Proj.

   Baa3    6.25%   5/01/30    $ 2,000      $ 2,160,500

Illinois Fin. Auth. Rev.,

                             

Illinois Inst. of Technology-A

   Baa1    5.00   4/01/31      2,500        2,517,425

Friendship Vlg. Schaumburg, Ser. A

   NR    5.625   2/15/37      1,000        1,008,880

Northwestern Mem. Hosp., Ser. A

   Aa2    5.25   8/15/34      5,000        5,205,600

Plymouth Landing Proj.

   NA    6.00   5/15/37      1,000        1,026,370

Illinois Hlth Facs. Auth. Rev., Lake Forest Hosp., Ser. A

   A3    6.25   7/01/22      4,200        4,552,086

Kane & De Kalb Cntys. Sch. Dist., No. 301, A.M.B.A.C., C.A.B.S., G.O.

   Aaa    Zero   12/01/11      3,360        2,681,179

McLean & Woodford Cntys. Cmnty. Unif. Sch. Dist. No. 005, G.O., F.S.A.

   Aaa    5.625   12/01/11      4,535 (d)      4,884,331

Metro. Pier & Expo. Auth. Dedicated St. Tax Rev., McCormick Place Expansion, Ser. A, M.B.I.A.

   Aaa    5.25   6/15/42      6,000        6,290,699

Round Lake Rev., Lakewood Spl. Tax #1

   NR    6.70   3/01/33      1,000        1,058,630
                           

                              51,280,494

Indiana    1.4%

                             

Indiana Hlth. & Edl. Fac. Fin. Auth. Rev.-Clarion Health

   A2    5.00   2/15/39      3,000        3,011,310

Indiana Hlth. Fac. Fin. Auth. Hosp. Rev., Cmnty. Foundation Northwest Ind., Ser. A

   BBB-(b)    6.00   3/01/34      3,000        3,140,790

Indiana St. Hsg. Fin. Auth. Singl. Fam. Mtge. Rev., Ser. B2, A.M.T., G.N.M.A./F.N.M.A.

   Aaa    4.00   1/01/34      1,765        1,738,913
                           

                              7,891,013

 

See Notes to Financial Statements.

 

22   Visit our website at www.jennisondryden.com


 

Description (a)    Moody’s
Rating
(Unaudited)
   Interest
Rate
  Maturity
Date
   Principal
Amount (000)
     Value (Note 1)
                               

Iowa    1.0%

                             

Iowa St. Fin. Auth. Hlthcare., Facs. Rev., Mercy Hlth. Initiatives Proj.

   NR    9.25%   7/01/25    $ 4,780      $ 5,692,645

Kentucky    0.2%

                             

Boone Cnty. Pollutn. Ctl. Rev. Ref- Coll-Dayton Pwr. & Lt. Co., Ser. A, F.G.I.C.

   Aaa    4.70   1/01/28      1,000        988,150

Louisiana    0.7%

                             

Calcasieu Parish Inc., Ind. Dev. Brd. Rev., Rfdg. Olin Corp. Proj.

   Baa3    6.625   2/01/16      3,500        3,752,070

Maine    0.8%

                             

Maine Hlth. & Higher Edl. Facs. Auth. Rev. Piper Shores,

                             

Ser. A

   NR    7.50   1/01/09      1,000 (d)      1,084,960

Ser. A

   NR    7.55   1/01/09      3,000 (d)      3,258,660
                           

                              4,343,620

Maryland    2.1%

                             

Anne Arundel Cnty. Spec. Oblig., Arundel Mills Proj.

   AAA(b)    7.10   7/01/09      3,000 (d)      3,344,730

Maryland St. Hlth. & Higher Edl. Facs. Auth. Rev.

   A3    6.75   7/01/10      5,000 (d)      5,613,050

Northeast Wste. Disp. Auth. Rev.,

                             

Sludge Corp. Facs.

   NR    7.25   7/01/07      1,054        1,085,346

Sludge Corp. Facs., A.M.T.

   NR    8.50   7/01/07      1,865        1,948,067
                           

                              11,991,193

Massachusetts    2.6%

                             

Massachusetts St. Coll. Bldg., Auth. Rev. Proj. & Rfdg. Bonds, Ser. A

   Aa2    7.50   5/01/14      1,750        2,109,870

 

See Notes to Financial Statements.

 

Dryden Municipal Bond Fund/High Income Series   23


Portfolio of Investments

 

as of April 30, 2006 Cont’d.

 

Description (a)    Moody’s
Rating
(Unaudited)
   Interest
Rate
  Maturity
Date
   Principal
Amount (000)
    Value (Note 1)
                              

Massachusetts St. Dev. Fin. Agcy. Rev., Hlthcare. Fac., Alliance, Ser. A

   NR    7.10%   7/01/32    $ 4,010     $ 4,091,804

Massachusetts St. Hlth. & Edl. Facs. Auth. Rev., Caritas Christi Oblig. Group, Rfdg.,

                            

Ser. A

   Baa3    5.75   7/01/28      2,000       2,031,700

Ser. B

   Baa3    6.75   7/01/16      3,595       3,958,922

Massachusetts St. Wtr. Poll. Abatement Trust Rev., Pool Proj., Ser. 9

   Aaa    5.25   8/01/33      2,500       2,627,475
                          

                             14,819,771

Michigan    1.9%

                            

Kalamazoo Hosp. Fin. Auth. Borgess Hosp. Fac. Rev., E.T.M., F.G.I.C.

   Aaa    6.908(i)   6/01/11      2,000 (d)(g)     2,005,200

Kent Hosp. Fin. Auth. Rev., Metro. Hosp. Proj., Ser. A

   BBB(b)    6.25   7/01/40      3,000       3,233,160

Michigan St. Hosp. Fin. Auth. Rev., Ascension Hlth. Sub Credit, Ser. A

   Aa3    5.00   11/01/12      1,250       1,310,050

Michigan Strategic Fund Solid Waste Disp. Rev.

   BBB(b)    4.50(f)   12/01/13      1,000       994,560

Summit Academy Mich. Pub. Sch., Academy Rev. Ref.

   BB+(b)    6.25   11/01/25      2,060       2,028,091

Summit Academy North Mich. Pub. Sch., Academy Rev. Ref.

   BB+(b)    5.50   11/01/30      1,500       1,415,340
                          

                             10,986,401

Minnesota    0.2%

                            

St. Paul Hsg. & Redev. Auth. Hosp. Rev. Healtheast Proj.

   Baa3    6.00   11/15/35      1,000       1,068,970

 

See Notes to Financial Statements.

 

24   Visit our website at www.jennisondryden.com


 

Description (a)    Moody’s
Rating
(Unaudited)
   Interest
Rate
  Maturity
Date
   Principal
Amount (000)
     Value (Note 1)
                               

Nevada    3.4%

                             

Clark Cnty. Impvt. Dist. Rev., No. 121, Southern Highlands Area

   NR    7.50%   12/01/19    $ 4,655      $ 4,977,452

Spec. Impvt. Dist. No. 142, Loc. Impvt.

   NR    6.10   8/01/18      2,000        2,067,620

Clark Cnty. Ind. Dev. Rev., Rfdg. Nevada Pwr. Co. Proj., Ser. C

   B-(b)    5.50(f)   10/01/30      4,500        4,396,950

Director St. Nevada Dept. Bus. & Ind. Rev., Las Ventanas Ret.,

                             

Proj. A

   NR    7.00   11/15/34      1,500        1,547,535

Proj. B

   NR    6.75   11/15/23      1,315        1,345,745

North Las Vegas Local Impvt. Rev., Spec. Impvt. Dist. No. 60

                             

Aliante

   NR    5.60   12/01/12      1,510        1,557,112

Aliante

   NR    6.40   12/01/22      1,235        1,274,397

Washoe Cnty. Wtr. Fac. Rev., Sierra Pac. Pwr. Co., A.M.T.

   Ba1    5.00   7/01/09      2,500        2,519,250
                           

                              19,686,061

New Jersey    6.0%

                             

Camden Cnty. Impt. Auth. Rev.,

                             

Hlthcare. Redev. Cooper Proj.

   Baa3    6.00   2/15/27      2,250        2,332,485

Hlthcare. Redev. Cooper Proj.

   Baa3    5.00   2/15/35      1,000        970,810

New Jersey Econ. Dev. Auth. Rev.,

                             

Cigarette Tax

   Baa2    5.625   6/15/19      1,250        1,310,550

Cigarette Tax

   Baa2    5.75   6/15/34      750        788,175

Kapkowski Rd. Landfill, Ser. A, C.A.B.S., E.T.M.

   Baa3    Zero   4/01/12      1,115        880,761

Rfdg. First Mtge. Franciscan Oaks Proj.

   NR    5.70   10/01/17      165        168,972

 

See Notes to Financial Statements.

 

Dryden Municipal Bond Fund/High Income Series   25


Portfolio of Investments

 

as of April 30, 2006 Cont’d.

 

Description (a)    Moody’s
Rating
(Unaudited)
   Interest
Rate
  Maturity
Date
   Principal
Amount (000)
     Value (Note 1)
                               

Spec. Facs. Rev., Continental Airlines, Inc. Proj., A.M.T.

   Caa2    6.25%   9/15/29    $ 5,530      $ 5,390,368

New Jersey Hlthcare. Facs. Fin. Auth. Rev.,

                             

Cherry Hill Proj.

   NR    8.00   7/01/27      2,000        2,073,000

Raritan Bay Med. Ctr.

   NR    7.25   7/01/27      4,000        4,097,600

St. Peters Univ. Hosp., Ser. A

   Baa1    6.875   7/01/30      2,250        2,427,615

New Jersey St. Edl. Facs. Auth. Rev., Felician Coll. of Lodi, Ser. D

   NR    7.375   11/01/22      3,490        3,648,760

New Jersey St. Tpke. Auth. Tpke. Rev., Growth & Income. Secs., Ser. B, A.M.B.A.C., C.A.B.S.

   Aaa    Zero   1/01/35      4,000        2,627,080

Tobacco Settlement Fin. Corp., NJ Rev.,

                             

Asset Bkd.

   Baa3    6.75   6/01/39      1,000        1,109,650

Asset Bkd.

   Baa3    6.125   6/01/42      1,000        1,052,770

Asset Bkd.

   Baa3    6.25   6/01/43      5,250        5,656,980
                           

                              34,535,576

New Mexico    1.2%

                             

Farmington Poll. Ctrl. Rev., El Paso Elec. Co. Proj., Ser. A, F.G.I.C.

   Baa3    4.00   8/01/12      2,000        1,976,460

New Mexico Mtge. Fin. Auth. Rev., Sngl. Fam. Mtge.,

                             

Ser. A, A.M.T., G.N.M.A., F.N.M.A., F.H.L.M.C.

   Aaa    5.50   7/01/36      1,980        2,099,711

Ser. E, A.M.T., G.N.M.A., F.N.M.A., F.H.L.M.C.

   AAA(b)    5.50   7/01/35      2,455        2,580,549
                           

                              6,656,720

New York    6.5%

                             

Brookhaven Ind. Dev. Agcy. Civic Facs. Rev., Brooks Mem. Hosp. Med. Ctr., Inc., Ser. A

   NR    8.25   11/15/30      2,000        2,174,120

City of New York, G.O.

   A1    5.00   12/01/20      3,500        3,618,370

 

See Notes to Financial Statements.

 

26   Visit our website at www.jennisondryden.com


 

Description (a)    Moody’s
Rating
(Unaudited)
   Interest
Rate
  Maturity
Date
   Principal
Amount (000)
     Value (Note 1)
                               

Erie Cnty. Tob. Asset Securitization Corp. Cap. Apprec., Asset Bkd.-1st Sub., Ser. B, C.A.B.S.

   NR    Zero   6/01/47    $ 5,000      $ 386,200

Asset Bkd.-2nd Sub., Ser. C, C.A.B.S.

   NR    Zero   6/01/50      4,000        222,600

Metro. Trans. Auth. Rev., N.Y. Svc. Contract, Rfdg.,

                             

Ser. B, M.B.I.A.

   Aaa    5.50%   7/01/19      3,050        3,291,042

Ser. A, A.M.B.A.C.

   Aaa    5.50   11/15/18      4,045        4,378,065

New York City Ind. Dev. Agcy. Civic Fac. Rev., Staten Island Univ. Hosp. Proj., Ser. B

   B2    6.375   7/01/31      995        1,005,995

New York City Industrial Develop. Agcy. Spl. Fac. Rev.,

                             

American Airlines-JFK Int’l. Arpt.

   B-(b)    7.125   8/01/11      3,495        3,597,858

American Airlines-JFK Int’l. Arpt.

   B-(b)    7.75   8/01/31      2,000        2,196,560

New York City Transitional Fin. Auth. Rev., Future Tax Sec’d., Ser. C

   Aa1    5.50   2/15/16      2,500        2,691,500

New York St. Dorm Auth. Revs., Non St. Supported Debt, Mt. Sinai,

                             

NYU Hlth., RMKT 7/01/05

   Ba1    5.50   7/01/26      4,000        4,042,080

NYU Hlth., C-RMKT 7/1/05

   Ba1    5.50   7/01/26      2,000        2,021,040

New York, Ser. G, G.O.

   A1    5.00   12/01/25      1,000        1,025,940

Tobacco Settlement Fin. Corp.,

                             

Asset-Bkd., Ser. C-1

   A1    5.50   6/01/14      3,500        3,648,015

Asset Bkd., Ser. C-1

   A1    5.50   6/01/15      3,000        3,153,150
                           

                              37,452,535

North Carolina    0.4%

                             

North Carolina Eastern Mun. Pwr. Agcy. Pwr. Sys. Rev., Rfdg., Ser. D

   Baa2    5.125   1/01/26      2,000        2,048,080

 

See Notes to Financial Statements.

 

Dryden Municipal Bond Fund/High Income Series   27


Portfolio of Investments

 

as of April 30, 2006 Cont’d.

 

Description (a)    Moody’s
Rating
(Unaudited)
   Interest
Rate
  Maturity
Date
   Principal
Amount (000)
     Value (Note 1)
                               

North Dakota    0.7%

                             

Ward Cnty. ND Hlthcare. Facs. Rev., Rfdg. Trinity Oblig.,

                             

Group A

   BBB+(b)    6.25%   7/01/26    $ 2,110      $ 2,184,778

Group B

   BBB+(b)    6.25   7/01/21      2,000        2,071,340
                           

                              4,256,118

Ohio    0.9%

                             

Cuyahoga Cnty. Hosp. Facs. Rev., Canton, Inc. Proj.

   Baa2    7.50   1/01/30      3,000        3,303,570

Ohio St. Wtr. Dev. Auth. Solid Wste. Disp. Rev., Wste. Mgmt. Proj., A.M.T.

   BBB(b)    4.50(f)   7/01/09      1,000        1,003,760

Richland Cnty. Hosp. Facs. Rev., Rfdg. Medcentral Hlth. Sys., Ser. A

   A-(b)    6.125   11/15/16      1,000        1,071,060
                           

                              5,378,390

Oklahoma    0.9%

                             

Norman Regional Hospital Authority Rev.

   BBB-(b)    5.375   9/01/36      2,000        2,000,640

Oklahoma Hsg. Fin. Agcy. Sngl. Fam. Rev., Mtge. Homeownership In. Prog. Ser. B, A.M.T., G.N.M.A./F.N.M.A.

   Aaa    4.875   9/01/33      3,005        3,036,012
                           

                              5,036,652

Pennsylvania    5.0%

                             

Allegheny Cnty. Hosp. Dev. Auth. Rev.,
Ohio Valley Gen. Hosp. Proj., Ser. A

   Baa2    5.125   4/01/35      1,335        1,316,911

Hlth. Sys., Ser. B

   Ba3    9.25   11/15/15      1,000        1,193,670

Hlth. Sys., Ser. B

   Ba3    9.25   11/15/22      1,825        2,171,841

Cumberland Cnty. Mun. Auth. Ret. Cmnty. Rev., Wesley Affiliated Svcs.,

                             

Ser. A

   NR    7.25   1/01/13      2,890 (d)      3,444,331

Ser. A

   NR    7.25   1/01/35      1,110        1,206,637

 

See Notes to Financial Statements.

 

28   Visit our website at www.jennisondryden.com


 

Description (a)    Moody’s
Rating
(Unaudited)
   Interest
Rate
  Maturity
Date
   Principal
Amount (000)
    Value (Note 1)
                              

Fulton Cnty. Indl. Dev. Auth. Hosp. Rev., Med. Ctr. Proj.

   NR    5.90%   7/01/40    $ 1,000     $ 1,000,210

Lancaster Cnty. Hosp. Auth. Rev., Gen. Hosp. Proj. Woods Sch.

   A+(b)    5.50   3/15/26      780       808,158

Langhorne Manor Woods Boro. Sch. Higher Ed. & Hlth. Auth. Rev., Lower Bucks Hosp.

   B2    7.35   7/01/22      4,650       4,650,279

Montgomery Cnty. Ind. Dev. Auth. Rev., MTG- Whitemarsh Cont. Care

   NR    6.25   2/01/35      2,450       2,588,303

Pennsylvania Econ. Dev. Fin. Auth. Rev. Exempt Facs. Shippingport PJ-A, A.M.T.

   Baa3    4.35   6/01/10      1,000       996,080

Res. Recov. Ref., Sub, Colver Proj., Ser. G, A.M.T.

   NR    5.125   12/01/15      1,000       987,960

Res. Recov. Ref., Colver Proj., Ser F, A.M.B.A.C.

   Aaa    4.625   12/01/18      1,500       1,489,200

Philadelphia Hosp. & Higher Ed. Facs. Auth. Rev., Grad. Hlth. Sys.
(cost $ 1,664,031; purchased 1/22/98) C.A.B.S.(c)

   Ca    Zero   7/01/05      1,651 (g)(h)     17

Grad. Hlth. Sys.
(cost $2,298,709; purchased 1/22/98) C.A.B.S (c)

   Ca    Zero   7/01/18      2,269 (g)(h)     23

Grad. Hlth. Sys., Ser. A (cost $1,890,089; purchased 1/21/98) C.A.B.S.(c)

   Ca    Zero   7/01/13      2,015 (g)(h)     20

Somerset Cnty. Hosp. Auth. Rev., GF Somers Hlthcare. First Mtge. (cost $1,106,647; purchased 2/10/97)(c)

   NR    4.20   6/01/09      1,095 (g)(h)     789,867

 

See Notes to Financial Statements.

 

Dryden Municipal Bond Fund/High Income Series   29


Portfolio of Investments

 

as of April 30, 2006 Cont’d.

 

Description (a)    Moody’s
Rating
(Unaudited)
     Interest
Rate
  Maturity
Date
   Principal
Amount (000)
    Value (Note 1)
                                

GF Somers Hlthcare. First Mtge. (cost $8,898,687; purchased 2/10/97)(c)

   NR      8.50%   6/01/24    $ 8,805 (g)(h)   $ 6,139,374
                            

                               28,782,881

South Carolina    1.7%

                              

Greenville Cnty. Sch. Dist. Rev. Installment Pur. Ref., Ref-Bldg. Equity Sooner

   Aa1      5.00   12/01/26      4,000       4,126,000

South Carolina Jobs Econ. Dev. Auth. Hosp. Facs. Rev., Rfdg. Palmetto Hlth.,

                              

Ser. C

   Baa1      6.875   8/01/13      4,460 (d)     5,228,949

Ser. C

   Baa1      6.875   8/01/27      540       617,182
                            

                               9,972,131

Tennessee    6.9%

                              

Bradley Cnty. Ind. Dev. Brd. Rev., Rfdg. Olin Corp. Proj., Ser. C

   Baa3      6.625   11/01/17      2,000       2,182,520

Chattanooga Hlth. Edl. & Hsg. Fac. Brd. Rev. Ref., CDFI Phase I LLC, PJ-Sub-B

   NR      6.00   10/01/35      1,000       1,016,490

Johnson City Hlth. & Edl. Facs. Brd. Hosp. Rev., Rfdg. First Mtge., Mountain States Hlth., Ser. A, M.B.I.A.

   Aaa      6.75   7/01/17      2,000       2,371,320

Memphis Ctr. City Rev., Fin. Corp., Red Birds, Ser. B (cost $26,000,000; purchased 12/30/98)

   NR      6.50   9/01/28      26,000 (g)(h)     24,536,199

Rutherford Cnty. Hlth. & Edl. Facs. GRP Homes Brd., First Mtge. Rev.

   NR      9.50   12/01/19      5,100       5,159,823

 

See Notes to Financial Statements.

 

30   Visit our website at www.jennisondryden.com


 

Description (a)    Moody’s
Rating
(Unaudited)
   Interest
Rate
  Maturity
Date
   Principal
Amount (000)
     Value (Note 1)
                               

Shelby Cnty. Hlth. Edl. & Hsg. Fac. Brd. Hosp. Rev.,

                             

Methodist Hlthcare

   A3    6.50%   9/01/12    $ 2,195 (d)    $ 2,513,165

Methodist Hlthcare., E.T.M.

   A3    6.50   9/01/12      1,305 (d)      1,494,160
                           

                              39,273,677

Texas    8.2%

                             

Alliance Arpt. Auth. Rev. Inc., FedEx

   Baa2    4.85   4/01/21      2,000        1,977,540

Austin Hsg. Fin. Corp. Multi-Fam. Hsg. Rev., Stony Creek, Ser. A

   Ba3    7.75   11/01/29      5,230        5,484,335

Brazos River Auth. Poll. Ctrl. Rev., TXU Energy Co. LLC Proj.,

                             

Ser. C, A.M.T.

   Baa2    6.75   10/01/38      1,255        1,410,683

Ser. D

   Baa2    5.40   10/01/14      1,000        1,059,260

Brazos River Auth. TXU

   Baa2    5.40   5/01/29      2,000        2,053,860

Dallas-Fort Worth Int’l. Arpt. Fac. Impvt. Corp. Rev.,

                             

American Airlines Inc., A.M.T.

   Caa2    6.375   5/01/35      3,000        2,508,480

American Airlines Inc., Ser. C, A.M.T.

   Caa2    6.15   11/01/07      1,950        1,918,215

Decatur Hosp. Auth. Rev., Wise Reg. Hlth. Sys., Ser. A

   NR    7.125   9/01/34      3,000        3,237,810

Houston Hlth. Facs. Dev. Corp. Ret. Fac. Rev., Buckingham Sr. Living Cmnty., Ser. A

   NR    7.125   2/15/34      1,250        1,364,175

Houston Util. Sys. Rev., Ref., Comb., First Lien, Ser. A, F.S.A.

   Aaa    5.25   5/15/21      7,000        7,394,519

Katy Texas Dev. Auth. Rev., Tax Increment Contract, Ser. B

   NR    6.00   6/01/18      4,000        4,155,280

Kerrville Tex. Health Facs. Dev. Corp. Hosp. Rev., Sid Peterson Mem. Hosp. Proj.

   BBB-(b)    5.375   8/15/35      4,050        4,076,325

 

See Notes to Financial Statements.

 

Dryden Municipal Bond Fund/High Income Series   31


Portfolio of Investments

 

as of April 30, 2006 Cont’d.

 

Description (a)    Moody’s
Rating
(Unaudited)
   Interest
Rate
  Maturity
Date
   Principal
Amount (000)
     Value (Note 1)
                               

Lower Colo River Auth. Rev., Rfdg., Trans. Svcs. Corp. Proj., Ser. C, A.M.B.A.C.

   Aaa    5.25%   5/15/24    $ 4,515      $ 4,760,932

Matagorda Cnty. Nav. Dist. No. 1 Rev., Coll. Centerpoint Energy Proj.

   Baa2    5.60   3/01/27      2,000        2,085,780

North Central Texas Hlth. Fac. Dev. Corp. Rev., Edgemere Ret. Fac. Sr. Hsg., Ser. A

   NR    7.50   11/15/29      2,000        2,140,180

Sabine River Auth. Poll. Ctrl. Rev., TXU Energy Co. LLC Proj., Ser. B

   Baa2    6.15   8/01/22      1,000        1,086,990

Texas Mun. Pwr. Agcy. Rev., M.B.I.A., E.T.M., C.A.B.S.

   Aaa    Zero   9/01/15      50 (d)      33,075
                           

                              46,747,439

Virginia    4.5%

                             

Chesapeake Hosp. Auth. Fac. Rev., Rfdg. Chesapeake Gen. Hosp., Ser. A

   A3    5.25   7/01/17      3,445        3,604,262

Chesterfield Cnty. Ind. Dev. Auth. Poll. Ctrl. Rev., Virginia Elec. & Pwr., Ser. A

   Baa1    5.875   6/01/17      2,000        2,149,400

Gloucester Cnty. Ind. Dev. Auth. Solid Wste Disp. Rev., Wste. Mgmt. Svcs., Ser. A, A.M.T.

   BBB(b)    5.125   5/01/14      2,700        2,766,771

Norfolk Redev. & Hsg. Auth. Multi-Fam. Rental Hsg. Fac. Rev., Sussex Apts. A.M.T.

   NR    8.00   9/01/26      5,670 (g)      5,905,362

Pocahontas Pkwy. Assoc. Toll Rd. Rev., C.A.B.S.,

                             

Ser. B

   Ba3    Zero   8/15/16      7,000        3,947,300

Ser. C

   B3    Zero   8/15/25      5,000        1,524,750

Ser. C

   B3    Zero   8/15/32      6,200        1,228,902

 

See Notes to Financial Statements.

 

32   Visit our website at www.jennisondryden.com


 

Description (a)    Moody’s
Rating
(Unaudited)
   Interest
Rate
  Maturity
Date
   Principal
Amount (000)
     Value (Note 1)
                               

Ser. C

   B3    Zero   8/15/33    $ 6,200      $ 1,155,556

Ser. C

   B3    Zero   8/15/34      6,200        1,086,550

Ser. C

   B3    Zero   8/15/35      5,800        955,782

Sussex Cnty. Ind. Dev. Auth. Solid Wste. Disp. Rev., Atlantic Wste., Ser. A, A.M.T.

   BBB(b)    5.125(f)%   5/01/14      1,600 (h)      1,639,568
                           

                              25,964,203

Washington    3.0%

                             

Bellevue Conv. Ctr. Auth., King City, Spec. Oblig. Rev., M.B.I.A., C.A.B.S.

   Aaa    Zero   2/01/10      870        749,957

Energy Northwest Elec. Rev., Columbia Generating,

                             

Ser B, Proj. No. 1, M.B.I.A.

   Aaa    6.00   7/01/17      4,300        4,759,971

Ser. B, A.M.B.A.C.

   Aaa    6.00   7/01/18      5,050        5,575,655

Skagit Cnty. Pub. Hosp. Dist. No. 001 Rev.,

                             

Skagit Valley Hosp.

   Baa3    5.375   12/01/22      1,190        1,215,430

Skagit Valley Hosp.

   Baa3    5.50   12/01/30      1,250        1,267,600

Tobacco Settlement Fin. Corp. Auth. Tobacco Settlement Rev., Asset Bkd.

   Baa3    6.50   6/01/26      2,545        2,765,702

Washington St. Pub. Pwr. Sup. Sys. Rev., Nuclear Proj. No. 1, Ser. B, E.T.M.

   Aaa    7.25   7/01/09      755 (d)      796,125
                           

                              17,130,440

West Virginia    1.4%

                             

West Virginia St. Hosp. Fin. Auth. Hosp. Rev., Oak Hill Hosp., Ser. B

   A2    6.75   9/01/10      7,000 (d)      7,875,349

Wisconsin    2.1%

                             

Badger Tobacco Asset Secur. Corp., Rev. Asset Bkd.

   Baa3    6.125   6/01/27      2,830        2,986,159

 

See Notes to Financial Statements.

 

Dryden Municipal Bond Fund/High Income Series   33


Portfolio of Investments

 

as of April 30, 2006 Cont’d.

 

Description (a)    Moody’s
Rating
(Unaudited)
     Interest
Rate
  Maturity
Date
   Principal
Amount (000)
     Value (Note 1)
                                 

Oconto Falls Tissue, Inc. Proj. A.M.T.

   NR      7.75%   12/01/22    $ 7,600      $ 5,586,304

Oconto Falls Cmnty. Dev. Auth. Rev., A.M.T.

   NR      8.125   12/01/22      1,395        1,063,715

Wisconsin Hlth. & Edl. Facs. Auth. Rev.,

                               

Eastcastle Place, Inc. Proj.

   NR      6.125   12/01/34      1,000        1,015,980

Beaver Dam Cmnty. Hosp. Inc., Ser. A

   NR      6.75   8/15/34      1,250        1,346,800
                             

                                11,998,958

Wyoming    0.5%

                               

Weston Cnty. Poll. Ctrl. Rev., Rfdg., Black Hills Pwr. Inc. Proj.

   Baa2      4.80   10/01/14      2,850        2,877,303
                             

Total long-term investments
(cost $545,262,942)

                              560,636,213
                             

SHORT-TERM INVESTMENTS    1.1%

                   

Alabama    0.3%

                               

McIntosh Indl. Dev. Brd. Environ. Impt. Rev., CIBC Specialty Chem. Corp., Ser. E, A.M.T., F.R.D.D.

   P-2      4.07(f)   5/01/06      1,800        1,800,000

California    0.5%

                               

California St. Econ. Rec., Ser. C-16, G.O., F.S.A., F.R.D.D.

   VMIG1      3.76(f)   5/01/06      3,100        3,100,000

Nevada    0.2%

                               

Truckee Meadows Wtr. Auth., Wtr. Rev. Mun. Secs. Tr. Rcpts., Ser. SGA. 137, F.S.A., F.R.D.D.

   NR      3.82(f)   5/01/06      1,200        1,200,000

 

See Notes to Financial Statements.

 

34   Visit our website at www.jennisondryden.com


 

Description (a)    Moody’s
Rating
(Unaudited)
     Interest
Rate
  Maturity
Date
   Principal
Amount (000)
     Value (Note 1)
                                 

South Carolina    0.1%

                               

Berkely Cnty. Exempt Fac. Indl. Rev., BP Amoco Chem. Co. Proj., A.M.T., F.R.D.D.

   VMIG1      3.86%(f)   5/01/06    $ 400      $ 400,000
                             

Total short-term investments
(cost $6,500,000)

                         6,500,000
                             

Total Investments    99.1%
(cost $551,762,942; Note 5)

                         567,136,213

Other assets in excess of liabilities(j)    0.9%

                              4,985,555
                             

Net Assets    100.0%

                            $ 572,121,768
                             


* The Fund’s current Statement of Additional Information contains a description of Moody’s and Standard & Poor’s ratings.
(a) The following abbreviations are used in portfolio descriptions:

A.M.B.A.C.—American Municipal Bond Assurance Corporation.

A.M.T.—Alternative Minimum Tax.

C.A.B.S.—Capital Appreciation Bonds.

C.O.P.—Certificates of Participation.

E.T.M.—Escrowed to Maturity.

F.G.I.C.—Financial Guaranty Insurance Company.

F.H.L.M.C.—Federal Home Loan Mortgage Corporation.

F.N.M.A.—Federal National Mortgage Association.

F.R.D.D.—Floating Rate Daily Demand Note(f).

F.S.A.—Financial Security Assurance.

G.N.M.A.—Government National Mortgage Association.

G.O.—General Obligation.

LLC—Limited Liability Corporation.

M.B.I.A.—Municipal Bond Insurance Corporation.

NR—No Moody’s or Standard & Poor’s rating available.

R.I.B.S—Residential Interest Bonds.

R.I.T.E.S—Residual Interest Tax Exempt Securities Receipts.

S.A.V.R.S.—Select Auction Variable Rate Securities.

(b) Standard & Poor’s rating.
(c) Represents issuer in default of interest payments; non-income producing security.
(d) Prerefunded issues are secured by escrowed cash and/or direct U.S. government guaranteed obligations.
(e) All or partial principal amount segregated as initial margin on financial futures contracts.
(f) Indicates a variable rate security. The maturity date presented for these instruments is the latter of the next date on which the security can be redeemed at par or the next date on which the rate of interest is adjusted. The interest rate shown reflects the rate in effect at April 30, 2006.

 

See Notes to Financial Statements.

 

Dryden Municipal Bond Fund/High Income Series   35


Portfolio of Investments

 

as of April 30, 2006 Cont’d.

 

(g) Indicates a security that has been deemed illiquid.
(h) Indicates a security restricted to resale. The aggregate cost of such securities is $41,858,163. The aggregate value of $31,465,500 is approximately 5.5% of net assets.
(i) Inverse floating rate bond. The coupon is inversely indexed to a floating interest rate. The rate shown is the rate as of April 30, 2006.
(j) Other assets in excess of liabilities include net unrealized appreciation on financial futures and interest rate swaps as follows:

 

Open future contracts outstanding at April 30, 2006:

 

Number of
Contracts


  Type

  Expiration
Date


  Value at
April 30,
2006


    Value at
Trade Date


    Unrealized
Appreciation


Short Positions:                          
150   U.S. Treasury 5 Yr. Notes   June 06   $ (15,623,438 )   $ (15,788,074 )   $ 164,636
78   U.S. Treasury 10 Yr. Notes   June 06     (8,235,094 )     (8,375,652 )     140,558
46   U.S. Treasury 30 Yr. Notes   June 06     (4,914,813 )     (5,062,823 )     148,010
                           

                            $ 453,204
                           

 

Interest rate swap agreement outstanding at April 30, 2006:

 

Counterparty


   Termination
Date


  

Notional
Amount

(000)


   Fixed
Rate


   

Floating

Rate


   Unrealized
(Depreciation)


 
                       BMA
Municipal
        

Morgan Stanley Capital Services, Inc. *

   6/15/2026    $ 8,600    4.155 %   Swap Index    $ (236,484 )
                           



* Fund pays the floating rate and receives the fixed rate.

 

The industry classification of long-term portfolio holdings, short-term investments and other assets in excess of liabilities shown as a percentage of net assets as of April 30, 2006 was as follows:

 

Healthcare

   31.0 %

Corporate Backed IDB & PCR

   13.5  

Special Tax/Assessment District

   12.8  

Other

   8.6  

General Obligation

   5.6  

Transportation

   4.5  

Power

   4.2  

Education

   4.1  

Housing

   3.6  

Tobacco

   3.1  

Lease Backed Certificate of Participation

   1.9  

Water & Sewer

   1.7  

Solid Waste/Resource Recovery

   1.7  

Tobacco Appropriated

   1.2  

Short-Term Investments

   1.1  

Pooled Financing

   0.5  

Other assets in excess of liabilities

   0.9  
    

Net Assets

   100.0 %
    

 

Industry Classification is subject to change.

 

See Notes to Financial Statements.

 

36   Visit our website at www.jennisondryden.com


 

Financial Statements

 

APRIL 30, 2006   ANNUAL REPORT

 

Dryden Municipal Bond Fund

High Income Series


Statement of Assets and Liabilities

 

as of April 30, 2006

 

Assets

        

Unaffiliated investments, at value (cost $551,762,942)

   $ 567,136,213  

Cash

     21,510  

Interest receivable

     10,076,818  

Receivable for Series shares sold

     206,926  

Prepaid expenses

     217  
    


Total assets

     577,441,684  
    


Liabilities

        

Payable for investments purchased

     2,000,000  

Payable for Series shares reacquired

     1,263,965  

Dividends payable

     864,165  

Accrued expenses

     438,409  

Management fee payable

     236,705  

Unrealized depreciation on interest rate swaps

     236,484  

Distribution fee payable

     145,053  

Transfer agent fee payable

     73,820  

Due to broker—variation margin

     44,031  

Deferred trustees’ fees

     17,284  
    


Total liabilities

     5,319,916  
    


Net Assets

   $ 572,121,768  
    


          

Net assets were comprised of:

        

Shares of beneficial interest, at par

   $ 554,125  

Paid-in capital in excess of par

     617,199,480  
    


       617,753,605  

Undistributed net investment income

     1,615,042  

Accumulated net realized loss on investments, financial futures transactions and swaps

     (62,836,931 )

Net unrealized appreciation on investments, financial futures transactions and swaps

     15,590,052  
    


Net assets, April 30, 2006

   $ 572,121,768  
    


 

See Notes to Financial Statements.

 

38   Visit our website at www.jennisondryden.com


 

 

Class A

      

Net asset value and redemption price per share

      

($451,784,629 ÷ 43,760,197 shares of beneficial interest issued and outstanding)

   $ 10.32

Maximum sales charge (4% of offering price)

     0.43
    

Maximum offering price to public

   $ 10.75
    

Class B

      

Net asset value, offering price and redemption price per share

      

($85,179,127 ÷ 8,247,231 shares of beneficial interest issued and outstanding)

   $ 10.33
    

Class C

      

Net asset value, offering price and redemption price per share

      

($26,610,861 ÷ 2,576,423 shares of beneficial interest issued and outstanding)

   $ 10.33
    

Class Z

      

Net asset value, offering price and redemption price per share

      

($8,547,151 ÷ 828,615 shares of beneficial interest issued and outstanding)

   $ 10.31
    

 

See Notes to Financial Statements.

 

Dryden Municipal Bond Fund/High Income Series   39


Statement of Operations

 

Year Ended April 30, 2006

 

Net Investment Income

        

Income

        

Unaffiliated interest

   $ 36,463,703  
    


Expenses

        

Management fee

     3,032,635  

Distribution fee—Class A

     1,146,185  

Distribution fee—Class B

     561,081  

Distribution fee—Class C

     189,149  

Transfer agent’s fees and expenses (including affiliated expense of $232,000)

     313,000  

Custodian’s fees and expenses

     120,000  

Reports to shareholders

     120,000  

Registration fees

     60,000  

Legal fees and expenses

     36,000  

Insurance

     30,000  

Trustees’ fees

     26,000  

Audit fee

     24,000  

Miscellaneous

     19,942  
    


Total expenses

     5,677,992  
    


Net investment income

     30,785,711  
    


Realized And Unrealized Gain (Loss) On Investments

        

Net realized gain (loss) on:

        

Investment transactions

     (15,882,904 )

Financial futures transactions

     142,161  
    


       (15,740,743 )
    


Net change in unrealized appreciation (depreciation) on:

        

Investment transactions

     12,683,133  

Financial futures transactions

     819,297  

Interest rate swap

     (236,484 )
    


       13,265,946  
    


Net loss on investments

     (2,474,797 )
    


Net Increase In Net Assets Resulting From Operations

   $ 28,310,914  
    


 

See Notes to Financial Statements.

 

40   Visit our website at www.jennisondryden.com


Statement of Changes in Net Assets

 

 

     Year Ended April 30,

 
     2006        2005  

Decrease In Net Assets

                   

Operations

                   

Net investment income

   $ 30,785,711        $ 32,646,831  

Net realized gain (loss) on investment and financial futures transactions

     (15,740,743 )        1,074,702  

Net change in unrealized appreciation (depreciation) on investments and financial futures

     13,265,946          21,104,583  
    


    


Net increase in net assets resulting from operations

     28,310,914          54,826,116  
    


    


Dividends from net investment income (Note 1)

                   

Class A

     (21,806,352 )        (23,408,983 )

Class B

     (5,060,707 )        (8,039,534 )

Class C

     (1,074,682 )        (1,059,656 )

Class Z

     (532,470 )        (614,345 )
    


    


       (28,474,211 )        (33,122,518 )
    


    


Series share transactions (Net of share conversions) (Note 6)

                   

Net proceeds from shares sold

     29,403,230          26,586,733  

Net asset value of shares issued in reinvestment of dividends

     13,984,438          15,439,660  

Cost of shares reacquired

     (106,944,388 )        (116,275,299 )
    


    


Net decrease in net assets from Series share transactions

     (63,556,720 )        (74,248,906 )
    


    


Total decrease

     (63,720,017 )        (52,545,308 )

Net Assets

                   

Beginning of year

     635,841,785          688,387,093  
    


    


End of year(a)

   $ 572,121,768        $ 635,841,785  
    


    


(a) Includes undistributed net investment income of:

   $ 1,615,042        $ 1,810,131  
    


    


 

See Notes to Financial Statements.

 

Dryden Municipal Bond Fund/High Income Series   41


Portfolio of Investments

 

as of April 30, 2006

 

Description (a)    Moody’s
Rating
(Unaudited)
     Interest
Rate
  Maturity
Date
   Principal
Amount (000)
     Value (Note 1)
                                 

LONG-TERM INVESTMENTS    99.0%

                   

California    7.5%

                               

California Hlth. Facs. Fin., Auth. Rev. Cedar-Sinai Med. Ctr.

   A3      5.00%   11/15/21    $ 1,000      $ 1,028,270

California St., G.O., M.B.I.A.

   Aaa      5.25   2/01/27      7,000        7,351,609

Golden St. Tobacco Securitization Corp. Tobacco Settlement Rev., Asset Bkd., Ser. B, C.A.B.S., A.M.B.A.C.

   Aaa      Zero   6/01/23      1,500        1,210,050

Los Angeles Unif. Sch. Dist. Admin. Bldg. Proj., Ser. B, C.O.P., A.M.B.A.C.

   Aaa      5.00   10/01/31      3,000        3,054,060

San Joaquin Hills Trans. Corridor Agcy. Toll Rd. Rev., Ser. A, C.A.B.S., M.B.I.A.

   Aaa      Zero   1/15/36      10,000        2,239,300

University Rev., Hosp., UCLA Med. Ctr., Ser. A, A.M.B.A.C.

   Aaa      5.25   5/15/30      3,000        3,145,590
                             

                                18,028,879

Delaware    0.6%

                               

Delaware River & Bay Auth. Dev. Rev., M.B.I.A.

   Aaa      5.00   1/01/24      1,500        1,560,930

District of Columbia    4.7%

                          

District of Columbia Rev., George Washington Univ., Ser. A, M.B.I.A.

   Aaa      5.125   9/15/31      2,000        2,044,180

District of Columbia, G.O.,

                               

Ser. A, M.B.I.A.

   Aaa      5.00   6/01/27      2,500        2,575,400

Ser. A, M.B.I.A.(d)

   Aaa      6.50   6/01/10      3,095        3,405,088

Ser. A, E.T.M., M.B.I.A.(c)

   Aaa      6.50   6/01/10      2,905        3,203,344
                             

                                11,228,012

 

See Notes to Financial Statements.

 

42   Visit our website at www.jennisondryden.com


 

Description (a)    Moody’s
Rating
(Unaudited)
     Interest
Rate
  Maturity
Date
   Principal
Amount (000)
     Value (Note 1)
                                 

Florida    3.0%

                               

City of Gainesville, Utility Sys. Rev. Ser. A, F.S.A.

   Aaa      5.00%   10/01/23    $ 2,500      $ 2,612,650

Jacksonville Fl. Economic Dev. Commn. Health Care Facs. Rev. Mayo Clinic

   Aa2      5.00   11/15/36      1,500        1,535,670

Polk Cnty. Sch. Dist.,

                               

Sales Tax Rev., F.S.A.

   Aaa      5.25   10/01/17      1,580        1,690,853

Sales Tax Rev., F.S.A.

   Aaa      5.25   10/01/18      1,325        1,415,060
                             

                                7,254,233

Georgia    2.3%

                               

Atlanta Arpt. Facs. Rev., Ser. A, A.M.B.A.C., E.T.M.(c)

   Aaa      6.50   1/01/10      2,000        2,186,320

Newnan Hosp. Auth. Rev., M.B.I.A.

   Aaa      5.50   1/01/21      3,185        3,404,542
                             

                                5,590,862

Hawaii    3.6%

                               

Hawaii Dept. Budget & Fin., Hawaiian Elec. Co. Projs., Rev. Ser. C, A.M.B.A.C., A.M.T.

   Aaa      6.20   11/01/29      8,000        8,610,399

Illinois    13.6%

                               

Chicago Proj. & Rfdg.,
Ser. A, G.O., F.S.A

   Aaa      5.00   1/01/28      3,000        3,097,410

G.O., F.G.I.C.

   Aaa      5.25   1/01/28      2,000        2,081,080

Chicago Midway Arpt. Rev., Ser. B., M.B.I.A., A.M.T.

   Aaa      5.75   1/01/22      5,000        5,103,050

Chicago O’ Hare Int’l Arpt. Rev.,
Ser. A, M.B.I.A.

   Aaa      5.25   1/01/26      4,000        4,245,880

Ser. B, F.G.I.C.

   Aaa      5.25   1/01/15      1,000        1,074,110

Pass. Facs. Chrg.,
Ser. A, A.M.B.A.C.

   Aaa      5.625   1/01/15      2,000        2,042,520

 

See Notes to Financial Statements.

 

Dryden Municipal Bond Fund/Insured Series   43


Portfolio of Investments

 

as of April 30, 2006 Cont’d.

 

Description (a)    Moody’s
Rating
(Unaudited)
   Interest
Rate
  Maturity
Date
   Principal
Amount (000)
     Value (Note 1)
                               

City of Springfield, Elec.Rev., M.B.I.A.

   Aaa    5.00%   3/01/31    $ 4,000      $ 4,131,680

Illinois St., G.O., F.S.A.

   Aaa    5.25   4/01/22      2,500        2,635,675

McLean & Woodford Cntys. Cmnty. Unif. Sch. Dist. No. 005, G.O., F.S.A.(c)

   Aaa    5.625   12/01/11      4,000        4,308,120

Metro. Pier & Exposition Auth. Dedicated St. Tax Rev., McCormick,

                             

Ser. A, C.A.B.S., M.B.I.A.

   Aaa    Zero   12/15/34      10,000        2,432,500

Ser. A, C.A.B.S., M.B.I.A.

   Aaa    Zero   6/15/37      7,500        1,604,700
                           

                              32,756,725

Indiana    4.5%

                             

Anderson Ind. Sch. Bldg. Corp. Rev.,

                             

First Mtg., F.S.A.

   Aaa    5.00   7/15/25      2,000        2,084,060

First Mtg., A.M.B.A.C.

   AAA(b)    5.00   7/15/27      2,000        2,063,540

Indiana St. Office Bldg. Commn. Facs. Rev.,
Ser E, A.M.B.A.C.

   Aaa    5.00   7/01/26      2,605        2,678,748

Indianapolis Ind. Local Pub. Impt. Bd. Bk. Rev. Waterworks Proj. Ser. A, M.B.I.A.

   Aaa    5.50   7/01/18      3,540        3,924,975
                           

                              10,751,323

Kansas    0.7%

                             

Saline Cnty. Unif. Sch. Dist. No. 305, G.O., F.S.A.(c)

   Aaa    5.50   9/01/11      1,525        1,628,883

Louisiana    0.7%

                             

New Orleans, G.O., M.B.I.A.

   Aaa    5.25   12/01/22      1,540        1,626,656

Massachusetts    2.0%

                             

Boston Convention Ctr. Act of 1997, Spec. Oblig. Rev., Ser. A, A.M.B.A.C.

   Aaa    5.00   5/01/19      2,000        2,071,700

 

See Notes to Financial Statements.

 

44   Visit our website at www.jennisondryden.com


 

Description (a)    Moody’s
Rating
(Unaudited)
     Interest
Rate
  Maturity
Date
   Principal
Amount (000)
     Value (Note 1)
                                 

Massachusetts Bay Tran. Auth. Sales Tax Rev., Ser. B, M.B.I.A.

   Aaa      5.50%   7/01/27    $ 1,325      $ 1,508,526

Massachusetts St. Spec. Oblig. Rev., Ser. A, F.S.A.

   Aaa      5.50   6/01/21      1,000        1,123,870
                             

                                4,704,096

Michigan    2.4%

                               

Detroit Wtr. Sup. Sys. Rev., Ser. B, M.B.I.A.

   Aaa      5.25   7/01/32      5,500        5,774,285

Minnesota    2.8%

                               

Becker Indpt. Sch. Dist. No. 726, G.O., F.S.A.,

                               

Ser. A

   Aaa      6.00   2/01/15      1,610        1,731,507

Ser. A

   Aaa      6.00   2/01/16      1,750        1,882,073

Minneapolis & St. Paul Metro. Arpts. Rev., Ser. C, F.G.I.C.

   Aaa      5.50   1/01/19      3,000        3,179,460
                             

                                6,793,040

Nevada    1.3%

                               

Clark Cnty. Sch. Dist. Refdg., Ser. B, G.O., F.S.A.

   Aaa      5.00   6/15/18      3,000        3,151,950

New Jersey    8.4%

                               

Jersey City Swr. Auth.,

                               

Rev., A.M.B.A.C.

   Aaa      6.00   1/01/10      2,585        2,783,709

Rev., A.M.B.A.C.

   Aaa      6.25   1/01/14      4,255        4,768,706

New Jersey Healthcare Facs. Fin. Auth. Greystone Pk. Psychiatric Hosp. Rev., A.M.B.A.C.

   Aaa      5.00   9/15/26      2,000        2,071,100

New Jersey St. Transn. Tr. Fd. Auth. Rev. Transn. Sys. Ser. B, M.B. I. A.

   Aaa      5.50   12/15/15      3,000        3,296,670

New Jersey St. Edl. Facs. Auth. Rev., Montclair St. Univ., Ser. F, F.G.I.C.

   Aaa      5.00   7/01/24      3,650        3,802,424

 

See Notes to Financial Statements.

 

Dryden Municipal Bond Fund/Insured Series   45


Portfolio of Investments

 

as of April 30, 2006 Cont’d.

 

Description (a)    Moody’s
Rating
(Unaudited)
     Interest
Rate
  Maturity
Date
   Principal
Amount (000)
     Value (Note 1)
                                 

New Jersey St. Tpke. Auth. Rev., Growth & Inc. Secs., Ser. A, F.S.A.

   Aaa      5.00%   1/01/20    $ 2,500      $ 2,608,875

Ser. B, A.M.B.A.C., Convertible C.A.B.S.

   Aaa      Zero   1/01/35      1,500        985,155
                             

                                20,316,639

New York    12.8%

                               

Erie Cnty. Ind. Dev. Agcy. Sch. Facs. Rev., City of Buffalo Proj., F.S.A.

   Aaa      5.75   5/01/21      2,750        2,989,938

Islip Res. Rec. Agy. Rev., Ser. B, A.M.B.A.C., A.M.T.

   Aaa      7.20   7/01/10      1,750        1,969,678

Long Island Pwr. Auth. N. Y. Elec. Sys. Rev. Gen. Ser. A , F.G. I. C.

   Aaa      5.00   12/01/25      3,000        3,122,940

Metro. Trans. Auth. N.Y. Svc. Contract, Rfdg. Rev.,

                               

Ser. B, M.B.I.A

   Aaa      5.50   7/01/19      5,000        5,395,150

Ser. B, M.B.I.A

   Aaa      5.50   7/01/23      7,285        7,819,572

New York Convention Ctr. Dev. Corp., Rev., Hotel Unit Fee, A.M.B.A.C.

   Aaa      5.00   11/15/30      2,000        2,067,460

New York St. Dorm. Auth. Rev., Sch. Dist. Fin. Proj., Ser. A, M.B.I.A.

   Aaa      5.75   10/01/17      3,000        3,291,210

New York St. Twy. Auth. Hwy. & Bridg. Tr. Fd. Rev., Ser. B, A.M.B.A.C.

   Aaa      5.00   4/01/21      3,000        3,142,260

Tobacco Settlement Fin. Corp. Rev., Asset Bkd., Ser. C-1

   A1      5.50   6/01/15      1,000        1,051,050
                             

                                30,849,258

Oklahoma    2.9%

                               

Norman Reg. Hosp. Auth., Rev., Ser. A, M.B.I.A.

   Aaa      5.50   9/01/11      4,110        4,212,339

 

See Notes to Financial Statements.

 

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Description (a)    Moody’s
Rating
(Unaudited)
     Interest
Rate
  Maturity
Date
   Principal
Amount (000)
     Value (Note 1)
                                 

Oklahoma City Arpt. Trust, Jr. Lien Rev., Ser. 24, A.M.B.A.C., A.M.T.

   Aaa      5.75%   2/01/18    $ 2,620      $ 2,651,938
                             

                                6,864,277

Pennsylvania    5.6%

                               

Pennsylvania Econ. Dev. Fin. Auth. Res. Recov. Rev.,

                               

Colver Proj. Ser. F, A.M.B.A.C., A.M.T.

   Aaa      5.00   12/01/15      2,500        2,612,650

Ref. Colver Proj. Ser. F, A.M.B.A.C.

   Aaa      4.625   12/01/18      1,250        1,241,000

Pennsylvania St. Ind. Dev. Auth. Rev., Econ. Dev., A.M.B.A.C.

   Aaa      5.50   7/01/17      5,000        5,408,400

Pennsylvania St.Tpk. Commn. Rev., Ser. A, F.S.A.

   Aaa      5.25   7/15/21      2,000        2,193,960

Philadelphia Wtr. & Swr. Rev., Wrt. Util. Impvt. Ser. A, F.S.A.

   Aaa      5.25   7/01/20      2,000        2,131,740
                             

                                13,587,750

Puerto Rico    2.8%

                               

Puerto Rico Comwlth. Hwy. & Transit Auth., Trans. Rev.,

                               

Ser. I, F.G.I.C.

   Aaa      5.00   7/01/25      3,000        3,120,210

Ser. I, F.G.I.C.

   Aaa      5.00   7/01/26      3,465        3,603,843
                             

                                6,724,053

South Carolina    2.7%

                               

Greenville Cnty. Sch. Dist. Installment Pur. Rev., Ref. Bldg. Equity Sooner-AGC

   Aa3      5.00   12/01/26      2,000        2,063,000

Lexington Wtr. & Swr., Rev., Ser. A, M.B.I.A.

   Aaa      5.75   4/01/20      4,180        4,489,153
                             

                                6,552,153

 

See Notes to Financial Statements.

 

Dryden Municipal Bond Fund/Insured Series   47


Portfolio of Investments

 

as of April 30, 2006 Cont’d.

 

Description (a)    Moody’s
Rating
(Unaudited)
   Interest
Rate
  Maturity
Date
   Principal
Amount (000)
   Value (Note 1)
                             

Texas    6.6%

                           

Corpus Christi Util. Sys. Rev., Ser. A, F.S.A. (c)

   Aaa    6.00%   7/15/10    $ 6,705    $ 7,279,350

Houston Arpt. Sys. Rev., E.T.M. (c)

   Aaa    7.20   7/01/13      2,925      3,286,267

Northside Tex. Indpt. Sch. Dist. Ref. Ser. D, G.O., P.S.F.G.

   Aaa    5.00   6/15/28      5,150      5,302,440
                         

                            15,868,057

Washington    5.1%

                           

Clark Cnty. Sch. Dist. No. 114, Evergreen, G.O., F.S.A.

   Aaa    5.25   12/01/18      3,800      4,024,504

Cowlitz Cnty. Sch. Dist. No. 122 Longview, G.O., F.S.A.

   Aaa    5.50   12/01/19      1,725      1,845,405

Ocean Shores, G.O., F.G.I.C.

   Aaa    5.50   12/01/20      1,570      1,685,442

Snohomish Cnty. Ltd. Tax, G.O., M.B.I.A.

   Aaa    5.375   12/01/19      2,000      2,125,160

Washington St. Hsg. Fin. Comn. Rev., Sngl. Fam. Pg., Ser. 2A, A.M.T., G.N.M.A./F.N.M.A.

   Aaa    5.375   12/01/18      2,505      2,555,401
                         

                            12,235,912

West Virginia    1.3%

                           

Clarksburg Wtr. Rev., F.G.I.C.

   Aaa    5.25   9/01/19      2,000      2,124,320

West Virginia St. Wtr. Dev. Auth. Rev., Ser. B, A.M.B.A.C., A.M.T.

   Aaa    5.875   7/01/20      1,015      1,085,329
                         

                            3,209,649

Wisconsin    1.1%

                           

Manitowoc Elec. Rev., Pwr. Sys., F.G.I.C.

   Aaa    5.25   10/01/34      2,500      2,583,650
                         

Total long-term investments
(cost $231,645,010)

                          238,251,671
                         

 

See Notes to Financial Statements.

 

48   Visit our website at www.jennisondryden.com


 

Description (a)   Moody’s
Rating
(Unaudited)
  Interest
Rate
  Maturity
Date
   Principal
Amount (000)
   Value (Note 1)  
                             

SHORT-TERM INVESTMENTS    2.0%

                       

California    0.1%

                           

California St., Mun. Secs. Tr. Rcpts.-SGA 135, G.O., A.M.B.A.C., F.R.D.D.(e)

  A-1+(b)   3.80%   5/01/06    $ 200    $ 200,000  

Florida    0.2%

                           

Municipal Secs. Trust Ctfs., Ser 2001-160, Tr. Ctf. Cl. A., 144A, F.G.I.C., F.R.D.D.(e)

  A-1(b)   3.82   5/01/06      600      600,000  

Tennessee    1.1%

                           

Blount Cnty. Tenn. Pub. Bldg. Auth. Rev. Adj. Loc. Govt. Pub. Impt.-A-1-D, A.M.B.A.C. , F.R.D.D.(e)

  VMIG1   3.82   5/01/06      1,400      1,400,000  

Sevier Cnty. Tenn. Pub. Bldg. Auth. Rev. Var. Loc. Govt. Pub. Impt.-IV-I-2, A.M.B.A.C., F.R.D.D.(e)

  VMIG1   3.82   5/01/06      1,160      1,160,000  
                       


                          2,560,000  

Texas    0.6%

                           

Dallas-Fort Worth Texas Regl. Arpt. Rev., Mun. Sec. Tr. Rcpts. SGA 49, M.B.I.A., F.R.D.D.(e)

  A-1+(b)   3.84   5/01/06      1,355      1,355,000  
                       


Total short-term investments
(cost $4,715,000)

                        4,715,000  
                       


Total Investments    101.0%
(cost $236,793,946; Note 5)

                    242,966,671  

Liabilities in excess of other assets(f)    (1.0%)

                        (2,295,661 )
                       


Net Assets    100.0%

                      $ 240,671,010  
                       


 

See Notes to Financial Statements.

 

Dryden Municipal Bond Fund/Insured Series   49


Portfolio of Investments

 

as of April 30, 2006 Cont’d.

 


(a) The following abbreviations are used in portfolio descriptions:

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.

A.M.B.A.C.—American Municipal Bond Assurance Corporation.

A.M.T.—Alternative Minimum Tax.

C.A.B.S.—Capital Appreciation Bonds.

C.O.P.—Certificates of Participation.

E.T.M.—Escrowed to Maturity.

F.G.I.C.—Financial Guaranty Insurance Company.

F.N.M.A.—Federal National Mortgage Association.

F.R.D.D.—Floating Rate Demand Note(e).

F.S.A.—Financial Security Assurance.

G.N.M.A.—Government National Mortgage Association.

G.O.—General Obligation.

M.B.I.A.—Municipal Bond Insurance Corporation.

P.S.F.G.—Permanent School Fund Guaranty.

(b) Standard & Poor’s rating.
(c) Prerefunded issues are secured by escrow cash or direct U.S. government guaranteed obligations.
(d) All or partial amount segregated as initial margin on financial futures contracts.
(e) Indicates a variable rate security. The maturity date presented for these instruments is the latter of the next date on which the security can be redeemed at a par or the next date on which the rate of interest is adjusted. The interest rate shown reflects the rate in effect at April 30, 2006.
(f) Liabilities in excess of other assets include net unrealized appreciation on financial futures as follows:

 

Open future contracts outstanding at April 30, 2006:

 

Number of
Contracts


  Type

  Expiration
Date


  Value at
April 30,
2006


    Value at
Trade Date


   

Unrealized

Appreciation


Short Positions:                          
24   U.S. Treasury 2 Yr. Notes   Jun. 06   $ (4,889,625 )   $ (4,899,922 )   $ 10,297
61   U.S. Treasury 5 Yr. Notes   Jun. 06     (6,353,531 )     (6,410,405 )     56,874
90   U.S. Treasury 30 Yr. Notes   Jun. 06     (9,615,937 )     (9,897,926 )     281,989
                           

                            $ 349,160
                           

 

The industry classification of long-term portfolio holdings, short-term investments and liabilities in excess of other assets shown as a percentage of net assets as of April 30, 2006 was as follows:

 

Transportation

   23.4 %

General Obligation

   19.8  

Water & Sewer

   14.3  

Education

   7.9  

Special Tax/Assessment District

   6.3  

Healthcare

   5.5  

Lease Backed Certificate of Participation

   5.4  

Power

   5.2  

Corporate Backed IDB & PCR

   3.6  

Solid Waste/Resource Recovery

   2.4  

Pooled Financing

   2.3  

Short-Term Investments

   2.0  

Housing

   1.1  

Tobacco Appropriated

   0.9  

Other

   0.9  

Tobacco

    

Liabilities in excess of other assets

   –1.0  
    

Net Assets

   100.0 %
    

 

Industry classification is subject to change.

 

See Notes to Financial Statements.

 

50   Visit our website at www.jennisondryden.com


 

Financial Statements

 

APRIL 30, 2006   ANNUAL REPORT

 

Dryden Municipal Bond Fund

Insured Series


 

Statement of Assets and Liabilities

 

as of April 30, 2006

 

Assets

      

Unaffiliated investments, at value (cost $236,793,946)

   $ 242,966,671

Cash

     32,777

Receivable for investments sold

     4,754,220

Interest receivable

     3,604,855

Prepaid expenses

     5,132

Receivable for Series shares sold

     2,200
    

Total assets

     251,365,855
    

Liabilities

      

Payable for investments purchased

     9,054,166

Payable for Series shares reacquired

     982,200

Dividends payable

     243,625

Accrued expenses

     182,514

Management fee payable

     100,151

Distribution fee payable

     58,213

Transfer agent fee payable

     37,172

Due to broker—variation margin

     22,775

Deferred trustees’ fees

     14,029
    

Total liabilities

     10,694,845
    

Net Assets

   $ 240,671,010
    

        

Net assets were comprised of:

      

Shares of beneficial interest, at par

   $ 226,264

Paid-in capital in excess of par

     232,194,371
    

       232,420,635

Undistributed net investment income

     300,775

Accumulated net realized gain on investments and financial future transactions

     1,427,715

Net unrealized appreciation on investments and financial future transactions

     6,521,885
    

Net assets, April 30, 2006

   $ 240,671,010
    

 

See Notes to Financial Statements.

 

52   Visit our website at www.jennisondryden.com


 

 

Class A

      

Net asset value and redemption price per share

      

($201,120,622 ÷ 18,912,109 shares of beneficial interest issued and outstanding)

   $ 10.63

Maximum sales charge (4.00% of offering price)

     .44
    

Maximum offering price to public

   $ 11.07
    

Class B

      

Net asset value, offering price and redemption price per share

      

($30,328,447 ÷ 2,847,500 shares of beneficial interest issued and outstanding)

   $ 10.65
    

Class C

      

Net asset value, offering price and redemption price per share

      

($5,971,327 ÷ 560,665 shares of beneficial interest issued and outstanding)

   $ 10.65
    

Class Z

      

Net asset value, offering price and redemption price per share

      

($3,250,614 ÷ 306,097 shares of beneficial interest issued and outstanding)

   $ 10.62
    

 

See Notes to Financial Statements.

 

Dryden Municipal Bond Fund/Insured Series   53


 

Statement of Operations

 

Year Ended April 30, 2006

 

Net Investment Income

        

Income

        

Unaffiliated Interest

   $ 12,904,652  
    


Expenses

        

Management fee

     1,371,565  

Distribution fee—Class A

     568,444  

Distribution fee—Class B

     181,695  

Distribution fee—Class C

     50,121  

Transfer agent’s fees and expenses (including affiliated expense of $112,500)

     153,000  

Custodian’s fees and expenses

     130,000  

Reports to shareholders

     60,000  

Registration fees

     55,000  

Legal fees and expenses

     40,000  

Audit fee

     25,000  

Trustees’ fees

     16,000  

Insurance

     14,000  

Miscellaneous

     14,312  
    


Total expenses

     2,679,137  
    


Net investment income

     10,225,515  
    


Realized And Unrealized Gain (Loss) On Investment Transactions

        

Net realized gain (loss) on:

        

Investment transactions

     2,722,917  

Financial futures transactions

     607,220  

Interest rate swap

     (19,722 )
    


       3,310,415  
    


Net change in unrealized appreciation (depreciation) on:

        

Investments

     (9,779,072 )

Financial futures contracts

     194,223  

Interest rate swap

     20,054  
    


       (9,564,795 )
    


Net loss on investment transactions

     (6,254,380 )
    


Net Increase In Net Assets Resulting From Operations

   $ 3,971,135  
    


 

See Notes to Financial Statements.

 

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Statement of Changes in Net Assets

 

     Year Ended April 30,

 
     2006        2005  

Increase (Decrease) In Net Assets

                   

Operations

                   

Net investment income

   $ 10,225,515        $ 11,383,142  

Net realized gain on investment transactions

     3,310,415          1,220,666  

Net change in unrealized appreciation (depreciation) on investments

     (9,564,795 )        4,189,868  
    


    


Net increase in net assets resulting from operations

     3,971,135          16,793,676  
    


    


Dividends and distributions (Note 1)

                   

Dividends from net investment income

                   

Class A

     (8,495,339 )        (9,275,030 )

Class B

     (1,266,061 )        (1,664,406 )

Class C

     (216,152 )        (246,667 )

Class Z

     (155,897 )        (210,938 )
    


    


       (10,133,449 )        (11,397,041 )
    


    


Distributions from net realized gains

                   

Class A

     (1,874,458 )        (2,585,711 )

Class B

     (290,276 )        (509,925 )

Class C

     (53,264 )        (83,023 )

Class Z

     (31,353 )        (52,719 )
    


    


       (2,249,351 )        (3,231,378 )
    


    


Series share transactions (Net of share conversions) (Note 6)

                   

Net proceeds from shares sold

     5,307,860          13,443,993  

Net asset value of shares issued in reinvestment of dividends and distributions

     7,924,862          9,115,454  

Cost of shares reacquired

     (60,940,258 )        (51,064,171 )
    


    


Net decrease in net assets from Series share transactions

     (47,707,536 )        (28,504,724 )
    


    


Total decrease

     (56,119,201 )        (26,339,467 )

Net Assets

                   

Beginning of year

     296,790,211          323,129,678  
    


    


End of year(a)

   $ 240,671,010        $ 296,790,211  
    


    


(a) Includes undistributed net investment income of:

   $ 300,775        $ 293,286  
    


    


 

See Notes to Financial Statements.

 

Dryden Municipal Bond Fund/Insured Series   55


 

Notes to Financial Statements

 

Dryden Municipal Bond Fund (the “Fund”) is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. The Fund was organized as an unincorporated business trust in Massachusetts on November 3, 1986 and consists of two series: the “High Income Series” and the “Insured Series”. Investment operations for Class A, Class B, Class C and Class Z shares of each Series commenced on January 22, 1990, September 17, 1987, August 1, 1994 and September 16, 1996, respectively.

 

The investment objectives of the Series are as follows: (i) the objective of the High Income Series is to provide the maximum amount of income that is eligible for exclusion from federal income taxes, (ii) the objective of the Insured Series is to provide the maximum amount of income that is eligible for exclusion from federal income taxes consistent with the preservation of capital. The ability of issuers of debt securities held by the Fund to meet their obligations may be affected by economic and political developments in a specific state, region or industry.

 

Note 1. Accounting Policies

 

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

 

Securities Valuation: The Fund values municipal securities (including commitments to purchase such securities on a “when-issued” basis) as of the normal close of trading on the New York Stock Exchange, on the basis of prices provided by a pricing service which uses information with respect to transactions in comparable securities and various relationships between securities in determining values. Securities listed on a securities exchange (other than options on securities and indices) are valued at the last sale 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 asked prices, or at the last bid price on such day in the absence of an asked 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 subadvisor, to be over-the-counter, are valued at market value using prices provided, by an independent pricing agent or principal market maker. 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. Securities for which reliable market quotations are not readily available or for

 

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which the pricing service does not provide a valuation methodology, or does not present fair value, are valued at fair value in accordance with Board of Trustees’ approved fair valuation procedures. When determining the fair 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. 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 securities which mature in sixty days or less are valued at amortized cost, which approximates market value. Short-term securities which mature in more than sixty days are valued at current market quotations. 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.

 

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 contracts.

 

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.

 

Dryden Municipal Bond Fund   57


Notes to Financial Statements

 

Cont’d

 

 

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 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 written options.

 

The Fund, as writer of an option, has 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 that is traded in the over-the counter market, bears the risk of the potential inability of the counterparties to meet the terms of their contracts.

 

Interest Rate Swap: The Fund may enter into interest rate swaps. In a simple interest rate swap, one investor pays a floating rate of interest on a notional amount and receives a fixed rate of interest on the same notional principal amount for a specified period of time. Alternatively, an investor may pay a fixed rate and receive a floating rate. Interest rate swaps were developed as asset/liability management tools. In more complex swaps, the notional principal may decline (or amortize) over time.

 

During the term of the swap, changes in the value of the swap are recorded as unrealized gains or losses by “marking-to-market” to reflect the market value of the swap. When the swap is terminated, the Fund will record a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the fund’s basis in the contract, if any.

 

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The Fund is exposed to credit loss in the event of non-performance by the other party to the interest rate swap. However, the Fund does not anticipate non-performance by any counterparty.

 

Written options, future contracts and swap contracts involve elements of both market and credit risk in excess of the amounts reflected in the Statement of Assets and Liabilities.

 

Inverse Floaters: The Fund invests in variable rate securities commonly called “inverse floaters”. The interest rates on these securities have an inverse relationship to market interest rate of other securities or the value of an index. Changes in interest rates on the other security or index inversely affect the rate paid on the inverse floater, and the inverse floater’s price will be more volatile than that of a fixed-rate bond. Additionally, some of these securities contain a “leverage factor” whereby the interest rate moves inversely by a “factor” to the benchmark rate. Certain interest rate movements and other market factors can substantially affect the liquidity of inverse floating rate notes.

 

When-Issued/Delayed Delivery Securities: Securities purchased or sold on a when-issued or delayed-delivery basis may be settled a month or more after trade date; interest income is not accrued until settlement date. At the time a Fund enters into such transactions, it instructs the custodian to segregate assets with a current value at least equal to the amount of its when-issued or delayed-delivery purchase commitments.

 

Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains or losses on sales of investments are calculated on the identified cost basis. Interest income, including amortization of premium and accretion of discount on debt securities, as required, is recorded on the accrual basis as an adjustment to interest income.

 

Net investment income or loss (other than distribution fees, which are charged directly to the respective Class) and unrealized and realized gains or losses, 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 dividends from the net investment income daily and distributions of net realized capital and currency gains, if any, annually. Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on the ex-dividend date. Permanent book/tax differences relating to income and gains are reclassified amongst undistributed net investment income, accumulated net realized gain or loss and paid in capital in excess of par, as appropriate.

 

Dryden Municipal Bond Fund   59


Notes to Financial Statements

 

Cont’d

 

 

Federal Income Taxes: For federal income tax purposes, each Series in the Fund is treated as a separate taxpaying entity. 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 (“PIM”). The Subadvisory Agreement provides that PIM will furnish investment advisory services in connection with the management of the Fund. PI pays for the services of PIM, the cost of compensation of officers for the Fund, occupancy and certain clerical and bookkeeping cost of the Fund. The Fund bears all other costs and expenses.

 

The management fee paid PI is computed daily and payable monthly at an annual rate of .50 of 1% of the average daily net assets of each series up to $1 billion and .45 of 1% of the average daily net assets of each series in excess of $1 billion. The effective management fee rate was .50 of 1% of the average daily net assets of the High Income and Insured Series for the year ended April 30, 2006.

 

The Fund has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”) which acts as the distributor of the Fund. The Fund compensates PIMS for distributing and servicing the Fund’s Class A, Class B and Class C shares, pursuant to plans of distribution (the “Class A, B and C Plans”), regardless of expenses actually incurred by it. 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 and C Plans, the Fund compensates PIMS for distribution related activities at an annual rate of up to .30 of 1%, .50 of 1% and 1%, of the

 

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average daily net assets of the Class A, B and C shares, respectively. PIMS contractually agreed to limit such fees to .25 of 1% and .75 of 1% average daily net assets of the Class A shares and Class C shares, respectively.

 

PIMS has advised the High Income Series and Insured Series that it received approximately $186,600 and $76,000 for Class A shares, respectively, in front-end sales charges during the year ended April 30, 2006. From these fees, PIMS paid such sales charges to affiliated broker-dealers, which in turn paid commissions to salespersons and incurred other distribution costs.

 

PIMS has advised the High Income Series and Insured Series that for the year ended April 30, 2006, it received approximately $141,500 ($139,500 Class B; $2,000 Class C) and $84,400 ($83,900 Class B; $500 Class C), respectively, in contingent deferred sales charges imposed upon certain redemptions by Class B and C shareholders, respectively.

 

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

 

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 provides for a commitment of $500 million. Interest on any borrowings under the SCA would be incurred at market rates. For the period from October 29, 2004 through October 28, 2005, the Fund paid a commitment fee of .075 of 1% of the unused portion of the agreement. Effective October 29, 2005, the Funds renewed the SCA with the banks. The commitment under the renewed SCA continues to be $500 million. The Fund pays a commitment fee of .0725 of 1% of the unused portion of the renewed SCA. The commitment fee is accrued daily and paid quarterly and is allocated to the Funds pro-rata based on net assets. The purpose of the SCA is to serve as an alternative source of funding for capital share redemptions. The expiration date of the renewed SCA is October 27, 2006. The Fund did not borrow any amounts pursuant to the SCA during the year ended April 30, 2006.

 

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 relating to the services of Wachovia Securities, LLC (“Wachovia”) and First

 

Dryden Municipal Bond Fund   61


Notes to Financial Statements

 

Cont’d

 

 

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 year ended April 30, 2006, the Fund incurred approximately $93,200 ($75,000 High Income Series; $18,200 Insured Series) in total networking fees. These amounts are included in transfer agent’s fees and expenses in the Statement of Operations.

 

For the year ended April 30, 2006, the Fund did not pay brokerage commissions to Wachovia or First Clearing.

 

Note 4. Portfolio Securities

 

Purchases and sales of portfolio securities, other than short-term investments, for the year ended April 30, 2006, were as follows:

 

Series


  

Purchases


  

Sales


High Income    $191,529,632    $247,771,373
Insured    $93,408,527    $137,721,223

 

Note 5. Distributions and Tax Information

 

In order to present undistributed net investment income and accumulated net realized gains or losses on investments, financial futures transactions and swaps on the Statement of Assets and Liabilities that more closely represent their tax character, certain adjustments have been made to paid-in-capital in excess of par, undistributed net investment income and accumulated net realized gain or loss on investments, financial futures transactions and swaps.

 

For the year ended April 30, 2006, the adjustments were as follows:

 

Series


  

Paid in Capital in
Excess of Par


  

Undistributed
Net Investment

Income


  

Accumulated
Net Realized
Gain


High Income    $(554,028)    $(2,506,589)    $3,060,617
Insured    $—    $(84,577)    $84,577

 

These adjustments were primarily due to the difference between financial and tax reporting with respect to accretion of market discount, expiration of capital loss carryforward, swap treatment and other differences. Net investment income, net realized gains or losses and net assets were not affected by this change.

 

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The tax character of total dividends paid for the most recent two fiscal years are as follows:

 

     High Income
Series


   Insured
Series


April 30, 2006              

Tax-Exempt

   $ 28,241,396    $ 10,132,683

Ordinary Income

     232,815      176,975

Long-term Capital Gains

          2,073,142
    

  

Total Dividends

   $ 28,474,211    $ 12,382,800
    

  

April 30, 2005              

Tax-Exempt

   $ 32,425,147    $ 11,337,863

Ordinary Income

     697,371      59,178

Long-term Capital Gains

          3,231,378
    

  

Total Dividends

   $ 33,122,518    $ 14,628,419
    

  

 

As of April 30, 2006, the components of distributable earnings on a tax basis were as follows:

 

Series


  

Tax-Exempt


  

Ordinary

Income


  

Long-Term
Capital
Gains


High Income    $2,322,596    $173,900   
Insured    $527,422    $31,007    $1,342,938

 

These amounts include a dividends payable timing difference of $864,165 and $243,625 for the High Income Series and Insured Series, respectively as of April 30, 2006.

 

The United States federal income tax basis of the Series’ investments and the net unrealized appreciation (depreciation) as of April 30, 2006 were as follows:

 

Series


 

Tax Basis


 

Appreciation


 

Depreciation


 

Total
Unrealized
Appreciation


 

Other Cost
Basis
Adjustment


 

Total Net
Unrealized
Appreciation


High Income   $549,444,271   $31,528,600   $13,836,658   $17,691,942   $(236,423)   $17,455,519
Insured   $236,360,010   $  7,805,885   $  1,199,224   $  6,606,661   $          —   $  6,606,661

 

These adjustments were primarily due to the difference between financial and tax reporting with respect to accretion of market discount, expiration of capital loss carryforward, swaps treatment and other differences. Net investment income, net realized gain (losses) and net assets were not affected by this change.

 

For federal income tax purposes, the High Income Series has a capital loss carryforward as of April 30, 2006 of approximately $58,171,000, of which $3,137,000 expires in 2007, $5,906,000 expires in 2008, $20,095,000 expires in 2009,

 

Dryden Municipal Bond Fund   63


Notes to Financial Statements

 

Cont’d

 

 

$13,512,000 expires in 2010, $4,457,000 expires in 2011 and $11,064,000 expires

in 2014. Accordingly, no capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such carryforwards. In addition approximately $554,000 of its capital loss carryforward expired in the fiscal year ended April 30, 2006. The High Income Series elected to treat post-October capital losses of approximately $6,532,000 incurred in the six months ended April 30, 2006 as having incurred in the next fiscal year.

 

Note 6. Capital

 

The High Income Series and Insured Series offer Class A, Class B, Class C and Class Z shares. Class A shares were sold with a front-end sales charge of up to 4%. All investors who purchase Class A shares in the 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 are sold with a contingent deferred sales charge of 1% during the first 12 months. 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 qualify to purchase Class A shares at net asset value. Class Z shares are not subject to any sales or redemption charge and are offered exclusively for sale to a limited group of investors.

 

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The Fund has authorized an unlimited number of shares of beneficial interest of each class at $.01 par value per share. Transactions in shares of beneficial interest were as follows:

 

Dryden Municipal Bond Fund/High Income Series

 

Class A


   Shares

     Amount

 

Year ended April 30, 2006:

               

Shares sold

   1,516,896      $ 15,761,657  

Shares issued in reinvestment of dividends

   1,038,877        10,780,505  

Shares reacquired

   (7,279,786 )      (75,542,675 )
    

  


Net increase (decrease) in shares outstanding before conversion

   (4,724,013 )      (49,000,513 )

Shares issued upon conversion from Class B

   4,001,025        41,582,297  
    

  


Net increase (decrease) in shares outstanding

   (722,988 )    $ (7,418,216 )
    

  


Year ended April 30, 2005:

               

Shares sold

   1,385,419      $ 14,021,188  

Shares issued in reinvestment of dividends

   1,099,579        11,164,001  

Shares reacquired

   (7,283,489 )      (73,874,672 )
    

  


Net increase (decrease) in shares outstanding before conversion

   (4,798,491 )      (48,689,483 )

Shares issued upon conversion from Class B

   3,536,976        35,857,695  
    

  


Net increase (decrease) in shares outstanding

   (1,261,515 )    $ (12,831,788 )
    

  


Class B


             

Year ended April 30, 2006:

               

Shares sold

   318,017      $ 3,304,697  

Shares issued in reinvestment of dividends

   202,826        2,105,931  

Shares reacquired

   (1,996,903 )      (20,732,680 )
    

  


Net increase (decrease) in shares outstanding before conversion

   (1,476,060 )      (15,322,052 )

Shares reacquired upon conversion into Class A

   (3,999,189 )      (41,582,297 )
    

  


Net increase (decrease) in shares outstanding

   (5,475,249 )    $ (56,904,349 )
    

  


Year ended April 30, 2005:

               

Shares sold

   550,724      $ 5,601,938  

Shares issued in reinvestment of dividends

   315,199        3,196,834  

Shares reacquired

   (2,865,056 )      (28,975,493 )
    

  


Net increase (decrease) in shares outstanding before conversion

   (1,999,133 )      (20,176,721 )

Shares reacquired upon conversion into Class A

   (3,533,490 )      (35,857,695 )
    

  


Net increase (decrease) in shares outstanding

   (5,532,623 )    $ (56,034,416 )
    

  


 

Dryden Municipal Bond Fund   65


Notes to Financial Statements

 

Cont’d

 

 

Class C


   Shares

     Amount

 

Year ended April 30, 2006:

               

Shares sold

   774,023      $ 8,044,948  

Shares issued in reinvestment of dividends

   57,560        597,542  

Shares reacquired

   (386,893 )      (4,016,766 )
    

  


Net increase (decrease) in shares outstanding

   444,690      $ 4,625,724  
    

  


Year ended April 30, 2005:

               

Shares sold

   150,208      $ 1,534,352  

Shares issued in reinvestment of dividends

   58,491        593,704  

Shares reacquired

   (537,413 )      (5,453,703 )
    

  


Net increase (decrease) in shares outstanding

   (328,714 )    $ (3,325,647 )
    

  


Class Z


             

Year ended April 30, 2006:

               

Shares sold

   221,330      $ 2,291,928  

Shares issued in reinvestment of dividends

   48,255        500,460  

Shares reacquired

   (640,191 )      (6,652,267 )
    

  


Net increase (decrease) in shares outstanding

   (370,606 )    $ (3,859,879 )
    

  


Year ended April 30, 2005:

               

Shares sold

   536,589      $ 5,429,255  

Shares issued in reinvestment of dividends

   47,658        485,121  

Shares reacquired

   (795,862 )      (7,971,431 )
    

  


Net increase (decrease) in shares outstanding

   (211,615 )    $ (2,057,055 )
    

  


Dryden Municipal Bond Fund/Insured Series              

Class A


             

Year ended April 30, 2006:

               

Shares sold

   351,961      $ 3,828,011  

Shares issued in reinvestment of dividends and distributions

   611,603        6,623,957  

Shares reacquired

   (4,587,717 )      (49,657,641 )
    

  


Net increase (decrease) in shares outstanding before conversion

   (3,624,153 )      (39,205,673 )

Shares issued upon conversion from Class B

   460,187        5,012,185  
    

  


Net increase (decrease) in shares outstanding

   (3,163,966 )    $ (34,193,488 )
    

  


Year ended April 30, 2005:

               

Shares sold

   778,046      $ 8,615,005  

Shares issued in reinvestment of dividends and distributions

   670,895        7,366,574  

Shares reacquired

   (3,456,633 )      (37,849,162 )
    

  


Net increase (decrease) in shares outstanding before conversion

   (2,007,692 )      (21,867,583 )

Shares issued upon conversion from Class B

   431,070        4,722,888  
    

  


Net increase (decrease) in shares outstanding

   (1,576,622 )    $ (17,144,695 )
    

  


 

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Class B


   Shares

     Amount

 

Year ended April 30, 2006:

               

Shares sold

   98,154      $ 1,067,999  

Shares issued in reinvestment of dividends and distributions

   91,401        991,716  

Shares reacquired

   (735,913 )      (8,003,408 )
    

  


Net increase (decrease) in shares outstanding before conversion

   (546,358 )      (5,943,693 )

Shares reacquired upon conversion into Class A

   (459,476 )      (5,012,185 )
    

  


Net increase (decrease) in shares outstanding

   (1,005,834 )    $ (10,955,878 )
    

  


Year ended April 30, 2005:

               

Shares sold

   260,009      $ 2,860,840  

Shares issued in reinvestment of dividends and distributions

   123,998        1,363,624  

Shares reacquired

   (814,723 )      (8,926,398 )
    

  


Net increase (decrease) in shares outstanding before conversion

   (430,716 )      (4,701,934 )

Shares reacquired upon conversion into Class A

   (430,465 )      (4,722,888 )
    

  


Net increase (decrease) in shares outstanding

   (861,181 )    $ (9,424,822 )
    

  


Class C


             

Year ended April 30, 2006:

               

Shares sold

   29,419      $ 322,155  

Shares issued in reinvestment of dividends and distributions

   14,170        153,692  

Shares reacquired

   (168,549 )      (1,837,284 )
    

  


Net increase (decrease) in shares outstanding

   (124,960 )    $ (1,361,437 )
    

  


Year ended April 30, 2005:

               

Shares sold

   135,601      $ 1,502,577  

Shares issued in reinvestment of dividends and distributions

   17,891        196,735  

Shares reacquired

   (167,243 )      (1,834,979 )
    

  


Net increase (decrease) in shares outstanding

   (13,751 )    $ (135,667 )
    

  


Class Z


             

Year ended April 30, 2006:

               

Shares sold

   8,274      $ 89,695  

Shares issued in reinvestment of dividends and distributions

   14,364        155,497  

Shares reacquired

   (132,978 )      (1,441,925 )
    

  


Net increase (decrease) in shares outstanding

   (110,340 )    $ (1,196,733 )
    

  


Year ended April 30, 2005:

               

Shares sold

   42,683      $ 465,571  

Shares issued in reinvestment of dividends and distributions

   17,180        188,521  

Shares reacquired

   (224,936 )      (2,453,632 )
    

  


Net increase (decrease) in shares outstanding

   (165,073 )    $ (1,799,540 )
    

  


 

Dryden Municipal Bond Fund   67


Financial Highlights

 

High Income Series

 

 

 

     Class A

 
     Year Ended
April 30, 2006(d)
 

Per Share Operating Performance:

        

Net Asset Value, Beginning Of Year

   $ 10.33  
    


Income from investment operations:

        

Net investment income

     .53  

Net realized and unrealized gain (loss) on investment transactions

     (.05 )
    


Total from investment operations

     .48  
    


Less Dividends:

        

Dividends from net investment income

     (.49 )
    


Net asset value, end of year

   $ 10.32  
    


Total Return(a):

     4.84 %

Ratios/Supplemental Data:

        

Net assets, end of year (000)

   $ 451,785  

Average net assets (000)

   $ 458,445  

Ratios to average net assets:

        

Expenses, including distribution and service (12b-1) fees(c)

     .87 %

Expenses, excluding distribution and service (12b-1) fees

     .62 %

Net investment income

     5.14 %

For Class A, B, C and Z shares:

        

Portfolio turnover rate

     32 %

(a) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each year reported, and includes reinvestment of dividends and distributions.
(b) Effective May 1, 2001, the Dryden Municipal Bond Fund/High Income Series has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended April 30, 2002 was to increase net investment income per share by $.01, decrease net realized and unrealized gain (loss) per share by $.01 and increase the ratio of net investment income from 5.84% to 5.87%.
(c) The distributor of the Series has 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.
(d) Calculated based upon average shares outstanding during the year.

 

See Notes to Financial Statements.

 

68   Visit our website at www.jennisondryden.com


Class A  
Year Ended April 30,  
2005     2004     2003     2002(b)  
                             
$ 9.99     $ 10.11     $ 10.06     $ 10.11  



 


 


 


                             
  .51       .53       .56       .61  
  .35       (.12 )     .04       (.06 )



 


 


 


  .86       .41       .60       .55  



 


 


 


                             
  (.52 )     (.53 )     (.55 )     (.60 )



 


 


 


$ 10.33     $ 9.99     $ 10.11     $ 10.06  



 


 


 


  8.81 %     4.13 %     6.15 %     5.53 %
                             
$ 459,598     $ 457,184     $ 491,218     $ 501,501  
$ 458,739     $ 479,691     $ 496,597     $ 517,930  
                             
  .86 %     .87 %     .85 %     .84 %
  .61 %     .62 %     .60 %     .59 %
  5.03 %     5.25 %     5.53 %     5.87 %
                             
  29 %     89 %     88 %     58 %

 

See Notes to Financial Statements.

 

Dryden Municipal Bond Fund/High Income Series   69


Financial Highlights

 

Cont’d

 

 

     Class B

 
     Year Ended
April 30, 2006(c)
 

Per Share Operating Performance:

        

Net Asset Value, Beginning Of Year

   $ 10.34  
    


Income from investment operations:

        

Net investment income

     .51  

Net realized and unrealized gain (loss) on investment transactions

     (.06 )
    


Total from investment operations

     .45  
    


Less Dividends:

        

Dividends from net investment income

     (.46 )
    


Net asset value, end of year

   $ 10.33  
    


Total Return(a):

     4.48 %

Ratios/Supplemental Data:

        

Net assets, end of year (000)

   $ 85,179  

Average net assets (000)

   $ 112,213  

Ratios to average net assets:

        

Expenses, including distribution and service (12b-1) fees

     1.12 %

Expenses, excluding distribution and service (12b-1) fees

     .62 %

Net investment income

     4.90 %

(a) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each year reported, and includes reinvestment of dividends and distributions.
(b) Effective May 1, 2001, the Dryden Municipal Bond Fund/High Income Series has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended April 30, 2002 was to increase net investment income and decrease net realized and unrealized gain (loss) per share by less than $.005 and increase the ratio of net investment income from 5.59% to 5.62%.
(c) Calculated based upon average shares outstanding during the year.

 

See Notes to Financial Statements.

 

70   Visit our website at www.jennisondryden.com


Class B  
Year Ended April 30,  
2005     2004     2003     2002(b)  
                             
$ 10.00     $ 10.11     $ 10.06     $ 10.11  



 


 


 


                             
  .49       .51       .54       .58  
  .34       (.12 )     .04       (.06 )



 


 


 


  .83       .39       .58       .52  



 


 


 


                             
  (.49 )     (.50 )     (.53 )     (.57 )



 


 


 


$ 10.34     $ 10.00     $ 10.11     $ 10.06  



 


 


 


  8.53 %     3.95 %     5.88 %     5.27 %
                             
$ 141,832     $ 192,517     $ 241,311     $ 285,581  
$ 165,596     $ 219,376     $ 264,067     $ 307,192  
                             
  1.11 %     1.12 %     1.10 %     1.09 %
  .61 %     .62 %     .60 %     .59 %
  4.78 %     5.00 %     5.31 %     5.62 %

 

See Notes to Financial Statements.

 

Dryden Municipal Bond Fund/High Income Series   71


Financial Highlights

 

Cont’d

 

 

     Class C

 
     Year Ended
April 30, 2006(d)
 

Per Share Operating Performance:

        

Net Asset Value, Beginning Of Year

   $ 10.34  
    


Income from investment operations:

        

Net investment income

     .48  

Net realized and unrealized gain (loss) on investment transactions

     (.05 )
    


Total from investment operations

     .43  
    


Less Dividends:

        

Dividends from net investment income

     (.44 )
    


Net asset value, end of year

   $ 10.33  
    


Total Return(a):

     4.23 %

Ratios/Supplemental Data:

        

Net assets, end of year (000)

   $ 26,611  

Average net assets (000)

   $ 25,219  

Ratios to average net assets:

        

Expenses, including distribution and service (12b-1) fees(c)

     1.37 %

Expenses, excluding distribution and service (12b-1) fees

     .62 %

Net investment income

     4.64 %

(a) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each year reported, and includes reinvestment of dividends and distributions.
(b) Effective May 1, 2001, the Dryden Municipal Bond Fund/High Income Series has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended April 30, 2002 was to increase net investment income and decrease net realized and unrealized gain (loss) per share by less than $.005 and increase the ratio of net investment income from 5.35% to 5.38%.
(c) The distributor of the Series has 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.
(d) Calculated based upon average shares outstanding during the year.

 

See Notes to Financial Statements.

 

72   Visit our website at www.jennisondryden.com


Class C  
Year Ended April 30,  
2005     2004     2003     2002(b)  
                             
$ 10.00     $ 10.11     $ 10.06     $ 10.11  



 


 


 


                             
  .46       .48       .51       .55  
  .35       (.11 )     .04       (.05 )



 


 


 


  .81       .37       .55       .50  



 


 


 


                             
  (.47 )     (.48 )     (.50 )     (.55 )



 


 


 


$ 10.34     $ 10.00     $ 10.11     $ 10.06  



 


 


 


  8.26 %     3.69 %     5.62 %     5.00 %
                             
$ 22,033     $ 24,599     $ 28,313     $ 26,619  
$ 23,042     $ 26,968     $ 27,121     $ 27,814  
                             
  1.36 %     1.37 %     1.35 %     1.34 %
  .61 %     .62 %     .60 %     .59 %
  4.53 %     4.75 %     5.04 %     5.38 %

 

See Notes to Financial Statements.

 

Dryden Municipal Bond Fund/High Income Series   73


Financial Highlights

 

Cont’d

 

 

     Class Z

 
     Year Ended
April 30, 2006(c)
 

Per Share Operating Performance:

        

Net Asset Value, Beginning Of Year

   $ 10.32  
    


Income from investment operations:

        

Net investment income

     .56  

Net realized and unrealized gain (loss) on investment transactions

     (.06 )
    


Total from investment operations

     .50  
    


Less Dividends:

        

Dividends from net investment income

     (.51 )
    


Net asset value, end of year

   $ 10.31  
    


Total Return(a):

     5.08 %

Ratios/Supplemental Data:

        

Net assets, end of year (000)

   $ 8,547  

Average net assets (000)

   $ 10,650  

Ratios to average net assets:

        

Expenses, including distribution and service (12b-1) fees

     .62 %

Expenses, excluding distribution and service (12b-1) fees

     .62 %

Net investment income

     5.39 %

(a) Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each year reported, and includes reinvestment of dividends and distributions.
(b) Effective May 1, 2001, the Dryden Municipal Bond Fund/High Income Series has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended April 30, 2002 was to increase net investment income per share by $.01, decrease net realized and unrealized gain (loss) per share by $.01 and increase the ratio of net investment income from 6.11% to 6.14%.
(c) Calculated based upon average shares outstanding during the year.

 

See Notes to Financial Statements.

 

74   Visit our website at www.jennisondryden.com


Class Z  
Year Ended April 30,  
2005     2004     2003     2002(b)  
                             
$ 9.98     $ 10.10     $ 10.05     $ 10.10  



 


 


 


                             
  .54       .56       .59       .63  
  .34       (.12 )     .04       (.06 )



 


 


 


  .88       .44       .63       .57  



 


 


 


                             
  (.54 )     (.56 )     (.58 )     (.62 )



 


 


 


$ 10.32     $ 9.98     $ 10.10     $ 10.05  



 


 


 


  9.09 %     4.41 %     6.41 %     5.79 %
                             
$ 12,379     $ 14,087     $ 15,361     $ 7,000  
$ 11,451     $ 15,572     $ 10,813     $ 6,368  
                             
  .61 %     .62 %     .60 %     .59 %
  .61 %     .62 %     .60 %     .59 %
  5.29 %     5.51 %     5.78 %     6.14 %

 

See Notes to Financial Statements.

 

Dryden Municipal Bond Fund/High Income Series   75


Financial Highlights

 

Insured Series

 

     Class A

 
     Year Ended
April 30, 2006
 

Per Share Operating Performance:

        

Net Asset Value, Beginning Of Year

   $ 10.98  
    


Income (loss) from investment operations:

        

Net investment income

     .41  

Net realized and unrealized gain (loss) on investment transactions

     (.26 )
    


Total from investment operations

     .15  
    


Less Dividends and Distributions:

        

Dividends from net investment income

     (.41 )

Distributions from net realized capital gains

     (.09 )
    


Total dividends and distributions

     (.50 )
    


Net asset value, end of year

   $ 10.63  
    


Total Return(a):

     1.33 %

Ratios/Supplemental Data:

        

Net assets, end of year (000)

   $ 201,121  

Average net assets (000)

   $ 227,378  

Ratios to average net assets:

        

Expenses, including distribution and service (12b-1) fees(c)

     .93 %

Expenses, excluding distribution and service (12b-1) fees

     .68 %

Net investment income

     3.77 %

For Class A, B, C and Z shares:

        

Portfolio turnover rate

     34 %

(a) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions.
(b) Effective May 1, 2001, the Dryden Municipal Bond Fund/Insured Series has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended April 30, 2002 was to increase net investment income and to decrease net realized and unrealized gains per share by less than $.005 and increase the ratio of net investment income from 4.62% to 4.64%.
(c) The distributor of the Series contractually agreed to limit its distribution and service (12b-1) fees to .25 of 1% on the average daily net assets of the Class A shares.

 

See Notes to Financial Statements.

 

76   Visit our website at www.jennisondryden.com


Class A  
Year Ended April 30,  
2005     2004     2003     2002(b)  
                             
$ 10.90     $ 11.59     $ 11.08     $ 10.91  



 


 


 


                             
  .41       .42       .49       .52  
  .20       (.39 )     .51       .17  



 


 


 


  .61       .03       1.00       .69  



 


 


 


                             
  (.41 )     (.42 )     (.49 )     (.52 )
  (.12 )     (.30 )            



 


 


 


  (.53 )     (.72 )     (.49 )     (.52 )



 


 


 


$ 10.98     $ 10.90     $ 11.59     $ 11.08  



 


 


 


  5.74 %     .13 %     9.17 %     6.38 %
                             
$ 242,325     $ 257,738     $ 281,077     $ 261,227  
$ 249,074     $ 271,328     $ 272,608     $ 269,146  
                             
  .91 %     .90 %     .88 %     .87 %
  .66 %     .65 %     .63 %     .62 %
  3.72 %     3.72 %     4.35 %     4.64 %
                             
  15 %     71 %     59 %     22 %

 

See Notes to Financial Statements.

 

Dryden Municipal Bond Fund/Insured Series   77


Financial Highlights

 

Cont’d

 

 

     Class B

 
     Year Ended
April 30, 2006
 

Per Share Operating Performance:

        

Net Asset Value, Beginning Of Year

   $ 10.99  
    


Income (loss) from investment operations:

        

Net investment income

     .39  

Net realized and unrealized gain (loss) on investment transactions

     (.26 )
    


Total from investment operations

     .13  
    


Less Dividends and Distributions:

        

Dividends from net investment income

     (.38 )

Distributions from net realized capital gains

     (.09 )
    


Total dividends and distributions

     (.47 )
    


Net asset value, end of year

   $ 10.65  
    


Total Return(a):

     1.18 %

Ratios/Supplemental Data:

        

Net assets, end of year (000)

   $ 30,328  

Average net assets (000)

   $ 36,339  

Ratios to average net assets:

        

Expenses, including distribution and service (12b-1) fees

     1.18 %

Expenses, excluding distribution and service (12b-1) fees

     .68 %

Net investment income

     3.52 %

(a) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions.
(b) Effective May 1, 2001, the Dryden Municipal Bond Fund/Insured Series has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended April 30, 2002 was to increase net investment income and to decrease net realized and unrealized gains per share by less than $.005 and increase the ratio of net investment income from 4.38% to 4.40%.

 

See Notes to Financial Statements.

 

78   Visit our website at www.jennisondryden.com


Class B  
Year Ended April 30,  
2005     2004     2003     2002(b)  
                             
$ 10.91     $ 11.60     $ 11.09     $ 10.92  



 


 


 


                             
  .38       .40       .47       .49  
  .20       (.40 )     .50       .17  



 


 


 


  .58             .97       .66  



 


 


 


                             
  (.38 )     (.39 )     (.46 )     (.49 )
  (.12 )     (.30 )            



 


 


 


  (.50 )     (.69 )     (.46 )     (.49 )



 


 


 


$ 10.99     $ 10.91     $ 11.60     $ 11.09  



 


 


 


  5.45 %     (.14 )%     8.90 %     6.12 %
                             
$ 42,363     $ 51,432     $ 60,724     $ 55,145  
$ 48,258     $ 56,466     $ 58,003     $ 54,136  
                             
  1.16 %     1.15 %     1.13 %     1.12 %
  .66 %     .65 %     .63 %     .62 %
  3.46 %     3.47 %     4.10 %     4.40 %

 

See Notes to Financial Statements.

 

Dryden Municipal Bond Fund/Insured Series   79


Financial Highlights

 

Cont’d

 

 

     Class C

 
     Year Ended
April 30, 2006
 

Per Share Operating Performance:

        

Net Asset Value, Beginning Of Year

   $ 10.99  
    


Income (loss) from investment operations:

        

Net investment income

     .36  

Net realized and unrealized gain (loss) on investment transactions

     (.26 )
    


Total from investment operations

     .10  
    


Less Dividends and Distributions:

        

Dividends from net investment income

     (.35 )

Distributions from net realized capital gains

     (.09 )
    


Total dividends and distributions

     (.44 )
    


Net asset value, end of year

   $ 10.65  
    


Total Return(a):

     .92 %

Ratios/Supplemental Data:

        

Net assets, end of year (000)

   $ 5,971  

Average net assets (000)

   $ 6,683  

Ratios to average net assets:

        

Expenses, including distribution and service (12b-1) fees(c)

     1.43 %

Expenses, excluding distribution and service (12b-1) fees

     .68 %

Net investment income

     3.27 %

(a) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions.
(b) Effective May 1, 2001, the Dryden Municipal Bond Fund/Insured Series has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended April 30, 2002 was to increase net investment income per share by $.01, decrease net realized and unrealized gains per share by $.01 and increase the ratio of net investment income from 4.14% to 4.17%.
(c) The distributor of the Series contractually agreed to limit its distribution and service (12b-1) fees to .75 of 1% on the average daily net assets of the Class C shares.

 

See Notes to Financial Statements.

 

80   Visit our website at www.jennisondryden.com


Class C  
Year Ended April 30,  
2005     2004     2003     2002(b)  
                             
$ 10.91     $ 11.60     $ 11.09     $ 10.92  



 


 


 


                             
  .35       .37       .44       .47  
  .20       (.40 )     .50       .16  



 


 


 


  .55       (.03 )     .94       .63  



 


 


 


                             
  (.35 )     (.36 )     (.43 )     (.46 )
  (.12 )     (.30 )            



 


 


 


  (.47 )     (.66 )     (.43 )     (.46 )



 


 


 


$ 10.99     $ 10.91     $ 11.60     $ 11.09  



 


 


 


  5.18 %     (.39 )%     8.63 %     5.86 %
                             
$ 7,538     $ 7,629     $ 8,457     $ 6,456  
$ 7,706     $ 8,329     $ 7,559     $ 5,320  
                             
  1.41 %     1.40 %     1.38 %     1.37 %
  .66 %     .65 %     .63 %     .62 %
  3.22 %     3.21 %     3.85 %     4.17 %

 

See Notes to Financial Statements.

 

Dryden Municipal Bond Fund/Insured Series   81


Financial Highlights

 

Cont’d

 

 

     Class Z

 
     Year Ended
April 30, 2006
 

Per Share Operating Performance:

        

Net Asset Value, Beginning Of Year

   $ 10.96  
    


Income (loss) from investment operations:

        

Net investment income

     .44  

Net realized and unrealized gain (loss) on investment transactions

     (.26 )
    


Total from investment operations

     .18  
    


Less Dividends and Distributions:

        

Dividends from net investment income

     (.43 )

Distributions from net realized capital gains

     (.09 )
    


Total dividends and distributions

     (.52 )
    


Net asset value, end of year

   $ 10.62  
    


Total Return(a):

     1.67 %

Ratios/Supplemental Data:

        

Net assets, end of year (000)

   $ 3,251  

Average net assets (000)

   $ 3,913  

Ratios to average net assets:

        

Expenses, including distribution and service (12b-1) fees

     .68 %

Expenses, excluding distribution and service (12b-1) fees

     .68 %

Net investment income

     4.02 %

(a) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions.
(b) Effective May 1, 2001, the Dryden Municipal Bond Fund/Insured Series has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended April 30, 2002 was to increase net investment income per share by $.01, decrease net realized and unrealized gains per share by $.01 and increase the ratio of net investment income from 4.88% to 4.91%.

 

See Notes to Financial Statements.

 

82   Visit our website at www.jennisondryden.com


Class Z  
Year Ended April 30,  
2005     2004     2003     2002(b)  
                             
$ 10.89     $ 11.58     $ 11.07     $ 10.91  



 


 


 


                             
  .44       .45       .52       .55  
  .19       (.39 )     .50       .15  



 


 


 


  .63       .06       1.02       .70  



 


 


 


                             
  (.44 )     (.45 )     (.51 )     (.54 )
  (.12 )     (.30 )            



 


 


 


  (.56 )     (.75 )     (.51 )     (.54 )



 


 


 


$ 10.96     $ 10.89     $ 11.58     $ 11.07  



 


 


 


  5.94 %     .40 %     9.45 %     6.55 %
                             
$ 4,565     $ 6,330     $ 9,179     $ 4,238  
$ 5,265     $ 7,365     $ 6,605     $ 3,152  
                             
  .66 %     .65 %     .63 %     .62 %
  .66 %     .65 %     .63 %     .62 %
  3.96 %     3.98 %     4.61 %     4.91 %

 

See Notes to Financial Statements.

 

Dryden Municipal Bond Fund/Insured Series   83


 

Report of Independent Registered Public Accounting Firm

 

The Board of Trustees and Shareholders of

Dryden Municipal Bond Fund:

 

We have audited the accompanying statements of assets and liabilities of the High Income Series and Insured Series (constituting the Dryden Municipal Bond Fund, hereafter referred to as the “Fund”) including the portfolios of investments, as of April 30, 2006, and the related statements of operations for the year then ended and the statements of changes in net assets, for each of the years in the two year period then ended, and the financial highlights for each of years in the three year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for the periods presented prior to April 30, 2004, were audited by another independent registered public accounting firm, whose report dated, June 23, 2003, expressed an unqualified opinion thereon.

 

We conducted our audits in accordance with the standards of the Public Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of April 30, 2006, by correspondence with the custodian and brokers or by other appropriate audit procedures when replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Dryden Municipal Bond Fund as of April 30, 2006 and the results of its operations for the year then ended, and the changes in its net assets for each of the years in the two year period then ended, and the financial highlights for each of the years in the three year period then ended in conformity with accounting principles generally accepted in the United States of America.

 

LOGO

New York, New York

June 26, 2006

 

84   Visit our website at www.jennisondryden.com


 

Tax Information

 

(Unaudited)

 

As required by the Internal Revenue Code, we wish to advise you as to the federal tax status of dividends and distributions paid by the Fund during its fiscal year ended April 30, 2006.

 

During its fiscal year ended April 30, 2006, the Fund paid aggregate dividends and distributions as follows:

 

     Dividends and Distributions per share

Series


   Class A

   Class B

   Class C

   Class Z

High Income

                           

Tax-Exempt Income

   $ .483    $ .458    $ .433    $ .507

Ordinary Income

     .004      .004      .004      .004

Long-Term Capital Gains

                   
    

  

  

  

     $ .487    $ .462    $ .437    $ .511
    

  

  

  

 

     Dividends and Distributions per share

Series


   Class A

   Class B

   Class C

   Class Z

Insured

                           

Tax-Exempt Income

   $ .410    $ .380    $ .350    $ .430

Ordinary Income

     .007      .007      .007      .007

Long-Term Capital Gains

     .082      .082      .082      .082
    

  

  

  

     $ .499    $ .469    $ .439    $ .519
    

  

  

  

 

Shortly after the close of the calendar year ending December 31, 2006, you will be advised again as to the federal tax status of the dividends and distributions received in calendar 2006. In addition, you will be advised at that time as to the portion of your dividends which may be subject to the Alternative Minimum Tax (AMT) as well as information with respect to state taxability.

 

Dryden Municipal Bond Fund   85


 

Management of the Fund

 

(Unaudited)

 

Information pertaining to the Trustees of the Fund is set forth below. Trustees who are not deemed to be “interested persons” of the Fund, as defined in the Investment Company Act of 1940 (the 1940 Act), are referred to as “Independent Trustees.” Trustees who are deemed to be “interested persons” of the Fund are referred to as “Interested Trustees.” “Fund Complex” consists of the Fund and any other investment companies managed by PI.

 

Independent Trustees(2)

 

Linda W. Bynoe (53), Trustee since 2005(3) Oversees 82 portfolios in Fund complex

Principal occupations (last 5 years): President and Chief Executive Officer (since March 1995) of Telemat, Ltd. (management consulting); formerly Vice President at Morgan Stanley & Co.

 

Other Directorships held: Director of Simon Property Group, Inc. (real estate investment trust) (since May 2003); Anixter International (communication products distributor) (since January 2006); Director of Northern Trust Corporation (since April 2006).

 

David E.A. Carson (71), Trustee since 2003(3) Oversees 86 portfolios in Fund complex

Principal occupations (last 5 years): Formerly Director (January 2000 to May 2000), Chairman (January 1999 to December 1999), Chairman and Chief Executive Officer (January 1998 to December 1998) and President, Chairman and Chief Executive Officer of People’s Bank (1983-1997).

 

Robert E. La Blanc (72), Trustee since 2003(3) Oversees 85 portfolios in Fund complex

Principal occupations (last 5 years): President (since 1981) of Robert E. La Blanc Associates, Inc. (telecommunications).

 

Other Directorships held:(4) Director of Chartered Semiconductor Manufacturing, Ltd. (since 1998); Computer Associates International, Inc. (since 2002) (software company); FiberNet Telecom Group, Inc. (since 2003) (telecom company).

 

Douglas H. McCorkindale (67), Trustee since 2003(3) Oversees 85 portfolios in Fund complex

Principal occupations (last 5 years): Chairman (since February 2001) of Gannett Co. Inc. (publishing and media); formerly Chief Executive Officer (June 2000-July 2005), President (September 1997-July 2005) and Vice Chairman (March 1984-May 2000) of Gannett Co. Inc.

 

Other Directorships held:(4) Director of Gannett Co. Inc.; Director of Continental Airlines, Inc. (since May 1993); Director of Lockheed Martin Corp. (aerospace and defense) (since May 2001).

 

Richard A. Redeker (62), Trustee since 1993(3) Oversees 85 portfolios in Fund complex

Principal occupations (last 5 years): Management Consultant; Director (since 2001) and Chairman of the Board (since 2006) of Invesmart, Inc.; Director of Penn Tank Lines, Inc. (since 1999).

 

86   Visit our website at www.jennisondryden.com


 

Robin B. Smith (66), Trustee since 2003(3) Oversees 85 portfolios in Fund complex

Principal occupations (last 5 years): Chairman of the Board (since January 2003) of Publishers Clearing House (direct marketing); formerly Chairman and Chief Executive Officer (August 1996-January 2003) of Publishers Clearing House.

 

Other Directorships held:(4) Director of BellSouth Corporation (since 1992).

 

Stephen G. Stoneburn (62), Trustee since 2003(3) Oversees 85 portfolios in Fund complex

Principal occupations (last 5 years): President and Chief Executive Officer (since June 1996) of Quadrant Media Corp. (a publishing company); formerly President (June 1995-June 1996) of Argus Integrated Media, Inc.; Senior Vice President and Managing Director (January 1993-1995) of Cowles Business Media; Senior Vice President of Fairchild Publications, Inc. (1975-1989).

 

Clay T. Whitehead (67), Trustee since 2003(3) Oversees 85 portfolios in Fund complex

Principal occupations (last 5 years): President (since 1983) of YCO (new business development firm).

 

Interested Trustees (1)

 

Judy A. Rice (58), President since 2003 and Trustee since 2000(3) Oversees 81 portfolios in Fund complex

Principal occupations (last 5 years): President, Chief Executive Officer, Chief Operating Officer and Officer-In-Charge (since February 2003) of Prudential Investments LLC; Vice President (since February 1999) of Prudential Investment Management Services LLC; President, Chief Executive Officer and Officer-In-Charge (since April 2003) of Prudential Mutual Fund Services LLC; Director (since May 2003) and Executive Vice President (since June 2005) of American Skandia Investment Services, Inc.; formerly Executive Vice President (September 1999-February 2003) of Prudential Investments LLC; Member of Board of Governors of the Investment Company Institute.

 

Robert F. Gunia (59), Vice President and Trustee since 1996(3) Oversees 158 portfolios in Fund complex

Principal occupations (last 5 years): Chief Administrative Officer (since September 1999) and Executive Vice President (since December 1996) of Prudential Investments LLC; President (since April 1999) of Prudential Investment Management Services LLC; Executive Vice President (since March 1999) and Treasurer (since May 2000) of Prudential Mutual Fund Services LLC.

 

Other Directorships held:(4) Vice President and Director (since May 1989) and Treasurer (since 1999) of The Asia Pacific Fund, Inc.

 

Information pertaining to the Officers of the Fund who are not also Trustees is set forth below.

 

Officers(2)

 

Kathryn L. Quirk (53), Chief Legal Officer since 2005(3)

Principal occupations (last 5 years): Vice President and Corporate Counsel (since September 2004) of Prudential; Executive Vice President, Chief Legal Officer and Secretary (since July 2005) of Prudential Investments LLC and Prudential Mutual Fund Services LLC; formerly Managing Director, General Counsel, Chief Compliance Officer, Chief Risk Officer and Corporate Secretary (1997-2002) of Zurich Scudder Investments, Inc.

 

Deborah A. Docs (48), Secretary since 1996(3)

Principal occupations (last 5 years): Vice President and Corporate Counsel (since January 2001) of Prudential; Vice President (since December 1996) and Assistant Secretary (since March 1999) of PI; formerly Vice President and Assistant Secretary (May 2003-June 2005) of American Skandia Investment Services, Inc.

 

Dryden Municipal Bond Fund   87


 

Jonathan D. Shain (47), Assistant Secretary since 2004(3)

Principal occupations (last 5 years): Vice President and Corporate Counsel (since August 1998) of Prudential; Vice President and Assistant Secretary (since May 2001) of PI; Vice President and Assistant Secretary (since February 2001) of PMFS; formerly Vice President and Assistant Secretary (May 2003-June 2005) of American Skandia Investment Services, Inc.

 

Claudia DiGiacomo (31), Assistant Secretary since 2005(3)

Principal occupations (last 5 years): Vice President and Corporate Counsel (since January 2005) of Prudential; Vice President and Assistant Secretary of PI (since December 2005); Associate at Sidley Austin Brown Wood LLP (1999-2004).

 

Helene Gurian (52), Acting Anti-Money Laundering Compliance Officer since 2006(3)

Principal occupations (last 5 years): Vice President, Prudential (since July 1997); Vice President, Compliance (July 1997-January 2001); Vice President, Compliance and Risk Officer, Retail Distribution (January 2001-May 2002); Vice President, Corporate Investigations (May 2002-date) responsible for supervision of Prudential’s fraud investigations, anti-money laundering program and high technology investigation unit.

 

Lee D. Augsburger (46), Chief Compliance Officer since 2004(3)

Principal occupations (last 5 years): Senior Vice President and Chief Compliance Officer (since April 2003) of PI; Vice President (since November 2000) and Chief Compliance Officer (since October 2000) of Prudential Investment Management, Inc.; Chief Compliance Officer and Senior Vice President (since May 2003) of American Skandia Investment Services, Inc.

 

Grace C. Torres (46), Treasurer and Principal Financial and Accounting Officer since 1996(3)

Principal occupations (last 5 years): Assistant Treasurer (since March 1999) and Senior Vice President (since September 1999) of PI; Assistant Treasurer (since May 2003) and Vice President (since June 2005) of American Skandia Investment Services, Inc.; Senior Vice President and Assistant Treasurer (since May 2003) of American Skandia Advisory Services, Inc.; formerly Senior Vice President (May 2003-June 2005) of American Skandia Investment Services, Inc.

 

John P. Schwartz (35), Assistant Secretary since 2006(3)

Principal occupations (last 5 years): Vice President and Corporate Counsel (since April 2005) of Prudential; Vice President and Assistant Secretary of PI (since December 2005); Associate at Sidley, Austin Brown & Wood LLP (1997-2005).

 

M. Sadiq Peshimam (42), Assistant Treasurer since 2006(3)

Principal occupations (last 5 years): Vice President (since 2005) and Director (since 2000) within Prudential Mutual Fund Administration.

 

Jack Benintende (42), Assistant Treasurer since 2006(3)

Principal occupations (last 5 years): Vice President (since June 2000) within Prudential Mutual Fund Administration; senior manager within the investment management practice of PricewaterhouseCoopers LLP (May 1994 through June 2000).

 

88   Visit our website at www.jennisondryden.com


 

The Fund Complex consists of all investment companies managed by PI. The Funds for which PI serves as manager include Jennison Dryden Mutual Funds, Strategic Partners Funds, The Prudential Variable Contract Accounts 2, 10, 11. The Target Portfolio Trust, The Prudential Series Fund, American Skandia Trust, and Prudential’s Gibraltar Fund, Inc.

 

(1) ”Interested” Trustee, as defined in the 1940 Act, by reason of employment with the Manager, the Subadviser or the Distributor.

 

(2) Unless otherwise noted, the address of the Trustees and Officers is c/o: Prudential Investments LLC, Gateway Center Three, 100 Mulberry Street, Newark, NJ 07102.

 

(3) There is no set term of office for Trustees and Officers. The Independent Trustees have adopted a retirement policy, which calls for the retirement of Trustees on December 31 of the year in which they reach the age of 75. The table shows the individuals length of service as Trustee and/or Officer.

 

(4) This includes only directorships of companies required to register, or file reports with the SEC under the Securities and Exchange Act of 1934 (that is, “public companies”) or other investment companies registered under the 1940 Act.

 

Additional Information about the Fund’s Trustees is included in the Fund’s Statement of Additional Information which is available without charge, upon request, by calling (800) 521-7466 or (732) 482-7555 (Calling from outside the U.S.)

 

Dryden Municipal Bond Fund   89


Growth of a $10,000 Investment

 

LOGO

 

Average Annual Total Returns (With Sales Charges) as of 4/30/06  
     One Year     Five Years     Ten Years     Since Inception  

Class A

   0.65 %   5.02 %   5.00 %   5.92 %

Class B

   –0.52     5.45     5.13     6.51  

Class C

   3.23     5.35     4.87     4.98  

Class Z

   5.08     6.15     N/A     5.48  
                          
Average Annual Total Returns (Without Sales Charges) as of 4/30/06  
     One Year     Five Years     Ten Years     Since Inception  

Class A

   4.84 %   5.88 %   5.43 %   6.18 %

Class B

   4.48     5.61     5.13     6.51  

Class C

   4.23     5.35     4.87     4.98  

Class Z

   5.08     6.15     N/A     5.48  

 

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. The returns in the graph and the tables do not reflect the deduction of taxes that a shareholder would pay on Series distributions or following the redemption of Series shares. An investor may obtain performance data current to 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 4.00%.

 

    Visit our website at www.jennisondryden.com


 

Source: Prudential Investments LLC and Lipper Inc.

Inception dates: Class A, 1/22/90; Class B, 9/17/87; Class C, 8/1/94; and Class Z, 9/16/96.

 

The graph compares a $10,000 investment in the Dryden Municipal Bond Fund/High Income Series (Class A shares) with a similar investment in the Lehman Brothers Municipal Bond Index by portraying the initial account values at the beginning of the 10-year period for Class A shares (April 30, 1996) and the account values at the end of the current fiscal year (April 30, 2006) as measured on a quarterly basis. For purposes of the graph, and unless otherwise indicated, it has been assumed that (a) the maximum applicable front-end sales charge was deducted from the initial $10,000 investment in Class A shares; (b) all recurring fees (including management fees) were deducted; and (c) all dividends and distributions were reinvested. The line graph provides information for Class A shares only. As indicated in the tables provided earlier, performance for Class B, Class C, and Class Z shares will vary due to the differing charges and expenses applicable to each share class (as indicated in the following paragraphs). Without a distribution and service (12b-1) fee waiver of 0.05% for Class A shares through April 30, 2006, the returns shown in the graph and for Class A shares in the tables would have been lower.

 

The Lehman Brothers Municipal Bond Index (Index) is an unmanaged index of over 39,000 long-term investment-grade municipal bonds. It gives a broad look at how long-term investment-grade municipal bonds have performed. The Index’s total returns include the reinvestment of all dividends, but do not include the effects of sales charges, operating expenses of a mutual fund, or taxes. The returns for the Index would be lower if they included the effects of sales charges, operating expenses, or taxes. The securities that comprise the Index may differ substantially from the securities in the Series. This is not the only index that may be used to characterize performance of municipal bond funds. Other indexes may portray different comparative performance. Investors cannot invest directly in an index.

 

Through March 14, 2004, the Series charged a maximum front-end sales charge of 3.00% for Class A shares and a 12b-1 fee of up to 0.30% annually. Effective March 15, 2004, Class A shares are subject to a maximum front-end sales charge of 4.00% and a 12b-1 fee of up to 0.30% annually. Investors who purchase Class A shares in an amount of $1 million or more do not pay a front-end sales charge, but are subject to a contingent deferred sales charge (CDSC) of 1% for shares sold within 12 months of purchase. Class B shares are subject to a declining CDSC of 5%, 4%, 3%, 2%, 1%, and 1%, respectively, for the first six years after the purchase and a 12b-1 fee of up to 0.50% annually. Approximately seven years after purchase, Class B shares will automatically convert to Class A shares on a quarterly basis. Through February 1, 2004, Class C shares were subject to a front-end sales charge of 1%, a CDSC of 1% for shares redeemed within 18 months of purchase, and a 12b-1 fee of 1% annually. Class C shares purchased on or after February 2, 2004, are not subject to a front-end sales charge, the CDSC of 1% for Class C shares purchased on or after that date will apply for 12 months from the date of purchase, and the annual 12b-1 fee will remain 1%. Class Z shares are not subject to a sales charge or 12b-1 fee. The returns on investment in the graph and 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. Without waiver of fees and/or expense subsidization, the Series’ returns would have been lower.

 

Dryden Municipal Bond Fund    


Growth of a $10,000 Investment

 

LOGO

 

Average Annual Total Returns (With Sales Charges) as of 4/30/06
     One Year     Five Years     Ten Years   Since Inception

Class A

   –2.72 %   3.65 %  

4.66%

 

5.69%

Class B

   –3.67     4.08      4.78    6.16

Class C

   –0.05     3.99      4.53    4.69

Class Z

   1.67     4.75      N/A    5.19
                      
Average Annual Total Returns (Without Sales Charges) as of 4/30/06
     One Year     Five Years     Ten Years   Since Inception

Class A

   1.33 %   4.50 %  

5.08%

 

5.95%

Class B

   1.18     4.25      4.78    6.16

Class C

   0.92     3.99      4.53    4.69

Class Z

   1.67     4.75      N/A    5.19

 

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. The returns in the graph and the tables do not reflect the deduction of taxes that a shareholder would pay on Series distributions or following the redemption of Series shares. An investor may obtain performance data current to 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 4.00%.

 

    Visit our website at www.jennisondryden.com


 

Source: Prudential Investments LLC and Lipper Inc.

Inception dates: Class A, 1/22/90; Class B, 9/17/87; Class C, 8/1/94; and Class Z, 9/16/96.

 

The graph compares a $10,000 investment in the Dryden Municipal Bond Fund/Insured Series (Class A shares) with a similar investment in the Lehman Brothers Municipal Bond Index by portraying the initial account values at the beginning of the 10-year period for Class A shares (April 30, 1996) and the account values at the end of the current fiscal year (April 30, 2006) as measured on a quarterly basis. For purposes of the graph, and unless otherwise indicated, it has been assumed that (a) the maximum applicable front-end sales charge was deducted from the initial $10,000 investment in Class A shares; (b) all recurring fees (including management fees) were deducted; and (c) all dividends and distributions were reinvested. The line graph provides information for Class A shares only. As indicated in the tables provided earlier, performance for Class B, Class C, and Class Z shares will vary due to the differing charges and expenses applicable to each share class (as indicated in the following paragraphs). Without a distribution and service (12b-1) fee waiver of 0.05% for Class A shares through April 30, 2006, the returns shown in the graph and for Class A shares in the tables would have been lower.

 

The Lehman Brothers Municipal Bond Index (Index) is an unmanaged index of over 39,000 long-term investment-grade municipal bonds. It gives a broad look at how long-term investment-grade municipal bonds have performed. The Index’s total returns include the reinvestment of all dividends, but do not include the effects of sales charges, operating expenses of a mutual fund, or taxes. The returns for the Index would be lower if they included the effects of sales charges, operating expenses, or taxes. The securities that comprise the Index may differ substantially from the securities in the Series. This is not the only index that may be used to characterize performance of municipal bond funds. Other indexes may portray different comparative performance. Investors cannot invest directly in an index.

 

Through March 14, 2004, the Series charged a maximum front-end sales charge of 3.00% for Class A shares and a 12b-1 fee of up to 0.30% annually. Effective March 15, 2004, Class A shares are subject to a maximum front-end sales charge of 4.00% and a 12b-1 fee of up to 0.30% annually. Investors who purchase Class A shares in an amount of $1 million or more do not pay a front-end sales charge, but are subject to a contingent deferred sales charge (CDSC) of 1% for shares sold within 12 months of purchase. Class B shares are subject to a declining CDSC of 5%, 4%, 3%, 2%, 1%, and 1%, respectively, for the first six years after the purchase and a 12b-1 fee of up to 1.00% annually. Approximately seven years after purchase, Class B shares will automatically convert to Class A shares on a quarterly basis. Through February 1, 2004, Class C shares were subject to a front-end sales charge of 1%, a CDSC of 1% for shares redeemed within 18 months of purchase, and a 12b-1 fee of up to 1% annually. Class C shares purchased on or after February 2, 2004, are not subject to a front-end sales charge, the CDSC of 1% for Class C shares purchased on or after that date will apply for 12 months from the date of purchase, and the annual 12b-1 fee will remain up to 1%. Class Z shares are not subject to a sales charge or 12b-1 fee. The returns on investment in the graph and 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. Without waiver of fees and/or expense subsidization, the Series’ returns would have been lower.

 

Dryden Municipal Bond Fund    


 

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 Trustees of the Series has delegated to the Series’ investment subadvisor the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Series. 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 Series voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Series’ website and on the Commission’s website.

 

TRUSTEES

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 • Jack Benintende, Assistant Treasurer • M. Sadiq Peshimam, Assistant TreasurerDeborah A. Docs, Secretary • Jonathan D. Shain, Assistant Secretary • Claudia DiGiacomo, Assistant Secretary • John P. Schwartz, Assistant Secretary • Helene Gurian, Acting Anti-Money Laundering Compliance Officer • Lee D. Augsburger, Chief Compliance Officer

 

MANAGER   Prudential Investments LLC    Gateway Center Three
100 Mulberry Street
Newark, NJ 07102

INVESTMENT SUBADVISOR   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    One Wall Street
New York, NY 10286

TRANSFER AGENT   Prudential Mutual Fund
Services LLC
   PO Box 8098
Philadelphia, PA 19176

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM   KPMG LLP    345 Park Avenue
New York, NY 10154

FUND COUNSEL   Wilkie Farr & Gallagher LLP    787 Seventh Avenue
New York, NY 10019


 

An investor should consider the investment objectives, risks, charges, and expenses of the Series carefully before investing. The prospectus for the Series contains this and other information about the Series. 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 TRUSTEES
Shareholders can communicate directly with the Board of Trustees by writing to the Chair of the Board, Dryden Municipal Bond Fund/High Income Series and Insured Series, PO Box 13964, Philadelphia, PA 19176. Shareholders can communicate directly with an individual Trustee by writing to the same address. Communications are not screened before being delivered to the addressee.

 

AVAILABILITY OF PORTFOLIO SCHEDULE
Each Series 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 Series’ Forms N-Q are available on the Commission’s website at www.sec.gov. The Series’ 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 Series’ schedule of portfolio holdings is also available on the Series’ website as of the end of each fiscal quarter.

 

The Series’ Statement of Additional Information contains additional information about the Series’ Trustees and is available without charge, upon request, by calling (800) 225-1852.

 

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


LOGO

 

 

Dryden Municipal Bond Fund/High Income Series        
    Share Class   A   B   C   Z    
   

NASDAQ

  PRHAX   PMHYX   PHICX   PHIZX    
   

CUSIP

  262467103   262467202   262467301   262467400    
                         
Dryden Municipal Bond Fund/Insured Series        
    Share Class   A   B   C   Z    
   

NASDAQ

  PMIAX   PMINX   PMICX   PMIZX    
   

CUSIP

  262467509   262467608   262467707   262467806    
                         

MF133E    IFS-A120366    Ed. 06/2006

 

 


Item 2 – Code of Ethics — See Exhibit (a)

As of the end of the period covered by this report, the registrant has adopted a code of ethics (the “Section 406 Standards for Investment Companies – Ethical Standards for Principal Executive and Financial Officers”) that applies to the registrant’s Principal Executive Officer and Principal Financial Officer; the registrant’s Principal Financial Officer also serves as the Principal Accounting Officer.

The registrant hereby undertakes to provide any person, without charge, upon request, a copy of the code of ethics. To request a copy of the code of ethics, contact the registrant 973-367-7521, and ask for a copy of the Section 406 Standards for Investment Companies - Ethical Standards for Principal Executive and Financial Officers.

Item 3 – Audit Committee Financial Expert –

The registrant’s Board has determined that Mr. David Carson, member of the Board’s Audit Committee is an “audit committee financial expert,” and that he is “independent,” for purposes of this Item.

Item 4 – Principal Accountant Fees and Services –

(a) Audit Fees

For the fiscal years ended April 30, 2006 and April 30, 2005, KPMG LLP (“KPMG”), the Registrant’s principal accountant, billed the Registrant $47,000 and $47,000, respectively, for professional services rendered for the audit of the Registrant’s annual financial statements or services that are normally provided in connection with statutory and regulatory filings.

(b) Audit-Related Fees

None.

(c) Tax Fees

None.

(d) All Other Fees

None.

(e) (1) Audit Committee Pre-Approval Policies and Procedures


THE PRUDENTIAL MUTUAL FUNDS

AUDIT COMMITTEE POLICY

on

Pre-Approval of Services Provided by the Independent Accountants

The Audit Committee of each Prudential Mutual Fund is charged with the responsibility to monitor the independence of the Fund’s independent accountants. As part of this responsibility, the Audit Committee must pre-approve any independent accounting firm’s engagement to render audit and/or permissible non-audit services, as required by law. In evaluating a proposed engagement of the independent accountants, the Audit Committee will assess the effect that the engagement might reasonably be expected to have on the accountant’s independence. The Committee’s evaluation will be based on:

 

    a review of the nature of the professional services expected to be provided,

 

    a review of the safeguards put into place by the accounting firm to safeguard independence, and

 

    periodic meetings with the accounting firm.

Policy for Audit and Non-Audit Services Provided to the Funds

On an annual basis, the scope of audits for each Fund, audit fees and expenses, and audit-related and non-audit services (and fees proposed in respect thereof) proposed to be performed by the Fund’s independent accountants will be presented by the Treasurer and the independent accountants to the Audit Committee for review and, as appropriate, approval prior to the initiation of such services. Such presentation shall be accompanied by confirmation by both the Treasurer and the independent accountants that the proposed services will not adversely affect the independence of the independent accountants. Proposed services shall be described in sufficient detail to enable the Audit Committee to assess the appropriateness of such services and fees, and the compatibility of the provision of such services with the auditor’s independence. The Committee shall receive periodic reports on the progress of the audit and other services which are approved by the Committee or by the Committee Chair pursuant to authority delegated in this Policy.

The categories of services enumerated under “Audit Services”, “Audit-related Services”, and “Tax Services” are intended to provide guidance to the Treasurer and the independent accountants as to those categories of services which the Committee believes are generally consistent with the independence of the independent accountants and which the Committee (or the Committee Chair) would expect upon the presentation of specific proposals to pre-approve. The enumerated categories are not intended as an exclusive list of audit, audit-related or tax services which the Committee (or the Committee Chair) would consider for pre-approval.

Audit Services

The following categories of audit services are considered to be consistent with the role of the Fund’s independent accountants:

 

    Annual Fund financial statement audits

 

    Seed audits (related to new product filings, as required)

 

    SEC and regulatory filings and consents


Audit-related Services

The following categories of audit-related services are considered to be consistent with the role of the Fund’s independent accountants:

 

    Accounting consultations

 

    Fund merger support services

 

    Agreed Upon Procedure Reports

 

    Attestation Reports

 

    Other Internal Control Reports

Individual audit-related services that fall within one of these categories and are not presented to the Audit Committee as part of the annual pre-approval process will be subject to pre-approval by the Committee Chair (or any other Committee member on whom this responsibility has been delegated) so long as the estimated fee for those services does not exceed $50,000.

Tax Services

The following categories of tax services are considered to be consistent with the role of the Fund’s independent accountants:

 

    Tax compliance services related to the filing or amendment of the following:

 

    Federal, state and local income tax compliance; and,

 

    Sales and use tax compliance

 

    Timely RIC qualification reviews

 

    Tax distribution analysis and planning

 

    Tax authority examination services

 

    Tax appeals support services

 

    Accounting methods studies

 

    Fund merger support services

 

    Tax consulting services and related projects

Individual tax services that fall within one of these categories and are not presented to the Audit Committee as part of the annual pre-approval process will be subject to pre-approval by the Committee Chair (or any other Committee member on whom this responsibility has been delegated) so long as the estimated fee for those services does not exceed $50,000.

Other Non-audit Services

Certain non-audit services that the independent accountants are legally permitted to render will be subject to pre-approval by the Committee or by one or more Committee members to whom the Committee has delegated this authority and who will report to the full Committee any pre-approval decisions made pursuant to this Policy. Non-audit services presented for pre-approval pursuant to this paragraph will be accompanied by a confirmation from both the Treasurer and the independent accountants that the proposed services will not adversely affect the independence of the independent accountants.


Proscribed Services

The Fund’s independent accountants will not render services in the following categories of non-audit services:

 

    Bookkeeping or other services related to the accounting records or financial statements of the Fund

 

    Financial information systems design and implementation

 

    Appraisal or valuation services, fairness opinions, or contribution-in-kind reports

 

    Actuarial services

 

    Internal audit outsourcing services

 

    Management functions or human resources

 

    Broker or dealer, investment adviser, or investment banking services

 

    Legal services and expert services unrelated to the audit

 

    Any other service that the Public Company Accounting Oversight Board determines, by regulation, is impermissible.

Pre-approval of Non-Audit Services Provided to Other Entities Within the Prudential Fund Complex

Certain non-audit services provided to Prudential Investments LLC or any of its affiliates that also provide ongoing services to the Prudential Mutual Funds will be subject to pre-approval by the Audit Committee. The only non-audit services provided to these entities that will require pre-approval are those related directly to the operations and financial reporting of the Funds. Individual projects that are not presented to the Audit Committee as part of the annual pre-approval process, will be subject to pre-approval by the Committee Chair (or any other Committee member on whom this responsibility has been delegated) so long as the estimated fee for those services does not exceed $50,000. Services presented for pre-approval pursuant to this paragraph will be accompanied by a confirmation from both the Treasurer and the independent accountants that the proposed services will not adversely affect the independence of the independent accountants.

Although the Audit Committee will not pre-approve all services provided to Prudential Investments LLC and its affiliates, the Committee will receive an annual report from the Fund’s independent accounting firm showing the aggregate fees for all services provided to Prudential Investments and its affiliates.

(e) (2) Percentage of services referred to in 4(b)- (4)(d) that were approved by the audit committee

Not applicable.

(f) Percentage of hours expended attributable to work performed by other than full time employees of principal accountant if greater than 50%.

Not applicable.


(g) Non-Audit Fees

Not applicable to Registrant for the fiscal years 2006 and 2005. The aggregate non-audit fees billed by KPMG for services rendered to the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant for the fiscal years 2006 and 2005 was $51,000 and $33,500, respectively.

(h) Principal Accountants Independence

Not applicable as KPMG has not provided non-audit services to the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to Rule 2-01(c)(7)(ii) of Regulation S-X.

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 – Attached hereto as Exhibit EX-99.CODE-ETH

 

  (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 Municipal Bond Fund

 

By (Signature and Title)*

 

            /s/Deborah A. Docs

              Deborah A. Docs
              Secretary

Date

 

                June 27, 2006

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

 

                June 27, 2006

 

By (Signature and Title)*

 

            /s/Grace C. Torres

 

 

            Grace C. Torres

 

            Treasurer and Principal Financial Officer

Date

 

                June 27, 2006

 

 

* Print the name and title of each signing officer under his or her signature.
EX-99.CODE-ETH 2 dex99codeeth.htm CODE OF ETHICS Code of Ethics

CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND

PRINCIPAL FINANCIAL OFFICERS

I. Covered Officers/Purpose of the Code

This code of ethics (the “Code”) is established for each fund listed on Attachment A hereto (each a Fund” and together the “Funds”) pursuant to Section 406 of the Sarbanes-Oxley Act and the rules adopted thereunder by the Securities and Exchange Commission (“SEC”). The Code applies to each Fund’s Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer or Controller, or senior officers performing similar functions (the “Covered Officers” each of whom are set forth in Exhibit B) for the purpose of promoting:

 

    honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

 

    full, fair, accurate, timely and understandable disclosure in reports and documents that a registrant files with, or submits to, the SEC and in other public communications made by a Fund;

 

    compliance with applicable governmental laws, rules and regulations;

 

    the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and

 

    accountability for adherence to the Code.

Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest.

II. Conflicts of Interest

A “conflict of interest” occurs when a Covered Officer’s private interest interferes with the interests of, or his service to, a Fund. For example, a conflict of interest would arise if a Covered Officer, or a member of his family, receives improper personal benefits as a result of his position with a Fund.

Certain conflicts of interest arise out of the relationships between Covered Officers and a Fund and already are subject to conflict of interest provisions in the Investment Company Act of 1940, as amended (the “1940 Act”) and the Investment Advisers Act of 1940, as amended (the “Advisers Act”). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with a Fund because of their status as “affiliated persons” of the Fund. A Fund’s and its investment adviser’s compliance programs and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code.

Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationships between a Fund and the Fund’s investment adviser, principal underwriter, administrator, or other service providers to the Fund (together “Service Providers”), of which the Covered Officers may also be principals or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties


(whether formally for a Fund or for a Service Provider, or for both), be involved in establishing policies and implementing decisions that will have different effects on such Service Providers and a Fund. The participation of the Covered Officers in such activities is inherent in the contractual relationships between a Fund and its Service Providers and is consistent with the performance by the Covered Officers of their duties as officers of the Fund. Thus, if performed in conformity with the provisions of the 1940 Act and the Advisers Act, such activities will be deemed to have been handled ethically. In addition, it is recognized by the Funds’ Board of Directors/Trustees (“Boards”) that the Covered Officers may also be officers or employees of one or more other investment companies covered by this or other codes.

Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the 1940 Act and the Advisers Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of a Fund.

Each Covered Officer must:

 

    not use his personal influence or personal relationships improperly to influence investment decisions or financial reporting by a Fund whereby the Covered Officer would benefit personally to the detriment of the Fund;

 

    not cause a Fund to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than the benefit the Fund; and

 

    not retaliate against any other Covered Officer or any employee of a Fund or its affiliated persons for reports of potential violations that are made in good faith.

There are some actual or potential conflict of interest situations that should always be brought to the attention of, and discussed with, the Funds’ Chief Legal Officer or other senior legal officer, if material. Examples of these include:

 

    service as a director on the board of any public or private company;

 

    the receipt of any non-nominal gifts;

 

    the receipt of any entertainment from any company with which a Fund has current or prospective business dealings unless such entertainment is business-related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety;

 

    any ownership interest in (other than insubstantial interests in publicly traded entities), or any consulting or employment relationship with, any of a Fund’s Service Providers, other than its investment adviser, principal underwriter, administrator or any affiliated person thereof; and

 

    a direct or indirect financial interest in commissions, transaction charges or spreads paid by a Fund for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer’s employment, such as compensation or equity ownership.

 

2


III. Disclosure and Compliance

Each Covered Officer:

 

    should familiarize himself with the disclosure requirements generally applicable to the Funds;

 

    should not knowingly misrepresent, or cause others to misrepresent, facts about a Fund to others, whether within or outside the Fund, including to the Fund’s Board of Directors/Trustees and its auditors, and to governmental regulators and self-regulatory organizations;

 

    should, to the extent appropriate within his area of responsibility, consult with other officers and employees of a Fund and its Service Providers with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Fund files with, or submits to, the SEC and in other public communications made by the Fund; and

 

    is responsible to promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations.

IV. Reporting and Accountability

Each Covered Officer must:

 

    upon adoption of the Code (or thereafter as applicable, upon becoming a Covered Officer), affirm in writing to the Board of Directors/Trustees that he has received, read, and understands the Code;

 

    annually thereafter affirm to the Board of Directors/Trustees that he has complied with the requirements of the Code; and

 

    notify the Funds’ Chief Legal Officer promptly if he knows of any violation of this Code. Failure to do so is itself a violation of this Code.

The Funds’ Chief Legal Officer is responsible for applying this Code to specific situations in which questions are presented under it and has the authority to interpret this Code in any particular situation. In such situations, the Chief Legal Officer is authorized to consult, as appropriate, with counsel to the Funds, counsel to the Independent Directors/Trustees, a Board Committee comprised of Independent Directors/Trustees, or the full Board.

The Funds will follow the following procedures in investigating and enforcing this Code:

 

    the Funds Chief Legal Officer will take all appropriate action to investigate any potential violations reported to her;

 

    if, after such investigation, the Chief Legal Officer believes that no violation has occurred, the Chief Legal Officer is not required to take any further action;

 

    any matter that the Chief Legal Officer believes is a violation or that the Chief Legal Officer believes should be reviewed by a Fund’s Board or Board Committee comprised of Independent Directors/Trustees will be reported to the Fund’s Board or Board Committee comprised of Independent Directors/Trustees;

 

3


    based upon its review of any matter referred to it, a Fund’s Board or Board Committee comprised of Independent Directors/Trustees shall determine whether or not a violation has occurred, whether a grant of waiver is appropriate or whether some other action should be taken. Based upon its determination, the Fund’s Board or Board Committee comprised of Independent Directors/Trustees may take such action as it deems appropriate, which may include without limitation: modifications of applicable policies and procedures; notification to appropriate personnel of the Fund’s investment adviser, principal underwriter or administrator, or their boards; notification to other Funds for which the Covered Officer serves as a Covered Officer; or recommendation to dismiss the Covered Officer; and

 

    any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules.

V. Other Policies and Procedures

This Code shall be the sole code of ethics adopted by the Funds for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of a Fund or its Service Providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code. The Funds’ and their investment adviser’s and principal underwriter’s code of ethics under Rule 17j-1 under the 1940 Act are separate requirements applying to the Covered Officers and others, and are not part of this Code.

VI. Amendments

Any amendments to this Code, other than amendments to Exhibit A, must be approved or ratified by a majority vote of the Board, including a majority of Independent Directors/Trustees.

VII. Confidentiality

All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Fund Board of Directors/Trustees, counsel to the Fund, and counsel to the Fund Independent Directors/Trustees.

VIII. Internal Use

The Code is intended solely for the internal use by the Funds and does not constitute an admission, by or on behalf of a Fund, as to any fact, circumstance, or legal conclusion.

IX. Recordkeeping

A Fund shall keep the information disclosed about waivers and amendments under the Code for the period of time as specified in the rules adopted pursuant to Section 406 of the Sarbanes-Oxley Act, and furnish such information to the SEC or its staff upon request.

Adopted and approved as of September 3, 2003.

 

4


EXHIBIT A

Funds Covered by this Code of Ethics

The Retail Funds:

 

Strategic Partners Asset Allocation Funds - Strategic Partners Moderate Growth Fund

Strategic Partners Asset Allocation Funds - Strategic Partners Conservative Growth Fund

Strategic Partners Asset Allocations Funds - Strategic Partners High Growth Fund

Strategic Partners Style Specific Funds – Jennison Conservative Growth Fund

Strategic Partners Style Specific Funds - Strategic Partners Small Capitalization Value Fund

Strategic Partners Style Specific Funds - Strategic Partners Large Capitalization Value Fund

Strategic Partners Style Specific Funds - Strategic Partners Total Return Bond Fund

Dryden California Municipal Fund: California Income Series

Dryden California Municipal Fund: California Series

Dryden Municipal Series Fund: Florida Series

Dryden Municipal Series Fund: New Jersey Series

Dryden Municipal Series Fund: New York Series

Dryden Municipal Series Fund: Pennsylvania Series

Cash Accumulation Trust - Liquid Assets Fund

Cash Accumulation Trust - National Money Market Fund

Dryden Index Series Fund: Dryden Stock Index Fund

The Prudential Investment Portfolios, Inc., Jennison Equity Opportunity Fund

The Prudential Investment Portfolios, Inc., Jennison Growth Fund

The Prudential Investment Portfolios, Inc., Dryden Active Allocation Fund

The Prudential Investment Portfolios, Inc., JennisonDryden Asset Allocation Funds

•      JennisonDryden Conservative Allocation Fund

•      JennisonDryden Moderate Allocation Fund

•      JennisonDryden Growth Allocation Fund

Jennison Small Company Fund, Inc.

Dryden Tax-Managed Funds - Dryden Large Cap-Core Equity Fund

Dryden Small-Cap Core Equity Fund, Inc.

Jennison U.S. Emerging Growth Fund, Inc.

Jennison Value Fund

Prudential World Fund, Inc., Jennison Global Growth Fund

Prudential World Fund, Inc., Strategic Partners International Value Fund

Prudential World Fund, Inc., Dryden International Equity Fund

Dryden Government Securities Trust - Money Market Series

 

A-1


Jennison Sector Funds, Inc. - Jennison Financial Services Fund

Jennison Sector Funds, Inc. - Jennison Health Sciences Fund

Jennison Sector Funds, Inc. - Jennison Technology Fund

Jennison Sector Funds, Inc. - Jennison Utility Fund

Jennison Blend Fund, Inc.

Dryden Global Total Return Fund, Inc.

Dryden High Yield Fund, Inc.

MoneyMart Assets, Inc.

Dryden National Municipals Fund, Inc.

Dryden Short-Term Bond Fund, Inc. - Dryden Short-Term Corporate Bond Fund

Dryden Short-Term Bond Fund, Inc. - Dryden Ultra Short Bond Fund

Dryden Tax-Free Money Fund, Inc.

Dryden Total Return Bond Fund, Inc.

The Target Portfolio Trust - Intermediate-Term Bond Portfolio

The Target Portfolio Trust - International Bond Portfolio

The Target Portfolio Trust - International Equity Portfolio

The Target Portfolio Trust - Large Capitalization Growth Portfolio

The Target Portfolio Trust - Large Capitalization Value Portfolio

The Target Portfolio Trust - Mortgage Backed Securities Portfolio

The Target Portfolio Trust - Small Capitalization Growth Portfolio

The Target Portfolio Trust - Small Capitalization Value Portfolio

The Target Portfolio Trust - Total Return Bond Portfolio

The Target Portfolio Trust - U.S. Government Money Market Portfolio

Jennison 20/20 Focus Fund

Dryden Core Investment Fund

Dryden Government Income Fund, Inc.

Strategic Partners Opportunity Funds – Jennison Select Growth Fund

Strategic Partners Opportunity Funds – Strategic Partners New Era Growth Fund

Strategic Partners Opportunity Funds – Dryden Strategic Value Fund

Prudential Institutional Liquidity Portfolio, Inc. - Institutional Money Market Series

Strategic Partners Real Estate Fund

Dryden Municipal Bond Fund - High Income Series

 

A-2


Dryden Municipal Bond Fund - Insured Series

Jennison Natural Resources Fund, Inc.

The High Yield Income Fund, Inc.

Nicholas-Applegate Fund, Inc. - Nicholas-Applegate Growth Equity Fund

The Prudential Variable Contract Account – 2

The Prudential Variable Contract Account – 10

The Prudential Variable Contract Account – 11

Strategic Partners Mutual Funds, Inc. - Strategic Partners International Growth Fund

Strategic Partners Mutual Funds, Inc. - Strategic Partners Small Cap Growth Fund

Strategic Partners Mutual Funds, Inc. - Strategic Partners Mid-Cap Growth Fund

Strategic Partners Mutual Funds, Inc. - Strategic Partners Mid-Cap Value Fund

Strategic Partners Mutual Funds, Inc. - Strategic Partners Technology Fund

Strategic Partners Mutual Funds, Inc. - Strategic Partners Managed OTC Fund

Strategic Partners Mutual Funds, Inc. - Strategic Partners Capital Growth Fund

Strategic Partners Mutual Funds, Inc. - Strategic Partners Concentrated Growth Fund

Strategic Partners Mutual Funds, Inc. - Strategic Partners Core Value Fund

Strategic Partners Mutual Funds, Inc. - Strategic Partners Large Cap Core Fund

Strategic Partners Mutual Funds, Inc. - Strategic Partners Equity Income Growth

Strategic Partners Mutual Funds, Inc. - Strategic Partners Balanced Fund

Strategic Partners Mutual Funds, Inc. - Strategic Partners High Yield Bond Fund

Strategic Partners Mutual Funds, Inc. - Strategic Partners Money Market Fund

The Insurance Funds:

American Skandia Trust - AST JPMorgan International Equity Portfolio

American Skandia Trust - AST William Blair International Growth Portfolio

American Skandia Trust - AST LSV International Value Portfolio

American Skandia Trust - AST MFS Global Equity Portfolio

American Skandia Trust - AST Small-Cap Growth Portfolio

American Skandia Trust - AST DeAM Small-Cap Growth Portfolio

American Skandia Trust - AST Federated Aggressive Growth Portfolio

American Skandia Trust - AST Goldman Sachs Small-Cap Value Portfolio

American Skandia Trust - AST Small-Cap Value Portfolio

American Skandia Trust - AST DeAM Small-Cap Value Portfolio

American Skandia Trust - AST Goldman Sachs Mid-Cap Growth Portfolio

American Skandia Trust - AST Neuberger Berman Mid-Cap Growth Portfolio

American Skandia Trust - AST Neuberger Berman Mid-Cap Value Portfolio

 

A-3


American Skandia Trust - AST Mid-Cap Value Portfolio

American Skandia Trust - AST T. Rowe Price Natural Resources Portfolio

American Skandia Trust - AST T. Rowe Price Large-Cap Value Portfolio

American Skandia Trust - AST MFS Growth Portfolio

American Skandia Trust - AST Marsico Capital Growth Portfolio

American Skandia Trust - AST Goldman Sachs Concentrated Growth Portfolio

American Skandia Trust - AST DeAM Large-Cap Value Portfolio

American Skandia Trust - AST Large-Cap Value Portfolio

American Skandia Trust - AST AllianceBernstein Core Value Portfolio

American Skandia Trust - AST Cohen & Steers Realty Portfolio

American Skandia Trust - AST Sanford Bernstein Managed Index 500 Portfolio

American Skandia Trust - AST American Century Income & Growth Portfolio

American Skandia Trust - AST AllianceBernstein Growth and Income Portfolio

American Skandia Trust - AST DeAM Global Allocation Portfolio

American Skandia Trust - AST American Century Strategic Balanced Portfolio

American Skandia Trust - AST T. Rowe Price Asset Allocation Portfolio

American Skandia Trust - AST T. Rowe Price Global Bond Portfolio

American Skandia Trust - AST Goldman Sachs High Yield Portfolio

American Skandia Trust - AST Lord Abbett Bond-Debenture Portfolio

American Skandia Trust - AST PIMCO Total Return Bond Portfolio

American Skandia Trust - AST PIMCO Limited Maturity Bond Portfolio

American Skandia Trust - AST Money Market Portfolio

American Skandia Trust - AST Aggressive Asset Allocation Portfolio

American Skandia Trust - AST Capital Growth Asset Allocation Portfolio

American Skandia Trust - AST Balanced Asset Allocation Portfolio

American Skandia Trust - AST Conservative Asset Allocation Portfolio

American Skandia Trust - AST Preservation Asset Allocation Portfolio

American Skandia Trust - AST First Trust Balanced Target Portfolio

American Skandia Trust - AST First Trust Capital Appreciation Target Portfolio

American Skandia Trust - AST Advanced Strategies Portfolio

The Prudential Series Fund - Conservative Balanced Portfolio

The Prudential Series Fund - Diversified Bond Portfolio

The Prudential Series Fund - Diversified Conservative Growth Portfolio

The Prudential Series Fund - Equity Portfolio

The Prudential Series Fund - Flexible Managed Portfolio

The Prudential Series Fund - Global Portfolio

The Prudential Series Fund - Government Income Portfolio

The Prudential Series Fund - High Yield Bond Portfolio

The Prudential Series Fund - Jennison Portfolio

The Prudential Series Fund - Jennison 20/20 Focus Portfolio

The Prudential Series Fund - Money Market Portfolio

The Prudential Series Fund - Natural Resources Portfolio

The Prudential Series Fund - Small Capitalization Stock Portfolio

The Prudential Series Fund - Stock Index Portfolio

 

A-4


The Prudential Series Fund - Value Portfolio

The Prudential Series Fund - Zero Coupon Bond Portfolio 2005

The Prudential Series Fund - SP AIM Core Equity Portfolio

The Prudential Series Fund - SP T. Rowe Price Large Cap Growth Portfolio

The Prudential Series Fund - SP Davis Value Portfolio

The Prudential Series Fund - SP LSV International Value Portfolio

The Prudential Series Fund - SP Small Cap Value Portfolio

The Prudential Series Fund - SP Large Cap Value Portfolio

The Prudential Series Fund - SP Mid Cap Growth Portfolio

The Prudential Series Fund - SP PIMCO High Yield Portfolio

The Prudential Series Fund - SP PIMCO Total Return Portfolio

The Prudential Series Fund - SP Prudential U.S. Emerging Growth Portfolio

The Prudential Series Fund - SP Small Cap Growth Portfolio

The Prudential Series Fund - SP Strategic Partners Focused Growth Portfolio

The Prudential Series Fund - SP William Blair International Growth Portfolio

The Prudential Series Fund - SP Aggressive Growth Asset Allocation Portfolio

The Prudential Series Fund - SP Balanced Asset Allocation Portfolio

The Prudential Series Fund - SP Conservative Asset Allocation Portfolio

The Prudential Series Fund - SP Growth Asset Allocation Portfolio

Prudential’s Gibraltar Fund

 

A-5


EXHIBIT B

Persons Covered by this Code of Ethics

Judy A. Rice – President and Chief Executive Officer of the Retail Funds

David R. Odenath – President and Chief Executive Officer of the Insurance Funds

Grace C. Torres – Treasurer and Chief Financial Officer for the Retail and Insurance Funds

Robert F. Gunia – President and Chief Executive Officer of Nicholas-Applegate Fund, Inc. - Nicholas-Applegate Growth Equity Fund

EX-99.CERT 3 dex99cert.htm CERTIFICATIONS PURSUANT TO SECTION 302 Certifications pursuant to Section 302

Item 12

Dryden Municipal Bond Fund

Annual period ending 04/30/06

File No. 811-04930

CERTIFICATIONS

I, Judy A. Rice, certify that:

 

  1. I have reviewed this report on Form N-CSR of Dryden Municipal Bond Fund;

 

  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 officers 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 over financial reporting 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: June 27, 2006

 

/s/Judy A. Rice

Judy A. Rice

President and Principal Executive Officer


Item 12

Dryden Municipal Bond Fund

Annual period ending 04/30/06

File No. 811-04930

CERTIFICATIONS

I, Grace C. Torres, certify that:

 

  1. I have reviewed this report on Form N-CSR of Dryden Municipal Bond Fund

 

  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 officers 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 over financial reporting 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: June 27, 2006

 

/s/Grace C. Torres

 

Grace C. Torres

Treasurer and Chief Financial Officer

EX-99.906CERT 4 dex99906cert.htm CERTIFICATIONS PURSUANT TO SECTION 906 Certifications pursuant to Section 906

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 Municipal Bond Fund

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: June 27, 2006    /s/Judy A. Rice   
   Judy A. Rice   
   President and Principal   
   Executive Officer   
Date: June 27, 2006    /s/Grace C. Torres   
   Grace C. Torres   
   Treasurer and Principal Financial   
   Officer   
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