ar123110vs2.htm

DECEMBER 31, 2010

ANNUAL REPORT

DWS VARIABLE SERIES II

DWS Alternative Asset Allocation Plus VIP

DWS Balanced VIP

DWS Blue Chip VIP

DWS Core Fixed Income VIP

DWS Diversified International Equity VIP

DWS Dreman Small Mid Cap Value VIP

DWS Global Thematic VIP

DWS Government & Agency Securities VIP

DWS High Income VIP

DWS Large Cap Value VIP

DWS Mid Cap Growth VIP

DWS Money Market VIP

DWS Small Cap Growth VIP

DWS Strategic Income VIP

DWS Strategic Value VIP

DWS Technology VIP

DWS Turner Mid Cap Growth VIP

Contents

Performance Summary, Information About Your Fund's Expenses, Management Summary, Portfolio Summary, Investment Portfolio, Statement of Assets and Liabilities, Statement of Operations, Statement of Changes in Net Assets and Financial Highlights for:

4 DWS Alternative Asset Allocation Plus VIP

15 DWS Balanced VIP

45 DWS Blue Chip VIP

61 DWS Core Fixed Income VIP

76 DWS Diversified International Equity VIP

96 DWS Dreman Small Mid Cap Value VIP

109 DWS Global Thematic VIP

123 DWS Government & Agency Securities VIP

137 DWS High Income VIP

162 DWS Large Cap Value VIP

174 DWS Mid Cap Growth VIP

187 DWS Money Market VIP

200 DWS Small Cap Growth VIP

213 DWS Strategic Income VIP

246 DWS Strategic Value VIP

259 DWS Technology VIP

271 DWS Turner Mid Cap Growth VIP

284 Notes to Financial Statements

307 Report of Independent Registered Public Accounting Firm

308 Tax Information

309 Proxy Voting

310 Investment Management Agreement Approval

347 Summary of Management Fee Evaluation by Independent Fee Consultant

349 Summary of Administrative Fee Evaluation by Independent Fee Consultant

350 Board Members and Officers

This report must be preceded or accompanied by a prospectus. To obtain an additional prospectus or summary prospectus, if available, call (800) 728-3337 or your financial representative. We advise you to consider the Fund's objectives, risks, charges and expenses carefully before investing. The summary prospectus and prospectus contain this and other important information about the Fund. Please read the prospectus carefully before you invest.

Investments in variable insurance portfolios (VIPs) involve risk. Stocks may decline in value. Bond investments are subject to interest-rate and credit risks. When interest rates rise, bond prices generally fall. Credit risk refers to the ability of an issuer to make timely payments of principal and interest. Investing in derivatives entails special risks relating to liquidity, leverage and credit that may reduce returns and/or increased volatility. Investing in foreign securities, particularly those of emerging markets, presents certain risks, such as currency fluctuations, political and economic changes, and market risks. There are additional risks associated with investing in commodities, high-yield bonds, aggressive growth stocks, non-diversified/ concentrated funds and small- and mid-cap stocks which are more fully explained in the prospectuses. Please read the prospectus for more information.

DWS Investments is part of Deutsche Bank's Asset Management division and, within the US, represents the retail asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Investment Management Americas Inc. and DWS Trust Company.

NOT FDIC/NCUA INSURED NO BANK GUARANTEE MAY LOSE VALUE NOT A DEPOSIT

NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY

Performance Summary December 31, 2010

DWS Alternative Asset Allocation Plus VIP

All performance shown is historical, assumes reinvestment of all dividend and capital gain distributions and does not guarantee future results. Investment return and principal value fluctuate with changing market conditions so that, when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please contact your participating insurance company for the Fund's most recent month-end performance. Performance doesn't reflect charges and fees ("contract charges") associated with the separate account that invests in the Fund or any variable life insurance policy or variable annuity contract for which the Fund is an investment option. These charges and fees will reduce ret urns. While all share classes have the same underlying portfolio, their performance will differ.

The gross expense ratios of the Fund, as stated in the fee table of the prospectus dated May 1, 2010 are 5.09% and 5.32% for Class A and Class B shares, respectively, and may differ from the expense ratios disclosed in the Financial Highlights tables in this report.

Risk Considerations

Although allocation among different asset categories generally limits risk, the investment advisor may favor an asset category that underperforms other assets or markets as a whole. The Fund expects to invest in underlying funds that emphasize alternatives or non-traditional asset categories or investment strategies, and as a result, it is subject to the risk factors of those underlying funds. Some of those risks include stock market risk, credit and interest rate risk, volatility in commodity prices and high-yield debt securities, short sales risk and the political, general economic, liquidity and currency risks of foreign investments, which may be particularly significant for emerging markets. The Fund may use derivatives, including as part of its global alpha strategy. The Fund also expects to have direct and indirect exposure to derivatives, which may be more volatile and less liquid than traditional securities. The Fund could suffer losses on its derivative positions. See the prospectus for additional risks and specific details regarding the Fund's risk profile.

Fund returns shown for all periods reflect a fee waiver and/or expense reimbursement. Without this waiver/reimbursement, returns would have been lower.

Growth of an Assumed $10,000 Investment in DWS Alternative Asset Allocation Plus VIP from 2/2/09 to 12/31/10
[] DWS Asset Allocation Plus VIP — Class A [] MSCI World Index [] Barclays Capital US Aggregate Bond Index [] S&P 500® Index [] Blended Index		The Morgan Stanley Capital International (MSCI) World Index is an unmanaged, capitalization-weighted measure of global stock markets including the US, Canada, Europe, Australia and the Far East. The index is calculated using closing local market prices and translates into US dollars using the London close foreign exchange rates. The Barclays Capital US Aggregate Bond Index is an unmanaged, market-value-weighted measure of Treasury issues, agency issues, corporate bond issues and mortgage securities. The Standard & Poor's 500® (S&P 500) Index is an unmanaged, capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The Blended Index is calculated using the performance of two unmanaged indices, representative of stocks (the Morgan Stanley Capital International (MSCI) World Index (70%)) and bonds (the Barclays Capital US Aggregate Bond Index (30%)). These results are summed to produce the aggregate benchmark. Equity index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees or expenses. Fixed income index returns, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

* The Fund commenced offering Class A shares on February 2, 2009. Index returns began on January 31, 2009.

Comparative Results
DWS Alternative Asset Allocation Plus VIP		1-Year			Life of Fund*
Class A	Growth of $10,000	$	11,246		$	14,204
Class A	Average annual total return		12.46	%		20.10	%
MSCI World Index	Growth of $10,000	$	11,176		$	15,923
MSCI World Index	Average annual total return		11.76	%		27.47	%
Barclays Capital US Aggregate Bond Index	Growth of $10,000	$	10,654		$	11,386
Barclays Capital US Aggregate Bond Index	Average annual total return		6.54	%		7.01	%
S&P 500 Index	Growth of $10,000	$	11,506		$	15,891
S&P 500 Index	Average annual total return		15.06	%		27.33	%
Blended Index	Growth of $10,000	$	11,069		$	14,526
Blended Index	Average annual total return		10.69	%		21.51	%
DWS Alternative Asset Allocation Plus VIP		1-Year			Life of Class**
Class B	Growth of $10,000	$	11,215		$	13,010
Class B	Average annual total return		12.15	%		17.63	%
MSCI World Index	Growth of $10,000	$	11,176		$	13,599
MSCI World Index	Average annual total return		11.76	%		21.43	%
Barclays Capital US Aggregate Bond Index	Growth of $10,000	$	10,654		$	11,138
Barclays Capital US Aggregate Bond Index	Average annual total return		6.54	%		7.05	%
S&P 500 Index	Growth of $10,000	$	11,506		$	14,133
S&P 500 Index	Average annual total return		15.06	%		24.42	%
Blended Index	Growth of $10,000	$	11,069		$	12,880
Blended Index	Average annual total return		10.69	%		17.33	%

The growth of $10,000 is cumulative.

* The Fund commenced offering Class A shares on February 2, 2009. Index returns began on January 31, 2009.

** The Fund commenced offering Class B shares on May 18, 2009. Index returns began on May 31, 2009.

Information About Your Fund's Expenses

DWS Alternative Asset Allocation Plus VIP

As an investor of the Fund, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees, distribution and service (12b-1) fees and other Fund expenses. Examples of transaction costs include contract charges, redemption fees and account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. In addition to the ongoing expenses which the Fund bears directly, the Fund's shareholders indirectly bear the expense of the Underlying Funds in which the Fund invests. These expenses are not included in the Fund's annualized expense ratios used to calculate the expen se estimate in the tables. In the most recent six-month period, the Fund limited the ongoing expenses the Fund bears directly; had it not done so, expenses would have been higher. The examples in the table are based on an investment of $1,000 invested at the beginning of the six-month period and held for the entire period (July 1, 2010 to December 31, 2010).

The tables illustrate your Fund's expenses in two ways:

•Actual Fund Return. This helps you estimate the actual dollar amount of ongoing expenses (but not transaction costs) paid on a $1,000 investment in the Fund using the Fund's actual return during the period. To estimate the expenses you paid over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the "Expenses Paid per $1,000" line under the share class you hold.

• Hypothetical 5% Fund Return. This helps you to compare your Fund's ongoing expenses (but not transaction costs) with those of other mutual funds using the Fund's actual expense ratio and a hypothetical rate of return of 5% per year before expenses. Examples using a 5% hypothetical Fund return may be found in the shareholder reports of other mutual funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.

Please note that the expenses shown in these tables are meant to highlight your ongoing expenses only and do not reflect any transaction costs. The "Expenses Paid per $1,000" line of the tables is useful in comparing ongoing expenses only and will not help you determine the relative total expense of owning different funds. If these transaction costs had been included, your costs would have been higher.

Expenses and Value of a $1,000 Investment for the six months ended December 31, 2010
Actual Fund Return	Class A		Class B
Beginning Account Value 7/1/10	$	1,000.00	$	1,000.00
Ending Account Value 12/31/10	$	1,128.80	$	1,127.00
Expenses Paid per $1,000*	$	1.13	$	2.47
Hypothetical 5% Fund Return	Class A		Class B
Beginning Account Value 7/1/10	$	1,000.00	$	1,000.00
Ending Account Value 12/31/10	$	1,024.15	$	1,022.89
Expenses Paid per $1,000*	$	1.07	$	2.35

* Expenses are equal to the Fund's annualized expense ratio for each share class, multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then divided by 365.

Annualized Expense Ratios**	Class A	Class B
DWS Variable Series II — DWS Alternative Asset Allocation Plus VIP	.21%	.46%

** The Fund invests in other funds and indirectly bears its proportionate share of fees and expenses incurred by the Underlying Funds in which the Fund is invested. These ratios do not include these indirect fees and expenses.

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

These tables do not reflect charges and fees ("contract charges") associated with the separate account that invests in the Fund or any variable life insurance policy or variable annuity contract for which the Fund is an investment option.

Management Summary December 31, 2010

DWS Alternative Asset Allocation Plus VIP

DWS Alternative Asset Allocation Plus VIP invests in ten DWS mutual funds plus four exchange-traded funds that together provide diversified exposure to alternative asset classes.1 The Fund returned 12.46% (Class A shares, unadjusted for contract charges) during 2010, while its blended benchmark returned 10.69%.

We define the alternative allocations in terms of three segments: absolute return, real return and nontraditional. The real return allocation, which holds investments whose returns should outpace the rate of inflation over time, benefited from the strong performance of DWS Gold & Precious Metals Fund, DWS Enhanced Commodity Strategy Fund and DWS RREEF Global Real Estate Securities Fund. The nontraditional allocation, which invests in funds that provide diversification but that may not yet be held in traditional portfolios, also added value.2 All five components of this allocation generated a positive return, with our three equity investments — DWS Emerging Markets Equity Fund, iShares MSCI EAFE Small Cap Index Fund and WisdomTree Emerging Markets SmallCap Dividend Fund — all providing excellent performance in the rising market. Our two bond investments within this allocation — DWS Emerging Markets Fixed Income Fund and SPDR Barclays Capital International Treasury Bond Fund — also gained ground, but lagged the return of the overall portfolio due to bonds' more muted performance in 2010.

The weakest returns came from the absolute return segment, which seeks to generate positive returns independent of market direction. Our investment in DWS Disciplined Market Neutral Fund, which holds roughly equal weightings in both long and short investments, typically does not keep pace with the broader market when stocks perform as well as they did during the past year. Nevertheless, we believe the fund remains an important part of the Fund's diversification.

As we move into 2011, we remain committed to providing our investors with a one-stop, professionally managed way to gain exposure to the alternative asset classes. We believe our multifaceted role as managers — selecting asset classes, determine the weightings for each asset class and deciding on the appropriate timing of portfolio reallocations — can add significant value for our investors over time.

Robert Wang

Inna Okounkova

Thomas Picciochi

Portfolio Managers, QS Investors, LLC

Subadvisor to the Fund

The Blended Index is calculated using the performance of two unmanaged indices, representative of stocks (the Morgan Stanley Capital International (MSCI) World Index (70%)) and bonds (the Barclays Capital US Aggregate Bond Index (30%)). These results are summed to produce the aggregate benchmark.

The iShares MSCI EAFE Small Cap Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, as represented by the MSCI EAFE Small Cap Index.

The WisdomTree Emerging Markets SmallCap Dividend Fund seeks investment results that correspond to the price and yield performance, before fees and expenses, of the WisdomTree Emerging Markets SmallCap Dividend Index.

The SPDR Barclays Capital International Treasury Bond Fund tracks the Barclays Capital Global Treasury Ex-US Capped Index. The international bond ETF invests at least 80% of securities that are in the underlying index as well as derivatives such as swaps and options. Some of the regions represented in the bond ETF are Japan, Germany, France, Italy and Greece.

Equity index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees or expenses. Fixed income index returns, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

1 An exchange-traded fund (ETF) is a security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange.

2 Diversification neither assures a profit nor guarantees against a loss.

Portfolio management market commentary is as of December 31, 2010, and may not come to pass. This information is subject to change at any time based on market and other conditions. Past performance does not guarantee future results. Current and future portfolio holdings are subject to risk.

Portfolio Summary

DWS Alternative Asset Allocation Plus VIP

Asset Allocation (As a % of Investment Portfolio)	12/31/10	12/31/09

Fixed Income — Bond Funds	42%	30%
Equity — Equity Funds	31%	65%
Market Neutral Fund	18%	—
Fixed Income — Money Market Fund	4%	—
Equity — Exchange-Traded Funds	3%	3%
Fixed Income — Exchange-Traded Fund	2%	2%
	100%	100%

Asset allocation is subject to change.

For more complete details about the Fund's investment portfolio, see page 10.

Following the Fund's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. The form will be available on the SEC's Web site at www.sec.gov, and it also may be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330. The Fund's portfolio holdings are also posted on www.dws-investments.com from time to time. Please see the Fund's current prospectus for more information.

Investment Portfolio December 31, 2010

DWS Alternative Asset Allocation Plus VIP

	Shares		Value ($)

Equity — Equity Funds 31.0%
DWS Emerging Markets Equity Fund "Institutional"		116,267		2,199,763
DWS Gold & Precious Metals Fund "Institutional"		56,634		1,346,767
DWS RREEF Global Infrastructure Fund "Institutional"		140,736		1,325,736
DWS RREEF Global Real Estate Securities Fund "Institutional"		506,169		3,796,269
Total Equity — Equity Funds (Cost $7,892,103)				8,668,535

Equity — Exchange-Traded Funds 2.7%
iShares MSCI EAFE Small Cap Index Fund		9,056		382,254
Vanguard FTSE All World ex-US Small-Cap Fund		2,479		246,958
WisdomTree Emerging Markets SmallCap Dividend Fund		2,319		126,385
Total Equity — Exchange-Traded Funds (Cost $652,941)				755,597

Fixed Income — Bond Funds 42.2%
DWS Emerging Markets Fixed Income Fund "Institutional"		270,908		2,942,058
DWS Enhanced Commodity Strategy Fund "Institutional"*		803,146		3,541,873
	Shares		Value ($)

DWS Floating Rate Plus Fund "Institutional"		141,702		1,331,995
DWS Global Inflation Plus Fund "Institutional"		386,409		3,972,283
Total Fixed Income — Bond Funds (Cost $11,035,168)				11,788,209

Fixed Income — Money Market Fund 3.8%
Central Cash Management Fund (Cost $1,072,672)		1,072,672		1,072,672

Fixed Income — Exchange-Traded Fund 1.7%
SPDR Barclays Capital International Treasury Bond (Cost $474,388)		8,229		481,068

Market Neutral Fund 17.9%
DWS Disciplined Market Neutral Fund "Institutional" (Cost $5,027,517)		528,646		4,985,131

	% of Net Assets		Value ($)

Total Investment Portfolio (Cost $26,154,789)+		99.3		27,751,212
Other Assets and Liabilities, Net		0.7		190,789
Net Assets		100.0		27,942,001

* Non-income producing security.

+ The cost for federal income tax purposes was $26,172,268. At December 31, 2010, net unrealized appreciation for all securities based on tax cost was $1,578,944. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $1,638,809 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $59,865.

EAFE: Europe, Australasia and Far East

FTSE: Financial Times and the London Stock Exchange

MSCI: Morgan Stanley Capital International

SPDR: Standard & Poor's Depositary Receipt

Fair Value Measurements

Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used as of December 31, 2010 in valuing the Fund's investments. For information on the Fund's policy regarding the valuation of investments, please refer to the Security Valuation section of Note A in the accompanying Notes to Financial Statements.

Assets	Level 1		Level 2		Level 3		Total

Equity Funds	$	8,668,535	$	—	$	—	$	8,668,535
Exchange-Traded Funds (a)		1,236,665		—		—		1,236,665
Bond Funds		11,788,209		—		—		11,788,209
Money Market Fund		1,072,672		—		—		1,072,672
Market Netural Fund		4,985,131		—		—		4,985,131
Total	$	27,751,212	$	—	$	—	$	27,751,212

There have been no significant transfers between Level 1 and Level 2 fair value measurements during the year ended December 31, 2010.

(a) See Investment Portfolio for additional detailed categorizations.

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

Statement of Assets and Liabilities

as of December 31, 2010
Assets
Investments: Investments in Underlying Affiliated Funds, at value (cost $23,954,788)	$	25,441,875
Investments in Underlying Non-affiliated Funds, at value (cost $1,127,329)		1,236,665
Investment in Central Cash Management Fund, at value (cost $1,072,672)		1,072,672
Total investments, at value (cost $26,154,789)		27,751,212
Receivable for Fund shares sold		237,032
Dividends receivable		3,012
Due from Advisor		5,574
Other assets		191
Total assets		27,997,021
Liabilities
Accrued expenses and other liabilities		55,020
Total liabilities		55,020
Net assets, at value	$	27,942,001
Net Assets Consist of
Undistributed net investment income		426,034
Net unrealized appreciation (depreciation) on investments		1,596,423
Accumulated net realized gain (loss)		81,658
Paid-in capital		25,837,886
Net assets, at value	$	27,942,001
Class A Net Asset Value, offering and redemption price per share ($5,020,913 ÷ 362,411 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)	$	13.85
Class B Net Asset Value, offering and redemption price per share ($22,921,088 ÷ 1,656,043 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)	$	13.84

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

Statement of Operations

for the year ended December 31, 2010
Investment Income
Income: Income distributions from Underlying Affiliated Funds	$	463,325
Dividends		22,190
Income distributions — Central Cash Management Fund		610
Total income		486,125
Expenses: Management fee		31,017
Administration fee		13,080
Services to shareholders		383
Distribution service fee (Class B)		25,810
Custodian fee		6,941
Legal fees		11,534
Audit and tax fees		43,862
Trustees' fees and expenses		3,085
Reports to shareholders		13,174
Total expenses before expense reductions		148,886
Expense reductions		(95,476	)
Total expenses after expense reductions		53,410
Net investment income (loss)		432,715
Realized and Unrealized Gain (Loss)
Net realized gain (loss) from: Sale of Underlying Affiliated Funds		(6,421	)
Sale of Underlying Non-affiliated Funds		1,845
Capital gain distributions from Underlying Affiliated Funds		99,137
		94,561
Change in net unrealized appreciation (depreciation) on investments		1,382,244
Net gain (loss)		1,476,805
Net increase (decrease) in net assets resulting from operations	$	1,909,520

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

Statement of Changes in Net Assets

Increase (Decrease) in Net Assets	Year Ended December 31, 2010			Period Ended December 31, 2009*
Operations: Net investment income	$	432,715		$	97,525
Net realized gain (loss)		94,561			93,568
Change in net unrealized appreciation (depreciation)		1,382,244			214,179
Net increase (decrease) in net assets resulting from operations		1,909,520			405,272
Distributions to shareholders from: Net investment income: Class A		(29,328	)		—
Class B		(74,563	)		—
Net realized gains: Class A		(23,912	)		—
Class B		(82,873	)		—
Total distributions		(210,676	)		—
Fund share transactions: Class A Proceeds from shares sold		3,888,928			1,288,284
Reinvestment of distributions		53,240			—
Payments for shares redeemed		(529,532	)		(300,310	)
Net increase (decrease) in net assets from Class A share transactions		3,412,636			987,974
Class B Proceeds from shares sold		19,061,697			6,723,581
Reinvestment of distributions		157,436			—
Payments for shares redeemed		(1,070,014	)		(3,636,425	)
Net increase (decrease) in net assets from Class B share transactions		18,149,119			3,087,156
Increase (decrease) in net assets		23,260,599			4,075,130
Net assets at beginning of period		4,681,402			201,000
Net assets at end of period (including undistributed net investment income of $426,034 and $97,525, respectively)	$	27,942,001		$	4,681,402
Other Information
Class A Shares outstanding at beginning of period		101,099			—
Shares sold		298,581			105,838
Shares issued to shareholders in reinvestment of distributions		4,172			—
Shares redeemed		(41,441	)		(24,739	)
Net increase (decrease) in Class A shares		261,312			81,099
Initial capital		—			20,000
Shares outstanding at end of period		362,411			101,099
Class B Shares outstanding at beginning of period		270,064			—
Shares sold		1,454,814			560,919
Shares issued to shareholders in reinvestment of distributions		12,329			—
Shares redeemed		(81,164	)		(290,947	)
Net increase (decrease) in Class B shares		1,385,979			269,972
Initial capital		—			92
Shares outstanding at end of period		1,656,043			270,064

* For the period from February 2, 2009 (commencement of operations) to December 31, 2009 for Class A shares and from May 18, 2009 (commencement of operations) to December 31, 2009 for Class B shares.

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

Financial Highlights

Class A Years Ended December 31,	2010				2009	a
Selected Per Share Data
Net asset value, beginning of period	$	12.63		$	10.00
Income (loss) from investment operations: Net investment incomeb		.46			.57
Net realized and unrealized gain (loss)		1.09			2.06
Total from investment operations		1.55			2.63
Less distributions from: Net investment income		(.18	)		—
Net realized gains		(.15	)		—
Total distributions		(.33	)		—
Net asset value, end of period	$	13.85		$	12.63
Total Return (%)c,d		12.46			26.30	**
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		5			1
Ratio of expenses before expense reductions (%)e		.94			11.67	*
Ratio of expenses after expense reductions (%)e		.21			.21	*
Ratio of net investment income (%)		3.51			5.39	*
Portfolio turnover rate (%)		6			155	**
a For the period from February 2, 2009 (commencement of operations of Class A shares) to December 31, 2009. b Based on average shares outstanding during the period. c Total return would have been lower had certain expenses not been reduced. d Total return would have been lower if the Advisor had not reduced some Underlying Funds' expenses. e The Fund invests in other Funds and indirectly bears its proportionate share of fees and expenses incurred by the Underlying Funds and non-affiliated funds in which the Fund is invested. This ratio does not include these indirect fees and expenses. * Annualized ** Not annualized

Class B Years Ended December 31,	2010				2009	a
Selected Per Share Data
Net asset value, beginning of period	$	12.61		$	10.87
Income (loss) from investment operations: Net investment incomeb		.42			.35
Net realized and unrealized gain (loss)		1.09			1.39
Total from investment operations		1.51			1.74
Less distributions from: Net investment income		(.13	)		—
Net realized gains		(.15	)		—
Total distributions		(.28	)		—
Net asset value, end of period	$	13.84		$	12.61
Total Return (%)c,d		12.15			16.01	**
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		23			3
Ratio of expenses before expense reductions (%)e		1.19			5.37	*
Ratio of expenses after expense reductions (%)e		.46			.61	*
Ratio of net investment income (%)		3.26			4.66	*
Portfolio turnover rate (%)		6			155	**
a For the period from May 18, 2009 (commencement of operations of Class B shares) to December 31, 2009. b Based on average shares outstanding during the period. c Total return would have been lower had certain expenses not been reduced. d Total return would have been lower if the Advisor had not reduced some Underlying Funds' expenses. e The Fund invests in other Funds and indirectly bears its proportionate share of fees and expenses incurred by the Underlying Funds and non-affiliated funds in which the Fund is invested. This ratio does not include these indirect fees and expenses. * Annualized ** Not annualized

Performance Summary December 31, 2010

DWS Balanced VIP

The gross expense ratio of the Fund, as stated in the fee table of the prospectus dated May 1, 2010 is 0.62% for Class A shares and may differ from the expense ratio disclosed in the Financial Highlights table in this report.

Risk Considerations

Although allocation among different asset categories generally limits risk, the investment advisor may favor an asset category that underperforms other assets or markets as a whole. Bond investments are subject to interest-rate and credit risks. When interest rates rise, bond prices generally fall. Credit risk refers to the ability of an issuer to make timely payments of principal and interest. The Fund may use derivatives, including as part of its global alpha strategy. Investing in derivatives entails special risks relating to liquidity, leverage and credit that may reduce returns and/or increase volatility. Stocks may decline in value. See the prospectus for details.

Fund returns for the 3-year, 5-year and 10-year periods shown reflect a fee waiver and/or expense reimbursement. Without this waiver/reimbursement, returns would have been lower.

Growth of an Assumed $10,000 Investment in DWS Balanced VIP
[] DWS Balanced VIP — Class A [] Russell 1000® Index [] Barclays Capital US Aggregate Bond Index
		The Russell 1000® Index is an unmanaged index that measures the performance of the 1,000 largest companies in the Russell 3000 Index, which represents approximately 92% of the total market capitalization of the Russell 3000 Index. The Barclays Capital US Aggregate Bond Index is an unmanaged, market-value-weighted measure of Treasury issues, agency issues, corporate bond issues and mortgage securities. Index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.
Yearly periods ended December 31

Comparative Results
DWS Balanced VIP		1-Year			3-Year			5-Year			10-Year
Class A	Growth of $10,000	$	11,122		$	9,976		$	11,531		$	12,066
Class A	Average annual total return		11.22	%		-0.08	%		2.89	%		1.90	%
Russell 1000 Index	Growth of $10,000	$	11,610		$	9,305		$	11,364		$	11,986
Russell 1000 Index	Average annual total return		16.10	%		-2.37	%		2.59	%		1.83	%
Barclays Capital US Aggregate Bond Index	Growth of $10,000	$	10,654		$	11,877		$	13,255		$	17,633
Barclays Capital US Aggregate Bond Index	Average annual total return		6.54	%		5.90	%		5.80	%		5.84	%

The growth of $10,000 is cumulative.

Information About Your Fund's Expenses

DWS Balanced VIP

As an investor of the Fund, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees and other Fund expenses. Examples of transaction costs include contract charges, redemption fees and account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. The example in the table is based on an investment of $1,000 invested at the beginning of the six-month period and held for the entire period (July 1, 2010 to December 31, 2010).

The tables illustrate your Fund's expenses in two ways:

Expenses and Value of a $1,000 Investment for the six months ended December 31, 2010
Actual Fund Return	Class A
Beginning Account Value 7/1/10	$	1,000.00
Ending Account Value 12/31/10	$	1,146.00
Expenses Paid per $1,000*	$	3.68
Hypothetical 5% Fund Return	Class A
Beginning Account Value 7/1/10	$	1,000.00
Ending Account Value 12/31/10	$	1,021.78
Expenses Paid per $1,000*	$	3.47

* Expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then divided by 365.

Annualized Expense Ratio	Class A
DWS Variable Series II — DWS Balanced VIP	.68%

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

Management Summary December 31, 2010

DWS Balanced VIP

The global equity and fixed-income markets both finished 2010 with strong returns, providing a tailwind for DWS Balanced VIP. For the 12 months ended December 31, 2010, the Fund returned 11.22% (Class A shares, unadjusted for contract charges). The Russell 1000® Index, the Fund's equity benchmark, returned 16.10%, and the Barclays Capital US Aggregate Bond Index, the Fund's bond benchmark, returned 6.54%.

The Fund uses several different investment strategies which include investments in five exchange-traded funds, or ETFs.1 In a reflection of the favorable market environment, all of these investment strategies produced a positive absolute return. We also measure each of the Fund's underlying investments in terms of their relative performance or, in other words, how well they performed in relation to their respective benchmarks. The Fund's shortfall versus the benchmark reflects the collective underperformance of several underlying investment strategies.

We made several shifts to the Fund's positioning during the second half of the year. One of the most significant changes was the liquidation of the quantitative small-cap core sleeve and the addition of the iShares Russell 2000® Value Index Fund. Additionally, we slightly increased the Fund's exposure to large-cap and international equities, and we reduced its exposure to small-cap equities. On the fixed-income side, we augmented the Fund's diversification by reducing exposure to global inflation-linked bonds and cash and increasing our allocation to emerging-market bonds and international developed market bonds. We achieved this via investments in two ETFs — iShares JPMorgan USD Emerging Markets Bond Fund and SPDR Barclays Capit al International Treasury Bond.

We believe DWS Balanced VIP, by virtue of its extensive diversification, continues to offer investors a compelling way to gain exposure to a wide range of asset classes within the global financial markets. We will continue to review asset allocation and manager allocation periodically, and we are always looking for opportunities to expand our universe and increase diversification among managers and investment styles.

Robert Wang

Inna Okounkova

Thomas Picciochi

Portfolio Managers, QS Investors, LLC

Subadvisor to the Fund

The Russell 1000 Index is an unmanaged index that measures the performance of the 1,000 largest companies in the Russell 3000® Index, which represents approximately 92% of the total market capitalization of the Russell 3000 Index.

The Barclays Capital US Aggregate Bond Index is an unmanaged, market-value-weighted measure of Treasury issues, corporate bond issues and mortgage securities.

The iShares Russell 2000 Value Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the small capitalization sector of the US equity market as represented by the Russell 2000 Value Index. The index represents approximate 50% of the Russell 2000 Index.

The iShares JPMorgan USD Emerging Markets Bond Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the JPMorgan EMBI Global Core Index.

The SPDR Barclays Capital International Treasury Bond ETF tracks the Barclays Global Treasury Ex-US Capped index. The international bond ETF invests at least 80% of securities that are in the underlying index as well as derivatives such as swaps and options. Some of the regions represented in the bond ETF are Japan, Germany, France, Italy and Greece.

Index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

1 An exchange-traded fund (ETF) is a security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange.

Portfolio Summary

DWS Balanced VIP

Asset Allocation (As a % of Investment Portfolio excluding Securities Lending Collateral)	12/31/10	12/31/09

Common Stocks	55%	54%
Government & Agency Obligations	9%	13%
Fixed Income — Exchange-Traded Funds	7%	3%
Mortgage-Backed Securities Pass-Throughs	7%	8%
Corporate Bonds	7%	8%
Cash Equivalents	6%	10%
Equity — Exchange-Traded Funds	5%	3%
Commercial Mortgage-Backed Securities	2%	1%
Municipal Bonds and Notes	1%	0%
Preferred Stocks	1%	0%
	100%	100%

Sector Diversification (As a % of Equities, Corporate Bonds, Senior Bank Loans and Preferred Securities)	12/31/10	12/31/09

Information Technology	16%	15%
Energy	14%	10%
Financials	13%	16%
Consumer Discretionary	12%	11%
Industrials	11%	11%
Health Care	10%	13%
Consumer Staples	9%	9%
Materials	6%	6%
Telecommunication Services	5%	5%
Utilities	4%	4%
	100%	100%

Asset allocation and sector diversification exclude derivatives and are subject to change.

For more complete details about the Fund's investment portfolio, see page 20.

Investment Portfolio December 31, 2010

DWS Balanced VIP

	Shares		Value ($)

Common Stocks 56.4%
Consumer Discretionary 6.6%
Auto Components 0.8%
Autoliv, Inc. (a)		7,100		560,474
BorgWarner, Inc.* (a)		22,292		1,613,049
Minth Group Ltd.		86,306		141,682
Nippon Seiki Co., Ltd.		8,273		99,131
S&T Dynamics Co., Ltd.*		5,003		100,667
				2,515,003
Automobiles 0.3%
Bayerische Motoren Werke (BMW) AG		1,656		130,143
Daimler AG (Registered)*		4,530		306,979
Honda Motor Co., Ltd.		9,032		356,978
PT Astra International Tbk		24,185		146,285
				940,385
Distributors 0.5%
Genuine Parts Co.		27,420		1,407,743
Diversified Consumer Services 0.3%
H&R Block, Inc. (a)		67,779		807,248
Hotels Restaurants & Leisure 1.2%
Carnival Corp. (Units)		19,047		878,257
Darden Restaurants, Inc. (a)		17,590		816,880
Domino's Pizza UK & IRL PLC		10,134		87,137
Marriott International, Inc. "A" (a)		24,919		1,035,135
McDonald's Corp.		6,220		477,447
Paddy Power PLC		3,364		138,006
PartyGaming PLC* (a)		16,776		53,749
REXLot Holdings Ltd.		1,209,877		127,637
Trump Entertainment Resorts, Inc.*		2		37
				3,614,285
Household Durables 0.1%
Advanced Digital Broadcast Holdings SA (Registered)		414		13,547
Hajime Construction Co., Ltd.		1,994		68,443
Jarden Corp.		1,794		55,381
Panasonic Corp.		22,414		316,400
				453,771
Internet & Catalog Retail 0.0%
Mecox Lane Ltd. (ADR)* (a)		4,052		30,025
Leisure Equipment & Products 0.1%
Universal Entertainment Corp.*		6,095		178,021
Media 1.0%
Aegis Group PLC		24,682		54,067
Charm Communications, Inc. (ADR)*		2,894		28,535
Dex One Corp.*		245		1,828
JC Decaux SA*		3,633		111,781
News Corp. "A"		63,987		931,651
Scripps Networks Interactive "A"		23,130		1,196,977
SuperMedia, Inc.*		43		375
Vertis Holdings, Inc.*		1,645		0
Vivendi		8,527		230,171
WPP PLC		30,237		372,190
				2,927,575
	Shares		Value ($)

Multiline Retail 0.6%
Dollar General Corp.* (a)		11,960		366,813
Kohl's Corp.*		14,560		791,190
Nordstrom, Inc. (a)		15,950		675,961
PPR		1,010		160,610
				1,994,574
Specialty Retail 0.8%
Advance Auto Parts, Inc. (a)		1,704		112,719
Aeropostale, Inc.*		4,348		107,135
Dick's Sporting Goods, Inc.* (a)		15,840		594,000
Guess?, Inc. (a)		2,421		114,562
Hennes & Mauritz AB "B"		3,513		117,050
hhgregg, Inc.* (a)		3,764		78,856
L'Occitane International SA*		23,750		65,694
Limited Brands, Inc. (a)		37,290		1,145,922
Nitori Holdings Co., Ltd.		1,345		117,613
Urban Outfitters, Inc.*		3,227		115,559
				2,569,110
Textiles, Apparel & Luxury Goods 0.9%
Burberry Group PLC		4,298		75,319
Compagnie Financiere Richemont SA "A"		5,753		338,456
Deckers Outdoor Corp.* (a)		2,398		191,217
LVMH Moet Hennessy Louis Vuitton SA		1,076		177,000
NIKE, Inc. "B" (a)		14,970		1,278,737
VF Corp.		8,644		744,940
				2,805,669
Consumer Staples 5.2%
Beverages 0.9%
C&C Group PLC		29,374		132,791
Carlsberg AS "B"		1,490		149,114
Central European Distribution Corp.*		2,600		59,540
Diageo PLC		27,977		516,884
PepsiCo, Inc.		28,067		1,833,617
				2,691,946
Food & Staples Retailing 1.5%
CVS Caremark Corp.		32,169		1,118,516
Kroger Co.		38,618		863,499
Metro AG		2,441		175,746
Seven & I Holdings Co., Ltd.		16,781		448,210
Sysco Corp.		23,420		688,548
Tesco PLC		23,968		158,816
Wal-Mart Stores, Inc.		8,735		471,079
Wesfarmers Ltd.		7,877		257,811
Woolworths Ltd.		18,023		497,163
				4,679,388
Food Products 1.1%
Diamond Foods, Inc. (a)		2,779		147,787
General Mills, Inc.		16,139		574,387
Green Mountain Coffee Roasters, Inc.* (a)		3,078		101,143
Kellogg Co.		13,681		698,826
Mead Johnson Nutrition Co.		9,888		615,528
Nestle SA (Registered)		16,271		953,115
SunOpta, Inc.*		18,642		145,780
	Shares		Value ($)

Unilever NV (CVA)		7,417		230,934
				3,467,500
Household Products 0.5%
Church & Dwight Co., Inc. (a)		8,968		618,971
Colgate-Palmolive Co. (a)		7,750		622,868
Reckitt Benckiser Group PLC		4,598		252,698
				1,494,537
Personal Products 0.1%
Kao Corp.		12,622		339,919
Tobacco 1.1%
Altria Group, Inc.		55,285		1,361,117
British American Tobacco PLC		11,332		435,244
ITC Ltd.		41,615		162,867
Philip Morris International, Inc.		23,311		1,364,393
				3,323,621
Energy 7.5%
Energy Equipment & Services 2.3%
AMEC PLC		11,344		203,394
Cameron International Corp.*		1,614		81,878
Compagnie Generale de Geophysique-Veritas*		5,847		177,949
Complete Production Services, Inc.* (a)		3,289		97,190
Dresser-Rand Group, Inc.*		2,152		91,654
Ensco PLC (ADR)		20,744		1,107,315
John Wood Group PLC		10,565		92,078
Lamprell PLC		17,323		86,832
National Oilwell Varco, Inc.		17,589		1,182,860
Noble Corp.		29,144		1,042,481
ProSafe SE		9,053		72,039
Saipem SpA		7,538		371,390
SBM Offshore NV		5,980		133,970
Schlumberger Ltd.		14,350		1,198,225
Technip SA		1,788		165,101
Tecnicas Reunidas SA		1,121		71,372
Transocean Ltd.*		13,310		925,178
				7,100,906
Oil, Gas & Consumable Fuels 5.2%
Alpha Natural Resources, Inc.*		22,852		1,371,806
Anadarko Petroleum Corp.		15,650		1,191,904
Canadian Natural Resources Ltd.		21,451		952,853
Chevron Corp.		16,064		1,465,840
ConocoPhillips		16,454		1,120,517
EOG Resources, Inc. (a)		7,880		720,311
Exxon Mobil Corp.		34,248		2,504,214
Marathon Oil Corp.		38,003		1,407,251
Nexen, Inc.		32,026		733,395
Northern Oil & Gas, Inc.*		4,213		114,636
Occidental Petroleum Corp.		11,760		1,153,656
Royal Dutch Shell PLC "A"		29,694		990,038
Suncor Energy, Inc.		39,678		1,519,271
Total SA		8,254		437,332
Ultra Petroleum Corp.* (a)		2,332		111,400
Woodside Petroleum Ltd.		7,131		310,415
				16,104,839
Financials 6.2%
Capital Markets 1.2%
Affiliated Managers Group, Inc.* (a)		897		89,000
Ashmore Group PLC		26,439		138,132
Charles Schwab Corp.		31,680		542,045
ICAP PLC		7,881		65,737
	Shares		Value ($)

Jefferies Group, Inc. (a)		4,571		121,726
Lazard Ltd. "A"		1,564		61,762
Morgan Stanley		29,250		795,893
Partners Group Holding AG		697		132,280
T. Rowe Price Group, Inc. (a)		24,010		1,549,605
UOB-Kay Hian Holdings Ltd.		47,752		65,860
Waddell & Reed Financial, Inc. "A"		2,242		79,120
				3,641,160
Commercial Banks 1.5%
Australia & New Zealand Banking Group Ltd.		14,418		344,336
Banco Santander Brasil SA (Units)		15,650		212,915
BNP Paribas		3,655		232,536
BOC Hong Kong (Holdings) Ltd.		49,954		170,952
China Construction Bank Corp. "H"		159,312		143,473
Dah Sing Banking Group Ltd.		44,966		76,594
DnB NOR ASA		20,326		285,260
HSBC Holdings PLC		67,067		680,817
Huntington Bancshares, Inc.		9,478		65,114
Industrial & Commercial Bank of China Ltd. "H"		215,754		160,161
Lloyds Banking Group PLC*		111,900		114,622
National Australia Bank Ltd.		13,395		324,700
Oversea-Chinese Banking Corp., Ltd.		39,230		302,016
Prosperity Bancshares, Inc.		1,972		77,460
Sberbank of Russia		104,751		356,889
Societe Generale		4,008		215,414
Sumitomo Mitsui Financial Group, Inc.		11,221		399,412
Swedbank AB "A"*		12,540		174,858
UniCredit SpA		111,097		229,761
Wing Hang Bank Ltd.		6,818		94,295
Zions Bancorp.		2,784		67,456
				4,729,041
Consumer Finance 0.0%
Kiatnakin Bank PCL		81,536		105,487
Magma Fincorp Ltd.		26,821		43,037
				148,524
Diversified Financial Services 0.7%
Hellenic Exchanges SA		3,394		22,223
Hong Kong Exchanges & Clearing Ltd.		18,685		423,807
ING Groep NV (CVA)*		26,371		256,544
JPMorgan Chase & Co.		28,724		1,218,472
Remgro Ltd.		10,456		179,280
				2,100,326
Insurance 2.7%
AIA Group Ltd.*		53,108		149,291
Allianz SE (Registered)		1,595		189,534
Assurant, Inc.		24,273		934,996
Fidelity National Financial, Inc. "A"		47,478		649,499
HCC Insurance Holdings, Inc.		23,434		678,180
Legal & General Group PLC		160,135		241,552
Lincoln National Corp.		42,889		1,192,743
MetLife, Inc.		40,898		1,817,507
PartnerRe Ltd.		16,288		1,308,741
Prudential Financial, Inc.		18,587		1,091,243
Sampo Oyj "A"		4,685		125,593
				8,378,879
Real Estate Management & Development 0.1%
K Wah International Holdings Ltd.		164,519		61,593
Kenedix, Inc.*		296		90,010
	Shares		Value ($)

Midland Holdings Ltd.		84,184		69,099
				220,702
Health Care 5.9%
Biotechnology 1.0%
Amgen, Inc.* (a)		8,780		482,022
Celgene Corp.* (a)		29,060		1,718,608
Gilead Sciences, Inc.*		21,560		781,334
Metabolix, Inc.*		3,675		44,725
Onyx Pharmaceuticals, Inc.*		1,809		66,698
				3,093,387
Health Care Equipment & Supplies 1.2%
Accuray, Inc.*		9,933		67,048
Baxter International, Inc.		23,015		1,165,019
Becton, Dickinson & Co.		10,498		887,291
Edwards Lifesciences Corp.* (a)		8,107		655,370
NxStage Medical, Inc.* (a)		6,901		171,697
Thoratec Corp.* (a)		21,871		619,387
				3,565,812
Health Care Providers & Services 1.6%
Diagnosticos da America SA		6,593		89,303
ExamWorks Group, Inc.* (a)		2,193		40,527
Express Scripts, Inc.*		26,630		1,439,351
Fleury SA		6,502		104,390
Fresenius Medical Care AG & Co. KGaA		5,826		336,649
McKesson Corp.		31,628		2,225,979
WellPoint, Inc.*		12,296		699,151
				4,935,350
Health Care Technology 0.1%
M3, Inc.		13		65,298
SXC Health Solutions Corp.*		1,972		84,520
				149,818
Life Sciences Tools & Services 0.3%
ICON PLC (ADR)* (a)		3,675		80,483
Life Technologies Corp.*		2,421		134,365
QIAGEN NV*		5,288		103,430
Thermo Fisher Scientific, Inc.*		13,189		730,143
				1,048,421
Pharmaceuticals 1.7%
AstraZeneca PLC		6,342		288,922
Flamel Technologies SA (ADR)*		12,637		86,437
GlaxoSmithKline PLC		24,837		480,169
Johnson & Johnson		10,584		654,620
Merck & Co., Inc.		34,630		1,248,065
Novartis AG (Registered)		2,607		153,408
Novo Nordisk AS "B"		2,077		233,777
Questcor Pharmaceuticals, Inc.* (a)		9,198		135,487
Sanofi-Aventis		5,066		323,930
Takeda Pharmaceutical Co., Ltd.		6,568		323,029
Teva Pharmaceutical Industries Ltd. (ADR)		24,006		1,251,433
VIVUS, Inc.*		6,883		64,494
				5,243,771
Industrials 6.8%
Aerospace & Defense 1.5%
BE Aerospace, Inc.* (a)		3,317		122,829
Northrop Grumman Corp.		13,614		881,915
Raytheon Co.		18,216		844,129
TransDigm Group, Inc.*		9,920		714,339
United Technologies Corp.		25,213		1,984,767
				4,547,979
	Shares		Value ($)

Airlines 0.2%
Cebu Air, Inc.*		20,540		53,167
Deutsche Lufthansa AG (Registered)*		6,877		150,297
Ryanair Holdings PLC (ADR) (a)		3,317		102,031
Singapore Airlines Ltd.		12,701		153,597
				459,092
Building Products 0.0%
Congoleum Corp.*		190,000		0
Commercial Services & Supplies 0.4%
Babcock International Group PLC		14,308		127,377
EnerNOC, Inc.* (a)		2,242		53,606
Quad Graphics, Inc.*		38		1,568
Serco Group PLC		9,554		82,745
Stericycle, Inc.* (a)		9,985		807,986
				1,073,282
Construction & Engineering 0.1%
Aecom Technology Corp.* (a)		3,764		105,279
Chicago Bridge & Iron Co. NV (NY Registered Shares)*		4,034		132,718
Larsen & Toubro Ltd.		3,461		153,100
Shui On Construction & Materials Ltd.		51,981		60,188
				451,285
Electrical Equipment 1.1%
AMETEK, Inc.		41,550		1,630,837
Nidec Corp.		1,189		119,892
Prysmian SpA		3,522		59,979
Roper Industries, Inc.		16,430		1,255,745
Schneider Electric SA		2,285		341,986
				3,408,439
Industrial Conglomerates 0.3%
Keppel Corp., Ltd.		40,631		358,393
Koninklijke Philips Electronics NV		6,436		197,122
Siemens AG (Registered)		4,029		498,809
				1,054,324
Machinery 2.2%
Altra Holdings, Inc.*		2,203		43,752
Amtek Engineering Ltd.*		153,000		128,757
Atlas Copco AB "A"		6,736		170,101
Austal Ltd.		25,202		89,960
Charter International PLC		5,747		75,668
Dover Corp.		20,402		1,192,497
EVA Precision Industrial Holdings Ltd.		203,716		198,925
FANUC Corp.		3,719		570,518
Joy Global, Inc. (a)		1,704		147,822
Komatsu Ltd.		10,589		320,095
Kubota Corp.		17,198		162,727
MAN SE		1,187		141,130
Mitsubishi Heavy Industries Ltd.		82,257		308,800
Navistar International Corp.*		19,427		1,125,018
Parker Hannifin Corp.		17,890		1,543,907
Rational AG		628		138,630
Rotork PLC		3,646		103,912
Volvo AB "B"*		16,451		293,202
				6,755,421
Marine 0.2%
A P Moller-Maersk AS "B"		41		371,375
Mitsui O.S.K Lines Ltd.		53,383		363,893
				735,268
	Shares		Value ($)

Professional Services 0.1%
Brunel International NV		1,947		76,726
FTI Consulting, Inc.* (a)		2,959		110,312
Michael Page International PLC		15,237		131,846
				318,884
Road & Rail 0.5%
Norfolk Southern Corp.		23,040		1,447,373
Trading Companies & Distributors 0.2%
MISUMI Group, Inc.		5,468		136,127
Mitsubishi Corp.		13,913		376,244
				512,371
Transportation Infrastructure 0.0%
Koninklijke Vopak NV		2,580		121,875
Information Technology 9.5%
Communications Equipment 1.4%
Brocade Communications Systems, Inc.*		79,295		419,470
Cisco Systems, Inc.*		131,841		2,667,143
Harris Corp.		1,882		85,255
QUALCOMM, Inc.		23,840		1,179,842
Sycamore Networks, Inc.		2,510		51,681
				4,403,391
Computers & Peripherals 2.3%
Apple, Inc.*		11,670		3,764,275
EMC Corp.*		58,340		1,335,986
Hewlett-Packard Co.		43,023		1,811,268
Toshiba Corp.		33,506		182,379
				7,093,908
Electronic Equipment, Instruments & Components 0.2%
E Ink Holdings, Inc.*		60,785		123,210
Itron, Inc.* (a)		2,242		124,319
Kingboard Chemical Holdings Ltd.		21,062		126,137
Venture Corp., Ltd.		15,763		113,738
				487,404
Internet Software & Services 0.8%
Akamai Technologies, Inc.*		15,750		741,037
Google, Inc. "A"*		2,405		1,428,498
Internet Initiative Japan, Inc.		33		93,684
Meetic		1,741		37,806
NIC, Inc. (a)		7,597		73,767
United Internet AG (Registered)		6,095		99,058
				2,473,850
IT Services 1.1%
Accenture PLC "A"		10,410		504,781
Automatic Data Processing, Inc.		16,098		745,015
Cardtronics, Inc.*		5,647		99,952
Digital Garage, Inc.*		51		126,472
FleetCor Technologies, Inc.*		715		22,108
iGATE Corp. (a)		4,253		83,827
Infosys Technologies Ltd.		2,314		177,766
International Business Machines Corp.		5,490		805,712
Telvent GIT SA*		2,540		67,107
VeriFone Systems, Inc.* (a)		12,117		467,232
Visa, Inc. "A"		3,410		239,996
				3,339,968
Office Electronics 0.2%
Canon, Inc.		14,117		723,703
Semiconductors & Semiconductor Equipment 0.9%
ARM Holdings PLC		22,115		145,951
FSI International, Inc.* (a)		15,326		67,741
	Shares		Value ($)

Intel Corp.		103,992		2,186,952
Lam Research Corp.*		1,614		83,573
Taiwan Semiconductor Manufacturing Co., Ltd.		113,397		276,137
				2,760,354
Software 2.6%
Adobe Systems, Inc.*		11,180		344,120
Check Point Software Technologies Ltd.* (a)		13,600		629,136
Concur Technologies, Inc.* (a)		16,820		873,463
Microsoft Corp.		104,984		2,931,153
Norkom Group PLC*		27,634		55,391
Oracle Corp.		62,100		1,943,730
Rovi Corp.*		1,794		111,246
SAP AG		3,208		163,352
Solera Holdings, Inc.		15,360		788,275
TiVo, Inc.* (a)		6,079		52,462
VanceInfo Technologies, Inc. (ADR)* (a)		2,733		94,398
				7,986,726
Materials 3.7%
Chemicals 1.7%
Air Liquide SA		1,039		131,400
Air Products & Chemicals, Inc.		14,167		1,288,489
BASF SE		5,441		434,059
Givaudan SA (Registered)		154		166,280
Huntsman Corp.		40,830		637,356
Johnson Matthey PLC		2,531		80,421
Linde AG		1,046		158,770
Praxair, Inc.		9,802		935,797
Shin-Etsu Chemical Co., Ltd.		8,359		452,531
STR Holdings, Inc.* (a)		3,154		63,080
The Mosaic Co.		10,956		836,600
				5,184,783
Construction Materials 0.1%
China National Building Material Co., Ltd. "H"		67,409		154,369
Containers & Packaging 0.7%
Owens-Illinois, Inc.* (a)		33,630		1,032,441
Sonoco Products Co.		32,657		1,099,561
				2,132,002
Metals & Mining 1.2%
BHP Billiton Ltd.		14,175		656,043
Cliffs Natural Resources, Inc.		1,498		116,859
Freeport-McMoRan Copper & Gold, Inc.		14,190		1,704,077
Lynas Corp., Ltd.*		94,986		200,132
Newcrest Mining Ltd.		2,950		122,018
Northam Platinum Ltd.		8,616		59,249
Randgold Resources Ltd. (ADR) (a)		987		81,260
Rio Tinto PLC		4,144		289,869
Thompson Creek Metals Co., Inc.*		5,468		80,489
ThyssenKrupp AG		2,303		95,413
Xstrata PLC		16,059		376,941
				3,782,350
Paper & Forest Products 0.0%
Schweitzer-Mauduit International, Inc.		1,921		120,870
Telecommunication Services 2.7%
Diversified Telecommunication Services 1.7%
AT&T, Inc.		51,276		1,506,489
BCE, Inc.		9,410		333,678
	Shares		Value ($)

CenturyLink, Inc. (a)		40,575		1,873,348
Koninklijke (Royal) KPN NV		11,647		169,958
Telefonica SA		17,556		398,715
TeliaSonera AB		8,744		69,325
Verizon Communications, Inc.		26,558		950,245
				5,301,758
Wireless Telecommunication Services 1.0%
America Movil SAB de CV "L"		79,231		227,107
American Tower Corp. "A"*		14,480		747,747
NTT DoCoMo, Inc.		288		502,859
Vodafone Group PLC		251,183		649,305
Vodafone Group PLC (ADR)		37,055		979,364
				3,106,382
Utilities 2.3%
Electric Utilities 1.8%
Allegheny Energy, Inc.		31,296		758,615
American Electric Power Co., Inc.		23,442		843,443
Duke Energy Corp.		40,980		729,854
Entergy Corp.		11,165		790,817
Exelon Corp.		9,736		405,407
FirstEnergy Corp.		20,855		772,052
Fortum Oyj		4,424		134,214
HongKong Electric Holdings Ltd.		43,475		274,068
Southern Co.		20,943		800,651
				5,509,121
Multi-Utilities 0.5%
GDF Suez		7,057		253,202
PG&E Corp.		27,726		1,326,412
				1,579,614
Total Common Stocks (Cost $139,202,524)				173,727,402

Preferred Stocks 0.4%
Consumer Discretionary 0.1%
Volkswagen AG		1,540		249,552
Energy 0.1%
Petroleo Brasileiro SA		10,118		170,853
Ultrapar Participacoes SA		2,650		169,443
				340,296
Financials 0.0%
Itau Unibanco Holding SA		6,520		156,438
Information Technology 0.1%
Samsung Electronics Co., Ltd.		460		262,973
Materials 0.1%
Vale SA "A"		5,766		168,488
Total Preferred Stocks (Cost $1,140,028)				1,177,747

Warrants 0.0%
Consumer Discretionary 0.0%
Reader's Digest Association, Inc., Expiration Date 2/19/2014*		80		2
Information Technology 0.0%
Kingboard Chemical Holdings Ltd., Expiration Date 10/31/2012*		3,400		3,609
Materials 0.0%
Hercules Trust II, Expiration Date 3/31/2029*		170		1,934
Total Warrants (Cost $30,284)				5,545

		Principal Amount ($) (b)		Value ($)

Corporate Bonds 6.8%
Consumer Discretionary 1.2%
AMC Entertainment, Inc.:
8.0%, 3/1/2014			35,000		35,350
8.75%, 6/1/2019			35,000		37,362
Ameristar Casinos, Inc., 9.25%, 6/1/2014			25,000		26,750
Asbury Automotive Group, Inc., 7.625%, 3/15/2017			35,000		35,350
Avis Budget Car Rental LLC, 144A, 8.25%, 1/15/2019			15,000		15,150
CanWest MediaWorks LP, 144A, 9.25%, 8/1/2015**			25,000		4,250
Carrols Corp., 9.0%, 1/15/2013			15,000		15,038
CBS Corp., 5.9%, 10/15/2040			270,000		260,085
DineEquity, Inc., 144A, 9.5%, 10/30/2018			10,000		10,600
DIRECTV Holdings LLC:
6.0%, 8/15/2040			530,000		532,083
6.35%, 3/15/2040			51,000		53,650
DISH DBS Corp.:
6.625%, 10/1/2014			40,000		41,500
7.125%, 2/1/2016			35,000		36,138
Expedia, Inc., 7.456%, 8/15/2018			550,000		627,000
Fontainebleau Las Vegas Holdings LLC, 144A, 11.0%, 6/15/2015**			25,000		88
Goodyear Tire & Rubber Co., 10.5%, 5/15/2016			10,000		11,400
Great Canadian Gaming Corp., 144A, 7.25%, 2/15/2015			30,000		30,675
Home Depot, Inc.:
5.4%, 9/15/2040			125,000		121,390
5.875%, 12/16/2036			50,000		52,007
Lowe's Companies, Inc., 3.75%, 4/15/2021			200,000		193,362
Mediacom Broadband LLC, 8.5%, 10/15/2015			20,000		20,100
NBC Universal, Inc., 144A, 5.95%, 4/1/2041			247,000		246,975
Norcraft Holdings LP, 9.75%, 9/1/2012			36,000		36,225
Penske Automotive Group, Inc., 7.75%, 12/15/2016			50,000		51,000
Sabre Holdings Corp., 8.35%, 3/15/2016			25,000		24,000
Sears Holdings Corp., 144A, 6.625%, 10/15/2018			10,000		9,325
TCI Communications, Inc., 8.75%, 8/1/2015			135,000		166,170
Time Warner, Inc.:
5.875%, 11/15/2016			147,000		165,921
6.2%, 3/15/2040			175,000		186,034
7.625%, 4/15/2031			175,000		212,745
Travelport LLC, 4.921%***, 9/1/2014			20,000		17,700
Unitymedia Hessen GmbH & Co., KG, 144A, 8.125%, 12/1/2017			100,000		104,500
Vertis, Inc., 13.5%, 4/1/2014 (PIK)**			42,609		1,278
Young Broadcasting, Inc., 8.75%, 1/15/2014**			130,000		1
		Principal Amount ($) (b)		Value ($)

Yum! Brands, Inc.:
3.875%, 11/1/2020 (a)			210,000		200,610
5.3%, 9/15/2019			65,000		68,846
					3,650,658
Consumer Staples 0.7%
Anheuser-Busch InBev Worldwide, Inc., 144A, 7.75%, 1/15/2019			500,000		622,174
CVS Caremark Corp.:
6.125%, 9/15/2039			275,000		293,826
6.25%, 6/1/2027			300,000		329,912
General Nutrition Centers, Inc., 5.75%***, 3/15/2014 (PIK)			15,000		14,850
Kraft Foods, Inc., 5.375%, 2/10/2020			600,000		645,761
Kroger Co., 5.4%, 7/15/2040			110,000		104,260
North Atlantic Trading Co., 144A, 10.0%, 3/1/2012			108,750		102,225
SUPERVALU, Inc., 8.0%, 5/1/2016			10,000		9,575
					2,122,583
Energy 0.9%
Belden & Blake Corp., 8.75%, 7/15/2012			130,000		124,150
BreitBurn Energy Partners LP, 144A, 8.625%, 10/15/2020			10,000		10,050
Bristow Group, Inc., 7.5%, 9/15/2017			30,000		31,650
Chaparral Energy, Inc., 8.5%, 12/1/2015			40,000		40,700
DCP Midstream LLC, 144A, 9.75%, 3/15/2019			200,000		258,464
El Paso Corp., 7.25%, 6/1/2018			20,000		21,410
Enterprise Products Operating LLC, 6.125%, 10/15/2039			230,000		239,386
Kinder Morgan Energy Partners LP:
6.5%, 9/1/2039			50,000		51,652
7.3%, 8/15/2033			360,000		400,717
Linn Energy LLC, 11.75%, 5/15/2017			35,000		40,075
Newfield Exploration Co., 7.125%, 5/15/2018			40,000		42,100
ONEOK Partners LP, 6.15%, 10/1/2016			201,000		225,896
OPTI Canada, Inc., 7.875%, 12/15/2014			10,000		7,063
Petrohawk Energy Corp., 7.875%, 6/1/2015			15,000		15,619
Plains All American Pipeline LP, 8.75%, 5/1/2019			600,000		744,597
Plains Exploration & Production Co., 7.0%, 3/15/2017			15,000		15,412
Stone Energy Corp., 6.75%, 12/15/2014			25,000		24,375
Weatherford International Ltd., 5.125%, 9/15/2020			300,000		298,510
Williams Partners LP, 4.125%, 11/15/2020			253,000		239,639
					2,831,465
		Principal Amount ($) (b)		Value ($)

Financials 2.2%
Algoma Acquisition Corp., 144A, 9.875%, 6/15/2015			20,000		18,000
Ally Financial, Inc., 144A, 7.5%, 9/15/2020			60,000		62,925
American Express Co., 7.0%, 3/19/2018			390,000		454,261
Ashton Woods USA LLC, 144A, Step-up Coupon, 0% to 6/30/2012, 11.0% to 6/30/2015			36,400		20,202
Bank of America Corp., Series L, 7.625%, 6/1/2019			410,000		472,088
Calpine Construction Finance Co., LP, 144A, 8.0%, 6/1/2016			30,000		31,875
CIT Group, Inc., 7.0%, 5/1/2015			65,355		65,518
Citigroup, Inc., 5.375%, 8/9/2020 (a)			500,000		519,504
Fifth Third Bancorp., 5.45%, 1/15/2017			429,000		438,508
Ford Motor Credit Co., LLC, 9.875%, 8/10/2011			60,000		62,456
General Electric Capital Corp., Series A, 5.25%, 10/19/2012			550,000		587,831
Hartford Financial Services Group, Inc., 5.95%, 10/15/2036			150,000		141,515
iPayment, Inc., 9.75%, 5/15/2014			25,000		23,500
JPMorgan Chase & Co., 2.6%, 1/15/2016			700,000		679,190
KeyBank NA, 5.7%, 11/1/2017			250,000		254,588
Lincoln National Corp., 8.75%, 7/1/2019			190,000		237,661
MetLife, Inc.:
6.75%, 6/1/2016			113,000		131,076
7.717%, 2/15/2019			250,000		306,933
Morgan Stanley:
3.45%, 11/2/2015			45,000		43,873
Series F, 6.625%, 4/1/2018			225,000		244,073
Navios Maritime Acquisition Corp., 144A, 8.625%, 11/1/2017			10,000		10,225
Nielsen Finance LLC, 144A, 7.75%, 10/15/2018			10,000		10,350
PNC Bank NA, 6.875%, 4/1/2018			300,000		342,918
Prudential Financial, Inc.:
Series B, 5.1%, 9/20/2014			100,000		107,417
6.2%, 1/15/2015			100,000		110,281
7.375%, 6/15/2019			30,000		35,371
Rainbow National Services LLC, 144A, 10.375%, 9/1/2014			4,000		4,150
Reynolds Group Issuer, Inc., 144A, 9.0%, 4/15/2019			100,000		103,625
Santander US Debt SA Unipersonal, 144A, 2.991%, 10/7/2013			500,000		485,735
The Goldman Sachs Group, Inc., 6.15%, 4/1/2018			400,000		440,477
Travelers Companies, Inc., 5.35%, 11/1/2040			120,000		118,231
		Principal Amount ($) (b)		Value ($)

Tropicana Entertainment LLC, 9.625%, 12/15/2014**			75,000		38
UCI Holdco, Inc., 9.25%***, 12/15/2013 (PIK)			42,024		41,919
WMG Acquisition Corp., 9.5%, 6/15/2016			20,000		21,450
					6,627,764
Health Care 0.5%
DaVita, Inc.:
6.375%, 11/1/2018			10,000		9,950
6.625%, 11/1/2020			10,000		9,900
Express Scripts, Inc.:
6.25%, 6/15/2014			250,000		279,490
7.25%, 6/15/2019			320,000		378,759
HCA, Inc.:
8.5%, 4/15/2019			10,000		10,950
9.125%, 11/15/2014			35,000		36,706
9.625%, 11/15/2016 (PIK)			42,000		44,993
IASIS Healthcare LLC, 8.75%, 6/15/2014			30,000		30,788
Laboratory Corp. of America Holdings, 4.625%, 11/15/2020			180,000		178,376
Medco Health Solutions, Inc., 7.125%, 3/15/2018			425,000		498,736
The Cooper Companies, Inc., 7.125%, 2/15/2015			45,000		46,350
					1,524,998
Industrials 0.2%
Actuant Corp., 6.875%, 6/15/2017			20,000		20,450
ARAMARK Corp., 8.5%, 2/1/2015			10,000		10,450
BE Aerospace, Inc., 8.5%, 7/1/2018			50,000		54,750
Belden, Inc., 7.0%, 3/15/2017			25,000		25,312
Cenveo Corp., 144A, 10.5%, 8/15/2016			10,000		9,825
Congoleum Corp., 9.0%, 12/31/2017 (PIK)			62,700		43,225
Corrections Corp. of America, 7.75%, 6/1/2017			10,000		10,613
CSX Corp.:
6.15%, 5/1/2037			150,000		161,274
6.25%, 3/15/2018			190,000		217,961
Great Lakes Dredge & Dock Co., 7.75%, 12/15/2013			20,000		20,175
K. Hovnanian Enterprises, Inc., 8.875%, 4/1/2012			25,000		24,500
Kansas City Southern de Mexico SA de CV, 7.375%, 6/1/2014			20,000		20,900
Navios Maritime Holdings, Inc., 9.5%, 12/15/2014			35,000		36,400
Owens Corning, Inc., 9.0%, 6/15/2019			10,000		11,732
United Rentals North America, Inc., 10.875%, 6/15/2016			35,000		39,987
					707,554
Information Technology 0.2%
Alcatel-Lucent USA, Inc., 6.45%, 3/15/2029			30,000		23,700
eBay, Inc., 1.625%, 10/15/2015			500,000		479,763
		Principal Amount ($) (b)		Value ($)

MasTec, Inc., 7.625%, 2/1/2017			35,000		34,825
SunGard Data Systems, Inc., 10.25%, 8/15/2015			70,000		73,588
Vangent, Inc., 9.625%, 2/15/2015			15,000		13,575
					625,451
Materials 0.3%
Appleton Papers, Inc., 144A, 11.25%, 12/15/2015			15,000		12,000
CPG International I, Inc., 10.5%, 7/1/2013			50,000		51,000
Crown Americas LLC, 7.625%, 5/15/2017			10,000		10,750
Domtar Corp., 10.75%, 6/1/2017			20,000		25,200
Dow Chemical Co., 4.25%, 11/15/2020			185,000		177,211
Exopack Holding Corp., 11.25%, 2/1/2014			80,000		83,000
GEO Specialty Chemicals, Inc.:
144A, 7.5%, 3/31/2015 (PIK)			209,283		179,983
10.0%, 3/31/2015			206,080		187,533
Georgia-Pacific LLC, 144A, 7.125%, 1/15/2017			15,000		15,975
Graphic Packaging International, Inc., 9.5%, 6/15/2017			30,000		32,738
Millar Western Forest Products Ltd., 7.75%, 11/15/2013			15,000		14,213
NewMarket Corp., 7.125%, 12/15/2016			65,000		66,462
Owens-Brockway Glass Container, Inc., 7.375%, 5/15/2016			10,000		10,625
Radnor Holdings Corp., 11.0%, 3/15/2010**			40,000		4
Silgan Holdings, Inc., 7.25%, 8/15/2016			20,000		21,300
Wolverine Tube, Inc., 15.0%, 3/31/2012 (PIK)**			43,120		23,285
					911,279
Telecommunication Services 0.4%
American Tower Corp.:
5.05%, 9/1/2020			350,000		344,202
7.25%, 5/15/2019			175,000		197,756
AT&T Mobility LLC, 6.5%, 12/15/2011			275,000		290,207
Cincinnati Bell, Inc., 8.375%, 10/15/2020			20,000		19,200
Cricket Communications, Inc., 10.0%, 7/15/2015			50,000		53,563
ERC Ireland Preferred Equity Ltd., 144A, 8.05%***, 2/15/2017 (PIK)	EUR		108,497		13,007
Intelsat Corp., 9.25%, 6/15/2016			110,000		118,800
Intelsat Subsidiary Holding Co. SA, 8.875%, 1/15/2015			60,000		61,650
iPCS, Inc., 2.412%***, 5/1/2013			10,000		9,625
Telesat Canada, 11.0%, 11/1/2015			70,000		78,575
West Corp., 144A, 8.625%, 10/1/2018			10,000		10,600
		Principal Amount ($) (b)		Value ($)

Windstream Corp.:
7.0%, 3/15/2019			25,000		24,625
8.625%, 8/1/2016			10,000		10,525
					1,232,335
Utilities 0.2%
AES Corp.:
8.0%, 10/15/2017			35,000		37,013
8.0%, 6/1/2020			30,000		31,800
DTE Energy Co., 7.625%, 5/15/2014			81,000		93,362
FirstEnergy Solutions Corp., 6.8%, 8/15/2039			234,000		226,793
Mirant North America LLC, 7.375%, 12/31/2013			20,000		20,377
NRG Energy, Inc.:
7.375%, 2/1/2016			50,000		51,250
7.375%, 1/15/2017			60,000		61,800
Sempra Energy, 6.5%, 6/1/2016			135,000		156,723
					679,118
Total Corporate Bonds (Cost $20,453,751)					20,913,205

Asset-Backed 0.3%
Automobile Receivables 0.1%
Ford Credit Auto Owner Trust, "B", Series 2007-B, 5.69%, 11/15/2012			379,000		395,663
Credit Card Receivables 0.2%
Citibank Omni Master Trust, "A8", Series 2009-A8, 144A, 2.36%***, 5/16/2016			500,000		506,197
Total Asset-Backed (Cost $885,529)					901,860

Mortgage-Backed Securities Pass-Throughs 7.4%
Federal Home Loan Mortgage Corp.:
4.0%, 8/1/2039			1,732,457		1,723,050
6.0%, 3/1/2038			38,000		41,082
Federal National Mortgage Association:
3.274%***, 8/1/2037			166,007		173,882
3.5%, 7/1/2025 (c)			3,350,000		3,374,078
4.0%, with various maturities from 5/1/2039 until 9/1/2040 (c)			4,964,684		4,943,524
4.5%, 9/1/2035			50,883		52,447
5.5%, with various maturities from 4/1/2035 until 4/1/2038 (c)			5,785,220		6,198,399
6.0%, with various maturities from 1/1/2024 until 8/1/2037 (c)			3,091,323		3,370,800
6.5%, with various maturities from 5/1/2017 until 1/1/2038 (c)			553,536		614,569
8.0%, 9/1/2015			68,510		74,278
		Principal Amount ($) (b)		Value ($)

Government National Mortgage Association:
4.5%, 7/1/2039 (c)			750,000		778,770
5.0%, 5/1/2038 (c)			750,000		797,402
5.5%, 5/1/2036 (c)			750,000		810,527
Total Mortgage-Backed Securities Pass-Throughs (Cost $22,807,624)					22,952,808

Commercial Mortgage-Backed Securities 1.8%
Banc of America Commercial Mortgage, Inc., "A4", Series 2007-4, 5.742%***, 2/10/2051			750,000		798,887
Bear Stearns Commercial Mortgage Securities, Inc., "A4", Series 2007-PW18, 5.7%, 6/13/2050			862,000		898,150
Greenwich Capital Commercial Funding Corp., "A4", Series 2006-GG7, 5.883%***, 7/10/2038			425,000		463,674
JPMorgan Chase Commercial Mortgage Securities Corp.:
"A4", Series 2006-LDP7, 5.872%***, 4/15/2045			315,000		344,487
"A4", Series 2007-LD12, 5.882%, 2/15/2051			625,000		661,722
LB-UBS Commercial Mortgage Trust:
"A2", Series 2005-C2, 4.821%, 4/15/2030			17,711		17,718
"A4", Series 2006-C1, 5.156%, 2/15/2031			1,250,000		1,335,222
"A3", Series 2006-C7, 5.347%, 11/15/2038			700,000		740,082
"A4", Series 2007-C6, 5.858%, 7/15/2040			300,000		315,201
Total Commercial Mortgage-Backed Securities (Cost $5,188,170)					5,575,143

Collateralized Mortgage Obligations 0.3%
FDIC Structured Sale Guaranteed Notes, "1A", Series 2010-S1, 144A, 0.811%***, 2/25/2048			582,444		583,358
Federal Home Loan Mortgage Corp., "H", Series 2278, 6.5%, 1/15/2031			5,440		5,956
NCUA Guaranteed Notes, "1A", Series 2010-R1, 0.715%***, 10/7/2020			388,217		387,732
Total Collateralized Mortgage Obligations (Cost $977,260)					977,046

Government & Agency Obligations 9.4%
Sovereign Bonds 2.6%
Federal Republic of Germany — Inflation Linked Note, 2.25%, 4/15/2013	EUR		214,842		304,764
Government of Canada — Inflation Linked Bond, 4.0%, 12/1/2031	CAD		269,751		419,738
		Principal Amount ($) (b)		Value ($)

Government of France — Inflation Linked Bonds:
1.0%, 7/25/2017	EUR		242,906		331,908
2.25%, 7/25/2020	EUR		510,081		736,840
3.15%, 7/25/2032	EUR		543,526		917,436
Government of Japan — Inflation Linked Bond, Series 9, 1.1%, 9/10/2016	JPY		41,664,000		515,989
Government of Sweden, Series 3105, 3.5%, 12/1/2015	SEK		2,650,000		533,164
Republic of Italy — Inflation Linked Bond, 2.1%, 9/15/2017	EUR		152,842		199,267
Republic of Poland, 6.375%, 7/15/2019			100,000		112,021
State of Qatar, 144A, 6.4%, 1/20/2040			100,000		108,500
United Kingdom Treasury — Inflation Linked Bonds:
1.125%, 11/22/2037	GBP		413,068		729,668
1.875%, 11/22/2022	GBP		532,462		947,438
2.0%, 1/26/2035	GBP		225,000		591,574
2.5%, 8/16/2013	GBP		120,000		521,807
2.5%, 7/26/2016	GBP		112,000		547,516
2.5%, 4/16/2020	GBP		91,000		453,099
					7,970,729
US Treasury Obligations 6.8%
US Treasury Bill, 0.185%****, 3/17/2011 (d)			188,000		187,958
US Treasury Bonds:
4.75%, 2/15/2037			1,500,000		1,612,032
5.375%, 2/15/2031			1,500,000		1,751,016
US Treasury Inflation-Indexed Bonds:
2.375%, 1/15/2025			794,754		884,412
3.625%, 4/15/2028			845,113		1,090,921
3.875%, 4/15/2029			159,643		214,109
US Treasury Inflation-Indexed Notes:
1.875%, 7/15/2015			185,523		200,973
2.375%, 1/15/2017			732,031		815,757
2.5%, 7/15/2016			481,908		540,867
3.375%, 1/15/2012			538,244		562,676
US Treasury Notes:
1.75%, 1/31/2014			8,000,000		8,167,504
3.125%, 5/15/2019			500,000		505,273
3.625%, 2/15/2020			2,750,000		2,853,983
4.5%, 11/15/2015			1,500,000		1,679,413
					21,066,894
Total Government & Agency Obligations (Cost $27,802,685)					29,037,623

Loan Participations and Assignments 0.0%
Senior Loans***
Hawker Beechcraft Acquisition Co., LLC:
Term Loan, 2.261%, 3/26/2014			22,288		19,602
Letter of Credit, 2.289%, 3/26/2014			1,336		1,175
IASIS Healthcare LLC, Term Loan, 5.538%, 6/13/2014 (PIK)			91,366		88,145
Total Loan Participations and Assignments (Cost $113,854)					108,922
		Principal Amount ($) (b)		Value ($)

Municipal Bonds and Notes 0.5%
California, University Revenues, Build America Bonds, 5.946%, 5/15/2045			125,000		116,633
Chicago, IL, Transit Authority, Sales Tax Receipts Revenue, Build America Bonds, Series B, 6.2%, 12/1/2040 (e)			185,000		170,342
Kentucky, Asset/Liability Commission, General Fund Revenue, 3.165%, 4/1/2018			500,000		488,680
Louisville & Jefferson County, KY, Metropolitan Sewer District & Drain System, Build America Bonds, 6.25%, 5/15/2043			150,000		151,029
Pennsylvania, State General Obligation, First Series, 5.25%, 2/1/2014, INS: NATL			240,000		269,162
Virginia, College Building Authority, Educational Facilities Revenue, 21st Century College, Series B, 5.0%, 2/1/2014			365,000		405,895
Total Municipal Bonds and Notes (Cost $1,639,001)					1,601,741

Preferred Securities 0.1%
Financials 0.1%
Farm Credit Bank of Texas, Series 1, 7.561%, 12/15/2013 (f)			218,000		225,035
Materials 0.0%
Hercules, Inc., 6.5%, 6/30/2029			40,000		31,000
Total Preferred Securities (Cost $244,655)					256,035

	Units		Value ($)

Other Investments 0.0%
Consumer Discretionary
AOT Bedding Super Holdings LLC* (Cost $2,000)		2		2,000

	Shares		Value ($)

Exchange-Traded Funds 12.7%
iShares JPMorgan USD Emerging Markets Bond Fund		41,986		4,495,861
iShares Russell 2000 Value Index Fund		90,940		6,464,925
SPDR Barclays Capital International Treasury Bond		79,818		4,666,160
Vanguard Emerging Markets Fund		198,166		9,541,693
Vanguard Total Bond Market Fund		172,600		13,854,602
Total Exchange-Traded Funds (Cost $33,133,216)				39,023,241

Securities Lending Collateral 6.8%
Daily Assets Fund Institutional, 0.27% (g) (h) (Cost $20,930,886)		20,930,886		20,930,886

Cash Equivalents 6.4%
Central Cash Management Fund, 0.19% (g) (Cost $19,630,591)		19,630,591		19,630,591

	% of Net Assets			Value ($)

Total Investment Portfolio (Cost $294,182,058)+		109.3			336,821,795
Other Assets and Liabilities, Net		(9.3	)		(28,549,600	)
Net Assets		100.0			308,272,195

* Non-income producing security.

** Non-income producing security. Issuer has defaulted on the payment of principal or the interest or has filed for bankruptcy. The following table represents bonds that are in default:

Security	Coupon			Maturity Date	Principal Amount ($)			Acquisition Cost ($)		Value ($)
CanWest MediaWorks LP		9.25	%	8/1/2015		25,000	USD		25,000		4,250
Fontainebleau Las Vegas Holdings LLC		11.0	%	6/15/2015		25,000	USD		25,000		88
Radnor Holdings Corp.		11.0	%	3/15/2010		40,000	USD		25,775		4
Tropicana Entertainment LLC		9.625	%	12/15/2014		75,000	USD		55,245		38
Vertis, Inc.		13.5	%	4/1/2014		42,609	USD		17,309		1,278
Wolverine Tube, Inc.		15.0	%	3/31/2012		43,120	USD		43,120		23,285
Young Broadcasting, Inc.		8.75	%	1/15/2014		130,000	USD		111,175		1
									302,624		28,944

*** These securities are shown at their current rate as of December 31, 2010. Floating rate securities' yields vary with a designated market index or market rate, such as the coupon-equivalent of the US Treasury bill rate.

**** Annualized yield at time of purchase; not a coupon rate.

+ The cost for federal income tax purposes was $297,261,185. At December 31, 2010, net unrealized appreciation for all securities based on tax cost was $39,560,610. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $46,622,458 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $7,061,848.

(a) All or a portion of these securities were on loan (see Notes to Financial Statements). The value of all securities loaned at December 31, 2010 amounted to $20,273,579, which is 6.6% of net assets.

(b) Principal amount stated in US dollars unless otherwise noted.

(d) At December 31, 2010, this security has been pledged, in whole or in part, to cover initial margin requirements for open futures contracts.

(e) Taxable issue.

(f) Date shown is call date; not a maturity date for the perpetual preferred securities.

(g) Affiliated fund managed by Deutsche Investment Management Americas Inc. The rate shown is the annualized seven-day yield at period end.

(h) Represents collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates.

144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

ADR: American Depositary Receipt

CVA: Certificaten Van Aandelen

FDIC: Federal Deposit Insurance Corp.

INS: Insured

NATL: National Public Finance Guarantee Corp.

PIK: Denotes that all or a portion of the income is paid in-kind.

SPDR: Standard & Poor's Depositary Receipt

Included in the portfolio are investments in mortgage or asset-backed securities which are interests in separate pools of mortgages or assets. Effective maturities of these investments may be shorter than stated maturities due to prepayments. Some separate investments in the Federal National Mortgage Association issues which have similar coupon rates have been aggregated for presentation purposes in this investment portfolio.

At December 31, 2010, open futures contracts purchased were as follows:

Futures	Currency	Expiration Date	Contracts		Notional Value ($)		Unrealized Appreciation/ (Depreciation) ($)
10 Year Australian Treasury Bond	AUD	3/15/2011		135		14,263,722		106,442
10 Year US Treasury Note	USD	3/22/2011		190		22,883,125		(619,876	)
2 Year US Treasury Note	USD	3/31/2011		296		64,796,250		46,626
DAX Index	EUR	3/18/2011		5		1,157,069		(21,631	)
Federal Republic of Germany Euro-Schatz	EUR	3/8/2011		19		2,767,604		(3,082	)
FTSE 100 Index	GBP	3/18/2011		23		2,113,187		20,440
Hang Seng Index	HKD	1/28/2011		2		296,161		3,975
IBEX 35 Index	EUR	1/21/2011		3		392,511		(10,011	)
S&P 500 E-Mini Index	USD	3/18/2011		22		1,378,300		18,810
TOPIX Index	JPY	3/11/2011		13		1,434,659		27,109
United Kingdom Long Gilt Bond	GBP	3/29/2011		39		7,265,574		(20,286	)
Total net unrealized depreciation								(451,484	)

At December 31, 2010, open futures contracts sold were as follows:

Futures	Currency	Expiration Date	Contracts		Notional Value ($)		Unrealized Appreciation/ (Depreciation) ($)
10 Year Canadian Government Bond	CAD	3/22/2011		75		9,244,695		(38,137	)
10 Year Japanese Government Bond	JPY	3/10/2011		25		43,296,588		(185,124	)
10 Year US Treasury Note	USD	3/22/2011		46		5,540,125		141,906
30 Year US Treasury Bond	USD	3/22/2011		20		2,442,500		100,625
AEX Index	EUR	1/21/2011		8		758,591		(6,200	)
ASX SPI 200 Index	AUD	3/17/2011		10		1,209,461		11,251
CAC 40 Index	EUR	1/21/2011		11		559,970		13,450
DJ Euro Stoxx 50 Index	EUR	3/18/2011		43		1,605,457		40,797
Federal Republic of Germany Euro-Bund	EUR	3/8/2011		170		28,466,796		184,919
FTSE MIB Index	EUR	3/18/2011		7		944,998		25,958
Russell 2000 E-Mini Index	USD	3/18/2011		4		312,920		(3,460	)
S&P TSE 60 Index	CAD	3/17/2011		3		462,899		(7,640	)
Ultra Long-Term US Treasury Bond	USD	3/22/2011		5		635,469		17,461
Total net unrealized appreciation								295,806

As of December 31, 2010, the Fund had the following open forward foreign currency exchange contracts:

Contracts to Deliver

In Exchange For

Settlement Date

Unrealized Appreciation ($)

Counterparty

USD

2,039,377

JPY

171,066,000

1/25/2011

68,229

UBS AG

USD

6,964,033

CAD

7,014,000

1/25/2011

86,748

UBS AG

USD

5,657,268

SEK

38,571,000

1/25/2011

72,772

UBS AG

USD

13,515,110

AUD

13,690,000

1/25/2011

439,420

UBS AG

USD

5,303,999

NOK

31,449,000

1/25/2011

78,876

UBS AG

GBP

3,926,000

USD

6,134,120

1/25/2011

14,340

UBS AG

Total unrealized appreciation

760,385

Contracts to Deliver		In Exchange For		Settlement Date	Unrealized Depreciation ($)			Counterparty
EUR	8,600	USD	11,386	1/20/2011		(105	)	JPMorgan Chase Securities, Inc.
EUR	681,000	USD	908,241	1/25/2011		(1,740	)	UBS AG
CHF	9,665,000	USD	10,065,140	1/25/2011		(275,076	)	UBS AG
NZD	11,904,000	USD	8,855,028	1/25/2011		(400,816	)	UBS AG
Total unrealized depreciation						(677,737	)

Currency Abbreviations

AUD Australian Dollar

CAD Canadian Dollar

CHF Swiss Franc

EUR Euro

GBP British Pound

HKD Hong Kong Dollar

JPY Japanese Yen

NOK Norwegian Krone

NZD New Zealand Dollar

SEK Swedish Krona

USD United States Dollar

For information on the Fund's policy and additional disclosures regarding futures contracts and forward foreign currency exchange contracts, please refer to Note B in the accompanying Notes to Financial Statements.

Fair Value Measurements

Assets	Level 1			Level 2			Level 3		Total

Common Stocks and/or Other Equity Investments (i) Consumer Discretionary	$	16,158,616		$	4,334,308		$	39	$	20,492,963
Consumer Staples		11,285,599			4,711,312			—		15,996,911
Energy		20,434,131			3,111,910			—		23,546,041
Financials		12,709,915			6,665,155			—		19,375,070
Health Care		15,727,947			2,308,612			—		18,036,559
Industrials		14,248,430			6,637,163			0		20,885,593
Information Technology		26,824,520			2,711,366			—		29,535,886
Materials		8,165,367			3,377,495			1,934		11,544,796
Telecommunication Services		6,617,978			1,790,162			—		8,408,140
Utilities		6,427,251			661,484			—		7,088,735
Fixed Income Investments (i) Corporate Bonds		—			20,498,209			414,996		20,913,205
Asset Backed		—			901,860			—		901,860
Mortgage-Backed Securities Pass-Throughs		—			22,952,808			—		22,952,808
Commercial Mortgage-Backed Securities		—			5,575,143			—		5,575,143
Collateralized Mortgage Obligations		—			977,046			—		977,046
Government & Agency Obligations		—			28,849,665			—		28,849,665
Loan Participations and Assignments		—			108,922			—		108,922
Municipal Bonds and Notes		—			1,601,741			—		1,601,741
Preferred Securities		—			256,035			—		256,035
Other Investments		—			—			2,000		2,000
Exchange-Traded Funds		39,023,241			—			—		39,023,241
Short-Term Investments (i)		40,561,477			187,958			—		40,749,435
Derivatives (j)		—			760,385			—		760,385
Total	$	218,184,472		$	118,978,739		$	418,969	$	337,582,180
Liabilities
Derivatives (j)	$	(155,678	)	$	(677,737	)	$	—	$	(833,415	)
Total	$	(155,678	)	$	(677,737	)	$	—	$	(833,415	)

There have been no significant transfers between Level 1 and Level 2 fair value measurements during the year ended December 31, 2010.

(i) See Investment Portfolio for additional detailed categorizations.

(j) Derivatives include unrealized appreciation (depreciation) on open futures contracts and forward foreign currency exchange contracts.

Level 3 Reconciliation

The following is a reconciliation of the Fund's Level 3 investments for which significant unobservable inputs were used in determining value:

	Common Stocks and/or Other Equity Investments
	Consumer Discretionary			Industrials		Financials			Materials		Corporate Bonds			Other Investments		Total
Balance as of December 31, 2009	$	0		$	—	$	278,682		$	0	$	383,110		$	—	$	661,792
Realized gains (loss)		(8,344	)		—		107,337			—		—			—		98,993
Change in unrealized appreciation (depreciation)		8,342			0		(37,791	)		1,934		33,279			—		5,764
Amortization premium/discount		—			—		—			—		5,349			—		5,349
Net purchases (sales)		41			—		(348,228	)		—		—			2,000		(346,187	)
Transfers into Level 3		—			—		—			—		4,178	(k)		—		4,178
Transfers (out) of Level 3		—			—		—			—		(10,920	) (l)		—		(10,920	)
Balance as of December 31, 2010	$	39		$	0	$	—		$	1,934	$	414,996		$	2,000	$	418,969
Net change in unrealized appreciation (depreciation) from investments still held as of December 31, 2010	$	(2	)	$	0	$	—		$	1,934	$	33,279		$	—	$	35,211

Transfers between price levels are recognized at the beginning of the reporting period.

(k) The investment was transferred from Level 2 to Level 3 because of the lack of observable market data due to a decrease in market activity.

(l) The investment was transferred from Level 3 to Level 2 as a result of the availability of a pricing source supported by observable inputs.

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

Statement of Assets and Liabilities

as of December 31, 2010
Assets
Investments: Investments in unaffiliated securities, at value (cost $253,620,581) — including $20,273,579 of securities loaned	$	296,260,318
Investment in Daily Assets Fund Institutional (cost $20,930,886)*		20,930,886
Investment in Central Cash Management Fund (cost $19,630,591)		19,630,591
Total investments, at value (cost $294,182,058)		336,821,795
Cash		131,748
Foreign currency, at value (cost $192,052)		209,917
Deposits with broker for open futures contracts		5,279,599
Receivable for investments sold		3,698
Receivable for Fund shares sold		2,493
Dividends receivable		249,181
Interest receivable		712,583
Unrealized appreciation on open forward foreign currency exchange contracts		760,385
Foreign taxes recoverable		53,154
Other assets		1,722
Total assets		344,226,275
Liabilities
Payable upon return of securities loaned		20,930,886
Payable for investments purchased		203,348
Payable for when-issued and delayed delivery securities purchased		13,171,613
Payable for Fund shares redeemed		160,169
Payable for variation margin on open futures contracts		467,763
Unrealized depreciation on open forward foreign currency exchange contracts		677,737
Accrued management fee		106,819
Deferred foreign taxes payable		5,598
Other accrued expenses and payables		230,147
Total liabilities		35,954,080
Net assets, at value	$	308,272,195
Net Assets Consist of
Undistributed net investment income		4,323,414
Net unrealized appreciation (depreciation) on: Investments (net of deferred foreign taxes of $5,598)		42,634,139
Futures		(155,678	)
Foreign currency		80,115
Accumulated net realized gain (loss)		(54,154,043	)
Paid-in capital		315,544,248
Net assets, at value	$	308,272,195
Class A Net Asset Value, offering and redemption price per share ($308,272,195 ÷ 13,930,205 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)	$	22.13

* Represents collateral on securities loaned.

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

Statement of Operations

for the year ended December 31, 2010
Investment Income
Income: Dividends (net of foreign taxes withheld of $105,864)	$	4,481,983
Interest		3,237,650
Income distributions — Central Cash Management Fund		63,397
Securities lending income, including income from Daily Assets Fund Institutional, net of borrower rebates		49,944
Total income		7,832,974
Expenses: Management fee		1,124,396
Administration fee		307,796
Services to shareholders		5,088
Custodian fee		287,824
Professional fees		99,564
Trustees' fees and expenses		12,524
Reports to shareholders		62,119
Other		116,154
Total expenses		2,015,465
Net investment income (loss)		5,817,509
Realized and Unrealized Gain (Loss)
Net realized gain (loss) from: Investments (net of deferred foreign taxes of $325)		19,036,432
Futures		(325,572	)
Foreign currency		(47,856	)
		18,663,004
Change in net unrealized appreciation (depreciation) on: Investments (net of deferred foreign taxes of $5,598)		7,992,264
Futures		94,474
Foreign currency		(135,693	)
		7,951,045
Net gain (loss)		26,614,049
Net increase (decrease) in net assets resulting from operations	$	32,431,558

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

Statement of Changes in Net Assets

	Years Ended December 31,
Increase (Decrease) in Net Assets	2010			2009
Operations: Net investment income (loss)	$	5,817,509		$	7,279,172
Net realized gain (loss)		18,663,004			(21,287,397	)
Change in net unrealized appreciation (depreciation)		7,951,045			77,797,202
Net increase (decrease) in net assets resulting from operations		32,431,558			63,788,977
Distributions to shareholders from: Net investment income: Class A		(9,827,154	)		(11,680,702	)
Total distributions		(9,827,154	)		(11,680,702	)
Fund share transactions: Class A Proceeds from shares sold		4,966,734			6,740,726
Shares issued to shareholders in reinvestment of distributions		9,827,154			11,680,702
Payments for shares redeemed		(48,195,061	)		(58,626,337	)
Shares converted*		—			39,887
Net increase (decrease) in net assets from Class A share transactions		(33,401,173	)		(40,165,022	)
Class B Payments for shares redeemed		—			(307	)
Shares converted*		—			(39,887	)
Net increase (decrease) in net assets from Class B share transactions		—			(40,194	)
Increase (decrease) in net assets		(10,796,769	)		11,903,059
Net assets at beginning of period		319,068,964			307,165,905
Net assets at end of period (including undistributed net investment income of $4,323,414 and $9,339,818, respectively)	$	308,272,195		$	319,068,964
Other Information
Class A Shares outstanding at beginning of period		15,551,177			17,697,143
Shares sold		238,427			369,933
Shares issued to shareholders in reinvestment of distributions		467,070			740,222
Shares redeemed		(2,326,469	)		(3,258,791	)
Shares converted*		—			2,670
Net increase (decrease) in Class A shares		(1,620,972	)		(2,145,966	)
Shares outstanding at end of period		13,930,205			15,551,177
Class B Shares outstanding at beginning of period		—			2,694
Shares redeemed		—			(19	)
Shares converted*		—			(2,675	)
Net increase (decrease) in Class B shares		—			(2,694	)
Shares outstanding at end of period		—			—

* On March 6, 2009, Class B shares converted into Class A shares.

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

Financial Highlights

Class A Years Ended December 31,	2010			2009			2008			2007			2006
Selected Per Share Data
Net asset value, beginning of period	$	20.52		$	17.35		$	24.81		$	24.46		$	22.75
Income (loss) from investment operations: Net investment incomea		.39			.44			.61			.74			.69	c
Net realized and unrealized gain (loss)		1.88			3.43			(7.20	)		.42			1.60
Total from investment operations		2.27			3.87			(6.59	)		1.16			2.29
Less distributions from: Net investment income		(.66	)		(.70	)		(.87	)		(.81	)		(.58	)
Net asset value, end of period	$	22.13		$	20.52		$	17.35		$	24.81		$	24.46
Total Return (%)		11.22			23.43			(27.33	)b		4.84	b		10.24	b,c
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		308			319			307			528			600
Ratio of expenses before expense reductions (%)		.65			.60			.64			.52			.55
Ratio of expenses after expense reductions (%)		.65			.60			.62			.51			.51
Ratio of net investment income (%)		1.89			2.40			2.83			3.00			2.99	c
Portfolio turnover rate (%)		203			207			263			199			108
a Based on average shares outstanding during the period. b Total return would have been lower had certain expenses not been reduced. c Includes non-recurring income from the Advisor recorded as a result of an administrative proceeding regarding disclosure of brokerage allocation practices in connection with sales of DWS Funds. The non-recurring income resulted in an increase in net investment income of $0.024 per share and an increase in the ratio of net investment income of 0.10%. Excluding this non-recurring income, total return would have been 0.10% lower.

Performance Summary December 31, 2010

DWS Blue Chip VIP

All performance shown is historical, assumes reinvestment of all dividend and capital gain distributions and does not guarantee future results. Investment return and principal value fluctuate with changing market conditions so that, when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please contact your participating insurance company for the Fund's most recent month-end performance. Performance doesn't reflect charges and fees ("contract charges") associated with the separate account that invests in the Fund or any variable life insurance policy or variable annuity contract for which the Fund is an investment option. These charges and fees will reduce returns. While all share classes have the same un derlying portfolio, their performance will differ.

The gross expense ratios of the Fund, as stated in the fee table of the prospectus dated May 1, 2010 are 0.75% and 1.02% for Class A and Class B shares, respectively, and may differ from the expense ratios disclosed in the Financial Highlights tables in this report.

Risk Considerations

Any fund that focuses in a particular segment of the market will generally be more volatile than a fund that invests more broadly. Stocks may decline in value. See the prospectus for details.

Fund returns shown during the 3-year, 5-year and 10-year/Life of Class periods reflect a fee waiver and/or expense reimbursement. Without this waiver/reimbursement, returns would have been lower.

Growth of an Assumed $10,000 Investment in DWS Blue Chip VIP
[] DWS Blue Chip VIP — Class A [] Russell 1000® Index		The Russell 1000® Index is an unmanaged index that measures the performance of the 1,000 largest companies in the Russell 3000® Index, which measures the performance of the 3,000 largest US companies based on total market capitalization. The Russell 1000 Index represents approximately 92% of the total market capitalization of the Russell 3000 Index. Index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

Yearly periods ended December 31

Comparative Results
DWS Blue Chip VIP		1-Year			3-Year			5-Year			10-Year
Class A	Growth of $10,000	$	11,377		$	9,375		$	11,221		$	11,957
Class A	Average annual total return		13.77	%		-2.13	%		2.33	%		1.80	%
Russell 1000 Index	Growth of $10,000	$	11,610		$	9,305		$	11,364		$	11,986
Russell 1000 Index	Average annual total return		16.10	%		-2.37	%		2.59	%		1.83	%
DWS Blue Chip VIP		1-Year			3-Year			5-Year			Life of Class*
Class B	Growth of $10,000	$	11,355		$	9,323		$	11,077		$	16,186
Class B	Average annual total return		13.55	%		-2.31	%		2.07	%		5.83	%
Russell 1000 Index	Growth of $10,000	$	11,610		$	9,305		$	11,364		$	15,703
Russell 1000 Index	Average annual total return		16.10	%		-2.37	%		2.59	%		5.45	%

The growth of $10,000 is cumulative.

* The Fund commenced offering Class B shares on July 1, 2002. Index returns began on June 30, 2002.

Information About Your Fund's Expenses

DWS Blue Chip VIP

The tables illustrate your Fund's expenses in two ways:

Expenses and Value of a $1,000 Investment for the six months ended December 31, 2010
Actual Fund Return	Class A		Class B
Beginning Account Value 7/1/10	$	1,000.00	$	1,000.00
Ending Account Value 12/31/10	$	1,218.50	$	1,216.40
Expenses Paid per $1,000*	$	4.14	$	5.59
Hypothetical 5% Fund Return	Class A		Class B
Beginning Account Value 7/1/10	$	1,000.00	$	1,000.00
Ending Account Value 12/31/10	$	1,021.48	$	1,020.16
Expenses Paid per $1,000*	$	3.77	$	5.09

Annualized Expense Ratios	Class A		Class B
DWS Variable Series II — DWS Blue Chip VIP	.74%		1.00%

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

Management Summary December 31, 2010

DWS Blue Chip VIP

US equities performed very well during 2010, as investors were cheered by gradually improving economic data and surprisingly strong corporate profits. The Russell 1000® Index — the Fund's benchmark — gained 16.10% on the year, building on its 28.43% rally of 2009. The Class A shares of the Fund, while also producing a positive return of 13.77%, fell short of the benchmark.

Our approach to managing the Fund is disciplined and dynamic — disciplined in the sense that we use a quantitative approach that measures numerous factors related to growth, value, quality and market sentiment, and dynamic in that we can choose to give different weightings to these factors based on a rigorous analysis of the past that seeks to determine which periods are most like now. The past year was a highly rotational year for style performance, with leadership changing several times — from growth to market sentiment, then to quality and then back to market sentiment. The Fund's growth and market sentiment factors performed relatively well over the full year, whereas the value and quality factors were mostly weak. We started the year with healthy weightings to market sentiment and growth, which added value early in the year. However, our relatively large weighting toward value throughout the year more than offset this and proved to be the biggest drag on relative performance.

From a sector perspective, our stock selection process was least effective in the technology segment, where our overweight positions in Microsoft Corp., Computer Sciences Corp. and the disk-drive maker Western Digital Corp.* weighed on performance.1 The industrials sector was an additional area of underperformance, due in part to our overweights in Raytheon Co. and the truck manufacturer Oshkosh Corp. Our stock picks also fell short in the utilities and consumer staples sectors. On the plus side, we outperformed the benchmark by a wide margin in the energy sector. We generated strong performance by moving to overweight positions in stocks that plummeted sharply in the wake of the Gulf oil spill and then staged rebounds from undervalued leve ls, such as Transocean Ltd., Anadarko Petroleum Corp.* and National Oilwell Varco, Inc. We also performed very well within financials, thanks in part to our overweight positions in Berkshire Hathaway, Inc. and ACE Ltd.

Robert Wang

Russell Shtern, CFA

Portfolio Managers, QS Investors, LLC

Subadvisor to the Fund

The Russell 1000 Index is an unmanaged index that measures the performance of the 1,000 largest companies in the Russell 3000® Index which measures the performance of the 3,000 largest US companies based on total market capitalization. The Russell 1000 Index represents approximately 92% of the total market capitalization of the Russell 3000 Index.

Index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

1 "Overweight" means the Fund holds a higher weighting in a given sector or security than the benchmark. "Underweight" means the Fund holds a lower weighting.

* Not held in the Fund as of December 31, 2010.

Portfolio Summary

DWS Blue Chip VIP

Asset Allocation (As a % of Investment Portfolio excluding Securities Lending Collateral)	12/31/10	12/31/09

Common Stocks	99%	99%
Cash Equivalents*	1%	1%
	100%	100%

Sector Diversification (As a % of Common Stocks)	12/31/10	12/31/09

Information Technology	19%	19%
Financials	17%	11%
Health Care	14%	14%
Industrials	12%	13%
Energy	11%	9%
Consumer Discretionary	11%	12%
Consumer Staples	7%	11%
Materials	5%	5%
Telecommunication Services	2%	4%
Utilities	2%	2%
	100%	100%

* In order to keep cash on hand to meet shareholder redemptions or other needs while maintaining exposure to the market, the Fund invests in futures contracts.

Asset allocation and sector diversification are subject to change.

For more complete details about the Fund's investment portfolio, see page 50.

Investment Portfolio December 31, 2010

DWS Blue Chip VIP

	Shares		Value ($)

Common Stocks 98.8%
Consumer Discretionary 10.4%
Auto Components 0.1%
Goodyear Tire & Rubber Co.*		6,700		79,395
Diversified Consumer Services 0.5%
Apollo Group, Inc. "A"*		3,400		134,266
Career Education Corp.* (a)		9,800		203,154
Coinstar, Inc.*		1,700		95,948
DeVry, Inc.		1,600		76,768
Sotheby's		1,700		76,500
				586,636
Hotels Restaurants & Leisure 1.0%
Chipotle Mexican Grill, Inc.* (a)		600		127,596
McDonald's Corp.		3,600		276,336
Panera Bread Co. "A"*		1,500		151,815
Starbucks Corp.		16,200		520,506
				1,076,253
Household Durables 0.2%
Garmin Ltd. (a)		6,700		207,633
Internet & Catalog Retail 1.0%
Liberty Media Corp. — Interactive "A"*		35,100		553,527
Priceline.com, Inc.*		1,400		559,370
				1,112,897
Media 2.8%
CBS Corp. "B"		9,100		173,355
Comcast Corp. "A" (a)		54,500		1,197,365
Liberty Media-Starz "A"*		1,900		126,312
McGraw-Hill Companies, Inc.		4,700		171,127
News Corp. "A"		9,800		142,688
Time Warner, Inc.		21,233		683,066
Walt Disney Co. (a)		13,900		521,389
				3,015,302
Multiline Retail 0.8%
Dillard's, Inc. "A" (a)		17,500		663,950
Kohl's Corp.*		4,600		249,964
				913,914
Specialty Retail 2.6%
Advance Auto Parts, Inc.		7,600		502,740
American Eagle Outfitters, Inc.		10,200		149,226
AnnTaylor Stores Corp.*		2,900		79,431
Barnes & Noble, Inc. (a)		8,400		118,860
Chico's FAS, Inc.		6,200		74,586
Guess?, Inc.		2,400		113,568
Rent-A-Center, Inc.		3,900		125,892
Ross Stores, Inc.		2,700		170,775
The Gap, Inc.		39,300		870,102
TJX Companies, Inc.		14,100		625,899
				2,831,079
Textiles, Apparel & Luxury Goods 1.4%
Coach, Inc.		7,200		398,232
Deckers Outdoor Corp.*		2,200		175,428
NIKE, Inc. "B" (a)		4,600		392,932
VF Corp.		6,000		517,080
				1,483,672
	Shares		Value ($)

Consumer Staples 6.9%
Beverages 0.2%
Molson Coors Brewing Co. "B"		4,300		215,817
Food & Staples Retailing 1.4%
Wal-Mart Stores, Inc.		26,700		1,439,931
Whole Foods Market, Inc.* (a)		900		45,531
				1,485,462
Food Products 2.7%
Archer-Daniels-Midland Co.		15,600		469,248
Corn Products International, Inc.		4,800		220,800
Fresh Del Monte Produce, Inc.		6,200		154,690
H.J. Heinz Co.		6,000		296,760
Hormel Foods Corp.		2,300		117,898
The Hershey Co.		15,700		740,255
Tyson Foods, Inc. "A" (a)		51,600		888,552
Unilever PLC (ADR)		2,900		89,552
				2,977,755
Household Products 0.6%
Kimberly-Clark Corp.		2,400		151,296
Procter & Gamble Co.		7,900		508,207
				659,503
Personal Products 0.4%
Estee Lauder Companies, Inc. "A"		1,200		96,840
Herbalife Ltd.		5,600		382,872
				479,712
Tobacco 1.6%
Lorillard, Inc.		8,900		730,334
Philip Morris International, Inc.		16,400		959,892
				1,690,226
Energy 11.2%
Energy Equipment & Services 3.4%
Complete Production Services, Inc.*		11,100		328,005
Diamond Offshore Drilling, Inc.		3,200		213,984
FMC Technologies, Inc.*		1,300		115,583
Helmerich & Payne, Inc.		2,000		96,960
Nabors Industries Ltd.*		12,200		286,212
National Oilwell Varco, Inc.		16,400		1,102,900
Noble Corp. (a)		4,900		175,273
Oceaneering International, Inc.* (a)		2,100		154,623
Oil States International, Inc.*		10,800		692,172
Transocean Ltd.* (a)		7,500		521,325
				3,687,037
Oil, Gas & Consumable Fuels 7.8%
Chevron Corp.		13,000		1,186,250
Cimarex Energy Co.		1,500		132,795
CNOOC Ltd. (ADR)		400		95,348
Devon Energy Corp.		13,100		1,028,481
Exxon Mobil Corp.		30,000		2,193,600
Hess Corp.		9,000		688,860
Murphy Oil Corp.		10,300		767,865
Newfield Exploration Co.*		2,800		201,908
Noble Energy, Inc.		4,100		352,928
Occidental Petroleum Corp.		6,700		657,270
Valero Energy Corp.		48,700		1,125,944
				8,431,249
	Shares		Value ($)

Financials 17.2%
Capital Markets 1.8%
Ameriprise Financial, Inc.		2,900		166,895
BlackRock, Inc.		1,900		362,102
Janus Capital Group, Inc.		5,800		75,226
Legg Mason, Inc.		4,800		174,096
State Street Corp.		5,400		250,236
T. Rowe Price Group, Inc. (a)		4,800		309,792
The Goldman Sachs Group, Inc.		3,600		605,376
				1,943,723
Commercial Banks 4.0%
CIT Group, Inc.*		8,800		414,480
Fifth Third Bancorp. (a)		50,600		742,808
Huntington Bancshares, Inc.		36,200		248,694
KeyCorp (a)		45,600		403,560
M&T Bank Corp. (a)		1,800		156,690
PNC Financial Services Group, Inc.		9,900		601,128
SunTrust Banks, Inc.		38,500		1,136,135
Wells Fargo & Co.		22,100		684,879
				4,388,374
Consumer Finance 2.4%
Capital One Financial Corp. (a)		40,900		1,740,704
Discover Financial Services		46,200		856,086
				2,596,790
Diversified Financial Services 2.7%
Bank of America Corp.		30,900		412,206
Citigroup, Inc.*		75,300		356,169
CME Group, Inc.		800		257,400
JPMorgan Chase & Co.		38,700		1,641,654
PHH Corp.*		7,500		173,625
The NASDAQ OMX Group, Inc.* (a)		5,300		125,663
				2,966,717
Insurance 5.8%
ACE Ltd.		21,900		1,363,275
Aflac, Inc.		5,400		304,722
Allied World Assurance Co. Holdings Ltd.		5,400		320,976
Arch Capital Group Ltd.*		2,000		176,100
Aspen Insurance Holdings Ltd.		4,200		120,204
Assurant, Inc.		3,400		130,968
Axis Capital Holdings Ltd.		3,200		114,816
Berkshire Hathaway, Inc. "A"*		2		240,900
Berkshire Hathaway, Inc. "B"*		2,240		179,446
Chubb Corp.		16,300		972,132
Everest Re Group Ltd.		2,000		169,640
Hartford Financial Services Group, Inc.		10,100		267,549
Platinum Underwriters Holdings Ltd.		2,400		107,928
The Travelers Companies, Inc.		33,100		1,844,001
				6,312,657
Real Estate Investment Trusts 0.5%
HCP, Inc. (REIT)		5,500		202,345
Public Storage (REIT)		1,700		172,414
SL Green Realty Corp. (REIT)		1,600		108,016
				482,775
Health Care 13.5%
Biotechnology 1.7%
Biogen Idec, Inc.*		8,100		543,105
Celgene Corp.*		5,700		337,098
Cephalon, Inc.* (a)		16,700		1,030,724
				1,910,927
	Shares		Value ($)

Health Care Providers & Services 8.1%
Aetna, Inc.		20,800		634,608
AmerisourceBergen Corp.		43,800		1,494,456
Cardinal Health, Inc.		45,700		1,750,767
Coventry Health Care, Inc.*		28,400		749,760
Health Net, Inc.*		5,100		139,179
Humana, Inc.*		16,600		908,684
UnitedHealth Group, Inc.		51,400		1,856,054
WellPoint, Inc.*		21,600		1,228,176
				8,761,684
Pharmaceuticals 3.7%
Eli Lilly & Co.		38,000		1,331,520
Endo Pharmaceuticals Holdings, Inc.*		13,700		489,227
Forest Laboratories, Inc.*		57,700		1,845,246
Medicis Pharmaceutical Corp. "A"		4,200		112,518
Par Pharmaceutical Companies, Inc.*		6,300		242,613
				4,021,124
Industrials 11.5%
Aerospace & Defense 3.1%
General Dynamics Corp.		9,500		674,120
Honeywell International, Inc.		7,500		398,700
Northrop Grumman Corp. (a)		25,600		1,658,368
Raytheon Co.		13,300		616,322
				3,347,510
Air Freight & Logistics 1.6%
FedEx Corp.		4,700		437,147
United Parcel Service, Inc. "B"		18,100		1,313,698
				1,750,845
Airlines 0.2%
Alaska Air Group, Inc.*		2,900		164,401
Commercial Services & Supplies 0.4%
Cintas Corp.		4,800		134,208
R.R. Donnelley & Sons Co.		16,600		290,002
				424,210
Construction & Engineering 0.4%
EMCOR Group, Inc.*		10,200		295,596
KBR, Inc.		5,200		158,444
				454,040
Electrical Equipment 0.2%
Rockwell Automation, Inc.		2,300		164,933
Industrial Conglomerates 1.1%
3M Co.		14,200		1,225,460
Machinery 2.0%
Danaher Corp.		8,200		386,794
Dover Corp.		3,100		181,195
Eaton Corp.		5,200		527,852
Ingersoll-Rand PLC		7,200		339,048
Oshkosh Corp.*		12,200		429,928
Parker Hannifin Corp.		1,900		163,970
Trinity Industries, Inc. (a)		6,500		172,965
				2,201,752
Professional Services 0.3%
Manpower, Inc.		4,600		288,696
Road & Rail 1.6%
Norfolk Southern Corp.		13,200		829,224
Ryder System, Inc.		18,100		952,784
				1,782,008
	Shares		Value ($)

Trading Companies & Distributors 0.6%
W.W. Grainger, Inc. (a)		4,900		676,739
Information Technology 18.7%
Communications Equipment 1.6%
F5 Networks, Inc.*		4,500		585,720
Nokia Corp. (ADR) (a)		34,100		351,912
Research In Motion Ltd.*		10,900		633,617
Tellabs, Inc.		20,600		139,668
				1,710,917
Computers & Peripherals 0.7%
Dell, Inc.*		8,800		119,240
Lexmark International, Inc. "A"*		16,800		584,976
				704,216
Electronic Equipment, Instruments & Components 3.9%
Anixter International, Inc.		1,800		107,514
Arrow Electronics, Inc.*		21,600		739,800
Avnet, Inc.*		18,400		607,752
FLIR Systems, Inc.*		2,600		77,350
Ingram Micro, Inc. "A"*		24,900		475,341
Jabil Circuit, Inc.		12,800		257,152
Power-One, Inc.* (a)		11,500		117,300
Tech Data Corp.*		11,600		510,632
Tyco Electronics Ltd.		27,700		980,580
Vishay Intertechnology, Inc.* (a)		28,000		411,040
				4,284,461
Internet Software & Services 0.8%
AOL, Inc.*		15,000		355,650
IAC/InterActiveCorp.* (a)		17,700		507,990
				863,640
IT Services 5.4%
Automatic Data Processing, Inc.		13,000		601,640
Cognizant Technology Solutions Corp. "A"*		3,900		285,831
Computer Sciences Corp.		28,300		1,403,680
International Business Machines Corp.		20,400		2,993,904
Western Union Co. (a)		31,900		592,383
				5,877,438
Semiconductors & Semiconductor Equipment 3.4%
Altera Corp. (a)		10,500		373,590
Analog Devices, Inc.		8,800		331,496
Fairchild Semiconductor International, Inc.* (a)		8,500		132,685
Intel Corp.		94,500		1,987,335
Lam Research Corp.*		3,000		155,340
Marvell Technology Group Ltd.*		19,500		361,725
Maxim Integrated Products, Inc.		7,100		167,702
Micron Technology, Inc.* (a)		25,900		207,718
				3,717,591
Software 2.9%
Activision Blizzard, Inc.		32,400		403,056
Microsoft Corp.		97,900		2,733,368
				3,136,424
	Shares		Value ($)

Materials 5.3%
Chemicals 2.4%
Ashland, Inc.		6,700		340,762
Cytec Industries, Inc.		1,600		84,896
E.I. du Pont de Nemours & Co.		21,500		1,072,420
Lubrizol Corp.		8,800		940,544
Potash Corp. of Saskatchewan, Inc. (a)		1,000		154,830
				2,593,452
Metals & Mining 2.6%
Barrick Gold Corp.		7,400		393,532
Freeport-McMoRan Copper & Gold, Inc.		11,200		1,345,008
Newmont Mining Corp.		18,500		1,136,455
				2,874,995
Paper & Forest Products 0.3%
Domtar Corp.		2,200		167,024
MeadWestvaco Corp.		4,900		128,184
				295,208
Telecommunication Services 2.5%
Diversified Telecommunication Services 2.2%
AT&T, Inc.		16,700		490,646
Verizon Communications, Inc.		51,700		1,849,826
				2,340,472
Wireless Telecommunication Services 0.3%
Vodafone Group PLC (ADR)		14,300		377,949
Utilities 1.6%
Electric Utilities 0.8%
Duke Energy Corp.		34,700		618,007
Exelon Corp.		7,600		316,464
				934,471
Independent Power Producers & Energy Traders 0.6%
NRG Energy, Inc.* (a)		34,108		666,470
Multi-Utilities 0.2%
Ameren Corp.		6,800		191,692
Total Common Stocks (Cost $91,736,793)				107,368,303

Securities Lending Collateral 12.0%
Daily Assets Fund Institutional, 0.27% (b) (c) (Cost $13,084,837)		13,084,837		13,084,837

Cash Equivalents 1.0%
Central Cash Management Fund, 0.19% (b) (Cost $1,081,171)		1,081,171		1,081,171

	% of Net Assets			Value ($)

Total Investment Portfolio (Cost $105,902,801)+		111.8			121,534,311
Other Assets and Liabilities, Net		(11.8	)		(12,874,612	)
Net Assets		100.0			108,659,699

* Non-income producing security.

+ The cost for federal income tax purposes was $106,855,572. At December 31, 2010, net unrealized appreciation for all securities based on tax cost was $14,678,739. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $16,161,936 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $1,483,197.

(a) All or a portion of these securities were on loan (see Notes to Financial Statements). The value of all securities loaned at December 31, 2010 amounted to $12,717,748, which is 11.7% of net assets.

(b) Affiliated fund managed by Deutsche Investment Management Americas Inc. The rate shown is the annualized seven-day yield at period end.

(c) Represents collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates.

ADR: American Depositary Receipt

REIT: Real Estate Investment Trust

At December 31, 2010, open futures contracts purchased were as follows:

Futures

Currency

Expiration Date

Contracts

Notional Value ($)

Unrealized Appreciation ($)

S&P 500 E-Mini Index

USD

3/18/2011

1,065,050

15,218

Currency Abbreviation

USD United States Dollar

Fair Value Measurements

Assets	Level 1		Level 2		Level 3		Total

Common Stocks (d)	$	107,368,303	$	—	$	—	$	107,368,303
Short-Term Investments (d)		14,166,008		—		—		14,166,008
Derivatives (e)		15,218		—		—		15,218
Total	$	121,549,529	$	—	$	—	$	121,549,529

There have been no significant transfers between Level 1 and Level 2 fair value measurements during the year ended December 31, 2010.

(d) See Investment Portfolio for additional detailed categorizations.

(e) Derivatives include unrealized appreciation (depreciation) on open futures contracts.

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

Statement of Assets and Liabilities

as of December 31, 2010
Assets
Investments: Investments in unaffiliated securities, at value (cost $91,736,793) — including $12,717,748 of securities loaned	$	107,368,303
Investment in Daily Assets Fund Institutional (cost $13,084,837)*		13,084,837
Investment in Central Cash Management Fund (cost $1,081,171)		1,081,171
Total investments, at value (cost $105,902,801)		121,534,311
Deposit with brokers for open futures contracts		128,868
Foreign currency, at value (cost $2,134)		2,233
Receivable for Fund shares sold		145,708
Receivable for variation margin on open futures contracts		15,218
Dividends receivable		76,948
Interest receivable		2,889
Other assets		587
Total assets		121,906,762
Liabilities
Payable upon return of securities loaned		13,084,837
Payable for Fund shares redeemed		35,395
Accrued management fee		46,929
Other accrued expenses and payables		79,902
Total liabilities		13,247,063
Net assets, at value	$	108,659,699
Net Assets Consist of
Undistributed net investment income		1,146,935
Net unrealized appreciation (depreciation) on: Investments		15,631,510
Futures		15,218
Foreign currency		99
Accumulated net realized gain (loss)		(49,691,433	)
Paid-in capital		141,557,370
Net assets, at value	$	108,659,699
Class A Net Asset Value, offering and redemption price per share ($108,493,126 ÷ 10,190,728 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)	$	10.65
Class B Net Asset Value, offering and redemption price per share ($166,573 ÷ 15,598 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)	$	10.68

* Represents collateral on securities loaned.

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

Statement of Operations

for the year ended December 31, 2010
Investment Income
Income: Dividends (net of foreign taxes withheld of $521)	$	1,948,786
Interest		205
Income distributions — Central Cash Management Fund		1,546
Securities lending income, including income from Daily Assets Fund Institutional, net of borrower rebates		74,190
Total income		2,024,727
Expenses: Management fee		580,643
Administration fee		105,571
Services to shareholders		2,584
Distribution service fee (Class B)		399
Custodian fee		19,378
Legal fees		10,001
Audit and tax fees		53,129
Trustees' fees and expenses		6,320
Reports to shareholders		12,605
Other		8,322
Total expenses		798,952
Net investment income (loss)		1,225,775
Realized and Unrealized Gain (Loss)
Net realized gain (loss) from: Investments		11,523,479
Futures		130,929
Foreign currency		(60	)
		11,654,348
Change in net unrealized appreciation (depreciation) on: Investments		520,926
Futures		7,705
Foreign currency		142
		528,773
Net gain (loss)		12,183,121
Net increase (decrease) in net assets resulting from operations	$	13,408,896

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

Statement of Changes in Net Assets

	Years Ended December 31,
Increase (Decrease) in Net Assets	2010			2009
Operations: Net investment income (loss)	$	1,225,775		$	1,559,434
Net realized gain (loss)		11,654,348			(19,218,958	)
Change in net unrealized appreciation (depreciation)		528,773			46,824,414
Net increase (decrease) in net assets resulting from operations		13,408,896			29,164,890
Distributions to shareholders from: Net investment income: Class A		(1,575,913	)		(2,044,479	)
Class B		(1,920	)		(2,260	)
Total distributions		(1,577,833	)		(2,046,739	)
Fund share transactions: Class A Proceeds from shares sold		4,447,701			5,027,733
Reinvestment of distributions		1,575,913			2,044,479
Payments for shares redeemed		(20,221,768	)		(29,505,512	)
Net increase (decrease) in net assets from Class A share transactions		(14,198,154	)		(22,433,300	)
Class B Proceeds from shares sold		1,931			267
Reinvestment of distributions		1,920			2,260
Payments for shares redeemed		(19,529	)		(12,442	)
Net increase (decrease) in net assets from Class B share transactions		(15,678	)		(9,915	)
Increase (decrease) in net assets		(2,382,769	)		4,674,936
Net assets at beginning of period		111,042,468			106,367,532
Net assets at end of period (including undistributed net investment income of $1,146,935 and $1,493,480, respectively)	$	108,659,699		$	111,042,468
Other Information
Class A Shares outstanding at beginning of period		11,688,302			14,644,836
Shares sold		457,619			630,574
Shares issued to shareholders in reinvestment of distributions		153,448			313,090
Shares redeemed		(2,108,641	)		(3,900,198	)
Net increase (decrease) in Class A shares		(1,497,574	)		(2,956,534	)
Shares outstanding at end of period		10,190,728			11,688,302
Class B Shares outstanding at beginning of period		17,241			18,379
Shares sold		199			34
Shares issued to shareholders in reinvestment of distributions		186			344
Shares redeemed		(2,028	)		(1,516	)
Net increase (decrease) in Class B shares		(1,643	)		(1,138	)
Shares outstanding at end of period		15,598			17,241

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

Financial Highlights

Class A Years Ended December 31,	2010			2009			2008			2007			2006
Selected Per Share Data
Net asset value, beginning of period	$	9.49		$	7.25		$	14.65		$	16.17		$	14.88
Income (loss) from investment operations: Net investment incomea		.11			.12			.12			.17			.17	c
Net realized and unrealized gain (loss)		1.19			2.27			(4.97	)		.36			2.07
Total from investment operations		1.30			2.39			(4.85	)		.53			2.24
Less distributions from: Net investment income		(.14	)		(.15	)		(.21	)		(.18	)		(.14	)
Net realized gains		—			—			(2.34	)		(1.87	)		(.81	)
Total distributions		(.14	)		(.15	)		(2.55	)		(2.05	)		(.95	)
Net asset value, end of period	$	10.65		$	9.49		$	7.25		$	14.65		$	16.17
Total Return (%)		13.77			33.97			(38.49	)b		3.50			15.65	c
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		108			111			106			242			314
Ratio of expenses before expense reductions (%)		.76			.75			.76			.71			.71
Ratio of expenses after expense reductions (%)		.76			.75			.76			.71			.71
Ratio of net investment income (%)		1.16			1.54			1.12			1.13			1.12	c
Portfolio turnover rate (%)		146			82			127			275			226
a Based on average shares outstanding during the period. b Total return would have been lower had certain expenses not been reduced. c Includes non-recurring income from the Advisor recorded as a result of an administrative proceeding regarding disclosure of brokerage allocation practices in connection with sales of DWS Funds. The non-recurring income resulted in an increase in net investment income of $0.003 per share and an increase in the ratio of net investment income of 0.02%. Excluding this non-recurring income, total return would have been 0.02% lower.

Class B Years Ended December 31,	2010			2009			2008			2007			2006
Selected Per Share Data
Net asset value, beginning of period	$	9.51		$	7.26		$	14.61		$	16.12		$	14.83
Income (loss) from investment operations: Net investment incomea		.09			.10			.04			.11			.11	c
Net realized and unrealized gain (loss)		1.19			2.27			(4.89	)		.36			2.07
Total from investment operations		1.28			2.37			(4.85	)		.47			2.18
Less distributions from: Net investment income		(.11	)		(.12	)		(.16	)		(.11	)		(.08	)
Net realized gains		—			—			(2.34	)		(1.87	)		(.81	)
Total distributions		(.11	)		(.12	)		(2.50	)		(1.98	)		(.89	)
Net asset value, end of period	$	10.68		$	9.51		$	7.26		$	14.61		$	16.12
Total Return (%)		13.55			33.46			(38.48	)b		3.15			15.19	c
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		.17			.16			.13			11			46
Ratio of expenses before expense reductions (%)		1.02			1.02			1.22			1.09			1.09
Ratio of expenses after expense reductions (%)		1.02			1.02			1.21			1.09			1.09
Ratio of net investment income (%)		.90			1.27			.67			.75			.74	c
Portfolio turnover rate (%)		146			82			127			275			226
a Based on average shares outstanding during the period. b Total return would have been lower had certain expenses not been reduced. c Includes non-recurring income from the Advisor recorded as a result of an administrative proceeding regarding disclosure of brokerage allocation practices in connection with sales of DWS Funds. The non-recurring income resulted in an increase in net investment income of $0.003 per share and an increase in the ratio of net investment income of 0.02%. Excluding this non-recurring income, total return would have been 0.02% lower.

Performance Summary December 31, 2010

DWS Core Fixed Income VIP

The gross expense ratios of the Fund, as stated in the fee table of the prospectus dated May 1, 2010 is 0.59% for Class A shares, and may differ from the expense ratios disclosed in the Financial Highlights tables in this report.

Risk Considerations

Bond investments are subject to interest-rate and credit risks. When interest rates rise, bond prices generally fall. Credit risk refers to the ability of an issuer to make timely payments of principal and interest. In the current market environment, mortgage backed securities are experiencing increased volatility. See the prospectus for details.

Fund returns shown for the 3-year, 5-year and 10-year periods reflect a fee waiver and/or expense reimbursement. Without this waiver/reimbursement, returns would have been lower.

Growth of an Assumed $10,000 Investment in DWS Core Fixed Income VIP
[] DWS Core Fixed Income VIP — Class A [] Barclays Capital US Aggregate Bond Index		Barclays Capital US Aggregate Bond Index is an unmanaged index representing domestic taxable investment-grade bonds, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities with average maturities of one year or more. Index returns, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

Yearly periods ended December 31

Comparative Results
DWS Core Fixed Income VIP		1-Year			3-Year			5-Year			10-Year
Class A	Growth of $10,000	$	10,651		$	9,256		$	10,053		$	12,897
Class A	Average annual total return		6.51	%		-2.54	%		0.10	%		2.58	%
Barclays Capital US Aggregate Bond Index	Growth of $10,000	$	10,654		$	11,877		$	13,255		$	17,633
Barclays Capital US Aggregate Bond Index	Average annual total return		6.54	%		5.90	%		5.80	%		5.84	%

The growth of $10,000 is cumulative.

Information About Your Fund's Expenses

DWS Core Fixed Income VIP

As an investor of the Fund, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees, and other Fund expenses. Examples of transaction costs include contract charges, redemption fees and account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. The example in the table is based on an investment of $1,000 invested at the beginning of the six-month period and held for the entire period (July 1, 2010 to December 31, 2010).

Expenses and Value of a $1,000 Investment for the six months ended December 31, 2010
Actual Fund Return	Class A
Beginning Account Value 7/1/10	$	1,000.00
Ending Account Value 12/31/10	$	1,011.60
Expenses Paid per $1,000*	$	3.50
Hypothetical 5% Fund Return	Class A
Beginning Account Value 7/1/10	$	1,000.00
Ending Account Value 12/31/10	$	1,021.73
Expenses Paid per $1,000*	$	3.52

Annualized Expense Ratio	Class A
DWS Variable Series II — DWS Core Fixed Income VIP	.69%

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

Management Summary December 31, 2010

DWS Core Fixed Income VIP

During the 12-month period ended December 31, 2010, the US Federal Reserve Board (the Fed) maintained the benchmark federal funds rate at near-zero levels and engaged in bond purchases designed to lower longer-term interest rates as it sought to stimulate economic growth.1 Treasury yields fell for most of the year, before rising in the fourth quarter as market participants reacted to better economic data and the extension of Bush-era tax cuts. For the year, credit-sensitive sectors outperformed as investors sought yield in an environment of low interest rates. Corporate bonds benefited as corporate profits and balance sheets displayed strength throughout the period, with below-investment-grade issues leading returns. Among other credit sect ors, commercial mortgage-backed securities were standout performers, despite an ongoing soft leasing environment in many markets.2

During the 12-month period, the Fund provided a total return of 6.51% (Class A shares, unadjusted for contract charges), compared with the 6.54% return of its benchmark, the Barclays Capital US Aggregate Bond Index.

The Fund's performance versus the benchmark continued to be driven principally by exposure to more credit-sensitive fixed-income sectors. Our overweighting of investment-grade corporate bonds was the leading contributor to returns, while a modest position in high-yield corporates added to performance as well.3 On the downside, our underweighting early in the period of commercial mortgage-backed securities constrained returns. The Fund's positioning with respect to overall duration and interest rate exposure was essentially a neutral factor for performance. We are maintaining a somewhat conservative stance with respect to overall interest rate exposure as we monitor the impact of Fed bond purchases on inflation expectations and rates. In add ition, we are closely watching economic data, which increasingly appear to indicate that the recovery is taking hold, a trend that would bode well for continued outperformance by credit-oriented sectors. Corporate balance sheets on the whole are in excellent condition and we are maintaining our overweighting of investment-grade corporate bonds. Our small high-yield position is being maintained as well, although we will not hesitate to move out of this sector if tighter spreads versus investment-grade issues change our risk/reward analysis.4

Kenneth R. Bowling, CFA

John Brennan

Jamie Guenther, CFA

Bruce Harley, CFA, CEBS

J. Kevin Horsley, CFA, CPA

J. Richard Robben, CFA

David Vignolo, CFA

Stephen Willer, CFA

Portfolio Managers

Barclays Capital US Aggregate Bond Index is an unmanaged index representing domestic taxable investment-grade bonds, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities with average maturities of one year or more.

Index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

1 The federal funds rate is the interest rate, set by the US Federal Reserve Board, at which banks lend money to each other, usually on an overnight basis.

2 Commercial mortgage-backed securities (CMBS) are secured by loans on a commercial property.

3 "Overweight" means the Fund holds a higher weighting in a given sector or security than the benchmark. "Underweight" means the Fund holds a lower weighting.

4 "Spread" refers to the excess yield various bond sectors offer over Treasuries with similar maturities. When spreads widen, yield differences are increasing between bonds in the two sectors being compared. When spreads narrow, the opposite is true.

Portfolio Summary

DWS Core Fixed Income VIP

Asset Allocation (As a % of Net Assets)	12/31/10	12/31/09

Mortgage-Backed Securities Pass-Throughs	30%	39%
Government & Agency Obligations	27%	19%
Corporate Bonds	23%	22%
Commercial Mortgage-Backed Securities	7%	4%
Municipal Bonds and Notes	7%	6%
Cash Equivalents and Other Assets and Liabilities, net	3%	5%
Collateralized Mortgage Obligations	2%	4%
Asset-Backed	1%	1%
	100%	100%

Quality (Excludes Cash Equivalents and Securities Lending Collateral)	12/31/10	12/31/09

US Government and Agencies	59%	50%
AAA	3%	23%
AA	7%	5%
A	13%	10%
BBB	15%	11%
BB	2%	—
Not Rated	1%	1%
	100%	100%

Interest Rate Sensitivity	12/31/10	12/31/09

Effective Maturity	7.0 years	6.8 years
Effective Duration	5.0 years	4.5 years

Asset allocation and Interest Rate Sensitivity are subject to change.

Effective maturity is the weighted average of the bonds held by the Fund taking into consideration any maturity shortening features.

Effective duration is an approximate measure of the Fund's sensitivity to interest rate changes taking into consideration any maturity shortening features.

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

For more complete details about the Fund's investment portfolio, see page 66.

Investment Portfolio December 31, 2010

DWS Core Fixed Income VIP

	Principal Amount ($)		Value ($)

Corporate Bonds 29.4%
Consumer Discretionary 4.0%
AMC Entertainment, Inc., 8.75%, 6/1/2019		143,000		152,652
CBS Corp., 5.9%, 10/15/2040		380,000		366,045
Comcast Cable Holdings LLC, 10.125%, 4/15/2022		180,000		244,106
DIRECTV Holdings LLC:
3.125%, 2/15/2016		200,000		197,333
6.35%, 3/15/2040		312,000		328,215
Home Depot, Inc.:
5.4%, 9/15/2040		175,000		169,946
5.875%, 12/16/2036		75,000		78,011
Lowe's Companies, Inc., 3.75%, 4/15/2021		300,000		290,043
MGM Resorts International, 144A, 9.0%, 3/15/2020		500,000		550,000
NBC Universal, Inc., 144A, 5.95%, 4/1/2041		172,000		171,982
Time Warner, Inc.:
6.2%, 3/15/2040		250,000		265,763
7.625%, 4/15/2031		250,000		303,921
Yum! Brands, Inc.:
3.875%, 11/1/2020		300,000		286,586
5.3%, 9/15/2019		100,000		105,917
				3,510,520
Consumer Staples 3.0%
Anheuser-Busch InBev Worldwide, Inc., 144A, 7.75%, 1/15/2019		400,000		497,739
CVS Caremark Corp., 6.125%, 9/15/2039		825,000		881,478
Kellogg Co., 4.0%, 12/15/2020		200,000		197,251
Kraft Foods, Inc., 5.375%, 2/10/2020		825,000		887,922
Kroger Co., 5.4%, 7/15/2040		150,000		142,172
				2,606,562
Energy 4.2%
DCP Midstream LLC, 144A, 9.75%, 3/15/2019		530,000		684,930
Enterprise Products Operating LLC, 4.6%, 8/1/2012		500,000		524,768
Kinder Morgan Energy Partners LP, 6.5%, 9/1/2039		300,000		309,910
ONEOK Partners LP, 6.15%, 10/1/2016		321,000		360,760
Plains All American Pipeline LP, 8.75%, 5/1/2019		750,000		930,746
Weatherford International Ltd., 5.125%, 9/15/2020		550,000		547,268
Williams Partners LP, 4.125%, 11/15/2020		360,000		340,988
				3,699,370
Financials 11.5%
American Express Co., 7.0%, 3/19/2018		700,000		815,341
Bank of America Corp.:
5.625%, 7/1/2020		410,000		417,992
5.65%, 5/1/2018		865,000		883,833
6.5%, 8/1/2016		80,000		86,807
Citigroup, Inc., 5.375%, 8/9/2020		800,000		831,206
	Principal Amount ($)		Value ($)

Fifth Third Bancorp., 5.45%, 1/15/2017		390,000		398,644
Ford Motor Credit Co., LLC, 8.0%, 6/1/2014		1,000,000		1,101,707
General Electric Capital Corp., Series A, 5.625%, 5/1/2018		600,000		654,308
Hartford Financial Services Group, Inc., 5.95%, 10/15/2036		270,000		254,727
JPMorgan Chase & Co., 5.125%, 9/15/2014		1,000,000		1,064,071
KeyBank NA, 5.7%, 11/1/2017		300,000		305,505
Lincoln National Corp., 8.75%, 7/1/2019		350,000		437,797
MetLife, Inc., 7.717%, 2/15/2019		395,000		484,954
Morgan Stanley, Series F, 6.0%, 4/28/2015		490,000		530,671
National Rural Utilities Cooperative Finance Corp., 10.375%, 11/1/2018		200,000		275,885
PNC Funding Corp., 5.25%, 11/15/2015		450,000		481,587
Prudential Financial, Inc.:
Series B, 5.1%, 9/20/2014		130,000		139,642
6.2%, 1/15/2015		90,000		99,253
7.375%, 6/15/2019		50,000		58,952
The Goldman Sachs Group, Inc., 6.0%, 6/15/2020		550,000		594,365
Travelers Companies, Inc., 5.35%, 11/1/2040		185,000		182,273
				10,099,520
Health Care 1.9%
Express Scripts, Inc.:
6.25%, 6/15/2014		205,000		229,182
7.25%, 6/15/2019		405,000		479,367
Laboratory Corp. of America Holdings, 4.625%, 11/15/2020		275,000		272,520
Medco Health Solutions, Inc.:
4.125%, 9/15/2020		125,000		120,866
7.125%, 3/15/2018		500,000		586,748
				1,688,683
Industrials 0.8%
CSX Corp.:
6.15%, 5/1/2037		250,000		268,791
6.25%, 3/15/2018		380,000		435,921
				704,712
Materials 1.5%
ArcelorMittal, 6.125%, 6/1/2018		500,000		532,744
Corporacion Nacional del Cobre de Chile, 144A, 3.75%, 11/4/2020		550,000		521,144
Dow Chemical Co., 4.25%, 11/15/2020		285,000		273,001
				1,326,889
Telecommunication Services 1.6%
American Tower Corp.:
5.05%, 9/1/2020		550,000		540,889
7.25%, 5/15/2019		250,000		282,508
Frontier Communications Corp., 7.875%, 4/15/2015		500,000		546,250
				1,369,647
	Principal Amount ($)		Value ($)

Utilities 0.9%
DTE Energy Co., 7.625%, 5/15/2014		148,000		170,588
FirstEnergy Solutions Corp., 6.8%, 8/15/2039		292,000		283,007
Sempra Energy, 6.5%, 6/1/2016		290,000		336,664
				790,259
Total Corporate Bonds (Cost $24,622,597)				25,796,162

Mortgage-Backed Securities Pass-Throughs 38.0%
Federal Home Loan Mortgage Corp.:
4.0%, 8/1/2039		1,276,547		1,269,616
6.0%, with various maturities from 12/1/2034 until 3/1/2038		788,217		857,877
Federal National Mortgage Association:
3.274%*, 8/1/2037		201,551		211,112
3.5%, 7/1/2025 (a)		4,675,000		4,708,602
4.0%, with various maturities from 9/1/2039 until 9/1/2040 (a)		5,361,893		5,336,903
4.5%, 10/1/2033		412,900		426,755
5.0%, 8/1/2040		295,592		310,648
5.152%*, 9/1/2038		161,891		171,859
5.5%, with various maturities from 12/1/2032 until 9/1/2036 (a)		10,439,727		11,183,444
6.0%, with various maturities from 4/1/2024 until 8/1/2035 (a)		4,208,503		4,586,910
6.5%, with various maturities from 3/1/2017 until 4/1/2037		1,050,961		1,169,493
8.0%, 9/1/2015		12,340		13,379
Government National Mortgage Association:
4.5%, 6/1/2039 (a)		1,000,000		1,038,359
5.0%, 4/1/2038 (a)		1,000,000		1,063,203
5.5%, 3/1/2036 (a)		1,000,000		1,080,703
Total Mortgage-Backed Securities Pass-Throughs (Cost $33,044,315)				33,428,863

Asset-Backed 1.4%
Credit Card Receivables
Citibank Omni Master Trust, "A8", Series 2009-A8, 144A, 2.36%*, 5/16/2016 (Cost $1,215,844)		1,200,000		1,214,872

Commercial Mortgage-Backed Securities 9.2%
Banc of America Commercial Mortgage, Inc.:
"A2", Series 2007-2, 5.634%, 4/10/2049		325,000		336,967
"A4", Series 2007-4, 5.742%*, 2/10/2051		750,000		798,887
Bear Stearns Commercial Mortgage Securities, Inc., "A4", Series 2007-PW18, 5.7%, 6/13/2050		1,923,000		2,003,645
Citigroup/Deutsche Bank Commercial Mortgage Trust, "A4", Series 2006-CD2, 5.347%*, 1/15/2046		250,000		268,300
Greenwich Capital Commercial Funding Corp., "A4", Series 2006-GG7, 5.883%*, 7/10/2038		525,000		572,774
	Principal Amount ($)		Value ($)

JPMorgan Chase Commercial Mortgage Securities Corp.:
"A4", Series 2006-LDP7, 5.872%*, 4/15/2045		600,000		656,165
"A4", Series 2007-LD12, 5.882%, 2/15/2051		925,000		979,348
LB-UBS Commercial Mortgage Trust:
"A3", Series 2006-C7, 5.347%, 11/15/2038		400,000		422,904
"A4", Series 2007-C6, 5.858%, 7/15/2040		1,000,000		1,050,670
Merrill Lynch Mortgage Trust, "ASB", Series 2007-C1, 5.826%*, 6/12/2050		900,000		967,442
Total Commercial Mortgage-Backed Securities (Cost $7,455,238)				8,057,102

Collateralized Mortgage Obligations 2.4%
FDIC Structured Sale Guaranteed Notes, "1A", Series 2010-S1, 144A, 0.811%*, 2/25/2048		702,680		703,783
Federal National Mortgage Association, "QD", Series 2005-29, 5.0%, 8/25/2033		435,000		465,656
MASTR Alternative Loans Trust, "5A1", Series 2005-1, 5.5%, 1/25/2020		319,006		327,165
NCUA Guaranteed Notes, "1A", Series 2010-R1, 0.716%*, 10/7/2020		582,325		581,598
Total Collateralized Mortgage Obligations (Cost $2,041,517)				2,078,202

Government & Agency Obligations 33.8%
Sovereign Bonds 0.6%
Republic of Poland, 6.375%, 7/15/2019		500,000		560,105
US Treasury Obligations 33.2%
US Treasury Bill, 0.185%**, 3/17/2011 (b)		320,000		319,929
US Treasury Bonds:
4.75%, 2/15/2037		2,000,000		2,149,376
5.375%, 2/15/2031 (c)		2,500,000		2,918,360
US Treasury Notes:
1.75%, 1/31/2014 (c)		18,700,000		19,091,540
3.625%, 2/15/2020		4,500,000		4,670,154
				29,149,359
Total Government & Agency Obligations (Cost $29,710,921)				29,709,464

Municipal Bonds and Notes 8.1%
California, University Revenues, Build America Bonds, 5.946%, 5/15/2045		180,000		167,951
Chicago, IL, Transit Authority, Sales Tax Receipts Revenue, Build America Bonds, Series B, 6.2%, 12/1/2040 (d)		265,000		244,004
Glendale, AZ, Municipal Property Corp., Excise Tax Revenue, Series B, 6.157%, 7/1/2033, INS: AGMC		420,000		401,898
	Principal Amount ($)		Value ($)

Jicarilla, NM, Sales & Special Tax Revenue, Apache Nation Revenue, 144A, 5.2%, 12/1/2013		575,000		569,330
Kentucky, Asset/Liability Commission, General Fund Revenue, 3.165%, 4/1/2018		775,000		757,454
Louisville & Jefferson County, KY, Metropolitan Sewer District & Drain Systems, Build America Bonds, 6.25%, 5/15/2043		200,000		201,372
Miami-Dade County, FL, Educational Facilities Authority Revenue, University of Miami, Series B, 6.1%, 4/1/2015		825,000		876,628
Michigan, Western Michigan University Revenue, 4.41%, 11/15/2014, INS: AMBAC (d)		620,000		630,187
Nashville & Davidson County, TN, Metropolitan Government, Convention Center Authority Revenue, Build America Bonds, Series A2, 7.431%, 7/1/2043		250,000		266,540
New Jersey, Economic Development Authority Revenue, Series B, 6.5%, 11/1/2014, INS: AGC		585,000		667,403
New Jersey, State Educational Facilities Authority Revenue, NJ City University, Series F, 6.85%, 7/1/2036, INS: AGC		395,000		428,220
Newark, NJ, Pension Obligation, 5.853%, 4/1/2022, INS: AGMC		865,000		857,751
	Principal Amount ($)		Value ($)

Pennsylvania, State General Obligation, First Series, 5.25%, 2/1/2014, INS: NATL		385,000		431,781
Virginia, College Building Authority, Educational Facilities Revenue, 21st Century College, Series B, 5.0%, 2/1/2014		570,000		633,864
Total Municipal Bonds and Notes (Cost $7,054,531)				7,134,383

	Shares		Value ($)

Securities Lending Collateral 21.0%
Daily Assets Fund Institutional, 0.27% (e) (f) (Cost $18,449,851)		18,449,851		18,449,851

Cash Equivalents 3.2%
Central Cash Management Fund, 0.19% (e) (Cost $2,798,238)		2,798,238		2,798,238

	% of Net Assets			Value ($)

Total Investment Portfolio (Cost $126,393,052)+		146.5			128,667,137
Other Assets and Liabilities, Net		(46.5	)		(40,818,885	)
Net Assets		100.0			87,848,252

* These securities are shown at their current rate as of December 31, 2010. Floating rate securities' yields vary with a designated market index or market rate, such as the coupon-equivalent of the US Treasury bill rate.

** Annualized yield at time of purchase; not a coupon rate.

+ The cost for federal income tax purposes was $126,399,437. At December 31, 2010, net unrealized appreciation for all securities based on tax cost was $2,267,700. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $3,032,557 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $764,857.

(a) Delayed delivery security included.

(b) At December 31, 2010, this security has been pledged, in whole or in part, to cover initial margin requirements for futures closed December 31, 2010.

(c) All or a portion of these securities were on loan (see Notes to Financial Statements). The value of all securities loaned at December 31, 2010 amounted to $17,977,097, which is 20.5% of net assets.

(d) Taxable issue.

(e) Affiliated fund managed by Deutsche Investment Management Americas Inc. The rate shown is the annualized seven-day yield at period end.

(f) Represents collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates.

AGC: Assured Guaranty Corp.

AGMC: Assured Guaranty Municipal Corp.

AMBAC: Ambac Financial Group, Inc.

FDIC: Federal Deposit Insurance Corp.

INS: Insured

NATL: National Public Finance Guarantee Corp.

Included in the portfolio are investments in mortgage or asset-backed securities which are interests in separate pools of mortgages or assets. Effective maturities of these investments may be shorter than stated maturities due to prepayments. Some separate investments in the Federal Home Loan Mortgage Corp. and Federal National Mortgage Association issues which have similar coupon rates have been aggregated for presentation purposes in the investment portfolio.

At December 31, 2010, open futures contracts sold were as follows:

Securities

Currency

Expiration Date

Contracts

Notional

Value ($)

Unrealized

Appreciation ($)

10 Year US Treasury Note

USD

3/22/2011

114

13,729,875

434,891

30 Year US Treasury Bond

USD

3/22/2011

4,885,000

182,500

Total unrealized appreciation

617,391

Currency Abbreviation

USD United States Dollar

For information on the Fund's policy and additional disclosures regarding futures contracts, please refer to Note B in the accompanying Notes to Financial Statements.

Fair Value Measurements

Assets	Level 1		Level 2		Level 3		Total

Fixed Income (g)
Corporate Bonds	$	—	$	25,796,162	$	—	$	25,796,162
Mortgage-Backed Securities Pass-Throughs		—		33,428,863		—		33,428,863
Asset-Backed		—		1,214,872		—		1,214,872
Commercial Mortgage-Backed Securities		—		8,057,102		—		8,057,102
Collateralized Mortgage Obligations		—		2,078,202		—		2,078,202
Government & Agency Obligations		—		29,389,535		—		29,389,535
Municipal Bonds and Notes		—		7,134,383		—		7,134,383
Short-Term Investments (g)		21,248,089		319,929		—		21,568,018
Derivatives (h)		617,391		—		—		617,391
Total	$	21,865,480	$	107,419,048	$	—	$	129,284,528

There have been no significant transfers between Level 1 and Level 2 fair value measurements during the year ended December 31, 2010.

(g) See Investment Portfolio for additional detailed categorizations.

(h) Derivatives include unrealized appreciation (depreciation) on open futures contracts.

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

Statement of Assets and Liabilities

as of December 31, 2010
Assets
Investments: Investments in unaffiliated securities, at value (cost $105,144,963) — including $17,977,097 of securities loaned	$	107,419,048
Investment in Daily Assets Fund Institutional (cost $18,449,851)*		18,449,851
Investment in Central Cash Management Fund (cost $2,798,238)		2,798,238
Total investments, at value (cost $126,393,052)		128,667,137
Cash		25,746
Receivable for Fund shares sold		16,068
Interest receivable		890,390
Other assets		608
Total assets		129,599,949
Liabilities
Payable upon return of securities loaned		18,449,851
Payable for investments purchased — delayed delivery securities		23,054,042
Payable for daily variation margin on open futures contracts		96,654
Payable for Fund shares redeemed		37,396
Accrued management fee		41,520
Other accrued expenses and payables		72,234
Total liabilities		41,751,697
Net assets, at value	$	87,848,252
Net Assets Consist of
Undistributed net investment income		2,279,173
Net unrealized appreciation (depreciation) on: Investments		2,274,085
Futures		617,391
Accumulated net realized gain (loss)		(54,331,570	)
Paid-in capital		137,009,173
Net assets, at value	$	87,848,252
Class A Net Asset Value, offering and redemption price per share ($87,848,252 ÷ 10,037,687 outstanding shares of beneficial interest, no par value, 24,742,586 shares authorized)	$	8.75

* Represents collateral on securities loaned.

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

Statement of Operations

for the year ended December 31, 2010
Investment Income
Income: Interest	$	3,181,169
Income distributions — Central Cash Management Fund		36,587
Securities lending income, including income from Daily Assets Fund Institutional, net of borrower rebates		6,363
Total income		3,224,119
Expenses: Management fee		482,684
Administration fee		96,537
Services to shareholders		2,357
Distribution service fee (Class B)		14
Record keeping fees (Class B)		799
Custodian fee		11,701
Legal fees		9,744
Audit and tax fees		48,504
Trustees' fees and expenses		5,860
Reports to shareholders		23,774
Other		14,233
Total expenses before expense reductions		696,207
Expense reductions		(809	)
Total expenses after expense reductions		695,398
Net investment income (loss)		2,528,721
Realized and Unrealized Gain (Loss)
Net realized gain (loss) from: Investments		4,576,974
Futures		(504,977	)
		4,071,997
Change in net unrealized appreciation (depreciation) on: Investments		(992,270	)
Futures		534,420
		(457,850	)
Net gain (loss)		3,614,147
Net increase (decrease) in net assets resulting from operations	$	6,142,868

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

Statement of Changes in Net Assets

	Years Ended December 31,
Increase (Decrease) in Net Assets	2010			2009
Operations: Net investment income (loss)	$	2,528,721		$	5,563,396
Net realized gain (loss)		4,071,997			(34,052,154	)
Change in net unrealized appreciation (depreciation)		(457,850	)		38,146,016
Net increase (decrease) in net assets resulting from operations		6,142,868			9,657,258
Distributions to shareholders from: Net investment income: Class A		(5,749,285	)		(8,879,629	)
Class B		—			(2,500,347	)
Total distributions		(5,749,285	)		(11,379,976	)
Fund share transactions: Class A Proceeds from shares sold		26,314,018			10,272,493
Shares converted*		53,582			—
Reinvestment of distributions		5,749,285			8,879,629
Payments for shares redeemed		(38,312,024	)		(33,814,458	)
Net increase (decrease) in net assets from Class A share transactions		(6,195,139	)		(14,662,336	)
Class B Proceeds from shares sold		785			2,365,047
Shares converted*		(53,582	)		—
Reinvestment of distributions		—			2,500,347
Payments for shares redeemed		(78	)		(36,868,329	)
Net increase (decrease) in net assets from Class B share transactions		(52,875	)		(32,002,935	)
Increase (decrease) in net assets		(5,854,431	)		(48,387,989	)
Net assets at beginning of period		93,702,683			142,090,672
Net assets at end of period (including undistributed net investment income of $2,279,173 and $5,499,737, respectively)	$	87,848,252		$	93,702,683
Other Information
Class A Shares outstanding at beginning of period		10,676,602			12,351,718
Shares sold		3,026,894			1,188,797
Shares converted*		5,994			—
Shares issued to shareholders in reinvestment of distributions		681,204			1,088,190
Shares redeemed		(4,353,007	)		(3,952,103	)
Net increase (decrease) in Class A shares		(638,915	)		(1,675,116	)
Shares outstanding at end of period		10,037,687			10,676,602
Class B Shares outstanding at beginning of period		5,948			3,628,194
Shares sold		89			275,459
Shares converted*		(6,028	)		—
Shares issued to shareholders in reinvestment of distributions		(9	)		305,666
Shares redeemed		—			(4,203,371	)
Net increase (decrease) in Class B shares		(5,948	)		(3,622,246	)
Shares outstanding at end of period		—			5,948

* On February 5, 2010, Class B shares converted into Class A shares.

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

Financial Highlights

Class A Years Ended December 31,	2010			2009			2008			2007			2006
Selected Per Share Date
Net asset value, beginning of period	$	8.77		$	8.90		$	11.82		$	11.86		$	11.81
Income (loss) from investment operations: Net investment incomea		.23			.39			.57			.56			.53
Net realized and unrealized gain (loss)		.32			.24			(2.72	)		(.08	)		(.05	)
Total from investment operations		.55			.63			(2.15	)		.48			.48
Less distributions from: Net investment income		(.57	)		(.76	)		(.77	)		(.52	)		(.43	)
Net realized gains		—			—			—			—			(.00	)*
Total distributions		(.57	)		(.76	)		(.77	)		(.52	)		(.43	)
Net asset value, end of period	$	8.75		$	8.77		$	8.90		$	11.82		$	11.86
Total Return (%)		6.51			7.72	c		(19.33	)b		4.17			4.26
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		88			94			110			186			277
Ratio of expenses before expense reductions (%)		.72			.59			.70			.66			.68
Ratio of expenses after expense reductions (%)		.72			.59			.70			.66			.68
Ratio of net investment income (%)		2.62			4.50			5.36			4.78			4.56
Portfolio turnover rate (%)		356			222			215			209			198
a Based on average shares outstanding during the period. b Total returns would have been lower had certain expenses not been reduced. c Includes a reimbursement from the Advisor to reimburse the effect of losses incurred as the result of certain operation errors during the period. Excluding this reimbursement, total return would have been 0.02% lower. * Amount is less than $.005.

Performance Summary December 31, 2010

DWS Diversified International Equity VIP

The gross expense ratio of the Fund, as stated in the fee table of the prospectus dated May 1, 2010 is 0.96% for Class A shares and may differ from the expense ratio disclosed in the Financial Highlights table in this report.

Risk Considerations

Investing in foreign securities, particularly those of emerging markets, presents certain risks, such as currency fluctuations, political and economic changes, and market risks. Stocks may decline in value. See the prospectus for details.

Fund returns for the 3-year, 5-year and 10-year periods shown reflect a fee waiver and/or expense reimbursement. Without this waiver/reimbursement, returns would have been lower.

Growth of an Assumed $10,000 Investment in DWS Diversified International Equity VIP
[] DWS Diversified International Equity VIP — Class A [] MSCI EAFE® Index		The Morgan Stanley Capital International (MSCI) EAFE® Index is an unmanaged, free float-adjusted, market capitalization index that tracks international stock performance in the 21 developed markets of Europe, Australasia and the Far East. The MSCI indices are calculated using closing local market prices and translates into US dollars using the London close foreign exchange rates. Index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

Yearly periods ended December 31

Comparative Results
DWS Diversified International Equity VIP		1-Year			3-Year			5-Year			10-Year
Class A	Growth of $10,000	$	11,093		$	7,346		$	10,765		$	12,373
Class A	Average annual total return		10.93	%		-9.77	%		1.48	%		2.15	%
MSCI EAFE Index	Growth of $10,000	$	10,775		$	8,040		$	11,292		$	14,108
MSCI EAFE Index	Average annual total return		7.75	%		-7.02	%		2.46	%		3.50	%

The growth of $10,000 is cumulative.

Information About Your Fund's Expenses

DWS Diversified International Equity VIP

The tables illustrate your Fund's expenses in two ways:

Expenses and Value of a $1,000 Investment for the six months ended December 31, 2010
Actual Fund Return	Class A
Beginning Account Value 7/1/10	$	1,000.00
Ending Account Value 12/31/10	$	1,245.00
Expenses Paid per $1,000*	$	5.21
Hypothetical 5% Fund Return	Class A
Beginning Account Value 7/1/10	$	1,000.00
Ending Account Value 12/31/10	$	1,020.57
Expenses Paid per $1,000*	$	4.69

Annualized Expense Ratio	Class A
DWS Variable Series II — DWS Diversified International Equity VIP	.92%

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

Management Summary December 31, 2010

DWS Diversified International Equity VIP

International equities withstood both the European debt crisis and the sluggish growth in Japan to finish 2010 with a gain of 7.75%, as measured by the MSCI EAFE Index. The Class A shares of the Fund returned 10.93% (unadjusted for contract charges), comfortably outpacing the benchmark.

In managing the Fund, we use a top-down approach based on the principle that country and sector, rather than stock selection, are the primary drivers of return. We divide the universe of international stocks into "risk units" according to sector and country: "UK Financials," for example. We assign these units weights to maximize diversification potential, and we rebalance the portfolio on a quarterly basis to maintain diversification.

The Fund's underweight in the financial sector made a substantial contribution to its return.1 Our overall weighting in financials was less than 40% of the benchmark weight, which added substantial value at a time in which financials were one of the worst-performing sectors in the index. The primary reason for the sector's shortfall was the concern about European banks' exposure to the poor-performing debt of the region's smaller economies. Accordingly, our underweights in the financial sectors of Spain, France and Italy boosted our return.

Our position in the emerging markets also made a positive contribution to the Fund's return. The Fund is invested in two exchanged-traded funds, or ETFs — Vanguard Emerging Markets and iShares MSCI Emerging Markets Index — that together provide the Fund with diversified emerging-markets exposure.2 The MCSI Emerging Markets Index returned 18.88% during 2010, well ahead of the MSCI EAFE Index.

The Fund's largest detractors were generally its underweights in the most economically sensitive sectors of the market, such as the materials, industrials and consumer discretionary sectors. Among risk units, the largest negative contributions came from our underweights in UK materials, Japan industrials and Australia materials.

We believe our proprietary investment process makes this a unique product within the universe of international investments. For investors looking for a way to diversify their domestic portfolios, DWS Diversified International Equity VIP offers a compelling combination of extensive diversification, low turnover and an approach that looks beyond market capitalization to structure a more optimized portfolio.

Robert Wang

Russell Shtern, CFA

Portfolio Managers, QS Investors, LLC

Subadvisor to the Fund

The Morgan Stanley Capital International (MSCI) EAFE Index is an unmanaged, free float-adjusted, market capitalization index that tracks international stock performance in the 21 developed markets of Europe, Australasia and the Far East. The index is calculated using closing local market prices and translates into US dollars using the London close foreign exchange rates.

The Vanguard Emerging Markets invests in stocks of companies located in emerging markets around the world, such as Brazil, Russia, China, Korea and Taiwan. The fund seeks to closely track the return of the MSCI Emerging Markets Index over the long term.

The iShares MSCI Emerging Markets Index seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in emerging markets, as represented by the MSCI Emerging Markets Index.

The Morgan Stanley Capital International (MSCI) Emerging Markets Index is an unmanaged, capitalization-weighted index of companies in a universe of 26 emerging markets. The index is calculated using closing local market prices and translates into US dollars using the London close foreign exchange rates.

Index returns assume reinvested dividends and, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

1 "Overweight" means the Fund holds a higher weighting in a given sector or security than the benchmark. "Underweight" means the Fund holds a lower weighting.

2 An exchange-traded fund (ETF) is a security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange.

Portfolio Summary

DWS Diversified International Equity VIP

Asset Allocation (As a % of Investment Portfolio excluding Securities Lending Collateral)	12/31/10	12/31/09

Common Stocks	87%	87%
Exchange-Traded Funds	9%	9%
Cash Equivalents*	3%	3%
Preferred Stocks	1%	1%
Government & Agency Obligations	—	0%
	100%	100%

Sector Diversification (As a % of Common Stocks, Preferred Stocks and Rights)	12/31/10	12/31/09

Telecommunication Services	16%	15%
Consumer Staples	12%	14%
Materials	11%	9%
Industrials	11%	9%
Financials	10%	10%
Health Care	9%	13%
Energy	9%	6%
Utilities	8%	9%
Consumer Discretionary	8%	9%
Information Technology	6%	6%
	100%	100%

Geographical Diversification (As a % of Investment Portfolio excluding Cash Equivalents and Securities Lending Collateral)	12/31/10	12/31/09

Continental Europe	49%	53%
Japan	21%	16%
Emerging Markets	10%	9%
United Kingdom	7%	7%
Canada	5%	5%
Australia	4%	6%
Asia (excluding Japan)	4%	4%
Other	—	0%
	100%	100%

* In order to keep cash on hand to meet shareholder redemptions or other needs while maintaining exposure to the market, the Fund invests in futures contracts.

Asset allocation, sector and geographical diversifications are subject to change.

For more complete details about the Fund's investment portfolio, see page 81.

Investment Portfolio December 31, 2010

DWS Diversified International Equity VIP

	Shares		Value ($)

Common Stocks 86.4%
Australia 4.3%
Asciano Ltd.*		17,279		28,188
Australia & New Zealand Banking Group Ltd.		2,823		67,420
BHP Billiton Ltd.		9,579		443,332
Brambles Ltd.		13,105		95,435
Coca-Cola Amatil Ltd.		3,584		39,810
Cochlear Ltd.		862		70,894
Commonwealth Bank of Australia		1,574		81,734
Crown Ltd.		9,187		77,521
CSL Ltd.		8,694		322,699
Fairfax Media Ltd.		54,011		77,339
Foster's Group Ltd.		10,776		62,603
Leighton Holdings Ltd.		1,643		51,725
National Australia Bank Ltd.		2,600		63,025
Newcrest Mining Ltd.		1,579		65,311
Origin Energy Ltd.		8,027		136,779
Paladin Energy Ltd.*		7,326		36,941
Qantas Airways Ltd.*		18,444		47,916
QBE Insurance Group Ltd.		2,063		38,297
Rio Tinto Ltd.		900		78,677
Santos Ltd.		9,683		130,235
Sonic Healthcare Ltd.		5,537		65,694
TABCORP Holdings Ltd.		15,130		110,027
Tatts Group Ltd.		24,689		65,150
Telstra Corp., Ltd.		144,475		412,276
Toll Holdings Ltd.		7,945		46,563
Transurban Group (Units)		14,907		78,064
Wesfarmers Ltd.		5,593		183,057
Westfield Group (REIT) (Units)		3,912		38,331
Westfield Retail Trust (REIT)*		3,912		10,283
Westpac Banking Corp.		2,569		58,358
Woodside Petroleum Ltd.		5,329		231,973
Woolworths Ltd.		6,442		177,702
WorleyParsons Ltd.		2,509		68,620
(Cost $2,231,498)				3,561,979
Austria 0.5%
Erste Group Bank AG		3,997		187,838
Immofinanz AG*		21,500		91,676
Raiffeisen Bank International AG		1,267		69,401
Vienna Insurance Group AG Wiener Versicherung Gruppe		1,323		68,751
(Cost $249,456)				417,666
Belgium 1.3%
Ageas		27,095		61,914
Anheuser-Busch InBev NV		6,331		362,093
Compagnie Nationale a Portefeuille		907		44,360
Delhaize Group		1,198		88,481
Dexia SA*		9,616		33,409
Groupe Bruxelles Lambert SA		588		49,447
KBC Groep NV*		1,952		66,516
Solvay SA		1,904		202,909
Umicore		3,759		195,501
(Cost $778,860)				1,104,630
Bermuda 0.2%
Seadrill Ltd. (Cost $63,651)		4,800		162,369
	Shares		Value ($)

Canada 4.9%
Agnico-Eagle Mines Ltd.		700		53,927
Bank of Montreal		700		40,467
Bank of Nova Scotia		1,100		63,170
Barrick Gold Corp.		2,600		138,904
BCE, Inc.		4,300		152,833
Bombardier, Inc. "B"		8,400		42,325
Canadian Imperial Bank of Commerce		400		31,512
Canadian National Railway Co.		3,100		206,864
Canadian Natural Resources Ltd.		2,800		124,892
Canadian Pacific Railway Ltd.		1,200		77,989
Canadian Tire Corp., Ltd. "A"		1,000		68,581
Canadian Utilities Ltd. "A"		2,800		153,193
CGI Group, Inc. "A"*		4,600		79,574
EnCana Corp.		1,500		43,885
Fortis, Inc.		5,800		198,214
George Weston Ltd.		800		67,746
Gildan Activewear, Inc.*		900		25,661
Goldcorp, Inc.		1,800		83,057
Imperial Oil Ltd.		2,100		85,707
Kinross Gold Corp.		2,300		43,742
Loblaw Companies Ltd.		2,100		85,263
Magna International, Inc. "A"		1,906		99,508
Manulife Financial Corp.		2,800		48,295
Metro, Inc. "A"		1,700		77,280
Open Text Corp.*		700		32,195
Potash Corp. of Saskatchewan, Inc.		700		108,748
Research In Motion Ltd.*		7,100		414,661
Rogers Communications, Inc. "B" (a)		5,000		173,992
Royal Bank of Canada		1,400		73,668
Saputo, Inc.		2,200		87,575
Shaw Communications, Inc. "B"		3,800		81,595
Shoppers Drug Mart Corp.		2,900		115,294
SNC-Lavalin Group, Inc.		1,200		72,135
Suncor Energy, Inc.		3,520		135,518
Teck Resources Ltd. "B"		1,500		93,216
Telus Corp.		1,700		73,946
Thomson Reuters Corp. (b)		3,000		112,360
Thomson Reuters Corp. (b)		1,158		43,159
Tim Hortons, Inc.		2,400		99,205
Toronto-Dominion Bank		1,000		74,676
TransAlta Corp.		8,100		172,297
Viterra, Inc.*		4,900		45,733
(Cost $2,788,578)				4,102,562
Cyprus 0.0%
Bank of Cyprus Public Co., Ltd. (Cost $60,706)		11,062		38,138
Denmark 2.2%
A P Moller-Maersk AS "A"		10		88,121
A P Moller-Maersk AS "B"		25		226,448
Carlsberg AS "B"		5,037		504,084
Coloplast AS "B"		299		40,638
Danske Bank AS*		12,075		309,525
DSV AS		3,456		76,339
Novo Nordisk AS "B"		3,809		428,722
Tryg AS		621		28,673
Vestas Wind Systems AS*		3,931		124,142
	Shares		Value ($)

William Demant Holding AS*		427		31,543
(Cost $1,278,483)				1,858,235
Finland 3.1%
Fortum Oyj		22,604		685,753
Kone Oyj "B"		3,962		220,119
Metso Corp.		3,040		169,715
Nokia Oyj		37,878		392,071
Outokumpu Oyj		4,027		74,775
Pohjola Bank PLC		5,199		62,309
Rautaruukki Oyj		2,774		64,975
Sampo Oyj "A"		9,439		253,037
Stora Enso Oyj "R"		19,919		204,757
UPM-Kymmene Oyj		16,621		293,846
Wartsila Corp.		1,893		144,496
(Cost $1,735,409)				2,565,853
France 7.2%
Air Liquide SA		2,497		315,789
Alcatel-Lucent*		27,533		80,207
Atos Origin SA*		697		37,107
AXA SA		3,081		51,258
BNP Paribas		1,550		98,613
Bouygues SA		1,062		45,775
Cap Gemini		1,723		80,425
Carrefour SA		6,517		268,662
Casino Guichard-Perrachon SA		996		97,093
Compagnie de Saint-Gobain		1,739		89,467
Compagnie Generale de Geophysique-Veritas*		1,118		34,026
Credit Agricole SA		3,149		39,993
DANONE SA		6,358		399,491
Dassault Systemes SA		1,112		83,838
Electricite de France		964		39,541
Essilor International SA		3,351		215,725
France Telecom SA		50,588		1,054,234
GDF Suez		6,014		215,780
Iliad SA		426		46,338
L'Oreal SA		2,731		303,195
Lafarge SA		1,526		95,679
LVMH Moet Hennessy Louis Vuitton SA		420		69,089
Pernod Ricard SA		2,240		210,610
Sanofi-Aventis		13,946		891,735
Schneider Electric SA		627		93,840
Societe Generale		1,401		75,298
Suez Environnement Co.		1,869		38,587
Technip SA		213		19,668
Total SA		10,370		549,447
Unibail-Rodamco SE (REIT)		265		52,410
Vallourec SA		689		72,368
Veolia Environnement		2,122		62,015
Vinci SA		1,171		63,656
Vivendi		3,089		83,382
(Cost $5,022,648)				5,974,341
Germany 4.9%
Allianz SE (Registered)		1,458		173,254
BASF SE		2,590		206,619
Bayer AG		2,784		205,730
Bayerische Motoren Werke (BMW) AG		649		51,004
Beiersdorf AG		3,770		209,184
Daimler AG (Registered)*		1,906		129,162
Deutsche Boerse AG		688		47,619
	Shares		Value ($)

Deutsche Post AG (Registered)		3,555		60,295
Deutsche Telekom AG (Registered)		81,553		1,053,208
E.ON AG		6,205		190,309
HeidelbergCement AG		833		52,233
Henkel AG & Co. KGaA		4,251		219,399
Infineon Technologies AG*		8,199		76,227
K+S AG		629		47,406
Linde AG		769		116,725
MAN SE		245		29,130
Merck KGaA		430		34,415
Metro AG		4,361		313,982
Muenchener Rueckversicherungs- Gesellschaft AG (Registered)		598		90,704
RWE AG		1,021		68,116
SAP AG		5,623		286,324
Siemens AG (Registered)		2,260		279,799
Suedzucker AG		3,769		100,244
ThyssenKrupp AG		1,086		44,993
(Cost $2,921,913)				4,086,081
Greece 0.3%
Alpha Bank AE*		9,054		45,976
EFG Eurobank Ergasias*		4,435		22,224
National Bank of Greece SA*		18,976		153,414
Piraeus Bank SA*		7,558		36,864
(Cost $428,467)				258,478
Hong Kong 2.2%
Cheung Kong (Holdings) Ltd.		5,000		77,064
Cheung Kong Infrastructure Holdings Ltd.		7,000		32,060
CLP Holdings Ltd.		19,500		158,804
Esprit Holdings Ltd.		18,495		87,802
Genting Singapore PLC*		116,000		197,951
Hang Seng Bank Ltd.		2,200		36,116
Hong Kong & China Gas Co., Ltd.		51,500		122,310
Hong Kong Exchanges & Clearing Ltd.		3,500		79,386
HongKong Electric Holdings Ltd.		17,500		110,320
Hutchison Whampoa Ltd.		26,000		268,269
Li & Fung Ltd.		26,000		152,030
MTR Corp., Ltd.		28,500		103,766
Noble Group Ltd.		29,363		49,649
NWS Holdings Ltd.		30,000		45,466
Shangri-La Asia Ltd.		24,000		65,150
SJM Holdings Ltd.		16,000		25,401
Sun Hung Kai Properties Ltd.		5,000		82,724
Swire Pacific Ltd. "A"		3,500		57,547
Yue Yuen Industrial (Holdings) Ltd.		14,500		52,047
(Cost $1,126,048)				1,803,862
Ireland 0.7%
CRH PLC (b)		20,956		434,054
CRH PLC (b)		1,456		30,449
Experian PLC		6,430		80,000
(Cost $437,178)				544,503
Italy 3.7%
A2A SpA		20,926		28,791
Assicurazioni Generali SpA		3,242		61,622
Atlantia SpA		5,502		112,337
Enel SpA		46,072		230,142
Eni SpA		20,641		451,027
Fiat SpA		12,889		265,393
Finmeccanica SpA		12,332		140,217
Intesa Sanpaolo		25,029		67,876
	Shares		Value ($)

Luxottica Group SpA		2,649		80,626
Mediaset SpA		10,870		65,803
Prysmian SpA		6,182		105,278
Saipem SpA		2,103		103,613
Snam Rete Gas SpA		9,753		48,499
Telecom Italia SpA		552,428		714,199
Telecom Italia SpA (RSP)		372,172		404,058
Terna — Rete Elettrica Nationale SpA		14,939		63,103
UBI Banca — Unione di Banche Italiane ScpA		3,919		34,330
UniCredit SpA		41,574		85,980
(Cost $2,699,436)				3,062,894
Japan 20.1%
AEON Co., Ltd.		11,300		141,313
Ajinomoto Co., Inc.		11,000		114,568
Alfresa Holdings Corp.		1,000		44,374
Asahi Breweries Ltd.		7,000		135,513
Asahi Glass Co., Ltd.		8,000		93,400
Asahi Kasei Corp.		14,000		91,320
Astellas Pharma, Inc.		5,900		224,755
Canon, Inc.		6,200		317,841
Central Japan Railway Co.		5		41,861
Chubu Electric Power Co., Inc.		8,600		211,388
Chugai Pharmaceutical Co., Ltd.		3,700		67,859
Chugoku Electric Power Co., Inc.		3,500		71,127
Cosmo Oil Co., Ltd.		43,000		140,754
Dai-ichi Life Insurance Co., Ltd.		47		76,280
Daiichi Sankyo Co., Ltd.		9,500		207,835
Daikin Industries Ltd.		1,100		38,978
Daiwa House Industry Co., Ltd.		3,000		36,766
Daiwa Securities Group, Inc.		10,000		51,423
Denso Corp.		1,100		37,930
East Japan Railway Co.		926		60,196
Eisai Co., Ltd. (a)		3,700		133,913
Electric Power Development Co., Ltd.		2,600		81,558
FamilyMart Co., Ltd.		1,400		52,743
FANUC Corp.		900		138,066
FUJIFILM Holdings Corp.		2,300		83,088
Fujitsu Ltd.		13,000		90,394
Hisamitsu Pharmaceutical Co., Inc.		900		37,898
Hitachi Ltd.		18,000		96,042
Hokkaido Electric Power Co., Inc.		2,400		49,068
Hokuriku Electric Power Co.		2,800		68,793
Honda Motor Co., Ltd.		2,900		114,619
HOYA		2,100		50,957
Idemitsu Kosan Co., Ltd.		1,500		159,151
INPEX Corp.		102		596,635
ITOCHU Corp.		6,000		60,680
Japan Petroleum Exploration Co., Ltd.		2,300		87,453
Japan Prime Realty Investment Corp. (REIT)		10		30,790
Japan Retail Fund Investment Corp. (REIT)		20		38,352
Japan Tobacco, Inc.		73		269,810
JFE Holdings, Inc.		5,300		184,414
JX Holdings, Inc.		106,320		720,011
Kansai Electric Power Co., Inc.		9,900		244,348
Kao Corp.		7,800		210,059
KDDI Corp.		69		398,341
Keyence Corp.		200		57,822
Kikkoman Corp.		4,000		44,753
	Shares		Value ($)

Kirin Holdings Co., Ltd.		14,000		196,265
Kobe Steel Ltd.		33,000		83,641
Komatsu Ltd.		4,200		126,962
Kubota Corp.		10,000		94,620
Kuraray Co., Ltd.		6,000		85,941
Kyocera Corp.		800		81,591
Kyowa Hakko Kirin Co., Ltd.		5,000		51,447
Kyushu Electric Power Co., Inc.		4,800		107,579
Lawson, Inc.		900		44,503
MEIJI Holdings Co., Ltd.		1,200		54,215
Miraca Holdings, Inc.		1,000		40,261
Mitsubishi Chemical Holdings Corp.		12,000		81,380
Mitsubishi Corp.		6,300		170,369
Mitsubishi Electric Corp.		11,000		115,331
Mitsubishi Estate Co., Ltd.		5,000		92,668
Mitsubishi Heavy Industries Ltd.		18,000		67,574
Mitsubishi Materials Corp.*		29,000		92,404
Mitsubishi Tanabe Pharma Corp.		3,000		50,656
Mitsubishi UFJ Financial Group, Inc.		51,400		277,722
Mitsui & Co., Ltd.		5,000		82,495
Mitsui Fudosan Co., Ltd.		3,000		59,759
Mitsui O.S.K Lines Ltd.		7,000		47,717
Mizuho Financial Group, Inc.		88,000		165,702
MS&AD Insurance Group Holdings, Inc.		2,400		60,114
Murata Manufacturing Co., Ltd.		1,300		91,029
NEC Corp.		26,000		78,070
Nidec Corp.		500		50,417
Nintendo Co., Ltd.		500		146,692
Nippon Steel Corp.		58,000		208,407
Nippon Telegraph & Telephone Corp.		12,109		553,990
Nishi-Nippon City Bank Ltd.		13,000		39,521
Nissan Motor Co., Ltd.		6,000		57,065
Nisshin Seifun Group, Inc.		4,000		50,755
Nissin Foods Holdings Co., Ltd.		1,100		39,414
Nitto Denko Corp.		1,900		89,405
NKSJ Holdings, Inc.*		12,000		88,289
Nomura Holdings, Inc.		12,000		76,048
Nomura Real Estate Office Fund, Inc. (REIT)		7		50,506
NTT DoCoMo, Inc.		354		618,098
OJI Paper Co., Ltd.		11,000		53,224
Olympus Corp.		3,500		105,835
Ono Pharmaceutical Co., Ltd.		1,500		70,003
Oriental Land Co., Ltd.		700		64,821
ORIX Corp.		260		25,562
Osaka Gas Co., Ltd.		30,000		116,371
Panasonic Corp.		4,600		64,934
Resona Holdings, Inc. (a)		2,600		15,595
Ricoh Co., Ltd.		4,000		58,556
ROHM Co., Ltd.		1,100		71,796
Santen Pharmaceutical Co., Ltd.		1,300		45,151
Sapporo Hokuyo Holdings, Inc.		10,400		48,644
Sapporo Holdings Ltd.		7,000		31,715
Seven & I Holdings Co., Ltd.		12,000		320,512
Sharp Corp.		3,000		30,896
Shikoku Electric Power Co., Inc.		2,400		70,587
Shin-Etsu Chemical Co., Ltd.		4,100		221,962
Shionogi & Co., Ltd.		5,000		98,446
Shiseido Co., Ltd.		5,000		109,169
Showa Shell Sekiyu KK		14,800		135,502
SOFTBANK Corp.		17,300		598,557
Sony Corp.		2,100		75,629
Sumitomo Chemical Co., Ltd.		14,000		68,912
	Shares		Value ($)

Sumitomo Corp.		5,300		74,925
Sumitomo Electric Industries Ltd.		6,500		90,214
Sumitomo Metal Industries Ltd.		26,000		63,987
Sumitomo Metal Mining Co., Ltd.		4,000		69,812
Sumitomo Mitsui Financial Group, Inc.		5,700		202,892
Sumitomo Realty & Development Co., Ltd.		2,000		47,715
Sumitomo Trust & Banking Co., Ltd.		9,000		56,720
Suzuken Co., Ltd.		1,300		39,690
Sysmex Corp.		1,100		76,235
T&D Holdings, Inc.		1,800		45,599
Taisho Pharmaceutical Co., Ltd.		2,000		43,759
Takeda Pharmaceutical Co., Ltd.		10,200		501,659
TDK Corp.		1,200		83,399
Terumo Corp.		2,300		129,328
Tohoku Electric Power Co., Inc.		5,600		124,836
Tokio Marine Holdings, Inc.		2,200		65,711
Tokyo Electric Power Co., Inc.		21,600		527,510
Tokyo Electron Ltd.		900		56,898
Tokyo Gas Co., Ltd.		31,000		137,415
TonenGeneral Sekiyu KK		19,000		207,743
Toray Industries, Inc.		10,000		59,696
Toshiba Corp.		25,000		136,079
Toyo Suisan Kaisha Ltd.		2,000		44,482
Toyota Motor Corp.		4,600		181,144
Tsumura & Co.		1,500		48,553
Unicharm Corp.		1,500		59,585
UNY Co., Ltd.		5,600		56,576
Yakult Honsha Co., Ltd.		1,700		48,948
Yamaguchi Financial Group, Inc.		3,000		30,368
(Cost $13,501,410)				16,687,718
Luxembourg 0.5%
ArcelorMittal		6,320		239,681
Millicom International Cellular SA (SDR)		943		90,465
Tenaris SA		4,211		103,183
(Cost $232,092)				433,329
Macau 0.2%
Sands China Ltd.*		32,000		70,811
Wynn Macau Ltd.		30,000		67,003
(Cost $91,291)				137,814
Netherlands 5.2%
AEGON NV*		13,839		84,624
Akzo Nobel NV		4,125		256,236
ASML Holding NV		11,111		429,097
Heineken Holding NV		913		39,682
Heineken NV		3,364		164,933
ING Groep NV (CVA)*		22,591		219,771
Koninklijke (Royal) KPN NV		73,369		1,070,630
Koninklijke Ahold NV		14,948		197,273
Koninklijke DSM NV		2,400		136,639
Koninklijke Philips Electronics NV		8,829		270,415
Randstad Holding NV*		1,215		64,132
Reed Elsevier NV		17,980		222,415
Royal Dutch Shell PLC "A"		3,949		131,665
Royal Dutch Shell PLC "B"		3,179		104,827
TNT NV		4,235		111,770
Unilever NV (CVA)		21,114		657,401
Wolters Kluwer NV		9,269		203,133
(Cost $3,155,279)				4,364,643
	Shares		Value ($)

Norway 2.7%
Aker Solutions ASA		3,600		61,310
DnB NOR ASA		24,684		346,421
Norsk Hydro ASA		35,480		259,456
Orkla ASA		33,980		330,413
Renewable Energy Corp. ASA*		6,626		20,237
Statoil ASA		17,400		413,572
Telenor ASA		25,300		411,353
Yara International ASA		7,642		442,069
(Cost $1,356,007)				2,284,831
Portugal 0.3%
EDP — Energias de Portugal SA (Cost $266,681)		79,204		263,648
Singapore 1.7%
CapitaLand Ltd.		20,000		57,817
DBS Group Holdings Ltd.		10,000		111,583
Fraser & Neave Ltd.		15,000		74,921
Jardine Cycle & Carriage Ltd.		2,000		57,038
Keppel Corp., Ltd.		14,000		123,489
Oversea-Chinese Banking Corp., Ltd.		14,000		107,780
SembCorp Industries Ltd.		19,000		76,098
Singapore Airlines Ltd.		6,000		71,532
Singapore Exchange Ltd.		7,000		45,927
Singapore Press Holdings Ltd.		37,000		114,747
Singapore Technologies Engineering Ltd.		15,000		39,974
Singapore Telecommunications Ltd.		167,000		396,891
United Overseas Bank Ltd.		7,000		99,271
(Cost $773,177)				1,377,068
Spain 3.8%
Abertis Infraestructuras SA		5,893		106,010
ACS, Actividades de Construccion y Servicios SA (a)		2,437		114,277
Banco Bilbao Vizcaya Argentaria SA		9,332		94,405
Banco Santander SA		14,432		153,345
EDP Renovaveis SA*		11,598		67,217
Enagas		2,258		44,983
Ferrovial SA		9,049		89,992
Gas Natural SDG SA		2,049		31,759
Gestevision Telecinco SA		3,887		42,760
Iberdrola Renovables		11,066		39,296
Iberdrola SA		31,585		243,338
Iberia Lineas Aereas de Espana SA*		8,829		37,697
Industria de Diseno Textil SA		4,356		326,437
Red Electrica Corporacion SA		1,144		53,788
Repsol YPF SA		22,674		632,404
Telefonica SA		45,620		1,036,077
Zardoya Otis SA		3,050		42,985
(Cost $2,508,005)				3,156,770
Sweden 3.1%
AB SKF "B"		2,358		67,923
Assa Abloy AB "B"		2,544		71,733
Atlas Copco AB "A"		3,215		81,187
Boliden AB		7,309		148,741
Electrolux AB "B"		3,335		94,669
Hennes & Mauritz AB "B"		11,314		376,974
Holmen AB "B"		2,160		71,148
Husqvarna AB "B"		7,799		65,087
Nordea Bank AB		12,273		133,467
Sandvik AB		5,637		109,770
Skandinaviska Enskilda Banken AB "A"		6,486		54,090
	Shares		Value ($)

Skanska AB "B"		3,667		72,717
SSAB AB "A"		5,874		98,701
Svenska Cellulosa AB "B"		18,870		297,735
Svenska Handelsbanken AB "A"		2,807		89,680
Tele2 AB "B"		4,023		84,051
Telefonaktiebolaget LM Ericsson "B"		28,799		333,484
TeliaSonera AB		21,657		171,703
Volvo AB "B"*		7,507		133,796
(Cost $1,485,950)				2,556,656
Switzerland 6.6%
ABB Ltd. (Registered)*		11,048		246,740
Adecco SA (Registered)		824		53,911
Aryzta AG*		543		25,085
Compagnie Financiere Richemont SA "A"		4,125		242,678
Credit Suisse Group AG (Registered)		1,994		80,455
Geberit AG (Registered)		332		76,769
Givaudan SA (Registered)		102		110,133
Holcim Ltd. (Registered)		2,786		210,546
Lonza Group AG (Registered)		466		37,382
Nestle SA (Registered)		19,171		1,122,990
Novartis AG (Registered)		9,930		584,327
Roche Holding AG (Genusschein)		3,411		500,027
Sika AG		27		59,255
Sonova Holding AG (Registered)		289		37,430
STMicroelectronics NV		7,073		73,146
Swatch Group AG (Bearer)		301		134,189
Swiss Reinsurance Co., Ltd. (Registered)		1,091		59,420
Swisscom AG (Registered)		2,760		1,214,110
Syngenta AG (Registered)		861		252,195
UBS AG (Registered)*		7,534		123,650
Wolseley PLC*		2,345		74,804
Xstrata PLC		2,858		67,084
Zurich Financial Services AG		398		103,083
(Cost $3,299,178)				5,489,409
United Kingdom 6.7%
Anglo American PLC		3,286		170,884
ARM Holdings PLC		29,996		197,964
AstraZeneca PLC		8,391		382,268
Autonomy Corp. PLC*		5,572		130,744
BAE Systems PLC		18,633		95,867
Barclays PLC		8,467		34,540
BG Group PLC		5,435		109,819
BHP Billiton PLC		4,437		176,471
BP PLC		25,484		184,973
British American Tobacco PLC		2,268		87,110
British Sky Broadcasting Group PLC		4,941		56,698
BT Group PLC		57,356		161,678
Cable & Wireless Communications PLC		24,059		18,204
Capita Group PLC		5,549		60,257
Centrica PLC		28,642		148,078
Compass Group PLC		11,814		107,016
Diageo PLC		2,849		52,636
GlaxoSmithKline PLC		27,730		536,099
HSBC Holdings PLC		12,924		131,195
Imperial Tobacco Group PLC		881		27,032
Inmarsat PLC		5,084		53,385
International Power PLC		9,966		67,994
	Shares		Value ($)

Kingfisher PLC		14,696		60,352
Lloyds Banking Group PLC*		35,330		36,190
Marks & Spencer Group PLC		8,450		48,613
National Grid PLC		13,726		118,343
Next PLC		1,325		40,800
Pearson PLC		4,110		64,592
Reed Elsevier PLC		7,134		60,229
Rio Tinto PLC		2,348		164,240
Rolls-Royce Group PLC*		12,478		121,201
SABMiller PLC		1,731		60,898
Scottish & Southern Energy PLC		5,665		108,196
Severn Trent PLC		2,133		49,152
Shire PLC		4,174		100,413
Smith & Nephew PLC		6,163		65,003
Smiths Group PLC		3,914		75,974
Standard Chartered PLC		1,687		45,384
Tesco PLC		11,554		76,559
The Sage Group PLC		36,069		153,747
Unilever PLC		1,529		46,795
United Utilities Group PLC		6,323		58,360
Vodafone Group PLC		342,837		886,229
William Morrison Supermarkets PLC		8,072		33,678
WPP PLC		7,538		92,786
(Cost $3,894,272)				5,558,646
Total Common Stocks (Cost $52,385,673)				71,852,123

Preferred Stocks 0.6%
Germany
Fresenius SE		632		54,108
Henkel AG & Co. KGaA		5,783		359,427
Volkswagen AG		396		64,171
Total Preferred Stocks (Cost $216,838)				477,706

Exchange-Traded Funds 9.6%
Emerging Markets
iShares MSCI Emerging Markets Index (a)		83,800		3,990,556
Vanguard Emerging Markets (a)		82,600		3,977,190
Total Exchange-Traded Funds (Cost $5,469,338)				7,967,746

Securities Lending Collateral 7.9%
Daily Assets Fund Institutional, 0.27% (c) (d) (Cost $6,610,195)		6,610,195		6,610,195

Cash Equivalents 3.2%
Central Cash Management Fund, 0.19% (c) (Cost $2,661,762)		2,661,762		2,661,762

	% of Net Assets			Value ($)

Total Investment Portfolio (Cost $67,343,806)+		107.7			89,569,532
Other Assets and Liabilities, Net		(7.7	)		(6,397,099	)
Net Assets		100.0			83,172,433

* Non-income producing security.

+ The cost for federal income tax purposes was $67,805,906. At December 31, 2010, net unrealized appreciation for all securities based on tax cost was $21,763,626. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $22,921,273 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $1,157,647.

(a) All or a portion of these securities were on loan (see Notes to Financial Statements). The value of all securities loaned at December 31, 2010 amounted to $6,491,313, which is 7.8% of net assets.

(b) Securities with the same description are the same corporate entity but trade on different stock exchanges.

(c) Affiliated fund managed by Deutsche Investment Management Americas Inc. The rate shown is the annualized seven-day yield at period end.

(d) Represents collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates.

CVA: Certificaten Van Aandelen

MSCI: Morgan Stanley Capital International

REIT: Real Estate Investment Trust

RSP: Risparmio (Convertible Savings Shares)

SDR: Swedish Depositary Receipt

At December 31, 2010, open futures contracts purchased were as follows:

Futures	Currency	Expiration Date	Contracts		Notional Value ($)		Unrealized Appreciation (Depreciation) ($)
ASX SPI 200 Index	AUD	3/17/2011		2		241,892		(3,375	)
DJ Euro Stoxx 50 Index	EUR	3/18/2011		42		1,568,121		(38,726	)
FTSE 100 Index	GBP	3/18/2011		3		275,633		1,684
Nikkei 225 Index	USD	3/10/2011		13		664,950		(450	)
S&P TSX 60 Index	CAD	3/17/2011		1		154,300		1,840
Total net unrealized depreciation								(39,027	)

Currency Abbreviations

AUD Australian Dollar

CAD Canadian Dollar

EUR Euro

GBP British Pound

USD United States Dollar

For information on the Fund's policy and additional disclosures regarding futures contracts, please refer to Note B in the accompanying Notes to Financial Statements.

Fair Value Measurements

Assets	Level 1			Level 2		Level 3		Total

Common and Preferred Stocks
Australia	$	—		$	3,561,979	$	—	$	3,561,979
Austria		—			417,666		—		417,666
Belgium		—			1,104,630		—		1,104,630
Bermuda		—			162,369		—		162,369
Canada		4,102,562			—		—		4,102,562
Cyprus		—			38,138		—		38,138
Denmark		—			1,858,235		—		1,858,235
Finland		—			2,565,853		—		2,565,853
France		—			5,974,341		—		5,974,341
Germany		—			4,563,787		—		4,563,787
Greece		—			258,478		—		258,478
Hong Kong		—			1,803,862		—		1,803,862
Ireland		—			544,503		—		544,503
Italy		—			3,062,894		—		3,062,894
Japan		—			16,687,718		—		16,687,718
Luxembourg		—			433,329		—		433,329
Macau		—			137,814		—		137,814
Netherlands		—			4,364,643		—		4,364,643
Norway		—			2,284,831		—		2,284,831
Portugal		—			263,648		—		263,648
Singapore		—			1,377,068		—		1,377,068
Spain		—			3,156,770		—		3,156,770
Sweden		—			2,556,656		—		2,556,656
Switzerland		—			5,489,409		—		5,489,409
United Kingdom		—			5,558,646		—		5,558,646
Exchange-Traded Funds		7,967,746			—		—		7,967,746
Short-Term Investments (e)		9,271,957			—		—		9,271,957
Total	$	21,342,265		$	68,227,267	$	—	$	89,569,532
Liabilities
Derivatives (f)	$	(39,027	)	$	—	$	—	$	(39,027	)
Total	$	(39,027	)	$	—	$	—	$	(39,027	)

There have been no significant transfers between Level 1 and Level 2 fair value measurements during the year ended December 31, 2010.

(e) See Investment Portfolio for additional detailed categorizations.

(f) Derivatives include unrealized appreciation (depreciation) on open futures contracts.

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

Statement of Assets and Liabilities

as of December 31, 2010
Assets
Investments: Investments in unaffiliated securities, at value (cost $58,071,849) — including $6,491,313 of securities loaned	$	80,297,575
Investment in Daily Assets Fund Institutional (cost $6,610,195)*		6,610,195
Investment in Central Cash Management Fund (cost $2,661,762)		2,661,762
Total investments, at value (cost $67,343,806)		89,569,532
Foreign currency, at value (cost $87,151)		88,902
Deposits with broker for open futures contracts		281,548
Receivable for investments sold		1,245
Receivable for Fund shares sold		14,646
Dividends receivable		70,486
Interest receivable		1,119
Foreign taxes recoverable		10,924
Other assets		459
Total assets		90,038,861
Liabilities
Payable upon return of securities loaned		6,610,195
Payable for Fund shares redeemed		60,107
Payable for daily variation margin on open futures contracts		39,027
Accrued management fee		55,970
Other accrued expenses and payables		101,129
Total liabilities		6,866,428
Net assets, at value	$	83,172,433
Net Assets Consist of
Undistributed net investment income		1,336,930
Net unrealized appreciation (depreciation) on: Investments		22,225,726
Futures		(39,027	)
Foreign currency		2,382
Accumulated net realized gain (loss)		(69,565,313	)
Paid-in capital		129,211,735
Net assets, at value	$	83,172,433
Class A Net Asset Value, offering and redemption price per share ($83,172,433 ÷ 10,297,508 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)	$	8.08

* Represents collateral on securities loaned.

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

Statement of Operations

for the year ended December 31, 2010
Investment Income
Income: Dividends (net of foreign taxes withheld of $330,003)	$	2,216,179
Interest		585
Income distributions — Central Cash Management Fund		1,903
Securities lending income, including income from Daily Assets Fund Institutional, net of borrower rebates		94,036
Total income		2,312,703
Expenses: Management fee		519,737
Administration fee		79,960
Services to shareholders		2,094
Custodian fee		68,980
Legal fees		8,349
Audit and tax fees		60,810
Trustees' fees and expenses		5,193
Reports to shareholders		11,959
Other		35,847
Total expenses		792,929
Net investment income (loss)		1,519,774
Realized and Unrealized Gain (Loss)
Net realized gain (loss) from: Investments		2,946,085
Futures		139,952
Foreign currency		(29,672	)
		3,056,365
Change in net unrealized appreciation (depreciation) on: Investments		3,584,528
Futures		(169,560	)
Foreign currency		(17,721	)
		3,397,247
Net gain (loss)		6,453,612
Net increase (decrease) in net assets resulting from operations	$	7,973,386

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

Statement of Changes in Net Assets

	Years Ended December 31,
Increase (Decrease) in Net Assets	2010			2009
Operations: Net investment income (loss)	$	1,519,774		$	1,533,993
Net realized gain (loss)		3,056,365			(23,604,083	)
Change in net unrealized appreciation (depreciation)		3,397,247			41,842,935
Net increase (decrease) in net assets resulting from operations		7,973,386			19,772,845
Distributions to shareholders from: Net investment income: Class A		(1,843,687	)		(5,187,036	)
Total distributions		(1,843,687	)		(5,187,036	)
Fund share transactions: Class A Proceeds from shares sold		3,841,591			1,865,488
Reinvestment of distributions		1,843,687			5,187,036
Payments for shares redeemed		(14,779,706	)		(26,149,949	)
Shares converted*		—			72,862
Net increase (decrease) in net assets from Class A share transactions		(9,094,428	)		(19,024,563	)
Class B Payments for shares redeemed		—			(294	)
Shares converted*		—			(72,862	)
Net increase (decrease) in net assets from Class B share transactions		—			(73,156	)
Increase (decrease) in net assets		(2,964,729	)		(4,511,910	)
Net assets at beginning of period		86,137,162			90,649,072
Net assets at end of period (including undistributed net investment income of $1,336,930 and $1,659,097, respectively)	$	83,172,433		$	86,137,162
Other Information
Class A Shares outstanding at beginning of period		11,562,525			14,554,587
Shares sold		508,055			283,708
Shares issued to shareholders in reinvestment of distributions		252,215			1,027,136
Shares redeemed		(2,025,287	)		(4,318,475	)
Shares converted*		—			15,569
Net increase (decrease) in Class A shares		(1,265,017	)		(2,992,062	)
Shares outstanding at end of period		10,297,508			11,562,525
Class B Shares outstanding at beginning of period		—			15,672
Shares issued to shareholders in reinvestment of distributions		—			—
Shares redeemed		—			(53	)
Shares converted*		—			(15,619	)
Net increase (decrease) in Class B shares		—			(15,672	)
Shares outstanding at end of period		—			—

* On March 6, 2009, Class B shares converted into Class A shares.

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

Financial Highlights

Class A Years Ended December 31,	2010			2009			2008			2007			2006
Selected Per Share Data
Net asset value, beginning of period	$	7.45		$	6.22		$	16.76		$	16.31		$	13.25
Income (loss) from investment operations: Net investment incomea		.14			.12			.33	d		.25			.24	b
Net realized and unrealized gain (loss)		.66			1.51			(6.67	)		2.24			3.11
Total from investment operations		.80			1.63			(6.34	)		2.49			3.35
Less distributions from: Net investment income		(.17	)		(.40	)		(.13	)		(.46	)		(.29	)
Net realized gains		—			—			(4.07	)		(1.58	)		—
Total distributions		(.17	)		(.40	)		(4.20	)		(2.04	)		(.29	)
Net asset value, end of period	$	8.08		$	7.45		$	6.22		$	16.76		$	16.31
Total Return (%)		10.93			29.36			(48.81	)c,e		16.71			25.56
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		83			86			91			236			223
Ratio of expenses before expense reductions (%)		.99			.94			1.02			.93			.88
Ratio of expenses after expense reductions (%)		.99			.94			1.01			.93			.88
Ratio of net investment income (%)		1.90			1.89			3.04	d		1.53			1.65	b
Portfolio turnover rate (%)		14			139			132			117			122
a Based on average shares outstanding during the period. b Net investment income per share and the ratio of net investment income without non-recurring dividend income amounting to $0.20 per share and 1.39% of average daily net assets, respectively. c Total return would have been lower had certain expenses not been reimbursed. d Net investment income per share and ratio of net investment income include non-recurring dividend income amounting to $0.16 per share and 1.49% of average daily net assets, respectively. e Includes a reimbursement from the Advisor to reimburse the effect of losses incurred as the result of certain operation errors during the period. Excluding this reimbursement, total return would have been 0.14% lower.

Performance Summary December 31, 2010

DWS Dreman Small Mid Cap Value VIP

The gross expense ratios of the Fund, as stated in the fee table of the prospectus dated May 1, 2010 are 0.79% and 1.14% for Class A and Class B shares, respectively, and may differ from the expense ratios disclosed in the Financial Highlights tables in this report.

Risk Considerations

Any Fund that focuses in a particular segment of the market will generally be more volatile than a fund that invests more broadly. Stocks of small and medium-sized companies involve greater risk than securities of larger, more-established companies. Any decline in value of a Fund security that is out on loan by the Fund will adversely affect performance. Financial failure of the borrower may mean a delay in recovery or loss of rights in the collateral. Stocks may decline in value. See the prospectus for details.

Fund returns shown for the 3-year, 5-year and 10-year/Life of Class periods reflect a fee waiver and/or expense reimbursement. Without this waiver/reimbursement, returns would have been lower.

Growth of an Assumed $10,000 Investment in DWS Dreman Small Mid Cap Value VIP
[] DWS Dreman Small Mid Cap Value VIP — Class A [] Russell 2500™ Value Index		The Russell 2500™ Value Index is an unmanaged Index of those securities in the Russell 3000® Index with lower price-to-book ratios and lower forecasted growth values. Index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

Yearly periods ended December 31

Comparative Results
DWS Dreman Small Mid Cap Value VIP		1-Year			3-Year			5-Year			10-Year
Class A	Growth of $10,000	$	12,307		$	10,628		$	13,698		$	28,196
Class A	Average annual total return		23.07	%		2.05	%		6.50	%		10.92	%
Russell 2500 Value Index	Growth of $10,000	$	12,482		$	10,839		$	12,079		$	22,678
Russell 2500 Value Index	Average annual total return		24.82	%		2.72	%		3.85	%		8.53	%
DWS Dreman Small Mid Cap Value VIP		1-Year			3-Year			5-Year			Life of Class*
Class B	Growth of $10,000	$	12,266		$	10,518		$	13,454		$	22,074
Class B	Average annual total return		22.66	%		1.70	%		6.11	%		9.76	%
Russell 2500 Value Index	Growth of $10,000	$	12,482		$	10,839		$	12,079		$	19,734
Russell 2500 Value Index	Average annual total return		24.82	%		2.72	%		3.85	%		8.33	%

The growth of $10,000 is cumulative.

* The Fund commenced offering Class B shares on July 1, 2002. Index returns began on June 30, 2002.

Information About Your Fund's Expenses

DWS Dreman Small Mid Cap Value VIP

The tables illustrate your Fund's expenses in two ways:

Expenses and Value of a $1,000 Investment for the six months ended December 31, 2010
Actual Fund Return	Class A		Class B
Beginning Account Value 7/1/10	$	1,000.00	$	1,000.00
Ending Account Value 12/31/10	$	1,279.90	$	1,277.50
Expenses Paid per $1,000*	$	4.65	$	6.72
Hypothetical 5% Fund Return	Class A		Class B
Beginning Account Value 7/1/10	$	1,000.00	$	1,000.00
Ending Account Value 12/31/10	$	1,021.12	$	1,019.31
Expenses Paid per $1,000*	$	4.13	$	5.96

Annualized Expense Ratios	Class A		Class B
DWS Variable Series II — DWS Dreman Small Mid Cap Value VIP	.81%		1.17%

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

Management Summary December 31, 2010

DWS Dreman Small Mid Cap Value VIP

Small- and mid-cap stocks performed very well in 2010, reflecting an environment of positive investor sentiment and gradually improving economic growth. The Class A shares of the Fund returned 23.07% for the year (unadjusted for contract charges), but lagged the 24.82% return of the fund's benchmark, the Russell 2500™ Value Index. Although the Fund underperformed, we are gratified that it largely kept pace with the index at a time in which the market's best performers were generally the type of richly valued, momentum-driven stocks that we seek to avoid.

We believe it is important to note that our value-focused approach has contributed to strong outperformance for the Fund over the long term, as it has outpaced the benchmark during both the 5- and 10-year periods ended December 31, 2010.

Our bottom-up stock selection process worked well in the information technology, materials and financial sectors during 2010, but we underperformed in the consumer discretionary segment. Our top individual performer in 2010 was CBL & Associates Properties, Inc., a real estate investment trust whose focus on retail properties positioned it to benefit from the improvement in consumer spending. Endo Pharmaceuticals Holdings, Inc., Pan American Silver Corp.* and Forest Oil Corp. also added significant value for the Fund. On the negative side, our leading detractors were ITT Educational Services, Inc.* and Alliant Techsystems, Inc.

We retain a reasonably optimistic outlook as we enter the new year. While the broader market is nowhere near as inexpensive as it was 12-18 months ago, there are still plenty of opportunities for bottom-up stock pickers. We continue to focus on companies with valuations that do not fully reflect their strong fundamentals, which in our view provide a margin of safety in the event of a market downturn.1 We believe this disciplined, value-based approach — together with our conscious decision to avoid chasing overvalued stocks when they rally — has been the key to our success over the past decade.

David N. Dreman

Lead Portfolio Manager

E. Clifton Hoover, Jr., CFA

Mark Roach

Portfolio Managers

Dreman Value Management, L.L.C., Subadvisor to the Fund

The Russell 2500 Value Index is an unmanaged index of those securities in the Russell 3000® Index with lower price-to-book ratio and lower forecasted growth values.

Index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

1 "Valuation" refers to the price investors pay for a given security. An asset can be undervalued, meaning that it trades for less than its intrinsic value, or overvalued, which means that it trades at a more expensive price than its underlying worth.

* Not held in the Fund as of December 31, 2010.

Portfolio Summary

DWS Dreman Small Mid Cap Value VIP

Asset Allocation (As a % of Investment Portfolio excluding Securities Lending Collateral)	12/31/10	12/31/09

Common Stocks	98%	100%
Closed-End Investment Company	1%	—
Cash Equivalents	1%	0%
	100%	100%

Sector Diversification (As a % of Common Stocks)	12/31/10	12/31/09

Financials	19%	15%
Information Technology	14%	15%
Industrials	13%	16%
Energy	11%	9%
Health Care	11%	9%
Consumer Discretionary	11%	14%
Materials	9%	6%
Utilities	6%	7%
Consumer Staples	6%	8%
Telecommunications Services	—	1%
	100%	100%

Asset allocation and sector diversification are subject to change.

For more complete details about the Fund's investment portfolio, see page 101.

Investment Portfolio December 31, 2010

DWS Dreman Small Mid Cap Value VIP

	Shares		Value ($)

Common Stocks 97.8%
Consumer Discretionary 11.0%
Auto Components 0.6%
Cooper Tire & Rubber Co. (a)		70,654		1,666,021
Diversified Consumer Services 1.1%
Regis Corp. (a)		187,925		3,119,555
Hotels Restaurants & Leisure 3.3%
Brinker International, Inc. (a)		192,550		4,020,444
International Speedway Corp. "A" (a)		113,475		2,969,641
LIFE TIME FITNESS, Inc.* (a)		48,596		1,991,950
				8,982,035
Leisure Equipment & Products 1.2%
Mattel, Inc.		131,425		3,342,138
Multiline Retail 1.0%
Big Lots, Inc.* (a)		91,179		2,777,312
Specialty Retail 1.2%
Aaron's, Inc. (a)		153,987		3,139,795
Textiles, Apparel & Luxury Goods 2.6%
Hanesbrands, Inc.* (a)		129,900		3,299,460
The Jones Group, Inc.		239,790		3,726,337
				7,025,797
Consumer Staples 5.7%
Beverages 1.6%
Constellation Brands, Inc. "A"* (a)		195,975		4,340,846
Food Products 2.7%
Del Monte Foods Co. (a)		214,750		4,037,300
Ralcorp Holdings, Inc.* (a)		53,300		3,465,033
				7,502,333
Household Products 1.4%
Energizer Holdings, Inc.*		50,975		3,716,078
Energy 11.2%
Energy Equipment & Services 5.9%
Atwood Oceanics, Inc.* (a)		90,490		3,381,612
Cal Dive International, Inc.*		481,725		2,731,381
McDermott International, Inc.*		126,125		2,609,526
Superior Energy Services, Inc.* (a)		111,975		3,918,005
Tidewater, Inc. (a)		65,875		3,546,710
				16,187,234
Oil, Gas & Consumable Fuels 5.3%
Arch Coal, Inc. (a)		123,000		4,312,380
Forest Oil Corp.* (a)		102,800		3,903,316
Frontline Ltd. (a)		113,375		2,876,324
Newfield Exploration Co.*		46,915		3,383,040
				14,475,060
Financials 17.5%
Capital Markets 1.3%
Raymond James Financial, Inc. (a)		104,600		3,420,420
Commercial Banks 2.2%
Bank of Hawaii Corp. (a)		60,100		2,837,321
BOK Financial Corp. (a)		61,025		3,258,735
				6,096,056
Insurance 6.3%
Allied World Assurance Co. Holdings Ltd. (a)		62,450		3,712,028
Argo Group International Holdings Ltd.		104,813		3,925,247
	Shares		Value ($)

Axis Capital Holdings Ltd.		93,800		3,365,544
Endurance Specialty Holdings Ltd. (a)		60,075		2,767,655
Everest Re Group Ltd.		40,225		3,411,885
				17,182,359
Real Estate Investment Trusts 7.7%
CBL & Associates Properties, Inc. (REIT) (a)		225,500		3,946,250
CommonWealth REIT (REIT) (a)		126,756		3,233,545
Hospitality Properties Trust (REIT)		146,750		3,381,120
Medical Properties Trust, Inc. (REIT) (a)		341,500		3,698,445
MFA Financial, Inc. (REIT)		411,975		3,361,716
Weingarten Realty Investors (REIT) (a)		149,400		3,549,744
				21,170,820
Health Care 11.2%
Biotechnology 1.2%
Cephalon, Inc.*		52,450		3,237,214
Health Care Equipment & Supplies 3.8%
Alere, Inc.* (a)		107,275		3,926,265
Beckman Coulter, Inc. (a)		47,700		3,588,471
Teleflex, Inc. (a)		54,200		2,916,502
				10,431,238
Health Care Providers & Services 3.7%
Healthspring, Inc.* (a)		125,175		3,320,893
LifePoint Hospitals, Inc.* (a)		88,825		3,264,319
Owens & Minor, Inc.		114,350		3,365,320
				9,950,532
Life Sciences Tools & Services 1.2%
Charles River Laboratories International, Inc.* (a)		93,375		3,318,547
Pharmaceuticals 1.3%
Endo Pharmaceuticals Holdings, Inc.* (a)		100,625		3,593,319
Industrials 12.4%
Aerospace & Defense 2.4%
Alliant Techsystems, Inc.*		45,250		3,367,958
Spirit AeroSystems Holdings, Inc. "A"*		155,000		3,225,550
				6,593,508
Commercial Services & Supplies 2.1%
Pitney Bowes, Inc. (a)		124,950		3,021,291
The Brink's Co.		101,475		2,727,648
				5,748,939
Construction & Engineering 1.2%
Tutor Perini Corp.		155,900		3,337,819
Electrical Equipment 2.9%
GrafTech International Ltd.*		183,925		3,649,072
Hubbell, Inc. "B" (a)		69,050		4,151,976
				7,801,048
Machinery 2.6%
Crane Co.		89,925		3,693,219
Joy Global, Inc.		39,385		3,416,649
				7,109,868
Trading Companies & Distributors 1.2%
Textainer Group Holdings Ltd. (a)		118,450		3,374,641
Information Technology 14.3%
Communications Equipment 2.0%
Arris Group, Inc.* (a)		260,450		2,922,249
	Shares		Value ($)

CommScope, Inc.* (a)		85,450		2,667,749
				5,589,998
Computers & Peripherals 1.6%
NCR Corp.*		89,728		1,379,119
Synaptics, Inc.* (a)		103,375		3,037,158
				4,416,277
Electronic Equipment, Instruments & Components 2.9%
Arrow Electronics, Inc.*		119,375		4,088,594
Jabil Circuit, Inc. (a)		196,500		3,947,685
				8,036,279
IT Services 3.1%
Amdocs Ltd.*		114,125		3,135,014
DST Systems, Inc.		77,050		3,417,167
Jack Henry & Associates, Inc. (a)		69,381		2,022,456
				8,574,637
Semiconductors & Semiconductor Equipment 2.6%
Microsemi Corp.*		156,150		3,575,835
Teradyne, Inc.* (a)		245,425		3,445,767
				7,021,602
Software 2.1%
Net 1 UEPS Technologies, Inc.*		156,665		1,920,713
Synopsys, Inc.*		138,575		3,729,053
				5,649,766
Materials 8.5%
Chemicals 3.0%
CF Industries Holdings, Inc.		34,200		4,622,130
Lubrizol Corp. (a)		32,900		3,516,352
				8,138,482
Containers & Packaging 1.1%
Owens-Illinois, Inc.*		98,125		3,012,438
Metals & Mining 4.4%
Coeur d'Alene Mines Corp.* (a)		194,375		5,310,325
IAMGOLD Corp. (a)		188,575		3,356,635
Reliance Steel & Aluminum Co. (a)		68,800		3,515,680
				12,182,640
	Shares		Value ($)

Utilities 6.0%
Electric Utilities 2.5%
Allegheny Energy, Inc.		142,100		3,444,504
Portland General Electric Co.		150,350		3,262,595
				6,707,099
Gas Utilities 1.0%
AGL Resources, Inc.		78,575		2,816,914
Independent Power Producers & Energy Traders 1.2%
Constellation Energy Group, Inc.		109,825		3,363,940
Multi-Utilities 1.3%
Ameren Corp. (a)		121,650		3,429,313
Total Common Stocks (Cost $206,930,389)				267,579,917

Closed-End Investment Company 1.2%
Financials
Apollo Investment Corp. (Cost $3,305,969)		302,775		3,351,719

Securities Lending Collateral 35.9%
Daily Assets Fund Institutional, 0.27% (b) (c) (Cost $98,280,070)		98,280,070		98,280,070

Cash Equivalents 0.6%
Central Cash Management Fund, 0.19% (b) (Cost $1,698,867)		1,698,867		1,698,867

	% of Net Assets			Value ($)

Total Investment Portfolio (Cost $310,215,295)+		135.5			370,910,573
Other Assets and Liabilities, Net		(35.5	)		(97,205,361	)
Net Assets		100.0			273,705,212

* Non-income producing security.

+ The cost for federal income tax purposes was $311,177,875. At December 31, 2010, net unrealized appreciation for all securities based on tax cost was $59,732,698. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $69,554,187 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $9,821,489.

(a) All or a portion of these securities were on loan (see Notes to Financial Statements). The value of all securities loaned at December 31, 2010 amounted to $95,671,560, which is 35.0% of net assets.

(b) Affiliated fund managed by Deutsche Investment Management Americas Inc. The rate shown is the annualized seven-day yield at period end.

(c) Represents collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates.

REIT: Real Estate Investment Trust

Fair Value Measurements

Assets	Level 1		Level 2		Level 3		Total

Common Stocks (d)	$	267,579,917	$	—	$	—	$	267,579,917
Closed-End Investment Company		3,351,719		—		—		3,351,719
Short-Term Investments (d)		99,978,937		—		—		99,978,937
Total	$	370,910,573	$	—	$	—	$	370,910,573

There have been no significant transfers between Level 1 and Level 2 fair value measurements during the year ended December 31, 2010.

(d) See Investment Portfolio for additional detailed categorizations.

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

Statement of Assets and Liabilities

as of December 31, 2010
Assets
Investments: Investments in unaffiliated securities, at value (cost $210,236,358) — including $95,671,560 of securities loaned	$	270,931,636
Investment in Daily Assets Fund Institutional (cost $98,280,070)*		98,280,070
Investment in Central Cash Management Fund (cost $1,698,867)		1,698,867
Total investments, at value (cost $310,215,295)		370,910,573
Cash		18,356
Receivable for investments sold		1,419,033
Receivable for Fund shares sold		291,039
Dividends receivable		398,083
Interest receivable		9,566
Other assets		1,379
Total assets		373,048,029
Liabilities
Payable upon return of securities loaned		98,280,070
Payable for investments purchased		528,674
Payable for Fund shares redeemed		245,511
Accrued management fee		162,677
Accrued expenses and payables		125,885
Total liabilities		99,342,817
Net assets, at value	$	273,705,212
Net Assets Consist of:
Undistributed net investment income		2,636,612
Net unrealized appreciation (depreciation) on investments		60,695,278
Accumulated net realized gain (loss)		(104,463,786	)
Paid-in capital		314,837,108
Net assets, at value	$	273,705,212
Class A Net Asset Value, offering and redemption price per share ($247,497,040 ÷ 20,271,172 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)	$	12.21
Class B Net Asset Value, offering and redemption price per share ($26,208,172 ÷ 2,147,844 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)	$	12.20

* Represents collateral on securities loaned.

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

Statement of Operations

for the year ended December 31, 2010
Investment Income
Income: Dividends (net of foreign taxes witheld of $18)	$	4,702,210
Income distributions — Central Cash Management Fund		13,649
Securities lending income, including income from Daily Assets Fund Institutional, net of borrower rebates		274,403
Total income		4,990,262
Expenses: Management fee		1,653,319
Administration fee		254,770
Services to shareholders		8,397
Distribution service fee (Class B)		59,943
Record keeping fees (Class B)		24,599
Custodian fee		13,570
Professional fees		67,753
Trustees fees and expenses		10,622
Reports to shareholders		58,443
Other		12,400
Total expenses		2,163,816
Net investment income (loss)		2,826,446
Realized and Unrealized Gain (Loss)
Net realized gain (loss) from investments		30,809,807
Change in net unrealized appreciation (depreciation) on investments		18,581,828
Net gain (loss)		49,391,635
Net increase (decrease) in net assets resulting from operations	$	52,218,081

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

Statement of Changes in Net Assets

	Years Ended December 31,
Increase (Decrease) in Net Assets	2010			2009
Operations: Net investment income (loss)	$	2,826,446		$	4,311,793
Net realized gain (loss)		30,809,807			(70,986,842	)
Change in net unrealized appreciation (depreciation)		18,581,828			125,626,581
Net increase (decrease) in net assets resulting from operations		52,218,081			58,951,532
Distributions to shareholders from: Net investment income: Class A		(3,068,046	)		(4,046,857	)
Class B		(217,515	)		(395,321	)
Total distributions		(3,285,561	)		(4,442,178	)
Fund share transactions: Class A Proceeds from shares sold		28,003,012			23,798,898
Reinvestment of distributions		3,068,046			4,046,857
Payments for shares redeemed		(62,437,627	)		(65,465,868	)
Net increase (decrease) in net assets from Class A share transactions		(31,366,569	)		(37,620,113	)
Class B Proceeds from shares sold		3,472,987			3,195,894
Reinvestment of distributions		217,515			395,321
Payments for shares redeemed		(5,804,013	)		(9,987,772	)
Net increase (decrease) in net assets from Class B share transactions		(2,113,511	)		(6,396,557	)
Increase (decrease) in net assets		15,452,440			10,492,684
Net assets at beginning of period		258,252,772			247,760,088
Net assets at end of period (including undistributed net investment income of $2,636,612 and $3,095,726, respectively)	$	273,705,212		$	258,252,772
Other Information
Class A Shares outstanding at beginning of period		23,383,684			28,178,465
Shares sold		2,611,387			2,960,168
Shares issued to shareholders in reinvestment of distributions		271,509			624,515
Shares redeemed		(5,995,408	)		(8,379,464	)
Net increase (decrease) in Class A shares		(3,112,512	)		(4,794,781	)
Shares outstanding at end of period		20,271,172			23,383,684
Class B Shares outstanding at beginning of period		2,341,698			3,073,371
Shares sold		327,236			387,629
Shares issued to shareholders in reinvestment of distributions		19,214			60,912
Shares redeemed		(540,304	)		(1,180,214	)
Net increase (decrease) in Class B shares		(193,854	)		(731,673	)
Shares outstanding at end of period		2,147,844			2,341,698

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

Financial Highlights

Class A Years Ended December 31,	2010			2009			2008			2007			2006
Selected Per Share Data
Net asset value, beginning of period	$	10.04		$	7.93		$	20.12		$	22.93		$	19.98
Income (loss) from investment operations: Net investment incomea		.12			.16			.13			.18			.15
Net realized and unrealized gain (loss)		2.19			2.11			(4.92	)		.54			4.69
Total from investment operations		2.31			2.27			(4.79	)		.72			4.84
Less distributions from: Net investment income		(.14	)		(.16	)		(.29	)		(.23	)		(.18	)
Net realized gains		—			—			(7.11	)		(3.30	)		(1.71	)
Total distributions		(.14	)		(.16	)		(7.40	)		(3.53	)		(1.89	)
Net asset value, end of period	$	12.21		$	10.04		$	7.93		$	20.12		$	22.93
Total Return (%)		23.07			29.70			(33.42	)b		3.06			25.06
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		247			235			223			468			562
Ratio of expenses before expense reductions (%)		.82			.79			.83			.78			.79
Ratio of expenses after expense reductions (%)		.82			.79			.82			.78			.79
Ratio of net investment income (%)		1.14			1.92			1.13			.85			.71
Portfolio turnover rate (%)		38			72			49			110			52
a Based on average shares outstanding during the period. b Total return would have been lower had certain expenses not been reduced.

Class B Years Ended December 31,	2010			2009			2008			2007			2006
Selected Per Share Data
Net asset value, beginning of period	$	10.03		$	7.92		$	20.08		$	22.88		$	19.93
Income (loss) from investment operations: Net investment incomea		.08			.13			.09			.10			.07
Net realized and unrealized gain (loss)		2.19			2.12			(4.92	)		.54			4.67
Total from investment operations		2.27			2.25			(4.83	)		.64			4.74
Less distributions from: Net investment income		(.10	)		(.14	)		(.22	)		(.14	)		(.08	)
Net realized gains		—			—			(7.11	)		(3.30	)		(1.71	)
Total distributions		(.10	)		(.14	)		(7.33	)		(3.44	)		(1.79	)
Net asset value, end of period	$	12.20		$	10.03		$	7.92		$	20.08		$	22.88
Total Return (%)		22.66			29.28			(33.67	)b		2.67			24.59
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		26			23			24			34			90
Ratio of expenses before expense reductions (%)		1.17			1.14			1.18			1.16			1.17
Ratio of expenses after expense reductions (%)		1.17			1.14			1.17			1.16			1.17
Ratio of net investment income (%)		.79			1.57			.78			.47			.33
Portfolio turnover rate (%)		38			72			49			110			52
a Based on average shares outstanding during the period. b Total return would have been lower had certain expenses not been reduced.

Performance Summary December 31, 2010

DWS Global Thematic VIP

The gross expense ratios of the Fund, as stated in the fee table of the prospectus dated May 1, 2010 are 1.39% and 1.74% for Class A and Class B shares, respectively, and may differ from the expense ratios disclosed in the Financial Highlights tables in this report.

Risk Considerations

Investing in derivatives entails special risks relating to liquidity, leverage and credit that may reduce returns and/or increase volatility. Investing in foreign securities, particularly those of emerging markets, presents certain risks, such as currency fluctuations, political and economic changes, and market risks. Any decline in value of a Fund security that is out on loan by the Fund will adversely affect performance. Financial failure of the borrower may mean a delay in recovery or loss of rights in the collateral. Stocks may decline in value. See the prospectus for details.

Fund returns shown for all periods reflect a fee waiver and/or expense reimbursement. Without this waiver/reimbursement, returns would have been lower.

Growth of an Assumed $10,000 Investment in DWS Global Thematic VIP
[] DWS Global Thematic VIP — Class A [] MSCI World Index		The Morgan Stanley Capital International (MSCI) World Index is an unmanaged, capitalization-weighted measure of global stock markets including the US, Canada, Europe, Australia and the Far East. The index is calculated using closing local market prices and translates into US dollars using the London close foreign exchange rates. Index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

Yearly periods ended December 31

Comparative Results
DWS Global Thematic VIP		1-Year			3-Year			5-Year			10-Year
Class A	Growth of $10,000	$	11,365		$	8,541		$	11,815		$	15,326
Class A	Average annual total return		13.65	%		-5.12	%		3.39	%		4.36	%
MSCI World Index	Growth of $10,000	$	11,176		$	8,613		$	11,276		$	12,562
MSCI World Index	Average annual total return		11.76	%		-4.85	%		2.43	%		2.31	%
DWS Global Thematic VIP		1-Year			3-Year			5-Year			Life of Class*
Class B	Growth of $10,000	$	11,324		$	8,455		$	11,603		$	18,809
Class B	Average annual total return		13.24	%		-5.44	%		3.02	%		7.71	%
MSCI World Index	Growth of $10,000	$	11,176		$	8,613		$	11,276		$	16,563
MSCI World Index	Average annual total return		11.76	%		-4.85	%		2.43	%		6.12	%

The growth of $10,000 is cumulative.

* The Fund commenced offering Class B shares on July 1, 2002. Index returns began on June 30, 2002.

Information About Your Fund's Expenses

DWS Global Thematic VIP

As an investor of the Fund, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees, distribution and service (12b-1) fees and other Fund expenses. Examples of transaction costs include contract charges, redemption fees and account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. In the most recent six-month period, the Fund limited these expenses; had it not done so, expenses would have been higher. The example in the table is based on an investment of $1,000 invested at the beginning of the six-month period and held for the entire period (Jul y 1, 2010 to December 31, 2010).

The tables illustrate your Fund's expenses in two ways:

Expenses and Value of a $1,000 Investment for the six months ended December 31, 2010
Actual Fund Return	Class A		Class B
Beginning Account Value 7/1/10	$	1,000.00	$	1,000.00
Ending Account Value 12/31/10	$	1,245.60	$	1,243.60
Expenses Paid per $1,000*	$	5.94	$	7.92
Hypothetical 5% Fund Return	Class A		Class B
Beginning Account Value 7/1/10	$	1,000.00	$	1,000.00
Ending Account Value 12/31/10	$	1,019.91	$	1,018.15
Expenses Paid per $1,000*	$	5.35	$	7.12

Annualized Expense Ratios	Class A		Class B
DWS Variable Series II — DWS Global Thematic VIP	1.05%		1.40%

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

Management Summary December 31, 2010

DWS Global Thematic VIP

The Fund's Class A shares returned 13.65% during 2010, outpacing the 11.76% return of the MSCI World Index. The Fund also has outperformed its benchmark during the 5- and 10-year periods ended December 31, 2010.

In managing the Fund, we strive to identify the themes that we believe will be the important long-term drivers of the global business environment, then we use intensive fundamental research and a wide array of quantitative tools to invest in companies that can benefit as these themes unfold. All 13 of the Fund's themes produced positive absolute returns during 2010. On a relative basis, nine themes outperformed the broader market while just three lagged.

Three of our best-performing themes of 2010 were those with heavy exposure to the emerging markets: Large Units, which invests in companies that are benefiting from the growth of middle classes and consumerism in emerging-markets countries; Global Agribusiness, where we seek companies that stand to benefit from the rapidly changing dietary needs of a growing global population; and Indian Ocean, which seeks to capitalize on the need for China and India to secure agricultural and energy supply routes in the region. Also performing very well was our theme Disequilibria, in which we hunt for situations where investors do not fully understand the capacity of an industry or a company to adapt to a structural change. Many industries experienced significant changes in the wake of the global recession of 2008-2009, creating abundant opportunities to capitalize on companies that were able to benefit from industry flux.

The smallest gain came from our theme Personalized Medicine, which is invested entirely in health care stocks — a sector that underperformed amid the momentum-driven market environment. We remain enthusiastic on the long-term prospects of this theme despite its recent underperformance, and we continue to add to the Fund's holdings in this area.

While we believe there is a good case for global equities as we move into 2011, we continue to spend time analyzing the potential adverse outcomes of various economic scenarios. Our investment framework remains guided by our well-researched themes and the core principle that investment management is a marathon and not a sprint.

Oliver Kratz, PhD

Portfolio Manager, Global Thematic Partners, LLC

Subadvisor to the Fund

The Morgan Stanley Capital International (MSCI) World Index is an unmanaged, capitalization-weighted measure of global stock markets including the US, Canada, Europe, Australia and the Far East. The index is calculated using closing local market prices and translates into US dollars using the London close foreign exchange rates.

Index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees of expenses. It is not possible to invest directly into an index.

Portfolio Summary

DWS Global Thematic VIP

Asset Allocation (As a % of Investment Portfolio excluding Securities Lending Collateral)	12/31/10	12/31/09

Common Stocks	94%	95%
Participatory Notes	3%	2%
Cash Equivalents	2%	1%
Preferred Stocks	1%	—
Exchange-Traded Funds	—	2%
	100%	100%

Sector Diversification (As a % of Investment Portfolio excluding Exchange-Traded Funds, Cash Equivalents and Securities Lending Collateral)	12/31/10	12/31/09

Financials	21%	23%
Information Technology	14%	11%
Health Care	12%	14%
Consumer Staples	11%	11%
Industrials	11%	14%
Materials	9%	2%
Telecommunication Services	7%	6%
Consumer Discretionary	6%	8%
Energy	5%	9%
Utilities	4%	2%
	100%	100%

Geographical Diversification (As a % of Investment Portfolio excluding Cash Equivalents and Securities Lending Collateral)	12/31/10	12/31/09

United States	32%	44%
Continental Europe	23%	23%
Japan	9%	9%
Latin America	8%	5%
Asia (excluding Japan)	8%	5%
United Kingdom	8%	7%
Africa	4%	2%
Middle East	4%	3%
Bermuda	1%	1%
Other	3%	1%
	100%	100%

Asset allocation, sector and geographical diversification are subject to change.

For more complete details about the Fund's investment portfolio, see page 114.

Investment Portfolio December 31, 2010

DWS Global Thematic VIP

	Shares		Value ($)

Common Stocks 95.6%
Austria 3.4%
Erste Group Bank AG		40,781		1,916,496
Raiffeisen Bank International AG		6,427		352,042
Wienerberger AG*		10,111		193,193
(Cost $1,834,682)				2,461,731
Bahrain 0.3%
Aluminium Bahrain 144A (GDR)* (Cost $262,586)		21,937		245,694
Bermuda 0.6%
Lazard Ltd. "A" (Cost $323,175)		11,956		472,143
Brazil 4.5%
All America Latina Logistica		41,745		377,342
Banco Bradesco SA (ADR) (Preferred)		16,875		342,394
Banco Santander Brasil SA (ADR)		32,906		447,522
Brasil Telecom SA (ADR)		4,401		96,514
Petroleo Brasileiro SA (ADR)		18,094		684,677
Santos Brasil Participacoes SA (Units)		34,497		477,684
SLC Agricola SA		63,320		839,453
(Cost $2,784,368)				3,265,586
Cayman Islands 0.3%
Herbalife Ltd. (Cost $153,889)		3,749		256,319
China 2.1%
Bank of China Ltd. "H"		938,871		496,444
China Metal Recycling Holdings Ltd.		199,352		211,078
Li Ning Co., Ltd.		89,245		189,448
Mindray Medical International Ltd. (ADR) (a)		23,089		609,550
(Cost $1,632,015)				1,506,520
Denmark 1.2%
Vestas Wind Systems AS* (Cost $875,294)		27,897		880,998
Egypt 0.5%
Orascom Telecom Holding SAE (GDR) REG S* (Cost $185,988)		96,576		352,502
France 0.8%
Carrefour SA (Cost $747,206)		14,437		595,163
Germany 6.3%
Axel Springer AG		3,028		493,655
Deutsche Lufthansa AG (Registered)*		18,558		405,585
Deutsche Post AG (Registered)		42,056		713,297
E.ON AG		67,902		2,082,574
HeidelbergCement AG		14,027		879,566
(Cost $4,117,461)				4,574,677
Greece 0.3%
Hellenic Exchanges SA (Cost $230,675)		31,318		205,066
Hong Kong 1.3%
China Mobile Ltd. (ADR)		6,721		333,496
Esprit Holdings Ltd.		116,286		552,048
Yingde Gases* (b)		69,766		61,483
(Cost $1,019,783)				947,027
	Shares		Value ($)

India 0.2%
Deccan Chronicle Holdings Ltd. (Cost $240,432)		67,247		164,828
Indonesia 1.9%
PT Semen Gresik (Persero) Tbk		377,454		395,662
PT Telekomunikasi Indonesia Tbk (ADR)		26,780		954,707
(Cost $1,244,304)				1,350,369
Israel 1.7%
NICE Systems Ltd. (ADR)*		5,989		209,016
Teva Pharmaceutical Industries Ltd. (ADR)		19,106		995,996
(Cost $1,141,082)				1,205,012
Italy 1.0%
Parmalat SpA		165,995		454,527
UniCredit SpA		124,822		258,146
(Cost $791,529)				712,673
Japan 9.3%
FANUC Corp.		3,300		506,241
Fujitsu Ltd.		74,000		514,552
Hitachi Ltd.		110,000		586,922
INPEX Corp.		171		1,000,241
Kirin Holdings Co., Ltd.		37,000		518,701
Mitsubishi UFJ Financial Group, Inc.		66,200		357,689
Mizuho Financial Group, Inc.		196,800		370,569
Nomura Holdings, Inc.		104,514		662,339
Seven & I Holdings Co., Ltd.		13,000		347,222
Sumitomo Mitsui Financial Group, Inc.		11,000		391,545
Takeda Pharmaceutical Co., Ltd.		6,000		295,094
Toyota Motor Corp.		24,000		945,101
Yamada Denki Co., Ltd.		4,020		274,124
(Cost $5,930,147)				6,770,340
Kazakhstan 0.1%
Kazakhstan Kagazy PLC 144A (GDR)* (Cost $916,872)		181,200		45,300
Korea 3.1%
KT&G Corp.*		15,968		920,365
Samsung Electronics Co., Ltd.		1,571		1,312,832
(Cost $1,940,032)				2,233,197
Malaysia 0.4%
Axiata Group Bhd.* (Cost $214,993)		185,900		286,203
Mexico 0.7%
Grupo Aeroportuario del Sureste SAB de CV (ADR) (a) (Cost $379,121)		8,482		478,809
Netherlands 2.5%
QIAGEN NV*		32,654		638,694
Unilever NV (CVA)		11,806		367,589
VimpelCom Ltd. (ADR) (c)		53,834		809,663
(Cost $1,699,907)				1,815,946
Norway 0.2%
Statoil Fuel & Retail ASA* (Cost $129,742)		19,358		176,926
	Shares		Value ($)

Panama 1.5%
Copa Holdings SA "A" (Cost $841,944)		18,635		1,096,483
Puerto Rico 1.4%
Popular, Inc.* (Cost $920,104)		316,838		994,871
Russia 1.1%
Aeroflot-Russian Airlines		107,905		280,553
Gazprom (ADR)		15,660		395,415
Sistema JSFC (GDR) (REG S)		5,253		130,957
(Cost $736,335)				806,925
South Africa 3.7%
Aquarius Platinum Ltd.		43,863		240,721
MTN Group Ltd.		37,788		771,076
Murray & Roberts Holdings Ltd.		47,792		291,431
Standard Bank Group Ltd.		68,349		1,115,892
Tiger Brands Ltd.		9,361		275,153
(Cost $2,311,096)				2,694,273
Spain 1.1%
Telefonica SA (Cost $794,722)		34,493		783,371
Sweden 2.8%
Telefonaktiebolaget LM Ericsson "B" (Cost $1,861,198)		174,404		2,019,548
Switzerland 2.2%
EFG International AG		17,204		235,630
Roche Holding AG (Genusschein)		6,133		899,052
Syngenta AG (Registered)		1,600		468,654
(Cost $1,496,506)				1,603,336
Thailand 0.1%
Seamico Securities PCL (Foreign Registered)* (Cost $153,906)		1,403,300		84,724
United Kingdom 7.4%
African Minerals Ltd.* (d)		19,586		128,559
Anglo American PLC		13,249		688,998
BAE Systems PLC		54,188		278,799
Barratt Developments PLC*		331,333		457,949
Diageo PLC		57,956		1,070,756
GlaxoSmithKline PLC		35,913		694,300
Imperial Tobacco Group PLC		21,678		665,147
Tesco PLC		109,726		727,063
Vodafone Group PLC		255,016		659,213
(Cost $4,884,794)				5,370,784
United States 31.6%
Abbott Laboratories		18,197		871,818
Advanced Micro Devices, Inc.*		102,758		840,560
Air Products & Chemicals, Inc.		4,995		454,295
Apache Corp.		3,790		451,882
Bank of America Corp.		112,710		1,503,551
Calpine Corp.*		39,059		521,047
Cisco Systems, Inc.*		44,299		896,169
Electronic Arts, Inc.*		26,791		438,837
EMC Corp.*		21,348		488,869
General Dynamics Corp.		12,234		868,125
General Electric Co.		45,728		836,365
General Motors Co.*		10,233		377,188
GSI Commerce, Inc.*		14,323		332,294
Harris Corp.		12,034		545,140
JPMorgan Chase & Co.		41,332		1,753,303
Kinetic Concepts, Inc.*		13,074		547,539
Laboratory Corp. of America Holdings*		13,043		1,146,741
	Shares		Value ($)

Life Technologies Corp.*		20,262		1,124,541
MasterCard, Inc. "A"		4,650		1,042,111
Medco Health Solutions, Inc.*		19,659		1,204,507
Monsanto Co.		5,794		403,494
Morgan Stanley		46,133		1,255,279
New York Times Co. "A"* (a)		37,641		368,882
Owens-Illinois, Inc.*		21,550		661,585
Rock-Tenn Co. "A"		2,966		160,016
Schweitzer-Mauduit International, Inc.		8,692		546,901
The NASDAQ OMX Group, Inc.*		29,036		688,444
Wal-Mart Stores, Inc.		21,281		1,147,684
Williams Companies, Inc.		24,851		614,317
World Fuel Services Corp.		7,879		284,905
Yahoo!, Inc.*		35,219		585,693
(Cost $20,218,099)				22,962,082
Total Common Stocks (Cost $63,013,987)				69,419,426

Preferred Stocks 0.5%
Germany 0.3%
Porsche Automobil Holding SE (Cost $135,727)		2,664		212,334
Russia 0.2%
Surgutneftegas (Cost $132,021)		281,496		140,748
Total Preferred Stocks (Cost $267,748)				353,082

Participatory Notes 2.9%
Jordan 0.2%
Arab Bank PLC (issuer HSBC Bank PLC), Expiration Date 4/12/2013* (Cost $183,726)		11,543		162,756
Nigeria 0.9%
Bank of Nigeria (issuer HSBC Bank PLC), Expiration Date 11/15/2013*		2,922,113		263,952
Guaranty Trust Bank PLC (issuer Morgan Stanley BV), Expiration Date 3/18/2011*		2,479,865		289,752
Zenith Bank Ltd. (issuer Morgan Stanley BV), Expiration Date 3/18/2011*		1,015,714		100,302
(Cost $601,105)				654,006
Pakistan 0.5%
National Bank of Pakistan (issuer Merrill Lynch International & Co.), Expiration Date 2/25/2015* (Cost $347,029)		398,560		356,611
Saudi Arabia 1.3%
Saudi Basic Industrial Corp. (issuer HSBC Bank PLC), Expiration Date 3/26/2012*		13,086		365,511
Yanbu National Petrochemicals Co. (issuer HSBC Bank PLC), Expiration Date 1/7/2013		47,967		608,821
(Cost $888,354)				974,332
Total Participatory Notes (Cost $2,020,214)				2,147,705

Securities Lending Collateral 1.3%
Daily Assets Fund Institutional, 0.27% (e) (f) (Cost $960,500)		960,500		960,500
	Shares		Value ($)

Cash Equivalents 2.2%
Central Cash Management Fund, 0.19% (e) (Cost $1,583,896)		1,583,896		1,583,896

	% of Net Assets			Value ($)

Total Investment Portfolio (Cost $67,846,345)+		102.5			74,464,609
Other Assets and Liabilities, Net		(2.5	)		(1,846,982	)
Net Assets		100.0			72,617,627

* Non-income producing security.

+ The cost for federal income tax purposes was $68,246,019. At December 31, 2010, net unrealized appreciation for all securities based on tax cost was $6,218,590. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $8,508,835 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $2,290,245.

(a) All or a portion of these securities were on loan (see Notes to Financial Statements). The value of all securities loaned at December 31, 2010 amounted to $932,405, which is 1.3% of net assets.

(b) Security is listed in country of domicile. Significant business activities of company are in China.

(c) Security is listed in country of domicile. Significant business activities of company are in Eastern Europe and South Asia.

(d) Security is listed in country of domicile. Significant business activities of company are in Africa.

(e) Affiliated fund managed by Deutsche Investment Management Americas Inc. The rate shown is the annualized seven-day yield at period end.

(f) Represents collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates.

ADR: American Depositary Receipt

CVA: Certificaten Van Aandelen

GDR: Global Depositary Receipt

REG S: Securities sold under Regulation S may not be offered, sold or delivered within the United States or to, or for the account or benefit of, US persons, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933.

Fair Value Measurements

Assets	Level 1		Level 2		Level 3		Total

Common Stocks & Preferred Stocks (g)
Austria	$	—	$	2,461,731	$	—	$	2,461,731
Bahrain		—		245,694		—		245,694
Bermuda		472,143		—		—		472,143
Brazil		3,265,586		—		—		3,265,586
Cayman Islands		256,319		—		—		256,319
China		609,550		896,970		—		1,506,520
Denmark		—		880,998		—		880,998
Egypt		—		352,502		—		352,502
France		—		595,163		—		595,163
Germany		—		4,787,011		—		4,787,011
Greece		—		205,066		—		205,066
Hong Kong		333,496		613,531		—		947,027
India		—		164,828		—		164,828
Indonesia		954,707		395,662		—		1,350,369
Israel		1,205,012		—		—		1,205,012
Italy		—		712,673		—		712,673
Japan		—		6,770,340		—		6,770,340
Kazakhstan		—		45,300		—		45,300
Korea		—		2,233,197		—		2,233,197
Malaysia		—		286,203		—		286,203
Mexico		478,809		—		—		478,809
Netherlands		809,663		1,006,283		—		1,815,946
Norway		—		176,926		—		176,926
Panama		1,096,483		—		—		1,096,483
Puerto Rico		994,871		—		—		994,871
Russia		—		947,673		—		947,673
South Africa		—		2,694,273		—		2,694,273
Spain		—		783,371		—		783,371
Sweden		—		2,019,548		—		2,019,548
Switzerland		—		1,603,336		—		1,603,336
Thailand		—		84,724		—		84,724
United Kingdom		—		5,370,784		—		5,370,784
United States		22,962,082		—		—		22,962,082
Participatory Notes (g)		—		2,147,705		—		2,147,705
Short-Term Investments (g)		2,544,396		—		—		2,544,396
Total	$	35,983,117	$	38,481,492	$	—	$	74,464,609

There have been no significant transfers between Level 1 and Level 2 fair value measurements during the year ended December 31, 2010.

(g) See Investment Portfolio for additional detailed categorizations.

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

Statement of Assets and Liabilities

as of December 31, 2010
Assets
Investments: Investments in unaffiliated securities, at value (cost $65,301,949) — including $932,405 of securities loaned	$	71,920,213
Investment in Daily Assets Fund Institutional (cost $960,500)*		960,500
Investment in Central Cash Management Fund (cost $1,583,896)		1,583,896
Total investments, at value (cost $67,846,345)		74,464,609
Foreign currency, at value (cost $129,430)		129,932
Receivable for investments sold		421,035
Receivable for Fund shares sold		92
Dividends receivable		66,283
Interest receivable		1,147
Foreign taxes recoverable		15,438
Due from Advisor		6,316
Other assets		325
Total assets		75,105,177
Liabilities
Payable for investments purchased		1,362,763
Payable for Fund shares redeemed		33,107
Payable upon return of securities loaned		960,500
Accrued expenses and payables		131,180
Total liabilities		2,487,550
Net assets, at value	$	72,617,627
Net Assets Consist of
Undistributed net investment income		361,169
Net unrealized appreciation (depreciation) on: Investments		6,618,264
Foreign currency		2,108
Accumulated net realized gain (loss)		(53,454,008	)
Paid-in capital		119,090,094
Net assets, at value	$	72,617,627
Class A Net Asset Value, offering and redemption price per share ($67,788,512 ÷ 7,301,949 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)	$	9.28
Class B Net Asset Value, offering and redemption price per share ($4,829,115 ÷ 519,624 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)	$	9.29

* Represents collateral on securities loaned.

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

Statement of Operations

for the year ended December 31, 2010
Investment Income
Income: Dividends (net of foreign taxes withheld of $75,539)	$	1,226,438
Income distributions — Central Cash Management Fund		2,453
Securities lending income, including income from Daily Assets Fund Institutional, net of borrower rebates		23,173
Total income		1,252,064
Expenses: Management fee		626,939
Administration fee		68,518
Services to shareholders		3,860
Distribution service fee (Class B)		11,552
Record keeping fees (Class B)		4,575
Custodian fee		142,829
Legal fees		9,737
Audit and tax fees		65,395
Trustees' fees and expenses		5,102
Reports to shareholders		10,208
Other		34,743
Total expenses before expense reductions		983,458
Expense reductions		(245,517	)
Total expenses after expense reductions		737,941
Net investment income (loss)		514,123
Realized and Unrealized Gain (Loss)
Net realized gain (loss) from: Investments (net of foreign taxes of $41,882)		7,284,942
Foreign currency		(78,627	)
		7,206,315
Change in net unrealized appreciation (depreciation) on: Investments		897,676
Foreign currency		1,793
		899,469
Net gain (loss)		8,105,784
Net increase (decrease) in net assets resulting from operations	$	8,619,907

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

Statement of Changes in Net Assets

	Years Ended December 31,
Increase (Decrease) in Net Assets	2010			2009
Operations: Net investment income (loss)	$	514,123		$	748,747
Net realized gain (loss)		7,206,315			(3,218,906	)
Change in net unrealized appreciation (depreciation)		899,469			24,610,274
Net increase (decrease) in net assets resulting from operations		8,619,907			22,140,115
Distributions to shareholders from: Net investment income: Class A		(621,927	)		(911,359	)
Class B		(28,358	)		(54,811	)
Total distributions		(650,285	)		(966,170	)
Fund share transactions: Class A Proceeds from shares sold		5,854,566			5,051,406
Reinvestment of distributions		621,927			911,359
Payments for shares redeemed		(12,215,497	)		(18,301,405	)
Net increase (decrease) in net assets from Class A share transactions		(5,739,004	)		(12,338,640	)
Class B Proceeds from shares sold		308,827			438,509
Reinvestment of distributions		28,358			54,811
Payments for shares redeemed		(1,123,823	)		(1,021,786	)
Net increase (decrease) in net assets from Class B share transactions		(786,638	)		(528,466	)
Increase (decrease) in net assets		1,443,980			8,306,839
Net assets at beginning of period		71,173,647			62,866,808
Net assets at end of period (including undistributed net investment income of $361,169 and $607,015, respectively)	$	72,617,627		$	71,173,647
Other Information
Class A Shares outstanding at beginning of period		8,018,621			10,056,541
Shares sold		692,269			725,805
Shares issued to shareholders in reinvestment of distributions		72,065			174,256
Shares redeemed		(1,481,006	)		(2,937,981	)
Net increase (decrease) in Class A shares		(716,672	)		(2,037,920	)
Shares outstanding at end of period		7,301,949			8,018,621
Class B Shares outstanding at beginning of period		617,302			702,064
Shares sold		36,659			66,888
Shares issued to shareholders in reinvestment of distributions		3,275			10,440
Shares redeemed		(137,612	)		(162,090	)
Net increase (decrease) in Class B shares		(97,678	)		(84,762	)
Shares outstanding at end of period		519,624			617,302

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

Financial Highlights

Class A Years Ended December 31,	2010			2009			2008			2007			2006
Selected Per Share Data
Net asset value, beginning of period	$	8.24		$	5.84		$	15.66		$	17.39		$	14.44
Income (loss) from investment operations: Net investment incomea		.06			.08			.11			.14			.15	c
Net realized and unrealized gain (loss)		1.06			2.42			(5.83	)		.88			4.02
Total from investment operations		1.12			2.50			(5.72	)		1.02			4.17
Less distributions from: Net investment income		(.08	)		(.10	)		(.19	)		(.11	)		(.09	)
Net realized gains		—			—			(3.91	)		(2.64	)		(1.13	)
Total distributions		(.08	)		(.10	)		(4.10	)		(2.75	)		(1.22	)
Net asset value, end of period	$	9.28		$	8.24		$	5.84		$	15.66		$	17.39
Total Return (%)b		13.65			43.82			(47.75	)		6.29			30.14	c
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		68			66			59			151			143
Ratio of expenses before expense reductions (%)		1.41			1.38			1.47			1.44			1.38
Ratio of expenses after expense reductions (%)		1.05			1.04			1.09			1.11			1.04
Ratio of net investment income (%)		.77			1.23			1.09			.82			.92	c
Portfolio turnover rate (%)		165			190			229			191			136
a Based on average shares outstanding during the period. b Total return would have been lower had certain expenses not been reduced. c Includes non-recurring income from the Advisor recorded as a result of an administrative proceeding regarding disclosure of brokerage allocation practices in connection with sales of DWS Funds. The non-recurring income resulted in an increase in net investment income of $0.004 per share and an increase in the ratio of net investment income of 0.03%. Excluding this non-recurring income, total return would have been 0.02% lower.

Class B Years Ended December 31,	2010			2009			2008			2007			2006
Selected Per Share Data
Net asset value, beginning of period	$	8.25		$	5.85		$	15.66		$	17.38		$	14.43
Income (loss) from investment operations: Net investment incomea		.04			.06			.07			.07			.09	c
Net realized and unrealized gain (loss)		1.05			2.42			(5.83	)		.90			4.02
Total from investment operations		1.09			2.48			(5.76	)		.97			4.11
Less distributions from: Net investment income		(.05	)		(.08	)		(.14	)		(.05	)		(.03	)
Net realized gains		—			—			(3.91	)		(2.64	)		(1.13	)
Total distributions		(.05	)		(.08	)		(4.05	)		(2.69	)		(1.16	)
Net asset value, end of period	$	9.29		$	8.25		$	5.85		$	15.66		$	17.38
Total Return (%)b		13.24			43.23			(47.87	)		5.84			29.65	c
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		5			5			4			10			25
Ratio of expenses before expense reductions (%)		1.76			1.73			1.82			1.81			1.76
Ratio of expenses after expense reductions (%)		1.40			1.39			1.45			1.47			1.43
Ratio of net investment income (%)		.42			.88			.73			.46			.53	c
Portfolio turnover rate (%)		165			190			229			191			136
a Based on average shares outstanding during the period. b Total return would have been lower had certain expenses not been reduced. c Includes non-recurring income from the Advisor recorded as a result of an administrative proceeding regarding disclosure of brokerage allocation practices in connection with sales of DWS Funds. The non-recurring income resulted in an increase in net investment income of $0.004 per share and an increase in the ratio of net investment income of 0.03%. Excluding this non-recurring income, total return would have been 0.02% lower.

Performance Summary December 31, 2010

DWS Government & Agency Securities VIP

The gross expense ratios of the Fund, as stated in the fee table of the prospectus dated May 1, 2010 are 0.58% and 0.92% for Class A and Class B shares, respectively, and may differ from the expense ratios disclosed in the Financial Highlights tables in this report.

Risk Considerations

Bond investments are subject to interest-rate and credit risks. When interest rates rise, bond prices generally fall. Credit risk refers to the ability of an issuer to make timely payments of principal and interest. In the current market environment, mortgage backed securities are experiencing increased volatility. The "full faith and credit" guarantee of the US government applies to the timely repayment of interest, and does not eliminate market risk. See the prospectus for details.

Fund returns shown for the 3-year, 5-year and 10-year/Life of Class periods reflect a fee waiver and/or expense reimbursement. Without this waiver/reimbursement, returns would have been lower.

Growth of an Assumed $10,000 Investment in DWS Government & Agency Securities VIP
[] DWS Government & Agency Securities VIP — Class A [] Barclays Capital GNMA Index		The Barclays Capital GNMA Index is an unmanaged, market-value-weighted measure of all fixed-rate securities backed by mortgage pools of the Government National Mortgage Association. Index returns, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

Yearly periods ended December 31

Comparative Results
DWS Government & Agency Securities VIP		1-Year			3-Year			5-Year			10-Year
Class A	Growth of $10,000	$	10,661		$	12,091		$	13,344		$	16,865
Class A	Average annual total return		6.61	%		6.53	%		5.94	%		5.37	%
Barclays Capital GNMA Index	Growth of $10,000	$	10,667		$	12,125		$	13,568		$	17,679
Barclays Capital GNMA Index	Average annual total return		6.67	%		6.63	%		6.29	%		5.86	%
DWS Government & Agency Securities VIP		1-Year			3-Year			5-Year			Life of Class*
Class B	Growth of $10,000	$	10,624		$	11,968		$	13,090		$	14,610
Class B	Average annual total return		6.24	%		6.17	%		5.53	%		4.56	%
Barclays Capital GNMA Index	Growth of $10,000	$	10,667		$	12,125		$	13,568		$	15,655
Barclays Capital GNMA Index	Average annual total return		6.67	%		6.63	%		6.29	%		5.41	%

The growth of $10,000 is cumulative.

* The Fund commenced offering Class B shares on July 1, 2002. Index returns began on June 30, 2002.

Information About Your Fund's Expenses

DWS Government & Agency Securities VIP

The tables illustrate your Fund's expenses in two ways:

Expenses and Value of a $1,000 Investment for the six months ended December 31, 2010
Actual Fund Return	Class A		Class B
Beginning Account Value 7/1/10	$	1,000.00	$	1,000.00
Ending Account Value 12/31/10	$	1,001.50	$	999.20
Expenses Paid per $1,000*	$	3.13	$	4.89
Hypothetical 5% Fund Return	Class A		Class B
Beginning Account Value 7/1/10	$	1,000.00	$	1,000.00
Ending Account Value 12/31/10	$	1,022.08	$	1,020.32
Expenses Paid per $1,000*	$	3.16	$	4.94

Annualized Expense Ratios	Class A		Class B
DWS Variable Series II — DWS Government & Agency Securities VIP	.62%		.97%

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

Management Summary December 31, 2010

DWS Government & Agency Securities VIP

During the 12-month period, the US Federal Reserve Board (the Fed) maintained the benchmark federal funds rate at near-zero levels and engaged in bond purchases designed to lower longer-term interest rates as it sought to stimulate economic growth.1 Treasury yields fell for most of the year, before rising in the fourth quarter as market participants reacted to better economic data and the extension of Bush-era tax cuts. For the year, credit-sensitive sectors such as corporate bonds outperformed as investors sought yield in an environment of extraordinarily low interest rates. GNMAs, for which repayment of principal is backed by the full faith and credit of the US government, also provided attractive returns for the full period, helped by a declining rate environment and modest prepayments on underlying mortgages.

During the 12-month period ended December 31, 2010, the Fund provided a total return of 6.61% (Class A shares, unadjusted for contract charges), compared with the 6.67% return of its benchmark, the Barclays Capital GNMA Index.

During the year, investors tried to balance the potential impact of very low interest rates on mortgage prepayments against the implications of a tighter lending climate following the financial crisis and downturn in housing prices. The Fund held certain specified pools of seasoned and low-balance mortgages with favorable prepayment characteristics that held up well in the uncertain environment for mortgage-backed securities. We also had significant exposure to longer-duration mortgages, which performed well as interest rates continued to decline for most of the period. The Fund's exposure to higher-interest-rate mortgages was less favorable for relative performance. These issues trade at a premium, and trading in them was particularly impacted by proposals that emerged to enable underwater homeowners to prepay mortga ges at par and refinance at lower rates. With refinancing continuing to be difficult for many homeowners, given underwater mortgages and tightened lending standards, we remain comfortable with our overall focus on generating income by holding bonds with higher coupons and steady cash flows. We will continue to closely monitor the refinancing environment and various policy proposals with the potential to increase prepayments. With 30-year mortgage rates still near historically low levels, we will continue to look for opportunities to add floating-rate issues where we can find attractive pricing and other ways to position the Fund ahead of an eventual rise in interest rates.

William Chepolis, CFA

Co-Manager

Ohn Choe, CFA

John D. Ryan

Portfolio Managers

The Barclays Capital GNMA Index is an unmanaged, market-value-weighted measure of all fixed-rate securities backed by mortgage pools of the Government National Mortgage Association.

Index returns, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

1 The federal funds rate is the interest rate, set by the US Federal Reserve, at which banks lend money to each other, usually on an overnight basis.

Portfolio Summary

DWS Government & Agency Securities VIP

Asset Allocation (As a % of Investment Portfolio)	12/31/10	12/31/09

Mortgage-Backed Securities Pass-Throughs	69%	70%
Collateralized Mortgage Obligation	15%	16%
Government & Agency Obligations	14%	10%
Cash Equivalents	2%	4%
	100%	100%

Coupons*	12/31/10	12/31/09

Less than 4.5%	4%	18%
4.5%-5.49%	50%	29%
5.5%-6.49%	40%	42%
6.5%-7.49%	4%	6%
7.5% and Greater	2%	5%
	100%	100%

Interest Rate Sensitivity	12/31/10	12/31/09

Effective Maturity	5.9 years	5.7 years
Effective Duration	5.0 years	4.6 years

* Excludes Cash Equivalents, Securities Lending Collateral and US Treasury Bills.

Asset allocation, coupons and interest rate sensitivity are subject to change.

Effective maturity is the weighted average of the bonds held by the Fund taking into consideration any maturity shortening features.

Effective duration is an approximate measure of the Fund's sensitivity to interest rate changes taking into consideration any maturity shortening features.

For more complete details about the Fund's investment portfolio, see page 128.

Investment Portfolio December 31, 2010

DWS Government & Agency Securities VIP

	Principal Amount ($)		Value ($)

Mortgage-Backed Securities Pass-Throughs 83.3%
Federal Home Loan Mortgage Corp.:
5.0%, 9/1/2036 (a)		15,000,000		15,732,421
7.0%, with various maturities from 6/1/2032 until 8/1/2035		263,476		290,117
Federal National Mortgage Association:
4.5%, 12/1/2038 (a)		10,000,000		10,266,406
5.0%, with various maturities from 10/1/2033 until 4/1/2036 (a)		14,422,091		15,164,163
Government National Mortgage Association:
4.5%, with various maturities from 2/15/2039 until 10/15/2040 (a)		3,438,403		3,584,194
5.0%, with various maturities from 12/15/2032 until 7/15/2040 (a)		11,397,116		12,327,983
5.5%, with various maturities from 3/15/2029 until 3/20/2040 (a)		46,206,832		49,986,154
6.0%, with various maturities from 7/15/2014 until 7/20/2039 (a)		17,397,268		19,165,837
6.5%, with various maturities from 4/15/2031 until 2/15/2039		4,575,400		5,110,697
7.0%, with various maturities from 10/15/2026 until 2/20/2039		2,685,289		3,011,685
7.5%, with various maturities from 4/15/2026 until 1/15/2037		1,095,618		1,242,032
Total Mortgage-Backed Securities Pass-Throughs (Cost $130,051,803)				135,881,689

Collateralized Mortgage Obligations 18.2%
Fannie Mae Benchmark Remic, "ZA", Series 2007-B2, 5.5%, 6/25/2037		1,704,216		1,790,925
Federal Home Loan Mortgage Corp.:
"OA", Series 3179, Principal Only, Zero Coupon, 7/15/2036		904,810		784,239
"FO", Series 2418, 1.16%*, 2/15/2032		529,262		539,639
"FA", Series 2419, 1.26%*, 2/15/2032		442,297		452,259
"FA", Series 2436, 1.26%*, 3/15/2032		441,110		450,889
"NI", Series 3657, Interest Only, 4.5%, 8/15/2027		2,467,460		271,639
"ZK", Series 3382, 5.0%, 7/15/2037		1,166,312		1,201,332
"22", Series 243, Interest Only, 5.325%**, 6/15/2021		2,429,666		301,574
"PI", Series 2535, Interest Only, 6.0%, 9/15/2032		1,075,492		82,363
"S17", Series 244, Interest Only, 6.19%**, 12/15/2036		3,774,462		480,009
"WS", Series 2877, Interest Only, 6.34%**, 10/15/2034		1,106,464		94,741
"A", Series 172, Interest Only, 6.5%, 1/1/2024		50,339		9,913
"ST", Series 2411, Interest Only, 8.49%**, 6/15/2021		2,413,469		379,237
	Principal Amount ($)		Value ($)

Federal National Mortgage Association:
"FA", Series G92-53, 1.031%*, 9/25/2022		1,291,456		1,307,589
"OF", Series 2001-60, 1.211%*, 10/25/2031		223,599		227,868
"FB", Series 2002-30, 1.261%*, 8/25/2031		485,528		496,408
"FG", Series 2002-66, 1.261%*, 9/25/2032		753,586		770,257
"25", Series 351, Interest Only, 4.5%, 5/1/2019		510,823		54,370
"HI", Series 2009-77, Interest Only, 4.5%, 9/25/2027		2,152,932		234,077
"20", Series 334, Interest Only, 5.0%, 3/1/2018		373,251		38,881
"21", Series 334, Interest Only, 5.0%, 3/1/2018		248,750		26,378
''23", Series 339, Interest Only, 5.0%, 7/1/2018		522,209		55,150
"ZA", Series 2008-24, 5.0%, 4/25/2038		602,220		618,402
"PI", Series 2009-14, Interest Only, 5.5%, 3/25/2024		1,843,156		226,232
"ZQ", Series G93-39, 6.5%, 12/25/2023		457,372		502,399
"SA", Series G92-57, IOette, 82.35%**, 10/25/2022		71,607		146,159
Government National Mortgage Association:
"FB", Series 2001-28, 0.761%*, 6/16/2031		491,847		496,021
"HI", Series 2010-H06, Interest Only, 1.15%**, 4/20/2060		1,022,799		49,913
"BI", Series 2010-H01, Interest Only, 1.596%**, 1/20/2060		1,988,409		147,938
"HI", Series 2010-H21, Interest Only, 1.785%**, 10/20/2060		2,048,263		166,589
"FI", Series 2009-H01, Interest Only, 1.796%**, 11/20/2059		1,998,548		153,688
"JY", Series 2010-20, 4.0%, 12/20/2033		1,786,472		1,647,685
"LI", Series 2009-104, Interest Only, 4.5%, 12/16/2018		587,403		63,474
"NI", Series 2010-44, Interest Only, 4.5%, 10/20/2037		963,539		140,720
"CI", Series 2010-87, Interest Only, 4.5%, 11/20/2038		1,251,588		374,586
"VB", Series 2010-26, 5.0%, 1/20/2024		600,000		641,071
"KE", Series 2004-19, 5.0%, 3/16/2034		500,000		520,213
"ZM", Series 2004-24, 5.0%, 4/20/2034		2,091,969		2,212,195
"Z", Series 2004-61, 5.0%, 8/16/2034		1,028,732		1,030,343
"LE", Series 2004-87, 5.0%, 10/20/2034		1,000,000		1,050,448
"ZB", Series 2005-15, 5.0%, 2/16/2035		1,471,630		1,553,900
"GZ", Series 2005-24, 5.0%, 3/20/2035		446,319		421,792
"ZA", Series 2005-75, 5.0%, 10/16/2035		502,101		505,910
	Principal Amount ($)		Value ($)

"CK", Series 2007-31, 5.0%, 5/16/2037		1,000,000		1,063,979
"MZ", Series 2009-98, 5.0%, 10/16/2039		900,949		918,669
"AI", Series 2008-46, Interest Only, 5.5%, 5/16/2023		563,141		70,675
"AI", Series 2008-51, Interest Only, 5.5%, 5/16/2023		1,178,100		142,207
"GI", Series 2003-19, Interest Only, 5.5%, 3/16/2033		1,090,909		223,861
"ZA", Series 2006-7, 5.5%, 2/20/2036		2,216,333		2,382,304
"IB", Series 2010-130, Interest Only, 5.5%, 2/20/2038		2,858,860		169,796
"NZ", Series 2009-65, 5.5%, 8/20/2039		357,202		377,085
"KZ", Series 2009-78, 5.5%, 9/16/2039		327,726		334,509
"DI", Series 2009-10, Interest Only, 6.0%, 4/16/2038		577,014		86,183
"PY", Series 2009-122, 6.0%, 12/20/2039		650,888		701,828
"SJ", Series 2004-22, Interest Only, 6.339%**, 4/20/2034		590,550		4,362
"SA", Series 2006-47, Interest Only, 6.539%**, 8/16/2036		400,205		65,259
"SM", Series 2004-49, Interest Only, 6.889%**, 1/20/2034		1,154,062		129,137
"IC", Series 1997-4, Interest Only, 7.5%, 3/16/2027		922,676		217,810
"SA", Series 1999-30, Interest Only, 7.739%**, 4/16/2029		698,263		71,332
Total Collateralized Mortgage Obligations (Cost $27,327,105)				29,678,411

	Principal Amount ($)		Value ($)

Government & Agency Obligations 17.0%
Other Government Related 2.3%
Citibank NA, FDIC Guaranteed, 0.316%*, 5/7/2012		2,800,000		2,802,274
JPMorgan Chase & Co.:
FDIC Guaranteed, 0.532%*, 6/15/2012		537,000		538,852
Series 3, FDIC Guaranteed, 0.553%*, 12/26/2012		463,000		465,349
				3,806,475
US Government Sponsored Agency 12.5%
Federal Home Loan Bank, 5.0%, 11/17/2017		18,000,000		20,407,428
US Treasury Obligations 2.2%
US Treasury Bill, 0.185%***, 3/17/2011 (b)		1,045,000		1,044,767
US Treasury Note, 0.875%, 2/29/2012		2,500,000		2,514,550
				3,559,317
Total Government & Agency Obligations (Cost $27,820,256)				27,773,220

	Shares		Value ($)

Cash Equivalents 2.5%
Central Cash Management Fund, 0.19% (c) (Cost $3,978,480)		3,978,480		3,978,480

	% of Net Assets			Value ($)

Total Investment Portfolio (Cost $189,177,644)+		121.0			197,311,800
Other Assets and Liabilities, Net		(21.0	)		(34,184,750	)
Net Assets		100.0			163,127,050

** These securities are shown at their current rate as of December 31, 2010.

*** Annualized yield at time of purchase; not a coupon rate.

+ The cost for federal income tax purposes was $189,177,684. At December 31, 2010, net unrealized appreciation for all securities based on tax cost was $8,134,116. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $8,765,237 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $631,121.

(a) When-issued or delayed delivery securities included.

(b) At December 31, 2010, this security has been pledged, in whole or in part, to cover initial margin requirements for open futures contracts.

(c) Affiliated fund managed by Deutsche Investment Management Americas Inc. The rate shown is the annualized seven-day yield at period end.

FDIC: Federal Deposit Insurance Corp.

Interest Only: Interest Only (IO) bonds represent the "interest only" portion of payments on a pool of underlying mortgages or mortgage-backed securities. IO securities are subject to prepayment risk of the pool of underlying mortgages.

IOettes: These securities represent the right to receive interest payments on an underlying pool of mortgages with similar features as those associated with IO securities. Unlike IO's, a nominal amount of principal is assigned to an IOette which is small in relation to the interest flow that constitutes almost all of the IOette cash flow. The effective yield of this security is lower than the stated interest rate.

Principal Only: Principal Only (PO) bonds represent the "principal only" portion of payments on a pool of underlying mortgages or mortgage-backed securities.

Included in the portfolio are investments in mortgage or asset-backed securities which are interests in separate pools of mortgages or assets. Effective maturities of these investments may be shorter than stated maturities due to prepayments. Some separate investments in the Federal Home Loan Mortgage Corp., Federal National Mortgage Association and Government National Mortgage Association issues which have similar coupon rates have been aggregated for presentation purposes in this investment portfolio.

At December 31, 2010, open futures contracts purchased were as follows:

Futures

Currency

Expiration Date

Contracts

Notional Value ($)

Unrealized Depreciation ($)

Ultra Long Term US Treasury Bond

USD

3/22/2011

2,287,688

(64,828

)

At December 31, 2010, open futures contracts sold were as follows:

Futures

Currency

Expiration Date

Contracts

Notional Value ($)

Unrealized Depreciation ($)

10 Year US Treasury Note

USD

3/22/2011

119

14,332,063

(80,855

)

Currency Abbreviation

USD United States Dollar

At December 31, 2010, open interest rate swap contracts were as follows:

Effective/ Expiration Dates	Notional Amount ($)			Cash Flows Paid by the Fund	Cash Flows Received by the Fund	Value ($)			Upfront Payments Paid/ (Received) ($)		Unrealized Depreciation ($)
10/28/2010 10/28/2025		320,000	1	Floating — LIBOR	Floating — 4.138%++		(10,086	)		—		(10,086	)
11/1/2010 11/1/2025		540,000	2	Floating — LIBOR	Floating — 4.292%++		(48,753	)		—		(48,753	)
11/12/2010 11/12/2025		640,000	1	Floating — LIBOR	Floating — 4.285%++		(18,640	)		—		(18,640	)
11/15/2010 11/15/2025		640,000	2	Floating — LIBOR	Floating — 4.585%++		(53,840	)		—		(53,840	)
11/16/2010 11/16/2025		320,000	1	Floating — LIBOR	Floating — 4.584%++		(6,437	)		—		(6,437	)
11/19/2010 11/19/2025		320,000	2	Floating — LIBOR	Floating — 4.784%++		(25,396	)		—		(25,396	)
11/23/2010 11/23/2025		150,000	1	Floating — LIBOR	Floating — 4.834%++		(1,981	)		—		(1,981	)
Total unrealized depreciation												(165,133	)

++ These interest rate swaps are shown at their current rate as of December 31, 2010.

At December 31, 2010, open total return swap contracts were as follows:

Effective/ Expiration Date		Notional Amount ($)				Fixed Cash Flows Paid			Reference Entity		Value ($)				Upfront Payments Paid/ (Received) ($)				Unrealized Appreciation ($)
5/28/2010 6/1/2012			6,900,000	3			0.45	%	Citi Global Interest Rate Strategy Index			11,198				4,600				6,598

Counterparties:

1 Morgan Stanley

2 Barclays Capital Securities, Inc.

3 Citigroup, Inc.

LIBOR: London InterBank Offered Rate

For information on the Fund's policy and additional disclosures regarding futures contracts, interest rate swap contracts and total return swap contracts, please refer to the Derivatives section of Note B in the accompanying Notes to Financial Statements.

Fair Value Measurements

Assets	Level 1			Level 2			Level 3		Total

Fixed-Income Investments (d) Mortgage-Backed Securities Pass-Throughs	$	—		$	135,881,689		$	—	$	135,881,689
Collateralized Mortgage Obligations		—			29,160,283			518,128		29,678,411
Government & Agency Obligations		—			26,728,453			—		26,728,453
Short-Term Investments		3,978,480			1,044,767			—		5,023,247
Derivatives (e)		—			6,598			—		6,598
Total	$	3,978,480		$	192,821,790		$	518,128	$	197,318,398
Liabilities
Derivatives (e)	$	(145,683	)	$	(165,133	)	$	—	$	(310,816	)
Total	$	(145,683	)	$	(165,133	)	$	—	$	(310,816	)

There have been no significant transfers between Level 1 and Level 2 fair value measurements during the year ended December 31, 2010.

(d) See Investment Portfolio for additional detailed categorizations.

(e) Derivatives include unrealized appreciation (depreciation) on open futures contracts, interest rate swap contracts and total return swap contracts.

Level 3 Reconciliation

The following is a reconciliation of the Fund's Level 3 investments for which significant unobservable inputs were used in determining value:

	Collateralized Mortgage Obligations			Government & Agency Obligations			Total
Balance as of December 31, 2009	$	135,301		$	523,600		$	658,901
Realized gains (loss)		(2,253	)		—			(2,253	)
Change in unrealized appreciation (depreciation)		44,476			36,400			80,876
Amortization premium/discount		(30,311	)		—			(30,311	)
Net purchases (sales)		370,915			(560,000	)		(189,085	)
Transfers into Level 3		—			—			—
Transfers (out) of Level 3		—			—			—
Balance as of December 31, 2010	$	518,218		$	—		$	518,218
Net change in unrealized appreciation (depreciation) from investments still held as of December 31, 2010	$	44,476		$	—		$	44,476

Transfers between price levels are recognized at the beginning of the reporting period.

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

Statement of Assets and Liabilities

as of December 31, 2010
Assets
Investments Investments in unaffiliated securities, at value (cost $185,199,164)	$	193,333,320
Investment in Central Cash Management Fund (cost $3,978,480)		3,978,480
Total investments, at value (cost $189,177,644)		197,311,800
Cash		11,209
Receivable for when-issued and delayed delivery securities sold		62,105,877
Receivable for Fund shares sold		82
Unrealized appreciation on open swap contracts		6,598
Upfront payments paid on open swap contracts		4,600
Interest receivable		663,286
Other assets		1,039
Total assets		260,104,491
Liabilities
Payable for when-issued and delayed delivery securities purchased		96,492,907
Payable for Fund shares redeemed		122,653
Payable for daily variation margin on open futures contracts		22,421
Unrealized depreciation on open swap contracts		165,133
Accrued management fee		64,314
Other accrued expenses and payables		110,013
Total liabilities		96,977,441
Net assets, at value	$	163,127,050
Net Assets Consist of
Undistributed net investment income		6,521,765
Net unrealized appreciation (depreciation) on: Investments		8,134,156
Futures		(145,683	)
Swap contracts		(158,535	)
Accumulated net realized gain (loss)		2,570,629
Paid-in capital		146,204,718
Net assets, at value	$	163,127,050
Class A Net Asset Value, offering and redemption price per share ($157,270,905 ÷ 12,120,178 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)	$	12.98
Class B Net Asset Value, offering and redemption price per share ($5,856,145 ÷ 452,192 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)	$	12.95

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

Statement of Operations

for the year ended December 31, 2010
Investment Income
Income: Interest	$	7,879,825
Income distributions — Central Cash Management Fund		11,105
Total income		7,890,930
Expenses: Management fee		789,612
Administration fee		175,469
Services to shareholders		2,747
Distribution service fee (Class B)		15,782
Record keeping fees (Class B)		6,123
Custodian fee		19,184
Legal fees		10,450
Audit and tax fees		67,125
Trustees' fees and expenses		8,731
Reports to shareholders		21,188
Other		30,423
Total expenses		1,146,834
Net investment income		6,744,096
Realized and Unrealized Gain (Loss)
Net realized gain (loss) from: Investments		2,806,212
Futures		950,817
Written options		87,625
Swap contracts		(659,466	)
		3,185,188
Change in net unrealized appreciation (depreciation) on: Investments		1,027,186
Futures		475,938
Swap contracts		(95,677	)
		1,407,447
Net gain (loss)		4,592,635
Net increase (decrease) in net assets resulting from operations	$	11,336,731

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

Statement of Changes in Net Assets

	Years Ended December 31,
Increase (Decrease) in Net Assets	2010			2009
Operations: Net investment income	$	6,744,096		$	8,168,646
Net realized gain (loss)		3,185,188			2,256,128
Change in net unrealized appreciation (depreciation)		1,407,447			5,187,713
Net increase (decrease) in net assets resulting from operations		11,336,731			15,612,487
Distributions to shareholders from: Net investment income: Class A		(7,785,441	)		(9,576,836	)
Class B		(277,185	)		(337,035	)
Total distributions		(8,062,626	)		(9,913,871	)
Fund share transactions: Class A Proceeds from shares sold		38,574,553			23,250,916
Reinvestment of distributions		7,785,441			9,576,836
Payments for shares redeemed		(61,339,038	)		(80,587,867	)
Net increase (decrease) in net assets from Class A share transactions		(14,979,044	)		(47,760,115	)
Class B Proceeds from shares sold		653,336			1,821,403
Reinvestment of distributions		277,185			337,035
Payments for shares redeemed		(1,704,050	)		(3,752,537	)
Net increase (decrease) in net assets from Class B share transactions		(773,529	)		(1,594,099	)
Increase (decrease) in net assets		(12,478,468	)		(43,655,598	)
Net assets at beginning of period		175,605,518			219,261,116
Net assets at end of period (including undistributed net investment income of $6,521,765 and $7,761,196, respectively)	$	163,127,050		$	175,605,518
Other Information
Class A Shares outstanding at beginning of period		13,231,519			17,044,556
Shares sold		2,996,102			1,856,164
Shares issued to shareholders in reinvestment of distributions		623,833			788,217
Shares redeemed		(4,731,276	)		(6,457,418	)
Net increase (decrease) in Class A shares		(1,111,341	)		(3,813,037	)
Shares outstanding at end of period		12,120,178			13,231,519
Class B Shares outstanding at beginning of period		510,999			639,523
Shares sold		50,683			144,579
Shares issued to shareholders in reinvestment of distributions		22,193			27,739
Shares redeemed		(131,683	)		(300,842	)
Net increase (decrease) in Class B shares		(58,807	)		(128,524	)
Shares outstanding at end of period		452,192			510,999

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

Financial Highlights

Class A Years Ended December 31,	2010			2009			2008			2007			2006
Selected Per Share Data
Net asset value, beginning of period	$	12.78		$	12.40		$	12.38		$	12.28		$	12.26
Income (loss) from investment operations: Net investment incomea		.50			.52			.56			.58			.55
Net realized and unrealized gain (loss)		.32			.45			.04			.12			(.06	)
Total from investment operations		.82			.97			.60			.70			.49
Less distributions from: Net investment income		(.62	)		(.59	)		(.58	)		(.60	)		(.47	)
Net asset value, end of period	$	12.98		$	12.78		$	12.40		$	12.38		$	12.28
Total Return (%)		6.61			8.08			4.93	b		5.95	b		4.16
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		157			169			211			199			211
Ratio of expenses before expense reductions (%)		.64			.58			.66			.66			.67
Ratio of expenses after expense reductions (%)		.64			.58			.65			.63			.67
Ratio of net investment income (%)		3.86			4.16			4.58			4.77			4.56
Portfolio turnover rate (%)		423			390			543			465			241
a Based on average shares outstanding during the period. b Total return would have been lower had certain expenses not been reduced.

Class B Years Ended December 31,	2010			2009			2008			2007			2006
Selected Per Share Data
Net asset value, beginning of period	$	12.75		$	12.37		$	12.35		$	12.25		$	12.23
Income (loss) from investment operations: Net investment incomea		.46			.48			.52			.53			.50
Net realized and unrealized gain (loss)		.31			.45			.03			.12			(.06	)
Total from investment operations		.77			.93			.55			.65			.44
Less distributions from: Net investment income		(.57	)		(.55	)		(.53	)		(.55	)		(.42	)
Net asset value, end of period	$	12.95		$	12.75		$	12.37		$	12.35		$	12.25
Total Return (%)		6.24			7.70			4.60	b		5.43	b		3.74
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		6			7			8			5			33
Ratio of expenses before expense reductions (%)		.99			.92			1.00			1.04			1.07
Ratio of expenses after expense reductions (%)		.99			.92			1.00			1.01			1.07
Ratio of net investment income (%)		3.51			3.81			4.24			4.39			4.16
Portfolio turnover rate (%)		423			390			543			465			241
a Based on average shares outstanding during the period. b Total return would have been lower had certain expenses not been reduced.

Performance Summary December 31, 2010

DWS High Income VIP

The gross expense ratios of the Fund, as stated in the fee table of the prospectus dated May 1, 2010 are 0.67% and 0.94% for Class A and Class B shares, respectively, and may differ from the expense ratios disclosed in the Financial Highlights tables in this report.

Risk Considerations

Fund returns shown for the 3-year, 5-year and 10-year/life of class periods reflect a fee waiver and/or expense reimbursement. Without this waiver/reimbursement, returns would have been lower.

Growth of an Assumed $10,000 Investment in DWS High Income VIP
[] DWS High Income VIP — Class A [] Credit Suisse High Yield Index		The Credit Suisse High Yield Index is an unmanaged, trader-priced portfolio constructed to mirror the global high-yield debt market. Index returns, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

Yearly periods ended December 31

Comparative Results
DWS High Income VIP		1-Year			3-Year			5-Year			10-Year
Class A	Growth of $10,000	$	11,400		$	12,138		$	13,538		$	20,159
Class A	Average annual total return		14.00	%		6.67	%		6.25	%		7.26	%
Credit Suisse High Yield Index	Growth of $10,000	$	11,442		$	13,028		$	14,966		$	23,912
Credit Suisse High Yield Index	Average annual total return		14.42	%		9.22	%		8.40	%		9.11	%
DWS High Income VIP		1-Year			3-Year			5-Year			Life of Class*
Class B	Growth of $10,000	$	11,364		$	12,040		$	13,329		$	19,657
Class B	Average annual total return		13.64	%		6.38	%		5.92	%		8.28	%
Credit Suisse High Yield Index	Growth of $10,000	$	11,442		$	13,028		$	14,966		$	22,564
Credit Suisse High Yield Index	Average annual total return		14.42	%		9.22	%		8.40	%		10.04	%

The growth of $10,000 is cumulative.

* The Fund commenced offering Class B shares on July 1, 2002. Index returns began on June 30, 2002.

Information About Your Fund's Expenses

DWS High Income VIP

The tables illustrate your Fund's expenses in two ways:

Expenses and Value of a $1,000 Investment for the six months ended December 31, 2010
Actual Fund Return	Class A		Class B
Beginning Account Value 7/1/10	$	1,000.00	$	1,000.00
Ending Account Value 12/31/10	$	1,098.70	$	1,098.30
Expenses Paid per $1,000*	$	3.65	$	5.02
Hypothetical 5% Fund Return	Class A		Class B
Beginning Account Value 7/1/10	$	1,000.00	$	1,000.00
Ending Account Value 12/31/10	$	1,021.73	$	1,020.42
Expenses Paid per $1,000*	$	3.52	$	4.84

Annualized Expense Ratios	Class A		Class B
DWS Variable Series II — DWS High Income VIP	.69%		.95%

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

Management Summary December 31, 2010

DWS High Income VIP

High-yield bonds — as gauged by the Fund's benchmark, the Credit Suisse High Yield Index — returned 14.42% in 2010 and outperformed the broader fixed-income market, as measured by the 6.54% return of the Barclays Capital US Aggregate Bond Index. High-yield bonds were energized by an environment of low government bond yields, improving balance sheets for high-yield companies and a steep decline in the default rate. The Class A shares of the Fund returned 14.00% (unadjusted for contract charges), underperforming the benchmark.

The Fund's underperformance was partially the result of our overweights in certain lower-volatility issuers such as NRG Energy, Inc. and HCA, Inc., as well as our underweights in higher-volatility issuers such as CIT Group, Inc., Realogy Corp.* and Residential Capital.*1 These detractors demonstrate that our risk management process can sometimes cause us to miss some winners. However, we believe a focus on risk and reward — rather than trying to chase short-term performance in the hottest areas of the market — remains the most prudent strategy.

The largest contributor to the Fund's performance was the Fund's exposure to bonds issued by Ford Motor Co. Ford benefited from rising sales, increased market share and declining debt, all of which set the stage of an upgrade to its credit quality rating.2 Our security selection in the chemicals sector, were key contributors included Hexion Specialty Chemicals,* Huntsman International LLC and Ashland, Inc., proved helpful to performance.

We maintain an upbeat outlook on high-yield bonds. Many positive factors remain in place, including accommodative monetary policy, new fiscal stimulus, strong corporate balance sheets and the high cash balances of large-cap corporations. The market is also benefiting from increased merger and acquisition activity, a receptive new issue environment, and a lower-than-expected default rate.

Given the supportive factors that characterize the current market backdrop, we believe the combination of attractive yields and a low single-digit default rate indicate a potentially favorable risk/return trade-off for high-yield bonds. However, bottom-up credit research and security selection will be more important than ever, given the substantial impact that individual defaults can have on performance in a low-default environment.

Gary Russell, CFA

Portfolio Manager

The Credit Suisse High Yield Index is an unmanaged, trader-priced portfolio constructed to mirror the global high-yield debt market.

The Barclays Capital US Aggregate Bond Index is an unmanaged, market-value-weighted measure of Treasury issues, agency issues, corporate bond issues and mortgage securities.

Index returns, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

1 "Overweight" means the Fund holds a higher weighting in a given sector or security than the benchmark. "Underweight" means the Fund holds a lower weighting.

2 Credit quality is a measure of a bond issuer's ability to repay interest and principal in a timely manner. Rating agencies assign letter designations such as AAA, AA and so forth. The lower the rating, the higher the probability of default. The fund's credit quality does not remove market risk and is subject to change.

* Not held in the portfolio as of December 31, 2010.

Portfolio Summary

DWS High Income VIP

Asset Allocation (As a % of Investment Portfolio excluding Securities Lending Collateral)	12/31/10	12/31/09

Corporate Bonds	87%	91%
Cash Equivalents	8%	0%
Loan Participations and Assignments	4%	8%
Preferred Securities	1%	1%
	100%	100%

Sector Diversification (As a % of Investment Portfolio excluding Cash Equivalents and Securities Lending Collateral)	12/31/10	12/31/09

Consumer Discretionary	20%	18%
Financials	19%	17%
Materials	12%	14%
Energy	12%	11%
Telecommunication Services	11%	11%
Industrials	10%	8%
Health Care	5%	7%
Information Technology	4%	3%
Consumer Staples	4%	3%
Utilities	3%	8%
	100%	100%

Quality (As a % of Investment Portfolio excluding Cash Equivalents and Securities Lending Collateral)	12/31/10	12/31/09

A	—	1%
BBB	—	7%
BB	15%	35%
B	54%	37%
CCC	26%	14%
D	1%	3%
Not Rated	4%	3%
	100%	100%

Interest Rate Sensitivity	12/31/10	12/31/09

Effective Maturity	5.5 years	4.8 years
Effective Duration	3.5 years	3.7 years

Asset allocation, sector diversification and interest rate sensitivity are subject to change.

Effective maturity is the weighted average of the bonds held by the Fund taking into consideration any maturity shortening features.

Effective duration is an approximate measure of the Fund's sensitivity to interest rate changes taking into consideration any maturity shortening features.

For more complete details about the Fund's investment portfolio, see page 142.

Investment Portfolio December 31, 2010

DWS High Income VIP

		Principal Amount ($) (a)		Value ($)

Corporate Bonds 85.6%
Consumer Discretionary 16.6%
AMC Entertainment, Inc.:
8.0%, 3/1/2014			590,000		595,900
8.75%, 6/1/2019			765,000		816,638
American Achievement Corp., 144A, 10.875%, 4/15/2016			570,000		584,250
Ameristar Casinos, Inc., 9.25%, 6/1/2014			395,000		422,650
Asbury Automotive Group, Inc.:
7.625%, 3/15/2017			590,000		595,900
144A, 8.375%, 11/15/2020			460,000		474,950
Ashtead Holdings PLC, 144A, 8.625%, 8/1/2015			380,000		393,775
Avis Budget Car Rental LLC:
144A, 8.25%, 1/15/2019			535,000		540,350
9.625%, 3/15/2018			260,000		280,150
Beazer Homes USA, Inc., 144A, 9.125%, 5/15/2019			285,000		270,750
Bon-Ton Department Stores, Inc., 10.25%, 3/15/2014			155,000		158,100
Brunswick Corp., 144A, 11.25%, 11/1/2016			295,000		351,050
Cablevision Systems Corp.:
7.75%, 4/15/2018			65,000		68,088
8.0%, 4/15/2020			65,000		69,550
CanWest MediaWorks LP, 144A, 9.25%, 8/1/2015**			340,000		57,800
Carrols Corp., 9.0%, 1/15/2013			225,000		225,563
CCO Holdings LLC:
7.25%, 10/30/2017			520,000		527,800
7.875%, 4/30/2018			225,000		232,875
8.125%, 4/30/2020			150,000		157,875
Cequel Communications Holdings I LLC, 144A, 8.625%, 11/15/2017			1,280,000		1,337,600
Clear Channel Worldwide Holdings, Inc.:
Series A, 9.25%, 12/15/2017			100,000		108,750
Series B, 9.25%, 12/15/2017			150,000		164,250
CSC Holdings LLC:
8.5%, 4/15/2014			500,000		549,375
8.5%, 6/15/2015			430,000		466,550
DineEquity, Inc., 144A, 9.5%, 10/30/2018			455,000		482,300
DISH DBS Corp., 7.125%, 2/1/2016			465,000		480,113
Fontainebleau Las Vegas Holdings LLC, 144A, 11.0%, 6/15/2015**			490,000		1,715
Gannett Co., Inc.:
8.75%, 11/15/2014			145,000		162,038
9.375%, 11/15/2017			295,000		328,925
Goodyear Tire & Rubber Co., 10.5%, 5/15/2016			225,000		256,500
Great Canadian Gaming Corp., 144A, 7.25%, 2/15/2015			505,000		516,362
		Principal Amount ($) (a)		Value ($)

Group 1 Automotive, Inc., 144A, 3.0%, 3/15/2020			375,000		466,406
Harrah's Operating Co., Inc.:
10.0%, 12/15/2018			790,000		720,875
11.25%, 6/1/2017			1,415,000		1,591,875
144A, 12.75%, 4/15/2018			295,000		296,475
Hertz Corp.:
144A, 7.5%, 10/15/2018			905,000		938,937
8.875%, 1/1/2014			645,000		659,512
Lear Corp.:
7.875%, 3/15/2018			235,000		251,450
8.125%, 3/15/2020			230,000		250,125
Macy's Retail Holdings, Inc., 8.375%, 7/15/2015			85,000		99,450
Mediacom Broadband LLC, 8.5%, 10/15/2015			635,000		638,175
Mediacom LLC, 9.125%, 8/15/2019			560,000		571,200
MGM Resorts International:
144A, 9.0%, 3/15/2020			145,000		159,500
144A, 10.0%, 11/1/2016			105,000		107,888
10.375%, 5/15/2014			340,000		381,650
11.125%, 11/15/2017			455,000		523,250
Michaels Stores, Inc., Step-up Coupon, 0% to 11/1/2011, 13.0% to 11/1/2016			150,000		148,500
Neiman Marcus Group, Inc., 10.375%, 10/15/2015			155,000		163,719
Norcraft Companies LP, 10.5%, 12/15/2015			1,260,000		1,338,750
Norcraft Holdings LP, 9.75%, 9/1/2012			630,000		633,937
Penske Automotive Group, Inc., 7.75%, 12/15/2016			1,085,000		1,106,700
PETCO Animal Supplies, Inc., 144A, 9.25%, 12/1/2018			315,000		331,931
Phillips-Van Heusen Corp., 7.375%, 5/15/2020			160,000		170,000
Regal Entertainment Group, 9.125%, 8/15/2018			140,000		149,100
Sabre Holdings Corp., 8.35%, 3/15/2016			515,000		494,400
Sears Holdings Corp., 144A, 6.625%, 10/15/2018			345,000		321,713
Seminole Indian Tribe of Florida:
144A, 7.75%, 10/1/2017			200,000		206,500
144A, 7.804%, 10/1/2020			450,000		438,525
Simmons Bedding Co., 144A, 11.25%, 7/15/2015			315,000		340,200
Sirius XM Radio, Inc., 144A, 8.75%, 4/1/2015			340,000		368,050
Sonic Automotive, Inc.:
5.0%, 10/1/2029			155,000		192,588
Series B, 9.0%, 3/15/2018			565,000		594,662
Standard Pacific Corp.:
8.375%, 5/15/2018			100,000		100,000
10.75%, 9/15/2016			440,000		507,100
Toys "R" Us, Inc., 7.375%, 10/15/2018			695,000		681,100
Toys "R" Us-Delaware, Inc., 144A, 7.375%, 9/1/2016			200,000		210,000
		Principal Amount ($) (a)		Value ($)

Travelport LLC:
4.921%***, 9/1/2014			390,000		345,150
9.0%, 3/1/2016			390,000		377,813
9.875%, 9/1/2014			275,000		267,781
Unitymedia GmbH, 144A, 9.625%, 12/1/2019	EUR		550,000		808,461
Unitymedia Hessen GmbH & Co., KG, 144A, 8.125%, 12/1/2017			945,000		987,525
Univision Communications, Inc., 144A, 7.875%, 11/1/2020			140,000		147,000
UPC Holding BV:
144A, 8.0%, 11/1/2016	EUR		405,000		562,850
144A, 8.375%, 8/15/2020	EUR		210,000		290,445
Vertis, Inc., 13.5%, 4/1/2014 (PIK)**			258,716		7,761
Visant Corp., 144A, 10.0%, 10/1/2017			460,000		488,750
Wynn Las Vegas LLC, 7.75%, 8/15/2020			280,000		303,100
Young Broadcasting, Inc., 8.75%, 1/15/2014**			2,040,000		20
					32,419,391
Consumer Staples 3.6%
B&G Foods, Inc., 7.625%, 1/15/2018			170,000		178,925
Dole Food Co., Inc., 144A, 8.0%, 10/1/2016			215,000		226,825
FAGE Dairy Industry SA, 144A, 9.875%, 2/1/2020			555,000		555,000
General Nutrition Centers, Inc., 5.75%***, 3/15/2014 (PIK)			280,000		277,200
NBTY, Inc., 144A, 9.0%, 10/1/2018			140,000		149,450
North Atlantic Trading Co., 144A, 10.0%, 3/1/2012			2,081,750		1,956,845
Rite Aid Corp.:
7.5%, 3/1/2017			295,000		283,569
8.0%, 8/15/2020			580,000		603,925
Smithfield Foods, Inc., 7.75%, 7/1/2017			1,880,000		1,955,200
Stater Bros. Holdings, Inc., 144A, 7.375%, 11/15/2018			180,000		184,500
SUPERVALU, Inc., 8.0%, 5/1/2016			210,000		201,075
Tops Holding Corp., 10.125%, 10/15/2015			330,000		339,075
					6,911,589
Energy 10.6%
Allis-Chalmers Energy, Inc., 9.0%, 1/15/2014			300,000		304,500
Arch Coal, Inc., 7.25%, 10/1/2020			110,000		116,050
Belden & Blake Corp., 8.75%, 7/15/2012			2,050,000		1,957,750
Berry Petroleum Co., 6.75%, 11/1/2020			535,000		537,675
BreitBurn Energy Partners LP, 144A, 8.625%, 10/15/2020			300,000		301,500
Bristow Group, Inc., 7.5%, 9/15/2017			485,000		511,675
Chaparral Energy, Inc., 8.5%, 12/1/2015			1,370,000		1,393,975
		Principal Amount ($) (a)		Value ($)

Chesapeake Energy Corp.:
6.625%, 8/15/2020			365,000		359,525
6.875%, 8/15/2018			185,000		187,775
6.875%, 11/15/2020			510,000		516,375
7.25%, 12/15/2018			620,000		641,700
9.5%, 2/15/2015			260,000		293,150
Cloud Peak Energy Resources LLC:
8.25%, 12/15/2017			145,000		155,694
8.5%, 12/15/2019			150,000		164,250
CONSOL Energy, Inc.:
144A, 8.0%, 4/1/2017			655,000		697,575
144A, 8.25%, 4/1/2020			250,000		270,000
Continental Resources, Inc.:
144A, 7.125%, 4/1/2021			175,000		183,750
7.375%, 10/1/2020			195,000		206,700
8.25%, 10/1/2019			105,000		116,550
Crosstex Energy LP, 8.875%, 2/15/2018			365,000		391,006
Dynegy Holdings, Inc., 7.75%, 6/1/2019			330,000		220,275
Energy Transfer Equity LP, 7.5%, 10/15/2020			215,000		221,450
Frontier Oil Corp., 6.875%, 11/15/2018			315,000		321,300
Genesis Energy LP, 144A, 7.875%, 12/15/2018			365,000		363,175
Global Geophysical Services, Inc., 10.5%, 5/1/2017			775,000		771,125
Harvest Operations Corp., 144A, 6.875%, 10/1/2017			140,000		144,200
Holly Corp., 9.875%, 6/15/2017			545,000		594,050
Holly Energy Partners LP, 144A, 8.25%, 3/15/2018			330,000		344,850
Inergy LP, 144A, 7.0%, 10/1/2018			350,000		352,625
Linn Energy LLC:
144A, 7.75%, 2/1/2021			335,000		343,375
144A, 8.625%, 4/15/2020			305,000		328,638
11.75%, 5/15/2017			650,000		744,250
Newfield Exploration Co., 7.125%, 5/15/2018			640,000		673,600
Offshore Group Investments Ltd., 144A, 11.5%, 8/1/2015			275,000		298,375
OPTI Canada, Inc., 7.875%, 12/15/2014			690,000		487,312
Petrohawk Energy Corp.:
7.25%, 8/15/2018			280,000		282,800
7.875%, 6/1/2015			220,000		229,075
10.5%, 8/1/2014			380,000		433,200
Plains Exploration & Production Co.:
7.0%, 3/15/2017			220,000		226,050
7.625%, 6/1/2018			720,000		757,800
8.625%, 10/15/2019			400,000		438,000
Range Resources Corp., 6.75%, 8/1/2020			105,000		108,281
Regency Energy Partners LP, 6.875%, 12/1/2018			205,000		207,563
Sabine Pass LNG LP:
7.25%, 11/30/2013			930,000		904,425
7.5%, 11/30/2016			100,000		93,750
SandRidge Energy, Inc., 8.625%, 4/1/2015 (PIK)			140,000		143,325
		Principal Amount ($) (a)		Value ($)

Southwestern Energy Co., 7.5%, 2/1/2018			585,000		659,587
Stone Energy Corp.:
6.75%, 12/15/2014			590,000		575,250
8.625%, 2/1/2017			125,000		126,875
					20,701,756
Financials 14.9%
Abengoa Finance SAU, 144A, 8.875%, 11/1/2017			775,000		716,875
Algoma Acquisition Corp., 144A, 9.875%, 6/15/2015			830,000		747,000
Ally Financial, Inc.:
144A, 6.25%, 12/1/2017			555,000		555,000
7.0%, 2/1/2012			565,000		584,775
144A, 7.5%, 9/15/2020			705,000		739,369
8.0%, 3/15/2020			685,000		748,362
8.0%, 11/1/2031			215,000		231,663
Antero Resources Finance Corp., 9.375%, 12/1/2017			70,000		73,238
Ardagh Packaging Finance PLC:
144A, 7.375%, 10/15/2017			215,000		221,719
144A, 7.375%, 10/15/2017	EUR		140,000		188,485
Ashton Woods USA LLC, 144A, Step-up Coupon, 0% to 6/30/2012, 11.0% to 6/30/2015			712,400		395,382
AWAS Aviation Capital Ltd., 144A, 7.0%, 10/15/2016			600,000		594,750
Blue Acquisition Sub, Inc., 144A, 9.875%, 10/15/2018 (b)			165,000		175,725
Calpine Construction Finance Co., LP, 144A, 8.0%, 6/1/2016			570,000		605,625
Case New Holland, Inc., 7.75%, 9/1/2013			290,000		311,750
CIT Group, Inc.:
7.0%, 5/1/2013			430,000		438,600
7.0%, 5/1/2015			623,195		624,753
7.0%, 5/1/2017			2,085,000		2,090,212
Dunkin Finance Corp., 144A, 9.625%, 12/1/2018			245,000		247,450
DuPont Fabros Technology LP, (REIT), 8.5%, 12/15/2017			435,000		465,450
E*TRADE Financial Corp.:
7.375%, 9/15/2013			995,000		990,025
12.5%, 11/30/2017 (PIK)			632,000		742,600
Express LLC, 8.75%, 3/1/2018			260,000		276,250
FCE Bank PLC, 9.375%, 1/17/2014	EUR		700,000		1,040,644
Fibria Overseas Finance Ltd., 144A, 7.5%, 5/4/2020			257,000		269,850
Ford Motor Credit Co., LLC:
6.625%, 8/15/2017			355,000		373,102
8.125%, 1/15/2020			100,000		116,341
Fresenius US Finance II, Inc., 144A, 9.0%, 7/15/2015			420,000		480,900
GenOn Escrow Corp., 144A, 9.5%, 10/15/2018			140,000		139,125
Giraffe Acquisition Corp., 144A, 9.125%, 12/1/2018			330,000		344,025
Hellas Telecommunications Finance SCA, 144A, 8.985%, 7/15/2015 (PIK)*	EUR		322,107		258
		Principal Amount ($) (a)		Value ($)

Hexion US Finance Corp., 8.875%, 2/1/2018			2,000,000		2,137,500
Inmarsat Finance PLC, 144A, 7.375%, 12/1/2017			670,000		703,500
International Lease Finance Corp.:
144A, 8.625%, 9/15/2015			235,000		252,625
144A, 8.75%, 3/15/2017			465,000		498,712
iPayment, Inc., 9.75%, 5/15/2014			475,000		446,500
National Money Mart Co., 10.375%, 12/15/2016			790,000		853,200
Navios Maritime Acquisition Corp., 144A, 8.625%, 11/1/2017			150,000		153,375
Nielsen Finance LLC:
Step-up Coupon, 0% to 8/1/2011, 12.5% to 8/1/2016			505,000		530,250
144A, 7.75%, 10/15/2018			150,000		155,250
11.5%, 5/1/2016			150,000		173,250
Nuveen Investments, Inc., 10.5%, 11/15/2015			700,000		715,750
OMEGA Healthcare Investors, Inc., 144A, (REIT), 6.75%, 10/15/2022			305,000		302,331
Pinafore LLC, 144A, 9.0%, 10/1/2018			230,000		248,400
Pinnacle Foods Finance LLC:
8.25%, 9/1/2017			425,000		434,562
9.25%, 4/1/2015			695,000		723,669
Reynolds Group Issuer, Inc.:
144A, 7.125%, 4/15/2019			415,000		422,263
144A, 7.75%, 10/15/2016			550,000		581,625
144A, 8.5%, 5/15/2018			610,000		613,050
144A, 9.0%, 4/15/2019			590,000		611,387
Roadhouse Financing, Inc., 144A, 10.75%, 10/15/2017			230,000		248,400
SLM Corp., 8.0%, 3/25/2020			135,000		136,877
Susser Holdings LLC, 8.5%, 5/15/2016			175,000		187,688
Tropicana Entertainment LLC, 9.625%, 12/15/2014**			1,220,000		622
UCI Holdco, Inc., 9.25%***, 12/15/2013 (PIK)			769,696		767,772
Virgin Media Finance PLC, Series 1, 9.5%, 8/15/2016			1,135,000		1,282,550
WMG Acquisition Corp., 9.5%, 6/15/2016			375,000		402,188
					29,112,599
Health Care 3.9%
Community Health Systems, Inc., 8.875%, 7/15/2015			435,000		456,750
DaVita, Inc.:
6.375%, 11/1/2018			130,000		129,350
6.625%, 11/1/2020			130,000		128,700
Hanger Orthopedic Group, Inc., 7.125%, 11/15/2018			140,000		139,650
HCA Holdings, Inc., 144A, 7.75%, 5/15/2021 (b)			605,000		605,000
HCA, Inc.:
9.25%, 11/15/2016			2,040,000		2,176,425
9.625%, 11/15/2016 (PIK)			809,000		866,641
IASIS Healthcare LLC, 8.75%, 6/15/2014			525,000		538,781
Mylan, Inc., 144A, 7.875%, 7/15/2020			95,000		102,363
		Principal Amount ($) (a)		Value ($)

The Cooper Companies, Inc., 7.125%, 2/15/2015			840,000		865,200
Valeant Pharmaceuticals International:
144A, 6.75%, 10/1/2017			245,000		243,775
144A, 7.0%, 10/1/2020			385,000		380,187
Vanguard Health Holding Co. II, LLC:
8.0%, 2/1/2018			285,000		292,125
144A, 8.0%, 2/1/2018			305,000		311,100
Warner Chilcott Co., LLC, 144A, 7.75%, 9/15/2018			420,000		424,200
					7,660,247
Industrials 8.8%
Accuride Corp., 144A, 9.5%, 8/1/2018			405,000		438,413
Actuant Corp., 6.875%, 6/15/2017			300,000		306,750
AMGH Merger Sub, Inc., 144A, 9.25%, 11/1/2018			190,000		199,500
ARAMARK Corp., 8.5%, 2/1/2015			560,000		585,200
Armored Autogroup, Inc., 144A, 9.25%, 11/1/2018			610,000		605,425
ArvinMeritor, Inc., 8.125%, 9/15/2015			280,000		292,950
BE Aerospace, Inc.:
6.875%, 10/1/2020			210,000		216,825
8.5%, 7/1/2018			300,000		328,500
Belden, Inc., 7.0%, 3/15/2017			420,000		425,250
Briggs & Stratton Corp., 6.875%, 12/15/2020			195,000		198,900
Cenveo Corp., 8.875%, 2/1/2018			1,055,000		1,020,712
CHC Helicopter SA, 144A, 9.25%, 10/15/2020			390,000		403,650
Congoleum Corp., 9.0%, 12/31/2017 (PIK)			396,000		272,998
Corrections Corp. of America, 7.75%, 6/1/2017			35,000		37,144
Delta Air Lines, Inc., 144A, 9.5%, 9/15/2014			99,000		107,786
DynCorp International, Inc., 144A, 10.375%, 7/1/2017			490,000		502,250
FTI Consulting, Inc., 144A, 6.75%, 10/1/2020			195,000		193,538
Garda World Security Corp., 144A, 9.75%, 3/15/2017			375,000		402,188
Great Lakes Dredge & Dock Co., 7.75%, 12/15/2013			300,000		302,625
Interline Brands, Inc., 144A, 7.0%, 11/15/2018			295,000		299,425
K. Hovnanian Enterprises, Inc.:
8.875%, 4/1/2012			435,000		426,300
10.625%, 10/15/2016			365,000		374,125
Kansas City Southern de Mexico SA de CV:
7.375%, 6/1/2014			1,045,000		1,092,025
8.0%, 2/1/2018			715,000		773,987
Kansas City Southern Railway Co., 8.0%, 6/1/2015			655,000		704,125
Navios Maritime Holdings, Inc., 9.5%, 12/15/2014			680,000		707,200
Ply Gem Industries, Inc., 13.125%, 7/15/2014			515,000		547,187
		Principal Amount ($) (a)		Value ($)

RailAmerica, Inc., 9.25%, 7/1/2017			304,000		334,020
RBS Global, Inc. & Rexnord Corp.:
8.5%, 5/1/2018			715,000		759,687
11.75%, 8/1/2016			120,000		128,700
Rearden G Holdings EINS GmbH, 144A, 7.875%, 3/30/2020			135,000		142,425
Sitel LLC, 144A, 11.5%, 4/1/2018			565,000		466,125
Spirit AeroSystems, Inc.:
144A, 6.75%, 12/15/2020			205,000		205,513
7.5%, 10/1/2017			215,000		223,600
SPX Corp., 144A, 6.875%, 9/1/2017			130,000		138,125
Titan International, Inc., 144A, 7.875%, 10/1/2017			945,000		996,975
Triumph Group, Inc., 8.0%, 11/15/2017			75,000		78,000
Tutor Perini Corp., 144A, 7.625%, 11/1/2018			325,000		326,625
United Rentals North America, Inc.:
9.25%, 12/15/2019			830,000		923,375
10.875%, 6/15/2016			390,000		445,575
USG Corp., 144A, 9.75%, 8/1/2014			220,000		232,100
					17,165,823
Information Technology 4.1%
Alcatel-Lucent USA, Inc., 6.45%, 3/15/2029			570,000		450,300
Allen Systems Group, Inc., 144A, 10.5%, 11/15/2016			210,000		211,575
Amkor Technology, Inc., 7.375%, 5/1/2018			250,000		260,000
Aspect Software, Inc., 144A, 10.625%, 5/15/2017			350,000		359,188
CDW LLC, 11.0%, 10/12/2015			440,000		456,500
Fidelity National Information Services, Inc.:
144A, 7.625%, 7/15/2017			95,000		99,988
144A, 7.875%, 7/15/2020			130,000		137,475
First Data Corp., 144A, 8.875%, 8/15/2020 (b)			495,000		522,225
Freescale Semiconductor, Inc., 144A, 9.25%, 4/15/2018			1,520,000		1,672,000
InterXion Holding NV, 144A, 9.5%, 2/12/2017	EUR		210,000		294,654
Jabil Circuit, Inc., 7.75%, 7/15/2016			145,000		162,763
MasTec, Inc., 7.625%, 2/1/2017			610,000		606,950
SunGard Data Systems, Inc.:
144A, 7.375%, 11/15/2018			140,000		140,700
10.25%, 8/15/2015			1,790,000		1,881,737
10.625%, 5/15/2015			365,000		402,412
Vangent, Inc., 9.625%, 2/15/2015			350,000		316,750
					7,975,217
Materials 10.9%
Appleton Papers, Inc., 144A, 11.25%, 12/15/2015			237,000		189,600
Ashland, Inc., 9.125%, 6/1/2017			260,000		299,650
		Principal Amount ($) (a)		Value ($)

Berry Plastics Corp.:
8.25%, 11/15/2015			660,000		699,600
9.5%, 5/15/2018			390,000		390,975
144A, 9.75%, 1/15/2021			460,000		455,400
Boise Paper Holdings LLC, 8.0%, 4/1/2020			170,000		181,900
BWAY Parent Co., Inc., 144A, 10.125%, 11/1/2015 (PIK)			230,000		232,300
Celanese US Holdings LLC, 144A, 6.625%, 10/15/2018			200,000		206,500
Clearwater Paper Corp., 144A, 7.125%, 11/1/2018			390,000		402,675
Clondalkin Acquisition BV, 144A, 2.302%***, 12/15/2013			265,000		253,738
CPG International I, Inc., 10.5%, 7/1/2013			880,000		897,600
Crown Americas LLC, 7.625%, 5/15/2017			40,000		43,000
Crown European Holdings SA, 144A, 7.125%, 8/15/2018	EUR		125,000		174,137
Domtar Corp., 10.75%, 6/1/2017			380,000		478,800
Essar Steel Algoma, Inc., 144A, 9.375%, 3/15/2015			1,410,000		1,418,812
Exopack Holding Corp., 11.25%, 2/1/2014			1,415,000		1,468,062
FMG Resources August 2006 Pty Ltd., 144A, 7.0%, 11/1/2015			140,000		143,500
GEO Specialty Chemicals, Inc.:
144A, 7.5%, 3/31/2015 (PIK)			1,297,793		1,116,102
10.0%, 3/31/2015			1,277,440		1,162,470
Graphic Packaging International, Inc.:
7.875%, 10/1/2018			70,000		73,325
9.5%, 6/15/2017			810,000		883,912
Hexcel Corp., 6.75%, 2/1/2015			1,425,000		1,453,500
Huntsman International LLC:
8.625%, 3/15/2020			330,000		358,875
144A, 8.625%, 3/15/2021			140,000		151,200
Ineos Finance PLC:
144A, 9.0%, 5/15/2015			325,000		345,719
144A, 9.25%, 5/15/2015	EUR		120,000		169,977
Koppers, Inc., 7.875%, 12/1/2019			440,000		471,900
Lumena Resources Corp., 144A, 12.0%, 10/27/2014			1,120,000		1,041,600
Lyondell Chemical Co., 144A, 8.0%, 11/1/2017			323,000		357,319
Millar Western Forest Products Ltd., 7.75%, 11/15/2013			200,000		189,500
Momentive Performance Materials, Inc.:
144A, 9.0%, 1/15/2021			385,000		406,175
144A, 9.5%, 1/15/2021	EUR		385,000		535,054
NewMarket Corp., 7.125%, 12/15/2016			1,005,000		1,027,612
OI European Group BV, 144A, 6.75%, 9/15/2020	EUR		130,000		175,022
Radnor Holdings Corp., 11.0%, 3/15/2010**			265,000		27
		Principal Amount ($) (a)		Value ($)

Rain CII Carbon LLC, 144A, 8.0%, 12/1/2018			270,000		276,750
Silgan Holdings, Inc., 7.25%, 8/15/2016			415,000		441,975
Solo Cup Co., 10.5%, 11/1/2013			210,000		219,450
Texas Industries, Inc., 144A, 9.25%, 8/15/2020			465,000		494,063
United States Steel Corp., 7.375%, 4/1/2020			480,000		492,000
Viskase Companies, Inc., 144A, 9.875%, 1/15/2018			940,000		979,950
Wolverine Tube, Inc., 15.0%, 3/31/2012 (PIK)**			830,088		448,248
					21,207,974
Telecommunication Services 9.7%
Buccaneer Merger Sub, Inc., 144A, 9.125%, 1/15/2019			130,000		134,225
Cincinnati Bell, Inc.:
8.25%, 10/15/2017			720,000		712,800
8.375%, 10/15/2020			1,030,000		988,800
8.75%, 3/15/2018			350,000		328,125
Clearwire Communications LLC, 144A, 12.0%, 12/1/2015			240,000		259,200
Cricket Communications, Inc.:
144A, 7.75%, 10/15/2020			1,455,000		1,385,887
10.0%, 7/15/2015 (b)			380,000		407,075
Crown Castle International Corp., 9.0%, 1/15/2015			775,000		854,437
Digicel Group Ltd., 144A, 10.5%, 4/15/2018			495,000		544,500
Digicel Ltd., 144A, 8.25%, 9/1/2017			1,090,000		1,117,250
ERC Ireland Preferred Equity Ltd., 144A, 8.05%***, 2/15/2017 (PIK)	EUR		638,816		76,584
Frontier Communications Corp.:
7.875%, 4/15/2015			65,000		71,013
8.25%, 4/15/2017			395,000		433,512
8.5%, 4/15/2020			525,000		573,562
8.75%, 4/15/2022			70,000		76,300
Grupo Iusacell Celular SA de CV, 10.0%, 3/31/2012**			278,182		102,927
Hughes Network Systems LLC, 9.5%, 4/15/2014			1,105,000		1,139,531
Intelsat Corp., 9.25%, 6/15/2016			1,735,000		1,873,800
Intelsat Jackson Holdings SA:
144A, 7.25%, 10/15/2020			695,000		701,950
11.25%, 6/15/2016			65,000		70,038
Intelsat Luxembourg SA, 11.5%, 2/4/2017 (PIK)			765,000		845,325
Intelsat Subsidiary Holding Co. SA:
Series B, 144A, 8.875%, 1/15/2015			165,000		168,713
8.875%, 1/15/2015			960,000		986,400
MetroPCS Wireless, Inc.:
6.625%, 11/15/2020			480,000		457,200
7.875%, 9/1/2018			135,000		140,063
Pacnet Ltd., 144A, 9.25%, 11/9/2015			225,000		231,190
Sprint Nextel Corp., 8.375%, 8/15/2017			590,000		632,775
		Principal Amount ($) (a)		Value ($)

Telesat Canada, 11.0%, 11/1/2015			1,545,000		1,734,261
West Corp.:
144A, 7.875%, 1/15/2019			285,000		289,988
144A, 8.625%, 10/1/2018			75,000		79,500
Windstream Corp.:
7.0%, 3/15/2019			430,000		423,550
7.875%, 11/1/2017			845,000		888,306
8.125%, 9/1/2018			180,000		189,000
8.625%, 8/1/2016			70,000		73,675
					18,991,462
Utilities 2.5%
AES Corp.:
8.0%, 10/15/2017			415,000		438,863
8.0%, 6/1/2020			525,000		556,500
Calpine Corp.:
144A, 7.5%, 2/15/2021			485,000		477,725
144A, 7.875%, 7/31/2020			560,000		567,000
Edison Mission Energy, 7.0%, 5/15/2017			1,220,000		966,850
Ferrellgas LP, 144A, 6.5%, 5/1/2021			120,000		117,000
GenOn Energy, Inc., 7.875%, 6/15/2017			150,000		145,500
NRG Energy, Inc.:
7.375%, 1/15/2017			990,000		1,019,700
144A, 8.25%, 9/1/2020			490,000		502,250
					4,791,388
Total Corporate Bonds (Cost $166,048,582)					166,937,446

Loan Participations and Assignments 4.3%
Senior Loans***
Alliance Mortgage Cycle Loan, Term Loan A, 9.5%, 6/1/2010**			700,000		0
Buffets, Inc.:
Letter of Credit, First Lien, 7.539%, 4/22/2015 (PIK)			94,092		71,980
Term Loan B, 12.0%, 4/21/2015 (PIK)			379,251		356,307
Burger King Corp., New Term Loan B, 6.25%, 10/19/2016			475,000		482,880
Clear Channel Communication, Term Loan B, 3.911%, 1/28/2016			580,000		505,760
Dunkin' Brands, Inc., Term Loan B, 5.75%, 11/23/2017			360,000		364,851
Hawker Beechcraft Acquisition Co., LLC:
Term Loan, 2.261%, 3/26/2014			1,014,352		892,112
Letter of Credit, 2.289%, 3/26/2014			60,643		53,335
IASIS Healthcare LLC, Term Loan, 5.538%, 6/13/2014 (PIK)			681,580		657,554
Kabel Deutschland GmbH, Term Loan, 8.272%, 11/19/2014 (PIK)	EUR		1,699,736		2,265,246
Nuveen Investments, Inc., First Lien, Term Loan, 3.303%, 11/13/2014			590,000		565,049
		Principal Amount ($) (a)		Value ($)

Pinafore LLC, Term Loan B, 6.25%, 9/29/2016			606,772		616,065
Roundy's Supermarkets, Inc., Second Lien, Term Loan, 10.0%, 4/18/2016			325,000		330,486
Tribune Co., Term Loan B, LIBOR plus 3.0%, 6/4/2014**			1,009,426		705,589
US Foodservice, Inc., Term Loan B, 2.76%, 7/3/2014			465,179		427,732
Total Loan Participations and Assignments (Cost $9,217,474)					8,294,946

Preferred Security 0.5%
Materials
Hercules, Inc., 6.5%, 6/30/2029 (Cost $733,742)			1,135,000		879,625

	Units		Value ($)

Other Investments 0.0%
Consumer Discretionary
AOT Bedding Super Holdings LLC* (Cost $31,000)		31		31,000

	Shares		Value ($)

Common Stocks 0.1%
Consumer Discretionary 0.1%
Buffets Restaurants Holdings, Inc.*		18,256		63,896
Dex One Corp.*		3,884		28,975
SuperMedia, Inc.*		726		6,323
Trump Entertainment Resorts, Inc.*		45		821
Vertis Holdings, Inc.*		9,993		0
				100,015
Industrials 0.0%
Congoleum Corp.*		1,200,000		1
Quad Graphics, Inc.*		649		26,778
				26,779
Materials 0.0%
GEO Specialty Chemicals, Inc.*		24,225		20,591
GEO Specialty Chemicals, Inc. 144A*		2,206		1,875
				22,466
Total Common Stocks (Cost $2,406,514)				149,260

Warrants 0.0%
Consumer Discretionary 0.0%
Reader's Digest Association, Inc., Expiration Date 2/19/2014*		1,115		33
Materials 0.0%
Hercules Trust II, Expiration Date 3/31/2029*		1,100		12,514
Total Warrants (Cost $244,286)				12,547

	Shares		Value ($)

Preferred Stock 0.2%
Financials
Ally Financial, Inc. Series G, 144A, 7.0% (Cost $402,862)		440		415,869

Securities Lending Collateral 0.7%
Daily Assets Fund Institutional, 0.27% (c) (d) (Cost $1,419,848)		1,419,848		1,419,848

	Shares		Value ($)

Cash Equivalents 7.9%
Central Cash Management Fund, 0.19% (c) (Cost $15,421,844)		15,421,844		15,421,844

	% of Net Assets		Value ($)

Total Investment Portfolio (Cost $195,926,152)+		99.3		193,562,385
Other Assets and Liabilities, Net		0.7		1,455,541
Net Assets		100.0		195,017,926

* Non-income producing security.

** Non-income producing security. Issuer has defaulted on the payment of principal or interest or has filed for bankruptcy. The following table represents bonds and senior loans that are in default:

Securities	Coupon			Maturity Date	Principal Amount ($)			Acquisition Cost ($)		Value ($)
Alliance Mortgage Cycle Loan		9.5	%	6/1/2010		700,000	USD		700,000		0
CanWest MediaWorks LP		9.25	%	8/1/2015		340,000	USD		340,000		57,800
Fontainebleau Las Vegas Holdings LLC		11.0	%	6/15/2015		490,000	USD		495,963		1,715
Grupo Iusacell Celular SA de CV		10.0	%	3/31/2012		278,182	USD		264,717		102,927
Radnor Holdings Corp.		11.0	%	3/15/2010		265,000	USD		234,313		27
Tribune Co.	LIBOR plus 3.0%			6/4/2014		1,009,426	USD		905,407		705,589
Tropicana Entertainment LLC		9.625	%	12/15/2014		1,220,000	USD		959,601		622
Vertis, Inc.		13.5	%	4/1/2014		258,716	USD		105,102		7,761
Wolverine Tube, Inc.		15.0	%	3/31/2012		830,088	USD		830,088		448,248
Young Broadcasting, Inc.		8.75	%	1/15/2014		2,040,000	USD		1,981,498		20
									6,816,689		1,324,709

+ The cost for federal income tax purposes was $195,945,391. At December 31, 2010, net unrealized depreciation for all securities based on tax cost was $2,383,006. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $9,065,576 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $11,448,582.

(a) Principal amount stated in US dollars unless otherwise noted.

(b) All or a portion of these securities were on loan (see Notes to Financial Statements). The value of all securities loaned at December 31, 2010 amounted to $1,366,721, which is 0.7% of net assets.

(c) Affiliated fund managed by Deutsche Investment Management Americas Inc. The rate shown is the annualized seven-day yield at period end.

(d) Represents collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates.

LIBOR: London InterBank Offered Rate

PIK: Denotes that all or a portion of the income is paid in kind.

REIT: Real Estate Investment Trust

At December 31, 2010, open credit default swap contracts sold were as follows:

Effective/ Expiration Date	Notional Amount ($) (e)			Fixed Cash Flows Received			Underlying Debt Obligation/Quality Rating (f)	Value ($)		Upfront Payments Paid/ (Received) ($)			Unrealized Appreciation ($)
6/21/2010 9/20/2013		380,000	1		5.0	%	Ford Motor Co., 6.5%, 8/1/2018, B		38,123		4,658			33,465
6/21/2010 9/20/2013		1,230,000	2		5.0	%	Ford Motor Co., 6.5%, 8/1/2018, B		127,393		(56,319	)		183,712
6/21/2010 9/20/2015		560,000	3		5.0	%	Ford Motor Co., 6.5%, 8/1/2018, B		63,225		(9,982	)		73,207
6/21/2010 9/20/2015		175,000	4		5.0	%	Ford Motor Co., 6.5%, 8/1/2018, B		19,758		(16,625	)		36,383
6/21/2010 9/20/2015		320,000	5		5.0	%	Ford Motor Co., 6.5%, 8/1/2018, B		32,103		(9,200	)		41,303
6/21/2010 9/20/2015		100,000	2		5.0	%	Ford Motor Co., 6.5%, 8/1/2018, B		11,290		(6,896	)		18,186
Total unrealized appreciation														386,256

(e) The maximum potential amount of future undiscounted payments that the Fund could be required to make under a credit default swap contract would be the notional amount of the contract. These potential amounts would be partially offset by any recovery values of the referenced debt obligation or net amounts received from the settlement of buy protection credit default swap contracts entered into by the Fund for the same referenced debt obligation.

(f) The quality ratings represent the lower of Moody's Investors Service, Inc. ("Moody's") or Standard & Poor's Corporation ("S&P") credit ratings.

Counterparties:

1 Citigroup, Inc.

2 The Goldman Sachs & Co.

3 Bank of America

4 JPMorgan Chase Securities, Inc.

5 Credit Suisse

At December 31, 2010, the Fund had the following open forward foreign currency exchange contracts:

Contracts to Deliver

In Exchange For

Settlement Date

Unrealized Appreciation ($)

Counterparty

USD

120,274

EUR

91,900

1/20/2011

2,528

JP Morgan Chase Securities, Inc.

Contracts to Deliver

In Exchange For

Settlement Date

Unrealized Depreciation ($)

Counterparty

EUR

4,957,900

USD

6,564,051

1/20/2011

(60,959

)

JPMorgan Chase Securities, Inc.

Currency Abbreviations

EUR Euro

USD United States Dollar

For information on the Fund's policy and additional disclosures regarding credit default swap contracts and forward foreign currency exchange contracts, please refer to Note A in the accompanying Notes to Financial Statements.

Fair Value Measurements

Assets	Level 1		Level 2			Level 3		Total

Fixed Income Investments (g)
Corporate Bonds	$	—	$	164,153,007		$	2,784,439	$	166,937,446
Loan Participations and Assignments		—		8,294,946			0		8,294,946
Preferred Security		—		879,625			—		879,625
Other Investments		—		—			31,000		31,000
Common Stocks (g)		125,972		—			23,288		149,260
Warrants (g)		—		—			12,547		12,547
Preferred Stock		—		415,869			—		415,869
Short-Term Investments (g)		16,841,692		—			—		16,841,692
Derivatives (h)		—		388,784			—		388,784
Total	$	16,967,664	$	174,132,231		$	2,851,274	$	193,951,169
Liabilities
Derivatives (h)	$	—	$	(60,959	)	$	—	$	(60,959	)
Total	$	—	$	(60,959	)	$	—	$	(60,959	)

There have been no significant transfers between Level 1 and Level 2 fair value measurements during the year ended December 31, 2010.

(g) See Investment Portfolio for additional detailed categorizations.

(h) Derivatives include unrealized appreciation (depreciation) on open credit default swap contracts and forward foreign currency exchange contracts.

Level 3 Reconciliation

The following is a reconciliation of the Fund's Level 3 investments for which significant unobservable inputs were used in determining value:

	Corporate Bonds			Loan Participations and Assignments			Other Investments		Common Stocks			Convertible Preferred Stocks			Warrants		Total
Balance as of December 31, 2009	$	2,525,906		$	1,393,416		$	—	$	22,466		$	0		$	5,989	$	3,947,777
Realized gains (loss)		—			98,158			—		—			(46,019	)		—		52,139
Change in unrealized appreciation (depreciation)		233,232			38,370			0		(89	)		46,019			6,558		324,090
Amortization premium/discount		16,050			11,724			—		—			—			—		27,774
Net purchases (sales)		165,230			(1,541,668	)		31,000		911			0			0		(1,344,527	)
Transfers into Level 3		57,741	(i)		—			—		—			—			—		57,741
Transfers (out) of Level 3		(213,720	) (j)		—			—		—			—			—		(213,720	)
Balance as of December 31, 2010	$	2,784,439		$	0		$	31,000	$	23,288		$	—		$	12,547	$	2,851,274
Net change in unrealized appreciation (depreciation) from investments still held as of December 31, 2010	$	(710,006	)	$	0		$	0	$	(89	)	$	—		$	6,558	$	(690,530	)

Transfers between price levels are recognized at the beginning of the reporting period.

(i) The investment was transferred from Level 2 to Level 3 because of the lack of observable market data due to a decrease in market activity.

(j) The investment was transferred from Level 3 to Level 2 as a result of the availability of a pricing source supported by observable inputs.

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

Statement of Assets and Liabilities

as of December 31, 2010
Assets
Investments: Investments in unaffiliated securities, at value (cost $179,084,460) — including $1,366,721 of securities loaned	$	176,720,693
Investment in Daily Assets Fund Institutional (cost $1,419,848)*		1,419,848
Investment in Central Cash Management Fund (cost $15,421,844)		15,421,844
Total investments, at value (cost $195,926,152)		193,562,385
Cash		75,291
Deposits from broker for open swap contracts		110,000
Foreign currency, at value (cost $132)		134
Receivable for investments sold		368,304
Receivable for Fund shares sold		43,905
Unrealized appreciation on open swap contracts		386,256
Upfront payments paid on swaps		4,658
Unrealized appreciation on open forward foreign currency exchange contracts		2,528
Interest receivable		3,600,397
Foreign taxes recoverable		3,198
Other assets		1,102
Total assets		198,158,158
Liabilities
Payable for investments purchased		1,180,462
Payable upon return of deposit		110,000
Payable for Fund shares redeemed		46,874
Payable upon return of securities loaned		1,419,848
Upfront payments received on open swap contracts		99,022
Unrealized depreciation on open forward foreign currency exchange contracts		60,959
Accrued management fee		79,351
Other accrued expenses and payables		143,716
Total liabilities		3,140,232
Net assets, at value	$	195,017,926
Net Assets Consist of
Undistributed net investment income		15,993,708
Net unrealized appreciation (depreciation) on: Investments		(2,363,767	)
Swap contracts		386,256
Foreign currency		(58,348	)
Accumulated net realized gain (loss)		(53,315,448	)
Paid-in capital		234,375,525
Net assets, at value	$	195,017,926
Class A Net Asset Value, offering and redemption price per share ($194,873,758 ÷ 28,235,548 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)	$	6.90
Class B Net Asset Value, offering and redemption price per share ($144,168 ÷ 20,802 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)	$	6.93

* Represents collateral on securities loaned.

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

Statement of Operations

for the year ended December 31, 2010
Investment Income
Interest (net of foreign taxes withheld of $1,461)	$	16,276,745
Income distributions — Central Cash Management Fund		20,610
Securities lending income, including income from Daily Assets Fund Institutional, net of borrower rebates		12,213
Total income		16,309,568
Expenses: Management fee		946,284
Administration fee		189,257
Services to shareholders		7,017
Distribution service fee (Class B)		367
Custodian fee		48,519
Legal fees		54,464
Audit and tax fees		74,597
Trustees' fees and expenses		9,300
Reports to shareholders		11,655
Other		25,049
Total expenses		1,366,509
Net investment income (loss)		14,943,059
Realized and Unrealized Gain (Loss)
Net realized gain (loss) from: Investments		797,934
Swap contracts		1,020,868
Foreign currency		1,101,998
		2,920,800
Change in net unrealized appreciation (depreciation) on: Investments		6,596,217
Swap contracts		386,256
Foreign currency		(30,720	)
		6,951,753
Net gain (loss)		9,872,553
Net increase (decrease) in net assets resulting from operations	$	24,815,612

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

Statement of Changes in Net Assets

	Years Ended December 31,
Increase (Decrease) in Net Assets	2010			2009
Operations: Net investment income	$	14,943,059		$	15,506,352
Net realized gain (loss)		2,920,800			(10,439,947	)
Change in net unrealized appreciation (depreciation)		6,951,753			54,537,371
Net increase (decrease) in net assets resulting from operations		24,815,612			59,603,776
Distributions to shareholders from: Net investment income: Class A		(15,325,538	)		(18,645,480	)
Class B		(11,524	)		(15,950	)
Total distributions		(15,337,062	)		(18,661,430	)
Fund share transactions: Class A Proceeds from shares sold		73,550,670			36,369,714
Reinvestment of distributions		15,325,538			18,645,480
Payments for shares redeemed		(100,347,223	)		(52,798,244	)
Net increase (decrease) in net assets from Class A share transactions		(11,471,015	)		2,216,950
Class B Proceeds from shares sold		2,173			2,036
Reinvestment of distributions		11,524			15,950
Payments for shares redeemed		(27,277	)		(32,524	)
Net increase (decrease) in net assets from Class B share transactions		(13,580	)		(14,538	)
Increase (decrease) in net assets		(2,006,045	)		43,144,758
Net assets at beginning of period		197,023,971			153,879,213
Net assets at end of period (including undistributed net investment income of $15,993,708 and $15,102,955, respectively)	$	195,017,926		$	197,023,971
Other Information
Class A Shares outstanding at beginning of period		30,057,940			29,000,230
Shares sold		11,151,687			6,555,256
Shares issued to shareholders in reinvestment of distributions		2,379,742			3,844,429
Shares redeemed		(15,353,821	)		(9,341,975	)
Net increase (decrease) in Class A shares		(1,822,392	)		1,057,710
Shares outstanding at end of period		28,235,548			30,057,940
Class B Shares outstanding at beginning of period		22,888			25,274
Shares sold		319			379
Shares issued to shareholders in reinvestment of distributions		1,778			3,268
Shares redeemed		(4,183	)		(6,033	)
Net increase (decrease) in Class B shares		(2,086	)		(2,386	)
Shares outstanding at end of period		20,802			22,888

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

Financial Highlights

Class A Years Ended December 31,	2010			2009			2008			2007			2006
Selected Per Share Data
Net asset value, beginning of period	$	6.55		$	5.30		$	7.81		$	8.38		$	8.23
Income (loss) from investment operations: Net investment incomea		.52			.51			.57			.63			.62
Net realized and unrealized gain (loss)		.36			1.40			(2.29	)		(.54	)		.19
Total from investment operations		.88			1.91			(1.72	)		.09			.81
Less distributions from: Net investment income		(.53	)		(.66	)		(.79	)		(.66	)		(.66	)
Net asset value, end of period	$	6.90		$	6.55		$	5.30		$	7.81		$	8.38
Total Return (%)		14.00			39.99			(23.94	)b		.96			10.47
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		195			197			154			248			322
Ratio of expenses before expense reductions (%)		.72			.67			.80			.69			.71
Ratio of expenses after expense reductions (%)		.72			.67			.79			.69			.71
Ratio of net investment income (%)		7.90			8.81			8.42			7.84			7.73
Portfolio turnover rate (%)		93			66			38			61			93
a Based on average shares outstanding during the period. b Total return would have been lower had certain expenses not been reduced.

Class B Years Ended December 31,	2010			2009			2008			2007			2006
Selected Per Share Data
Net asset value, beginning of period	$	6.58		$	5.31		$	7.81		$	8.38		$	8.22
Income (loss) from investment operations: Net investment incomea		.50			.49			.53			.60			.59
Net realized and unrealized gain (loss)		.36			1.42			(2.27	)		(.54	)		.20
Total from investment operations		.86			1.91			(1.74	)		.06			.79
Less distributions from: Net investment income		(.51	)		(.64	)		(.76	)		(.63	)		(.63	)
Net asset value, end of period	$	6.93		$	6.58		$	5.31		$	7.81		$	8.38
Total Return (%)		13.64			39.64			(24.13	)b		.54			10.11
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		.1			.2			.1			10			53
Ratio of expenses before expense reductions (%)		.99			.94			1.25			1.08			1.10
Ratio of expenses after expense reductions (%)		.99			.94			1.23			1.08			1.10
Ratio of net investment income (%)		7.63			8.54			7.98			7.45			7.34
Portfolio turnover rate (%)		93			66			38			61			93
a Based on average shares outstanding during the period. b Total return would have been lower had certain expenses not been reduced.

Performance Summary December 31, 2010

DWS Large Cap Value VIP

The gross expense ratios of the Fund, as stated in the fee table of the prospectus dated May 1, 2010 are 0.76% and 1.06% for Class A and Class B shares, respectively, and may differ from the expense ratios disclosed in the Financial Highlights tables in this report.

Risk Considerations

Stocks may decline in value. See the prospectus for details.

Fund returns shown for the 3-year, 5-year and 10-year/Life of Class periods reflect a fee waiver and/or expense reimbursement. Without this waiver/reimbursement, returns would have been lower.

Growth of an Assumed $10,000 Investment in DWS Large Cap Value VIP
[] DWS Large Cap Value VIP — Class A [] Russell 1000® Value Index		The Russell 1000® Value Index is an unmanaged index that consists of those stocks in the Russell 1000 Index with less-than-average growth orientation. Russell 1000® Index is an unmanaged price-only index of the 1,000 largest capitalized companies that are domiciled in the US and whose common stocks are traded. Index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

Yearly periods ended December 31

Comparative Results
DWS Large Cap Value VIP		1-Year			3-Year			5-Year			10-Year
Class A	Growth of $10,000	$	11,077		$	8,833		$	11,534		$	14,865
Class A	Average annual total return		10.77	%		-4.05	%		2.90	%		4.04	%
Russell 1000 Value Index	Growth of $10,000	$	11,551		$	8,731		$	10,654		$	13,780
Russell 1000 Value Index	Average annual total return		15.51	%		-4.42	%		1.28	%		3.26	%
DWS Large Cap Value VIP		1-Year			3-Year			5-Year			Life of Class*
Class B	Growth of $10,000	$	11,053		$	8,744		$	11,335		$	14,675
Class B	Average annual total return		10.53	%		-4.38	%		2.54	%		4.62	%
Russell 1000 Value Index	Growth of $10,000	$	11,551		$	8,731		$	10,654		$	15,327
Russell 1000 Value Index	Average annual total return		15.51	%		-4.42	%		1.28	%		5.15	%

The growth of $10,000 is cumulative.

* The Fund commenced offering Class B shares on July 1, 2002. Index returns began on June 30, 2002.

Information About Your Fund's Expenses

DWS Large Cap Value VIP

The tables illustrate your Fund's expenses in two ways:

Expenses and Value of a $1,000 Investment for the six months ended December 31, 2010
Actual Fund Return	Class A		Class B
Beginning Account Value 7/1/10	$	1,000.00	$	1,000.00
Ending Account Value 12/31/10	$	1,194.30	$	1,192.90
Expenses Paid per $1,000*	$	4.48	$	6.08
Hypothetical 5% Fund Return	Class A		Class B
Beginning Account Value 7/1/10	$	1,000.00	$	1,000.00
Ending Account Value 12/31/10	$	1,021.12	$	1,019.66
Expenses Paid per $1,000*	$	4.13	$	5.60

Annualized Expense Ratios	Class A		Class B
DWS Variable Series II — DWS Large Cap Value VIP	.81%		1.10%

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

Management Summary December 31, 2010

DWS Large Cap Value VIP

The DWS Large Cap Value VIP delivered a total return of 10.77% in 2010 (Class A shares, unadjusted for contract charges) but underperformed the 15.51% return of the benchmark, the Russell 1000® Value Index. While we added quite a bit of value through our sector allocations — specifically, our underweight in financials and overweight in energy — this was more than offset by the underperformance of our individual stock picks.1

Although the Fund (Class A shares) lagged the Russell 1000 Value Index during the past year, it has outpaced the benchmark by a comfortable margin over the 3-, 5- and 10-year periods ended December 31, 2010.

An important reason for the Fund's underperformance was our preference for high-dividend-paying stocks with stable cash flows and our corresponding underweight in the higher-risk cyclical areas of the market. This positioning was based on our view that the economic recovery was largely the result of short-term, unsustainable fiscal and monetary stimuli rather than a sustainable, longer-term improvement in final demand. Expecting that this would ultimately result in a lower-growth, lower-return market environment, we shifted assets out of cyclical deep-value stocks into less cyclical stable-value stocks during the early part of the year. Unfortunately, cyclical higher-beta stocks, in fact, strongly outperformed the market by a substantial margin during the past 12 months.2

Although our defensive approach hurt performance in 2010, we believe it remains appropriate given our ongoing caution regarding the broader market. Additionally, it positions the Fund in the areas of the market with the most attractive valuations.3 Many cyclical stocks staged substantial rallies in the fourth quarter, leaving them vulnerable to potential disappointments. Conversely, many stocks that lagged during the recent run-up offer much more reasonable valuations. These types of out-of-favor, undervalued stocks are typically characterized by more muted investor expectations, meaning that they are both less vulnerable to disappointments and more likely to have upside potential. We therefore remain consistent in our strategy as we await the potential return to compelling performance for the market's most attractively valued companies.

Thomas Schuessler, PhD.

Lead Portfolio Manager

Volker Dosch

Oliver Pfeil, PhD.

Portfolio Managers

The Russell 1000® Value Index is an unmanaged index that consists of those stocks in the Russell 1000 Index with less-than-average growth orientation. Russell 1000® Index is an unmanaged price-only index of the 1,000 largest capitalized companies that are domiciled in the US and whose common stocks are traded.

Index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

1 "Overweight" means the Fund holds a higher weighting in a given sector or security than the benchmark. "Underweight" means the Fund holds a lower weighting.

2 Beta is a measure of volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole.

3 "Valuation" refers to the price investors pay for a given security. An asset can be undervalued, meaning that it trades for less than its intrinsic value, or overvalued, which means that it trades at a more expensive price than its underlying worth.

Portfolio Summary

DWS Large Cap Value VIP

Asset Allocation (As a % of Investment Portfolio excluding Securities Lending Collateral)	12/31/10	12/31/09

Common Stocks	98%	99%
Cash Equivalents	2%	1%
	100%	100%

Sector Diversification (As a % of Common Stocks)	12/31/10	12/31/09

Energy	18%	15%
Financials	13%	15%
Health Care	12%	13%
Consumer Staples	12%	12%
Utilities	10%	11%
Telecommunication Services	9%	11%
Information Technology	8%	2%
Consumer Discretionary	7%	5%
Industrials	6%	10%
Materials	5%	6%
	100%	100%

Asset allocation and sector diversification are subject to change.

For more complete details about the Fund's investment portfolio, see page 167.

Investment Portfolio December 31, 2010

DWS Large Cap Value VIP

	Shares		Value ($)

Common Stocks 97.8%
Consumer Discretionary 7.2%
Distributors 2.1%
Genuine Parts Co.		84,678		4,347,369
Diversified Consumer Services 1.3%
H&R Block, Inc. (a)		217,813		2,594,153
Hotels Restaurants & Leisure 1.3%
Carnival Corp. (Units)		59,867		2,760,467
Media 1.4%
News Corp. "A"		197,872		2,881,016
Textiles, Apparel & Luxury Goods 1.1%
VF Corp. (a)		26,538		2,287,045
Consumer Staples 11.5%
Beverages 1.4%
PepsiCo, Inc.		42,128		2,752,222
Food & Staples Retailing 3.1%
CVS Caremark Corp.		103,849		3,610,830
Kroger Co.		123,703		2,765,999
				6,376,829
Food Products 2.9%
General Mills, Inc.		50,103		1,783,166
Kellogg Co.		43,279		2,210,692
Mead Johnson Nutrition Co.		32,885		2,047,091
				6,040,949
Tobacco 4.1%
Altria Group, Inc.		172,422		4,245,030
Philip Morris International, Inc.		73,171		4,282,698
				8,527,728
Energy 17.6%
Energy Equipment & Services 4.7%
Ensco PLC (ADR)		64,045		3,418,722
Noble Corp.		90,557		3,239,224
Transocean Ltd.* (a)		44,883		3,119,817
				9,777,763
Oil, Gas & Consumable Fuels 12.9%
Canadian Natural Resources Ltd.		69,548		3,089,322
Chevron Corp.		49,457		4,512,951
ConocoPhillips		51,156		3,483,723
Exxon Mobil Corp.		50,290		3,677,205
Marathon Oil Corp. (a)		119,795		4,436,009
Nexen, Inc.		104,342		2,389,432
Suncor Energy, Inc.		131,220		5,024,414
				26,613,056
Financials 12.6%
Diversified Financial Services 1.8%
JPMorgan Chase & Co.		85,723		3,636,370
Insurance 10.8%
Assurant, Inc.		74,334		2,863,346
Fidelity National Financial, Inc. "A" (a)		148,069		2,025,584
HCC Insurance Holdings, Inc.		73,331		2,122,199
Lincoln National Corp. (a)		133,833		3,721,896
MetLife, Inc.		95,678		4,251,930
	Shares		Value ($)

PartnerRe Ltd. (a)		50,697		4,073,504
Prudential Financial, Inc.		57,640		3,384,044
				22,442,503
Health Care 12.0%
Health Care Equipment & Supplies 3.1%
Baxter International, Inc.		72,472		3,668,533
Becton, Dickinson & Co. (a)		32,656		2,760,085
				6,428,618
Health Care Providers & Services 3.0%
McKesson Corp.		56,640		3,986,323
WellPoint, Inc.*		38,719		2,201,562
				6,187,885
Life Sciences Tools & Services 1.1%
Thermo Fisher Scientific, Inc.*		40,838		2,260,792
Pharmaceuticals 4.8%
Johnson & Johnson		32,793		2,028,247
Merck & Co., Inc.		106,108		3,824,132
Teva Pharmaceutical Industries Ltd. (ADR)		77,764		4,053,838
				9,906,217
Industrials 5.6%
Aerospace & Defense 3.8%
Northrop Grumman Corp.		42,452		2,750,041
Raytheon Co.		56,220		2,605,235
United Technologies Corp.		31,674		2,493,377
				7,848,653
Machinery 1.8%
Dover Corp. (a)		63,567		3,715,491
Information Technology 8.0%
Communications Equipment 1.7%
Brocade Communications Systems, Inc.*		254,336		1,345,438
Cisco Systems, Inc.*		104,962		2,123,381
				3,468,819
Computers & Peripherals 1.6%
Hewlett-Packard Co.		81,776		3,442,769
IT Services 1.1%
Automatic Data Processing, Inc.		49,734		2,301,689
Semiconductors & Semiconductor Equipment 1.7%
Intel Corp.		168,322		3,539,812
Software 1.9%
Microsoft Corp.		138,377		3,863,486
Materials 5.1%
Chemicals 3.4%
Air Products & Chemicals, Inc.		45,671		4,153,778
Praxair, Inc. (a)		30,296		2,892,359
				7,046,137
Containers & Packaging 1.7%
Sonoco Products Co. (a)		101,372		3,413,195
Telecommunication Services 8.5%
Diversified Telecommunication Services 7.1%
AT&T, Inc.		163,617		4,807,068
BCE, Inc.		28,303		1,003,624
	Shares		Value ($)

CenturyLink, Inc. (a)		126,161		5,824,853
Verizon Communications, Inc.		82,706		2,959,221
				14,594,766
Wireless Telecommunication Services 1.4%
Vodafone Group PLC (ADR) (a)		113,690		3,004,827
Utilities 9.7%
Electric Utilities 7.7%
Allegheny Energy, Inc.		97,123		2,354,262
American Electric Power Co., Inc.		74,383		2,676,300
Duke Energy Corp. (a)		130,206		2,318,969
Entergy Corp.		34,093		2,414,807
Exelon Corp. (a)		30,886		1,286,093
FirstEnergy Corp. (a)		65,378		2,420,294
Southern Co. (a)		64,406		2,462,241
				15,932,966
	Shares		Value ($)

Multi-Utilities 2.0%
PG&E Corp.		87,684		4,194,801
Total Common Stocks (Cost $163,225,850)				202,188,393

Securities Lending Collateral 18.8%
Daily Assets Fund Institutional, 0.27% (b) (c) (Cost $38,843,948)		38,843,948		38,843,948

Cash Equivalents 2.3%
Central Cash Management Fund, 0.19% (b) (Cost $4,846,822)		4,846,822		4,846,822

	% of Net Assets			Value ($)

Total Investment Portfolio (Cost $206,916,620)+		118.9			245,879,163
Other Assets and Liabilities, Net		(18.9	)		(39,120,423	)
Net Assets		100.0			206,758,740

* Non-income producing security.

+ The cost for federal income tax purposes was $209,013,049. At December 31, 2010, net unrealized appreciation for all securities based on tax cost was $36,866,114. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $42,154,718 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $5,288,604.

(a) All or a portion of these securities were on loan (see Notes to Financial Statements). The value of all securities loaned at December 31, 2010 amounted to $37,916,422, which is 18.3% of net assets.

(b) Affiliated fund managed by Deutsche Investment Management Americas Inc. The rate shown is the annualized seven-day yield at period end.

(c) Represents collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates.

ADR: American Depositary Receipt

Fair Value Measurements

Assets	Level 1		Level 2		Level 3		Total

Common Stocks (d)	$	202,188,393	$	—	$	—	$	202,188,393
Short-Term Investments (d)		43,690,770		—		—		43,690,770
Total	$	245,879,163	$	—	$	—	$	245,879,163

There have been no significant transfers between Level 1 and Level 2 fair value measurements during the year ended December 31, 2010.

(d) See Investment Portfolio for additional detailed categorizations.

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

Statement of Assets and Liabilities

as of December 31, 2010
Assets
Investments: Investments in unaffiliated securities, at value (cost $163,225,850) — including $37,916,422 of securities loaned	$	202,188,393
Investment in Daily Assets Fund Institutional (cost $38,843,948)*		38,843,948
Investment in Central Cash Management Fund (cost $4,846,822)		4,846,822
Total investments, at value (cost $206,916,620)		245,879,163
Cash		21,120
Foreign currency, at value (cost $10,034)		11,513
Receivable for Fund shares sold		150,489
Dividends receivable		450,987
Interest receivable		7,301
Foreign taxes recoverable		22,127
Other assets		1,106
Total assets		246,543,806
Liabilities
Payable upon return of securities loaned		38,843,948
Payable for investments purchased		628,063
Payable for Fund shares redeemed		114,217
Accrued management fee		106,533
Other accrued expenses and payables		92,305
Total liabilities		39,785,066
Net assets, at value	$	206,758,740
Net Assets Consist of
Undistributed net investment income		4,084,211
Net unrealized appreciation (depreciation) on: Investments		38,962,543
Foreign currency		6,252
Accumulated net realized gain (loss)		(43,182,951	)
Paid-in capital		206,888,685
Net assets, at value	$	206,758,740
Class A Net Asset Value, offering and redemption price per share ($205,517,002 ÷ 17,416,427 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)	$	11.80
Class B Net Asset Value, offering and redemption price per share ($1,241,738 ÷ 105,172 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)	$	11.81

* Represents collateral on securities loaned.

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

Statement of Operations

for the year ended December 31, 2010
Investment Income
Income: Dividends (net of foreign taxes withheld of $40,452)	$	5,902,166
Income distributions — Central Cash Management Fund		15,586
Securities lending income, including income from Daily Assets Fund Institutional, net of borrower rebates		32,223
Total income		5,949,975
Expenses: Management fee		1,313,548
Administration fee		202,084
Services to shareholders		5,403
Distribution service fee (Class B)		2,177
Record keeping fees (Class B)		316
Custodian fee		11,677
Professional fees		62,232
Trustees' fees and expenses		8,477
Reports to shareholders		39,446
Other		5,790
Total expenses		1,651,150
Net investment income (loss)		4,298,825
Realized and Unrealized Gain (Loss)
Net realized gain (loss) from: Investments		7,964,499
Foreign currency		1,697
Payment by affiliate (see Note I)		62,550
		8,028,746
Change in net unrealized appreciation (depreciation) on: Investments		7,886,334
Foreign currency		3,358
		7,889,692
Net gain (loss)		15,918,438
Net increase (decrease) in net assets resulting from operations	$	20,217,263

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

Statement of Changes in Net Assets

	Years Ended December 31,
Increase (Decrease) in Net Assets	2010			2009
Operations: Net investment income (loss)	$	4,298,825		$	3,970,664
Net realized gain (loss)		8,028,746			(2,868,405	)
Change in net unrealized appreciation (depreciation)		7,889,692			44,336,276
Net increase (decrease) in net assets resulting from operations		20,217,263			45,438,535
Distributions to shareholders from: Net investment income: Class A		(4,108,146	)		(2,847,989	)
Class B		(14,019	)		(9,025	)
Total distributions	$	(4,122,165	)	$	(2,857,014	)
Fund share transactions: Class A Proceeds from shares sold		8,671,405			5,193,145
Net assets acquired in tax-free reorganization		—			107,453,089
Reinvestment of distributions		4,108,146			2,847,989
Payments for shares redeemed		(36,788,065	)		(62,359,106	)
Net increase (decrease) in net assets from Class A share transactions		(24,008,514	)		53,135,117
Class B Proceeds from shares sold		506,629			313,837
Net assets acquired in tax-free reorganization		—			202,242
Reinvestment of distributions		14,019			9,025
Payments for shares redeemed		(88,091	)		(238,487	)
Net increase (decrease) in net assets from Class B share transactions		432,557			286,617
Increase (decrease) in net assets		(7,480,859	)		96,003,255
Net assets at beginning of period		214,239,599			118,236,344
Net assets at end of period (including undistributed net investment income of $4,084,211 and $3,905,854, respectively)	$	206,758,740		$	214,239,599
Other Information
Class A Shares outstanding at beginning of period		19,667,770			13,220,277
Shares sold		778,508			540,244
Shares issued in tax-free reorganization		—			12,224,432
Shares issued to shareholders in reinvestment of distributions		366,145			355,554
Shares redeemed		(3,395,996	)		(6,672,737	)
Net increase (decrease) in Class A shares		(2,251,343	)		6,447,493
Shares outstanding at end of period		17,416,427			19,667,770
Class B Shares outstanding at beginning of period		66,594			32,776
Shares sold		45,434			32,526
Shares issued in tax-free reorganization		—			22,957
Shares issued to shareholders in reinvestment of distributions		1,246			1,124
Shares redeemed		(8,102	)		(22,789	)
Net increase (decrease) in Class B shares		38,578			33,818
Shares outstanding at end of period		105,172			66,594

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

Financial Highlights

Class A Years Ended December 31,	2010			2009			2008			2007			2006
Selected Per Share Data
Net asset value, beginning of period	$	10.86		$	8.92		$	19.21		$	17.96		$	15.81
Income (loss) from investment operations: Net investment income (loss)a		.23			.21			.21			.26			.29	c
Net realized and unrealized gain (loss)		.93			1.97			(5.68	)		1.98			2.12
Total from investment operations		1.16			2.18			(5.47	)		2.24			2.41
Less distributions from: Net investment income		(.22	)		(.24	)		(.34	)		(.32	)		(.26	)
Net realized gains		—			—			(4.48	)		(.67	)		—
Total distributions		(.22	)		(.24	)		(4.82	)		(.99	)		(.26	)
Net asset value, end of period	$	11.80		$	10.86		$	8.92		$	19.21		$	17.96
Total Return (%)		10.77			25.37			(36.40	)b		13.15	b,d		15.41	c
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		206			214			118			229			275
Ratio of expenses before expense reductions (%)		.82			.76			.87			.83			.83
Ratio of expenses after expense reductions (%)		.82			.76			.86			.82			.83
Ratio of net investment income (loss) (%)		2.13			2.22			1.59			1.43			1.73	c
Portfolio turnover rate (%)		32			76			97			103			76
a Based on average shares outstanding during the period. b Total return would have been lower had certain expenses not been reduced. c Includes non-recurring income from the Advisor recorded as a result of an administrative proceeding regarding disclosure of brokerage allocation practices in connection with sales of DWS Funds. The non-recurring income resulted in an increase in net investment income of $0.008 per share and an increase in the ratio of net investment income of 0.04%. Excluding this non-recurring income, total return would have been 0.04% lower. d Includes a reimbursement from the Advisor to reimburse the effect of losses incurred as the result of certain operation errors during the period. Excluding this reimbursement, total return would have been 0.04% lower.

Class B Years Ended December 31,	2010			2009			2008			2007			2006
Selected Per Share Data
Net asset value, beginning of period	$	10.86		$	8.92		$	19.20		$	17.94		$	15.79
Income (loss) from investment operations: Net investment income (loss)a		.20			.19			.12			.19			.23	c
Net realized and unrealized gain (loss)		.93			1.96			(5.64	)		1.99			2.11
Total from investment operations		1.13			2.15			(5.52	)		2.18			2.34
Less distributions from: Net investment income		(.18	)		(.21	)		(.28	)		(.25	)		(.19	)
Net realized gains		—			—			(4.48	)		(.67	)		—
Total distributions		(.18	)		(.21	)		(4.76	)		(.92	)		(.19	)
Net asset value, end of period	$	11.81		$	10.86		$	8.92		$	19.20		$	17.94
Total Return (%)		10.53			24.86			(36.64	)b		12.77	b,d		14.96	c
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		1			1			.29			8			40
Ratio of expenses before expense reductions (%)		1.11			1.06			1.28			1.21			1.21
Ratio of expenses after expense reductions (%)		1.11			1.06			1.26			1.20			1.21
Ratio of net investment income (loss) (%)		1.84			1.92			1.20			1.06			1.35	c
Portfolio turnover rate (%)		32			76			97			103			76
a Based on average shares outstanding during the period. b Total return would have been lower had certain expenses not been reduced. c Includes non-recurring income from the Advisor recorded as a result of an administrative proceeding regarding disclosure of brokerage allocation practices in connection with sales of DWS Funds. The non-recurring income resulted in an increase in net investment income of $0.008 per share and an increase in the ratio of net investment income of 0.04%. Excluding this non-recurring income, total return would have been 0.04% lower. d Includes a reimbursement from the Advisor to reimburse the effect of losses incurred as the result of certain operation errors during the period. Excluding this reimbursement, total return would have been 0.04% lower.

Performance Summary December 31, 2010

DWS Mid Cap Growth VIP

The gross expense ratio of the Fund, as stated in the fee table of the prospectus dated May 1, 2010 is 1.17% for Class A shares and may differ from the expense ratio disclosed in the Financial Highlights table in this report.

Risk Considerations

Stocks of medium-sized companies involve greater risk than securities of larger, more-established companies. Stocks may decline in value. See the prospectus for details.

Fund returns shown for all periods reflect a fee waiver and/or expense reimbursement. Without this waiver/reimbursement, returns would have been lower.

Growth of an Assumed $10,000 Investment in DWS Mid Cap Growth VIP
[] DWS Mid Cap Growth VIP — Class A [] Russell Midcap® Growth Index		The Russell Midcap® Growth Index is an unmanaged index that measures the performance of those Russell Midcap companies with higher price-to-book ratios and higher forecasted growth values. The stocks are also members of the Russell 1000® Growth Index. Index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

Yearly periods ended December 31

Comparative Results
DWS Mid Cap Growth VIP		1-Year			3-Year			5-Year			10-Year
Class A	Growth of $10,000	$	12,795		$	9,148		$	10,998		$	9,567
Class A	Average annual total return		27.95	%		-2.93	%		1.92	%		-0.44	%
Russell Midcap Growth Index	Growth of $10,000	$	12,638		$	10,294		$	12,692		$	13,592
Russell Midcap Growth Index	Average annual total return		26.38	%		0.97	%		4.88	%		3.12	%

The growth of $10,000 is cumulative.

Information About Your Fund's Expenses

DWS Mid Cap Growth VIP

As an investor of the Fund, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees and other Fund expenses. Examples of transaction costs include contract charges, redemption fees and account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. In the most recent six-month period, the Fund limited these expenses; had it not done so, expenses would have been higher. The example in the table is based on an investment of $1,000 invested at the beginning of the six-month period and held for the entire period (July 1, 2010 to December 31, 2010).

The tables illustrate your Fund's expenses in two ways:

Expenses and Value of a $1,000 Investment for the six months ended December 31, 2010
Actual Fund Return	Class A
Beginning Account Value 7/1/10	$	1,000.00
Ending Account Value 12/31/10	$	1,314.70
Expenses Paid per $1,000*	$	5.83
Hypothetical 5% Fund Return	Class A
Beginning Account Value 7/1/10	$	1,000.00
Ending Account Value 12/31/10	$	1,020.16
Expenses Paid per $1,000*	$	5.09

Annualized Expense Ratio	Class A
DWS Variable Series II — DWS Mid Cap Growth VIP	1.00%

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

These tables do not reflect charges and fees ("contract charges") associated with the separate account that invests in the Fund of any variable life insurance policy or variable annuity contract for which the Fund is an investment option.

Management Summary December 31, 2010

DWS Mid Cap Growth VIP

The year 2010 began on an optimistic note with a few bright spots in the economy — improving consumer confidence, the government reports showing strong fourth-quarter 2009 gross domestic product (GDP) growth and a six-year high in manufacturing activity — partially offset by growing concerns about the health of the European financial system.1 By May 2010, the US stock market had entered a period of significant volatility amid regulatory uncertainty (health care and financial reform) and fears of a possible double-dip recession. The market then staged a rebound during the last four months of the year amid increasing confidence that the US Federal Reserve Board's (the Fed's) second round of quantitative easing measures would suppo rt asset prices, along with evidence that the US economy was on a path to faster growth in 2011.

For the 12 months ended December 31, 2010, the Fund returned 27.95% (Class A shares, unadjusted for contract charges), compared with the 26.38% return of the Russell Midcap® Growth Index. These strong returns belie the elevated level of investor risk aversion that impacted the global equity markets during much of the summer months as high unemployment, European debt problems, a possible economic "hard landing" within China and some slippage for US economic indicators temporarily dampened enthusiasm for stocks.

The Fund's outperformance of the benchmark came primarily from favorable stock selection. During the period, stock selection was positive within the health care, information technology and consumer staples sectors. Other contributions to returns came from an overweight to energy and an underweight to telecom services.2 Stock selection in energy and consumer discretionary detracted from performance. In addition, underweight positions in materials, information technology and consumer discretionary weighed on returns.

Joseph Axtell, CFA

Rafaelina M. Lee

Portfolio Managers

The Russell Midcap Growth Index is an unmanaged index that measures the performance of those Russell Midcap companies with higher price-to-book ratios and higher forecasted growth values. The stocks are also members of the Russell 1000® Growth Index.

Index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

1 Gross domestic product is the value of goods and services produced in an economy.

2 "Overweight" means the Fund holds a higher weighting in a given sector than the benchmark index. "Underweight" means the Fund holds a lower weighting.

Portfolio Summary

DWS Mid Cap Growth VIP

Asset Allocation (As a % of Investment Portfolio excluding Securities Lending Collateral)	12/31/10	12/31/09

Common Stocks	96%	98%
Cash Equivalents	4%	2%
	100%	100%

Sector Diversification (As a % of Common Stocks)	12/31/10	12/31/09

Information Technology	21%	22%
Consumer Discretionary	19%	18%
Industrials	14%	14%
Health Care	14%	12%
Energy	12%	12%
Financials	8%	9%
Materials	6%	8%
Consumer Staples	4%	3%
Telecommunication Services	2%	2%
	100%	100%

Asset allocation and sector diversification are subject to change.

For more complete details about the Fund's investment portfolio, see page 179.

Investment Portfolio December 31, 2010

DWS Mid Cap Growth VIP

	Shares		Value ($)

Common Stocks 96.6%
Consumer Discretionary 18.1%
Auto Components 2.8%
BorgWarner, Inc.*		5,556		402,032
Gentex Corp.		11,572		342,068
				744,100
Hotels Restaurants & Leisure 2.5%
Darden Restaurants, Inc.		8,015		372,217
Panera Bread Co. "A"* (a)		3,000		303,630
				675,847
Household Durables 1.0%
Jarden Corp.		8,300		256,221
Internet & Catalog Retail 1.3%
Priceline.com, Inc.*		850		339,618
Specialty Retail 7.4%
Advance Auto Parts, Inc.		5,500		363,825
Children's Place Retail Stores, Inc.*		7,300		362,372
Guess?, Inc.		8,900		421,148
Tiffany & Co. (a)		6,600		410,982
Urban Outfitters, Inc.* (a)		11,500		411,815
				1,970,142
Textiles, Apparel & Luxury Goods 3.1%
Deckers Outdoor Corp.*		6,654		530,590
Hanesbrands, Inc.*		11,286		286,664
				817,254
Consumer Staples 3.7%
Food Products 1.2%
Diamond Foods, Inc. (a)		5,800		308,444
Household Products 1.0%
Church & Dwight Co., Inc.		3,962		273,457
Personal Products 1.5%
Herbalife Ltd.		6,053		413,844
Energy 11.1%
Energy Equipment & Services 6.7%
Cameron International Corp.*		3,713		188,360
Complete Production Services, Inc.*		9,387		277,386
Core Laboratories NV (a)		2,486		221,378
Dresser-Rand Group, Inc.*		5,050		215,080
FMC Technologies, Inc.*		4,880		433,881
McDermott International, Inc.*		14,000		289,660
National Oilwell Varco, Inc.		2,272		152,792
				1,778,537
Oil, Gas & Consumable Fuels 4.4%
Alpha Natural Resources, Inc.*		3,776		226,673
Concho Resources, Inc.*		2,916		255,646
Pioneer Natural Resources Co.		2,080		180,586
Ultra Petroleum Corp.* (a)		4,830		230,729
Whiting Petroleum Corp.*		2,442		286,178
				1,179,812
Financials 8.1%
Capital Markets 4.7%
Affiliated Managers Group, Inc.* (a)		1,800		178,596
Invesco Ltd.		5,700		137,142
Jefferies Group, Inc.		8,900		237,007
Lazard Ltd. "A"		4,854		191,684
	Shares		Value ($)

Och-Ziff Capital Management Group "A" (Limited Partnership)		18,720		291,658
TD Ameritrade Holding Corp. (a)		10,891		206,820
				1,242,907
Commercial Banks 1.4%
Huntington Bancshares, Inc.		19,766		135,792
Prosperity Bancshares, Inc.		4,400		172,832
Zions Bancorp.		2,881		69,807
				378,431
Diversified Financial Services 1.3%
Portfolio Recovery Associates, Inc.* (a)		4,800		360,960
Insurance 0.7%
W.R. Berkley Corp.		6,500		177,970
Health Care 13.5%
Biotechnology 2.7%
Alexion Pharmaceuticals, Inc.* (a)		2,483		200,005
Human Genome Sciences, Inc.* (a)		6,800		162,452
Onyx Pharmaceuticals, Inc.*		3,763		138,742
Regeneron Pharmaceuticals, Inc.*		6,300		206,829
				708,028
Health Care Equipment & Supplies 1.9%
Kinetic Concepts, Inc.*		6,700		280,596
Thoratec Corp.*		7,800		220,896
				501,492
Health Care Providers & Services 3.3%
AmerisourceBergen Corp.		8,900		303,668
Fresenius Medical Care AG & Co. KGaA (ADR)		5,230		301,719
Laboratory Corp. of America Holdings* (a)		3,200		281,344
				886,731
Health Care Technology 1.7%
Cerner Corp.* (a)		1,599		151,489
SXC Health Solutions Corp.*		7,233		310,006
				461,495
Life Sciences Tools & Services 2.4%
ICON PLC (ADR)*		5,824		127,546
Life Technologies Corp.*		5,500		305,250
QIAGEN NV* (a)		10,213		199,664
				632,460
Pharmaceuticals 1.5%
Questcor Pharmaceuticals, Inc.*		27,486		404,869
Industrials 13.9%
Aerospace & Defense 1.3%
BE Aerospace, Inc.*		9,400		348,082
Commercial Services & Supplies 1.1%
Stericycle, Inc.* (a)		3,500		283,220
Construction & Engineering 0.4%
Aecom Technology Corp.*		3,712		103,825
Electrical Equipment 2.9%
AMETEK, Inc.		7,446		292,255
Babcock & Wilcox Co.*		4,950		126,671
General Cable Corp.*		10,200		357,918
				776,844
	Shares		Value ($)

Machinery 4.6%
Flowserve Corp.		1,801		214,715
Gardner Denver, Inc.		4,560		313,819
Joy Global, Inc.		4,000		347,000
Terex Corp.* (a)		11,175		346,872
				1,222,406
Professional Services 1.7%
FTI Consulting, Inc.* (a)		5,082		189,457
Robert Half International, Inc.		8,930		273,258
				462,715
Road & Rail 1.9%
Genesee & Wyoming, Inc. "A"*		4,960		262,632
Kansas City Southern*		4,945		236,668
				499,300
Information Technology 20.6%
Communications Equipment 2.5%
F5 Networks, Inc.*		2,484		323,317
Harris Corp. (a)		2,700		122,310
Juniper Networks, Inc.*		6,166		227,649
				673,276
Computers & Peripherals 2.0%
NetApp, Inc.*		5,350		294,036
SanDisk Corp.*		4,728		235,738
				529,774
Electronic Equipment, Instruments & Components 0.8%
Itron, Inc.*		3,850		213,482
Internet Software & Services 1.0%
Equinix, Inc.* (a)		3,356		272,709
IT Services 1.3%
Cognizant Technology Solutions Corp. "A"*		4,610		337,867
Semiconductors & Semiconductor Equipment 6.7%
Analog Devices, Inc.		3,500		131,845
ARM Holdings PLC (ADR)		11,965		248,274
ASML Holding NV (NY Registered Shares) (a)		3,669		140,669
Broadcom Corp. "A"		3,682		160,351
Cavium Networks, Inc.* (a)		6,741		254,001
First Solar, Inc.* (a)		1,679		218,505
Marvell Technology Group Ltd.*		13,728		254,654
Netlogic Microsystems, Inc.*		4,200		131,922
Novellus Systems, Inc.*		7,405		239,330
				1,779,551
	Shares		Value ($)

Software 6.3%
BMC Software, Inc.*		2,621		123,554
Check Point Software Technologies Ltd.*		2,905		134,385
Concur Technologies, Inc.*		5,913		307,062
MICROS Systems, Inc.*		2,868		125,791
Red Hat, Inc.*		6,789		309,918
Rovi Corp.* (a)		4,832		299,632
Salesforce.com, Inc.* (a)		2,705		357,060
				1,657,402
Materials 5.4%
Chemicals 1.1%
Scotts Miracle-Gro Co. "A"		2,100		106,617
Solutia, Inc.*		7,452		171,992
				278,609
Containers & Packaging 0.8%
Crown Holdings, Inc.*		6,589		219,941
Metals & Mining 2.6%
Cliffs Natural Resources, Inc.		3,000		234,030
Kinross Gold Corp.		10,400		197,184
Thompson Creek Metals Co., Inc.*		18,099		266,417
				697,631
Paper & Forest Products 0.9%
Schweitzer-Mauduit International, Inc.		3,968		249,667
Telecommunication Services 2.2%
Wireless Telecommunication Services
American Tower Corp. "A"*		6,078		313,868
MetroPCS Communications, Inc.* (a)		21,176		267,453
				581,321
Total Common Stocks (Cost $17,324,405)				25,700,241

Securities Lending Collateral 20.0%
Daily Assets Fund Institutional, 0.27% (b) (c) (Cost $5,310,295)		5,310,295		5,310,295

Cash Equivalents 3.9%
Central Cash Management Fund, 0.19% (b) (Cost $1,025,897)		1,025,897		1,025,897

	% of Net Assets			Value ($)

Total Investment Portfolio (Cost $23,660,597)+		120.5			32,036,433
Other Assets and Liabilities, Net		(20.5	)		(5,439,897	)
Net Assets		100.0			26,596,536

* Non-income producing security.

+ The cost for federal income tax purposes was $23,757,711. At December 31, 2010, net unrealized appreciation for all securities based on tax cost was $8,278,722. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $8,520,038 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $241,316.

(a) All or a portion of these securities were on loan (see Notes to Financial Statements). The value of all securities loaned at December 31, 2010 amounted to $5,167,474, which is 19.4% of net assets.

(b) Affiliated fund managed by Deutsche Investment Management Americas Inc. The rate shown is the annualized seven-day yield at period end.

(c) Represents collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates.

ADR: American Depositary Receipt

Fair Value Measurements

Assets	Level 1		Level 2		Level 3		Total

Common Stocks (d)	$	25,700,241	$	—	$	—	$	25,700,241
Short-Term Investments (d)		6,336,192		—		—		6,336,192
Total	$	32,036,433	$	—	$	—	$	32,036,433

There have been no significant transfers between Level 1 and Level 2 fair value measurements during the year ended December 31, 2010.

(d) See Investment Portfolio for additional detailed categorizations.

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

Statement of Assets and Liabilities

as of December 31, 2010
Assets
Investments: Investments in unaffiliated securities, at value (cost $17,324,405) — including $5,167,474 of securities loaned	$	25,700,241
Investment in Daily Assets Fund Institutional (cost $5,310,295)*		5,310,295
Investment in Central Cash Management Fund (cost $1,025,897)		1,025,897
Total investments, at value (cost $23,660,597)		32,036,433
Dividends receivable		3,385
Interest receivable		815
Foreign taxes recoverable		319
Other assets		124
Total assets		32,041,076
Liabilities
Payable upon return of securities loaned		5,310,295
Payable for Fund shares redeemed		50,783
Accrued management fee		20,245
Other accrued expenses and payables		63,217
Total liabilities		5,444,540
Net assets, at value	$	26,596,536
Net Assets Consist of
Net unrealized appreciation (depreciation) on investments		8,375,836
Accumulated net realized gain (loss)		(25,844,555	)
Paid-in capital		44,065,255
Net assets, at value	$	26,596,536
Class A Net Asset Value, offering and redemption price per share ($26,596,536 ÷ 2,135,742 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)	$	12.45

* Represents collateral on securities loaned.

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

Statement of Operations

for the year ended December 31, 2010
Investment Income
Dividends (net of foreign taxes withheld of $1,411)	$	141,436
Income distributions — Central Cash Management Fund		1,047
Securities lending income, including income from Daily Assets Fund Institutional, net of borrower rebates		8,700
Total income		151,183
Expenses: Management fee		149,048
Administration fee		22,413
Services to shareholders		887
Custodian fee		9,826
Legal fees		9,140
Audit and tax fees		46,898
Trustees' fees and expenses		3,099
Reports to shareholders		13,510
Other		3,824
Total expenses before expense reductions		258,645
Expense reductions		(24,596	)
Total expenses after expense reductions		234,049
Net investment income (loss)		(82,866	)
Realized and Unrealized Gain (Loss)
Net realized gain (loss) from investments		2,083,999
Change in net unrealized appreciation (depreciation) on investments		3,665,748
Net gain (loss)		5,749,747
Net increase (decrease) in net assets resulting from operations	$	5,666,881

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

Statement of Changes in Net Assets

	Years Ended December 31,
Increase (Decrease) in Net Assets	2010			2009
Operations: Net investment income (loss)	$	(82,866	)	$	(40,620	)
Net realized gain (loss)		2,083,999			(3,073,291	)
Change in net unrealized appreciation (depreciation)		3,665,748			10,072,701
Net increase (decrease) in net assets resulting from operations		5,666,881			6,958,790
Fund share transactions: Class A Proceeds from shares sold		3,568,315			2,976,222
Payments for shares redeemed		(5,044,677	)		(5,876,870	)
Shares converted*		—			17,354
Net increase (decrease) in net assets from Class A share transactions		(1,476,362	)		(2,883,294	)
Class B Payments for shares redeemed		—			(64	)
Shares converted*		—			(17,354	)
Net increase (decrease) in net assets from Class B share transactions		—			(17,418	)
Increase (decrease) in net assets		4,190,519			4,058,078
Net assets at beginning of period		22,406,017			18,347,939
Net assets at end of period (including net investment income and accumulated net investment loss of $0 and $4,978, respectively)	$	26,596,536		$	22,406,017
Other Information
Class A Shares outstanding at beginning of period		2,302,964			2,694,618
Shares sold		322,729			374,687
Shares redeemed		(489,951	)		(769,440	)
Shares converted*		—			3,099
Net increase (decrease) in Class A shares		(167,222	)		(391,654	)
Shares outstanding at end of period		2,135,742			2,302,964
Class B Shares outstanding at beginning of period		—			3,171
Shares redeemed		—			(10	)
Shares converted*		—			(3,161	)
Net increase (decrease) in Class B shares		—			(3,171	)
Shares outstanding at end of period		—			—

* On March 6, 2009, Class B shares converted into Class A shares.

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

Financial Highlights

Class A Years Ended December 31,	2010			2009			2008			2007			2006
Selected Per Share Data
Net asset value, beginning of period	$	9.73		$	6.80		$	13.61		$	12.56		$	11.32
Income (loss) from investment operations: Net investment income (loss)a		(.04	)		(.02	)		(.02	)		(.05	)		(.06	)c
Net realized and unrealized gain (loss)		2.76			2.95			(6.79	)		1.10			1.30
Total from investment operations		2.72			2.93			(6.81	)		1.05			1.24
Net asset value, end of period	$	12.45		$	9.73		$	6.80		$	13.61		$	12.56
Total Return (%)b		27.95			43.09			(50.04	)		8.36			10.95	c
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		27			22			18			51			53
Ratio of expenses before expense reductions (%)		1.15			1.17			1.17			1.05			1.03
Ratio of expenses after expense reductions (%)		1.04			.92			1.02			.90			.93
Ratio of net investment income (loss) (%)		(.37	)		(.21	)		(.19	)		(.38	)		(.51	)c
Portfolio turnover rate (%)		57			89			82			68			46
a Based on average shares outstanding during the period. b Total return would have been lower had certain expenses not been reduced. c Includes non-recurring income from the Advisor recorded as a result of an administrative proceeding regarding disclosure of brokerage allocation practices in connection with sales of DWS Funds. The non-recurring income resulted in an increase in net investment income of $0.003 per share and an increase in the ratio of net investment income of 0.03%. Excluding this non-recurring income, total return would have been 0.03% lower.

Performance Summary December 31, 2010

DWS Money Market VIP

All performance shown is historical, assumes reinvestment of all dividend and capital gain distributions and does not guarantee future results. Investment return and principal value fluctuate with changing market conditions so that, when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please contact your participating insurance company for the Fund's most recent month-end performance. Performance doesn't reflect charges and fees ("contract charges") associated with the separate account that invests in the Fund or any variable life insurance policy or variable annuity contract for which the Fund is an investment option. These charges and fees will reduce ret urns. The yield quotation more closely reflects the current earnings of the Fund than the total return quotation.

Risk Considerations

An investment in this Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or by any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. The share price of money market funds can fall below the $1.00 share price. You should not rely on or expect the Advisor to enter into support agreements or take other actions to maintain the Fund's $1.00 share price. The credit quality of the Fund's holdings can change rapidly in certain markets, and the default of a single holding could have an adverse impact on the Fund's share price. The Fund's share price can also be negatively affected during periods of high redemption pressures and/or illiquid markets. The actions of a few large investors in the Fund may have a significant adverse effect on the share price of the Fund. See the prospectus for specific details regarding the Fund's risk profile.

Fund's Class A Shares Yield	7-day current yield
December 31, 2010	0.01%*
December 31, 2009	0.02%

* The investment advisor has agreed to waive fees/reimburse expenses. This waiver may be changed or terminated at anytime without notice. Without such fee waivers/expense reimbursements, the 7-day current yield would have been -0.14% as of December 31, 2010.

Yields are historical, will fluctuate and do not guarantee future performance. The 7-day current yield refers to the income paid by the Fund over a 7-day period expressed as an annual percentage rate of the Fund's shares outstanding.

Information About Your Fund's Expenses

DWS Money Market VIP

As an investor of the Fund, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees and other Fund expenses. Examples of transaction costs include contract charges, redemption fees and account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. In the most recent six-month period the Fund limited these expenses; had it not done so, expenses would have been higher. The example in the table is based on an investment of $1,000 invested at the beginning of the six-month period and held for the entire period (July 1, 2010 to December 31, 2010).< /div>

The tables illustrate your Fund's expenses in two ways:

Expenses and Value of a $1,000 Investment for the six months ended December 31, 2010
Actual Fund Return	Class A
Beginning Account Value 7/1/10	$	1,000.00
Ending Account Value 12/31/10	$	1,000.10
Expenses Paid per $1,000*	$	1.87
Hypothetical 5% Fund Return	Class A
Beginning Account Value 7/1/10	$	1,000.00
Ending Account Value 12/31/10	$	1,023.34
Expenses Paid per $1,000*	$	1.89

Annualized Expense Ratio	Class A
DWS Variable Series II — DWS Money Market VIP	.37%

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

Management Summary December 31, 2010

DWS Money Market VIP

At the start of 2010, the money market yield curve began to change configuration as — for the first time in 12 months — short-term money market rates rose somewhat.1 The slight increase in rates came in response to several market dynamics, including Congress's raising of the nation's debt ceiling and political and budgetary concerns within peripheral countries in the Eurozone.2 By mid-June, the crisis in Europe had eased somewhat as the European Central Bank and the International Monetary Fund collaborated in order to offer loans and liquidity facilities to banks in fiscally troubled countries such as Greece, Spain and Italy. In September, investors r esponded positively to US Federal Reserve Board (the Fed) Chairman Bernanke's statement that the Fed would take additional steps in the form of "quantitative easing" to prop up the US economy as needed. By the close of the year, the Treasury yield curve began to steepen — as fixed-income issues sold off — in response to improved economic data and investor anxiety over possible inflationary pressures.

During the 12-month period ended December 31, 2010, the Fund provided a total return of 0.01% (Class A shares, unadjusted for contract charges), compared with the 0.01% average return for the 102 funds in the Lipper Money Market Variable Annuity Funds category for the same period, according to Lipper Inc.

We were able to maintain a competitive yield for the Fund during the period. (All performance is historical and does not guarantee future results. Yields fluctuate and are not guaranteed.) Over the period, we continued to hold a large percentage of fixed-rate, short-maturity investments. The Fund also held a percentage in floating-rate securities (whose yields adjust periodically in response to changes in interest rates) to track any increases in LIBOR rate levels.3 Lastly, any investments the Fund has made in slightly longer maturities have been in Treasury, agency and top-quality corporate money market securities. The Fund holds a significant amount of its short-term liquidity in overnight and 7-day investments.

A group of investment professionals is responsible for the day-to-day management of the Fund. These investment professionals have a broad range of experience managing money market funds.

The Lipper Money Market Variable Annuity Funds category includes funds that invest in high-quality financial instruments rated in the top two grades with dollar-weighted average maturities of less than 90 days, and that intend to keep a constant net asset value. It is not possible to invest directly in a Lipper category. For the 1-, 3-, 5- and 10-year periods, this category's average return was 0.01% (102 funds), 0.81% (99 funds), 2.34% (96 funds) and 2.11% (76 funds), respectively, as of 12/31/10.

1 The yield curve is a graphical representation of how yields on bonds of different maturities compare. Normally, yield curves slant up, as bonds with longer maturities typically offer higher yields than short-term bonds.

2 The Eurozone refers to a currency union among the European Union member states that have adopted the euro as their sole currency.

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

Portfolio Summary

DWS Money Market VIP

Asset Allocation (As a % of Investment Portfolio)	12/31/10	12/31/09

Commercial Paper	31%	33%
Short-Term Notes	21%	21%
Repurchase Agreements	20%	13%
Government & Agency Obligations	14%	10%
Certificates of Deposit and Bank Notes	14%	22%
Supranational	—	1%
	100%	100%

Weighted Average Maturity*

DWS Variable Series II — DWS Money Market VIP	51 days	48 days
First Tier Retail Money Fund Average	39 days	47 days

* The Fund is compared to its respective iMoneyNet Category: First Tier Retail Money Fund Average — Category includes a widely recognized composite of money market funds that invest in only first tier (highest rating) securities. Portfolio Holdings of First Tier funds include US Treasury, US Other, Repos, Time Deposits, Domestic Bank Obligations, Foreign Bank Obligations, First Tier Commercial Paper, Floating Rate Notes and Asset Backed Commercial Paper.

Weighted average maturity, also known as effective maturity, is the weighted average of the bonds held by the Fund taking into consideration any maturity shortening features.

Asset allocation and weighted average maturity are subject to change.

For more complete details about the Fund's investment portfolio, see page 192.

Following the Fund's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. In addition, each month, information about the Fund and its portfolio holdings is filed with the SEC on Form N-MFP. The SEC delays the public availability of the information filed on Form N-MFP for 60 days after the end of the reporting period included in the filing. These forms will be available on the SEC's Web site at www.sec.gov, and they may also be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330. The Fund's portfolio holdings are also posted on www.dws-investments.com from time to time. Please see the Fund's current prospectus for more information.

Investment Portfolio December 31, 2010

DWS Money Market VIP

	Principal Amount ($)		Value ($)

Certificates of Deposit and Bank Notes 14.0%
Abbey National Treasury Services PLC, 0.46%, 2/2/2011		2,000,000		2,000,000
Banco Bilbao Vizcaya Argentaria SA, 0.5%, 2/14/2011		750,000		750,000
Bank of Tokyo-Mitsubishi UFJ Ltd., 0.38%, 5/16/2011		2,000,000		2,000,000
BNP Paribas:
0.41%, 3/17/2011		800,000		800,017
0.55%, 5/13/2011		750,000		750,109
0.63%, 1/27/2011		1,500,000		1,500,000
Credit Agricole SA, 0.3%, 1/19/2011		2,000,000		2,000,000
Dexia Credit Local, 144A, 2.375%, 9/23/2011		665,000		673,485
International Finance Corp., 3.0%, 11/15/2011		500,000		511,262
KBC Bank NV:
0.4%, 1/18/2011		1,000,000		1,000,000
0.4%, 1/19/2011		1,000,000		1,000,000
Kommuninvest I Sverige, 0.55%, 4/19/2011		1,000,000		1,000,623
Landeskreditbank Baden- Wuerttemberg Foerderbank, 2.5%, 2/14/2011		1,500,000		1,503,785
Mizuho Corporate Bank Ltd., 0.3%, 3/7/2011		2,000,000		2,000,000
Natixis, 0.3%, 1/20/2011		3,000,000		3,000,000
Nordea Bank Finland PLC:
0.26%, 1/12/2011		1,500,000		1,499,999
0.27%, 1/12/2011		2,000,000		2,000,000
0.44%, 6/30/2011		1,000,000		1,000,149
Skandinaviska Enskilda Banken AB:
0.29%, 1/4/2011		1,000,000		1,000,000
0.3%, 2/4/2011		1,000,000		1,000,000
Societe Generale, 0.41%, 4/26/2011		900,000		900,000
Sumitomo Mitsui Banking Corp.:
0.3%, 1/31/2011		1,000,000		1,000,000
0.3%, 3/3/2011		2,000,000		2,000,000
Total Certificates of Deposit and Bank Notes (Cost $30,889,429)				30,889,429

Commercial Paper 30.7%
Issued at Discount**
Abbey National North America LLC:
0.455%, 2/1/2011		2,000,000		1,999,216
0.46%, 2/16/2011		1,000,000		999,412
0.9%, 1/19/2011		2,000,000		1,999,100
Argento Variable Funding:
144A, 0.32%, 2/4/2011		1,750,000		1,749,471
144A, 0.33%, 1/28/2011		1,500,000		1,499,629
144A, 0.36%, 2/9/2011		1,500,000		1,499,415
144A, 0.37%, 2/24/2011		700,000		699,612
ASB Finance Ltd., 0.501%, 2/9/2011		1,200,000		1,199,350
	Principal Amount ($)		Value ($)

Banco Bilbao Vizcaya Argentaria SA:
0.49%, 2/4/2011		1,200,000		1,199,445
0.5%, 2/16/2011		700,000		699,553
0.5%, 2/18/2011		600,000		599,600
BNZ International Funding Ltd., 144A, 0.52%, 1/21/2011		2,500,000		2,499,278
Caisse D'Amortissement de la Dette Sociale:
0.25%, 2/7/2011		750,000		749,807
0.26%, 2/22/2011		800,000		799,700
0.26%, 3/15/2011		1,200,000		1,199,367
Cancara Asset Securitisation LLC:
144A, 0.3%, 1/10/2011		2,000,000		1,999,850
144A, 0.3%, 1/18/2011		2,000,000		1,999,717
Google, Inc., 0.4%, 9/16/2011		800,000		797,707
Grampian Funding LLC:
144A, 0.3%, 2/11/2011		1,000,000		999,658
144A, 0.34%, 1/10/2011		1,000,000		999,915
144A, 0.36%, 2/3/2011		1,250,000		1,249,588
144A, 0.36%, 2/11/2011		1,500,000		1,499,385
144A, 0.37%, 2/17/2011		1,150,000		1,149,445
144A, 0.37%, 3/1/2011		1,500,000		1,499,090
Johnson & Johnson:
144A, 0.18%, 1/18/2011		800,000		799,932
144A, 0.22%, 4/7/2011		1,750,000		1,748,973
Kells Funding LLC:
144A, 0.3%, 3/18/2011		1,200,000		1,199,240
144A, 0.31%, 3/21/2011		2,000,000		1,998,639
Kreditanstalt fuer Wiederaufbau:
144A, 0.23%, 2/15/2011		800,000		799,770
144A, 0.245%, 2/24/2011		800,000		799,706
Nieuw Amsterdam Receivables Corp., 144A, 0.27%, 1/6/2011		1,000,000		999,963
NRW.Bank:
0.27%, 1/4/2011		1,150,000		1,149,974
0.32%, 3/8/2011		1,350,000		1,349,208
0.42%, 3/31/2011		2,400,000		2,397,508
0.43%, 3/31/2011		750,000		749,203
Oesterreichische Kontrollbank AG, 0.245%, 2/28/2011		800,000		799,684
PepsiCo, Inc, 0.18%, 2/11/2011		2,300,000		2,299,529
Regency Markets No. 1 LLC, 144A, 0.27%, 1/20/2011		2,375,000		2,374,662
Romulus Funding Corp., 144A, 0.36%, 1/13/2011		2,000,000		1,999,760
Santander Central Hispano Finance Delaware, Inc., 0.5%, 3/11/2011		1,350,000		1,348,706
Shell International Finance BV:
0.4%, 5/2/2011		800,000		798,924
0.5%, 2/4/2011		800,000		799,622
Societe de Prise de Participation de l'Etat, 144A, 0.24%, 2/24/2011		800,000		799,712
Societe Generale North America, Inc., 0.33%, 2/1/2011		1,000,000		999,716
Standard Chartered Bank:
0.3%, 2/22/2011		1,200,000		1,199,480
0.33%, 1/13/2011		2,000,000		1,999,780
	Principal Amount ($)		Value ($)

Straight-A Funding LLC, 144A, 0.25%, 3/10/2011		1,200,000		1,199,433
Swedbank AB, 0.31%, 1/5/2011		1,150,000		1,149,960
Toyota Motor Credit Corp., 0.25%, 1/13/2011		2,000,000		1,999,833
Victory Receivables Corp., 144A, 0.29%, 1/31/2011		2,200,000		2,199,468
Total Commercial Paper (Cost $67,546,695)				67,546,695

Short Term Notes* 21.3%
Abbey National Treasury Services PLC:
0.439%, 3/7/2011		1,000,000		1,000,000
0.59%, 11/2/2011		1,000,000		1,000,000
Australia & New Zealand Banking Group Ltd., 144A, 0.43%, 1/20/2012		1,200,000		1,200,000
Bank of Nova Scotia:
0.37%, 9/12/2011		800,000		800,000
0.45%, 12/8/2011		800,000		800,000
Barclays Bank PLC:
0.58%, 7/19/2011		2,000,000		2,000,000
0.66%, 4/21/2011		2,200,000		2,200,000
BNP Paribas, 0.538%, 4/26/2011		1,800,000		1,800,000
Canadian Imperial Bank of Commerce:
0.28%, 5/12/2011		1,400,000		1,400,000
0.29%, 4/26/2011		1,000,000		1,000,000
0.46%, 4/26/2011		2,000,000		2,000,000
Commonwealth Bank of Australia, 144A, 0.323%, 1/3/2011		1,380,000		1,380,000
DnB NOR Bank ASA, 144A, 0.295%, 4/26/2011		1,500,000		1,500,000
Intesa Sanpaolo SpA, 0.37%, 10/27/2011		1,000,000		1,000,000
JPMorgan Chase Bank NA, 0.26%, 5/31/2011		1,300,000		1,300,000
Kells Funding LLC, 144A, 0.4%, 12/1/2011		1,000,000		1,000,000
National Australia Bank Ltd.:
144A, 0.29%, 1/27/2011		1,000,000		1,000,000
0.322%, 6/10/2011		1,500,000		1,500,000
Nordea Bank Finland PLC:
0.589%, 10/14/2011		2,000,000		2,004,577
0.589%, 10/20/2011		2,000,000		2,004,688
Rabobank Nederland NV:
0.262%, 3/11/2011		1,800,000		1,800,000
144A, 1.79%, 4/7/2011		4,000,000		4,000,000
Royal Bank of Canada:
0.26%, 2/24/2011		675,000		675,000
0.41%, 8/12/2011		1,200,000		1,200,000
Societe Generale:
0.42%, 4/21/2011		900,000		900,000
0.42%, 5/19/2011		2,200,000		2,200,000
Toronto-Dominion Bank, 0.265%, 2/4/2011		1,500,000		1,500,000
Westpac Banking Corp.:
0.289%, 4/14/2011		1,800,000		1,800,000
0.3%, 1/10/2011		1,300,000		1,300,000
0.307%, 6/1/2011		2,000,000		2,000,000
0.46%, 1/10/2012		1,500,000		1,500,000
Total Short Term Notes (Cost $46,764,265)				46,764,265

	Principal Amount ($)		Value ($)

Government & Agency Obligations 14.2%
Foreign Government Obligations 0.4%
Kingdom of Denmark, 2.75%, 11/15/2011		1,000,000		1,020,058
Other Government Related (a) 1.0%
European Investment Bank:
0.23%, 2/16/2011		800,000		799,765
2.625%, 5/16/2011		750,000		756,392
2.625%, 11/15/2011		600,000		611,562
				2,167,719
US Government Sponsored Agencies 5.4%
Federal Farm Credit Bank, 0.241%*, 11/2/2011		750,000		749,969
Federal Home Loan Bank:
0.24%, 10/28/2011		1,800,000		1,799,054
0.25%, 10/28/2011		750,000		749,949
0.269%**, 9/12/2011		2,500,000		2,495,237
0.4%, 1/4/2011		700,000		699,999
0.43%, 2/22/2011		800,000		800,002
0.54%, 5/24/2011		1,100,000		1,100,034
Federal National Mortgage Association:
0.161%*, 7/27/2011		1,200,000		1,199,551
0.284%**, 1/18/2011		1,500,000		1,499,787
4.68%, 6/15/2011		750,000		764,946
				11,858,528
US Treasury Obligations 7.4%
US Treasury Bills:
0.16%**, 3/10/2011		2,000,000		1,999,396
0.217%**, 10/20/2011		1,000,000		998,236
US Treasury Notes:
1.0%, 9/30/2011		2,000,000		2,010,794
1.0%, 10/31/2011		1,000,000		1,006,244
1.125%, 6/30/2011		2,500,000		2,508,627
1.125%, 12/15/2011		1,200,000		1,209,364
4.5%, 2/28/2011		650,000		654,239
4.625%, 8/31/2011		1,800,000		1,851,794
4.625%, 10/31/2011		1,000,000		1,035,746
4.75%, 3/31/2011		2,300,000		2,325,601
5.125%, 6/30/2011		650,000		665,784
				16,265,825
Total Government & Agency Obligations (Cost $31,312,130)				31,312,130

Repurchase Agreements 20.5%
Banc of America Securities LLC, 0.25%, dated 12/31/2010, to be repurchased at $20,526,652 on 1/3/2011 (b)		20,526,224		20,526,224
JPMorgan Securities, Inc., 0.17%, dated 12/31/2010, to be repurchased at $14,447,499 on 1/3/2011 (c)		14,447,294		14,447,294
JPMorgan Securities, Inc., 0.20%, dated 12/31/2010, to be repurchased at $8,000,133 on 1/3/2011 (d)		8,000,000		8,000,000
The Goldman Sachs & Co., 0.17%, dated 12/31/2010, to be repurchased at $2,000,028 on 1/3/2011 (e)		2,000,000		2,000,000
Total Repurchase Agreements (Cost $44,973,518)				44,973,518

	% of Net Assets			Value ($)

Total Investment Portfolio (Cost $221,486,037)+		100.7			221,486,037
Other Assets and Liabilities, Net		(0.7	)		(1,569,492	)
Net Assets		100.0			219,916,545

** Annualized yield at time of purchase; not a coupon rate.

+ The cost for federal income tax purposes was $221,486,037.

(a) Government-backed debt issued by financial companies or government sponsored enterprises.

(b) Collateralized by $16,238,000 Federal National Mortgage Association, with various coupon rates from 5.0-7.25%, with various maturity dates of 5/11/2017-5/15/2030 with a value of $20,937,401.

(d) Collateralized by $8,197,133 Federal National Mortgage Association, 1.75%, maturing on 8/25/2020 with a value of $8,172,037.

(e) Collateralized by $1,977,493 Federal Home Loan Mortgage Corp., with various coupon rates from 1.875-4.07%, with various maturity dates of 9/1/2015-6/1/2032 with a value of $2,040,000.

STRIPS: Separate Trading of Registered Interest and Principal Securities

Fair Value Measurements

Assets	Level 1		Level 2		Level 3		Total

Investments in Securities (f)	$	—	$	176,512,519	$	—	$	176,512,519
Repurchase Agreements		—		44,973,518		—		44,973,518
Total	$	—	$	221,486,037	$	—	$	221,486,037

There have been no transfers between Level 1 and Level 2 fair value measurements during the year ended December 31, 2010.

(f) See Investment Portfolio for additional detailed categorizations.

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

Statement of Assets and Liabilities

as of December 31, 2010
Assets
Investments: Investment in unaffiliated securities, valued at amortized cost	$	176,512,519
Repurchase agreements, valued at amortized cost		44,973,518
Total investments, valued at amortized cost		221,486,037
Cash		14
Receivable for Fund shares sold		60,705
Due from Advisor		15,381
Interest receivable		197,386
Other assets		1,349
Total assets		221,760,872
Liabilities
Payable for Fund shares redeemed		1,754,575
Distributions payable		1,007
Other accrued expenses and payables		88,745
Total liabilities		1,844,327
Net assets, at value	$	219,916,545
Net Assets Consist of
Distributions in excess of net investment income		(1,007	)
Paid-in capital		219,917,552
Net assets, at value	$	219,916,545
Class A Net Asset Value, offering and redemption price per share ($219,916,545 ÷ 220,001,268 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)	$	1.00

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

Statement of Operations

for the year ended December 31, 2010
Investment Income
Income: Interest	$	862,229
Expenses: Management fee		704,427
Administration fee		247,168
Services to shareholders		1,924
Custodian fee		27,571
Professional fees		64,438
Trustees' fee and expenses		10,980
Reports to shareholders		60,076
Other		13,636
Total expenses		1,130,220
Expense reductions		(292,806	)
Total expenses after expense reductions		837,414
Net investment income		24,815
Net realized gain (loss)		1,201
Net increase (decrease) in net assets resulting from operations	$	26,016

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

Statement of Changes in Net Assets

	Years Ended December 31,
Increase (Decrease) in Net Assets	2010			2009
Operations: Net investment income	$	24,815		$	1,242,942
Net realized gain (loss)		1,201			23,268
Net increase (decrease) in net assets resulting from operations		26,016			1,266,210
Distributions to shareholders from: Net investment income Class A		(24,815	)		(1,233,793	)
Class B		—			(37	)
Total distributions	$	(24,815	)	$	(1,233,830	)
Fund share transactions: Class A Proceeds from shares sold		111,590,276			102,195,146
Shares converted*		—			41,096
Reinvestment of distributions		26,864			1,523,848
Payments for shares redeemed		(161,340,354	)		(231,903,870	)
Net increase (decrease) in net assets from Class A share transactions		(49,723,214	)		(128,143,780	)
Class B Proceeds from shares sold		—			50
Shares converted*		—			(41,096	)
Reinvestment of distributions		—			58
Payments for shares redeemed		—			(49	)
Net increase (decrease) in net assets from Class B share transactions		—			(41,037	)
Increase (decrease) in net assets		(49,722,013	)		(128,152,437	)
Net assets at beginning of period		269,638,558			397,790,995
Net assets at end of period (including distributions in excess of net investment income of $1,007 and $16,402, respectively)	$	219,916,545		$	269,638,558
Other Information
Class A Shares outstanding at beginning of period		269,724,482			397,868,262
Shares sold		111,590,276			102,195,146
Shares converted*		—			41,096
Shares issued to shareholders in reinvestment of distributions		26,864			1,523,848
Shares redeemed		(161,340,354	)		(231,903,870	)
Net increase (decrease) in Class A shares		(49,723,214	)		(128,143,780	)
Shares outstanding at end of period		220,001,268			269,724,482
Class B Shares outstanding at beginning of period		—			41,037
Shares sold		—			50
Shares converted*		—			(41,096	)
Shares issued to shareholders in reinvestment of distributions		—			58
Shares redeemed		—			(49	)
Net increase (decrease) in Class B shares		—			(41,037	)
Shares outstanding at end of period		—			—

* On February 3, 2009, Class B shares converted into Class A shares.

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

Financial Highlights

Class A Years Ended December 31,	2010			2009			2008			2007			2006
Selected Per Share Data
Net asset value, beginning of period	$	1.000		$	1.000		$	1.000		$	1.000		$	1.000
Income from investment operations: Net investment income		.000	*		.003			.026			.049			.046
Total from investment operations		.000	*		.003			.026			.049			.046
Less distributions from: Net investment income		.000	*		(.003	)		(.026	)		(.049	)		(.046	)
Net asset value, end of period	$	1.000		$	1.000		$	1.000		$	1.000		$	1.000
Total Return (%)		.01	a		.34			2.64	a		5.00	a		4.65	a
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		220			270			398			355			294
Ratio of expenses before expense reductions (%)		.46			.43			.52			.46			.52
Ratio of expenses after expense reductions (%)		.34			.43			.50			.45			.51
Ratio of net investment income (%)		.01			.37			2.56			4.88			4.58
a Total return would have been lower had certain expenses not been reduced. * Amount is less than $.0005.

Performance Summary December 31, 2010

DWS Small Cap Growth VIP

The gross expense ratio of the Fund, as stated in the fee table of the prospectus dated May 1, 2010 is 0.77% for Class A shares and may differ from the expense ratio disclosed in the Financial Highlights table in this report.

Risk Considerations

Stocks of smaller companies involve greater risk than securities of larger, more-established companies. Stocks may decline in value. See the prospectus for details.

Fund returns shown for the 3-year, 5-year and 10-year periods reflect a fee waiver and/or expense reimbursement. Without this waiver/reimbursement, returns would have been lower.

Growth of an Assumed $10,000 Investment in DWS Small Cap Growth VIP
[] DWS Small Cap Growth VIP — Class A [] Russell 2000® Growth Index		The Russell 2000® Growth Index is an unmanaged, capitalization-weighted measure of 2,000 of the smallest capitalized US companies with a greater-than-average growth orientation and whose common stocks trade on the NYSE, NYSE Alternext US (formerly known as "Amex") and Nasdaq. Index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

Yearly periods ended December 31

Comparative Results
DWS Small Cap Growth VIP		1-Year			3-Year			5-Year			10-Year
Class A	Growth of $10,000	$	12,944		$	9,190		$	10,274		$	7,692
Class A	Average annual total return		29.44	%		-2.77	%		0.54	%		-2.59	%
Russell 2000 Growth Index	Growth of $10,000	$	12,909		$	10,668		$	12,944		$	14,491
Russell 2000 Growth Index	Average annual total return		29.09	%		2.18	%		5.30	%		3.78	%

The growth of $10,000 is cumulative.

Information About Your Fund's Expenses

DWS Small Cap Growth VIP

The tables illustrate your Fund's expenses in two ways:

Expenses and Value of a $1,000 Investment for the six months ended December 31, 2010
Actual Fund Return	Class A
Beginning Account Value 7/1/10	$	1,000.00
Ending Account Value 12/31/10	$	1,333.00
Expenses Paid per $1,000*	$	4.06
Hypothetical 5% Fund Return	Class A
Beginning Account Value 7/1/10	$	1,000.00
Ending Account Value 12/31/10	$	1,021.73
Expenses Paid per $1,000*	$	3.52

Annualized Expense Ratio	Class A
DWS Variable Series II — DWS Small Cap Growth VIP	.69%

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

Management Summary December 31, 2010

DWS Small Cap Growth VIP

The year 2010 began on an optimistic note with a few bright spots in the economy — improving consumer confidence, the government's report showing strong fourth-quarter 2009 gross domestic product GDP growth and a six-year high in manufacturing activity — partially offset by growing concerns about the health of the European financial system.1 By May 2010, the US stock market had entered a period of significant volatility amid regulatory uncertainty (health care and financial reform) and fears of a possible double-dip recession. The market then staged a rebound during the last four months of the year amid increasing confidence that the US Federal Reserve Board's (the Fed's) second round of quantitative easing measures would suppor t asset prices, along with evidence that the US economy was on a path to faster growth in 2011.

For the 12 months ended December 31, 2010, the Fund returned 29.44% (Class A shares, unadjusted for contract charges), compared with the 29.09% return of the Russell 2000® Growth Index. These strong returns belie the elevated level of investor risk aversion that impacted the global equity markets during much of the summer months as high unemployment, European debt problems, a possible economic "hard landing" within China and some slippage for US economic indicators temporarily dampened enthusiasm for stocks.

The Fund's outperformance of the benchmark came primarily from favorable stock selection. During the period, stock selection was positive within the health care, information technology and consumer staples sectors. Other contributions to return came from an overweight to energy and an underweight to telecom services.2 Stock selection in energy and consumer discretionary detracted from performance. In addition, underweight positions in materials, information technology and consumer discretionary weighed on returns.

We continue to maintain a long-term perspective, investing in quality small-cap growth stocks. Effective on or about May 1, 2011, the name of the Fund will be changed to DWS Small Mid Cap Growth VIP. The Fund's investment objective will also change to long-term capital appreciation. For a description of the new investment objective, please see the supplement dated January 19, 2011 to the Fund's current prospectus posted on www.dws-investments.com.

Joseph Axtell, CFA

Rafaelina M. Lee

Portfolio Managers

The Russell 2000 Growth Index is an unmanaged, capitalization-weighted measure of 2,000 of the smallest capitalized US companies with a greater-than-average growth orientation and whose common stocks trade on the NYSE, NYSE Alternext US (formerly known as "Amex") and Nasdaq.

Index returns assume reinvestment of dividends and, unlike funds returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

1 Gross domestic product is the value of goods and services produced in an economy.

2 "Overweight" means that a Fund holds a higher weighting in a given sector compared with its benchmark index. "Underweight" means that a Fund holds a lower weighting in a given sector.

Portfolio Summary

DWS Small Cap Growth VIP

Asset Allocation (As a % of Investment Portfolio excluding Securities Lending Collateral)	12/31/10	12/31/09

Common Stocks	97%	98%
Cash Equivalents	3%	2%
	100%	100%

Sector Diversification (As a % of Common Stocks)	12/31/10	12/31/09

Information Technology	25%	24%
Health Care	20%	17%
Consumer Discretionary	16%	16%
Industrials	16%	19%
Energy	9%	9%
Financials	6%	7%
Materials	5%	2%
Consumer Staples	3%	5%
Telecommunication Services	—	1%
	100%	100%

Asset allocation and sector diversification are subject to change.

For more complete details about the Fund's investment portfolio, see page 205.

Investment Portfolio December 31, 2010

DWS Small Cap Growth VIP

	Shares		Value ($)

Common Stocks 97.6%
Consumer Discretionary 15.9%
Auto Components 0.9%
Gentex Corp.		27,633		816,831
Diversified Consumer Services 0.6%
Capella Education Co.* (a)		7,900		525,982
Hotels Restaurants & Leisure 1.4%
Buffalo Wild Wings, Inc.*		18,902		828,853
Red Robin Gourmet Burgers, Inc.* (a)		18,900		405,783
				1,234,636
Internet & Catalog Retail 0.2%
Mecox Lane Ltd. (ADR)* (a)		22,883		169,563
Media 1.4%
Cinemark Holdings, Inc.		70,334		1,212,558
Specialty Retail 8.5%
Advance Auto Parts, Inc.		19,700		1,303,155
Children's Place Retail Stores, Inc.*		23,300		1,156,612
DSW, Inc. "A"* (a)		39,161		1,531,195
Guess?, Inc.		31,500		1,490,580
hhgregg, Inc.* (a)		44,600		934,370
Urban Outfitters, Inc.*		31,821		1,139,510
				7,555,422
Textiles, Apparel & Luxury Goods 2.9%
Carter's, Inc.* (a)		22,600		666,926
Deckers Outdoor Corp.* (a)		12,448		992,604
True Religion Apparel, Inc.* (a)		39,109		870,566
				2,530,096
Consumer Staples 3.1%
Food Products
Diamond Foods, Inc. (a)		24,355		1,295,199
Green Mountain Coffee Roasters, Inc.* (a)		43,050		1,414,623
				2,709,822
Energy 8.4%
Energy Equipment & Services 2.4%
Complete Production Services, Inc.*		26,075		770,516
Dril-Quip, Inc.*		17,678		1,373,934
				2,144,450
Oil, Gas & Consumable Fuels 6.0%
Carrizo Oil & Gas, Inc.* (a)		36,299		1,251,952
Clean Energy Fuels Corp.*		27,300		377,832
Cloud Peak Energy, Inc.*		22,911		532,223
Concho Resources, Inc.*		11,469		1,005,487
Northern Oil & Gas, Inc.*		44,689		1,215,988
Rosetta Resources, Inc.*		24,500		922,180
				5,305,662
Financials 5.7%
Capital Markets 1.3%
Stifel Financial Corp.* (a)		17,900		1,110,516
Commercial Banks 0.9%
Prosperity Bancshares, Inc.		21,100		828,808
Consumer Finance 1.9%
Dollar Financial Corp.* (a)		56,842		1,627,386
	Shares		Value ($)

Diversified Financial Services 1.6%
Portfolio Recovery Associates, Inc.* (a)		19,268		1,448,954
Health Care 19.6%
Biotechnology 5.6%
Alexion Pharmaceuticals, Inc.*		10,651		857,938
Halozyme Therapeutics, Inc.*		106,100		840,312
Human Genome Sciences, Inc.*		20,000		477,800
ImmunoGen, Inc.* (a)		65,600		607,456
Onyx Pharmaceuticals, Inc.*		12,559		463,051
Regeneron Pharmaceuticals, Inc.*		31,600		1,037,428
United Therapeutics Corp.*		10,600		670,132
				4,954,117
Health Care Equipment & Supplies 3.4%
Accuray, Inc.*		88,274		595,850
Kinetic Concepts, Inc.*		23,700		992,556
NxStage Medical, Inc.*		19,107		475,382
Thoratec Corp.* (a)		32,500		920,400
				2,984,188
Health Care Providers & Services 2.4%
ExamWorks Group, Inc.*		27,635		510,695
Gentiva Health Services, Inc.*		31,400		835,240
Universal American Financial Corp.		40,107		820,188
				2,166,123
Health Care Technology 1.9%
SXC Health Solutions Corp.*		40,470		1,734,544
Life Sciences Tools & Services 1.2%
ICON PLC (ADR)*		27,058		592,570
QIAGEN NV* (a)		22,367		437,275
				1,029,845
Pharmaceuticals 5.1%
Auxilium Pharmaceuticals, Inc.*		20,048		423,013
Flamel Technologies SA (ADR)* (a)		55,700		380,988
Par Pharmaceutical Companies, Inc.*		25,900		997,409
Questcor Pharmaceuticals, Inc.* (a)		146,192		2,153,408
VIVUS, Inc.* (a)		56,355		528,046
				4,482,864
Industrials 15.7%
Aerospace & Defense 2.6%
AAR Corp.*		39,331		1,080,423
BE Aerospace, Inc.*		33,200		1,229,396
				2,309,819
Commercial Services & Supplies 0.9%
EnerNOC, Inc.* (a)		34,100		815,331
Construction & Engineering 0.6%
MYR Group, Inc.*		23,600		495,600
Electrical Equipment 1.4%
General Cable Corp.* (a)		34,893		1,224,395
Machinery 6.1%
Altra Holdings, Inc.*		15,383		305,506
Ampco-Pittsburgh Corp.		21,334		598,419
Badger Meter, Inc. (a)		15,702		694,343
Columbus McKinnon Corp.*		28,675		582,676
RBC Bearings, Inc.*		32,677		1,277,017
Sauer-Danfoss, Inc.*		24,876		702,747
Terex Corp.*		39,400		1,222,976
				5,383,684
	Shares		Value ($)

Professional Services 2.1%
FTI Consulting, Inc.* (a)		17,924		668,207
TrueBlue, Inc.*		68,240		1,227,637
				1,895,844
Road & Rail 1.2%
Genesee & Wyoming, Inc. "A"*		19,456		1,030,195
Trading Companies & Distributors 0.8%
United Rentals, Inc.* (a)		30,937		703,817
Information Technology 24.2%
Communications Equipment 3.5%
Aruba Networks, Inc.*		15,850		330,948
Comverse Technology, Inc.*		64,655		469,395
Polycom, Inc.*		24,371		949,982
Riverbed Technology, Inc.* (a)		29,190		1,026,612
Sycamore Networks, Inc.		16,900		347,971
				3,124,908
Electronic Equipment, Instruments & Components 0.8%
Itron, Inc.*		12,482		692,127
Internet Software & Services 3.5%
Digital River, Inc.*		29,245		1,006,613
GSI Commerce, Inc.*		35,526		824,203
MercadoLibre, Inc.*		12,509		833,725
NIC, Inc.		45,100		437,921
				3,102,462
IT Services 6.9%
Cardtronics, Inc.*		42,700		755,790
FleetCor Technologies, Inc.*		19,144		591,932
Forrester Research, Inc.		40,300		1,422,187
iGATE Corp. (a)		67,043		1,321,418
iSoftStone Holdings Ltd. (ADR)*		25,781		468,441
Syntel, Inc.		18,437		881,104
Telvent GIT SA* (a)		25,117		663,591
				6,104,463
Semiconductors & Semiconductor Equipment 3.5%
Atheros Communications*		12,405		445,588
Cavium Networks, Inc.* (a)		31,533		1,188,163
Netlogic Microsystems, Inc.* (a)		23,500		738,135
Novellus Systems, Inc.*		21,144		683,374
				3,055,260
	Shares		Value ($)

Software 6.0%
CommVault Systems, Inc.*		24,732		707,830
Concur Technologies, Inc.* (a)		26,337		1,367,681
NICE Systems Ltd. (ADR)*		23,649		825,350
QLIK Technologies, Inc.*		18,888		487,499
Sourcefire, Inc.*		15,400		399,322
Taleo Corp. "A"*		30,930		855,215
TiVo, Inc.*		30,084		259,625
VanceInfo Technologies, Inc. (ADR)*		12,021		415,205
				5,317,727
Materials 5.0%
Chemicals 1.8%
Solutia, Inc.*		42,631		983,924
STR Holdings, Inc.* (a)		32,210		644,200
				1,628,124
Metals & Mining 2.3%
Molycorp, Inc.* (a)		14,006		698,899
Randgold Resources Ltd. (ADR) (a)		3,100		255,223
Thompson Creek Metals Co., Inc.*		73,000		1,074,560
				2,028,682
Paper & Forest Products 0.9%
Schweitzer-Mauduit International, Inc. (a)		12,681		797,889
Total Common Stocks (Cost $58,328,703)				86,282,694

Securities Lending Collateral 24.8%
Daily Assets Fund Institutional, 0.27% (b) (c) (Cost $21,950,973)		21,950,973		21,950,973

Cash Equivalents 2.9%
Central Cash Management Fund, 0.19% (b) (Cost $2,532,069)		2,532,069		2,532,069

	% of Net Assets			Value ($)

Total Investment Portfolio (Cost $82,811,745)+		125.3			110,765,736
Other Assets and Liabilities, Net		(25.3	)		(22,336,473	)
Net Assets		100.0			88,429,263

* Non-income producing security.

+ The cost for federal income tax purposes was $83,216,134. At December 31, 2010, net unrealized appreciation for all securities based on tax cost was $27,549,602. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $28,627,462 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $1,077,860.

(a) All or a portion of these securities were on loan (see Notes to Financial Statements). The value of all securities loaned at December 31, 2010 amounted to $21,144,795, which is 23.9% of net assets.

(b) Affiliated fund managed by Deutsche Investment Management Americas Inc. The rate shown is the annualized seven-day yield at period end.

(c) Represents collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates.

ADR: American Depositary Receipt

Fair Value Measurements

Assets	Level 1		Level 2		Level 3		Total

Common Stocks (d)	$	86,282,694	$	—	$	—	$	86,282,694
Short-Term Investments (d)		24,483,042		—		—		24,483,042
Total	$	110,765,736	$	—	$	—	$	110,765,736

There have been no significant transfers between Level 1 and Level 2 fair value measurements during the year ended December 31, 2010.

(d) See Investment Portfolio for additional detailed categorizations.

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

Statement of Assets and Liabilities

as of December 31, 2010
Assets
Investments: Investments in unaffiliated securities, at value (cost $58,328,703) — including $21,144,795 of securities loaned	$	86,282,694
Investment in Daily Assets Fund Institutional (cost $21,950,973)*		21,950,973
Investment in Central Cash Management Fund (cost $2,532,069)		2,532,069
Total investments, at value (cost $82,811,745)		110,765,736
Cash		10,000
Receivable for Fund shares sold		105
Dividends receivable		2,288
Interest receivable		6,480
Other assets		439
Total assets		110,785,048
Liabilities
Payable upon return of securities loaned		21,950,973
Payable for Fund shares redeemed		272,959
Accrued management fee		42,627
Other accrued expenses and payables		89,226
Total liabilities		22,355,785
Net assets, at value	$	88,429,263
Net Assets Consist of
Undistributed net investment income		516,412
Net unrealized appreciation (depreciation) on investments		27,953,991
Accumulated net realized gain (loss)		(42,803,640	)
Paid-in capital		102,762,500
Net assets, at value	$	88,429,263
Class A Net Asset Value, offering and redemption price per share ($88,429,263 ÷ 6,384,947 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)	$	13.85

* Represents collateral on securities loaned.

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

Statement of Operations

for the year ended December 31, 2010
Investment Income
Income: Dividends (net of foreign taxes withheld of $1,244)	$	442,311
Income distributions — Central Cash Management Fund		3,293
Securities lending income, including income from Daily Assets Fund Institutional, net of borrower rebates		78,166
Total income		523,770
Expenses: Management fee		434,077
Administration fee		78,923
Services to shareholders		4,365
Custodian fee and other		10,831
Legal fees		8,644
Audit and tax fees		58,410
Trustees' fees and expenses		5,538
Reports to shareholders		10,959
Total expenses		611,747
Net investment income (loss)		(87,977	)
Realized and Unrealized Gain (Loss)
Net realized gain (loss) from investments		11,959,891
Change in net unrealized appreciation (depreciation) on investments		8,823,086
Net gain (loss)		20,782,977
Net increase (decrease) in net assets resulting from operations	$	20,695,000

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

Statement of Changes in Net Assets

	Years Ended December 31,
Increase (Decrease) in Net Assets	2010			2009
Operations: Net investment income (loss)	$	(87,977	)	$	(146,790	)
Net realized gain (loss)		11,959,891			(20,542,495	)
Change in net unrealized appreciation (depreciation)		8,823,086			44,155,860
Net increase (decrease) in net assets resulting from operations		20,695,000			23,466,575
Fund share transactions: Class A Proceeds from shares sold		6,051,148			3,738,488
Payments for shares redeemed		(17,902,129	)		(17,049,742	)
Shares converted*		—			10,873
Net increase (decrease) in net assets from Class A share transactions		(11,850,981	)		(13,300,381	)
Class B Proceeds from shares sold		—			244
Payments for shares redeemed		—			(33	)
Shares converted*		—			(10,873	)
Net increase (decrease) in net assets from Class B share transactions		—			(10,662	)
Increase (decrease) in net assets		8,844,019			10,155,532
Net assets at beginning of period		79,585,244			69,429,712
Net assets at end of period (including undistributed net investment income of $516,412 and accumulated net investment loss of $14,597, respectively)	$	88,429,263		$	79,585,244
Other Information
Class A Shares outstanding at beginning of period		7,439,067			9,122,504
Shares sold		517,480			442,413
Shares redeemed		(1,571,600	)		(2,127,728	)
Shares converted*		—			1,878
Net increase (decrease) in Class A shares		(1,054,120	)		(1,683,437	)
Shares outstanding at end of period		6,384,947			7,439,067
Class B Shares outstanding at beginning of period		—			1,867
Shares sold		—			38
Shares redeemed		—			(5	)
Shares converted*		—			(1,900	)
Net increase (decrease) in Class B shares		—			(1,867	)
Shares outstanding at end of period		—			—

* On March 6, 2009, Class B shares converted into Class A shares.

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

Financial Highlights

Class A Years Ended December 31,	2010			2009			2008			2007			2006
Selected Per Share Data
Net asset value, beginning of period	$	10.70		$	7.61		$	15.07		$	14.19		$	13.48
Income (loss) from investment operations: Net investment income (loss)a		(.01	)		(.02	)		(.01	)		(.01	)		(.04	)c
Net realized and unrealized gain (loss)		3.16			3.11			(7.45	)		.89			.75
Total from investment operations		3.15			3.09			(7.46	)		.88			.71
Net asset value, end of period	$	13.85		$	10.70		$	7.61		$	15.07		$	14.19
Total Return (%)		29.44			40.60			(49.50	)b		6.20	b		5.27	b,c
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		88			80			69			174			208
Ratio of expenses before expense reductions (%)		.78			.77			.88			.75			.73
Ratio of expenses after expense reductions (%)		.78			.77			.85			.72			.72
Ratio of net investment income (loss) (%)		(.12	)		(.22	)		(.04	)		(.09	)		(.32	)c
Portfolio turnover rate (%)		64			93			67			67			73
a Based on average shares outstanding during the period. b Total return would have been lower had certain expenses not been reduced. c Includes non-recurring income from the Advisor recorded as a result of an administrative proceeding regarding disclosure of brokerage allocation practices in connection with sales of DWS Funds. The non-recurring income resulted in an increase in net investment income of $0.008 per share and an increase in the ratio of net investment income of 0.06%. Excluding this non-recurring income, total return would have been 0.06% lower.

Performance Summary December 31, 2010

DWS Strategic Income VIP

The gross expense ratio of the Fund, as stated in the fee table of the prospectus dated May 1, 2010 is 0.86% for Class A shares and may differ from the expense ratio disclosed in the Financial Highlights table in this report.

Risk Considerations

Bond investments are subject to interest-rate and credit risks. When interest rates rise, bond prices generally fall. Credit risk refers to the ability of an issuer to make timely payments of principal and interest. Investments in lower-quality and non-rated securities present greater risk of loss than investments in higher-quality securities. The Fund may use derivatives, including as part of its global alpha strategy. Investing in derivatives entails special risks relating to liquidity, leverage and credit that may reduce returns and/or increase volatility. Investing in foreign securities, particularly those of emerging markets, presents certain risks, such as currency fluctuations, political and economic changes, and market risks. See the prospectus for details.

Fund returns for all periods shown reflect a fee waiver and/or expense reimbursement. Without this waiver/reimbursement, returns would have been lower.

Growth of an Assumed $10,000 Investment in DWS Strategic Income VIP
[] DWS Strategic Income VIP — Class A [] Barclays Capital US Government/Credit Index [] Blended Index		The Barclays Capital US Government/Credit Index is an unmanaged index comprising intermediate- and long-term government and investment-grade corporate debt securities. The Blended Index consists of the Credit Suisse High Yield Index (35%), Barclays Capital US Government/Credit Index (35%), JPMorgan Emerging Markets Bond Index Global Diversified (15%) and Citigroup Non US Hedged World Government Bond Index ("WGBI") (15%). The Advisor believes this blended benchmark, which is a secondary benchmark, more accurately reflects typical portfolio asset allocations and represents the overall investment process. Index returns, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

Yearly periods ended December 31

Comparative Results
DWS Strategic Income VIP		1-Year			3-Year			5-Year			10-Year
Class A	Growth of $10,000	$	11,005		$	12,460		$	14,317		$	20,107
Class A	Average annual total return		10.05	%		7.61	%		7.44	%		7.23	%
Barclays Capital US Government/Credit Index	Growth of $10,000	$	10,659		$	11,777		$	13,105		$	17,626
Barclays Capital US Government/Credit Index	Average annual total return		6.59	%		5.60	%		5.56	%		5.83	%
Blended Index	Growth of $10,000	$	10,954		$	12,399		$	14,000		$	20,969
Blended Index	Average annual total return		9.54	%		7.43	%		6.96	%		7.69	%

The growth of $10,000 is cumulative.

Information About Your Fund's Expenses

DWS Strategic Income VIP

As an investor of the Fund, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees and other Fund expenses. Examples of transaction costs include contract charges, redemption fees and account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. In the most recent six-month period, the Fund limited these expenses; had it not done so, expenses would have been higher. The example in the table is based on an investment of $1,000 invested at the beginning of the six-month period and held for the entire period (July 1, 2010 to December 31, 2010).

The tables illustrate your Fund's expenses in two ways:

Expenses and Value of a $1,000 Investment for the six months ended December 31, 2010
Actual Fund Return	Class A
Beginning Account Value 7/1/10	$	1,000.00
Ending Account Value 12/31/10	$	1,051.90
Expenses Paid per $1,000*	$	4.29
Hypothetical 5% Fund Return	Class A
Beginning Account Value 7/1/10	$	1,000.00
Ending Account Value 12/31/10	$	1,021.02
Expenses Paid per $1,000*	$	4.23

Annualized Expense Ratio	Class A
DWS Variable Series II — DWS Strategic Income VIP	.83%

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

Management Summary December 31, 2010

DWS Strategic Income VIP

The Class A shares of the Fund returned 10.05% (unadjusted for contract charges) during the 12-month period ended December 31, 2010. This compares with returns of 9.54% for the Fund's blended benchmark and 6.59% for the Barclays Capital US Government/Credit Index.

The primary positive factor in the Fund's performance was its overweight in high-yield bonds, which outpaced the broader market by a wide margin.1 We continued to add to this market segment throughout the year, bringing the Fund's weighting in high yield from about 45% at the beginning of 2010 to approximately 55% at year end. Given the outperformance of high-yield bonds, this decision proved helpful to performance. The Fund's weighting in domestic investment-grade bonds also delivered a positive return, thanks to the solid performance of our positions in corporate bonds and mortgage-backed securities.2 On the negative side, our relative performance in the Fund's domestic segment was held back somewhat by our smaller-than-normal position in commercial mortgage-backed securities.3

Turning our attention to the Fund's overseas allocation, our position in emerging-markets debt produced a strong absolute return, which seeks to generate positive returns independent of market direction, but had only a modest impact on performance due to our small average weighting of about 6% to 8% of assets. The Fund's position in non-US developed-market bonds was a modest detractor. While we generated positive performance through our investments in euro-denominated corporate debt, our positions in Greece and Spain weighed significantly on performance during the first half of the year. Our currency positioning and global tactical asset allocation overlay strategy were also modest detractors from performance.4

We believe the year ahead will prove challenging for government bonds, given the extremely low absolute yields in the developed markets. In such an environment, we would expect to see continued outperformance from the "spread sectors" such as high-yield and investment-grade corporate bonds.5 Accordingly, about 80% of the Fund is now invested in these areas — up from about 60% at the start of the year. This allocation includes not just domestic corporates, but also bonds issued by corporations domiciled in Europe, Asia and the emerging markets.

As always, our investment process remains focused on using credit research to identify the most compelling investment opportunities for the Fund. At a time in which government bonds are offering paltry yields, we believe our global, multi-asset-class approach provides us with the best chance to strike this favorable balance over time.

Gary Russell, CFA

William Chepolis, CFA

John D. Ryan

Portfolio Managers, Deutsche Investment Management Americas Inc.

Thomas Picciochi

Robert Wang

Portfolio Managers, QS Investors, LLC

Subadvisor to the Fund

The Blended Index consists of the Credit Suisse High Yield Index (35%), Barclays Capital US Government/Credit Index (35%), JPMorgan Emerging Markets Bond Index Global Diversified (15%) and Citigroup Non US Hedged WBGI (15%). The Advisor believes this blended benchmark, which is a secondary benchmark, more accurately reflects typical portfolio asset allocations and represents the overall investment process.

The Barclays Capital US Government/Credit Index is an unmanaged index comprising intermediate- and long-term government and investment-grade corporate debt securities.

Index returns, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

1 "Overweight" means the Fund holds a higher weighting in a given sector or security than the benchmark. "Underweight" means the Fund holds a lower weighting.

2 Mortgage-backed securities (MBS) are secured by loans on residential property.

3 Commercial mortgage-backed securities (CMBS) are secured by loans on a commercial property.

4 The global tactical asset allocation (GTAA) strategy is a total return strategy designed to add value by benefiting from global market inefficiencies. The strategy combines diverse macro investment views to determine the positions, using a disciplined, risk-managed process. The result is a collection of long and short investment positions within global markets designed to generate excess returns that have little correlation to major markets. These positions are then implemented through futures and forward contracts.

5 "Spread sectors" refers to all segments of the bond market other than government bonds. They are named as such because they are priced on the yield spread, or difference in yield, relative to Treasuries.

Portfolio Summary

DWS Strategic Income VIP

Asset Allocation (As a % of Investment Portfolio excluding Securities Lending Collateral)	12/31/10	12/31/09

Corporate Bonds	62%	62%
Government & Agency Obligations	17%	18%
Cash Equivalents	5%	8%
Mortgage-Backed Securities Pass-Throughs	5%	4%
Loan Participations and Assignments	4%	3%
Collateralized Mortgage Obligations	3%	2%
Commercial Mortgage-Backed Securities	3%	1%
Preferred Securities	1%	1%
Asset Backed	—	1%
	100%	100%

Quality (Excludes Cash Equivalents and Securities Lending Collateral)	12/31/10	12/31/09

AAA	20%	13%
AA	2%	9%
A	5%	7%
BBB	16%	15%
BB	16%	20%
B	28%	23%
CCC	11%	9%
Below CCC	—	2%
Not Rated	2%	2%
	100%	100%

Interest Rate Sensitivity	12/31/10	12/31/09

Effective Maturity	7.2 years	6.6 years
Effective Duration	4.7 years	3.7 years

Asset allocation and interest rate sensitivity are subject to change.

Effective maturity is the weighted average of the bonds held by the Fund taking into consideration any maturity shortening features.

Effective duration is an approximate measure of the Fund's sensitivity to interest rate changes taking into consideration any maturity shortening features.

For more complete details about the Fund's investment portfolio, see page 218.

Investment Portfolio December 31, 2010

DWS Strategic Income VIP

		Principal Amount ($) (a)		Value ($)

Corporate Bonds 64.0%
Consumer Discretionary 7.9%
AMC Entertainment, Inc., 8.0%, 3/1/2014			105,000		106,050
American Achievement Corp., 144A, 10.875%, 4/15/2016			110,000		112,750
Ameristar Casinos, Inc., 9.25%, 6/1/2014			115,000		123,050
Asbury Automotive Group, Inc.:
7.625%, 3/15/2017			65,000		65,650
144A, 8.375%, 11/15/2020			80,000		82,600
Ashtead Holdings PLC, 144A, 8.625%, 8/1/2015			120,000		124,350
Avis Budget Car Rental LLC:
144A, 8.25%, 1/15/2019			95,000		95,950
9.625%, 3/15/2018			45,000		48,488
Beazer Homes USA, Inc., 144A, 9.125%, 5/15/2019			50,000		47,500
Bon-Ton Department Stores, Inc., 10.25%, 3/15/2014			30,000		30,600
Brunswick Corp., 144A, 11.25%, 11/1/2016			45,000		53,550
Cablevision Systems Corp.:
7.75%, 4/15/2018			10,000		10,475
144A, 8.0%, 12/15/2018			95,000		97,850
8.0%, 4/15/2020			10,000		10,700
CanWest MediaWorks LP, 144A, 9.25%, 8/1/2015**			50,000		8,500
Carnival Corp., 6.65%, 1/15/2028			285,000		292,317
Carrols Corp., 9.0%, 1/15/2013			30,000		30,075
CCO Holdings LLC:
7.25%, 10/30/2017			90,000		91,350
7.875%, 4/30/2018			40,000		41,400
8.125%, 4/30/2020			25,000		26,313
Cequel Communications Holdings I LLC, 144A, 8.625%, 11/15/2017			215,000		224,675
Clear Channel Worldwide Holdings, Inc.:
Series A, 9.25%, 12/15/2017			15,000		16,313
Series B, 9.25%, 12/15/2017			25,000		27,375
DineEquity, Inc., 144A, 9.5%, 10/30/2018			150,000		159,000
DISH DBS Corp.:
6.625%, 10/1/2014			65,000		67,437
7.125%, 2/1/2016			155,000		160,037
Fontainebleau Las Vegas Holdings LLC, 144A, 11.0%, 6/15/2015**			65,000		228
Ford Motor Co., 7.45%, 7/16/2031			65,000		69,631
General Electric Co., 144A, 4.375%, 4/1/2021			145,000		140,738
Goodyear Tire & Rubber Co., 10.5%, 5/15/2016			25,000		28,500
Great Canadian Gaming Corp., 144A, 7.25%, 2/15/2015			55,000		56,237
Group 1 Automotive, Inc., 144A, 3.0%, 3/15/2020			65,000		80,844
		Principal Amount ($) (a)		Value ($)

Harrah's Operating Co., Inc.:
10.0%, 12/15/2018			135,000		123,187
11.25%, 6/1/2017			240,000		270,000
144A, 12.75%, 4/15/2018			55,000		55,275
Hertz Corp.:
144A, 7.5%, 10/15/2018			155,000		160,812
8.875%, 1/1/2014			183,000		187,117
Hyundai Motor Manufacturing Czech, 144A, 4.5%, 4/15/2015			145,000		148,787
Lear Corp.:
7.875%, 3/15/2018			40,000		42,800
8.125%, 3/15/2020			40,000		43,500
Limited Brands, Inc., 7.0%, 5/1/2020			20,000		21,100
Macy's Retail Holdings, Inc., 8.375%, 7/15/2015			10,000		11,700
Mediacom Broadband LLC, 8.5%, 10/15/2015			110,000		110,550
Mediacom LLC, 9.125%, 8/15/2019			30,000		30,600
MGM Resorts International:
144A, 9.0%, 3/15/2020			65,000		71,500
144A, 10.0%, 11/1/2016			15,000		15,413
10.375%, 5/15/2014			45,000		50,512
11.125%, 11/15/2017			50,000		57,500
Michaels Stores, Inc., Step-up Coupon, 0% to 11/1/2011, 13.0% to 11/1/2016			25,000		24,750
Neiman Marcus Group, Inc., 10.375%, 10/15/2015			25,000		26,406
Norcraft Holdings LP, 9.75%, 9/1/2012			71,000		71,444
Penske Automotive Group, Inc., 7.75%, 12/15/2016			175,000		178,500
PETCO Animal Supplies, Inc., 144A, 9.25%, 12/1/2018			60,000		63,225
Phillips-Van Heusen Corp., 7.375%, 5/15/2020			25,000		26,563
Regal Entertainment Group, 9.125%, 8/15/2018			25,000		26,625
Sabre Holdings Corp., 8.35%, 3/15/2016			160,000		153,600
Sears Holdings Corp., 144A, 6.625%, 10/15/2018			60,000		55,950
Seminole Indian Tribe of Florida:
144A, 7.75%, 10/1/2017			40,000		41,300
144A, 7.804%, 10/1/2020			70,000		68,215
Simmons Bedding Co., 144A, 11.25%, 7/15/2015			50,000		54,000
Sirius XM Radio, Inc., 144A, 8.75%, 4/1/2015			55,000		59,537
Sonic Automotive, Inc.:
5.0%, 10/1/2029			25,000		31,063
Series B, 9.0%, 3/15/2018			95,000		99,987
Standard Pacific Corp.:
8.375%, 5/15/2018			10,000		10,000
144A, 8.375%, 5/15/2018			65,000		65,000
10.75%, 9/15/2016			80,000		92,200
Toys "R" Us-Delaware, Inc., 144A, 7.375%, 9/1/2016			35,000		36,750
		Principal Amount ($) (a)		Value ($)

Travelport LLC:
4.921%***, 9/1/2014			45,000		39,825
9.0%, 3/1/2016			65,000		62,969
9.875%, 9/1/2014			45,000		43,819
Unitymedia Hessen GmbH & Co., KG, 144A, 8.125%, 12/1/2017			200,000		209,000
Univision Communications, Inc., 144A, 7.875%, 11/1/2020			25,000		26,250
UPC Holding BV, 144A, 8.0%, 11/1/2016	EUR		100,000		138,975
Vertis, Inc., 13.5%, 4/1/2014 (PIK)**			24,348		730
Visant Corp., 144A, 10.0%, 10/1/2017			80,000		85,000
Wyndham Worldwide Corp., 5.75%, 2/1/2018			210,000		213,536
Wynn Las Vegas LLC, 7.75%, 8/15/2020			50,000		54,125
Young Broadcasting, Inc., 8.75%, 1/15/2014**			275,000		3
					5,990,233
Consumer Staples 2.2%
Alliance One International, Inc., 10.0%, 7/15/2016			25,000		25,625
Altria Group, Inc., 9.95%, 11/10/2038			145,000		204,324
B&G Foods, Inc., 7.625%, 1/15/2018			25,000		26,313
Central Garden & Pet Co., 8.25%, 3/1/2018			35,000		35,437
Darling International, Inc., 144A, 8.5%, 12/15/2018			80,000		83,400
Dole Food Co., Inc., 144A, 8.0%, 10/1/2016			35,000		36,925
FAGE Dairy Industry SA, 144A, 9.875%, 2/1/2020			85,000		85,000
General Nutrition Centers, Inc., 5.75%***, 3/15/2014 (PIK)			40,000		39,600
NBTY, Inc., 144A, 9.0%, 10/1/2018			25,000		26,688
North Atlantic Trading Co., 144A, 10.0%, 3/1/2012			223,000		209,620
Pilgrim's Pride Corp., 144A, 7.875%, 12/15/2018			60,000		59,700
Reynolds American, Inc., 6.75%, 6/15/2017			200,000		223,543
Rite Aid Corp.:
7.5%, 3/1/2017			60,000		57,675
8.0%, 8/15/2020			100,000		104,125
Smithfield Foods, Inc.:
7.75%, 7/1/2017			220,000		228,800
144A, 10.0%, 7/15/2014			85,000		97,962
Stater Bros. Holdings, Inc., 144A, 7.375%, 11/15/2018			30,000		30,750
SUPERVALU, Inc., 8.0%, 5/1/2016			35,000		33,513
TreeHouse Foods, Inc., 7.75%, 3/1/2018			25,000		27,094
					1,636,094
Energy 7.4%
Allis-Chalmers Energy, Inc., 9.0%, 1/15/2014			55,000		55,825
Anadarko Petroleum Corp., 6.375%, 9/15/2017			215,000		234,201
		Principal Amount ($) (a)		Value ($)

Arch Coal, Inc., 7.25%, 10/1/2020			20,000		21,100
Atlas Energy Operating Co., LLC, 12.125%, 8/1/2017			55,000		69,575
Belden & Blake Corp., 8.75%, 7/15/2012			310,000		296,050
Berry Petroleum Co., 6.75%, 11/1/2020			90,000		90,450
Bill Barrett Corp., 9.875%, 7/15/2016			40,000		43,900
BreitBurn Energy Partners LP, 144A, 8.625%, 10/15/2020			50,000		50,250
Bristow Group, Inc., 7.5%, 9/15/2017			70,000		73,850
Chaparral Energy, Inc., 8.5%, 12/1/2015			230,000		234,025
Chesapeake Energy Corp.:
6.625%, 8/15/2020			60,000		59,100
6.875%, 8/15/2018			30,000		30,450
6.875%, 11/15/2020			75,000		75,937
7.25%, 12/15/2018			100,000		103,500
9.5%, 2/15/2015			185,000		208,587
CITGO Petroleum Corp., 144A, 11.5%, 7/1/2017			105,000		117,600
Colorado Interstate Gas Co., 6.8%, 11/15/2015			30,000		34,561
CONSOL Energy, Inc.:
144A, 8.0%, 4/1/2017			115,000		122,475
144A, 8.25%, 4/1/2020			60,000		64,800
Continental Resources, Inc.:
144A, 7.125%, 4/1/2021			30,000		31,500
7.375%, 10/1/2020			35,000		37,100
8.25%, 10/1/2019			20,000		22,200
Crosstex Energy LP, 8.875%, 2/15/2018			55,000		58,919
El Paso Corp.:
7.25%, 6/1/2018			55,000		58,878
9.625%, 5/15/2012			132,000		140,681
El Paso Pipeline Partners Operating Co., LLC, 6.5%, 4/1/2020			155,000		162,625
Energy Transfer Equity LP, 7.5%, 10/15/2020			35,000		36,050
Frontier Oil Corp., 6.875%, 11/15/2018			55,000		56,100
Genesis Energy LP, 144A, 7.875%, 12/15/2018			65,000		64,675
Global Geophysical Services, Inc., 10.5%, 5/1/2017			130,000		129,350
Harvest Operations Corp., 144A, 6.875%, 10/1/2017			25,000		25,750
Holly Energy Partners LP, 144A, 8.25%, 3/15/2018			55,000		57,475
Inergy LP, 144A, 7.0%, 10/1/2018			60,000		60,450
KCS Energy, Inc., 7.125%, 4/1/2012			240,000		240,600
Linn Energy LLC:
144A, 7.75%, 2/1/2021			60,000		61,500
144A, 8.625%, 4/15/2020			55,000		59,263
11.75%, 5/15/2017			75,000		85,875
Newfield Exploration Co., 7.125%, 5/15/2018			90,000		94,725
Nexen, Inc., 5.875%, 3/10/2035			75,000		69,738
Niska Gas Storage US LLC, 144A, 8.875%, 3/15/2018			55,000		58,850
OPTI Canada, Inc., 7.875%, 12/15/2014			125,000		88,281
		Principal Amount ($) (a)		Value ($)

Petrohawk Energy Corp.:
7.25%, 8/15/2018			50,000		50,500
7.875%, 6/1/2015			30,000		31,238
Plains Exploration & Production Co.:
7.0%, 3/15/2017			60,000		61,650
7.625%, 6/1/2018			110,000		115,775
8.625%, 10/15/2019			55,000		60,225
Quicksilver Resources, Inc., 11.75%, 1/1/2016			15,000		17,475
Range Resources Corp., 6.75%, 8/1/2020			20,000		20,625
Regency Energy Partners LP:
6.875%, 12/1/2018			35,000		35,438
9.375%, 6/1/2016			115,000		126,212
Reliance Holdings USA, Inc., 144A, 4.5%, 10/19/2020			250,000		238,538
Sabine Pass LNG LP:
7.25%, 11/30/2013			115,000		111,837
7.5%, 11/30/2016			100,000		93,750
SandRidge Energy, Inc., 8.625%, 4/1/2015 (PIK)			25,000		25,594
Southwestern Energy Co., 7.5%, 2/1/2018			85,000		95,837
Stone Energy Corp.:
6.75%, 12/15/2014			95,000		92,625
8.625%, 2/1/2017			25,000		25,375
Transocean, Inc., 6.5%, 11/15/2020			360,000		382,218
Valero Energy Corp., 6.125%, 2/1/2020			160,000		169,931
Williams Partners LP, 4.125%, 11/15/2020			190,000		179,966
					5,621,630
Financials 16.7%
Algoma Acquisition Corp., 144A, 9.875%, 6/15/2015			125,000		112,500
Ally Financial, Inc.:
144A, 6.25%, 12/1/2017			95,000		95,000
6.875%, 9/15/2011			297,000		305,167
7.0%, 2/1/2012			185,000		191,475
7.25%, 3/2/2011			455,000		457,275
144A, 7.5%, 9/15/2020			120,000		125,850
8.0%, 3/15/2020			115,000		125,637
8.0%, 11/1/2031			75,000		80,813
8.3%, 2/12/2015			35,000		38,500
American International Group, Inc., Series G, 5.6%, 10/18/2016			290,000		298,757
Antero Resources Finance Corp., 9.375%, 12/1/2017			10,000		10,463
Ashton Woods USA LLC, 144A, Step-up Coupon, 0% to 6/30/2012, 11.0% to 6/30/2015			75,400		41,847
Barclays Bank PLC:
5.125%, 1/8/2020			145,000		148,082
5.14%, 10/14/2020			185,000		166,453
BBVA Bancomer SA, 144A, 7.25%, 4/22/2020			115,000		121,647
Blue Acquisition Sub, Inc., 144A, 9.875%, 10/15/2018			30,000		31,950
BP Capital Markets PLC, 4.5%, 10/1/2020			120,000		119,711
Bumble Bee Acquisition Corp., 144A, 9.0%, 12/15/2017			130,000		135,200
		Principal Amount ($) (a)		Value ($)

Calpine Construction Finance Co., LP, 144A, 8.0%, 6/1/2016			120,000		127,500
Case New Holland, Inc., 7.75%, 9/1/2013			45,000		48,375
CIT Group, Inc.:
7.0%, 5/1/2013			80,000		81,600
7.0%, 5/1/2015			105,970		106,235
7.0%, 5/1/2017			355,000		355,887
Citigroup Funding, Inc., 5.0%, 4/7/2013			295,000		295,000
Credit Agricole SA, 144A, 3.5%, 4/13/2015			171,000		172,136
Discover Bank, 7.0%, 4/15/2020			145,000		155,881
Dunkin Finance Corp., 144A, 9.625%, 12/1/2018			45,000		45,450
E*TRADE Financial Corp., 7.375%, 9/15/2013			120,000		119,400
Express LLC, 8.75%, 3/1/2018			45,000		47,813
FCE Bank PLC, 9.375%, 1/17/2014	EUR		100,000		148,663
Ford Motor Credit Co., LLC:
7.25%, 10/25/2011			60,000		62,013
7.375%, 2/1/2011			45,000		45,135
7.5%, 8/1/2012			500,000		531,604
9.875%, 8/10/2011			145,000		150,936
GE Capital European Funding, 4.25%, 3/1/2017	EUR		290,000		393,485
GenOn Escrow Corp., 144A, 9.5%, 10/15/2018			25,000		24,844
Giraffe Acquisition Corp., 144A, 9.125%, 12/1/2018			55,000		57,338
Hartford Financial Services Group, Inc., 5.5%, 3/30/2020			290,000		294,181
Hellas Telecommunications Finance SCA, 144A, 8.985%, 7/15/2015 (PIK)*	EUR		109,187		88
Hexion US Finance Corp., 8.875%, 2/1/2018			340,000		363,375
Hospitality Properties Trust, (REIT), 7.875%, 8/15/2014			200,000		221,218
Host Hotels & Resorts LP, (REIT), 6.875%, 11/1/2014			165,000		169,950
HSBC Finance Corp., 144A, 6.676%, 1/15/2021			120,000		121,234
Hutchison Whampoa Finance 09 Ltd., 4.75%, 11/14/2016	EUR		150,000		208,874
Intergas Finance BV, REG S, 6.875%, 11/4/2011			275,000		285,312
International Finance Corp., 5.75%, 3/16/2015	AUD		285,000		289,497
International Lease Finance Corp.:
144A, 8.625%, 9/15/2015			40,000		43,000
144A, 8.75%, 3/15/2017			180,000		193,050
iPayment, Inc., 9.75%, 5/15/2014			45,000		42,300
Lincoln National Corp., 7.0%, 6/15/2040			290,000		315,367
Lloyds TSB Bank PLC, 144A, 6.5%, 9/14/2020			290,000		266,809
Manulife Financial Corp., 4.9%, 9/17/2020			290,000		275,987
Morgan Stanley, 3.45%, 11/2/2015			220,000		214,490
		Principal Amount ($) (a)		Value ($)

Navios Maritime Acquisition Corp., 144A, 8.625%, 11/1/2017			25,000		25,563
Nielsen Finance LLC:
Step-up Coupon, 0% to 8/1/2011, 12.5% to 8/1/2016			45,000		47,250
144A, 7.75%, 10/15/2018			25,000		25,875
11.5%, 5/1/2016			20,000		23,100
Nomura Holdings, Inc., 6.7%, 3/4/2020			90,000		96,326
Nuveen Investments, Inc., 10.5%, 11/15/2015			130,000		132,925
OMEGA Healthcare Investors, Inc., 144A, (REIT), 6.75%, 10/15/2022			55,000		54,519
Pacific Life Global Funding, 144A, 3.32%***, 2/6/2016			386,000		382,580
Pinafore LLC, 144A, 9.0%, 10/1/2018			40,000		43,200
Pinnacle Foods Finance LLC:
8.25%, 9/1/2017			70,000		71,575
9.25%, 4/1/2015			35,000		36,444
PNC Bank NA, 6.875%, 4/1/2018			180,000		205,751
Prudential Financial, Inc., 4.5%, 11/15/2020			135,000		132,023
Qtel International Finance Ltd., 144A, 4.75%, 2/16/2021			200,000		190,814
Rainbow National Services LLC, 144A, 10.375%, 9/1/2014			13,000		13,488
Reynolds Group Issuer, Inc.:
144A, 7.125%, 4/15/2019			100,000		101,750
144A, 8.5%, 5/15/2018			195,000		195,975
144A, 9.0%, 4/15/2019			105,000		108,806
Roadhouse Financing, Inc., 144A, 10.75%, 10/15/2017			40,000		43,200
Santander US Debt SA Unipersonal, 144A, 3.724%, 1/20/2015			145,000		137,382
SLM Corp., 8.0%, 3/25/2020			25,000		25,348
Societe Generale, 144A, 3.5%, 1/15/2016			290,000		285,645
Sprint Capital Corp.:
7.625%, 1/30/2011			50,000		50,125
8.375%, 3/15/2012			135,000		142,762
Susser Holdings LLC, 8.5%, 5/15/2016			30,000		32,175
Telecom Italia Capital SA, 4.95%, 9/30/2014			174,000		178,270
Toys "R" Us Property Co. I, LLC, 10.75%, 7/15/2017			50,000		57,000
Tropicana Entertainment LLC, 9.625%, 12/15/2014**			150,000		77
UCI Holdco, Inc., 9.25%***, 12/15/2013 (PIK)			83,525		83,316
Ventas Realty LP, (REIT), 3.125%, 11/30/2015			95,000		91,531
Virgin Media Finance PLC, Series 1, 9.5%, 8/15/2016			300,000		339,000
Virgin Media Secured Finance PLC, 6.5%, 1/15/2018			375,000		394,687
WMG Acquisition Corp., 9.5%, 6/15/2016			45,000		48,263
					12,677,099
		Principal Amount ($) (a)		Value ($)

Health Care 3.8%
Celgene Corp., 3.95%, 10/15/2020			170,000		161,625
Community Health Systems, Inc., 8.875%, 7/15/2015			80,000		84,000
DaVita, Inc.:
6.375%, 11/1/2018			20,000		19,900
6.625%, 11/1/2020			20,000		19,800
Genzyme Corp., 5.0%, 6/15/2020			155,000		162,729
Hanger Orthopedic Group, Inc., 7.125%, 11/15/2018			25,000		24,937
HCA Holdings, Inc., 144A, 7.75%, 5/15/2021			105,000		105,000
HCA, Inc.:
7.875%, 2/15/2020			365,000		390,550
8.5%, 4/15/2019			45,000		49,275
9.125%, 11/15/2014			155,000		162,556
9.25%, 11/15/2016			310,000		330,731
9.625%, 11/15/2016 (PIK)			152,000		162,830
IASIS Healthcare LLC, 8.75%, 6/15/2014			95,000		97,494
Laboratory Corp. of America Holdings, 4.625%, 11/15/2020			215,000		213,061
Life Technologies Corp., 6.0%, 3/1/2020			215,000		230,294
Mylan, Inc., 144A, 7.875%, 7/15/2020			15,000		16,163
The Cooper Companies, Inc., 7.125%, 2/15/2015			95,000		97,850
Valeant Pharmaceuticals International:
144A, 6.75%, 10/1/2017			40,000		39,800
144A, 7.0%, 10/1/2020			65,000		64,187
Vanguard Health Holding Co. II, LLC:
8.0%, 2/1/2018			55,000		56,375
144A, 8.0%, 2/1/2018			45,000		45,900
Warner Chilcott Co., LLC, 144A, 7.75%, 9/15/2018			75,000		75,750
Watson Pharmaceuticals, Inc., 6.125%, 8/15/2019			220,000		243,615
					2,854,422
Industrials 4.6%
Accuride Corp., 144A, 9.5%, 8/1/2018			75,000		81,187
Actuant Corp., 6.875%, 6/15/2017			40,000		40,900
AMGH Merger Sub, Inc., 144A, 9.25%, 11/1/2018			30,000		31,500
ARAMARK Corp., 8.5%, 2/1/2015			20,000		20,900
Armored Autogroup, Inc., 144A, 9.25%, 11/1/2018			105,000		104,212
ArvinMeritor, Inc.:
8.125%, 9/15/2015			55,000		57,544
10.625%, 3/15/2018			60,000		67,500
BE Aerospace, Inc.:
6.875%, 10/1/2020			35,000		36,138
8.5%, 7/1/2018			105,000		114,975
Belden, Inc.:
7.0%, 3/15/2017			45,000		45,563
9.25%, 6/15/2019			40,000		43,850
Bombardier, Inc., 144A, 7.75%, 3/15/2020			55,000		59,262
		Principal Amount ($) (a)		Value ($)

Briggs & Stratton Corp., 6.875%, 12/15/2020			35,000		35,700
Cenveo Corp.:
8.875%, 2/1/2018			100,000		96,750
144A, 10.5%, 8/15/2016			55,000		54,038
Clean Harbors, Inc., 7.625%, 8/15/2016			32,000		34,000
Congoleum Corp., 9.0%, 12/31/2017 (PIK)			41,250		28,437
Corrections Corp. of America, 7.75%, 6/1/2017			30,000		31,838
DynCorp International, Inc., 144A, 10.375%, 7/1/2017			85,000		87,125
FTI Consulting, Inc., 144A, 6.75%, 10/1/2020			145,000		143,912
Garda World Security Corp., 144A, 9.75%, 3/15/2017			60,000		64,350
Great Lakes Dredge & Dock Co., 7.75%, 12/15/2013			50,000		50,438
Hutchison Whampoa International 09/19 Ltd., 144A, 5.75%, 9/11/2019			225,000		240,956
Interline Brands, Inc., 144A, 7.0%, 11/15/2018			50,000		50,750
K. Hovnanian Enterprises, Inc., 8.875%, 4/1/2012			55,000		53,900
Kansas City Southern de Mexico SA de CV:
7.375%, 6/1/2014			115,000		120,175
8.0%, 2/1/2018			105,000		113,662
Kansas City Southern Railway Co., 8.0%, 6/1/2015			100,000		107,500
Masco Corp., 7.125%, 3/15/2020			145,000		151,689
Navios Maritime Holdings, Inc., 9.5%, 12/15/2014			75,000		78,000
Oshkosh Corp.:
8.25%, 3/1/2017			10,000		10,875
8.5%, 3/1/2020			25,000		27,438
Owens Corning, Inc., 9.0%, 6/15/2019			217,000		254,583
Ply Gem Industries, Inc., 13.125%, 7/15/2014			95,000		100,937
RailAmerica, Inc., 9.25%, 7/1/2017			36,000		39,555
RBS Global & Rexnord Corp., 8.5%, 5/1/2018			120,000		127,500
Sitel LLC, 144A, 11.5%, 4/1/2018			95,000		78,375
Spirit AeroSystems Holdings, Inc., 144A, 6.75%, 12/15/2020			75,000		75,187
SPX Corp., 144A, 6.875%, 9/1/2017			20,000		21,250
Textron, Inc., 7.25%, 10/1/2019			145,000		166,163
Titan International, Inc., 144A, 7.875%, 10/1/2017			160,000		168,800
TransDigm, Inc., 144A, 7.75%, 12/15/2018			65,000		67,275
Tutor Perini Corp., 144A, 7.625%, 11/1/2018			55,000		55,275
USG Corp., 144A, 9.75%, 8/1/2014			45,000		47,475
					3,487,439
		Principal Amount ($) (a)		Value ($)

Information Technology 2.5%
Alcatel-Lucent USA, Inc., 6.45%, 3/15/2029			70,000		55,300
Allen Systems Group, Inc., 144A, 10.5%, 11/15/2016			35,000		35,263
Amkor Technology, Inc., 7.375%, 5/1/2018			45,000		46,800
Aspect Software, Inc., 144A, 10.625%, 5/15/2017			60,000		61,575
CDW LLC, 11.0%, 10/12/2015			155,000		160,812
Equinix, Inc., 8.125%, 3/1/2018			120,000		125,400
Fidelity National Information Services, Inc.:
144A, 7.625%, 7/15/2017			20,000		21,050
144A, 7.875%, 7/15/2020			25,000		26,438
First Data Corp., 144A, 8.875%, 8/15/2020			85,000		89,675
Freescale Semiconductor, Inc., 144A, 9.25%, 4/15/2018			265,000		291,500
Jabil Circuit, Inc., 7.75%, 7/15/2016			30,000		33,675
L-3 Communications Corp.:
5.875%, 1/15/2015			105,000		106,969
Series B, 6.375%, 10/15/2015			80,000		82,400
MasTec, Inc., 7.625%, 2/1/2017			65,000		64,675
NXP BV, 3.039%***, 10/15/2013			150,000		147,750
SunGard Data Systems, Inc.:
144A, 7.375%, 11/15/2018			25,000		25,125
10.25%, 8/15/2015			225,000		236,531
Unisys Corp., 144A, 12.75%, 10/15/2014			80,000		94,600
Vangent, Inc., 9.625%, 2/15/2015			35,000		31,675
Western Union Co., 6.2%, 6/21/2040			145,000		143,446
					1,880,659
Materials 8.1%
Agrium, Inc., 6.125%, 1/15/2041			290,000		307,140
Albemarle Corp., 4.5%, 12/15/2020			100,000		98,422
Appleton Papers, Inc., 144A, 11.25%, 12/15/2015			25,000		20,000
ArcelorMittal, 6.125%, 6/1/2018			250,000		266,372
Ashland, Inc., 9.125%, 6/1/2017			55,000		63,387
Ball Corp.:
7.125%, 9/1/2016			30,000		32,325
7.375%, 9/1/2019			25,000		26,875
Berry Plastics Corp.:
9.5%, 5/15/2018			65,000		65,162
144A, 9.75%, 1/15/2021			80,000		79,200
Boise Paper Holdings LLC, 8.0%, 4/1/2020			30,000		32,100
BWAY Parent Co., Inc., 144A, 10.125%, 11/1/2015 (PIK)			40,000		40,400
Celanese US Holdings LLC, 144A, 6.625%, 10/15/2018			35,000		36,138
Clearwater Paper Corp., 144A, 7.125%, 11/1/2018			65,000		67,112
Cliffs Natural Resources, Inc., 6.25%, 10/1/2040			290,000		282,325
Clondalkin Acquisition BV, 144A, 2.302%***, 12/15/2013			75,000		71,812
		Principal Amount ($) (a)		Value ($)

Corporacion Nacional del Cobre de Chile, 144A, 3.75%, 11/4/2020			130,000		123,180
CPG International I, Inc., 10.5%, 7/1/2013			130,000		132,600
Crown Americas LLC, 7.625%, 5/15/2017			30,000		32,250
Crown European Holdings SA, 144A, 7.125%, 8/15/2018	EUR		50,000		69,655
Dow Chemical Co.:
8.55%, 5/15/2019			290,000		363,442
9.4%, 5/15/2039			145,000		210,457
Essar Steel Algoma, Inc., 144A, 9.375%, 3/15/2015			240,000		241,500
Exopack Holding Corp., 11.25%, 2/1/2014			160,000		166,000
FMG Resources August 2006 Pty Ltd., 144A, 7.0%, 11/1/2015			25,000		25,625
GEO Specialty Chemicals, Inc.:
144A, 7.5%, 3/31/2015 (PIK)			120,175		103,350
10.0%, 3/31/2015			119,040		108,326
Georgia-Pacific LLC:
144A, 5.4%, 11/1/2020			145,000		143,358
144A, 7.125%, 1/15/2017			35,000		37,275
144A, 8.25%, 5/1/2016			65,000		73,369
Graphic Packaging International, Inc.:
7.875%, 10/1/2018			10,000		10,475
9.5%, 6/15/2017			130,000		141,862
Greif, Inc., 7.75%, 8/1/2019			195,000		213,525
Hexcel Corp., 6.75%, 2/1/2015			280,000		285,600
Huntsman International LLC:
8.625%, 3/15/2020			60,000		65,250
144A, 8.625%, 3/15/2021			25,000		27,000
International Paper Co., 7.95%, 6/15/2018			145,000		172,545
Lyondell Chemical Co., 144A, 8.0%, 11/1/2017			100,000		110,625
Millar Western Forest Products Ltd., 7.75%, 11/15/2013			35,000		33,163
Momentive Performance Materials, Inc., 144A, 9.0%, 1/15/2021			230,000		242,650
Nalco Co., 144A, 6.625%, 1/15/2019			45,000		46,013
NewMarket Corp., 7.125%, 12/15/2016			110,000		112,475
Novelis, Inc.:
144A, 8.375%, 12/15/2017			140,000		144,900
144A, 8.75%, 12/15/2020			110,000		114,125
Owens-Brockway Glass Container, Inc., 7.375%, 5/15/2016			110,000		116,875
Radnor Holdings Corp., 11.0%, 3/15/2010**			25,000		3
Rain CII Carbon LLC, 144A, 8.0%, 12/1/2018			45,000		46,125
Silgan Holdings, Inc., 7.25%, 8/15/2016			50,000		53,250
Solo Cup Co., 10.5%, 11/1/2013			170,000		177,650
Teck Resources Ltd., 4.5%, 1/15/2021			310,000		315,181
Texas Industries, Inc., 144A, 9.25%, 8/15/2020			75,000		79,687
		Principal Amount ($) (a)		Value ($)

United States Steel Corp., 7.375%, 4/1/2020			80,000		82,000
Viskase Companies, Inc., 144A, 9.875%, 1/15/2018			145,000		151,163
Wolverine Tube, Inc., 15.0%, 3/31/2012 (PIK)**			91,631		49,481
					6,110,780
Telecommunication Services 7.1%
American Tower Corp., 4.5%, 1/15/2018			270,000		267,642
Buccaneer Merger Sub, Inc., 144A, 9.125%, 1/15/2019			25,000		25,813
CC Holdings GS V LLC, 144A, 7.75%, 5/1/2017			350,000		382,375
Cincinnati Bell, Inc.:
8.375%, 10/15/2020			180,000		172,800
8.75%, 3/15/2018			170,000		159,375
Clearwire Communications LLC:
144A, 12.0%, 12/1/2015			20,000		21,550
144A, 12.0%, 12/1/2017			60,000		62,100
Cricket Communications, Inc.:
144A, 7.75%, 10/15/2020			250,000		238,125
10.0%, 7/15/2015			100,000		107,125
Crown Castle International Corp., 9.0%, 1/15/2015			195,000		214,987
Digicel Group Ltd., 144A, 10.5%, 4/15/2018			100,000		110,000
Digicel Ltd., 144A, 8.25%, 9/1/2017			300,000		307,500
ERC Ireland Preferred Equity Ltd., 144A, 8.05%***, 2/15/2017 (PIK)	EUR		78,745		9,538
Frontier Communications Corp.:
6.25%, 1/15/2013			36,000		37,980
7.875%, 4/15/2015			10,000		10,925
8.25%, 4/15/2017			70,000		76,825
8.5%, 4/15/2020			90,000		98,325
8.75%, 4/15/2022			10,000		10,900
Grupo Iusacell Celular SA de CV, 10.0%, 3/31/2012**			29,280		10,834
Hughes Network Systems LLC, 9.5%, 4/15/2014			150,000		154,687
Intelsat Corp., 9.25%, 6/15/2016			380,000		410,400
Intelsat Jackson Holdings SA:
144A, 7.25%, 10/15/2020			120,000		121,200
11.25%, 6/15/2016			60,000		64,650
Intelsat Luxembourg SA, 11.5%, 2/4/2017 (PIK)			200,000		221,000
Intelsat Subsidiary Holding Co. SA, 8.875%, 1/15/2015			195,000		200,362
iPCS, Inc., 2.412%***, 5/1/2013			35,000		33,687
MetroPCS Wireless, Inc.:
6.625%, 11/15/2020			90,000		85,725
7.875%, 9/1/2018			25,000		25,938
Nextel Communications, Inc., Series E, 6.875%, 10/31/2013			60,000		60,150
Qwest Communications International, Inc.:
144A, 7.125%, 4/1/2018			55,000		56,925
8.0%, 10/1/2015			60,000		64,500
Qwest Corp., 7.5%, 10/1/2014			285,000		319,200
		Principal Amount ($) (a)		Value ($)

SBA Telecommunications, Inc.:
8.0%, 8/15/2016			35,000		37,887
8.25%, 8/15/2019			25,000		27,313
Sprint Nextel Corp., 8.375%, 8/15/2017 (b)			115,000		123,337
Telefonica Emisiones SAU, 6.421%, 6/20/2016			290,000		316,968
Telesat Canada, 11.0%, 11/1/2015			180,000		202,050
Verizon Communications, Inc., 8.95%, 3/1/2039			110,000		156,760
West Corp.:
144A, 7.875%, 1/15/2019			50,000		50,875
144A, 8.625%, 10/1/2018			15,000		15,900
Windstream Corp.:
7.0%, 3/15/2019			60,000		59,100
7.875%, 11/1/2017			135,000		141,919
8.125%, 9/1/2018			70,000		73,500
8.625%, 8/1/2016			10,000		10,525
					5,359,277
Utilities 3.7%
AES Corp.:
8.0%, 10/15/2017			10,000		10,575
8.0%, 6/1/2020			175,000		185,500
Calpine Corp.:
144A, 7.5%, 2/15/2021			80,000		78,800
144A, 7.875%, 7/31/2020			95,000		96,187
Edison Mission Energy, 7.0%, 5/15/2017			65,000		51,513
Ferrellgas LP, 144A, 6.5%, 5/1/2021			20,000		19,500
Korea Gas Corp., 144A, 4.25%, 11/2/2020			185,000		175,520
Mirant Americas Generation LLC, 8.3%, 5/1/2011			230,000		233,450
Mirant North America LLC, 7.375%, 12/31/2013			60,000		61,130
NRG Energy, Inc.:
7.25%, 2/1/2014			390,000		397,800
7.375%, 2/1/2016			660,000		676,500
7.375%, 1/15/2017			90,000		92,700
144A, 8.25%, 9/1/2020			85,000		87,125
Oncor Electric Delivery Co., 144A, 5.25%, 9/30/2040			130,000		124,871
RRI Energy, Inc., 7.875%, 6/15/2017			25,000		24,250
San Diego Gas & Electric Co., 6.0%, 6/1/2026			180,000		207,521
Suburban Propane Partners LP, 7.375%, 3/15/2020			15,000		16,013
Toledo Edison Co., 7.25%, 5/1/2020			230,000		271,872
					2,810,827
Total Corporate Bonds (Cost $47,107,385)					48,428,460

Mortgage-Backed Securities Pass-Throughs 5.5%
Federal National Mortgage Association, 4.0%, 10/1/2023 (c)			1,000,000		1,029,610
Government National Mortgage Association, 4.5%, 7/1/2039 (c)			3,000,000		3,115,078
Total Mortgage-Backed Securities Pass-Throughs (Cost $4,088,477)					4,144,688
		Principal Amount ($) (a)		Value ($)

Commercial Mortgage-Backed Securities 3.1%
Citigroup Commercial Mortgage Trust, "AMP3", Series 2006-C5, 144A, 5.501%, 10/15/2049			127,595		113,277
Credit Suisse Mortgage Capital Certificates Trust, "A2", Series 2007-C1, 5.268%, 2/15/2040			814,000		826,456
CS First Boston Mortgage Securities Corp., "H", Series 2002-CKP1, 144A, 7.191%***, 12/15/2035			290,000		286,115
JPMorgan Chase Commercial Mortgage Securities Corp.:
"F", Series 2004-LN2, 144A, 5.452%***, 7/15/2041			500,000		322,735
"A4", Series 2006-LDP7, 5.872%***, 4/15/2045			140,000		153,105
LB-UBS Commercial Mortgage Trust, "A3", Series 2006-C7, 5.347%, 11/15/2038			440,000		465,194
Wachovia Bank Commercial Mortgage Trust, "A4", Series 2005-C22, 5.27%***, 12/15/2044			140,000		150,078
Total Commercial Mortgage-Backed Securities (Cost $2,338,559)					2,316,960

Collateralized Mortgage Obligations 3.5%
Banc of America Mortgage Securities, "2A2", Series 2004-A, 3.493%***, 2/25/2034			197,420		181,352
Bear Stearns Adjustable Rate Mortgage Trust, "2A1", Series 2005-11, 3.436%***, 12/25/2035			258,663		247,466
Citicorp Mortgage Securities, Inc., "1A7", Series 2006-4, 6.0%, 8/25/2036			60,243		60,157
Countrywide Home Loans, "2A5", Series 2004-13, 5.75%, 8/25/2034			180,689		164,321
Federal National Mortgage Association, "BI", Series 2010-13, Interest Only, 5.0%, 12/25/2038			445,564		63,930
Government National Mortgage Association, "XA", Series 2009-118, 5.0%, 12/20/2039			347,329		344,906
JPMorgan Mortgage Trust, "2A1", Series 2006-A2, 5.72%***, 4/25/2036			711,435		655,719
Merrill Lynch Mortgage Investors Trust:
"2A1A", Series 2005-A9, 2.7%***, 12/25/2035			119,270		119,090
"2A", Series 2003-A6, 3.19%***, 10/25/2033			130,698		127,749
Morgan Stanley Mortgage Loan Trust, "5A5", Series 2005-4, 5.5%, 8/25/2035			133,860		130,053
Vericrest Opportunity Loan Transferee, "M", Series 2010-NPL1, 144A, 6.0%, 5/25/2039			149,454		146,521
		Principal Amount ($) (a)		Value ($)

Washington Mutual Mortgage Pass-Through Certificates Trust, "1A1", Series 2005-AR12, 2.721%***, 10/25/2035			119,151		114,132
Wells Fargo Mortgage-Backed Securities Trust:
"A3", Series 2005-4, 5.0%, 4/25/2035			115,095		114,565
"A19", Series 2006-11, 6.0%, 9/25/2036			124,533		124,412
Total Collateralized Mortgage Obligations (Cost $2,503,586)					2,594,373

Government & Agency Obligations 17.2%
Other Government Related (d) 5.3%
Citibank NA, FDIC Guaranteed, 0.316%***, 5/7/2012			650,000		650,528
International Bank for Reconstruction & Development, 5.25%***, 4/9/2025			290,000		284,461
JPMorgan Chase & Co., Series 3, FDIC Guaranteed, 0.553%***, 12/26/2012			232,000		233,177
Kreditanstalt fuer Wiederaufbau, 1.35%, 1/20/2014	JPY		185,000,000		2,347,476
Pemex Project Funding Master Trust, 5.75%, 3/1/2018			460,000		491,826
					4,007,468
Sovereign Bonds 7.0%
Federative Republic of Brazil:
8.875%, 10/14/2019			295,000		389,400
12.5%, 1/5/2016	BRL		250,000		174,398
Government of Canada, 4.5%, 6/1/2015	CAD		350,000		384,461
Republic of Argentina, 5.83%, 12/31/2033	ARS		375		176
Republic of El Salvador, 144A, 7.65%, 6/15/2035			156,000		164,970
Republic of Lithuania:
144A, 5.125%, 9/14/2017			205,000		201,965
144A, 7.375%, 2/11/2020			195,000		215,404
Republic of Panama, 9.375%, 1/16/2023			500,000		688,750
Republic of Peru, 7.35%, 7/21/2025			285,000		346,703
Republic of Poland, 6.375%, 7/15/2019			345,000		386,473
Republic of South Africa, 6.875%, 5/27/2019			220,000		257,675
Republic of Uruguay:
7.625%, 3/21/2036			60,000		71,250
9.25%, 5/17/2017			105,000		135,450
Republic of Venezuela, 9.25%, 9/15/2027			150,000		111,750
Russian Federation, REG S, 7.5%, 3/31/2030			478,731		553,652
United Kingdom Treasury Bond, 3.75%, 9/7/2019	GBP		750,000		1,206,322
					5,288,799
US Government Sponsored Agency 0.1%
Federal Home Loan Mortgage Corp., 1.125%, 12/15/2011			100,000		100,695
		Principal Amount ($) (a)		Value ($)

US Treasury Obligations 4.8%
US Treasury Bill, 0.185%****, 3/17/2011 (e)			99,000		98,978
US Treasury Bond, 4.375%, 5/15/2040			551,000		553,667
US Treasury Notes:
0.875%, 2/29/2012			2,250,000		2,263,095
2.625%, 11/15/2020			759,000		715,950
					3,631,690
Total Government & Agency Obligations (Cost $12,104,046)					13,028,652

Loan Participations and Assignments 3.7%
Senior Loans*** 3.2%
Buffets, Inc.:
Letter of Credit, First Lien, 7.539%, 4/22/2015 (PIK)			11,948		9,141
Term Loan B, 12.0%, 4/21/2015 (PIK)			69,862		65,636
Burger King Corp., New Term Loan B, 6.25%, 10/19/2016			85,000		86,410
Charter Communications Operating LLC:
Replacement Term Loan, 2.27%, 3/6/2014			18,104		17,904
Term Loan, 3.56%, 9/6/2016			208,149		205,287
New Term Loan, 7.25%, 3/6/2014			94,108		97,945
Clear Channel Communication, Term Loan B, LIBOR plus 3.65%, 1/28/2016			110,000		95,920
Dunkin' Brands, Inc., Term Loan B, 5.75%, 11/23/2017			70,000		70,943
Ford Motor Co., Term Loan B1, 3.02%, 12/16/2013			183,850		183,803
Hawker Beechcraft Acquisition Co., LLC:
Term Loan, 2.261%, 3/26/2014			165,210		145,300
Letter of Credit, 2.289%, 3/26/2014			9,903		8,709
IASIS Healthcare LLC, Term Loan, 5.538%, 6/13/2014 (PIK)			109,416		105,559
Kabel Deutschland GmbH, Term Loan, 8.272%, 11/19/2014 (PIK)	EUR		93,849		126,321
Momentive Specialty Chemicals, Inc.:
Term Loan C1, 2.563%, 5/6/2013			114,379		112,556
Term Loan C2, 2.563%, 5/6/2013			58,987		58,046
Nuveen Investments, Inc., First Lien, Term Loan, 3.303%, 11/13/2014			115,000		110,137
OSI Restaurant Partners LLC:
Term Loan, 2.563%, 6/14/2013			11,007		10,537
Term Loan B, 2.625%, 6/14/2014			113,924		109,062
Pinafore LLC, Term Loan B, 6.25%, 9/29/2016			522,909		530,918
Roundy's Supermarkets, Inc., Second Lien, Term Loan, LIBOR plus 8.0%, 4/18/2016			65,000		66,097
		Principal Amount ($) (a)		Value ($)

Syniverse Technologies, Inc., Term Loan B, LIBOR plus 3.75%, 12/21/2017			50,000		50,641
Tribune Co., Term Loan B, LIBOR plus 3.0%, 6/4/2014**			88,875		62,124
US Foodservice, Inc., Term Loan B, 2.76%, 7/3/2014			84,346		77,556
VML US Finance LLC:
Delayed Draw Term Loan B, 4.8%, 5/25/2012			18,154		18,177
Term Loan B, 4.8%, 5/27/2013			31,429		31,469
					2,456,198
Sovereign Loans 0.5%
BOM Capital PLC, 144A, 6.699%, 3/11/2015			205,000		211,150
VTB Bank, 144A, 6.875%, 5/29/2018			145,000		153,337
					364,487
Total Loan Participations and Assignments (Cost $2,735,317)					2,820,685

Preferred Securities 0.7%
Financials 0.6%
Capital One Capital VI, 8.875%, 5/15/2040			330,000		343,613
USB Capital XIII Trust, 6.625%, 12/15/2039			145,000		148,107
					491,720
Materials 0.1%
Hercules, Inc., 6.5%, 6/30/2029			95,000		73,625
Total Preferred Securities (Cost $526,972)					565,345

	Units		Value ($)

Other Investments 0.0%
Consumer Discretionary
AOT Bedding Super Holdings LLC* (Cost $4,000)		4		4,000

	Shares		Value ($)

Common Stocks 0.0%
Consumer Discretionary 0.0%
Buffets Restaurants Holdings, Inc.*		2,318		8,113
Dex One Corp.*		540		4,029
SuperMedia, Inc.*		99		862
Trump Entertainment Resorts, Inc.*		6		109
Vertis Holdings, Inc.*		940		0
				13,113
	Shares		Value ($)

Industrials 0.0%
Congoleum Corp.*		125,000		0
Quad Graphics, Inc.*		69		2,847
				2,847
Materials 0.0%
GEO Specialty Chemicals, Inc.*		2,058		1,749
Total Common Stocks (Cost $279,466)				17,709

Preferred Stock 0.1%
Financials
Ally Financial, Inc., Series G, 144A, 7.0% (Cost $100,132)		110		103,967

Warrants 0.0%
Consumer Discretionary 0.0%
Reader's Digest Association, Inc., Expiration Date 2/19/2014*		159		5
Materials 0.0%
Hercules Trust II, Expiration Date 3/31/2029*		85		967
Total Warrants (Cost $17,432)				972

	Contracts		Value ($)

Call Options Purchased 0.0%
Floating Rate — LIBOR, Effective Date 5/16/2011, Expiration Date 5/16/2012, Cap Rate 3.0% (Cost $54,460)		14,000,000		467

	Shares		Value ($)

Securities Lending Collateral 0.2%
Daily Assets Fund Institutional, 0.27% (f) (g) (Cost $122,734)		122,734		122,734

Cash Equivalents 5.6%
Central Cash Management Fund, 0.19% (f) (Cost $4,269,126)		4,269,126		4,269,126

	% of Net Assets			Value ($)

Total Investment Portfolio (Cost $76,251,692)+		103.6			78,418,138
Other Assets and Liabilities, Net		(3.6	)		(2,711,284	)
Net Assets		100.0			75,706,854

* Non-income producing security.

** Non-income producing security. Issuer has defaulted on the payment of principal or interest or has filed for bankruptcy. The following table represents bonds and senior loans that are in default:

Securities	Coupon			Maturity Date	Principal Amount ($)			Acquisition Cost ($)		Value ($)
CanWest MediaWorks LP		9.25	%	8/1/2015		50,000	USD		50,000		8,500
Fontainebleau Las Vegas Holdings LLC		11.0	%	6/15/2015		65,000	USD		65,225		228
Grupo Iusacell Celular SA de CV		10.0	%	3/31/2012		29,280	USD		27,863		10,834
Radnor Holdings Corp.		11.0	%	3/15/2010		25,000	USD		15,888		3
Tribune Co.	LIBOR plus 3.0%			6/4/2014		88,875	USD		88,819		62,124
Tropicana Entertainment LLC		9.625	%	12/15/2014		150,000	USD		122,979		77
Vertis, Inc.		13.5	%	4/1/2014		24,348	USD		9,890		730
Wolverine Tube, Inc.		15.0	%	3/31/2012		91,631	USD		91,631		49,481
Young Broadcasting, Inc.		8.75	%	1/15/2014		275,000	USD		224,631		3
									696,926		131,980

**** Annualized yield at time of purchase; not a coupon rate.

+ The cost for federal income tax purposes was $76,320,197. At December 31, 2010, net unrealized appreciation for all securities based on tax cost was $2,097,941. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $3,741,864 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $1,643,923.

(a) Principal amount stated in US dollars unless otherwise noted.

(b) All or a portion of these securities were on loan (see Notes to Financial Statements). The value of all securities loaned at December 31, 2010 amounted to $116,902, which is 0.2% of net assets.

(d) Government-backed debt issued by financial companies or government sponsored enterprises.

(e) At December 31, 2010, this security has been pledged, in whole or in part, to cover initial margin requirements for open futures contracts.

(f) Affiliated fund managed by Deutsche Investment Management Americas Inc. The rate shown is the annualized seven-day yield at period end.

(g) Represents collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates.

FDIC: Federal Deposit Insurance Corp.

PIK: Denotes that all or a portion of the income is paid in-kind.

REIT: Real Estate Investment Trust

At December 31, 2010, open futures contracts purchased were as follows:

Futures	Currency	Expiration Date	Contracts		Notional Value ($)		Unrealized Appreciation/ (Depreciation) ($)
10 Year Australian Treasury Bond	AUD	3/15/2011		34		3,592,345		26,808
10 Year US Treasury Note	USD	3/22/2011		47		5,660,563		(153,853	)
2 Year US Treasury Note	USD	3/31/2011		74		16,199,063		11,578
DAX Index	EUR	3/18/2011		1		231,414		(4,326	)
Federal Republic of Germany Euro-Bund	EUR	3/8/2011		7		1,172,162		10,009
Federal Republic of Germany Euro-Schatz	EUR	3/8/2011		5		728,317		(811	)
FTSE 100 Index	GBP	3/18/2011		6		551,266		5,332
Hang Seng Index	HKD	1/28/2011		1		148,080		1,988
IBEX 35 Index	EUR	1/21/2011		1		130,837		(3,337	)
S&P 500 E-Mini Index	USD	3/18/2011		6		375,900		5,130
TOPIX Index	JPY	3/11/2011		3		331,075		6,577
United Kingdom Long Gilt Bond	GBP	3/29/2011		16		2,980,748		(5,477	)
Total net unrealized depreciation								(100,382	)

At December 31, 2010, open futures contracts sold were as follows:

Futures	Currency	Expiration Date	Contracts		Notional Value ($)		Unrealized Appreciation/ (Depreciation) ($)
10 Year Canadian Government Bond	CAD	3/22/2011		19		2,341,989		(9,848	)
10 Year Japanese Government Bond	JPY	3/10/2011		6		10,391,181		(50,690	)
AEX Index	EUR	1/21/2011		2		189,648		(1,550	)
ASX SPI 200 Index	AUD	3/17/2011		3		362,838		3,375
CAC 40 Index	EUR	1/21/2011		3		152,719		3,668
DJ Euro Stoxx 50 Index	EUR	3/18/2011		11		410,698		10,437
Federal Republic of Germany Euro-Bund	EUR	3/8/2011		42		7,032,973		45,686
FTSE MIB Index	EUR	3/18/2011		2		269,999		7,416
Russell 2000 E-Mini Index	USD	3/18/2011		1		78,230		(865	)
S&P TSX 60 Index	CAD	3/17/2011		1		154,300		(2,547	)
Total net unrealized appreciation								5,082

At December 31, 2010, open written interest rate option contracts were as follows:

Effective/ Expiration Date	Cash Flows Paid		Contract Amount				Strike Rate (%)				Value ($)				Premiums Received ($)				Unrealized Depreciation ($)
Call Option 5/16/2011 5/16/2012	30-year USD Swap Rate — 10-year USD Swap Rate			29,000,000				0.6				(35,163	)			30,740				(4,423	)

At December 31, 2010, open credit default swap contracts sold were as follows:

Effective/ Expiration Date	Notional Amount ($) (i)			Fixed Cash Flows Received			Underlying Debt Obligation/Quality Rating (h)	Value ($)			Upfront Payments Paid/ (Received) ($)			Unrealized Appreciation/ (Depreciation) ($)
9/21/2009 12/20/2014		290,000	1		1.0	%	Berkshire Hathaway Finance Corp., 4.625%, 10/15/2013, AA		(1,114	)		(7,340	)		6,226
6/21/2010 9/20/2013		70,000	2		5.0	%	Ford Motor Co., 6.5%, 8/1/2018, B		7,023			858			6,165
6/21/2010 9/20/2015		90,000	3		5.0	%	Ford Motor Co., 6.5%, 8/1/2018, B		10,162			(1,604	)		11,766
3/22/2010 6/20/2015		290,000	4		1.0	%	Freeport-McMoRan Copper & Gold, Inc., 8.375%, 4/1/2017, BBB-		(138	)		(1,646	)		1,508
9/20/2010 12/20/2015		1,630,000	5		1.0	%	Markit iTraxx SovX Western Europe		(78,525	)		(50,148	)		(28,377	)
Total net unrealized depreciation															(2,712	)

(h) The quality ratings represent the lower of Moody's Investors Service, Inc. ("Moody's") or Standard & Poor's Corporation ("S&P") credit ratings and are unaudited.

(i) The maximum potential amount of future undiscounted payments that the Fund could be required to make under a credit default swap contract would be the notional amount of the contract. These potential amounts would be partially offset by any recovery values of the referenced debt obligation or net amounts received from the settlement of buy protection credit default swap contracts entered into by the Fund for the same referenced debt obligation.

At December 31, 2010, open interest rate swaps contracts were as follows:

Effective/ Expiration Date	Notional Amount ($)			Cash Flows Paid by the Fund	Cash Flows Received by the Fund	Value ($)			Upfront Payments Paid ($)		Unrealized Depreciation ($)
10/27/2010 10/27/2020		1,500,000	4	Fixed — 4.12%	Floating — LIBOR		(109,121	)		525		(109,646	)
11/24/2010 11/24/2020		1,300,000	6	Fixed — 3.96%	Floating — LIBOR		(71,822	)		591		(72,413	)
10/28/2010 10/28/2025		140,000	4	Fixed — 4.138%	Floating — LIBOR		(4,412	)		—		(4,412	)
11/1/2010 11/1/2025		240,000	6	Fixed — 4.292%	Floating — LIBOR		(21,668	)		—		(21,668	)
11/12/2010 11/12/2025		280,000	4	Fixed — 4.285%	Floating — LIBOR		(8,155	)		—		(8,155	)
11/15/2010 11/15/2025		280,000	6	Fixed — 4.585%	Floating — LIBOR		(23,555	)		—		(23,555	)
11/16/2010 11/16/2025		140,000	4	Fixed — 4.584%	Floating — LIBOR		(2,817	)		—		(2,817	)
11/19/2010 11/19/2025		140,000	6	Fixed — 4.784%	Floating — LIBOR		(11,110	)		—		(11,110	)
11/23/2010 11/23/2025		70,000	4	Fixed — 4.834%	Floating — LIBOR		(924	)		—		(924	)
Total unrealized depreciation												(254,700	)

At December 31, 2010, open total return swap contracts were as follows:

Effective/ Expiration Date		Notional Amount ($)				Fixed Cash Flows Paid			Reference Entity		Value ($)				Upfront Payment Paid ($)				Unrealized Appreciation ($)
5/28/2010 6/1/2012			2,800,000	2			0.45	%	Global Interest Rate Strategy Index			4,545				1,867				2,678

Counterparties:

1 JPMorgan Chase Securities, Inc.

2 Citigroup, Inc.

3 Bank of America

4 Morgan Stanley

5 The Goldman Sachs & Co.

6 Barclays Bank PLC

LIBOR: London InterBank Offered Rate

At December 31, 2010, the Fund had the following open forward foreign currency exchange contracts:

Contracts to Deliver

In Exchange For

Settlement Date

Unrealized Appreciation ($)

Counterparty

EUR

1,510,000

USD

2,091,391

1/14/2011

69,078

UBS AG

USD

1,740,512

CAD

1,753,000

1/25/2011

21,681

Bank of New York Mellon Corp.

USD

1,325,283

NOK

7,858,000

1/25/2011

19,708

Bank of New York Mellon Corp.

USD

3,376,310

AUD

3,420,000

1/25/2011

109,775

UBS AG

USD

1,413,474

SEK

9,637,000

1/25/2011

18,182

HSBC Bank USA

USD

509,540

JPY

42,741,000

1/25/2011

17,047

Royal Bank of Scotland PLC

GBP

981,000

USD

1,532,749

1/25/2011

3,583

Royal Bank of Scotland PLC

Total unrealized appreciation

259,054

Contracts to Deliver		In Exchange For		Settlement Date	Unrealized Depreciation ($)			Counterparty
CAD	236,000	USD	235,609	1/14/2011		(1,604	)	Credit Suisse
EUR	200,000	USD	262,132	1/14/2011		(5,724	)	Morgan Stanley
EUR	368,900	USD	488,408	1/20/2011		(4,535	)	JPMorgan Chase Securities, Inc.
EUR	170,000	USD	226,727	1/25/2011		(434	)	Royal Bank of Scotland PLC
NZD	2,974,000	USD	2,212,269	1/25/2011		(100,137	)	UBS AG
CHF	2,415,000	USD	2,514,983	1/25/2011		(68,734	)	HSBC Bank USA
GBP	925,000	USD	1,440,234	2/22/2011		(1,967	)	Morgan Stanley
JPY	195,000,000	USD	2,325,665	2/22/2011		(79,250	)	Morgan Stanley
Total unrealized depreciation						(262,385	)

Currency Abbreviations

ARS Argentine Peso

AUD Australian Dollar

BRL Brazilian Real

CAD Canadian Dollar

CHF Swiss Franc

EUR Euro

GBP British Pound

HKD Hong Kong Dollar

JPY Japanese Yen

NOK Norwegian Krone

NZD New Zealand Dollar

SEK Swedish Krona

USD United States Dollar

For information on the Fund's policy and additional disclosures regarding option contracts, futures contracts, interest rate swap contracts, credit default swap contracts, total return swap contracts and forward foreign currency exchange contracts, please refer to Note B in the accompanying Notes to Financial Statements.

Fair Value Measurements

Assets	Level 1			Level 2			Level 3			Total

Fixed Income Investments (j)
Corporate Bonds	$	—		$	47,884,841		$	543,619		$	48,428,460
Mortgage-Backed Securities Pass-Throughs		—			4,144,688			—			4,144,688
Commercial Mortgage-Backed Securities		—			2,316,960			—			2,316,960
Collateralized Mortgage Obligations		—			2,594,373			—			2,594,373
Government & Agency Obligations		—			12,645,213			284,461			12,929,674
Loan Participations and Assignments		—			2,820,685			—			2,820,685
Preferred Securities		—			565,345			—			565,345
Common Stocks		15,851			—			1,858			17,709
Preferred Stock		—			103,967			—			103,967
Warrants		—			—			972			972
Other Investments		—			—			4,000			4,000
Short-Term Investments		4,391,860			98,978			—			4,490,838
Derivatives (k)		—			287,397			467			287,864
Total	$	4,407,711		$	73,462,447		$	835,377		$	78,705,535
Liabilities
Derivatives (k)	$	(95,300	)	$	(545,462	)	$	(35,163	)	$	(675,925	)
Total	$	(95,300	)	$	(545,462	)	$	(35,163	)	$	(675,925	)

There have been no significant transfers between Level 1 and Level 2 fair value measurements during the year ended December 31, 2010.

(j) See Investment Portfolio for additional detailed categorizations.

(k) Derivatives include value of open options purchased, unrealized appreciation (depreciation) on open futures contracts, credit default swap contracts, interest rate swap contracts, total return swap contracts, forward foreign currency exchange contracts and written options, at value.

Level 3 Reconciliation

The following is a reconciliation of the Fund's Level 3 investments for which significant unobservable inputs were used in determining value:

	Corporate Bonds			Asset-Backed			Government & Agency Obligations			Loan Participations and Assignments			Common Stocks
Balance as of December 31, 2009	$	1,399,392		$	600,572		$	—		$	72,237		$	1,749
Total realized gain (loss)		—			57,024			—			3,736			—
Change in unrealized appreciation (depreciation)		141,636			(25,710	)		(5,539	)		7,898			(12	)
Amortization premium/ discount		16,809			—			—			407			—
Net purchases (sales)		(1,000,000	)		(631,886	)		290,000			(84,278	)		121
Transfers into Level 3		8,402	(l)		—			—			—			—
Transfers (out) of Level 3		(22,620	) (m)		—			—			—			—
Balance as of December 31, 2010	$	543,619		$	—		$	284,461		$	—		$	1,858
Net change in unrealized appreciation (depreciation) from investments still held as of December 31, 2010	$	(59,208	)	$	—		$	(5,539	)	$	—		$	(12	)

	Warrants			Convertible Preferred Stocks			Call Options Purchased			Other Investments		Total			Written Options
Balance as of December 31, 2009	$	625		$	0		$	—		$	—	$	2,074,575		$	—
Total realized gain (loss)		—			(4,191	)		—			—		56,569			—
Change in unrealized appreciation (depreciation)		347			4,191			(53,993	)		0		68,818			(4,423	)
Amortization premium/ discount		—			—			—			—		17,216			—
Net purchases (sales)		—			0			54,460			4,000		(1,367,583	)		(30,740	)
Transfers into Level 3		—			—			—			—		8,402			—
Transfers (out) of Level 3			—		—			—			—		(22,620	)		—
Balance as of December 31, 2010	$	972		$	—		$	467		$	4,000	$	835,377		$	(35,163	)
Net change in unrealized appreciation (depreciation) from investments still held as of December 31, 2010	$	972		$	—		$	(53,993	)	$	0	$	(117,780	)	$	(4,423	)

Transfers between price levels are recognized at the beginning of the reporting period.

(l) The investment was transferred from Level 2 to Level 3 because of the lack of observable market data due to a decrease in market activity.

(m) The investment was transferred from Level 3 to Level 2 as a result of the availability of a pricing source supported by observable inputs.

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

Statement of Assets and Liabilities

as of December 31, 2010
Assets
Investments: Investments in unaffiliated securities, at value (cost $71,859,832) — including $116,902 of securities loaned	$	74,026,278
Investment in Daily Assets Fund Institutional (cost $122,734)*		122,734
Investment in Central Cash Management Fund (cost $4,269,126)		4,269,126
Total investments, at value (cost $76,251,692)		78,418,138
Cash		185,479
Foreign currency, at value (cost $122,513)		124,704
Deposit with brokers for open futures contracts		918,646
Receivable for investments sold		104,426
Interest receivable		1,081,310
Upfront payments paid on swaps		3,841
Unrealized appreciation on open swap contracts		28,343
Unrealized appreciation on open forward foreign currency exchange contracts		259,054
Foreign taxes recoverable		4,684
Other assets		447
Total assets		81,129,072
Liabilities
Payable for investments purchased		280,508
Payable for investments purchased — delayed delivery securities		4,097,602
Payable upon return of securities loaned		122,734
Payable for daily variation margin on open futures contracts		86,632
Payable for Fund shares redeemed		64,777
Options written, at value (premiums received $30,740)		35,163
Upfront payments received on swaps		60,738
Unrealized depreciation on open swap contracts		283,077
Unrealized depreciation on open forward foreign currency exchange contracts		262,385
Accrued management fee		19,509
Other accrued expenses and payables		109,093
Total liabilities		5,422,218
Net assets, at value	$	75,706,854
Net Assets Consist of
Undistributed net investment income		4,058,018
Net unrealized appreciation (depreciation) on: Investments		2,166,446
Swap contracts		(254,734	)
Written options		(4,423	)
Futures		(95,300	)
Foreign currency		8,924
Accumulated net realized gain (loss)		(944,838	)
Paid-in capital		70,772,761
Net assets, at value	$	75,706,854
Class A Net Asset Value, offering and redemption price per share ($75,706,854 ÷ 6,329,747 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)	$	11.96

* Represents collateral on securities loaned.

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

Statement of Operations

for the year ended December 31, 2010
Investment Income
Income: Interest (net of foreign taxes withheld of $164)	$	4,821,293
Income distributions — Central Cash Management Fund		10,113
Securities lending income, including income from Daily Assets Fund Institutional, net of borrower rebates		2,499
Total income		4,833,905
Expenses: Management fee		410,735
Administration fee		74,679
Services to shareholders		1,730
Custodian fee		70,329
Legal fees		17,266
Audit and tax fees		66,284
Trustees' fees and expenses		5,347
Reports to shareholders		17,398
Other		42,290
Total expenses before expense reductions		706,058
Expense reductions		(67,414	)
Total expenses after expense reductions		638,644
Net investment income (loss)		4,195,261
Realized and Unrealized Gain (Loss)
Net realized gain (loss) from: Investments		1,957,117
Swap contracts		(37,558	)
Futures		59,063
Foreign currency		404,118
		2,382,740
Change in net unrealized appreciation (depreciation) on: Investments		1,121,385
Swap contracts		(309,862	)
Written options		(4,423	)
Futures		(1,691	)
Foreign currency		(282,893	)
		522,516
Net gain (loss)		2,905,256
Net increase (decrease) in net assets resulting from operations	$	7,100,517

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

Statement of Changes in Net Assets

	Years Ended December 31,
Increase (Decrease) in Net Assets	2010			2009
Operations: Net investment income	$	4,195,261		$	4,244,300
Net realized gain (loss)		2,382,740			564,606
Change in net unrealized appreciation (depreciation)		522,516			9,572,764
Net increase (decrease) in net assets resulting from operations		7,100,517			14,381,670
Distributions to shareholders from: Net investment income: Class A		(4,806,010	)		(3,708,667	)
Fund share transactions: Class A Proceeds from shares sold		11,245,997			9,943,530
Shares converted*		—			44,195
Reinvestment of distributions		4,806,010			3,708,667
Payments for shares redeemed		(16,514,815	)		(23,212,559	)
Net increase (decrease) in net assets from Class A share transactions		(462,808	)		(9,516,167	)
Class B Shares converted*		—			(44,195	)
Payments for shares redeemed		—			(151	)
Net increase (decrease) in net assets from Class B share transactions		—			(44,346	)
Increase (decrease) in net assets		1,831,699			1,112,490
Net assets at beginning of period		73,875,155			72,762,665
Net assets at end of period (including undistributed net investment income of $4,058,018 and $4,333,267, respectively)	$	75,706,854		$	73,875,155
Other Information
Class A Shares outstanding at beginning of period		6,362,456			7,250,530
Shares sold		957,272			943,043
Shares converted*		—			4,547
Shares issued to shareholders in reinvestment of distributions		420,473			392,867
Shares redeemed		(1,410,454	)		(2,228,531	)
Net increase (decrease) in Class A shares		(32,709	)		(888,074	)
Shares outstanding at end of period		6,329,747			6,362,456
Class B Shares outstanding at beginning of period		—			4,594
Shares converted*		—			(4,579	)
Shares redeemed		—			(15	)
Net increase (decrease) in Class B shares		—			(4,594	)
Shares outstanding at end of period		—			—

* On March 6, 2009, Class B shares converted into Class A shares.

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

Financial Highlights

Class A Years Ended December 31,	2010			2009			2008			2007			2006
Selected Per Share Data
Net asset value, beginning of period	$	11.61		$	10.03		$	11.70		$	11.80		$	11.50
Income (loss) from investment operations: Net investment incomea		.66			.63			.55			.63			.62
Net realized and unrealized gain (loss)		.47			1.50			(1.38	)		(.01	)		.36
Total from investment operations		1.13			2.13			(.83	)		.62			.98
Less distributions from: Net investment income		(.78	)		(.55	)		(.69	)		(.72	)		(.57	)
Net realized gains		—			—			(.15	)		—			(.11	)
Total distributions		(.78	)		(.55	)		(.84	)		(.72	)		(.68	)
Net asset value, end of period	$	11.96		$	11.61		$	10.03		$	11.70		$	11.80
Total Return (%)		10.05	b		22.73	b		(7.75	)b		5.43	b		8.98
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		76			74			73			100			86
Ratio of expenses before expense reductions (%)		.95			.86			.89			.84			.85
Ratio of expenses after expense reductions (%)		.86			.80			.87			.83			.85
Ratio of net investment income (%)		5.62			5.96			5.06			5.50			5.47
Portfolio turnover rate (%)		167			370			234			147			143
a Based on average shares outstanding during the period. b Total return would have been lower had certain expenses not been reduced.

Performance Summary December 31, 2010

DWS Strategic Value VIP

The gross expense ratios of the Fund, as stated in the fee table of the prospectus dated May 1, 2010 are 0.80% and 1.11% for Class A and Class B shares, respectively, and may differ from the expense ratios disclosed in the Financial Highlights tables in this report.

Risk Considerations

Investing in derivatives entails special risks relating to liquidity, leverage and credit that may reduce returns and/or increase volatility. Stocks may decline in value. See the prospectus for details.

Fund returns for all periods shown reflect a fee waiver and/or expense reimbursement. Without this waiver/reimbursement, returns would have been lower.

Growth of an Assumed $10,000 Investment in DWS Strategic Value VIP
[] DWS Strategic Value VIP — Class A [] S&P 500® Index		The Standard & Poor's 500® (S&P 500) Index is an unmanaged, capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. Index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

Yearly periods ended December 31

Comparative Results
DWS Strategic Value VIP		1-Year			3-Year			5-Year			10-Year
Class A	Growth of $10,000	$	11,252		$	7,617		$	8,875		$	12,012
Class A	Average annual total return		12.52	%		-8.68	%		-2.36	%		1.85	%
S&P 500 Index	Growth of $10,000	$	11,506		$	9,168		$	11,199		$	11,507
S&P 500 Index	Average annual total return		15.06	%		-2.86	%		2.29	%		1.41	%
DWS Strategic Value VIP		1-Year			3-Year			5-Year			Life of Class*
Class B	Growth of $10,000	$	11,213		$	7,543		$	8,721		$	12,809
Class B	Average annual total return		12.13	%		-8.97	%		-2.70	%		2.95	%
S&P 500 Index	Growth of $10,000	$	11,506		$	9,168		$	11,199		$	15,038
S&P 500 Index	Average annual total return		15.06	%		-2.86	%		2.29	%		4.92	%

The growth of $10,000 is cumulative.

* The Fund commenced offering Class B shares on July 1, 2002. Index returns began on June 30, 2002.

Information About Your Fund's Expenses

DWS Strategic Value VIP

The tables illustrate your Fund's expenses in two ways:

Expenses and Value of a $1,000 Investment for the six months ended December 31, 2010
Actual Fund Return	Class A		Class B
Beginning Account Value 7/1/10	$	1,000.00	$	1,000.00
Ending Account Value 12/31/10	$	1,226.20	$	1,223.70
Expenses Paid per $1,000*	$	4.71	$	6.56
Hypothetical 5% Fund Return	Class A		Class B
Beginning Account Value 7/1/10	$	1,000.00	$	1,000.00
Ending Account Value 12/31/10	$	1,020.97	$	1,019.31
Expenses Paid per $1,000*	$	4.28	$	5.96

Annualized Expense Ratios	Class A		Class B
DWS Variable Series II — DWS Strategic Value VIP	.84%		1.17%

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

Management Summary December 31, 2010

DWS Strategic Value VIP

The US equity market performed well during the past year, gaining 15.06% as measured by the Fund's benchmark, the Standard & Poor's 500® (S&P 500) Index. The Class A shares of the Fund returned 12.52% (unadjusted for contract charges).

The most important factor in the Fund's underperformance was the pro-cyclical bias we held throughout the year. By "pro-cyclical," we mean that we tilted the Fund toward the areas of the market most likely to benefit from an improving economy. This approach worked well during the first three months of the Fund's fiscal year, and again in the fourth quarter rally. However, our pro-cyclical tilt proved to be a significant negative in the April-August 2010 interval, during which elevated concerns about the possibility of a "double-dip" recession weighed heavily on the more economically sensitive areas of the market. Unfortunately, this more than offset the outperformance we generated during the other parts of the year. Other important factors in our underperformance included our underweight in the consumer discretionary sector and our relatively conservative positioning in technology.1

On the plus side, we added value in the energy sector, thanks to both an overweight position and strong stock selection. Our stock selection in the health care, consumer staples and industrials sectors also was additive to performance.

We are disappointed that the Fund failed to keep pace with the benchmark during the past year, but we remain confident in its positioning as we head into 2011. We are focused on owning stocks with high free cash flow, a metric that has correlated with outperformance for individual stocks over time. Free cash flow strength opens the door for a variety of positive developments, including increased dividends, share buybacks and the potential to be acquired at a premium by a competitor. While high free cash flows did not necessarily lead to outperformance for individual stocks during the past year, we believe that the best time to add exposure to a time-tested investment style is when it is out of favor.

In the wake of a financial shock as large as what we experienced in 2008-2009, the process of recovery is bound to be uneven. The result, inevitably, is periodic instability such as what we witnessed in the April-August 2010 time frame.

Thomas Schuessler, PhD

Volker Dosch

Oliver Pfeil, PhD

Portfolio Managers

The Standard & Poor's 500 (S&P 500) Index is an unmanaged, capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

Index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

1 "Overweight" means the Fund holds a higher weighting in a given sector or security than the benchmark. "Underweight" means the Fund holds a lower weighting.

Portfolio Summary

DWS Strategic Value VIP

Asset Allocation (As a % of Investment Portfolio excluding Securities Lending Collateral)	12/31/10	12/31/09

Common Stocks	98%	98%
Cash Equivalents	2%	2%
	100%	100%

Sector Diversification (As a % of Common Stocks)	12/31/10	12/31/09

Energy	22%	13%
Financials	16%	16%
Information Technology	15%	15%
Industrials	11%	12%
Consumer Discretionary	10%	7%
Health Care	9%	14%
Consumer Staples	7%	12%
Telecommunication Services	4%	6%
Materials	3%	4%
Utilities	3%	1%
	100%	100%

Asset allocation and sector diversification are subject to change.

For more complete details about the Fund's investment portfolio, see page 251.

Investment Portfolio December 31, 2010

DWS Strategic Value VIP

	Shares		Value ($)

Common Stocks 98.3%
Consumer Discretionary 10.0%
Automobiles 1.0%
General Motors Co.*		73,980		2,726,903
Hotels Restaurants & Leisure 2.2%
McDonald's Corp.		62,115		4,767,947
MGM Resorts International* (a)		80,000		1,188,000
				5,955,947
Household Durables 0.4%
Newell Rubbermaid, Inc.		60,000		1,090,800
Leisure Equipment & Products 0.8%
Mattel, Inc.		87,213		2,217,826
Media 1.6%
Time Warner, Inc.		131,875		4,242,419
Multiline Retail 1.5%
Target Corp.		64,560		3,881,993
Specialty Retail 1.1%
Bed Bath & Beyond, Inc.*		30,000		1,474,500
Lowe's Companies, Inc.		55,829		1,400,191
				2,874,691
Textiles, Apparel & Luxury Goods 1.4%
VF Corp. (a)		43,799		3,774,598
Consumer Staples 7.0%
Beverages 1.5%
PepsiCo, Inc.		61,068		3,989,572
Food & Staples Retailing 2.0%
CVS Caremark Corp.		88,016		3,060,316
Safeway, Inc. (a)		108,536		2,440,975
				5,501,291
Tobacco 3.5%
Altria Group, Inc.		205,453		5,058,253
Philip Morris International, Inc.		73,109		4,279,070
				9,337,323
Energy 21.4%
Energy Equipment & Services 5.6%
Ensco PLC (ADR)		73,117		3,902,985
National Oilwell Varco, Inc.		43,893		2,951,804
Transocean Ltd.* (a)		58,269		4,050,278
Weatherford International Ltd.* (a)		181,327		4,134,256
				15,039,323
Oil, Gas & Consumable Fuels 15.8%
Apache Corp.		48,056		5,729,717
Chevron Corp.		65,658		5,991,292
ConocoPhillips		114,579		7,802,830
Exxon Mobil Corp.		43,803		3,202,875
Hess Corp.		80,468		6,159,021
Marathon Oil Corp.		131,664		4,875,518
Nexen, Inc.		97,451		2,231,628
Occidental Petroleum Corp.		29,367		2,880,903
Williams Companies, Inc.		135,158		3,341,106
				42,214,890
Financials 15.3%
Capital Markets 1.8%
Janus Capital Group, Inc.		80,000		1,037,600
Legg Mason, Inc.		30,000		1,088,100
	Shares		Value ($)

The Goldman Sachs Group, Inc.		16,213		2,726,378
				4,852,078
Commercial Banks 3.0%
Royal Bank of Canada		50,000		2,618,000
Wells Fargo & Co.		172,565		5,347,789
				7,965,789
Consumer Finance 1.0%
Capital One Financial Corp. (a)		63,978		2,722,904
Diversified Financial Services 5.6%
Citigroup, Inc.*		1,057,545		5,002,188
JPMorgan Chase & Co.		233,319		9,897,392
				14,899,580
Insurance 3.9%
Hartford Financial Services Group, Inc. (a)		154,087		4,081,765
Lincoln National Corp.		130,684		3,634,322
MetLife, Inc.		61,167		2,718,261
				10,434,348
Thrifts & Mortgage Finance 0.0%
Washington Mutual, Inc.*		1,394,944		78,954
Health Care 8.9%
Biotechnology 0.9%
Amgen, Inc.*		43,291		2,376,676
Health Care Providers & Services 3.5%
Aetna, Inc.		99,770		3,043,983
UnitedHealth Group, Inc.		83,959		3,031,759
WellPoint, Inc.*		58,337		3,317,042
				9,392,784
Life Sciences Tools & Services 1.1%
Thermo Fisher Scientific, Inc.*		51,917		2,874,125
Pharmaceuticals 3.4%
Abbott Laboratories		52,809		2,530,079
Mylan, Inc.*		174,984		3,697,412
Novartis AG (ADR) (a)		48,184		2,840,447
				9,067,938
Industrials 10.4%
Aerospace & Defense 5.4%
Honeywell International, Inc.		76,520		4,067,803
ITT Corp. (a)		58,665		3,057,033
United Technologies Corp.		94,868		7,468,009
				14,592,845
Construction & Engineering 0.9%
URS Corp.*		58,652		2,440,510
Industrial Conglomerates 1.5%
General Electric Co.		226,206		4,137,308
Machinery 1.6%
Deere & Co.		50,053		4,156,902
Road & Rail 1.0%
CSX Corp.		41,068		2,653,403
Information Technology 14.8%
Communications Equipment 1.0%
Cisco Systems, Inc.*		135,000		2,731,050
Computers & Peripherals 3.4%
Hewlett-Packard Co.		179,144		7,541,962
Lexmark International, Inc. "A"*		45,000		1,566,900
				9,108,862
	Shares		Value ($)

Electronic Equipment, Instruments & Components 0.5%
Corning, Inc.		70,000		1,352,400
IT Services 2.5%
Accenture PLC "A"		102,451		4,967,849
Computer Sciences Corp.		33,254		1,649,398
				6,617,247
Office Electronics 1.6%
Xerox Corp.		373,129		4,298,447
Semiconductors & Semiconductor Equipment 1.0%
Micron Technology, Inc.* (a)		331,290		2,656,946
Software 4.8%
BMC Software, Inc.*		65,869		3,105,065
Microsoft Corp.		354,564		9,899,427
				13,004,492
Materials 3.4%
Metals & Mining
Agnico-Eagle Mines Ltd. (a)		21,894		1,679,270
BHP Billiton Ltd. (ADR) (a)		20,000		1,858,400
Freeport-McMoRan Copper & Gold, Inc.		23,244		2,791,372
Kinross Gold Corp.		146,385		2,775,459
				9,104,501
Telecommunication Services 4.5%
Diversified Telecommunication Services 2.8%
AT&T, Inc.		146,263		4,297,207
CenturyLink, Inc. (a)		65,928		3,043,896
				7,341,103
	Shares		Value ($)

Wireless Telecommunication Services 1.7%
Vodafone Group PLC (ADR) (a)		175,281		4,632,677
Utilities 2.6%
Electric Utilities 0.6%
FirstEnergy Corp. (a)		43,893		1,624,919
Multi-Utilities 2.0%
PG&E Corp.		58,501		2,798,688
Sempra Energy		48,382		2,539,087
				5,337,775
Total Common Stocks (Cost $225,572,465)				263,304,139

Securities Lending Collateral 14.9%
Daily Assets Fund Institutional, 0.27% (b) (c) (Cost $39,865,520)		39,865,520		39,865,520

Cash Equivalents 2.1%
Central Cash Management Fund, 0.19% (b) (Cost $5,724,962)		5,724,962		5,724,962

	% of Net Assets			Value ($)

Total Investment Portfolio (Cost $271,162,947)+		115.3			308,894,621
Other Assets and Liabilities, Net		(15.3	)		(40,966,695	)
Net Assets		100.0			267,927,926

* Non-income producing security.

+ The cost for federal income tax purposes was $272,059,584. At December 31, 2010, net unrealized appreciation for all securities based on tax cost was $36,835,037. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $50,605,721 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $13,770,684.

(a) All or a portion of these securities were on loan (see Notes to Financial Statements). The value of all securities loaned at December 31, 2010 amounted to $38,874,375, which is 14.5% of net assets.

(b) Affiliated fund managed by Deutsche Investment Management Americas Inc. The rate shown is the annualized seven-day yield at period end.

(c) Represents collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates.

ADR: American Depositary Receipt

Fair Value Measurements

Assets	Level 1		Level 2		Level 3		Total

Common Stocks (d)	$	263,304,139	$	—	$	—	$	263,304,139
Short-Term Investments (d)		45,590,482		—		—		45,590,482
Total	$	308,894,621	$	—	$	—	$	308,894,621

There have been no significant transfers between Level 1 and Level 2 fair value measurements during the year ended December 31, 2010.

(d) See Investment Portfolio for additional detailed categorizations.

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

Statement of Assets and Liabilities

as of December 31, 2010
Assets
Investments: Investments in unaffiliated securities, at value (cost $225,572,465) — including $38,874,375 of securities loaned	$	263,304,139
Investment in Daily Assets Fund Institutional (cost $39,865,520)*		39,865,520
Investment in Central Cash Management Fund (cost $5,724,962)		5,724,962
Total investments at value (cost $271,162,947)		308,894,621
Receivable for Fund shares sold		803
Dividends receivable		426,895
Interest receivable		2,761
Foreign taxes recoverable		2,107
Other assets		1,438
Total assets		309,328,625
Liabilities
Payable upon return of securities loaned		39,865,520
Payable for Fund shares redeemed		154,974
Payable for investments purchased		1,085,769
Accrued management fee		149,132
Other accrued expenses and payables		145,304
Total liabilities		41,400,699
Net assets, at value	$	267,927,926
Net Assets Consist of
Undistributed net investment income		3,522,893
Net unrealized appreciation (depreciation) on: Investments		37,731,674
Foreign currency		64
Accumulated net realized gain (loss)		(141,564,092	)
Paid-in capital		368,237,387
Net assets, at value	$	267,927,926
Class A Net Asset Value, offering and redemption price per share ($266,068,810 ÷ 32,742,109 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)	$	8.13
Class B Net Asset Value, offering and redemption price per share ($1,859,116 ÷ 228,157 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)	$	8.15

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

Statement of Operations

for the year ended December 31, 2010
Investment Income
Income: Dividends (net of foreign taxes withheld of $43,360)	$	5,932,680
Income distributions — Central Cash Management Fund		19,988
Securities lending income, including income from Daily Assets Fund Institutional, net of borrower rebates		32,898
Total income		5,985,566
Expenses: Management fee		1,756,021
Administration fee		264,774
Services to shareholders		20,135
Distribution service fee (Class B)		4,271
Record keeping fees (Class B)		940
Custodian fee		17,404
Professional fees		65,688
Trustees' fees and expenses		9,696
Reports to shareholders		69,429
Other		13,801
Total expenses before expense reductions		2,222,159
Expense reductions		(36,423	)
Total expenses after expense reductions		2,185,736
Net investment income (loss)		3,799,830
Realized and Unrealized Gain (Loss)
Net realized gain (loss) from: Investments		17,969,063
Foreign currency		351
Payments by Affiliates (see Note I)		289,394
		18,258,808
Change in net unrealized appreciation (depreciation) on: Investments		8,466,003
Foreign currency		64
		8,466,067
Net gain (loss)		26,724,875
Net increase (decrease) in net assets resulting from operations	$	30,524,705

* Represents collateral on securities loaned.

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

Statement of Changes in Net Assets

	Years Ended December 31,
Increase (Decrease) in Net Assets	2010			2009
Operations: Net investment income (loss)	$	3,799,830		$	5,183,044
Net realized gain (loss)		18,258,808			(11,128,319	)
Change in net unrealized appreciation (depreciation)		8,466,067			65,208,508
Net increase (decrease) in net assets resulting from operations		30,524,705			59,263,233
Distributions to shareholders from: Net investment income: Class A		(5,244,990	)		(12,778,810	)
Class B		(28,738	)		(81,600	)
Total distributions		(5,273,728	)		(12,860,410	)
Fund share transactions: Class A Proceeds from shares sold		4,504,378			5,209,923
Reinvestment of distributions		5,244,990			12,778,810
Payments for shares redeemed		(50,438,746	)		(90,662,545	)
Net increase (decrease) in net assets from Class A share transactions		(40,689,378	)		(72,673,812	)
Class B Proceeds from shares sold		431,727			544,525
Reinvestment of distributions		28,738			81,600
Payments for shares redeemed		(713,355	)		(1,038,519	)
Net increase (decrease) in net assets from Class B share transactions		(252,890	)		(412,394	)
Increase (decrease) in net assets		(15,691,291	)		(26,683,383	)
Net assets at beginning of period		283,619,217			310,302,600
Net assets at end of period (including undistributed net investment income of $3,522,893 and $4,996,440, respectively)	$	267,927,926		$	283,619,217
Other Information
Class A Shares outstanding at beginning of period		38,269,626			49,642,073
Shares sold		610,579			874,127
Shares issued to shareholders in reinvestment of distributions		674,163			2,576,373
Shares redeemed		(6,812,259	)		(14,822,947	)
Net increase (decrease) in Class A shares		(5,527,517	)		(11,372,447	)
Shares outstanding at end of period		32,742,109			38,269,626
Class B Shares outstanding at beginning of period		265,888			327,546
Shares sold		56,800			86,408
Shares issued to shareholders in reinvestment of distributions		3,675			16,352
Shares redeemed		(98,206	)		(164,418	)
Net increase (decrease) in Class B shares		(37,731	)		(61,658	)
Shares outstanding at end of period		228,157			265,888

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

Financial Highlights

Class A Years Ended December 31,	2010			2009			2008			2007			2006
Selected Per Share Data
Net asset value, beginning of period	$	7.36		$	6.21		$	14.40		$	15.02		$	13.41
Income (loss) from investment operations: Net investment income (loss)a		.11			.12			.22			.29			.27
Net realized and unrealized gain (loss)		.81			1.31			(5.80	)		(.56	)		2.21
Total from investment operations		.92			1.43			(5.58	)		(.27	)		2.48
Less distributions from: Net investment income		(.15	)		(.28	)		(.36	)		(.22	)		(.28	)
Net realized gains		—			—			(2.25	)		(.13	)		(.59	)
Total distributions		(.15	)		(.28	)		(2.61	)		(.35	)		(.87	)
Net asset value, end of period	$	8.13		$	7.36		$	6.21		$	14.40		$	15.02
Total Return (%)		12.52	b		25.30	b		(45.98	)b		(1.86	)		18.74
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		266			282			308			792			992
Ratio of expenses before expense reductions (%)		.84			.80			.81			.78			.77
Ratio of expenses after expense reductions(%)		.82			.76			.80			.78			.77
Ratio of net investment income (%)		1.44			1.89			2.21			1.94			1.87
Portfolio turnover rate (%)		87			91			28			27			20
a Based on average shares outstanding during the period. b Total return would have been lower had certain expenses not been reduced.

Class B Years Ended December 31,	2010			2009			2008			2007			2006
Selected Per Share Data
Net asset value, beginning of period	$	7.38		$	6.22		$	14.41		$	15.02		$	13.39
Income (loss) from investment operations: Net investment income (loss)a		.08			.10			.16			.24			.22
Net realized and unrealized gain (loss)		.81			1.32			(5.79	)		(.56	)		2.19
Total from investment operations		.89			1.42			(5.63	)		(.32	)		2.41
Less distributions from: Net investment income		(.12	)		(.26	)		(.31	)		(.16	)		(.19	)
Net realized gains		—			—			(2.25	)		(.13	)		(.59	)
Total distributions		(.12	)		(.26	)		(2.56	)		(.29	)		(.78	)
Net asset value, end of period	$	8.15		$	7.38		$	6.22		$	14.41		$	15.02
Total Return (%)b		12.13			24.94			(46.16	)		(2.19	)		18.21
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		2			2			2			37			191
Ratio of expenses before expense reduction (%)		1.15			1.11			1.21			1.15			1.16
Ratio of expenses after expense reduction (%)		1.14			1.08			1.17			1.13			1.16
Ratio of net investment income (%)		1.12			1.57			1.84			1.59			1.48
Portfolio turnover rate (%)		87			91			28			27			20
a Based on average shares outstanding during the period. b Total return would have been lower had certain expenses not been reduced.

Performance Summary December 31, 2010

DWS Technology VIP

The gross expense ratios of the Fund, as stated in the fee table of the prospectus dated May 1, 2010 are 0.84% and 1.18% for Class A and Class B shares, respectively, and may differ from the expense ratios disclosed in the Financial Highlights tables in this report.

Risk Considerations

Any Fund that concentrates in a particular segment of the market will generally be more volatile than a fund that invests more broadly. This Fund is non-diversified and can take larger positions in fewer issues, increasing its potential risk. Stocks may decline in value. See the prospectus for details.

Fund returns shown during the 3-year, 5-year and 10-year periods reflect a fee waiver and/or expense reimbursement for Class A shares. Without this waiver/reimbursement, returns would have been lower.

Growth of an Assumed $10,000 Investment in DWS Technology VIP
[] DWS Technology VIP — Class A [] Russell 1000® Growth Index [] S&P® North American Technology Sector Index		The Russell 1000® Growth Index is an unmanaged index that consists of those stocks in the Russell 1000 Index with higher price-to-book ratios and higher forecasted growth values. The S&P North American Technology Sector Index is the technology subindex of the S&P North American Sector Indices. The S&P North American Technology Sector Index family is designed as equity benchmarks for US-traded technology-related securities. Index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

Yearly periods ended December 31

Comparative Results
DWS Technology VIP		1-Year			3-Year			5-Year			10-Year
Class A	Growth of $10,000	$	11,866		$	10,237		$	11,789		$	7,967
Class A	Average annual total return		18.66	%		0.79	%		3.35	%		-2.25	%
Russell 1000 Growth Index	Growth of $10,000	$	11,671		$	9,858		$	12,023		$	10,017
Russell 1000 Growth Index	Average annual total return		16.71	%		-0.47	%		3.75	%		0.02	%
S&P North American Technology Sector Index	Growth of $10,000	$	11,265		$	10,417		$	13,276		$	9,168
S&P North American Technology Sector Index	Average annual total return		12.65	%		1.37	%		5.83	%		-0.86	%
DWS Technology VIP		1-Year			3-Year			5-Year			Life of Class*
Class B	Growth of $10,000	$	11,769		$	10,104		$	11,553		$	16,857
Class B	Average annual total return		17.96	%		0.35	%		2.93	%		6.34	%
Russell 1000 Growth Index	Growth of $10,000	$	11,671		$	9,858		$	12,023		$	15,890
Russell 1000 Growth Index	Average annual total return		16.71	%		-0.47	%		3.75	%		5.60	%
S&P North American Technology Sector Index	Growth of $10,000	$	11,265		$	10,417		$	13,276		$	19,158
S&P North American Technology Sector Index	Average annual total return		12.65	%		1.37	%		5.83	%		7.94	%

The growth of $10,000 is cumulative.

* The Fund commenced offering Class B shares on July 1, 2002. Index returns began on June 30, 2002.

Information About Your Fund's Expenses

DWS Technology VIP

The tables illustrate your Fund's expenses in two ways:

Expenses and Value of a $1,000 Investment for the six months ended December 31, 2010
Actual Fund Return	Class A		Class B
Beginning Account Value 7/1/10	$	1,000.00	$	1,000.00
Ending Account Value 12/31/10	$	1,300.10	$	1,297.60
Expenses Paid per $1,000*	$	5.45	$	7.76
Hypothetical 5% Fund Return	Class A		Class B
Beginning Account Value 7/1/10	$	1,000.00	$	1,000.00
Ending Account Value 12/31/10	$	1,020.47	$	1,018.45
Expenses Paid per $1,000*	$	4.79	$	6.82

Annualized Expense Ratios	Class A		Class B
DWS Variable Series II — DWS Technology VIP	.94%		1.34%

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

Management Summary December 31, 2010

DWS Technology VIP

Technology stocks produced double-digit returns during 2010 — as measured by the 12.65% gain of the Fund's benchmark, the S&P® North American Technology Sector Index — but underperformed the 15.06% return of the Standard & Poor's 500® (S&P 500) Index. The Class A shares of the Fund returned 18.66% (unadjusted for contract charges), outperforming the benchmark by a wide margin.

The Fund's strong performance was largely attributable to the effectiveness of our individual stock selection. Of the many stocks that stood out as winners, the largest contributor was Isilon Systems, Inc.,* a vendor of data storage systems suitable for very large files. The stock performed well due to the effectiveness of the company's new sales strategy, rising demand for its storage products and takeover speculation. Also among the Fund's top contributors were LogMeIn, Inc.,* Apple Inc., Ariba, Inc. and F5 Networks, Inc.

On the negative side, our performance was hurt by an overweight position in Hewlett-Packard Co.1 The stock lagged the broader sector by a wide margin due to the forced departure of esteemed CEO Mark Hurd and the Board's unexpected choice of former SAP CEO Leo Apotheker as his replacement. Other detractors of note included Comverse Technology, Inc. and Google, Inc.

We believe the tech sector continues to present a mix of defensive and offensive characteristics, making it attractive at a time of an uncertain economic outlook. The tech sector also provides investors with the opportunity to take part in a number of compelling longer-term themes. For instance, we favor companies participating in technological trends with significant potential impact on the overall economy, such as cloud computing, mobile data, business analytics and online advertising. Many companies related to these themes are likely to become potential targets for further merger and acquisition (M&A) activity, creating opportunities for bottom-up investors.

Frederic L. Fayolle, CFA

Lead Portfolio Manager

Clark Chang

Walter Holick

Portfolio Managers

The S&P North American Technology Sector Index is an unmanaged, capitalization-weighted index based on a universe of technology-related stocks.

Index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.

1 "Overweight" means the Fund holds a higher weighting in a given sector or security than the benchmark. "Underweight" means the Fund holds a lower weighting.

* Not held in the portfolio as of December 31, 2010.

Portfolio Summary

DWS Technology VIP

Asset Allocation (As a % of Investment Portfolio excluding Securities Lending Collateral)	12/31/10	12/31/09

Common Stocks	99%	98%
Cash Equivalents	1%	2%
	100%	100%

Sector Diversification (As a % of Common Stocks)	12/31/10	12/31/09

Information Technology:
Computers & Peripherals	22%	25%
Software	18%	18%
Communications Equipment	17%	17%
Semiconductors & Semiconductor Equipment	16%	16%
Internet Software & Services	14%	14%
IT Services	9%	7%
Electronic Equipment, Instruments & Components	1%	2%
Consumer Discretionary:
Hotel Restaurants & Leisure	0%	—
Internet & Catalog Retail	3%	1%
	100%	100%

Asset allocation and sector diversification are subject to change.

For more complete details about the Fund's investment portfolio, see page 264.

Investment Portfolio December 31, 2010

DWS Technology VIP

	Shares		Value ($)

Common Stocks 99.3%
Consumer Discretionary 3.1%
Hotels Restaurants & Leisure 0.3%
Ctrip.com International Ltd. (ADR)*		6,070		245,532
Internet & Catalog Retail 2.8%
Amazon.com, Inc.*		7,210		1,297,800
Priceline.com, Inc.*		1,950		779,122
				2,076,922
Information Technology 96.2%
Communications Equipment 17.2%
Acme Packet, Inc.*		7,523		399,923
Aviat Networks, Inc.*		2,463		12,487
Cisco Systems, Inc.*		183,760		3,717,465
Comverse Technology, Inc.*		126,644		919,435
F5 Networks, Inc.*		8,850		1,151,916
Juniper Networks, Inc.* (a)		29,800		1,100,216
Motorola, Inc.*		59,350		538,304
Polycom, Inc.* (a)		23,810		928,114
QUALCOMM, Inc.		77,996		3,860,022
Research In Motion Ltd.*		6,460		375,520
				13,003,402
Computers & Peripherals 22.2%
Apple, Inc.*		29,370		9,473,587
EMC Corp.* (a)		93,957		2,151,615
Gemalto NV		7,700		327,670
Hewlett-Packard Co.		90,770		3,821,417
QLogic Corp.*		3,660		62,293
SanDisk Corp.*		17,290		862,079
Xyratex Ltd.*		7,848		128,001
				16,826,662
Electronic Equipment, Instruments & Components 1.0%
Corning, Inc.		39,250		758,310
Internet Software & Services 13.6%
Akamai Technologies, Inc.*		6,720		316,176
Digital River, Inc.*		16,620		572,060
eBay, Inc.*		10,450		290,824
Equinix, Inc.*		2,710		220,215
Google, Inc. "A"*		9,450		5,613,017
LogMeIn, Inc.* (a)		24,313		1,078,038
Open Text Corp.* (a)		3,400		156,604
QuinStreet, Inc.* (a)		27,888		535,728
Telecity Group PLC*		40,505		297,064
Tencent Holdings Ltd.		18,080		397,756
VistaPrint NV* (a)		3,030		139,380
Yahoo!, Inc.* (a)		41,070		682,994
				10,299,856
IT Services 8.9%
Accenture PLC "A"		9,820		476,172
Amdocs Ltd.*		8,580		235,693
Cognizant Technology Solutions Corp. "A"*		25,390		1,860,833
Fiserv, Inc.*		10,400		609,024
FleetCor Technologies, Inc.*		4,920		152,126
International Business Machines Corp.		12,740		1,869,722
iSoftStone Holdings Ltd. (ADR)*		4,530		82,310
	Shares		Value ($)

MasterCard, Inc. "A"		960		215,146
Teradata Corp.*		22,861		940,959
Visa, Inc. "A" (a)		4,610		324,452
				6,766,437
Semiconductors & Semiconductor Equipment 15.7%
Aixtron SE (a)		10,660		393,643
Altera Corp. (a)		11,660		414,863
Applied Materials, Inc.		24,000		337,200
ASML Holding NV (NY Registered Shares) (a)		14,190		544,044
Avago Technologies Ltd.		17,129		487,663
Broadcom Corp. "A"		20,310		884,500
Cavium Networks, Inc.* (a)		7,010		264,137
Cirrus Logic, Inc.*		21,400		341,972
Inphi Corp.*		1,940		38,975
Integrated Device Technology, Inc.*		74,600		496,836
Intel Corp.		152,879		3,215,045
KLA-Tencor Corp.		12,740		492,273
Marvell Technology Group Ltd.*		17,900		332,045
MaxLinear, Inc. "A"* (a)		22,300		239,948
Microchip Technology, Inc. (a)		8,270		282,917
Microsemi Corp.*		14,290		327,241
Netlogic Microsystems, Inc.*		13,880		435,971
Novellus Systems, Inc.* (a)		16,910		546,531
NXP Semiconductors NV*		10,220		213,905
Texas Instruments, Inc. (a)		49,900		1,621,750
				11,911,459
Software 17.6%
Activision Blizzard, Inc.		36,210		450,452
Adobe Systems, Inc.*		20,990		646,072
ANSYS, Inc.*		5,160		268,681
Ariba, Inc.*		55,660		1,307,453
BMC Software, Inc.*		19,040		897,546
Check Point Software Technologies Ltd.*		11,080		512,561
Citrix Systems, Inc.*		4,770		326,316
Informatica Corp.* (a)		20,790		915,384
Longtop Financial Technologies Ltd. (ADR)*		4,900		177,282
Microsoft Corp.		127,410		3,557,287
Oracle Corp.		87,010		2,723,413
QLIK Technologies, Inc.*		7,958		205,396
RealD, Inc.*		976		25,298
Rovi Corp.* (a)		3,150		195,332
Salesforce.com, Inc.* (a)		1,560		205,920
Symantec Corp.*		18,560		310,694
Taleo Corp. "A"*		10,890		301,109
VanceInfo Technologies, Inc. (ADR)*		8,160		281,846
				13,308,042
Total Common Stocks (Cost $42,878,738)				75,196,622

Securities Lending Collateral 12.3%
Daily Assets Fund Institutional, 0.27% (b) (c) (Cost $9,321,665)		9,321,665		9,321,665

	Shares		Value ($)

Cash Equivalents 0.9%
Central Cash Management Fund, 0.19% (b) (Cost $675,065)		675,065		675,065

	% of Net Assets			Value ($)

Total Investment Portfolio (Cost $52,875,468)+		112.5			85,193,352
Other Assets and Liabilities, Net		(12.5	)		(9,493,284	)
Net Assets		100.0			75,700,068

* Non-income producing security.

+ The cost for federal income tax purposes was $56,197,483. At December 31, 2010, net unrealized appreciation for all securities based on tax cost was $28,995,869. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $32,698,880 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $3,703,011.

(a) All or a portion of these securities were on loan (see Notes to Financial Statements). The value of all securities loaned at December 31, 2010 amounted to $9,072,813, which is 12.0% of net assets.

(b) Affiliated fund managed by Deutsche Investment Management Americas Inc. The rate shown is the annualized seven-day yield at period end.

(c) Represents collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates.

ADR: American Depositary Receipt

Fair Value Measurements

Assets	Level 1		Level 2		Level 3		Total

Common Stocks (d)
Consumer Discretionary	$	2,322,454	$	—	$	—	$	2,322,454
Information Technology		71,458,035		1,416,133		—		72,874,168
Short-Term Investments (d)		9,996,730		—		—		9,996,730
Total	$	83,777,219	$	1,416,133	$	—	$	85,193,352

There have been no significant transfers between Level 1 and Level 2 fair value measurements during the year ended December 31, 2010.

(d) See Investment Portfolio for additional detailed categorizations.

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

Statement of Assets and Liabilities

as of December 31, 2010
Assets
Investments: Investments in unaffiliated securities, at value (cost $42,878,738) — including $9,072,813 of securities loaned	$	75,196,622
Investment in Daily Assets Fund Institutional (cost $9,321,665)*		9,321,665
Investment in Central Cash Management Fund (cost $675,065)		675,065
Total investments, at value (cost $52,875,468)		85,193,352
Cash		3,103
Foreign currency, at value (cost $9,181)		9,138
Receivable for Fund shares sold		128
Interest receivable		4,770
Other assets		406
Total assets		85,210,897
Liabilities
Payable upon return of securities loaned		9,321,665
Payable for Fund shares redeemed		72,412
Accrued management fee		42,305
Other accrued expenses and payables		74,447
Total liabilities		9,510,829
Net assets, at value	$	75,700,068
Net Assets Consist of
Distributions in excess of net investment income		(79	)
Net unrealized appreciation (depreciation) on: Investments		32,317,884
Foreign currency		(43	)
Accumulated net realized gain (loss)		(108,783,810	)
Paid-in capital		152,166,116
Net assets, at value	$	75,700,068
Class A Net Asset Value, offering and redemption price per share ($75,572,811 ÷ 6,893,997 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)	$	10.96
Class B Net Asset Value, offering and redemption price per share ($127,257 ÷ 11,963 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)	$	10.64

* Represents collateral on securities loaned.

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

Statement of Operations

for the year ended December 31, 2010
Investment Income
Income: Dividends (net of foreign taxes withheld of $607)	$	442,108
Income distributions — Central Cash Management Fund		974
Securities lending income, including income from Daily Assets Fund Institutional, net of borrower rebates		29,747
Total income		472,829
Expenses: Management fee		484,850
Administration fee		72,910
Services to shareholders		2,813
Distribution service fee (Class B)		2,449
Record keeping fees (Class B)		962
Custodian fee		10,843
Legal fees		9,743
Audit and tax fees		52,788
Trustees' fees and expenses		5,376
Reports to shareholders		24,990
Other		17,141
Total expenses		684,865
Net investment income (loss)		(212,036	)
Realized and Unrealized Gain (Loss)
Net realized gain (loss) from: Investments		7,855,733
Foreign currency		3,739
Payments by affiliate (see Note I)		1,507
		7,860,979
Change in net unrealized appreciation (depreciation) on: Investments		4,413,329
Foreign currency		(5,229	)
		4,408,100
Net gain (loss)		12,269,079
Net increase (decrease) in net assets resulting from operations	$	12,057,043

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

Statement of Changes in Net Assets

	Years Ended December 31,
Increase (Decrease) in Net Assets	2010			2009
Operations: Net investment income (loss)	$	(212,036	)	$	43,997
Net realized gain (loss)		7,860,979			(13,132,543	)
Net unrealized appreciation (depreciation)		4,408,100			45,141,538
Net increase (decrease) in net assets resulting from operations		12,057,043			32,052,992
Distributions to shareholders from: Net investment income: Class A		(30,198	)		—
Fund share transactions: Class A Proceeds from shares sold		4,885,683			8,267,890
Reinvestment of distributions		30,198			—
Payments for shares redeemed		(19,283,343	)		(20,829,816	)
Net increase (decrease) in net assets from Class A share transactions		(14,367,462	)		(12,561,926	)
Class B Proceeds from shares sold		154,027			696,779
Payments for shares redeemed		(2,934,016	)		(561,458	)
Net increase (decrease) in net assets from Class B share transactions		(2,779,989	)		135,321
Increase (decrease) in net assets		(5,120,606	)		19,626,387
Net assets at beginning of period		80,820,674			61,194,287
Net assets at end of period (including distributions in excess of net investment income and undistributed net investment income of $79 and $24,841, respectively)	$	75,700,068		$	80,820,674
Other Information
Class A Shares outstanding at beginning of period		8,447,123			10,336,451
Shares sold		509,793			1,071,894
Shares issued to shareholders in reinvestment of distributions		3,065			—
Shares redeemed		(2,065,984	)		(2,961,222	)
Net increase (decrease) in Class A shares		(1,553,126	)		(1,889,328	)
Shares outstanding at end of period		6,893,997			8,447,123
Class B Shares outstanding at beginning of period		309,078			290,168
Shares sold		17,099			100,046
Shares redeemed		(314,214	)		(81,136	)
Net increase (decrease) in Class B shares		(297,115	)		18,910
Shares outstanding at end of period		11,963			309,078

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

Financial Highlights

Class A Years Ended December 31,	2010			2009		2008			2007			2006
Selected Per Share Data
Net asset value, beginning of period	$	9.24		$	5.76	$	10.71		$	9.37		$	9.30
Income (loss) from investment operations: Net investment income (loss)a		(.03	)		.01		(.00	)*		(.02	)		(.01	)c
Net realized and unrealized gain (loss)		1.75			3.47		(4.95	)		1.36			.08
Total from investment operations		1.72			3.48		(4.95	)		1.34			.07
Less distributions from: Net investment income		(.00	)*		—		—			—			—
Net asset value, end of period	$	10.96		$	9.24	$	5.76		$	10.71		$	9.37
Total Return (%)		18.66			60.42		(46.22	)b		14.30			.75	c
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		76			78		60			153			165
Ratio of expenses before expense reductions (%)		.93			.84		1.01			.91			.89
Ratio of expenses after expense reductions (%)		.93			.84		1.00			.91			.89
Ratio of net investment income (loss) (%)		(.29	)		.08		(.01	)		(.15	)		(.12	)c
Portfolio turnover rate (%)		23			45		71			91			49
a Based on average shares outstanding during the period. b Total return would have been lower had certain expenses not been reduced. c Includes non-recurring income from the Advisor recorded as a result of an administrative proceeding regarding disclosure of brokerage allocation practices in connection with sales of DWS Funds. The non-recurring income resulted in an increase in net investment income of $0.017 per share and an increase in the ratio of net investment income of 0.18%. Excluding this non-recurring income, total return would have been 0.19% lower. * Amount is less than $0.005.

Class B Years Ended December 31,	2010			2009			2008			2007			2006
Selected Per Share Data
Net asset value, beginning of period	$	9.02		$	5.64		$	10.53		$	9.25		$	9.21
Income (loss) from investment operations: Net investment income (loss)a		(.06	)		(.02	)		(.03	)		(.05	)		(.04	)c
Net realized and unrealized gain (loss)		1.68			3.40			(4.86	)		1.33			.08
Total from investment operations		1.62			3.38			(4.89	)		1.28			.04
Net asset value, end of period	$	10.64		$	9.02		$	5.64		$	10.53		$	9.25
Total Return (%)		17.96			59.93			(46.44	)b		13.84			.43	c
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		.1			3			2			3			14
Ratio of expenses before expense reductions (%)		1.29			1.18			1.35			1.29			1.28
Ratio of expenses after expense reductions (%)		1.29			1.18			1.35			1.29			1.28
Ratio of net investment income (loss) (%)		(.64	)		(.27	)		(.35	)		(.53	)		(.51	)c
Portfolio turnover rate (%)		23			45			71			91			49
a Based on average shares outstanding during the period. b Total return would have been lower had certain expenses not been reduced. c Includes non-recurring income from the Advisor recorded as a result of an administrative proceeding regarding disclosure of brokerage allocation practices in connection with sales of DWS Funds. The non-recurring income resulted in an increase in net investment income of $0.017 per share and an increase in the ratio of net investment income of 0.18%. Excluding this non-recurring income, total return would have been 0.19% lower.

Performance Summary December 31, 2010

DWS Turner Mid Cap Growth VIP

The gross expense ratio of the Fund, as stated in the fee table of the prospectus dated May 1, 2010 is 0.89% for Class A shares and may differ from the expense ratio disclosed in the Financial Highlights table in this report.

Risk Considerations

Stocks of medium-sized companies involve greater risk than securities of larger, more-established companies. Stocks may decline in value. See the prospectus for details.

Fund returns for all periods shown reflect a fee waiver and/or expense reimbursement. Without this waiver/reimbursement, returns would have been lower.

Growth of an Assumed $10,000 Investment in DWS Turner Mid Cap Growth VIP from 5/1/2001 to 12/31/2010
[] DWS Turner Mid Cap Growth VIP — Class A [] Russell Midcap® Growth Index		The Russell Midcap® Growth Index is an unmanaged index that measures the performance of those Russell Midcap companies with higher price-to-book ratios and higher forecasted growth values. The stocks are also members of the Russell 1000 Growth Index. Index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly in an index.

Yearly periods ended December 31

Comparative Results
DWS Turner Mid Cap Growth VIP		1-Year			3-Year			5-Year			Life of Fund*
Class A	Growth of $10,000	$	12,900		$	9,774		$	13,092		$	14,428
Class A	Average annual total return		29.00	%		-0.76	%		5.54	%		3.86	%
Russell Midcap Growth Index	Growth of $10,000	$	12,638		$	10,294		$	12,692		$	15,551
Russell Midcap Growth Index	Average annual total return		26.38	%		0.97	%		4.88	%		4.67	%

The growth of $10,000 is cumulative.

* The Fund commenced operations on May 1, 2001. Index returns began on April 30, 2001.

Information About Your Fund's Expenses

DWS Turner Mid Cap Growth VIP

As an investor of the Fund, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees and other Fund expenses. Examples of transaction costs include contract charges, redemption fees and account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. In the most recent six-month period, the Fund limited these expenses; had it not done so, expenses would have been higher. The example in the table is based on an investment of $1,000 invested at the beginning of the six-month period and held for the entire period (July 1, 2010 to December 31, 2010).

The tables illustrate your Fund's expenses in two ways:

Expenses and Value of a $1,000 Investment for the six months ended December 31, 2010
Actual Fund Return	Class A
Beginning Account Value 7/1/10	$	1,000.00
Ending Account Value 12/31/10	$	1,348.50
Expenses Paid per $1,000*	$	5.68
Hypothetical 5% Fund Return	Class A
Beginning Account Value 7/1/10	$	1,000.00
Ending Account Value 12/31/10	$	1,020.37
Expenses Paid per $1,000*	$	4.89

Annualized Expense Ratio	Class A
DWS Variable Series II — DWS Turner Mid Cap Growth VIP	.96%

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

Management Summary December 31, 2010

DWS Turner Mid Cap Growth VIP

Both DWS Turner Mid Cap Growth VIP and the stock market capped 2010 with a strong finish, propelled by a strengthening global economy, robust earnings and a growing bullish sentiment among investors. The Standard & Poor's 500® (S&P 500) Index finished the year with a healthy gain of 15.06%. This is the index's second yearly gain in a row and its fourth over the past five years. The year, although strong, was not without its challenges as investors had to deal with the May 6th "flash crash", financial reform and continued concerns over the health of many European economies. On the other hand, the US Federal Reserve Board (the Fed) continued to be active in the market, with round two of the quantitative easing effort initiated la ter in the year, and corporate earnings continued to post strong gains.

For 2010, small-cap stocks outpaced both mid- and large-cap stocks. The Russell 2000® Index posted a gain of 26.85% versus 16.10% for the Russell 1000® Index. Growth stocks outperformed value stocks across the market-cap spectrum for the year as investors became more optimistic over the economic rebound and sought out companies with stronger earnings prospects.

With improving economic conditions and a favorable backdrop for companies looking to grow their earnings, the performance of the Fund was strong, with Class A shares returning 29.00%, outpacing the 26.38% return for the Fund's benchmark, the Russell Midcap® Growth Index, as of December 31, 2010 (unadjusted for contract charges). Seven of the nine portfolio sectors outperformed the benchmark, with outperformance largely attributed to strength in the technology sector due to good stock selection.

The technology and financial services sectors contributed the most to relative gains, while the health care sector and producer durables, a Turner Custom Sector, were the lead detractors. A sustained pickup in corporate spending aided the technology sector as our holdings in F5 Networks, Inc., Salesforce.com, Inc. and Cypress Semiconductor Corp. generated strong double-digit returns. Within financial services, the life/health insurance and real estate development industries led the way. Health care was among the worst-performing sectors as unanswered health care reform questions continued to linger over the industry. Electronic production equipment, electrical products and industrial machinery companies detracted.

As before, the Fund emphasizes three types of growth stocks. One, it holds classic growth stocks in industries such as biotechnology and wireless communications that we think have high-return potential for fundamental reasons. Two, it holds stocks of companies gaining market share in their businesses. And three, it holds cyclical stocks in industries such as metals, heavy equipment, bioagriculture, retailing and chemicals that historically have tended to do well as the economy improves.

Christopher K. McHugh

Lead Manager, Turner Investment Partners, Inc.

Subadvisor to the Fund

Tara Hedlund, CFA

Jason Schrotberger, CFA

Portfolio Managers

The Russell Midcap Growth Index is an unmanaged index that measures the performance of those Russell Midcap companies with higher price-to-book ratios and higher forecasted growth values.

Index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly in an index.

Portfolio Summary

DWS Turner Mid Cap Growth VIP

Asset Allocation (As a % of Investment Portfolio excluding Securities Lending Collateral)	12/31/10	12/31/09

Common Stocks	99%	99%
Cash Equivalents	1%	1%
	100%	100%

Sector Diversification (As a % of Common Stocks)	12/31/10	12/31/09

Information Technology	28%	27%
Consumer Discretionary	18%	16%
Health Care	12%	15%
Industrials	11%	10%
Financials	10%	10%
Materials	8%	6%
Energy	6%	7%
Consumer Staples	4%	7%
Telecommunication Services	2%	1%
Utilities	1%	1%
	100%	100%

Asset allocation and sector diversification are subject to change.

For more complete details about the Fund's investment portfolio, see page 276.

Investment Portfolio December 31, 2010

DWS Turner Mid Cap Growth VIP

	Shares		Value ($)

Common Stocks 98.8%
Consumer Discretionary 17.6%
Auto Components 1.2%
BorgWarner, Inc.* (a)		10,260		742,414
Hotels Restaurants & Leisure 6.5%
Darden Restaurants, Inc.		7,510		348,764
Royal Caribbean Cruises Ltd.*		12,510		587,970
Starwood Hotels & Resorts Worldwide, Inc. (a)		23,700		1,440,486
WMS Industries, Inc.*		16,775		758,901
Wynn Resorts Ltd.		6,660		691,575
				3,827,696
Internet & Catalog Retail 1.2%
Priceline.com, Inc.*		1,770		707,203
Media 1.3%
Interpublic Group of Companies, Inc.*		75,190		798,518
Multiline Retail 1.5%
Nordstrom, Inc. (a)		20,850		883,623
Specialty Retail 3.7%
Abercrombie & Fitch Co. "A" (a)		13,290		765,903
Dick's Sporting Goods, Inc.*		14,010		525,375
Guess?, Inc.		18,850		891,982
				2,183,260
Textiles, Apparel & Luxury Goods 2.2%
Coach, Inc.		23,230		1,284,851
Consumer Staples 3.8%
Beverages 0.5%
Hansen Natural Corp.*		6,020		314,726
Food & Staples Retailing 1.2%
Whole Foods Market, Inc.*		13,890		702,695
Food Products 2.1%
Green Mountain Coffee Roasters, Inc.*		15,560		511,302
Mead Johnson Nutrition Co.		11,210		697,822
				1,209,124
Energy 6.3%
Energy Equipment & Services 1.0%
Cameron International Corp.*		11,800		598,614
Oil, Gas & Consumable Fuels 5.3%
Alpha Natural Resources, Inc.*		10,860		651,926
Cimarex Energy Co.		7,810		691,419
Concho Resources, Inc.*		9,200		806,564
QEP Resources, Inc.		12,800		464,768
Whiting Petroleum Corp.*		4,190		491,026
				3,105,703
Financials 9.5%
Capital Markets 3.4%
Invesco Ltd.		27,690		666,221
T. Rowe Price Group, Inc. (a)		20,340		1,312,744
				1,978,965
Commercial Banks 0.9%
M&T Bank Corp.		6,290		547,545
Consumer Finance 0.7%
Discover Financial Services		23,040		426,931
	Shares		Value ($)

Diversified Financial Services 2.1%
IntercontinentalExchange, Inc.*		6,140		731,581
MSCI, Inc. "A"*		12,530		488,169
				1,219,750
Insurance 1.3%
Aon Corp.		8,820		405,808
Unum Group		16,060		388,973
				794,781
Real Estate Management & Development 1.1%
CB Richard Ellis Group, Inc. "A"*		32,550		666,624
Health Care 11.7%
Biotechnology 2.7%
Alexion Pharmaceuticals, Inc.* (a)		9,880		795,834
Onyx Pharmaceuticals, Inc.*		7,680		283,161
United Therapeutics Corp.*		8,340		527,255
				1,606,250
Health Care Equipment & Supplies 1.8%
Intuitive Surgical, Inc.*		1,790		461,372
Varian Medical Systems, Inc.*		8,400		581,952
				1,043,324
Health Care Providers & Services 4.2%
AMERIGROUP Corp.*		8,610		378,151
AmerisourceBergen Corp.		19,480		664,658
Emergency Medical Services Corp. "A"*		5,550		358,586
Laboratory Corp. of America Holdings*		3,960		348,163
Universal Health Services, Inc. "B"		17,110		742,916
				2,492,474
Life Sciences Tools & Services 0.9%
Charles River Laboratories International, Inc.*		6,550		232,787
Illumina, Inc.*		4,670		295,798
				528,585
Pharmaceuticals 2.1%
Hospira, Inc.*		9,020		502,324
Valeant Pharmaceuticals International, Inc.		12,560		355,322
Watson Pharmaceuticals, Inc.*		7,620		393,573
				1,251,219
Industrials 10.6%
Aerospace & Defense 1.2%
Goodrich Corp.		8,480		746,834
Airlines 1.4%
United Continental Holdings, Inc.*		33,936		808,355
Machinery 4.5%
Cummins, Inc.		10,330		1,136,403
Joy Global, Inc.		11,890		1,031,458
Parker Hannifin Corp.		5,810		501,403
				2,669,264
Professional Services 0.8%
Manpower, Inc.		7,200		451,872
Road & Rail 0.8%
Canadian Pacific Railway Ltd.		7,240		469,224
	Shares		Value ($)

Trading Companies & Distributors 1.9%
Fastenal Co. (a)		13,390		802,195
WESCO International, Inc.*		5,760		304,128
				1,106,323
Information Technology 28.1%
Communications Equipment 6.3%
Acme Packet, Inc.*		8,270		439,633
Aruba Networks, Inc.*		28,110		586,937
F5 Networks, Inc.*		12,600		1,640,016
Finisar Corp.*		13,120		389,533
Juniper Networks, Inc.*		11,990		442,671
Riverbed Technology, Inc.*		5,950		209,261
				3,708,051
Computers & Peripherals 3.4%
NetApp, Inc.* (a)		18,210		1,000,821
SanDisk Corp.*		20,230		1,008,668
				2,009,489
Electronic Equipment, Instruments & Components 0.6%
Aeroflex Holding Corp.*		20,500		337,225
Internet Software & Services 2.7%
Akamai Technologies, Inc.*		7,620		358,521
LogMeIn, Inc.*		9,350		414,579
MercadoLibre, Inc.* (a)		4,270		284,596
OpenTable, Inc.*		1,650		116,292
VeriSign, Inc.		12,300		401,841
				1,575,829
IT Services 0.9%
VeriFone Systems, Inc.*		13,290		512,462
Semiconductors & Semiconductor Equipment 10.5%
ASML Holding NV (NY Registered Shares) (a)		20,810		797,855
Atheros Communications*		22,530		809,278
Broadcom Corp. "A"		17,150		746,883
Cree, Inc.*		4,730		311,660
Cypress Semiconductor Corp.*		50,140		931,601
First Solar, Inc.* (a)		1,550		201,717
Lam Research Corp.*		15,670		811,393
Netlogic Microsystems, Inc.*		22,230		698,244
Varian Semiconductor Equipment Associates, Inc.*		24,730		914,268
				6,222,899
	Shares		Value ($)

Software 3.7%
Fortinet, Inc.*		11,110		359,408
Salesforce.com, Inc.*		9,790		1,292,280
SuccessFactors, Inc.*		19,030		551,109
				2,202,797
Materials 8.3%
Chemicals 2.7%
CF Industries Holdings, Inc.		7,300		986,595
LyondellBasell Industries NV*		17,390		598,216
				1,584,811
Metals & Mining 5.6%
Cliffs Natural Resources, Inc. (a)		10,920		851,869
Silver Wheaton Corp.*		10,820		422,413
United States Steel Corp. (a)		13,690		799,770
Walter Energy, Inc.		9,770		1,248,997
				3,323,049
Telecommunication Services 2.3%
Wireless Telecommunication Services
Crown Castle International Corp.*		19,260		844,166
NII Holdings, Inc.*		11,200		500,192
				1,344,358
Utilities 0.6%
Gas Utilities
Questar Corp.		21,780		379,190
Total Common Stocks (Cost $36,798,115)				58,366,907

Securities Lending Collateral 16.1%
Daily Assets Fund Institutional, 0.27% (b) (c) (Cost $9,501,633)		9,501,633		9,501,633

Cash Equivalents 1.2%
Central Cash Management Fund, 0.19% (b) (Cost $682,786)		682,786		682,786

	% of Net Assets			Value ($)

Total Investment Portfolio (Cost $46,982,534)+		116.1			68,551,326
Other Assets and Liabilities, Net		(16.1	)		(9,506,407	)
Net Assets		100.0			59,044,919

* Non-income producing security.

+ The cost for federal income tax purposes was $47,461,113. At December 31, 2010, net unrealized appreciation for all securities based on tax cost was $21,090,213. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $21,587,307 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $497,094.

(a) All or a portion of these securities were on loan (see Notes to Financial Statements). The value of all securities loaned at December 31, 2010 amounted to $9,276,096, which is 15.7% of net assets.

(b) Affiliated fund managed by Deutsche Investment Management Americas Inc. The rate shown is the annualized seven-day yield at period end.

(c) Represents collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates.

Fair Value Measurements

Assets	Level 1		Level 2		Level 3		Total

Common Stocks (d)	$	58,366,907	$	—	$	—	$	58,366,907
Short-Term Investments (d)		10,184,419		—		—		10,184,419
Total	$	68,551,326	$	—	$	—	$	68,551,326

There have been no significant transfers between Level 1 and Level 2 fair value measurements during the year ended December 31, 2010.

(d) See Investment Portfolio for additional detailed categorizations.

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

Statement of Assets and Liabilities

as of December 31, 2010
Assets
Investments: Investments in unaffiliated securities, at value (cost $36,798,115) — including $9,276,096 of securities loaned	$	58,366,907
Investment in Daily Assets Fund Institutional (cost $9,501,633)*		9,501,633
Investment in Central Cash Management Fund (cost $682,786)		682,786
Total investments, at value (cost $46,982,534)		68,551,326
Cash		10,000
Receivable for investments sold		312,238
Dividends receivable		12,654
Interest receivable		740
Other assets		286
Total assets		68,887,244
Liabilities
Payable upon return of securities loaned		9,501,633
Payable for investments purchased		155,357
Payable for Fund shares redeemed		83,068
Accrued management fee		40,161
Other accrued expenses and payables		62,106
Total liabilities		9,842,325
Net assets, at value	$	59,044,919
Net Assets Consist of
Net unrealized appreciation (depreciation) on: Investments		21,568,792
Foreign currency		10
Accumulated net realized gain (loss)		(16,197,182	)
Paid-in capital		53,673,299
Net assets, at value	$	59,044,919
Class A Net Asset Value, offering and redemption price per share ($59,044,919 ÷ 6,033,131 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)	$	9.79

* Represents collateral on securities loaned.

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

Statement of Operations

for the year ended December 31, 2010
Investment Income
Income: Dividends (net of foreign taxes withheld of $3,538)	$	408,183
Income distributions — Central Cash Management Fund		2,018
Securities lending income, including income from Daily Assets Fund Institutional, net of borrower rebates		1,716
Total income		411,917
Expenses: Management fee		368,747
Administration fee		51,573
Services to shareholders		1,911
Custodian fee		12,628
Legal fees		7,226
Audit and tax fees		46,905
Trustees' fees and expenses		3,784
Reports to shareholders		13,380
Other		3,465
Total expenses before expense reductions		509,619
Expense reductions		(679	)
Total expenses after expense reductions		508,940
Net investment income (loss)		(97,023	)
Realized and Unrealized Gain (Loss)
Net realized gain (loss) from investments: Investments		6,420,921
Foreign currency		35
		6,420,956
Change in net unrealized appreciation (depreciation) on: Investments		7,106,878
Foreign currency		10
		7,106,888
Net gain (loss)		13,527,844
Net increase (decrease) in net assets resulting from operations	$	13,430,821

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

Statement of Changes in Net Assets

	Years Ended December 31,
Increase (Decrease) in Net Assets	2010			2009
Operations: Net investment income (loss)	$	(97,023	)	$	10,140
Net realized gain (loss)		6,420,956			(5,079,785	)
Change in net unrealized appreciation (depreciation)		7,106,888			23,095,058
Net increase (decrease) in net assets resulting from operations		13,430,821			18,025,413
Distributions to shareholders from: Net investment income: Class A		(7,813	)		—
Total distributions		(7,813	)		—
Fund share transactions: Class A Proceeds from shares sold		4,327,117			3,565,715
Shares issued to shareholders in reinvestment of distributions		7,813			—
Payments for shares redeemed		(9,376,315	)		(19,620,216	)
Shares converted*		—			5,097
Net increase (decrease) in net assets from Class A share transactions		(5,041,385	)		(16,049,404	)
Class B Payments for shares redeemed		—			(21	)
Shares converted*		—			(5,097	)
Net increase (decrease) in net assets from Class B share transactions		—			(5,118	)
Increase (decrease) in net assets		8,381,623			1,970,891
Net assets at beginning of period		50,663,296			48,692,405
Net assets at end of period (including undistributed net investment income of $0 and $4,590, respectively)	$	59,044,919		$	50,663,296
Other Information
Class A Shares outstanding at beginning of period		6,675,631			9,629,198
Shares sold		522,352			533,210
Shares issued to shareholders in reinvestment of distributions		906			—
Shares redeemed		(1,165,758	)		(3,488,014	)
Shares converted*		—			1,237
Net increase (decrease) in Class A shares		(642,500	)		(2,953,567	)
Shares outstanding at end of period		6,033,131			6,675,631
Class B Shares outstanding at beginning of period		—			1,306
Shares redeemed		—			(5	)
Shares converted*		—			(1,301	)
Net increase (decrease) in Class B shares		—			(1,306	)
Shares outstanding at end of period		—			—

* On March 6, 2009, Class B shares converted into Class A shares.

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

Financial Highlights

Class A Years Ended December 31,	2010			2009			2008			2007			2006
Selected Per Share Data
Net asset value, beginning of period	$	7.59		$	5.06		$	12.55		$	10.92		$	11.02
Income (loss) from investment operations: Net investment income (loss)a		(.02	)		.00	*		(.01	)		(.04	)		(.01	)
Net realized and unrealized gain (loss)		2.22			2.53			(5.28	)		2.64			.77
Total from investment operations		2.20			2.53			(5.29	)		2.60			.76
Less distributions from: Net investment income		(.00	)*		—			—			—			—
Net realized gains		—			—			(2.20	)		(.97	)		(.86	)
Tax return of capital		—			—			(.00	)*		—			—
Total distributions		(.00	)*		—			(2.20	)		(.97	)		(.86	)
Net asset value, end of period	$	9.79		$	7.59		$	5.06		$	12.55		$	10.92
Total Return (%)		29.00	b		50.00			(49.49	)b		25.75			6.52
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		59			51			49			129			117
Ratio of expenses before expense reductions (%)		.99			.89			1.03			.95			.97
Ratio of expenses after expense reductions (%)		.99			.89			1.00			.95			.97
Ratio of net investment income (loss) (%)		(.19	)		.02			(.14	)		(.36	)		(.06	)
Portfolio turnover rate (%)		96			86			156			133			148
a Based on average shares outstanding during the period. b Total return would have been lower had certain expenses not been reduced. * Amount is less than $.005.

Notes to Financial Statements

A. Organization and Significant Accounting Policies

DWS Variable Series II (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company organized as a Massachusetts business trust. The Trust offers seventeen funds (hereinafter referred to individually as "Fund" or collectively as "Funds"), including DWS Alternative Asset Allocation Plus VIP that invests primarily in existing affiliated DWS Funds ("Underlying Funds") and exchange-traded funds ("ETFs"). Each Underlying Fund's accounting policies and investment holdings are outlined in the Underlying Fund's financial statements and are available upon request. Each Fund (except DWS Technology VIP) is classified as a diversified open-end management investment company. DWS Technology VIP is classified as a non-diversified, open-end management investment company.

Multiple Classes of Shares of Beneficial Interest. Certain Funds of the Trust offer two classes of shares (Class A shares and Class B shares). Effective February 5, 2010, Class B shares of DWS Core Fixed Income VIP were converted into the Class A shares of the same Fund. Sales of Class B shares are subject to record keeping fees up to 0.15% and Rule 12b-1 fees under the 1940 Act equal to an annual rate of 0.25%, of the average daily net assets of the Class B shares of the applicable Fund. Class A shares are not subject to such fees.

Investment income, realized and unrealized gains and losses, and certain fund-level expenses and expense reductions, if any, are borne pro rata on the basis of relative net assets by the holders of all classes of shares except that each class bears certain expenses unique to that class (including the applicable Rule 12b-1 fee and record keeping fees). Differences in class-level expenses may result in payment of different per share dividends by class. All shares have equal rights with respect to voting subject to class-specific arrangements.

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

Security Valuation. Investments are stated at value determined as of the close of regular trading on the New York Stock Exchange on each day the exchange is open for trading.

Various inputs are used in determining the value of the Funds' investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, and credit risk). Level 3 includes significant unobservable inputs (including the Funds' own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

DWS Money Market VIP values all securities utilizing the amortized cost method permitted in accordance with Rule 2a-7 under the 1940 Act and certain conditions therein. Under this method, which does not take into account unrealized capital gains or losses on securities, an instrument is initially valued at its cost and thereafter assumes a constant accretion/amortization rate to maturity of any discount or premium. Securities held by a money market fund are reflected as Level 2 because the securities are valued at amortized cost (which approximates fair value) and, accordingly, the inputs used to determine value are not quoted prices in an active market.

Equity securities and ETFs are valued at the most recent sale price or official closing price reported on the exchange (US or foreign) or over-the-counter market on which they trade and are categorized as Level 1 securities. Securities or ETFs for which no sales are reported are valued at the calculated mean between the most recent bid and asked quotations on the relevant market or, if a mean cannot be determined, at the most recent bid quotation. For certain international equity securities, in order to adjust for events which may occur between the close of the foreign exchanges and the close of the New York Stock Exchange, a fair valuation model may be used. This fair valuation model takes into account comparisons to the valuation of American Depository Receipts (ADRs), exchange-traded funds, futures contracts and ce rtain indices and these securities are categorized as Level 2.

Debt securities are valued by independent pricing services approved by the Funds' Board. If the pricing services are unable to provide valuations, securities are valued at the most recent bid quotation or evaluated price, as applicable, obtained from one or more broker-dealers. Such services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as broker quotes. These securities are generally categorized as Level 2.

Futures contracts are generally valued at the settlement prices established each day on the exchange on which they are traded and are categorized as Level 1.

Forward currency contracts are valued at the prevailing forward exchange rate of the underlying currencies and are categorized as Level 2.

Swap contracts are valued daily based upon prices supplied by a Board approved pricing vendor, if available, and otherwise are valued at the price provided by the broker-dealer. Swap contracts are generally categorized as Level 2.

Exchange-traded options are valued at the last sale price or, in the absence of a sale, the mean between the closing bid and asked prices or at the most recent asked price (bid for purchased options) if no bid or asked price are available. Exchange-traded options are categorized as Level 1. Over-the-counter written or purchased options are valued based upon a price provided by the broker-dealer with which the option, was traded and are generally categorized as Level 3.

Money market instruments purchased with an original or remaining maturity of sixty days or less, maturing at par, are valued at amortized cost, which approximates value, and are categorized as Level 2. Investments in open-end investment companies are valued at their net asset value each business day and are categorized as Level 1.

Investments in the Underlying Funds are valued at the net asset value per share of each class of the Underlying Funds and are categorized as Level 1.

Securities and other assets for which market quotations are not readily available or for which the above valuation procedures are deemed not to reflect fair value are valued in a manner that is intended to reflect their fair value as determined in accordance with procedures approved by the Board and are generally categorized as Level 3. In accordance with each Fund's valuation procedures, factors used in determining value may include, but are not limited to, the type of the security; the size of the holding; the initial cost of the security; the existence of any contractual restrictions on the security's disposition; the price and extent of public trading in similar securities of the issuer or of comparable companies; quotations or evaluated prices from broker-dealers and/or pricing services; information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities); an analysis of the company's or issuer's financial statements; an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold and with respect to debt securities; the maturity, coupon, creditworthiness, currency denomination and the movement of the market in which the security is normally traded. The value determined under these procedures may differ from published values for the same securities.

Disclosure about the classification of fair value measurements is included in a table following the Funds' Investment Portfolio.

Foreign Currency Translations. The books and records of the Trust are maintained in US dollars. Investment securities and other assets and liabilities denominated in a foreign currency are translated into US dollars at the prevailing exchange rates at period end. Purchases and sales of investment securities, income and expenses are translated into US dollars at the prevailing exchange rates on the respective dates of the transactions.

Net realized and unrealized gains and losses on foreign currency transactions represent net gains and losses between trade and settlement dates on securities transactions, the disposition of forward foreign currency exchange contracts and foreign currencies, and the difference between the amount of net investment income accrued and the US dollar amount actually received. That portion of both realized and unrealized gains and losses on investments that results from fluctuations in foreign currency exchange rates is not separately disclosed but is included with net realized and unrealized gain/appreciation and loss/depreciation on investments.

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

Securities Lending. Each Fund, except DWS Money Market VIP and DWS Alternative Asset Allocation Plus VIP, lends securities to certain financial institutions. The Fund retains beneficial ownership of the securities it has loaned and continues to receive interest and dividends paid by the issuer of securities and to participate in any changes in their market value. The Fund requires the borrowers of the securities to maintain collateral with the Fund consisting of either cash or liquid, unencumbered assets having a value at least equal to the value of the securities loaned. When the collateral falls below specified amounts, the lending agent will use its best effort to obtain additional collateral on the next business day to meet required amounts u nder the security lending agreement. The Fund may invest the cash collateral into a joint trading account in an affiliated money market fund pursuant to Exemptive Orders issued by the SEC. The Fund receives compensation for lending its securities either in the form of fees or by earning interest on invested cash collateral net of borrower rebates and fees paid to a lending agent. Either the Fund or the borrower may terminate the loan. There may be risks of delay and costs in recovery of securities or even loss of rights in the collateral should the borrower of the securities fail financially. The Fund is also subject to all investment risks associated with the reinvestment of any cash collateral received, including, but not limited to, interest rate, credit and liquidity risk associated with such investments. DWS Government & Agency Securities VIP had no securities on loan as of December 31, 2010.

Loan Participations and Assignments. DWS Balanced VIP, DWS High Income VIP and DWS Strategic Income VIP invest in Loan Participations and Assignments. Loan Participations and Assignments are portions of loans originated by banks and sold in pieces to investors. These US dollar-denominated fixed and floating rate loans ("Loans") in which the Fund invests, are arranged between the borrower and one or more financial institutions ("Lenders"). These Loans may take the form of Senior Loans, which are corporate obligations often issued in connection with recapitalizations, acquisitions, leveraged buy-outs and refinancings, and Sovereign Loans, which are debt instruments between a foreign sovereign entity and one or more financial institutions. The Fund invests in such Loans in the form of participations in Loans ("Participations") or assignments of all or a portion of Loans from third parties ("Assignments"). Participations typically result in the Fund having a contractual relationship only with the Lender, not with the borrower. The Fund has the right to receive payments of principal, interest and any fees to which it is entitled from the Lender selling the Participation and only upon receipt by the Lender of the payments from the borrower. In connection with purchasing Participations, the Fund generally has no right to enforce compliance by the borrower with the terms of the loan agreement relating to the Loan, or any rights of set-off against the borrower, and the Fund will not benefit directly from any collateral supporting the Loan in which it has purchased the Participation. As a result, the Fund assumes the credit risk of both the borrower and the Lender that is selling the Participation. Assignments typically result in the Fund having a direct cont ractual relationship with the borrower, and the Fund may enforce compliance by the borrower with the terms of the loan agreement. All Loan Participations and Assignments involve interest rate risk, liquidity risk and credit risk, including the potential default or insolvency of the borrower.

Participatory Notes. DWS Global Thematic VIP invests in Participatory Notes (P-Notes). P-Notes are promissory notes designed to offer a return linked to the performance of a particular underlying equity security or market. P-Notes are issued by banks or broker-dealers and allow the Fund to gain exposure to local shares in foreign markets. Investments in P-Notes involve the same risks associated with a direct investment in the underlying foreign companies or foreign markets that they seek to replicate. Although each participation note is structured with a defined maturity date, early redemption may be possible. Risks associated with participation notes include the possible failure of a counterparty to perform in accordance with the terms of the ag reement and potential delays or an inability to redeem before maturity under certain market conditions.

Mortgage Dollar Rolls. DWS Balanced VIP, DWS Core Fixed Income VIP and DWS Government & Agency Securities VIP may enter into mortgage dollar rolls in which the Fund sells to a bank or broker/dealer (the "counterparty") mortgage-backed securities for delivery in the current month and simultaneously contracts to repurchase similar, but not identical, securities on a fixed date. The counterparty receives all principal and interest payments, including prepayments, made on the security while it is the holder. The Fund receives compensation as consideration for entering into the commitment to repurchase. The compensation is paid in the form of a lower price for the security upon its repurchase, or alternatively, a fee. Mortgage dollar rolls may be renewed with a new sale and repurchase price and a cash settlement made at each renewal without physical delivery of the securities subject to the contract.

Certain risks may arise upon entering into mortgage dollar rolls from the potential inability of counterparties to meet the terms of their commitments. Additionally, the value of such securities may change adversely before the Fund is able to repurchase them. There can be no assurance that the Fund's use of the cash that it receives from a mortgage dollar roll will provide a return that exceeds its costs.

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

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

Taxes. Each Fund's policy is to comply with the requirements of the Internal Revenue Code, as amended, which are applicable to regulated investment companies and to distribute all of its taxable income to its shareholders.

Additionally, based on the Funds' understanding of the tax rules and rates related to income, gains and transactions for the foreign jurisdictions in which they invest, the Funds will provide for foreign taxes, and where appropriate, deferred foreign taxes.

At December 31, 2010, the following Funds had an approximate net tax basis capital loss carryforward which may be applied against any realized net taxable capital gains of each succeeding year until fully utilized or until the following expiration dates, whichever occurs first:

Fund	Capital Loss Carryforward ($)		Expiration Date		Capital Loss Carryforward Utilized ($)		Capital Loss Carryforward Expired ($)
DWS Balanced VIP		6,483,000	12/31/2016			16,309,000		—
		45,045,000	12/31/2017
DWS Blue Chip VIP		15,813,000	12/31/2016			10,865,000		—
		32,910,000	12/31/2017
DWS Core Fixed Income VIP		5,512,000	12/31/2016			4,494,000		—
		48,195,000	12/31/2017
DWS Diversified International Equity VIP		30,075,000	12/31/2016			2,858,000		—
		39,164,000	12/31/2017
DWS Dreman Small Mid Cap Value VIP		10,090,000	12/31/2016			30,517,000		—
		93,411,000	12/31/2017
DWS Global Thematic VIP		35,242,000	12/31/2016			6,786,000		—
		17,811,000	12/31/2017
DWS Government & Agency Securities VIP		—		—		1,158,000		—
DWS High Income VIP		13,877,000	12/31/2011			1,517,000		53,591,000
		3,844,000	12/31/2014
		858,000	12/31/2015
		17,300,000	12/31/2016
		17,232,000	12/31/2017
DWS Large Cap Value VIP		29,003,000	12/31/2016			7,651,000		—
		12,084,000	12/31/2017
DWS Mid Cap Growth VIP		18,281,000	12/31/2011			1,874,000		—
		935,000	12/31/2016
		6,533,000	12/31/2017
DWS Small Cap Growth VIP		8,113,000	12/31/2016			10,901,000		55,922,000
		34,287,000	12/31/2017
DWS Strategic Income VIP		543,000	12/31/2017			2,458,000		—
DWS Strategic Value VIP		52,455,000	12/31/2016			15,988,000		—
		88,212,000	12/31/2017
DWS Technology VIP		71,516,000	12/31/2011			6,205,000		87,294,000
		13,148,000	12/31/2016
		20,753,000	12/31/2017
DWS Turner Mid Cap Growth VIP		800,000	12/31/2016			5,953,000		—
		14,919,000	12/31/2017

In addition, included in DWS Large Cap Value VIP's net tax basis capital loss carryforward of approximately $41,087,000 is $19,469,000 inherited from its merger with DWS Davis Venture Value VIP in fiscal year 2009, which may be applied against any realized net taxable capital gains of each succeeding year until fully utilized or until the above expiration dates, whichever occurs first, subject to certain limitations under Sections 381-384 of the Internal Revenue Code.

In addition, from November 1, 2010 through December 31, 2010, the following Funds incurred net realized capital losses. As permitted by tax regulations, the Funds intend to elect to defer these losses and treat them as arising in the fiscal year ended December 31, 2011.

Fund
DWS Global Thematic VIP	$	43,000
DWS High Income VIP		185,000
DWS Strategic Income VIP		472,000

The Funds have reviewed the tax positions for the open tax years as of December 31, 2010 and have determined that no provision for income tax is required in the Funds' financial statements. The Funds' federal tax returns for the prior three fiscal years and for the two fiscal years of DWS Alternative Asset Allocation Plus VIP remain open subject to examination by the Internal Revenue Service.

Distribution of Income and Gains. Distributions of net investment income, if any, for each Fund, except DWS Money Market VIP, are made annually. Net realized gains from investment transactions, in excess of available capital loss carryforwards, would be taxable to each Fund if not distributed and, therefore, will be distributed to shareholders at least annually. Net investment income of DWS Money Market VIP is declared as a daily dividend and is distributed to shareholders monthly. DWS Money Market VIP may take into account capital gains and losses in its daily dividend declarations. Each Fund may also make additional distributions for tax purposes if necessary.

The timing and characterization of certain income and capital gains distributions are determined annually in accordance with federal tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences primarily relate to net operating losses, investments in foreign denominated investments, investments in forward currency contracts, investments in futures contracts, investments in swap contracts, income received from Passive Foreign Investment Companies and Real Estate Investment Trusts and certain securities sold at a loss. As a result, net investment income (loss) and net realized gain (loss) on investment transactions for a reporting period may differ significantly from distributions during such period. Accordingly, each Fund may periodically make reclass ifications among certain of its capital accounts without impacting the net asset value of the Fund.

At December 31, 2010, the Funds' components of distributable earnings on a tax basis were as follows:

Fund	Undistributed Ordinary Income ($)*		Undistributed Net Long-Term Capital gains		Capital Loss Carryforwards ($)			Unrealized Appreciation (Depreciation) on Investments ($)
DWS Alternative Asset Allocation Plus VIP		426,034		99,137		—			1,578,944
DWS Balanced VIP		4,560,940		—		(51,528,000	)		39,560,610
DWS Blue Chip VIP		1,146,935		—		(48,723,000	)		14,678,739
DWS Core Fixed Income VIP		2,279,173		—		(53,707,000	)		2,267,700
DWS Diversified International Equity VIP		1,473,946		—		(69,239,000	)		21,763,626
DWS Dreman Small Mid Cap Value VIP		2,636,612		—		(103,501,000	)		59,732,698
DWS Global Thematic VIP		363,173		—		(53,053,000	)		6,218,590
DWS Government & Agency Securities VIP		7,707,477		1,262,738		—			8,134,116
DWS High Income VIP		16,310,534		—		(53,111,000	)		(2,383,006	)
DWS Large Cap Value VIP		4,084,211		—		(41,087,000	)		36,866,114
DWS Mid Cap Growth VIP		—		—		(25,749,000	)		8,278,722
DWS Small Cap Growth VIP		516,412		—		(42,400,000	)		27,549,602
DWS Strategic Income VIP		4,050,541		—		(543,000	)		2,097,941
DWS Strategic Value VIP		3,522,893		—		(140,667,000	)		36,835,037
DWS Technology VIP		—		—		(105,417,000	)		28,995,869
DWS Turner Mid Cap Growth VIP		—		—		(15,719,000	)		21,090,213

In addition, the tax character of distributions paid by the Funds is summarized as follows:

	Distributions from Ordinary Income ($)*
	Years Ended December 31,
Fund	2010		2009
DWS Alternative Asset Allocation Plus VIP		210,676		—
DWS Balanced VIP		9,827,154		11,680,702
DWS Blue Chip VIP		1,577,833		2,046,739
DWS Core Fixed Income VIP		5,749,285		11,379,976
DWS Diversified International Equity VIP		1,843,687		5,187,036
DWS Dreman Small Mid Cap Value VIP		3,285,561		4,442,178
DWS Global Thematic VIP		650,285		966,170
DWS Government & Agency Securities VIP		8,062,626		9,913,871
DWS High Income VIP		15,337,062		18,661,430
DWS Large Cap Value VIP		4,122,165		2,857,014
DWS Money Market VIP		24,815		1,233,830
DWS Strategic Income VIP		4,806,010		3,708,667
DWS Strategic Value VIP		5,273,728		12,860,410
DWS Technology VIP		30,198		—
DWS Turner Mid Cap Growth VIP		7,813		—

* For tax purposes, short-term capital gain distributions are considered ordinary income distributions.

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

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

Real Estate Investment Trusts. DWS Balanced VIP and DWS Dreman Small Mid Cap Value VIP periodically recharacterize distributions received from a Real Estate Investment Trust ("REIT") investment based on information provided by the REIT into the following categories: ordinary income, long-term and short-term capital gains, and return of capital. If information is not available timely from a REIT, the recharacterization will be estimated for financial reporting purposes and a recharacterization will be made to the accounting records in the following year when such information becomes available. Distributions received from REITs in excess of income are recorded as either a reduction of cost of investments or realized gains. The Fund distinguishes be tween dividends on a tax basis and a financial reporting basis and only distributions in excess of tax basis earnings and profits are reported in the financial statements as a return of capital.

Other. Investment transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date net of foreign withholding taxes. Certain dividends from foreign securities may be recorded subsequent to the ex-dividend date as soon as the Fund is informed of such dividends. Realized gains and losses from investment transactions are recorded on an identified cost basis. All discounts and premiums are accreted/amortized for both tax and financial reporting purposes for each Fund, with the exception of securities in default of princi pal. Distributions of income and capital gains from the Underlying Funds are recorded on the ex-dividend date.

B. Derivative Instruments

Interest Rate Swap Contracts. For the year ended December 31, 2010, DWS Government & Agency Securities VIP and DWS Strategic Income VIP entered into interest rate swap transactions to gain exposure to different parts of the yield curve while managing overall duration. The use of interest rate swaps is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio security transactions. In an interest rate swap, the Fund agrees to pay to the other party to the interest rate swap (which is known as the "counterparty") a fixed rate payment in exchange for the counterparty agreeing to pay to the Fund a variable rate payment, or the Fund agrees to receive from the counterparty a fixed rate payment in exchange for the counterparty agreeing to receive from the Fund a variable rate payment. The payment obligations are based on the notional amount of the swap. Certain risks may arise when entering into swap transactions including counterparty default, liquidity or unfavorable changes in interest rates. In connection with these agreements, securities and or cash may be identified as collateral in accordance with the terms of the swap agreements to provide assets of value and recourse in the event of default. The maximum counterparty credit risk is the net present value of the cash flows to be received from or paid to the counterparty over the term of the interest rate swap contract, to the extent that this amount is beneficial to the Fund, in addition to any related collateral posted to the counterparty by the Fund. This risk may be partially reduced by a master netting arrangement between the Fund and the counterparty. The value of the swap is adjusted daily and the change in value, if any, is recorded as unrealized appreciation or depreciation in the Statement of Assets and Liabilities. An upfront payment made by the Fund is recorded as an asset in the Statement of Assets and Liabilities. An upfront payment received by the Fund is recorded as a liability in the Statement of Assets and Liabilities. Payments received or made at the end of the measurement period are recorded as realized gain or loss in the Statement of Operations.

A summary of the open interest rate swap contracts as of December 31, 2010 is included in a table following the Investment Portfolio for DWS Government & Agency Securities VIP and DWS Strategic Income VIP. For the year ended December 31, 2010, DWS Government & Agency Securities VIP's investment in interest rate swap contracts had a total notional amount generally indicative of a range from approximately $2,930,000 to $12,800,000 and DWS Strategic Income VIP's investment in interest rate swap contracts had a total notional amount generally indicative of a range from approximately $3,600,000 to $4,850,000.

Credit Default Swap Contracts. A credit default swap is a contract between a buyer and a seller of protection against pre-defined credit events for the reference entity. For the year ended December 31, 2010, DWS High Income VIP and DWS Strategic Income VIP bought or sold credit default swap contracts to gain exposure to an underlying issuer's credit quality characteristics without directly investing in that issuer, or to hedge the risk of default on Fund securities. As a seller in the credit default swap contract, the Fund is required to pay the par (or other agreed-upon) value of the referenced entity to the counterparty with the occurrence of a credit event by a third party, such as a US or foreign corporate issuer, on the reference entity, whi ch would likely result in a loss to the Fund. In return, the Fund receives from the counterparty a periodic stream of payments over the term of the contract provided that no credit event has occurred. If no credit event occurs, the Fund keeps the stream of payments with no payment obligations. The Fund may also buy credit default swap contracts in order to hedge against the risk of a credit event on debt securities, in which case the Fund functions as the counterparty referenced above. This involves the risk that the contract may expire worthless. It also involves counterparty risk that the seller may fail to satisfy its payment obligations to the Fund with the occurrence of a credit event. When the Fund sells a credit default swap contract it will cover its commitment. This may be achieved by, among other methods, maintaining cash or liquid assets equal to the aggregate notional value of the reference entities for all outstanding credit default swap contracts sold by the Fund.

The value of the credit default swap is adjusted daily and the change in value, if any, is recorded daily as unrealized appreciation or depreciation in the Statement of Assets and Liabilities. An upfront payment made by the Fund is recorded as an asset in the Statement of Assets and Liabilities. An upfront payment received by the Fund is recorded as a liability in the Statement of Assets and Liabilities. Under the terms of the credit default swap contracts, the Fund receives or makes quarterly payments based on a specified interest rate on a fixed notional amount. These payments are recorded as a realized gain or loss in the Statement of Operations. Payments received or made as a result of a credit event or termination of the contract are recognized, net of a proportional amount of the upfront payment, as realized gai ns or losses in the Statement of Operations.

A summary of the open credit default swap contracts as of December 31, 2010 is included in a table following the Investment Portfolio for DWS High Income VIP and DWS Strategic Income VIP. For the year ended December 31, 2010, DWS Strategic Income VIP's investment in credit default swap contracts purchased had a total notional value generally indicative of a range from $0 to approximately $4,000,000. DWS High Income VIP's investment in credit default swap contracts sold had a total notional value generally indicative of a range from $0 to approximately $17,275,000 and DWS Strategic Income VIP's investment in credit default swap contracts sold had a total notional value generally indicative of a range from approximately $580,000 to $2,370,000.

Total Return Swap Contracts. Total return swaps involve commitments to pay interest in exchange for a market-linked return based on a notional amount. For the year ended December 31, 2010, DWS Strategic Income VIP and DWS Government & Agency Securities VIP entered into total return swap transactions to enhance potential gain. To the extent the total return of the reference security or index underlying the total return swap exceeds or falls short of the offsetting interest rate obligation, the Fund will receive a payment or make a payment to the counterparty, respectively. Certain risks may arise when entering into swap transactions including counterparty default, liquidity or unfavorable changes in the value of underlying reference security o r index. The value of the swap is adjusted daily and the change in value, if any, is recorded as unrealized appreciation or depreciation in the Statement of Assets and Liabilities. An upfront payment made by the Fund is recorded as an asset in the Statement of Assets and Liabilities. An upfront payment received by the Fund is recorded as a liability in the Statement of Assets and Liabilities. Payments received or made at the end of each measurement period are recorded as realized gain or loss in the Statement of Operations.

A summary of the open total return swap contracts as of December 31, 2010 is included in a table following the Investment Portfolio for DWS Government & Agency Securities VIP and DWS Strategic Income VIP. For the year ended December 31, 2010, DWS Government & Agency Securities VIP's investment in total return swap contracts had a total notional amount generally indicative of a range from approximately $6,900,000 to $9,000,000 and DWS Strategic Income VIP's investment in total return swap contracts had a total notional amount generally indicative of a range from approximately $2,800,000 to $3,000,000.

Options. An option contract is a contract in which the writer (seller) of the option grants the buyer of the option, upon payment of a premium, the right to purchase from (call option), or sell to (put option), the writer a designated instrument at a specified price within a specified period of time. Certain options, including options on indices and interest rate options, will require cash settlement by the Fund if the option is exercised. Interest rate options are comprised of multiple European style options that have periodic exercise dates within the terms of the contract. For the year ended December 31, 2010, DWS Global Thematic VIP and DWS Government & Agency Securities VIP entered into option contracts in order to enhance potential gain . For the year ended December 31, 2010, DWS Strategic Income VIP entered into option contracts in order to hedge against potential adverse interest rate movements of portfolio assets.

The liability representing the Fund's obligation under an exchange-traded written option or investment in a purchased option is valued at the last sale price or, in the absence of a sale, the mean between the closing bid and asked prices or at the most recent asked price (bid for purchased options) if no bid and asked price are available. Over-the-counter written or purchased options are valued using dealer-supplied quotations. Gain or loss is recognized when the option contract expires, exercised or is closed.

If the Fund writes a covered call option, the Fund foregoes, in exchange for the premium, the opportunity to profit during the option period from an increase in the market value of the underlying security above the exercise price. If the Fund writes a put option it accepts the risk of a decline in the value of the underlying security below the exercise price. Over-the-counter options have the risk of the potential inability of counterparties to meet the terms of their contracts. The Fund's maximum exposure to purchased options is limited to the premium initially paid. In addition, certain risks may arise upon entering into option contracts including the risk that an illiquid secondary market will limit the Fund's ability to close out an option contract prior to the expiration date and that a change in the value of the option contract may not correlate exactly with changes in the value of the securities or currencies hedged.

A summary of the open option contracts as of December 31, 2010 is included in the Investment Portfolio for DWS Strategic Income VIP. For the year ended December 31, 2010, DWS Strategic Income VIP's investment in written option contracts had a total value generally indicative of a range from $0 to approximately $53,000 and in purchased option contracts had a total value generally indicative of a range from $0 to approximately $59,000.

There are no open option contracts as of December 31, 2010 for DWS Global Thematic VIP and DWS Government & Agency Securities VIP. During the year ended December 31, 2010, DWS Global Thematic VIP's investment in purchased option contracts had a total value generally indicative of a range from $0 to approximately $1,000 and DWS Government & Agency Securities VIP's investment in written option contracts had a total value generally indicative of a range from $0 to approximately $197,000 and in purchased option contracts had a total value generally indicative of a range from $0 to approximately $49,000.

Futures Contracts. A futures contract is an agreement between a buyer or seller and an established futures exchange or its clearinghouse in which the buyer or seller agrees to take or make a delivery of a specific amount of a financial instrument at a specified price on a specific date (settlement date). For the year ended December 31, 2010, DWS Balanced VIP, DWS Core Fixed Income VIP, DWS Government & Agency Securities VIP and DWS Strategic Income VIP entered into interest rate futures to gain exposure to different parts of the yield curve while managing overall duration. In addition, DWS Balanced VIP and DWS Strategic Income VIP seek to enhance returns by employing a global tactical asset allocation overlay strategy. DWS Balanced VIP and DW S Strategic Income VIP enter into futures contracts on fixed-income securities and equities, including on financial indices, and security indices and on currency as part of its global tactical asset allocation overlay strategy. For the year ended December 31, 2010, as part of this strategy, DWS Balanced VIP and DWS Strategic Income VIP used futures contracts to attempt to take advantage of short-term and medium-term inefficiencies within the global equity and bond markets. For the year ended December 31, 2010, DWS Blue Chip VIP and DWS Diversified International Equity VIP entered into futures contracts to keep cash on hand to meet shareholder redemptions or other needs while maintaining exposure to the market. DWS Diversified International Equity VIP also entered into futures contracts as a means of gaining exposure to a particular asset class.

Futures contracts are valued at the most recent settlement price. Upon entering into a futures contract, the Fund is required to deposit with a financial intermediary cash or securities ("initial margin") in an amount equal to a certain percentage of the face value indicated in the futures contract. Subsequent payments ("variation margin") are made or received by the Fund dependent upon the daily fluctuations in the value and are recorded for financial reporting purposes as unrealized gains or losses by the Fund. Gains or losses are realized when the contract expires or is closed. Since all futures contracts are exchange-traded, counterparty risk is minimized as the exchange's clearinghouse acts as the counterparty, and guarantees the futures against default.

Certain risks may arise upon entering into futures contracts, including the risk that an illiquid market will limit the Fund's ability to close out a futures contract prior to the settlement date and that a change in the value of a futures contract may not correlate exactly with the changes in the value of the underlying hedged security, index or currency. Risk of loss may exceed amounts recognized in the Statement of Assets and Liabilities.

A summary of the open futures contracts as of December 31, 2010 is included in a table following the Investment Portfolio for DWS Balanced VIP, DWS Blue Chip VIP, DWS Core Fixed Income VIP, DWS Diversified International Equity VIP, DWS Government & Agency Securities VIP and DWS Strategic Income VIP. For the year ended December 31, 2010, DWS Balanced VIP's investment in futures contracts purchased had a total notional value generally indicative of a range from approximately $67,752,000 to $118,748,000, DWS Blue Chip VIP's investment in futures contracts purchased had a total notional value generally indicative of a range from approximately $359,000 to $1,806,000, DWS Diversified International Equity VIP's investment in futures contracts purchased had a total notional value generally indicative of a range from appro ximately $676,000 to $2,958,000, DWS Government & Agency Securities VIP's investment in futures contracts purchased had a total notional value generally indicative of a range from $0 to approximately $33,947,000 and DWS Strategic Income VIP's investment in futures contracts purchased had a total notional value generally indicative of a range from approximately $19,962,000 to $32,102,000. DWS Balanced VIP's investment in futures contracts sold had a total notional value generally indicative of a range from approximately $60,075,000 to $95,480,000, DWS Core Fixed Income VIP's investment in futures contracts sold had a total notional value generally indicative of a range from $0 to approximately $25,611,000, DWS Government & Agency Securities VIP's investment in futures contracts sold had a total notional value generally indicative of a range from approximately $14,332,000 to $49,098,000 and DWS Strategic Income VIP's investment in futures contracts sold had a total notional value generally indicative o f a range from approximately $13,614,000 to $21,729,000.

Forward Foreign Currency Exchange Contracts. A forward foreign currency exchange contract ("forward currency contract") is a commitment to purchase or sell a foreign currency at the settlement date at a negotiated rate. For the year ended December 31, 2010, DWS Balanced VIP, DWS High Income VIP and DWS Strategic Income VIP entered into forward currency contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign currency denominated portfolio holdings and to facilitate transactions in foreign currency denominated securities. In addition, DWS Balanced VIP and DWS Strategic Income VIP seek to enhance returns by employing a global tactical asset allocation overlay strategy. For the year ended December 31, 201 0, as part of this strategy, DWS Balanced VIP and DWS Strategic Income VIP used forward currency contracts to gain exposure to changes in the value of foreign currencies, and to attempt to take advantage of short-term and medium-term inefficiencies within the currency markets.

Forward currency contracts are valued at the prevailing forward exchange rate of the underlying currencies and unrealized gain (loss) is recorded daily. On the settlement date of the forward currency contract, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value of the contract at the time it was closed. Certain risks may arise upon entering into forward currency contracts from the potential inability of counterparties to meet the terms of their contracts. The maximum counterparty credit risk to the Fund is measured by the unrealized gain on appreciated contracts. Additionally, when utilizing forward currency contracts to hedge, the Fund gives up the opportunity to profit from favorable exchange rate movements during the term of the contract.

A summary of the open forward currency contracts as of December 31, 2010 is included in a table following the Investment Portfolio for DWS Balanced VIP, DWS High Income VIP and DWS Strategic Income VIP. For the year ended December 31, 2010, DWS Balanced VIP's investment in forward currency contracts US dollars purchased had a total contract value generally indicative of a range from approximately $15,249,000 to $33,339,000, DWS High Income VIP's investment in forward currency contracts US dollars purchased had a total contract value generally indicative of a range from approximately $6,564,000 to $13,966,000 and DWS Strategic Income VIP's investment in forward currency contracts US dollars purchased had a total contract value generally indicative of a range from approximately $12,029,000 to $20,192,000. DWS Balanced V IP's investment in forward currency contracts US dollars sold had a total contract value generally indicative of a range from approximately $13,605,000 to $33,480,000, DWS High Income VIP's investment in forward currency contracts US dollars sold had a total contract value generally indicative of a range from $0 to approximately $210,000 and DWS Strategic Income VIP's investment in forward currency contracts US dollars sold had a total contract value generally indicative of a range from approximately $3,370,000 to $8,365,000.

DWS Balanced VIP

The following tables summarize the value of the Fund's derivative instruments held as of December 31, 2010 and the related location in the accompanying Statement of Assets and Liabilities, presented by primary underlying risk exposure:

Asset Derivative		Forward Contracts
Foreign Exchange Contracts (a)		$	760,385

The above derivative is located in the following Statement of Assets and Liabilities account:

(a) Unrealized appreciation on open forward foreign currency exchange contracts

Liability Derivatives	Forward Contracts			Futures Contracts			Total
Equity Contracts (a)	$	—		$	112,848		$	112,848
Interest Rate Contracts (a)		—			(268,526	)		(268,526	)
Foreign Exchange Contracts (b)		(677,737	)		—			(677,737	)
	$	(677,737	)	$	(155,678	)	$	(833,415	)

Each of the above derivatives is located in the following Statement of Assets and Liabilities accounts:

(a) Net unrealized appreciation (depreciation) on futures. Liability of payable for daily variation margin on open futures contracts reflects unsettled variation margin

(b) Unrealized depreciation on open forward foreign currency exchange contracts

Additionally, the amount of unrealized and realized gains and losses on derivative instruments recognized in Fund earnings during the year ended December 31, 2010 and the related location in the accompanying Statement of Operations is summarized in the following tables by primary underlying risk exposure:

Realized Gain (Loss)	Forward Contracts		Futures Contracts			Total
Equity Contracts (a)	$	—	$	(1,379,315	)	$	(1,379,315	)
Interest Rate Contracts (a)		—		1,053,743			1,053,743
Foreign Exchange Contracts (b)		171,662		—			171,662
	$	171,662	$	(325,572	)	$	(153,910	)

Each of the above derivatives is located in the following Statement of Operations accounts:

(a) Net realized gain (loss) from futures

(b) Net realized gain (loss) from foreign currency (Statement of Operations includes both forward currency contracts and foreign currency transactions)

Change in Net Unrealized Appreciation (Depreciation)	Forward Contracts			Futures Contracts		Total
Equity Contracts (a)	$	—		$	26,819	$	26,819
Interest Rate Contracts (a)		—			67,655		67,655
Foreign Exchange Contracts (b)		(60,489	)		—		(60,489	)
	$	(60,489	)	$	94,474	$	33,985

Each of the above derivatives is located in the following Statement of Operations accounts:

(a) Change in net unrealized appreciation (depreciation) on futures

(b) Change in net unrealized appreciation (depreciation) on foreign currency (Statement of Operations includes both forward currency contracts and foreign currency transactions)

DWS Blue Chip VIP

The following table summarizes the value of the Fund's derivative instruments held as of December 31, 2010 and the related location in the accompanying Statement of Assets and Liabilities, presented by primary underlying risk exposure:

Asset Derivative		Futures Contracts
Equity Contracts (a)		$	15,218

The above derivative is located in the following Statement of Assets and Liabilities account:

(a) Net unrealized appreciation (depreciation) on futures. Asset of receivable for daily variation margin on open futures contracts reflects unsettled variation margin.

Realized Gain (Loss)		Futures Contracts
Equity Contracts (a)		$	130,929

The above derivative is located in the following Statement of Operations account:

(a) Net realized gain (loss) from futures

Change in Net Unrealized Appreciation (Depreciation)		Futures Contracts
Equity Contracts (a)		$	7,705

The above derivative is located in the following Statement of Operations account:

(a) Change in net unrealized appreciation (depreciation) on futures

DWS Core Fixed Income VIP

Asset Derivative		Futures Contracts
Interest Rate Contracts (a)		$	617,391

The above derivative is located in the following Statement of Assets and Liabilities account:

(a) Net unrealized appreciation (depreciation) on futures. Liability of payable for daily variation margin on open futures contracts reflects unsettled variation margin.

Realized Gain (Loss)		Futures Contracts
Interest Rate Contracts (a)		$	(504,977	)

The above derivative is located in the following Statement of Operations account:

(a) Net realized gain (loss) from futures

Change in Net Unrealized Appreciation (Depreciation)		Futures Contracts
Interest Rate Contracts (a)		$	534,420

The above derivative is located in the following Statement of Operations account:

(a) Change in net unrealized appreciation (depreciation) on futures

DWS Diversified International Equity VIP

Liability Derivative		Futures Contracts
Equity Contracts (a)		$	(39,027	)

The above derivative is located in the following Statement of Assets and Liabilities account:

(a) Net unrealized appreciation (depreciation) on futures. Liability of payable for daily variation margin on open futures contracts reflects unsettled variation margin.

Realized Gain (Loss)		Futures Contracts
Equity Contracts (a)		$	139,952

The above derivative is located in the following Statement of Operations account:

(a) Net realized gain (loss) from futures

Change in Net Unrealized Appreciation (Depreciation)		Futures Contracts
Equity Contracts (a)		$	(169,560	)

The above derivative is located in the following Statement of Operations account:

(a) Change in net unrealized appreciation (depreciation) on futures

DWS Global Thematic VIP

The following tables summarize the amount of unrealized and realized gains and losses on derivative instruments recognized in Fund earnings during the year ended December 31, 2010 and the related location in the accompanying Statement of Operations, presented by primary underlying risk exposure:

Realized Gain (Loss)		Purchased Options
Equity Contracts (a)		$	(212,772	)

The above derivative is located in the following Statement of Operations account:

(a) Net realized gain (loss) from investments (includes purchased options)

Change in Net Unrealized Appreciation (Depreciation)		Purchased Options
Equity Contracts (a)		$	212,262

The above derivative is located in the following Statement of Operations account:

(a) Change in net unrealized appreciation (depreciation) on investments (includes purchased options)

DWS Government & Agency Securities VIP

Asset Derivative		Swap Contracts
Interest Rate Contracts (a)		$	6,598

The above derivative is located in the following Statement of Assets and Liabilities account:

(a) Unrealized appreciation on open swap contracts

Liability Derivative		Futures Contracts				Swap Contracts				Total
Interest Rate Contracts (a)		$	(145,683	)		$	(165,133	)		$	(310,816	)

Each of the above derivatives is located in the following Statement of Assets and Liabilities accounts:

(a) Net unrealized appreciation (depreciation) on futures and unrealized depreciation on open swap contracts. Liability of payable for daily variation margin on open futures contracts reflects unsettled variation margin.

Realized Gain (Loss)		Purchased Options				Written Options				Swap Contracts				Futures Contracts				Total
Interest Rate Contracts (a)		$	(323,210	)		$	87,625			$	(659,466	)		$	950,817			$	55,766

Each of the above derivatives is located in the following Statement of Operations accounts:

(a) Net realized gain (loss) from investments (includes purchased options), written options, swap contracts and futures, respectively

Change in Net Unrealized Appreciation (Depreciation)		Swap Contracts				Futures Contracts				Total
Interest Rate Contracts (a)		$	(95,677	)		$	475,938			$	380,261

Each of the above derivatives is located in the following Statement of Operations accounts:

(a) Change in net unrealized appreciation (depreciation) on swap contracts and futures, respectively

DWS High Income VIP

Asset Derivatives	Forward Contracts		Swap Contracts		Total
Credit Contracts (a)	$	—	$	386,256	$	386,256
Foreign Exchange Contracts (b)		2,528		—		2,528
	$	2,528	$	386,256	$	388,784

Each of the above derivatives is located in the following Statement of Assets and Liabilities accounts:

(a) Unrealized appreciation on open swap contracts

(b) Unrealized appreciation on open forward foreign currency exchange contracts

Liability Derivative		Forward Contracts
Foreign Exchange Contracts (a)		$	(60,959	)

The above derivative is located in the following Statement of Assets and Liabilities account:

(a) Unrealized depreciation on open forward foreign currency exchange contracts

Realized Gain (Loss)	Forward Contracts		Swap Contracts		Total
Credit Contracts (a)	$	—	$	1,020,868	$	1,020,868
Foreign Exchange Contracts (b)		1,453,531		—		1,453,531
	$	1,453,531	$	1,020,868	$	2,474,399

Each of the above derivatives is located in the following Statement of Operations accounts:

(a) Net realized gain (loss) from swap contracts

(b) Net realized gain (loss) from foreign currency (Statement of Operations includes both forward currency contracts and foreign currency transactions)

Change in Net Unrealized Appreciation (Depreciation)	Forward Contracts			Swap Contracts		Total
Credit Contracts (a)	$	—		$	386,256	$	386,256
Foreign Exchange Contracts (b)		(34,981	)		—		(34,981	)
	$	(34,981	)	$	386,256	$	351,275

Each of the above derivatives is located in the following Statement of Operations accounts:

(a) Change in net unrealized appreciation (depreciation) on swap contracts

(b) Change in net unrealized appreciation (depreciation) on foreign currency (Statement of Operations includes both forward currency contracts and foreign currency transactions)

DWS Strategic Income VIP

Asset Derivatives	Purchased Options		Forward Contracts		Swap Contracts		Total
Interest Rate Contracts (a)	$	467	$	—	$	2,678	$	3,145
Credit Contracts (a)		—		—		25,665		25,665
Foreign Exchange Contracts (b)		—		259,054		—		259,054
	$	467	$	259,054	$	28,343	$	287,864

Each of the above derivatives is located in the following Statement of Assets and Liabilities accounts:

(a) Investments in securities, at value (includes purchased options) and unrealized appreciation on open swap contracts

(b) Unrealized appreciation on open forward foreign currency exchange contracts

Liability Derivatives	Written Options			Forward Contracts			Swap Contracts			Futures Contracts			Total
Equity Contracts (a)	$	—		$	—		$	—		$	31,298		$	31,298
Interest Rate Contracts (a)		(35,163	)		—			(254,700	)		(126,598	)		(416,461	)
Credit Contracts (a)		—			—			(28,377	)		—			(28,377	)
Foreign Exchange Contracts (b)		—			(262,385	)		—			—			(262,385	)
	$	(35,163	)	$	(262,385	)	$	(283,077	)	$	(95,300	)	$	(675,925	)

Each of the above derivatives is located in the following Statement of Assets and Liabilities accounts:

(a) Options written, at value, net unrealized appreciation (depreciation) on futures and unrealized depreciation on open swap contracts. Liability of payable for daily variation margin on open futures contracts reflects unsettled variation margin.

(b) Unrealized depreciation on open forward foreign currency exchange contracts

Realized Gain (Loss)	Purchased Options		Forward Contracts		Swap Contracts			Futures Contracts			Total
Equity Contracts (a)	$	—	$	—	$	—		$	(421,417	)	$	(421,417	)
Interest Rate Contracts (a)		38,962		—		94,915			480,480			614,357
Credit Contracts (a)		—		—		(132,473	)		—			(132,473	)
Foreign Exchange Contracts (b)		—		434,022		—			—			434,022
	$	38,962	$	434,022	$	(37,558	)	$	59,063		$	494,489

Each of the above derivatives is located in the following Statement of Operations accounts:

(a) Net realized gain (loss) from investments (includes purchased options), swap contracts and futures, respectively

(b) Net realized gain (loss) from foreign currency (Statement of Operations includes both forward currency contracts and foreign currency transactions)

Change in Net Unrealized Appreciation (Depreciation)	Purchased Options			Written Options			Forward Contracts			Swap Contracts			Futures Contracts			Total
Equity Contracts (a)	$	—		$	—		$	—		$	—		$	19,172		$	19,172
Interest Rate Contracts (a)		(57,941	)		(4,423	)		—			(308,385	)		(20,863	)		(391,612	)
Credit contracts (a)		—			—			—			(1,477	)		—			(1,477	)
Foreign Exchange Contracts (b)		—			—			(279,489	)		—			—			(279,489	)
	$	(57,941	)	$	(4,423	)	$	(279,489	)	$	(309,862	)	$	(1,691	)	$	(653,406	)

Each of the above derivatives is located in the following Statement of Operations accounts:

(a) Change in net unrealized appreciation (depreciation) on investments (includes purchased options), written options, swap contracts and futures, respectively

(b) Change in net unrealized appreciation (depreciation) on foreign currency (Statement of Operations includes both forward currency contracts and foreign currency transactions)

C. Purchases and Sales of Securities

During the year ended December 31, 2010, purchases and sales of investment transactions (excluding short-term investments) were as follows:

Fund	Purchases ($)		Sales ($)
DWS Alternative Asset Allocation Plus VIP Underlying Affiliated Funds		20,924,087		733,000
Underlying Non-affiliated Funds		988,703		54,941
DWS Balanced VIP excluding US Treasury Obligations		501,453,180		520,652,361
US Treasury Obligations		71,576,766		77,346,084
DWS Blue Chip VIP		151,115,169		165,670,571
DWS Core Fixed Income VIP excluding US Treasury Obligations		255,494,334		250,517,214
US Treasury Obligations		97,533,517		86,987,776
DWS Diversified International Equity VIP		10,585,084		20,213,690
DWS Dreman Small Mid Cap Value VIP		93,395,395		129,147,757
DWS Global Thematic VIP		110,185,987		116,147,618
DWS Government & Agency Securities VIP		814,547,329		814,973,550
DWS High Income VIP		165,760,238		191,044,642
DWS Large Cap Value VIP		61,553,310		87,416,345
DWS Mid Cap Growth VIP		12,373,056		14,480,595
DWS Small Cap Growth VIP		49,541,542		62,144,300
DWS Strategic Income VIP excluding US Treasury Obligations		83,860,216		81,802,651
US Treasury Obligations		38,991,537		36,504,796
DWS Strategic Value VIP		218,849,807		258,849,951
DWS Technology VIP		16,212,693		32,717,685
DWS Turner Mid Cap Growth VIP		48,107,657		53,568,971

For the year ended December 31, 2010, transactions for written options on futures were as follows for DWS Government & Agency Securities VIP:

	Number of Contracts			Premiums
Outstanding, beginning of period		—		$	—
Options written		636			202,702
Options closed		(120	)		(65,361	)
Options exercised		(256	)		(105,437	)
Options expired		(260	)		(31,904	)
Outstanding, end of period		—		$	—

For the year ended December 31, 2010, transactions for written options on interest rate swaps were as follows for DWS Strategic Income VIP:

	Contract Amount		Premiums
Outstanding, beginning of period		—	$	—
Options written		29,000,000		30,740
Outstanding, end of period		29,000,000	$	30,740

D. Related Parties

Management Agreement. Under the Investment Management Agreement with Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), an indirect, wholly owned subsidiary of Deutsche Bank AG, the Advisor directs the investments of each Fund in accordance with its investment objectives, policies and restrictions. The Advisor determines the securities, instruments and other contracts relating to investments to be purchased, sold or entered into by each Fund or delegates such responsibility to each Fund's subadvisor.

Under the Investment Management Agreement with the Advisor, the fees are equivalent to the annual rates shown below of each Fund's average daily net assets, computed and accrued daily and payable monthly:

Fund	Annual Management Fee Rate
DWS Alternative Asset Allocation Plus VIP on assets invested in other DWS Funds on assets invested in all other assets not considered DWS Funds		.200%1.200	%
DWS Balanced VIP $0-$250 million		.370	%
next $750 million		.345	%
over $1 billion		.310	%
DWS Blue Chip VIP $0-$250 million		.550	%
next $750 million		.520	%
next $1.5 billion		.500	%
next $2.5 billion		.480	%
next $2.5 billion		.450	%
next $2.5 billion		.430	%
next $2.5 billion		.410	%
over $12.5 billion		.390	%
DWS Core Fixed Income VIP $0-$250 million		.500	%
next $750 million		.470	%
next $1.5 billion		.450	%
next $2.5 billion		.430	%
next $2.5 billion		.400	%
next $2.5 billion		.380	%
next $2.5 billion		.360	%
over $12.5 billion		.340	%
DWS Diversified International Equity VIP $0-$1.5 billion		.650	%
next $1.75 billion		.635	%
next $1.75 billion		.620	%
over $5 billion		.605	%
DWS Dreman Small Mid Cap Value VIP $0-$250 million		.650	%
next $750 million		.620	%
next $1.5 billion		.600	%
next $2.5 billion		.580	%
next $2.5 billion		.550	%
next $2.5 billion		.540	%
next $2.5 billion		.530	%
over $12.5 billion		.520	%
DWS Global Thematic VIP $0-$250 million		.915	%
next $500 million		.865	%
next $750 million		.815	%
next $1.5 billion		.765	%
over $3 billion		.715	%
DWS Government & Agency Securities VIP $0-$250 million		.450	%
next $750 million		.430	%
next $1.5 billion		.410	%
next $2.5 billion		.400	%
next $2.5 billion		.380	%
next $2.5 billion		.360	%
next $2.5 billion		.340	%
over $12.5 billion		.320	%
DWS High Income VIP $0-$250 million		.500	%
next $750 million		.470	%
next $1.5 billion		.450	%
next $2.5 billion		.430	%
next $2.5 billion		.400	%
next $2.5 billion		.380	%
next $2.5 billion		.360	%
over $12.5 billion		.340	%
DWS Large Cap Value VIP $0-$250 million		.650	%
next $750 million		.625	%
next $1.5 billion		.600	%
next $2.5 billion		.575	%
next $2.5 billion		.550	%
next $2.5 billion		.525	%
next $2.5 billion		.500	%
over $12.5 billion		.475	%
DWS Mid Cap Growth VIP $0-$250 million		.665	%
next $750 million		.635	%
next $1.5 billion		.615	%
next $2.5 billion		.595	%
next $2.5 billion		.565	%
next $2.5 billion		.555	%
next $2.5 billion		.545	%
over $12.5 billion		.535	%
DWS Money Market VIP $0-$500 million		.285	%
next $500 million		.270	%
next $1.0 billion		.255	%
over $2.0 billion		.240	%
DWS Small Cap Growth VIP $0-$250 million		.550	%
next $750 million		.525	%
over $1 billion		.500	%
DWS Strategic Income VIP $0-$250 million		.550	%
next $750 million		.520	%
next $1.5 billion		.500	%
next $2.5 billion		.480	%
next $2.5 billion		.450	%
next $2.5 billion		.430	%
next $2.5 billion		.410	%
over $12.5 billion		.390	%
DWS Strategic Value VIP $0-$250 million		.665	%
next $750 million		.635	%
next $1.5 billion		.615	%
next $2.5 billion		.595	%
next $2.5 billion		.565	%
next $2.5 billion		.555	%
next $2.5 billion		.545	%
over $12.5 billion		.535	%
DWS Technology VIP $0-$250 million		.665	%
next $750 million		.635	%
next $1.5 billion		.615	%
next $2.5 billion		.595	%
next $2.5 billion		.565	%
next $2.5 billion		.555	%
next $2.5 billion		.545	%
over $12.5 billion		.535	%
DWS Turner Mid Cap Growth VIP $0-$250 million		.715	%
next $250 million		.700	%
next $500 million		.685	%
over $1 billion		.670	%

QS Investors, LLC ("QS Investors") acts as an investment sub-advisor to DWS Alternative Asset Allocation Plus VIP, DWS Balanced VIP, DWS Blue Chip VIP, DWS Diversified International Equity VIP and DWS Strategic Income VIP. On August 1, 2010, members of the Advisor's Quantitative Strategies Group, including some members of the Funds' portfolio management teams, separated from the Advisor and formed QS Investors as a separate investment advisory firm unaffiliated with the Advisor (the "Separation"). As an investment sub-advisor to DWS Blue Chip VIP and DWS Diversified International Equity VIP, QS Investors makes investment decisions and buys and sells securities for the Funds. As an investment sub-advisor to DWS Alternative Asset Allocation Plus VIP, QS Investors renders strategic asset allocation services to the Fund. As an investment sub-advisor to DWS Balanced VIP, QS Investors renders strategic asset allocation services to the Fund and manages the assets attributable to the Fund's Global Tactical Asset Allocation ("GTAA") overlay strategy. As an investment sub-advisor to DWS Strategic Income VIP, QS Investors manages the assets attributable only to the Fund's GTAA overlay strategy. QS Investors is paid by the Advisor, not the Funds, for the services QS Investors provides to the Funds.

Global Thematic Partners, LLC ("GTP") acts as investment sub-advisor to DWS Global Thematic VIP. On July 1, 2010, members of the Advisor's Global Equity Team, including members of the DWS Global Thematic VIP portfolio management team, separated from the Advisor and formed GTP as a separate investment advisory firm unaffiliated with the Advisor (the "Separation"). As an investment sub-advisor to DWS Global Thematic VIP, GTP makes investment decisions and buys and sells securities for the Fund. GTP is paid by the Advisor, not the Fund, for the services GTP provides to the Fund.

Deutsche Asset Management International GmbH ("DeAMi") serves as subadvisor to DWS Large Cap Value VIP and a portion of DWS Balanced VIP's large cap value allocation of the portfolio. DeAMi is paid by the Advisor for its services.

Dreman Value Management, L.L.C. ("DVM") serves as subadvisor to DWS Dreman Small Mid Cap Value VIP and is paid by the Advisor for its services.

Turner Investment Partners, Inc. serves as subadvisor to DWS Turner Mid Cap Growth VIP and is paid by the Advisor for its services.

For the year ended December 31, 2010, the Advisor has agreed to waive 0.15% of the monthly management fee based on average daily net assets for DWS Alternative Asset Allocation Plus VIP.

For the period from January 1, 2010 through September 30, 2010, the Advisor had contractually agreed to waive its fee and/or reimburse certain operating expenses to the extent necessary to maintain the operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest expense) of each class as follows:

Fund	Annual Rate
DWS Global Thematic VIP Class A	1.06%
Class B	1.46%
DWS High Income VIP Class B	1.25%
DWS Large Cap Value VIP Class A	.88%
Class B	1.28%
DWS Mid Cap Growth VIP Class A	1.09%
DWS Strategic Income VIP Class A	.87%
DWS Turner Mid Cap Growth VIP Class A	1.01%

For the period from January 1, 2010 through April 30, 2011, the Advisor had contractually agreed to waive its fee and/or reimburse certain operating expenses to the extent necessary to maintain the operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage, interest expense and Underlying Funds) of each class as follows:

Fund	Annual Rate
DWS Alternative Asset Allocation Plus VIP Class A	.21%
Class B	.61%

For the period from January 1, 2010 through April 30, 2010, the Advisor had contractually agreed to waive its fee and/or reimburse certain operating expenses to the extent necessary to maintain the operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest expense) of each class as follows:

Fund	Annual Rate
DWS Money Market VIP Class A	.44%
DWS Strategic Value VIP Class A	.78%
Class B	1.11%

For the period from May 1, 2010 through January 31, 2011, the Advisor has contractually agreed to waive its fee and/or reimburse certain operating expenses to the extent necessary to maintain the operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest expense) of the class as follows:

Fund	Annual Rate
DWS Money Market VIP Class A	.51%

For the period from May 1, 2011 through September 30, 2011, the Advisor has contractually agreed to waive its fee and/or reimburse certain operating expenses to the extent necessary to maintain the operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage, interest expense and Underlying Funds) of each class as follows:

Fund	Annual Rate
DWS Alternative Asset Allocation Plus VIP Class A	.35%
Class B	.75%

For the period from October 1, 2010 through September 30, 2011, the Advisor has contractually agreed to waive its fee and/or reimburse certain operating expenses to the extent necessary to maintain the operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest expense) of each class as follows:

Fund	Annual Rate
DWS Core Fixed Income VIP Class A	.71%
DWS Global Thematic VIP Class A	1.03%
Class B	1.43%
DWS Mid Cap Growth VIP Class A	.97%
DWS Strategic Income VIP Class A	.78%
DWS Turner Mid Cap Growth VIP Class A	.97%

For the period from January 1, 2010 through February 5, 2010, the Advisor had voluntarily agreed to waive its fee and/or reimburse certain operating expenses to the extent necessary to maintain the operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest expense) of the class as follows:

Fund	Annual Rate
DWS Core Fixed Income VIP Class B	1.07%

In addition, the Advisor has agreed to voluntarily waive additional expenses for DWS Money Market VIP. The waiver may be changed or terminated at any time without notice. Under this arrangement, the Advisor waived certain expenses of the Fund.

Accordingly, for the year ended December 31, 2010, the total management fees, management fees waived and effective management fee rates were as follows:

Fund	Total Aggregated ($)		Waived ($)		Annual Effective Rate
DWS Alternative Asset Allocation Plus VIP		31,017		31,017		.00	%
DWS Balanced VIP		1,124,396		—		.37	%
DWS Blue Chip VIP		580,643		—		.55	%
DWS Core Fixed Income VIP		482,684		—		.50	%
DWS Diversified International Equity VIP		519,737		—		.65	%
DWS Dreman Small Mid Cap Value VIP		1,653,319		—		.65	%
DWS Global Thematic VIP		626,939		245,154		.56	%
DWS Government & Agency Securities VIP		789,612		—		.45	%
DWS High Income VIP		946,284		—		.50	%
DWS Large Cap Value VIP		1,313,548		—		.65	%
DWS Mid Cap Growth VIP		149,048		24,596		.56	%
DWS Money Market VIP		704,427		292,096		.17	%
DWS Small Cap Growth VIP		434,077		—		.55	%
DWS Strategic Income VIP		410,735		67,252		.46	%
DWS Strategic Value VIP		1,756,021		35,990		.65	%
DWS Technology VIP		484,850		—		.665	%
DWS Turner Mid Cap Growth VIP		368,747		559		.71	%

In addition, for the year ended December 31, 2010, the Advisor waived $51,328 and $809 of other expenses for DWS Alternative Asset Allocation Plus VIP and DWS Core Fixed Income VIP, respectively.

DWS Alternative Asset Allocation Plus VIP indirectly bears its proportionate share of fees and expenses incurred by the Underlying Funds in which it is invested.

Administration Fee. Pursuant to an Administrative Services Agreement, DIMA provides most administrative services to the Funds. For all services provided under the Administrative Services Agreement, the Funds pay DIMA an annual fee ("Administration Fee") of 0.10% of the Funds' average daily net assets, computed and accrued daily and payable monthly. For the year ended December 31, 2010, the Administration Fee was as follows:

Fund	Total Aggregated ($)		Waived ($)		Unpaid at December 31, 2010 ($)
DWS Alternative Asset Allocation Plus VIP		13,080		13,080		—
DWS Balanced VIP		307,796		—		26,033
DWS Blue Chip VIP		105,571		—		9,119
DWS Core Fixed Income VIP		96,537		—		7,487
DWS Diversified International Equity VIP		79,960		—		6,963
DWS Dreman Small Mid Cap Value VIP		254,770		—		23,011
DWS Global Thematic VIP		68,518		—		6,051
DWS Government & Agency Securities VIP		175,469		—		13,991
DWS High Income VIP		189,257		—		15,979
DWS Large Cap Value VIP		202,084		—		17,334
DWS Mid Cap Growth VIP		22,413		—		2,228
DWS Money Market VIP		247,168		—		19,561
DWS Small Cap Growth VIP		78,923		—		7,452
DWS Strategic Income VIP		74,679		—		6,418
DWS Strategic Value VIP		264,774		—		22,475
DWS Technology VIP		72,910		—		6,462
DWS Turner Mid Cap Growth VIP		51,573		—		4,967

Service Provider Fees. DWS Investments Service Company ("DISC"), an affiliate of the Advisor, is the transfer agent, dividend-paying agent and shareholder service agent for each Fund. Pursuant to a sub-transfer agency agreement between DISC and DST Systems, Inc. ("DST"), DISC has delegated certain transfer agent, dividend-paying agent and shareholder service agent functions to DST. DISC compensates DST out of the shareholder servicing fee it receives from each Fund. For the year ended December 31, 2010 and for the period ended February 5, 2010 for DWS Core Fixed Income VIP for Class B shares, the amounts charged to each Fund by DISC were as follows:

Fund	Total Aggregated ($)		Waived ($)		Unpaid at December 31, 2010 ($)
DWS Alternative Asset Allocation Plus VIP Class A		51		51		—
DWS Alternative Asset Allocation Plus VIP Class B		53		—		12
DWS Balanced VIP Class A		517		—		129
DWS Blue Chip VIP Class A		223		—		59
DWS Blue Chip VIP Class B		24		—		6
DWS Core Fixed Income VIP Class A		74		—		33
DWS Core Fixed Income VIP Class B		60		—		10
DWS Diversified International Equity VIP Class A		138		—		34
DWS Dreman Small Mid Cap Value VIP Class A		678		—		168
DWS Dreman Small Mid Cap Value VIP Class B		390		—		102
DWS Global Thematic VIP Class A		363		363		—
DWS Global Thematic VIP Class B		83		—		18
DWS Government & Agency Securities VIP Class A		325		—		77
DWS Government & Agency Securities VIP Class B		56		—		12
DWS High Income VIP Class A		307		—		71
DWS High Income VIP Class B		24		—		6
DWS Large Cap Value VIP Class A		279		—		71
DWS Large Cap Value VIP Class B		47		—		12
DWS Mid Cap Growth VIP Class A		—		—		—
DWS Money Market VIP Class A		710		710		—
DWS Small Cap Growth VIP Class A		336		—		92
DWS Strategic Income VIP Class A		162		162		—
DWS Strategic Value VIP Class A		433		433		—
DWS Strategic Value VIP Class B		197		—		48
DWS Technology VIP Class A		134		—		35
DWS Technology VIP Class B		107		—		24
DWS Turner Mid Cap Growth VIP Class A		120		120		—

Distribution Service Agreement. Under the Funds' Class B 12b-1 plans, DWS Investments Distributors, Inc. ("DIDI") received a fee ("Distribution Service Fee") of 0.25% of average daily net assets of Class B shares. For the year ended December 31, 2010 and for the period ended February 5, 2010 for DWS Core Fixed Income VIP, the Distribution Service Fee was as follows:

Fund	Total Aggregated ($)		Unpaid at December 31, 2010 ($)
DWS Alternative Asset Allocation Plus VIP		25,810		4,472
DWS Blue Chip VIP		399		277
DWS Core Fixed Income VIP		14		—
DWS Dreman Small Mid Cap Value VIP		59,943		5,482
DWS Global Thematic VIP		11,552		1,002
DWS Government & Agency Securities VIP		15,782		1,330
DWS High Income VIP		367		31
DWS Large Cap Value VIP		2,177		235
DWS Strategic Value VIP		4,271		393
DWS Technology VIP		2,449		31

Typesetting and Filing Service Fees. Under an agreement with DIMA, DIMA is compensated for providing typesetting and certain regulatory filing services to each Fund. For the year ended December 31, 2010, the amount charged to each Fund by DIMA included in the Statement of Operations under "reports to shareholders" was as follows:

Fund	Amount ($)		Unpaid at December 31, 2010 ($)
DWS Alternative Asset Allocation Plus VIP		13,134		2,147
DWS Balanced VIP		10,742		3,844
DWS Blue Chip VIP		12,605		3,200
DWS Core Fixed Income VIP		11,979		3,064
DWS Diversified International Equity VIP		11,959		2,922
DWS Dreman Small Mid Cap Value VIP		12,427		3,129
DWS Global Thematic VIP		10,208		1,734
DWS Government & Agency Securities VIP		12,898		3,141
DWS High Income VIP		11,655		2,493
DWS Large Cap Value VIP		11,866		2,924
DWS Mid Cap Growth VIP		11,630		3,135
DWS Money Market VIP		10,874		1,873
DWS Small Cap Growth VIP		10,959		3,135
DWS Strategic Income VIP		11,019		3,562
DWS Strategic Value VIP		13,417		4,180
DWS Technology VIP		11,852		2,738
DWS Turner Mid Cap Growth VIP		11,771		3,031

Trustees' Fees and Expenses. The Funds paid each Trustee not affiliated with the Advisor retainer fees plus specified amounts for various committee services and for the Board Chairperson.

Affiliated Cash Management Vehicles. The Funds may invest uninvested cash balances in Central Cash Management Fund, which is managed by the Advisor. The Funds indirectly bear their proportionate share of the expenses of the underlying money market funds. Central Cash Management Fund does not pay the Advisor an investment management fee. Central Cash Management Fund seeks a high level of current income consistent with liquidity and the preservation of capital.

E. Investing in High Yield Securities

The Funds' performance could be hurt if a security declines in credit quality or goes into default, or if an issuer does not make timely payments of interest or principal. Because the issuers of high-yield debt securities or junk bonds (debt securities rated below the fourth-highest category) may be in uncertain financial health, the prices of their debt securities can be more vulnerable to bad economic news, or even the expectation of bad news, than investment-grade debt securities. Because the Funds may invest in securities not paying current interest or in securities already in default, these risks may be more pronounced.

F. Investing in Emerging Markets

Investing in emerging markets may involve special risks and considerations not typically associated with investing in developed markets. These risks include revaluation of currencies, high rates of inflation or deflation, repatriation restrictions on income and capital, and future adverse political, social and economic developments. Moreover, securities issued in these markets may be less liquid, subject to government ownership controls or delayed settlements, and may have prices that are more volatile or less easily assessed than those of comparable securities of issuers in developed markets.

G. Ownership of the Funds

At December 31, 2010, the beneficial ownership in each Fund was as follows:

DWS Alternative Asset Allocation Plus VIP: One Participating Insurance Company was the owner of record of 10% or more of the total outstanding Class A shares of the Fund, owning 98%. Two Participating Insurance Companies were owners of record of 10% or more of the total outstanding Class B shares of the Fund, owning 83% and 17%.

DWS Balanced VIP: Three Participating Insurance Companies were owners of record of 10% or more of the total outstanding Class A shares of the Fund, each owning 45%, 22% and 15%.

DWS Blue Chip VIP: Two Participating Insurance Companies were owners of record of 10% or more of the total outstanding Class A shares of the Fund, each owning 53% and 39%. One Participating Insurance Company was the owner of record of 10% or more of the total outstanding Class B shares of the Fund, owning 100%.

DWS Core Fixed Income VIP: Three Participating Insurance Companies were owners of record of 10% or more of the total outstanding Class A shares of the Fund, each owning 44%, 41% and 13%.

DWS Diversified International Equity VIP: Three Participating Insurance Companies were owners of record of 10% or more of the total outstanding Class A shares of the Fund, each owning 42%, 29% and 28%.

DWS Dreman Small Mid Cap Value VIP: Three Participating Insurance Companies were owners of record of 10% or more of the total outstanding Class A shares of the Fund, each owning 39%, 26% and 15%. Three Participating Insurance Companies were owners of record of 10% or more of the total outstanding Class B shares of the Fund, each owning 41%, 19% and 11%.

DWS Global Thematic VIP: Two Participating Insurance Companies were owners of record of 10% or more of the total outstanding Class A shares of the Fund, each owning 57% and 33%. One Participating Insurance Company was the owner of record of 10% or more of the total outstanding Class B shares of the Fund, owning 98%.

DWS Government & Agency Securities VIP: Three Participating Insurance Companies were owners of record of 10% or more of the total outstanding Class A shares of the Fund, each owning 40%, 38% and 16%. One Participating Insurance Company was the owner of record of 10% or more of the total outstanding Class B shares of the Fund, owning 96%.

DWS High Income VIP: Three Participating Insurance Companies were owners of record of 10% or more of the total outstanding Class A shares of the Fund, each owning 34%, 32% and 28%. One Participating Insurance Company was the owner of record of 10% or more of the total outstanding Class B shares of the Fund, owning 100%.

DWS Large Cap Value VIP: Three Participating Insurance Companies were owners of record of 10% or more of the total outstanding Class A shares of the Fund, each owning 53%, 30% and 10%. Two Participating Insurance Companies were owners of record of 10% or more of the total outstanding Class B shares of the Fund, each owning 86% and 14%.

DWS Mid Cap Growth VIP: Two Participating Insurance Companies were owners of record of 10% or more of the total outstanding Class A shares of the Fund, each owning 63% and 35%.

DWS Money Market VIP: Three Participating Insurance Companies were owners of record of 10% or more of the total outstanding Class A shares of the Fund, each owning 28%, 20% and 15%.

DWS Small Cap Growth VIP: Three Participating Insurance Companies were owners of record of 10% or more of the total outstanding Class A shares of the Fund, each owning 42%, 28% and 25%.

DWS Strategic Income VIP: Two Participating Insurance Companies were owners of record of 10% or more of the total outstanding Class A shares of the Fund, each owning 59% and 39%.

DWS Strategic Value VIP: Two Participating Insurance Companies were owners of record of 10% or more of the total outstanding Class A shares of the Fund, each owning 56% and 30%. Five Participating Insurance Companies were owners of record of 10% or more of the total outstanding Class B shares of the Fund, each owning 26%, 25%, 15%, 11% and 11%.

DWS Technology VIP: Two Participating Insurance Companies were owners of record of 10% or more of the total outstanding Class A shares of the Fund, each owning 57% and 37%. Two Participating Insurance Companies were owners of record of 10% or more of the total outstanding Class B shares of the Fund, owning 79% and 12%.

DWS Turner Mid Cap Growth VIP: Two Participating Insurance Companies were owners of record of 10% or more of the total outstanding Class A shares of the Fund, each owning 75% and 25%.

H. Line of Credit

The Trust and other affiliated funds (the "Participants") share in a $450 million revolving credit facility provided by a syndication of banks. The Funds may borrow for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Participants are charged an annual commitment fee which is allocated based on net assets, among each of the Participants. Interest is calculated at a rate per annum equal to the sum of the Federal Funds Rate plus 1.25 percent plus if LIBOR exceeds the Federal Funds Rate the amount of such excess. The facility borrowing limit for each Fund as a percentage of net assets is as follows:

Fund	Facility Borrowing Limit
DWS Balanced VIP	33%
DWS Blue Chip VIP	33%
DWS Core Fixed Income VIP	33%
DWS Diversified International Equity VIP	33%
DWS Dreman Small Mid Cap Value VIP	33%
DWS Global Thematic VIP	33%
DWS Government & Agency Securities VIP	33%
DWS High Income VIP	33%
DWS Large Cap Value VIP	33%
DWS Mid Cap Growth VIP	33%
DWS Money Market VIP	33%
DWS Small Cap Growth VIP	33%
DWS Strategic Income VIP	33%
DWS Strategic Value VIP	33%
DWS Technology VIP	20%
DWS Turner Mid Cap Growth VIP	33%

I. Payments by Affiliates

During the year ended December 31, 2010, the Advisor agreed to reimburse DWS Large Cap Value VIP, DWS Strategic Value VIP and DWS Technology VIP $62,550, $289,394 and $1,507, respectively, for losses incurred on trades executed incorrectly. The amounts of the reimbursement are 0.03%, 0.11% and 0.00%, respectively, of the Funds' average net assets.

J. Acquisition of Assets

On April 24, 2009, DWS Large Cap Value VIP acquired all of the net assets of DWS Davis Venture Value VIP pursuant to a plan of reorganization approved by shareholders on November 21, 2008. The primary reason for the acquisition was to consolidate Funds managed by the Advisor with comparable investment objectives. The acquisition was accomplished by a tax-free exchange of 17,064,120 Class A shares and 32,154 Class B shares of DWS Davis Venture Value VIP for 12,224,432 Class A shares and 22,957 Class B shares of DWS Large Cap Value VIP, respectively, outstanding on April 24, 2009. DWS Davis Venture Value VIP's net assets at that date, $107,655,331, including $5,676,099 of net unrealized appreciation, were combined with those of DWS Large Cap Value VIP. The aggregate net assets of the Fund immediately before the acquisit ion were $106,678,067. The combined net assets of the Fund immediately following the acquisition were $214,333,398.

K. Subsequent Events

On January 12, 2011, the Board of the following Acquired Funds approved, in principle, the mergers of each Acquired Fund into the Acquiring Fund. Completion of each merger is subject to a number of conditions. The merger of DWS Technology VIP is subject to approval by shareholders of the Fund at a shareholder meeting expected to be held in April 2011. The mergers are expected to be completed on or about May 1, 2011.

Acquired Funds	Acquiring Funds
DWS Variable Series II — DWS Mid Cap Growth VIP	DWS Variable Series II — DWS Small Cap Growth VIP
DWS Variable Series II — DWS Strategic Value VIP	DWS Variable Series II — DWS Large Cap Value VIP
DWS Variable Series II — DWS Technology VIP	DWS Variable Series I — DWS Capital Growth VIP
DWS Variable Series II — DWS Turner Mid Cap Growth VIP	DWS Variable Series II — DWS Small Cap Growth VIP

In addition, on January 12, 2011, the Board approved changes to the name and strategy of DWS Small Cap Growth VIP. Effective on or about May 1, 2011, DWS Small Cap Growth VIP's investment objective will change from maximum appreciation of investors capital to long-term capital appreciation. In connection with the implementation of the new investment objective, the name will change from DWS Small Cap Growth VIP to DWS Small Mid Cap Growth VIP. In addition, the Russell 2500 Growth Index will replace the Russell 2000 Growth Index as the benchmark index because the Advisor believes that it better reflects the new investment strategy. For a description of the new investment objective, please see the supplement dated January 19, 2011 to DWS Small Cap Growth VIP's current prospectus posted on www.dws-investments.com.< /div>

Report of Independent Registered Public Accounting Firm

To the Board of Trustees and Shareholders of DWS Variable Series II:

We have audited the accompanying statements of assets and liabilities of DWS Variable Series II (the "Trust"), comprising the DWS Alternative Asset Allocation Plus VIP, DWS Balanced VIP, DWS Blue Chip VIP, DWS Core Fixed Income VIP, DWS Diversified International Equity VIP (formerly DWS International Select Equity VIP), DWS Dreman Small Mid Cap Value VIP, DWS Global Thematic VIP, DWS Government & Agency Securities VIP, DWS High Income VIP, DWS Large Cap Value VIP, DWS Mid Cap Growth VIP, DWS Money Market VIP, DWS Small Cap Growth VIP, DWS Strategic Income VIP, DWS Strategic Value VIP (formerly DWS Dreman High Return Equity VIP), DWS Technology VIP and DWS Turner Mid Cap Growth VIP, including the investment portfolios, as of December 31, 2010, and the related statements of operations, the statements of changes in n et assets and the financial highlights for each of the periods indicated therein. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Trust's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2010, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. 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 aforementioned funds of the DWS Variable Series II at December 31, 2010, the results of their operations, the changes in their net assets and the financial highlights for each of the periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts

February 14, 2011

Tax Information (Unaudited)

The following Funds designated as capital gain dividends for their year ended December 31, 2010:

Fund	Capital Gain ($)		% Representing 15% Rate Gains
DWS Alternative Asset Allocation Plus VIP		109,000		100
DWS Government & Agency Securities VIP		1,388,000		100

For corporate shareholders, the following percentage of income dividends paid during the following Funds' fiscal year ended December 31, 2010 qualified for the dividends received deduction:

Fund	Dividends Received %
DWS Alternative Asset Allocation Plus VIP	8
DWS Balanced VIP	22
DWS Blue Chip VIP	100
DWS Diversified International Equity VIP	4
DWS Dreman Small Mid Cap Value VIP	100
DWS Global Thematic VIP	59
DWS Large Cap Value VIP	100
DWS Strategic Value VIP	100
DWS Technology VIP	100
DWS Turner Mid Cap Growth VIP	100

DWS Diversified International Equity VIP paid foreign taxes of $274,450 and earned $1,655,652 of foreign source income during the year ended December 31, 2010. Pursuant to Section 853 of the Internal Revenue Code, the Fund designates $0.03 per share as foreign taxes paid and $0.16 per share as income earned from foreign sources for the year ended December 31, 2010.

DWS Global Thematic VIP paid foreign taxes of $117,000 and earned $347,000 of foreign source income during the year ended December 31, 2010. Pursuant to Section 853 of the International Revenue Code, the Fund designates $0.02 per share as foreign taxes paid and $0.04 per share as income earned from foreign sources for the year ended December 31, 2010.

Please consult a tax advisor if you have questions about federal or state income tax laws, or on how to prepare your tax returns. If you have specific questions about your account, please contact your insurance provider.

Proxy Voting

The Trust's policies and procedures for voting proxies for portfolio securities and information about how the Trust voted proxies related to its portfolio securities during the 12-month period ended June 30 are available on our Web site — www.dws-investments.com (click on "proxy voting" at the bottom of the page) — or on the SEC's Web site — www.sec.gov. To obtain a written copy of the Trust's policies and procedures without charge, upon request, call us toll free at (800) 728-3337.

Investment Management Agreement Approval

DWS Alternative Asset Allocation Plus VIP

The Board of Trustees, including the Independent Trustees, approved the renewal of your Fund's investment management agreement (the "Agreement") with Deutsche Investment Management Americas Inc. ("DWS"), sub-advisory agreements (each a "Sub-Advisory Agreement") between DWS and RREEF America L.L.C. ("RREEF"), an affiliate of DWS, and DWS and QS Investors, LLC ("QS Investors") and sub-sub-advisory agreements (the "Sub-Sub-Advisory Agreements," and together with the Agreement and Sub-Advisory Agreements, the "Agreements") between RREEF and each of Deutsche Alternatives Asset Management (Global) Limited, Deutsche Asset Management (Hond Kong) Limited and Deutsche Investments Australia Limted (the "Sub-Sub-Advisors"), all affiliates of DWS, in September 2010.

In terms of the process that the Board followed prior to approving the Agreements, shareholders should know that:

• In September 2010, all but one of the Fund's Trustees were independent of DWS and its affiliates.

• The Trustees meet frequently to discuss fund matters. Each year, the Trustees dedicate substantial time to contract review matters. Over the course of several months, the Board's Contract Committee, in coordination with the Board's Fixed Income and Quant Oversight Committee, reviewed comprehensive materials received from DWS, independent third parties and independent counsel. These materials included an analysis of the Fund's fees and expenses, and profitability compiled by the Fund's independent fee consultant. The Board also received extensive information throughout the year regarding performance of the Fund.

• The Independent Trustees regularly meet privately with their independent counsel to discuss contract review and other matters. In addition, the Independent Trustees were also advised by the Fund's independent fee consultant in the course of their review of the Fund's contractual arrangements and considered a comprehensive report prepared by the independent fee consultant in connection with their deliberations (the "IFC Report").

• In connection with reviewing the Agreements, the Board also reviewed the terms of the Fund's Rule 12b-1 plan, distribution agreement, administrative services agreement, transfer agency agreement and other material service agreements.

• Based on its evaluation of the information provided, the Contract Committee presented its findings and recommendations to the Independent Trustees as a group. The Independent Trustees reviewed the Contract Committee's findings and recommendations and presented their recommendations to the full Board.

In connection with the contract review process, the Contract Committee and the Board considered the factors discussed below, among others. The Board also considered that DWS and its predecessors have managed the Fund since its inception, and the Board believes that a long-term relationship with a capable, conscientious advisor is in the best interests of the Fund. The Board considered, generally, that shareholders chose to invest or remain invested in the Fund knowing that DWS managed the Fund. DWS, RREEF and the Sub-Sub-Advisors are part of Deutsche Bank, a major global banking institution that is engaged in a wide range of financial services. The Board believes that there are significant advantages to being part of a global asset management business that offers a wide range of investing expertise and resources, incl uding hundreds of portfolio managers and analysts with research capabilities in many countries throughout the world.

While shareholders may focus primarily on fund performance and fees, the Fund's Board considers these and many other factors, including the quality and integrity of DWS's, QS Investors', RREEF's and the Sub-Sub-Advisors' personnel and such other issues as back-office operations, fund valuations, and compliance policies and procedures. In addition, in connection with approving the continuation of the Fund's Sub-Advisory Agreement with QS Investors, the Board noted it had engaged in a comprehensive review of the agreement in connection with its initial approval in May 2010.

On the basis of this evaluation and the ongoing review of investment results by the Board, the Board concluded that the nature, quality and extent of services provided by DWS, QS Investors, RREEF and the Sub-Sub-Advisors historically have been and continue to be satisfactory.

Fees and Expenses. The Board considered the Fund's investment management fee schedule, sub-advisory fee schedules, sub-sub-advisory fee schedules, operating expenses, and total expense ratios and comparative information provided by Lipper and the independent fee consultant regarding investment management fee rates paid to other investment advisors by similar funds (1st quartile being the most favorable and 4th quartile being the least favorable). With respect to management fees paid to other investment advisors by similar funds, the Board noted that the contractual fee rates paid by the Fund, which include a 0.10% fee paid to DWS under the Fund's administrative services agreement, were higher than the median (3rd quartile) of the applicable Lippe r peer group (based on Lipper data provided as of December 31, 2009). With respect to the sub-advisory fees paid to QS Investors and RREEF, the Board noted that the fees are paid by DWS out of its fee and not directly by the Fund. With respect to the sub-sub-advisory fees paid to the Sub-Sub-Advisors, the Board noted that the fees are paid by RREEF out of its fee and not directly by the Fund. The Board noted that the Fund's Class A shares total (net) operating expenses were expected to be higher than the median (4th quartile) of the applicable Lipper expense universe (based on Lipper data provided as of December 31, 2009, and analyzing Lipper expense universe Class A expenses less any applicable 12b-1 fees) ("Lipper Universe Expenses"). The Board also reviewed data comparing each share class's total (net) operating expenses to the applicable Lipper Universe Expenses. The Board considered the Fund's management fee rate as compared to fees charged by DWS and certain of its affiliates for comparable mutual fund s and considered differences in fund and fee structures between the DWS Funds. The Board also considered how the Fund's total (net) operating expenses compared to the total (net) operating expenses of a more customized peer group selected by Lipper (based on such factors as asset size). The Board also noted that the expense limitations agreed to by DWS helped to ensure that the Fund's total (net) operating expenses would remain competitive.

The information considered by the Board as part of its review of management fees included information regarding fees charged by DWS and its affiliates to similar institutional accounts and to similar funds offered primarily to European investors ("DWS Europe funds"), in each case as applicable. The Board observed that advisory fee rates for institutional accounts generally were lower than the management fees charged by similarly managed DWS US mutual funds ("DWS Funds"), but also took note of the differences in services provided to DWS Funds as compared to institutional accounts. In the case of DWS Europe funds, the Board observed that fee rates for DWS Europe funds generally were higher than for similarly managed DWS Funds, but noted that differences in the types of services provided to DWS Funds relative to DWS Euro pe funds made it difficult to compare such fees.

On the basis of the information provided, the Board concluded that management fees were reasonable and appropriate in light of the nature, quality and extent of services provided by DWS, QS Investors, RREEF and the Sub-Sub-Advisors.

Profitability. The Board reviewed detailed information regarding revenues received by DWS from advising the DWS Funds along with the estimated costs and pre-tax profits realized by DWS from advising the DWS Funds. The Board also received information regarding the estimated enterprise-wide profitability of DWS and its affiliates with respect to all fund services in totality. The Board did not receive profitability information with respect to the Fund, but did receive such information with respect to the funds in which the Fund invests. The Board also reviewed information regarding the profitability of certain similar investment management firms. The Board noted that while information regarding the profitability of such firms is limited (and in som e cases is not necessarily prepared on a comparable basis), DWS and its affiliates' overall profitability with respect to the DWS fund complex (after taking into account distribution and other services provided to the funds by DWS and its affiliates) was lower than the overall profitability levels of many comparable firms for which such data was available. The Board did not consider the profitability of QS Investors with respect to the Fund. The Board noted that DWS pays QS Investors' fee out of its management fee, and its understanding that the Fund's sub-advisory fee schedule was the product of an arm's length negotiation with DWS.

Economies of Scale. The Board considered whether there are economies of scale with respect to the management of the Fund and whether the Fund benefits from any economies of scale. In this regard, the Board noted that while the Fund's current investment management fee schedule does not include breakpoints, the Board intends to consider implementation of one or more breakpoints once the Fund reaches an efficient operating size. The Board concluded that the Fund's fee schedule represents an appropriate sharing between the Fund and DWS of such economies of scale as may exist in the management of the Fund at current asset levels.

Other Benefits to DWS and QS Investors and Their Affiliates. The Board also considered the character and amount of other incidental benefits received by DWS and QS Investors and their affiliates, including any fees received by DWS for administrative services provided to the Fund and any fees received by an affiliate of DWS for distribution services. The Board also considered benefits to DWS and QS Investors related to brokerage and soft-dollar allocations, including allocating brokerage to pay for research generated by parties other than the executing broker dealers, which pertain primarily to funds investing in equity securities, along with the incidental public relations benefits to DWS and QS Investors related to DWS Funds advertising and cros s-selling opportunities among DWS products and services. The Board concluded that management fees were reasonable in light of these fallout benefits.

Compliance. The Board considered the significant attention and resources dedicated by DWS to documenting and enhancing its compliance processes in recent years. The Board noted in particular (i) the experience and seniority of both DWS's chief compliance officer and the Fund's chief compliance officer; (ii) the large number of DWS compliance personnel; and (iii) the substantial commitment of resources by DWS and its affiliates to compliance matters. The Board also considered the attention and resources dedicated by DWS to the oversight of QS Investors' compliance program and compliance with the applicable fund policies and procedures.

Based on all of the information considered and the conclusions reached, the Board unanimously (including the Independent Trustees) determined that the continuation of the Agreements is in the best interests of the Fund. In making this determination, the Board did not give particular weight to any single factor identified above. The Board considered these factors over the course of numerous meetings, certain of which were in executive session with only the Independent Trustees and their counsel present. It is possible that individual Trustees may have weighed these factors differently in reaching their individual decisions to approve the continuation of the Agreements.

DWS Balanced VIP

In terms of the process that the Board followed prior to approving the Agreements, shareholders should know that:

• In September 2010, all but one of the Fund's Trustees were independent of DWS and its affiliates.

• The Trustees meet frequently to discuss fund matters. Each year, the Trustees dedicate substantial time to contract review matters. Over the course of several months, the Board's Contract Committee, in coordination with the Board's Fixed Income and Quant Oversight Committee, reviewed comprehensive materials received from DWS, independent third parties and independent counsel. These materials included an analysis of the Fund's performance, fees and expenses, and profitability compiled by the Fund's independent fee consultant. The Board also received extensive information throughout the year regarding performance of the Fund.

• In connection with reviewing the Agreements, the Board also reviewed the terms of the Fund's distribution agreement, administrative services agreement, transfer agency agreement and other material service agreements.

In connection with the contract review process, the Contract Committee and the Board considered the factors discussed below, among others. The Board also considered that DWS and its predecessors have managed the Fund since its inception, and the Board believes that a long-term relationship with a capable, conscientious advisor is in the best interests of the Fund. The Board considered, generally, that shareholders chose to invest or remain invested in the Fund knowing that DWS managed the Fund, and that the Agreement was approved by the Fund's shareholders. DWS and DeAMi are part of Deutsche Bank, a major global banking institution that is engaged in a wide range of financial services. The Board believes that there are significant advantages to being part of a global asset management business that offers a wide range of investing expertise and resources, including hundreds of portfolio managers and analysts with research capabilities in many countries throughout the world.

While shareholders may focus primarily on fund performance and fees, the Fund's Board considers these and many other factors, including the quality and integrity of DWS's, DeAMi's and QS Investors' personnel and such other issues as back-office operations, fund valuations, and compliance policies and procedures. In addition, in connection with approving the continuation of the Fund's Sub-Advisory Agreement with QS Investors, the Board noted it had engaged in a comprehensive review of the agreement in connection with its initial approval in May 2010.

Nature, Quality and Extent of Services. The Board considered the terms of the Agreements, including the scope of advisory services provided under the Agreements. The Board noted that, under the Agreements, DWS, DeAMi and QS Investors provide portfolio management services to the Fund and that, pursuant to a separate administrative services agreement, DWS provides administrative services to the Fund. The Board considered the experience and skills of senior management and investment personnel, the resources made available to such personnel, the ability of DWS to attract and retain high-quality personnel, and the organizational depth and stability of DWS. The Board reviewed the Fund's performance over short-term and long-term periods and compared tho se returns to various agreed-upon performance measures, including market indices and a peer universe compiled by the independent fee consultant using information supplied by Lipper Inc. ("Lipper"). The Board also noted that it has put into place a process of identifying "Focus Funds" (e.g., funds performing poorly relative to their benchmark or a peer universe compiled by Lipper), and receives more frequent reporting and information from DWS regarding such funds, along with DWS's remedial plans to address underperformance. The Board believes this process is an effective manner of identifying and addressing underperforming funds. Based on the information provided, the Board noted that for the one-, three- and five-year periods ended December 31, 2009, the Fund's performance (Class A shares) was in the 2nd quartile, 4th quartile and 4th quartile, respectively, of the applicable Lipper universe (the 1st quartile being the best performers and the 4th quartile being the worst performers). The Board also observed that the Fund has outperformed its benchmark in the one-year period and has underperformed its benchmark in the three- and five-year periods ended December 31, 2009.

On the basis of this evaluation and the ongoing review of investment results by the Board, the Board concluded that the nature, quality and extent of services provided by DWS, DeAMi and QS Investors historically have been and continue to be satisfactory.

Fees and Expenses. The Board considered the Fund's investment management fee schedule, sub-advisory fee schedules, operating expenses, and total expense ratios, and comparative information provided by Lipper and the independent fee consultant regarding investment management fee rates paid to other investment advisors by similar funds (1st quartile being the most favorable and 4th quartile being the least favorable). With respect to management fees paid to other investment advisors by similar funds, the Board noted that the contractual fee rates paid by the Fund, which include the 0.10% fee paid to DWS under the Fund's administrative services agreement, were lower than the median (1st quartile) of the applicable Lipper peer group (based on Lipper data provided as of December 31, 2009). With respect to the sub-advisory fees paid to DeAMi and QS Investors, the Board noted that the fees are paid by DWS out of its fee and not directly by the Fund. The Board noted that the Fund's Class A shares total (net) operating expenses were expected to be lower than the median (2nd quartile) of the applicable Lipper expense universe (based on Lipper data provided as of December 31, 2009, and analyzing Lipper expense universe Class A expenses less any applicable 12b-1 fees) ("Lipper Universe Expenses"). The Board considered the Fund's management fee rate as compared to fees charged by DWS and certain of its affiliates for comparable mutual funds and considered differences in fund and fee structures between the DWS Funds. The Board also considered how the Fund's total (net) operating expenses compared to the total (net) operating expenses of a more customized peer group selected by Lipper (based on such factors as asset size).

Profitability. The Board reviewed detailed information regarding revenues received by DWS under the Agreement. The Board considered the estimated costs and pre-tax profits realized by DWS from advising the DWS Funds, as well as estimates of the pre-tax profits attributable to managing the Fund in particular. The Board also received information regarding the estimated enterprise-wide profitability of DWS and its affiliates with respect to all fund services in totality and by fund. The Board reviewed DWS's methodology in allocating its costs to the management of the Fund. Based on the information provided, the Board concluded that the pre-tax profits realized by DWS in connection with the management of the Fund were not unreasonable. The Board also reviewed information regarding the profitability of certain similar investment management firms. The Board noted that while information regarding the profitability of such firms is limited (and in some cases is not necessarily prepared on a comparable basis), DWS and its affiliates' overall profitability with respect to the DWS fund complex (after taking into account distribution and other services provided to the funds by DWS and its affiliates) was lower than the overall profitability levels of many comparable firms for which such data was available. The Board did not consider the profitability of QS Investors with respect to the Fund. The Board noted that DWS pays QS Investors' fee out of its management fee, and its understanding that the Fund's sub-advisory fee schedule was the product of an arm's length negotiation with DWS.

Economies of Scale. The Board considered whether there are economies of scale with respect to the management of the Fund and whether the Fund benefits from any economies of scale. The Board noted that the Fund's management fee schedule includes fee breakpoints. The Board concluded that the Fund's fee schedule represents an appropriate sharing between the Fund and DWS of such economies of scale as may exist in the management of the Fund at current asset levels.

DWS Blue Chip VIP

In terms of the process that the Board followed prior to approving the Agreements, shareholders should know that:

• In September 2010, all but one of the Fund's Trustees were independent of DWS and its affiliates.

• The Trustees meet frequently to discuss fund matters. Each year, the Trustees dedicate substantial time to contract review matters. Over the course of several months, the Board's Contract Committee, in coordination with the Board's Fixed Income and Quant Oversight Committee, reviewed comprehensive materials received from DWS, independent third parties and independent counsel. These materials included an analysis of the Fund's performance, fees and expenses, and profitability compiled by the Fund's independent fee consultant. The Board also received extensive information throughout the year regarding performance of the Fund.

In connection with the contract review process, the Contract Committee and the Board considered the factors discussed below, among others. The Board also considered that DWS and its predecessors have managed the Fund since its inception, and the Board believes that a long-term relationship with a capable, conscientious advisor is in the best interests of the Fund. The Board considered, generally, that shareholders chose to invest or remain invested in the Fund knowing that DWS managed the Fund, and that the Agreement was approved by the Fund's shareholders. DWS is part of Deutsche Bank, a major global banking institution that is engaged in a wide range of financial services. The Board believes that there are significant advantages to being part of a global asset management business that offers a wide range of investin g expertise and resources, including hundreds of portfolio managers and analysts with research capabilities in many countries throughout the world.

While shareholders may focus primarily on fund performance and fees, the Fund's Board considers these and many other factors, including the quality and integrity of DWS's and QS Investors' personnel and such other issues as back-office operations, fund valuations, and compliance policies and procedures. In addition, in connection with approving the continuation of the Fund's Sub-Advisory Agreement, the Board noted it had engaged in a comprehensive review of the agreement in connection with its initial approval in May 2010.

Nature, Quality and Extent of Services. The Board considered the terms of the Agreements, including the scope of advisory services provided under the Agreements. The Board noted that, under the Agreements, DWS and QS Investors provide portfolio management services to the Fund and that, pursuant to a separate administrative services agreement, DWS provides administrative services to the Fund. The Board considered the experience and skills of senior management and investment personnel, the resources made available to such personnel, the ability of DWS to attract and retain high-quality personnel, and the organizational depth and stability of DWS. The Board reviewed the Fund's performance over short-term and long-term periods and compared those retu rns to various agreed-upon performance measures, including market indices and a peer universe compiled by the independent fee consultant using information supplied by Lipper Inc. ("Lipper"). The Board also noted that it has put into place a process of identifying "Focus Funds" (e.g., funds performing poorly relative to their benchmark or a peer universe compiled by Lipper), and receives more frequent reporting and information from DWS regarding such funds, along with DWS's remedial plans to address underperformance. The Board believes this process is an effective manner of identifying and addressing underperforming funds. Based on the information provided, the Board noted that for the one-, three- and five-year periods ended December 31, 2009, the Fund's performance (Class A shares) was in the 2nd quartile of the applicable Lipper universe (the 1st quartile being the best performers and the 4th quartile being the worst performers). The Board also observed that the Fund has outperformed its benchmark in the o ne-, three- and five-year periods ended December 31, 2009.

On the basis of this evaluation and the ongoing review of investment results by the Board, the Board concluded that the nature, quality and extent of services provided by DWS and QS Investors historically have been and continue to be satisfactory.

Fees and Expenses. The Board considered the Fund's investment management fee schedule, sub-advisory fee schedule, operating expenses, and total expense ratios, and comparative information provided by Lipper and the independent fee consultant regarding investment management fee rates paid to other investment advisors by similar funds (1st quartile being the most favorable and 4th quartile being the least favorable). With respect to management fees paid to other investment advisors by similar funds, the Board noted that the contractual fee rates paid by the Fund, which include the 0.10% fee paid to DWS under the Fund's administrative services agreement, were lower than the median (2nd quartile) of the applicable Lipper peer group (based on Lipper d ata provided as of December 31, 2009). With respect to the sub-advisory fee paid to QS Investors, the Board noted that the fee is paid by DWS out of its fee and not directly by the Fund. The Board noted that the Fund's Class A shares total (net) operating expenses were expected to be lower than the median (2nd quartile) of the applicable Lipper expense universe (based on Lipper data provided as of December 31, 2009, and analyzing Lipper expense universe Class A expenses less any applicable 12b-1 fees) ("Lipper Universe Expenses"). The Board also reviewed data comparing each share class's total (net) operating expenses to the applicable Lipper Universe Expenses. The Board considered the Fund's management fee rate as compared to fees charged by DWS and certain of its affiliates for comparable mutual funds and considered differences in fund and fee structures between the DWS Funds. The Board also considered how the Fund's total (net) operating expenses compared to the total (net) operating expenses of a more cu stomized peer group selected by Lipper (based on such factors as asset size).

Economies of Scale. The Board considered whether there are economies of scale with respect to the management of the Fund and whether the Fund benefits from any economies of scale. The Board noted that the Fund's management fee schedule includes fee breakpoints. The Board concluded that the Fund's fee schedule represents an appropriate sharing between the Fund and DWS of such economies of scale as may exist in the management of the Fund at current asset levels.

Compliance. The Board considered the significant attention and resources dedicated by DWS to documenting and enhancing its compliance processes in recent years. The Board noted in particular (i) the experience and seniority of both DWS's chief compliance officer and the Fund's chief compliance officer; (ii) the large number of DWS compliance personnel; and (iii) the substantial commitment of resources by DWS and its affiliates to compliance matters. The Board also considered the attention and resources dedicated by DWS to the oversight of the investment sub-advisor's compliance program and compliance with the applicable fund policies and procedures.

DWS Core Fixed Income VIP

In terms of the process that the Board followed prior to approving the Agreement, shareholders should know that:

• In September 2010, all but one of the Fund's Trustees were independent of DWS and its affiliates.

• The Trustees meet frequently to discuss fund matters. Each year, the Trustees dedicate substantial time to contract review matters. Over the course of several months, the Board's Contract Committee, in coordination with the Board's Fixed Income and Quant Oversight Committee, reviewed comprehensive materials received from DWS, independent third parties and independent counsel. These materials included an analysis of the Fund's performance, fees and expenses, and profitability compiled by the Fund's independent fee consultant. The Board also received extensive information throughout the year regarding performance of the Fund.

• In connection with reviewing the Agreement, the Board also reviewed the terms of the Fund's distribution agreement, administrative services agreement, transfer agency agreement and other material service agreements.

In connection with the contract review process, the Contract Committee and the Board considered the factors discussed below, among others. The Board also considered that DWS and its predecessors have managed the Fund since its inception, and the Board believes that a long-term relationship with a capable, conscientious advisor is in the best interests of the Fund. The Board considered, generally, that shareholders chose to invest or remain invested in the Fund knowing that DWS managed the Fund, and that the Agreement was approved by the Fund's shareholders. DWS is part of Deutsche Bank, a major global banking institution that is engaged in a wide range of financial services. The Board believes that there are significant advantages to being part of a global asset management business that offers a wide range of investin g expertise and resources, including hundreds of portfolio managers and analysts with research capabilities in many countries throughout the world.

While shareholders may focus primarily on fund performance and fees, the Fund's Board considers these and many other factors, including the quality and integrity of DWS's personnel and such other issues as back-office operations, fund valuations, and compliance policies and procedures.

Nature, Quality and Extent of Services. The Board considered the terms of the Agreement, including the scope of advisory services provided under the Agreement. The Board noted that, under the Agreement, DWS provides portfolio management services to the Fund and that, pursuant to a separate administrative services agreement, DWS provides administrative services to the Fund. The Board considered the experience and skills of senior management and investment personnel, the resources made available to such personnel, the ability of DWS to attract and retain high-quality personnel, and the organizational depth and stability of DWS. The Board reviewed the Fund's performance over short-term and long-term periods and compared those returns to various agre ed-upon performance measures, including market indices and a peer universe compiled by the independent fee consultant using information supplied by Lipper Inc. ("Lipper"). The Board also noted that it has put into place a process of identifying "Focus Funds" (e.g., funds performing poorly relative to their benchmark or a peer universe compiled by Lipper), and receives more frequent reporting and information from DWS regarding such funds, along with DWS's remedial plans to address underperformance. The Board believes this process is an effective manner of identifying and addressing underperforming funds. Based on the information provided, the Board noted that for the one-, three- and five-year periods ended December 31, 2009, the Fund's performance (Class A shares) was in the 4th quartile of the applicable Lipper universe (the 1st quartile being the best performers and the 4th quartile being the worst performers). The Board also observed that the Fund has outperformed its benchmark in the one-year period and has underperformed its benchmark in the three- and five-year periods ended December 31, 2009. The Board noted the disappointing investment performance of the Fund in recent periods and continued to discuss with senior management of DWS the factors contributing to such underperformance and actions being taken to improve performance. The Board recognized that DWS has made significant changes in its investment personnel and processes in recent years in an effort to improve long-term performance.

On the basis of this evaluation and the ongoing review of investment results by the Board, the Board concluded that the nature, quality and extent of services provided by DWS historically have been and continue to be satisfactory.

Fees and Expenses. The Board considered the Fund's investment management fee schedule, operating expenses, and total expense ratios, and comparative information provided by Lipper and the independent fee consultant regarding investment management fee rates paid to other investment advisors by similar funds (1st quartile being the most favorable and 4th quartile being the least favorable). With respect to management fees paid to other investment advisors by similar funds, the Board noted that the contractual fee rates paid by the Fund, which include the 0.10% fee paid to DWS under the Fund's administrative services agreement, were higher than the median (3rd quartile) of the applicable Lipper peer group (based on Lipper data provided as of Decembe r 31, 2009). The Board noted that the Fund's Class A shares total (net) operating expenses were expected to be higher than the median (3rd quartile) of the applicable Lipper expense universe (based on Lipper data provided as of December 31, 2009, and analyzing Lipper expense universe Class A expenses less any applicable 12b-1 fees) ("Lipper Universe Expenses"). The Board considered the Fund's management fee rate as compared to fees charged by DWS and certain of its affiliates for comparable mutual funds and considered differences in fund and fee structures between the DWS Funds. The Board also considered how the Fund's total (net) operating expenses compared to the total (net) operating expenses of a more customized peer group selected by Lipper (based on such factors as asset size). The Board also noted that the expense limitation agreed to by DWS helped to ensure that the Fund's total (net) operating expenses would remain competitive.

On the basis of the information provided, the Board concluded that management fees were reasonable and appropriate in light of the nature, quality and extent of services provided by DWS.

Economies of Scale. The Board considered whether there are economies of scale with respect to the management of the Fund and whether the Fund benefits from any economies of scale. The Board noted that the Fund's management fee schedule includes fee breakpoints. The Board concluded that the Fund's fee schedule represents an appropriate sharing between the Fund and DWS of such economies of scale as may exist in the management of the Fund at current asset levels.

Other Benefits to DWS and Its Affiliates. The Board also considered the character and amount of other incidental benefits received by DWS and its affiliates, including any fees received by DWS for administrative services provided to the Fund and any fees received by an affiliate of DWS for distribution services. The Board also considered benefits to DWS related to brokerage and soft-dollar allocations, including allocating brokerage to pay for research generated by parties other than the executing broker dealers, which pertain primarily to funds investing in equity securities, along with the incidental public relations benefits to DWS related to DWS Funds advertising and cross-selling opportunities among DWS products and services. The Board concl uded that management fees were reasonable in light of these fallout benefits.

Based on all of the information considered and the conclusions reached, the Board unanimously (including the Independent Trustees) determined that the continuation of the Agreement is in the best interests of the Fund. In making this determination, the Board did not give particular weight to any single factor identified above. The Board considered these factors over the course of numerous meetings, certain of which were in executive session with only the Independent Trustees and their counsel present. It is possible that individual Trustees may have weighed these factors differently in reaching their individual decisions to approve the continuation of the Agreement.

DWS Diversified International Equity VIP

In terms of the process that the Board followed prior to approving the Agreements, shareholders should know that:

• In September 2010, all but one of the Fund's Trustees were independent of DWS and its affiliates.

• The Trustees meet frequently to discuss fund matters. Each year, the Trustees dedicate substantial time to contract review matters. Over the course of several months, the Board's Contract Committee, in coordination with the Board's Fixed Income and Quant Oversight Committee, reviewed comprehensive materials received from DWS, independent third parties and independent counsel. These materials included an analysis of the Fund's performance, fees and expenses, and profitability compiled by the Fund's independent fee consultant. The Board also received extensive information throughout the year regarding performance of the Fund.

In connection with the contract review process, the Contract Committee and the Board considered the factors discussed below, among others. The Board also considered that DWS and its predecessors have managed the Fund since its inception, and the Board believes that a long-term relationship with a capable, conscientious advisor is in the best interests of the Fund. The Board considered, generally, that shareholders chose to invest or remain invested in the Fund knowing that DWS managed the Fund, and that the Agreement was approved by the Fund's shareholders. DWS is part of Deutsche Bank, a major global banking institution that is engaged in a wide range of financial services. The Board believes that there are significant advantages to being part of a global asset management business that offers a wide range of investin g expertise and resources, including hundreds of portfolio managers and analysts with research capabilities in many countries throughout the world.

Nature, Quality and Extent of Services. The Board considered the terms of the Agreements, including the scope of advisory services provided under the Agreements. The Board noted that, under the Agreements, DWS and QS Investors provide portfolio management services to the Fund and that, pursuant to a separate administrative services agreement, DWS provides administrative services to the Fund. The Board considered the experience and skills of senior management and investment personnel, the resources made available to such personnel, the ability of DWS to attract and retain high-quality personnel, and the organizational depth and stability of DWS. The Board reviewed the Fund's performance over short-term and long-term periods and compared those retu rns to various agreed-upon performance measures, including market indices and a peer universe compiled by the independent fee consultant using information supplied by Lipper Inc. ("Lipper"). The Board also noted that it has put into place a process of identifying "Focus Funds" (e.g., funds performing poorly relative to their benchmark or a peer universe compiled by Lipper), and receives more frequent reporting and information from DWS regarding such funds, along with DWS's remedial plans to address underperformance. The Board believes this process is an effective manner of identifying and addressing underperforming funds. Based on the information provided, the Board noted that for the one-, three- and five-year periods ended December 31, 2009, the Fund's performance (Class A shares) was in the 3rd quartile, 4th quartile and 4th quartile, respectively, of the applicable Lipper universe (the 1st quartile being the best performers and the 4th quartile being the worst performers). The Board also observed that th e Fund has underperformed its benchmark in the one-, three- and five-year periods ended December 31, 2009. The Board noted the disappointing investment performance of the Fund in recent periods and continued to discuss with senior management of DWS and QS Investors the factors contributing to such underperformance and actions being taken to improve performance. The Board recognized that DWS has made significant changes in its investment personnel and processes in recent years in an effort to improve long-term performance.

Fees and Expenses. The Board considered the Fund's investment management fee schedule, sub-advisory fee schedule, operating expenses, and total expense ratios, and comparative information provided by Lipper and the independent fee consultant regarding investment management fee rates paid to other investment advisors by similar funds (1st quartile being the most favorable and 4th quartile being the least favorable). With respect to management fees paid to other investment advisors by similar funds, the Board noted that the contractual fee rates paid by the Fund, which include the 0.10% fee paid to DWS under the Fund's administrative services agreement, were lower than the median (1st quartile) of the applicable Lipper peer group (based on Lipper d ata provided as of December 31, 2009). With respect to the sub-advisory fee paid to QS Investors, the Board noted that the fee is paid by DWS out of its fee and not directly by the Fund. The Board noted that the Fund's Class A shares total (net) operating expenses were expected to be higher than the median (3rd quartile) of the applicable Lipper expense universe (based on Lipper data provided as of December 31, 2009, and analyzing Lipper expense universe Class A expenses less any applicable 12b-1 fees) ("Lipper Universe Expenses"). The Board considered the Fund's management fee rate as compared to fees charged by DWS and certain of its affiliates for comparable mutual funds and considered differences in fund and fee structures between the DWS Funds. The Board also considered how the Fund's total (net) operating expenses compared to the total (net) operating expenses of a more customized peer group selected by Lipper (based on such factors as asset size).

Economies of Scale. The Board considered whether there are economies of scale with respect to the management of the Fund and whether the Fund benefits from any economies of scale. The Board noted that the Fund's management fee schedule includes fee breakpoints. The Board concluded that the Fund's fee schedule represents an appropriate sharing between the Fund and DWS of such economies of scale as may exist in the management of the Fund at current asset levels.

Compliance. The Board considered the significant attention and resources dedicated by DWS to documenting and enhancing its compliance processes in recent years. The Board noted in particular (i) the experience and seniority of both DWS's chief compliance officer and the Fund's chief compliance officer; (ii) the large number of DWS compliance personnel; and (iii) the substantial commitment of resources by DWS and its affiliates to compliance matters. The Board also considered the attention and resources dedicated by DWS to the oversight of the investment sub-advisor's compliance program and compliance with the applicable fund policies and procedures.

DWS Dreman Small Mid Cap Value VIP

In terms of the process that the Board followed prior to approving the Agreements, shareholders should know that:

• In September 2010, all but one of the Fund's Trustees were independent of DWS and its affiliates.

• The Trustees meet frequently to discuss fund matters. Each year, the Trustees dedicate substantial time to contract review matters. Over the course of several months, the Board's Contract Committee, in coordination with the Board's Equity Oversight Committee, reviewed comprehensive materials received from DWS, independent third parties and independent counsel. These materials included an analysis of the Fund's performance, fees and expenses, and profitability compiled by the Fund's independent fee consultant. The Board also received extensive information throughout the year regarding performance of the Fund.

In connection with the contract review process, the Contract Committee and the Board considered the factors discussed below, among others. The Board also considered that DWS and its predecessors have managed the Fund since its inception, and the Board believes that a long-term relationship with a capable, conscientious advisor is in the best interests of the Fund. The Board considered, generally, that shareholders chose to invest or remain invested in the Fund knowing that DWS managed the Fund, and that the Agreement was approved by the Fund's shareholders. DWS is part of Deutsche Bank, a major global banking institution that is engaged in a wide range of financial services. The Board believes that there are significant advantages to being part of a global asset management business that offers a wide range of investin g expertise and resources, including hundreds of portfolio managers and analysts with research capabilities in many countries throughout the world.

While shareholders may focus primarily on fund performance and fees, the Fund's Board considers these and many other factors, including the quality and integrity of DWS's and DVM's personnel and such other issues as back-office operations, fund valuations, and compliance policies and procedures.

Nature, Quality and Extent of Services. The Board considered the terms of the Agreements, including the scope of advisory services provided under the Agreements. The Board noted that, under the Agreements, DWS and DVM provide portfolio management services to the Fund and that, pursuant to a separate administrative services agreement, DWS provides administrative services to the Fund. The Board considered the experience and skills of senior management and investment personnel, the resources made available to such personnel, the ability of DWS to attract and retain high-quality personnel, and the organizational depth and stability of DWS. The Board reviewed the Fund's performance over short-term and long-term periods and compared those returns to va rious agreed-upon performance measures, including market indices and a peer universe compiled by the independent fee consultant using information supplied by Lipper Inc. ("Lipper"). The Board also noted that it has put into place a process of identifying "Focus Funds" (e.g., funds performing poorly relative to their benchmark or a peer universe compiled by Lipper), and receives more frequent reporting and information from DWS regarding such funds, along with DWS's remedial plans to address underperformance. The Board believes this process is an effective manner of identifying and addressing underperforming funds. Based on the information provided, the Board noted that for the one-, three- and five-year periods ended December 31, 2009, the Fund's performance (Class A shares) was in the 2nd quartile, 1st quartile and 1st quartile, respectively, of the applicable Lipper universe (the 1st quartile being the best performers and the 4th quartile being the worst performers). The Board also observed that the Fund ha s outperformed its benchmark in the one-, three- and five-year periods ended December 31, 2009.

On the basis of this evaluation and the ongoing review of investment results by the Board, the Board concluded that the nature, quality and extent of services provided by DWS and DVM historically have been and continue to be satisfactory.

Fees and Expenses. The Board considered the Fund's investment management fee schedule, sub-advisory fee schedule, operating expenses, and total expense ratios, and comparative information provided by Lipper and the independent fee consultant regarding investment management fee rates paid to other investment advisors by similar funds (1st quartile being the most favorable and 4th quartile being the least favorable). With respect to management fees paid to other investment advisors by similar funds, the Board noted that the contractual fee rates paid by the Fund, which include the 0.10% fee paid to DWS under the Fund's administrative services agreement, were lower than the median (1st quartile) of the applicable Lipper peer group (based on Lipper d ata provided as of December 31, 2009). With respect to the sub-advisory fee paid to DVM, the Board noted that the fee is paid by DWS out of its fee and not directly by the Fund. The Board noted that the Fund's Class A shares total (net) operating expenses were expected to be lower than the median (1st quartile) of the applicable Lipper expense universe (based on Lipper data provided as of December 31, 2009, and analyzing Lipper expense universe Class A expenses less any applicable 12b-1 fees) ("Lipper Universe Expenses"). The Board also reviewed data comparing each share class's total (net) operating expenses to the applicable Lipper Universe Expenses. The Board considered the Fund's management fee rate as compared to fees charged by DWS and certain of its affiliates for comparable mutual funds and considered differences in fund and fee structures between the DWS Funds. The Board also considered how the Fund's total (net) operating expenses compared to the total (net) operating expenses of a more customized peer group selected by Lipper (based on such factors as asset size).

On the basis of the information provided, the Board concluded that management fees were reasonable and appropriate in light of the nature, quality and extent of services provided by DWS and DVM.

Profitability. The Board reviewed detailed information regarding revenues received by DWS under the Agreement. The Board considered the estimated costs and pre-tax profits realized by DWS from advising the DWS Funds, as well as estimates of the pre-tax profits attributable to managing the Fund in particular. The Board also received information regarding the estimated enterprise-wide profitability of DWS and its affiliates with respect to all fund services in totality and by fund. The Board reviewed DWS's methodology in allocating its costs to the management of the Fund. Based on the information provided, the Board concluded that the pre-tax profits realized by DWS in connection with the management of the Fund were not unreasonable. The Board also reviewed information regarding the profitability of certain similar investment management firms. The Board noted that while information regarding the profitability of such firms is limited (and in some cases is not necessarily prepared on a comparable basis), DWS and its affiliates' overall profitability with respect to the DWS fund complex (after taking into account distribution and other services provided to the funds by DWS and its affiliates) was lower than the overall profitability levels of many comparable firms for which such data was available. The Board did not consider the profitability of DVM with respect to the Fund. The Board noted that DWS pays DVM's fee out of its management fee, and its understanding that the Fund's sub-advisory fee schedule was the product of an arm's length negotiation with DWS.

Economies of Scale. The Board considered whether there are economies of scale with respect to the management of the Fund and whether the Fund benefits from any economies of scale. The Board noted that the Fund's management fee schedule includes fee breakpoints. The Board concluded that the Fund's fee schedule represents an appropriate sharing between the Fund and DWS of such economies of scale as may exist in the management of the Fund at current asset levels.

Other Benefits to DWS and DVM and Their Affiliates. The Board also considered the character and amount of other incidental benefits received by DWS and DVM and their affiliates, including any fees received by DWS for administrative services provided to the Fund and any fees received by an affiliate of DWS for distribution services. The Board also considered the incidental public relations benefits to DWS and DVM related to DWS Funds advertising and cross-selling opportunities among DWS products and services. The Board concluded that management fees were reasonable in light of these fallout benefits.

Compliance. The Board considered the significant attention and resources dedicated by DWS to documenting and enhancing its compliance processes in recent years. The Board noted in particular (i) the experience and seniority of both DWS's chief compliance officer and the Fund's chief compliance officer; (ii) the large number of DWS compliance personnel; and (iii) the substantial commitment of resources by DWS and its affiliates to compliance matters. The Board also considered the attention and resources dedicated by DWS to the oversight of the investment sub-advisor's compliance program and compliance with the applicable fund policies and procedures.

DWS Global Thematic VIP

In terms of the process that the Board followed prior to approving the Agreements, shareholders should know that:

• In September 2010, all but one of the Fund's Trustees were independent of DWS and its affiliates.

• The Trustees meet frequently to discuss fund matters. Each year, the Trustees dedicate substantial time to contract review matters. Over the course of several months, the Board's Contract Committee, in coordination with the Board's Equity Oversight Committee, reviewed comprehensive materials received from DWS, independent third parties and independent counsel. These materials included an analysis of the Fund's performance, fees and expenses, and profitability compiled by the Fund's independent fee consultant. The Board also received extensive information throughout the year regarding performance of the Fund.

In connection with the contract review process, the Contract Committee and the Board considered the factors discussed below, among others. The Board also considered that DWS and its predecessors have managed the Fund since its inception, and the Board believes that a long-term relationship with a capable, conscientious advisor is in the best interests of the Fund. The Board considered, generally, that shareholders chose to invest or remain invested in the Fund knowing that DWS managed the Fund, and that the Agreement was approved by the Fund's shareholders. DWS is part of Deutsche Bank, a major global banking institution that is engaged in a wide range of financial services. The Board believes that there are significant advantages to being part of a global asset management business that offers a wide range of investin g expertise and resources, including hundreds of portfolio managers and analysts with research capabilities in many countries throughout the world.

While shareholders may focus primarily on fund performance and fees, the Fund's Board considers these and many other factors, including the quality and integrity of DWS's and Global Thematic's personnel and such other issues as back-office operations, fund valuations, and compliance policies and procedures. In addition, in connection with approving the continuation of the Fund's Sub-Advisory Agreement, the Board noted it had engaged in a comprehensive review of the agreement in connection with its initial approval in May 2010.

Nature, Quality and Extent of Services. The Board considered the terms of the Agreements, including the scope of advisory services provided under the Agreements. The Board noted that, under the Agreements, DWS and Global Thematic provide portfolio management services to the Fund and that, pursuant to a separate administrative services agreement, DWS provides administrative services to the Fund. The Board considered the experience and skills of senior management and investment personnel, the resources made available to such personnel, the ability of DWS to attract and retain high-quality personnel, and the organizational depth and stability of DWS. The Board reviewed the Fund's performance over short-term and long-term periods and compared those r eturns to various agreed-upon performance measures, including market indices and a peer universe compiled by the independent fee consultant using information supplied by Lipper Inc. ("Lipper"). The Board also noted that it has put into place a process of identifying "Focus Funds" (e.g., funds performing poorly relative to their benchmark or a peer universe compiled by Lipper), and receives more frequent reporting and information from DWS regarding such funds, along with DWS's remedial plans to address underperformance. The Board believes this process is an effective manner of identifying and addressing underperforming funds. Based on the information provided, the Board noted that for the one-, three- and five-year periods ended December 31, 2009, the Fund's performance (Class A shares) was in the 1st quartile, 4th quartile and 1st quartile, respectively, of the applicable Lipper universe (the 1st quartile being the best performers and the 4th quartile being the worst performers). The Board also observed that the Fund has outperformed its benchmark in the one- and five-year periods and has underperformed its benchmark in the three-year period ended December 31, 2009.

On the basis of this evaluation and the ongoing review of investment results by the Board, the Board concluded that the nature, quality and extent of services provided by DWS and Global Thematic historically have been and continue to be satisfactory.

Fees and Expenses. The Board considered the Fund's investment management fee schedule, sub-advisory fee schedule, operating expenses, and total expense ratios, and comparative information provided by Lipper and the independent fee consultant regarding investment management fee rates paid to other investment advisors by similar funds (1st quartile being the most favorable and 4th quartile being the least favorable). With respect to management fees paid to other investment advisors by similar funds, the Board noted that the contractual fee rates paid by the Fund, which include the 0.10% fee paid to DWS under the Fund's administrative services agreement, were higher than the median (4th quartile) of the applicable Lipper peer group (based on Lipper data provided as of December 31, 2009). With respect to the sub-advisory fee paid to Global Thematic, the Board noted that the fee is paid by DWS out of its fee and not directly by the Fund. The Board noted that the Fund's Class A shares total (net) operating expenses were expected to be higher than the median (4th quartile) of the applicable Lipper expense universe (based on Lipper data provided as of December 31, 2009, and analyzing Lipper expense universe Class A expenses less any applicable 12b-1 fees) ("Lipper Universe Expenses"). The Board also reviewed data comparing each share class's total (net) operating expenses to the applicable Lipper Universe Expenses. The Board considered the Fund's management fee rate as compared to fees charged by DWS and certain of its affiliates for comparable mutual funds and considered differences in fund and fee structures between the DWS Funds. The Board also considered how the Fund's total (net) operating expenses compared to the total (net) operating expenses of a mo re customized peer group selected by Lipper (based on such factors as asset size). The Board also noted that the expense limitations agreed to by DWS helped to ensure that the Fund's total (net) operating expenses would remain competitive.

Profitability. The Board reviewed detailed information regarding revenues received by DWS under the Agreement. The Board considered the estimated costs and pre-tax profits realized by DWS from advising the DWS Funds, as well as estimates of the pre-tax profits attributable to managing the Fund in particular. The Board also received information regarding the estimated enterprise-wide profitability of DWS and its affiliates with respect to all fund services in totality and by fund. The Board reviewed DWS's methodology in allocating its costs to the management of the Fund. Based on the information provided, the Board concluded that the pre-tax profits realized by DWS in connection with the management of the Fund were not unreasonable. The Board also reviewed information regarding the profitability of certain similar investment management firms. The Board noted that while information regarding the profitability of such firms is limited (and in some cases is not necessarily prepared on a comparable basis), DWS and its affiliates' overall profitability with respect to the DWS fund complex (after taking into account distribution and other services provided to the funds by DWS and its affiliates) was lower than the overall profitability levels of many comparable firms for which such data was available. The Board did not consider the profitability of Global Thematic with respect to the Fund. The Board noted that DWS pays Global Thematic's fee out of its management fee, and its understanding that the Fund's sub-advisory fee schedule was the product of an arm's length negotiation with DWS.

Economies of Scale. The Board considered whether there are economies of scale with respect to the management of the Fund and whether the Fund benefits from any economies of scale. The Board noted that the Fund's management fee schedule includes fee breakpoints. The Board concluded that the Fund's fee schedule represents an appropriate sharing between the Fund and DWS of such economies of scale as may exist in the management of the Fund at current asset levels.

Other Benefits to DWS and Global Thematic and Their Affiliates. The Board also considered the character and amount of other incidental benefits received by DWS and Global Thematic and their affiliates, including any fees received by DWS for administrative services provided to the Fund and any fees received by an affiliate of DWS for distribution services. The Board also considered benefits to DWS and Global Thematic related to brokerage and soft-dollar allocations, including allocating brokerage to pay for research generated by parties other than the executing broker dealers, which pertain primarily to funds investing in equity securities, along with the incidental public relations benefits to DWS and Global Thematic related to DWS Funds advertis ing and cross-selling opportunities among DWS products and services. The Board concluded that management fees were reasonable in light of these fallout benefits.

Compliance. The Board considered the significant attention and resources dedicated by DWS to documenting and enhancing its compliance processes in recent years. The Board noted in particular (i) the experience and seniority of both DWS's chief compliance officer and the Fund's chief compliance officer; (ii) the large number of DWS compliance personnel; and (iii) the substantial commitment of resources by DWS and its affiliates to compliance matters. The Board also considered the attention and resources dedicated by DWS to the oversight of the investment sub-advisor's compliance program and compliance with the applicable fund policies and procedures.

DWS Government & Agency Securities VIP

In terms of the process that the Board followed prior to approving the Agreement, shareholders should know that:

• In September 2010, all but one of the Fund's Trustees were independent of DWS and its affiliates.

• The Trustees meet frequently to discuss fund matters. Each year, the Trustees dedicate substantial time to contract review matters. Over the course of several months, the Board's Contract Committee, in coordination with the Board's Fixed Income and Quant Oversight Committee, reviewed comprehensive materials received from DWS, independent third parties and independent counsel. These materials included an analysis of the Fund's performance, fees and expenses, and profitability compiled by the Fund's independent fee consultant. The Board also received extensive information throughout the year regarding performance of the Fund.

• In connection with reviewing the Agreement, the Board also reviewed the terms of the Fund's Rule 12b-1 plan, distribution agreement, administrative services agreement, transfer agency agreement and other material service agreements.

In connection with the contract review process, the Contract Committee and the Board considered the factors discussed below, among others. The Board also considered that DWS and its predecessors have managed the Fund since its inception, and the Board believes that a long-term relationship with a capable, conscientious advisor is in the best interests of the Fund. The Board considered, generally, that shareholders chose to invest or remain invested in the Fund knowing that DWS managed the Fund, and that the Agreement was approved by the Fund's shareholders. DWS is part of Deutsche Bank, a major global banking institution that is engaged in a wide range of financial services. The Board believes that there are significant advantages to being part of a global asset management business that offers a wide range of investin g expertise and resources, including hundreds of portfolio managers and analysts with research capabilities in many countries throughout the world.

Nature, Quality and Extent of Services. The Board considered the terms of the Agreement, including the scope of advisory services provided under the Agreement. The Board noted that, under the Agreement, DWS provides portfolio management services to the Fund and that, pursuant to a separate administrative services agreement, DWS provides administrative services to the Fund. The Board considered the experience and skills of senior management and investment personnel, the resources made available to such personnel, the ability of DWS to attract and retain high-quality personnel, and the organizational depth and stability of DWS. The Board reviewed the Fund's performance over short-term and long-term periods and compared those returns to various agre ed-upon performance measures, including market indices and a peer universe compiled by the independent fee consultant using information supplied by Lipper Inc. ("Lipper"). The Board also noted that it has put into place a process of identifying "Focus Funds" (e.g., funds performing poorly relative to their benchmark or a peer universe compiled by Lipper), and receives more frequent reporting and information from DWS regarding such funds, along with DWS's remedial plans to address underperformance. The Board believes this process is an effective manner of identifying and addressing underperforming funds. Based on the information provided, the Board noted that for the one-, three- and five-year periods ended December 31, 2009, the Fund's performance (Class A shares) was in the 1st quartile of the applicable Lipper universe (the 1st quartile being the best performers and the 4th quartile being the worst performers). The Board also observed that the Fund has outperformed its benchmark in the one-year period and has underperformed its benchmark in the three- and five-year periods ended December 31, 2009.

Fees and Expenses. The Board considered the Fund's investment management fee schedule, operating expenses, and total expense ratios, and comparative information provided by Lipper and the independent fee consultant regarding investment management fee rates paid to other investment advisors by similar funds (1st quartile being the most favorable and 4th quartile being the least favorable). With respect to management fees paid to other investment advisors by similar funds, the Board noted that the contractual fee rates paid by the Fund, which include the 0.10% fee paid to DWS under the Fund's administrative services agreement, were at the median (2nd quartile) of the applicable Lipper peer group (based on Lipper data provided as of December 31, 200 9). The Board noted that the Fund's Class A shares total (net) operating expenses were expected to be higher than the median (3rd quartile) of the applicable Lipper expense universe (based on Lipper data provided as of December 31, 2009, and analyzing Lipper expense universe Class A expenses less any applicable 12b-1 fees) ("Lipper Universe Expenses"). The Board also reviewed data comparing each share class's total (net) operating expenses to the applicable Lipper Universe Expenses. The Board considered the Fund's management fee rate as compared to fees charged by DWS and certain of its affiliates for comparable mutual funds and considered differences in fund and fee structures between the DWS Funds. The Board also considered how the Fund's total (net) operating expenses compared to the total (net) operating expenses of a more customized peer group selected by Lipper (based on such factors as asset size).

On the basis of the information provided, the Board concluded that management fees were reasonable and appropriate in light of the nature, quality and extent of services provided by DWS.

Economies of Scale. The Board considered whether there are economies of scale with respect to the management of the Fund and whether the Fund benefits from any economies of scale. The Board noted that the Fund's management fee schedule includes fee breakpoints. The Board concluded that the Fund's fee schedule represents an appropriate sharing between the Fund and DWS of such economies of scale as may exist in the management of the Fund at current asset levels.

Based on all of the information considered and the conclusions reached, the Board unanimously (including the Independent Trustees) determined that the continuation of the Agreement is in the best interests of the Fund. In making this determination, the Board did not give particular weight to any single factor identified above. The Board considered these factors over the course of numerous meetings, certain of which were in executive session with only the Independent Trustees and their counsel present. It is possible that individual Trustees may have weighed these factors differently in reaching their individual decisions to approve the continuation of the Agreement.

DWS High Income VIP

In terms of the process that the Board followed prior to approving the Agreement, shareholders should know that:

• In September 2010, all but one of the Fund's Trustees were independent of DWS and its affiliates.

• The Trustees meet frequently to discuss fund matters. Each year, the Trustees dedicate substantial time to contract review matters. Over the course of several months, the Board's Contract Committee, in coordination with the Board's Fixed Income and Quant Oversight Committee, reviewed comprehensive materials received from DWS, independent third parties and independent counsel. These materials included an analysis of the Fund's performance, fees and expenses, and profitability compiled by the Fund's independent fee consultant. The Board also received extensive information throughout the year regarding performance of the Fund.

In connection with the contract review process, the Contract Committee and the Board considered the factors discussed below, among others. The Board also considered that DWS and its predecessors have managed the Fund since its inception, and the Board believes that a long-term relationship with a capable, conscientious advisor is in the best interests of the Fund. The Board considered, generally, that shareholders chose to invest or remain invested in the Fund knowing that DWS managed the Fund, and that the Agreement was approved by the Fund's shareholders. DWS is part of Deutsche Bank, a major global banking institution that is engaged in a wide range of financial services. The Board believes that there are significant advantages to being part of a global asset management business that offers a wide range of investin g expertise and resources, including hundreds of portfolio managers and analysts with research capabilities in many countries throughout the world.

Nature, Quality and Extent of Services. The Board considered the terms of the Agreement, including the scope of advisory services provided under the Agreement. The Board noted that, under the Agreement, DWS provides portfolio management services to the Fund and that, pursuant to a separate administrative services agreement, DWS provides administrative services to the Fund. The Board considered the experience and skills of senior management and investment personnel, the resources made available to such personnel, the ability of DWS to attract and retain high-quality personnel, and the organizational depth and stability of DWS. The Board reviewed the Fund's performance over short-term and long-term periods and compared those returns to various agre ed-upon performance measures, including market indices and a peer universe compiled by the independent fee consultant using information supplied by Lipper Inc. ("Lipper"). The Board also noted that it has put into place a process of identifying "Focus Funds" (e.g., funds performing poorly relative to their benchmark or a peer universe compiled by Lipper), and receives more frequent reporting and information from DWS regarding such funds, along with DWS's remedial plans to address underperformance. The Board believes this process is an effective manner of identifying and addressing underperforming funds. Based on the information provided, the Board noted that for the one-, three- and five-year periods ended December 31, 2009, the Fund's performance (Class A shares) was in the 3rd quartile, 4th quartile and 3rd quartile, respectively, of the applicable Lipper universe (the 1st quartile being the best performers and the 4th quartile being the worst performers). The Board also observed that the Fund has underper formed its benchmark in the one-, three- and five-year periods ended December 31, 2009.

Fees and Expenses. The Board considered the Fund's investment management fee schedule, operating expenses, and total expense ratios, and comparative information provided by Lipper and the independent fee consultant regarding investment management fee rates paid to other investment advisors by similar funds (1st quartile being the most favorable and 4th quartile being the least favorable). With respect to management fees paid to other investment advisors by similar funds, the Board noted that the contractual fee rates paid by the Fund, which include the 0.10% fee paid to DWS under the Fund's administrative services agreement, were lower than the median (1st quartile) of the applicable Lipper peer group (based on Lipper data provided as of December 31, 2009). The Board noted that the Fund's Class A shares total (net) operating expenses were expected to be lower than the median (2nd quartile) of the applicable Lipper expense universe (based on Lipper data provided as of December 31, 2009, and analyzing Lipper expense universe Class A expenses less any applicable 12b-1 fees) ("Lipper Universe Expenses"). The Board also reviewed data comparing each share class's total (net) operating expenses to the applicable Lipper Universe Expenses. The Board considered the Fund's management fee rate as compared to fees charged by DWS and certain of its affiliates for comparable mutual funds and considered differences in fund and fee structures between the DWS Funds. The Board also considered how the Fund's total (net) operating expenses compared to the total (net) operating expenses of a more customized peer group selected by Lipper (based on such factors as asset size).

On the basis of the information provided, the Board concluded that management fees were reasonable and appropriate in light of the nature, quality and extent of services provided by DWS.

Economies of Scale. The Board considered whether there are economies of scale with respect to the management of the Fund and whether the Fund benefits from any economies of scale. The Board noted that the Fund's management fee schedule includes fee breakpoints. The Board concluded that the Fund's fee schedule represents an appropriate sharing between the Fund and DWS of such economies of scale as may exist in the management of the Fund at current asset levels.

Based on all of the information considered and the conclusions reached, the Board unanimously (including the Independent Trustees) determined that the continuation of the Agreement is in the best interests of the Fund. In making this determination, the Board did not give particular weight to any single factor identified above. The Board considered these factors over the course of numerous meetings, certain of which were in executive session with only the Independent Trustees and their counsel present. It is possible that individual Trustees may have weighed these factors differently in reaching their individual decisions to approve the continuation of the Agreement.

DWS Large Cap Value VIP

In terms of the process that the Board followed prior to approving the Agreements, shareholders should know that:

• In September 2010, all but one of the Fund's Trustees were independent of DWS and its affiliates.

• The Trustees meet frequently to discuss fund matters. Each year, the Trustees dedicate substantial time to contract review matters. Over the course of several months, the Board's Contract Committee, in coordination with the Board's Equity Oversight Committee, reviewed comprehensive materials received from DWS, independent third parties and independent counsel. These materials included an analysis of the Fund's performance, fees and expenses, and profitability compiled by the Fund's independent fee consultant. The Board also received extensive information throughout the year regarding performance of the Fund.

In connection with the contract review process, the Contract Committee and the Board considered the factors discussed below, among others. The Board also considered that DWS and its predecessors have managed the Fund since its inception, and the Board believes that a long-term relationship with a capable, conscientious advisor is in the best interests of the Fund. The Board considered, generally, that shareholders chose to invest or remain invested in the Fund knowing that DWS managed the Fund, and that the Agreement was approved by the Fund's shareholders. DWS and DeAMi are part of Deutsche Bank, a major global banking institution that is engaged in a wide range of financial services. The Board believes that there are significant advantages to being part of a global asset management business that offers a wide range of investing expertise and resources, including hundreds of portfolio managers and analysts with research capabilities in many countries throughout the world.

While shareholders may focus primarily on fund performance and fees, the Fund's Board considers these and many other factors, including the quality and integrity of DWS's and DeAMi's personnel and such other issues as back-office operations, fund valuations, and compliance policies and procedures.

Nature, Quality and Extent of Services. The Board considered the terms of the Agreements, including the scope of advisory services provided under the Agreements. The Board noted that, under the Agreements, DWS and DeAMi provide portfolio management services to the Fund and that, pursuant to a separate administrative services agreement, DWS provides administrative services to the Fund. The Board considered the experience and skills of senior management and investment personnel, the resources made available to such personnel, the ability of DWS to attract and retain high-quality personnel, and the organizational depth and stability of DWS. The Board reviewed the Fund's performance over short-term and long-term periods and compared those returns to various agreed-upon performance measures, including market indices and a peer universe compiled by the independent fee consultant using information supplied by Lipper Inc. ("Lipper"). The Board also noted that it has put into place a process of identifying "Focus Funds" (e.g., funds performing poorly relative to their benchmark or a peer universe compiled by Lipper), and receives more frequent reporting and information from DWS regarding such funds, along with DWS's remedial plans to address underperformance. The Board believes this process is an effective manner of identifying and addressing underperforming funds. Based on the information provided, the Board noted that for the one-, three- and five-year periods ended December 31, 2009, the Fund's performance (Class A shares) was in the 2nd quartile, 1st quartile and 1st quartile, respectively, of the applicable Lipper universe (the 1st quartile being the best performers and the 4th quartile being the worst performers). The Board also observed that the Fund has outperformed its benchmark in the one-, three- and five-year periods ended December 31, 2009.

On the basis of this evaluation and the ongoing review of investment results by the Board, the Board concluded that the nature, quality and extent of services provided by DWS and DeAMi historically have been and continue to be satisfactory.

Fees and Expenses. The Board considered the Fund's investment management fee schedule, sub-advisory fee schedule, operating expenses, and total expense ratios, and comparative information provided by Lipper and the independent fee consultant regarding investment management fee rates paid to other investment advisors by similar funds (1st quartile being the most favorable and 4th quartile being the least favorable). With respect to management fees paid to other investment advisors by similar funds, the Board noted that the contractual fee rates paid by the Fund, which include the 0.10% fee paid to DWS under the Fund's administrative services agreement, were at the median (2nd quartile) of the applicable Lipper peer group (based on Lipper data prov ided as of December 31, 2009). With respect to the sub-advisory fee paid to DeAMi, the Board noted that the fee is paid by DWS out of its fee and not directly by the Fund. The Board noted that the Fund's Class A shares total (net) operating expenses were expected to be higher than the median (3rd quartile) of the applicable Lipper expense universe (based on Lipper data provided as of December 31, 2009, and analyzing Lipper expense universe Class A expenses less any applicable 12b-1 fees) ("Lipper Universe Expenses"). The Board also reviewed data comparing each share class's total (net) operating expenses to the applicable Lipper Universe Expenses. The Board considered the Fund's management fee rate as compared to fees charged by DWS and certain of its affiliates for comparable mutual funds and considered differences in fund and fee structures between the DWS Funds. The Board also considered how the Fund's total (net) operating expenses compared to the total (net) operating expenses of a more customized peer group selected by Lipper (based on such factors as asset size).

On the basis of the information provided, the Board concluded that management fees were reasonable and appropriate in light of the nature, quality and extent of services provided by DWS and DeAMi.

Economies of Scale. The Board considered whether there are economies of scale with respect to the management of the Fund and whether the Fund benefits from any economies of scale. The Board noted that the Fund's management fee schedule includes fee breakpoints. The Board concluded that the Fund's fee schedule represents an appropriate sharing between the Fund and DWS of such economies of scale as may exist in the management of the Fund at current asset levels.

DWS Mid Cap Growth VIP

In terms of the process that the Board followed prior to approving the Agreement, shareholders should know that:

• In September 2010, all but one of the Fund's Trustees were independent of DWS and its affiliates.

• The Trustees meet frequently to discuss fund matters. Each year, the Trustees dedicate substantial time to contract review matters. Over the course of several months, the Board's Contract Committee, in coordination with the Board's Equity Oversight Committee, reviewed comprehensive materials received from DWS, independent third parties and independent counsel. These materials included an analysis of the Fund's performance, fees and expenses, and profitability compiled by the Fund's independent fee consultant. The Board also received extensive information throughout the year regarding performance of the Fund.

In connection with the contract review process, the Contract Committee and the Board considered the factors discussed below, among others. The Board also considered that DWS and its predecessors have managed the Fund since its inception, and the Board believes that a long-term relationship with a capable, conscientious advisor is in the best interests of the Fund. The Board considered, generally, that shareholders chose to invest or remain invested in the Fund knowing that DWS managed the Fund, and that the Agreement was approved by the Fund's shareholders. DWS is part of Deutsche Bank, a major global banking institution that is engaged in a wide range of financial services. The Board believes that there are significant advantages to being part of a global asset management business that offers a wide range of investin g expertise and resources, including hundreds of portfolio managers and analysts with research capabilities in many countries throughout the world.

Nature, Quality and Extent of Services. The Board considered the terms of the Agreement, including the scope of advisory services provided under the Agreement. The Board noted that, under the Agreement, DWS provides portfolio management services to the Fund and that, pursuant to a separate administrative services agreement, DWS provides administrative services to the Fund. The Board considered the experience and skills of senior management and investment personnel, the resources made available to such personnel, the ability of DWS to attract and retain high-quality personnel, and the organizational depth and stability of DWS. The Board reviewed the Fund's performance over short-term and long-term periods and compared those returns to various agre ed-upon performance measures, including market indices and a peer universe compiled by the independent fee consultant using information supplied by Lipper Inc. ("Lipper"). The Board also noted that it has put into place a process of identifying "Focus Funds" (e.g., funds performing poorly relative to their benchmark or a peer universe compiled by Lipper), and receives more frequent reporting and information from DWS regarding such funds, along with DWS's remedial plans to address underperformance. The Board believes this process is an effective manner of identifying and addressing underperforming funds. Based on the information provided, the Board noted that for the one-, three- and five-year periods ended December 31, 2009, the Fund's performance (Class A shares) was in the 2nd quartile, 4th quartile and 4th quartile, respectively, of the applicable Lipper universe (the 1st quartile being the best performers and the 4th quartile being the worst performers). The Board also observed that the Fund has underper formed its benchmark in the one-, three- and five-year periods ended December 31, 2009.

Fees and Expenses. The Board considered the Fund's investment management fee schedule, operating expenses, and total expense ratios, and comparative information provided by Lipper and the independent fee consultant regarding investment management fee rates paid to other investment advisors by similar funds (1st quartile being the most favorable and 4th quartile being the least favorable). With respect to management fees paid to other investment advisors by similar funds, the Board noted that the contractual fee rates paid by the Fund, which include the 0.10% fee paid to DWS under the Fund's administrative services agreement, were at the median (2nd quartile) of the applicable Lipper peer group (based on Lipper data provided as of December 31, 200 9). The Board noted that the Fund's Class A shares total (net) operating expenses were expected to be higher than the median (4th quartile) of the applicable Lipper expense universe (based on Lipper data provided as of December 31, 2009, and analyzing Lipper expense universe Class A expenses less any applicable 12b-1 fees) ("Lipper Universe Expenses"). The Board considered the Fund's management fee rate as compared to fees charged by DWS and certain of its affiliates for comparable mutual funds and considered differences in fund and fee structures between the DWS Funds. The Board also considered how the Fund's total (net) operating expenses compared to the total (net) operating expenses of a more customized peer group selected by Lipper (based on such factors as asset size). The Board also noted that the expense limitation agreed to by DWS helped to ensure that the Fund's total (net) operating expenses would remain competitive.

On the basis of the information provided, the Board concluded that management fees were reasonable and appropriate in light of the nature, quality and extent of services provided by DWS.

Economies of Scale. The Board considered whether there are economies of scale with respect to the management of the Fund and whether the Fund benefits from any economies of scale. The Board noted that the Fund's management fee schedule includes fee breakpoints. The Board concluded that the Fund's fee schedule represents an appropriate sharing between the Fund and DWS of such economies of scale as may exist in the management of the Fund at current asset levels.

Based on all of the information considered and the conclusions reached, the Board unanimously (including the Independent Trustees) determined that the continuation of the Agreement is in the best interests of the Fund. In making this determination, the Board did not give particular weight to any single factor identified above. The Board considered these factors over the course of numerous meetings, certain of which were in executive session with only the Independent Trustees and their counsel present. It is possible that individual Trustees may have weighed these factors differently in reaching their individual decisions to approve the continuation of the Agreement.

DWS Money Market VIP

In terms of the process that the Board followed prior to approving the Agreement, shareholders should know that:

• In September 2010, all but one of the Fund's Trustees were independent of DWS and its affiliates.

• The Trustees meet frequently to discuss fund matters. Each year, the Trustees dedicate substantial time to contract review matters. Over the course of several months, the Board's Contract Committee, in coordination with the Board's Fixed Income and Quant Oversight Committee, reviewed comprehensive materials received from DWS, independent third parties and independent counsel. These materials included an analysis of the Fund's performance, fees and expenses, and profitability compiled by the Fund's independent fee consultant. The Board also received extensive information throughout the year regarding performance of the Fund.

In connection with the contract review process, the Contract Committee and the Board considered the factors discussed below, among others. The Board also considered that DWS and its predecessors have managed the Fund since its inception, and the Board believes that a long-term relationship with a capable, conscientious advisor is in the best interests of the Fund. The Board considered, generally, that shareholders chose to invest or remain invested in the Fund knowing that DWS managed the Fund, and that the Agreement was approved by the Fund's shareholders. DWS is part of Deutsche Bank, a major global banking institution that is engaged in a wide range of financial services. The Board believes that there are significant advantages to being part of a global asset management business that offers a wide range of investin g expertise and resources, including hundreds of portfolio managers and analysts with research capabilities in many countries throughout the world.

Nature, Quality and Extent of Services. The Board considered the terms of the Agreement, including the scope of advisory services provided under the Agreement. The Board noted that, under the Agreement, DWS provides portfolio management services to the Fund and that, pursuant to a separate administrative services agreement, DWS provides administrative services to the Fund. The Board considered the experience and skills of senior management and investment personnel, the resources made available to such personnel, the ability of DWS to attract and retain high-quality personnel, and the organizational depth and stability of DWS. The Board reviewed the Fund's performance over short-term and long-term periods and compared those returns to various agre ed-upon performance measures, including a peer universe compiled by the independent fee consultant using information supplied by Lipper Inc. ("Lipper"). The Board also noted that it has put into place a process of identifying "Focus Funds" (e.g., funds performing poorly relative to their benchmark or a peer universe compiled by iMoneyNet, Inc.), and receives more frequent reporting and information from DWS regarding such funds, along with DWS's remedial plans to address underperformance. The Board believes this process is an effective manner of identifying and addressing underperforming funds. Based on the information provided, the Board noted that for the one-, three- and five-year periods ended December 31, 2009, the Fund's gross performance (Class A shares) was in the 1st quartile of the applicable Lipper universe (the 1st quartile being the best performers and the 4th quartile being the worst performers).

Fees and Expenses. The Board considered the Fund's investment management fee schedule, operating expenses, and total expense ratios, and comparative information provided by Lipper and the independent fee consultant regarding investment management fee rates paid to other investment advisors by similar funds (1st quartile being the most favorable and 4th quartile being the least favorable). With respect to management fees paid to other investment advisors by similar funds, the Board noted that the contractual fee rates paid by the Fund, which include the 0.10% fee paid to DWS under the Fund's administrative services agreement, were lower than the median (2nd quartile) of the applicable Lipper peer group (based on Lipper data provided as of December 31, 2009). The Board noted that the Fund's Class A shares total (net) operating expenses were expected to be lower than the median (2nd quartile) of the applicable Lipper expense universe (based on Lipper data provided as of December 31, 2009, and analyzing Lipper expense universe Class A expenses less any applicable 12b-1 fees) ("Lipper Universe Expenses"). The Board considered the Fund's management fee rate as compared to fees charged by DWS and certain of its affiliates for comparable mutual funds and considered differences in fund and fee structures between DWS Funds. The Board also considered how the Fund's total (net) operating expenses compared to the total (net) operating expenses of a more customized peer group selected by Lipper (based on such factors as asset size). The Board also noted that the expense limitation agreed to by DWS helped to ensure that the Fund's total (net) operating expenses would remain competitive.

On the basis of the information provided, the Board concluded that management fees were reasonable and appropriate in light of the nature, quality and extent of services provided by DWS.

Economies of Scale. The Board considered whether there are economies of scale with respect to the management of the Fund and whether the Fund benefits from any economies of scale. The Board noted that the Fund's management fee schedule includes fee breakpoints. The Board concluded that the Fund's fee schedule represents an appropriate sharing between the Fund and DWS of such economies of scale as may exist in the management of the Fund at current asset levels.

Based on all of the information considered and the conclusions reached, the Board unanimously (including the Independent Trustees) determined that the continuation of the Agreement is in the best interests of the Fund. In making this determination, the Board did not give particular weight to any single factor identified above. The Board considered these factors over the course of numerous meetings, certain of which were in executive session with only the Independent Trustees and their counsel present. It is possible that individual Trustees may have weighed these factors differently in reaching their individual decisions to approve the continuation of the Agreement.

DWS Small Cap Growth VIP

In terms of the process that the Board followed prior to approving the Agreement, shareholders should know that:

• In September 2010, all but one of the Fund's Trustees were independent of DWS and its affiliates.

• The Trustees meet frequently to discuss fund matters. Each year, the Trustees dedicate substantial time to contract review matters. Over the course of several months, the Board's Contract Committee, in coordination with the Board's Equity Oversight Committee, reviewed comprehensive materials received from DWS, independent third parties and independent counsel. These materials included an analysis of the Fund's performance, fees and expenses, and profitability compiled by the Fund's independent fee consultant. The Board also received extensive information throughout the year regarding performance of the Fund.

In connection with the contract review process, the Contract Committee and the Board considered the factors discussed below, among others. The Board also considered that DWS and its predecessors have managed the Fund since its inception, and the Board believes that a long-term relationship with a capable, conscientious advisor is in the best interests of the Fund. The Board considered, generally, that shareholders chose to invest or remain invested in the Fund knowing that DWS managed the Fund, and that the Agreement was approved by the Fund's shareholders. DWS is part of Deutsche Bank, a major global banking institution that is engaged in a wide range of financial services. The Board believes that there are significant advantages to being part of a global asset management business that offers a wide range of investin g expertise and resources, including hundreds of portfolio managers and analysts with research capabilities in many countries throughout the world.

Nature, Quality and Extent of Services. The Board considered the terms of the Agreement, including the scope of advisory services provided under the Agreement. The Board noted that, under the Agreement, DWS provides portfolio management services to the Fund and that, pursuant to a separate administrative services agreement, DWS provides administrative services to the Fund. The Board considered the experience and skills of senior management and investment personnel, the resources made available to such personnel, the ability of DWS to attract and retain high-quality personnel, and the organizational depth and stability of DWS. The Board reviewed the Fund's performance over short-term and long-term periods and compared those returns to various agre ed-upon performance measures, including market indices and a peer universe compiled by the independent fee consultant using information supplied by Lipper Inc. ("Lipper"). The Board also noted that it has put into place a process of identifying "Focus Funds" (e.g., funds performing poorly relative to their benchmark or a peer universe compiled by Lipper), and receives more frequent reporting and information from DWS regarding such funds, along with DWS's remedial plans to address underperformance. The Board believes this process is an effective manner of identifying and addressing underperforming funds. Based on the information provided, the Board noted that for the one-, three- and five-year periods ended December 31, 2009, the Fund's performance (Class A shares) was in the 1st quartile, 4th quartile and 4th quartile, respectively, of the applicable Lipper universe (the 1st quartile being the best performers and the 4th quartile being the worst performers). The Board also observed that the Fund has outperfo rmed its benchmark in the one-year period and has underperformed its benchmark in the three- and five-year periods ended December 31, 2009.

Fees and Expenses. The Board considered the Fund's investment management fee schedule, operating expenses, and total expense ratios, and comparative information provided by Lipper and the independent fee consultant regarding investment management fee rates paid to other investment advisors by similar funds (1st quartile being the most favorable and 4th quartile being the least favorable). With respect to management fees paid to other investment advisors by similar funds, the Board noted that the contractual fee rates paid by the Fund, which include the 0.10% fee paid to DWS under the Fund's administrative services agreement, were lower than the median (1st quartile) of the applicable Lipper peer group (based on Lipper data provided as of December 31, 2009). The Board noted that the Fund's Class A shares total (net) operating expenses were expected to be lower than the median (1st quartile) of the applicable Lipper expense universe (based on Lipper data provided as of December 31, 2009, and analyzing Lipper expense universe Class A expenses less any applicable 12b-1 fees) ("Lipper Universe Expenses"). The Board considered the Fund's management fee rate as compared to fees charged by DWS and certain of its affiliates for comparable mutual funds and considered differences in fund and fee structures between the DWS Funds. The Board also considered how the Fund's total (net) operating expenses compared to the total (net) operating expenses of a more customized peer group selected by Lipper (based on such factors as asset size).

On the basis of the information provided, the Board concluded that management fees were reasonable and appropriate in light of the nature, quality and extent of services provided by DWS.

Economies of Scale. The Board considered whether there are economies of scale with respect to the management of the Fund and whether the Fund benefits from any economies of scale. The Board noted that the Fund's management fee schedule includes fee breakpoints. The Board concluded that the Fund's fee schedule represents an appropriate sharing between the Fund and DWS of such economies of scale as may exist in the management of the Fund at current asset levels.

Based on all of the information considered and the conclusions reached, the Board unanimously (including the Independent Trustees) determined that the continuation of the Agreement is in the best interests of the Fund. In making this determination, the Board did not give particular weight to any single factor identified above. The Board considered these factors over the course of numerous meetings, certain of which were in executive session with only the Independent Trustees and their counsel present. It is possible that individual Trustees may have weighed these factors differently in reaching their individual decisions to approve the continuation of the Agreement.

DWS Strategic Income VIP

In terms of the process that the Board followed prior to approving the Agreements, shareholders should know that:

• In September 2010, all but one of the Fund's Trustees were independent of DWS and its affiliates.

• The Trustees meet frequently to discuss fund matters. Each year, the Trustees dedicate substantial time to contract review matters. Over the course of several months, the Board's Contract Committee, in coordination with the Board's Fixed Income and Quant Oversight Committee, reviewed comprehensive materials received from DWS, independent third parties and independent counsel. These materials included an analysis of the Fund's performance, fees and expenses, and profitability compiled by the Fund's independent fee consultant. The Board also received extensive information throughout the year regarding performance of the Fund.

In connection with the contract review process, the Contract Committee and the Board considered the factors discussed below, among others. The Board also considered that DWS and its predecessors have managed the Fund since its inception, and the Board believes that a long-term relationship with a capable, conscientious advisor is in the best interests of the Fund. The Board considered, generally, that shareholders chose to invest or remain invested in the Fund knowing that DWS managed the Fund, and that the Agreement was approved by the Fund's shareholders. DWS is part of Deutsche Bank, a major global banking institution that is engaged in a wide range of financial services. The Board believes that there are significant advantages to being part of a global asset management business that offers a wide range of investin g expertise and resources, including hundreds of portfolio managers and analysts with research capabilities in many countries throughout the world.

Nature, Quality and Extent of Services. The Board considered the terms of the Agreements, including the scope of advisory services provided under the Agreements. The Board noted that, under the Agreements, DWS and QS Investors provide portfolio management services to the Fund and that, pursuant to a separate administrative services agreement, DWS provides administrative services to the Fund. The Board considered the experience and skills of senior management and investment personnel, the resources made available to such personnel, the ability of DWS to attract and retain high-quality personnel, and the organizational depth and stability of DWS. The Board reviewed the Fund's performance over short-term and long-term periods and compared those retu rns to various agreed-upon performance measures, including market indices and a peer universe compiled by the independent fee consultant using information supplied by Lipper Inc. ("Lipper"). The Board also noted that it has put into place a process of identifying "Focus Funds" (e.g., funds performing poorly relative to their benchmark or a peer universe compiled by Lipper), and receives more frequent reporting and information from DWS regarding such funds, along with DWS's remedial plans to address underperformance. The Board believes this process is an effective manner of identifying and addressing underperforming funds. Based on the information provided, the Board noted that for the one-, three- and five-year periods ended December 31, 2009, the Fund's performance (Class A shares) was in the 2nd quartile, 1st quartile and 1st quartile, respectively, of the applicable Lipper universe (the 1st quartile being the best performers and the 4th quartile being the worst performers). The Board also observed that th e Fund has outperformed its benchmark in the one-year period and has underperformed its benchmark in the three- and five-year periods ended December 31, 2009.

Fees and Expenses. The Board considered the Fund's investment management fee schedule, sub-advisory fee schedule, operating expenses, and total expense ratios, and comparative information provided by Lipper and the independent fee consultant regarding investment management fee rates paid to other investment advisors by similar funds (1st quartile being the most favorable and 4th quartile being the least favorable). With respect to management fees paid to other investment advisors by similar funds, the Board noted that the contractual fee rates paid by the Fund, which include the 0.10% fee paid to DWS under the Fund's administrative services agreement, were at the median (2nd quartile) of the applicable Lipper peer group (based on Lipper data prov ided as of December 31, 2009). With respect to the sub-advisory fee paid to QS Investors, the Board noted that the fee is paid by DWS out of its fee and not directly by the Fund. The Board noted that the Fund's Class A shares total (net) operating expenses were expected to be higher than the median (4th quartile) of the applicable Lipper expense universe (based on Lipper data provided as of December 31, 2009, and analyzing Lipper expense universe Class A expenses less any applicable 12b-1 fees) ("Lipper Universe Expenses"). The Board considered the Fund's management fee rate as compared to fees charged by DWS and certain of its affiliates for comparable mutual funds and considered differences in fund and fee structures between the DWS Funds. The Board also considered how the Fund's total (net) operating expenses compared to the total (net) operating expenses of a more customized peer group selected by Lipper (based on such factors as asset size). The Board also noted that the expense limitation agreed to by DWS helped to ensure that the Fund's total (net) operating expenses would remain competitive.

Economies of Scale. The Board considered whether there are economies of scale with respect to the management of the Fund and whether the Fund benefits from any economies of scale. The Board noted that the Fund's management fee schedule includes fee breakpoints. The Board concluded that the Fund's fee schedule represents an appropriate sharing between the Fund and DWS of such economies of scale as may exist in the management of the Fund at current asset levels.

Compliance. The Board considered the significant attention and resources dedicated by DWS to documenting and enhancing its compliance processes in recent years. The Board noted in particular (i) the experience and seniority of both DWS's chief compliance officer and the Fund's chief compliance officer; (ii) the large number of DWS compliance personnel; and (iii) the substantial commitment of resources by DWS and its affiliates to compliance matters. The Board also considered the attention and resources dedicated by DWS to the oversight of the investment sub-advisor's compliance program and compliance with the applicable fund policies and procedures.

DWS Strategic Value VIP

In terms of the process that the Board followed prior to approving the Agreement, shareholders should know that:

• In September 2010, all but one of the Fund's Trustees were independent of DWS and its affiliates.

• The Trustees meet frequently to discuss fund matters. Each year, the Trustees dedicate substantial time to contract review matters. Over the course of several months, the Board's Contract Committee, in coordination with the Board's Equity Oversight Committee, reviewed comprehensive materials received from DWS, independent third parties and independent counsel. These materials included an analysis of the Fund's performance, fees and expenses, and profitability compiled by the Fund's independent fee consultant. The Board also received extensive information throughout the year regarding performance of the Fund.

In connection with the contract review process, the Contract Committee and the Board considered the factors discussed below, among others. The Board also considered that DWS and its predecessors have managed the Fund since its inception, and the Board believes that a long-term relationship with a capable, conscientious advisor is in the best interests of the Fund. The Board considered, generally, that shareholders chose to invest or remain invested in the Fund knowing that DWS managed the Fund, and that the Agreement was approved by the Fund's shareholders. DWS is part of Deutsche Bank, a major global banking institution that is engaged in a wide range of financial services. The Board believes that there are significant advantages to being part of a global asset management business that offers a wide range of investin g expertise and resources, including hundreds of portfolio managers and analysts with research capabilities in many countries throughout the world.

Nature, Quality and Extent of Services. The Board considered the terms of the Agreement, including the scope of advisory services provided under the Agreement. The Board noted that, under the Agreement, DWS provides portfolio management services to the Fund and that, pursuant to a separate administrative services agreement, DWS provides administrative services to the Fund. The Board considered the experience and skills of senior management and investment personnel, the resources made available to such personnel, the ability of DWS to attract and retain high-quality personnel, and the organizational depth and stability of DWS. The Board reviewed the Fund's performance over short-term and long-term periods and compared those returns to various agre ed-upon performance measures, including market indices and a peer universe compiled by the independent fee consultant using information supplied by Lipper Inc. ("Lipper"). The Board also noted that it has put into place a process of identifying "Focus Funds" (e.g., funds performing poorly relative to their benchmark or a peer universe compiled by Lipper), and receives more frequent reporting and information from DWS regarding such funds, along with DWS's remedial plans to address underperformance. The Board believes this process is an effective manner of identifying and addressing underperforming funds. Based on the information provided, the Board noted that for the one, three- and five-year periods ended December 31, 2009, the Fund's performance (Class A shares) was in the 2nd quartile, 4th quartile and 4th quartile, respectively, of the applicable Lipper universe (the 1st quartile being the best performers and the 4th quartile being the worst performers). The Board also observed that the Fund has underperf ormed its benchmark in the one-, three- and five-year periods ended December 31, 2009.

Fees and Expenses. The Board considered the Fund's investment management fee schedule, operating expenses, and total expense ratios, and comparative information provided by Lipper and the independent fee consultant regarding investment management fee rates paid to other investment advisors by similar funds (1st quartile being the most favorable and 4th quartile being the least favorable). With respect to management fees paid to other investment advisors by similar funds, the Board noted that the contractual fee rates paid by the Fund, which include the 0.10% fee paid to DWS under the Fund's administrative services agreement, were higher than the median (3rd quartile) of the applicable Lipper peer group (based on Lipper data provided as of Decembe r 31, 2009). The Board noted that the Fund's Class A shares total (net) operating expenses were expected to be higher than the median (3rd quartile) of the applicable Lipper expense universe (based on Lipper data provided as of December 31, 2009, and analyzing Lipper expense universe Class A expenses less any applicable 12b-1 fees) ("Lipper Universe Expenses"). The Board also reviewed data comparing each share class's total (net) operating expenses to the applicable Lipper Universe Expenses. The Board considered the Fund's management fee rate as compared to fees charged by DWS and certain of its affiliates for comparable mutual funds and considered differences in fund and fee structures between the DWS Funds. The Board also considered how the Fund's total (net) operating expenses compared to the total (net) operating expenses of a more customized peer group selected by Lipper (based on such factors as asset size).

On the basis of the information provided, the Board concluded that management fees were reasonable and appropriate in light of the nature, quality and extent of services provided by DWS.

Economies of Scale. The Board considered whether there are economies of scale with respect to the management of the Fund and whether the Fund benefits from any economies of scale. The Board noted that the Fund's management fee schedule includes fee breakpoints. The Board concluded that the Fund's fee schedule represents an appropriate sharing between the Fund and DWS of such economies of scale as may exist in the management of the Fund at current asset levels.

Based on all of the information considered and the conclusions reached, the Board unanimously (including the Independent Trustees) determined that the continuation of the Agreement is in the best interests of the Fund. In making this determination, the Board did not give particular weight to any single factor identified above. The Board considered these factors over the course of numerous meetings, certain of which were in executive session with only the Independent Trustees and their counsel present. It is possible that individual Trustees may have weighed these factors differently in reaching their individual decisions to approve the continuation of the Agreement.

DWS Technology VIP

In terms of the process that the Board followed prior to approving the Agreement, shareholders should know that:

• In September 2010, all but one of the Fund's Trustees were independent of DWS and its affiliates.

• The Trustees meet frequently to discuss fund matters. Each year, the Trustees dedicate substantial time to contract review matters. Over the course of several months, the Board's Contract Committee, in coordination with the Board's Equity Oversight Committee, reviewed comprehensive materials received from DWS, independent third parties and independent counsel. These materials included an analysis of the Fund's performance, fees and expenses, and profitability compiled by the Fund's independent fee consultant. The Board also received extensive information throughout the year regarding performance of the Fund.

In connection with the contract review process, the Contract Committee and the Board considered the factors discussed below, among others. The Board also considered that DWS and its predecessors have managed the Fund since its inception, and the Board believes that a long-term relationship with a capable, conscientious advisor is in the best interests of the Fund. The Board considered, generally, that shareholders chose to invest or remain invested in the Fund knowing that DWS managed the Fund, and that the Agreement was approved by the Fund's shareholders. DWS is part of Deutsche Bank, a major global banking institution that is engaged in a wide range of financial services. The Board believes that there are significant advantages to being part of a global asset management business that offers a wide range of investin g expertise and resources, including hundreds of portfolio managers and analysts with research capabilities in many countries throughout the world.

Nature, Quality and Extent of Services. The Board considered the terms of the Agreement, including the scope of advisory services provided under the Agreement. The Board noted that, under the Agreement, DWS provides portfolio management services to the Fund and that, pursuant to a separate administrative services agreement, DWS provides administrative services to the Fund. The Board considered the experience and skills of senior management and investment personnel, the resources made available to such personnel, the ability of DWS to attract and retain high-quality personnel, and the organizational depth and stability of DWS. The Board reviewed the Fund's performance over short-term and long-term periods and compared those returns to various agre ed-upon performance measures, including market indices and a peer universe compiled by the independent fee consultant using information supplied by Lipper Inc. ("Lipper"). The Board also noted that it has put into place a process of identifying "Focus Funds" (e.g., funds performing poorly relative to their benchmark or a peer universe compiled by Lipper), and receives more frequent reporting and information from DWS regarding such funds, along with DWS's remedial plans to address underperformance. The Board believes this process is an effective manner of identifying and addressing underperforming funds. Based on the information provided, the Board noted that for the one-, three- and five-year periods ended December 31, 2009, the Fund's performance (Class A shares) was in the 2nd quartile, 3rd quartile and 4th quartile, respectively, of the applicable Lipper universe (the 1st quartile being the best performers and the 4th quartile being the worst performers). The Board also observed that the Fund has underper formed its benchmark in the one-, three- and five-year periods ended December 31, 2009.

Fees and Expenses. The Board considered the Fund's investment management fee schedule, operating expenses, and total expense ratios, and comparative information provided by Lipper and the independent fee consultant regarding investment management fee rates paid to other investment advisors by similar funds (1st quartile being the most favorable and 4th quartile being the least favorable). With respect to management fees paid to other investment advisors by similar funds, the Board noted that the contractual fee rates paid by the Fund, which include the 0.10% fee paid to DWS under the Fund's administrative services agreement, were at the median (2nd quartile) of the applicable Lipper peer group (based on Lipper data provided as of December 31, 200 9). The Board noted that the Fund's Class A shares total (net) operating expenses were expected to be lower than the median (1st quartile) of the applicable Lipper expense universe (based on Lipper data provided as of December 31, 2009, and analyzing Lipper expense universe Class A expenses less any applicable 12b-1 fees) ("Lipper Universe Expenses"). The Board also reviewed data comparing the each share class's total (net) operating expenses to the applicable Lipper Universe Expenses. The Board considered the Fund's management fee rate as compared to fees charged by DWS and certain of its affiliates for comparable mutual funds and considered differences in fund and fee structures between the DWS Funds. The Board also considered how the Fund's total (net) operating expenses compared to the total (net) operating expenses of a more customized peer group selected by Lipper (based on such factors as asset size).

On the basis of the information provided, the Board concluded that management fees were reasonable and appropriate in light of the nature, quality and extent of services provided by DWS.

Economies of Scale. The Board considered whether there are economies of scale with respect to the management of the Fund and whether the Fund benefits from any economies of scale. The Board noted that the Fund's management fee schedule includes fee breakpoints. The Board concluded that the Fund's fee schedule represents an appropriate sharing between the Fund and DWS of such economies of scale as may exist in the management of the Fund at current asset levels.

Based on all of the information considered and the conclusions reached, the Board unanimously (including the Independent Trustees) determined that the continuation of the Agreement is in the best interests of the Fund. In making this determination, the Board did not give particular weight to any single factor identified above. The Board considered these factors over the course of numerous meetings, certain of which were in executive session with only the Independent Trustees and their counsel present. It is possible that individual Trustees may have weighed these factors differently in reaching their individual decisions to approve the continuation of the Agreement.

DWS Turner Mid Cap Growth VIP

In terms of the process that the Board followed prior to approving the Agreements, shareholders should know that:

• In September 2010, all but one of the Fund's Trustees were independent of DWS and its affiliates.

• The Trustees meet frequently to discuss fund matters. Each year, the Trustees dedicate substantial time to contract review matters. Over the course of several months, the Board's Contract Committee, in coordination with the Board's Equity Oversight Committee, reviewed comprehensive materials received from DWS, independent third parties and independent counsel. These materials included an analysis of the Fund's performance, fees and expenses, and profitability compiled by the Fund's independent fee consultant. The Board also received extensive information throughout the year regarding performance of the Fund.

In connection with the contract review process, the Contract Committee and the Board considered the factors discussed below, among others. The Board also considered that DWS and its predecessors have managed the Fund since its inception, and the Board believes that a long-term relationship with a capable, conscientious advisor is in the best interests of the Fund. The Board considered, generally, that shareholders chose to invest or remain invested in the Fund knowing that DWS managed the Fund, and that the Agreement was approved by the Fund's shareholders. DWS is part of Deutsche Bank, a major global banking institution that is engaged in a wide range of financial services. The Board believes that there are significant advantages to being part of a global asset management business that offers a wide range of investin g expertise and resources, including hundreds of portfolio managers and analysts with research capabilities in many countries throughout the world.

While shareholders may focus primarily on fund performance and fees, the Fund's Board considers these and many other factors, including the quality and integrity of DWS's and Turner's personnel and such other issues as back-office operations, fund valuations, and compliance policies and procedures.

Nature, Quality and Extent of Services. The Board considered the terms of the Agreements, including the scope of advisory services provided under the Agreements. The Board noted that, under the Agreements, DWS and Turner provide portfolio management services to the Fund and that, pursuant to a separate administrative services agreement, DWS provides administrative services to the Fund. The Board considered the experience and skills of senior management and investment personnel, the resources made available to such personnel, the ability of DWS to attract and retain high-quality personnel, and the organizational depth and stability of DWS. The Board reviewed the Fund's performance over short-term and long-term periods and compared those returns to various agreed-upon performance measures, including market indices and a peer universe compiled by the independent fee consultant using information supplied by Lipper Inc. ("Lipper"). The Board also noted that it has put into place a process of identifying "Focus Funds" (e.g., funds performing poorly relative to their benchmark or a peer universe compiled by Lipper), and receives more frequent reporting and information from DWS regarding such funds, along with DWS's remedial plans to address underperformance. The Board believes this process is an effective manner of identifying and addressing underperforming funds. Based on the information provided, the Board noted that for the one-, three- and five-year periods ended December 31, 2009, the Fund's performance (Class A shares) was in the 1st quartile, 2nd quartile and 3rd quartile, respectively, of the applicable Lipper universe (the 1st quartile being the best performers and the 4th quartile being the worst performers). The Board also observed that the Fund has outperformed its benchmark in the one-, three- and five-year periods ended December 31, 2009.

On the basis of this evaluation and the ongoing review of investment results by the Board, the Board concluded that the nature, quality and extent of services provided by DWS and Turner historically have been and continue to be satisfactory.

Fees and Expenses. The Board considered the Fund's investment management fee schedule, sub-advisory fee schedule, operating expenses, and total expense ratios, and comparative information provided by Lipper and the independent fee consultant regarding investment management fee rates paid to other investment advisors by similar funds (1st quartile being the most favorable and 4th quartile being the least favorable). With respect to management fees paid to other investment advisors by similar funds, the Board noted that the contractual fee rates paid by the Fund, which include the 0.10% fee paid to DWS under the Fund's administrative services agreement, were higher than the median (3rd quartile) of the applicable Lipper peer group (based on Lipper data provided as of December 31, 2009). With respect to the sub-advisory fee paid to Turner, the Board noted that the fee is paid by DWS out of its fee and not directly by the Fund. The Board noted that the Fund's Class A shares total (net) operating expenses were expected to be higher than the median (3rd quartile) of the applicable Lipper expense universe (based on Lipper data provided as of December 31, 2009, and analyzing Lipper expense universe Class A expenses less any applicable 12b-1 fees) ("Lipper Universe Expenses"). The Board considered the Fund's management fee rate as compared to fees charged by DWS and certain of its affiliates for comparable mutual funds and considered differences in fund and fee structures between the DWS Funds. The Board also considered how the Fund's total (net) operating expenses compared to the total (net) operating expenses of a more customized peer group selected by Lipper (based on such factors as asset size). The Board also noted that the expense limitation agreed to by DWS helped to ensure that the Fund's total (net) operating expenses would remain competitive.

On the basis of the information provided, the Board concluded that management fees were reasonable and appropriate in light of the nature, quality and extent of services provided by DWS and Turner.

Profitability. The Board reviewed detailed information regarding revenues received by DWS under the Agreement. The Board considered the estimated costs and pre-tax profits realized by DWS from advising the DWS Funds, as well as estimates of the pre-tax profits attributable to managing the Fund in particular. The Board also received information regarding the estimated enterprise-wide profitability of DWS and its affiliates with respect to all fund services in totality and by fund. The Board reviewed DWS's methodology in allocating its costs to the management of the Fund. Based on the information provided, the Board concluded that the pre-tax profits realized by DWS in connection with the management of the Fund were not unreasonable. The Board also reviewed information regarding the profitability of certain similar investment management firms. The Board noted that while information regarding the profitability of such firms is limited (and in some cases is not necessarily prepared on a comparable basis), DWS and its affiliates' overall profitability with respect to the DWS fund complex (after taking into account distribution and other services provided to the funds by DWS and its affiliates) was lower than the overall profitability levels of many comparable firms for which such data was available. The Board did not consider the profitability of Turner with respect to the Fund. The Board noted that DWS pays Turner's fee out of its management fee, and its understanding that the Fund's sub-advisory fee schedule was the product of an arm's length negotiation with DWS.

Economies of Scale. The Board considered whether there are economies of scale with respect to the management of the Fund and whether the Fund benefits from any economies of scale. The Board noted that the Fund's management fee schedule includes fee breakpoints. The Board concluded that the Fund's fee schedule represents an appropriate sharing between the Fund and DWS of such economies of scale as may exist in the management of the Fund at current asset levels.

Other Benefits to DWS and Turner and Their Affiliates. The Board also considered the character and amount of other incidental benefits received by DWS and Turner and their affiliates, including any fees received by DWS for administrative services provided to the Fund and any fees received by an affiliate of DWS for distribution services. The Board also considered benefits to DWS and Turner related to brokerage and soft-dollar allocations, including allocating brokerage to pay for research generated by parties other than the executing broker dealers, which pertain primarily to funds investing in equity securities, along with the incidental public relations benefits to DWS and Turner related to DWS Funds advertising and cross-selling opportunities among DWS products and services. The Board concluded that management fees were reasonable in light of these fallout benefits.

Compliance. The Board considered the significant attention and resources dedicated by DWS to documenting and enhancing its compliance processes in recent years. The Board noted in particular (i) the experience and seniority of both DWS's chief compliance officer and the Fund's chief compliance officer; (ii) the large number of DWS compliance personnel; and (iii) the substantial commitment of resources by DWS and its affiliates to compliance matters. The Board also considered the attention and resources dedicated by DWS to the oversight of the investment sub-advisor's compliance program and compliance with the applicable fund policies and procedures.

Summary of Management Fee Evaluation by Independent Fee Consultant

October 3, 2010

Pursuant to an Order entered into by Deutsche Investment Management Americas and affiliates (collectively, "DeAM") with the Attorney General of New York, I, Thomas H. Mack, have been appointed the Independent Fee Consultant for the DWS Funds (formerly the DWS Scudder Funds). My duties include preparing an annual written evaluation of the management fees DeAM charges the Funds, considering among other factors the management fees charged by other mutual fund companies for like services, management fees DeAM charges other clients for like services, DeAM's costs of supplying services under the management agreements and related profit margins, possible economies of scale if a Fund grows larger, and the nature and quality of DeAM's services, including fund performance. This rep ort summarizes my evaluation for 2010, including my qualifications, the evaluation process for each of the DWS Funds, consideration of certain complex-level factors, and my conclusions. I served in substantially the same capacity in 2007, 2008, and 2009.

Qualifications

For more than 35 years I have served in various professional capacities within the investment management business. I have held investment analysis and advisory positions, including securities analyst, portfolio strategist and director of investment policy with a large investment firm. I have also performed business management functions, including business development, financial management and marketing research and analysis.

Since 1991, I have been an independent consultant within the asset management industry. I have provided services to over 125 client organizations, including investment managers, mutual fund boards, product distributors and related organizations. Over the past ten years I have completed a number of assignments for mutual fund boards, specifically including assisting boards with management contract renewal.

I hold a Master of Business Administration degree, with highest honors, from Harvard University and Master of Science and Bachelor of Science (highest honors) degrees from the University of California at Berkeley. I am an independent director and audit committee financial expert for two closed-end mutual funds and have served in various leadership and financial oversight capacities with non-profit organizations.

Evaluation of Fees for each DWS Fund

My work focused primarily on evaluating, fund-by-fund, the fees charged to each of the 118 publicly offered Fund portfolios in the DWS Fund family. For each Fund, I considered each of the key factors mentioned above, as well as any other relevant information. In doing so I worked closely with the Funds' Independent Directors in their annual contract renewal process, as well as in their approval of contracts for several new funds (documented separately).

In evaluating each Fund's fees, I reviewed comprehensive materials provided by or on behalf of DeAM, including expense information prepared by Lipper Analytical, comparative performance information, profitability data, manager histories, and other materials. I also accessed certain additional information from the Lipper and Morningstar databases and drew on my industry knowledge and experience.

To facilitate evaluating this considerable body of information, I prepared for each Fund a document summarizing the key data elements in each area as well as additional analytics discussed below. This made it possible to consider each key data element in the context of the others.

In the course of contract renewal, DeAM agreed to implement a number of fee and expense adjustments requested by the Independent Directors which will favorably impact future fees and expenses, and my evaluation includes the effects of these changes.

Fees and Expenses Compared with Other Funds

The competitive fee and expense evaluation for each fund focused on two primary comparisons:

The Fund's contractual management fee (the advisory fee plus the administration fee where applicable) compared with those of a group of typically 12-15 funds in the same Lipper investment category (e.g. Large Capitalization Growth) having similar distribution arrangements and being of similar size.

The Fund's total expenses compared with a broader universe of funds from the same Lipper investment category and having similar distribution arrangements.

These two comparisons provide a view of not only the level of the fee compared with funds of similar scale but also the total expense the Fund bears for all the services it receives, in comparison with the investment choices available in the Fund's investment category and distribution channel. The principal figure-of-merit used in these comparisons was the subject Fund's percentile ranking against peers.

DeAM's Fees for Similar Services to Others

DeAM provided management fee schedules for all of its US domiciled fund and non-fund investment management accounts in any of the investment categories where there is a DWS Fund. These similar products included the other DWS Funds, non-fund pooled accounts, institutional accounts and sub-advisory accounts. Using this information, I calculated for each Fund the fee that would be charged to each similar product, at the subject Fund's asset level.

Evaluating information regarding non-fund products is difficult because there are varying levels of services required for different types of accounts, with mutual funds generally requiring considerably more regulatory and administrative types of service as well as having more frequent cash flows than other types of accounts. Also, while mutual fund fees for similar fund products can be expected to be similar, there will be some differences due to different pricing conditions in different distribution channels (e.g. retail funds versus those used in variable insurance products), differences in underlying investment processes and other factors.

Costs and Profit Margins

DeAM provided a detailed profitability analysis for each Fund. After making some adjustments so that the presentation would be more comparable to the available industry figures, I reviewed profit margins from investment management alone, from investment management plus other fund services (excluding distribution) provided to the Funds by DeAM (principally shareholder services), and DeAM profits from all sources, including distribution. A later section comments on overall profitability.

Economies of Scale

Economies of scale — an expected decline in management cost per dollar of fund assets as fund assets grow — are very rarely quantified and documented because of inherent difficulties in collecting and analyzing relevant data. However, in virtually every investment category that I reviewed, larger funds tend to have lower fees and lower total expenses than smaller funds. To see how each DWS Fund compares with this industry observation, I reviewed:

The trend in Fund assets over the last five years and the accompanying trend in total expenses. This shows if the Fund has grown and, if so, whether total expense (management fees as well as other expenses) have declined as a percent of assets.

Whether the Fund has break-points in its management fee schedule, the extent of the fee reduction built into the schedule and the asset levels where the breaks take effect, and in the case of a sub-advised Fund how the Fund's break-points compare with those of the sub-advisory fee schedule.

How the Fund's contractual fee schedule compares with trends in the industry data. To accomplish this, I constructed a chart showing how actual latest-fiscal-year contractual fees of the Fund and of other similar funds relate to average fund assets, with the subject Fund's contractual fee schedule superimposed.

Quality of Service — Performance

The quality-of-service evaluation focused on investment performance, which is the principal result of the investment management service. Each Fund's performance was reviewed over the past 1, 3, 5 and 10 years, as applicable, and compared with that of other funds in the same investment category and with a suitable market index.

In addition, I calculated and reviewed risk-adjusted returns relative to an index of similar mutual funds' returns and a suitable market index. The risk-adjusted returns analysis provides a way of determining the extent to which the Fund's return comparisons are mainly the product of investment value-added (or lack thereof) or alternatively taking considerably more or less risk than is typical in its investment category.

I also received and considered the history of portfolio manager changes for each Fund, as this provided an important context for evaluating the performance results.

Complex-Level Considerations

While this evaluation was conducted mainly at the individual fund level, there are some issues relating to the reasonableness of fees that can alternatively be considered across the whole fund complex:

I reviewed DeAM's profitability analysis for all DWS Funds, with a view toward determining if the allocation procedures used were reasonable and how profit levels compared with public data for other investment managers.

I considered whether DeAM and affiliates receive any significant ancillary or "fall-out" benefits that should be considered in interpreting the direct profitability results. These would be situations where serving as the investment manager of the Funds is beneficial to another part of the Deutsche Bank organization.

I considered how aggregated DWS Fund expenses had varied over the years, by asset class and in the context of trends in asset levels.

I reviewed the structure of the DeAM organization, trends in staffing levels, and information on compensation of investment management and other professionals compared with industry data.

Findings

Based on the process and analysis discussed above, which included reviewing a wide range of information from management and external data sources and considering among other factors the fees DeAM charges other clients, the fees charged by other fund managers, DeAM's costs and profits associated with managing the Funds, economies of scale, possible fall-out benefits, and the nature and quality of services provided, in my opinion the management fees charged the DWS Funds are reasonable.

Thomas H. Mack

Summary of Administrative Fee Evaluation by Independent Fee Consultant

DWS Money Market VIP

October 4, 2010

Pursuant to an Order entered into by Deutsche Asset Management (DeAM) with the Attorney General of New York, I, Thomas H. Mack, have been appointed the Independent Fee Consultant for the DWS Funds and have as part of my duties evaluated the reasonableness of a proposed pass-through to the funds of certain reporting costs associated with new regulations for money funds. My evaluation considered the following:

• My recently completed annual evaluation (please see my summary report of October 3, 2010), concluding that the prospective fees and expenses of all the DWS-sponsored money funds are reasonable.

• The fact that in my opinion the services DWS would provide under the combination of the Advisory and proposed Administration Agreements continues to be comparable with those typically provided to competitive funds under their management agreements.

• Management's analysis showing that the maximum total expense ratio impact of this change on any fund share class would be 1.3 basis points, which in my opinion is not material to my conclusions about the reasonableness of expenses.

Based on the foregoing considerations, in my opinion the proposed fees and expenses for the affected DWS-sponsored money funds are reasonable.

Thomas H. Mack

Board Members and Officers

The following table presents certain information regarding the Board Members and Officers of the Trust as of December 31, 2010. Each Board Member's year of birth is set forth in parentheses after his or her name. Unless otherwise noted, (i) each Board Member has engaged in the principal occupation(s) noted in the table for at least the most recent five years, although not necessarily in the same capacity; and (ii) the address of each Independent Board Member is c/o Paul K. Freeman, Independent Chairman, DWS Funds, PO Box 101833, Denver, CO 80250-1833. Except as otherwise noted below, the term of office for each Board Member is until the election and qualification of a successor, or until such Board Member sooner dies, resigns, is removed or as otherwise provided in the governing documents of the fund. Because the fund does not hold an annual meeting of shareholders, each Board Member will hold office for an indeterminate period. The Board Members may also serve in similar capacities with other funds in the fund complex. The Length of Time Served represents the year in which the Board Member joined the board of one or more DWS funds now overseen by the Board.

Independent Board Members
Name, Year of Birth, Position with the Fund and Length of Time Served1	Business Experience and Directorships During the Past Five Years	Number of Funds in DWS Fund Complex Overseen
Paul K. Freeman (1950) Chairperson since 2009 Board Member since 1993	Consultant, World Bank/Inter-American Development Bank; Executive and Governing Council of the Independent Directors Council (education committees); formerly, Project Leader, International Institute for Applied Systems Analysis (1998-2001); Chief Executive Officer, The Eric Group, Inc. (environmental insurance) (1986-1998)	122
John W. Ballantine (1946) Board Member since 1999	Retired; formerly, Executive Vice President and Chief Risk Management Officer, First Chicago NBD Corporation/The First National Bank of Chicago (1996-1998); Executive Vice President and Head of International Banking (1995-1996). Directorships: Healthways, Inc. (provider of disease and care management services); Portland General Electric (utility company); Stockwell Capital Investments PLC (private equity). Former Directorships: First Oak Brook Bancshares, Inc. and Oak Brook Bank; Prisma Energy International	122
Henry P. Becton, Jr. (1943) Board Member since 1990	Vice Chair and former President, WGBH Educational Foundation. Directorships: Association of Public Television Stations; Lead Director, Becton Dickinson and Company3 (medical technology company); Lead Director, Belo Corporation3 (media company); Public Radio International; Public Radio Exchange (PRX); The PBS Foundation. Former Directorships: Boston Museum of Science; American Public Television; Concord Academy; New England Aquarium; Mass. Corporation for Educational Telecommunications; Committee for Economic De velopment; Public Broadcasting Service	122
Dawn-Marie Driscoll (1946) Board Member since 1987	President, Driscoll Associates (consulting firm); Executive Fellow, Center for Business Ethics, Bentley University; formerly, Partner, Palmer & Dodge (1988-1990); Vice President of Corporate Affairs and General Counsel, Filene's (1978-1988). Directorships: Trustee of 22 open-end mutual funds managed by Sun Capital Advisers, Inc. (since 2007); Director of ICI Mutual Insurance Company (since 2007); Advisory Board, Center for Business Ethics, Bentley University; Trustee, Southwest Florida Community Foundation (charitable organization). Former Directorships: Investment Company Institute (audit, executive, nominating committees) and Independent Directors Council (governance, executive committees)	122
Keith R. Fox (1954) Board Member since 1996	Managing General Partner, Exeter Capital Partners (a series of private investment funds). Directorships: Progressive International Corporation (kitchen goods importer and distributor); BoxTop Media Inc. (advertising); The Kennel Shop (retailer); former Chairman, National Association of Small Business Investment Companies	122
Kenneth C. Froewiss (1945) Board Member since 2001	Adjunct Professor of Finance, NYU Stern School of Business (September 2009-present; Clinical Professor from 1997-September 2009); Member, Finance Committee, Association for Asian Studies (2002-present); Director, Mitsui Sumitomo Insurance Group (US) (2004-present); prior thereto, Managing Director, J.P. Morgan (investment banking firm) (until 1996)	122
Richard J. Herring (1946) Board Member since 1990	Jacob Safra Professor of International Banking and Professor, Finance Department, The Wharton School, University of Pennsylvania (since July 1972); Co-Director, Wharton Financial Institutions Center (since July 2000); Co-Chair, U.S. Shadow Financial Regulatory Committee; Executive Director, Financial Economists Roundtable; Director, Japan Equity Fund, Inc. (since September 2007), Thai Capital Fund, Inc. (since September 2007), Singapore Fund, Inc. (since September 2007); Independent Director of Barclays Bank Delaware (since September 2010). Formerly, Vice Dean and Director, Wharton Undergraduate Division (July 1995-June 2000); Director, Lauder Institute of International Management Studies (July 2000-June 2006)	122
William McClayton (1944) Board Member since 2004+	Private equity investor (since October 2009); previously, Managing Director, Diamond Management & Technology Consultants, Inc. (global consulting firm) (2001-2009); Directorship: Board of Managers, YMCA of Metropolitan Chicago; formerly: Senior Partner, Arthur Andersen LLP (accounting) (1966-2001); Trustee, Ravinia Festival	122
Rebecca W. Rimel (1951) Board Member since 1995	President and Chief Executive Officer, The Pew Charitable Trusts (charitable organization) (1994 to present); Trustee, Thomas Jefferson Foundation (charitable organization) (1994 to present); Trustee, Executive Committee, Philadelphia Chamber of Commerce (2001-2007); Director, CardioNet, Inc.2 (2009-present) (health care). Formerly, Executive Vice President, The Glenmede Trust Company (investment trust and wealth management) (1983-2004); Board Member, Investor Education (charitable organization) (2004-2005); Director, Viasys Health Care2 (January 2007-June 2007); Trustee, Pro Publica (charitable organization) (2007-2010)	122
William N. Searcy, Jr. (1946) Board Member since 1993	Private investor since October 2003; Trustee of 22 open-end mutual funds managed by Sun Capital Advisers, Inc. (since October 1998). Formerly, Pension & Savings Trust Officer, Sprint Corporation2 (telecommunications) (November 1989-September 2003)	122
Jean Gleason Stromberg (1943) Board Member since 1997	Retired. Formerly, Consultant (1997-2001); Director, Financial Markets US Government Accountability Office (1996-1997); Partner, Fulbright & Jaworski, L.L.P. (law firm) (1978-1996). Directorships: The William and Flora Hewlett Foundation. Former Directorships: Service Source, Inc., Mutual Fund Directors Forum (2002-2004), American Bar Retirement Association (funding vehicle for retirement plans) (1987-1990 and 1994-1996)	122
Robert H. Wadsworth (1940) Board Member since 1999	President, Robert H. Wadsworth & Associates, Inc. (consulting firm) (1983 to present); Director, The Phoenix Boys Choir Association	125

Interested Board Member and Officer4
Name, Year of Birth, Position with the Trust/ Corporation and Length of Time Served1,5	Business Experience and Directorships During the Past Five Years	Number of Funds in DWS Fund Complex Overseen
Ingo Gefeke7 (1967) Board Member since 2010 Executive Vice President since 2010	Managing Director3, Deutsche Asset Management; Global Head of Distribution and Product Management, DWS Global Head of Trading and Securities Lending. Member of the Board of Directors of DWS Investment GmbH Frankfurt (since July 2009) and DWS Holding & Service GmbH Frankfurt (since January 2010); formerly, Global Chief Administrative Officer, Deutsche Asset Management (2004-2009); Global Chief Operating Officer, Global Transaction Banking, Deutsche Bank AG, New York (2001-2004); Chief Operating Officer, Global Banking Division Americas, Deutsche Bank AG, New York (1999-2001); Central Management, Global Banking Services, Deutsche Bank AG, Frankfurt (1998-1999); Relationship Management, Deutsche Bank AG, Tokyo, Japan (1997-1998)	55

Officers4
Name, Year of Birth, Position with the Fund and Length of Time Served5	Principal Occupation(s) During Past 5 Years and Other Directorships Held
Michael G. Clark6 (1965) President, 2006-present	Managing Director3, Deutsche Asset Management (2006-present); President of DWS family of funds; Director, ICI Mutual Insurance Company (since October 2007); formerly, Director of Fund Board Relations (2004-2006) and Director of Product Development (2000-2004), Merrill Lynch Investment Managers; Senior Vice President Operations, Merrill Lynch Asset Management (1999-2000)
John Millette8 (1962) Vice President and Secretary, 1999-present	Director3, Deutsche Asset Management
Paul H. Schubert6 (1963) Chief Financial Officer, 2004-present Treasurer, 2005-present	Managing Director3, Deutsche Asset Management (since July 2004); formerly, Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family of Funds (1998-2004); Vice President and Director of Mutual Fund Finance at UBS Global Asset Management (1994-1998)
Caroline Pearson8 (1962) Chief Legal Officer, April 2010-present	Managing Director3, Deutsche Asset Management; formerly, Assistant Secretary for DWS family of funds (1997-2010)
Rita Rubin9 (1970) Assistant Secretary, 2009-present	Vice President and Counsel, Deutsche Asset Management (since October 2007); formerly, Vice President, Morgan Stanley Investment Management (2004-2007)
Paul Antosca8 (1957) Assistant Treasurer, 2007-present	Director3, Deutsche Asset Management (since 2006); Vice President, The Manufacturers Life Insurance Company (U.S.A.) (1990-2006)
Jack Clark8 (1967) Assistant Treasurer, 2007-present	Director3, Deutsche Asset Management (since 2007); formerly, Vice President, State Street Corporation (2002-2007)
Diane Kenneally8 (1966) Assistant Treasurer, 2007-present	Director3, Deutsche Asset Management
John Caruso9 (1965) Anti-Money Laundering Compliance Officer, 2010-present	Managing Director3, Deutsche Asset Management
Robert Kloby9 (1962) Chief Compliance Officer, 2006-present	Managing Director3, Deutsche Asset Management

1 The length of time served represents the year in which the Board Member joined the board of one or more DWS funds currently overseen by the Board.

2 A publicly held company with securities registered pursuant to Section 12 of the Securities Exchange Act of 1934.

3 Executive title, not a board directorship.

4 As a result of their respective positions held with the Advisor, these individuals are considered "interested persons" of the Advisor within the meaning of the 1940 Act. Interested persons receive no compensation from the fund.

5 The length of time served represents the year in which the officer was first elected in such capacity for one or more DWS funds.

6 Address: 100 Plaza One, Jersey City, NJ 07311.

7 Effective January 11, 2011, Mr. Gefeke, an interested Board Member and Executive Vice President, resigned from the fund's Board and as an officer.

The mailing address of Mr. Gefeke is 345 Park Avenue, New York, New York 10154. Mr. Gefeke was an interested Board Member of certain DWS funds by virtue of his positions with Deutsche Asset Management. As an interested person, Mr. Gefeke received no compensation from the fund.

8 Address: One Beacon Street, Boston, MA 02108.

9 Address: 60 Wall Street, New York, New York 10005.

The fund's Statement of Additional Information ("SAI") includes additional information about the Board Members. The SAI is available, without charge, upon request. If you would like to request a copy of the SAI, you may do so by calling the following toll-free number: (800) 728-3337.

Notes

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

This information must be preceded or accompanied by a current prospectus.

Portfolio changes should not be considered recommendations for action by individual investors.

DWS Investment Distributors, Inc.

222 South Riverside Plaza

Chicago, IL 60606

(800) 621-1148

VS2-1 (R-20593-1 2/11)


ITEM 2.	CODE OF ETHICS

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

ITEM 3.	AUDIT COMMITTEE FINANCIAL EXPERT

	The fund’s audit committee is comprised solely of trustees who are "independent" (as such term has been defined by the Securities and Exchange Commission ("SEC") in regulations implementing Section 407 of the Sarbanes-Oxley Act (the "Regulations")). The fund’s Board of Trustees has determined that there are several "audit committee financial experts" (as such term has been defined by the Regulations) serving on the fund’s audit committee including Mr. William McClayton, the chair of the fund’s audit committee. An “audit committee financial expert” is not an “expert” for any purpose, including for purposes of Section 11 of the Securities Act of 1933 and the designation or identification of a person as an “audit committee financial expert” does not impose on su ch person any duties, obligations or liability that are greater than the duties, obligations and liability imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification.

ITEM 4.	PRINCIPAL ACCOUNTANT FEES AND SERVICES

DWS VARIABLE SERIES II

FORM N-CSR DISCLOSURE RE: AUDIT FEES

The following table shows the amount of fees that Ernst & Young LLP (“E&Y”), the Fund’s Independent Registered Public Accounting Firm, billed to the Fund during the Fund’s last two fiscal years. The Audit Committee approved in advance all audit services and non-audit services that E&Y provided to the Fund.

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

Fiscal Year Ended December 31,	Audit Fees Billed to Fund		Audit-Related Fees Billed to Fund		Tax Fees Billed to Fund		All Other Fees Billed to Fund
2010	$	813,764	$	0	$	157,315	$	0
2009	$	808,655	$	0	$	143,296	$	0

The above “Tax Fees” were billed for professional services rendered for tax return preparation.

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

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

Fiscal Year Ended December 31,	Audit-Related Fees Billed to Adviser and Affiliated Fund Service Providers		Tax Fees Billed to Adviser and Affiliated Fund Service Providers		All Other Fees Billed to Adviser and Affiliated Fund Service Providers
2010	$	0	$	295,930	$	0
2009	$	0	$	440,000	$	0

The above “Tax Fees” were billed in connection with tax compliance services and agreed upon procedures.

Non-Audit Services

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

Fiscal Year Ended December 31,	Total Non-Audit Fees Billed to Fund (A)		Total Non-Audit Fees billed to Adviser and Affiliated Fund Service Providers (engagements related directly to the operations and financial reporting of the Fund) (B)		Total Non-Audit Fees billed to Adviser and Affiliated Fund Service Providers (all other engagements) (C)		Total of (A), (B) and (C)
2010	$	157,315	$	295,930	$	680,807	$	1,134,052
2009	$	143,296	$	440,000	$	686,000	$	1,296,296

All other engagement fees were billed for services in connection with agreed upon procedures and tax compliance for DIMA and other related entities that provide support for the operations of the Fund.

Audit Committee Pre-Approval Policies and Procedures. Generally, each Fund’s Audit Committee must pre approve (i) all services to be performed for a Fund by a Fund’s Independent Registered Public Accounting Firm and (ii) all non-audit services to be performed by a Fund’s Independent Registered Public Accounting Firm for the DIMA Entities with respect to operations and financial reporting of the Fund, except that the Chairperson or Vice Chairperson of each Fund’s Audit Committee may grant the pre-approval for non-audit services described in items (i) and (ii) above for non-prohibited services for engagements of less than $100,000. All such delegated pre approvals shall be presented to each Fund’s Audit Committee no later than the next Audit Committee meeting.

There were no amounts that were approved by the Audit Committee pursuant to the de minimis exception under Rule 2-01 of Regulation S-X.

According to the registrant’s principal Independent Registered Public Accounting Firm, substantially all of the principal Independent Registered Public Accounting Firm's hours spent on auditing the registrant's financial statements were attributed to work performed by full-time permanent employees of the principal Independent Registered Public Accounting Firm.

***

In connection with the audit of the 2009 and 2010 financial statements, the Fund entered into an engagement letter with E&Y. The terms of the engagement letter required by E&Y, and agreed to by the Audit Committee, include provisions in which the parties consent to the sole jurisdiction of federal courts in New York, Boston or the Northern District of Illinois, as well as a waiver of right to a trial by jury and an exclusion of punitive damages.

***

E&Y advised the Fund’s Audit Committee that E&Y had identified three matters that it determined to be inconsistent with the SEC’s auditor independence rules.

First, E&Y advised the Fund’s Audit Committee that, in 2007 and 2008, Deutsche Bank AG (“DB”) provided standard overdraft protection on a depository account to the E&Y member firm in India (“E&Y India”). DB is within the “Investment Company Complex” (as defined by SEC rules) and therefore covered by the SEC auditor independence rules applicable to the Fund. E&Y advised the Audit Committee that E&Y India utilized this arrangement twice in 2007; therefore, the arrangement constituted a lending type arrangement in violation of Rule 2-01(c)(1)(ii)(A) of Regulation S-X as described above. E&Y advised the Audit Committee that E&Y believes its independence has not been impacted as it relates to the audit of the Fund. In reaching this conclusion, E&Y noted a number of factors, including that the arrangement did not create a mutual or conflicting interest between E&Y and the Fund and that the arrangement did not involve the Fund, but rather affiliates of the Fund in the Investment Company Complex. E&Y informed the Audit Committee that E&Y India has cancelled the overdraft arrangement.

Second, E&Y advised the Fund’s Audit Committee that, in 2008, an E&Y professional purchased interests in a fund sponsored by a subsidiary of Deutsche Bank AG that is not audited by E&Y. Subsequent to the purchase, the E&Y professional became a Covered Person (as defined by SEC rules) of the Fund as a result of providing non-audit services to a DB entity within the Investment Company Complex. E&Y informed the Audit Committee that this investment constituted an investment in an affiliate of an audit client in violation of the Rule 2-01(c)(1) of Regulation S-X. E&Y advised the Audit Committee that E&Y believes its independence has not been impacted as it relates to the audit of the Fund. In reaching this conclusion, E&Y noted a number of factors, incl uding that the E&Y professional did not have any financial interest in the Fund and was not involved with the provision of audit services to the Fund. E&Y informed the Audit Committee that the E&Y professional no longer provides any services to any entity within the Investment Company Complex and is no longer deemed to be a Covered Person with respect to the Fund.

Finally, E&Y advised the Fund’s Audit Committee that, in 2008, an E&Y professional whose spouse owned interests in two DWS Funds that are not audited by E&Y, became a Covered Person of the Fund as a result of providing attest services to a DB entity within the Investment Company Complex. E&Y informed the Audit Committee that this investment constituted an investment in an affiliate of an audit client in violation of the Rule 2-01(c)(1) of Regulation S-X. E&Y advised the Audit Committee that E&Y believes its independence has not been impacted as it relates to the audit of the Fund. In reaching this conclusion, E&Y noted a number of factors, including that the E&Y professional did not have any financi al interest in the Fund and was not involved with the provision of audit services to the Fund. E&Y informed the Audit Committee that the E&Y professional no longer provides any services to any entity within the Investment Company Complex and is no longer deemed to be a Covered Person with respect to the Fund.


ITEM 5.	AUDIT COMMITTEE OF LISTED REGISTRANTS

	Not applicable

ITEM 6.	SCHEDULE OF INVESTMENTS

	Not applicable

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

	Not applicable

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

	Not applicable

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

	Not applicable

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

	There were no material changes to the procedures by which shareholders may recommend nominees to the Fund’s Board. The primary function of the Nominating and Governance Committee is to identify and recommend individuals for membership on the Board and oversee the administration of the Board Governance Guidelines. Shareholders may recommend candidates for Board positions by forwarding their correspondence by U.S. mail or courier service to Paul K. Freeman, Independent Chairman, DWS Funds, P.O. Box 101833, Denver, CO 80250-1833.

ITEM 11.	CONTROLS AND PROCEDURES

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

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

ITEM 12.	EXHIBITS

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

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

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

Form N-CSR Item F

SIGNATURES

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

Registrant:	DWS Variable Series II


By:	/s/Michael G. Clark Michael G. Clark President

Date:	February 23, 2011

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:	/s/Michael G. Clark Michael G. Clark President

Date:	February 23, 2011



By:	/s/Paul Schubert Paul Schubert Chief Financial Officer and Treasurer

Date:	February 23, 2011

EX-99.CODE ETH 2 codeofethics.htm CODE OF ETHICS codeofethics.htm

DWS Investments

Principal Executive and Principal Financial Officer Code of Ethics

For the Registered Management Investment Companies Listed on Appendix A

Effective Date

[January 31, 2005]

Table of Contents

Page Number


	I. Overview	3

II. Purposes of the Officer Code

III. Responsibilities of Covered Officers

A. Honest and Ethical Conduct

B. Conflicts of Interest

C. Use of Personal Fund Shareholder Information

D. Public Communications

E. Compliance with Applicable Laws, Rules and Regulations

IV. Violation Reporting

A. Overview

B. How to Report

C. Process for Violation Reporting to the Fund Board

D. Sanctions for Code Violations

V. Waivers from the Officer Code

VI. Amendments to the Code

VII. Acknowledgement and Certification of Adherence to the Officer Code

IX. Recordkeeping

X. Confidentiality

Appendices

Appendix A: List of Officers Covered under the Code, by Board

Appendix B: Officer Code Acknowledgement and Certification Form

Appendix C: Definitions

Overview

This Principal Executive Officer and Principal Financial Officer Code of Ethics (“Officer Code”) sets forth the policies, practices, and values expected to be exhibited in the conduct of the Principal Executive Officers and Principal Financial Officers of the investment companies (“Funds”) they serve (“Covered Officers”). A list of Covered Officers and Funds is included on Appendix A.

The Boards of the Funds listed on Appendix A have elected to implement the Officer Code, pursuant to Section 406 of the Sarbanes-Oxley Act of 2002 and the SEC’s rules thereunder, to promote and demonstrate honest and ethical conduct in their Covered Officers.

Deutsche Asset Management, Inc. or its affiliates (“DeAM”) serves as the investment adviser to each Fund. All Covered Officers are also employees of DeAM or an affiliate. Thus, in addition to adhering to the Officer Code, these individuals must comply with DeAM policies and procedures, such as the DeAM Code of Ethics governing personal trading activities, as adopted pursuant to Rule 17j-1 under the Investment Company Act of 1940.1 In addition, such individuals also must comply with other applicable Fund policies and procedures.

The DeAM Compliance Officer, who shall not be a Covered Officer and who shall serve as such subject to the approval of the Fund’s Board (or committee thereof), is primarily responsible for implementing and enforcing this Code. The Compliance Officer has the authority to interpret this Officer Code and its applicability to particular circumstances. Any questions about the Officer Code should be directed to the DeAM Compliance Officer.

The DeAM Compliance Officer and his or her contact information can be found in Appendix A.

_________________________

1 The obligations imposed by the Officer Code are separate from, and in addition to, any obligations imposed under codes of ethics adopted pursuant to Rule 17j-1 under the Investment Company Act of 1940, and any other code of conduct applicable to Covered Officers in whatever capacity they serve. The Officer Code does not incorporate any of those other codes and, accordingly, violations of those codes will not necessarily be considered violations of the Officer Code and waivers granted under those codes would not necessarily require a waiver to be granted under this Code. Sanctions imposed under those codes may be considered in determining appropriate sanctions for any violation of this Code.

II.	Purposes of the Officer Code

	The purposes of the Officer Code are to deter wrongdoing and to:

	•	promote honest and ethical conduct among Covered Officers, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

•

promote full, fair, accurate, timely and understandable disclosures in reports and documents that the Funds file with or submit to the SEC (and in other public communications from the Funds) and that are within the Covered Officer’s responsibilities;

•

promote compliance with applicable laws, rules and regulations;

•

encourage the prompt internal reporting of violations of the Officer Code to the DeAM Compliance Officer; and

	•	establish accountability for adherence to the Officer Code.

	Any questions about the Officer Code should be referred to DeAM’s Compliance Officer.

III.	Responsibilities of Covered Officers

	A.	Honest and Ethical Conduct
		It is the duty of every Covered Officer to encourage and demonstrate honest and ethical conduct, as well as adhere to and require adherence to the Officer Code and any other applicable policies and procedures designed to promote this behavior. Covered Officers must at all times conduct themselves with integrity and distinction, putting first the interests of the Fund(s) they serve. Covered Officers must be honest and candid while maintaining confidentiality of information where required by law, DeAM policy or Fund policy. Covered Officers also must, at all times, act in good faith, responsibly and with due care, competence and diligence, without misrepresenting or being misleading about material facts or allowing their independent judgment to be subordinated. Covered Officers also should maintain skills appropriate and necessary for the performance of their duties for the Fund(s). Covered Officers also must responsibly use and control all Fund assets and resources entrusted to them. Covered Officers may not retaliate against others for, or otherwise discourage the reporting of, actual or apparent violations of the Officer Code or applicable laws or regulations. Covered Officers should create an environment that encourages the exchange of information, including concerns of the type that this Code is designed to address.

	B.	Conflicts of Interest
		A “conflict of interest” occurs when a Covered Officer’s personal interests interfere with the interests of the Fund for which he or she serves as an officer. Covered Officers may not improperly use their position with a Fund for personal or private gain to themselves, their family, or any other person. Similarly, Covered Officers may not use their personal influence or personal relationships to influence decisions or other Fund business or operational matters where they would benefit personally at the Fund’s expense or to the Fund’s detriment. Covered Officers may not cause the Fund to take action, or refrain from taking action, for their personal benefit at the Fund’ ;s expense or to the Fund’s detriment. Some examples of conflicts of interest follow (this is not an all-inclusive list): being in the position of supervising, reviewing or having any influence on the job evaluation, pay or benefit of any immediate family member who is an employee of a Fund service provider or is otherwise associated with the Fund; or having an ownership interest in, or having any consulting or employment relationship with, any Fund service provider other than DeAM or its affiliates. Certain conflicts of interest covered by this Code arise out of the relationships between Covered Officers and the Fund that already are subject to conflict of interest provisions in the Investment Company Act and the Investment 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 the Fund because of their status as “affiliated persons” of the Fund. Covered Officers must comply with applicable laws and regulations. Therefore, any violations of existing statutory and regulatory prohibitions on individual behavior could be considered a violation of this Code. As to conflicts arising from, or as a result of the advisory relationship (or any other relationships) between the Fund and DeAM, of which the Covered Officers are also officers or employees, it is recognized by the Board that, subject to DeAM’s fiduciary duties to the Fund, the Covered Officers will in the normal course of their duties (whether formally for the Fund or for DeAM, or for both) be involved in establishing policies and implementing decisions which will have different effects on DeAM and the Fund. The Board recognizes that the participation of the Covered Officers in such activities is inherent in the contract relationship between the Fund and DeAM, and is consistent with the expectat ion of the Board of the performance by the Covered Officers of their duties as officers of the Fund. Covered Officers should avoid actual conflicts of interest, and appearances of conflicts of interest, between the Covered Officer’s duties to the Fund and his or her personal interests beyond those contemplated or anticipated by applicable regulatory schemes. If a Covered Officer suspects or knows of a conflict or an appearance of one, the Covered Officer must immediately report the matter to the DeAM Compliance Officer. If a Covered Officer, in lieu of reporting such a matter to the DeAM Compliance Officer, may report the matter directly to the Fund’s Board (or committee thereof), as appropriate (e.g., if the conflict involves the DeAM Compliance Officer or the Covered Officer reasonably be lieves it would be futile to report the matter to the DeAM Compliance Officer). When actual, apparent or suspected conflicts of interest arise in connection with a Covered Officer, DeAM personnel aware of the matter should promptly contact the DeAM Compliance Officer. There will be no reprisal or retaliation against the person reporting the matter. Upon receipt of a report of a possible conflict, the DeAM Compliance Officer will take steps to determine whether a conflict exists. In so doing, the DeAM Compliance Officer may take any actions he or she determines to be appropriate in his or her sole discretion and may use all reasonable resources, including retaining or engaging legal counsel, accounting firms or other consultants, subject to applicable law.2 The costs associated with such actions may be borne by the Fund, if appropriate, after consultation with the Fund’s Board (or committee thereof). Otherwise, such costs will be borne by DeAM o r other appropriate Fund service provider. After full review of a report of a possible conflict of interest, the DeAM Compliance Officer may determine that no conflict or reasonable appearance of a conflict exists. If, however, the DeAM Compliance Officer determines that an actual conflict exists, the Compliance Officer will resolve the conflict solely in the interests of the Fund, and will report the conflict and its resolution to the Fund’s Board (or committee thereof). If the DeAM Compliance Officer determines that the appearance of a conflict exists, the DeAM Compliance Officer will take appropriate steps to remedy such appearance. In lieu of determining whether a conflict exists and/or resolving a conflict, the DeAM Compliance Officer instead may refer the matter to the Fund’s Board (or committee thereof), as appropriate. However, the DeAM Compliance Officer must refer the matter to the Fund’s Board (or committee thereof) if the DeAM Compliance Officer is directly involved in the conflict or under similar appropriate circumstances. After responding to a report of a possible conflict of interest, the DeAM Compliance Officer will discuss the matter with the person reporting it (and with the Covered Officer at issue, if different) for purposes of educating those involved on conflicts of interests (including how to detect and avoid them, if appropriate). Appropriate resolution of conflicts may restrict the personal activities of the Covered Officer and/or his family, friends or other persons. Solely because a conflict is disclosed to the DeAM Compliance Officer (and/or the Board or Committee thereof) and/or resolved by the DeAM Compliance Officer does not mean that the conflict or its resolution constitutes a waiver from the Code’s requirements. Any questions about conflicts of interests, including whether a particular situation might be a conflict or an appearance of one, should be directed to the DeAM Compliance Officer.

_________________________

2 For example, retaining a Fund’s independent accounting firm may require pre-approval by the Fund’s audit committee.

	C.	Use of Personal Fund Shareholder Information
		A Covered Officer may not use or disclose personal information about Fund shareholders, except in the performance of his or her duties for the Fund. Each Covered Officer also must abide by the Funds’ and DeAM’s privacy policies under SEC Regulation S-P.

	D.	Public Communications
		In connection with his or her responsibilities for or involvement with a Fund’s public communications and disclosure documents (e.g., shareholder reports, registration statements, press releases), each Covered Officer must provide information to Fund service providers (within the DeAM organization or otherwise) and to the Fund’s Board (and any committees thereof), independent auditors, government regulators and self-regulatory organizations that is fair, accurate, complete, objective, relevant, timely and understandable. Further, within the scope of their duties, Covered Officers having direct or supervisory authority over Fund disclosure documents or other public Fund communications will, to the extent appropriate within their area of responsibility, endeavor to ensure full, fair, timely, accurate and understandable disclosure in Fund disclosure documents. Such Covered Officers will oversee, or appoint others to oversee, processes for the timely and accurate creation and review of all public reports and regulatory filings. Within the scope of his or her responsibilities as a Covered Officer, each Covered Officer also will familiarize himself or herself with the disclosure requirements applicable to the Fund, as well as the business and financial operations of the Fund. Each Covered Officer also will adhere to, and will promote adherence to, applicable disclosure controls, processes and procedures, including DeAM’s Disclosure Controls and Procedures, which govern the process by which Fund disclosure documents are created and reviewed. To the extent that Covered Officers participate in the creation of a Fund’s books or records, they must do so in a way that promotes the accuracy, fairness and timeliness of those records.

	E.	Compliance with Applicable Laws, Rules and Regulations
		In connection with his or her duties and within the scope of his or her responsibilities as a Covered Officer, each Covered Officer must comply with governmental laws, rules and regulations, accounting standards, and Fund policies/procedures that apply to his or her role, responsibilities and duties with respect to the Funds (“Applicable Laws”). These requirements do not impose on Covered Officers any additional substantive duties. Additionally, Covered Officers should promote compliance with Applicable Laws. If a Covered Officer knows of any material violations of Applicable Laws or suspects that such a violation may have occurred, the Covered Officer is expected to promptly report the matter to the DeAM Compliance Officer.

IV.	Violation Reporting

	A.	Overview
		Each Covered Officer must promptly report to the DeAM Compliance Officer, and promote the reporting of, any known or suspected violations of the Officer Code. Failure to report a violation may be a violation of the Officer Code.

		Examples of violations of the Officer Code include, but are not limited to, the following:

		•	Unethical or dishonest behavior

•

Obvious lack of adherence to policies surrounding review and approval of public communications and regulatory filings

•

Failure to report violations of the Officer Code

•

Known or obvious deviations from Applicable Laws

•

Failure to acknowledge and certify adherence to the Officer Code

The DeAM Compliance Officer has the authority to take any and all action he or she considers appropriate in his or her sole discretion to investigate known or suspected Code violations, including consulting with the Fund’s Board, the independent Board members, a Board committee, the Fund’s legal counsel and/or counsel to the independent Board members. The Compliance Officer also has the authority to use all reasonable resources to investigate violations, including retaining or engaging legal counsel, accounting firms or other consultants, subject to applicable law.3 The costs associated with such actions may be borne by the Fund, if appropriate, after consultation with the Fund’s Board (or committee thereof). Otherwise, such costs will b e borne by DeAM.

	B.	How to Report
		Any known or suspected violations of the Officer Code must be promptly reported to the DeAM Compliance Officer.

	C.	Process for Violation Reporting to the Fund Board
		The DeAM Compliance Officer will promptly report any violations of the Code to the Fund’s Board (or committee thereof).

	D.	Sanctions for Code Violations
		Violations of the Code will be taken seriously. In response to reported or otherwise known violations, DeAM and the relevant Fund’s Board may impose sanctions within the scope of their respective authority over the Covered Officer at issue. Sanctions imposed by DeAM could include termination of employment. Sanctions imposed by a Fund’s Board could include termination of association with the Fund.

_________________________

3 For example, retaining a Fund’s independent accounting firm may require pre-approval by the Fund’s audit committee.

Waivers from the Officer Code

A Covered Officer may request a waiver from the Officer Code by transmitting a written request for a waiver to the DeAM Compliance Officer.4 The request must include the rationale for the request and must explain how the waiver would be in furtherance of the standards of conduct described in and underlying purposes of the Officer Code. The DeAM Compliance Officer will present this information to the Fund’s Board (or committee thereof). The Board (or committee) will determine whether to grant the requested waiver. If the Board (or committee) grants the requested waiver, the DeAM Compliance Officer thereafter will monitor the activities subject to the waiver, as appropriate, and will promptly report to the Fund& #8217;s Board (or committee thereof) regarding such activities, as appropriate.

The DeAM Compliance Officer will coordinate and facilitate any required public disclosures of any waivers granted or any implicit waivers.

_________________________

4 Of course, it is not a waiver of the Officer Code if the Fund’s Board (or committee thereof) determines that a matter is not a deviation from the Officer Code’s requirements or is otherwise not covered by the Code.

VI.

Amendments to the Code

The DeAM Compliance Officer will review the Officer Code from time to time for its continued appropriateness and will propose any amendments to the Fund’s Board (or committee thereof) on a timely basis. In addition, the Board (or committee thereof) will review the Officer Code at least annually for its continued appropriateness and may amend the Code as necessary or appropriate.

The DeAM Compliance Officer will coordinate and facilitate any required public disclosures of Code amendments.

VII.

Acknowledgement and Certification of Adherence to the Officer Code

Each Covered Officer must sign a statement upon appointment as a Covered Officer and annually thereafter acknowledging that he or she has received and read the Officer Code, as amended or updated, and confirming that he or she has complied with it (see Appendix B: Acknowledgement and Certification of Obligations Under the Officer Code).

Understanding and complying with the Officer Code and truthfully completing the Acknowledgement and Certification Form is each Covered Officer’s obligation.

The DeAM Compliance Officer will maintain such Acknowledgements in the Fund’s books and records.

VIII.	Scope of Responsibilities
	A Covered Officer’s responsibilities under the Officer Code are limited to:


	(1)	Fund matters over which the Officer has direct responsibility or control, matters in which the Officer routinely participates, and matters with which the Officer is otherwise involved (i.e., matters within the scope of the Covered Officer’s responsibilities as a Fund officer); and

(2)

Fund matters of which the Officer has actual knowledge.

IX.	Recordkeeping
	The DeAM Compliance Officer will create and maintain appropriate records regarding the implementation and operation of the Officer Code, including records relating to conflicts of interest determinations and investigations of possible Code violations.

Confidentiality

All reports and records prepared or maintained pursuant to this Officer Code shall be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Officer Code, such matters shall not be disclosed to anyone other than the DeAM Compliance Officer, the Fund’s Board (or committee thereof), legal counsel, independent auditors, and any consultants engaged by the Compliance Officer.

Appendices

Appendix A:

List of Officers Covered under the Code, by Board:

Fund Board	Principal Executive Officers	Principal Financial Officers	Treasurer
DWS Funds	Michael Clark	Paul Schubert	Paul Schubert
Germany*	Michael Clark	Paul Schubert	Paul Schubert

* Central Europe and Russia, European Equity, and New Germany Funds

DeAM Compliance Officer:

Joseph S. Yuen

Code of Ethics Compliance

212-454-7443

212-454-4703 fax

As of: Jan 1, 2009

Appendix B: Acknowledgement and Certification

Initial Acknowledgement and Certification

of Obligations Under the Officer Code


	Print Name	Department	Location	Telephone

I acknowledge and certify that I am a Covered Officer under the DWS Investments Principal Executive and Financial Officer Code of Ethics (“Officer Code”), and therefore subject to all of its requirements and provisions.

I have received and read the Officer Code and I understand the requirements and provisions set forth in the Officer Code.

I have disclosed any conflicts of interest of which I am aware to the DeAM Compliance Officer.

I will act in the best interest of the Funds for which I serve as an officer and have maintained the confidentiality of personal information about Fund shareholders.

I will report any known or suspected violations of the Officer Code in a timely manner to the DeAM Compliance Officer.


Signature	Date

Annual Acknowledgement and Certification

of Obligations Under the Officer Code


	Print Name	Department	Location	Telephone

I have received and read the Officer Code, and I understand the requirements and provisions set forth in the Officer Code.

I have adhered to the Officer Code.

I have not knowingly been a party to any conflict of interest, nor have I had actual knowledge about actual or apparent conflicts of interest that I did not report to the DeAM Compliance Officer in accordance with the Officer Code’s requirements.

I have acted in the best interest of the Funds for which I serve as an officer and have maintained the confidentiality of personal information about Fund shareholders.

With respect to the duties I perform for the Fund as a Fund officer, I believe that effective processes are in place to create and file public reports and documents in accordance with applicable regulations.

With respect to the duties I perform for the Fund as a Fund officer, I have complied to the best of my knowledge with all Applicable Laws (as that term is defined in the Officer Code) and have appropriately monitored those persons under my supervision for compliance with Applicable Laws.

I have reported any known or suspected violations of the Officer Code in a timely manner to the DeAM Compliance Officer.


Signature	Date

Appendix C: Definitions

Principal Executive Officer

Individual holding the office of President of the Fund or series of Funds, or a person performing a similar function.

Principal Financial Officer

Individual holding the office of Treasurer of the Fund or series of Funds, or a person performing a similar function.

Registered Investment Management Investment Company

Registered investment companies other than a face-amount certificate company or a unit investment trust.

Waiver

A waiver is an approval of an exemption from a Code requirement.

Implicit Waiver

An implicit waiver is the failure to take action within a reasonable period of time regarding a material departure from a requirement or provision of the Officer Code that has been made known to the DeAM Compliance Officer or the Fund’s Board (or committee thereof).

EX-99.CERT 3 ex99cert.htm CERTIFICATIONS ex99cert.htm

President

Form N-CSR Certification under Sarbanes Oxley Act

I, Michael G. Clark, certify that:

1.	I have reviewed this report, filed on behalf of DWS Variable Series II, on Form N-CSR;

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;

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;

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

(a)

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

(b)

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

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

(d)

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

5.	The registrant's other certifying officer(s) 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 control 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.

February 23, 2011	/s/Michael G. Clark
	Michael G. Clark
	President

Chief Financial Officer and Treasurer

Form N-CSR Certification under Sarbanes Oxley Act

I, Paul Schubert, certify that:

1.	I have reviewed this report, filed on behalf of DWS Variable Series II, on Form N-CSR;

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;

(a)

(b)

(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)

5.	The registrant's other certifying officer(s) 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 control 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.

February 23, 2011	/s/Paul Schubert
	Paul Schubert
	Chief Financial Officer and Treasurer

EX-99.906 CERT 4 ex99906cert.htm 906 CERTIFICATIONS ex99906cert.htm

President

Section 906 Certification under Sarbanes Oxley Act

I, Michael G. Clark, certify that:

1.	I have reviewed this report, filed on behalf of DWS Variable Series II, on Form N-CSR;

Based on my knowledge and pursuant to 18 U.S.C. § 1350, the periodic report on Form N-CSR (the “Report”) fully complies with the requirements of § 13 (a) or § 15 (d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

February 23, 2011	/s/Michael G. Clark
	Michael G. Clark
	President

Chief Financial Officer and Treasurer

Section 906 Certification under Sarbanes Oxley Act

I, Paul Schubert, certify that:

1.	I have reviewed this report, filed on behalf of DWS Variable Series II, on Form N-CSR;

February 23, 2011	/s/Paul Schubert
	Paul Schubert
	Chief Financial Officer and Treasurer

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Date of fiscal year end:	12/31

Date of reporting period:	12/31/2010