N-CSR 1 ar123105af3_mmfi.htm ANNUAL REPORT

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM N-CSR

Investment Company Act file number

811-06576

DWS ADVISOR FUNDS III

(FORMERLY SCUDDER ADVISOR FUNDS III)

(Exact Name of Registrant as Specified in Charter)

One South Street, Baltimore, Maryland 21202

(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (212) 454-7190

Paul Schubert

345 Park Avenue

New York, NY 10154

(Name and Address of Agent for Service)

Date of fiscal year end:

12/31

Date of reporting period:

12/31/05

ITEM 1.

REPORT TO STOCKHOLDERS

Money Market Fund Investment

Annual Report

to Shareholders

December 31, 2005


	Contents


3		Portfolio Management Review
Money Market Fund Investment
7		Information About Your Fund’s Expenses
9		Portfolio Summary
10		Financial Statements
13		Financial Highlights
14		Notes to Financial Statements
20		Report of Independent Registered Public Accounting Firm
21		Tax Information
22		Trustees and Officers
Cash Management Portfolio
26		Investment Portfolio
33		Financial Statements
36		Financial Highlights
37		Notes to Financial Statements
43		Report of Independent Registered Public Accounting Firm
44		Investment Management Agreement Approval
49		Account Management Resources

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

An investment in this fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Please read this fund’s prospectus for specific details regarding its risk profile.

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

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

2 Money Market Fund Investment


	Portfolio Management Review

Money Market Fund Investment: A Team Approach to Investing

Deutsche Asset Management, Inc. (“DeAM, Inc.” or the “Advisor”), which is part of Deutsche Asset Management, is the investment advisor for Cash Management Portfolio (the “Portfolio”), in which the fund invests all of its assets. DeAM, Inc. provides a full range of investment advisory services to institutional and retail clients. DeAM, Inc. is also responsible for selecting brokers and dealers and for negotiating brokerage commissions and dealer charges.

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

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

A group of investment professionals is responsible for the day-to-day management of the Portfolio.

In the following interview, Money Market Fund Investment Lead Portfolio Manager Christine Haddad discusses the market environment and the portfolio management team’s approach to managing during its most recent fiscal year.


	Q: Will you discuss the market environment for the fund during the year ended December 31, 2005?

	A: During the year ended December 31, 2005, the US Federal Reserve (the Fed) continued its recent policy of increasing short-term interest rates in an attempt to undo the easing of monetary policy (i.e., the lowering of interest rates) that occurred through June 2004. In eight increments of 0.25%, the policymakers raised the federal funds rate — the interest rate banks charge when they lend each other money overnight — to 4.25%.

Money Market Fund Investment 3


	Despite these increases in the federal funds rate, longer-term yields remained low, creating a yield curve — an economic graph with a line going from left to right, showing how high or low yields are from the shortest to the longest maturities — that was atypically flat. (Typically, the line rises from left to right as investors who are willing to tie up their money for a longer period of time are rewarded with higher yields.)

	Throughout the year, the Fed repeatedly said that its monetary policy remained “accommodative” to economic growth and that risks in the overall economy between inflation and deflation appeared to be balanced.

	Indeed, over the period, the US economy showed resiliency despite two devastating hurricanes and continual increases in energy prices. As the year began, monthly job growth was the most important economic indicator for money markets. However, the focus gradually shifted to inflation, with economists and investors watching carefully for any signs of an increase. Going forward, the markets will likely watch for any changes in policy from incoming Fed Chairman Ben S. Bernanke.

	At the end of December 2005, the one-year London Interbank Offered Rate (LIBOR) — the rate of interest at which banks borrow large volumes of funds from other banks in the international market, and the most widely used industry standard for measuring one-year money market rates — was at 4.84%, close to a four-year high. The premium level of the LIBOR (which is set by the market) over the federal funds rate (which is set by the Fed) was 4.25%, representing the market’s concern that the Fed may have to continue raising short-term interest rates to keep the economy’s growth moderate and prevent inflation.

4 Money Market Fund Investment


	Q: How did the fund perform over its most recent fiscal year?

	A: For the period, the fund registered favorable performance and achieved its stated objectives of providing a high level of current income consistent with liquidity and the preservation of capital.

	Q: In light of market conditions during the period, what has been the strategy for the fund?

	A: During the period, our strategy was to extend maturity somewhat in order to take advantage of select buying opportunities among money market securities with slightly longer maturities and higher yields. For the period, we also increased the fund’s allocation in floating-rate securities. Our decision to increase the fund’s floating-rate position helped to mitigate risks associated with extending maturity. This is because the interest rates of floating rate securities adjust frequently based on indices such as LIBOR and the federal funds rate as market conditions change. These securities provide flexibility in an uncertain interest rate environment.

Money Market Fund Investment 5

Performance is historical and does not guarantee future results. Current performance may be lower or higher than the performance data quoted.


	7-Day Current Yield


	7-day
	current
	yield

December 31, 2005		3.93%*

December 31, 2004		1.85%*

*The investment advisor has agreed to waive fees/reimburse expenses. Without such fee waivers/expense reimbursements the 7-day current yield would have been 3.77% as of December 31, 2005, and 1.65% as of December 31, 2004.

Yields are historical, will fluctuate and do not guarantee future performance. The 7-day current yield refers to the income paid by the portfolio over a 7-day period expressed as an annual percentage rate of the fund’s shares outstanding. Please visit our Web site at moneyfunds.deam-us.db.com for the product’s most recent month-end performance.


	Q: What detracted from performance during the period?

	A: In December, we kept additional cash on hand — as we do each year — to meet any tax-related redemptions as well as investors’ year-end liquidity needs. Keeping a larger percentage of assets in overnight liquid positions detracted somewhat from yield and total return.

	Q: Will you describe your management philosophy?

	A: We continue our insistence on the highest credit quality within the fund. We also plan to maintain our conservative investment strategies and standards. We continue to apply a careful approach to investing on behalf of the fund and to seek competitive yield for our shareholders.

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

6 Money Market Fund Investment


	Information About Your Fund’s Expenses

As an investor of the Fund, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees and other Fund expenses. Examples of transaction costs include sales charges (loads), redemption fees and account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. In the most recent six-month period, the Fund limited these expenses; had it not done so, expenses would have been higher. The tables are based on an investment of $1,000 made at the beginning of the six-month period ended December 31, 2005.

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


n		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.

n		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.

Money Market Fund Investment 7


	Expenses and Value of a $1,000 Investment for the six months ended December 31, 2005


Actual Fund Return

Beginning Account Value 7/1/05	$	1,000.00

Ending Account Value 12/31/05	$	1,017.40

Expenses Paid per $1,000*	$	1.78


Hypothetical 5% Fund Return

Beginning Account Value 7/1/05	$	1,000.00

Ending Account Value 12/31/05	$	1,023.44

Expenses Paid per $1,000*	$	1.79


*		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.

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

8 Money Market Fund Investment


	Portfolio Summary


Asset Allocation	12/31/05		12/31/04


Commercial Paper		32%		36%
Certificates of Deposit and Bank Notes		27%		23%
Short Term Notes		21%		20%
Repurchase Agreements		7%		3%
Time Deposit		4%		5%
Promissory Notes		4%		3%
Funding Agreements		3%		3%
US Government Sponsored Agencies†		1%		4%
Master Notes		1%		2%
Asset Backed		—		1%

		100%		100%


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



Weighted Average Maturity

Money Market Fund Investment	47 days	32 days
First Tier Retail Money Fund Average*	34 days	36 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.

Asset allocation is subject to change. For more complete details about the Portfolio’s holdings, see pages 26 through 32. A quarterly Fact Sheet is available upon request. Information concerning portfolio holdings of the Portfolio as of month-end will be posted to moneyfunds.deam-us.db.com and www.dws-scudder.com on the 15th day of the following month. Please see the Account Management Resources section for contact information.

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

Money Market Fund Investment 9


	Financial Statements


	Statement of Assets and Liabilities as of December 31, 2005


Assets

Investment in the Cash Management Portfolio at value	$	485,729,237

Other assets		13,701

Total assets		485,742,938


Liabilities

Dividends payable		270,688

Accrued administrator service fee		80,407

Other accrued expenses and payables		40,758

Total liabilities		391,853

Net assets, at value	$	485,351,085


Net Assets

Net assets consist of:
Undistributed net investment income		51,454

Paid-in capital		485,299,631

Net assets, at value	$	485,351,085


Net Asset Value

Net Asset Value, offering and redemption price per share ($485,351,085 ÷ 485,299,646 outstanding shares of beneficial interest, $.001 par value, unlimited number of shares authorized)	$	1.00

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

10 Money Market Fund Investment


	Statement of Operations for the year ended December 31, 2005


Investment Income

Income:
Net investment income allocated from the Cash Management Portfolio:
Interest	$	17,137,679

Expenses*		(921,096	)

Net investment income allocated from Portfolio		16,216,583

Expenses:
Administrator service fee		1,544,284

Audit fees		24,593

Legal fees		32,717

Trustees’ fees and expenses		4,298

Reports to shareholders		18,489

Registration fees		24,862

Other		10,122

Total expenses, before expense reductions		1,659,365

Expense reductions		(780,285	)

Total expenses, after expense reductions		879,080

Net investment income		15,337,503

Net realized gain (loss) from investments		6,787

Net increase (decrease) in net assets resulting from operations	$	15,344,290


*		For the year ended December 31, 2005, the Advisor to the Cash Management Portfolio waived fees, of which $146,407 was allocated to the Fund on a pro-rated basis.

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

Money Market Fund Investment 11


	Statement of Changes in Net Assets


	Years Ended December 31,
Increase (Decrease) in Net Assets	2005			2004

Operations:
Net investment income	$	15,337,503		$	5,176,765

Net realized gain (loss) on investment transactions		6,787			4,012

Net increase (decrease) in net assets resulting from operations		15,344,290			5,180,777

Distributions to shareholders from:
Net investment income		(15,337,505	)		(5,177,378	)

Fund share transactions:
Proceeds from shares sold		5,101,985,020			6,599,712,053

Reinvestment of distributions		11,951,953			3,834,433

Cost of shares redeemed		(5,022,139,767	)		(6,624,602,081	)

Net increase (decrease) in net assets from Fund share transactions		91,797,206			(21,055,595	)

Increase (decrease) in net assets		91,803,991			(21,052,196	)

Net assets at beginning of period		393,547,094			414,599,290

Net assets at end of period (including undistributed net investment income of $51,454 and $44,670, respectively)	$	485,351,085		$	393,547,094


Other Information

Shares outstanding at beginning of period		393,502,440			414,558,035

Shares sold		5,101,985,020			6,599,712,053

Shares issued to shareholders in reinvestment of distributions		11,951,953			3,834,433

Shares redeemed		(5,022,139,767	)		(6,624,602,081	)

Net increase (decrease) in Fund shares		91,797,206			(21,055,595	)

Shares outstanding at end of period		485,299,646			393,502,440

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

12 Money Market Fund Investment


	Financial Highlights


Years Ended
December 31,		2005			2004			2003			2002			2001


Selected Per Share Data

Net asset value, beginning of period		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Income from investment operations:
	Net investment income		.029			.011			.009			.015			.04

	Net realized and unrealized gain (loss) on investment transactions^a		—			—			—			—			—

	Total from investment operations		.029			.011			.009			.015			.04

Less distributions from:
	Net investment income		(.029	)		(.011	)		(.009	)		(.015	)		(.04	)

Net asset value, end of period		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Total Return (%)^b			2.97			1.09			.89			1.55			4.04

Ratios to Average Net Assets and Supplemental Data

Net assets, end of period ($ millions)			485			394			415			474			429

Ratio of expenses before expense reductions, including expenses allocated from Cash Management Portfolio (%)			.53			.53			.52			.52			.51

Ratio of expenses after expense reductions, including expenses allocated from Cash Management Portfolio (%)			.35			.35			.35			.35			.35

Ratio of net investment income (%)			2.98			1.09			.89			1.54			3.88


^a		Amount is less than $.0005.

^b		Total return would have been lower had certain expenses not been reduced.

Money Market Fund Investment 13


	Notes to Financial Statements

Note 1—Organization and Significant Accounting Policies

A. Organization

Money Market Fund Investment (the “Fund”) is a diversified series of DWS Advisor Funds III (formerly Scudder Advisor Funds III) (the “Trust”), which is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end, diversified management investment company organized as a Massachusetts business trust. The Fund is one of several funds the Trust offers to investors.

The Fund seeks to achieve its investment objective by investing substantially all of its assets in the Cash Management Portfolio (the “Portfolio”), an open-end management investment company registered under the 1940 Act and advised by Deutsche Asset Management, Inc. (“DeAM, Inc.” or the “Advisor”). Details concerning the Portfolio’s investment objective and policies and the risk factors associated with the Portfolio’s investments are described in the Fund’s Prospectus and Statement of Additional Information.

At December 31, 2005, the Fund owned approximately 5% of the Portfolio. The financial statements of the Portfolio, including the Investment Portfolio, are contained elsewhere in this report and should be read in conjunction with the Fund’s financial statements.

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

B. Security Valuation

The Fund determines the value of its investment in the Portfolio by multiplying its proportionate ownership of the Portfolio by the total value of the Portfolio’s net assets.

The Portfolio’s policies for determining the value of its net assets are discussed in the Portfolio’s financial statements, which accompany this report.

C. Federal Income Taxes

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

14 Money Market Fund Investment

D. Distribution of Income

Net investment income of the Fund is declared as a daily dividend and is distributed to shareholders monthly.

Permanent book and tax differences relating to shareholder distributions will result in reclassifications to paid in capital. Temporary book and tax differences will reverse in a subsequent period. There were no significant book to tax differences for the Fund.

At December 31, 2005, the Fund’s components of distributable earnings (accumulated losses) on a tax-basis were as follows:


Undistributed ordinary income*	$	51,454

In addition, during the year ended December 31, 2005, the tax character of distributions paid to shareholders by the Fund is summarized as follows:


	For the Year Ended
	December 31,

	2005		2004

Distributions from ordinary income*	$	15,337,345	$	5,177,378
Distributions from long-term capital gains		160		—


*		For tax purposes short-term capital gains distributions are considered ordinary income distributions.

E. Contingencies

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

F. Other

The Fund receives a daily allocation of the Portfolio’s net investment income and net realized gains and losses in proportion to its investment in the Portfolio. Expenses directly attributed to a fund are charged to that fund, while expenses which are attributable to the Trust are allocated among the funds in the Trust on the basis of relative net assets.

Note 2—Fees and Transactions with Affiliates

DeAM, Inc. is the Advisor for the Portfolio and Investment Company Capital Corp. (“ICCC” or the “Administrator”) is the Administrator for the Fund, both indirect, wholly owned subsidiaries of Deutsche Bank AG. The Fund pays the Administrator

Money Market Fund Investment 15

an annual fee (“Administrator Service Fee”) based on its average daily net assets which is calculated daily and paid monthly at the annual rate of 0.30%.

For the year ended December 31, 2005 and through April 30, 2006, the Advisor and Administrator have contractually agreed to waive a portion of their fees and/or reimburse expenses of the Fund to the extent necessary to maintain the operating expenses at 0.35% of the Fund’s average daily net assets, including expenses (excluding extraordinary expenses) of the Portfolio.

Accordingly, for the year ended December 31, 2005, the Administrator waived a portion of its Administrator Service Fee as follows:


	Total		Amount		Annual
	Aggregated		Waived		Effective Rate

Money Market Fund Investment	$	1,544,284	$	780,285		.	15%

Typesetting and Filing Service Fees. Under an agreement with Deutsche Investment Management Americas Inc. (“DeIM”), an indirect, wholly owned subsidiary of Deutsche Bank AG, DeIM is compensated for providing typesetting and regulatory filing services to the Fund. For the year ended December 31, 2005, the amount charged to the Fund by DeIM included in the reports to shareholders aggregated $10,560, of which $3,600 is unpaid at December 31, 2005.

Trustees’ Fees and Expenses. As compensation for his or her services, each Independent Trustee receives an aggregate annual fee, plus a fee for each meeting attended (plus reimbursement for reasonable out-of-pocket expenses incurred in connection with his or her attendance at board and committee meetings) from each Fund in the Fund Complex for which he or she serves. In addition, the Chairman of the Fund Complex’s Audit Committee receives an annual fee for his services. Payment of such fees and expenses is allocated among all such Funds described above in direct proportion to their relative net assets.

Note 3—Concentration of Ownership

From time to time the Fund may have a concentration of several shareholders holding a significant percentage of shares outstanding. Investment activities of these shareholders could have a material impact on the Fund.

At December 31, 2005, there was one shareholder who held 43% of the outstanding shares of the Fund.

Note 4—Regulatory Matters and Litigation

Market Timing Related Regulatory and Litigation Matters. Since at least July 2003, federal, state and industry regulators have been conducting ongoing

16 Money Market Fund Investment

inquiries and investigations (“inquiries”) into the mutual fund industry, and have requested information from numerous mutual fund companies, including DWS Scudder. The DWS funds’ advisors have been cooperating in connection with these inquiries and are in discussions with the regulators concerning proposed settlements. Publicity about mutual fund practices arising from these industry-wide inquiries serves as the general basis of a number of private lawsuits against the DWS funds. These lawsuits, which previously have been reported in the press, involve purported class action and derivative lawsuits, making various allegations and naming as defendants various persons, including certain DWS funds, the funds’ investment advisors and their affiliates, and certain individuals, including in some cases fund Trustees/ Directors, officers, and other parties. Each DWS fund’s investment advisor has agreed to indemnify the applicable DWS funds in connection with these lawsuits, or other lawsuits or regulatory actions that may be filed making allegations similar to these lawsuits regarding market timing, revenue sharing, fund valuation or other subjects arising from or related to the pending inquiries. It is not possible to determine with certainty what the outcome of these inquiries will be or what the effect, if any, would be on the funds or their advisors.

With respect to the lawsuits, based on currently available information, the funds’ investment advisors believe the likelihood that the pending lawsuits will have a material adverse financial impact on a DWS fund is remote and such actions are not likely to materially affect their ability to perform under their investment management agreements with the DWS funds.

With respect to the regulatory matters, Deutsche Asset Management (“DeAM”) has advised the funds as follows:

DeAM expects to reach final agreements with regulators early in 2006 regarding allegations of improper trading in the DWS funds. DeAM expects that it will reach settlement agreements with the Securities and Exchange Commission, the New York Attorney General and the Illinois Secretary of State providing for payment of disgorgement, penalties, and investor education contributions totaling approximately $134 million. Approximately $127 million of this amount would be distributed to shareholders of the affected DWS funds in accordance with a distribution plan to be developed by an independent distribution consultant. DeAM does not believe that any of the DWS funds will be named as respondents or defendants in any proceedings. The funds’ investment advisors do not believe these amounts will have a material adverse financial impact on them or materially affect their ability to perform under their investment management agreements with the DWS funds. The above-described amounts are not material to Deutsche Bank, and they have already been reserved.

Money Market Fund Investment 17

Based on the settlement discussions thus far, DeAM believes that it will be able to reach a settlement with the regulators on a basis that is generally consistent with settlements reached by other advisors, taking into account the particular facts and circumstances of market timing at DeAM and at the legacy Scudder and Kemper organizations prior to their acquisition by DeAM in April 2002. Among the terms of the expected settled orders, DeAM would be subject to certain undertakings regarding the conduct of its business in the future, including maintaining existing management fee reductions for certain funds for a period of five years. DeAM expects that these settlements would resolve regulatory allegations that it violated certain provisions of federal and state securities laws (i) by entering into trading arrangements that permitted certain investors to engage in market timing in certain DWS funds and (ii) by failing more generally to take adequate measures to prevent market timing in the DWS funds, primarily during the 1999–2001 period. With respect to the trading arrangements, DeAM expects that the settlement documents will include allegations related to one legacy DeAM arrangement, as well as three legacy Scudder and six legacy Kemper arrangements. All of these trading arrangements originated in businesses that existed prior to the current DeAM organization, which came together in April 2002 as a result of the various mergers of the legacy Scudder, Kemper and Deutsche fund groups, and all of the arrangements were terminated prior to the start of the regulatory investigations that began in the summer of 2003. No current DeAM employee approved the trading arrangements.

There is no certainty that the final settlement documents will contain the foregoing terms and conditions. The independent Trustees/ Directors of the DWS funds have carefully monitored these regulatory investigations with the assistance of independent legal counsel and independent economic consultants. Additional information announced by DeAM regarding the terms of the expected settlements will be made available at www.dws-scudder.com/regulatory settlements, which will also disclose the terms of any final settlement agreements once they are announced.

Other Regulatory Matters. DeAM is also engaged in settlement discussions with the Enforcement Staffs of the SEC and the NASD regarding DeAM’s practices during 2001–2003 with respect to directing brokerage commissions for portfolio transactions by certain DWS funds to broker-dealers that sold shares in the DWS funds and provided enhanced marketing and distribution for shares in the DWS funds. In addition, on January 13, 2006, DWS Scudder Distributors, Inc. received a Wells notice from the Enforcement Staff of the NASD regarding DWS Scudder Distributors’ payment of non-cash compensation to associated persons of NASD member firms, as well as DWS Scudder Distributors’ procedures regarding

18 Money Market Fund Investment

non-cash compensation regarding entertainment provided to such associated persons. Additional information announced by DeAM regarding the terms of the expected settlements will be made available at www.dws-scudder.com/regulatory settlements, which will also disclose the terms of any final settlement agreements once they are announced.

Note 5—Subsequent Event

Effective February 6, 2006, Scudder Investments changed its name to DWS Scudder and Scudder funds were renamed DWS funds. The DWS Scudder name represents the alignment of Scudder with all of Deutsche Bank’s mutual fund operations around the globe. On February 6, 2006, the funds became part of the DWS family under the letter “D” in the mutual fund listing section of the newspaper. In addition, the Web site for all Scudder funds changed to www.dws-scudder.com.

Money Market Fund Investment 19


	Report of Independent Registered Public Accounting Firm

To the Trustees of DWS Advisor Funds III (formerly Scudder Advisor Funds III) and Shareholders of Money Market Fund Investment:

In our opinion, the accompanying statement of assets and liabilities and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Money Market Fund Investment (hereafter referred to as the “Fund”) at December 31, 2005, and the results of its operations, the changes in its net assets and the financial highlights for each of the periods indicated therein, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

Boston, Massachusetts

February 24, 2006

20 Money Market Fund Investment


Tax Information	(Unaudited)

Pursuant to Section 852 of the Internal Revenue Code, the Fund designates $200 as capital gain dividends for its year ended December 31, 2005, of which 100% represents 20% rate gains.

Please contact a tax advisor if you have questions about federal or state income tax laws, or on how to prepare your tax returns. If you have specific questions about your account, please call 1-800-621-1048.

Money Market Fund Investment 21


	Trustees and Officers

The following individuals hold the same position with the fund and the Cash Management Portfolio.


	Independent Trustees


Name, Date of		Number of
Birth, Position		Funds in
with the Fund		the Fund
and Length of	Business Experience and Directorships	Complex
Time Served^1,2	During the Past 5 Years	Overseen

Richard R. Burt 2/3/47 Trustee since 2002	Chairman, Diligence Inc. (international information collection and risk-management firm (since September 2002); Chairman, IEP Advisors, Inc. (July 1998–present); Member of the Board, Hollinger International, Inc.³(publishing) (September 1995 to present), HCL Technologies Limited (information technology) (since April 1999), UBS Mutual Funds (formerly known as Brinson and Mitchell Hutchins families of funds) (registered investment companies) (September 1995 to present); and Member, Textron Inc.³International Advisory Council (since July 1996); Director, The European Equity Fund, Inc. (since 2000), The New Germany Fund, Inc. (since 2004), The Central Europe and Russia Fund, Inc. (since 2000), DWS Global High Income Fund, Inc. (since 2005), DWS Global Commodities Stock Fund, Inc. (since 2005). Formerly, Partner, McKinsey & Company (consulting) (1991–1994) and US Chief Negotiator in Strategic Arms Reduction Talks (START) with former Soviet Union and US Ambassador to the Federal Republic of Germany (1985–1991); Member of the Board, Homestake Mining³(mining and exploration) (1998–February 2001), Archer Daniels Midland Company³(agribusiness operations) (October 1996–June 2001) and Anchor Gaming (gaming software and equipment) (March 1999–December 2001); Chairman of the Board, Weirton Steel Corporation³(April 1996–2004).		54

Martin J. Gruber 7/15/37 Trustee since 1999	Nomura Professor of Finance, Leonard N. Stern School of Business, New York University (since September 1965); Director, Japan Equity Fund, Inc. (since January 1992), Thai Capital Fund, Inc. (since January 2000) and Singapore Fund, Inc. (since January 2000) (registered investment companies), DWS Global High Income Fund, Inc. (since 2005), DWS Global Commodities Stock Fund, Inc. (since 2005). Formerly, Trustee, TIAA (pension funds) (January 1996–January 2000); Trustee, CREF and CREF Mutual Funds (January 2000–March 2005); Chairman, CREF and CREF Mutual Funds, (February 2004–March 2005) and Director, S.G. Cowen Mutual Funds (January 1985–January 2001).		51

Richard J. Herring 2/18/46 Trustee since 1990 for the fund and since 1999 for Cash Management Portfolio	Jacob Safra Professor of International Banking and Professor, Finance Department, The Wharton School, University of Pennsylvania (since July 1972); Director, Lauder Institute of International Management Studies (since July 2000); Co-Director, Wharton Financial Institutions Center (since July 2000). Formerly, Vice Dean and Director, Wharton Undergraduate Division (July 1995–June 2000).		51

22 Money Market Fund Investment


Name, Date of		Number of
Birth, Position		Funds in
with the Fund		the Fund
and Length of	Business Experience and Directorships	Complex
Time Served^1,2	During the Past 5 Years	Overseen

Graham E. Jones 1/31/33 Trustee since 2002	Senior Vice President, BGK Realty, Inc. (commercial real estate) (since 1995); Trustee, 7 open-end mutual funds managed by Sun Capital Advisers, Inc. (since 1998); Director, DWS Global High Income Fund, Inc. (since 2005), DWS Global Commodities Stock Fund, Inc. (since 2005). Formerly, Trustee of various investment companies managed by Sun Capital Advisors, Inc. (1998–2005); Trustee, Morgan Stanley Asset Management, various funds (1985–2001); Trustee, Weiss, Peck and Greer, various funds (1985–2005).		51

Rebecca W. Rimel 4/10/51 Trustee since 2002	President and Chief Executive Officer, The Pew Charitable Trusts (charitable foundation) (1994–present); Trustee, Thomas Jefferson Foundation (charitable organization) (1994–present); Trustee, Executive Committee, Philadelphia Chamber of Commerce (2001–present); Director, DWS Global High Income Fund, Inc. (since 2005), DWS Global Commodities Stock Fund, Inc. (since 2005). Formerly, Executive Vice President, The Glenmede Trust Company (investment trust and wealth management) (1983–2004); Board Member, Investor Education (charitable organization) (2004–2005).		51

Philip Saunders, Jr. 10/11/35 Trustee since 1999 for the fund and since 1990 for Cash Management Portfolio	Principal, Philip Saunders Associates (economic and financial consulting) (since November 1988). Formerly, Director, Financial Industry Consulting, Wolf & Company (consulting) (1987–1988); President, John Hancock Home Mortgage Corporation (1984–1986); Senior Vice President of Treasury and Financial Services, John Hancock Mutual Life Insurance Company, Inc. (1982–1986).		51

William N. Searcy, Jr. 9/3/46 Trustee since 2002	Private investor (since October 2003); Trustee of 18 open-end mutual funds managed by Sun Capital Advisers, Inc. (since October 1998). Formerly, Pension & Savings Trust Officer, Sprint Corporation³(telecommunications) (November 1989–October 2003).		51

Money Market Fund Investment 23


	Interested Trustee


Name, Date of		Number of
Birth, Position		Funds in
with the Fund		the Fund
and Length of	Business Experience and Directorships	Complex
Time Served^1,2	During the Past 5 Years	Overseen

William N. Shiebler⁴2/6/42 Trustee since 2004	Vice Chairman, Deutsche Asset Management (“DeAM”) and a member of the DeAM Global Executive Committee (since 2002); Vice Chairman of Putnam Investments, Inc. (1999); Director and Senior Managing Director of Putnam Investments, Inc. and President, Chief Executive Officer, and Director of Putnam Mutual Funds Inc. (1990–1999).		120


	Officers


Name, Date of Birth,
Position with the Fund and		Business Experience and Directorships
Length of Time Served^1,2		During the Past 5 Years

Vincent J. Esposito⁶6/8/56 President since 2005		Managing Director⁵, Deutsche Asset Management (since 2003); President and Chief Executive Officer of The Central Europe and Russia Fund, Inc., The European Equity Fund, Inc., The New Germany Fund, Inc. (since 2003) (registered investment companies); Vice Chairman and Director of The Brazil Fund, Inc. (2004–present); formerly, Managing Director, Putnam Investments (1991–2002).

Paul H. Schubert⁶1/11/63 Chief Financial Officer since 2004 Treasurer since June 2005		Managing Director⁵, 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).

John Millette⁷8/23/62 Secretary since 2003		Director⁵, Deutsche Asset Management.

Patricia DeFilippis⁶6/21/63 Assistant Secretary since 2005		Vice President, Deutsche Asset Management (since June 2005); Counsel, New York Life Investment Management LLC (2003–2005); legal associate, Lord, Abbett & Co. LLC (1998–2003).

Elisa D. Metzger⁶9/15/62 Assistant Secretary since 2005		Director⁵, Deutsche Asset Management (since September 2005); Counsel, Morrison and Foerster LLP (1999–2005).

Caroline Pearson⁷4/1/62 Assistant Secretary since 2002		Managing Director⁵, Deutsche Asset Management.

24 Money Market Fund Investment


Name, Date of Birth,
Position with the Fund and		Business Experience and Directorships
Length of Time Served^1,2		During the Past 5 Years

Scott M. McHugh⁷9/13/71 Assistant Treasurer since 2005		Director⁵, Deutsche Asset Management.

Kathleen Sullivan D’Eramo ⁷1/25/57 Assistant Treasurer since 2003		Director⁵, Deutsche Asset Management.

John Robbins⁶4/8/66 Anti-Money Laundering Compliance Officer since 2005		Managing Director⁵, Deutsche Asset Management (since 2005); formerly, Chief Compliance Officer and Anti-Money Laundering Compliance Officer for GE Asset Management (1999–2005).

Philip Gallo⁶8/2/62 Chief Compliance Officer since 2004		Managing Director⁵, Deutsche Asset Management (2003–present). Formerly, Co-Head of Goldman Sachs Asset Management Legal (1994–2003).

A. Thomas Smith^6,8(1956) Chief Legal Officer since 2005		Managing Director⁵, Deutsche Asset Management (2004–present); formerly, General Counsel, Morgan Stanley and Van Kampen and Investments (1999–2004); Vice President and Associate General Counsel, New York Life Insurance Company (1994–1999); senior attorney, The Dreyfus Corporation (1991–1993); senior attorney, Willkie Farr & Gallagher (1989–1991); staff attorney, US Securities & Exchange Commission and the Illinois Securities Department (1986–1989).


¹		Unless otherwise indicated, the mailing address of each Trustee and officer with respect to fund operations is One South Street, Baltimore, MD 21202.

²		Length of time served represents the date that each Trustee or officer first began serving in that position with DWS Advisor Funds III of which this fund is a series.

³		A publicly held company with securities registered pursuant to Section 12 of the Securities Exchange Act of 1934.

⁴		Mr. Shiebler is a Trustee who is an “interested person” within the meaning of Section 2(a)(19) of the 1940 Act. Mr. Shiebler is a Managing Director of Deutsche Asset Management, the US asset management unit of Deutsche Bank AG and its affiliates. Mr. Shiebler’s business address is 345 Park Avenue, New York, New York 10154.

⁵		Executive title, not a board directorship.

⁶		Address: 345 Park Avenue, New York, New York 10154.

⁷		Address: Two International Place, Boston, Massachusetts 02110.

⁸		Elected on December 2, 2005.

The fund’s Statement of Additional Information includes additional information about the fund’s Trustees. To receive your free copy of the Statement of Additional Information, call toll-free: 1-800-621-1048.

Money Market Fund Investment 25


Investment Portfolio	as of December 31, 2005


		Principal
Cash Management Portfolio		Amount ($)		Value ($)

Certificates of Deposit and Bank Notes 26.5%
Alliance & Leicester PLC, 4.02%, 9/6/2006			35,000,000		34,829,488
American Express Centurion Bank, 4.31%, 1/20/2006			127,000,000		127,000,000
Australia & New Zealand Banking Group Ltd., 3.59%, 5/30/2006			25,000,000		25,000,000
Banco Bilbao Vizcaya Argentaria SA, 4.27%, 1/9/2006			100,000,000		99,998,043
Bank of Tokyo-Mitsubishi:
	4.28%, 2/10/2006		50,000,000		50,000,000
	4.34%, 1/27/2006		65,000,000		65,000,000
	4.34%, 1/31/2006		150,000,000		150,000,000
Barclays Bank PLC, 4.0%, 3/1/2006			80,000,000		80,000,000
Calyon:
	3.27%, 3/6/2006		55,000,000		55,000,000
	4.75%, 11/14/2006		25,000,000		25,000,000
Calyon North America, Inc., 4.16%, 8/8/2006			50,000,000		50,018,509
Canadian Imperial Bank of Commerce:
	4.75%, 11/14/2006		25,000,000		25,000,000
	4.75%, 12/15/2006		40,000,000		40,000,000
Credit Agricole SA:
	4.7%, 9/19/2006		40,000,000		40,000,000
	4.74%, 9/28/2006		50,000,000		50,000,000
Depfa Bank PLC, 3.22%, 2/6/2006			101,000,000		101,000,000
HBOS Treasury Services PLC:
	3.62%, 4/12/2006		60,000,000		60,000,000
	4.25%, 2/7/2006		32,000,000		31,998,532
HSBC Bank PLC, 6.5%, 1/24/2006			11,550,000		11,573,020
HSBC Bank USA, NA, 4.26%, 2/10/2006			50,000,000		49,999,725
LaSalle Bank NA, 3.59%, 5/30/2006			50,000,000		50,000,000
Natexis Banque Populaires, 4.31%, 2/1/2006			75,000,000		75,000,000
Nordea Bank Finland PLC, 4.75%, 12/4/2006			40,000,000		40,000,000
Norinchukin Bank, 4.3%, 1/31/2006			27,900,000		27,900,000
Northern Rock PLC, 4.31%, 1/31/2006			100,000,000		100,000,000
Royal Bank of Canada, 4.05%, 7/24/2006			35,000,000		35,000,000
Royal Bank of Scotland PLC:
	4.4%, 10/4/2006		55,000,000		55,000,000
	4.75%, 11/14/2006		25,000,000		25,000,000
Societe Generale:
	3.27%, 3/3/2006		86,000,000		86,000,000
	4.32%, 2/1/2006		105,000,000		105,000,000
	4.71%, 9/19/2006		35,000,000		35,001,224
Tango Finance Corp., 4.045%, 7/25/2006			30,000,000		29,999,158

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

26 Cash Management Portfolio


		Principal
Cash Management Portfolio		Amount ($)		Value ($)

Toronto Dominion Bank:
	3.6%, 6/7/2006		32,000,000		32,000,000
	3.71%, 5/19/2006		10,000,000		10,000,185
	3.72%, 6/7/2006		50,000,000		49,997,906
	3.73%, 6/23/2006		40,000,000		40,000,000
	3.75%, 5/16/2006		21,000,000		20,999,241
	3.95%, 7/31/2006		40,000,000		40,000,000
UBS AG, 4.3%, 1/31/2006			100,000,000		100,000,000
UniCredito Italiano SpA:
	3.73%, 4/12/2006		10,000,000		10,000,000
	4.29%, 2/1/2006		50,000,000		50,000,000
Wells Fargo Bank, NA:
	4.3%, 1/25/2006		203,500,000		203,498,982
	4.31%, 1/20/2006		95,000,000		95,000,000
	4.31%, 1/26/2006		145,400,000		145,400,000

Total Certificates of Deposit and Bank Notes (Cost $2,632,214,013)					2,632,214,013


Commercial Paper 32.0%**
AB Spintab, 3.92%, 2/28/2006			35,000,000		34,778,956
Abbey National PLC, 4.45%, 1/3/2006			150,000,000		149,962,917
Atlantic Asset Securitization LLC, 4.32%, 1/19/2006			91,875,000		91,676,550
Atlantis One Funding Corp.:
	4.22%, 2/9/2006		100,000,000		99,542,833
	4.255%, 1/9/2006		70,000,000		69,933,811
	4.255%, 2/16/2006		85,000,000		84,537,860
	4.27%, 2/21/2006		130,000,000		129,213,608
	4.31%, 1/12/2006		27,808,000		27,771,378
Cancara Asset Securitization LLC, 4.32%, 1/23/2006			35,144,000		35,051,220
CC (USA), Inc., 3.96%, 1/20/2006			50,000,000		49,895,500
Charta, LLC:
	4.26%, 2/7/2006		50,000,000		49,781,083
	4.35%, 1/23/2006		105,000,000		104,720,875
CIT Group, Inc., 4.21%, 2/2/2006			8,500,000		8,468,191
Compass Securitization LLC:
	4.29%, 1/31/2006		50,000,000		49,821,250
	4.35%, 1/23/2006		70,000,000		69,813,917
CRC Funding, LLC, 4.32%, 1/27/2006			95,000,000		94,703,600
Dorada Finance, Inc., 4.0%, 1/27/2006			51,500,000		51,351,222
Falcon Asset Securitization Corp.:
	4.32%, 1/24/2006		66,687,000		66,502,944
	4.32%, 1/27/2006		41,454,000		41,324,664
	4.35%, 2/1/2006		61,433,000		61,202,882
	4.35%, 2/2/2006		107,913,000		107,495,736

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

Cash Management Portfolio 27


		Principal
Cash Management Portfolio		Amount ($)		Value ($)

Giro Funding US Corp.:
	4.14%, 1/20/2006		33,250,000		33,177,349
	4.305%, 1/31/2006		50,000,000		49,820,625
Greyhawk Funding LLC:
	4.22%, 2/7/2006		50,000,000		49,783,139
	4.23%, 2/7/2006		38,000,000		37,834,795
Inter-American Development Bank, 4.12%, 1/31/2006			1,185,000		1,180,951
Irish Life and Permanent PLC, 4.26%, 2/8/2006			75,000,000		74,662,750
Jupiter Securitization Corp.:
	4.32%, 1/23/2006		24,405,000		24,340,571
	4.35%, 1/23/2006		58,105,000		57,950,538
K2 (USA) LLC:
	3.96%, 1/23/2006		50,000,000		49,879,000
	4.0%, 1/27/2006		35,000,000		34,898,889
	4.21%, 2/3/2006		13,600,000		13,547,515
Liberty Street Funding:
	4.35%, 1/25/2006		45,785,000		45,652,224
	4.35%, 1/31/2006		80,000,000		79,710,000
Mane Funding Corp.:
	4.22%, 1/17/2006		75,000,000		74,859,333
	4.31%, 1/27/2006		44,803,000		44,663,538
Nordea North America, Inc., 4.31%, 2/2/2006			36,000,000		35,862,080
Park Avenue Receivables Co., LLC, 4.34%, 1/23/2006			46,783,000		46,658,921
Perry Global Funding LLC:
	Series A, 4.22%, 1/10/2006		52,325,000		52,269,797
	Series A, 4.22%, 1/17/2006		35,000,000		34,934,356
	Series A, 4.225%, 2/7/2006		49,069,000		48,855,925
	Series A, 4.43%, 3/15/2006		74,091,000		73,425,436
Preferred Receivables Funding Corp., 4.35%, 2/1/2006			25,311,000		25,216,189
Rabobank USA Financial Corp., 4.15%, 1/3/2006			25,437,000		25,431,135
Ranger Funding Co. LLC, 4.305%, 1/27/2006			98,944,000		98,636,367
Sanofi-Aventis, 4.37%, 2/15/2006			50,000,000		49,726,875
Scaldis Capital LLC, 4.32%, 1/9/2006			49,971,000		49,923,028
Sheffield Receivables Corp.:
	4.31%, 1/17/2006		6,803,000		6,789,968
	4.32%, 1/23/2006		53,035,000		52,894,988
	4.32%, 1/24/2006		30,000,000		29,917,200
Swedish National Housing Finance Corp., 3.925%, 3/2/2006			51,000,000		50,666,375
The Concentrate Manufacturing Co. of Ireland, 4.26%, 1/6/2006			8,400,000		8,395,030
The Goldman Sachs Group, Inc., 3.185%, 3/3/2006			30,000,000		29,838,096
Tulip Funding Corp., 4.32%, 1/18/2006			220,365,000		219,915,455

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

28 Cash Management Portfolio


		Principal
Cash Management Portfolio		Amount ($)		Value ($)

Windmill Funding Corp., 4.32%, 1/24/2006			53,750,000		53,601,650
Yorktown Capital LLC, 4.32%, 1/24/2006			35,000,000		34,903,400

Total Commercial Paper (Cost $3,177,374,485)					3,177,374,485


Master Notes 1.1%
Bear Stearns & Co., Inc., 4.4%*, 1/3/2006(a) (Cost $110,000,000)			110,000,000		110,000,000


US Government Sponsored Agencies 1.3%
Federal National Mortgage Association:
	3.15%, 2/8/2006		32,000,000		31,985,356
	4.0%, 8/8/2006		50,000,000		50,000,000
	4.07%, 8/18/2006		40,000,000		40,000,000
	4.371%*, 12/22/2006		10,000,000		9,994,250

Total US Government Sponsored Agencies (Cost $131,979,606)					131,979,606


*Funding Agreements 2.5%**
GE Capital Assurance Co.:
	2.62%, 1/25/2006		75,000,000		75,000,000
	3.93%, 9/1/2006		60,000,000		60,000,000
New York Life Insurance Co., 4.57%, 9/19/2006			80,000,000		80,000,000
Travelers Insurance Co., 3.47%, 3/31/2006			30,000,000		30,000,000

Total Funding Agreements (Cost $245,000,000)					245,000,000


*Promissory Notes 3.7%**
The Goldman Sachs Group, Inc.:
	3.871%, 6/23/2006		140,000,000		140,000,000
	4.35%, 2/16/2006		200,000,000		200,000,000
	4.37%, 6/23/2006		30,000,000		30,000,000

Total Promissory Notes (Cost $370,000,000)					370,000,000


*Short Term Notes 21.2%**
American Express Centurion Bank, 4.3%, 8/8/2006			30,000,000		30,000,000
Australia & New Zealand Banking Group Ltd., 4.15%, 6/23/2006			30,000,000		30,000,000
Beta Finance, Inc., 144A, 3.56%, 4/10/2006			45,000,000		45,004,021

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

Cash Management Portfolio 29


		Principal
Cash Management Portfolio		Amount ($)		Value ($)

Branch Banking & Trust Co., 3.27%, 3/15/2006			165,000,000		164,990,914
Citigroup, Inc., 4.63%, 3/20/2006			100,000,000		100,036,175
Commonwealth Bank of Australia, 4.0%, 8/24/2006			40,000,000		40,000,000
Credit Suisse:
	3.98%, 9/28/2006		150,000,000		150,000,000
	4.02%, 9/26/2006		93,000,000		93,000,000
	4.49%, 9/26/2006		90,000,000		90,000,000
Greenwich Capital Holdings, Inc., 3.64%, 4/4/2006			75,000,000		75,000,000
Harris Trust & Savings Bank, 4.07%, 2/2/2006			30,000,000		29,999,869
HSBC Finance Corp., 4.02%, 3/24/2006			25,000,000		25,000,000
International Business Machines Corp., 4.329%, 3/8/2006			66,000,000		66,000,000
M&I Marshall & Ilsley Bank, 4.349%, 12/15/2006			56,000,000		56,000,000
Merrill Lynch & Co., Inc.:
	4.12%, 1/4/2006		35,000,000		35,000,000
	4.349%, 9/15/2006		35,000,000		35,000,000
Morgan Stanley, 4.29%, 7/10/2006			225,000,000		225,000,000
Nationwide Building Society, 144A, 4.41%, 1/13/2006			45,000,000		45,001,108
Pfizer Investment Capital PLC, 4.329%, 12/15/2006			50,000,000		50,000,000
Skandinaviska Enskila Banken, 4.38%, 7/18/2006			50,000,000		50,000,000
SunTrust Bank, Atlanta, 4.19%, 4/28/2006			250,000,000		250,000,000
Tango Finance Corp., 144A, 4.32%, 2/10/2006			25,000,000		24,999,733
UniCredito Italiano SpA:
	3.96%, 6/30/2006		75,000,000		74,981,298
	4.01%, 10/4/2006		100,000,000		99,963,152
	4.34%, 2/28/2006		150,000,000		149,991,003
	4.43%, 6/14/2006		75,000,000		74,975,571

Total Short Term Notes (Cost $2,109,942,844)					2,109,942,844

Time Deposit 4.3%
Bank of Montreal, 3.375%, 1/3/2006			125,000,000		125,000,000
National Australia Bank Ltd., 3.5%, 1/3/2006			113,800,000		113,800,000
Nordia Bank AB, 3.5%, 1/3/2006			183,707,041		183,707,041

Total Time Deposit (Cost $422,507,041)					422,507,041

Repurchase Agreements 7.0%
Banc of America Securities LLC, 4.27%, dated 12/30/2005, to be repurchased at $88,201,973 on 1/3/2006 (b)			88,160,146		88,160,146
Countrywide Securities Corp., 4.29%, dated 12/30/2005, to be repurchased at $500,238,333 on 1/3/2006 (c)			500,000,000		500,000,000

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

30 Cash Management Portfolio


	Principal
Cash Management Portfolio	Amount ($)		Value ($)

JPMorgan Securities, Inc., 3.45%, dated 12/30/2005, to be repurchased at $7,657,239 on 1/3/2006 (d)		7,654,305		7,654,305
UBS Securities LLC, 4.3%, dated 12/30/2005, to be repurchased at $100,047,778 on 1/3/2006 (e)		100,000,000		100,000,000

Total Repurchase Agreements (Cost $695,814,451)				695,814,451


	% of
	Net Assets		Value ($)

Total Investment Portfolio (Cost $9,894,832,440)†		99.6		9,894,832,440
Other Assets and Liabilities, Net		0.4		36,533,278

Net Assets		100.0		9,931,365,718


*		Floating rate notes are securities whose yields vary with a designated market index or market rate, such as the coupon-equivalent of the US Treasury bill rate. These securities are shown at their current rate as of December 31, 2005.

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

†		The cost for federal income tax purposes was $9,894,832,440.

(a)		Reset date; not a maturity date.

(b)		Collateralized by:

Principal

Rate

Maturity

Collateral

Amount ($)

Security

(%)

Date

Value ($)

50,875,461

Federal Home Loan Mortgage Corp.

4.5– 5.5

12/1/2020– 8/1/2035

50,193,283

40,459,637

Federal National Mortgage Association

5.0– 5.5

3/1/2020– 8/1/2035

40,611,667

Total Collateral Value

90,804,950


(c)		Collateralized by:

Principal

Rate

Maturity

Collateral

Amount ($)

Security

(%)

Date

Value ($)

2,665,000

Federal Home Loan Bank

3.25– 4.625

8/2/2007– 3/16/2015

2,673,765

122,027,394

Federal Home Loan Mortgage Corp.

3.567– 6.5

9/1/2015– 12/1/2035

121,413,094

380,381,976

Federal National Mortgage Association

3.204– 8.0

12/1/2012– 1/1/2036

384,727,343

4,009,815

Government National Mortgage Association

4.5

2/15/2018

3,951,909

Total Collateral Value

512,766,111


(d)		Collateralized by $8,285,000 US Treasury Note, STRIPS, maturing on 5/15/2007 with a value of $7,810,021.

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

Cash Management Portfolio 31


(e)		Collateralized by:

Principal

Rate

Maturity

Collateral

Amount ($)

Security

(%)

Date

Value ($)

70,078,848

Federal National Mortgage Association, STRIPS, Interest Only

4.5

12/1/2035

10,719,961

124,185,206

Federal National Mortgage Association, STRIPS, Principal Only

—

4/1/2032-
2/1/2035

92,281,814

Total Collateral Value

103,001,775

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.

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 on the pool of underlying mortgages.

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

STRIPS: Separate Trading of Registered Interest and Principal Securities.

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

32 Cash Management Portfolio


	Financial Statements


	Statement of Assets and Liabilities as of December 31, 2005


Assets

Investments in securities, at amortized cost	$	9,894,832,440

Cash		2,287,298

Interest receivable		35,125,218

Other assets		549,276

Total assets		9,932,794,232


Liabilities

Accrued advisory fee		1,013,976

Accrued administrator service fee		409,043

Other accrued expenses and payables		5,495

Total liabilities		1,428,514

Net assets, at value	$	9,931,365,718

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

Cash Management Portfolio 33


	Statement of Operations for the year ended December 31, 2005


Investment Income

Income:
Interest	$	325,481,697

Expenses:
Advisory fee		14,956,589

Administrator service fee		4,985,530

Auditing		50,366

Legal		31,069

Trustees’ fees and expenses		340,320

Other		284,804

Total expenses, before expense reductions		20,648,678

Expense reductions		(2,822,888	)

Total expenses, after expense reductions		17,825,790

Net investment income		307,655,907

Net realized gain (loss) from investment transactions		117,517

Net increase (decrease) in net assets resulting from operations	$	307,773,424

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

34 Cash Management Portfolio


	Statement of Changes in Net Assets


	Years Ended December 31,
Increase (Decrease) in Net Assets	2005			2004

Operations:
Net investment income	$	307,655,907		$	143,447,885

Net realized gain (loss) on investment transactions		117,517			91,685

Net increase (decrease) in net assets resulting from operations		307,773,424			143,539,570

Capital transaction in shares of beneficial interest:
Proceeds from capital invested		112,816,875,647			122,171,335,290

Value of capital withdrawn		(113,004,956,853	)		(125,052,740,207	)

Net increase (decrease) in net assets from capital transactions in shares of beneficial interest		(188,081,206	)		(2,881,404,917	)

Increase (decrease) in net assets		119,692,218			(2,737,865,347	)

Net assets at beginning of period		9,811,673,500			12,549,538,847

Net assets at end of period	$	9,931,365,718		$	9,811,673,500

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

Cash Management Portfolio 35


	Financial Highlights

Cash Management Portfolio


Years Ended December 31,	2005		2004		2003		2002		2001



Ratios to Average Net Assets and Supplemental Data

Net assets, end of period ($ millions)		9,931		9,812		12,550		11,237		10,864

Ratio of expenses before expense reductions (%)		.21		.21		.21		.20		.20

Ratio of expenses after expense reductions (%)		.18		.18		.18		.18		.18

Ratio of net investment income (%)		3.08		1.22		1.04		1.71		4.04

Total Return (%)^a,b		3.15		1.26		1.06		1.72		—


^a		Total return would have been lower had certain expenses not been reduced.

^b		Total return for the Portfolio was derived from the performance of Cash Reserves Fund Institutional.

36 Cash Management Portfolio


	Notes to Financial Statements

Note 1—Organization and Significant Accounting Policies

A. Organization

Cash Management Portfolio (the “Portfolio”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a diversified, open-end management investment company organized as a New York business trust.

The Portfolio’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 Portfolio in the preparation of its financial statements.

B. Security Valuation

The Portfolio’s securities are valued 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 to maturity of any discount or premium.

Investments in open-end investment companies are valued at their net asset value each business day.

C. Repurchase Agreements

The Portfolio may enter into repurchase agreements with certain banks and broker/dealers whereby the Portfolio, 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 Portfolio has the right to sell the securities and recover any resulting loss from the financial institution. If the financial institution enters into bankruptcy, the Portfolio’s claims on the collateral may be subject to legal proceedings.

Cash Management Portfolio 37

D. Federal Income Taxes

The Portfolio is considered a Partnership under the Internal Revenue Code, as amended. Therefore, no federal income tax provision is necessary.

E. Contingencies

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

F. Other

Investment transactions are accounted for on the trade date. Interest income is recorded on the accrual basis. Distributions of income and capital gains from investment companies are recorded on the ex-dividend date. 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.

The Portfolio makes a daily allocation of its net investment income and realized gains and losses from securities transactions to its investors in proportion to their investment in the Portfolio.

Note 2—Fees and Transactions with Affiliates

Deutsche Asset Management, Inc. (“DeAM, Inc.” or the “Advisor”), an indirect, wholly owned subsidiary of Deutsche Bank AG, is the Portfolio’s Advisor. Under the Advisory Agreement, the Portfolio pays the Advisor an annual fee based on its average daily net assets which is calculated daily and paid monthly at the annual rate of 0.15%.

For the year ended December 31, 2005 and through April 30, 2006, the Advisor and Administrator maintained the annualized expenses of the Portfolio at not more than 0.18% of the Portfolio’s average daily net assets. The amount of the waiver and whether the Advisor and Administrator waive a portion of their fees may vary at any time without notice to the shareholders.

38 Cash Management Portfolio

Accordingly, for the year ended December 31, 2005, the Advisor waived a portion of its Advisory fee as follows:


	Total		Amount		Annual
	Aggregated		Waived		Effective Rate

Cash Management Portfolio	$	14,956,589	$	2,700,770		.	12%

Investment Company Capital Corp. (“ICCC” or the “Administrator”), an indirect, wholly owned subsidiary of Deutsche Bank AG, is the Portfolio’s Administrator. The Portfolio pays the Administrator an annual fee (“Administrator service fee”) based on its average daily net assets which is calculated daily and paid monthly at an annual rate of 0.05%.

Note 3—Expense Reductions

For the year ended December 31, 2005, the Advisor agreed to reimburse the Fund $122,118, which represents a portion of the fee savings expected to be realized by the Advisor related to the outsourcing by the Advisor of certain administrative services to an unaffiliated service provider.

Note 4—Line of Credit

The Portfolio and several other affiliated funds (the “Participants”) share in a $1.1 billion revolving credit facility administered by J.P. Morgan Chase Bank for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Participants are charged an annual commitment fee which is allocated, based upon net assets, among each of the Participants. Interest is calculated at the Federal Funds Rate plus 0.5 percent. The Portfolio may borrow up to a maximum of 5 percent of its net assets under this agreement.

Cash Management Portfolio 39

Note 5—Regulatory Matters and Litigation

Market Timing Related Regulatory and Litigation Matters. Since at least July 2003, federal, state and industry regulators have been conducting ongoing inquiries and investigations (“inquiries”) into the mutual fund industry, and have requested information from numerous mutual fund companies, including DWS Scudder. The DWS funds’ advisors have been cooperating in connection with these inquiries and are in discussions with the regulators concerning proposed settlements. Publicity about mutual fund practices arising from these industry-wide inquiries serves as the general basis of a number of private lawsuits against the DWS funds. These lawsuits, which previously have been reported in the press, involve purported class action and derivative lawsuits, making various allegations and naming as defendants various persons, including certain DWS funds, the funds’ investment advisors and their affiliates, and certain individuals, including in some cases fund Trustees/ Directors, officers, and other parties. Each DWS fund’s investment advisor has agreed to indemnify the applicable DWS funds in connection with these lawsuits, or other lawsuits or regulatory actions that may be filed making allegations similar to these lawsuits regarding market timing, revenue sharing, fund valuation or other subjects arising from or related to the pending inquiries. It is not possible to determine with certainty what the outcome of these inquiries will be or what the effect, if any, would be on the funds or their advisors.

With respect to the regulatory matters, Deutsche Asset Management (“DeAM”) has advised the funds as follows:

40 Cash Management Portfolio


	or materially affect their ability to perform under their investment management agreements with the DWS funds. The above-described amounts are not material to Deutsche Bank, and they have already been reserved.

	Based on the settlement discussions thus far, DeAM believes that it will be able to reach a settlement with the regulators on a basis that is generally consistent with settlements reached by other advisors, taking into account the particular facts and circumstances of market timing at DeAM and at the legacy Scudder and Kemper organizations prior to their acquisition by DeAM in April 2002. Among the terms of the expected settled orders, DeAM would be subject to certain undertakings regarding the conduct of its business in the future, including maintaining existing management fee reductions for certain funds for a period of five years. DeAM expects that these settlements would resolve regulatory allegations that it violated certain provisions of federal and state securities laws (i) by entering into trading arrangements that permitted certain investors to engage in market timing in certain DWS funds and (ii) by failing more generally to take adequate measures to prevent market timing in the DWS funds, primarily during the 1999–2001 period. With respect to the trading arrangements, DeAM expects that the settlement documents will include allegations related to one legacy DeAM arrangement, as well as three legacy Scudder and six legacy Kemper arrangements. All of these trading arrangements originated in businesses that existed prior to the current DeAM organization, which came together in April 2002 as a result of the various mergers of the legacy Scudder, Kemper and Deutsche fund groups, and all of the arrangements were terminated prior to the start of the regulatory investigations that began in the summer of 2003. No current DeAM employee approved the trading arrangements.

Cash Management Portfolio 41

DWS funds. In addition, on January 13, 2006, DWS Scudder Distributors, Inc. received a Wells notice from the Enforcement Staff of the NASD regarding DWS Scudder Distributors’ payment of non-cash compensation to associated persons of NASD member firms, as well as DWS Scudder Distributors’ procedures regarding non-cash compensation regarding entertainment provided to such associated persons. Additional information announced by DeAM regarding the terms of the expected settlements will be made available at www.dws-scudder.com/regulatory settlements, which will also disclose the terms of any final settlement agreements once they are announced.

42 Cash Management Portfolio


	Report of Independent Registered Public Accounting Firm

To the Trustees and Holders of Beneficial Interest of Cash Management Portfolio:

In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the related statements of operations and of changes in net assets and the financial highlights presents fairly, in all material respects, the financial position of Cash Management Portfolio (hereafter referred to as the “Portfolio”) at December 31, 2005, and the results of its operations, the changes in its net assets and the financial highlights for each of the periods indicated therein, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Portfolio’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2005 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

Boston, Massachusetts

February 24, 2006

Cash Management Portfolio 43


	Investment Management Agreement Approval

Money Market Fund Investment (the “Fund”), a series of the DWS Advisor Funds III (the “Trust”), invests all of its assets in the Cash Management Portfolio (the “Portfolio”) in order to achieve its investment objectives. The Board of Trustees of the Portfolio, which is also the Board of Trustees of the Trust, approved the continuation of the current investment management agreement with Deutsche Asset Management, Inc. (the “Advisor”) in September 2005. In terms of the process the Trustees followed prior to approving the contract, shareholders should know that:


n		At the present time, all but one of the Portfolio’s and the Fund’s Trustees are independent of the Advisor and its affiliates.

n		The Trustees meet frequently to discuss fund matters. Each year, the Trustees dedicate part or all of several meetings to contract review matters.

n		The Trustees regularly meet privately with their independent counsel (and, as needed, other advisors) to discuss contract review and other matters.

The Advisor and its predecessors have managed the Portfolio since inception, and the Trustees believe that a long-term relationship with a capable, conscientious advisor is in the best interest of shareholders. As you may know, the Advisor is part of Deutsche Bank, a major global banking institution that is engaged in a wide range of financial services. The Trustees believe that there are significant advantages to being part of a global asset management business with extensive investing expertise and resources, including hundreds of portfolio managers and analysts with research capabilities in many countries throughout the world.

Shareholders may focus only on fund performance and fees, but the Portfolio’s Trustees consider these and many other factors, including the quality and integrity of the Advisor’s personnel and back-office operations, fund valuations, and compliance policies and procedures. The Trustees noted that the Advisor has also implemented new, forward-looking policies and procedures in many important areas, such as those involving brokerage commissions and so-called “soft dollars”, even when not obligated to do so by law or regulation.

44 Cash Management Portfolio

In determining to approve the continuation of the Portfolio’s current investment management agreement, the Trustees considered factors that it believes relevant to the interests of shareholders, including:


n		The investment management fee schedule for the Fund, including (i) comparative information provided by Lipper regarding investment management fee rates paid to other investment advisors by similar funds and (ii) fee rates paid to the Advisor by similar funds and institutional accounts advised by the Advisor. With respect to management fees paid to other investment advisors by similar funds, the Trustees noted that the fee rate paid by the Fund was lower than the median (1st quartile) of the applicable Lipper universe as of December 31, 2004. The Board gave only limited consideration to fees paid by similar institutional accounts advised by the Advisor, in light of the material differences in the scope of services provided to mutual funds as compared to those provided to institutional accounts. The Board concluded that the fee schedule in effect for the Fund represented reasonable compensation in light of the nature, extent and quality of the services being provided to the Portfolio, the performance of the Portfolio and fees paid by similar funds.

n		The extent to which economies of scale would be realized as the Portfolio grows. In this regard, the Board noted that the Portfolio’s investment management fee schedule includes no fee breakpoints but that the Portfolio’s contractual fee is already low both actually and relative to the Fund’s peer group. The Board concluded that the Portfolio’s current fee schedule is appropriate.

n		The total operating expense of the Fund relative to the Fund’s peer group as determined by Lipper. In this regard, the Board noted that the total expenses of the Fund for the year ended December 31, 2004 were lower than the median (1st quartile) of the applicable Lipper universe. The Board also considered the expense limitations agreed to by the Advisor that serve to ensure that the Fund’s total operating expenses would be competitive relative to the applicable Lipper universe.

n		The investment performance of the Fund and the Advisor relative to industry peer groups. The Board noted that for the one-, three- and five-year periods ended June 30, 2005, the Fund’s performance was in the 1st quartile of the applicable iMoneyNet universe. The Board also observed that

Cash Management Portfolio 45


		the Fund outperformed its benchmark in the one-, three- and five-year periods. The Board recognized that the Advisor has made significant changes in its investment personnel and processes in recent years in an effort to improve long-term performance.

n		The nature, extent and quality of the advisory services provided by the Advisor. The Board considered extensive information regarding the Advisor, including the Advisor’s personnel, particularly those personnel with responsibilities for providing services to the Portfolio, resources, policies and investment processes. The Board also considered the terms of the current investment management agreement, including the scope of services provided under the agreement. In this regard, the Board concluded that the quality and range of services provided by the Advisor have benefited, and should continue to benefit, the Fund and its shareholders.

n		The costs of the services to, and profits realized by, the Advisor and its affiliates from their relationships with the Portfolio and the Fund. The Board reviewed information concerning the costs incurred and profits realized by the Advisor during 2004 from providing investment management services to the Portfolio and, separately, to the entire DWS fund complex, and reviewed with the Advisor the cost allocation methodology used to determine its profitability. In analyzing the Advisor’s costs and profits, the Board also reviewed the fees paid to, and services provided by, the Advisor and its affiliates. As part of this review, the Board considered information provided by an independent accounting firm engaged to review the Advisor’s cost allocation methodology and calculations. The Board concluded that the Portfolio’s investment management fee schedule represented reasonable compensation in light of the costs incurred by the Advisor and its affiliates in providing services to the Portfolio and the Fund. 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, the Advisor’s overall profitability with respect to the DWS fund complex (after taking into account distribution and other services provided by the Advisor and its affiliates) was lower than the overall profitability levels of most comparable firms for which such data was available.

46 Cash Management Portfolio


n		The practices of the Advisor regarding the selection and compensation of brokers and dealers executing portfolio transactions for the Portfolio, including the Advisor’s soft dollar practices. In this regard, the Board observed that the Advisor had voluntarily terminated the practice of allocating brokerage commissions to acquire research services from third-party service providers. The Board indicated that it would continue to monitor the Portfolio’s trading activities to ensure that the principle of “best price and execution” remains paramount in the portfolio trading process.

n		The Advisor’s commitment to, and record of, compliance including its written compliance policies and procedures. In this regard, the Board considered the Advisor’s commitment to indemnify the Fund against any costs and liabilities related to lawsuits or regulatory actions making allegations regarding market timing, revenue sharing, fund valuation or other subjects arising from or relating to pending regulatory inquiries. The Board also considered the significant attention and resources dedicated by the Advisor to documenting and enhancing its compliance processes in recent years. The Board noted in particular (i) the experience and seniority of the Advisor’s chief compliance officer, who reports to the Board, (ii) the large number of compliance personnel who report to the Advisor’s chief compliance officer, and (iii) the substantial commitment of resources by the Advisor to compliance matters.

n		Deutsche Bank’s commitment to restructuring and growing its US mutual fund business. The Board considered recent and ongoing efforts by Deutsche Bank to restructure its US mutual fund business to improve efficiency and competitiveness and to reduce compliance and operational risk. The Board considered assurances received from Deutsche Bank that it would commit the resources necessary to maintain high quality services to the Portfolio and the Fund and its shareholders as long as they remained in existence and while various organizational initiatives are being implemented. The Board also considered Deutsche Bank’s strategic plans for investing in the growth of its US mutual fund business and the potential benefits to the Fund’s shareholders.

Based on all of the foregoing, the Board determined to continue the Portfolio’s current investment management agreement, and concluded that the continuation of the agreement was in the best interests of shareholders. In reaching this

Cash Management Portfolio 47

conclusion the Board did not give particular weight to any single factor identified above. The Board considered these factors over the course of numerous meetings, many 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 current agreement.

48 Cash Management Portfolio


	Account Management Resources


Automated Information Lines		Institutional Investor Services (800) 730-1313 Personalized account information, information on other DeAM funds and services via touchtone telephone and the ability to exchange or redeem shares.

Web Site		moneyfunds.deam-us.db.com View your account transactions and balances, trade shares, monitor your asset allocation, and change your address, 24 hours a day. Obtain prospectuses and applications, blank forms, interactive worksheets, news about the funds, subscription to fund updates by e-mail, retirement planning information, and more.

For More Information		(800) 730-1313, option 1 To speak with a fund service representative.

Written Correspondence		Deutsche Asset Management PO Box 219210 Kansas City, MO 64121-9210

Proxy Voting		A description of the fund’s policies and procedures for voting proxies for portfolio securities and information about how the fund voted proxies related to its portfolio securities during the 12-month period ended June 30 is available on our Web site — www.dws-scudder.com (type “proxy voting” in the search field) — or on the SEC’s Web site — www.sec.gov. To obtain a written copy of the fund’s policies and procedures without charge, upon request, call us toll free at (800) 621-1048.

Principal Underwriter		If you have questions, comments or complaints, contact: DWS Scudder Distributors, Inc. 222 South Riverside Plaza Chicago, IL 60606-5808 (800) 621-1148

Nasdaq Symbol		BPYXX

CUSIP Number		233371 301

Fund Number		838

Money Market Fund Investment 49


	Notes


	Notes


	Notes


	Notes


	Notes


	Notes

222 South Riverside Plaza

Chicago, IL 60606-5808

1660ANN

42076 (2/06)

ITEM 2.

CODE OF ETHICS.

As of the end of the period, December 31, 2005, DWS Advisor Funds III 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 Board of Directors/Trustees has determined that the Fund has at least one “audit committee financial expert” serving on its audit committee: Mr. Graham E. Jones. This audit committee member is “independent,” meaning that he is not an “interested person” of the Fund (as that term is defined in Section 2(a)(19) of the Investment Company Act of 1940) and he does not accept any consulting, advisory, or other compensatory fee from the Fund (except in the capacity as a Board or committee member).

An “audit committee financial expert” is not an “expert” for any purpose, including for purposes of Section 11 of the Securities Act of 1933, as a result of being designated as an “audit committee financial expert.” Further, the designation of a person as an “audit committee financial expert” does not mean that the person has any greater duties, obligations, or liability than those imposed on the person without the “audit committee financial expert” designation. Similarly, the designation of a person as an “audit committee financial expert” does not affect the duties, obligations, or liability of any other member of the audit committee or board of directors.

ITEM 4.

PRINCIPAL ACCOUNTANT FEES AND SERVICES.

MONEY MARKET FUND INVESTMENT

FORM N-CSR DISCLOSURE RE: AUDIT FEES

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

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

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

Fiscal Year Ended December 31,	Audit Fees Billed to Fund	Audit-Related Fees Billed to Fund	Tax Fees Billed to Fund	All Other Fees Billed to Fund
2005	$15,350	$225	$0	$0
2004	$14,300	$185	$3,255	$0

The above “Audit- Related Fees” were billed for agreed upon procedures performed and the above "Tax Fees" were billed for professional services rendered for tax compliance and 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 PWC to Deutsche Investment Management Americas, Inc. (“DeIM” or the “Adviser”), and any entity controlling, controlled by or under common control with DeIM (“Control Affiliate”) that provides ongoing services to the Fund (“Affiliated Fund Service Provider”), for engagements directly related to the Fund’s operations and financial reporting, during the Fund’s last two fiscal years.

Fiscal Year Ended December 31,	Audit-Related Fees Billedto Adviser and Affiliated Fund Service Providers	Tax Fees Billed to Adviser and Affiliated Fund Service Providers	All Other Fees Billed to Adviser and Affiliated Fund Service Providers
2005	$268,900	$197,605	$0
2004	$431,907	$0	$0

The “Audit-Related Fees” were billed for services in connection with the assessment of internal controls, agreed-upon procedures and additional related procedures and the above “Tax Fees” were billed in connection with consultation services and agreed-upon procedures.

Non-Audit Services

The following table shows the amount of fees that PWC billed during the Fund’s last two fiscal years for non-audit services. For engagements entered into on or after May 6, 2003, the Audit Committee pre-approved all non-audit services that PWC provided to the Adviser and any Affiliated Fund Service Provider that related directly to the Fund’s operations and financial reporting. The Audit Committee requested and received information from PWC about any non-audit services that PWC rendered during the Fund’s last fiscal year to the Adviser and any Affiliated Fund Service Provider. The Committee considered this information in evaluating PWC’s independence.

Fiscal Year
Ended
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)

2005

$197,605

$104,635

$302,240

2004

$3,255

$253,272

$256,527

All other engagement fees were billed for services in connection with risk management, tax services and process improvement/integration initiatives for DeIM and other related entities that provide support for the operations of the fund.

ITEM 5.

AUDIT COMMITTEE OF LISTED REGISTRANTS

Not Applicable

ITEM 6.

SCHEDULE OF INVESTMENTS

Not Applicable

ITEM 7.

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

Not Applicable

ITEM 8.

PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 9.

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

Not Applicable.

ITEM 10.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

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

ITEM 11.

CONTROLS AND PROCEDURES.

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

(b)

There have been no changes in the registrant’s internal control over financial reporting that occurred during the registrant’s last half-year (the registrant’s second fiscal half-year in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal controls over financial reporting.

ITEM 12.

EXHIBITS.

(a)(1)

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

(a)(2)

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

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

Form N-CSR Item F

SIGNATURES

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

Registrant:

Money Market Fund Investment, a series of DWS Advisor Funds III

By:	/s/Vincent J. Esposito
	Vincent J. Esposito

President

Date:

March 2, 2006

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

Registrant:

Money Market Fund Investment, a series of DWS Advisor Funds III

By:	/s/Vincent J. Esposito
	Vincent J. Esposito

President

Date:

March 2, 2006

By:	/s/Paul Schubert
	Paul Schubert

Chief Financial Officer and Treasurer

Date:

March 2, 2006

Annualized Expense Ratio

Money Market Fund Investment