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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
   Form 10-K/A
   (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    October 31, 2007oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number
    814-00201
   MVC
    Capital, Inc.
 (Exact name of registrant as
    specified in its charter)
  Delaware

94-3346760(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)287 Bowman Avenue,
    Purchase, New York

10577(Zip Code)(Address of principal executive
    offices)   Registrants telephone number, including area code
 (914) 701-0310
 Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock


New York Stock Exchange   Securities registered pursuant to section 12(g) of the
    Act:
 None
   (Title of class)
   (Title of class)
   o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  o þ o
  Rule 12b-2 o þ
      DOCUMENT
    INCORPORATED BY REFERENCE:




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EXPLANATORY NOTE




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##### 





MVC
    Capital, Inc.
  (A
    Delaware Corporation)
  Index
  
  PagePartIItem 1.


Business


3Item 1A.


Risk Factors


15Item 1B.


Unresolved Staff Comments


24Item 2.


Properties


25Item 3.


Legal Proceedings


25Item 4.


Submission of Matters to a Vote of Security
    Holders


25Part IIItem 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


25Item 6.


Selected Consolidated Financial Data


29Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


30Item 7A.


Quantitative and Qualitative Disclosures about
    Market Risk


66Item 8.


Financial Statements and Supplementary Data


67Item 9.


Changes in and Disagreements With Accountants on
    Accounting and Financial Disclosure


103Item 9A.


Controls and Procedures


103Item 9B.


Other Information


103Part IIIItem 10.


Directors and Executive Officers of the
    Registrant


105Item 11.


Executive Compensation


105Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


105Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


105Item 14.


Principal Accounting Fees and Services


105Part IVItem 15.


Exhibits, Financial Statements, Schedules


106SIGNATURES


112Certifications of the CEO and CFOSection 906 Certifications




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Part I
  Factors
    That May Affect Future Results
  This Annual Report on
    Form 10-K
    contains certain forward-looking statements within the meaning
    of the federal securities laws that involve substantial
    uncertainties and risks. The Companys future results may
    differ materially from its historical results and actual results
    could differ materially from those projected in the
    forward-looking statements as a result of certain risk factors.
    These factors are described in the Risk Factors
    section below. Readers should pay particular attention to the
    considerations described in the section of this report entitled
    Managements Discussion and Analysis of Financial
    Condition and Results of Operations. Readers should also
    carefully review the risk factors described in the other
    documents the Company files, or has filed, from time to time
    with the United States Securities and Exchange Commission (the
    SEC).
  In this Annual Report on
    Form 10-K,
    unless otherwise indicated, MVC Capital,
    we, us, our or the
    Company refer to MVC Capital, Inc. and its
    wholly-owned subsidiary, MVC Financial Services, Inc. and
    TTG Advisers or the Adviser refers to
    The Tokarz Group Advisers LLC. Unless the context dictates
    otherwise, we also refers to TTG Advisers acting on
    behalf of MVC Capital.
  Item 1.
    Business  General
    and/or long-term
   3




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and/or
         4




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Corporate
    History And Offices
      i.e.
    (914) 701-0310. http://www.mvccapital.com. Form 10-K, Form 10-Q, Form 8-K,
 5




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Our
    Investment Strategy
  i.e. and/or
  i.e.
  and/or
  and/or and/or
    Fair Value as a Percentage of Our Net AssetsAs of


As of


As ofOctober 31,


October 31,


October 31,Type of Investment

2007


2006


2005Senior/Subordinated Loans and credit facilities


53.56
%


55.98
%


28.81
%Common Stock


18.31
%


39.40
%


23.10
%Warrants


0.30
%


0.46
%


0.89
%Preferred Stock


19.18
%


13.79
%


7.96
%Other Equity Investments


11.38
%


6.77
%


0.78
%Other Rights


0.00
%


0.00
%


0.00
%      6




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Market. Investment
    Criteria.
  
    Businesses with secure market niches and predictable profit
    margins;
    The presence or availability of highly qualified management
    teams;
    The line of products or services offered and their market
    potential;
    The presence of a sustainable competitive advantage;
    Favorable industry and competitive dynamics; and
    Stable free cash flow of the business.  and/or
  Investment Sourcing.
  
    private mezzanine and equity investors;
    investment banks;
    industry executives;
    business brokers;
    merger and acquisition advisors;
    financial services companies; and
    banks, law firms and accountants.  Allocation of Investment Opportunities.
 7




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Co-Investments.
  Investment Structure.
  and/or
             8




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(payment-in-kind
  Providing Management Assistance.
  Portfolio Company Monitoring.
      Investment Approval Procedures.
    
    Initial investment screening by deal person or investment team;
    Investment professionals present an investment proposal
    containing key terms and understandings (verbal and written) to
    the entire investment team;
    Our Chief Compliance Officer reviews the proposed investment for
    compliance with the 1940 Act, the Code and all other relevant
    rules and regulations;
    Investment professionals are provided with authorization to
    commence due diligence;
    Any investment professional can call a meeting, as deemed
    necessary, to: (i) review the due diligence reports;
    (ii) review the investment structure and terms;
    (iii) or to obtain any other information deemed relevant; 9




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
    Once all due diligence is completed, the proposed investment is
    rated using a rating system which tests several factors
    including, but not limited to, cash flow, EBITDA growth,
    management and business stability. We use this rating system as
    the base line for tracking the investment in the future;
    Our Chief Compliance Officer confirms that the proposed
    investment will not cause us to violate the 1940 Act, the Code
    or any other applicable rule or regulation;
    Mr. Tokarz approves the transaction; and
    The investment is funded.  Employees
    Operating
    Expenses
    provided, however
 10




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e.g. provided that
  Valuation
    of Portfolio Securities
            Valuation
    Methodology
  and/or
 11




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Equity Securities.
      Loans and Debt Securities.
      and/or
  payment-in-kind payment-in-kind payment-in-kind payment-in-kind payment-in-kind
 12




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Custodian
    Transfer
    Agent and Distribution Agent
    Certain
    Government Regulations
    Business Development Company.
            
    does not have any class of securities with respect to which a
    broker or dealer may extend margin credit;
    is controlled by a business development company or a group of
    companies including a business development company and the
    business development company has an affiliated person who is a
    director of the eligible portfolio company; or
    is a small and solvent company having total assets of not more
    than $4 million and capital and surplus of not less than
    $2 million.  Rules 2a-46 55a-1
     13




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(202) 942-8090. http://www.sec.gov. http://www.mvccapital.com.
     14




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Item1A.
    Risk
    Factors    BUSINESS
    RISKS
  Business risks are risks that are associated with general
    business conditions, the economy, and the operations of the
    Company. Business risks are not risks associated with our
    specific investments or an offering of our securities.
  We
    depend on key personnel of TTG Advisers, especially
    Mr. Tokarz, in seeking to achieve our investment
    objective.
    Our
    investment adviser, TTG Advisers, is a recently-formed
    entity.
    Our
    returns may be substantially lower than the average returns
    historically realized by the private equity industry as a
    whole.
    
    the lower return we are likely to realize on short-term liquid
    investments during the period in which we are identifying
    potential investments, and
    the periodic disclosure required of business development
    companies, which could result in the Company being less
    attractive as an investor to certain potential portfolio
    companies.  Substantially
    all of our portfolio investments are recorded at fair
    value and, as a result, there is a degree of uncertainty
    regarding the carrying values of our portfolio
    investments.
   15




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Economic
    recessions or downturns could impair our portfolio companies and
    harm our operating results.
      We may
    not realize gains from our equity investments.
    The
    market for private equity investments can be highly competitive.
    In some cases, our status as a regulated business development
    company may hinder our ability to participate in certain
    investment opportunities.
   16




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Our
    ability to use our capital loss carryforwards may be subject to
    limitations.
  e.g.
  Loss
    of pass-through tax treatment would substantially reduce net
    assets and income available for dividends.
    Complying
    with the RIC requirements may cause us to forego otherwise
    attractive opportunities.
    Regulations
    governing our operation as a business development company affect
    our ability to, and the way in which we, raise additional
    capital.
   17




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Any
    failure on our part to maintain our status as a business
    development company would reduce our operating
    flexibility.
  and/or
  Changes
    in the law or regulations that govern us could have a material
    impact on our business.
    Results
    may fluctuate and may not be indicative of future
    performance.
    Our
    common stock price can be volatile.
    
    price and volume fluctuations in the overall stock market from
    time to time;
    significant volatility in the market price and trading volume of
    securities of business development companies or other financial
    services companies;
    volatility resulting from trading in derivative securities
    related to our common stock including puts, calls, long-term
    equity participation securities, or LEAPs, or short trading
    positions;
    changes in regulatory policies or tax guidelines with respect to
    business development companies or RICs;
    actual or anticipated changes in our earnings or fluctuations in
    our operating results or changes in the expectations of
    securities analysts;
    general economic conditions and trends;
    loss of a major funding source; or
    departures of key personnel of TTG Advisers. 18




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We are
    subject to market discount risk.
    We
    have not established a minimum dividend payment level and we
    cannot assure you of our ability to make distributions to our
    shareholders in the future.
  year-to-year
  We
    have borrowed and may continue to borrow money, which magnifies
    the potential for gain or loss on amounts invested and may
    increase the risk of investing in us.
        Changes
    in interest rates may affect our cost of capital and net
    operating income and our ability to obtain additional
    financing.
   19




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We may
    be unable to meet our covenant obligations under our credit
    facility which could adversely affect our
    business.
    A
    portion of our existing investment portfolio was not selected by
    the investment team of TTG Advisers.
  i.e.
  Under
    the Advisory Agreement, TTG Advisers is entitled to compensation
    based on our portfolios performance. This arrangement may
    result in riskier or more speculative investments in an effort
    to maximize incentive compensation.
    There
    are potential conflicts of interest that could impact our
    investment returns.
     20




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Allocation of Investment
    Opportunities
  Our
    relationship with MVC Acquisition Corp. could give rise to
    conflicts of interest with respect to the allocation of
    investment opportunities between us on the one hand and MVC
    Acquisition Corp. on the other hand.
    The
    war with Iraq, terrorist attacks, and other acts of violence or
    war may affect any market for our common stock, impact the
    businesses in which we invest and harm our operations and our
    profitability.
    Our
    financial condition and results of operations will depend on our
    ability to effectively manage our future growth.
   21




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INVESTMENT
    RISKS
  Investment risks are risks associated with our
    determination to execute on our business objective. These risks
    are not risks associated with general business conditions or
    those relating to an offering of our securities.
  Investing
    in private companies involves a high degree of
    risk.
    Our
    investments in portfolio companies are generally
    illiquid.
    Our
    investments in small and middle-market privately-held companies
    are extremely risky and the Company could lose its entire
    investment.
    
    Small and middle-market companies may have limited financial
    resources and may not be able to repay the loans we make to
    them.  Our strategy includes providing financing
    to companies that typically do not have capital sources readily
    available to them. While we believe that this provides an
    attractive opportunity for us to generate profits, this may make
    it difficult for the borrowers to repay their loans to us upon
    maturity.
    Small and middle-market companies typically have narrower
    product lines and smaller market shares than large
    companies.  Because our target companies are
    smaller businesses, they may be more vulnerable to
    competitors actions and market conditions, as well as
    general economic downturns. In addition, smaller companies may
    face intense competition, including competition from companies
    with greater financial resources, more extensive development,
    manufacturing, marketing and other capabilities, and a larger
    number of qualified managerial and technical personnel.
    There is generally little or no publicly available
    information about these privately-held
    companies.  There is generally little or no
    publicly available operating and financial information about
    them. As a result, we rely on our investment professionals to
    perform due diligence investigations of these privately-held
    companies, their operations and their prospects. We may not
    learn all of the material information we need to know regarding
    these companies through our investigations.
    Small and middle-market companies generally have less
    predictable operating results.  We expect that our
    portfolio companies may have significant variations in their
    operating results, may from time to time be parties to
    litigation, may be engaged in rapidly changing businesses with
    products subject to a substantial risk of obsolescence, may
    require substantial additional capital to support their
    operations, finance expansion or maintain their competitive
    position, may otherwise have a weak financial position or may be
    adversely affected by changes in the business cycle. Our
    portfolio companies may not meet net income, cash flow and other
    coverage tests typically imposed by their senior lenders. 22




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
    Small and middle-market businesses are more likely to be
    dependent on one or two persons.  Typically, the
    success of a small or middle-market company also depends on the
    management talents and efforts of one or two persons or a small
    group of persons. The death, disability or resignation of one or
    more of these persons could have a material adverse impact on
    our portfolio company and, in turn, on us.
    Small and middle-market companies are likely to have greater
    exposure to economic downturns than larger
    companies.We expect that our portfolio companies
    will have fewer resources than larger businesses and an economic
    downturn may thus more likely have a material adverse effect on
    them.
    Small and middle-market companies may have limited operating
    histories.We may make debt or equity investments
    in new companies that meet our investment criteria. Portfolio
    companies with limited operating histories are exposed to the
    operating risks that new businesses face and may be particularly
    susceptible to, among other risks, market downturns, competitive
    pressures and the departure of key executive officers.  Our
    borrowers may default on their payments, which may have an
    effect on our financial performance.
    Our
    investments in mezzanine and other debt securities may involve
    significant risks.
  and/or
  When
    we are a debt or minority equity investor in a portfolio
    company, we may not be in a position to control the entity, and
    management of the company may make decisions that could decrease
    the value of our portfolio holdings.
    We may
    choose to waive or defer enforcement of covenants in the debt
    securities held in our portfolio, which may cause us to lose all
    or part of our investment in these companies.
   23




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Our
    portfolio companies may incur obligations that rank equally
    with, or senior to, our investments in such companies. As a
    result, the holders of such obligations may be entitled to
    payments of principal or interest prior to us, preventing us
    from obtaining the full value of our investment in the event of
    an insolvency, liquidation, dissolution, reorganization,
    acquisition, merger or bankruptcy of the relevant portfolio
    company.
    Our
    portfolio investments may be concentrated in a limited number of
    portfolio companies, which would magnify the effect if one of
    those companies were to suffer a significant loss. This could
    negatively impact our ability to pay dividends and cause you to
    lose all or part of your investment.
    Investments
    in foreign debt or equity may involve significant risks in
    addition to the risks inherent in U.S.
    investments.
    Investing
    in our securities may involve a high degree of
    risk.
    Item 1B.
    Unresolved
    Staff Comments   24




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Item 2.
    Properties    Item 3.
    Legal
    Proceedings    Item 4.
    Submission
    of Matters to a Vote of Security Holders    Part II
  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities      Quarter Ended

High


LowFISCAL YEAR 200710/31/07

$
19.01


$
15.7007/31/07

$
19.93


$
15.8304/30/07

$
17.89


$
15.3801/31/07

$
15.26


$
13.11FISCAL YEAR 200610/31/06

$
13.87


$
12.6107/31/06

$
13.49


$
11.9804/30/06

$
12.75


$
11.6601/31/06

$
12.22


$
10.50  25




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Performance
    Graph
    Shareholder
    Return Performance Graph
    Five-Year Cumulative Total
    Return1(Through October 31, 2007)
  
  Dividends
  12-month
      1
 26




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For
    the Quarter Ended January 31, 2006
    For
    the Quarter Ended April 30, 2006
    For
    the Quarter Ended July 31, 2006
   27




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For
    the Quarter Ended October 31, 2006
    For
    the Quarter Ended January 31, 2007
    For
    the Quarter Ended April 30, 2007
    For
    the Quarter Ended July 31, 2007
    For
    the Quarter Ended October 31, 2007
      form 1099-DIV,
       28




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Item 6.
    Selected
    Consolidated Financial Data  See Managements Discussion and Analysis
    of Financial Condition and Results of Operations on
    page 30 for more information.
  Selected
    Consolidated Financial Data
  Year Ended October 31,2007


2006


2005


2004


2003(In thousands, except per share data)Operating Data:Interest and related portfolio income:Interest and dividend income

$
22,826


$
13,909


$
9,457


$
2,996


$
2,833Fee income


3,750



3,828



1,809



926



62Other income


374



771



933



64



Total operating income


26,950



18,508



12,199



3,986



2,895Expenses:Employee






3,499



2,336



1,366



2,476Incentive compensation (Note 5)


10,813



6,055



1,117







Administrative


2,559



3,420



3,021



2,891



8,911
(1)Interest and other borrowing costs


4,859



1,594



31



2



Management fee


7,034















Total operating expenses


25,265



14,568



6,505



4,259



11,387Litigation recovery of management fees (Note 12)














370



Net operating income (loss) before taxes


1,685



3,940



5,694



97



(8,492
)Tax expense (benefit), net


(375
)


159



(101
)


79



Net operating income (loss)


2,060



3,781



5,795



18



(8,492
)Net realized and unrealized gains (losses):Net realized gains (losses)


66,944



5,221



(3,295
)


(37,795
)


(4,220
)Net change in unrealized appreciation (depreciation)


(3,302
)


38,334



23,768



49,382



(42,771
)Net realized and unrealized gains (losses) on investments


63,642



43,555



20,473



11,587



(46,991
)Net increase (decrease) in net assets resulting from operations

$
65,702


$
47,336


$
26,268


$
11,605


$
(55,483
)Per Share:Net increase (decrease) in net assets per share resulting from
    operations

$
2.92


$
2.48


$
1.45


$
0.91


$
(3.42
)Dividends per share

$
0.54


$
0.48


$
0.24


$
0.12


$
Balance Sheet Data:Portfolio at value

$
379,168


$
275,892


$
122,298


$
78,520


$
24,071Portfolio at cost


393,428



286,851



171,591



151,582



146,515Total assets


470,491



347,047



201,379



126,577



137,880Shareholders equity


369,097



236,993



198,707



115,567



137,008Shareholders equity per share (net asset value)

$
15.21


$
12.41


$
10.41


$
9.40


$
8.48Common shares outstanding at period end


24,265



19,094



19,087



12,293



16,153Other Data:Number of Investments funded in period


26



24



9



7



5Investments funded ($) in period

$
167,134


$
166,300


$
53,836


$
60,710


$
21,955     (1)
    
    The administrative expenses for the year ended October 31,
    2003 included approximately $4.0 million of
    proxy/litigation fees and expenses. These are non-recurring
    expenses. 29




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2007


2006


2005Qtr 4


Qtr 3


Qtr 2


Qtr 1


Qtr 4


Qtr 3


Qtr 2


Qtr 1


Qtr 4


Qtr 3


Qtr 2


Qtr 1(In thousands, except per share data)Quarterly Data (Unaudited):Total operating income


8,438



7,030



6,073



5,409



6,104



4,607



3,915



3,882



3,361



4,404



2,439



1,995Incentive compensation


771



1,618



4,898



3,526



1,338



1,161



2,005



1,551



320



402



395



Interest, fees and other borrowing costs


1,223



1,252



1,256



1,128



910



636



39



9



11



8







12Management fee


1,929



1,616



1,854



1,635































Other expenses


630



608



652



669



2,117



1,676



1,739



1,387



1,450



1,440



1,331



1,136Tax expense (benefit)


77



(78
)


(394
)


20



16



62



(24
)


105



(32
)


74



(108
)


(35
)Net operating income (loss) before net realized and unrealized
    gains


3,808



2,014



(2,193
)


(1,569
)


1,723



1,072



156



830



1,612



2,480



821



882Net increase in net assets resulting from operations


8,514



13,788



24,323



19,077



15,866



8,046



11,117



12,307



8,933



10,310



4,360



2,665Net increase in net assets resulting from operations per share


0.35



0.57



1.00



1.00



0.83



0.42



0.58



0.65



0.46



0.58



0.23



0.18Net asset value per share


15.21



14.98



14.53



13.23



12.41



11.70



11.40



10.94



10.41



10.06



9.64



9.41   Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  may, will, expect, believe,
    anticipate, intend, could, estimate, might continue,
  Overview
  and/or
  i.e. and/or
   30




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##### Table of Contents



i.e.
  and/or
  and/or and/or
    Operating
    Income
  For the Fiscal Years Ended October 31, 2007, 2006 and
    2005.
  For
    the Fiscal Year Ended October 31, 2007
   31




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For
    the Fiscal Year Ended October 31, 2006
    For
    the Fiscal Year Ended October 31, 2005
    Operating
    Expenses
  For the Fiscal Years Ended October 31, 2007, 2006 and
    2005.
  For
    the Fiscal Year Ended October 31, 2007
     32




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For
    the Fiscal Year Ended October 31, 2006
   33




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For
    the Fiscal Year Ended October 31, 2005
       34




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Realized
    Gains and Losses On Portfolio Securities
  For the Fiscal Years Ended October 31, 2007, 2006 and
    2005.
  For
    the Fiscal Year Ended October 31, 2007
     35




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For
    the Fiscal Year Ended October 31, 2006
                For
    the Fiscal Year Ended October 31, 2005
     36




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##### Table of Contents



Unrealized
    Appreciation and Depreciation of Portfolio Securities
  For the Fiscal Years Ended October 31, 2007, 2006 and
    2005.
  For
    the Fiscal Year Ended October 31, 2007
    For
    the Fiscal Year Ended October 31, 2006
   37




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##### Table of Contents



For
    the Fiscal Year Ended October 31, 2005
    Portfolio
    Investments
  For the Fiscal Years Ended October 31, 2007 and
    2006.
  For
    the Fiscal Year Ended October 31, 2007
     38




---



##### Table of Contents



39




---



##### Table of Contents



40




---



##### Table of Contents



For
    the Fiscal Year Ended October 31, 2006
         41




---



##### Table of Contents



42




---



##### Table of Contents



43




---



##### Table of Contents



Portfolio
    Companies
    Actelis
    Networks, Inc.
  e-business
    Amersham
    Corp.
              Auto
    MOTOL BENI
             44




---



##### Table of Contents



Baltic
    Motors Corporation
                  BP
    Clothing, LLC
  ®
 45




---



##### Table of Contents



Custom
    Alloy Corporation
          Dakota
    Growers Pasta Company, Inc.
     46




---



##### Table of Contents



DPHI,
    Inc. (formerly DataPlay, Inc.)
    Series A-1
  Endymion
    Systems, Inc.
      Foliofn,
    Inc.
  fn
  fn
    fn
  fn.
  Genevac
    U.S. Holdings, Inc.
       47




---



##### Table of Contents



Harmony
    Pharmacy & Health Center, Inc.
            Henry
    Company
          HuaMei
    Capital Company, Inc.
            Impact
    Confections, Inc.
     48




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##### Table of Contents



Innovative
    Brands, LLC
          JDC
    Lighting, LLC
        Levlad
    Arbonne International LLC
          Lockorder
    Limited (formerly SafeStone Technologies PLC)
  e-business
   49




---



##### Table of Contents



Mainstream
    Data, Inc.
      Marine
    Exhibition Corporation
        MVC
    Automotive Group BV
          MVC
    Partners LLC
       50




---



##### Table of Contents



Octagon
    Credit Investors, LLC
              Ohio
    Medical Corporation
             51




---



##### Table of Contents



Phoenix
    Coal Corporation
          PreVisor,
    Inc.
            SafeStone
    Technologies Limited (formerly SafeStone Technologies
    PLC)
  e-business
      SGDA
    Sanierungsgesellschaft fur Deponien und Altasten
    mbH
   52




---



##### Table of Contents



SIA BM
    Auto
          SIA
    Tekers Invest
           53




---



##### Table of Contents



Sonexis,
    Inc.
      SP
    Industries, Inc.
            Storage
    Canada, LLC
          Summit
    Research Labs, Inc.
     54




---



##### Table of Contents



Timberland
    Machines & Irrigation, Inc.
                     55




---



##### Table of Contents



Total
    Safety U.S., Inc.
              Turf
    Products, LLC
              U.S.
    Gas & Electric, Inc.
     56




---



##### Table of Contents



Velocitius
    B.V.
                Vendio
    Services, Inc.
           57




---



##### Table of Contents



Vestal
    Manufacturing Enterprises, Inc.
            Vitality
    Foodservice, Inc.
            WBS
    Carbons Acquisitions Corp.
          Liquidity
    and Capital Resources
   58




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##### Table of Contents



Issuances
    of Equity Securities by the Issuer:
  30-day
 59




---



##### Table of Contents



Commitments
    to/for Portfolio Companies:
    Commitments
    of MVC Capital, Inc.
  Portfolio Company

Amount Committed


Amount Funded at October 31, 2007Timberland

$
4.0 million


$
4.0 millionStorage Canada

$
6.0 million


$
2.7 millionMarine

$
2.0 million



BENI

$
542,550



Octagon

$
12.0 million


$
4.1 millionVelocitius

$
260,000


$
191,084Velocitius

$
650,000


$
612,882Turf

$
1.0 million



Harmony Pharmacy

$
4.0 million


$
4.0 millionTekers

$
2.0 million



U.S. Gas

$
10.0 million


$
84,882U.S. Gas

$
2.0 million



Total

$
44.5 million


$
15.7 million          60




---



##### Table of Contents



Commitments
    of the Company:
     61




---



##### Table of Contents



Payments Due by PeriodLess Than








AfterTotal


1 Year


1-3 Years


4-5 Years


5 YearsTerm Debt Portion of Credit Facility

$
50,000,000



N/A


$
50,000,000



N/A



N/ATotal Debt

$
50,000,000



N/A


$
50,000,000



N/A



N/A   Subsequent
    Events
             62




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##### Table of Contents



Significant
    Accounting Policies
      Valuation of Portfolio Securities
          and/or
 63




---



##### Table of Contents



and/or
  payment-in-kind payment-in-kind payment-in-kind payment-in-kind payment-in-kind
  Investment Classification 
 64




---



##### Table of Contents



Investment Transactions and Related Operating
    Income  first-in, payment-in-kind
  Cash Equivalents 
  Restricted Securities 
  Distributions to Shareholders 
  Income Taxes 
    Reclassifications 
  Recent Accounting
    Pronouncements
 65




---



##### Table of Contents



Tax Status and Capital Loss Carryforwards:
    Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk    90-day 90-day
   66




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##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  CONSOLIDATED
    FINANCIAL STATEMENTS
  MVC
    Capital, Inc.
  Consolidated
    Balance Sheets
  October 31,


October 31,2007


2006ASSETSAssetsCash and cash equivalents

$
84,727,933


$
66,217,123Investments at fair value (cost $393,428,353 and $286,850,759 )Non-control/Non-affiliated investments (cost $119,646,416 and
    $108,557,066)


85,543,666



71,848,976Affiliate investments (cost $116,118,374 and $70,922,386)


127,959,158



74,498,140Control investments (cost $157,663,563 and $107,371,307)


165,664,710



129,544,436Total investments at fair value


379,167,534



275,891,552Dividends, interest and fees receivable


3,105,100



1,617,511Prepaid expenses


2,412,827



2,597,547Prepaid taxes


228,159



Deferred tax


803,283



548,120Deposits


25,156



120,000Other assets


20,993



54,796Total assets

$
470,490,985


$
347,046,649LIABILITIES AND SHAREHOLDERS EQUITYLiabilitiesRevolving credit facility

$
30,000,000


$
50,000,000Term loan


50,000,000



50,000,000Provision for incentive compensation (Note 5)


17,875,496



7,172,352Management fee payable


1,929,258



Employee compensation and benefits






1,635,600Other accrued expenses and liabilities


977,953



774,048Professional fees


558,091



402,133Consulting fees


89,452



70,999Taxes payable






33,455Directors fees


(36,034
)


(35,312
)Total liabilities


101,394,216



110,053,275Shareholders equityCommon stock, $0.01 par value; 150,000,000 shares
    authorized; 24,265,336 and 19,093,929 shares outstanding,
    respectively


283,044



231,459Additional
    paid-in-capital


431,814,990



353,479,871Accumulated earnings


24,375,844



22,026,261Dividends paid to stockholders


(33,764,634
)


(21,592,946
)Accumulated net realized loss


(6,283,708
)


(73,016,601
)Net unrealized depreciation


(14,260,819
)


(10,959,207
)Treasury stock, at cost, 4,039,112 and 4,052,019 shares
    held, respectively


(33,067,948
)


(33,175,463
)Total shareholders equity


369,096,769



236,993,374Total liabilities and shareholders equity

$
470,490,985


$
347,046,649Net asset value per share

$
15.21


$
12.41    67




---



##### Table of Contents



MVC
    Capital, Inc.
  Consolidated
    Schedule of Investments
    October 31, 2007
  Company

Industry

Investment

Principal


Cost


Fair ValueNon-control/Non-affiliated investments - 23.18% (a, c, g,
    f)Actelis Networks, Inc.

Technology Investments

Preferred Stock (150,602 shares)(d)





$
5,000,003


$
Amersham Corp.

Manufacturer of Precision - Machined Components

Second Lien Seller Note 10.0000%, 06/29/2010(h)

$
2,659,035



2,659,035



2,659,035Second Lien Seller Note 16.0000%, 06/30/2013 (b, h)


3,090,594



3,090,594



3,090,5945,749,629



5,749,629BP Clothing, LLC

Apparel

Second Lien Loan 14.0000%, 07/18/2012 (b, h)


17,829,579



17,549,872



17,829,580Term Loan A 9.3800%, 07/18/2011 (h)


2,550,000



2,514,351



2,514,351Term Loan B 11.5300%, 07/18/2011 (h)


2,000,000



1,972,222



1,972,22222,036,445



22,316,153DPHI, Inc.

Technology Investments

Preferred Stock (602,131 shares) (d)






4,520,355



FOLIOfn,Inc.

Technology Investments

Preferred Stock (5,802,259 shares) (d)






15,000,000



7,600,000Henry Company

Building Products / Specialty Chemicals

Term Loan A 8.6280%, 04/06/2011 (h)


1,837,309



1,837,309



1,837,309Term Loan B 12.5025%, 04/06/2011 (h)


2,000,000



2,000,000



2,000,0003,837,309



3,837,309Innovative Brands, LLC

Consumer Products

Term Loan 11.1250%, 09/25/2011 (h)


14,850,000



14,850,000



14,850,000JDC Lighting, LLC

Electrical Distribution

Senior Subordinated Debt 17.0000%, 01/31/2009 (b, h)


3,175,371



3,147,234



3,175,371Lockorder Limited

Technology Investments

Common Stock (21,064 shares) (d, e)






2,007,701



MainStream Data, Inc.

Technology Investments

Common Stock (5,786 shares) (d)






3,750,000



SafeStone Technologies Limited

Technology Investments

Common Stock (21,064 shares) (d, e)






2,007,701



Sonexis, Inc.

Technology Investments

Common Stock (131,615 shares) (d)






10,000,000



SP Industries, Inc.

Laboratory Research Equipment

Term Loan B 13.1300%, 03/31/2011 (h)


7,392,634



7,361,420



7,392,634Senior Subordinated Debt 16.0000%, 03/31/2012 (b, h)


13,485,570



13,236,072



13,485,57020,597,492



20,878,204Storage Canada, LLC

Self Storage

Term Loan 8.7500%, 03/30/2013 (h)


1,320,500



1,326,047



1,320,500Term Loan 8.7500%, 10/06/2013 (h)


619,000



619,000



619,000Term Loan 8.7500%, 01/19/2014 (h)


705,000



705,000



705,0002,650,047



2,644,500Total Safety U.S., Inc.

Engineering Services

First Lien Seller Note 8.1425%, 12/08/2012 (h)


992,500



992,500



992,500Second Lien Seller Note 11.3318%, 12/08/2013 (h)


3,500,000



3,500,000



3,500,0004,492,500



4,492,500Sub Total Non-control/Non-affiliated investments








119,646,416



85,543,666Affiliate investments  34.67% (a, c, g,
    f)Custom Alloy Corporation

Manufacturer of Pipe Fittings

Unsecured Subordinated Loan 14.0000%, 09/18/2012 (b,h)


14,035,389



13,557,190



14,035,389Convertible Series A Preferred Stock (9 shares)(d)






44,000



44,000Convertible Series B Preferred Stock (1,991 shares)(d)






9,956,000



9,956,00023,557,190



24,035,389Dakota Growers Pasta Company, Inc.

Manufacturer of Packaged Foods

Common Stock (1,016,195 shares)






5,521,742



10,161,950Convertible Preferred Stock (1,065,000) (d)






10,357,500



10,650,00015,879,242



20,811,950Endymion Systems, Inc.

Technology Investments

Preferred Stock (7,156,760 shares) (d)






7,000,000



Genevac U.S. Holdings, Inc.

Laboratory Research Equipment

Senior Subordinated Debt 12.5000%, 01/03/2008 (e, h)


12,962,963



12,962,963



12,962,963Common Stock (140 shares) (b, e)






1,103,002



1,103,00214,065,965



14,065,965HuaMei Capital Company, Inc.

Financial Services

Common Stock (500 shares) (d)






2,000,000



2,000,000Impact Confections, Inc.

Confections Manufacturing

Senior Subordinated Debt 17.0000%, 07/30/2009 (b, h)


5,718,372



5,664,803



5,718,372and Distribution

Senior Subordinated Debt 9.1287%, 07/29/2008(h)


325,000



323,388



325,000Common Stock (252 shares) (d)






2,700,000



2,700,0008,688,191



8,743,372Marine Exhibition Corporation

Theme Park

Senior Subordinated Debt 11.0000%, 06/30/2013 (b, h)


10,506,628



10,344,177



10,506,628Convertible Preferred Stock (20,000 shares) (b)






2,203,455



2,203,45512,547,632



12,710,083   68




---



##### Table of Contents



MVC
    Capital, Inc.
  Consolidated
    Schedule of Investments  (Continued)
    October 31, 2007
  Company

Industry

Investment

Principal


Cost


Fair ValueOctagon Credit Investors, LLC

Financial Services

Term Loan 9.3790%, 12/31/2011 (h)

$
5,000,000


$
4,944,431


$
5,000,000Revolving Line of Credit 9.3790%, 12/31/2011 (h)


4,100,000



4,100,000



4,100,000Limited Liability Company Interest






1,110,370



3,765,27510,154,801



12,865,275Phoenix Coal Corporation

Coal Processing and Production

Common Stock (1,666,667 shares) (d)






1,000,000



1,000,000PreVisor, Inc.

Human Capital Management

Common Stock (9 shares) (d)






6,000,000



9,000,000Vitality Foodservice, Inc.

Non-Alcoholic Beverages

Common Stock (556,472 shares) (d)






5,564,716



9,064,716Preferred Stock (1,000,000 shares) (b, h)






9,660,637



12,562,408Warrants (d)










1,100,00015,225,353



22,727,124Sub Total Affiliate investments










116,118,374



127,959,158Control Investments  44.88% (a, c, g, f)auto MOTOL BENI

Automotive Dealership

Bridge Loan 12.0000%, 12/31/2007 (e, h)


2,000,000



2,000,000



2,000,000Common Stock (200 shares)  (d, e)






2,000,000



2,700,0004,000,000



4,700,000Harmony Pharmacy & Health Center, Inc.

Healthcare  Retail

Revolving Credit Facility 10.0000%, 12/01/09 (h)


4,000,000



4,000,000



4,000,000Common Stock (2,000,000 shares) (d)






750,000



750,0004,750,000



4,750,000MVC Automotive Group BV

Automotive Dealership

Common Equity Interest (d,e)






20,911,500



20,911,500Bridge Loan 10.0000%, 03/17/2008 (e,h)


19,088,500



19,088,500



19,088,50040,000,000



40,000,000MVC Partners, LLC

Private Equity Firm

Limited Liability Company Interest (d)






116,173



116,173Ohio Medical Corporation

Medical Device Manufacturer

Common Stock (5,620 shares) (d)






17,000,000



17,200,000Convertible Unsecured Subordinated Promissary Note 17.1288%,
    07/30/2008 (h)


3,250,000



3,250,000



3,250,00020,250,000



20,450,000SIA Tekers Invest

Port Facilities

Common Stock (68,800 shares) (d, e)






2,300,000



2,600,000SGDA Sanierungsgesellschaft

Soil Remediation

Term Loan 7.0000%, 08/25/2009 (e, h)


6,187,350



6,059,477



6,059,477fur Deponien und Altlasten



Common Equity Interest  (d, e)






438,551



560,000Preferred Equity Interest  (d, e)






5,000,000



5,600,00011,498,028



12,219,477Summit Research Labs, Inc.

Specialty Chemicals

Second Lien Loan 14.0000%, 08/15/2012  (b, h)


5,414,733



5,334,906



5,414,733Common Stock (800 shares) (d)






11,200,000



12,200,00016,534,906



17,614,733Timberland Machines & Irrigation, Inc.

Distributor  Landscaping and

Senior Subordinated Debt 14.5500%, 08/04/2009 (b, h)


6,860,431



6,824,441



6,860,431Irrigation Equipment

Junior Revolving Line of Credit 12.5000%, 07/07/2009 (h)


4,000,000



4,000,000



4,000,000Common Stock (542 shares) (d)






5,420,291



3,420,291Warrants (d)










16,244,732



14,280,722Turf Products, LLC

Distributor  Landscaping and

Senior Subordinated Debt 15.0000%, 11/30/2010 (b, h)


7,676,330



7,636,647



7,676,330Irrigation Equipment

Limited Liability Company Interest (d)






3,821,794



5,821,794Warrants (d)










11,458,441



13,498,124U.S. Gas & Electric, Inc.

Energy Services

Second Lien Loan 14.0000%, 07/26/2012 (b, h)


5,551,318



5,343,119



5,551,318Senior Credit Facility 12.2500% 7/26/2010 (h)


84,882



84,882



84,882Convertible Series B Preferred Stock (32,200 shares) (d)






500,000



500,000Convertible Series C Preferred Stock (8,216 shares) (d)










Convertible Series F Preferred Stock (1,535 shares) (d)










5,928,001



6,136,200Velocitius B.V

Renewable Energy

Revolving Credit Facility I, 8.0000%, 10/31/2009 (e, h)


191,084



191,084



191,084Revolving Credit Facility II, 8.0000%, 04/30/2010 (e, h)


612,882



612,882



612,882Common Equity Interest (d, e)






11,395,315



11,395,31512,199,281



12,199,281Vendio Services, Inc.

Technology Investments

Common Stock (10,476 shares) (d)






5,500,000



15,421Preferred Stock (6,443,188 shares) (d)






1,134,001



9,484,5796,634,001



9,500,000   69




---



##### Table of Contents



MVC
    Capital, Inc.
  Consolidated
    Schedule of Investments  (Continued)
    October 31, 2007
  Company

Industry

Investment

Principal


Cost


Fair ValueVestal Manufacturing Enterprises, Inc.

Iron Foundries

Senior Subordinated Debt 12.0000%, 04/29/2011 (h)

$
700,000


$
700,000


$
700,000Common Stock (81,000 shares) (d)






1,850,000



3,700,0002,550,000



4,400,000WBS Carbons Acquistions Corp.

Specialty Chemicals

Bridge Loan 5.0000%, 11/22/2011  (b, h)


1,600,000



1,600,000



1,600,000Common Stock (400 shares) (d)






1,600,000



1,600,0003,200,000



3,200,000Sub Total Control Investments










157,663,563



165,664,710TOTAL INVESTMENT ASSETS 102.73% (f)









$
393,428,353


$
379,167,534     (a)
    
    These securities are restricted
    from public sale without prior registration under the Securities
    Act of 1933. The Fund negotiates certain aspects of the method
    and timing of the disposition of these investments, including
    registration rights and related costs.(b)
    
    These securities accrue a portion
    of their interest/dividends in payment in kind
    interest/dividends which is capitalized to the investment.(c)
    
    All of the Funds equity and
    debt investments are issued by eligible portfolio companies, as
    defined in the Investment Company Act of 1940, except auto MOTOL
    BENI, Genevac U.S. Holdings, Inc., Lockorder Limited, SafeStone
    Technologies Limited, MVC Automotive, SGDA
    Sanierungsgesellschaft fur Deponien und Altlasten, SIA Tekers
    Invest and Velocitius B.V. The Fund makes available significant
    managerial assistance to all of the portfolio companies in which
    it has invested.(d)
    
    Non-income producing assets.(e)
    
    The principal operations of these
    portfolio companies are located outside of the United States.(f)
    
    Percentages are based on net assets
    of $369,096,769 as of October 31, 2007.(g)
    
    See Note 3 for further
    information regarding Investment Classification.(h)
    
    All or a portion of these
    securities have been committed as collateral for the Guggenheim
    Corporate Funding, LLC Credit Facility.
    
    Denotes zero Cost/fair value.   70




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##### Table of Contents



MVC
    Capital, Inc.
  Consolidated
    Schedule of Investments
 October 31,
    2006
  Company

Industry

Investment

Principal


Cost


Fair ValueNon-control/Non-affiliated investments  30.32% (a,
    c, g, f)Actelis Networks, Inc.

Technology Investments

Preferred Stock (150,602 shares) (d)





$
5,000,003


$
Amersham Corp.

Manufacturer of Precision - Machined Components

Second Lien Seller Note 10.0000%, 06/29/2010(h)

$
2,473,521



2,473,521



2,473,521Second Lien Seller Note 16.0000%, 06/30/2013 (b, h)


2,627,538



2,627,538



2,627,5385,101,059



5,101,059BP Clothing, LLC

Apparel

Second Lien Loan 14.0000%, 07/18/2012 (b, h)


10,041,165



9,862,650



10,041,165Term Loan A 9.6500%, 07/18/2011(h)


2,910,000



2,858,549



2,858,549Term Loan B 11.8000%, 07/18/2011(h)


2,000,000



1,964,638



1,964,63814,685,837



14,864,352DPHI, Inc.

Technology Investments

Preferred Stock (602,131 shares) (d)






4,520,350



FOLIOfn,Inc.

Technology Investments

Preferred Stock (5,802,259 shares) (d)






15,000,000



5,000,000Henry Company

Building Products / Specialty Chemicals

Term Loan A 8.8244%, 04/06/2011(h)


3,000,000



3,000,000



3,000,000Term Loan B 13.0744%, 04/06/2011(h)


2,000,000



2,000,000



2,000,0005,000,000



5,000,000Innovative Brands, LLC

Consumer Products

Term Loan 11.1250%, 09/22/2011(h)


15,000,000



15,000,000



15,000,000JDC Lighting, LLC

Electrical Distribution

Senior Subordinated Debt 17.0000%, 01/31/2009 (b, h)


3,035,844



2,988,002



3,035,844MainStream Data

Technology Investments

Common Stock (5,786 shares) (d)






3,750,000



SafeStone Technologies PLC

Technology Investments

Preferred Stock (2,106,378 shares) (d, e)






4,015,402



Sonexis, Inc.

Technology Investments

Common Stock (131,615 shares) (d)






10,000,000



SP Industries, Inc.

Laboratory Research Equipment

Term Loan B 13.3244%, 03/31/2011(h)


3,059,300



3,007,411



3,059,300Senior Subordinated Debt 16.0000%, 03/31/2012 (b, h)


12,959,013



12,653,021



12,959,01315,660,432



16,018,313Storage Canada, LLC

Self Storage

Term Loan 8.7500%, 03/30/2013(h)


1,320,500



1,327,073



1,320,500Term Loan 8.7500%, 10/06/2013(h)


619,000



619,000



619,0001,946,073



1,939,500Total Safety U.S., Inc.

Engineering Services

Term Loan A 9.8300%, 12/31/2010(h)


4,908,257



4,908,257



4,908,257Term Loan B 13.8300%, 12/31/2010(h)


981,651



981,651



981,6515,889,908



5,889,908Sub Total Non-control/Non-affiliated investments








108,557,066



71,848,976Affiliate investments  31.43% (a, c, g, f)Dakota Growers Pasta Company, Inc.

Manufacturer of Packaged Foods

Common Stock (1,081,195 shares)






5,879,242



8,957,880Endymion Systems, Inc.

Technology Investments

Preferred Stock (7,156,760 shares) (d)






7,000,000



Impact Confections, Inc.

Confections Manufacturing

Senior Subordinated Debt 17.0000%, 07/30/2009 (b, h)


5,468,123



5,390,649



5,468,123and Distribution

Senior Subordinated Debt 9.3244%, 07/29/2008(h)


325,000



321,218



325,000Common Stock (252 shares) (d)






2,700,000



2,700,0008,411,867



8,493,123Marine Exhibition Corporation

Theme Park

Senior Subordinated Debt 11.0000%, 06/30/2013 (b, h)


10,091,111



9,899,988



10,091,111Convertible Preferred Stock (20,000 shares)(b)






2,035,652



2,035,65211,935,640



12,126,763Octagon Credit Investors, LLC

Financial Services

Term Loan 9.5744%, 12/31/2011(h)


5,000,000



4,931,096



5,000,000Revolving Line of Credit 9.5744%, 12/31/2011(h)


3,250,000



3,250,000



3,250,000Limited Liability Company Interest






894,095



1,927,9329,075,191



10,177,932Phoenix Coal Corporation

Coal Processing and Production

Common Stock (1,666,667) (d)






1,000,000



1,000,000Second Lien Note 15.0000%, 06/08/2011 (b, h)


7,088,615



6,959,809



7,088,6157,959,809



8,088,615   71




---



##### Table of Contents



MVC
    Capital, Inc.
  Consolidated
    Schedule of Investments
 October 31,
    2006  (Continued)
  Company

Industry

Investment

Principal


Cost


Fair ValuePreVisor, Inc.

Human Capital Management

Common Stock (9 shares) (d)





$
6,000,000


$
6,000,000Vitality Foodservice, Inc.

Non-Alcoholic Beverages

Common Stock (500,000 shares) (d)






5,000,000



8,500,000Preferred Stock (1,000,000 shares) (b, h)






9,660,637



11,053,827Warrants(d)










1,100,00014,660,637



20,653,827Sub Total Affiliate investments










70,922,386



74,498,140Control investments  54.66% (a, c, g, f)auto MOTOL BENI

Automotive Dealership

Common Stock (200 shares) (d, e)






2,000,000



2,000,000Baltic Motors Corporation

Automotive Dealership

Senior Subordinated Debt 10.0000%, 06/24/2007 (e, h)

$
4,500,000



4,500,000



4,500,000Bridge Loan 12.0000%, 12/22/2006 (e, h)


1,000,000



1,000,000



1,000,000Common Stock (60,684 shares) (d, e)






8,000,000



21,155,00013,500,000



26,655,000Harmony Pharmacy & Health Center, Inc.

Healthcare  Retail

Common Stock (2,000,000 shares) (d)






750,000



750,000Ohio Medical Corporation

Medical Device Manufacturer

Common Stock (5,620 shares) (d)






17,000,000



26,200,000SGDA Sanierungsgesellschaft

Soil Remediation

Term Loan 7.0000%, 08/25/2009 (e, h)


6,187,350



5,989,710



5,989,710fur Deponien und Altlasten



Common Equity Interest (d, e)






338,551



338,551Preferred Equity Interest (d, e)






5,000,000



5,000,00011,328,261



11,328,261SIA BM Auto

Automotive Dealership

Common Stock (47,300 shares) (d, e)






8,000,000



8,000,000Summit Research Labs, Inc.

Specialty Chemicals

Second Lien Loan 14.0000%, 08/15/2012 (b, h)


5,044,813



4,948,327



5,044,813Common Stock (800 shares) (d)






11,200,000



11,200,00016,148,327



16,244,813Timberland Machines & Irrigation, Inc.

Distributor  Landscaping and

Senior Subordinated Debt 14.4260%, 08/04/2009 (b, h)


6,607,859



6,551,408



6,607,859Irrigation Equipment

Junior Revolving Line of Credit 12.5000%, 07/07/2007(h)


2,829,709



2,829,709



2,829,709Common Stock (542 shares) (d)






5,420,291



4,420,291Warrants(d)














14,801,408



13,857,859Turf Products, LLC

Distributor  Landscaping and

Senior Subordinated Debt 15.0000%, 11/30/2010 (b, h)


7,676,330



7,627,137



7,676,330Irrigation Equipment

Limited Liability Company Interest(d)






3,821,794



5,821,794Warrants (d)










11,448,931



13,498,124Velocitius B.V.

Renewable Energy

Common Equity Interest (d, e)






2,966,765



2,966,765Revolving Line of Credit 8.0000%, 10/31/2009 (e, h)


143,614



143,614



143,6143,110,379



3,110,379Vendio Services, Inc.

Technology Investments

Common Stock (10,476 shares) (d)






5,500,000



Preferred Stock (6,443,188 shares) (d)






1,134,001



3,400,0006,634,001



3,400,000Vestal Manufacturing Enterprises, Inc.

Iron Foundries

Senior Subordinated Debt 12.0000%, 04/29/2011(h)


800,000



800,000



800,000Common Stock (81,000 shares)






1,850,000



3,700,0002,650,000



4,500,000Sub Total Control Investments










107,371,307



129,544,436TOTAL INVESTMENT ASSETS 116.41%(f)







$
286,850,759


$
275,891,552     (a)
    
    These securities are restricted
    from public sale without prior registration under the Securities
    Act of 1933. The Fund negotiates certain aspects of the method
    and timing of the disposition of these investments, including
    registration rights and related costs.(b)
    
    These securities accrue a portion
    of their interest/dividends in payment in kind
    interest/dividends which is capitalized to the investment.   72




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##### Table of Contents



MVC
    Capital, Inc.
  Consolidated
    Schedule of Investments
 October 31,
    2006  (Continued)
   (c)
    
    All of the Funds equity and
    debt investments are issued by eligible portfolio companies, as
    defined in the Investment Company Act of 1940, except auto MOTOL
    BENI, Baltic Motors Corporation, Safestone Technologies PLC,
    SGDA Sanierungsgesellschaft fur Deponien und Altlasten,SIA BM
    Auto and Velocitius B.V. The Fund makes available significant
    managerial assistance to all of the portfolio companies in which
    it has invested.(d)
    
    Non-income producing assets.(e)
    
    The principal operations of these
    portfolio companies are located outside of the United States.(f)
    
    Percentages are based on net assets
    of $236,993,374 as of October 31, 2006.(g)
    
    See Note 3 for further
    information regarding Investment Classification.(h)
    
    All or a portion of these
    securities have been committed as collateral for the Guggenheim
    Corporate Funding, LLC Credit Facility.
    
    Denotes zero cost/fair value.   73




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##### Table of Contents



MVC
    Capital, Inc.
  Consolidated
    Statements of Operations
  For the Year Ended


For the Year Ended


For the Year EndedOctober 31, 2007


October 31, 2006


October 31, 2005Operating Income:Dividend incomeAffiliate investments

$
469,037


$
89,842


$
1,346,760Control investments






132,545



Total dividend income


469,037



222,387



1,346,760Interest income (net of foreign taxes withheld of $0, $18,433,
    and $0, respectively)Non-control/Non-affiliated investments


12,091,574



6,930,733



5,134,907Affiliate investments


5,011,527



2,922,372



874,041Control investments


5,254,144



3,833,499



2,101,808Total interest income


22,357,245



13,686,604



8,110,756Fee incomeNon-control/Non-affiliated investments


921,311



1,187,954



398,520Affiliate investments


1,671,940



470,530



232,256Control investments


1,157,022



2,169,236



1,178,331Total fee income


3,750,273



3,827,720



1,809,107Other income


373,912



771,405



932,761Total operating income


26,950,467



18,508,116



12,199,384Operating Expenses:Incentive compensation (Note 5)


10,813,362



6,055,024



1,117,328Management fee


7,034,287







Interest and other borrowing costs


4,859,429



1,594,009



30,771Other expenses


500,288



334,212



461,769Legal fees


468,000



685,396



529,541Insurance


408,606



471,711



590,493Audit fees


345,000



381,944



287,797Administration


287,573



194,826



137,191Directors fees


234,000



205,071



148,875Consulting fees


111,500



344,576



192,255Printing and postage


107,700



129,438



71,785Public relations fees


95,701



70,316



116,482Employee compensation and benefits






3,498,571



2,336,242Facilities






603,328



484,420Total operating expenses


25,265,446



14,568,422



6,504,949Net operating income before taxes


1,685,021



3,939,694



5,694,435Tax (Benefit) Expenses:Deferred tax benefit


(255,163
)


(244,865
)


(215,977
)Current tax (benefit) expense


(119,529
)


403,937



115,044Total tax (benefit) expense


(374,692
)


159,072



(100,933
)Net operating income


2,059,713



3,780,622



5,795,368Net Realized and Unrealized Gain (Loss) on Investments:Net realized gain (loss) on investmentsNon-control/Non-affiliated investments


(73,842
)


(151,877
)


(6,684,320
)Affiliate investments


451,461



5,373,267



3,407,457Control investments


66,516,647







Foreign currency


49,279







(18,687
)Total net realized gain (loss) on investments


66,943,545



5,221,390



(3,295,550
)Net change in unrealized (depreciation) appreciation on
    investments


(3,301,612
)


38,334,356



23,768,366Net realized and unrealized gain on investments


63,641,933



43,555,746



20,472,816Net increase in net assets resulting from operations

$
65,701,646


$
47,336,368


$
26,268,184Net increase in net assets per share resulting from
    operations

$
2.92


$
2.48


$
1.45Dividends declared per share

$
0.54


$
0.48


$
0.24    74




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##### Table of Contents



MVC
    Capital, Inc.
  Consolidated
    Statements of Cash Flows
  For the Year Ended


For the Year Ended


For the Year EndedOctober 31, 2007


October 31, 2006


October 31, 2005Cash flows from Operating Activities:Net increase in net assets resulting from operations

$
65,701,646


$
47,336,368


$
26,268,184Adjustments to reconcile net increase in net assets resulting
    from operations to net cash provided (used) by operating
    activities:Realized (gain) loss


(66,943,545
)


(5,221,390
)


3,295,550Net change in unrealized (appreciation) depreciation


3,301,612



(38,334,356
)


(23,768,366
)Amortization of discounts and fees


(93,902
)


(505,428
)


(235,428
)Increase in accrued
    payment-in-kind
    dividends and interest


(2,850,999
)


(2,183,786
)


(1,370,777
)Increase in allocation of flow through income


(216,275
)


(279,422
)


(114,845
)Changes in assets and liabilities:Interest and fees receivable


(1,487,589
)


(715,013
)


(474,207
)Prepaid expenses


184,720



(2,232,767
)


(130,977
)Prepaid taxes


(228,159
)


98,374



(98,374
)Deferred tax


(255,163
)


(244,865
)


(215,977
)Deposits


94,844



(120,000
)


Other assets


33,803



33,804



(43,155
)Payable for investment purchased






(79,708
)


79,708Incentive compensation (Note 9)


10,703,144Other Liabilities


637,797



7,492,705



1,576,079Purchases of equity investments


(57,357,976
)


(45,913,914
)


(17,315,000
)Purchases of debt instruments


(114,538,723
)


(111,105,943
)


(37,950,271
)Purchases of short term investments


(9,902,105
)


(406,066,963
)


(313,505,406
)Proceeds from equity investments


83,022,172



10,593,459



23,396,719Proceeds from debt instruments


52,303,760



37,895,884



10,796,111Sales/maturities of short term investments


10,000,000



458,554,888



297,482,209Net cash provided (used) by operating activities


(27,890,939
)


(50,998,073
)


(32,328,223
)Cash flows from Financing Activities:Issuance of common stock


83,825,625







60,478,127Offering expenses


(5,431,091
)






Distributions to shareholders paid


(11,992,785
)


(9,081,994
)


(4,572,359
)Net borrowings under (repayments on) revolving credit facility


(20,000,000
)


100,000,000



(10,427,296
)Net cash provided by financing activities


46,401,749



90,918,006



45,478,472Net change in cash and cash equivalents for the year


18,510,810



39,919,933



13,150,249Cash and cash equivalents, beginning of year


66,217,123



26,297,190



13,146,941Cash and cash equivalents, end of year

$
84,727,933


$
66,217,123


$
26,297,190    75




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##### Table of Contents



Non-cash activity:
                               76




---



##### Table of Contents



77




---



##### Table of Contents



MVC
    Capital, Inc.
  Consolidated
    Statements of Changes in Net Assets
  For the Year Ended


For the Year Ended


For the Year EndedOctober 31, 2007


October 31, 2006


October 31, 2005Operations:Net operating income

$
2,059,713


$
3,780,622


$
5,795,368Net realized gain (loss)


66,943,545



5,221,390



(3,295,550
)Net change in unrealized appreciation (depreciation)


(3,301,612
)


38,334,356



23,768,366Net increase in net assets from operations


65,701,646



47,336,368



26,268,184Shareholder Distributions:Distributions to shareholders


(12,171,688
)


(9,163,765
)


(4,580,676
)Net decrease in net assets from shareholder distributions


(12,171,688
)


(9,163,765
)


(4,580,676
)Capital Share Transactions:Issuance of common stock


83,825,625







60,478,127Reissuance of treasury stock to purchase investment










1,400,000Offering expenses


(5,431,091
)






(402,296
)Reissuance of treasury stock in lieu of cash dividend


178,903



81,771



8,317Net increase in net assets from capital share transactions


78,573,437



81,771



61,484,148Total increase in net assets


132,103,395



38,254,374



83,171,656Net assets, beginning of year


236,993,374



198,739,000



115,567,344Net assets, end of year

$
369,096,769


$
236,993,374


$
198,739,000Common shares outstanding, end of year


24,265,336



19,093,929



19,086,566    78




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##### Table of Contents



MVC
    Capital, Inc.
  Consolidated Selected Per Share Data and Ratios
  For the


For the


For the


For the


For theYear Ended


Year Ended


Year Ended


Year Ended


Year EndedOctober 31,


October 31,


October 31,


October 31,


October 31,2007


2006


2005


2004


2003Net asset value, beginning of year

$
12.41


$
10.41


$
9.40


$
8.48


$
11.84Gain (loss) from operations:Net operating income gain (loss)


0.13



0.20



0.32







(0.53
)Net realized and unrealized gain (loss) on investments


2.79



2.28



1.13



0.91



(2.89
)Total gain (loss) from investment operations


2.92



2.48



1.45



0.91



(3.42
)Less distributions from:Income


(0.54
)


(0.48
)


(0.24
)






Return of capital














(0.12
)


Total distributions


(0.54
)


(0.48
)


(0.24
)


(0.12
)


Capital share transactionsAnit-dilutive (Dilutive) effect of share issuance


0.42







(0.20
)






Anti-dilutive effect of share repurchase program














0.13



0.06Total capital share transactions


0.42







(0.20
)


0.13



0.06Net asset value, end of year

$
15.21


$
12.41


$
10.41


$
9.40


$
8.48Market value, end of year

$
17.06


$
13.08


$
11.25


$
9.24


$
8.10Market premium (discount)


12.16
%


5.40
%


8.07
%


(1.70
)%


(4.48
)%Total Return  At NAV(a)


27.39
%


24.23
%


13.36
%


12.26
%


(28.38
)%Total Return  At Market(a)


35.02
%


20.75
%


24.38
%


15.56
%


2.53
%Ratios and Supplemental Data:Net assets, end of year (in thousands)

$
369,097


$
236,993


$
198,739


$
115,567


$
137,008Ratios to average net assets:Expenses excluding incentive compensation, interest and other
    borrowing costs


2.88
%


3.29
%


3.03
%


3.74
%(c)


7.01
%(b)Expenses excluding incentive compensation


4.40
%


4.03
%


3.05
%


3.74
%(c)


7.01
%(b)Expenses excluding tax expense (benefit)


7.89
%


6.78
%


3.75
%


3.68
%(c)


7.01
%(b)Expenses including tax expense (benefit), incentive
    compensation, interest and other borrowing costs


7.78
%


6.85
%


3.69
%


3.74
%(c)


7.01
%(b)Net operating income (loss) before incentive compensation,
    interest and other borrowing costs


5.54
%


5.32
%


4.00
%


0.02
%


(5.22
%)(b)Net operating income (loss) before incentive compensation


4.02
%


4.58
%


3.98
%


0.02
%


(5.22
%) (b)Net operating income (loss) before tax expense (benefit)


0.53
%


1.83
%


3.28
%


0.08
%


(5.22
%)(b)Net operating income (loss) after tax expense (benefit),
    incentive compensation, interest and other borrowing costs


0.64
%


1.76
%


3.34
%


0.02
%


(5.22
%)(b)     (a)
    
    Total annual return is historical and assumes changes in share
    price, reinvestments of all dividends and distributions, and no
    sales charge for the year.(b)
    
    The expense ratio for the year ended October 31, 2003
    included approximately $4.0 million of proxy/litigation
    fees and expenses. When these fees and expenses are excluded,
    the Funds expense ratio was 4.52% and the net operating
    loss was (2.74%).(c)
    
    The expense ratio for the year ended October 31, 2004,
    included a one-time expense recovery of approximately $250,000.
    For the year ended October 31, 2004, without this one-time
    recovery, the expense ratio, excluding and including tax expense
    would have been 3.89% and 3.95%, respectively.   79




---



##### Table of Contents



MVC
    Capital, Inc.
  Notes to Consolidated Financial Statements
 October 31, 2007
  1.
    Organization
    and Business Purpose  and/or
                 80




---



##### Table of Contents



MVC
    Capital, Inc.
  Notes to Consolidated Financial
    Statements  (Continued)
  2.
    Consolidation    3.
    Significant
    Accounting Policies      Valuation of Portfolio Securities 
           81




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##### Table of Contents



MVC
    Capital, Inc.
  Notes to Consolidated Financial
    Statements  (Continued)
  and/or
                and/or
  payment-in-kind payment-in-kind payment-in-kind payment-in-kind
 82




---



##### Table of Contents



MVC
    Capital, Inc.
  Notes to Consolidated Financial
    Statements  (Continued)
  payment-in-kind
    Investment Classification 
  Investment Transactions and Related Operating
    Income  first-in,
  Cash Equivalents 
  Restricted Securities 
  Distributions to Shareholders 
  Income Taxes  and/or
 83




---



##### Table of Contents



MVC
    Capital, Inc.
  Notes to Consolidated Financial
    Statements  (Continued)
    Reclassifications 
  Recent Accounting Pronouncements 
    4.
    Management       84




---



##### Table of Contents



MVC
    Capital, Inc.
  Notes to Consolidated Financial
    Statements  (Continued)
          and/or
  5.
    Incentive
    Compensation   85




---



##### Table of Contents



MVC
    Capital, Inc.
  Notes to Consolidated Financial
    Statements  (Continued)
        6.
    Dividends
    and Distributions to Shareholders  12-month
   86




---



##### Table of Contents



MVC
    Capital, Inc.
  Notes to Consolidated Financial
    Statements  (Continued)
    For
    the Fiscal Year Ended October 31, 2007
          For
    the Fiscal Year Ended October 31, 2006
         87




---



##### Table of Contents



MVC
    Capital, Inc.
  Notes to Consolidated Financial
    Statements  (Continued)
    For
    the Fiscal Year Ended October 31, 2005
      7.
    Transactions
    with Other Parties  Regulation S-K)
  Form 10-K
   88




---



##### Table of Contents



MVC
    Capital, Inc.
  Notes to Consolidated Financial
    Statements  (Continued)
  8.
    Concentration
    of Market and Credit Risk  90-day 90-day
  9.
    Portfolio
    Investments  For
    the Fiscal Year Ended October 31, 2007
       89




---



##### Table of Contents



MVC
    Capital, Inc.
  Notes to Consolidated Financial
    Statements  (Continued)
                                     90




---



##### Table of Contents



MVC
    Capital, Inc.
  Notes to Consolidated Financial
    Statements  (Continued)
                 91




---



##### Table of Contents



MVC
    Capital, Inc.
  Notes to Consolidated Financial
    Statements  (Continued)
      For
    the Fiscal Year Ended October 31, 2006
       92




---



##### Table of Contents



MVC
    Capital, Inc.
  Notes to Consolidated Financial
    Statements  (Continued)
                       93




---



##### Table of Contents



MVC
    Capital, Inc.
  Notes to Consolidated Financial
    Statements  (Continued)
                     94




---



##### Table of Contents



MVC
    Capital, Inc.
  Notes to Consolidated Financial
    Statements  (Continued)
    10.
    Commitments
    and Contingencies  Commitments
    to/for Portfolio Companies:
    Commitments
    of MVC Capital, Inc.
  Portfolio Company

Amount Committed


Amount Funded at October 31, 2007Timberland

$
4.0 million


$
4.0 millionStorage Canada

$
6.0 million


$
2.7 millionMarine

$
2.0 million



BENI

$
542,550



Octagon

$
12.0 million


$
4.1 millionVelocitius

$
260,000


$
191,084Velocitius

$
650,000


$
612,882Turf

$
1.0 million



Harmony Pharmacy

$
4.0 million


$
4.0 millionTekers

$
2.0 million



U.S. Gas

$
10.0 million


$
84,882U.S. Gas

$
2.0 million



Total

$
44.5 million


$
15.7 million        95




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##### Table of Contents



MVC
    Capital, Inc.
  Notes to Consolidated Financial
    Statements  (Continued)
                       96




---



##### Table of Contents



MVC
    Capital, Inc.
  Notes to Consolidated Financial
    Statements  (Continued)
    Commitments
    of the Company:
        11.
    Certain
    Issuances of Equity Securities by the Issuer  30-day
     97




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##### Table of Contents



MVC
    Capital, Inc.
  Notes to Consolidated Financial
    Statements  (Continued)
    12.
    Recovery
    of Expenses and Unusual Income Items    13.
    Tax
    Matters  Return of Capital Statement of Position (ROCSOP)
    Adjustment:
  Distributions to Shareholders:
  Tax Basis Accumulated Earnings (Deficit)Accumulated capital and other losses

$
(6,623,425)Undistributed net operating income


264,870Gross unrealized appreciation


35,254,780Gross unrealized depreciation


(50,618,032)Net unrealized depreciation

$
(15,363,252)Total tax basis accumulated deficit


(21,721,807)Tax cost of investments


394,530,786Current year distributions to shareholders on a tax basisOrdinary income


12,171,688Prior year distributions to shareholders on a tax basisOrdinary income


9,163,765    98




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##### Table of Contents



MVC
    Capital, Inc.
  Notes to Consolidated Financial
    Statements  (Continued)
  Qualified
    Dividend Income Percentage
    Corporate
    Dividends Received Deduction Percentage
  i.e.
  14.
    Income
    Taxes    Fiscal Year EndedOctober 31,

October 31,

October 31,2007

2006

2005Current tax (benefit) expense:Federal

$
(119,529)

$
314,859

$
92,892State





89,078


22,152Total current tax expense


(119,529)


403,937


115,044Deferred tax benefit:Federal


(191,210)


(203,645)


(174,390)State


(63,953)


(41,220)


(41,587)Total deferred tax benefit


(255,163)


(244,865)


(215,977)Total tax (benefit) provision

$
(374,692)

$
159,072

$
(100,933)     Fiscal YearEndedOctober 31,2007Federal statutory tax rate


34.00%Permanent difference


(0.00)%State taxes, net of federal tax benefit


5.79%Valuation allowance for deferred tax assets


Other, net


Effective income tax rate


39.79%      99




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##### Table of Contents



MVC
    Capital, Inc.
  Notes to Consolidated Financial
    Statements  (Continued)
      October 31,


October 31,


October 31,2007


2006


2005Deferred tax assets:Deferred revenues

$
781,935


$
548,120


$
295,307New York State NOL


19,584







Others


1,763



2,822



7,948Total deferred tax assets

$
803,283


$
548,120


$
303,255Valuation allowance










Net deferred tax assets

$
803,283


$
548,120


$
303,255Deferred tax liabilities:Deferred tax liabilities










Total deferred tax liabilities










Net deferred taxes

$
803,283


$
548,120


$
303,255   Valuation
    Allowance
    15.
    Segment
    Data   100




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##### Table of Contents



MVC
    Capital, Inc.
  Notes to Consolidated Financial
    Statements  (Continued)
    MVC


MVCFS


ConsolidatedInterest and dividend income

$
22,753,025


$
73,257


$
22,826,282Fee income


95,833



3,654,440



3,750,273Other income


373,912







373,912Total operating income


23,222,770



3,727,697



26,950,467Total operating expenses


20,616,251



4,649,195



25,265,446Net operating income (loss) before taxes


2,606,519



(921,498
)


1,685,021Tax benefit






(374,692
)


(374,692
)Net operating income (loss)


2,606,519



(546,806
)


2,059,713Net realized gain (loss) on investments and foreign currency


66,943,545







66,943,545Net change in unrealized appreciation on investments


(3,301,612
)






(3,301,612
)Net increase (decrease) in net assets resulting from operations

$
66,248,452


$
(546,806
)

$
65,701,646     16.
    Subsequent
    Events                 101




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##### Table of Contents



Report
of Independent Registered Public Accounting Firm
                102




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Form 10-K,
      Managements
    Report on Internal Control over Financial
    Reporting
  Rule 13a-15(f) Internal Control
     Integrated Framework Internal Control  Integrated Framework
  Item 9B.
    Other
    Information   103




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##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
                  104




---



##### Table of Contents



Changes
    in Internal Controls
  Rule 13a-15(f)
  Part III
  Item 10.
    Directors
    and Executive Officers of the Registrant    http://www.mvccapital.com.
  Form 10-K Form 10-K.
  Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and Retail
    Stockholder Matters    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accounting Fees and Services   105




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##### Table of Contents



Part IV
  Item 15.
    Exhibits,
    Financial Statements, Schedules  Page(s)(a)(1)

Financial StatementsConsolidated Balance SheetsOctober 31, 2007 and October 31, 2006


67Consolidated Schedule of InvestmentsOctober 31, 2007


68-70October 31, 2006


71-73Consolidated Statement of OperationsFor the Year Ended October 31, 2007,the Year Ended October 31, 2006, andthe Year Ended October 31, 2005


74Consolidated Statement of Cash FlowsFor the Year Ended October 31, 2007,the Year Ended October 31, 2006, andthe Year Ended October 31, 2005


75Consolidated Statement of Changes in Net AssetsFor the Year Ended October 31, 2007,the Year Ended October 31, 2006, andthe Year Ended October 31, 2005


78Consolidated Selected Per Share Data and RatiosFor the Year Ended October 31, 2007,the Year Ended October 31, 2006,the Year Ended October 31, 2005,the Year Ended October 31, 2004, andthe Year Ended October 31, 2003


79Notes to Consolidated Financial Statements


80-101Report of Independent Registered Public Accounting Firm


102-104(a)(2)

The following financial statement schedules are filed here with:Schedule 12-14
    of Investments in and Advances to Affiliates


109       ExhibitNumber

Description3
.1

Certificate of Incorporation. (Incorporated by reference to
    Exhibit 99.a filed with the Registrants initial
    Registration Statement on
    Form N-2
    (File
    No. 333-92287)
    filed on December 8, 1999)3
.2

Certificate of Amendment of Certificate of Incorporation.
    (Incorporated by reference to Exhibit 99.a.2 filed with
    the Registrants Pre-Effective Amendment No. 1 to the
    Registration Statement on
    Form N-2
    (File
    No. 333-119625)
    filed on November 23, 2004)3
.3

Fifth Amended and Restated Bylaws. (Incorporated by reference
    to Exhibit 99.b. filed with Registrants Pre-Effective
    Amendment No. 1 to the Registration Statement on
    Form N-2
    (File
    No. 333-125953)
    filed on August 29, 2005)4
.1

Form of Share Certificate. (Incorporated by reference to
    Exhibit 99.d.1 filed with the Registrants
    Pre-Effective Amendment No. 1 to the Registration Statement
    on
    Form N-2
    (File
    No. 333-119625)
    filed on November 23, 2004) 106




---



##### Table of Contents



ExhibitNumber

Description10
.1

Dividend Reinvestment Plan, as amended. (Incorporated by
    reference to Exhibit 99.e filed with the Registrants
    Pre-Effective Amendment No. 1 to the Registration Statement
    on
    Form N-2
    (File
    No. 333-119625)
    filed on November 23, 2004)10
.2

Sub-lease for 287 Bowman Avenue, Purchase, NY 10577.
    (Incorporated by reference to Exhibit 10 filed with
    Registrants Quarterly Report on
    Form 10-Q
    (File
    No. 814-00201)
    filed on June 8, 2005)10
.3

Agreement between the Registrant and Michael Tokarz.
    (Incorporated by reference to Exhibit 10.2 filed with
    Annual Report on
    Form 10-K
    (File
    No. 814-00201)
    filed on January 29, 2004)10
.4

Investment Advisory and Management Agreement between the
    Registrant and The Tokarz Group Advisers LLC. Incorporated by
    reference to Exhibit 99.g filed with the Registrants
    Post-Effective Amendment No. 2 to the Registration
    Statement on
    Form N-2
    (File
    No. 333-119625)
    filed on November 29, 2006)10
.5

Form of Custody Agreement between Registrant and U.S. Bank
    National Association. (Incorporated by reference to
    Exhibit 99.j.1 filed with the Registrants
    Pre-Effective Amendment No. 1 to the Registration Statement
    on
    Form N-2
    (File
    No. 333-119625)
    filed on November 23, 2004)10
.6

Form of Amendment to Custody Agreement between Registrant and
    U.S. Bank National Association. (Incorporated by reference to
    Exhibit 99.j.2 filed with the Registrants
    Pre-Effective Amendment No. 1 to the Registration Statement
    on
    Form N-2
    (File
    No. 333-119625)
    filed on February 21, 2006)10
.7

Form of Custodian Agreement between Registrant and LaSalle Bank
    National Association. (Incorporated by reference to
    Exhibit 99.j.3 filed with the Registrants
    Pre-Effective Amendment No. 1 to the Registration Statement
    on
    Form N-2
    (File
    No. 333-119625)
    filed on November 23, 2004)10
.8

Form of Registrar, Transfer Agency and Service Agreement with
    Registrant and State Street Bank and Trust Company.
    (Incorporated by reference to Exhibit 99.k(1) filed with
    the Registrants Pre-Effective Amendment No. 2 to the
    Registration Statement on
    Form N-2
    (File
    No. 333-92287)
    filed on February 11, 2000)10
.9

Form of Transfer Agency Letter Agreement with Registrant and
    EquiServe Trust Company, N.A. (Incorporated by reference
    to Exhibit 99.k.2 filed with the Registrants
    Pre-Effective Amendment No. 1 to the Registration Statement
    on
    Form N-2
    (File
    No. 333-119625)
    filed on November 23, 2004)10
.10

Form of Loan Agreement with Registrant and LaSalle Bank National
    Association. (Incorporated by reference to
    Exhibit 99.k.3 filed with the Registrants
    Pre-Effective Amendment No. 1 to the Registration Statement
    on
    Form N-2
    (File
    No. 333-119625)
    filed on November 23, 2004)10
.11

Form of Amendment to Loan Agreement with Registrant and LaSalle
    Bank National Association. (Incorporated by reference to
    Exhibit 10.10 filed with Annual Report on
    Form 10-K
    (File
    No. 814-00201)
    filed on December 22, 2005)10
.12

Form of Custody Account Pledge Agreement with Registrant and
    LaSalle Bank National Association. (Incorporated by reference
    to Exhibit 99.k.4 filed with the Registrants
    Pre-Effective Amendment No. 1 to the Registration Statement
    on
    Form N-2
    (File
    No. 333-119625)
    filed on November 23, 2004)10
.13

Form of Fund Administration Servicing Agreement with
    Registrant and U.S. Bancorp Fund Services, LLC.
    (Incorporated by reference to Exhibit 99.k.6 filed with
    the Registrants Pre-Effective Amendment No. 1 to the
    Registration Statement on
    Form N-2
    (File
    No. 333-119625)
    filed on February 21, 2006.)10
.14

Form of Fund Accounting Servicing Agreement with Registrant
    and U.S. Bancorp Fund Services, LLC. (Incorporated by
    reference to Exhibit 99.k.7 filed with Registrants
    Pre-Effective Amendment No. 1 to the Registration Statement
    on
    Form N-2
    (File
    No. 333-119625)
    filed on February 21, 2006)10
.15

Form of Credit Agreement with Registrant and Guggenheim
    Corporate Funding, LLC et al. (Incorporated by reference to
    Exhibit 10 filed with Registrants Quarterly Report on
    Form 10Q (File
    No. 814-00201)
    filed on June 9, 2006)14


Joint Code of Ethics of the Registrant and The Tokarz Group LLC.
    (Incorporated by reference to Exhibit 99r filed with the
    Registrants Post-Effective Amendment No. 2 to the
    Registration Statement on
    Form N-2
    (File
    No. 333-119625)
    filed on November 29, 2006) 107




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##### Table of Contents



ExhibitNumber

Description31*


Certifications of the Chief Executive Officer and the Chief
    Financial Officer pursuant to
    Rule 13a-14(a)
    of the Securities Exchange Act of 193432*


Certifications of the Chief Executive Officer and the Chief
    Financial Officer pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350     *
    
    Filed herewith  (b)
    Exhibits  Exhibit No.

Exhibit31


Certifications pursuant to
    Rule 13a-14(a)
    of the Securities Exchange Act of 193432


Certifications pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350    108




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##### Table of Contents



Schedule 12-14
  MVC Capital, Inc. and Subsidiaries
  Schedule of Investments in and Advances to Affiliaties
  Amount of Interestor Dividends Credited


October 31,


Gross


Gross


October 31,Portfolio Company

Investment(1)

to Income(5)


Other(2)


2006 Value


Additions(3)


Reductions(4)


2007 ValueCompanies More than 25% ownedauto MOTOL BENI

Common Stock










2,000,000



700,000







2,700,000(Automotive Dealership)

Loan


101,033











2,000,000







2,000,000Baltic Motors Corporation

Loan


330,000







4,500,000







(4,500,000
)


(Automotive Dealership)

Loan


159,167







1,000,000







(1,000,000
)


Common Stock










21,155,000







(21,155,000
)


Harmony Pharmacy & Health Center, Inc.

Revolver


204,055











4,000,000







4,000,000(Healthcase  Retail)

Common Stock










750,000











750,000MVC Automotive Group

Common Stock














20,911,500







20,911,500(Automotive Dealership)

Bridge Loan


217,397











19,088,500







19,088,500MVC Partners, LLC

Common Equity Interest














116,173







116,173(Private Equity Firm)Ohio Medical Corporation

Common Stock










26,200,000







(9,000,000
)


17,200,000(Medical Device Manufacturer)

Note


111,396











3,250,000







3,250,000SIA Tekers Invest

Common Stock














2,600,000







2,600,000(Port Facilities)SGDA Sanierungsgesellschaft fur Deponien und Altlasten

Loan


508,896







5,989,710



69,767







6,059,477(Soil Remediation)

Common Equity Interest










338,551



221,449







560,000Preferred Equity Interest










5,000,000



600,000







5,600,000SIA BM Auto

Common Stock










8,000,000







(8,000,000
)


(Automotive Dealership)Summit Research Labs, Inc.

Loan


744,300







5,044,813



369,920







5,414,733(Specialty Chemical)

Preferred Stock










11,200,000



1,000,000







12,200,000Timberland Machines & Irrigation, Inc.

Loan


857,006







6,607,859



252,572







6,860,431(Distributer  Landscaping & Irrigation
    Equipment)

Revolver


451,116







2,829,709



1,170,291







4,000,000Common Stock










4,420,291







(1,000,000
)


3,420,291Warrants






















Turf Products, LLC

Loan


1,151,450







7,676,330











7,676,330(Distributer  Landscaping & Irrigation
    Equipment)

LLC Interest










5,821,794











5,821,794Warrant






















U.S. Gas & Electric, Inc.

Loan


219,473











5,551,318







5,551,318(Energy Services)

Revolver


457











84,882







84,882Preferred Stock














500,000







500,000Vendio Services, Inc.

Common Stock














15,421







15,421(Technology)

Preferred Stock










3,400,000



6,084,579







9,484,579Vestal ManufacturingEnterprises, Inc.

Loan


86,167







800,000







(100,000
)


700,000(Iron Foundries)

Common Stock










3,700,000











3,700,000   109




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##### Table of Contents



MVC
    Capital, Inc. and Subsidiaries
  Schedule of Investments in and Advances to
    Affiliaties  (Continued)
  Amount of Interestor Dividends Credited


October 31,


Gross


Gross


October 31,Portfolio Company

Investment(1)

to Income(5)


Other(2)


2006 Value


Additions(3)


Reductions(4)


2007 ValueVelocitius B.V

Revolver I


12,270







143,614



47,470







191,084(Renewable Energy)

Revolver II


23,517











612,882







612,882Common Equity










2,966,765



8,428,550







11,395,315InterestWBS Carbons Acquistions Corp.

Loan


76,444











1,600,000







1,600,000(Specialty Chemicals)

Common Stock














1,600,000







1,600,000Total companies more than 25% owned



$
5,254,144


















$
165,664,710Companies More than 5% owned, but less than 25%Custom Alloy Corporation

Loan


250,052











14,035,389







14,035,389(Manufacturer of Tubular Goods for the Energy Industry)

Preferred Stock














44,000







44,000Preferred Stock














9,956,000







9,956,000Dakota Growers Pasta Company, Inc.

Common Stock










8,957,880



1,204,070







10,161,950(Manufacturer of Packged Food)

Preferred Stock


151,367











10,650,000







10,650,000Endymion Systems, Inc.

Preferred Stock






















(Technology Investments)Genevac U.S. Holdings, Inc.

Loan


954,218











12,962,963







12,962,963(Laboratory Research Equipment)

Common Stock


65,965











1,103,002







1,103,002HuaMei Capital Company, Inc.

Common Stock














2,000,000







2,000,000(Financial Services)Impact Confections, Inc.

Loan


948,814







5,468,123



250,249







5,718,372(Confections Manufacturing & Distribution)

Loan


28,077







325,000











325,000Common Stock










2,700,000











2,700,000Marine Exhibition Corporation

Loan


1,147,908







10,091,111



415,517







10,506,628(Theme Park)

Preferred Stock*


251,705







2,035,652



167,803







2,203,455Octagon Credit Investors, LLC

Loan


486,623







5,000,000











5,000,000(Financial Services)

Revolver


372,690







3,250,000



850,000







4,100,000LLC Interest










1,927,932



1,837,343







3,765,275Phoenix Coal Corporation

Loan


823,146







7,088,615







(7,088,615
)


(Coal Processing and Production)

Common Stock










1,000,000











1,000,000Previsor

Common Stock










6,000,000



3,000,000







9,000,000(Human Capital Management)Vitality Foodservice, Inc.

Common Stock










8,500,000



564,716







9,064,716(Non-Alcoholic Beverages)

Preferred Stock










11,053,827



1,508,581







12,562,408Warrants










1,100,000











1,100,000Total companies more than 5% owned, but less than 25%



$
5,480,564


















$
127,959,158       (1)
    
    Common stock, preferred stock, warrants, options and equity
    interests are generally non-income producing and restricted. The
    principal amount for loans and debt securities and the number of
    shares of common and preferred stock is shown in the
    consolidated schedule of investments as of October 31, 2007.   110




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##### Table of Contents



MVC
    Capital, Inc. and Subsidiaries
  Schedule of Investments in and Advances to
    Affiliaties  (Continued)
   (2)
    
    Other includes interest, dividend, or other income which was
    applied to the principal of the investment and therefore reduced
    the total investment. These reductions are also included in the
    Gross Reductions for the investment, as applicable.(3)
    
    Gross additions includes increases in the cost basis of
    investments resulting from new portfolio investments,
    paid-kind-interest or dividends, the amortization of discounts
    and closing fees, and the exchange of one or more existing
    securities for one or more new securities. Gross additions also
    includes net increases in unrealized appreciation or net
    decreases in unrealized depreciation.(4)
    
    Gross reductions included decreases in the cost basis of
    investments resulting from principal collections related to
    investment repayments or sales and the exchange of one or more
    existing securities for one or more new securities. Gross
    reductions also include net increases in unrealized depreciation
    or net decreases in unrealized appreciation.(5)
    
    Represents the total amount of interest or dividends credited to
    income for portion of the year an investment was included in the
    companies more than 25%*
    
    All or a portion of the dividend income on this investment was
    or will be paid in the form of additional securities or by
    increasing the liquidation preference. Dividends
    paid-in-kind
    are also included in the Gross Additions for the investment, as
    applicable.   111




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##### Table of Contents



Signature

Title

Date/s/  Michael
    Tokarz(Michael
    Tokarz)

Chairman
    (Principal Executive Officer)
    and Director

Date: May 9, 2008/s/  Peter
    Seidenberg(Peter
    Seidenberg)

Chief Financial Officer

Date: May 9, 2008/s/  Emilio
    Dominianni(Emilio
    Dominianni)

Director

Date: May 9, 2008/s/  Gerald
    Hellerman(Gerald
    Hellerman)

Director

Date: May 9, 2008/s/  Warren
    Holtsberg(Warren
    Holtsberg)

Director

Date: May 9, 2008/s/  Robert
    C. Knapp(Robert
    C. Knapp)

Director

Date: May 9, 2008/s/  William
    E. Taylor(William
    E. Taylor)

Director

Date: May 9, 2008  112