As filed with the Securities and Exchange Commission on June 13, 2008
                                     Investment Company Act File number 811-8312



                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM N-CSR
                         CERTIFIED SHAREHOLDER REPORT OF
                   REGISTERED MANAGEMENT INVESTMENT COMPANIES

                                Daily Income Fund
               (Exact name of registrant as specified in charter)

                                600 Fifth Avenue
                               New York, NY 10020
               (Address of principal executive offices) (Zip code)


                                 Christine Manna
                     c/o Reich & Tang Asset Management, LLC
                                600 Fifth Avenue
                            New York, New York 10020
                     (Name and address of agent for service)

Registrant's telephone number, including area code: 212-830-5200

Date of fiscal year end:   March 31

Date of reporting period:  March 31, 2008

<PAGE>

Item 1: Report to Stockholders

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DAILY                                                          600 FIFTH AVENUE
INCOME                                                       NEW YORK, NY 10020
FUND                                                             (212) 830-5200
===============================================================================
















                                 Annual
                                 Report
                             March 31, 2008














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                       [THIS PAGE INTENTIONALLY LEFT BLANK.]























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                               DAILY INCOME FUND
                               TABLE OF CONTENTS
===============================================================================

<TABLE>
<S>                                                <C>                 <C>                                              <C>
Shareholder Letter                                  4                  Municipal Portfolio
Money Market Portfolio                                                 Expense Chart                                     48
                                                                       Schedule of Investments                           50
     Expense Chart                                  5                  Statement of Assets and Liabilities               61
     Schedule of Investments                        7                  Statement of Operations                           62
     Statement of Assets and Liabilities            2                  Statements of Changes in Net Assets               63
     Statement of Operations                        4                  Financial Highlights                              64
     Statements of Changes in Net Assets           25
     Financial Highlights                          26                  Notes to Financial Statements                     68

U.S Treasury Portfolio                                                 Report of Independent Registered Public
                                                                       Accounting Firm                                   77
     Expense Chart                                 30
     Schedule of Investments                       32                  Additional Information                            78
     Statement of Assets and Liabilities           34
     Statement of Operations                       35                  Board Approval of Investment Management Contract  79
     Statements of Changes in Net Assets           36
     Financial Highlights                          37                  Proxy Results                                     82

U.S. Government Portfolio                                              Trustees and Officers Tables                      86

     Expense Chart                                 40
     Schedule of Investments                       41
     Statement of Assets and Liabilities           43
     Statement of Operations                       44
     Statements of Changes in Net Assets           45
     Financial Highlights                          46


</TABLE>

<PAGE>
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DAILY INCOME FUND
SHAREHOLDER LETTER
===============================================================================


Dear Shareholder:

We are pleased to present the annual  report of Daily  Income Fund (the  "Fund")
for the year ended March 31, 2008. As of March 31, 2008:

The Money Market Portfolio had net assets of $6,968,153,278.

The U.S. Treasury Portfolio had net assets of $1,412,681,309.

The U.S. Government Portfolio had net assets of $821,993,885.

The Municipal Portfolio had net assets of $489,970,529.

We thank you for your support and look forward to  continuing to serve your cash
management needs.



Sincerely,



/s/ Michael P. Lydon




Michael P. Lydon
President






<PAGE>
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DAILY INCOME FUND
MONEY MARKET PORTFOLIO
EXPENSE CHART
FOR THE SIX MONTHS ENDED MARCH 31, 2008
(UNAUDITED)
===============================================================================


As a  shareholder  of the  Portfolio,  you incur the  following  ongoing  costs:
management fees and other Portfolio  expenses.  You may also incur  distribution
and/or  service  (12b-1) fees.  This example is intended to help you  understand
your ongoing  costs (in dollars) of  investing in the  Portfolio  and to compare
these costs with the ongoing  costs of  investing  in other  mutual  funds.

The Example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period October 1, 2007 through March 31, 2008.

ACTUAL EXPENSES

The first line of the table below  provides  information  about  actual  account
values and actual expenses.  You may use information in this line, together with
the amount you invested, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6),  then  multiply  the result by the number in the first
line under the heading  entitled  "Expenses  Paid During the Period" to estimate
the expenses you paid on your account during this period.

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES

The second  line of the table  below  provides  information  about  hypothetical
account  values and  hypothetical  expenses  based on the Fund's actual  expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Fund's actual return.  The hypothetical  account values and expenses may not
be used to estimate the actual ending  account  balance or expenses you paid for
the  period.  You may use this  information  to  compare  the  ongoing  costs of
investing in the Fund and other funds.  To do so,  compare this 5%  hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.

Please note that the  expenses  shown in the table are meant to  highlight  your
ongoing  costs only and do not reflect any  transactional  costs,  such as sales
charges  (loads),  redemption fees, or exchange fees that you may incur in other
mutual  funds.  Therefore,  the second line of the table is useful in  comparing
ongoing costs only,  and will not help you determine the relative total costs of
owning different funds.

<TABLE>

---------------------------------------------------------------------------------------------------------------------------
        Institutional Shares &        Beginning Account  Ending Account Value     Expenses Paid            Annualized
           Pinnacle Shares              Value 10/01/07         03/31/08         During the period       Expense Ratio *
---------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>                 <C>                    <C>                    <C>
  Actual                                  $1,000.00           $1,022.30                $1.01                 0.20%
---------------------------------------------------------------------------------------------------------------------------
  Hypothetical (5% return before          $1,000.00           $1,024.00                $1.01                 0.20%
  expenses)
---------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------
     Institutional Service Shares     Beginning Account  Ending Account Value      Expenses Paid          Annualized
                                        Value 10/01/07         03/31/08         During the Period       Expense Ratio *
---------------------------------------------------------------------------------------------------------------------------
  Actual                                  $1,000.00           $1,021.00                $2.27                 0.45%
---------------------------------------------------------------------------------------------------------------------------
  Hypothetical (5% return before          $1,000.00           $1,022.75                $2.28                 0.45%
  expenses)
---------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------
           Investor Shares            Beginning Account  Ending Account Value     Expenses Paid            Annualized
                                        Value 10/01/07         03/31/08         During the Period       Expense Ratio *
---------------------------------------------------------------------------------------------------------------------------
  Actual                                  $1,000.00           $1,020.00                $3.29                 0.65%
---------------------------------------------------------------------------------------------------------------------------
 Hypothetical (5% return before           $1,000.00           $1,021.75                $3.29                 0.65%
 expenses)
---------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------
       Short Term Income Shares       Beginning Account  Ending Account Value     Expenses Paid            Annualized
                                        Value 10/01/07         03/31/08         During the Period       Expense Ratio *
---------------------------------------------------------------------------------------------------------------------------
  Actual                                  $1,000.00           $1,018.50                $4.74                 0.94%
---------------------------------------------------------------------------------------------------------------------------
  Hypothetical (5% return before          $1,000.00           $1,020.30                $4.75                 0.94%
  expenses)
---------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------
            Retail Shares             Beginning Account  Ending Account Value     Expenses Paid             Annualized
                                        Value 10/01/07         03/31/08         During the Period       Expense Ratio *
---------------------------------------------------------------------------------------------------------------------------
  Actual                                  $1,000.00           $1,018.20                $5.05                 1.00%
---------------------------------------------------------------------------------------------------------------------------
  Hypothetical (5% return before          $1,000.00           $1,020.00                $5.05                 1.00%
  expenses)
---------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------

                                      Beginning Account  Ending Account Value    Expenses Paid           Annualized
           Advantage Shares            Value 10/01/07         03/31/08         During the Period       Expense Ratio *
---------------------------------------------------------------------------------------------------------------------------
  Actual                                  $1,000.00           $1,018.10                $5.15                 1.02%
---------------------------------------------------------------------------------------------------------------------------
  Hypothetical (5% return before          $1,000.00           $1,019.90                $5.15                 1.02%
  expenses)

---------------------------------------------------------------------------------------------------------------------------

                                      Beginning Account    Ending Account Value   Expenses Paid             Annualized
            Xpress Shares               Value 10/01/07         03/31/08         During the Period       Expense Ratio *
---------------------------------------------------------------------------------------------------------------------------
  Actual                                  $1,000.00           $1,017.00                $6.30                 1.25%
---------------------------------------------------------------------------------------------------------------------------
  Hypothetical (5% return before          $1,000.00           $1,018.75                $6.31                 1.25%
  expenses)
---------------------------------------------------------------------------------------------------------------------------

</TABLE>

*    Expenses are equal to the Fund's  annualized  expense ratios  multiplied by
     the average  account  value over the period  (October 1, 2007 through March
     31,  2008),  multiplied  by 183/366  (to  reflect  the most  recent  fiscal
     half-year).


<PAGE>
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DAILY INCOME FUND
MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS
MARCH 31, 2008
===============================================================================

<TABLE>

      Face                                                                        Maturity           Current            Value
     Amount                                                                         Date            Coupon (1)         (Note 1)
------------                                                                       ------           ----------         --------
Commercial Paper (0.68%)
-----------------------------------------------------------------------------------------------------------------------------------
<S>             <C>                                                              <C>                  <C>       <C>
$   17,237,000  Tennessee School Board Authority - Series B                       04/10/08            2.95%     $  17,237,000
    30,000,000  Vermont EDA Economic Development Capitalization Program-Series A
                LOC Calyon                                                        06/10/08            2.88         30,000,000
--------------                                                                                                  -------------
    47,237,000  Total Commercial Paper                                                                             47,237,000
--------------                                                                                                  -------------
Domestic Certificates of Deposit (6.46%)
-----------------------------------------------------------------------------------------------------------------------------------
$  200,000,000  American Express Centurian Bank                                   04/09/08            2.91%     $ 200,000,000
   100,000,000  HSBC Bank USA                                                     05/12/08            4.25        100,000,000
    50,000,000  Wilmington Trust Company                                          05/12/08            5.05         50,000,000
    50,000,000  Wilmington Trust Company                                          05/20/08            2.93         50,000,000
    50,000,000  Wilmington Trust Company                                          07/10/08            4.24         50,000,000
--------------                                                                                                  -------------
   450,000,000  Total Domestic Certificates of Deposit                                                            450,000,000
--------------                                                                                                  -------------
Eurodollar Certificates of Deposit (12.20%)
-----------------------------------------------------------------------------------------------------------------------------------
$   75,000,000  Banco Santander Central Hispano, SA                               04/07/08            5.16%     $  75,000,122
   100,000,000  Bank of Scotland                                                  06/10/08            4.90        100,000,000
   200,000,000  Credit Agricole S.A.                                              04/11/08            4.32        200,001,099
   100,000,000  Credit Industriel et Commercial                                   05/06/08            3.14        100,000,000
    75,000,000  Credit Industriel et Commercial                                   05/07/08            3.20         75,000,000
   100,000,000  Ulster Bank Limited                                               04/08/08            4.63        100,000,096
   100,000,000  Ulster Bank Limited                                               05/06/08            3.07        100,000,482
   100,000,000  Unicredito Italiano SPA                                           05/06/08            3.14        100,000,000
--------------                                                                                                  -------------
   850,000,000  Total Eurodollar Certificates of Deposit                                                          850,001,799
--------------                                                                                                  -------------
Floating Rate Securities (2.87%)
-----------------------------------------------------------------------------------------------------------------------------------
$   35,000,000  BNP Paribas ((2))                                                 08/07/08            3.13%     $  34,971,380
    50,000,000  Goldman Sachs & Co. ((3))                                         04/16/08            2.85         50,000,000
    50,000,000  Harris Bank Floater ((4))                                         08/18/08            3.07         50,000,000
    25,000,000  JPMorgan Chase & Co. Extendable Floating Rate Note ((5))          12/11/08            2.98         25,000,000
    40,000,000  Merrill Lynch & Co. Extendible Floater ((6))                      12/17/08            2.91         40,000,000
--------------                                                                                                  -------------
   200,000,000  Total Floating Rate Securities                                                                    199,971,380
--------------                                                                                                  -------------
Foreign Commercial Paper (4.82%)
-----------------------------------------------------------------------------------------------------------------------------------
$   50,000,000  Anglo Irish Bank Corporation PLC                                  04/11/08            4.43%     $  49,939,167
    60,000,000  Anglo Irish Bank Corporation PLC                                  05/05/08            3.07         59,826,033
   150,000,000  Anglo Irish Bank Corporation PLC                                  05/12/08            3.13        149,470,416
    77,880,000  Societe Generale North America                                    07/11/08            3.95         77,034,418
--------------                                                                                                   ------------
   337,880,000  Total Foreign Commercial Paper                                                                    336,270,034
--------------                                                                                                   ------------
Letter of Credit Commercial Paper (2.17%)
-----------------------------------------------------------------------------------------------------------------------------------
$   52,000,000  Dean Health Systems, Inc.
                LOC Marshall & Ilsley Bank                                        04/03/08      3.06%     $  51,991,189

</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>
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DAILY INCOME FUND
MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 2008
===============================================================================

<TABLE>

      Face                                                                        Maturity           Current            Value
     Amount                                                                         Date            Coupon (1)         (Note 1)
------------                                                                       ------           ----------         --------
Letter of Credit Commercial Paper (Continued)
-----------------------------------------------------------------------------------------------------------------------------------
<S>             <C>                                                               <C>                <C>          <C>
$  100,000,000  ICICI Bank Ltd.
                LOC Fortis Bank                                                   08/04/08             3.09%       $  98,940,972
--------------                                                                                                     -------------
   152,000,000  Total Letter of Credit Commercial Paper                                                              150,932,161
--------------                                                                                                     -------------
Loan Participations (2.53%)
-----------------------------------------------------------------------------------------------------------------------------------
$   34,000,000  Army & Air Force Exchange Service with JPMorgan Chase as agent    04/01/08             3.05%       $  34,000,000
    55,000,000  Army & Air Force Exchange Service with JPMorgan Chase as agent    04/29/08             3.13           55,000,000
    87,000,000  AXA Equitable Life Insurance Company with JPMorgan Chase as
                agent (7)                                                         06/23/08             2.68           87,000,000
--------------                                                                                                     -------------
   176,000,000  Total Loan Participation                                                                             176,000,000
--------------                                                                                                     -------------
Bank Notes (2.22%)
-----------------------------------------------------------------------------------------------------------------------------------
$    5,015,000  Michigan Public Educational Facilities Authority - Series C
                LOC Bank of New York                                              08/22/08             5.30%       $   5,015,000
   150,000,000  Regions Bank                                                      05/09/08             4.36          150,000,780
--------------                                                                                                     -------------
   155,015,000  Total Bank Notes                                                                                     155,015,780
--------------                                                                                                     -------------
Repurchase Agreement (2.15%)
-----------------------------------------------------------------------------------------------------------------------------------
$  150,000,000  Annaly Mortgage Management, purchased on 03/31/08, repurchase
                proceeds at maturity $150,011,042 (Collateralized by $216,798,527
                FMAC, 3.42% to 6.00%, due 06/15/32 to 08/15/36, value $57,690,210,
                FNMA,5.50% to 6.00%, due 07/25/29 to 03/25/37, value $99,809,790) 04/01/08             2.65%       $ 150,000,000
--------------                                                                                                     -------------
   150,000,000  Total Repurchase Agreement                                                                           150,000,000
--------------                                                                                                     -------------
Time Deposit (10.32%)
-----------------------------------------------------------------------------------------------------------------------------------
$   15,000,000  Barclays Bank PLC                                                 04/01/08             2.00%      $  15,000,000
    80,000,000  Barclays Bank PLC                                                 04/01/08             2.75          80,000,000
   119,000,000  BNP Paribas                                                       04/01/08             2.75         119,000,000
   175,000,000  BNP Paribas                                                       04/01/08             3.00         175,000,000
    45,000,000  National Bank of Canada                                           04/01/08             2.85          45,000,000
   129,000,000  Royal Bank of Canada                                              04/01/08             2.50         129,000,000
   156,000,000  Royal Bank of Canada                                              04/01/08             2.82         156,000,000
--------------                                                                                                    -------------
   719,000,000  Total Time Deposit                                                                                  719,000,000
--------------                                                                                                    -------------
Variable Rate Demand Instruments ((8)) (14.76%)
-----------------------------------------------------------------------------------------------------------------------------------
$    2,000,000  1212 Jackson LLC - Series 2004
                LOC Fifth Third Bank                                              09/01/24             3.85%      $   2,000,000
     1,875,000  1800 Indian Wood Ltd. - Series 2005
                Loc Fifth Third Bank                                              04/01/26             3.85           1,875,000
     1,695,000  2150 Investment Company - Series 1997
                LOC Fifth Third Bank                                              02/01/17             3.85           1,695,000
     1,795,000  361 Summit Boulevard, LLC - Series 2003
                LOC First Commercial Bank                                         05/01/28             2.90           1,795,000
     4,240,000  A&M Associates Project - Series 2002
                LOC U.S. Bank, N.A.                                               12/01/34             3.51           4,240,000

</TABLE>

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

<PAGE>
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===============================================================================
<TABLE>

      Face                                                                     Maturity        Current         Value
     Amount                                                                      Date         Coupon (1)      (Note 1)
------------                                                                    ------        ----------      --------
Variable Rate Demand Instruments ((8)) (Continued)
-----------------------------------------------------------------------------------------------------------------------------------
<S>             <C>                                                               <C>                <C>          <C>
$    1,925,000  Alatrade Foods LLC - Series 2004
                LOC Amsouth Bank                                                12/01/14      2.93%     $   1,925,000
     2,000,000  Albany, NY Industrial Development Agency Civic Facilities RB
                (Albany Medical Center Project) - Series 2006B
                LOC Royal Bank of Scotland                                      05/01/35      3.18          2,000,000
     5,500,000  Allegheny County, PA IDA (Union Electric Steel Corporation)
                LOC PNC Bank, N.A                                               11/01/27      2.78          5,500,000
     2,800,000  Allied Services, Ltd. - Series 2006
                LOC Fifth Third Bank                                            03/01/21      3.85          2,800,000
     2,250,000  Alta Mira LLC - Series 2004
                LOC Marshall & Ilsley Bank                                      11/01/34      3.60          2,250,000
       800,000  Atlantic Tool & Die Company - Series 1996
                LOC Key Bank, N.A.                                              12/01/11      3.50            800,000
     1,670,000  Atlantic Tool & Die Company - Series 2002
                LOC Key Bank, N.A.                                              03/01/17      3.50          1,670,000
     1,788,000  Aztec Properties, LLC
                LOC U.S. Bank, N.A.                                             08/01/20      3.50          1,788,000
     1,665,000  Baird Properties, LLC
                LOC Columbus Bank & Trust Company                               12/01/26      3.00          1,665,000
     5,493,000  Baldwin County Sewer Service, LLC - Series 2005
                LOC Amsouth Bank                                                05/01/25      2.93          5,493,000
     1,160,000  Bank of Kentucky Building, LLC - Series 1999
                LOC U.S. Bank, N.A.                                             12/01/19      3.50          1,160,000
       100,000  Barnes & Thornburg LLP - Series 2003
                LOC Fifth Third Bank                                            07/01/08      3.85            100,000
     1,600,000  Barnes & Thornburg LLP - Series 2005
                LOC Fifth Third Bank                                            12/01/55      3.85          1,600,000
     7,259,000  BB Auto Land of Roswell, LLC - Series 2003A
                LOC Bank of North Georgia                                       05/01/23      3.00          7,259,000
     2,205,000  BBC, LLC - Series 2000
                LOC Columbus Bank & Trust Company                               11/01/20      2.78          2,205,000
     7,935,000  Beacon Orthopedics Facilities, LLC - Series 2004
                LOC Fifth Third Bank                                            02/01/24      3.50          7,935,000
     2,760,000  Bennett Realty LLC - Series 2003
                LOC Fifth Third Bank                                            04/01/23      3.85          2,760,000
       720,000  Berkeley Square Retirement Center - Series 1998A
                LOC Fifth Third Bank                                            02/01/13      3.50            720,000
       830,000  Big Brothers Big Sisters Association of Greater Columbus
                - Series 2000
                LOC Fifth Third Bank                                            12/01/20      3.91            830,000
     3,600,000  Bluegrass Wireless, LLC
                LOC Fifth Third Bank                                            02/01/12      3.85          3,600,000
     3,025,000  Bob Sumerel Tire Co., Inc.
                LOC Fifth Third Bank                                            04/01/19      3.85          3,025,000
     5,680,000  Bonita Community Health Center, Inc.
                LOC Fifth Third Bank                                            12/01/31      3.65          5,680,000
       780,000  Briarwood Investments, LLC - Series 2003
                LOC Federal Home Loan Bank of Cincinnati                        04/01/23      3.50            780,000

</TABLE>

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

<PAGE>
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DAILY INCOME FUND
MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 2008
===============================================================================
<TABLE>

      Face                                                                    Maturity       Current          Value
     Amount                                                                     Date        Coupon (1)       (Note 1)
------------                                                                   ------       ----------       --------

Variable Rate Demand Instruments ((8)) (Continued)
-----------------------------------------------------------------------------------------------------------------------------------
<S>             <C>                                                               <C>                <C>          <C>
$    9,875,000  Bridge Park Real Estate, LLC
                LOC Fifth Third Bank                                            12/01/27      3.85%     $   9,875,000
     2,600,000  Brookville Enterprises - Series 2004
                LOC Fifth Third Bank                                            10/01/25      3.85          2,600,000
     1,750,000  Burke County, GA Development Authority IDRB
                (Lichtenberg Holdings II, LLC Project) - Series 2002
                LOC JPMorgan Chase Bank, N.A.                                   01/01/13      2.77          1,750,000
       125,000  Burton I. Saltzman (Dave's Supermarket, Inc. Project)
                LOC U.S. Bank, N.A.                                             09/01/08      3.66            125,000
     1,210,000  Butler County Surgical Properties LLC - Series 2003
                LOC Fifth Third Bank                                            03/01/23      3.85          1,210,000
     2,895,000  Butler County Surgical Properties LLC - Series 2005
                LOC Fifth Third Bank                                            07/01/25      3.85          2,895,000
     2,925,000  Bybee Food LLC
                LOC Key Bank, N.A.                                              11/01/26      3.50          2,925,000
     4,880,000  Capital Markets Access Company, LLC.
                (Cape Coral Medical & Surgical Suites, LLC Project)
                LOC SunTrust Bank                                               08/01/20      2.80          4,880,000
       318,000  Capital One Funding Corporation
                Floating Rate Option Notes - Series 1997 D
                LOC JPMorgan Chase Bank, N.A.                                   07/02/18      3.00            318,000
     3,125,000  Carmichael Imaging, LLC - Series 2002
                LOC Regions Bank                                                11/01/10      2.80          3,125,000
     1,800,000  CEGW, Inc
                LOC PNC Bank, N.A.                                              03/31/09      3.45          1,800,000
       965,000  Central Michigan Inns, LLC (Pohlcat Inc) - Series 2000A
                LOC Wachovia Bank, N.A.                                         04/01/30      3.17            965,000
     7,900,000  CFM International Inc. - Series 1999A
                Guaranteed by General Electric Company                          01/01/10      2.95          7,900,000
     4,300,000  Charles K. Blandin Foundation - Series 2004 ((9))
                LOC Wells Fargo Bank, N.A.                                      05/01/19      3.10          4,300,000
       475,000  Chuo Mubea Suspension Component Company - Series 2004
                LOC Fifth Third Bank                                            01/01/11      3.85            475,000
    22,000,000  Church of the Highlands, Inc.
                LOC Amsouth Bank                                                01/01/23      2.80         22,000,000
     2,615,000  Cinnamon Properties, Inc.
                LOC U.S. Bank, N.A.                                             04/01/20      3.50          2,615,000
     2,060,000  Cirrus Development Ltd. - Series 1999
                LOC U.S. Bank, N.A.                                             05/01/14      3.50          2,060,000
    11,315,000  City of Auburn, AL
                Industrial Development & Infrastructure RB - Series 2004A
                LOC Allied Irish Bank PLC                                       05/01/24      2.78         11,315,000
     5,200,000  City of Florence, KY IDRB (Fifth Third Processing Center
                Project) - Series 2005A
                LOC Fifth Third Bank                                            04/15/10      4.05          5,200,000
     5,000,000  City of Marion, IN EDRB (Dolgencorp, Inc Project) - Series 2005A
                LOC Key Bank, N.A.                                              02/01/35      3.50          5,000,000

</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------



===============================================================================

 <TABLE>
     Face                                                                    Maturity       Current            Value
     Amount                                                                     Date        Coupon (1)       (Note 1)
------------                                                                   ------       ----------       --------
Variable Rate Demand Instruments ((8)) (Continued)
-----------------------------------------------------------------------------------------------------------------------------------
<S>             <C>                                                               <C>                <C>          <C>
  $  2,000,000  CMW Real Estate, LLC - Series 2000
                LOC Firstar Bank, National Association                          06/01/20      3.70%     $   2,000,000
     3,900,000  Cobb County, GA Development Authority RB
                (Prime Power Project) - Series 2006
                LOC Bank of North Georgia                                       01/01/32      2.90          3,900,000
     1,065,000  Cole Investments LLC
                LOC Fifth Third Bank                                            07/01/19      3.85          1,065,000
     3,620,000  Columbus Area, Inc. - Series 2004
                LOC Key Bank                                                    07/01/24      3.50          3,620,000
     2,850,000  Columbus, GA Development Authority RB
                (Columbus Economic Development Corporation/
                Bricken Financial Project) - Series 2006
                LOC Wachovia Bank, N.A.                                         02/01/26      3.17          2,850,000
     5,885,000  Columbus, GA Development Authority RB
                (Four J.S. Family, LLP Project) - Series 2000
                LOC Columbus Bank & Trust Company                               09/01/20      2.90          5,885,000
    10,165,000  Columbus, GA Development Authority RB
                (Four J.S. Family, LLP Project) - Series 2002
                LOC Columbus Bank & Trust Company                               12/01/22      2.95         10,165,000
     3,715,000  Columbus, GA Development Authority RB
                (Riverton Ford Inc. Project) - Series 2000
                LOC Columbus Bank & Trust Company                               04/01/20      2.95          3,715,000
     2,925,000  Columbus, GA Development Authority RB
                (Rivertown Pediatric Project) - Series 2003
                LOC Columbus Bank & Trust Company                               05/01/23      2.90          2,925,000
     7,000,000  Columbus, GA Development Authority RB
                (Sunbelt - SCG, LLC Project) - Series 2007
                LOC Regions Bank                                                09/01/27      2.75          7,000,000
     6,000,000  Columbus, GA Development Authority RB
                (Sunbelt - TCG, LLC Project) - Series 2007
                LOC Regions Bank                                                09/01/27      2.75          6,000,000
     9,935,000  Columbus, GA Development Authority RB
                (Woodmont Properties, LLC
                Greystone Farms II Project) - Series 2006
                LOC Columbus Bank & Trust Company                               02/01/26      2.90          9,935,000
       805,000  Community Limited Care Dialysis Center - Series 1997
                LOC Fifth Third Bank                                            12/01/12      3.50            805,000
     1,240,000  Consolidated Equities, LLC - Series 1995
                LOC Fifth Third Bank                                            12/01/25      3.85          1,240,000
     8,995,000  Country Club of the South - Series 2002
                LOC Bank of North Georgia                                       12/01/31      2.90          8,995,000
       305,000  Crownover Lumber Company, Inc. - Series 1997
                LOC Fifth Third Bank                                            09/01/08      3.50            305,000
     6,215,000  Cubba Capital II, LLC - Series 2006A
                Collateralized by Federal Home Loan Bank                        03/01/55      3.50          6,215,000
     5,000,000  Cubba Capital II, LLC - Series 2006B
                LOC Charter One Bank                                            09/01/56      3.50          5,000,000

</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 2008
===============================================================================

<TABLE>
     Face                                                                    Maturity       Current            Value
     Amount                                                                     Date        Coupon (1)       (Note 1)
------------                                                                   ------       ----------       --------
Variable Rate Demand Instruments ((8)) (Continued)
-----------------------------------------------------------------------------------------------------------------------------------
<S>             <C>                                                               <C>                <C>          <C>
$    3,800,000  D&G Conduit LLC
                LOC Amsouth Bank                                                10/01/23      2.78%     $   3,800,000
     6,925,000  Daniel Land Company - Series 2004
                LOC Columbus Bank & Trust Company                               09/01/29      2.90          6,925,000
     7,200,000  Dayton Freight Lines, Inc.
                LOC Fifth Third Bank                                            12/01/45      3.85          7,200,000
     1,525,000  D.E.D.E. Realty - Series 1998
                LOC Fifth Third Bank                                            12/01/11      3.85          1,525,000
     2,135,000  Deerfoot Market Place, LLC - Series 2002
                LOC First Commercial Bank                                       03/01/28      3.00          2,135,000
     1,720,000  Delta Capital LLC - Series 1996B
                LOC JPMorgan Chase Bank, N.A.                                   10/01/26      3.60          1,720,000
       300,000  Derby Fabricating LLC
                LOC Fifth Third Bank                                            06/01/24      3.85            300,000
     1,875,000  Devin F. & Janis L. McCarthy - Series 1997
                LOC U.S. Bank, N.A.                                             07/01/17      3.50          1,875,000
     9,250,000  D.G.Y. Real Estate LP - Series 2000A
                LOC PNC Bank, N.A.                                              05/01/20      3.45          9,250,000
     1,935,000  Eagles Landing, LLC
                LOC Regions Bank                                                12/01/26      2.78          1,935,000
     2,600,000  East Kentucky Network, LLC
                LOC Fifth Third Bank                                            02/01/16      3.85          2,600,000
     2,870,000  Eckert Seamans Cherin & Mellott, LLC - Series 2000
                LOC PNC Bank, N.A.                                              01/01/15      2.83          2,870,000
     6,965,000  El Dorado Enterprises of Miami, Inc. - Series 2000
                LOC Wachovia Bank, N.A.                                         06/01/20      3.92          6,965,000
     8,330,000  Elsinore Properties LLP - Series 1999
                LOC Fifth Third Bank                                            01/01/29      3.85          8,330,000
     2,225,000  Erie County, NY IDA RB
                (Niagara-Maryland LLC Project) - Series 2003
                LOC Manufacturers and Traders Trust Co.                         06/01/23      3.18          2,225,000
     1,000,000  Falls Village Realty, LLC - Series 2004
                LOC Fifth Third Bank                                            12/01/29      3.85          1,000,000
     1,805,000  Fannin & Fannin LLC
                LOC Fifth Third Bank                                            12/01/24      3.85          1,805,000
     3,290,000  FE, LLC - Series 1998A
                LOC Fifth Third Bank                                            04/01/28      3.65          3,290,000
     4,762,924  Federal Home Loan Mortgage Corporation
                Class A Certificates - Series M006                              10/15/45      2.68          4,762,924
     1,415,000  Findlay Evangelical Presbyterian Church - Series 2004
                LOC Fifth Third Bank                                            11/01/30      3.85          1,415,000
     2,690,000  Fiore Capital LLC - Series 2005A
                LOC Marshall & Ilsley Bank                                      08/01/45      3.30          2,690,000
     1,290,000  First Park Place LLC
                LOC Fifth Third Bank                                            12/01/19      3.85          1,290,000
    10,680,000  Flint River Services, Inc. - Series 2005
                LOC Columbus Bank & Trust Company                               01/01/30      2.90         10,680,000

</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------



===============================================================================

<TABLE>
     Face                                                                    Maturity       Current            Value
     Amount                                                                     Date        Coupon (1)       (Note 1)
------------                                                                   ------       ----------       --------
Variable Rate Demand Instruments (8) (Continued)
-----------------------------------------------------------------------------------------------------------------------------------
<S>             <C>                                                               <C>                <C>          <C>
$   14,745,000  Ft. Northport, LLC - Series 2004
                LOC Regions Bank                                                12/01/31      2.80%     $  14,745,000
    17,000,000  Fuller Road Management Corp. (Nanofab East Project)- Series 2007
                LOC Key Bank, N.A.                                              07/01/37      3.33         17,000,000
     1,005,000  G&J Land Management - Series 1996
                LOC Fifth Third Bank                                            12/01/17      3.50          1,005,000
     4,045,000  G&J Properties II, LLC - Series 2002
                LOC Royal Bank of Scotland                                      09/01/23      3.85          4,045,000
     3,260,000  G&L Manufacturing, Inc.
                LOC Fifth Third Bank                                            07/01/20      3.85          3,260,000
     3,075,000  Gardner Publications - Series 2000
                LOC Fifth Third Bank                                            10/01/10      3.85          3,075,000
     1,390,000  Garfield Investment Group
                LOC Fifth Third Bank                                            07/01/28      3.85          1,390,000
    10,590,000  Gastro Partners Land Company, LLC - Series 2005
                LOC Union Planters Bank                                         03/01/35      2.78         10,590,000
     1,060,000  GCG Portage L.L.C.
                LOC Old Kent Bank & Trust Company                               02/01/26      3.60          1,060,000
     1,500,000  Genesee County, MI Taxable Obligation Notes                     11/01/08      3.75          1,500,000
     7,900,000  Genoa Medical Development, LLC
                LOC Fifth Third Bank                                            12/01/45      3.85          7,900,000
       725,000  Gilead Friends Church - Series 2002
                LOC Fifth Third Bank                                            10/01/17      3.85            725,000
     2,590,000  GMC Financing LLC, LLC - Series 2005
                LOC Federal Home Loan Bank                                      06/01/30      2.77          2,590,000
     1,255,000  Goson Project - Series 1997
                Guaranteed by Federal Home Loan Bank                            11/01/17      3.95          1,255,000
     2,520,000  Governor's Village LLC - Series 2000
                LOC Fifth Third Bank                                            03/01/20      3.85          2,520,000
     5,550,000  Graf Brothers Flooring, Inc. - Series 2005
                LOC Fifth Third Bank                                            05/01/20      3.85          5,550,000
       635,000  Graves Lumber Co. Project - Series 2000
                Guaranteed by Federal Home Loan Bank of Cincinnati              11/01/10      3.95            635,000
     1,305,000  Great Expectations Ltd. (Bass Chevrolet) - Series 1996
                LOC Fifth Third Bank                                            07/01/17      3.60          1,305,000
     1,100,300  Gutwein & Co., Inc. and Gutwein Properties LLC - Series 2004
                LOC Fifth Third Bank                                            12/01/24      3.85          1,100,300
     1,270,000  HCH, LLC - Series 2000
                LOC Key Bank, N.A.                                              08/01/15      3.50          1,270,000
     1,063,000  HCS & DJS Leasing - Series 2004
                LOC Fifth Third Bank                                            06/01/34      3.85          1,063,000
     3,165,000  Healtheum, LLC - Series 2004
                LOC Wells Fargo, N.A.                                           11/01/29      2.67          3,165,000
     2,200,000  Henderson, OH Regional Authority
                LOC Fifth Third Bank                                            07/01/23      3.85          2,220,200
    14,446,200  Herman & Kettle Capital, LLC - Series 2005 (9)
                LOC Fifth Third Bank                                            06/01/55      3.90         14,446,200

</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 2008
===============================================================================

<TABLE>
     Face                                                                    Maturity       Current          Value
     Amount                                                                     Date        Coupon (1)       (Note 1)
------------                                                                   ------       ----------       --------
Variable Rate Demand Instruments ((8)) (Continued)
-----------------------------------------------------------------------------------------------------------------------------------
<S>             <C>                                                               <C>                <C>          <C>
$    1,755,000  HFA of Lee County, FL MHRB
                (University Club Apartments) - Series 2002B
                Guaranteed by Federal National Mortgage Association             05/15/35      3.25%     $   1,755,000
     6,865,000  Holland- Sheltair Aviation Funding, LLC - Series 2005 B4
                LOC Bank of New York Mellon                                     05/01/35      3.29          6,865,000
     1,700,000  Hoosier Stamping Manufacturing Corp. - Series 2004
                LOC Fifth Third Bank                                            07/01/36      3.85          1,700,000
       810,000  Hope Realty, Ltd. & Harmony Realty, Ltd. (Kurtz Bros., Inc.)
                - Series 2000
                LOC Key Bank, N.A.                                              08/01/15      3.50            810,000
     2,785,000  Hostun LLC - Series 2004
                LOC U.S. Bank, N.A.                                             12/01/27      3.90          2,785,000
     2,815,000  Hudson Toyota and Hyundai Realty LLC - Series 2003
                LOC Fifth Third Bank                                            04/01/23      3.85          2,815,000
     1,500,000  IHA Capital Development Corp
                LOC Fifth Third Bank                                            07/01/28      3.85          1,500,000
       600,000  Illinois Development Finance Authority
                (Harbortown Industry Inc. Project) - Series 2000
                LOC LaSalle National Bank, N.A.                                 12/01/20      2.85            600,000
       900,000  Indian Creek Christian Church Inc.
                LOC Fifth Third Bank                                            12/01/55      3.85            900,000
    18,870,000  Inter Mountain Cable, Inc - Series 2006
                LOC Fifth Third Bank                                            12/01/21      3.85         18,870,000
     1,562,500  IOP Properties LLC
                LOC Fifth Third Bank                                            04/01/44      3.85          1,562,500
     1,200,000  Jacksons Food Stores, Inc. - Series 2006
                LOC Key Bank, N.A.                                              03/01/16      3.50          1,200,000
       950,000  James B. Krewatch & Marden H. Krewatch
                Revocable Living Trust - Series 2005
                LOC Fifth Third Bank                                            11/01/25      3.85            950,000
     3,950,000  Jeff Wyler Automotive Family, Inc.
                LOC U.S. Bank, N.A.                                             01/02/26      3.50          3,950,000
     1,240,000  Joe Holland Chevrolet, Inc. - Joe Holland Chrysler LLC
                (The Holland Family Limited Partnership Number 1) - Series 2004
                LOC Fifth Third Bank                                            07/01/24      3.85          1,240,000
     1,830,000  Keating Meuthing Klekamp
                LOC Fifth Third Bank                                            11/01/24      3.85          1,830,000
     2,600,000  Kenwood County Club, Incorporated - Series 2005
                LOC U.S. Bank, N.A.                                             12/01/15      3.50          2,600,000
     2,903,000  KFDT LP - Series 2005
                LOC Fifth Third Bank                                            04/01/35      3.85          2,903,000
     2,070,000  Kingston Healthcare Company - Series 1997A
                LOC Fifth Third Bank                                            11/01/17      3.50          2,070,000
     1,610,000  Kingston Healthcare Company - Series 1998A
                LOC Fifth Third Bank                                            03/01/18      3.50          1,610,000
     4,515,000  Kingston Healthcare Corporation
                LOC Fifth Third Bank                                            08/01/25      3.65          4,515,000

</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------



===============================================================================

 <TABLE>

     Face                                                                    Maturity       Current          Value
     Amount                                                                     Date        Coupon (1)       (Note 1)
------------                                                                   ------       ----------       --------
Variable Rate Demand Instruments ((8)) (Continued)
-----------------------------------------------------------------------------------------------------------------------------------
<S>             <C>                                                               <C>                <C>          <C>
$      700,000  Kit Carson County, CO Agricultural Development RB
                (Midwest Farms, LLC) - Series 1997
                LOC Wells Fargo Bank, N.A.                                      06/01/27      3.10%     $     700,000
     3,875,000  Kool Capital, LLC
                LOC Michigan National Bank                                      04/01/29      3.97          3,875,000
     1,950,000  L3 Corporation - Series 2002
                LOC Fifth Third Bank                                            11/01/17      3.85          1,950,000
     4,400,000  Lakeland Income Properties, LLC - Series 2004
                LOC Federal Home Loan Bank                                      04/01/29      2.77          4,400,000
     4,400,000  Lake Mary Bay Limited Partnership - Series 2005
                LOC Amsouth Bank                                                03/01/25      2.93          4,400,000
     2,295,000  Landmark Church of Christ - Series 2005
                LOC Columbus Bank & Trust Company                               04/01/20      2.95          2,295,000
     4,795,000  Laurel County, KY Industrial Building RB
                (Consolidated Biscuit Company Project)
                LOC Fifth Third Bank                                            03/01/15      3.70          4,795,000
     1,810,000  Lauren Company, LLC - Series 2003
                LOC Wells Fargo Bank, N.A.                                      07/01/33      2.77          1,810,000
       270,000  Lee County, FL MHRB (Crossings at Cape Coral Apartments
                Projects) - Series 1999 B
                LOC SunTrust Bank                                               06/01/14      3.20            270,000
     6,610,000  Lee Family Limited Partnership
                Collateralized by Federal Home Loan Bank                        06/01/34      3.92          6,610,000
     1,505,000  Le Sportsac Inc. - Series 2005
                LOC Fifth Third Bank                                            11/01/14      3.85          1,505,000
    19,440,000  Lexington Financial Services, LLC Health Care RB - Series 2001
                LOC LaSalle National Bank, N.A.                                 02/01/26      2.70         19,440,000
     1,055,000  Louisiana Endoscopy Center, Inc.
                LOC Union Planters Bank                                         03/01/35      2.78          1,055,000
       470,000  LRC - B Wadsworth Investors, Ltd. - Series 1997
                LOC U.S. Bank, N.A.                                             09/01/17      3.50            470,000
     1,000,000  LRC Meadows Investor LLC
                LOC JPMorgan Chase Bank, N.A.                                   12/01/34      3.92          1,000,000
       455,000  Machining Center Inc. - Series 1997
                LOC Comerica Bank                                               10/01/27      3.60            455,000
       760,000  Manatee County, FL MHRB - Series 2002B
                (La Mirada Gardens Project)
                LOC SunTrust Bank                                               11/01/33      3.25            760,000
     3,375,000  Maryland Health & Higher Educational Facilities Authority
                (Glen Meadows Retirement Community) - Series 1999B
                LOC Wachovia Bank, N.A.                                         07/01/29      3.03          3,375,000
     2,257,100  Materials Processing Inc. - Series 2004
                LOC Fifth Third Bank                                            09/01/34      3.85          2,257,100
       600,000  Mayfair Village Retirement Center, Inc., KY - Series 1995
                LOC PNC Bank, N.A.                                              05/15/09      3.00            600,000
     7,400,000  M-B Companies, Inc. - Series 2008
                LOC US Bank, N.A                                                03/01/48      3.90          7,400,000
     6,850,000  MBE Investment Company LLC - Series 2004A
                LOC Comerica Bank                                               12/01/54      3.50          6,850,000

</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 2008
===============================================================================

<TABLE>

     Face                                                                    Maturity       Current          Value
     Amount                                                                     Date        Coupon (1)       (Note 1)
------------                                                                   ------       ----------       --------
Variable Rate Demand Instruments ((8)) (Continued)
-----------------------------------------------------------------------------------------------------------------------------------
<S>             <C>                                                               <C>                <C>          <C>
$    1,755,000  Mercer County, OH HealthCare Facilities RB
                LOC Fifth Third Bank                                            04/01/23      3.85%     $   1,755,000
       895,000  Miami River Stone Company - Series 2002
                LOC U.S. Bank, N.A.                                             08/01/09      3.50            895,000
       855,000  Miami Valley Realty Associates - Series 1997
                LOC Key Bank, N.A.                                              06/01/12      3.50            855,000
     2,150,000  Michigan City, IN Economic Development RB
                (Consolidated Biscuit Co., Project) - Series 1998
                LOC Fifth Third Bank                                            10/01/13      3.85          2,150,000
     6,555,000   Michigan Equity Group, LLC
                (Oakland Investment Company Project) - Series 2004A
                LOC Fifth Third Bank                                            04/01/34      3.85          6,555,000
     1,880,000  Michigan HEFA RB (Hope College Project) - Series 1996A
                LOC Old Kent Bank & Trust Co.                                   10/01/16      3.50          1,880,000
       885,000  Milwaukee, WI (Historic Third Ward Parking Project)
                LOC Northern Trust Bank                                         09/01/28      3.60            885,000
     2,500,000  Mississippi Business Finance Corporation IDRB
                (Attala Steel Industries, LLC Project) - Series 2005
                Guaranteed by Federal Home Loan Bank of Dallas                  07/01/20      2.77          2,500,000
     1,840,000  Mississippi Business Finance Corporation IDRB
                (Howard Industries Inc. Project) - Series 1995
                LOC Amsouth Bank                                                06/01/10      2.80          1,840,000
     2,550,000  Mississippi Business Finance Corporation
                (Wade Inc. Project) - Series 2006
                LOC Regions Bank                                                02/01/21      2.80          2,550,000
     4,300,000  Mississippi Business Finance Corporation IDRB
                (Pottery Barn Inc. Project) - Series 2004
                LOC Bank of America, N.A.                                       06/01/24      2.75          4,300,000
     7,225,000  Mississippi Business Finance Corporation IDRB
                (Lextron - Visteon Leasing, LLC Project) - Series 2003
                LOC JPMorgan Chase Bank, N.A.                                   12/01/27      2.96          7,225,000
     1,800,000  Mississippi Business Finance Corporation IDRB
                (TT & W Farm Products Inc. Project) - Series 2000B
                LOC Amsouth Bank                                                11/01/11      2.80          1,800,000
     1,025,000  MMR Development Corp.
                LOC Fifth Third Bank                                            05/01/23      3.85          1,025,000
       865,000  Montgomery, AL IDRB (The Jobs Company, LLC Project)
                - Series 1996C
                LOC Columbus Bank & Trust Company                               07/01/16      2.78            865,000
     4,000,000  Montgomery, AL Health Facilities Development Inc.
                LOC First Commercial Bank                                       11/01/33      2.90          4,000,000
     6,760,000  Montgomery County, PA MHRB
                (Brookside Manor Apartments) - Series 2001A
                Collateralized by Federal National Mortgage Association         08/15/31      2.65          6,760,000
     9,700,000  Moore Orthopedic Clinic -Land, LLC - Series 2006
                LOC National Bank of South Carolina                             08/01/31      2.90          9,700,000
     3,010,000  Mount Ontario Holdings LLC - Series 2001 ((9))
                LOC U.S Bank, N.A.                                              04/01/21      3.10          3,010,000
     1,715,000  Mrs. K.C. Jordan & Associates, Inc.
                LOC Fifth Third Bank                                            04/01/23      3.85          1,715,000

</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------



===============================================================================

 <TABLE>

      Face                                                                    Maturity       Current          Value
     Amount                                                                     Date        Coupon (1)       (Note 1)
------------                                                                   ------       ----------       --------
Variable Rate Demand Instruments ((8)) (Continued)
-----------------------------------------------------------------------------------------------------------------------------------
<S>             <C>                                                               <C>                <C>          <C>
$    2,785,000  Nebar Investments, LLC - Series 2005
                LOC Fifth Third Bank                                            07/01/50      3.85%     $   2,785,000
     4,095,000  New Hampshire Health & Educational Facility Authority RB
                (Weeks Medical Center Issue) - Series 2005B
                LOC Allied Irish Bank PLC                                       07/01/35      2.64          4,095,000
     1,415,000  New Lexington Clinic, P.S.C. - Series 2003
                LOC Fifth Third Bank                                            05/01/18      3.85          1,415,000
     1,430,000  New York City, NY IDA Civic Facility RB (Wartburg Luthern Home
                for the Aging and Wartburg Nursing Home, Inc. Project)
                - Series 2006B
                LOC Key Bank, N.A.                                              06/01/27      3.18          1,430,000
     1,100,000  New York State HFA RB (345 East 94th Street)
                Guaranteed by Federal Home Loan Mortgage Corporation            11/01/30      2.95          1,100,000
     3,000,000  North Coast Quarry, Ltd.
                LOC Fifth Third Bank                                            07/01/31      3.85          3,000,000
     2,980,000  Northern Kentucky Cancer Center, LLC - Series 2003
                LOC U.S. Bank, N.A.                                             05/01/24      3.50          2,980,000
     6,935,000  North Lagoon Partners, Inc. - Series 2004
                LOC Columbus Bank & Trust Company                               10/01/29      2.78          6,935,000
     1,500,000  NO S Properties, LLC - Series 2004
                LOC Fifth Third Bank                                            08/01/24      3.85          1,500,000
     1,695,000  NPI Capital, LLC - Series 1999A
                LOC Michigan National Bank                                      07/01/29      3.60          1,695,000
     2,560,000  OHC Real Estate LLC - Series 2006A
                LOC U.S. Bank, N.A.                                             11/01/26      3.50          2,560,000
     1,275,000  OHC Real Estate LLC - Series 2006B
                LOC U.S. Bank, N.A.                                             11/01/26      3.50          1,275,000
     6,900,000  Olathe, KS IDRB (Diamant Board Project) - Series 1997B
                LOC Svenska Handelsbanken                                       03/01/27      2.65          6,900,000
       970,000  Oswego County, NY IDA Facilities
                (OH Properties, Inc Project - B)
                LOC Manufacturers & Traders Trust Company                       06/01/24      2.72            970,000
     2,075,000  Parisi Investment, LP & Supply Co. - Series 1998
                LOC U.S. Bank, N.A.                                             05/01/18      3.50          2,075,000
     3,420,000  Parker Towing Company Inc. - Series 2006
                LOC Amsouth Bank                                                06/01/11      3.18          3,420,000
     3,700,000  Pennsylvania EDFA 2005 Series B3
                LOC PNC Bank, N.A.                                              08/01/25      2.78          3,700,000
     1,300,000  Pennsylvania EDFA Taxable Development RB
                (West 914 Incorporation Project) - Series 1991A
                LOC PNC Bank, N.A.                                              05/01/21      2.78          1,300,000
       300,000  Portland, OR EDRB
                (Broadway Project) - Series 2003B
                Insured by AMBAC Indemnity Corporation                          04/01/11      6.50            300,000
     4,205,736  Precision Radiotherapy LLC
                LOC Fifth Third Bank                                            08/01/18      3.85          4,205,736
     2,885,000  Putnam County, NY IDA IDRB
                (Broad Reach, LLC Project) - Series 2006A
                LOC Charter One Bank                                            07/01/32      3.18          2,885,000

</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 2008
===============================================================================
<TABLE>

     Face                                                                    Maturity       Current          Value
     Amount                                                                     Date        Coupon (1)       (Note 1)
------------                                                                   ------       ----------       --------
Variable Rate Demand Instruments ((8)) (Continued)
-----------------------------------------------------------------------------------------------------------------------------------
<S>             <C>                                                               <C>                <C>          <C>
$      915,000  Putnam County, NY IDA IDRB
                (Broad Reach, LLC Project) - Series 2006B
                LOC Charter One Bank                                            07/01/14      3.18%     $     915,000
     7,000,000  RDV Finance LLC
                LOC Fifth Third Bank                                            10/01/39      3.65          7,000,000
     5,000,000  Real Estate, LLC and White Wilson Medical Center
                LOC Fifth Third Bank                                            05/01/57      3.85          5,000,000
     2,355,000  Realty Holdings Co. LLC - Series 2004
                LOC Fifth Third Bank                                            05/01/24      3.85          2,355,000
     4,570,000  Reynolds Road Fitness Center - Series 1998
                LOC Fifth Third Bank                                            01/01/19      3.85          4,570,000
     3,490,000  Robert C. Fox Jr. (Fox Racing Shoe Project) - Series A
                LOC Comerica Bank                                               06/01/33      2.67          3,490,000
     3,855,000  Rockwood Quarry LLC - Series 2002
                LOC Fifth Third Bank                                            12/01/22      3.65          3,855,000
       980,000  S & S Partnership (Model Graphics) - Series 1999
                LOC U.S. Bank, N.A.                                             09/01/19      3.60            980,000
    10,113,000  Saber Management LLC - Series 2006
                LOC Charter One Bank                                            07/01/56      3.75         10,113,000
     1,240,000  Sand Run Nursery & Preserve LLC - Series 2004
                LOC U.S. Bank, N.A.                                             03/01/24      3.50          1,240,000
     4,800,000  Santa Rosa Property Holdings, LLC - Series 2006
                LOC Columbus Bank & Trust Company                               08/01/31      2.90          4,800,000
     2,325,000  Savoy Properties, Ltd. - Series 2000
                LOC Key Bank, N.A.                                              08/01/20      3.50          2,325,000
     6,090,000  Scott Street Land Company, Ltd. - Series 2000
                LOC Fifth Third Bank                                            01/03/22      3.85          6,090,000
    10,000,000  Sea Island Company & Sea Island Coastal
                Properties LLC - Series 2003B
                LOC Columbus Bank & Trust Company                               04/01/23      2.90         10,000,000
     3,850,000  Security Self-Storage, Inc. - Series 1999
                LOC JPMorgan Chase Bank, N.A.                                   02/01/19      3.70          3,850,000
     2,800,000  Security Self-Storage, Inc. - Series 2005
                LOC Fifth Third Bank                                            05/01/35      3.85          2,800,000
     3,330,000  Servaas, Inc. - Series 2003
                LOC Fifth Third Bank                                            03/01/13      3.85          3,330,000
     2,970,000  Shepherd Capital LLC
                LOC Fifth Third Bank                                            03/15/49      3.97          2,970,000
     4,095,000  Smugglers Notch Management Company, Ltd. and
                Smugglers Notch Investment Company, Ltd. - Series 2000
                LOC Key Bank, N.A.                                              09/01/15      3.50          4,095,000
     6,100,000  South Central Communications Corporation - Series 2003
                LOC Fifth Third Bank                                            04/01/18      3.65          6,100,000
     1,630,000  Southern Orthopaedic Properties LLC - Series 2001
                LOC Columbus Bank & Trust Company                               10/01/21      2.95          1,630,000
    67,800,000  Southern Ute Indian Tribe of the Southern Ute Indian
                Reservation, CO - Series 2007                                   01/01/27      3.50         67,800,000

</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------



===============================================================================

 <TABLE>

     Face                                                                    Maturity       Current          Value
     Amount                                                                     Date        Coupon (1)       (Note 1)
------------                                                                   ------       ----------       --------
Variable Rate Demand Instruments (8) (Continued)
-----------------------------------------------------------------------------------------------------------------------------------
<S>             <C>                                                               <C>                <C>          <C>
$   11,925,000  Southwestern Group Limited - Series 2001
                LOC U.S. Bank, N.A.                                             07/01/21      3.50%     $  11,925,000
     1,160,000  Stallard-Schrier Family LP - Series 1996
                LOC Fifth Third Bank                                            09/01/16      3.50          1,160,000
       900,000  State Crest Ltd. - Series 2000
                LOC Fifth Third Bank                                            06/01/23      3.85            900,000
    10,380,000  St. Johns County IDA First Mortgage RB
                (Presbyterian Retirement Communities Project) - Series 2004B
                LOC Allied Irish Bank PLC                                       08/01/34      3.20         10,380,000
     1,000,000  Stone Creek LLC
                LOC Columbus Bank & Trust Company                               12/01/41      2.95          1,000,000
    10,370,000  Stonegate-Partners I, LLC (Stonegate Partners Project)
                - Series 2002
                LOC U.S. Bank, N.A.                                             06/01/34      3.51         10,370,000
    18,405,000  SWC Princeton, LLC - Series 2006
                LOC Compass Bank                                                03/01/32      2.77         18,405,000
     2,100,000  Tampa Bay, FL (Elders Land Development) - Series 2003
                LOC Fifth Third Bank                                            09/01/23      3.85          2,100,000
     2,520,000  Tant Real Estate, LLC - Series 2003
                LOC Columbus Bank & Trust Company                               03/01/23      2.95          2,520,000
     1,695,000  Taylor Steel, Inc.
                LOC Key Bank, N.A.                                              02/01/23      3.50          1,695,000
       650,000  T.D. Management Ltd. - Series 1996
                LOC Fifth Third Bank                                            01/01/11      3.50            650,000
     7,030,000  Thayer Properties II, LLC - Series 2001
                LOC Columbus Bank & Trust Company                               09/01/21      3.00          7,030,000
     1,605,000  The Home City Ice Company & HC Transport, Inc., Series - 2004
                LOC U.S. Bank, N.A.                                             05/01/19      3.50          1,605,000
     2,560,000  The Medical Clinic Board of the City of Mobile, AL - Spring Hill
                (Springhill Medical Complex, Inc.) - Series 1996B
                LOC Regions Bank                                                09/01/11      2.80          2,560,000
     2,935,000  The Physician's Center, L.P. - Series 2003
                Guaranteed by Federal Home Loan Bank                            10/01/29      2.78          2,935,000
     5,510,000  The Shoppes at Edgewater - Series 2003
                LOC Amsouth Bank                                                01/01/23      2.80          5,510,000
     1,220,000  The Wilmington Iron & Metal Company, Inc - Series 1999
                LOC JPMorgan Chase Bank, N.A.                                   08/01/14      3.90          1,220,000
     6,775,000  Three Reading LP
                LOC Federal Home Loan Bank of Pittsburg                         06/01/24      2.80          6,775,000
     2,280,000  Tireless Corporation - Series 1999
                LOC Fifth Third Bank                                            04/01/19      3.85          2,280,000
     3,785,000  Tom Richards, Inc. (Team Land, LLC / Team Industries)
                Guaranteed by Federal Home Loan Bank of Cincinnati              12/01/16      3.95          3,785,000
     2,770,000  Town of Islip, NY IDA (Brentwood Real Estate LLC) - Series 2000
                LOC Citibank, N.A.                                              11/01/20      2.15          2,770,000
     1,340,000  Trendway Corporation - Series 1996
                LOC ABN Amro Bank, N.A.                                         12/01/26      3.60          1,340,000

</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 2008
===============================================================================

<TABLE>

      Face                                                                    Maturity       Current          Value
     Amount                                                                     Date        Coupon (1)       (Note 1)
------------                                                                   ------       ----------       --------
Variable Rate Demand Instruments ((8)) (Continued)
-----------------------------------------------------------------------------------------------------------------------------------
<S>             <C>                                                               <C>                <C>          <C>
$    5,900,000  Triple Crown Investments, LLC - Series 2004
                LOC Federal Home Loan Bank of Dallas                            08/01/25      2.78%     $   5,900,000
     1,880,000  Trotman Bay Minette, Inc. - Series 2000
                LOC Columbus Bank & Trust Company                               01/01/21      2.78          1,880,000
     2,545,000  Twelfth Street Partners, LLC - Series 2005
                LOC Fifth Third Bank                                            04/01/25      3.85          2,545,000
     4,595,000  Upper Illinois River Valley Development Authority
                (Exolon-ESK Company Project) - Series 1996B
                LOC Bank of America, N.A.                                       12/01/21      3.50          4,595,000
       735,000  Vincent Enterprise & Partners - Series 2000
                LOC Key Bank, N.A.                                              03/01/20      3.50            735,000
       570,000  Walt Sweeney Ford - Series 1996
                LOC Fifth Third Bank                                            01/01/12      3.60            570,000
       430,000  Warrior Roofing Manufacturing, Inc - Series 2001
                LOC Columbus Bank & Trust Company                               09/01/26      3.00            430,000
     3,333,000  Washington State HFC Non-Profit Housing RB ((9))
                (Rockwood Program) - Series B
                LOC Wells Fargo Bank, N.A.                                      01/01/30      2.97          3,333,000
     1,375,000  Washington State HFC Non-Profit Housing RB
                (The Vintage at Richland Project) - Series 2004B
                Guaranteed by Federal National Mortgage Association             01/15/38      3.07          1,375,000
     8,955,000  Wellington Green, LLC - Series 1999
                LOC Charter One Bank                                            04/01/29      3.50          8,955,000
     8,700,000  Wellstone Mills LLC - Series 2004A
                LOC PNC Bank, N.A.                                              12/15/24      2.83          8,700,000
     1,650,000  Westchester County, NY IDA RB
                (B.W.P. Distributors Inc.) - Series 1997
                LOC Wachovia Bank, N.A.                                         10/01/28      3.92          1,650,000
       425,000  Westchester Presbyterian Church
                LOC U.S Bank, N.A.                                              09/01/13      3.50            425,000
    15,200,000  William Morris Realty Greystone, LLC - Series 2007
                LOC Regions Bank                                                03/01/32      2.72         15,200,000
     4,800,000  Willow Creek Interest LLC, OH - Series 2005
                LOC Fifth Third Bank                                            04/01/25      3.85          4,800,000
     2,687,563  Wilmington Trust Company (Amtrak Trust 93-A) - Series B Notes
                Guaranteed by General Electric Company                          01/01/11      4.66          2,687,563
     7,500,000  Winder-Barrow Industrial Building Authority
                (The Concrete Company Project) - Series 2000
                LOC Columbus Bank & Trust Company                               02/01/20      2.95          7,500,000
       890,000  Windsor Medical Center, Inc. -  Series 1997
                LOC Federal Home Loan Bank                                      12/03/18      3.95            890,000
     1,590,000  Wisconsin Housing Preservation Corporation - Series 2005
                LOC Marshall & Ilsley Bank                                      05/01/35      3.30          1,590,000
     2,100,000  Woods Group TN, LLC - Series 2006
                LOC Amsouth Bank                                                09/01/31      2.93          2,100,000
--------------                                                                                         --------------
 1,028,262,323  Total Variable Rate Demand Instruments                                                  1,028,262,323
--------------                                                                                         --------------

</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------



===============================================================================

 <TABLE>

      Face                                                                    Maturity       Current          Value
     Amount                                                                     Date        Coupon (1)       (Note 1)
------------                                                                   ------       ----------       --------
Yankee Certificates of Deposit (38.10%)
-----------------------------------------------------------------------------------------------------------------------------------
<S>             <C>                                                               <C>                <C>          <C>
$  100,000,000  Abbey National Bank Floating Rate YCD (10)                      04/07/08      4.59%     $  99,999,601
   150,000,000  Allied Irish Bank PLC                                           06/09/08      4.33        150,000,000
   100,000,000  Banco Bilbao de Vizcaya Argentaria Floating Rate YCD  (11)      04/07/08      4.59         99,999,682
   200,000,000  Banco of Nova Scotia                                            04/11/08      2.85        200,000,000
    50,000,000  Bank of Scotland                                                06/02/08      2.73         50,026,899
   110,000,000  Bank of Scotland                                                06/09/08      2.97        110,049,417
   100,000,000  Bayerische Landesbank Girozentrale                              04/03/08      3.13        100,000,000
   100,000,000  Bank of Montreal  (12)                                          06/17/08      2.40        100,000,000
    75,000,000  CIBC Floating Rate YCD  (12)                                    05/08/08      2.40         75,000,000
    50,000,000  CIBC Floating Rate YCD  (13)                                    05/21/08      2.66         50,000,000
    25,000,000  CIBC Floating Rate YCD  (14)                                    07/28/08      2.41         25,000,000
    75,000,000  Credit Industriel et Commercial                                 04/03/08      3.13         75,000,000
    50,000,000  Credit Industriel et Commercial                                 04/28/08      2.75         50,000,000
    25,000,000  Credit Industriel et Commercial                                 05/27/08      5.33         25,000,000
    85,000,000  Credit Suisse First Boston                                      05/16/08      5.00         85,018,206
    50,000,000  Credit Suisse First Boston                                      05/22/08      5.31         50,000,000
    40,000,000  Credit Suisse First Boston                                      06/04/08      5.37         40,000,000
    50,000,000  Deutsche Bank  (12)                                             04/24/08      2.40         50,000,000
   100,000,000  Deutsche Zentral-Genossenschaftsb                               04/11/08      3.11        100,000,138
   200,000,000  Deutsche Zentral-Genossenschaftsb                               05/01/08      3.24        200,000,000
    50,000,000  Deutsche Zentral-Genossenschaftsb                               10/10/08      5.00         50,000,000
    75,000,000  HSH Nordbank AG                                                 04/09/08      4.48         75,000,000
    75,000,000  HSH Nordbank AG                                                 05/07/08      3.19         75,000,000
   100,000,000  Landesbank Baden Wurtemburg                                     05/06/08      3.08        100,000,000
   100,000,000  National Bank of Canada  (6)                                    04/21/08      2.70        100,000,000
    20,000,000  Norddeutsche Landesbank Girozentral                             04/07/08      5.41         20,000,000
    50,000,000  Standard Chartered Bank PLC Floating Rate YCD  (15)             04/07/08      4.59         49,999,821
   100,000,000  Standard Chartered Bank PLC Floating Rate YCD  (16)             04/07/08      3.05         99,999,761
   100,000,000  Standard Chartered Bank PLC Floating Rate YCD                   04/07/08      3.19        100,000,000
   150,000,000  Unicredito Italiano                                             05/28/08      3.07        150,000,000
    50,000,000  Union Bank of Switzerland                                       09/17/08      5.10         50,000,000
    50,000,000  Union Bank of Switzerland                                       09/17/08      5.05         50,000,000
--------------                                                                                         --------------
 2,655,000,000  Total Yankee Certificates of Deposit                                                    2,655,093,525
--------------                                                                                         --------------
                Total Investments (99.28%) (Cost $6,917,784,002+)                                       6,917,784,002
                Cash and other assets in excess of liabilities (0.72%)                                     50,369,276
                                                                                                       --------------
                Net Assets (100.00%)                                                                   $6,968,153,278
                                                                                                       ==============
                +   Aggregate cost for federal income tax purposes is identical.

</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 2008
===============================================================================

<TABLE>

FOOTNOTES:
<S>                                                                       <C>
1) The interest rate shown reflects the security's current                10) The interest rate is adjusted quarterly based upon
   coupon, unless yield is available.                                         three month LIBOR minus 0.06%.
2) The interest rate is adjusted quarterly based upon three               11) The interest rate is adjusted quarterly based upon
   month LIBOR plus 0.15%.                                                    three month LIBOR minus 0.055%.
3) The interest rate is adjusted monthly based upon one                   12) The interest rate is adjusted daily based upon
   month LIBOR plus 0.03%.                                                    Federal Funds Target plus 0.15%.
4) The interest rate is adjusted quarterly based upon four                13) The interest rate is adjusted monthly based upon one
   months LIBOR minus 0.50%.                                                  month LIBOR plus 0.06%.
5) The interest rate is adjusted monthly based upon one month             14) The interest rate is adjusted daily based upon
   LIBOR minus 0.02%.                                                         Federal Funds Target plus 0.165%.
6) The interest rate is adjusted monthly based upon one month             15) The interest rate is adjusted monthly based upon one
   LIBOR plus 0.14%.                                                          month LIBOR minus 0.035%.
7) The interest rate is adjusted quarterly based upon three               16) The interest rate is adjusted quarterly based upon
   month LIBOR plus 0.08%.                                                    three month LIBOR minus 0.0525%.
8) Securities payable on demand at par including accrued
   interest(with seven days' notice).Interest rate is adjusted
   weekly, unless otherwise noted.
9) Securities payable on demand at par including accrued
   interest (with one day notice).  Interest rate is adjusted daily.

<CAPTION>

KEY:
<S>           <C>   <C>                                          <C>      <C>   <C>
      EDFA      =   Economic Development Finance Authority       IDRB      =    Industrial Development Revenue Bond
      EDRB      =   Economic Development Revenue Bond            LOC       =    Letter of Credit
      HEFA      =   Health and Education Finance Authority       MHRB      =    Multi-Family Housing Revenue Bond
      HFA       =   Housing Finance Authority                    RB        =    Revenue Bond
      HFC       =   Housing Finance Commission                   YCD       =    Yankee Certificate of Deposit
      IDA       =   Industrial Development Authority

<CAPTION>

BREAKDOWN OF PORTFOLIO HOLDINGS BY MATURITY:

--------------------------------------------------------------------------------------
     Securities Maturing in                Value                 % of Portfolio
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
<S>                                   <C>                          <C>
  Less than 31 Days                   $ 4,265,429,998                 61.66%
  31 through 60 Days                    1,704,287,298                 24.63
  61 through 90 Days                      567,076,316                  8.20
  91 through 120 Days                     127,034,418                  1.84
  121 through 180 Days                    203,955,972                  2.95
  Over 180 Days                            50,000,000                  0.72
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
  Total                               $ 6,917,784,002                100.00%
--------------------------------------------------------------------------------------

</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
MONEY MARKET PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2008
===============================================================================

<TABLE>

ASSETS
<S>                                                                                       <C>
  Investments in securities, at amortized cost (Note 1).............................      $    6,767,784,002
  Repurchase agreements.............................................................             150,000,000
  Cash..............................................................................               4,273,608
  Accrued interest receivable.......................................................              52,335,034
  Prepaid expenses..................................................................                 135,198
                                                                                          ------------------
         Total assets...............................................................           6,974,527,842
                                                                                          ------------------

LIABILITIES
  Payable to affiliates*............................................................               2,262,143
  Accrued expenses..................................................................                 404,670
  Dividends payable.................................................................               3,700,503
  Other payable.....................................................................                   7,248
                                                                                          ------------------
         Total liabilities..........................................................               6,374,564
                                                                                          ------------------
  Net assets........................................................................      $    6,968,153,278
                                                                                          ==================

SOURCE OF NET ASSETS
  Net capital paid in on shares of capital stock (Note 4)...........................      $    6,968,153,551
  Accumulated net realized loss.....................................................                    (233)
  Accumulated overdistributed net investment income.................................                     (40)
                                                                                          ------------------
  Net assets........................................................................      $    6,968,153,278
                                                                                          ==================
<CAPTION>

Net asset value, per share (Note 4):
Class Name                                          Net Assets         Shares Outstanding        Net Asset Value
<S>                                              <C>                   <C>                        <C>
Institutional Shares........................       $751,532,017            751,532,402                 $1.00
Institutional Service Shares................       $260,608,969            260,609,102                 $1.00
Investor Shares.............................       $316,547,547            316,547,709                 $1.00
Short Term Income Shares....................       $297,507,851            297,508,003                 $1.00
Retail Shares...............................     $1,439,855,672          1,439,856,408                 $1.00
Pinnacle Shares.............................       $178,212,705            178,212,796                 $1.00
Advantage Shares............................     $3,451,675,785          3,451,677,550                 $1.00
Xpress Shares...............................       $272,212,732            272,212,871                 $1.00


</TABLE>

*    Includes fees payable to Reich & Tang Asset  Management,  LLC, Reich & Tang
     Distributors, Inc. and Reich & Tang Services, Inc.

The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 2008
===============================================================================

<TABLE>

INVESTMENT INCOME
<S>                                                                                     <C>
Income:
    Interest........................................................................    $      345,210,915
                                                                                        ------------------
Expenses: (Note 2)
    Investment management fee.......................................................             8,332,825
    Administration fee..............................................................             3,472,010
    Shareholder servicing fee (Institutional Service Shares)........................               656,286
    Shareholder servicing fee (Investor Shares).....................................               581,548
    Shareholder servicing fee (Short Term Income Shares)............................               566,412
    Shareholder servicing fee (Retail Shares).......................................             3,267,876
    Shareholder servicing fee (Advantage Shares)....................................             8,294,437
    Shareholder servicing fee (Xpress Shares).......................................             2,036,141
    Distribution fee (Investor Shares)..............................................               465,239
    Distribution fee (Short Term Income Shares).....................................             1,019,542
    Distribution fee (Retail Shares)................................................             8,496,478
    Distribution fee (Advantage Shares).............................................            24,883,312
    Distribution fee (Xpress Shares)................................................             6,108,423
    Sub-Accounting fee (Advantage Shares)...........................................             3,317,775
    Sub-Accounting fee (Xpress Shares)..............................................               814,456
    Custodian expenses..............................................................               207,342
    Shareholder servicing and related shareholder expenses+.........................             1,628,904
    Legal, compliance and filing fees...............................................               848,111
    Audit and accounting............................................................               527,341
    Trustees' fees and expenses.....................................................               397,214
    Other...........................................................................                87,826
                                                                                        ------------------
    Total expenses..................................................................            76,009,498
          Less:  Fees waived (Note 2)...............................................           (12,524,521)
                 Expense paid indirectly (Note 2)...................................                (2,530)
                                                                                        ------------------
    Net expenses....................................................................            63,482,447
                                                                                        ------------------
    Net investment income...........................................................           281,728,468

REALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments.............................................                  (233)
                                                                                        ------------------
Increase in net assets from operations..............................................    $      281,728,235
                                                                                        ==================

</TABLE>

+    Includes  class specific  transfer  agency  expenses of $104,888,  $52,514,
     $114,442,   $131,226,   $653,574,   and  $28,696  for  the   Institutional,
     Institutional  Service,  Investor,  Short Term Income, Retail, and Pinnacle
     Shares respectively.

The accompanying notes are an integral part of these financial statements

<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
MONEY MARKET PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED MARCH 31, 2008 AND 2007
===============================================================================

<TABLE>

                                                                              2008                        2007
                                                                              ----                        ----
INCREASE (DECREASE) IN NET ASSETS
<S>                                                                    <C>                         <C>
Operations:
    Net investment income.........................................     $   281,728,468             $     95,361,885
    Net realized gain (loss) on investments.......................                (233)                       2,797
                                                                       ---------------             ----------------
Increase in net assets from operations............................         281,728,235                   95,364,682
Dividends to shareholders from net investment income:
    Institutional Shares..........................................         (29,254,977)                 (30,400,132)
    Institutional Service Shares..................................         (11,820,882)                 (11,264,771)
    Investor Shares...............................................          (9,893,960)                    (546,986)
    Short-Term Income Shares......................................          (8,887,585)                    (203,619)
    Retail Shares.................................................         (51,609,017)                  (4,247,022)
    Pinnacle Shares...............................................          (8,183,099)                  (7,787,391)
    Advantage Shares..............................................        (131,002,246)                 (40,911,972)
    Xpress Shares.................................................         (31,076,702)                      -0-
                                                                       ---------------             ----------------
         Total dividends to shareholders..........................        (281,728,468)                 (95,361,893)
                                                                       ---------------             ----------------
Distributions to shareholders from realized gains on investments:
    Institutional Shares..........................................                  (5)                        (462)
    Institutional Service Shares..................................                  (2)                        (149)
    Investor Shares...............................................                  (2)                         (10)
    Short-Term Income Shares......................................               -0-                             (7)
    Retail Shares.................................................                  (7)                        (152)
    Pinnacle Shares...............................................                  (1)                         (89)
    Advantage Shares..............................................                 (23)                      (1,711)
    Xpress Shares.................................................               -0-                        -0-
                                                                       ---------------             ----------------
         Total distributions to shareholders......................                 (40)                      (2,580)
                                                                       ---------------             ----------------
Capital share transactions (Note 4):
    Institutional Shares..........................................         111,959,237                  266,851,902
    Institutional Service Shares..................................          (7,255,798)                  43,814,744
    Investor Shares...............................................          27,257,449                  151,946,857
    Short-Term Income Shares......................................         199,669,738                   57,096,721
    Retail Shares.................................................         505,196,112                  897,903,953
    Pinnacle Shares...............................................           7,184,587                   36,345,944
    Advantage Shares..............................................         338,089,059                3,113,588,491
    Xpress Shares.................................................         272,212,871                       -0-
    Net asset value of shares issued in connection with merger Cortland
    General Money Market into Retail Shares (Note 5)..............          36,753,053                       -0-
    Net asset value of shares issued in connection with merger Short Term
    Money Market Class A into Short Term Income Shares (Note 5)...          40,741,544                       -0-
    Net asset value of shares issued in connection with merger Short Term
    Money Market Class B into Investor Shares (Note 5)............         137,343,403                       -0-
                                                                       ---------------             ----------------
          Total capital share transactions........................       1,669,151,255                4,567,548,612
                                                                       ---------------             ----------------
    Total increase ...............................................       1,669,150,982                4,567,548,821
Net assets:
    Beginning of year.............................................       5,299,002,296                  731,453,475
                                                                       ---------------             ----------------
    End of year...................................................     $ 6,968,153,278             $  5,299,002,296
                                                                       ===============             ================
Overdistributed net investment income.............................     $           (40)            $        -0-
                                                                       ===============             ================

</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS
===============================================================================

<TABLE>

                                                                                    For the Years Ended March 31,
                                                                     ------------------------------------------------------------
Institutional shares                                                    2008        2007         2006         2005        2004
--------------------                                                 ---------   ---------    ---------    ---------    ---------
<S>                                                                  <C>         <C>           <C>          <C>        <C>
Per Share Operating Performance:
(for a share outstanding throughout the year)
Net asset value, beginning of year...............................    $   1.00    $   1.00     $   1.00     $   1.00     $   1.00
                                                                     ---------   ---------    ---------    ---------    ---------
Income from investment operations:
  Net investment income..........................................        0.048       0.051        0.036        0.016        0.010
  Net realized and unrealized gain(loss)  on investments.........        0.000       0.000         --          0.000        0.000
                                                                     ---------   ---------    ---------    ---------    ---------
  Total from investment operations...............................        0.048       0.051        0.036        0.016        0.010
Less distributions from:
  Dividends from net investment income...........................       (0.048)     (0.051)      (0.036)      (0.016)      (0.010)
  Net realized gain(loss) on investment..........................       (0.000)     (0.000)         --      (0.000)      (0.000)
                                                                     ---------   ---------    ---------    ---------    ---------
  Total Distributions............................................       (0.048)     (0.051)      (0.036)      (0.016)      (0.010)
                                                                     ---------   ---------    ---------    ---------    ---------
Net asset value, end of year.....................................    $   1.00    $   1.00     $   1.00     $   1.00     $   1.00
                                                                     =========   =========    =========    =========    =========
Total Return.....................................................        4.91%       5.19%        3.63%        1.61%        1.00%
Ratios/Supplemental Data
Net assets, end of year (000's)..................................    $ 751,532   $ 639,573    $ 372,721    $ 215,314    $ 163,829
Ratios to average net assets:
  Expenses (net of fees waived) (a)..............................        0.20%       0.20%        0.20%        0.20%        0.20%
  Net investment income..........................................        4.78%       5.10%        3.66%        1.63%        0.99%
  Management and administration fees waived......................        0.02%       0.03%        0.06%        0.06%        0.06%
  Transfer agency fees waived....................................        0.00%        --          0.02%        0.02%        0.02%
  Expenses paid indirectly.......................................        0.00%       0.00%        0.00%        0.00%        0.00%

<CAPTION>
                                                                                    For the Years Ended March 31,
                                                                     ------------------------------------------------------------
Institutional Service shares                                            2008        2007         2006         2005        2004
----------------------------                                         ---------   ---------    ---------    ---------    ---------
<S>                                                                  <C>         <C>           <C>          <C>        <C>
Per Share Operating Performance:
(for a share outstanding throughout the year)
Net asset value, beginning of year...............................    $   1.00    $   1.00     $   1.00     $   1.00     $   1.00
                                                                     ---------   ---------    ---------    ---------    ---------
Income from investment operations:
  Net investment income..........................................        0.046       0.048        0.033        0.013        0.007
  Net realized and unrealized gain(loss)  on investments.........        0.000       0.000         --          0.000        0.000
                                                                     ---------   ---------    ---------    ---------    ---------
  Total from investment operations...............................        0.046       0.048        0.033        0.013        0.007
Less distributions from:
  Dividends from net investment income...........................       (0.046)     (0.048)      (0.033)      (0.013)      (0.007)
  Net realized gain(loss) on investment..........................       (0.000)     (0.000)       (--)        (0.000)      (0.000)
                                                                     ---------   ---------    ---------    ---------    ---------
  Total Distributions............................................       (0.046)     (0.048)      (0.033)      (0.013)      (0.007)
                                                                     ---------   ---------    ---------    ---------    ---------
Net asset value, end of year.....................................    $   1.00    $   1.00     $   1.00     $   1.00     $   1.00
                                                                     =========   =========    =========    =========    =========
Total Return.....................................................        4.65%       4.92%        3.36%        1.34%        0.73%
Ratios/Supplemental Data
Net assets, end of year (000's)..................................    $ 260,609   $ 267,865    $ 224,050    $ 119,989    $  53,373
Ratios to average net assets:
  Expenses (net of fees waived) (a)..............................        0.45%       0.45%        0.47%        0.47%        0.47%
  Net investment income..........................................        4.50%       4.83%        3.39%        1.49%        0.73%
  Management and administration fees waived......................        0.02%       0.03%        0.06%        0.08%        0.06%
  Shareholder servicing fees waived..............................        0.01%        --           --           --           --
  Transfer agency fees waived....................................         --          --          0.01%        0.02%        0.00%
  Expenses paid indirectly.......................................        0.00%       0.00%        0.00%        0.00%        0.00%

(a) Includes expenses paid indirectly.

</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------



===============================================================================

<TABLE>

Investor shares                                                                 Commencement of Operations
---------------                                            Year Ended            November 28, 2006 through
Per Share Operating Performance:                         March 31, 2008               March 31, 2007
                                                         --------------               --------------
(for a share outstanding throughout the year)
<S>                                                        <C>                        <C>
Net asset value, beginning of year.....................     $   1.00                    $    1.00
                                                            ---------                   ----------
Income from investment operations:
   Net investment income...............................         0.044                        0.016
   Net realized and unrealized gain(loss)  on investments       0.000                        0.000
                                                            ---------                   ----------
   Total from investment operations....................         0.044                        0.016
Less distributions from:
   Dividends from net investment income................        (0.044)                      (0.016)
   Net realized gain on investments....................        (0.000)                      (0.000)
                                                            ---------                   ----------
   Total Distributions.................................        (0.044)                      (0.016)
                                                            ---------                   ----------
Net asset value, end of year...........................     $   1.00                    $    1.00
                                                            =========                   ==========
Total Return...........................................         4.44%                        1.62%(a)
Ratios/Supplemental Data
Net assets, end of year (000's)........................     $ 316,547                   $ 151,947
Ratios to average net assets:
   Expenses (net of fees waived) (b)...................         0.65%                        0.65%(c)
   Net investment income...............................         4.25%                        4.76%(c)
   Management and administration fees waived...........         0.02%                        0.03%(c)
   Distribution fees waived............................         0.04%                        --   (c)
   Transfer Agency Account fee waiver..................         --                           0.03%(c)
   Expenses paid indirectly............................         0.00%                        0.00%(c)


Short Term Income shares                                                        Commencement of Operations
-------------------------                                  Year Ended            February 12, 2007 through
Per Share Operating Performance:                         March 31, 2008               March 31, 2007
                                                         --------------               --------------
(for a share outstanding throughout the year)
Net asset value, beginning of year.....................     $   1.00                    $    1.00
                                                            ---------                   ----------
Income from investment operations:
   Net investment income...............................         0.041                        0.006
   Net realized and unrealized gain(loss)  on investments       0.000                        0.000
                                                            ---------                   ----------
   Total from investment operations....................         0.041                        0.006
Less distributions from:
   Dividends from net investment income................        (0.041)                      (0.006)
   Net realized gain on investments....................         --                          (0.000)
                                                            ---------                   ----------
   Total Distributions.................................        (0.041)                      (0.006)
                                                            ---------                   ----------
Net asset value, end of year...........................     $   1.00                    $    1.00
                                                            =========                   ==========
Total Return...........................................         4.14%                        0.59%(a)
Ratios/Supplemental Data
Net assets, end of year (000's)........................     $ 297,508                   $  57,097
Ratios to average net assets:
   Expenses (net of fees waived) (b)...................         0.94%                        0.94%(c)
   Net investment income...............................         3.92%                        4.47%(c)
   Management and administration fees waived...........         0.02%                        0.03%(c)
   Distribution fees waived............................         0.01%                        --  (c)
   Expenses paid indirectly............................         0.00%                        0.00%(c)

</TABLE>

(a)      Unannualized
(b)      Includes expenses paid indirectly.
(c)      Annualized


<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS (CONTINUED)
===============================================================================

 <TABLE>

Retail shares                                                                   Commencement of Operations
-------------                                              Year Ended            November 28, 2006 through
Per Share Operating Performance:                         March 31, 2008               March 31, 2007
                                                         --------------               --------------
(for a share outstanding throughout the year)
<S>                                                        <C>                        <C>
Net asset value, beginning of year.....................     $   1.00                    $    1.00
                                                            ---------                   ----------
Income from investment operations:
   Net investment income...............................         0.040                        0.015
   Net realized and unrealized gain(loss)  on investments       0.000                        0.000
                                                            ---------                   ----------
   Total from investment operations....................         0.040                        0.015
Less distributions from:
   Dividends from net investment income................        (0.040)                      (0.015)
   Net realized gain on investments....................        (0.000)                      (0.000)
                                                            ---------                   ----------
   Total Distributions.................................        (0.040)                      (0.015)
                                                            ---------                   ----------
Net asset value, end of year...........................     $   1.00                    $    1.00
                                                            =========                   ==========
Total Return...........................................         4.08%                        1.49%(a)
Ratios/Supplemental Data
Net assets, end of year (000's)........................     $1,439,855                  $ 897,904
Ratios to average net assets:
   Expenses (net of fees waived) (b)...................         1.00%                        1.00%(c)
   Net investment income...............................         3.95%                        4.39%(c)
   Management and administration fees waived...........         0.02%                        0.03%(c)
   Distribution fees waived............................         0.14%                        0.10%(c)
   Transfer Agency Account fee waiver..................          --                          0.03%(c)
   Expenses paid indirectly............................         0.00%                        0.00%(c)

<CAPTION>

                                                                                    For the Years Ended March 31,
                                                                     ------------------------------------------------------------
Pinnacle shares                                                        2008        2007         2006         2005        2004
---------------                                                      ---------   ---------    ---------    ---------    ---------
<S>                                                                  <C>         <C>           <C>          <C>        <C>
Per Share Operating Performance:
(for a share outstanding throughout the year)
Net asset value, beginning of year...............................    $   1.00    $   1.00     $   1.00     $   1.00     $   1.00
                                                                     ---------   ---------    ---------    ---------    ---------
Income from investment operations:
  Net investment income..........................................        0.048       0.051        0.036        0.016        0.010
  Net realized and unrealized gain(loss)  on investments.........        0.000       0.000         --          0.000        0.000
                                                                     ---------   ---------    ---------    ---------    ---------
  Total from investment operations...............................        0.048       0.051        0.036        0.016        0.010
Less distributions from:
  Dividends from net investment income...........................       (0.048)     (0.051)      (0.036)      (0.016)      (0.010)
  Net realized gain(loss) on investment..........................       (0.000)     (0.000)       (--)        (0.000)      (0.000)
                                                                     ---------   ---------    ---------    ---------    ---------
  Total Distributions............................................       (0.048)     (0.051)      (0.036)      (0.016)      (0.010)
                                                                     ---------   ---------    ---------    ---------    ---------
Net asset value, end of year.....................................    $   1.00    $   1.00     $   1.00     $   1.00     $   1.00
                                                                     =========   =========    =========    =========    =========
Total Return.....................................................        4.91%       5.19%        3.63%        1.61%        1.00%
Ratios/Supplemental Data
Net assets, end of year (000's)..................................    $ 178,213   $ 171,028    $ 134,682    $ 114,792    $ 122,839
Ratios to average net assets:
  Expenses (net of fees waived) (a)..............................        0.20%       0.20%        0.20%        0.20%        0.20%
  Net investment income..........................................        4.79%       5.08%        3.66%        1.63%        0.99%
  Management and administration fees waived......................        0.02%       0.03%        0.06%        0.08%        0.06%
  Transfer agency fees waived....................................        0.01%        --          0.02%        0.02%        0.02%
  Expenses paid indirectly.......................................        0.00%       0.00%        0.00%        0.00%        0.00%

</TABLE>
(a)      Unannualized
(b)      Includes expenses paid indirectly.
(c)      Annualized

The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------



===============================================================================

<TABLE>

Advantage shares                                                                Commencement of Operations
----------------                                           Year Ended            November 1, 2006 through
Per Share Operating Performance:                         March 31, 2008               March 31, 2007
                                                         --------------               --------------
(for a share outstanding throughout the year)
<S>                                                        <C>                        <C>
Net asset value, beginning of year.....................     $   1.00                    $    1.00
                                                            ---------                   ----------
Income from investment operations:
   Net investment income...............................         0.040                        0.018
   Net realized and unrealized gain(loss)  on investments       0.000                        0.000
                                                            ---------                   ----------
   Total from investment operations....................         0.040                        0.018
Less distributions from:
   Dividends from net investment income................        (0.040)                      (0.018)
   Net realized gain on investments....................        (0.000)                      (0.000)
                                                            ---------                   ----------
   Total Distributions.................................        (0.040)                      (0.018)
                                                            ---------                   ----------
Net asset value, end of year...........................     $   1.00                    $    1.00
                                                            =========                   ==========
Total Return...........................................         4.06%                        1.81%(a)
Ratios/Supplemental Data
Net assets, end of year (000's)........................     $3,451,676                  $3,113,588
Ratios to average net assets:
   Expenses (net of fees waived) (b)...................         1.02%                        1.02%(c)
   Net investment income...............................         3.95%                        4.35%(c)
   Management and administration fees waived...........         0.02%                        0.03%(c)
   Distribution fees waived............................         0.17%                        0.16%(c)
   Sub-Accounting fees waived..........................         0.10%                        0.10%(c)
   Expenses paid indirectly............................         0.00%                        0.00%(c)

<CAPTION>


Xpress shares                                      Commencement of Operations
-------------                                       June 20, 2007 through
Per Share Operating Performance:                         March 31, 2008
                                                         --------------
<S>                                                       <C>
Per Share Operating Performance:
(for a share outstanding throughout the year)
Net asset value, beginning of year.....................     $   1.00
                                                            ---------
Income from investment operations:
   Net investment income...............................         0.028
   Net realized and unrealized gain(loss)  on investments       0.000
                                                            ---------
   Total from investment operations....................         0.028
Less distributions from:
   Dividends from net investment income................        (0.028)
   Net realized gain on investments....................          --
                                                            ---------
   Total Distributions.................................        (0.028)
                                                            ---------
Net asset value, end of year...........................     $   1.00
                                                            =========
Total Return...........................................         2.88%(a)
Ratios/Supplemental Data
Net assets, end of year (000's)........................     $ 272,213
Ratios to average net assets:
   Expenses (net of fees waived) (b)...................         1.25%(c)
   Net investment income...............................         3.82%(c)
   Administration fees waived..........................         0.02%(c)
   Sub-Accounting fees waived..........................         0.04%(c)
   Expenses paid indirectly............................         0.00%(c)


(a)      Unannualized
(b)      Includes expenses paid indirectly.
(c)      Annualized

</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
U.S. TREASURY PORTFOLIO
EXPENSE CHART
FOR THE SIX MONTHS ENDED MARCH 31, 2008
(UNAUDITED)
===============================================================================

As a  shareholder  of the  Portfolio,  you incur the  following  ongoing  costs:
management fees and other Portfolio  expenses.  You may also incur  distribution
and/or  service  (12b-1) fees.  This example is intended to help you  understand
your ongoing  costs (in dollars) of  investing in the  Portfolio  and to compare
these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period October 1, 2007 through March 31, 2008.

ACTUAL EXPENSES

The first line of the table below  provides  information  about  actual  account
values and actual expenses.  You may use information in this line, together with
the amount you invested, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6),  then  multiply  the result by the number in the first
line under the heading  entitled  "Expenses  Paid During the Period" to estimate
the expenses you paid on your account during this period.

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES

The second  line of the table  below  provides  information  about  hypothetical
account  values and  hypothetical  expenses  based on the Fund's actual  expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Fund's actual return.  The hypothetical  account values and expenses may not
be used to estimate the actual ending  account  balance or expenses you paid for
the  period.  You may use this  information  to  compare  the  ongoing  costs of
investing in the Fund and other funds.  To do so,  compare this 5%  hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.

Please note that the  expenses  shown in the table are meant to  highlight  your
ongoing  costs only and do not reflect any  transactional  costs,  such as sales
charges  (loads),  redemption fees, or exchange fees that you may incur in other
mutual  funds.  Therefore,  the second line of the table is useful in  comparing
ongoing costs only,  and will not help you determine the relative total costs of
owning different funds.

<TABLE>

----------------------------------------------------------------------------------------------------------------------------
          Institutional Shares            Beginning Account    Ending Account Value     Expenses Paid        Annualized
           & Pinnacle Shares                Value 10/01/07           03/31/08          During the period   Expense Ratio*
----------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>                    <C>                   <C>                  <C>
  Actual                                      $1,000.00              $1,017.10               $1.01              0.20%
----------------------------------------------------------------------------------------------------------------------------
  Hypothetical (5% return before              $1,000.00              $1,024.00               $1.01              0.20%
  expenses)
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
      Institutional Service Shares        Beginning Account    Ending Account Value      Expenses Paid       Annualized
                                            Value 10/01/07           03/31/08          During the Period   Expense Ratio*
----------------------------------------------------------------------------------------------------------------------------
  Actual                                      $1,000.00              $1,015.80               $2.27              0.45%
----------------------------------------------------------------------------------------------------------------------------
  Hypothetical (5% return before              $1,000.00              $1,022.75               $2.28              0.45%
  expenses)
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
            Investor Shares               Beginning Account    Ending Account Value     Expenses Paid        Annualized
                                            Value 10/01/07           03/31/08          During the Period   Expense Ratio*
----------------------------------------------------------------------------------------------------------------------------
  Actual                                      $1,000.00              $1,014.90               $3.17              0.63%
----------------------------------------------------------------------------------------------------------------------------
  Hypothetical (5% return before              $1,000.00              $1,021.85               $3.18              0.63%
  expenses)
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
        Short Term Income Shares          Beginning Account    Ending Account Value      Expenses Paid      Annualized
                                            Value 10/01/07           03/31/08          During the Period   Expense Ratio*
----------------------------------------------------------------------------------------------------------------------------
  Actual                                      $1,000.00              $1,013.50               $4.53              0.90%
----------------------------------------------------------------------------------------------------------------------------
  Hypothetical (5% return before              $1,000.00              $1,020.50               $4.55              0.90%
  expenses)
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
              Retail Shares                 Beginning Account   Ending Account Value     Expenses Paid        Annualized
                                             Value 10/01/07           03/31/08          During the Period   Expense Ratio*
----------------------------------------------------------------------------------------------------------------------------
  Actual                                        $1,000.00             $1,013.00               $4.93             0.98%
----------------------------------------------------------------------------------------------------------------------------
  Hypothetical (5% return before expenses)      $1,000.00             $1,020.10               $4.95             0.98%
----------------------------------------------------------------------------------------------------------------------------


</TABLE>

*    Expenses are equal to the Fund's  annualized  expense ratios  multiplied by
     the average  account  value over the period  (October 1, 2007 through March
     31,  2008),  multiplied  by 183/366  (to  reflect  the most  recent  fiscal
     half-year).


-------------------------------------------------------------------------------

<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
U.S. TREASURY PORTFOLIO
SCHEDULE OF INVESTMENTS
MARCH 31, 2008
===============================================================================

<TABLE>

       Face                                                                        Maturity                             Value
     Amount                                                                         Date              Yield           (Note 1)
------------                                                                       ------             ------           --------
Repurchase Agreements (49.76%)
-----------------------------------------------------------------------------------------------------------------------------------
$   70,000,000  Bank of America Securities, LLC, purchased on 03/31/08, repurchase
                proceeds at maturity $70,002,431 (Collateralized by $66,994,000,
                U. S. Treasury Note, 4.625%, due 11/15/09, value $71,400,013)     04/01/08             1.25%    $   70,000,000
    95,000,000  Bank of America Securities, LLC, purchased on 03/31/08, repurchase
                proceeds at maturity $95,005,410 (Collateralized by $ 94,050,445,
                GNMA, 6.00% to 6.50%, due 12/15/37 to 03/20/38,
                value $96,900,001)                                                04/01/08             2.05         95,000,000
   170,000,000  Bear, Stearns & Co., Inc., purchased on 03/31/08, repurchase
                proceeds at maturity $170,010,294 (Collateralized by $168,340,502,
                GNMA, 4.50% to 7.00%, due 12/15/37 to 03/15/38, value
                $173,400,406)                                                     04/01/08             2.18        170,000,000
   230,000,000  Goldman Sachs, purchased on 03/31/08, repurchase proceeds at
                maturity $230,012,778 (Collateralized by $1,761,775,160, GNMA
                0.0000% to 24.8662%, due 06/15/26 to 01/20/38, value
                $234,600,001)                                                     04/01/08             2.00        230,000,000
    60,000,000  Merrill Lynch Pierce Fenner & Smith Co., purchased on 03/31/08,
                repurchase proceeds at maturity $60,001,750 (Collateralized by
                $54,340,000 TRIN, 2.00%, 04/15/12, value $61,202,396)             04/01/08             1.05         60,000,000
    78,000,000  UBS Securities, LLC, purchased on 03/31/08, repurchase proceeds at
                maturity $78,002,925 (Collateralized by $73,665,000,
                U.S. Treasury Bond, 13.25% due 05/15/14, value $27,342,081,
                U.S. Treasury Note, 4.75% due 12/31/08, value $52,221,390)        04/01/08             1.35         78,000,000
--------------                                                                                                  --------------
   703,000,000  Total Repurchase Agreements                                                                        703,000,000
--------------                                                                                                  --------------
U.S. Government Obligations (50.17%)
-----------------------------------------------------------------------------------------------------------------------------------
$  200,000,000  U.S. Treasury Bill                                                04/17/08             0.36%    $  199,968,000
   100,000,000  U.S. Treasury Bill                                                09/04/08             1.29         99,449,667
   100,000,000  U.S. Treasury Bill                                                09/18/08             1.16         99,456,944
   100,000,000  U.S. Treasury Bill                                                04/15/08             1.26         99,951,778
   130,000,000  U.S. Treasury Bill                                                04/15/08             1.12        129,944,389
    50,000,000  U.S. Treasury Note, 3.75%                                         05/15/08             4.98         49,927,718
    30,000,000  U.S. Treasury Note, 3.75%                                         05/15/08             5.00         29,956,490
--------------                                                                                                  --------------
   710,000,000  Total U.S. Government Obligations                                                                  708,654,986
--------------                                                                                                  --------------
                Total Investments (99.93%) (Cost $1,411,654,986+)                                                1,411,654,986
                Cash and other assets in excess of liabilities (0.07%)                                               1,026,323
                                                                                                                --------------
                Net Assets (100.00%)                                                                            $1,412,681,309
                                                                                                                ==============
            +   Aggregate cost for federal income tax purposes is identical.
<CAPTION>

KEY:
<S>           <C>  <C>
      GNMA     =   Government National Mortgage Association
      TRIN     =   U.S. Treasury Inflation Index

</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
U.S. TREASURY PORTFOLIO
BREAKDOWN OF PORTFOLIO HOLDING BY MATURITY
MARCH 31, 2008
===============================================================================

<TABLE>

------------------------------ ------------------------ --------------------------
    Securities Maturing in              Value                % of Portfolio
------------------------------ ------------------------ --------------------------
------------------------------ ------------------------ --------------------------
<S>                               <C>                          <C>
  Less than 31 Days               $ 1,132,864,167                80.25%
  31 through 60 Days                   79,884,208                 5.66
  61 through 90 Days                           --                 --
  91 through 120 Days                          --                 --
  121 through 180 Days                         --                 --
  Over 180 Days                       198,906,611                14.09
------------------------------ ------------------------ --------------------------
------------------------------ ------------------------ --------------------------
  Total                               $1,411,654,986             100.00%
------------------------------ ------------------------ --------------------------

</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
U.S. TREASURY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2008
===============================================================================

<TABLE>

ASSETS
<S>                                                                                       <C>
  Investments in securities, at amortized cost (Note 1).............................      $      708,654,986
  Repurchase agreements.............................................................             703,000,000
  Cash..............................................................................                 780,731
  Accrued interest receivable.......................................................               1,172,950
  Prepaid expenses..................................................................                  30,371
                                                                                          ------------------
         Total assets...............................................................           1,413,639,038
                                                                                          ------------------

LIABILITIES
  Payable to affiliates*............................................................                 315,093
  Accrued expenses..................................................................                 183,756
  Dividends payable.................................................................                 458,790
  Other Payables....................................................................                      90
                                                                                          ------------------
         Total liabilities..........................................................                 957,729
                                                                                          ------------------
  Net assets........................................................................      $    1,412,681,309
                                                                                          ==================

SOURCE OF NET ASSETS
  Net capital paid in on shares of capital stock (Note 4)...........................      $    1,412,681,309
                                                                                          ------------------
  Net assets........................................................................      $    1,412,681,309
                                                                                          ==================
<CAPTION>

Net asset value, per share (Note 4):
Class Name                                         Net Assets          Shares Outstanding        Net Asset Value
<S>                                               <C>                   <C>                       <C>
Institutional Shares........................      $544,745,587             544,745,587                $1.00
Institutional Service Shares................      $331,209,254             331,209,254                $1.00
Investor Shares.............................      $270,278,579             270,278,579                $1.00
Short Term Income Shares....................      $174,840,009             174,840,009                $1.00
Retail Shares...............................       $20,976,329              20,976,329                $1.00
Pinnacle Shares.............................       $70,631,551              70,631,551                $1.00

</TABLE>



*    Includes fees payable to Reich & Tang Asset  Management,  LLC, Reich & Tang
     Distributors, Inc. and Reich & Tang Services, Inc.

The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
U.S. TREASURY PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 2008
===============================================================================

<TABLE>

INVESTMENT INCOME
Income:
<S>                                                                                     <C>
    Interest........................................................................    $       54,947,009
                                                                                        ------------------
Expenses: (Note 2)
    Investment management fee.......................................................             1,556,757
    Administration fee..............................................................               648,649
    Shareholder servicing fee (Institutional Service Shares)........................               637,759
    Shareholder servicing fee (Investor Shares).....................................               511,461
    Shareholder servicing fee (Short Term Income Shares)............................               377,320
    Shareholder servicing fee (Retail Shares).......................................                 8,144
    Distribution fee (Investor Shares)..............................................               409,169
    Distribution fee (Short Term Income Shares).....................................               679,176
    Distribution fee (Retail Shares)................................................                21,174
    Custodian expenses..............................................................                56,837
    Shareholder servicing and related shareholder expenses+.........................               420,693
    Legal, compliance and filing fees...............................................               171,517
    Audit and accounting............................................................               187,275
    Trustees' fees and expenses.....................................................                83,408
    Other...........................................................................                29,090
                                                                                        ------------------
    Total expenses..................................................................             5,798,429
          Less:  Fees waived (Note 2)...............................................              (596,034)
                 Expense paid indirectly (Note 2)...................................               (12,014)
                                                                                        ------------------
    Net expenses....................................................................             5,190,381
    Net investment income...........................................................            49,756,628

REALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain/loss on investments...............................................               -0-
                                                                                        ------------------
Increase in net assets from operations..............................................    $       49,756,628
                                                                                        ==================

</TABLE>

+    Includes  class specific  transfer  agency  expenses of $125,394,  $51,021,
     $102,270, $75,982, $1,594, and $11,291 for the Institutional, Institutional
     Service,   Investor,   Short  Term  Income,  Retail  Shares,  and  Pinnacle
     respectively.

The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
U.S. TREASURY PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED MARCH 31, 2008 AND 2007
===============================================================================

<TABLE>
                                                                              2008                         2007
INCREASE (DECREASE) IN NET ASSETS                                             ----                         ----
<S>                                                                    <C>                         <C>
Operations:
    Net investment income.........................................     $    49,756,628             $     43,582,659
    Net realized gain (loss) on investments.......................              -0-                        -0-
                                                                       ---------------             ----------------
Increase in net assets from operations............................          49,756,628                   43,582,659
Dividends to shareholders from net investment income:
    Institutional Shares..........................................         (26,167,548)                 (30,970,760)
    Institutional Service Shares..................................          (9,579,659)                 (10,279,709)
    Investor Shares...............................................          (7,173,722)                    (449,775)
    Short Term Income Shares......................................          (4,577,752)                    (309,804)
    Retail Shares.................................................             (62,001)                      (5,127)
    Pinnacle Shares...............................................          (2,195,946)                  (1,567,484)
                                                                       ---------------             ----------------
         Total dividends to shareholders..........................         (49,756,628)                 (43,582,659)
                                                                       ---------------             ----------------
Distributions to shareholders from realized gains on investments:
    Institutional Shares..........................................              -0-                         -0-
    Institutional Service Shares..................................              -0-                         -0-
    Investor Shares...............................................              -0-                         -0-
    Short Term Income Shares......................................              -0-                         -0-
    Retail Shares.................................................              -0-                         -0-
    Pinnacle Shares...............................................              -0-                         -0-
                                                                        --------------              ---------------
         Total distributions to shareholders......................              -0-                         -0-
                                                                        --------------              ---------------
Capital share transactions (Note 4):
    Institutional Shares..........................................         (45,508,503)                (239,459,937)
    Institutional Service Shares..................................          82,247,669                  (55,206,814)
    Investor Shares...............................................          82,110,572                  134,910,723
    Short Term Income Shares......................................         136,417,283                   22,663,323
    Retail Shares.................................................          20,604,784                      371,545
    Pinnacle Shares...............................................          31,003,640                   11,123,008
    Net asset value of shares issued in connection with merger Short Term
    Government Class A into Short Term Income Shares (Note 5).....          15,759,403                       -0-
    Net asset value of shares issued in connection with merger Short Term
    Government Class B into Investor Shares (Note 5)..............          53,257,284                       -0-
                                                                       ---------------             ----------------
          Total capital share transactions........................         375,892,132                 (125,598,152)
                                                                       ---------------             ----------------
    Total increase (decrease) ....................................         375,892,132                 (125,598,152)
                                                                       ---------------             ----------------
Net assets:
    Beginning of year.............................................       1,036,789,177                1,162,387,329
                                                                       ---------------             ----------------
    End of year...................................................     $ 1,412,681,309             $  1,036,789,177
                                                                       ===============             ================
Undistributed net investment income...............................     $        -0-                $        -0-
                                                                       ===============             ================

</TABLE>
<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
U.S. TREASURY PORTFOLIO
FINANCIAL HIGHLIGHTS
===============================================================================

<TABLE>

                                                                                    For the Years Ended March 31,
                                                                     ------------------------------------------------------------
Institutional shares                                                    2008        2007         2006         2005        2004
--------------------                                                 ---------   ---------    ---------    ---------    ---------
<S>                                                                  <C>         <C>           <C>          <C>        <C>
Per Share Operating Performance:
(for a share outstanding throughout the year)
Net asset value, beginning of year...............................    $   1.00    $   1.00     $   1.00     $   1.00     $   1.00
                                                                     ---------   ---------    ---------    ---------    ---------
Income from investment operations:
  Net investment income..........................................        0.041       0.049        0.034        0.014        0.009
  Net realized and unrealized gain(loss)  on investments.........         --          --          0.000        0.000        0.000
                                                                     ---------   ---------    ---------    ---------    ---------
  Total from investment operations...............................        0.041       0.049        0.034        0.014        0.009
Less distributions from:
  Dividends from net investment income...........................       (0.041)     (0.049)      (0.034)      (0.014)      (0.009)
  Net realized gain(loss) on investment..........................        (--)         --         (0.000)      (0.000)      (0.000)
                                                                     ---------   ---------    ---------    ---------    ---------
  Total Distributions............................................       (0.041)     (0.049)      (0.034)      (0.014)      (0.009)
                                                                     ---------   ---------    ---------    ---------    ---------
Net asset value, end of year.....................................    $   1.00    $   1.00     $   1.00     $   1.00     $   1.00
                                                                     =========   =========    =========    =========    =========
Total Return.....................................................        4.18%       5.02%        3.48%        1.44%        0.91%
Ratios/Supplemental Data
Net assets, end of year (000's)..................................    $ 544,746   $ 590,254    $ 829,714    $ 484,434    $ 466,041
Ratios to average net assets:
  Expenses (net of fees waived) (a)..............................        0.20%       0.20%        0.20%        0.20%        0.20%
  Net investment income..........................................        4.17%       4.89%        3.51%        1.45%        0.90%
  Management and administration fees waived......................        0.03%       0.03%        0.05%        0.03%        0.04%
  Expenses paid indirectly.......................................        0.00%       0.00%        0.00%        0.00%        0.00%

<CAPTION>
                                                                                    For the Years Ended March 31,
                                                                     ------------------------------------------------------------
Institutional Service shares                                            2008        2007         2006         2005        2004
----------------------------                                         ---------   ---------    ---------    ---------    ---------
<S>                                                                  <C>         <C>           <C>          <C>        <C>
Per Share Operating Performance:
(for a share outstanding throughout the year)
Net asset value, beginning of year...............................    $   1.00    $   1.00     $   1.00     $   1.00     $   1.00
                                                                     ---------   ---------    ---------    ---------    ---------
Income from investment operations:
  Net investment income..........................................        0.039       0.047        0.032        0.012        0.007
  Net realized and unrealized gain(loss)  on investments.........         --          --          0.000        0.000        0.000
                                                                     ---------   ---------    ---------    ---------    ---------
  Total from investment operations...............................        0.039       0.047        0.032        0.012        0.007
Less distributions from:
  Dividends from net investment income...........................       (0.039)     (0.047)      (0.032)      (0.012)      (0.007)
  Net realized gain(loss) on investment..........................        (--)         --         (0.000)      (0.000)      (0.000)
                                                                     ---------   ---------    ---------    ---------    ---------
  Total Distributions............................................       (0.039)     (0.047)      (0.032)      (0.012)      (0.007)
                                                                     ---------   ---------    ---------    ---------    ---------
Net asset value, end of year.....................................    $   1.00    $   1.00     $   1.00     $   1.00     $   1.00
                                                                     =========   =========    =========    =========    =========
Total Return.....................................................        3.92%       4.76%        3.22%        1.19%        0.66%
Ratios/Supplemental Data
Net assets, end of year (000's)..................................    $ 331,209   $ 248,962    $ 304,168    $ 236,621    $ 261,931
Ratios to average net assets:
  Expenses (net of fees waived) (a)..............................        0.45%       0.45%        0.45%        0.45%        0.45%
  Net investment income..........................................        3.76%       4.65%        3.17%        1.18%        0.66%
  Management and administration fees waived......................        0.03%       0.03%        0.05%        0.03%        0.04%
  Expenses paid indirectly.......................................        0.00%       0.00%        0.00%        0.00%        0.00%

</TABLE>

(a) Includes expenses paid indirectly.

The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
U.S. TREASURY PORTFOLIO
FINANCIAL HIGHLIGHTS (CONTINUED)
===============================================================================

<TABLE>

Investor shares                                                                 Commencement of Operations
----------------                                           Year Ended            February 21, 2007 through
Per Share Operating Performance:                         March 31, 2008               March 31, 2007
                                                         --------------               --------------
<S>                                                      <C>                          <C>
(for a share outstanding throughout the year)
Net asset value, beginning of year.....................     $   1.00                    $    1.00
                                                            ---------                   ----------
Income from investment operations:
   Net investment income...............................         0.037                        0.005
   Net realized and unrealized gain(loss)  on investments        --                            --
                                                            ---------                   ----------
   Total from investment operations....................         0.037                        0.005
Less distributions from:
   Dividends from net investment income................        (0.037)                      (0.005)
   Net realized gain on investments....................          --                            --
                                                            ---------                   ----------
   Total Distributions.................................        (0.037)                      (0.005)
                                                            ---------                   ----------
Net asset value, end of year...........................     $   1.00                    $    1.00
                                                            =========                   ==========
Total Return...........................................         3.73%                        0.50%(a)
Ratios/Supplemental Data
Net assets, end of year (000's)........................     $ 270,279                   $ 134,911
Ratios to average net assets:
   Expenses (net of fees waived) (b)...................         0.63%                        0.63%(c)
   Net investment income...............................         3.51%                        4.62%(c)
   Administration fees waived..........................         0.03%                        0.03%(c)
   Distribution fees waived............................         0.05%                        0.05%(c)
   Expenses paid indirectly............................         0.00%                        0.00%(c)

                                                                                Commencement of Operations
Short Term Income shares                                   Year Ended            November 2, 2006 through
------------------------                                 March 31, 2008               March 31, 2007
                                                         --------------               --------------
Per Share Operating Performance:
(for a share outstanding throughout the year)
Net asset value, beginning of year.....................     $   1.00                    $    1.00
                                                            ---------                   ----------
Income from investment operations:
   Net investment income...............................         0.034                        0.018
   Net realized and unrealized gain(loss)  on investments        --                           --
                                                            ---------                   ----------
   Total from investment operations....................         0.034                        0.018
Less distributions from:
   Dividends from net investment income................        (0.034)                      (0.018)
   Net realized gain on investments....................          --                           --
                                                            ---------                   ----------
   Total Distributions.................................        (0.034)                      (0.018)
                                                            ---------                   ----------
Net asset value, end of year...........................     $   1.00                    $    1.00
                                                            =========                   ==========
Total Return...........................................         3.46%                        1.80%(a)
Ratios/Supplemental Data
Net assets, end of year (000's)........................     $ 174,840                   $  22,663
Ratios to average net assets:
   Expenses (net of fees waived) (b)...................         0.90%                        0.90%(c)
   Net investment income...............................         3.03%                        4.32%(c)
   Administration fees waived..........................         0.03%                        0.03%(c)
   Distribution fee waiver.............................         0.03%                        0.03%(c)
   Expenses paid indirectly............................         0.00%                        0.00%(c)

</TABLE>

(a)      Unannualized
(b)      Includes expenses paid indirectly
(c)      Annualized

The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------


===============================================================================

<TABLE>

Retail shares                                                                   Commencement of Operations
--------------                                              Year Ended            December 12, 2006 through
Per Share Operating Performance:                          March 31,2008               March 31, 2007
                                                          -------------               --------------
 (for a share outstanding throughout the year)
Net asset value, beginning of year.....................     $   1.00                    $    1.00
                                                            ---------                   ----------
Income from investment operations:
   Net investment income...............................         0.033                        0.013
   Net realized and unrealized gain(loss)  on investments        --                           --
                                                            ---------                   ----------
   Total from investment operations....................         0.033                        0.013
                                                            ---------                   ----------
Less distributions from:
   Dividends from net investment income................        (0.033)                      (0.013)
   Net realized gain on investments....................          --                           --
                                                            ---------                   ----------
   Total Distributions.................................        (0.033)                      (0.013)
                                                            ---------                   ----------
Net asset value, end of year...........................     $   1.00                    $    1.00
                                                            =========                   ==========
Total Return...........................................         3.36%                        1.28%(a)
Ratios/Supplemental Data
Net assets, end of year (000's)........................     $  20,976                   $     371
Ratios to average net assets:
   Expenses (net of fees waived) (b)...................         0.99%                        1.00%(c)
   Net investment income...............................         1.90%                        4.22%(c)
   Administration fees waived..........................         0.03%                        0.03%(c)
   Distribution fees waived............................         0.14%                        0.10%(c)
   Transfer Agency Account fees waived.................         --                           0.03%(c)
   Expenses paid indirectly............................         0.00%                        0.00%(c)


<CAPTION>
                                                                            For the Years Ended March 31,
Pinnacle shares                                                2008         2007         2006          2005         2004
---------------                                                ----         ----         ----          ----         ----
Per Share Operating Performance:
<S>                                                        <C>           <C>          <C>            <C>         <C>
(for a share outstanding throughout the year
Net asset value, beginning of year.....................     $   1.00     $   1.00     $    1.00      $  1.00      $  1.00
                                                            ---------    ---------    ---------      --------     --------
Income from investment operations:
   Net investment income...............................         0.041        0.049        0.034         0.014        0.009
   Net realized and unrealized gain(loss)  on investments        --           --          0.000         0.000        0.000
                                                            ---------    ---------    ---------      --------     --------
   Total from investment operations....................         0.041        0.049        0.034         0.014        0.009
Less distributions from:
   Dividends from net investment income................        (0.041)      (0.049)       (0.034)      (0.014)      (0.009)
   Net realized gain(loss) on investment...............          --           --          (0.000)      (0.000)      (0.000)
                                                            ---------    ---------    ----------     --------     --------
   Total Distributions.................................        (0.041)      (0.049)       (0.034)      (0.014)      (0.009)
                                                            ---------    ---------    ----------     --------     --------
Net asset value, end of year...........................     $   1.00     $   1.00     $    1.00      $  1.00      $  1.00
                                                            =========    =========    ==========     ========     ========
Total Return...........................................         4.18%        5.02%         3.48%        1.44%        0.91%
Ratios/Supplemental Data
Net assets, end of year (000's)........................     $  70,632    $  39,628    $  28,505    $  39,809    $  29,252
Ratios to average net assets:
   Expenses (net of fees waived)(b)....................         0.20%        0.20%         0.20%        0.20%        0.20%
   Net investment income...............................         3.89%        4.93%         3.51%        1.45%        0.90%
   Management and administration fees waived...........         0.03%        0.03%         0.05%        0.03%        0.04%
   Expenses paid indirectly............................         0.00%        0.00%         0.00%        0.00%        0.00%

</TABLE>

(a)      Unannualized
(b)      Includes expenses paid indirectly
(c)      Annualized
<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
U.S. GOVERNMENT PORTFOLIO
EXPENSE CHART
FOR THE SIX MONTHS ENDED MARCH 31, 2008
(UNAUDITED)
===============================================================================

As a  shareholder  of the  Portfolio,  you incur the  following  ongoing  costs:
management fees and other Portfolio  expenses.  You may also incur  distribution
and/or  service  (12b-1) fees.  This example is intended to help you  understand
your ongoing  costs (in dollars) of  investing in the  Portfolio  and to compare
these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period October 1, 2007 through March 31, 2008.

ACTUAL EXPENSES

The first line of the table below  provides  information  about  actual  account
values and actual expenses.  You may use information in this line, together with
the amount you invested, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6),  then  multiply  the result by the number in the first
line under the heading  entitled  "Expenses  Paid During the Period" to estimate
the expenses you paid on your account during this period.

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES

The second  line of the table  below  provides  information  about  hypothetical
account  values and  hypothetical  expenses  based on the Fund's actual  expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Fund's actual return.  The hypothetical  account values and expenses may not
be used to estimate the actual ending  account  balance or expenses you paid for
the  period.  You may use this  information  to  compare  the  ongoing  costs of
investing in the Fund and other funds.  To do so,  compare this 5%  hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.

Please note that the  expenses  shown in the table are meant to  highlight  your
ongoing  costs only and do not reflect any  transactional  costs,  such as sales
charges  (loads),  redemption fees, or exchange fees that you may incur in other
mutual  funds.  Therefore,  the second line of the table is useful in  comparing
ongoing costs only,  and will not help you determine the relative total costs of
owning different funds.

<TABLE>

---------------------------------------------------------------------------------------------------------------------------

                                          Beginning Account    Ending Account Value      Expenses Paid       Annualized
          Institutional Shares             Value 10/01/07            03/31/08          During the Period   Expense Ratio*
---------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>                   <C>                   <C>                  <C>
  Actual                                      $1,000.00             $1,019.40                $1.11              0.22%
---------------------------------------------------------------------------------------------------------------------------
  Hypothetical (5% return before              $1,000.00             $1,023.90                $1.11              0.22%
  expenses)
---------------------------------------------------------------------------------------------------------------------------


                                          Beginning Account    Ending Account Value      Expenses Paid       Annualized
      Institutional Service Shares         Value 10/01/07            03/31/08          During the Period   Expense Ratio*
---------------------------------------------------------------------------------------------------------------------------
  Actual                                      $1,000.00             $1,018.30                $2.27             0.45%
---------------------------------------------------------------------------------------------------------------------------
  Hypothetical (5% return before              $1,000.00             $1,022.75                $2.28             0.45%
  expenses)

---------------------------------------------------------------------------------------------------------------------------

                                          Beginning Account    Ending Account Value      Expenses Paid       Annualized
             Retail Shares                 Value 10/01/07            03/31/08          During the Period   Expense Ratio*
---------------------------------------------------------------------------------------------------------------------------
  Actual                                      $1,000.00             $1,015.50                $5.04             1.00%
---------------------------------------------------------------------------------------------------------------------------
  Hypothetical (5% return before              $1,000.00             $1,020.00                $5.05             1.00%
  expenses)
---------------------------------------------------------------------------------------------------------------------------


                                          Beginning Account    Ending Account Value  Expenses Paid During    Annualized
            Advantage Shares               Value 10/01/07            03/31/08              the Period      Expense Ratio*
---------------------------------------------------------------------------------------------------------------------------
  Actual                                      $1,000.00             $1,015.40                $5.14             1.02%
---------------------------------------------------------------------------------------------------------------------------
  Hypothetical (5% return before              $1,000.00             $1,019.90                $5.15             1.02%
  expenses)
---------------------------------------------------------------------------------------------------------------------------

</TABLE>

*    Expenses are equal to the Fund's  annualized  expense ratios  multiplied by
     the average  account  value over the period  (October 1, 2007 through March
     31,  2008),  multiplied  by 183/366  (to  reflect  the most  recent  fiscal
     half-year).

The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
U.S. GOVERNMENT PORTFOLIO
SCHEDULE OF INVESTMENTS
MARCH 31, 2008
===============================================================================

<TABLE>

      Face                                                                        Maturity     Current        Value
     Amount                                                                         Date      Coupon (1)     (Note 1)
------------                                                                       ------     ----------     --------
Loan Participations (4.87%)
-----------------------------------------------------------------------------------------------------------------------------------
<S>            <C>                                                              <C>           <C>       <C>
$   10,000,000  Army & Air Force Exchange Service with JPMorgan Chase as agent  04/29/08      3.29%     $  10,000,000
    30,000,000  Army & Air Force Exchange Service with JPMorgan Chase as agent  06/24/08      2.68         30,000,000
--------------                                                                                          -------------
    40,000,000  Total Loan Participations                                                                  40,000,000
--------------                                                                                          -------------
Repurchase Agreements (39.29%)
-----------------------------------------------------------------------------------------------------------------------------------
$  195,000,000  Bank of America Securities,LLC,purchased on 03/31/08, repurchase
                proceeds at maturity $195,011,104(Collateralized by $191,549,606
                GNMA, 5.50% to 7.00%, due 01/15/38 to 03/15/43
                value $198,900,001)                                             04/01/08      2.05%     $ 195,000,000
   128,000,000  UBS Securities, LLC, purchased on 03/31/08, repurchase
                proceeds at maturity$128,008,533(Collateralized by $168,331,000,
                RFIN, 0.00%, due 07/15/08 to 04/15/30 value $130,563,967)       04/01/08      2.40        128,000,000
--------------                                                                                          -------------
   323,000,000  Total Repurchase Agreements                                                               323,000,000
--------------                                                                                          -------------
U.S. Government Agency Discount Notes (41.35%)
-----------------------------------------------------------------------------------------------------------------------------------
$  121,000,000  Federal Farm Credit Bank                                        04/01/08      1.04%     $ 121,000,000
    29,000,000  Federal Farm Credit Bank                                        04/03/08      1.09         28,998,244
   160,000,000  Federal Home Loan Bank                                          04/02/08      1.55        159,993,111
     5,000,000  Federal Home Loan Bank                                          04/04/08      4.58          4,998,133
    20,000,000  Federal Home Loan Bank                                          01/23/09      3.63         20,013,633
     5,000,000  Federal Home Loan Mortgage Corporation                          07/21/08      4.73          4,930,101
--------------                                                                                          -------------
   340,000,000  Total U.S. Government Agency Discount Notes                                               339,933,222
--------------                                                                                          -------------
U.S. Government Agency Medium Term Notes (14.66%)
-----------------------------------------------------------------------------------------------------------------------------------
$   12,500,000  Federal Farm Credit Bank                                        02/05/09      3.00%     $  12,500,000
    20,000,000  Federal Farm Credit Bank                                        04/01/09      2.50         20,000,000
     5,000,000  Federal Home Loan Bank                                          07/16/08      4.75          5,003,045
    20,000,000  Federal Home Loan Bank (2)                                      10/17/08      2.63         20,000,000
    15,000,000  Federal Home Loan Bank                                          11/28/08      4.57         15,000,000
    15,000,000  Federal Home Loan Bank                                          01/16/09      3.75         15,000,000
     5,000,000  Federal Home Loan Bank                                          03/04/09      3.00          5,000,000
     3,000,000  Federal Home Loan Mortgage Corporation                          06/30/08      5.28          2,983,796
    10,000,000  Federal Home Loan Mortgage Corporation                          01/07/09      4.20         10,000,000
    15,000,000  Federal Home Loan Mortgage Corporation                          03/30/09      3.00         15,000,000
--------------                                                                                          -------------
   120,500,000  Total U.S. Government Agency Medium Term Notes                                            120,486,841
--------------                                                                                          -------------
                Total Investments (100.17%) (Cost $823,420,063+)                                          823,420,063
                Liabilities in excess of cash and other assets (-0.17%)                                    (1,426,178)
                                                                                                        -------------
                Net Assets (100.00%)                                                                    $ 821,993,885
                                                                                                        =============
             +  Aggregate cost for federal income tax purposes is identical.

</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
U.S. GOVERNMENT PORTFOLIO
SCHEDULE OF INVESTMENTS
MARCH 31, 2008
===============================================================================

FOOTNOTES:
1)   The interest rate shown  reflects the  security's  current  coupon,  unless
     yield is available.
2)  Rate changes daily based upon Federal Funds Effective Rate plus 0.125%


<TABLE>

KEY:
      GNMA     =   Government National Mortgage Association
      RFIN     =   Resolution Funding Corporation Strip Interest


BREAKDOWN OF PORTFOLIO HOLDINGS BY MATURITY:
------------------------------- ---------------------------- -----------------------
    Securities Maturing in                 Value                 % of Portfolio
------------------------------- ---------------------------- -----------------------
------------------------------- ---------------------------- -----------------------
<S>                                     <C>                          <C>
Less than 30 Days                       $ 698,003,121                  84.77%
31 through 60 Days                         27,500,000                   3.34
61 through 90 Days                         30,000,000                   3.64
91 through 120 Days                        12,916,942                   1.57
121 through 180 Days                           --                        --
Over 180 Days                              55,000,000                   6.68
------------------------------- ---------------------------- -----------------------
------------------------------- ---------------------------- -----------------------
Total                                    $823,420,063                 100.00%
------------------------------- ---------------------------- -----------------------

</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
U.S. GOVERNMENT PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2008
===============================================================================

<TABLE>

ASSETS
<S>                                                                                       <C>
  Investments in securities, at amortized cost (Note 1).............................      $      500,420,063
  Repurchase agreements.............................................................             323,000,000
  Accrued interest receivable.......................................................               1,046,435
  Prepaid expenses..................................................................                   9,179
                                                                                          ------------------
         Total assets...............................................................             824,475,677
                                                                                          ------------------
LIABILITIES
  Payable to affiliates*............................................................                 282,623
  Due to Custodian..................................................................               1,857,576
  Accrued expenses..................................................................                 141,565
  Dividends payable.................................................................                 197,902
  Other payable.....................................................................                   2,126
                                                                                          ------------------
         Total liabilities..........................................................               2,481,792
                                                                                          ------------------
  Net assets........................................................................      $      821,993,885
                                                                                          ==================
SOURCE OF NET ASSETS
  Net capital paid in on shares of capital stock (Note 4)...........................      $      822,018,205
  Undistributed net investment income...............................................                  42,484
  Accumulated net realized loss.....................................................                 (66,804)
                                                                                          ------------------
  Net assets........................................................................      $      821,993,885
                                                                                          ==================
<CAPTION>

Net asset value, per share (Note 4):
Class Name                                         Net Assets         Shares Outstanding         Net Asset Value
<S>                                                <C>                 <C>                       <C>
Institutional Shares........................            $10,473                 10,473                 $1.00
Institutional Service Shares................           $335,701                335,729                 $1.00
Retail Shares...............................       $159,268,991            159,281,935                 $1.00
Advantage Shares............................       $662,378,720            662,432,552                 $1.00

</TABLE>

*    Includes fees payable to Reich & Tang Asset  Management,  LLC, Reich & Tang
     Distributors, Inc. and Reich & Tang Services, Inc.

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

<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
U.S. GOVERNMENT PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 2008
===============================================================================

<TABLE>

INVESTMENT INCOME
Income:
<S>                                                                                     <C>
    Interest........................................................................    $       19,629,599
                                                                                        ------------------
Expenses: (Note 2)
    Investment management fee.......................................................               537,123
    Administration fee..............................................................               223,801
    Shareholder servicing fee (Institutional Service Shares)........................                   662
    Shareholder servicing fee (Retail Shares).......................................               272,642
    Shareholder servicing fee (Advantage Shares)....................................               845,677
    Distribution fee (Retail Shares)................................................               708,869
    Distribution fee (Advantage Shares).............................................             2,537,030
    Sub-Accounting fee (Advantage Shares)...........................................               338,271
    Custodian expenses..............................................................                34,308
    Shareholder servicing and related shareholder expenses+.........................                80,444
    Legal, compliance and filing fees...............................................               231,277
    Audit and accounting............................................................               127,828
    Trustees' fees and expenses.....................................................                25,928
    Other...........................................................................                 6,474
                                                                                        ------------------
    Total expenses..................................................................             5,970,334
                Less:   Fees waived (Note 2)........................................            (1,428,168)
                                                                                        ------------------
    Net expenses....................................................................             4,542,166
                                                                                        ------------------
    Net investment income...........................................................            15,087,433

REALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments.............................................              (54,070)
                                                                                        ------------------
Increase in net assets from operations..............................................    $       15,033,363
                                                                                        ==================

</TABLE>

+    Includes class specific  transfer  agency  expenses of $4, $53, and $53,760
     for  the   Institutional,   Institutional   Service,   and  Retail   Shares
     respectively.

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

<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
U.S. GOVERNMENT PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
===============================================================================

<TABLE>
                                                                                               Commencement of Operations
                                                                         Year Ended             October 30, 2006 through
                                                                       March 31, 2008                 March 31, 2007
                                                                       --------------                 --------------
INCREASE (DECREASE) IN NET ASSETS
<C>                                                                    <C>                         <C>
Operations:
    Net investment income.........................................     $    15,087,433             $      2,891,319
    Net realized gain (loss) on investments.......................             (54,070)                       5,230
                                                                       ---------------             ----------------
Increase in net assets from operations............................          15,033,363                    2,896,549
Dividends to shareholders from net investment income:
    Institutional Shares .........................................                (455)                    (244,853)
    Institutional Service Shares .................................             (10,130)                         (17)
    Retail Shares.................................................          (3,686,594)                    (189,222)
    Advantage Shares..............................................         (11,390,254)                  (2,457,227)
                                                                       ---------------             ----------------
         Total dividends to shareholders..........................         (15,087,433)                  (2,891,319)
                                                                       ---------------             ----------------
Distributions to shareholders from realized gains on investments:
    Institutional Shares..........................................               -0-                         -0-
    Institutional Service Shares..................................               -0-                         -0-
    Retail Shares.................................................               -0-                             (8)
    Advantage Shares..............................................               -0-                         (5,222)
                                                                       ---------------             ----------------
         Total distributions to shareholders......................               -0-                         (5,230)
                                                                       ---------------             ----------------
Capital share transactions (Note 4):
    Institutional Shares..........................................                 473                       10,000
    Institutional Service Shares..................................             325,729                       10,000
    Retail Shares.................................................          46,204,413                   57,051,170
    Advantage Shares..............................................         468,605,201                  193,827,351
    Net asset value of shares issued in connection with merger....
    Cortland Government into Retail Shares (Note 5)...............          56,013,618                       -0-
                                                                       ---------------             ----------------
          Total capital share transactions........................         571,149,434                  250,898,521
                                                                       ---------------             ----------------
    Total increase ...............................................         571,095,364                  250,898,521
Net assets:
    Beginning of year.............................................         250,898,521                       -0-
                                                                       ---------------             ----------------
     End of year..................................................     $   821,993,885             $    250,898,521
                                                                       ===============             ================
Undistributed net investment income...............................     $        42,484                       $  -0-
                                                                       ===============             ================
</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>
DAILY INCOME FUND
U.S. GOVERNMENT PORTFOLIO
FINANCIAL HIGHLIGHTS
===============================================================================

<TABLE>

Institutional shares                                                            Commencement of Operations
---------------------                                      Year Ended            October 30, 2006 through
Per Share Operating Performance:                         March 31, 2008               March 31, 2007
                                                         --------------               --------------
<S>                                                       <C>                         <C>
(for a share outstanding throughout the year)
Net asset value, beginning of year.....................     $   1.00                    $    1.00
                                                            ---------                   ----------
Income from investment operations:
   Net investment income...............................         0.045                        0.009
   Net realized and unrealized gain(loss)on investments        (0.000)                       0.000
                                                            ---------                   ----------
   Total from investment operations....................         0.045                        0.009
Less distributions from:
   Dividends from net investment income................        (0.045)                      (0.009)
   Net realized gain on investments....................          --                           --
                                                            ---------                   ----------
   Total Distributions.................................        (0.045)                      (0.009)
                                                            ---------                   ----------
Net asset value, end of year...........................     $   1.00                    $    1.00
                                                            =========                   ==========
Total Return...........................................         4.54%                        0.88%(a)
Ratios/Supplemental Data
Net assets, end of year (000's)........................     $      10                   $      10
Ratios to average net assets:
   Expenses (net of fees waived) (b)...................         0.21%                        0.20%(c)
   Net investment income...............................         4.44%                        5.10%(c)
   Management and administration fees waived...........         0.09%                        0.16%(c)


Institutional Service shares                                                     Commencement of Operations
----------------------------                               Year Ended            March 19, 2007 through
Per Share Operating Performance:                         March 31, 2008               March 31, 2007
                                                         --------------               --------------
(for a share outstanding throughout the year)
Net asset value, beginning of year.....................     $   1.00                    $    1.00
                                                            ---------                   ----------
Income from investment operations:
   Net investment income...............................         0.042                        0.002
   Net realized and unrealized gain(loss)on investments        (0.000)                       0.000
                                                            ---------                   ----------
   Total from investment operations....................         0.042                        0.002
Less distributions from:
   Dividends from net investment income................        (0.042)                      (0.002)
   Net realized gain on investments....................         --                           --
                                                            ---------                   ----------
   Total Distributions.................................        (0.042)                      (0.002)
                                                            ---------                   ----------
Net asset value, end of year...........................     $   1.00                    $    1.00
                                                            =========                   ==========
Total Return...........................................         4.31%                        0.17%(a)
Ratios/Supplemental Data
Net assets, end of year (000's)........................     $     336                   $      10
Ratios to average net assets:
   Expenses (net of fees waived) (b)...................         0.45%                        0.45%(c)
   Net investment income...............................         3.82%                        4.85%(c)
   Management and administration fees waived...........         0.09%                        0.16%(c)

</TABLE>

(b)      Unannualized
(c)      Includes expenses paid indirectly.
(d)      Annualized

The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------



===============================================================================

<TABLE>


Retail shares                                                                 Commencement of Operations
-------------                                            Year Ended            December 12, 2006 through
Per Share Operating Performance:                         March 31, 2008               March 31, 2007
                                                         --------------               --------------
<S>                                                      <C>                          <C>
(for a share outstanding throughout the year)
Net asset value, beginning of year.....................     $   1.00                    $    1.00
                                                            ---------                   ----------
Income from investment operations:
   Net investment income...............................         0.037                        0.013
   Net realized and unrealized gain(loss)on investments        (0.000)                       0.000
                                                            ---------                   ----------
   Total from investment operations....................         0.037                        0.013
Less distributions from:
   Dividends from net investment income................        (0.037)                      (0.013)
   Net realized gain on investments....................          --                           --
                                                            ---------                   ----------
   Total Distributions.................................        (0.037)                      (0.013)
                                                            ---------                   ----------
Net asset value, end of year...........................     $   1.00                    $    1.00
                                                            =========                   ==========
Total Return...........................................         3.73%                        1.30%(a)
Ratios/Supplemental Data
Net assets, end of year (000's)........................     $159,269                    $  57,051
Ratios to average net assets:
   Expenses (net of fees waived) (b)...................         1.00%                        1.00%(c)
   Net investment income...............................         3.38%                        4.29%(c)
   Management and administration fees waived...........         0.09%                        0.16%(c)
   Distribution fees waived............................         0.13%                        0.10%(c)
   Transfer Agency Account fees waived.................          --                          0.03%(c)


Advantage shares                                                               Commencement of Operations
----------------                                          Year Ended            December 2, 2006 through
Per Share Operating Performance:                         March 31, 2008               March 31, 2007
                                                         --------------               --------------
(for a share outstanding throughout the year)
Net asset value, beginning of year.....................     $   1.00                    $    1.00
                                                            ---------                   ----------
Income from investment operations:
   Net investment income...............................         0.036                        0.018
   Net realized and unrealized gain(loss)on investments        (0.000)                       0.000
                                                            ---------                   ----------
   Total from investment operations....................         0.036                        0.018
Less distributions from:
   Dividends from net investment income................        (0.036)                      (0.018)
   Net realized gain on investments....................         --                           --
                                                            ---------                   ----------
   Total Distributions.................................        (0.036)                      (0.018)
                                                            ---------                   ----------
Net asset value, end of year...........................     $   1.00                    $    1.00
                                                            =========                   ==========
Total Return...........................................         3.71%                        1.77%(a)
Ratios/Supplemental Data
Net assets, end of year (000's)........................     $ 662,379                   $ 193,827
Ratios to average net assets:
   Expenses (net of fees waived) (b)...................         1.02%                        1.02%(c)
   Net investment income...............................         3.37%                        4.26%(c)
   Management and administration fees waived...........         0.09%                        0.16%(c)
   Distribution fees waived............................         0.16%                        0.16%(c)
   Sub-Accounting fees waived..........................         0.10%                        0.10%(c)

</TABLE>
(a)      Unannualized
(b)      Includes expenses paid indirectly.
(a)      Annualized(c)

The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
MUNICIPAL PORTFOLIO
EXPENSE CHART
FOR THE SIX MONTHS ENDED MARCH 31, 2008
(UNAUDITED)
===============================================================================

As a  shareholder  of the  Portfolio,  you incur the  following  ongoing  costs:
management fees and other Portfolio  expenses.  You may also incur  distribution
and/or  service  (12b-1) fees.  This example is intended to help you  understand
your ongoing  costs (in dollars) of  investing in the  Portfolio  and to compare
these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period October 1, 2007 through March 31, 2008.

ACTUAL EXPENSES

The first line of the table below  provides  information  about  actual  account
values and actual expenses.  You may use information in this line, together with
the amount you invested, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6),  then  multiply  the result by the number in the first
line under the heading  entitled  "Expenses  Paid During the Period" to estimate
the expenses you paid on your account during this period.

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES

The second  line of the table  below  provides  information  about  hypothetical
account  values and  hypothetical  expenses  based on the Fund's actual  expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Fund's actual return.  The hypothetical  account values and expenses may not
be used to estimate the actual ending  account  balance or expenses you paid for
the  period.  You may use this  information  to  compare  the  ongoing  costs of
investing in the Fund and other funds.  To do so,  compare this 5%  hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.

Please note that the  expenses  shown in the table are meant to  highlight  your
ongoing  costs only and do not reflect any  transactional  costs,  such as sales
charges  (loads),  redemption fees, or exchange fees that you may incur in other
mutual  funds.  Therefore,  the second line of the table is useful in  comparing
ongoing costs only,  and will not help you determine the relative total costs of
owning different funds.

<TABLE>

---------------------------------------------------------------------------------------------------------------------------

                                           Beginning Account    Ending Account Value     Expenses Paid       Annualized
          Institutional Shares              Value 10/01/07            03/31/08         During the Period   Expense Ratio*
---------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>                      <C>                    <C>               <C>
  Actual                                       $1,000.00              $1,015.20              $1.01             0.20%
---------------------------------------------------------------------------------------------------------------------------
  Hypothetical (5% return before               $1,000.00              $1,024.00              $1.01             0.20%
  expenses)

---------------------------------------------------------------------------------------------------------------------------

                                           Beginning Account    Ending Account Value     Expenses Paid       Annualized
      Institutional Service Shares          Value 10/01/07            03/31/08         During the Period   Expense Ratio*
---------------------------------------------------------------------------------------------------------------------------
  Actual                                       $1,000.00              $1,013.80              $2.32             0.46%
---------------------------------------------------------------------------------------------------------------------------
  Hypothetical (5% return before               $1,000.00              $1,022.70              $2.33             0.46%
  expenses)
---------------------------------------------------------------------------------------------------------------------------

                                           Beginning Account    Ending Account Value     Expenses Paid       Annualized
        Short Term Income Shares            Value 10/01/07            03/31/08         During the Period   Expense Ratio*
---------------------------------------------------------------------------------------------------------------------------
  Actual                                       $1,000.00              $1,012.30              $3.82             0.76%
---------------------------------------------------------------------------------------------------------------------------
  Hypothetical (5% return before               $1,000.00              $1,021.20              $3.84             0.76%
  expenses)
---------------------------------------------------------------------------------------------------------------------------


                                           Beginning Account    Ending Account Value     Expenses Paid       Annualized
             Retail Shares                  Value 10/01/07            03/31/08         During the Period   Expense Ratio*
---------------------------------------------------------------------------------------------------------------------------
  Actual                                       $1,000.00              $1,011.10              $5.03             1.00%
---------------------------------------------------------------------------------------------------------------------------
  Hypothetical (5% return before               $1,000.00              $1,020.00              $5.05             1.00%
  expenses)
---------------------------------------------------------------------------------------------------------------------------

</TABLE>

<PAGE>
-------------------------------------------------------------------------------



===============================================================================

<TABLE>

---------------------------------------------------------------------------------------------------------------------------

                                           Beginning Account    Ending Account Value     Expenses Paid       Annualized
            Advantage Shares                Value 10/01/07            03/31/08         During the Period   Expense Ratio*
---------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>                     <C>                  <C>                   <C>
  Actual                                       $1,000.00              $1,011.00              $5.13             1.02%
---------------------------------------------------------------------------------------------------------------------------
  Hypothetical (5% return before               $1,000.00              $1,019.90              $5.15             1.02%
  expenses)
---------------------------------------------------------------------------------------------------------------------------

</TABLE>

*    Expenses are equal to the Fund's  annualized  expense ratios  multiplied by
     the average  account  value over the period  (October 1, 2007 through March
     31,  2008),  multiplied  by 183/366  (to  reflect  the most  recent  fiscal
     half-year).

<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
MUNICIPAL PORTFOLIO
SCHEDULE OF INVESTMENTS
MARCH 31, 2008
===============================================================================

<TABLE>
                                                                                                                    Ratings  (1)
                                                                                                                  -----------------
    Face                                                                         Maturity  Current       Value             Standard
   Amount                                                                          Date   Coupon (2)   (Note 1)   Moody's  & Poor's
---------                                                                          ----   ----------   --------   -------  --------
Put Bonds (3) (1.00%)
-----------------------------------------------------------------------------------------------------------------------------------
<S>           <C>                                                               <C>         <C>      <C>          <C>      <C>
$    860,000  City of Dayton, KY Industrial Building RB
              LOC Fifth Third Bank                                              04/01/08     4.10%   $   860,000     P-1      A-1+
   1,515,000  Michigan Oakland County EDC RB (Orchard - Maple Project)
              LOC LaSalle National Bank, N.A.                                   05/15/08     3.68      1,515,000     P-1      A-1+
   2,500,000  Michigan Strategic Fund
              LOC Bank of Nova Scotia                                           04/01/08     3.85      2,500,000     P-1      A-1+
------------                                                                                         -----------
   4,875,000  Total Put Bonds                                                                          4,875,000
------------                                                                                         -----------
Tax Exempt Commercial Paper (6.67%)
-----------------------------------------------------------------------------------------------------------------------------------
$  2,000,000  City of Milwaukee, WI 2008 Program - Series C2
              LOC State Street Bank & Trust Company                             05/02/08     2.40%   $ 2,000,000              A-1+
   1,000,000  City of St. Louis, MO Airport RN
              (Lambert - St. Louis International Airport) - Series 2004
              LOC JPMorgan Chase Bank, N.A.                                     07/02/08     2.00      1,000,000     P-1      A-1+
   3,000,000  Hillsborough County Aviation Authority Airport Facilities Notes,FL
              LOC Landesbank Baden Wurtemburg                                   06/05/08     1.90      3,000,000     P-1      A-1+
   2,000,000  Jacksonville, FL Electric Authority RB                            04/02/08     2.35      2,000,000   VMIG-1     A-1+
   5,000,000  New Jersey EDA Exempt Facility RB (Keystone-1992 Project)
              LOC BNP Paribas                                                   06/05/08     1.90      5,000,000   VMIG-1     A-1+
   1,000,000  Oklahoma City, OK Water Utilities Trust - Series A
              LOC State Street Bank & Trust Company                             06/05/08     1.90      1,000,000     P-1      A-1+
   5,000,000  Pendleton County, KY Multi-County Lease RB
              LOC JPMorgan Chase Bank, N.A.                                     05/08/08     2.70      5,000,000     P-1      A-1+
   3,700,000  San Antonio, Texas Water - Series A                               07/02/08     1.90      3,700,000     P-1      A-1+
  10,000,000  Washington D.C Metropolitan Transit
              LOC Wachovia Bank, N.A.                                           07/02/08     1.85     10,000,000     P-1      A-1+
------------                                                                                         -----------
  32,700,000 Total Tax-Exempt Commercial Paper                                                        32,700,000
------------                                                                                         -----------
Tax Exempt General Obligation Notes & Bonds (18.43%)
-----------------------------------------------------------------------------------------------------------------------------------
$  2,300,000  Bay Village, OH                                                   07/19/08     3.73%   $ 2,301,781    MIG-1
   2,345,000  Clark County, OH BAN (4)                                          06/12/08     3.75      2,346,107
   2,455,000  Concord, CO Metropolitan District Refunding & Improvement Bond
              LOC Wells Fargo Bank                                              12/01/08     3.50      2,455,000              A-1+
   1,099,400  Des Plaines, Illinois Park District (4)                           12/15/08     1.80      1,104,740
   1,600,000  Fairborn, OH Tax Increment RN - Series 2007
              LOC US Bank, N.A.                                                 09/12/08     3.75      1,606,269     P-1      A-1+
     700,000  Fairfield County, OH BAN (4)                                      04/01/08     3.90        700,000
   1,425,000  Federal Highway Grant Anticipation, AK - Series A (4)             08/01/08     3.76      1,433,045
   1,000,000  Iowa Higher Education Loan Authority RB
              LOC LaSalle National Bank, N.A.                                   05/20/08     3.75      1,000,968              SP-1
   1,000,000  Iowa Higher Education Loan RAN
              LOC US Bank, N.A.                                                 05/20/08     3.70      1,001,033              SP-1+
   1,292,000  Marion County, OH BAN (4)                                         05/01/08     3.72      1,292,388
   3,685,000  Michigan Lowell Area Schools (4)                                  05/01/09     2.60      3,739,547

</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------



===============================================================================
<TABLE>
                                                                                                                    Ratings  (1)
                                                                                                                  -----------------
    Face                                                                         Maturity  Current       Value             Standard
   Amount                                                                          Date   Coupon (2)   (Note 1)   Moody's  & Poor's
---------                                                                          ----   ----------   --------   -------  --------
Tax Exempt General Obligation Notes & Bonds (Continued)
-----------------------------------------------------------------------------------------------------------------------------------
<S>           <C>                                                               <C>         <C>      <C>          <C>      <C>
$  3,945,000  Michigan Public Educational Authority RB
              LOC Bank of New York Mellon                                       08/22/08     4.50%   $ 3,957,334              SP-1+
   7,000,000  Minnesota State Housing Finance Agency AMT                        08/11/08     3.78      7,000,000    MIG-1     SP-1+
   2,815,000  Muskingum County, OH (4)                                          01/15/09     2.93      2,827,292
  10,000,000  Neshaminy, PA School District TRAN (4)                            06/30/08     3.90     10,005,899
   1,400,000  Newaygo Public School District, MI (4)                            06/30/08     3.70      1,401,819
     270,000  New Richmond, WI School District BAN                              06/06/08     4.13        270,000    MIG-1
   1,095,000  Ogilvie, MN Independent School District # 3
              GO Aid Anticipation Certificates of Indebtedness-Series 2007B (4) 08/19/08     3.82      1,095,722
   2,300,000  St. Louis, MO General Fund RB TAN                                 06/30/08     3.75      2,304,089    MIG-1     SP-1+
  10,000,000  Texas State TRAN                                                  08/28/08     3.68     10,031,813    MIG-1     SP-1+
   1,900,000  Vandalia City, OH BAN (4)                                         08/22/08     3.88      1,900,000
  12,000,000  Vermont Housing Finance Agency - Series 2007
              LOC Calyon                                                        09/25/08     3.85     12,000,000     P-1      A-1+
  10,000,000  Will & Kendall County, IL Community Consolidated School
              District  No 202                                                  10/01/08     1.50     10,049,671              SP-1+
   8,500,000  Wisconsin Kettle Moraine School District
              Tax & Revenue Anticipation Promisory Note (4).                    09/03/08     3.72      8,501,014
------------                                                                                         -----------
  90,126,400 Total Tax Exempt General Obligation Notes & Bonds                                        90,325,531
------------                                                                                         -----------
Variable Rate Demand Instruments - Private Placements (5) (3.21%)
-----------------------------------------------------------------------------------------------------------------------------------
$  2,869,000  Anaheim, CA MHRB
              (West Anaheim Royale Project) - Series 1985C
              LOC Union Bank of California                                      12/01/15     3.15%   $ 2,869,000     P-1       A-1
   1,959,000  Anaheim, CA (West Anaheim Convalescent Home)
              LOC Union Bank of California                                      12/01/15     3.15      1,959,000     P-1       A-1
   2,848,000  Culver City, CA RDRB (Culver City Royale Project) - Series 1985
              LOC Union Bank of California                                      12/01/15     3.15      2,848,000     P-1       A-1
   1,500,000  Harford County, MD EDRB
              (Harrigan Roller Company, Inc. Project) - Series 1984
              LOC Dresdner Bank, A.G.                                           12/28/14     3.60      1,500,000     P-1       A-1
   3,745,000  Howard County, MD RB
              (The Bluffs & Hawthorne Apartment Facility) - Series 1995
              LOC Allfirst Bank                                                 12/01/20     2.38      3,745,000   VMIG-1
   1,270,000  St. Cloud, MN (Kelly Inn Project) - Private Placement
              LOC US Bank, N.A.                                                 04/01/13     2.40      1,270,000     P-1      A-1+
   1,545,600  West Jordan, UT IDRB
              (The Lynn Partnership Nursing Home Project) - Series 1985
              LOC Bank of America, N.A.                                         07/01/15     3.41      1,545,600     P-1      A-1+
------------                                                                                         -----------
  15,736,600  Variable Rate Demand Instruments - Private Placements                                   15,736,600
------------                                                                                         -----------
Variable Rate Demand Instruments (5) (68.43%)
-----------------------------------------------------------------------------------------------------------------------------------
$  5,200,000  ABN AMRO MuniTops Certificate Trust 2002-33
              Port Authority of New York and New Jersey Consolidated Bonds -
              One Hundred Twenty-Eighth Series
              Insured by FSA                                                    11/01/10     2.22%   $ 5,200,000   VMIG-1

</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
MUNICIPAL PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 2008
===============================================================================

<TABLE>
                                                                                                                    Ratings  (1)
                                                                                                                  -----------------
    Face                                                                         Maturity  Current       Value             Standard
   Amount                                                                          Date   Coupon (2)   (Note 1)   Moody's  & Poor's
---------                                                                          ----   ----------   --------   -------  --------
Variable Rate Demand Instruments (Continued) (5)
-----------------------------------------------------------------------------------------------------------------------------------
<S>           <C>                                                               <C>         <C>      <C>          <C>      <C>
$  2,040,000  Adams County, PA IDA RB (Say Plastic Inc. Project) - Series 2007
              LOC Wachovia Bank, N.A.                                           08/01/32     2.25%   $ 2,040,000     P-1      A-1+
   1,345,000  Alabama Demopolis IDA (Gulf Opportunity Zone)
              LOC Compass Bank                                                  08/01/22     2.45      1,345,000     P-1       A-1
     250,000  Appling County Development Authority, GA
              (Georgia Power Hatch Project)                                     12/01/18     1.40        250,000   VIMG-1
   5,000,000  Arizona Spear Custody Receipts Retated to IDA of Chandler (4)
              LOC Deutsche Bank, A.G.                                           12/01/37     2.33      5,000,000
   3,000,000  Bay Medical Center, FL Hospital Revenue Refunding Bonds
              (Bay Medical Center Project) - Series 2007A
              LOC Regions Bank                                                  10/01/27     2.28      3,000,000   VMIG-1
     650,000  BB & T Municipal Trust Floater Certificates - Series 4000
              LOC Branch Banking And Trust Company                              07/01/18     2.34        650,000   VMIG-1
     475,000  Beaver County, PA IDA PCRB
              (First Energy Generation Corp.) - Series B
              LOC Royal Bank of Scotland, N.A.                                  12/01/41     2.16        475,000   VMIG-1     A-1+
   5,200,000  Blue Springs, MO IDA MHRB
              (Autumn Place Apartments Project) - Series 2004 - A1
              Guaranteed by FNMA                                                08/15/37     2.15      5,200,000   VMIG-1
   2,750,000  Broward County, FL HFA
              (Sailboat Bend Artist Lofts Project - Series 2006
              LOC Citibank, N.A.                                                04/15/38     2.37      2,750,000              A-1+
   1,880,000  Calcasieu Parish Public Trust Authority Gulf Opportunity Zone RB
              (Delta Equine Center LLC Project) - Series 2007(4)
              LOC Branch Banking And Trust Company                              01/01/32     2.38      1,880,000
   1,150,000  Caledonia, WI IDRB
              (Quick Cable Corpoation Project) - Series 1998
              LOC Fifth Third Bank                                              12/01/18     2.34      1,150,000     P-1      A-1+
     635,000  California Statewide Communities Development Authority RB
              (North Peninsula Jewish Campus) - Series 2004
              LOC Bank of America, N.A.                                         07/01/34     0.90        635,000   VMIG-1
   5,355,000  Chicago, IL MHRB Putters Series 2054
              LOC FHA/GNMA                                                      12/20/39     2.56      5,355,000   VMIG-1
   5,605,000  Chicago IL MHRB (Sankofa Housing Project) - Series 2007B
              LOC Harris Trust                                                  12/01/08     2.20      5,605,000   VMIG-1
     965,000  City of Lima, OH Health Care Facilities RB
              (Allen County Health Partners) - Series 2005
              LOC Huntington National Bank                                      11/01/25     3.25        965,000     P-1
   1,840,000  Cleveland - Cuyahoga County, OH Port Authority RB
              (CBT Project) - Series 2007
              LOC Charter One Bank                                              06/01/31     2.51      1,840,000     P-1      A-1+
   5,177,161  Clipper Tax Exempt Trust COPs - (Oklahoma) - Series 2004-3        02/01/10     2.33      5,177,161   VMIG-1
     400,000  Cohasset MN RB
              (Minnesota Power & Light Co. Project) Series 1997A
              LOC LaSalle National Bank, N.A.                                   06/01/20     2.10        400,000              A-1+
   4,000,000  Cornerstar Metropolitan District RB in The City of Aurora, CO
              - Series 2007
              LOC Compass Bank                                                  12/01/37     2.29      4,000,000               A-1
   5,000,000  Colorado HFA (Boulder Community Hospital Project) - Series 2000
              LOC JPMorgan Chase Bank, N.A.                                     10/01/30     2.15      5,000,000   VMIG-1     A-1+

</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------



===============================================================================

<TABLE>
                                                                                                                    Ratings  (1)
                                                                                                                  -----------------
    Face                                                                         Maturity  Current       Value             Standard
   Amount                                                                          Date   Coupon (2)   (Note 1)   Moody's  & Poor's
---------                                                                          ----   ----------   --------   -------  --------
Variable Rate Demand Instruments (Continued) (5)
-----------------------------------------------------------------------------------------------------------------------------------
<S>           <C>                                                               <C>         <C>      <C>          <C>      <C>
$ 3,000,000   Colorado HFA Solid Waste Disposal RB
              (Waste Management Incorporate Project)
              LOC Wachovia Bank, N.A.                                           08/01/38     2.20%   $ 3,000,000              A-1+
  4,200,000   Connecticut HEFA RB (Yale University) - Series T                  07/01/29     1.50      4,200,000   VMIG-1     A-1+
  1,000,000   Connecticut HEFA RB (Yale University) - Series U                  07/01/33     1.50      1,000,000   VMIG-1     A-1+
  4,175,000   Connecticut HEFA RB (Yale University) - Series U-1 & U-2          07/01/33     1.70      4,175,000   VMIG-1     A-1+
  5,925,000   Connecticut State Special Tax Obligation Bonds
              (Second Lien Transportation Infrastructure) - Series 1
              Insured by FSA                                                    12/01/10     2.09      5,925,000     P-1      A-1+
  2,000,000   County of Henry, OH Improvement RB (Henry County Hospital, Inc)
              Series 2006
              LOC Key Bank, N.A                                                 03/01/31     2.29      2,000,000     P-1      A-1
  1,000,000   Delaware State EDA Revenue (Delaware Hospice Inc Project)
              LOC Wilmington Trust Company                                      02/01/32     2.19      1,000,000   VMIG-1
  3,000,000   Development Authority of Fulton County, GA RB
              (Piedmont Healthcare Inc. Project) - Series 2007
              LOC SunTrust Bank                                                 06/01/37     2.09      3,000,000   VMIG-1
  5,365,000   Douglas County, NE IDRB (Phillips Manufacturing Project)
              - Series 2002
              LOC Wells Fargo Bank N.A                                          12/01/18     2.31      5,365,000              A-1+
  2,890,000   Elkhart County, IN EDRB
              (Reflex Industries Project) - Series 2007
              LOC Fifth Third Bank                                              12/01/27     2.34      2,890,000     P-1      A-1+
    300,000   Farmington, NM PCRB
              (Arizona Public Service Corp Four Corners Project) - Series B
              LOC Barclay Bank PLC                                              09/01/24     1.17        300,000     P-1      A-1+
  3,765,000   Floating Rate Trust Receipts - Series L29(New York State Dormitory
              Authority, St. Lukes - Roosevelt Hospital Center - Series 2005)
              Collateralized by FHA                                             08/15/25     2.20      3,765,000               A-1
  2,315,000   Florida State Board of Education (ROC RR II R-12211)              06/01/33     2.27      2,315,000              A-1+
  1,785,000   Franklin County, OH RB
              (The Villa at Saint Therese Project) - Series 1997F
              LOC Fifth Third Bank                                              10/01/22     2.17      1,785,000     P-1      A-1+
    720,000   Frisco City, AL IDRB (Standard Furniture Manufacturing Co. Inc.)
              LOC Royal Bank of Canada                                          11/01/09     2.32        720,000               A-1
  1,000,000   Fulton County, KY Industrial Building RB
              (Burke Parsons Bowlby Corporation Project)
              LOC Branch Banking And Trust Company                              07/01/26     2.38      1,000,000     P-1      A-1+
  1,350,000   Gainesville Florida IDRB (Heat Pipe Technology Project)
              LOC AmSouth Bank                                                  05/01/18     2.24      1,350,000     P-1       A-1
 10,000,000   Gainesville, FL Utilites System RB - Series 2007A                 10/01/36     2.00     10,000,000   VMIG-1     A-1+
  7,000,000   Greenwood County, SC (Fuji Photo Film, Inc Project)               09/01/11     2.38      7,000,000              A-1+
  1,000,000   Gwinnett County Development Authority, GA RB
              (Greater Atlanta Christian School, Inc. Project) - Series 2002
              LOC SunTrust Bank                                                 05/01/22     2.09      1,000,000   VMIG-1
  9,000,000   Maryland Health and Educationa Facilities Authority, RB
              (University of Maryland Medical System Project) - Series 2007A
              LOC Wachovia Bank, N.A.                                           07/01/34     2.07      9,000,000   VMIG-1     A-1+


</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
DAILY INCOME FUND
MUNICIPAL PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 2008


 <TABLE>
                                                                                                                    Ratings  (1)
                                                                                                                  -----------------
    Face                                                                         Maturity  Current       Value             Standard
   Amount                                                                          Date   Coupon (2)   (Note 1)   Moody's  & Poor's
---------                                                                          ----   ----------   --------   -------  --------
Variable Rate Demand Instruments (Continued) (5)
-----------------------------------------------------------------------------------------------------------------------------------
<S>           <C>                                                               <C>         <C>      <C>          <C>      <C>
$  2,000,000  Illinois Development Finance Authority RB
              (Chicago Gear-D.O. James Corporation) - Series 2007
              LOC Fifth Third Bank                                              12/01/31     2.34%   $ 2,000,000     P-1      A-1+
   1,600,000  Illinois Development Finance Authority IDRB
              (US Acrylic, Inc. Project) - Series 2003
              LOC Fifth Third Bank                                              08/01/33     2.34      1,600,000     P-1      A-1+
   3,000,000  Illinois Development Finance Authority
              (Butterfield Creek Project) - Series 1999 AMT
              LOC LaSalle National Bank, N.A.                                   04/01/39     2.48      3,000,000               A-1
   2,625,000  Illinois Financial Authority, IL RB
              (Riverside Health System Project) - Series 2004
              LOC JPMorgan Chase Bank, N.A.                                     11/15/29     3.05      2,625,000   VMIG-1     A-1+
   3,700,000  Iowa Higher Education Loan Authority Private College Facility RB
              (University of Dubuque Project) - Series 2007
              LOC Northern Trust                                                04/01/35     1.30      3,700,000              A-1+
   1,450,000  Iredell County, NC Industrial Facilities & Pollution Control Funding
              (Riley Technologies Project) (4)
              LOC Branch Banking And Trust Company                              11/01/31     2.38      1,450,000
   3,055,000  Jacksonville, FL Economic Development Commission Special Facilities
              Airport RB (Holland Sheltair Aviation Group Project) - Series 2005-B1
              LOC Mellon Bank N.A.                                              05/01/35     2.28      3,055,000              A-1+
     500,000  Jacksonville, FL HFA Hospital Revenue
              (Baptist Medical Center) - Series 2003A
              LOC Bank of America, N.A.                                         08/15/33     1.25        500,000              A-1+
     280,000  Jay Street Development Corporation, Courts Facility Lease RB
              (New York City-Jay Street Corporation) Fiscal 2004,- Subseries A-1
              LOC Depfa Bank PLC                                                05/01/22     2.00        280,000   VMIG-1     A-1+
     900,000  Jefferson County, KY Industrial Building (R.C. TWAY Company,
              Kentucky Manufacturing Company Project) Series 1998
              LOC JPMorgan Chase Bank, N.A.                                     06/01/18     2.35        900,000     P-1      A-1+
   1,370,000  Jeffersontown, KY Lease Program RB
              (Kentucky League of Cities Fund Trust) - Series 2000
              LOC US Bank, N.A.                                                 03/01/30     2.25      1,370,000   VMIG-1
     300,000  King George County, VA IDA RB
              (Birchwood Power Partners Project) - Series 1995
              LOC Bank of Nova Scotia                                           11/01/25     1.52        300,000              A-1+
   2,400,000  La Porte County, IN EDC RB
              (Universal Forest Products) - Series 2000
              LOC Michigan National Bank                                        11/01/20     2.25      2,400,000     P-1      A-1+
   3,000,000  Lockport, IL IDRB (Panduit Corporation Project) - Series 1990
              LOC Fifth Third Bank                                              04/01/25     2.27      3,000,000              A-1+
     600,000  Loudoun County, VA IDA RB
              (Howard Hughes Medical Institute Project) - Series 2003C          02/15/38     1.50        600,000   VMIG-1     A-1+
  1,700,000   Lowell Area Schools, MI School Building & Site Bonds
              GO Unlimited Tax - Series 2004 (4)                                05/01/29     2.27      1,700,000
     250,000  Manatee County, FL PCRB (FL Powers & Light Project) 1994          09/01/24     1.25        250,000   VMIG-1      A-1
   2,406,000  Marion County, FL IDA
              (Chambrel At Pinecastle Project) - Series 2002
              Guaranteed by FNMA                                                11/15/32     2.09      2,406,000              A-1+
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------



===============================================================================


 <TABLE>
                                                                                                                    Ratings  (1)
                                                                                                                  -----------------
    Face                                                                         Maturity  Current       Value             Standard
   Amount                                                                          Date   Coupon (2)   (Note 1)   Moody's  & Poor's
---------                                                                          ----   ----------   --------   -------  --------
Variable Rate Demand Instruments (Continued) (5)
-----------------------------------------------------------------------------------------------------------------------------------
<S>           <C>                                                               <C>         <C>      <C>          <C>      <C>
$  2,000,000  Marion County, FL IDA RB
              (Capris Furniture Industries Project) - Series 2005
              LOC SunTrust Bank                                                 02/01/25     2.29%   $ 2,000,000     P-1      A-1+
    300,000   Massachusetts Water Resources Authority RB
              (Multi-Modal Subordinated Group) - Series 2002C
              LOC Landesbank Hessen                                             08/01/20     1.47        300,000   VMIG-1     A-1+
   3,000,000  Metropolitan Transportation Authority, NY
              Transportation  RB Series 2005E-1
              LOC Fortis Bank, S.A/N.V.                                         11/01/35     2.02      3,000,000   VMIG-1     A-1+
   7,000,000  Metropolitan Transportation Authority, NY
              Transportation  RB Series 2005E-2
              LOC Fortis Bank, S.A/N.V.                                         11/01/35     2.10      7,000,000   VMIG-1     A-1+
   1,500,000  Michigan State Strategic Fund Limited Obligation RB
              (Envelope Printery Inc Project)
              LOC Fifth Third Bank                                              03/01/27     2.34      1,500,000     P-1      A-1+
   2,200,000  Michigan State Strategic Fund Limited Obligation RB
              (Grand River Infrastructure, Inc.) - Series 2006
              LOC Fifth Third Bank                                              06/01/14     2.34      2,200,000     P-1      A-1+
   2,350,000  Michigan State Strategic Fund Limited Obligation RB
              (Nuvar Properties LLC Project) - Series 2007
              LOC Fifth Third Bank                                              04/01/37     2.34      2,350,000     P-1      A-1+
     920,000  Michigan State Strategic Fund  (Ilmor Engineering Incorporated)
              LOC Fifth Third Bank                                              03/01/36     2.34        920,000     P-1      A-1+
   1,740,000  Michigan State Strategic Fund (Sintel, Inc. Project) - Series 2005
              LOC Fifth Third Bank                                              10/01/30     2.34      1,740,000     P-1      A-1+
    580,000   Mississippi Home Corporation Single Family Mortgage RB
              Wachovia Merlots Trust Series 2000YYY
              Guaranteed by GNMA                                                12/01/31     2.30        580,000   VMIG-1
   3,000,000  Missouri State HEFA (Barnes Hospital)
              LOC JPMorgan Chase Bank, N.A.                                     12/01/15     2.15      3,000,000   VMIG-1     A-1+
     250,000  Montgomery, AL IDRB Pollution Control & Solid Waste Disposal
              (General Electric Company Project)                                05/01/21     1.10        250,000   VMIG-1     A-1+
     250,000  Montgomery, AL IDRB Municipal Electricity Authority of Georgia
              Insured by FSA                                                    01/01/26     1.50        250,000   VMIG-1     A-1+
   1,450,000  Nashville & Davidson County, TN
              (Wedgewood Tower Project) - Series 2004 A
              LOC AmSouth Bank                                                  06/01/34     2.41      1,450,000     P-1       A-1
   5,545,000  Nevada Housing Division MHRB
              (Golden Apartments) - Series 2007
              LOC Citibank, N.A.                                                10/01/42     2.25      5,545,000              A-1+
   2,165,000  Nevada Housing Division Multi-Unit Housing RB
              (Maryland Villas Project) -Series 1997
              LOC Federal Home Loan Bank                                        10/01/30     2.25      2,165,000              A-1+
   3,500,000  Neveda Housing Division MHRB (Golden Apartment Project)
              Guaranteed by FHLMC                                               10/01/37     2.25      3,500,000              A-1+
   2,000,000  New Jersey EDA (Stolthaven Perth Amboy Inc. Project) - Series A
              LOC Citibank, N.A.                                                01/15/18     0.98      2,000,000     P-1      A-1+
   1,000,000  New York Office of City Comptroller RB
              LOC JPMorgan Chase Bank, N.A.                                     02/15/16     2.00      1,000,000     P-1      A-1+
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
MUNICIPAL PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 2008
===============================================================================
<TABLE>
                                                                                                                    Ratings  (1)
                                                                                                                  -----------------
    Face                                                                         Maturity  Current       Value             Standard
   Amount                                                                          Date   Coupon (2)   (Note 1)   Moody's  & Poor's
---------                                                                          ----   ----------   --------   -------  --------
Variable Rate Demand Instruments (Continued) (5)
-----------------------------------------------------------------------------------------------------------------------------------
<S>           <C>                                                               <C>         <C>      <C>          <C>      <C>
$  6,085,000  New York City, NY GO Bonds - Series 1995 F-3
              LOC Morgan Guaranty Trust                                         02/15/13     1.95%   $ 6,085,000   VMIG-1     A-1+
   1,525,000  New York City HDC MHRB (100 Jane Street Development)
              Collateralized by FNMA                                            09/15/28     2.17      1,525,000              A-1+
   3,000,000  New York City Transitional Finance Authority RB - Series A-1      11/15/22     2.05      3,000,000   VMIG-1     A-1+
     250,000  New York State Dormitory Authority
              Guaranteed by GNMA                                                02/15/41     2.19        250,000              A-1
    435,000   Ohio, KY Air Quality Development Authority, PCRB
              (First Energy Generation Corp. Project)
              LOC Fifth Third Bank                                              10/01/20     2.34        435,000     P-1      A-1+
  1,500,000   Ohio State Air Quality Development Authority PCRB
              (Firstenergy Generation Corp.) - Series 2006A
              LOC Key Bank, N.A.                                                12/01/23     2.20      1,500,000   VMIG-1     A-1
   1,000,000  Olathe, KS IDRB Multi-Modal (Diamant Boart Project) - Series 1997A
              LOC Svenska Handelsbanken                                         03/01/27     2.35      1,000,000     P-1      A-1+
   1,200,000  Orange County, FL HFA (Windsor Pines Project) - Series 2000E
              LOC Bank of America, N.A.                                         03/01/35     2.37      1,200,000   VMIG-1
   1,100,000  Orange County, FL MHRB
              (Post Fountains at Lee Vista Project)- Series 1997E
              Collateralized by FNMA                                            06/01/25     2.20      1,100,000              A-1+
   1,200,000  Orland Park, IL IDRB (Panduit Corporation Project) - Series 1996
              LOC Fifth Third Bank                                              04/01/31     2.27      1,200,000              A-1+
     250,000  Orlando, FL Utilities Commission - Series B                       10/01/22     2.09        250,000   VMIG-1     A-1+
   8,000,000  Palm Beach County, FL EDFA  (Lynn University Project) - Series 2001
              LOC Bank of America, N.A.                                         11/01/21     2.10      8,000,000     P-1      A-1+
   2,000,000  Pennsylvania EDFA (Amtrak Project) - Series B of 2001
              LOC JPMorgan Chase Bank, N.A.                                     11/01/41     2.28      2,000,000   VMIG-1     A-1+
   2,500,000  Pennsylvania EDFA EDRB
              (Joseph R & Nancy L Delsignore Project) - Series 2005B2
              LOC PNC Bank, N.A.                                                08/01/30     2.24      2,500,000     P-1      A-1+
   1,500,000  Pennsylvania EDFA EDRB
              (North America Communications, Inc. Project) - Series 2005B3
              LOC PNC Bank, N.A.                                                08/01/12     2.24      1,500,000     P-1      A-1+
  4,000,000   Port Authority of New York & New Jersey Versatile Structure
              Obligation RB- Series 3                                           06/01/20     1.10      4,000,000   VMIG-1     A-1+
   1,975,000  Port Bellingham, WA IDC
              (BP West Coast Products LLC Project) - Series 2003                03/01/38     1.35      1,975,000   VMIG-1     A-1+
   2,900,000  Port Orange, FL (Parmer College of Chiropractic Project)
              LOC LaSalle National Bank, N.A.                                   10/01/32     2.10      2,900,000              A-1
 15,990,000   Puerto Rico BB&T Municipal Trust Floater Series 2006
              Related to Puerto Rico Electric Power Authority - Series VV
              LOC Branch Banking And Trust Company                              07/01/32     2.27     15,990,000   VMIG-1
  3,500,000   Riesel IDC Solid Waste Disposal RB
              (Sandy Creek Energy Associated)
              LOC Credit Suisse                                                 10/01/42     2.28      3,500,000              A-1+
   1,800,000  Rockingham County, NC IDRB PCFA
              (Eden Customs Processing, LLC Project) Series 2004 (4)
              LOC Branch Banking And Trust Company                              01/01/17     2.38      1,800,000

</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------



===============================================================================

 <TABLE>
                                                                                                                    Ratings  (1)
                                                                                                                  -----------------
    Face                                                                         Maturity  Current       Value             Standard
   Amount                                                                          Date   Coupon (2)   (Note 1)   Moody's  & Poor's
---------                                                                          ----   ----------   --------   -------  --------
Variable Rate Demand Instruments (Continued) (5)
-----------------------------------------------------------------------------------------------------------------------------------
<S>           <C>                                                               <C>         <C>      <C>          <C>      <C>
$  1,925,000  Rockingham, NC IDRB PCFA
              (Whiteridge Plastics Project) - Series 2003 (4)
              LOC Branch Banking And Trust Company                              03/01/15     2.38%   $ 1,925,000
   7,650,000  Rome, GA Housing Authority MHRB
              (Ashland Park Apartment Project) - Series 2002
              LOC Union Planters Bank                                           07/01/34     2.42      7,650,000               A-1
    9,140,000 Sabine Neches Housing Finance Corporation, TX
              Single Family Mortgage RB RR II R-11208
              LOC GNMA/ FNMA /FHLMC                                             12/01/39     2.32      9,140,000   VMIG-1
    1,000,000 Savannah, GA EDA Solid Waste Disposal RB
              (Republic Services of Georgia Limited Partnership Project)
              LOC SunTrust Bank                                                 06/01/30     2.19      1,000,000   VMIG-1
   3,035,000  South Carolina Jobs EDA (Cannon Medical Hospital) - Series 2004A
              LOC National Bank of South Carolina                               06/01/24     2.36      3,035,000     P-1
   2,365,000  South Carolina Jobs EDA RB
              (DCS Diversified Coating Systems, Inc Project) - Series 2002
              LOC Branch Bank And Trust Company                                 04/01/17     2.38      2,365,000   VMIG-1
   1,230,000  South Carolina Ridgeland Township RB (LRC Ridgeland LLC
              Project) - Series 2006A
              LOC Columbus Bank & Trust Company                                 09/01/21     2.36      1,230,000     P-1       A-1
   5,910,000  South Carolina Three Rivers Solid Waste Disposal Facilities
              - Series A
              LOC US Bank, N.A.                                                 10/01/08     2.75      5,910,000              A-1+
     800,000  Suffolk County, VA Redevelopment and Housing Authority MHRB
              (Oak Springs Apartments, LLC) - Series A
              Guaranteed by FHLMC                                               12/01/19     2.09        800,000   VMIG-1
   1,065,000  Suffolk County, VA Redevelopment & Housing Authority MHRB
              (Pembroke Crossing Apartments) - Series 1998 (4)
              LOC SunTrust Bank                                                 09/01/19     2.19      1,065,000
   1,100,000  Texas Calhoun County Navigation Port, RB
              (BP PLC) - Series 2003                                            01/01/24     1.35      1,100,000   VMIG-1     A-1+
   1,375,000  Tulsa, OK IDA (Indian Health Care Resource Center of Tulsa)
              LOC JPMorgan Chase Bank, N.A.                                     06/01/14     3.50      1,375,000   VMIG-1     A-1+
     795,000  Tuscaloosa County, AL IDA
              (Automotive Carridor, LLC Expansion Project) - Series 2001
              LOC Regions Bank                                                  11/01/24     2.45        795,000     P-1      A-1
   1,375,000  Tuscaloosa County, AL IDA
              (Automotive Carridor, LLC Expansion Project) - Series 2001(4)
              LOC Regions Bank                                                  10/01/21     2.45      1,375,000
     265,000  University of North Carolina at Chapel Hill RB - Series 2001 B    12/01/25     2.08        265,000   VMIG-1     A-1+
   4,800,000  University of North Carolina COPs
              (Chapel Hill Foundation Project) - Series 1989
              LOC Bank of America, N.A.                                         10/01/09     2.08      4,800,000   VMIG-1
   1,520,000  Upper Illinois River Valley IDA RB
              (Advance Flexible Composites) Series A(4)
              LOC LaSalle National Bank, N.A.                                   06/01/25     2.41      1,520,000
     300,000  Utah Transit Authority Sales Tax RB Adj-Sub-Series A
              LOC Fortis Bank S.A./N.V.                                         06/15/36     1.40        300,000   VMIG-1     A-1+
   4,450,000  Volusia County, FL IDA RB (Intellitech Project)
              LOC LaSalle National Bank, N.A.                                   10/01/37     2.20      4,450,000              A-1+

</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
MUNICIPAL PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 2008
===============================================================================

<TABLE>
                                                                                                                    Ratings  (1)
                                                                                                                  -----------------
    Face                                                                         Maturity  Current       Value             Standard
   Amount                                                                          Date   Coupon (2)   (Note 1)   Moody's  & Poor's
---------                                                                          ----   ----------   --------   -------  --------
Variable Rate Demand Instruments (Continued) (5)
-----------------------------------------------------------------------------------------------------------------------------------
<S>           <C>                                                               <C>         <C>      <C>          <C>      <C>
$  4,500,000  Volusia County, FL IDA RB (West Volusia Family YMCA Project)
              LOC SunTrust Bank                                                 12/01/27     2.14%   $ 4,500,000   VMIG-1
   2,725,000  Washington State EDFA
              (Summer Building LLC Project) - Series 2005F
              LOC Key Bank, N.A.                                                12/01/30     2.36      2,725,000     P-1      A-1
     250,000  Washington State HFC
              LOC Allied Irish Bank, PLC                                        07/01/33     1.13        250,000   VMIG-1     A-1
     970,000  Washington State HFC Putters - Series 1335
              LOC GNMA/FNMA/FHLMC                                               12/01/09     2.56        970,000   VMIG-1
   2,800,000  Washington State HFC MHRB  -
              (Seasons Apartment Project) Series 2006
              Collateralized by FNMA                                            12/15/40     2.40      2,800,000   VMIG-1
   2,095,000  Washington State HFC Putters 1335
              LOC GNMA/FNMA                                                     12/01/23     1.50      2,095,000   VMIG-1
   1,045,000  Wauwatosa, WI Housing Authority RB
              (Hart Park Square Project)
              LOC Marshall & Ilsley Bank                                        03/01/34     2.47      1,045,000     P-1      A-1
   2,100,000  West Des Moines, IA RB Woodgrain Millwork Inc Project)-Series 1995
              LOC Wells Fargo Bank, N.A.                                        04/01/10     2.46      2,100,000     P-1      A-1+
   3,010,000  Will-Kankakee Regional Development Authority, IL IDRB - Series A
              LOC Fifth Third Bank                                              08/01/36     2.34      3,010,000     P-1      A-1+
   1,000,000  Wisconsin State HEFA
              (Indian Community School of Wilwaukee) - Series 2006
              LOC JPMorgan Chase Bank, N.A.                                     12/01/36     3.50      1,000,000   VMIG-1
   2,375,000  Wisconsin Sturtevant IDRB (SLJB LLC Inc. Project) - Series 1997
              LOC Fifth Third Bank                                              05/01/12     2.40      2,375,000     P-1      A-1+
------------                                                                                       -------------
 335,273,161  Total Variable Rate Demand Instruments                                                 335,273,161
------------                                                                                       -------------
              Total Investments (97.74%) (Cost $478,910,292+)                                        478,910,292
              Cash and other assets, net of liabilities (2.26%)                                       11,060,237
                                                                                                   -------------
              Net Assets (100.00%)                                                                 $ 489,970,529
                                                                                                   =============
              +   Aggregate cost for federal income tax purposes is identical.

</TABLE>

FOOTNOTES:
1)   Unless the securities are assigned their own ratings, the ratings are those
     of the bank whose letter of credit  guarantees  the issue or the  insurance
     company  who insures the issue.  All  letters of credit and  insurance  are
     irrevocable  and direct pay covering both  principal and interest.  Ratings
     are unaudited.

     In addition, certain issuers may have  either a line of credit, a liquidity
     facility, a standby purchase agreement or some other financing mechanism to
     ensure the remarketing of the securities.  This is not a guarantee and does
     not serve to insure or collateralize the issue.

2)   The interest rate shown  reflects the  security's  current  coupon,  unless
     yield is available.

3)   The maturity date indicated for the put bonds is the next put date

4)   Securities that are not rated which the Fund's adviser has determined to be
     of comparable quality to those rated securities in which the fund invests.

5)   Securities  payable on demand at par including  accrued  interest  (usually
     with seven days notice) and where indicated are unconditionally  secured as
     to principal  and interest by a bank letter of credit.  The interest  rates
     are  adjustable  and are based on bank prime rates or other  interest  rate
     adjustment  indices.  The rate  shown is the rate in  effect at the date of
     this statement.

The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------



===============================================================================

<TABLE>

KEY:
<S>          <C>  <C>                                         <S>        <C>  <C>
      AMT      =  Alternate Minimum Tax                         GNMA      =  Government National Mortgage Association

      BAN      =  Bond Anticipation Note                        GO        =  General Obligation

      COPs     =  Certificates of Participation                 IDA       =  Industrial Development Authority

      EDA      =  Economic Development Authority                IDC       =  Industrial Development Corporation

      EDC      =  Economic Development Corporation              IDRB      =  Industrial Development Revenue Bond

      EDFA     =  Economic Development Finance Authority        LOC       =  Letter of Credit

      EDRB     =  Economic Development Revenue Bond             MHRB      =  Multi-Family Housing Revenue Bond

      FHA      =  Federal Housing Authority                     PCFA      =  Pollution Control Finance Authority

      FHLMC    =  Federal Home Loan Mortgage Association        PCRB      =  Pollution Control Revenue Bond

      FNMA     =  Federal National Mortgage Association         RDRB      =  Residential Development Revenue Bond

      FSA      =  Financial Security Assurance                  RB        =  Revenue Bond

      HDC      =  Housing Development Corporation               RN        =  Revenue Note

      HEFA     =  Health and Education Facilities Authority     TAN       =  Tax Anticipation Note

      HFA      =  Housing Finance Authority                     TRAN      =  Tax and Revenue Anticipation Note

      HFC      =  Housing Finance Commission


</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
MUNICIPAL PORTFOLIO
BREAKDOWN OF PORTFOLIO HOLDINGS BY STATE
MARCH 31, 2008
===============================================================================

<TABLE>

------------------------- ----------------------------- ------------------------------
         States                      Value                     % of Portfolio
------------------------- ----------------------------- ------------------------------
<S>                              <C>                            <C>
Alabama                           $   4,485,000                       0.94%
Arizona                               5,000,000                       1.04
Arkansas                              1,433,045                       0.30
California                            8,311,000                       1.73
Colorado                             14,455,000                       3.02
Connecticut                          15,300,000                       3.19
Delaware                              1,000,000                       0.21
District of Columbia                 10,000,000                       2.09
Florida                              55,026,000                      11.49
Georgia                              13,150,000                       2.75
Illinois                             40,069,412                       8.37
Indiana                               5,290,000                       1.10
Iowa                                  7,802,001                       1.63
Kansas                                1,000,000                       0.21
Kentucky                              9,565,000                       2.00
Louisiana                             1,880,000                       0.39
Maryland                             14,245,000                       2.97
Massachusetts                           300,000                       0.06
Michigan                             23,523,700                       4.91
Minnesota                             9,765,722                       2.04
Mississippi                             580,000                       0.12
Missouri                             11,504,089                       2.40
Nebraska                              5,365,000                       1.12
Nevada                               11,210,000                       2.34
New Jersey                           11,000,000                       2.30
New Mexico                              300,000                       0.06
New York                             31,755,000                       6.63
North Carolina                       10,240,000                       2.14
Ohio                                 21,063,837                       4.40
Oklahoma                              7,552,161                       1.58
Pennsylvania                         18,520,899                       3.87
Puerto Rico                          15,990,000                       3.34
South Carolina                       19,540,000                       4.08
Tennessee                             1,450,000                       0.30
Texas                                27,471,813                       5.74
Utah                                  1,845,600                       0.38
Vermont                              12,000,000                       2.51
Virginia                              2,765,000                       0.58
Washington                           10,815,000                       2.26
Wisconsin                            16,341,013                       3.41
------------------------- ----------------------------- ------------------------------
Total                             $ 478,910,292                    100.00%
------------------------- ----------------------------- ------------------------------

</TABLE>
The accompanying notes are an integral part of these financial statements.

<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
MUNICIPAL PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2008
===============================================================================

<TABLE>

ASSETS
  Investments in securities, at amortized cost (Note 1).............................      $      478,910,292
  Cash..............................................................................               8,525,961
  Accrued interest receivable.......................................................               3,022,703
  Prepaid expenses..................................................................                  26,517
  Other assets......................................................................                     232
                                                                                          ------------------
         Total assets...............................................................             490,485,705
                                                                                          ------------------

LIABILITIES
  Payable to affiliates*............................................................                 150,480
  Accrued expenses..................................................................                 136,685
  Dividends payable.................................................................                 228,011
                                                                                          ------------------
         Total liabilities..........................................................                 515,176
                                                                                          ------------------
  Net assets........................................................................      $      489,970,529
                                                                                          ==================

SOURCE OF NET ASSETS
  Net capital paid in on shares of capital stock (Note 4)...........................      $      489,904,129
  Accumulated net realized gains....................................................                  11,145
  Accumulated undistributed net investment income ..................................                  55,255
                                                                                          ------------------
  Net assets........................................................................      $      489,970,529
                                                                                          ==================
<CAPTION>

Net asset value, per share (Note 4):
Class Name                                          Net Assets          Shares Outstanding       Net Asset Value
<S>                                                 <C>                  <C>                      <C>
Institutional Shares........................         $3,855,993              3,857,231                 $1.00
Institutional Service Shares................           $110,286                110,321                 $1.00
Short Term Income Shares....................        $93,232,518             93,262,456                 $1.00
Retail Shares...............................       $170,909,248            170,964,128                 $1.00
Advantage Shares............................       $221,862,484            221,933,725                 $1.00


</TABLE>

*    Includes fees payable to Reich & Tang Asset  Management,  LLC, Reich & Tang
     Distributors, Inc. and Reich & Tang Services, Inc.


The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
MUNICIPAL PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 2008
===============================================================================

<TABLE>

INVESTMENT INCOME
<S>                                                                                     <C>
Income:
    Interest........................................................................    $       14,939,976
                                                                                        ------------------
Expenses: (Note 2)
    Investment management fee.......................................................               522,579
    Administration fee..............................................................               217,741
    Shareholder servicing fee (Institutional Service Shares)........................                    34
    Shareholder servicing fee (Short Term Income Shares)............................               286,621
    Shareholder servicing fee (Retail Shares).......................................               368,822
    Shareholder servicing fee (Advantage Shares)....................................               429,065
    Distribution fee (Short Term Income Shares).....................................               515,918
    Distribution fee (Retail Shares)................................................               958,938
    Distribution fee (Advantage Shares).............................................             1,287,195
    Sub-Accounting fee (Advantage Shares)...........................................               171,626
    Custodian expenses..............................................................                23,898
    Shareholder servicing and related shareholder expenses+.........................               176,151
    Legal, compliance and filing fees...............................................               379,131
    Audit and accounting............................................................               133,279
    Trustees' fees and expenses.....................................................                27,313
    Other...........................................................................                 7,110
                                                                                        ------------------
    Total expenses..................................................................             5,505,421
          Less: Fees waived ........................................................            (1,401,562)
                 Expense paid indirectly ...........................................                (3,281)
                                                                                        ------------------
    Net expenses....................................................................             4,100,578
                                                                                        ------------------
    Net investment income...........................................................            10,839,398
REALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on investments....................................................                34,502
                                                                                        ------------------
Increase in net assets from operations..............................................    $       10,873,900
                                                                                        ==================

+    Includes class specific transfer agency expenses of $334, $3, $57,324,  and
     $73,236 for the Institutional,  Institutional  Service,  Short Term Income,
     and Retail Shares, respectively.

</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
MUNICIPAL PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
===============================================================================

<TABLE>
                                                                                               Commencement of Operations
                                                                         Year Ended             October 30, 2006 through
                                                                       March 31, 2008                 March 31, 2007
                                                                       --------------                 --------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
<S>                                                                    <C>                         <C>
    Net investment income.........................................     $    10,839,398             $      1,499,539
    Net realized gain on investments..............................              34,502                       -0-
                                                                       ---------------             ----------------
Increase in net assets from operations............................          10,873,900                    1,499,539
Dividends to shareholders from net investment income:
    Institutional Shares.........................................              (47,801)                    (117,822)
    Institutional Service Shares .................................                (377)                         (12)
    Short Term Income Shares .....................................          (3,142,101)                     (99,509)
    Retail Shares.................................................          (3,506,790)                    (106,568)
    Advantage Shares..............................................          (4,142,329)                  (1,175,628)
                                                                       ---------------             ----------------
         Total dividends to shareholders..........................         (10,839,398)                  (1,499,539)
                                                                       ---------------             ----------------
Capital share transactions (Note 4):
    Institutional Shares..........................................           3,847,231                       10,000
    Institutional Service Shares..................................             100,321                       10,000
    Short Term Income Shares......................................          (5,174,033)                  57,915,009
    Retail Shares.................................................          73,422,037                   41,816,875
    Advantage Shares..............................................          85,387,834                  136,545,892
    Net asset value of shares issued in connection with merger Cortland
    Municipal into Retail Shares (Note 5).........................           6,256,528                       -0-
    Net asset value of shares issued in connection with merger Daily Tax
    Free Class A into Retail Shares (Note 5)......................          28,913,828                       -0-
    Net asset value of shares issued in connection with merger Daily Tax
    Free Class B into Short Term Income Shares (Note 5)...........          40,438,840                       -0-
    Net asset value of shares issued in connection with merger Daily Tax
    Free Thornburg Shares into Retail Shares (Note 5).............          20,445,665                       -0-
                                                                       ---------------             ----------------
          Total capital share transactions........................         253,638,251                  236,297,776
                                                                       ---------------             ----------------
    Total increase ...............................................         253,672,753                  236,297,776
Net assets:
    Beginning of year.............................................         236,297,776                      -0-
                                                                       ---------------             ----------------
     End of year..................................................     $   489,970,529             $    236,297,776
                                                                       ===============             ================
Undistributed net investment income...............................     $        55,255             $        -0-
                                                                       ===============             ================

</TABLE>

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

<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
MUNICIPAL PORTFOLIO
FINANCIAL HIGHLIGHTS
===============================================================================

<TABLE>

Institutional shares                                                            Commencement of Operations
--------------------                                       Year Ended            October 30, 2006 through
Per Share Operating Performance:                         March 31, 2008               March 31, 2007
                                                         --------------               --------------
(for a share outstanding throughout the year)
<S>                                                        <C>                        <C>
Net asset value, beginning of year.....................     $   1.00                    $    1.00
                                                            ---------                   ----------
Income from investment operations:
   Net investment income...............................         0.033                        0.006
   Net realized and unrealized gain(loss)  on investments       0.000                         --
                                                            ---------                   ----------
   Total from investment operations....................         0.033                        0.006
                                                            ---------                   ----------
Less distributions from:
   Dividends from net investment income................        (0.033)                      (0.006)
   Net realized gain on investments....................        (0.000)                       (--)
                                                            ---------                   ----------
   Total Distributions.................................        (0.033)                      (0.006)
                                                            ---------                   ----------
Net asset value, end of year...........................     $   1.00                    $    1.00
                                                            =========                   ==========
Total Return...........................................         3.35%                        0.60%(a)
Ratios/Supplemental Data
Net assets, end of year (000's)........................     $   3,856                   $      10
Ratios to average net assets:
   Expenses (net of fees waived) (b)...................         0.20%                        0.20%(c)
   Net investment income...............................         2.87%                        3.44%(c)
   Management and administration fees waived...........         0.13%                        0.16%(c)
   Expenses paid indirectly............................         0.00%                         --


Institutional Service shares                                                   Commencement of Operations
----------------------------                               Year Ended            March 19, 2007 through
Per Share Operating Performance:                         March 31, 2008               March 31, 2007
                                                         --------------               --------------
(for a share outstanding throughout the year)
Net asset value, beginning of year.....................     $   1.00                    $    1.00
                                                            ---------                   ----------
Income from investment operations:
   Net investment income...............................         0.030                        0.001
   Net realized and unrealized gain(loss)  on investments       0.000                         --
                                                            ---------                   ----------
   Total from investment operations....................         0.030                        0.001
Less distributions from:
   Dividends from net investment income................        (0.030)                      (0.001)
   Net realized gain on investments....................         0.000                         --
                                                            ---------                   ----------
   Total Distributions.................................        (0.030)                      (0.001)
                                                            ---------                   ----------
Net asset value, end of year...........................     $   1.00                    $    1.00
                                                            =========                   ==========
Total Return...........................................         3.09%                        0.12%(a)
Ratios/Supplemental Data
Net assets, end of year (000's)........................     $     110                   $       10
Ratios to average net assets:
   Expenses (net of fees waived) (b)...................         0.45%                        0.42%(c)
   Net investment income...............................         2.81%                        3.25%(c)
   Management and administration fees waived...........         0.13%                        0.16%(c)
   Transfer Agency Accoount fees waived................         0.01%                         --
   Expenses paid indirectly............................         0.00%                         --

</TABLE>
(a)      Unannualized
(b)      Includes expenses paid indirectly
(c)      Annualized

The accomapnying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------



===============================================================================

<TABLE>

Short Term Income shares                                                        Commencement of Operations
------------------------                                   Year Ended            February 20, 2007 through
Per Share Operating Performance:                         March 31, 2008               March 31, 2007
                                                         --------------               --------------
(for a share outstanding throughout the year)
<S>                                                        <C>                        <C>
Net asset value, beginning of year.....................     $   1.00                    $    1.00
                                                            ---------                   ----------
Income from investment operations:
   Net investment income...............................         0.027                        0.003
   Net realized and unrealized gain(loss)  on investments       0.000                         --
                                                            ---------                   ----------
   Total from investment operations....................         0.027                        0.003
                                                            ---------                   ----------
Less distributions from:
   Dividends from net investment income................        (0.027)                      (0.003)
   Net realized gain on investments....................        (0.000)                       (--)
                                                            ---------                   ----------
   Total Distributions.................................        (0.027)                      (0.003)
                                                            ---------                   ----------
Net asset value, end of year...........................     $   1.00                    $    1.00
                                                            =========                   ==========
Total Return...........................................         2.78%                        0.29%(a)
Ratios/Supplemental Data
Net assets, end of year (000's)........................     $  93,233                   $   57,915
Ratios to average net assets:
   Expenses (net of fees waived) (b)...................         0.76%                        0.76%(c)
   Net investment income...............................         2.74%                        2.89%(c)
   Management and administration fees waived...........         0.13%                        0.16%(c)
   Distribution fees waived............................         0.17%                        0.17%(c)
   Expenses paid indirectly............................         0.00%                         --

Retail shares                                                                  Commencement of Operations
-------------                                             Year Ended            December 8, 2006 through
Per Share Operating Performance:                         March 31, 2008               March 31, 2007
                                                         --------------               --------------
(for a share outstanding throughout the year)
Net asset value, beginning of year.....................     $   1.00                    $    1.00
                                                            ---------                   ----------
Income from investment operations:
   Net investment income...............................         0.025                        0.008
   Net realized and unrealized gain(loss)  on investments       0.000                         --
                                                            ---------                   ----------
   Total from investment operations....................         0.025                        0.008
                                                            ---------                   ----------
Less distributions from:
   Dividends from net investment income................        (0.025)                      (0.008)
   Net realized gain on investments....................         --                           (--)
                                                            ---------                   ----------
   Total Distributions.................................        (0.025)                      (0.008)
                                                            ---------                   ----------
Net asset value, end of year...........................     $   1.00                    $    1.00
                                                            =========                   ==========
Total Return...........................................         2.54%                        0.84%(a)
Ratios/Supplemental Data
Net assets, end of year (000's)........................     $ 170,909                   $   41,817
Ratios to average net assets:
   Expenses (net of fees waived) (b)...................         1.00%                        1.00%(c)
   Net investment income...............................         2.38%                        2.65%(c)
   Management and administration fees waived...........         0.13%                        0.16%(c)
   Distribution fees waived............................         0.13%                        0.10%(c)
   Transfer Agency Account fees waived.................          --                          0.03%(c)
   Expenses paid indirectly............................         0.00%                         --

</TABLE>

(a)      Unannualized
(b)      Includes expenses paid indirectly
(c)      Annualized

The accompanying notes are an integral part of these financial statements.
<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
MUNICIPAL PORTFOLIO
FINANCIAL HIGHLIGHTS (CONTINUED)
===============================================================================

<TABLE>
                                                                                Commencement of Operations
Advantage shares                                          Year Ended            November 2, 2006 through
Per Share Operating Performance:                         March 31, 2008               March 31, 2007
                                                         --------------               --------------
<S>                                                         <C>                        <C>
(for a share outstanding throughout the year)
Net asset value, beginning of year.....................     $   1.00                    $    1.00
                                                            ---------                   ----------
Income from investment operations:
   Net investment income...............................         0.025                        0.011
   Net realized and unrealized gain(loss)  on investments       0.000                         --
                                                            ---------                   ----------
   Total from investment operations....................         0.025                        0.011
Less distributions from:
   Dividends from net investment income................        (0.025)                      (0.011)
   Net realized gain on investments....................        (0.000)                       (--)
                                                            ---------                   ----------
   Total Distributions.................................        (0.025)                      (0.011)
                                                            ---------                   ----------
Net asset value, end of year...........................     $   1.00                    $    1.00
                                                            =========                   ==========
Total Return...........................................         2.52%                        1.09%(a)
Ratios/Supplemental Data
Net assets, end of year (000's)........................     $ 221,862                   $ 136,546
Ratios to average net assets:
   Expenses (net of fees waived) (b)...................         1.02%                        1.02%(c)
   Net investment income...............................         2.41%                        2.65%(c)
   Management and administration fees waived...........         0.13%                        0.16%(c)
   Distribution fees waived............................         0.16%                        0.16%(c)
   Sub-Accounting fees waived..........................         0.10%                        0.10%(c)
   Expenses paid indirectly............................         0.00%                         --

(a)      Unannualized
(b)      Include expenses paid indirectly
(c)      Annualized

</TABLE>

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

<PAGE>





















              [THIS PAGE INTENTIONALLY LEFT BLANK.]























<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
NOTES TO THE FINANCIAL STATEMENTS
===============================================================================

1. Summary of Accounting Policies

Daily Income Fund (the "Fund") is a, diversified, open-end management investment
company  registered  under  the  Investment  Company  Act of  1940.  The Fund is
comprised of four managed  portfolios  of money  market  instruments:  the Money
Market Portfolio, the U.S. Treasury Portfolio, the U.S. Government Portfolio and
the Municipal  Portfolio (each referred to as  "Portfolio").  Each portfolio has
five core classes of stock  authorized,  Institutional,  Institutional  Service,
Investor,  Short Term  Income,  and  Retail  shares.  The Money  Market and U.S.
Treasury  Portfolios have Pinnacle shares. In addition,  the Money Market,  U.S.
Government and Municipal  Portfolios consist of the Advantage Primary Liquidity,
Advantage   Government   Liquidity  and  Advantage  Municipal  Liquidity  shares
("Advantage  shares").  The Money Market  Portfolio  also  consists of the money
market Xpress shares ("Xpress  shares").  The Institutional  Service,  Investor,
Short Term Income,  Retail,  Advantage,  and Xpress shares of each Portfolio are
subject to a service fee pursuant to each  Portfolio's  distribution and service
plan. The  Institutional  and Pinnacle  shares are not subject to a service fee.
The Investor,  Short Term Income, Retail,  Advantage,  and Xpress shares of each
Portfolio are also subject to a  distribution  fee pursuant to each  Portfolio's
Distribution plan. The Institutional,  Institutional Service and Pinnacle shares
are not subject to a distribution fee. Additionally, each Portfolio may allocate
among its classes certain expenses, to the extent allowable to specific classes,
including  transfer agent fees,  government  registration fees, certain printing
and postage costs, and  administrative  and legal expenses.  For the years ended
March 31,  2008 and 2007  class  specific  expenses  of the Fund are  limited to
shareholder  servicing  fees,  distribution  fees and transfer  agent  expenses.
Income,  expenses (other than expenses  attributable to a specific  class),  and
realized and unrealized  gains and losses on  investments  are allocated to each
class of shares  based on its relative net assets.  In all other  respects,  all
share  classes  represent  the same  interest  in the  income and assets of each
respective  Portfolio.  Commencement of operations for each of the share classes
began as follows:

<TABLE>
                                        Money Market        U.S. Treasury       U.S. Government         Municipal
      Share classes                       Portfolio           Portfolio            Portfolio            Portfolio
      -------------                       ---------           ---------            ---------            ---------
<S>                                     <C>                  <C>                  <C>                   <C>
 Institutional shares............         May 13, 1994    November 18, 1996    October 30, 2006     October 30, 2006
 Institutional Service shares....        April 3, 1995    November 29, 1995      March 19, 2007       March 19, 2007
 Investor shares.................    November 28, 2006    February 21, 2007          Not Active           Not Active
 Short Term Income shares........    February 12, 2007     November 2, 2006          Not Active    February 20, 2007
 Retail shares...................    November 28, 2006    December 12, 2006   December 12, 2006     December 8, 2006
 Pinnacle shares.................        July 29, 1999        July 29, 1999                 N/A           Not Active
 Advantage shares................     November 1, 2006                  N/A    November 2, 2006     November 2, 2006
 Xpress shares...................        June 20, 2007                  N/A                 N/A                  N/A

</TABLE>
The Fund's  financial  statements  are prepared in  accordance  with  accounting
principles  generally  accepted in the United  States of America for  investment
companies as follows:

   a) Valuation of Securities -
     Investments are valued at amortized cost, which approximates  market value.
     Under this valuation  method, a portfolio  instrument is valued at cost and
     any discount or premium is amortized on a constant basis to the maturity of
     the instrument. If fluctuating interest rates cause the market value of the
     Fund's portfolio to deviate more than 1/2 of 1%from the value determined on
     the basis of amortized  cost,  the Board of Trustees will consider  whether
     any action  should be  initiated.  The  maturity  of  variable  rate demand
     instruments  is deemed to be the longer of the period  required  before the
     Fund is entitled to receive  payment of the principal  amount or the period
     remaining until the next interest rate adjustment.

   b) Repurchase Agreements -
     The Money Market,  U.S. Treasury and U.S.  Government  Portfolios may enter
     into repurchase  agreements In connection  with  transactions in repurchase
     agreements,  it is the Fund's policy that its custodian take  possession of
     the underlying collateral  securities,  the fair value of which exceeds the
     principal amount of the repurchase transaction, including accrued interest,
     at all times.  If the seller  defaults,  and the fair  market  value of the
     collateral  declines,  realization  of the  collateral  by the  Fund may be
     delayed or limited.

   c) Federal Income Taxes -
     It is the policy of each Portfolio to comply with the  requirements  of the
     Internal Revenue Code applicable to regulated  investment  companies and to
     distribute all of its taxable  income to its  shareholders.  Therefore,  no
     provision for federal income tax is required.

   d) Dividends and Distributions -
     Dividends from net investment income (excluding long-term capital gains and
     losses,  if any, and  amortization of market  discount) are declared daily,
     paid monthly and taxable as ordinary income. Capital gains distributions if
     any,  will be made at least  annually and in no event later than sixty days
     after the end of the Fund's fiscal year.
<PAGE>
-------------------------------------------------------------------------------



===============================================================================
1. Summary of Accounting Policies (continued)

   e) Use of Estimates -
     The  preparation  of financial  statements  in conformity  with  accounting
     principles  generally  accepted  in the United  States of America  requires
     management  to make  estimates  and  assumptions  that affect the  reported
     amounts of assets and liabilities  and disclosure of contingent  assets and
     liabilities  at the  date of the  financial  statements  and  the  reported
     amounts of increases and decreases in net assets from operations during the
     reporting period. Actual results could differ from those estimates.

   f) Representations and Indemnifications -
     In the normal  course of  business  the Fund  enters  into  contracts  that
     contain a variety of  representations  and warranties which provide general
     indemnifications.  The Fund's maximum exposure under these  arrangements is
     unknown,  as this would involve  future claims that may be made against the
     Fund that have not yet occurred.  However,  based on  experience,  the Fund
     expects the risk of loss to be remote.

   g) General -
     Securities  transactions  are  recorded  on a trade  date  basis.  Interest
     income,  including  accretion of discount and  amortization of premium,  is
     accrued as earned.  Realized gains and losses from securities  transactions
     are recorded on the identified cost basis.

2. Investment Management Fees and Other Transactions with Affiliates

Under the  Investment  Management  Contract,  each  Portfolio pays an investment
management  fee to Reich & Tang Asset  Management,  LLC (the  "Manager")  at the
annual rate of .12% of the Portfolio's average daily net assets.

Pursuant to an  Administrative  Services  Contract  each  Portfolio  pays to the
Manager an annual fee of .05% of the Portfolio's average daily net assets.

Pursuant  to  a  Sub-Accounting  and  Administration  Agreement,  Reich  &  Tang
Distributors, Inc. (the "Distributor"), an affiliate of the Manager, performs or
sub-contracts   or  employs  others  to  perform  certain   sub-accounting   and
administrative  services  for the  Advantage  and Xpress  shareholders.  For its
services under the Sub-Accounting and Administrative  Agreement, the Distributor
receives  from the Fund a fee equal to 0.10% per annum of the average  daily net
assets of the Advantage shares.

The  Fund  and  the  Distributor,  have  entered  into a  Shareholder  Servicing
Agreement and  Distribution  Agreement.  For its services under the  Shareholder
Servicing  and  Distribution  Agreements,  the  Distributor  receives  from  the
Portfolio  a fee,  accrued  daily and paid  monthly,  at an annual  rate of each
Class's average daily net assets as follows:
<TABLE>
                                        Shareholder Servicing Fees       Distribution Fees
                                        --------------------------       -----------------
<S>                                              <C>                          <C>
Institutional Service Shares................       .25%                         -0-
Investor Shares.............................       .25%                         .20%
Short Term Income Shares....................       .25%                         .45%
Retail Shares...............................       .25%                         .65%
Advantage Shares............................       .25%                         .75%
Xpress Shares...............................       .25%                         .75%

</TABLE>
For the year ended March 31, 2008, the following fees were voluntarily waived by
the Manager, Distributor and shareholder servicing agent:
<TABLE>

                                                Money Market     U.S. Treasury     U.S. Government       Municipal
                                                 Portfolio         Portfolio          Portfolio          Portfolio
                                                 ---------         ---------          ---------          ---------
<S>                                              <C>               <C>                 <C>               <C>
Investment management fees..................       $-0-              $-0-            $183,850          $351,430
Administration fees.........................  1,274,289           440,292             223,801           217,741
Shareholder servicing fees - Institutional
Service shares..............................     23,541               -0-                 -0-               -0-
Distribution fees - Investor shares.........     89,496           103,286                 N/A               N/A
Distribution fees - Short Term Income shares     17,452            47,774                 N/A           194,903
Distribution fees - Retail shares...........  1,820,818             4,682             141,013           191,259
Distribution fees - Advantage shares........  5,608,617               N/A             541,233           274,602
Sub-Accounting fees - Advantage shares......  3,317,775               N/A             338,271           171,626
Sub-Accounting fees - Xpress shares.........    325,782               N/A                 N/A               N/A
Transfer agency fees - Institutional shares.     36,856               -0-                 -0-               -0-
Transfer agency fees - Institutional Service
shares......................................        -0-               -0-                 -0-                 1
Transfer agency fees - Pinnacle shares......      9,895               -0-                 N/A               N/A
                                            -----------          --------          ----------        ----------
Total.......................................$12,524,521          $596,034          $1,428,168        $1,401,562
                                            ===========          ========          ==========        ==========
</TABLE>
The Manager, Distributor and Shareholder Servicing Agent have no right to recoup
prior fee waivers.
<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
===============================================================================

2. Investment Management Fees and Other Transactions with Affiliates (continued)

Directors of the Fund not affiliated  with the Manager are paid a fee that is to
be allocated among multiple funds, as defined below.  Each Independent  Director
receives  an annual  retainer  of $50,000  and a fee of $3,000 for each Board of
Directors meeting attended.  Each Independent Director also receives a fee up to
$1,500 at the discretion of the Lead Director for telephonic  Board meetings and
committee  meetings  that are not held on the  same day as a Board  Meeting.  In
addition,  the Lead Independent  Director  receives an additional  annual fee of
$12,000,  payable  quarterly  and the Audit  Committee  Chairman and  Compliance
Oversight  Committee  Chairman  will each  receive an  additional  annual fee of
$8,000, payable quarterly. Each Independent Director will also be reimbursed for
all  out-of-pocket  expenses  relating to attendance at such meetings.  The fees
noted above are to be allocated at the discretion of the Manager among the Fund,
the California Daily Tax Free Income Fund, Inc., the Connecticut  Daily Tax Free
Income Fund,  Inc., the Florida Daily Municipal  Income Fund, and the New Jersey
Daily Municipal Income Fund, Inc.  Effective January 1, 2008 the annual retainer
was  changed to  $60,000  and the annual  fees  payable to the Lead  Independent
Director,  the Audit Committee Chairman and the Compliance  Oversight  Committee
Chairman were changed to $13,800, $9,200 and $9,200, respectively.

Pursuant to the Transfer  Agency  Agreement  between  Reich & Tang and the Fund,
Reich & Tang Services, Inc. as transfer agent and dividend agent, receives a fee
of $17.40 per account per year or a minimum of (i) 0.05% of the monthly  average
net assets of the Investor,  Short Term Income, and Retail Shares of the Fund or
(ii)  0.02% of the  monthly  average  net assets of the  Institutional  Service,
Institutional and Pinnacle shares of the Fund. For the year ended March 31, 2008
these fees after waivers amounted to:
<TABLE>

                                     Money Market    U.S. Treasury     U.S. Government      Municipal
                                      Portfolio        Portfolio          Portfolio         Portfolio
                                      ---------        ---------          ---------         ---------
                                 Amount     %      Amount     %      Amount     %       Amount      %
                                 ------    ---     ------    ---    -------   ----      ------     ---
<S>                              <C>       <C>    <C>       <C>      <C>      <C>       <C>        <C>
 Institutional shares........    $85,564   0.01%  $125,294   0.02%     $ 1     *         $335       *
 Institutional Service shares     52,568   0.02%    51,032   0.02%      60     0.02%        1       *
 Pinnacle shares.............     24,273   0.01%    11,298   0.02%     N/A                N/A
 Investor shares.............    116,301   0.05%   100,862   0.05%     N/A                N/A
 Short Term Income shares....    153,042   0.05%    76,926   0.05%     N/A             57,243    0.05%
 Retail shares...............    653,671   0.05%     1,626   0.05%  54,581     0.05%   73,777    0.05%
                              ----------          --------         -------           --------
    Total.................... $1,085,419          $367,038         $54,642           $131,356
                              ==========          ========         =======           ========

</TABLE>

* Per account

The Delafield  Fund,  Inc., an affiliate  invests its excess cash under the Rule
12d-1 of the 1940 Act into the Daily  Income  Fund - Money  Market  Portfolio  -
Institutional  Class Shares.  For the period  October 11, 2007 through March 31,
2008, The Delafield Fund has invested an average of $92,135,872  and as of March
31, 2008, has an investment of $66,451,000.  Natixis Global Asset Management, LP
("NGAM LP"), the parent company of the Manager,  invests a portion of its excess
cash  balances in Daily  Income Fund - Money  Market  Portfolio -  Institutional
shares.  For the year ended March 31,  2008,  NGAM LP has invested an average of
$368,310,413 and as of March 31, 2008 has an investment of $41,909,617. Also, on
a daily basis,  the Manager,  Distributor and Transfer Agent invest their excess
cash in Daily Income Fund which is considered an immaterial amount.

3. Compensating Balance Arrangement and Other Transactions

Reich & Tang and the Bank of New York have entered into a  compensating  balance
arrangement  with the Daily Income Fund Municipal  Portfolio,  which would allow
the  Portfolio  to  compensate  the Bank for any  overdrafts  by  maintaining  a
positive cash balance the next day. Conversely,  on any day the Fund maintains a
positive balance it will be allowed to overdraw the account as compensation.  In
both cases the Federal  Reserve  requirements,  currently 10%, will be assessed.
Therefore,  all  overdrafts  must be  compensated  at 100% of the  total and all
positive  balances will allow for an overdraft of 90% of the total. On March 31,
2008 the cash balance was $8,271,632.

For the year ended March 31, 2008, the breakdown of expenses paid  indirectly by
the Fund were as follows:

<TABLE>

                                                Money Market      U.S. Treasury     U.S. Government      Municipal
                                                  Portfolio         Portfolio          Portfolio         Portfolio
                                                  ---------         ---------          ---------         ---------
<S>                                               <C>               <C>                 <C>              <C>
Custodian expenses............................      $2,530          $ 12,014               $-0-            $3,281
                                                    ======          ========            ========          =======
</TABLE>
<PAGE>
-------------------------------------------------------------------------------



===============================================================================

4. Transactions in Shares of Beneficial Interest

At March 31, 2008, an unlimited number of shares of beneficial  interest ($0.001
par value) were authorized. Transactions were as follows:

<TABLE>

Money Market Portfolio                               Year Ended                             Year Ended
                                                   March 31, 2008                         March 31, 2007
                                                   --------------                         --------------
   Institutional Shares                       Net Assets          Shares           Net Assets          Shares
------------------------                   ---------------  ---------------      --------------   --------------
<S>                                        <C>              <C>                  <C>              <C>
Sold...................................... $14,990,645,052   14,990,645,052      $3,532,193,281    3,532,193,281
Issued on reinvestment of dividends.......      29,569,001       29,569,001          30,075,742       30,075,742
Redeemed.................................. (14,908,254,816) (14,908,254,816)     (3,295,417,121)  (3,295,417,121)
                                           ---------------  ---------------      --------------   --------------
     Net increase (decrease).............. $   111,959,237      111,959,237      $  266,851,902      266,851,902
                                           ===============  ===============      ==============   ==============

Institutional Service Shares                  Net Assets          Shares           Net Assets          Shares
----------------------------               ---------------  ---------------      --------------   --------------
Sold...................................... $ 1,810,227,955    1,810,227,955      $2,353,647,274    2,353,647,274
Issued on reinvestment of dividends.......      12,054,054       12,054,054          11,234,194       11,234,194
Redeemed..................................  (1,829,537,807)  (1,829,537,807)     (2,321,066,724)  (2,321,066,724)
                                           ---------------  ---------------      --------------   --------------
     Net increase (decrease).............. $    (7,255,798)      (7,255,798)     $   43,814,744       43,814,744
                                           ===============  ===============      ==============   ==============

                                                                                    Commencement of Operations
                                                                                     November 28, 2006 through
                                                                                          March 31, 2007
                                                                                          --------------
   Investor Shares                            Net Assets          Shares           Net Assets          Shares
------------------                        ----------------  ---------------      --------------   --------------
Sold......................................$    895,721,451      895,721,451      $  326,218,371      326,218,371
Issued on reinvestment of dividends.......       9,881,325        9,881,325             231,079          231,079
Redeemed..................................    (878,345,327)    (878,345,327)       (174,502,593)    (174,502,593)
Shares issued with merger.................     137,343,403      137,343,403              -0-               -0-
                                          ----------------  ---------------      --------------   --------------
     Net increase (decrease)..............$    164,600,852      164,600,852      $  151,946,857      151,946,857
                                          ================  ===============      ==============   ==============

                                                                                    Commencement of Operations
                                                                                     February 12, 2007 through
                                                                                         March 31, 2007
                                                                                         --------------
   Short Term Income Shares                   Net Assets          Shares           Net Assets          Shares
---------------------------               ----------------  ---------------      --------------   --------------
Sold......................................$  1,927,769,280    1,927,769,280      $  216,561,971      216,561,971
Issued on reinvestment of dividends.......       8,493,927        8,493,927              76,285           76,285
Redeemed..................................  (1,736,593,469)  (1,736,593,469)       (159,541,535)    (159,541,535)
Shares issued with merger.................      40,741,544       40,741,544              -0-               -0-
                                          ----------------  ---------------      --------------   --------------
     Net increase (decrease)..............$    240,411,282      240,411,282      $   57,096,721       57,096,721
                                          ================  ===============      ==============   ==============

                                                                                    Commencement of Operations
                                                                                     November 28, 2006 through
                                                                                          March 31, 2007
                                                                                          --------------
   Retail Shares                              Net Assets          Shares           Net Assets          Shares
----------------                          ----------------  ---------------      --------------   --------------
Sold......................................$  4,656,278,890    4,656,278,890      $1,938,862,432    1,938,862,432
Issued on reinvestment of dividends.......      52,018,793       52,018,793           2,713,087        2,713,087
Redeemed..................................  (4,203,101,571)  (4,203,101,571)     (1,043,671,566)  (1,043,671,566)
Shares issued with merger.................      36,753,053       36,756,343              -0-               -0-
                                          ----------------  ---------------      --------------   --------------
     Net increase (decrease)..............$    541,949,165      541,952,455      $  897,903,953      897,903,953
                                          ================  ===============      ==============   ==============

                                                                                            Year Ended
                                                                                          March 31, 2007
                                                                                          --------------
   Pinnacle Shares                            Net Assets          Shares           Net Assets          Shares
------------------                        ----------------  ---------------      --------------   --------------
Sold......................................$    206,875,371      206,875,371      $  191,582,537      191,582,537
Issued on reinvestment of dividends.......       8,159,098        8,159,098           7,811,634        7,811,634
Redeemed..................................    (207,849,882)    (207,849,882)       (163,048,227)    (163,048,227)
                                          ----------------  ---------------      --------------   --------------
     Net increase (decrease)..............$      7,184,587        7,184,587      $   36,345,944       36,345,944
                                          ================  ===============      ==============   ==============

</TABLE>

<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

===============================================================================

<TABLE>

4. Transactions in Shares of Beneficial Interest (continued)

                                                                                      Commencement of Operations
Money Market Portfolio                               Year Ended                        November 1, 2006 through
                                                   March 31, 2008                         March 31, 2007
                                                   --------------                         --------------
   Advantage Shares                           Net Assets         Shares            Net Assets          Shares
------------------------                   ---------------  ---------------      --------------   --------------
<S>                                        <C>                <C>                <C>              <C>
Sold...................................... $ 4,908,390,896    4,908,390,896      $4,544,671,364   $4,544,671,364
Issued on reinvestment of dividends.......     135,201,857      135,201,857          34,760,496       34,760,496
Redeemed..................................  (4,705,503,694)  (4,705,503,694)     (1,465,843,369)  (1,465,843,369)
                                           ---------------  ---------------      --------------   --------------
     Net increase (decrease).............. $   338,089,059      338,089,059      $3,113,588,491   $3,113,588,491
                                           ===============  ===============      ==============   ==============

                                            Commencement of Operations
                                             June 20, 2007 through
                                                 March 31, 2007
                                                 --------------

Xpress Shares                                Net Assets          Shares
-------------                              ---------------  ---------------
Sold...................................... $ 2,717,706,062    2,717,706,062
Issued on reinvestment of dividends.......      31,077,996       31,077,996
Redeemed..................................  (2,476,571,781)  (2,476,571,781)
                                           ---------------  ---------------
     Net increase (decrease).............. $   272,212,871      272,212,871
                                           ===============  ===============

U.S. Treasury Portfolio                              Year Ended                          Year Ended
                                                   March 31, 2008                      March 31, 2007
                                                   --------------                      --------------
   Institutional Shares                     Net Assets       Shares               Net Assets       Shares
-----------------------                   --------------    --------------      --------------  --------------
Sold.................................     $4,536,481,973     4,536,481,973      $3,095,014,636   3,095,014,636
Issued on reinvestment of dividends..         27,132,074        27,132,074           8,283,894       8,283,894
Redeemed.............................     (4,609,122,550)   (4,609,122,550)     (3,342,758,467) (3,342,758,467)
                                          --------------    --------------      --------------  --------------
     Net increase (decrease).........     $  (45,508,503)      (45,508,503)     $ (239,459,937)   (239,459,937)
                                          ==============    ==============      ==============  ==============

   Institutional Service Shares             Net Assets         Shares             Net Assets       Shares
-------------------------------           --------------    --------------      --------------  --------------
Sold.................................     $1,379,265,207     1,379,265,207      $1,017,713,607   1,017,713,607
Issued on reinvestment of dividends..          9,245,471         9,245,471           6,373,235       6,373,235
Redeemed.............................     (1,306,263,009)   (1,306,263,009)     (1,079,293,656) (1,079,293,656)
                                          --------------    --------------      --------------  --------------
     Net increase (decrease).........     $   82,247,669        82,247,669      $  (55,206,814)    (55,206,814)
                                          ==============    ==============      ==============  ==============

                                                                                     Commencement of Operations
                                                                                      February 21, 2007 through
                                                                                            March 31, 2007
                                                                                            --------------
   Investor Shares                            Net Assets       Shares              Net Assets      Shares
------------------                        --------------    --------------      --------------  --------------
Sold.................................     $  915,435,582       915,435,582      $  281,725,704     281,725,704
Issued on reinvestment of dividends..          7,365,733         7,365,733             176,886         176,886
Redeemed.............................       (840,690,743)     (840,690,743)       (146,991,867)   (146,991,867)
Shares issued with merger............         53,257,284        53,257,284               -0-             -0-
                                          --------------    --------------      --------------  --------------
     Net increase (decrease).........     $  135,367,856       135,367,856      $  134,910,723     134,910,723
                                          ==============    ==============      ==============  ==============

                                                                                     Commencement of Operations
                                                                                      November 2, 2006 through
                                                                                            March 31, 2007
                                                                                            --------------
   Short Term Income Shares                 Net Assets       Shares               Net Assets      Shares
---------------------------               --------------    --------------      --------------  ---------------
Sold.................................     $  825,189,251       825,189,251      $   46,491,785       46,491,785
Issued on reinvestment of dividends..          4,502,404         4,502,404             266,519          266,519
Redeemed.............................       (693,274,372)     (693,274,372)        (24,094,981)     (24,094,981)
Shares issued with merger............         15,759,403        15,759,403               -0-              -0-
                                          --------------    --------------      --------------  ---------------
     Net increase (decrease).........     $  152,176,686       152,176,686      $   22,663,323       22,663,323
                                          ==============    ==============      ==============  ===============

</TABLE>

<PAGE>
-------------------------------------------------------------------------------



===============================================================================

<TABLE>
4. Transactions in Shares of Beneficial Interest (continued)

                                                                                Commencement of Operations
                                                    Year Ended                   December 12, 2006 through
                                                   March 31,2008                       March 31, 2007
                                                   -------------                       --------------
U.S. Treasury Portfolio
   Retail Shares                               Net Assets          Shares           Net Assets          Shares
----------------                          ---------------     -------------      --------------     ------------
<S>                                       <C>                 <C>                <C>                <C>
Sold......................................$     71,335,591       71,335,591      $    3,448,689        3,448,689
Issued on reinvestment of dividends.......          58,708           58,708               4,406            4,406
Redeemed..................................     (50,789,515)     (50,789,515)         (3,081,550)      (3,081,550)
                                          ----------------    -------------      --------------     ------------
     Net increase (decrease)..............$     20,604,784       20,604,784      $      371,545          371,545
                                          ================    =============      ==============     ============


                                                                                            Year Ended
                                                                                          March 31, 2007
                                                                                          --------------
   Pinnacle Shares                            Net Assets          Shares           Net Assets          Shares
------------------                        ----------------    -------------      --------------     ------------
Sold......................................$     98,444,058       98,444,058      $   53,982,889       53,982,889
Issued on reinvestment of dividends.......       2,191,008        2,191,008           1,572,612        1,572,612
Redeemed..................................     (69,631,426)     (69,631,426)        (44,432,493)     (44,432,493)
                                          ----------------    -------------      --------------     ------------
     Net increase (decrease)..............$     31,003,640       31,003,640      $   11,123,008       11,123,008
                                          ================    =============      ==============     ============

U.S. Government Portfolio                                  Year Ended                  Commencement of Operations
                                                         March 31, 2008                   October 30, through
                                                                                             March 31, 2007
                                                         --------------                      --------------
   Institutional Shares (a)                   Net Assets          Shares           Net Assets          Shares
--------------------------                ----------------    -------------      --------------     ------------
Sold......................................$         10,429           10,429      $       10,000           10,000
Issued on reinvestment of dividends.......             473              473              -0-               -0-
Redeemed..................................         (10,429)         (10,429)             -0-               -0-
                                          ----------------    -------------      --------------     ------------
     Net increase (decrease)..............$            473              473      $       10,000           10,000
                                          ================    =============      ==============     ============

                                                                                    Commencement of Operations
                                                                                        March 19, 2007 through
                                                                                          March 31, 2007
                                                                                          --------------
   Institutional Service Shares (a)           Net Assets          Shares           Net Assets          Shares
----------------------------------        ----------------    -------------      --------------     ------------
Initial Investment made by NATIXIS (b)....$                                      $   35,000,000       35,000,000
Sold......................................       3,610,769        3,610,769              10,000           10,000
Issued on reinvestment of dividends.......           9,972            9,972             244,835          244,835
Redeemed..................................      (3,295,012)      (3,295,012)        (35,244,835)     (35,244,835)
                                          ----------------    -------------      --------------     ------------
     Net increase (decrease)..............$        325,729          325,729      $       10.000           10.000
                                          ================    =============      ==============     ============

                                                                                     Commencement of Operations
                                                                                     December 12, 2006 through
                                                                                          March 31, 2007
                                                                                          --------------
   Retail Shares                              Net Assets          Shares           Net Assets          Shares
-----------------                         ----------------    -------------      --------------     ------------
Sold......................................$    960,561,944      960,561,944      $  124,415,380      124,415,380
Issued on reinvestment of dividends.......       3,731,782        3,731,782             101,389          101,389
Redeemed..................................    (918,089,313)    (918,089,313)        (67,465,599)     (67,465,599)
Shares issued with merger.................      56,013,618       56,026,352              -0-               -0-
                                          ----------------    -------------      --------------     ------------
     Net increase (decrease)..............$    102,218,031      102,230,765      $   57,051,170       57,051,170
                                          ================    =============      ==============     ============

                                                                                    Commencement of Operations
                                                                                     November 2, 2006 through
                                                                                          March 31, 2007
                                                                                          --------------
   Advantage Shares                           Net Assets          Shares           Net Assets          Shares
-------------------                       ----------------    -------------      --------------     ------------
Sold......................................$  1,006,741,134    1,006,741,134      $  302,636,615      302,636,615
Issued on reinvestment of dividends.......      11,591,409       11,591,409           2,087,366        2,087,366
Redeemed..................................    (549,727,342)    (549,727,342)       (110,896,630)    (110,896,630)
                                          ----------------    -------------      --------------     ------------
     Net increase (decrease)..............$    468,605,201      468,605,201      $  193,827,351      193,827,351
                                          ================    =============      ==============     ============

</TABLE>
<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

===============================================================================

<TABLE>

4. Transactions in Shares of Beneficial Interest (continued)

Municipal Portfolio                                                                     Commencement of Operations
                                                           Year Ended                     October 30,2006 through
                                                         March 31, 2008                       March 31, 2007
                                                         --------------                       --------------
   Institutional Shares (a)                   Net Assets          Shares           Net Assets          Shares
----------------------------              ----------------  ---------------      --------------   --------------
<S>                                       <C>                <C>                  <C>               <C>
Sold......................................$     10,521,314       10,521,314      $       10,000           10,000
Issued on reinvestment of dividends.......          44,000           44,000              -0-               -0-
Redeemed..................................      (6,718,083)      (6,718,083)             -0-               -0-
                                          ----------------  ---------------      --------------   --------------
     Net increase (decrease)..............$      3,847,231        3,847,231      $       10,000           10,000
                                          ================  ===============      ==============   ==============

                                                                                     Commencement of Operations
                                                                                      March 19, 2007 through
                                                                                          March 31, 2007
                                                                                          --------------
   Institutional Service Shares (a)           Net Assets          Shares           Net Assets          Shares
----------------------------------        ----------------  ---------------      --------------   --------------
Initial Investment made by NATIXIS (b)....$                                      $   25,000,000       25,000,000
Sold......................................         110,288          110,288              10,000           10,000
Issued on reinvestment of dividends.......             321              321             117,810          117,810
Redeemed..................................         (10,288)         (10,288)        (25,117,810)     (25,117,810)
                                          ----------------  ---------------      --------------   --------------
     Net increase (decrease)..............$        100,321          100,321      $       10.000           10.000
                                          ================  ===============      ==============   ==============

                                                                                    Commencement of Operations
                                                                                     February 20, 2007 through
                                                                                          March 31, 2007
                                                                                          --------------
   Short Term Income Shares                   Net Assets          Shares           Net Assets          Shares
---------------------------               ----------------  ---------------      --------------   --------------
Sold......................................$  1,121,360,019    1,121,360,019      $   98,421,212       98,421,212
Issued on reinvestment of dividends.......       2,765,057        2,765,057              32,790           32,790
Redeemed..................................  (1,129,299,109)  (1,129,299,109)        (40,538,993)     (40,538,993)
Shares issued with merger.................      40,438,840       40,521,480              -0-               -0-
                                          ----------------  ---------------      --------------   --------------
     Net increase (decrease)..............$     35,264,807       35,347,447      $   57,915,009       57,915,009
                                          ================  ===============      ==============   ==============

                                                                                   Commencement of Operations
                                                                                     December 8, 2006 through
                                                                                          March 31, 2007
                                                                                          --------------
   Retail Shares                              Net Assets          Shares           Net Assets          Shares
----------------                          ----------------  ---------------      --------------   --------------
Sold......................................$    917,892,821      917,892,821      $  146,464,053      146,464,053
Issued on reinvestment of dividends.......       3,335,826        3,335,826              60,003           60,003
Redeemed..................................    (847,806,610)    (847,806,610)       (104,707,181)    (104,707,181)
Shares issued with merger.................      55,616,021       55,725,216              -0-               -0-
                                          ----------------  ---------------      --------------   --------------
     Net increase (decrease)..............$    129,038,058      129,147,253      $   41,816,875       41,816,875
                                          ================  ===============      ==============   ==============

                                                                                    Commencement of Operations
                                                                                     November 2, 2006 through
                                                                                          March 31, 2007
                                                                                          --------------
   Advantage Shares                           Net Assets          Shares           Net Assets          Shares
-------------------                       ----------------  ---------------      --------------   --------------
Sold......................................$    697,837,046      697,837,046      $  310,727,491      310,727,491
Issued on reinvestment of dividends.......       4,230,809        4,230,809           1,009,357        1,009,357
Redeemed..................................    (616,680,021)    (616,680,021)       (175,190,956)    (175,190,956)
                                          ----------------  ---------------      --------------   --------------
     Net increase (decrease)..............$     85,387,834       85,387,834      $  136,545,892      136,545,892
                                          ================  ===============      ==============   ==============
</TABLE>

(a)  On March 19, 2007 Reich & Tang Asset  Management,  LLC invested  $10,000 in
     each of the Institutional and Institutional  classes of the U.S. Government
     Portfolio and Municipal Portfolios. The amounts are equivalent to less than
     1% of total net assets of each Portfolio. On December 7, 2007, Reich & Tang
     Asset Management,  LLC redeemed $10,000 from the U.S. Government  Portfolio
     Institutional  Service  Shares and  $10,000  from the  Municipal  Portfolio
     Institutional Shares.

(b)  The U.S.  Government  and  Municipal  Portfolios  commenced  operations  on
     October 30, 2006 with seed money  investment  of  $60,000,000  from Natixis
     Global  Asset  Management,  LP,  an  affiliate  of the  Manager.  The  U.S.
     Government  Portfolio  received  $35,000,000  and the  Municipal  Portfolio
     received $25,000,000. The entire amount for both Portfolios was redeemed on
     December 19, 2006.

<PAGE>
-------------------------------------------------------------------------------



===============================================================================

5. Transfer of Net Assets

On November 19, 2007, the Fund acquired  assets and  liabilities of the Cortland
Trust,  Inc.,  the Daily Tax Free Income  Fund,  Inc.  and the Short Term Income
Fund, Inc., pursuant to a plan of reorganization approved by the Cortland Trust,
Inc., the Daily Tax Free Income Fund,  Inc. and the Short Term Income Fund, Inc.
on November 5, 2008. Total net assets of the Cortland Trust, Inc., the Daily Tax
Free Income Fund, Inc. and the Short Term Income Fund, Inc. were as follows:

<TABLE>

                                                  Investor                   Short Term                   Retail
      Money Market Portfolio                       Shares                   Income Shares                 Shares
<S>                                               <C>                       <C>                         <C>
Cortland Trust, Inc. - Cortland General
 Money Market Portfolio                             N/A                           N/A                   36,753,053
Short Term Income Fund, Inc. - Money
Market Portfolio - Class A                          N/A                       40,741,544                    N/A
Short Term Income Fund, Inc. - Money
Market Portfolio - Class B                       137,343,403                      N/A                       N/A

                                                  Investor                   Short Term                   Retail
      U.S. Treasury Portfolio                      Shares                   Income Shares                 Shares

Short Term Income Fund, Inc. - U.S.
Government Portfolio - Class A                      N/A                       15,759,403                    N/A
Short Term Income Fund, Inc. - U.S.
Government Portfolio - Class B                   53,257,284                       N/A                       N/A

                                                  Investor                   Short Term                   Retail
      U.S. Government Portfolio                    Shares                  Income Shares                  Shares

Cortland Trust, Inc. - Cortland U.S.
Government Portfolio                                N/A                           N/A                   56,013,618

                                                  Investor                    Short Term                  Retail
      Municipal Portfolio                          Shares                  Income Shares                  Shares

Cortland Trust, Inc. - Municipal
 Money Market Portfolio - Cortland Shares           N/A                           N/A                    6,256,528
Daily Tax Free Income Fund, Inc. - Class A          N/A                           N/A                   28,913,828
Daily Tax Free Income Fund, Inc. - Thornburg Shares N/A                           N/A                   20,445,665

<CAPTION>

Total net assets immediately after the transfer were:

                                             Money Market         U.S. Treasury     U.S. Government           Municipal
                                               Portfolio            Portfolio          Portfolio              Portfolio
                                               ---------            ---------          ---------              ---------
<S>                                        <C>                   <C>                  <C>                  <C>
Net Assets...........................      $7,977,528,224        $1,508,011,873       $533,345,255         $528,676,295
                                           ==============        ==============       ============         ============

</TABLE>

The total net assets of Cortland General Money Market Portfolio  included losses
of $3,290  which  were  offset to  capital.  The  total net  assets of  Cortland
Government  Portfolio  included  accumulated  losses of  $12,734.  The total net
assets of Cortland Municipal Portfolio included accumulated losses of $6,957 and
undistributed  income of $20,102.  The total net assets of Daily Tax Free Income
Fund,  Inc.  included   accumulated  losses  of  $16,399.  The  transaction  was
structured to qualify as a tax-free  reorganization  under the Internal  Revenue
code of 1986, as amended.


<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
===============================================================================

6. Tax Information

The tax character of all dividends and distributions paid during the years ended
March 31, 2008 and 2007 were as follows:

<TABLE>

                             Money Market             U.S. Treasury           U.S. Government            Municipal
                              Portfolio                 Portfolio                Portfolio               Portfolio
                              ---------                 ---------                ---------               ---------
                    <S>           <C>             <C>          <C>            <C>       <C>         <C>         <C>
                       2008         2007           2008         2007          2008      2007         2008        2007
                       ----         ----           ----         ----          ----      ----         ----        ----
 Ordinary Income   $281,728,508 $95,364,473     $49,756,628  $43,582,659  $15,087,433 $2,896,549   $    1,883   $-0-
 Tax-Exempt Income $-0-         $-0-            $-0-         $-0-         $-0-        $-0-         $10,837,515  $1,499,539

</TABLE>

At March 31, 2008, the Fund had capital loss transactions  available for Federal
income tax purposes and to be applied  against future gains, if any. The capital
loss transactions were as follows:

<TABLE>

                                                   Capital Loss                 Capital Loss             Expiration of
                                                     Utilized                    Remaining               Carryforwards
<S>                                                <C>                          <C>                        <C>
Money Market Portfolio                              -0-                         $    233                   2016
U.S. Treasury Portfolio                             -0-                            -0-                      N/A
U.S. Government Portfolio                           -0-                           12,734                   2014
                                                                                  54,070                   2016
                                                                                --------
   Total U.S. Government Portfolio                                                66,804*
Municipal Portfolio                                12,856                          1,309                   2010
                                                                                   2,234                   2014
                                                                                   6,958                   2015
                                                                                --------
   Total Municipal Portfolio                                                      10,501*

</TABLE>

* Subject to IRC limitations.

At March 31,  2008,  there were no  distributable  earnings for the Money Market
Portfolio and U.S. Treasury Portfolio. The U.S. Government Portfolio had $42,484
of distributable  earnings. The Municipal Portfolio had $55,255 of distributable
earnings.

The  Fund  has   adopted   Financial   Accounting   Standards   Board   ("FASB")
Interpretation   No.  48,   Accounting  for  Uncertainty  in  Income  Taxes,  an
interpretation  of  FASB  Statement  No.  109  ("FIN  48").  FIN  48  requires
Management  to determine  whether a tax position of the Fund is more likely than
not to be  sustained  upon  examination  by  the  applicable  taxing  authority,
including  resolution of any related appeals or litigation  processes,  based on
the  technical  merits of the  position.  The tax  benefit to be  recognized  is
measured as the largest  amount of benefit  that is greater  than fifty  percent
likely of being realized upon ultimate settlement which could result in the Fund
recording a tax liability  that would reduce net assets.  FIN 48 must be applied
to all existing tax positions  and open tax years upon initial  adoption and the
cumulative effect, if any, is to be reported as an adjustment to net assets.

Based on its analysis, Management has determined that the adoption of FIN 48 did
not have an impact to the Fund's  financial  statements upon adoption.  However,
Management's  conclusions  regarding  FIN  48  may  be  subject  to  review  and
adjustment  at a later date  based on factors  including,  but not  limited  to,
further implementation guidance expected from the FASB, and on-going analyses of
tax laws, regulations and interpretations thereof.

7. New Accounting Pronouncement

In September 2006, FASB issued Statement of Financial  Accounting  Standards No.
157,  Fair  Value  Measurements  ("SFAS157").   SFAS  157  defines  fair  value,
establishes a framework for measuring fair value, and expands  disclosures about
fair value  measurements.  SFAS 157 applies to reporting periods beginning after
November 15, 2007. Management is currently evaluating the impact the adoption of
SFAS 157 will have on the Fund's financial statements.


<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

===============================================================================


To The Board of Trustees and Shareholders of
Daily Income Fund

In our opinion, the accompanying statements of assets and liabilities, including
the schedules of  investments,  and the related  statements of operations and of
changes  in net assets  and the  financial  highlights  present  fairly,  in all
material  respects,  the  financial  position of Money  Market  Portfolio,  U.S.
Treasury   Portfolio,   U.S.   Government   Portfolio  and  Municipal  Portfolio
(constituting  Daily Income Fund,  hereafter referred to as the "Fund") at March
31, 2008,  and the results of each of their  operations,  the changes in each of
their net assets and the financial highlights for each of the periods presented,
in conformity with accounting principles generally accepted in the United States
of America.  These  financial  statements  and financial  highlights  (hereafter
referred to as  "financial  statements")  are the  responsibility  of the Fund's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements  based on our  audits.  We  conducted  our audits of these  financial
statements in accordance  with the  standards of the Public  Company  Accounting
Oversight  Board  (United  States).  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements,  assessing the accounting  principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits,  which included  confirmation of securities at March
31, 2008 by correspondence with the custodian and brokers,  provide a reasonable
basis for our opinion.



PricewaterhouseCoopers LLP
New York, New York
May 30, 2008


<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
ADDITIONAL INFORMATION
(UNAUDITED)
===============================================================================

ADDITIONAL INFORMATION ABOUT PORTFOLIO HOLDINGS

The Fund is required to file its complete  schedule of portfolio  holdings  with
the  Securities  and Exchange  Commission  ("SEC") on Form N-Q for its first and
third fiscal  quarters.  The Fund's Form N-Q is available  without charge on the
SEC's  website  (http://www.sec.gov)  or by calling  the Fund toll free at (800)
433-1918.  You can also obtain  copies of the Fund's  Form N-Q by  visiting  the
SEC's  Public  Reference  Room in  Washington,  DC (please call the SEC at (800)
732-0330 for information on the operation of the Public Reference Room).

INFORMATION ABOUT PROXY VOTING

Information  regarding  the Fund's proxy  voting  record for the 12 month period
ending  June 30 of each year is filed  with the SEC on Form  N-PX no later  than
August 31 of each year. The Fund's Form N-PX is available  without charge,  upon
request,  by  calling  the  Fund at  (800)  433-1918  and on the  SEC's  website
(http//www.sec.gov). The Fund does not presently invest in voting securities and
has therefore not adopted proxy voting policies and procedures.

QUALIFIED INTEREST INCOME

For the fiscal year ended March 31, 2008,  the Funds'  designate  the  following
percentages of ordinary  distributions paid during the fiscal year that are from
qualified interest income to foreign shareholders:

                                                          Qualified Interest
                                                                Income
                                                                -------
Daily Income Fund - Money Market Portfolio                          29%
Daily Income Fund - U.S. Treasury Portfolio                        100%
Daily Income Fund - U.S. Government Portfolio                      100%


TAX EXEMPT INCOME DISTRIBUTION

For  the  fiscal  year  ended  March 31,  2008,  the  Municipal  Portfolio  paid
tax-exempt distributions in the amount of $10,837,515.

<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
BOARD APPROVAL OF INVESTMENT MANAGEMENT CONTRACT
(UNAUDITED)
===============================================================================

INFORMATION ABOUT THE INVESTMENT MANAGEMENT CONTRACT

     On March 11,  2008,  the Board of Trustees  (the  "Trustees")  of the Daily
Income Fund (the "Fund")  approved the continuance of the Investment  Management
Contract.  Specifically,  with regards to the approval of the continuance of the
Investment  Management  Contract,  the Trustees of the Fund had  considered  the
following factors:

   1)    The nature, extent and quality of services provided by the Manager.

The Trustees  reviewed in detail the nature and extent of the services  provided
by the Manager under the terms of the Fund's Investment  Management Contract and
the quality of those  services over the past year.  The Trustees  noted that the
services  include managing the investment and reinvestment of the Fund's assets;
the provision of reports to the Board regarding  changes in portfolio  holdings,
important  developments  affecting the entities whose securities are included in
the Fund's portfolio,  and the money market industry and the economy in general;
and the payment of compensation  of all officers,  trustees and employees of the
Fund who are officers of the Manager or its affiliates.  The Board also observed
that the Manager provides various  administrative  services to the Fund pursuant
to the terms of a separate  Administrative  Services Contract and considered the
nature,  extent and quality of services  provided  under that agreement as well.
The Trustees  evaluated these factors based on their direct  experience with the
Manager  and in  consultation  with  counsel to the  independent  Trustees.  The
Trustees concluded that the nature and extent of the services provided under the
Investment  Management  Contract were  reasonable and appropriate in relation to
the management fees, that the level of services  provided by the Manager had not
diminished  over the past year and that the quality of services  continues to be
high. The Trustees  reviewed the personnel  responsible  for providing  advisory
services to the Fund and concluded,  based on their  experience and  interaction
with the Manager,  that  (i) the  Manager was able to retain  quality  portfolio
managers  and  other  personnel;  (ii) the  Manager  exhibited  a high  level of
diligence and attention to detail in carrying out its advisory  responsibilities
under the Investment  Management  Contract;  (iii) the Manager was responsive to
requests of the Trustees; and (iv) the Manager had kept the Trustees apprised of
developments relating to the Fund and the industry in general. The Trustees also
focused on the Manager's reputation and long-standing relationship with the Fund
and, in  particular,  the  experience  of the Manager in advising  money  market
funds.  The  Trustees  also noted the high  quality of services  provided by the
Manager under the Administrative Services Contract.

   2)    The performance of the Fund and the Manager.

The Trustees  reviewed  the  investment  performance  of the Fund's Money Market
Portfolio,  U.S. Treasury  Portfolio,  U.S.  Government  Portfolio and Municipal
Portfolio (each, a "Portfolio" and together,  the "Portfolios"),  on an absolute
basis and as compared to various Lipper peer group  categories for the one-month
and one-,  three-,  five- and ten-year  periods ended  December 31, 2007 for the
Money Market  Portfolio  and U.S.  Treasury  Portfolio and for the one-month and
one-year periods ended December 31, 2007 for the U.S.  Government  Portfolio and
Municipal Portfolio. The peer group categories included: (i) an asset-based peer
group of institutional  money market funds, as classified by Lipper, as the peer
group for the Money Market Portfolio; an asset-based peer group of institutional
U.S. Treasury money market funds, as classified by Lipper, as the peer group for
the U.S. Treasury Portfolio;  an asset-based peer group of U.S. government money
market funds, as classified by Lipper, as the peer group for the U.S. Government
Portfolio;  and an asset- based peer group of tax-exempt  money market funds, as
classified  by  Lipper,   as  the  peer  group  for  the   Municipal   Portfolio
("performance   group  1");  (ii) a   competitors'  class  peer  group  for  the
Portfolios,  representing  other  institutional  money  market  funds  that  are
considered  to be  competitors  of  the  Money  Market  Portfolio  with  similar
distribution channels; other institutional U.S. Treasury money market funds that
are  considered to be competitors  of the U.S.  Treasury  Portfolio with similar
distribution  channels;  other  U.S.  Government  money  market  funds  that are
considered  to be  competitors  of the U.S.  Government  Portfolio  with similar
distribution   channels;  and  other  tax-exempt  money  market  funds  and  one
institutional tax-exempt money market fund that are considered to be competitors
of the Municipal  Portfolio  with similar  distribution  channels  ("performance
group  2");  (iii)  a  peer  group  for  the  Money  Market   Portfolio  of  all
institutional  money market funds regardless of asset size or primary channel of
distribution;  a peer group for the U.S. Treasury Portfolio of all institutional
U.S.  Treasury money market funds regardless of asset size or primary channel of
distribution;  a peer group for the U.S. Government Portfolio of all retail U.S.
Government  money market funds  regardless  of asset size or primary  channel of
distribution;  a peer group for the Municipal Portfolio of all retail tax-exempt
money market funds  regardless of asset size or primary  channel of distribution
("performance  universe");  and  (iv) for the Money  Market  Portfolio  and U.S.
Treasury Portfolio only, other funds with similar  investment  objectives to the
Money  Market  Portfolio  and the U.S.  Treasury  Portfolio  that are advised or
sub-advised by the Manager.  These peer groups are referred to  collectively  as
the "Peer  Groups."  The  Manager  advised  the Board that it does not advise or
sub-advise other types of accounts,  such as institutional and pension accounts,
with similar  investment  policies to the  Portfolios.  The  Trustees  used each
Portfolio's   performance  against  their  respective  Peer  Groups  to  provide
objective   comparative   benchmarks   against  which  they  could  assess  each
Portfolio's performance. The Trustees considered those comparisons as helpful in
their  assessment  as to  whether  the  Manager  was  obtaining  for the  Fund's
shareholders  the performance  that was available in the marketplace  given each
Portfolio's investment objectives,  strategies, limitations and restrictions. In
reviewing each Portfolio's  performance,  the Trustees noted that while the U.S.
Government Portfolio's and
<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
BOARD APPROVAL OF INVESTMENT MANAGEMENT CONTRACT (CONTINUED)
(UNAUDITED)
===============================================================================

INFORMATION ABOUT THE INVESTMENT MANAGEMENT CONTRACT, CONTINUED

   2)    The performance of the Fund and the Manager, continued.

Municipal  Portfolio's  gross performance was at the bottom end of the range for
their  respective Peer Groups for the one-year  period,  the Trustees noted that
overall the gross  performance of the Portfolios  against their  respective Peer
Groups was  satisfactory.  In particular,  the Trustees noted that (i) the Money
Market Portfolio's  ranking against its Lipper  performance  universe was in the
1st  quintile for the  one-month,  one-year  and  five-year  periods and the 2nd
quintile  for the  three-year  and  ten-year  periods;  (ii) the  U.S.  Treasury
Portfolio's  ranking  against  its Lipper  performance  universe  was in the 1st
quintile for the  one-month  and  ten-year  periods and the 3rd quintile for the
one-year,   three-year  and  five-year  periods;   (iii)  the  U.S.   Government
Portfolio's  ranking  against  its Lipper  performance  universe  was in the 3rd
quintile for the one-month  period and the 5th quintile for the one-year period;
and (iv) the  Municipal  Portfolio's  ranking  against  its  Lipper  performance
universe was in the 1st quintile for the  one-month  period and the 4th quintile
for the one-year period (the 1st quintile is the highest quintile).

In  connection  with its  assessment  of the  performance  of the  Manager,  the
Trustees  considered  the Manager's  financial  condition and whether it has the
resources  necessary  to  continue  to  carry  out  its  obligations  under  the
Investment Management Contract.  The Trustees took into account, in this regard,
the payments made by the Manager from its own  resources to securities  brokers,
banks  and  financial   institutions   or  other   industry   professionals   or
organizations  whose  customers  are  shareholders  of the Fund  ("Participating
Organizations")  in connection  with  distribution  assistance  and  shareholder
servicing  provided by the Participating  Organizations.  The Trustees concluded
that the Manager had the  financial  resources  necessary to continue to perform
its  obligations  under the  Investment  Management  Contract and to continue to
provide the high quality services that it had provided to the Fund to date.

3)   The cost of the  advisory  services  and the profits to the Manager and its
     affiliates from the relationship with the Fund.

In connection  with the Trustees'  consideration  of the level of the management
fees,  the Trustees  considered a number of factors.  The Trustees  compared the
level of the  management  fees for the  Portfolios  against  the  advisory  fees
charged  to the  funds in their  respective  Peer  Groups  and each  Portfolio's
combined  management-administrative fees against fees covering both advisory and
administrative  services  charged to the funds in their  respective  Peer Groups
(noting  that the only  difference  in the Peer  Groups for  expense  comparison
purposes from the Peer Groups for performance  comparison  purposes was that the
expense  universe  Peer  Groups  were  slightly  smaller).   The  Trustees  also
considered  comparative  total fund expenses of each class of the Portfolios and
their  respective  Peer Groups.  The Trustees used this combined fee information
and total  expense  data as a guide to help  assess the  reasonableness  of each
Portfolio's  management fee, although they acknowledged that it was difficult to
make  precise  comparisons  with other funds since the exact  nature of services
provided under the respective Peer Groups fund agreements is often not apparent.
The Trustees also viewed the respective  Peer Groups fee  information as a whole
as useful in assessing whether the Manager was providing services at a cost that
was competitive with other,  similar funds. In assessing this  information,  the
Trustees considered both the comparative  contract rates as well as the level of
the management  fees after waivers and/or  reimbursements.  The Board noted that
the  contract  rate  of  each  Portfolio's  management  fee  and  combined  fees
(management  and  administrative)  were reasonable when compared to the combined
fees of the respective Peer Groups. The Trustees also noted that the Manager did
not advise or sub-advise any other types of accounts,  such as  institutional or
pension  accounts,  with  similar  investment  policies to the  Portfolios.  The
Trustees  concluded  that  the  level  of each  Portfolio's  management  fee was
reasonable in light of these factors.

The Trustees also considered the profitability to the Manager and its affiliates
arising out of their  relationships  with the Fund.  In this regard the Trustees
reviewed  profitability  data relating to the Manager and its affiliates for the
year ended December 31, 2006. The Trustees  considered  revenues received by the
Manager under the Investment  Management  Contract and  Administrative  Services
Contract. In reviewing the Manager's profitability reports, the Trustees and the
Manager discussed the Manager's associated costs and the impact of such costs on
the Manager's net  profitability.  The Trustees concluded that the profitability
of the Fund to the Manager and its affiliates was not excessive.

4)   The extent to which  economies  of scale will be realized as the Fund grows
     and whether fee levels reflect those economies of scale.

With respect to the Trustees'  consideration of economies of scale, the Trustees
discussed with the Manager whether economies of scale would be realized by it in
its  management of the Fund at higher asset levels.  The Trustees also discussed
with the Manager  whether certain of the Manager's costs would increase if asset
levels rise and observed that as assets rise, the Manager and its affiliates may
be required to pay increased fees to Participating  Organizations.  The Trustees
also reviewed the  respective  Peer Groups data to assess whether the respective
Peer Groups funds had advisory or administrative  fee breakpoints and, if so, at
what asset  levels.  The Trustees  concluded  that they were unable to assess at
this time whether economies of scale would be realized if the Fund were to
<PAGE>
 ------------------------------------------------------------------------------



===============================================================================

INFORMATION ABOUT THE INVESTMENT MANAGEMENT CONTRACT, CONTINUED

experience significant asset growth. In the event of significant asset growth in
the future,  the Trustees  determined to reassess  whether the  management  fees
appropriately took into account any economies of scale that had been realized as
a result of that growth.

   5)    Other Factors.

In addition to the above factors,  the Trustees  acknowledged  the importance of
the ability of the  Manager's  affiliate,  the  distributor,  to market the Fund
through  its   distribution   networks,   including  its  customer  service  and
administration system with banks and bank customers.

Based on a consideration  of all these factors in their totality,  the Trustees,
including  all  of  the  disinterested  Trustees,  determined  that  the  Fund's
management fees were fair and reasonable with respect to the quality of services
that the Manager provides and in light of the other factors described above that
the Trustees deemed  relevant.  The Trustees based their decision on evaluations
of all  these  factors  as a whole  and  did not  consider  any  one  factor  as
all-important or controlling.  The disinterested  Trustees were also assisted by
the advice of independent counsel in making this determination..

<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
RESULTS OF PROXY
SHORT TERM INCOME FUND, INC.
SPECIAL MEETINGS OF SHAREHOLDERS, NOVEMBER 5, 2007
(UNAUDITED)
===============================================================================

A Special  Meeting of the  Shareholders of the Short Term Income Fund, Inc. (the
"Fund"),  was held at the offices of the Fund,  600 Fifth Avenue,  New York, New
York on November 5, 2007, at 9:00 A.M.,  Eastern time to approve the  Agreements
and Plans of  Reorganization  and Liquidation  between Daily Income Fund and the
Fund.

The results of the voting are as follows:

<TABLE>

Money Market Portfolio                        Shares                       % of                       % of
Class A Shares                                 Voted                Outstanding Shares            Shares Voted
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>                        <C>                          <C>
   For                                    39,420,664.20                    77.69%                    98.51%
   Against                                   272,012.36                     0.54%                     0.68%
   Abstain                                   323,013.80                     0.64%                     0.81%

Money Market Portfolio                        Shares                       % of                       % of
Class B Shares                                 Voted                Outstanding Shares            Shares Voted
-----------------------------------------------------------------------------------------------------------------------------------

   For                                    74,234,277.01                    54.89%                    95.78%
   Against                                 1,884,334.93                     1.39%                     2.43%
   Abstain                                 1,388,211.13                     1.03%                     1.79%

US Government Portfolio                       Shares                       % of                       % of
Class A Shares                                 Voted                Outstanding Shares            Shares Voted
-----------------------------------------------------------------------------------------------------------------------------------

   For                                     7,882,170.11                    53.80%                    79.15%
   Against                                 1,854,489.36                    12.66%                    18.62%
   Abstain                                   221,709.37                     1.51%                     2.23%

US Government Portfolio                       Shares                       % of                       % of
Class B Shares                                 Voted                Outstanding Shares            Shares Voted
-----------------------------------------------------------------------------------------------------------------------------------

   For                                    29,858,116.31                    58.57%                    98.68%
   Against                                    83,809.73                     0.16%                     0.28%
   Abstain                                   315,684.87                     0.62%                     1.04%

</TABLE>

<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
RESULTS OF PROXY
CORTLAND TRUST, INC.
SPECIAL MEETINGS OF SHAREHOLDERS, NOVEMBER 5 and 6, 2007
(UNAUDITED)
===============================================================================
                                                                 -83-
On  November  5, 2007,  at 9:00 A.M.,  Eastern  time,  a Special  Meeting of the
Shareholders  of Cortland Trust,  Inc. (the "Fund"),  was held at the offices of
the Fund,  600 Fifth Avenue,  New York,  New York to approve the  Agreements and
Plans of Reorganization and Liquidation between Daily Income Fund and the Fund.

The results of the voting are as follows:

CORTLAND TRUST, INC.
SPECIAL MEETING OF SHAREHOLDERS, NOVEMBER 5, 2007

<TABLE>

                                              Shares                       % of                       % of
Cortland Government                            Voted                Outstanding Shares            Shares Voted
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>                         <C>                           <C>
   For                                    35,554,827.03                   58.82%                     96.38%
   Against                                   853,547.98                    1.41%                      2.31%
   Abstain                                   481,443.37                    0.80%                      1.31%

                                              Shares                       % of                       % of
Cortland General Money Market                  Voted                Outstanding Shares            Shares Voted
-----------------------------------------------------------------------------------------------------------------------------------

   For                                    14,337,902.75                   37.97%                     94.53%
   Against                                   214,099.34                    0.57%                      1.41%
   Abstain                                   615,406.78                    1.63%                      4.06%

                                              Shares                       % of                       % of
Cortland Municipal                             Voted                Outstanding Shares            Shares Voted
-----------------------------------------------------------------------------------------------------------------------------------

   For                                     2,524,650.67                   38.21%                     99.84%
   Against                                     1,729.17                    0.03%                      0.07%
   Abstain                                     2,192.92                    0.03%                      0.09%

</TABLE>

On  November  6, 2007,  at 9:00 A.M.,  Eastern  time,  a Special  Meeting of the
Shareholders  of Cortland Trust,  Inc. (the "Fund"),  was held at the offices of
the Fund,  600 Fifth Avenue,  New York,  New York to approve the  Agreements and
Plans of Reorganization and Liquidation between Daily Income Fund and the Fund.

The results of the voting are as follows:

CORTLAND TRUST, INC.
SPECIAL MEETING OF SHAREHOLDERS, NOVEMBER 6, 2007

<TABLE>

                                              Shares                       % of                       % of
Cortland General Money Market                  Voted                Outstanding Shares            Shares Voted
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>                        <C>                           <C>
   For                                    18,409,360.76                   48.75%                     95.73%
   Against                                   214,099.34                    0.57%                      1.11%
   Abstain                                   606,691.78                    1.61%                      3.15%

                                              Shares                       % of                       % of
Cortland Municipal                             Voted                Outstanding Shares            Shares Voted
-----------------------------------------------------------------------------------------------------------------------------------

   For                                     3,323,768.49                   50.31%                     99.88%
   Against                                     1,729.17                    0.03%                      0.05%
   Abstain                                     2,192.92                    0.03%                      0.07%

</TABLE>

<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
RESULTS OF PROXY
DAILY TAX FREE INCOME FUND, INC.
SPECIAL MEETING OF SHAREHOLDERS, NOVEMBER 5, 2007
(UNAUDITED)
===============================================================================

A Special  Meeting of the  Shareholders of Daily Tax Free Income Fund, Inc. (the
"Fund"),  was held at the offices of the Fund,  600 Fifth Avenue,  New York, New
York on November 5, 2007, at 9:00 A.M.,  Eastern time to approve the  Agreements
and Plans of  Reorganization  and Liquidation  between Daily Income Fund and the
Fund.

The results of the voting are as follows:

<TABLE>

                                              Shares                       % of                       % of
Class A Shares                                 Voted                Outstanding Shares            Shares Voted
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>                       <C>                            <C>
   For                                    15,007,503.260                  71.91%                     98.55%
   Against                                    16,413.100                   0.08%                      0.11%
   Abstain                                   204,460.890                   0.98%                      1.34%

                                              Shares                       % of                       % of
Class B Shares                                 Voted                Outstanding Shares            Shares Voted
-----------------------------------------------------------------------------------------------------------------------------------

  For                                     34,369,982.210                  81.13%                     97.62%
   Against                                   605,738.900                   1.43%                      1.72%
   Abstain                                   232,138.560                   0.55%                      0.66%

                                              Shares                       % of                       % of
Thornburg Shares                               Voted                Outstanding Shares            Shares Voted
-----------------------------------------------------------------------------------------------------------------------------------

   For                                     9,639,516.610                  50.01%                     98.39%
   Against                                    68,341.800                   0.35%                      0.70%
   Abstain                                    89,772.510                   0.47%                      0.91%

</TABLE>

<PAGE>

















                          [THIS PAGE INTENTIONALLY LEFT BLANK.]
















<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
TRUSTEES AND OFFICERS INFORMATION
(UNAUDITED)
===============================================================================

<TABLE>
                                                  Trustees and Officers Information
                                                          March 31, 2008(1)

--------------------- ---------- --------------- ------------------------------------ ------------------ -------------------

--------------------  Position(s)Term of Office        Principal Occupation(s)            Number of             Other
 Name, Address(2),     Held with and Length of               During Past                Portfolios in       Directorships
      and Age            Fund    Time Served(3)                5 Years                  Fund Complex           held by
                                                                                         Overseen by           Director
                                                                                          Director
---------------------- --------- --------------- ------------------------------------ ------------------ -------------------
Disinterested Directors:
--------------------- ---------- --------------- ------------------------------------ ------------------ -------------------
<S>                   <C>                        <C>                                  <C>                  <C>
 Albert R. Dowden,     Trustee     Since 2006    Corporate Director/Trustee for       Director/Trustee   Director/Trustee
 Age 66                                          Annuity & Life Re (Holdings) Ltd.,   of seven           for Annuity &
                                                 Boss Group, Ltd., Homeowners of      portfolios         Life Re
                                                 American Holding Corporation, AIM                       (Holdings) Ltd.,
                                                 Funds and CompuDyne Corporation.                        Boss Group, Ltd.,
                                                                                                         Homeowners of
                                                                                                         America Holding
                                                                                                         Corporation, AIM
                                                                                                         Funds and
                                                                                                         CompuDyne
                                                                                                         Corporation.
--------------------- ---------- --------------- ------------------------------------ ------------------ -------------------
 Carl Frischling,      Trustee     Since 2006    Partner of Kramer Levin Naftalis &   Director/Trustee   Director of the AIM
 Esq., Age 71                                    Frankel LLP (a law firm) with        of seven           Funds.
                                                 which he has been associated with    portfolios
                                                 since 1994.
--------------------- ---------- --------------- ------------------------------------ ------------------ -------------------
Edward A. Kuczmarski,   Trustee    Since 2006    Certified Public Accountant and      Director/Trustee   Trustee of the
 Age 58                                          Partner  of Hays & Company LLP       of eleven          Empire
                                                 since 1980.                          portfolios         Builder Tax Free
                                                                                                         Bond Fund and
                                                                                                         Director of ISI
                                                                                                         Funds.
--------------------- ---------- --------------- ------------------------------------ ------------------ -------------------
 William Lerner,       Trustee     Since 2006    Self-employed consultant to          Director/Trustee   Director of
 Esq., Age 71                                    business entities and                of seven           MTM Technologies,
                                                 entrepreneurs for corporate          portfolios         Inc. and Coach
                                                 governance and corporate                                Industries Group,
                                                 secretarial services.                                   Inc.
--------------------- ---------- --------------- ------------------------------------ ------------------ -------------------
Dr. W. Giles Mellon,   Trustee     Since 1987    Professor Emeritus of Business       Director/Trustee          N/A
 Age 77                                          Administration in the Graduate       of ten portfolios
                                                 School of Management, Rutgers
                                                 University with which he has been
                                                 associated with since 1966.
--------------------- ---------- --------------- ------------------------------------ ------------------ -------------------
 James L. Schultz,     Trustee     Since 2006    Self-employed as a consultant.       Director/Trustee   Director of
 Age 71                                                                               of seven           Computer Research,
                                                                                      portfolios         Inc.
--------------------- ---------- --------------- ------------------------------------ ------------------ -------------------
 Robert Straniere,     Trustee     Since 1987    Owner, Straniere Law Firm since      Director/Trustee   Director of Sparx
 Esq,                                            1980, NYS Assemblyman from 1981 to   of ten portfolios  Japan Funds
 Age 67                                          2004. Partner, Hantor-Davidoff law
                                                 firm since May, 2006. Partner,
                                                 Gotham Global Group since June,
                                                 2005. President, NYC Hot Dog Co.,
                                                 since November, 2005. Counsel at
                                                 Fisher & Fisher from 1995 to 2006.
--------------------- ---------- --------------- ------------------------------------ ------------------ -------------------
--------------------- ---------- --------------- ------------------------------------ ------------------ -------------------
 Dr. Yung Wong,        Trustee     Since 1987    Managing Director of Abacus          Director/Trustee          N/A
 Age 69                                          Associates, an investment firm,      of ten portfolios
                                                 since 1996.
--------------------- ---------- --------------- ------------------------------------ ------------------ -------------------


</TABLE>

<PAGE>
-------------------------------------------------------------------------------



===============================================================================

<TABLE>

                                                  Trustees and Officers Information
                                                          March 31, 2008(1)

--------------------- ----------- --------------- --------------------------------------- ----------------- ------------------

--------------------  Position(s) Term of Office         Principal Occupation(s)             Number of             Other
 Name, Address(2),    Held with   and Length of                During Past                 Portfolios in       Directorships
      and Age            Fund     Time Served(3)                 5 Years                    Fund Complex          held by
                                                                                            Overseen by          Director
                                                                                              Director
------------------------------------- --------------- ------------ ---------------------- ----------- ------------------------
Interested Directors/Officers:
--------------------- ----------- --------------- --------------------------------------- ----------------- ------------------
<S>                   <C>           <C>           <C>                                      <C>                   <C>
Steven W. Duff,       Trustee(4)    Since 1994    President and Chief Executive Officer   Director/Trustee        None
Age 54                                            of Reich & Tang Asset Management, LLC   and/or Officer
                                                  ("RTAM, LLC"), a registered Investment  of ten
                                                  Advisor, and Chief Investment Officer   portfolios
                                                  of the Mutual Funds Division of RTAM,
                                                  LLC.  Associated with RTAM, LLC since
                                                  1994.  Mr. Duff is also
                                                  Director/Trustee of six other funds in
                                                  the Reich & Tang Fund Complex. Prior
                                                  to December 2007, Mr. Duff was
                                                  President of the Fund and President
                                                  of eight other funds in the Reich &
                                                  Tang Fund Complex, Director of Pax
                                                  World Money Market Fund, Inc.,
                                                  Principal Executive Officer of
                                                  Delafield Fund, Inc., and President
                                                  and Chief Executive Officer of Tax
                                                  Exempt Proceeds Fund, Inc. Mr. Duff
                                                  also serves as a Director of Reich &
                                                  Tang Services, Inc. and Director,
                                                  Chief Executive Officer and President
                                                  of Reich & Tang Distributors, Inc.
--------------------- ----------- --------------- --------------------------------------- ----------------- ------------------
--------------------- ----------- --------------- --------------------------------------- ----------------- ------------------
Christopher           Chief         Since 2007    Vice President, Chief Compliance              N/A                N/A
Brancazio,            Compliance                  Officer, AML Officer and Secretary of
Age 42                 Officer                    RTAM, LLC since September 2007. Mr.
                                                  Brancazio is also Chief Compliance
                                                  Officer and AML Officer of eight other
                                                  funds in the Reich & Tang Fund
                                                  Complex. From February 2007 to August
                                                  2007, Mr. Brancazio was a Compliance
                                                  Officer at Bank of New York Asset
                                                  Management. From March 2002 to
                                                  February 2007, Mr. Brancazio served as
                                                  Vice President, Chief Compliance
                                                  Officer, and AML Officer of Trainer
                                                  Wortham & Co. Inc., and the Trainer
                                                  Wortham Mutual Funds.  Mr. Brancazio
                                                  also serves as Vice President, Chief
                                                  Compliance Officer, AML Officer and
                                                  Secretary of Reich & Tang Services,
                                                  Inc. and Reich & Tang Distributors,
                                                  Inc.
--------------------- ----------- --------------- --------------------------------------- ----------------- ------------------
Richard De Sanctis,   Vice          Since 2005    Executive Vice President and Chief            N/A                N/A
Age 51                President                   Operating Officer of RTAM LLC and
                                                  Reich & Tang Services, Inc. Associated
                      Treasurer                   with RTAM, LLC since 1990.  Mr. De
                      and           1994-2004     Sanctis is also Vice President of
                      Assistant                   eight other funds in the Reich & Tang
                      Secretary                   Fund Complex, and serves as Executive
                                                  Vice President and Chief Financial
                                                  Officer of Reich & Tang Distributors,
                                                  Inc.  Prior to December 2004, Mr. De
                                                  Sanctis was Treasurer and Assistant
                                                  Secretary of eleven funds in the Reich
                                                  & Tang Fund Complex and Vice
                                                  President, Treasurer and Assistant
                                                  Secretary of Cortland Trust, Inc.
--------------------- ----------- --------------- --------------------------------------- ----------------- ------------------

</TABLE>

<PAGE>
-------------------------------------------------------------------------------
DAILY INCOME FUND
TRUSTEES AND OFFICERS INFORMATION (CONTINUED)
(UNAUDITED)
===============================================================================

<TABLE>
                                                  Trustees and Officers Information
                                                          March 31, 2008(1)

--------------------- ---------- --------------- ------------------------------------ ------------------ -------------------

--------------------  Position(s)Term of Office        Principal Occupation(s)            Number of             Other
 Name, Address(2),     Held with and Length of               During Past                Portfolios in       Directorships
      and Age            Fund    Time Served(3)                5 Years                  Fund Complex           held by
                                                                                         Overseen by           Director
                                                                                          Director
--------------------- ---------- --------------- ------------------------------------ ------------------ -------------------
Interested Directors/Officers (continued):
--------------------- ---------- --------------- ------------------------------------ ------------------ -------------------
<S>                    <C>         <C>           <C>                                     <C>                  <C>
Joseph Jerkovich,     Chief        Since 2008    Senior Vice President and Chief             N/A                N/A
Age 40                Financial                  Financial Officer of RTAM, LLC and
                       Officer                   of Reich & Tang Service Inc.
                                                 Associated with RTAM, LLC since
                                                 September 2004. Mr. Jerkovich is
                                                 Vice President of eight other funds
                                                 in the Reich & Tang Fund Complex
                                                 and is also Senior Vice President
                                                 and Controller of Reich & Tang
                                                 Distributors, Inc.
--------------------- ---------- --------------- ------------------------------------ ------------------ -------------------
Michael Lydon,        President    Since 2007    Executive Vice President of RTAM,    Director/Trustee          N/A
Age 44                and                        LLC and President and Chief               of nine
                      Director                   Executive Officer of the Mutual         portfolios
                                                 Funds division of RTAM, LLC.
                                                 Associated with RTAM, LLC since
                      Vice        2005 - 2007    January 2005.  Mr. Lydon was Vice
                      President                  President at Automatic Data
                                                 Processing from July 2000 to
                                                 December 2004.  Mr. Lydon is also
                                                 President and Director /Trustee of
                                                 four other funds in the Reich &
                                                 Tang Fund Complex, President to New
                                                 York Daily Tax Free Income Fund,
                                                 Inc., Director of Pax World Money
                                                 Market Fund, Inc., Principal
                                                 Executive Officer of Delafield
                                                 Fund, Inc., and President and Chief
                                                 Executive Officer of Tax Exempt
                                                 Proceeds Fund, Inc.  Mr. Lydon also
                                                 serves as President and Chief
                                                 Executive Officer for Reich & Tang
                                                 Services, Inc.  Prior to 2007, Mr.
                                                 Lydon was Vice President of eleven
                                                 other Funds in the Reich & Tang
                                                 Fund Complex.
--------------------- ---------- --------------- ------------------------------------ ------------------ -------------------
--------------------- ---------- --------------- ------------------------------------ ------------------ -------------------
Christine Manna,      Secretary    Since 2007    Vice President and Assistant                N/A                N/A
Age 37                                           Secretary of RTAM, LLC. Ms. Manna
                                                 is also Secretary of eight other
                                                 funds in the Reich & Tang Complex.
                                                 Ms. Manna has been associated with
                                                 RTAM, LLC and its predecessors
                                                 since June 1995. Ms. Manna is also
                                                 Vice President and Assistant
                                                 Secretary of Reich & Tang Services,
                                                 Inc. and Reich & Tang Distributors,
                                                 Inc.
--------------------- ---------- --------------- ------------------------------------ ------------------ -------------------

</TABLE>

<PAGE>
-------------------------------------------------------------------------------



===============================================================================

<TABLE>

                                                  Trustees and Officers Information
                                                          March 31, 2008(1)

--------------------- ---------- --------------- ------------------------------------ ------------------ -------------------

--------------------  Position(s)Term of Office        Principal Occupation(s)            Number of             Other
 Name, Address(2),     Held with and Length of               During Past                Portfolios in       Directorships
      and Age            Fund    Time Served(3)                5 Years                  Fund Complex           held by
                                                                                         Overseen by           Director
                                                                                          Director
--------------------- ---------- --------------- ------------------------------------ ------------------ -------------------
Interested Directors/Officers (continued):
--------------------- ---------- --------------- ------------------------------------ ------------------ -------------------
<S>                  <C>           <C>           <C>                                      <C>                 <C>
Anthony Pace,         Treasurer    Since 2004    Vice President of RTAM, LLC since           N/A                N/A
Age 42                and                        September 2004.  Mr. Pace was a
                      Assistant                  Director of a Client Service Group
                      Secretary                  at GlobeOp Financial Services,
                                                 Inc. from May 2002 to August 2004
                                                 and Controller/Director of Mutual
                                                 Fund Administration for Smith
                                                 Barney Funds Management LLC and
                                                 Salomon Brothers Asset Management
                                                 Inc. from 1998 to May 2002.  Mr.
                                                 Pace is also Treasurer and
                                                 Assistant Secretary of eight other
                                                 funds in the Reich & Tang Fund
                                                 Complex.
--------------------- ---------- --------------- ------------------------------------ ------------------ -------------------
Robert Rickard,       Vice         Since 2007    Senior Vice President of RTAM,              N/A                N/A
Age 39                President                  LLC. Associated with RTAM, LLC
                                                 since December 1991. Mr. Rickard
                                                 is also Vice President of eight
                                                 other funds in the Reich & Tang
                                                 Fund Complex. Mr. Rickard is also
                                                 Senior Vice President of Reich &
                                                 Tang Distributors, Inc.
--------------------- ---------- --------------- ------------------------------------ ------------------ -------------------

</TABLE>

(1)  The Statement of Additional  Information  includes  additional  information
     about Daily Income Fund (the "Fund")  trustees/officers  and is  available,
     without charge,  upon request by calling the Fund's transfer agent at (800)
     433-1918.

(2)  The address for each of the above  trustees/officers of the Fund is Reich &
     Tang Asset Management, LLC, 600 Fifth Avenue, New York, NY 10020.

(3)  Each Trustee will hold office for an indefinite  term until the earliest of
     (i) the next  meeting of  shareholders,  if any,  called for the purpose of
     considering  the  election  or  re-election  of such  Trustee and until the
     election and qualification of his or her successor, if any, elected at such
     meeting,  or (ii) the date a Trustee  resigns or  retires,  or a Trustee is
     removed by the Board of Trustees or  shareholders,  in accordance  with the
     Fund's  Articles of  Incorporation,  as amended,  and Amended and  Restated
     By-Laws.  Each  officer will hold office for an  indefinite  term until the
     date he or she resigns or retires or until his\her successor is elected and
     qualifies.

(4)  Steven W. Duff and Michael P. Lydon may be deemed interested persons of the
     Fund due to their affiliation with Reich & Tang Asset Management,  LLC, the
     Fund's investment advisor.

<PAGE>


























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<PAGE>






















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<PAGE>




---------------------------------------------------
This  report is  submitted  for  the  general
information  of   the  shareholders  of  the
Fund.It  is  not  authorized  for distribution
to prospective investors in the Fund unless
preceded or accompanied by an effective prospectus,
which includes information regarding the Fund's
objectives and policies, experience of its
management, marketability of shares, and other
information.
--------------------------------------------------








Daily Income Fund
     600 Fifth Avenue
     New York, New York 10020

Manager
     Reich & Tang Asset Management, LLC
     600 Fifth Avenue
     New York, New York 10020

Custodian
     The Bank of New York
     2 Hanson Place, 7th Floor,
     Brooklyn, New York 11217

Transfer Agent &
  Dividend Disbursing Agent
     Reich & Tang Services, Inc.
     600 Fifth Avenue
     New York, New York 10020





DIF 3/08A

<PAGE>
Item 2:    Code of Ethics

The registrant has adopted a Code of Ethics applicable to its Principal
Executive and Senior Financial Officers.

Item 3:    Audit Committee Financial Expert

The registrant's Board of Trustees has determined that there is an audit
committee financial expert serving on its audit committee, Edward A. Kuczmarski,
who is "independent," as defined in the instructions to this Item.

Item 4:    Principal Accountant Fees and Services

                                   FYE 3/31/2008            FYE 3/31/2007

4(a)     Audit Fees                $188,001                 $126,500
4(b)     Audit Related Fees        $      0                 $      0
4(c)     Tax Fees                  $ 16,000                 $  7,500
4(d)     All Other Fees            $      0                 $      0

4(e)(1) The audit committee has adopted pre-approval policies and procedures
whereby the audit committee has pre-approved the provision of certain enumerated
tax services to the registrant by the registrant's principal accountant to the
extent the fee is less than $5,000 per occurrence.

4(e)(2) None

4(f) Not applicable.

4(g) $16,000 and $52,950, respectively, were the amount of non-audit fees that
were billed by the registrant's accountant for services rendered to (i) the
registrant, and (ii) the registrant's investment adviser and any control person
of the adviser that provides ongoing services to the registrant for the fiscal
year ended March 31, 2008. $7,500 and $49,500, respectively, were the amount of
non-audit fees that were billed by the registrant's accountant for services
rendered to (i) the registrant, and (ii) the registrant's investment adviser and
any control person of the adviser that provides ongoing services to the
registrant for the fiscal year ended March 31, 2007.

4(h) The registrant's audit committee has considered whether its principal
accountant's provision of non-audit services that were rendered to the
registrant's investment adviser, and any control persons of the investment
adviser that provides ongoing services to the registrant, that were not
pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, is
compatible with maintaining the principal accountant's independence.

Item 5:    Audit Committee of Listed Registrants

Not applicable.

Item 6:    Schedule of Investments

Schedule of Investments in securities of unaffiliated issuers is included under
Item 1.

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Item 7:    Disclosure of Proxy Voting Policies and Procedures for Closed-End
           Management Investment Companies

Not applicable.

Item 8:    Purchases of Equity Securities by Closed-End Management Investment
           Company and Affiliated Purchasers

Not applicable.

Item 9:    Submission of Matters to a Vote of Security Holders

There were no material changes to the procedures by which shareholders may
recommend nominees to the registrant's board of directors that were implemented
after the registrant last provided disclosure in response to the requirements of
Item 7(d)(2)(ii)(G) of Schedule 14A, or this Item 9.

Item 10:   Controls and Procedures

(a)      The registrant's Principal Executive Officer and Principal Financial
         Officer have evaluated the design and operation of the registrant's
         disclosure controls and procedures within 90 days of this filing and
         have concluded that the registrant's disclosure controls and procedures
         were effective in ensuring that information required to be disclosed by
         the registrant in this Form N-CSR was recorded, processed, summarized
         and reported on a timely basis.

(b)      There were no changes in the registrant's internal controls over
         financial reporting that occurred during the second fiscal quarter of
         the period covered by this report that have materially affected, or are
         reasonably likely to affect, the registrant's internal controls over
         financial reporting.

Item 11:   Exhibits

(a)(1) Code of Ethics.

(a)(2) Certifications of Principal Executive Officer and Principal Financial
       Officer, under Rule 30a-2 of the Investment Company Act of 1940.

(a)(3) Not applicable.

(b)    Certifications of Principal Executive Officer and Principal Financial
       Officer, under Section 906 of the Sarbanes-Oxley Act of 2002 and 18
       U.S.C. ss.1350.

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                                   SIGNATURES

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

(Registrant) Daily Income Fund

By (Signature and Title)* /s/ Christine Manna
                              Christine Manna, Secretary
Date: June 12, 2008

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

By (Signature and Title)* /s/ Michael P. Lydon
                              Michael P. Lydon, President
Date: June 12, 2008

By (Signature and Title)* /s/ Joseph Jerkovich
                              Joseph Jerkovich, Treasurer
Date: June 12, 2008

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