FEBRUARY 1, 2009







                                   PROSPECTUS
                              ------------------
                               CLASSES A, B AND C

                               DWS MICRO CAP FUND


                            DWS MID CAP GROWTH FUND


                           DWS SMALL CAP GROWTH FUND


As with all mutual funds, the Securities and Exchange Commission (SEC) does not
approve or disapprove these shares or determine whether the information in this
prospectus is truthful or complete. It is a criminal offense for anyone to
inform you otherwise.


                                                 RESHAPING INVESTING. [DWS Logo]
                                                             Deutsche Bank Group



<PAGE>

CONTENTS




<TABLE>
<S>      <C>
HOW EACH FUND WORKS
  4      DWS Micro Cap Fund
 14      DWS Mid Cap Growth Fund
 23      DWS Small Cap Growth Fund
 32      Other Policies and Secondary
         Risks
 34      Who Manages and Oversees
         the Funds
 37      Financial Highlights


</TABLE>
<TABLE>
<S>      <C>
HOW TO INVEST IN THE FUNDS
 48      Choosing a Share Class
 54      How to Buy Class A, B and C
         Shares
 55      How to Exchange or Sell
         Class A, B and C Shares
 58      Policies You Should Know
         About
 71      Understanding Distributions
         and Taxes
 75      Appendix
</TABLE>

<PAGE>

HOW EACH FUND WORKS

On the next few pages, you'll find information about each fund's investment
objective, the main strategies each uses to pursue that objective and the main
risks that could affect performance.

Whether you are considering investing in a fund or are already a shareholder,
you'll want to LOOK THIS INFORMATION OVER CAREFULLY. You may want to keep it on
hand for reference as well.

CLASSES A, B AND C shares are generally intended for investors seeking the
advice and assistance of a financial advisor.

Remember that mutual funds are investments, not bank deposits. They're not
insured or guaranteed by the FDIC or any other government agency. Their share
prices will go up and down, and you could lose money by investing in them.

You can find DWS prospectuses on the Internet at WWW.DWS-INVESTMENTS.COM (the
Web site does not form a part of this prospectus).
<PAGE>


<TABLE>
<S>                     <C>        <C>        <C>
                         Class A    Class B    Class C
  ticker symbol          SMFAX      SMFBX      SMFCX
    fund number          489        689        789

    DWS MICRO CAP FUND


</TABLE>

            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund seeks capital appreciation.

            Under normal circumstances, the fund invests at least 80% of its
            assets, determined at the time of purchase, in stocks and other
            securities with equity characteristics of US micro capitalization
            companies. For the purposes of this 80% limitation, the micro
            capitalization equity universe is defined as the bottom 5% of the
            total domestic equity market capitalization (at the time of initial
            investment) using a minimum market capitalization of $10 million.
            The fund may invest up to 20% of its total assets in the securities
            of foreign companies that would be considered to be in the bottom
            5% in terms of market capitalization in the US equity market
            (subject to a $10 million market capitalization minimum). The
            fund's equity investments are mainly common stocks, but may also
            include other types of equity securities, such as preferred stocks
            or convertible securities.

            The fund invests primarily in equity securities of US micro
            capitalization growth-oriented companies. Portfolio management
            focuses on individual security selection rather than industry
            selection. Portfolio management uses an active process, which
            combines financial analysis with company visits to evaluate
            management and strategies. Each portfolio manager has specific
            sector responsibilities with investment discretion over securities
            within their sectors.

            Company research lies at the heart of our investment process.
            Portfolio management uses a "bottom-up" approach to picking
            securities.

            -  Portfolio management focuses on undervalued stocks with
               fast-growing earnings that they believe have superior near-
               to-intermediate term performance potential.

4 | DWS Micro Cap Fund
<PAGE>

            -  Portfolio management emphasizes individual selection of smaller
               stocks across all economic sectors, early in their growth cycles
               and with the potential to be the blue chips of the future.

            -  Portfolio management generally seeks companies with a leading or
               dominant position in their niche markets, a high rate of return
               on invested capital and the ability to finance a major part of
               future growth from internal sources.

            The fund follows a disciplined selling process in order to lessen
            risk. A security may be sold if one or more of the following
            conditions are met:

            -  the stock price reaches portfolio management's expectations;

            -  there is a material change in the company's fundamentals;

            -  portfolio management believes other investments offer better
               opportunities; or

            -  the market capitalization of a stock distorts the weighted
               average market capitalization of the fund.

            The fund may invest up to 20% of its assets in high quality debt
            instruments and money market instruments with remaining maturities
            of one year or less, including repurchase agreements. The fund may
            invest up to 5% of its net assets in non-convertible bonds and
            preferred stocks that portfolio management believes to be of high
            quality.

            OTHER INVESTMENTS. The fund is permitted, but not required, to use
            various types of derivatives (contracts whose value is based on,
            for example, indices, currencies or securities). Derivatives may be
            used for hedging and for risk management or for non-hedging
            purposes to seek to enhance potential gains. The fund may use
            derivatives in circumstances where portfolio management believes
            they offer an economical means of gaining exposure to a particular
            asset class or to keep cash on hand to meet shareholder redemptions
            or other needs while maintaining exposure to the market.

            In particular, the fund may use futures and options and write
            covered call options.


                                                         DWS Micro Cap Fund  | 5
<PAGE>

            SECURITIES LENDING. The fund may lend its investment securities in
            an amount up to 33 1/3% of its total assets to approved
            institutional borrowers who need to borrow securities in order to
            complete certain transactions.


            THE MAIN RISKS OF INVESTING IN THE FUND

            There are several risk factors that could hurt the fund's
            performance, cause you to lose money or cause the fund's
            performance to trail that of other investments.

            STOCK MARKET RISK. The fund is affected by how the stock market
            performs. To the extent the fund invests in a particular
            capitalization or market sector, the fund's performance may be
            proportionately affected by that segment's general performance.
            When stock prices fall, you should expect the value of your
            investment to fall as well. Because a stock represents ownership in
            its issuer, stock prices can be hurt by poor management, shrinking
            product demand and other business risks. These factors may affect
            single companies as well as groups of companies. In addition,
            movements in financial markets may adversely affect a stock's
            price, regardless of how well the company performs. The market as a
            whole may not favor the types of investments the fund makes, which
            could affect the fund's ability to sell them at an attractive
            price.

            MICRO CAPITALIZATION COMPANY RISK. The fund's investments in micro
            capitalization companies will be more susceptible to share price
            fluctuations since micro capitalization company stocks tend to
            experience steeper fluctuations in price - down as well as up - than
            the stocks of larger companies. A shortage of reliable information -
            the same information gap that creates opportunity in micro
            capitalization company investing - can also pose added risk.
            Industry-wide reversals may have a greater impact on micro
            capitalization companies, since they lack a large company's
            financial resources. Micro capitalization companies may have limited
            product lines and markets. They may also have shorter operating
            histories and more volatile businesses and may be more dependent on
            key personnel. Finally, micro capitalization company stocks are
            typically less liquid than large company stocks. Particularly when
            they are performing poorly, a micro capitalization company's shares
            may be more difficult to sell.




THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

This fund is designed for investors with long-term goals who can tolerate
capital fluctuation in pursuit of capital appreciation.


6 | DWS Micro Cap Fund
<PAGE>

            GROWTH INVESTING RISK. Since growth stocks usually reinvest a large
            portion of earnings in their own businesses, they may lack the
            dividends associated with value stocks that might otherwise cushion
            their decline in a falling market. Earnings disappointments in
            growth stocks often result in sharp price declines because
            investors buy these stocks for their potential superior earnings
            growth. Growth stocks may also be out of favor for certain periods
            in relation to value stocks.

            SECURITY SELECTION RISK. A risk that pervades all investing is the
            risk that the securities in the fund's portfolio may decline in
            value.

            FOREIGN INVESTMENT RISK. Foreign investments involve certain
            special risks, including:

            -  POLITICAL RISK. Some foreign governments have limited the
               outflow of profits to investors abroad, imposed restrictions on
               the exchange or export of foreign currency, extended diplomatic
               disputes to include trade and financial relations, seized
               foreign investments and imposed higher taxes.

            -  INFORMATION RISK. Companies based in foreign markets are usually
               not subject to accounting, auditing and financial reporting
               standards and practices as stringent as those in the US.
               Therefore, their financial reports may present an incomplete,
               untimely or misleading picture of a company, as compared to the
               financial reports required in the US.

            -  LIQUIDITY RISK. Investments that trade less frequently can be
               more difficult or more costly to buy, or to sell, than more
               liquid or active investments. This liquidity risk is a factor of
               the trading volume of a particular investment, as well as the
               size and liquidity of the entire local market. On the whole,
               foreign exchanges are smaller and less liquid than US exchanges.
               This can make buying and selling certain investments more
               difficult and costly. Relatively small transactions in some
               instances can have a disproportionately large effect on the
               price and supply of securities. In certain situations, it may
               become virtually impossible to sell an investment in an orderly
               fashion at a price that approaches portfolio management's
               estimate of its value. For the same reason, it may at times be
               difficult to value the fund's foreign investments.

                                                         DWS Micro Cap Fund  | 7
<PAGE>

            -  REGULATORY RISK. There is generally less government regulation of
               foreign markets, companies and securities dealers than in the US.

            -  CURRENCY RISK. The fund invests in securities denominated in
               foreign currencies. Changes in exchange rates between foreign
               currencies and the US dollar may affect the US dollar value of
               foreign securities or the income or gain received on these
               securities.

            -  LIMITED LEGAL RECOURSE RISK. Legal remedies for investors may be
               more limited than the legal remedies available in the US.

            -  TRADING PRACTICE RISK. Brokerage commissions and other fees are
               generally higher for foreign investments than for US
               investments. The procedures and rules governing foreign
               transactions and custody may also involve delays in payment,
               delivery or recovery of money or investments.

            -  TAXES. Foreign withholding and certain other taxes may reduce
               the amount of income available to distribute to shareholders of
               the fund. In addition, special US tax considerations may apply
               to the fund's foreign investments.

            PRICING RISK. At times, market conditions may make it difficult to
            value some investments, and the fund may use certain valuation
            methodologies for some of its investments, such as fair value
            pricing. Given the subjective nature of such valuation
            methodologies, it is possible that the value determined for an
            investment may be different than the value realized upon such
            investment's sale. If the fund has valued its securities too
            highly, you may pay too much for fund shares when you buy into the
            fund. If the fund has underestimated the price of its securities,
            you may not receive the full market value when you sell your fund
            shares.

            SECURITIES LENDING RISK. Any loss in the market price of securities
            loaned by the fund that occurs during the term of the loan would be
            borne by the fund and would adversely affect the fund's
            performance. Also, there may be delays in recovery of securities
            loaned or even a loss of rights in the collateral should the
            borrower of the securities fail financially while the loan is
            outstanding. However, loans will be made only to borrowers selected
            by the fund's delegate after a review of relevant facts and
            circumstances, including the creditworthiness of the borrower.


8 | DWS Micro Cap Fund
<PAGE>

            Other factors that could affect performance include:

            -  portfolio management could be wrong in the analysis of
               industries, companies, economic trends, the relative
               attractiveness of different securities or other matters.

            -  derivatives could produce disproportionate losses due to a
               variety of factors, including the failure of the counterparty to
               meet its obligations or unexpected price or interest rate
               movements.


                                                         DWS Micro Cap Fund  | 9
<PAGE>

THE FUND'S PERFORMANCE HISTORY

While a fund's past performance (before and after taxes) isn't necessarily a
sign of how it will do in the future, it can be valuable for an investor to
know.

The bar chart shows how the performance of the fund's Class A shares has varied
from year to year, which may give some idea of risk. The bar chart does not
reflect sales loads; if it did, total returns would be lower than those shown.
The table on the following page shows how fund performance compares to relevant
index performance (which, unlike fund performance, does not reflect fees or
expenses). The table includes the effects of maximum sales loads on fund
performance. The performance of the fund and the index information varies over
time. All figures assume reinvestment of dividends and distributions (in the
case of after-tax returns, reinvested net of assumed tax rates).

The table shows returns for Class A shares on a before-tax and after-tax basis.
After-tax returns are shown for Class A only and will vary for Classes B and C.
After-tax returns are estimates calculated using the historical highest
marginal individual federal income tax rates and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on an investor's tax
situation and may differ from those shown in the table. After-tax returns shown
are not relevant for investors who hold their shares through tax-deferred
arrangements, such as 401(k) plans or individual retirement accounts.

The performance data for the period prior to July 10, 2006 provided in the bar
chart below and the table on the following page are those of the fund's
predecessor fund, DWS Micro Cap Fund, a series of DWS Investments Trust (the
"Predecessor Fund"). On July 10, 2006, the Predecessor Fund transferred its
assets to the fund, which is a series of DWS Advisor Funds. The fund assumed
the Predecessor Fund's liabilities.

In addition, the inception date for Class A, B and C shares of the Predecessor
Fund is June 28, 2002. The inception date for Institutional Class shares of the
Predecessor Fund is December 18, 1996. In the bar chart and the table, the
performance figures for Classes A, B or C of the Predecessor Fund before its
inception date are based on the historical performance of the original share
class of the Predecessor Fund (Institutional Class), adjusted to reflect the
higher gross total annual operating expenses of Classes A, B or C, and sales
charges for the table.

DWS Micro Cap Fund

ANNUAL TOTAL RETURN (%) AS OF 12/31 EACH YEAR - CLASS A (Results do not reflect
sales loads; if they did, total returns would be lower than those shown.)



<TABLE>
<S>      <C>     <C>      <C>       <C>      <C>      <C>     <C>       <C>       <C>
77.08    2.96    15.08    -27.19    40.66    12.71    7.83     8.44      7.18      -43.43
1999     2000    2001     2002      2003     2004     2005    2006      2007      2008
</TABLE>





<TABLE>
<CAPTION>
FOR THE PERIODS INCLUDED IN THE BAR CHART:
<S>                                        <C>
BEST QUARTER: 29.66%, Q4 1999              WORST QUARTER: -30.08%, Q4 2008
</TABLE>



10 | DWS Micro Cap Fund
<PAGE>

AVERAGE ANNUAL TOTAL RETURNS (%) as of 12/31/2008 (Fund returns include the
effects of maximum sales load.)


<TABLE>
<CAPTION>
                                               1 YEAR       5 YEARS      10 YEARS
<S>                                         <C>            <C>          <C>
 CLASS A
   Return before Taxes                         -46.68        -5.51         4.93
   Return after Taxes on Distributions         -46.68        -7.68         3.10
   Return after Taxes on Distributions
   and Sale of Fund Shares                     -32.35*       -5.59*        2.91
 CLASS B (Return before Taxes)                 -45.54        -5.21         4.76
 CLASS C (Return before Taxes)                 -43.86        -5.11         4.77
 RUSSELL 2000 (Reg. TM) GROWTH INDEX
 (reflects no deductions for fees,
 expenses or taxes)                            -38.54        -2.35         -0.76
</TABLE>


*   Return after Taxes on Distributions and Sale of Fund Shares is higher than
   other return figures for the same period due to a capital loss occurring
   upon redemption resulting in an assumed tax deduction for the shareholder.

     Total returns would have been lower if operating expenses hadn't been
reduced.

 RUSSELL 2000 (Reg. TM) GROWTH INDEX is an unmanaged capitalization-weighted
 measure of 2,000 of the smallest capitalized US companies with a
 greater-than-average growth orientation and whose common stocks trade on the
 NYSE, NYSE Alternext US (formerly known as "AMEX") and Nasdaq.


--------------------------------------------------------------------------------
Current performance may be higher or lower than the performance data quoted
above. For more recent performance information, call your financial advisor or
(800) 621-1048 or visit our Web site at www.dws-investments.com.


--------------------------------------------------------------------------------
Return information assumes that fund shares were sold at the end of the period.


RETURN AFTER TAXES ON DISTRIBUTIONS reflects taxes only on the fund's
distributions and not on a shareholder's gain or loss from selling fund shares.


RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES reflects taxes on
both the fund's distributions and a shareholder's gain or loss from selling
fund shares.


                                                        DWS Micro Cap Fund  | 11
<PAGE>

HOW MUCH INVESTORS PAY

The table below describes the fees and expenses that you may pay if you buy and
hold fund shares. This information doesn't include any fees that may be charged
by your financial advisor.


<TABLE>
<CAPTION>
FEE TABLE                                        CLASS A         CLASS B       CLASS C
<S>                                         <C>                 <C>          <C>
 SHAREHOLDER FEES, paid directly from your investment
 Maximum Sales Charge (Load) Imposed
 on Purchases (as % of offering price)             5.75%1          None          None
 Maximum Deferred Sales Charge (Load)
 (as % of redemption proceeds)                    None2             4.00%         1.00%
 Redemption/Exchange fee on shares
 owned less than 15 days (as % of
 redemption proceeds) 3                            2.00             2.00          2.00

 ANNUAL OPERATING EXPENSES, deducted from fund assets
 Management Fee 4                                 1.10  %          1.10%         1.10%
 Distribution/Service (12b-1) Fee                 0.24             0.99          1.00
 Other Expenses 5                                 0.87             0.95          0.86
 TOTAL ANNUAL OPERATING EXPENSES 6, 7             2.21             3.04          2.96
</TABLE>


1   Because of rounding in the calculation of the offering price, the actual
   maximum front-end sales charge paid by an investor may be higher than the
   percentage noted (see "Choosing a Share Class - Class A shares").

2   The redemption of shares purchased at net asset value under the Large Order
   NAV Purchase Privilege (see "Choosing a Share Class - Class A shares") may
   be subject to a contingent deferred sales charge of 1.00% if redeemed
   within 12 months of purchase and 0.50% if redeemed within the following six
   months.

3   This fee is charged on all applicable redemptions or exchanges. Please see
   "Policies You Should Know About - Policies about transactions" for further
   information.

4   Through November 30, 2009, the Advisor has contractually agreed to waive a
   portion of its Investment Management Fee in the amount of 0.305% of the
   fund's average daily total net assets.

5   "Other Expenses" include an administrative services fee paid to the Advisor
   in the amount of 0.10%.

6   Through September 30, 2009, the Advisor has contractually agreed to waive
   all or a portion of its fees and reimburse or pay certain operating
   expenses of the fund to the extent necessary to maintain the fund's total
   operating expenses at 1.69%, 2.44% and 2.44% for Class A, Class B and Class
   C shares, respectively, excluding certain expenses such as extraordinary
   expenses, taxes, brokerage and interest.

7   Except as otherwise noted, the information in the table is based on amounts
   incurred during the fund's most recent fiscal year. It is important for you
   to understand that a decline in the fund's average net assets during the
   current fiscal year due to recent unprecedented market volatility or other
   factors could cause the fund's expense ratios for the fund's current fiscal
   year to be higher than the expense information presented.


12 | DWS Micro Cap Fund
<PAGE>

Based on the costs above, this example helps you compare the expenses of each
share class to those of other mutual funds. This example assumes the expenses
above remain the same. It also assumes that you invested $10,000, earned 5%
annual returns and reinvested all dividends and distributions. This is only an
example; actual expenses will be different.


<TABLE>
<CAPTION>
EXAMPLE                1 YEAR      3 YEARS      5 YEARS      10 YEARS
<S>                   <C>         <C>          <C>          <C>
 EXPENSES, assuming you sold your shares at the end of each period
 Class A shares         $786       $1,226       $1,692       $2,973
 Class B shares*         707        1,239        1,796        2,985
 Class C shares          399          915        1,557        3,280

 EXPENSES, assuming you kept your shares
 Class A shares         $786       $1,226       $1,692       $2,973
 Class B shares*         307          939        1,596        2,985
 Class C shares          299          915        1,557        3,280
</TABLE>


*   Reflects conversion of Class B to Class A shares, which pay lower fees.
   Conversion occurs six years after purchase.

                                                        DWS Micro Cap Fund  | 13
<PAGE>


<TABLE>
<S>                          <C>        <C>        <C>
                              Class A    Class B    Class C
  ticker symbol               SMCAX      SMCBX      SMCCX
    fund number               483        683        783

    DWS MID CAP GROWTH FUND


</TABLE>

            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund seeks long-term capital growth.

            Under normal circumstances, the fund invests at least 80% of its
            assets, determined at the time of purchase, in companies with
            market caps within the market capitalization range of the Russell
            Mid Cap Growth Index or securities with equity characteristics that
            provide exposure to those companies. The fund's equity investments
            are mainly common stocks, but may also include other types of
            equity securities such as preferred stocks or convertible
            securities.

            The fund invests primarily in equity securities of medium-sized
            growth-oriented companies. Portfolio management focuses on
            individual security selection rather than industry selection.
            Portfolio management uses an active process which combines
            financial analysis with company visits to evaluate management and
            strategies. Each portfolio manager has specific sector
            responsibilities with investment discretion over securities within
            their sectors.

            Company research lies at the heart of the investment process.
            Portfolio management uses a "bottom-up" approach to picking
            securities.

            -  Portfolio management focuses on undervalued stocks with
               fast-growing earnings and superior near-to-intermediate term
               performance potential.

            -  Portfolio management emphasizes individual selection of
               medium-sized stocks across all economic sectors, early in their
               growth cycles and with the potential to be the blue chips of the
               future.

            -  Portfolio management generally seeks companies with a leading or
               dominant position in their niche markets, a high rate of return
               on invested capital and the ability to finance a major part of
               future growth from internal sources.

14 | DWS Mid Cap Growth Fund
<PAGE>

            The fund follows a disciplined selling process in order to lessen
            risk. A security may be sold if one or more of the following
            conditions are met:

            -  the stock price reaches portfolio management's expectations;

            -  there is a material change in the company's fundamentals;

            -  portfolio management believes other investments offer better
               opportunities; or

            -  the market capitalization of a stock distorts the weighted
               average market capitalization of the fund.

            The fund may invest up to 20% of its assets in stocks and other
            securities of companies based outside the US.

            OTHER INVESTMENTS. The fund is permitted, but not required, to use
            various types of derivatives (contracts whose value is based on,
            for example, indices, currencies or securities). Derivatives may be
            used for hedging and for risk management or for non-hedging
            purposes to seek to enhance potential gains. The fund may use
            derivatives in circumstances where portfolio management believes
            they offer an economical means of gaining exposure to a particular
            asset class or to keep cash on hand to meet shareholder redemptions
            or other needs while maintaining exposure to the market.

            In particular, the fund may use futures and options and write
            covered call options.

            SECURITIES LENDING. The fund may lend its investment securities in
            an amount up to 33 1/3% of its total assets to approved
            institutional borrowers who need to borrow securities in order to
            complete certain transactions.


            THE MAIN RISKS OF INVESTING IN THE FUND

            There are several risk factors that could hurt the fund's
            performance, cause you to lose money or cause the fund's
            performance to trail that of other investments.

            STOCK MARKET RISK. The fund is affected by how the stock market
            performs. To the extent the fund invests in a particular
            capitalization or market sector, the fund's performance may be
            proportionately affected by that segment's general performance.
            When stock prices fall, you should expect the value of your
            investment to fall as well. Because a stock




THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

This fund is designed for investors with long-term goals who can tolerate
capital fluctuation in pursuit of long-term capital growth.



                                                   DWS Mid Cap Growth Fund  | 15
<PAGE>

            represents ownership in its issuer, stock prices can be hurt by
            poor management, shrinking product demand and other business risks.
            These factors may affect single companies as well as groups of
            companies. In addition, movements in financial markets may
            adversely affect a stock's price, regardless of how well the
            company performs. The market as a whole may not favor the types of
            investments the fund makes, which could affect the fund's ability
            to sell them at an attractive price.

            MEDIUM-SIZED COMPANY RISK. Medium-sized company stocks tend to
            experience steeper price fluctuations than stocks of larger
            companies. A shortage of reliable information can also pose added
            risk to stocks of medium sized companies. Industry-wide reversals
            may have a greater impact on medium-sized companies, since they
            usually lack the financial resources of larger companies.
            Medium-sized company stocks are typically less liquid than large
            company stocks. Accordingly, it may be harder to find buyers for
            medium-sized company shares.

            GROWTH INVESTING RISK. Since growth stocks usually reinvest a large
            portion of earnings in their own businesses, they may lack the
            dividends associated with value stocks that might otherwise cushion
            their decline in a falling market. Earnings disappointments in
            growth stocks often result in sharp price declines because
            investors buy these stocks for their potential superior earnings
            growth. Growth stocks may also be out of favor for certain periods
            in relation to value stocks.

            SECURITY SELECTION RISK. A risk that pervades all investing is the
            risk that the securities in the fund's portfolio may decline in
            value.

            FOREIGN INVESTMENT RISK. Foreign investments involve certain
            special risks, including:

            -  POLITICAL RISK. Some foreign governments have limited the
               outflow of profits to investors abroad, imposed restrictions on
               the exchange or export of foreign currency, extended diplomatic
               disputes to include trade and financial relations, seized
               foreign investments and imposed higher taxes.

16 | DWS Mid Cap Growth Fund
<PAGE>

            -  INFORMATION RISK. Companies based in foreign markets are usually
               not subject to accounting, auditing and financial reporting
               standards and practices as stringent as those in the US.
               Therefore, their financial reports may present an incomplete,
               untimely or misleading picture of a company, as compared to the
               financial reports required in the US.

            -  LIQUIDITY RISK. Investments that trade less frequently can be
               more difficult or more costly to buy, or to sell, than more
               liquid or active investments. This liquidity risk is a factor of
               the trading volume of a particular investment, as well as the
               size and liquidity of the entire local market. On the whole,
               foreign exchanges are smaller and less liquid than US exchanges.
               This can make buying and selling certain investments more
               difficult and costly. Relatively small transactions in some
               instances can have a disproportionately large effect on the
               price and supply of securities. In certain situations, it may
               become virtually impossible to sell an investment in an orderly
               fashion at a price that approaches portfolio management's
               estimate of its value. For the same reason, it may at times be
               difficult to value the fund's foreign investments.

            -  REGULATORY RISK. There is generally less government regulation
               of foreign markets, companies and securities dealers than in the
               US.

            -  CURRENCY RISK. The fund invests in securities denominated in
               foreign currencies. Changes in exchange rates between foreign
               currencies and the US dollar may affect the US dollar value of
               foreign securities or the income or gain received on these
               securities.

            -  LIMITED LEGAL RECOURSE RISK. Legal remedies for investors may be
               more limited than the legal remedies available in the US.

            -  TRADING PRACTICE RISK. Brokerage commissions and other fees are
               generally higher for foreign investments than for US
               investments. The procedures and rules governing foreign
               transactions and custody may also involve delays in payment,
               delivery or recovery of money or investments.

            -  TAXES. Foreign withholding and certain other taxes may reduce
               the amount of income available to distribute to shareholders of
               the fund. In addition, special US tax considerations may apply
               to the fund's foreign investments.


                                                   DWS Mid Cap Growth Fund  | 17
<PAGE>

            PRICING RISK. At times, market conditions may make it difficult to
            value some investments, and the fund may use certain valuation
            methodologies for some of its investments, such as fair value
            pricing. Given the subjective nature of such valuation
            methodologies, it is possible that the value determined for an
            investment may be different than the value realized upon such
            investment's sale. If the fund has valued its securities too
            highly, you may pay too much for fund shares when you buy into the
            fund. If the fund has underestimated the price of its securities,
            you may not receive the full market value when you sell your fund
            shares.

            SECURITIES LENDING RISK. Any loss in the market price of securities
            loaned by the fund that occurs during the term of the loan would be
            borne by the fund and would adversely affect the fund's
            performance. Also, there may be delays in recovery of securities
            loaned or even a loss of rights in the collateral should the
            borrower of the securities fail financially while the loan is
            outstanding. However, loans will be made only to borrowers selected
            by the fund's delegate after a review of relevant facts and
            circumstances, including the creditworthiness of the borrower.

            Other factors that could affect performance include:

            -  portfolio management could be wrong in the analysis of
               industries, companies, economic trends, the relative
               attractiveness of different securities or other matters.

            -  derivatives could produce disproportionate losses due to a
               variety of factors, including the failure of the counterparty to
               meet its obligations or unexpected price or interest rate
               movements.


18 | DWS Mid Cap Growth Fund
<PAGE>

THE FUND'S PERFORMANCE HISTORY

While a fund's past performance (before and after taxes) isn't necessarily a
sign of how it will do in the future, it can be valuable for an investor to
know.

The bar chart shows how the performance of the fund's Class A shares has varied
from year to year, which may give some idea of risk. The bar chart does not
reflect sales loads; if it did, total returns would be lower than those shown.
The table on the following page shows how fund performance compares to relevant
index performance (which, unlike fund performance, does not reflect fees or
expenses). The table includes the effects of maximum sales loads on fund
performance. The performance of the fund and the index information varies over
time. All figures assume reinvestment of dividends and distributions (in the
case of after-tax returns, reinvested net of assumed tax rates).

The table shows returns for Class A shares on a before-tax and after-tax basis.
After-tax returns are shown for Class A only and will vary for Classes B and C.
After-tax returns are estimates calculated using the historical highest
marginal individual federal income tax rates and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on an investor's tax
situation and may differ from those shown in the table. After-tax returns shown
are not relevant for investors who hold their shares through tax-deferred
arrangements, such as 401(k) plans or individual retirement accounts.

The inception date for Class A, B and C shares of the fund is June 28, 2002. In
the bar chart, the performance figures for Class A before its inception date
are based on the historical performance of the fund's original share class
(Investment Class), adjusted to reflect the higher gross total annual operating
expenses of Class A. Investment Class shares merged into Class S shares on
October 20, 2006.

In the table, the performance figures for each share class prior to its
inception are based on the historical performance of Investment Class, adjusted
to reflect both the higher gross total annual operating expenses for Class A, B
or C and the current applicable sales charges of Classes A, B, and C.

DWS Mid Cap Growth Fund

ANNUAL TOTAL RETURN (%) AS OF 12/31 EACH YEAR - CLASS A (Results do not reflect
sales loads; if they did, total returns would be lower than those shown.)



<TABLE>
<S>        <C>        <C>         <C>         <C>        <C>       <C>        <C>        <C>       <C>
49.68       -1.70      -13.37      -20.49     28.34       9.84     12.24      10.77      7.92       -50.13
1999       2000        2001        2002       2003       2004      2005       2006       2007       2008
</TABLE>





<TABLE>
<CAPTION>
FOR THE PERIODS INCLUDED IN THE BAR CHART:
<S>                                        <C>
BEST QUARTER: 29.95%, Q4 1999              WORST QUARTER: -32.68%, Q4 2008
</TABLE>



                                                   DWS Mid Cap Growth Fund  | 19
<PAGE>

AVERAGE ANNUAL TOTAL RETURNS (%) as of 12/31/2008 (Fund returns include the
effects of maximum sales load.)


<TABLE>
<CAPTION>
                                               1 YEAR       5 YEARS      10 YEARS
<S>                                         <C>            <C>          <C>
 CLASS A
   Return before Taxes                         -52.99        -7.08        -1.04
   Return after Taxes on Distributions         -52.99        -8.09        -2.32
   Return after Taxes on Distributions
   and Sale of Fund Shares                     -36.46*       -5.49*       -0.74*
 CLASS B (Return before Taxes)                 -51.98        -6.84        -1.28
 CLASS C (Return before Taxes)                 -50.53        -6.70        -1.29
 RUSSELL MIDCAP (Reg. TM) GROWTH INDEX
 (reflects no deductions for fees,
 expenses or taxes)                            -44.32        -2.33        -0.19
</TABLE>


*   Return after Taxes on Distributions and Sale of Fund Shares is higher than
   other return figures for the same period due to a capital loss occurring
   upon redemption resulting in an assumed tax deduction for the shareholder.

     Total returns would have been lower if operating expenses hadn't been
reduced.

 RUSSELL MIDCAP (Reg. TM) GROWTH INDEX is an unmanaged capitalization-weighted
 index of medium and medium/small companies in the Russell 1000 (Reg. TM) Index
 chosen for their growth orientation. Russell 1000 (Reg. TM) Index is an
 unmanaged price-only index of the 1,000 largest capitalized companies that are
 domiciled in the US and whose common stocks are traded.


--------------------------------------------------------------------------------
Current performance may be higher or lower than the performance data quoted
above. For more recent performance information, call your financial advisor or
(800) 621-1048 or visit our Web site at www.dws-investments.com.


--------------------------------------------------------------------------------
Return information assumes that fund shares were sold at the end of the period.


RETURN AFTER TAXES ON DISTRIBUTIONS reflects taxes only on the fund's
distributions and not on a shareholder's gain or loss from selling fund shares.


RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES reflects taxes on
both the fund's distributions and a shareholder's gain or loss from selling
fund shares.


20 | DWS Mid Cap Growth Fund
<PAGE>

HOW MUCH INVESTORS PAY

The table below describes the fees and expenses that you may pay if you buy and
hold fund shares. This information doesn't include any fees that may be charged
by your financial advisor.


<TABLE>
<CAPTION>
FEE TABLE                                        CLASS A         CLASS B       CLASS C
<S>                                         <C>                 <C>          <C>
 SHAREHOLDER FEES, paid directly from your investment
 Maximum Sales Charge (Load) Imposed
 on Purchases (as % of offering price)             5.75%1         None          None
 Maximum Deferred Sales Charge (Load)
 (as % of redemption proceeds)                   None2             4.00%         1.00%
 Redemption/Exchange fee on shares
 owned less than 15 days (as % of
 redemption proceeds)3                            2.00             2.00          2.00

 ANNUAL OPERATING EXPENSES, deducted from fund assets
 Management Fee                                   0.63  %          0.63%         0.63%
 Distribution/Service (12b-1) Fee                 0.24             0.99          1.00
 Other Expenses 4                                 0.50             0.57          0.49
 TOTAL ANNUAL OPERATING EXPENSES 5, 6             1.37             2.19          2.12
</TABLE>


1   Because of rounding in the calculation of the offering price, the actual
   maximum front-end sales charge paid by an investor may be higher than the
   percentage noted (see "Choosing a Share Class - Class A shares").

2   The redemption of shares purchased at net asset value under the Large Order
   NAV Purchase Privilege (see "Choosing a Share Class - Class A shares") may
   be subject to a contingent deferred sales charge of 1.00% if redeemed
   within 12 months of purchase and 0.50% if redeemed within the following six
   months.

3   This fee is charged on all applicable redemptions or exchanges. Please see
   "Policies You Should Know About - Policies about transactions" for further
   information.

4   "Other Expenses" include an administrative services fee paid to the Advisor
   in the amount of 0.10%.

5   Through September 30, 2009, the Advisor has contractually agreed to waive
   all or a portion of its management fee and reimburse or pay operating
   expenses of the fund to the extent necessary to maintain the fund's total
   operating expenses at 2.18% for Class B shares, excluding certain expenses
   such as extraordinary expenses, taxes, brokerage and interest.

6   Except as otherwise noted, the information in the table is based on amounts
   incurred during the fund's most recent fiscal year. It is important for you
   to understand that a decline in the fund's average net assets during the
   current fiscal year due to recent unprecedented market volatility or other
   factors could cause the fund's expense ratios for the fund's current fiscal
   year to be higher than the expense information presented.


                                                   DWS Mid Cap Growth Fund  | 21
<PAGE>

Based on the costs above, this example helps you compare the expenses of each
share class to those of other mutual funds. This example assumes the expenses
above remain the same. It also assumes that you invested $10,000, earned 5%
annual returns, and reinvested all dividends and distributions. This is only an
example; actual expenses will be different.


<TABLE>
<CAPTION>
EXAMPLE                1 YEAR      3 YEARS      5 YEARS      10 YEARS
<S>                   <C>         <C>          <C>          <C>
 EXPENSES, assuming you sold your shares at the end of each period
 Class A shares         $706         $984       $1,282       $2,127
 Class B shares*         622          985        1,375        2,125
 Class C shares          315          664        1,139        2,452

 EXPENSES, assuming you kept your shares
 Class A shares         $706         $984       $1,282       $2,127
 Class B shares*         222          685        1,175        2,125
 Class C shares          215          664        1,139        2,452
</TABLE>


*   Reflects conversion of Class B to Class A shares, which pay lower fees.
   Conversion occurs six years after purchase.

22 | DWS Mid Cap Growth Fund
<PAGE>


<TABLE>
<S>                            <C>        <C>        <C>
                                Class A    Class B    Class C
  ticker symbol                 SSDAX      SSDBX      SSDCX
    fund number                 471        671        771

    DWS SMALL CAP GROWTH FUND


</TABLE>

            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund seeks long-term capital growth.

            Under normal circumstances, the fund invests at least 80% of its
            assets, determined at the time of purchase, in stocks and other
            securities with equity characteristics of US smaller capitalization
            companies. For purposes of this 80% investment limitation, the
            small capitalization equity universe is defined as the bottom 20%
            of the total domestic equity market capitalization (at the time of
            initial investment), using a minimum market capitalization of $10
            million. The fund may invest up to 20% of its assets in the stocks
            of non-US companies and large capitalization stocks. The fund may
            also invest in other types of equity securities such as preferred
            stocks or convertible securities.

            The fund invests primarily in equity securities of US smaller
            capitalization companies. Portfolio management focuses on
            individual security selection rather than industry selection.
            Portfolio management uses an active process which combines
            financial analysis with company visits to evaluate management and
            strategies. Each portfolio manager has specific sector
            responsibilities with investment discretion over the securities
            within sectors.

            Company research lies at the heart of our investment process.
            Portfolio management uses a "bottom-up" approach to picking
            securities.

            -  Portfolio management focuses on stocks with superior growth
               prospects and above average near-to-intermediate term
               performance potential.

            -  Portfolio management emphasizes individual selection of small
               company stocks across all economic sectors, early in their
               growth cycles and with the potential to be the blue chips of the
               future.

                                                 DWS Small Cap Growth Fund  | 23
<PAGE>

            -  Portfolio management generally seeks companies with a leading or
               dominant position in their niche markets, a high rate of return
               on invested capital and the ability to finance a major part of
               future growth from internal sources.

            Portfolio management looks primarily for financial attributes that
            set these companies apart:

            -  estimated above-average growth in revenues and earnings; and

            -  a balance sheet that can support this growth potential with
               sufficient working capital and manageable levels of debt.

            The fund follows a disciplined selling process in order to lessen
            risk. A security may be sold if one or more of the following
            conditions are met:

            -  the stock price reaches portfolio management's expectations;

            -  there is a material change in the company's fundamentals;

            -  portfolio management believes other investments offer better
               opportunities; or

            -  the market capitalization of a stock distorts the weighted
               average market capitalization of the fund.

            OTHER INVESTMENTS. The fund is permitted, but not required, to use
            various types of derivatives (contracts whose value is based on,
            for example, indices, currencies or securities). Derivatives may be
            used for hedging and for risk management or for non-hedging
            purposes to seek to enhance potential gains. The fund may use
            derivatives in circumstances where portfolio management believes
            they offer an economical means of gaining exposure to a particular
            asset class or to keep cash on hand to meet shareholder redemptions
            or other needs while maintaining exposure to the market.

            In particular, the fund may use futures and options and write
            covered call options.

            SECURITIES LENDING. The fund may lend its investment securities in
            an amount up to 33 1/3% of its total assets to approved
            institutional borrowers who need to borrow securities in order to
            complete certain transactions.


24 | DWS Small Cap Growth Fund
<PAGE>

            THE MAIN RISKS OF INVESTING IN THE FUND

            There are several risk factors that could hurt the fund's
            performance, cause you to lose money or cause the fund's
            performance to trail that of other investments.

            STOCK MARKET RISK. The fund is affected by how the stock market
            performs. To the extent the fund invests in a particular
            capitalization or market sector, the fund's performance may be
            proportionately affected by that segment's general performance.
            When stock prices fall, you should expect the value of your
            investment to fall as well. Because a stock represents ownership in
            its issuer, stock prices can be hurt by poor management, shrinking
            product demand and other business risks. These factors may affect
            single companies as well as groups of companies. In addition,
            movements in financial markets may adversely affect a stock's
            price, regardless of how well the company performs. The market as a
            whole may not favor the types of investments the fund makes, which
            could affect the fund's ability to sell them at an attractive
            price.

            SMALL COMPANY CAPITALIZATION RISK. Small company stocks tend to
            experience steeper price fluctuations than the stocks of larger
            companies. A shortage of reliable information can also pose added
            risk to small company stocks. Industry-wide reversals may have a
            greater impact on small companies, since they lack the financial
            resources of larger companies. Small company stocks are typically
            less liquid than large company stocks. Accordingly, it may be
            harder to find buyers for small company shares.

            GROWTH INVESTING RISK. Since growth stocks usually reinvest a large
            portion of earnings in their own businesses, they may lack the
            dividends associated with value stocks that might
            otherwise cushion their decline in a falling market. Earnings
            disappointments in growth stocks often result in sharp price
            declines because investors buy these stocks for their potential
            superior earnings growth. Growth stocks may also be out of favor
            for certain periods in relation to value stocks.

            SECURITY SELECTION RISK. A risk that pervades all investing is the
            risk that the securities in the fund's portfolio may decline in
            value.

            FOREIGN INVESTMENT RISK. Foreign investments involve certain
            special risks, including:



THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

This fund is designed for investors with long-term goals who can tolerate
capital fluctuation in pursuit of long-term capital growth.


                                                 DWS Small Cap Growth Fund  | 25
<PAGE>

            -  POLITICAL RISK. Some foreign governments have limited the outflow
               of profits to investors abroad, imposed restrictions on the
               exchange or export of foreign currency, extended diplomatic
               disputes to include trade and financial relations, seized foreign
               investments and imposed higher taxes.

            -  INFORMATION RISK. Companies based in foreign markets are usually
               not subject to accounting, auditing and financial reporting
               standards and practices as stringent as those in the US.
               Therefore, their financial reports may present an incomplete,
               untimely or misleading picture of a company, as compared to the
               financial reports required in the US.

            -  LIQUIDITY RISK. Investments that trade less frequently can be
               more difficult or more costly to buy, or to sell, than more
               liquid or active investments. This liquidity risk is a factor of
               the trading volume of a particular investment, as well as the
               size and liquidity of the entire local market. On the whole,
               foreign exchanges are smaller and less liquid than US exchanges.
               This can make buying and selling certain investments more
               difficult and costly. Relatively small transactions in some
               instances can have a disproportionately large effect on the
               price and supply of securities. In certain situations, it may
               become virtually impossible to sell an investment in an orderly
               fashion at a price that approaches portfolio management's
               estimate of its value. For the same reason, it may at times be
               difficult to value the fund's foreign investments.

            -  REGULATORY RISK. There is generally less government regulation
               of foreign markets, companies and securities dealers than in the
               US.

            -  CURRENCY RISK. The fund invests in securities denominated in
               foreign currencies. Changes in exchange rates between foreign
               currencies and the US dollar may affect the US dollar value of
               foreign securities or the income or gain received on these
               securities.

            -  LIMITED LEGAL RECOURSE RISK. Legal remedies for investors may be
               more limited than the legal remedies available in the US.

26 | DWS Small Cap Growth Fund
<PAGE>

            -  TRADING PRACTICE RISK. Brokerage commissions and other fees are
               generally higher for foreign investments than for US investments.
               The procedures and rules governing foreign transactions and
               custody may also involve delays in payment, delivery or recovery
               of money or investments.

            -  TAXES. Foreign withholding and certain other taxes may reduce
               the amount of income available to distribute to shareholders of
               the fund. In addition, special US tax considerations may apply
               to the fund's foreign investments.

            PRICING RISK. At times, market conditions may make it difficult to
            value some investments, and the fund may use certain valuation
            methodologies for some of its investments, such as fair value
            pricing. Given the subjective nature of such valuation
            methodologies, it is possible that the value determined for an
            investment may be different than the value realized upon such
            investment's sale. If the fund has valued its securities too
            highly, you may pay too much for fund shares when you buy into the
            fund. If the fund has underestimated the price of its securities,
            you may not receive the full market value when you sell your fund
            shares.

            SECURITIES LENDING RISK. Any loss in the market price of securities
            loaned by the fund that occurs during the term of the loan would be
            borne by the fund and would adversely affect the fund's
            performance. Also, there may be delays in recovery of securities
            loaned or even a loss of rights in the collateral should the
            borrower of the securities fail financially while the loan is
            outstanding. However, loans will be made only to borrowers selected
            by the fund's delegate after a review of relevant facts and
            circumstances, including the creditworthiness of the borrower.

            Other factors that could affect performance include:

            -  portfolio management could be wrong in the analysis of
               industries, companies, economic trends, the relative
               attractiveness of different securities or other matters.

            -  derivatives could produce disproportionate losses due to a
               variety of factors, including the failure of the counterparty to
               meet its obligations or unexpected price or interest rate
               movements.


                                                 DWS Small Cap Growth Fund  | 27
<PAGE>

THE FUND'S PERFORMANCE HISTORY

While a fund's past performance (before and after taxes) isn't necessarily a
sign of how it will do in the future, it can be valuable for an investor to
know.

The bar chart shows how the performance of the fund's Class A shares has varied
from year to year, which may give some idea of risk. The bar chart does not
reflect sales loads; if it did, total returns would be lower than those shown.
The table on the following page shows how fund performance compares to relevant
index performance (which, unlike fund performance, does not reflect fees or
expenses). The table includes the effects of maximum sales loads on fund
performance. The performance of the fund and the index information varies over
time. All figures assume reinvestment of dividends and distributions (in the
case of after-tax returns, reinvested net of assumed tax rates).

The table shows returns for Class A shares on a before-tax and after-tax basis.
After-tax returns are shown for Class A only and will vary for Classes B and C.
After-tax returns are estimates calculated using the historical highest
marginal individual federal income tax rates and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on an investor's tax
situation and may differ from those shown in the table. After-tax returns shown
are not relevant for investors who hold their shares through tax-deferred
arrangements, such as 401(k) plans or individual retirement accounts.

The inception date for Class A, B and C shares is June 28, 2002. In the bar
chart, the performance figures for Class A before its inception date are based
on the historical performance of the fund's original share class (Investment
Class), adjusted to reflect the higher gross total annual operating expenses of
Class A. Investment Class shares merged into Class S shares on October 20,
2006.

In the table, the performance figures for each share class prior to its
inception are based on the historical performance of Investment Class, adjusted
to reflect both the higher gross total annual operating expenses for Class A, B
or C and the current applicable sales charge of Classes A, B, and C.

DWS Small Cap Growth Fund

ANNUAL TOTAL RETURN (%) AS OF 12/31 EACH YEAR - CLASS A (Results do not reflect
sales loads; if they did, total returns would be lower than those shown.)



<TABLE>
<S>        <C>        <C>        <C>         <C>        <C>        <C>       <C>       <C>       <C>
44.75      10.28       -8.56      -22.31     21.68      13.29       6.89      4.73     5.63       -50.39
1999       2000       2001        2002       2003       2004       2005      2006      2007       2008
</TABLE>





<TABLE>
<CAPTION>
FOR THE PERIODS INCLUDED IN THE BAR CHART:
<S>                                        <C>
BEST QUARTER: 27.14%, Q4 1999              WORST QUARTER: -32.52%, Q4 2008
</TABLE>



28 | DWS Small Cap Growth Fund
<PAGE>

AVERAGE ANNUAL TOTAL RETURNS (%) as of 12/31/2008 (Fund returns include the
effects of the maximum sales load.)


<TABLE>
<CAPTION>
                                               1 YEAR        5 YEARS       10 YEARS
<S>                                         <C>            <C>            <C>
 CLASS A
   Return before Taxes                         -53.24          -8.93        -1.45
   Return after Taxes on Distributions         -53.47         -10.01        -2.61
   Return after Taxes on Distributions
   and Sale of Fund Shares                     -34.31*         -7.02*       -1.13*
 CLASS B (Return before Taxes)                 -52.19          -8.68        -1.60
 CLASS C (Return before Taxes)                 -50.77          -8.53        -1.60
 RUSSELL 2000 (Reg. TM) GROWTH INDEX
 (reflects no deductions for fees,
 expenses or taxes)                            -38.54          -2.35        -0.76
</TABLE>


*   Return after Taxes on Distributions and Sale of Fund Shares is higher than
   other return figures for the same period due to a capital loss occurring
   upon redemption resulting in an assumed tax deduction for the shareholder.

     Total returns would have been lower if operating expenses hadn't been
reduced.

 RUSSELL 2000 (Reg. TM) GROWTH INDEX is an unmanaged capitalization-weighted
 measure of 2,000 of the smallest capitalized US companies with a
 greater-than-average growth orientation and whose common stocks trade on the
 NYSE, NYSE Alternext US (formerly known as "AMEX") and Nasdaq.


--------------------------------------------------------------------------------
Current performance may be higher or lower than the performance data quoted
above. For more recent performance information, call your financial advisor or
(800) 621-1048 or visit our Web site at www.dws-investments.com.


--------------------------------------------------------------------------------
Return information assumes that fund shares were sold at the end of the period.


RETURN AFTER TAXES ON DISTRIBUTIONS reflects taxes only on the fund's
distributions and not on a shareholder's gain or loss from selling fund shares.


RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES reflects taxes on
both the fund's distributions and a shareholder's gain or loss from selling
fund shares.


                                                 DWS Small Cap Growth Fund  | 29
<PAGE>

HOW MUCH INVESTORS PAY

The table below describes the fees and expenses that you may pay if you buy and
hold fund shares. This information doesn't include any fees that may be charged
by your financial advisor.


<TABLE>
<CAPTION>
FEE TABLE                                        CLASS A         CLASS B       CLASS C
<S>                                         <C>                 <C>          <C>
 SHAREHOLDER FEES, paid directly from your investment
 Maximum Sales Charge (Load) Imposed
 on Purchases (as % of offering price)             5.75%1         None          None
 Maximum Deferred Sales Charge (Load)
 (as % of redemption proceeds)                   None2             4.00%         1.00%
 Redemption/Exchange fee on shares
 owned less than 15 days (as % of
 redemption proceeds)3                            2.00             2.00          2.00

 ANNUAL OPERATING EXPENSES, deducted from fund assets
 Management Fee                                   0.65  %          0.65%         0.65
 Distribution/Service (12b-1) Fee                 0.21             1.00          0.98
 Other Expenses4                                  0.49             0.67          0.56
 TOTAL ANNUAL OPERATING EXPENSES5                 1.35             2.32          2.19
 Less Expense Waiver/Reimbursement6               0.10             0.32          0.19
 NET ANNUAL FUND OPERATING
 EXPENSES6                                        1.25             2.00          2.00
</TABLE>


1   Because of rounding in the calculation of the offering price, the actual
   maximum front-end sales charge paid by an investor may be higher than the
   percentage noted (see "Choosing a Share Class - Class A shares").

2   The redemption of shares purchased at net asset value under the Large Order
   NAV Purchase Privilege (see "Choosing a Share Class - Class A shares") may
   be subject to a contingent deferred sales charge of 1.00% if redeemed
   within 12 months of purchase and 0.50% if redeemed within the following six
   months.

3   This fee is charged on all applicable redemptions or exchanges. Please see
   "Policies You Should Know About - Policies about transactions" for further
   information.

4   "Other Expenses" include an administrative services fee paid to the Advisor
   in the amount of 0.10%.

5   Except as otherwise noted, the information in the table is based on amounts
   incurred during the fund's most recent fiscal year. It is important for you
   to understand that a decline in the fund's average net assets during the
   current fiscal year due to recent unprecedented market volatility or other
   factors could cause the fund's expense ratios for the fund's current fiscal
   year to be higher than the expense information presented.

6   Through January 31, 2010, the Advisor has contractually agreed to waive all
   or a portion of its management fee and reimburse or pay operating expenses
   of the fund to the extent necessary to maintain the fund's total operating
   expenses at 1.25% for Class A shares, and 2.00% for both Class B and C
   shares, excluding certain expenses such as extraordinary expenses, taxes,
   brokerage and interest.

30 | DWS Small Cap Growth Fund
<PAGE>

Based on the costs above (including one year of capped expenses in each
period), this example helps you compare the expenses of each share class to
those of other mutual funds. This example assumes the expenses above remain the
same. It also assumes that you invested $10,000, earned 5% annual returns and
reinvested all dividends and distributions. This is only an example; actual
expenses will be different.


<TABLE>
<CAPTION>
EXAMPLE                1 YEAR      3 YEARS      5 YEARS      10 YEARS
<S>                   <C>         <C>          <C>          <C>
 EXPENSES, assuming you sold your shares at the end of each period
 Class A shares         $695         $969       $1,263       $2,097
 Class B shares*         603          994        1,411        2,163
 Class C shares          303          667        1,157        2,509

 EXPENSES, assuming you kept your shares
 Class A shares         $695         $969       $1,263       $2,097
 Class B shares*         203          694        1,211        2,163
 Class C shares          203          667        1,157        2,509
</TABLE>


*   Reflects conversion of Class B to Class A shares, which pay lower fees.
   Conversion occurs six years after purchase.

                                                 DWS Small Cap Growth Fund  | 31
<PAGE>

OTHER POLICIES AND SECONDARY RISKS

           While the previous pages describe the main points of each fund's
           strategy and risks, there are a few other issues to know about:

           -  Although major changes tend to be infrequent, each fund's Board
              could change a fund's investment objective without seeking
              shareholder approval. The Board will provide shareholders with at
              least 60 days notice prior to making any changes to each fund's
              80% investment policy as described herein.

           -  As a temporary defensive measure, each fund could shift up to
              100% of its assets into investments such as money market
              securities or other short-term securities that offer comparable
              levels of risk. This could prevent losses, but, while engaged in
              a temporary defensive position, a fund will not be pursuing its
              investment objective. However, portfolio management may choose
              not to use these strategies for various reasons, even in volatile
              market conditions.

           -  Each fund may trade actively. This could raise transaction costs
              (thus lowering return) and could mean increased taxable
              distributions to shareholders and distributions that will be
              taxable to shareholders at higher federal income tax rates.

           -  Certain DWS fund-of-funds are permitted to invest in each fund.
              As a result, a fund may have large inflows or outflows of cash
              from time to time. This could have adverse effects on a fund's
              performance if a fund were required to sell securities or invest
              cash at times when it otherwise would not do so. This activity
              could also accelerate the realization of capital gains and
              increase a fund's transaction costs. The Advisor will monitor the
              impact of these transactions and a fund may discontinue such
              arrangements if they are not deemed to be in the best interests
              of a fund.


           Secondary risks

           The risk disclosure below applies to each fund, unless otherwise
           noted.

           DERIVATIVES RISK. Risks associated with derivatives include the risk
           that the derivative is not well correlated with the security, index
           or currency to which it relates; the risk that derivatives may
           result in losses or missed opportunities; the risk that the fund
           will be unable to sell the derivative because of an illiquid


32 | Other Policies and Secondary Risks
<PAGE>

           secondary market; and the risk that the derivative transaction could
           expose the fund to the effects of leverage, which could increase the
           fund's exposure to the market and magnify potential losses. There is
           no guarantee that derivatives, to the extent employed, will have the
           intended effect, and their use could cause lower returns or even
           losses to the fund. The use of derivatives by the fund to hedge risk
           may reduce the opportunity for gain by offsetting the positive
           effect of favorable price movements.


           For more information

           This prospectus doesn't tell you about every policy or risk of
           investing in each fund.

           If you want more information on each fund's allowable securities and
           investment practices and the characteristics and risks of each one,
           you may want to request a copy of the Statement of Additional
           Information (the back cover tells you how to do this).

           Keep in mind that there is no assurance that a fund will achieve its
           objective.

           A complete list of each fund's portfolio holdings as of the
           month-end is posted on www.dws-investments.com on or about the 15th
           day of the following month. More frequent posting of portfolio
           holdings information may be made from time to time on
           www.dws-investments.com. The posted portfolio holdings information
           is available by fund and generally remains accessible at least until
           the date on which a fund files its Form N-CSR or N-Q with the
           Securities and Exchange Commission for the period that includes the
           date as of which the posted information is current. Each fund's
           Statement of Additional Information includes a description of a
           fund's policies and procedures with respect to the disclosure of a
           fund's portfolio holdings.


                                        Other Policies and Secondary Risks  | 33
<PAGE>

WHO MANAGES AND OVERSEES THE FUNDS


           The investment advisor

           Deutsche Investment Management Americas Inc. ("DIMA" or the
           "Advisor"), with headquarters at 345 Park Avenue, New York, NY
           10154, is the investment advisor for each fund. Under the oversight
           of the Board, the Advisor makes investment decisions, buys and sells
           securities for each fund and conducts research that leads to these
           purchase and sale decisions. The Advisor provides a full range of
           global investment advisory services to institutional and retail
           clients.

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

           Deutsche Asset Management is a global asset management organization
           that offers a wide range of investing expertise and resources,
           including hundreds of portfolio managers and analysts and an office
           network that reaches the world's major investment centers. This
           well-resourced global investment platform brings together a wide
           variety of experience and investment insight across industries,
           regions, asset classes and investing styles.

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


34 | Who Manages and Oversees the Funds
<PAGE>

           MANAGEMENT FEE. The Advisor receives a management fee from each
           fund. Below are the actual rates paid by each fund for the most
           recent fiscal year, as a percentage of each fund's average daily net
           assets.


<TABLE>
<CAPTION>
FUND NAME                                   FEE PAID
<S>                                       <C>
  DWS Micro Cap Fund                           0.88%*
  DWS Mid Cap Growth Fund                     0.63  %
  DWS Small Cap Growth Fund                   0.65  %
</TABLE>


           *   Reflects the effects of expense limitations and/or fee waivers
then in effect.


           Effective October 1, 2008, DWS Micro Cap Fund pays the Advisor under
           the investment management agreement a fee, calculated daily and paid
           monthly, at the annual rate of 1.100% of the fund's average daily
           net assets up to $250 million, 0.950% of the next $250 million and
           0.800% thereafter.

           A discussion regarding the basis for the Board's approval of each
           fund's investment management agreement is contained in the most
           recent shareholder report for the annual period ended September 30
           (see "Shareholder reports" on the back cover).

           Under a separate administrative services agreement between each fund
           and the Advisor, each fund pays the Advisor a fee for providing most
           of each fund's administrative services.


                                        Who Manages and Oversees the Funds  | 35
<PAGE>

Portfolio management

Each fund is managed by a team of investment professionals who collaborate to
develop and implement each fund's investment strategy. Each portfolio manager
on the team has authority over all aspects of each fund's investment portfolio,
including but not limited to, purchase and sales of individual securities,
portfolio construction techniques, portfolio risk assessment, and the
management of daily cash flows in accordance with portfolio holdings.

The following people handle the day-to-day management of each fund:

Joseph Axtell, CFA
Managing Director of Deutsche Asset Management and Portfolio Manager of the
funds.
- Joined Deutsche Asset Management in 2001 and the funds in 2006.
- Senior analyst at Merrill Lynch Investment Managers for the international
     equity portion of a global balanced portfolio (1996-2001).
- Director, International Research at PCM International (1989-1996).
- Associate manager, structured debt and equity group at Prudential Capital
   Corporation (1988-1989).
- Analyst at Prudential-Bache Capital Funding in London (1987-1988).
- Equity analyst in the healthcare sector at Prudential Equity Management
   Associates (1985-1987).
- BS, Carlson School of Management, University of Minnesota.

Rafaelina M. Lee
Director of Deutsche Asset Management and Portfolio Manager of the funds.
- Joined Deutsche Asset Management in 1999 and the funds in 2008.
- Research analyst for US Micro, Small and Mid Cap Equity: New York.
- Over 20 years of investment industry experience in US portfolio strategy,
  Latin America market strategy and US equity research at JP Morgan
  Securities, UBS Securities and Goldman Sachs & Co.
- BA, Columbia University; MBA, Stern School of Business, New York University.

Jeffrey Saeger, CFA
Director of Deutsche Asset Management and Portfolio Manager of the funds.
- Joined Deutsche Asset Management in 1996 and the funds in 2009.
- Over 14 years of investment industry experience.
- BS, State University of New York at Fredonia.

Each fund's Statement of Additional Information provides additional information
about a portfolio manager's investments in each fund, a description of the
portfolio management compensation structure and information regarding other
accounts managed.


36 | Who Manages and Oversees the Funds
<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights are designed to help you understand recent financial
performance. The figures in the first part of each table are for a single
share. The total return figures represent the percentage that an investor in a
fund would have earned (or lost), assuming all dividends and distributions were
reinvested. This information has been audited by PricewaterhouseCoopers LLP,
independent registered public accounting firm, whose report, along with each
fund's financial statements, is included in each fund's annual report (see
"Shareholder reports" on the back cover). On July 10, 2006, DWS Micro Cap Fund
acquired all the assets and assumed all the liabilities of the Predecessor
Fund. The information contained in the following tables for DWS Micro Cap Fund
for periods prior to July 10, 2006 has been derived from the Predecessor Fund's
financial statements.


                                                      Financial Highlights  | 37
<PAGE>

DWS Micro Cap Fund - Class A


<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER
30,                                   2008           2007             2006              2005           2004
<S>                               <C>            <C>            <C>                 <C>            <C>
SELECTED PER SHARE DATA
-----------------------------------------------------------------------------------------------            -
NET ASSET VALUE, BEGINNING
OF PERIOD                          $  20.09       $  18.87         $  22.45          $  20.99       $  18.69
------------------------------     --------       --------         --------          --------       --------
Income (loss) from
investment operations:
  Net investment income
  (loss)a                            (  .16)        (  .25)          (  .22)d          (  .32)        (  .31)
______________________________     ________       ________         ________          ________       ________
  Net realized and unrealized
  gain (loss)                        ( 3.83)          5.02              .24              3.93           2.61
------------------------------     --------       --------         --------          --------       --------
  TOTAL FROM INVESTMENT
  OPERATIONS                         ( 3.99)          4.77              .02              3.61           2.30
______________________________     ________       ________         ________          ________       ________
Less distributions from:
  Net realized gains                 ( 2.87)        ( 3.55)          ( 3.60)           ( 2.15)             -
______________________________     ________       ________         ________          ________       ________
Redemption fees                         .00*           .00*             .00*              .00*             -
------------------------------     --------       --------         --------          --------       --------
NET ASSET VALUE, END OF
PERIOD                             $  13.23       $  20.09         $  18.87          $  22.45       $  20.99
------------------------------     --------       --------         --------          --------       --------
Total Return (%)b,c                  (22.41)         27.19           (  .90)d,e         17.88          12.37
------------------------------     --------       --------         --------          --------       --------

RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
-----------------------------------------------------------------------------------------------     --------
Net assets, end of period ($
millions)                                16             27               29                26             22
______________________________     ________       ________         ________          ________       ________
Ratio of expenses before
expense reductions (%)                 2.36           2.17             2.29              2.24           2.15
______________________________     ________       ________         ________          ________       ________
Ratio of expenses after
expense reductions (%)                 1.72           1.64             1.75              1.74           1.74
______________________________     ________       ________         ________          ________       ________
Ratio of net investment
income (loss) (%)                    ( 1.04)        ( 1.29)          ( 1.09)d          ( 1.52)        ( 1.47)
______________________________     ________       ________         ________          ________       ________
Portfolio turnover rate (%)              59             73              100               108             99
------------------------------     --------       --------         --------          --------       --------
</TABLE>


a   Based on average shares outstanding during the period.

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

c   Total return does not reflect the effect of any sales charges.

d   Includes non-recurring income from the Advisor recorded as a result of an
   administrative proceeding regarding disclosure of brokerage allocation
   practices in connection with sales of DWS Funds. The non-recurring income
   resulted in an increase in net investment income of $0.061 per share and an
   increase in the ratio of net investment income of 0.29%. Excluding this
   non-recurring income, total return would have been 0.33% lower.

e   The Fund realized a gain of $18,520 on the disposal of an investment not
   adhering to the Fund's investment restrictions. Excluding this gain, total
   return would have been 0.02% lower.

*
  Amount is less than $.005.

38 | Financial Highlights
<PAGE>

DWS Micro Cap Fund - Class B


<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER
30,                                     2008           2007             2006              2005           2004
<S>                                 <C>            <C>            <C>                 <C>            <C>
SELECTED PER SHARE DATA
-------------------------------------------------------------------------------------------------            -
NET ASSET VALUE, BEGINNING
OF PERIOD                            $  19.03       $  18.16         $  21.88          $  20.64       $  18.52
--------------------------------     --------       --------         --------          --------       --------
Income (loss) from
investment operations:
  Net investment income
  (loss)a                              (  .26)        (  .37)          (  .36)d          (  .47)        (  .46)
________________________________     ________       ________         ________          ________       ________
  Net realized and unrealized
  gain (loss)                          ( 3.59)          4.79              .24              3.86           2.58
--------------------------------     --------       --------         --------          --------       --------
  TOTAL FROM INVESTMENT
  OPERATIONS                           ( 3.85)          4.42           (  .12)             3.39           2.12
________________________________     ________       ________         ________          ________       ________
Less distributions from:
  Net realized gains                   ( 2.87)        ( 3.55)          ( 3.60)           ( 2.15)             -
________________________________     ________       ________         ________          ________       ________
Redemption fees                           .00*           .00*             .00*              .00*             -
--------------------------------     --------       --------         --------          --------       --------
NET ASSET VALUE, END OF
PERIOD                               $  12.31       $  19.03         $  18.16          $  21.88       $  20.64
--------------------------------     --------       --------         --------          --------       --------
Total Return (%)b,c                    (23.01)         26.18           ( 1.60)d,e         16.95          11.56
--------------------------------     --------       --------         --------          --------       --------

RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
-------------------------------------------------------------------------------------------------     --------
Net assets, end of period
($ millions)                                2              4                4                 5              5
________________________________     ________       ________         ________          ________       ________
Ratio of expenses before
expense reductions (%)                   3.19           3.00             3.05              2.98           2.90
________________________________     ________       ________         ________          ________       ________
Ratio of expenses after
expense reductions (%)                   2.47           2.39             2.50              2.49           2.49
________________________________     ________       ________         ________          ________       ________
Ratio of net investment
income (loss) (%)                      ( 1.79)        ( 2.04)          ( 1.84)d          ( 2.27)        ( 2.22)
________________________________     ________       ________         ________          ________       ________
Portfolio turnover rate (%)                59             73              100               108             99
--------------------------------     --------       --------         --------          --------       --------
</TABLE>


a   Based on average shares outstanding during the period.

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

c   Total return does not reflect the effect of any sales charges.

d   Includes non-recurring income from the Advisor recorded as a result of an
   administrative proceeding regarding disclosure of brokerage allocation
   practices in connection with sales of DWS Funds. The non-recurring income
   resulted in an increase in net investment income of $0.061 per share and an
   increase in the ratio of net investment income of 0.29%. Excluding this
   non-recurring income, total return would have been 0.34% lower.

e   The Fund realized a gain of $18,520 on the disposal of an investment not
   adhering to the Fund's investment restrictions. Excluding this gain, total
   return would have been 0.02% lower.

*   Amount is less than $.005.

                                                      Financial Highlights  | 39
<PAGE>

DWS Micro Cap Fund - Class C


<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER
30,                                     2008           2007             2006              2005           2004
<S>                                 <C>            <C>            <C>                 <C>            <C>
SELECTED PER SHARE DATA
-------------------------------------------------------------------------------------------------            -
NET ASSET VALUE, BEGINNING
OF PERIOD                            $  19.03       $  18.15         $  21.88          $  20.64       $  18.51
--------------------------------     --------       --------         --------          --------       --------
Income (loss) from
investment operations:
  Net investment income
  (loss)a                              (  .26)        (  .37)          (  .36)d          (  .47)        (  .46)
________________________________     ________       ________         ________          ________       ________
  Net realized and unrealized
  gain (loss)                          ( 3.59)          4.80              .23              3.86           2.59
--------------------------------     --------       --------         --------          --------       --------
  TOTAL FROM INVESTMENT
  OPERATIONS                           ( 3.85)          4.43           (  .13)             3.39           2.13
________________________________     ________       ________         ________          ________       ________
Less distributions from:
  Net realized gains                   ( 2.87)        ( 3.55)          ( 3.60)           ( 2.15)             -
________________________________     ________       ________         ________          ________       ________
Redemption fees                           .00*           .00*             .00*              .00*             -
--------------------------------     --------       --------         --------          --------       --------
NET ASSET VALUE, END OF
PERIOD                               $  12.31       $  19.03         $  18.15          $  21.88       $  20.64
--------------------------------     --------       --------         --------          --------       --------
Total Return (%)b,c                    (23.01)         26.26           ( 1.66)d,e         16.95          11.56
--------------------------------     --------       --------         --------          --------       --------

RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
-------------------------------------------------------------------------------------------------     --------
Net assets, end of period
($ millions)                                5              8                8                 9             14
________________________________     ________       ________         ________          ________       ________
Ratio of expenses before
expense reductions (%)                   3.11           2.94             3.02              2.98           2.90
________________________________     ________       ________         ________          ________       ________
Ratio of expenses after
expense reductions (%)                   2.47           2.39             2.50              2.49           2.49
________________________________     ________       ________         ________          ________       ________
Ratio of net investment
income (loss) (%)                      ( 1.79)        ( 2.04)          ( 1.84)d          ( 2.27)        ( 2.22)
________________________________     ________       ________         ________          ________       ________
Portfolio turnover rate (%)                59             73              100               108             99
--------------------------------     --------       --------         --------          --------       --------
</TABLE>


a   Based on average shares outstanding during the period.

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

c   Total return does not reflect the effect of any sales charges.

d   Includes non-recurring income from the Advisor recorded as a result of an
   administrative proceeding regarding disclosure of brokerage allocation
   practices in connection with sales of DWS Funds. The non-recurring income
   resulted in an increase in net investment income of $0.061 per share and an
   increase in the ratio of net investment income of 0.29%. Excluding this
   non-recurring income, total return would have been 0.34% lower.

e   The Fund realized a gain of $18,520 on the disposal of an investment not
   adhering to the Fund's investment restrictions. Excluding this gain, total
   return would have been 0.02% lower.

*   Amount is less than $.005.

40 | Financial Highlights
<PAGE>

DWS Mid Cap Growth Fund - Class A


<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER
30,                                     2008           2007           2006            2005           2004
<S>                                 <C>            <C>            <C>             <C>            <C>
SELECTED PER SHARE DATA
---------------------------------------------------------------------------------------------            -
NET ASSET VALUE, BEGINNING
OF PERIOD                            $  19.07       $  15.70        $ 15.17        $  12.06       $  11.46
--------------------------------     --------       --------        -------        --------       --------
Income (loss) from
investment operations:
  Net investment income
  (loss)a                              (  .09)        (  .14)        (  .14)d        (  .12)        (  .10)
________________________________     ________       ________        _______        ________       ________
  Net realized and unrealized
  gain (loss)                          ( 4.67)          3.51            .67            3.23            .70
--------------------------------     --------       --------        -------        --------       --------
  TOTAL FROM INVESTMENT
  OPERATIONS                           ( 4.76)          3.37            .53            3.11            .60
________________________________     ________       ________        _______        ________       ________
Less distributions from:
  Net realized gains                   ( 2.50)             -              -               -              -
________________________________     ________       ________        _______        ________       ________
Redemption fees                           .00*           .00*           .00*            .00*             -
--------------------------------     --------       --------        -------        --------       --------
NET ASSET VALUE, END OF
PERIOD                               $  11.81       $  19.07        $ 15.70        $  15.17       $  12.06
--------------------------------     --------       --------        -------        --------       --------
Total Return (%)b,c                    (28.43)         21.46         3.49d            25.79           5.24
--------------------------------     --------       --------        -------        --------       --------

RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
---------------------------------------------------------------------------------------------     --------
Net assets, end of period
($ millions)                              236            566            528             587            242
________________________________     ________       ________        _______        ________       ________
Ratio of expenses before
expense reductions (%)                   1.37           1.25           1.35            1.31           1.35
________________________________     ________       ________        _______        ________       ________
Ratio of expenses after
expense reductions (%)                   1.25           1.24           1.29            1.25           1.25
________________________________     ________       ________        _______        ________       ________
Ratio of net investment
income (loss) (%)                      (  .62)        (  .76)        (  .90)d        (  .83)        (  .86)
________________________________     ________       ________        _______        ________       ________
Portfolio turnover rate (%)                82             56             53              83            116
--------------------------------     --------       --------        -------        --------       --------
</TABLE>


a   Based on average shares outstanding during the period.

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

c   Total return does not reflect the effect of any sales charges.

d   Includes non-recurring income from the Advisor recorded as a result of an
   administrative proceeding regarding disclosure of brokerage allocation
   practices in connection with sales of DWS Funds. The non-recurring income
   resulted in an increase in net investment income of $0.002 per share and an
   increase in the ratio of net investment income of 0.01%. Excluding this
   non-recurring income, total return would have been 0.01% lower.

*   Amount is less than $.005.

                                                      Financial Highlights  | 41
<PAGE>

DWS Mid Cap Growth Fund - Class B


<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER
30,                                     2008           2007            2006            2005           2004
<S>                                 <C>            <C>            <C>              <C>            <C>
SELECTED PER SHARE DATA
----------------------------------------------------------------------------------------------            -
NET ASSET VALUE, BEGINNING
OF PERIOD                            $  18.32       $  15.21         $ 14.81        $  11.86       $  11.35
--------------------------------     --------       --------         -------        --------       --------
Income (loss) from
investment operations:
  Net investment income
  (loss)a                              (  .19)       (   .26)         (  .25)d        (  .22)        (  .19)
________________________________     ________       ________         _______        ________       ________
  Net realized and unrealized
  gain (loss)                          ( 4.44)          3.37             .65            3.17            .70
--------------------------------     --------       --------         -------        --------       --------
  TOTAL FROM INVESTMENT
  OPERATIONS                           ( 4.63)          3.11             .40            2.95            .51
________________________________     ________       ________         _______        ________       ________
Less distributions from:
  Net realized gains                   ( 2.50)             -               -               -              -
________________________________     ________       ________         _______        ________       ________
Redemption fees                           .00*           .00*            .00*            .00*             -
--------------------------------     --------       --------         -------        --------       --------
NET ASSET VALUE, END OF
PERIOD                               $  11.19       $  18.32         $ 15.21        $  14.81       $  11.86
--------------------------------     --------       --------         -------        --------       --------
Total Return (%)b,c                    (28.95)         20.45         2.70d             24.87           4.49
--------------------------------     --------       --------         -------        --------       --------

RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------     --------
Net assets, end of period
($ millions)                               16             33              40              56              9
________________________________     ________       ________         _______        ________       ________
Ratio of expenses before
expense reductions (%)                   2.19           2.16            2.21            2.05           2.10
________________________________     ________       ________         _______        ________       ________
Ratio of expenses after
expense reductions (%)                   2.00           2.00            2.04            2.00           2.00
________________________________     ________       ________         _______        ________       ________
Ratio of net investment
income (loss) (%)                      ( 1.37)       (  1.52)         ( 1.65)d        ( 1.58)        ( 1.61)
________________________________     ________       ________         _______        ________       ________
Portfolio turnover rate (%)                82             56              53              83            116
--------------------------------     --------       --------         -------        --------       --------
</TABLE>


a   Based on average shares outstanding during the period.

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

c   Total return does not reflect the effect of any sales charges.

d   Includes non-recurring income from the Advisor recorded as a result of an
   administrative proceeding regarding disclosure of brokerage allocation
   practices in connection with sales of DWS Funds. The non-recurring income
   resulted in an increase in net investment income of $0.002 per share and an
   increase in the ratio of net investment income of 0.01%. Excluding this
   non-recurring income, total return would have been 0.01% lower.

*   Amount is less than $.005.

42 | Financial Highlights
<PAGE>

DWS Mid Cap Growth Fund - Class C


<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER
30,                                     2008           2007            2006            2005           2004
<S>                                 <C>            <C>            <C>              <C>            <C>
SELECTED PER SHARE DATA
----------------------------------------------------------------------------------------------            -
NET ASSET VALUE, BEGINNING
OF PERIOD                            $  18.31       $  15.20         $ 14.80        $  11.85       $  11.35
--------------------------------     --------       --------         -------        --------       --------
Income (loss) from
investment operations:
  Net investment income
  (loss)a                              (  .19)        (  .26)         (  .25)d        (  .22)        (  .19)
________________________________     ________       ________         _______        ________       ________
  Net realized and unrealized
  gain (loss)                          ( 4.43)          3.37             .65            3.17            .69
--------------------------------     --------       --------         -------        --------       --------
  TOTAL FROM INVESTMENT
  OPERATIONS                           ( 4.62)          3.11             .40            2.95            .50
________________________________     ________       ________         _______        ________       ________
Less distributions from:
  Net realized gains                   ( 2.50)             -               -               -              -
________________________________     ________       ________         _______        ________       ________
Redemption fees                           .00*           .00*            .00*            .00*             -
--------------------------------     --------       --------         -------        --------       --------
NET ASSET VALUE, END OF
PERIOD                               $  11.19       $  18.31         $ 15.20        $  14.80       $  11.85
--------------------------------     --------       --------         -------        --------       --------
Total Return (%)b,c                    (28.90)         20.46         2.70d             24.89           4.41
--------------------------------     --------       --------         -------        --------       --------

RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------     --------
Net assets, end of period
($ millions)                               17             28              28              34              8
________________________________     ________       ________         _______        ________       ________
Ratio of expenses before
expense reductions (%)                   2.12           2.07            2.09            2.05           2.10
________________________________     ________       ________         _______        ________       ________
Ratio of expenses after
expense reductions (%)                   2.00           2.00            2.04            2.00           2.00
________________________________     ________       ________         _______        ________       ________
Ratio of net investment
income (loss) (%)                      ( 1.37)        ( 1.52)         ( 1.65)d        ( 1.58)        ( 1.61)
________________________________     ________       ________         _______        ________       ________
Portfolio turnover rate (%)                82             56              53              83            116
--------------------------------     --------       --------         -------        --------       --------
</TABLE>


a   Based on average shares outstanding during the period.

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

c   Total return does not reflect the effect of any sales charges.

d   Includes non-recurring income from the Advisor recorded as a result of an
   administrative proceeding regarding disclosure of brokerage allocation
   practices in connection with sales of DWS Funds. The non-recurring income
   resulted in an increase in net investment income of $0.002 per share and an
   increase in the ratio of net investment income of 0.01%. Excluding this
   non-recurring income, total return would have been 0.01% lower.

*   Amount is less than $.005.

                                                      Financial Highlights  | 43
<PAGE>

DWS Small Cap Growth Fund - Class A


<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER
30,                                     2008           2007             2006             2005           2004
<S>                                 <C>            <C>             <C>               <C>            <C>
SELECTED PER SHARE DATA
-------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD                            $  26.32        $  23.60         $ 24.96         $  21.29       $  19.74
--------------------------------     --------        --------         -------         --------       --------
Income (loss) from
investment operations:
  Net investment income
  (loss)a                              (  .11)         (  .18)         (  .23)c         (  .25)        (  .20)
________________________________     ________        ________         _______         ________       ________
  Net realized and unrealized
  gain (loss)                          ( 7.80)           4.51             .83             4.09           1.75
--------------------------------     --------        --------         -------         --------       --------
  TOTAL FROM INVESTMENT
  OPERATIONS                           ( 7.91)           4.33             .60             3.84           1.55
________________________________     ________        ________         _______         ________       ________
Less distributions from:
  Net realized gains                   (  .36)         ( 1.61)         ( 1.96)          (  .17)             -
________________________________     ________        ________         _______         ________       ________
Redemption fees                           .00*            .00*            .00*             .00*             -
--------------------------------     --------        --------         -------         --------       --------
NET ASSET VALUE, END OF
PERIOD                               $  18.05        $  26.32         $ 23.60         $  24.96       $  21.29
--------------------------------     --------        --------         -------         --------       --------
Total Return (%)b                      (30.40)          19.08         2.20c,d            17.91           7.95
--------------------------------     --------        --------         -------         --------       --------

RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
-------------------------------------------------------------------------------------------------------------------
Net assets, end of period
($ millions)                               38              59              87               80             40
________________________________     ________        ________         _______         ________       ________
Ratio of expenses before
expense reductions (%)                   1.35            1.37            1.42             1.37           1.35
________________________________     ________        ________         _______         ________       ________
Ratio of expenses after
expense reductions (%)                   1.25            1.25            1.29             1.25           1.25
________________________________     ________        ________         _______         ________       ________
Ratio of net investment
income (loss) (%)                      (  .52)         (  .73)         (  .91)c         ( 1.03)        (  .93)
________________________________     ________        ________         _______         ________       ________
Portfolio turnover rate (%)                82          64e                 74              119            116
--------------------------------     --------        --------         -------         --------       --------
</TABLE>


a   Based on average shares outstanding during the period.

b   Total return would have been lower had certain expenses not been reduced.
   Total return does not reflect the effect of any sales charges.

c   Includes non-recurring income from the Advisor recorded as a result of an
   administrative proceeding regarding disclosure of brokerage allocation
   practices in connection with sales of DWS Funds. The non-recurring income
   resulted in an increase in net investment income of $0.008 per share and an
   increase in the ratio of net investment income of 0.03%. Excluding this
   non-recurring income, total return would have been 0.03% lower.

d   The Fund realized a gain of $92,403 on the disposal of an investment not
   adhering to the Fund's investment restrictions. Excluding this gain, total
   return would have been 0.02% lower.

e   Excludes portfolio securities delivered as a result of processing
   redemption in-kind transactions.

*   Amount is less than $.005.

44 | Financial Highlights
<PAGE>

DWS Small Cap Growth Fund - Class B


<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER
30,                                     2008           2007             2006             2005           2004
<S>                                 <C>            <C>             <C>               <C>            <C>
SELECTED PER SHARE DATA
-------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD                            $  25.18        $  22.81         $ 24.36         $  20.94       $  19.56
--------------------------------     --------        --------         -------         --------       --------
Income (loss) from
investment operations:
  Net investment income
  (loss)a                              (  .26)         (  .35)         (  .40)c         (  .42)        (  .36)
________________________________     ________        ________         _______         ________       ________
  Net realized and unrealized
  gain (loss)                          ( 7.42)           4.33             .81             4.01           1.74
--------------------------------     --------        --------         -------         --------       --------
  TOTAL FROM INVESTMENT
  OPERATIONS                           ( 7.68)           3.98             .41             3.59           1.38
________________________________     ________        ________         _______         ________       ________
Less distributions from:
  Net realized gains                   (  .36)         ( 1.61)         ( 1.96)          (  .17)             -
________________________________     ________        ________         _______         ________       ________
Redemption fees                           .00*            .00*            .00*             .00*             -
--------------------------------     --------        --------         -------         --------       --------
NET ASSET VALUE, END OF
PERIOD                               $  17.14        $  25.18         $ 22.81         $  24.36       $  20.94
--------------------------------     --------        --------         -------         --------       --------
Total Return (%)b                      (30.89)          18.20         1.38c,d            17.06           7.16
--------------------------------     --------        --------         -------         --------       --------

RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
-------------------------------------------------------------------------------------------------------------------
Net assets, end of period
($ millions)                                2               5               6                8              3
________________________________     ________        ________         _______         ________       ________
Ratio of expenses before
expense reductions (%)                   2.32            2.26            2.24             2.11           2.10
________________________________     ________        ________         _______         ________       ________
Ratio of expenses after
expense reductions (%)                   2.00            2.00            2.04             2.00           2.00
________________________________     ________        ________         _______         ________       ________
Ratio of net investment
income (loss) (%)                      ( 1.27)         ( 1.48)         ( 1.66)c         ( 1.78)        ( 1.68)
________________________________     ________        ________         _______         ________       ________
Portfolio turnover rate (%)                82          64e                 74              119            116
--------------------------------     --------        --------         -------         --------       --------
</TABLE>


a   Based on average shares outstanding during the period.

b   Total return would have been lower had certain expenses not been reduced.
   Total return does not reflect the effect of any sales charges.

c   Includes non-recurring income from the Advisor recorded as a result of an
   administrative proceeding regarding disclosure of brokerage allocation
   practices in connection with sales of DWS Funds. The non-recurring income
   resulted in an increase in net investment income of $0.008 per share and an
   increase in the ratio of net investment income of 0.03%. Excluding this
   non-recurring income, total return would have been 0.04% lower.

d   The Fund realized a gain of $92,403 on the disposal of an investment not
   adhering to the Fund's investment restrictions. Excluding this gain, total
   return would have been 0.02% lower.

e   Excludes portfolio securities delivered as a result of processing
   redemption in-kind transactions.

*   Amount is less than $.005.

                                                      Financial Highlights  | 45
<PAGE>

DWS Small Cap Growth Fund - Class C


<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER
30,                                     2008           2007             2006             2005           2004
<S>                                 <C>            <C>             <C>               <C>            <C>
SELECTED PER SHARE DATA
-------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD                            $  25.19        $  22.81         $ 24.36         $  20.94       $  19.56
--------------------------------     --------        --------         -------         --------       --------
Income (loss) from
investment operations:
  Net investment income
  (loss)a                              (  .26)         (  .35)         (  .40)c         (  .42)        (  .36)
________________________________     ________        ________         _______         ________       ________
  Net realized and unrealized
  gain (loss)                          ( 7.43)           4.34             .81             4.01           1.74
--------------------------------     --------        --------         -------         --------       --------
  TOTAL FROM INVESTMENT
  OPERATIONS                           ( 7.69)           3.99             .41             3.59           1.38
________________________________     ________        ________         _______         ________       ________
Less distributions from:
  Net realized gains                   (  .36)         ( 1.61)         ( 1.96)          (  .17)             -
________________________________     ________        ________         _______         ________       ________
Redemption fees                           .00*            .00*            .00*             .00*             -
--------------------------------     --------        --------         -------         --------       --------
NET ASSET VALUE, END OF
PERIOD                               $  17.14        $  25.19         $ 22.81         $  24.36       $  20.94
--------------------------------     --------        --------         -------         --------       --------
Total Return (%)b                      (30.92)          18.25         1.38c,d            17.06           7.16
--------------------------------     --------        --------         -------         --------       --------

RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
-------------------------------------------------------------------------------------------------------------------
Net assets, end of period
($ millions)                                5               9               9               10              5
________________________________     ________        ________         _______         ________       ________
Ratio of expenses before
expense reductions (%)                   2.19            2.16            2.11             2.10           2.10
________________________________     ________        ________         _______         ________       ________
Ratio of expenses after
expense reductions (%)                   2.00            2.00            2.04             2.00           2.00
________________________________     ________        ________         _______         ________       ________
Ratio of net investment
income (loss) (%)                      ( 1.27)         ( 1.48)         ( 1.66)c         ( 1.78)        ( 1.68)
________________________________     ________        ________         _______         ________       ________
Portfolio turnover rate (%)                82          64e                 74              119            116
--------------------------------     --------        --------         -------         --------       --------
</TABLE>


a   Based on average shares outstanding during the period.

b   Total return would have been lower had certain expenses not been reduced.
   Total return does not reflect the effect of any sales charges.

c   Includes non-recurring income from the Advisor recorded as a result of an
   administrative proceeding regarding disclosure of brokerage allocation
   practices in connection with sales of DWS Funds. The non-recurring income
   resulted in an increase in net investment income of $0.008 per share and an
   increase in the ratio of net investment income of 0.03%. Excluding this
   non-recurring income, total return would have been 0.03% lower.

d   The Fund realized a gain of $92,403 on the disposal of an investment not
   adhering to the Fund's investment restrictions. Excluding this gain, total
   return would have been 0.02% lower.

e   Excludes portfolio securities delivered as a result of processing
   redemption in-kind transactions.

*   Amount is less than $.005.

46 | Financial Highlights
<PAGE>

HOW TO INVEST IN THE FUNDS
This prospectus offers the share classes noted on the front cover. Each class
has its own fees and expenses, offering you a choice of cost structures. Each
fund may offer other classes of shares in a separate prospectus. These shares
are intended for investors seeking the advice and assistance of a financial
advisor, who will typically receive compensation for those services.

THE FOLLOWING PAGES TELL YOU HOW TO INVEST IN A FUND AND WHAT TO EXPECT AS A
SHAREHOLDER. The following pages also tell you about many of the services,
choices and benefits of being a shareholder. You'll also find information on
how to check the status of your account using the method that's most convenient
for you.

If you're investing directly with DWS Investments, all of this information
applies to you. If you're investing through a "third party provider" - for
example, a workplace retirement plan, financial supermarket or financial
advisor - your provider may have its own policies or instructions and you
should follow those.

You can find out more about the topics covered here by speaking with your
FINANCIAL ADVISOR OR A REPRESENTATIVE OF YOUR WORKPLACE RETIREMENT PLAN OR
OTHER INVESTMENT PROVIDER.

Before you invest, take a moment to look over the characteristics of each share
class, so that you can be sure to choose the class that's right for you. YOU
MAY WANT TO ASK YOUR FINANCIAL ADVISOR TO HELP YOU WITH THIS DECISION.
<PAGE>

CHOOSING A SHARE CLASS

We describe each share class in detail on the following pages. But first, you
may want to look at the table below, which gives you a brief description and
comparison of the main features of each class. You should consult with your
financial advisor to determine which class of shares is appropriate for you.


<TABLE>
<CAPTION>
 CLASSES AND FEATURES                         POINTS TO HELP YOU COMPARE
<S>                                          <C>
 CLASS A
                                              -  Some investors may be able to reduce
 -  Sales charge of up to 5.75% charged
                                             or eliminate their sales charge; see
  when you buy shares
                                             "Class A shares"
 -  In most cases, no charge when you
                                             -  Total annual expenses are lower than
  sell shares
                                             those for Class B or Class C
 -  Up to 0.25% annual shareholder           -  Distributions are generally higher than
  servicing fee                              Class B or Class C
 CLASS B
 -  No sales charge when you buy shares       -  The deferred sales charge rate falls to
                                             zero after six years
 -  Deferred sales charge declining from
  4.00%, charged when you sell shares        -  Shares automatically convert to
  you bought within the last six years       Class A after six years, which means
                                             lower annual expenses going forward
 -  0.75% annual distribution fee and up
  to 0.25% annual shareholder servicing      -  Distributions are generally lower than
  fee                                        Class A
 CLASS C
 -  No sales charge when you buy shares       -  The deferred sales charge rate for one
                                             year is lower for Class C shares than
 -  Deferred sales charge of 1.00%,
                                             Class B shares, but your shares never
  charged when you sell shares you
                                             automatically convert to Class A, so
  bought within the last year
                                             annual expenses remain higher than
 -  0.75% annual distribution fee and up
                                             Class A
  to 0.25% annual shareholder servicing
                                             -  Distributions are generally lower than
  fee
                                             Class A
</TABLE>


Your financial advisor will typically be paid a fee when you buy shares and may
receive different levels of compensation depending upon which class of shares
you buy. Each fund may pay financial advisors or other intermediaries
compensation for the services they provide to their clients. This compensation
may vary depending on the share class and fund you buy. Your financial advisor
may also receive compensation from the Advisor and/or its affiliates. Please
see "Financial intermediary support payments" for more information.



48 | Choosing a Share Class
<PAGE>

           Class A shares

           Class A shares may make sense for long-term investors, especially
           those who are eligible for a reduced or eliminated sales charge.

           Class A shares have a 12b-1 plan, under which a shareholder
           servicing fee of up to 0.25% is deducted from class assets each
           year. Because the shareholder servicing fee is continuous in nature,
           it may, over time, increase the cost of your investment and may cost
           you more than paying other types of sales charges.

           Class A shares have an up-front sales charge that varies with the
           amount you invest:


<TABLE>
<CAPTION>
                              FRONT-END SALES          FRONT-END SALES
                                CHARGE AS %          CHARGE AS % OF YOUR
YOUR INVESTMENT            OF OFFERING PRICE 1,2        NET INVESTMENT 2
<S>                             <C>                       <C>
  Up to $50,000                 5.75%                     6.10%
$    50,000-$99,999             4.50                      4.71
$  100,000-$249,999             3.50                      3.63
$  250,000-$499,999             2.60                      2.67
$  500,000-$999,999             2.00                      2.04
  $1 million or more            see below                see below
</TABLE>


           1   The offering price includes the sales charge.

           2   Because of rounding in the calculation of the offering price,
               the actual front-end sales charge paid by an investor may be
               higher or lower than the percentages noted.


           YOU MAY BE ABLE TO LOWER YOUR CLASS A SALES CHARGE IF:

           -  you indicate your intent in writing to invest at least $50,000 in
              Class A shares (including Class A shares in other retail DWS
              funds) over the next 24 months ("Letter of Intent")

           -  the amount of Class A shares you already own (including Class A
              shares in other retail DWS funds) plus the amount you're
              investing now in Class A shares is at least $50,000 ("Cumulative
              Discount")

           -  you are investing a total of $50,000 or more in Class A shares of
              several retail DWS funds on the same day ("Combined Purchases")

                                                    Choosing a Share Class  | 49
<PAGE>

           The point of these three features is to let you count investments
           made at other times or in certain other funds for purposes of
           calculating your present sales charge. Any time you can use the
           privileges to "move" your investment into a lower sales charge
           category, it's generally beneficial for you to do so.

           For purposes of determining whether you are eligible for a reduced
           Class A sales charge, you and your immediate family (your spouse or
           life partner and your children or stepchildren age 21 or younger)
           may aggregate your investments in the DWS family of funds. This
           includes, for example, investments held in a retirement account, an
           employee benefit plan or at a financial advisor other than the one
           handling your current purchase. These combined investments will be
           valued at their current offering price to determine whether your
           current investment qualifies for a reduced sales charge.

           To receive a reduction in your Class A initial sales charge, you
           must let your financial advisor or Shareholder Services know at the
           time you purchase shares that you qualify for such a reduction. You
           may be asked by your financial advisor or Shareholder Services to
           provide account statements or other information regarding related
           accounts of you or your immediate family in order to verify your
           eligibility for a reduced sales charge.

           For more information about sales charge discounts, please visit
           www.dws-investments.com (click on the link entitled "Fund Sales
           Charge and Breakpoint Schedule"), consult with your financial
           advisor or refer to the section entitled "Purchase or Redemption of
           Shares" in each fund's Statement of Additional Information.

           IN CERTAIN CIRCUMSTANCES, YOU MAY BE ABLE TO BUY CLASS A SHARES
           WITHOUT A SALES CHARGE. For example, the sales charge will be waived
           if you are reinvesting dividends or distributions or if you are
           exchanging an investment in Class A shares of another fund in the
           DWS family of funds for an investment in Class A shares of a fund.
           In addition, a sales charge waiver may apply to transactions by
           certain retirement plans and certain other entities or persons
           (e.g., affiliated persons of Deutsche Asset Management or the DWS
           funds) and with respect to certain types of investments (e.g., an
           investment advisory or agency commission program under which you pay
           a fee to an investment advisor or other firm for portfolio
           management or brokerage services).


50 | Choosing a Share Class
<PAGE>

           Details regarding the types of investment programs and categories of
           investors eligible for a sales charge waiver are provided in each
           fund's Statement of Additional Information.

           There are a number of additional provisions that apply in order to
           be eligible for a sales charge waiver. Each fund may waive the sales
           charge for investors in other situations as well. Your financial
           advisor or Shareholder Services can answer your questions and help
           you determine if you are eligible.

           IF YOU'RE INVESTING $1 MILLION OR MORE, either as a lump sum or
           through one of the sales charge reduction features described above,
           you may be eligible to buy Class A shares without a sales charge
           ("Large Order NAV Purchase Privilege"). However, you may be charged
           a contingent deferred sales charge (CDSC) of 1.00% on any shares you
           sell within 12 months of owning them and a similar charge of 0.50%
           on shares you sell within the following six months. This CDSC is
           waived under certain circumstances (see "Policies You Should Know
           About"). Your financial advisor or Shareholder Services can answer
           your questions and help you determine if you're eligible.


           Class B shares

           Class B shares may make sense for long-term investors who prefer to
           see all of their investment go to work right away and can accept
           somewhat higher annual expenses. Please note, however, that since
           not all DWS funds offer Class B shares, exchange options may be
           limited.

           With Class B shares, you pay no up-front sales charge to a fund.
           Class B shares have a 12b-1 plan, under which a distribution fee of
           0.75% and a shareholder servicing fee of up to 0.25% are deducted
           from class assets each year. This means the annual expenses for
           Class B shares are somewhat higher (and their performance
           correspondingly lower) compared to Class A shares. However, unlike
           Class A shares, your entire investment goes to work immediately.
           After six years, Class B shares automatically convert on a tax-free
           basis to Class A shares, which has the net effect of lowering the
           annual expenses from the seventh year on.


                                                    Choosing a Share Class  | 51
<PAGE>

           Class B shares have a CDSC. This charge declines over the years you
           own shares and disappears completely after six years of ownership.
           But for any shares you sell within those six years, you may be
           charged as follows:


<TABLE>
<CAPTION>
    YEAR AFTER YOU BOUGHT SHARES               CDSC ON SHARES YOU SELL
<S>                                    <C>
  First year                           4.00%
  Second or third year                 3.00
  Fourth or fifth year                 2.00
  Sixth year                           1.00
  Seventh year and later               None (automatic conversion to Class A)
</TABLE>


           This CDSC is waived under certain circumstances (see "Policies You
           Should Know About"). Your financial advisor or Shareholder Services
           can answer your questions and help you determine if you're eligible.


           While Class B shares don't have any front-end sales charge, their
           higher annual expenses mean that over the years you could end up
           paying more than the equivalent of the maximum allowable front-end
           sales charge.

           If you are thinking of making a large purchase in Class B shares or
           if you already own a large amount of Class A shares of a fund or
           other DWS funds, it may be more cost efficient to purchase Class A
           shares instead. Orders to purchase Class B shares of $100,000 or
           more will be declined with the exception of orders received from
           financial representatives acting for clients whose shares are held
           in an omnibus account and certain employer-sponsored employee
           benefit plans.


           Class C shares

           Class C shares may appeal to investors who plan to sell some or all
           of their shares within six years of buying them or who aren't
           certain of their investment time horizon.

           With Class C shares, you pay no up-front sales charge to a fund.
           Class C shares have a 12b-1 plan, under which a distribution fee of
           0.75% and a shareholder servicing fee of up to 0.25% are deducted
           from class assets each year. Because of these fees, the annual
           expenses for Class C shares are similar to those of Class B shares,
           but higher than those for Class A shares (and the performance of
           Class C shares is correspondingly lower than that of Class A
           shares).


52 | Choosing a Share Class
<PAGE>

           Unlike Class B shares, Class C shares do NOT automatically convert
           to Class A shares after six years, so they continue to have higher
           annual expenses.

           Class C shares have a CDSC, but only on shares you sell within one
           year of buying them:


<TABLE>
<CAPTION>
   YEAR AFTER YOU BOUGHT SHARES        CDSC ON SHARES YOU SELL
<S>                                   <C>
  First year                          1.00%
  Second year and later                         None
</TABLE>


           This CDSC is waived under certain circumstances (see "Policies You
           Should Know About"). Your financial advisor or Shareholder Services
           can answer your questions and help you determine if you're eligible.


           While Class C shares do not have an up-front sales charge, their
           higher annual expenses mean that, over the years, you could end up
           paying more than the equivalent of the maximum allowable up-front
           sales charge.

           Orders to purchase Class C shares of $500,000 or more will be
           declined with the exception of orders received from financial
           representatives acting for clients whose shares are held in an
           omnibus account and certain employer-sponsored employee benefit
           plans.


                                                    Choosing a Share Class  | 53
<PAGE>

How to BUY Class A, B and C Shares



<TABLE>
<CAPTION>
 FIRST INVESTMENT                                ADDITIONAL INVESTMENTS
<S>                                             <C>
 $1,000 or more for most accounts                $50 or more for most accounts and IRAs
 $500 or more for IRAs                          $50 or more for an account with an
 $500 or more for an account with an            Automatic Investment Plan
 Automatic Investment Plan
 THROUGH A FINANCIAL ADVISOR
 -  To obtain an application, contact your      -  Contact your advisor using the
  advisor                                       method that's most convenient for you
 BY MAIL OR EXPRESS MAIL (SEE BELOW)
 -  Fill out and sign an application            -  Send a check payable to "DWS
                                                Investments" and an investment slip
 -  Send it to us at the appropriate
  address, along with an investment             -  If you don't have an investment slip,
  check made payable to "DWS                    include a letter with your name,
  Investments"                                  account number, the full name of the
                                                fund and the share class and your
                                                investment instructions
 BY WIRE
 -  Call (800) 621-1048 for instructions        -  Call (800) 621-1048 for instructions
 BY PHONE
 Not available                                  -  Call (800) 621-1048 for instructions
 WITH AN AUTOMATIC INVESTMENT PLAN
 -  Fill in the information on your             -  To set up regular investments from a
  application including a check for the         bank checking account call (800) 621-
  initial investment and a voided check         1048 ($50 minimum)
 USING QuickBuy
 Not available                                  -  Call (800) 621-1048 to make sure
                                                QuickBuy is set up on your account; if
                                                it is, you can request a transfer from
                                                your bank account of any amount
                                                between $50 and $250,000
 ON THE INTERNET
 Not available                                  -  Call (800) 621-1048 to ensure you have
                                                electronic services
                                                -  Register at www.dws-
                                                investments.com or log in if already
                                                registered
                                                -  Follow the instructions for buying
                                                shares with money from your bank
                                                account
</TABLE>


--------------------------------------------------------------------------------
REGULAR MAIL:

First Investment: DWS Investments, PO Box 219356, Kansas City, MO 64121-9356
Additional Investments: DWS Investments, PO Box 219154, Kansas City, MO
64121-9154

EXPRESS, REGISTERED OR CERTIFIED MAIL:
DWS Investments, 210 West 10th Street, Kansas City, MO 64105-1614

54 | How to Buy Class A, B and C Shares
<PAGE>

How to EXCHANGE or SELL Class A, B and C Shares

<TABLE>
<CAPTION>
 EXCHANGING INTO ANOTHER FUND                    SELLING SHARES
<S>                                             <C>
                                                 Some transactions, including most for
 -  Exchanges into existing accounts:
                                                over $100,000, can only be ordered in
  $50 minimum per fund
                                                writing with a signature guarantee;
 -  Exchanges into new accounts:
                                                please see "Signature Guarantee"
  $1,000 minimum per fund for most
  accounts
  $500 minimum for IRAs
 THROUGH A FINANCIAL ADVISOR
 -  Contact your advisor using the              -  Contact your advisor using the
  method that's most convenient for you         method that's most convenient for you
 BY PHONE                                        BY PHONE OR WIRE
 -  Call (800) 621-1048 for instructions        -  Call (800) 621-1048 for instructions
 BY MAIL OR EXPRESS MAIL
 (see previous page for address)
 Write a letter that includes:                  Write a letter that includes:
 -  the fund, class and account number          -  the fund, class and account number
  you're exchanging out of                      from which you want to sell shares
 -  the dollar amount or number of shares       -  the dollar amount or number of shares
  you want to exchange                          you want to sell
 -  the name and class of the fund you          -  your name(s), signature(s) and
  want to exchange into                         address, as they appear on your
                                                account
 -  your name(s), signature(s) and
  address, as they appear on your               -  a daytime telephone number
  account
 -  a daytime telephone number
 WITH AN AUTOMATIC EXCHANGE PLAN                 WITH AN AUTOMATIC WITHDRAWAL PLAN
 -  To set up regular exchanges from a          -  Call (800) 621-1048 (minimum $50)
  fund account, call (800) 621-1048
 USING QuickSell
 Not available                                  -  Call (800) 621-1048 to make sure
                                                QuickSell is set up on your account; if
                                                it is, you can request a transfer to your
                                                bank account of any amount between
                                                $50 and $250,000
 ON THE INTERNET
 -  Register at www.dws-                        -  Register at www.dws-
  investments.com or log in if already          investments.com or log in if already
  registered                                    registered
 -  Follow the instructions for making on-      -  Follow the instructions for making on-
  line exchanges                                line redemptions
</TABLE>


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

<TABLE>
<S>               <C>
TO REACH US:      WEB SITE: www.dws-investments.com
                  TELEPHONE REPRESENTATIVE: (800) 621-1048, M-F, 9 a.m. - 6 p.m. ET
                  TDD LINE: (800) 972-3006, M-F, 9 a.m. - 6 p.m. ET
</TABLE>



                           How to Exchange or Sell Class A, B and C Shares  | 55
<PAGE>

           Financial intermediary support payments

           The Advisor, DWS Investments Distributors, Inc. (the "Distributor")
           and/or their affiliates may pay additional compensation, out of
           their own assets and not as an additional charge to each fund, to
           selected affiliated and unaffiliated brokers, dealers, participating
           insurance companies or other financial intermediaries ("financial
           advisors") in connection with the sale and/or distribution of fund
           shares or the retention and/or servicing of fund investors and fund
           shares ("revenue sharing"). Such revenue sharing payments are in
           addition to any distribution or service fees payable under any Rule
           12b-1 or service plan of each fund, any record keeping/sub-transfer
           agency/networking fees payable by each fund (generally through the
           Distributor or an affiliate) and/or the Distributor to certain
           financial advisors for performing such services and any sales
           charge, commissions, non-cash compensation arrangements expressly
           permitted under applicable rules of the Financial Industry
           Regulatory Authority or other concessions described in the fee table
           or elsewhere in this prospectus or the Statement of Additional
           Information as payable to all financial advisors. For example, the
           Advisor, the Distributor and/or their affiliates may compensate
           financial advisors for providing a fund with "shelf space" or access
           to a third party platform or fund offering list or other marketing
           programs, including, without limitation, inclusion of the fund on
           preferred or recommended sales lists, mutual fund "supermarket"
           platforms and other formal sales programs; granting the Distributor
           access to the financial advisor's sales force; granting the
           Distributor access to the financial advisor's conferences and
           meetings; assistance in training and educating the financial
           advisor's personnel; and obtaining other forms of marketing support.


           The level of revenue sharing payments made to financial advisors may
           be a fixed fee or based upon one or more of the following factors:
           gross sales, current assets and/or number of accounts of each fund
           attributable to the financial advisor, the particular fund or fund
           type or other measures as agreed to by the Advisor, the Distributor
           and/or their affiliates and the financial advisors or any
           combination thereof. The amount of these revenue sharing payments is
           determined at the discretion of the Advisor, the Distributor and/or
           their affiliates from time to time, may be substantial, and may be
           different for different financial advisors based on, for example,
           the nature of the services provided by the financial advisor.


56 | How to Exchange or Sell Class A, B and C Shares
<PAGE>

           The Advisor, the Distributor and/or their affiliates currently make
           revenue sharing payments from their own assets in connection with
           the sale and/or distribution of DWS fund shares or the retention
           and/or servicing of investors and DWS fund shares to financial
           advisors in amounts that generally range from .01% up to .50% of
           assets of each fund serviced and maintained by the financial
           advisor, .05% to .25% of sales of each fund attributable to the
           financial advisor, a flat fee of $13,350 up to $500,000, or any
           combination thereof. These amounts are subject to change at the
           discretion of the Advisor, the Distributor and/or their affiliates.
           Receipt of, or the prospect of receiving, this additional
           compensation may influence your financial advisor's recommendation
           of each fund or of any particular share class of each fund. You
           should review your financial advisor's compensation disclosure
           and/or talk to your financial advisor to obtain more information on
           how this compensation may have influenced your financial advisor's
           recommendation of each fund. Additional information regarding these
           revenue sharing payments is included in each fund's Statement of
           Additional Information, which is available to you on request at no
           charge (see the back cover of this prospectus for more information
           on how to request a copy of the Statement of Additional
           Information).

           The Advisor, the Distributor and/or their affiliates may also make
           such revenue sharing payments to financial advisors under the terms
           discussed above in connection with the distribution of both DWS
           funds and non-DWS funds by financial advisors to retirement plans
           that obtain record keeping services from ADP, Inc. on the DWS
           Investments branded retirement plan platform (the "Platform") with
           the level of revenue sharing payments being based upon sales of both
           the DWS funds and the non-DWS funds by the financial advisor on the
           Platform or current assets of both the DWS funds and the non-DWS
           funds serviced and maintained by the financial advisor on the
           Platform.

           It is likely that broker-dealers that execute portfolio transactions
           for each fund will include firms that also sell shares of the DWS
           funds to their customers. However, the Advisor will not consider
           sales of DWS fund shares as a factor in the selection of
           broker-dealers to execute portfolio transactions for the DWS funds.
           Accordingly, the Advisor has implemented policies and procedures
           reasonably designed to prevent its traders from considering sales of
           DWS fund shares as a factor in the selection of


                           How to Exchange or Sell Class A, B and C Shares  | 57
<PAGE>

           broker-dealers to execute portfolio transactions for each fund. In
           addition, the Advisor, the Distributor and/or their affiliates will
           not use fund brokerage to pay for their obligation to provide
           additional compensation to financial advisors as described above.


POLICIES YOU SHOULD KNOW ABOUT

           Along with the information on the previous pages, the policies below
           may affect you as a shareholder. Some of this information, such as
           the section on distributions and taxes, applies to all investors,
           including those investing through a financial advisor.

           If you are investing through a financial advisor or through a
           retirement plan, check the materials you received from them about
           how to buy and sell shares because particular financial advisors or
           other intermediaries may adopt policies, procedures or limitations
           that are separate from those described by a fund. Please note that a
           financial advisor may charge fees separate from those charged by a
           fund and may be compensated by a fund.

           Keep in mind that the information in this prospectus applies only to
           the shares offered herein. Other share classes are described in
           separate prospectuses and have different fees, requirements and
           services.

           In order to reduce the amount of mail you receive and to help reduce
           expenses, we generally send a single copy of any shareholder report
           and prospectus to each household. If you do not want the mailing of
           these documents to be combined with those for other members of your
           household, please contact your financial advisor or call (800)
           621-1048.


           Policies about transactions

           EACH FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange
           is open. Each fund calculates its share price for each class every
           business day, as of the close of regular trading on the New York
           Stock Exchange (typically 4:00 p.m. Eastern time, but sometimes
           earlier, as in the case of scheduled half-day trading or unscheduled
           suspensions of trading). You can place an order to buy or sell
           shares at any time.


58 | Policies You Should Know About
<PAGE>

           To help the government fight the funding of terrorism and money
           laundering activities, federal law requires all financial
           institutions to obtain, verify and record information that
           identifies each person who opens an account. What this means to you:
           When you open an account, we will ask for your name, address, date
           of birth and other information that will allow us to identify you.
           Some or all of this information will be used to verify the identity
           of all persons opening an account.

           We might request additional information about you (which may include
           certain documents, such as articles of incorporation for companies)
           to help us verify your identity and, in some cases, the information
           and/or documents may be required to conduct the verification. The
           information and documents will be used solely to verify your
           identity.

           We will attempt to collect any missing required and requested
           information by contacting you or your financial advisor. If we are
           unable to obtain this information within the time frames established
           by each fund, then we may reject your application and order.

           Each fund will not invest your purchase until all required and
           requested identification information has been provided and your
           application has been submitted in "good order." After we receive all
           the information, your application is deemed to be in good order and
           we accept your purchase, you will receive the net asset value per
           share next calculated, less any applicable sales charge.

           If we are unable to verify your identity within time frames
           established by each fund, after a reasonable effort to do so, you
           will receive written notification.

           With certain limited exceptions, only US residents may invest in
           each fund.

           Because orders placed through a financial advisor must be forwarded
           to the transfer agent before they can be processed, you'll need to
           allow extra time. Your financial advisor should be able to tell you
           approximately when your order will be processed. It is the
           responsibility of your financial advisor to forward your order to
           the transfer agent in a timely manner.


                                            Policies You Should Know About  | 59
<PAGE>

           INITIAL PURCHASE MINIMUMS. The minimum initial investment for Class
           A, B and C shares is $1,000, except for investments on behalf of
           participants in certain fee-based and wrap programs offered through
           certain financial intermediaries approved by the Advisor, for which
           there is no minimum initial investment; and IRAs, for which the
           minimum initial investment is $500 per account. The minimum initial
           investment is $500 per account if you establish an automatic
           investment plan. Group retirement plans and certain other accounts
           have similar or lower minimum share balance requirements.

           SUB-MINIMUM BALANCES. Each fund may close your account and send you
           the proceeds if your balance falls below $1,000 ($250 for retirement
           accounts and $500 for accounts with an Automatic Investment Plan
           funded with $50 or more per month in subsequent investments). We
           will give you 60 days' notice (90 days for retirement accounts) so
           you can either increase your balance or close your account (these
           policies don't apply to investors with $100,000 or more in DWS fund
           shares, investors in certain fee-based and wrap programs offered
           through certain financial intermediaries approved by the Advisor, or
           group retirement plans and certain other accounts having lower
           minimum share balance requirements).

           SUBSEQUENT INVESTMENTS. The minimum subsequent investment is $50.
           However, there is no minimum investment requirement for subsequent
           investments in Class A shares on behalf of participants in certain
           fee-based and wrap programs offered through certain financial
           intermediaries approved by the Advisor.

           MARKET TIMING POLICIES AND PROCEDURES. Short-term and excessive
           trading of fund shares may present risks to long-term shareholders,
           including potential dilution in the value of fund shares,
           interference with the efficient management of a fund's portfolio
           (including losses on the sale of investments), taxable gains to
           remaining shareholders and increased brokerage and administrative
           costs. These risks may be more pronounced if a fund invests in
           certain securities, such as those that trade in foreign markets, are
           illiquid or do not otherwise have "readily available market
           quotations." Certain investors may seek to employ short-term trading
           strategies aimed at exploiting variations in portfolio valuation
           that arise from the nature of the securities held by a fund (e.g.,
           "time zone arbitrage"). Each fund discourages short-term and
           excessive trading and has adopted policies and procedures that are
           intended to detect and deter short-term and excessive trading.


60 | Policies You Should Know About
<PAGE>

           Pursuant to its policies, each fund will impose a 2% redemption fee
           on fund shares held for less than a specified holding period
           (subject to certain exceptions discussed below under "Redemption
           fees"). Each fund also reserves the right to reject or cancel a
           purchase or exchange order for any reason without prior notice. For
           example, a fund may in its discretion reject or cancel a purchase or
           an exchange order even if the transaction is not subject to the
           specific roundtrip transaction limitation described below if the
           Advisor believes that there appears to be a pattern of short-term or
           excessive trading activity by a shareholder or deems any other
           trading activity harmful or disruptive to a fund. Each fund, through
           its Advisor and transfer agent, will measure short-term and
           excessive trading by the number of roundtrip transactions within a
           shareholder's account during a rolling 12-month period. A
           "roundtrip" transaction is defined as any combination of purchase
           and redemption activity (including exchanges) of the same fund's
           shares. Each fund may take other trading activity into account if a
           fund believes such activity is of an amount or frequency that may be
           harmful to long-term shareholders or disruptive to portfolio
           management.

           Shareholders are limited to four roundtrip transactions in the same
           DWS fund (excluding money market funds) over a rolling 12-month
           period. Shareholders with four or more roundtrip transactions in the
           same DWS fund within a rolling 12-month period generally will be
           blocked from making additional purchases of, or exchanges into, that
           DWS fund. Each fund has sole discretion whether to remove a block
           from a shareholder's account. The rights of a shareholder to redeem
           shares of a DWS fund are not affected by the four roundtrip
           transaction limitation, but all redemptions remain subject to each
           fund's redemption fee policy (see "Redemption fees" described
           below).

           Each fund may make exceptions to the roundtrip transaction policy
           for certain types of transactions if, in the opinion of the Advisor,
           the transactions do not represent short-term or excessive trading or
           are not abusive or harmful to a fund, such as, but not limited to,
           systematic transactions, required minimum retirement distributions,
           transactions initiated by a fund or administrator and transactions
           by certain qualified funds-of-funds.

                                            Policies You Should Know About  | 61
<PAGE>

           In certain circumstances where shareholders hold shares of a fund
           through a financial intermediary, the fund may rely upon the
           financial intermediary's policy to deter short-term or excessive
           trading if the Advisor believes that the financial intermediary's
           policy is reasonably designed to detect and deter transactions that
           are not in the best interests of a fund. A financial intermediary's
           policy relating to short-term or excessive trading may be more or
           less restrictive than the DWS funds' policy, may permit certain
           transactions not permitted by the DWS funds' policies, or prohibit
           transactions not subject to the DWS funds' policies.

           The Advisor may also accept undertakings from a financial
           intermediary to enforce short-term or excessive trading policies on
           behalf of a fund that provide a substantially similar level of
           protection for each fund against such transactions. For example,
           certain financial intermediaries may have contractual, legal or
           operational restrictions that prevent them from blocking an account.
           In such instances, the financial intermediary may use alternate
           techniques that the Advisor considers to be a reasonable substitute
           for such a block.

           In addition, if a fund invests some portion of its assets in foreign
           securities, it has adopted certain fair valuation practices intended
           to protect the fund from "time zone arbitrage" with respect to its
           foreign securities holdings and other trading practices that seek to
           exploit variations in portfolio valuation that arise from the nature
           of the securities held by a fund. (See "How each fund calculates
           share price.")

           There is no assurance that these policies and procedures will be
           effective in limiting short-term and excessive trading in all cases.
           For example, the Advisor may not be able to effectively monitor,
           detect or limit short-term or excessive trading by underlying
           shareholders that occurs through omnibus accounts maintained by
           broker-dealers or other financial intermediaries. The Advisor
           reviews trading activity at the omnibus level to detect short-term
           or excessive trading. If the Advisor has reason to suspect that
           short-term or excessive trading is occurring at the omnibus level,
           the Advisor will contact the financial intermediary to request
           underlying shareholder level activity. Depending on the amount of
           fund shares held in such omnibus accounts (which may represent most
           of a fund's shares) short-term and/or excessive trading of fund
           shares could adversely affect long-term shareholders in a fund. If
           short-term or excessive trading is identified, the Advisor will take
           appropriate action.


62 | Policies You Should Know About
<PAGE>

           Each fund's market timing policies and procedures may be modified or
           terminated at any time.

           REDEMPTION FEES. Each fund imposes a redemption fee of 2% of the
           total redemption amount (calculated at net asset value, without
           regard to the effect of any contingent deferred sales charge; any
           contingent deferred sales charge is also assessed on the total
           redemption amount without regard to the assessment of the 2%
           redemption fee) on all fund shares redeemed or exchanged within 15
           days of buying them (either by purchase or exchange). The redemption
           fee is paid directly to each fund and is designed to encourage
           long-term investment and to offset transaction and other costs
           associated with short-term or excessive trading. For purposes of
           determining whether the redemption fee applies, shares held the
           longest time will be treated as being redeemed first and shares held
           the shortest time will be treated as being redeemed last.

           The redemption fee is applicable to fund shares purchased either
           directly or through a financial intermediary, such as a
           broker-dealer. Transactions through financial intermediaries
           typically are placed with a fund on an omnibus basis and include
           both purchase and sale transactions placed on behalf of multiple
           investors. These purchase and sale transactions are generally netted
           against one another and placed on an aggregate basis; consequently
           the identities of the individuals on whose behalf the transactions
           are placed generally are not known to a fund. For this reason, each
           fund has undertaken to notify financial intermediaries of their
           obligation to assess the redemption fee on customer accounts and to
           collect and remit the proceeds to each fund. However, due to
           operational requirements, the intermediaries' methods for tracking
           and calculating the fee may be inadequate or differ in some respects
           from each fund's. Subject to approval by the Advisor or each fund's
           Board, intermediaries who transact business on an omnibus basis may
           implement the redemption fees according to their own operational
           guidelines (which may be different than the funds' policies) and
           remit the fees to the funds.

           The redemption fee will not be charged in connection with the
           following exchange or redemption transactions: (i) transactions on
           behalf of participants in certain research wrap programs; (ii)
           transactions on behalf of a shareholder to return any excess IRA
           contributions to the shareholder; (iii) transactions on behalf of a
           shareholder to effect a required minimum distribution on an IRA;
           (iv) transactions on behalf of any mutual fund advised by


                                            Policies You Should Know About  | 63
<PAGE>

           the Advisor and its affiliates (e.g., "funds of funds") or, in the
           case of a master/feeder relationship, redemptions by the feeder fund
           from the master portfolio; (v) transactions on behalf of certain
           unaffiliated mutual funds operating as funds of funds; (vi)
           transactions following death or disability of any registered
           shareholder, beneficial owner or grantor of a living trust with
           respect to shares purchased before death or disability; (vii)
           transactions involving hardship of any registered shareholder;
           (viii) systematic transactions with pre-defined trade dates for
           purchases, exchanges or redemptions, such as automatic account
           rebalancing, or loan origination and repayments; (ix) transactions
           involving shares purchased through the reinvestment of dividends or
           other distributions; (x) transactions involving shares transferred
           from another account in the same fund or converted from another
           class of the same fund (the redemption fee period will carry over to
           the acquired shares); (xi) transactions initiated by a fund or
           administrator (e.g., redemptions for not meeting account minimums,
           to pay account fees funded by share redemptions, or in the event of
           the liquidation or merger of the fund); or (xii) transactions in
           cases when there are legal or contractual limitations or
           restrictions on the imposition of the redemption fee (as determined
           by a fund or its agents in their sole discretion). It is the policy
           of the DWS funds to permit approved fund platform providers to
           execute transactions with the funds without the imposition of a
           redemption fee if such providers have implemented alternative
           measures that are determined by the Advisor to provide controls on
           short-term and excessive trading that are comparable to the DWS
           funds' policies.

           THE AUTOMATED INFORMATION LINE IS AVAILABLE 24 HOURS A DAY BY
           CALLING (800) 621-1048. You can use our automated phone services to
           get information on DWS funds generally and on accounts held directly
           at DWS Investments. You can also use this service to make exchanges
           and to purchase and sell shares.

           QUICKBUY AND QUICKSELL let you set up a link between a DWS fund
           account and a bank account. Once this link is in place, you can move
           money between the two with a phone call. You'll need to make sure
           your bank has Automated Clearing House (ACH) services. Transactions
           take two to three days to be completed and there is a $50 minimum
           and a $250,000 maximum. To set up QuickBuy or QuickSell on a new
           account, see the account application; to add it to an existing
           account, call (800) 621-1048.




THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

The DWS Investments Web site can be a valuable resource for shareholders with
Internet access. Go to WWW.DWS-INVESTMENTS.COM to get up-to-date information,
review balances or even place orders for exchanges.


64 | Policies You Should Know About
<PAGE>

           TELEPHONE AND ELECTRONIC TRANSACTIONS. Generally, you are
           automatically entitled to telephone and electronic transaction
           privileges, but you may elect not to have them when you open your
           account or by contacting Shareholder Services at (800) 621-1048 at a
           later date.

           Since many transactions may be initiated by telephone or
           electronically, it's important to understand that as long as we take
           reasonable steps to ensure that an order to purchase or redeem
           shares is genuine, such as recording calls or requesting
           personalized security codes or other information, we are not
           responsible for any losses that may occur as a result. For
           transactions conducted over the Internet, we recommend the use of a
           secure Internet browser. In addition, you should verify the accuracy
           of your confirmation statements immediately after you receive them.

           EACH FUND DOES NOT ISSUE SHARE CERTIFICATES. However, if you
           currently have shares in certificated form, you must include the
           share certificates properly endorsed or accompanied by a duly
           executed stock power when exchanging or redeeming shares. You may
           not exchange or redeem shares in certificate form by telephone or
           via the Internet.

           WHEN YOU ASK US TO SEND OR RECEIVE A WIRE, please note that while we
           don't charge a fee to send or receive wires, it's possible that your
           bank may do so. Wire transactions are generally completed within 24
           hours. Each fund can only send wires of $1,000 or more and accept
           wires of $50 or more.

           EACH FUND ACCEPTS PAYMENT FOR SHARES ONLY IN US DOLLARS by a check
           drawn on a US bank, a bank or Federal Funds wire transfer or an
           electronic bank transfer. Each fund does not accept third party
           checks. A third party check is a check made payable to one or more
           parties and offered as payment to one or more other parties (e.g., a
           check made payable to you that you offer as payment to someone
           else). Checks should normally be payable to DWS Investments and
           drawn by you or a financial institution on your behalf with your
           name or account number included with the check.

           SIGNATURE GUARANTEE. When you want to sell more than $100,000 worth
           of shares or send proceeds to a third party or to a new address,
           you'll usually need to place your order in writing and include a
           signature guarantee. However, if you want money


                                            Policies You Should Know About  | 65
<PAGE>

           wired to a bank account that is already on file with us, you don't
           need a signature guarantee. Also, generally you don't need a
           signature guarantee for an exchange, although we may require one in
           certain other circumstances.

           A signature guarantee is simply a certification of your signature -
           a valuable safeguard against fraud. You can get a signature
           guarantee from an eligible guarantor institution, including
           commercial banks, savings and loans, trust companies, credit unions,
           member firms of a national stock exchange or any member or
           participant of an approved signature guarantor program. Note that
           you can't get a signature guarantee from a notary public and we must
           be provided the original guarantee.

           SELLING SHARES OF TRUST ACCOUNTS AND BUSINESS OR ORGANIZATION
           ACCOUNTS may require additional documentation. Please call (800)
           621-1048 or contact your financial advisor for more information.

           WHEN YOU SELL SHARES THAT HAVE A CDSC, we calculate the CDSC as a
           percentage of what you paid for the shares or what you are selling
           them for - whichever results in the lower charge to you. In
           processing orders to sell shares, the shares with the lowest CDSC
           are sold first. Exchanges from one fund into another don't affect
           CDSCs; for each investment you make, the date you first bought
           shares is the date we use to calculate a CDSC on that particular
           investment.

           There are certain cases in which you may be exempt from a CDSC.
           These include:

           -  the death or disability of an account owner (including a joint
              owner). This waiver applies only under certain conditions. Please
              contact your financial advisor or Shareholder Services to
              determine if the conditions exist

           -  withdrawals made through an automatic withdrawal plan up to a
              maximum of 12% per year of the net asset value of the account

           -  withdrawals related to certain retirement or benefit plans

           -  redemptions for certain loan advances, hardship provisions or
              returns of excess contributions from retirement plans

           -  for Class A shares purchased through the Large Order NAV Purchase
              Privilege, redemption of shares whose dealer of record at the
              time of the investment notifies the Distributor that the dealer
              waives the applicable commission



THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

If you ever have difficulty placing an order by phone or Internet, you can send
us your order in writing.


66 | Policies You Should Know About
<PAGE>

            -  for Class C shares, redemption of shares purchased through a
               dealer-sponsored asset allocation program maintained on an
               omnibus record-keeping system, provided the dealer of record has
               waived the advance of the first year distribution and service
               fees applicable to such shares and has agreed to receive such
               fees quarterly

           In each of these cases, there are a number of additional provisions
           that apply in order to be eligible for a CDSC waiver. Your financial
           advisor or Shareholder Services can answer your questions and help
           you determine if you are eligible.

           IF YOU SELL SHARES IN A DWS FUND AND THEN DECIDE TO INVEST WITH DWS
           INVESTMENTS AGAIN WITHIN SIX MONTHS, you may be able to take
           advantage of the "reinstatement feature." With this feature, you can
           put your money back into the same class of a DWS fund at its current
           net asset value and, for purposes of a sales charge, it will be
           treated as if it had never left DWS Investments.

           You'll be reimbursed (in the form of fund shares) for any CDSC you
           paid when you sold. Future CDSC calculations will be based on your
           original investment date, rather than your reinstatement date. There
           is also an option that lets investors who sold Class B shares buy
           Class A shares (if available) with no sales charge, although they
           won't be reimbursed for any CDSC they paid. You can only use the
           reinstatement feature once for any given group of shares. To take
           advantage of this feature, contact Shareholder Services or your
           financial advisor.

           MONEY FROM SHARES YOU SELL is normally sent out within one business
           day of when your order is processed (not when it is received),
           although it could be delayed for up to seven days. There are
           circumstances when it could be longer, including, but not limited
           to, when you are selling shares you bought recently by check  or ACH
           (the funds will be placed under a 10 calendar day hold to ensure
           good funds) or when unusual circumstances prompt the SEC to allow
           further delays. Certain expedited redemption processes (e.g.,
           redemption proceeds by wire) may also be delayed or unavailable when
           you are selling shares recently purchased or in the event of the
           closing of the Federal Reserve wire payment system. Each fund
           reserves the right to suspend or postpone redemptions as permitted
           pursuant to Section 22(e) of the Investment Company Act of 1940.
           Generally, those circumstances are when 1) the New York Stock
           Exchange is closed other than customary weekend or holiday


                                            Policies You Should Know About  | 67
<PAGE>

           closings; 2) trading on the New York Stock Exchange is restricted;
           3) an emergency exists which makes the disposal of securities owned
           by a fund or the fair determination of the value of a fund's net
           assets not reasonably practicable; or 4) the SEC, by order, permits
           the suspension of the right of redemption. Redemption payments by
           wire may also be delayed in the event of a non-routine closure of
           the Federal Reserve wire payment system. For additional rights
           reserved by each fund, please see "Other rights we reserve."

           You may obtain additional information about other ways to sell your
           shares by contacting your financial advisor.


           How each fund calculates share price

           To calculate net asset value, or NAV, each share class uses the
           following equation:


<TABLE>
<S>                                                     <C> <C>
            TOTAL ASSETS - TOTAL LIABILITIES
           -----------------------------------------    =    NAV
               TOTAL NUMBER OF SHARES OUTSTANDING
</TABLE>


           The price at which you buy shares is based on the NAV per share
           calculated after the order is received and accepted by the transfer
           agent, although for Class A shares it will be adjusted to allow for
           any applicable sales charge (see "Choosing a Share Class"). The
           price at which you sell shares is also based on the NAV per share
           calculated after the order is received and accepted by the transfer
           agent, although a CDSC may be taken out of the proceeds (see
           "Choosing a Share Class").

           EACH FUND CHARGES A REDEMPTION FEE EQUAL TO 2.00% of the value of
           shares redeemed or exchanged within 15 days of purchase. Please see
           "Policies about transactions - Redemption fees" for further
           information.

           WE TYPICALLY VALUE SECURITIES USING INFORMATION FURNISHED BY AN
           INDEPENDENT PRICING SERVICE OR MARKET QUOTATIONS, WHERE APPROPRIATE.
           However, we may use methods approved by the Board, such as a fair
           valuation model, which are intended to reflect fair value when
           pricing service information or market quotations are not readily
           available or when a security's value or a meaningful portion of the
           value of a fund's portfolio is believed to have been materially
           affected by a significant event, such as a natural disaster, an
           economic event like a bankruptcy filing, or a substantial
           fluctuation in domestic or foreign markets that has occurred between
           the close of the exchange or market on


68 | Policies You Should Know About
<PAGE>

           which the security is principally traded (for example, a foreign
           exchange or market) and the close of the New York Stock Exchange. In
           such a case, a fund's value for a security is likely to be different
           from the last quoted market price or pricing service information. In
           addition, due to the subjective and variable nature of fair value
           pricing, it is possible that the value determined for a particular
           asset may be materially different from the value realized upon such
           asset's sale. It is expected that the greater the percentage of fund
           assets that is invested in non-US securities, the more extensive
           will be a fund's use of fair value pricing. This is intended to
           reduce a fund's exposure to "time zone arbitrage" and other harmful
           trading practices. (See "Market timing policies and procedures.")

           TO THE EXTENT THAT A FUND INVESTS IN SECURITIES THAT ARE TRADED
           PRIMARILY IN FOREIGN MARKETS, the value of its holdings could change
           at a time when you aren't able to buy or sell fund shares. This is
           because some foreign markets are open on days or at times when a
           fund doesn't price its shares. (Note that prices for securities that
           trade on foreign exchanges can change significantly on days when the
           New York Stock Exchange is closed and you cannot buy or sell fund
           shares. Price changes in the securities a fund owns may ultimately
           affect the price of fund shares the next time the NAV is
           calculated.)


           Other rights we reserve

           You should be aware that we may do any of the following:

           -  withdraw or suspend the offering of shares at any time

           -  withhold a portion of your distributions and redemption proceeds
              if we have been notified by the IRS that you are subject to
              backup withholding or if you fail to provide us with the correct
              taxpayer ID number and certain certifications, including
              certification that you are not subject to backup withholding

           -  reject a new account application if you don't provide any
              required or requested identifying information, or for any other
              reason

                                            Policies You Should Know About  | 69
<PAGE>

            -  refuse, cancel, limit or rescind any purchase or exchange order,
               without prior notice; freeze any account (meaning you will not be
               able to purchase fund shares in your account); suspend account
               services; and/or involuntarily redeem your account if we think
               that the account is being used for fraudulent or illegal
               purposes; one or more of these actions will be taken when, at our
               sole discretion, they are deemed to be in a fund's best interests
               or when a fund is requested or compelled to do so by governmental
               authority or by applicable law

           -  close and liquidate your account if we are unable to verify your
              identity, or for other reasons; if we decide to close your
              account, your fund shares will be redeemed at the net asset value
              per share next calculated after we determine to close your
              account (less any applicable sales charges or redemption fees);
              you may recognize a gain or loss on the redemption of your fund
              shares and you may incur a tax liability

           -  pay you for shares you sell by "redeeming in kind," that is, by
              giving you securities (which typically will involve brokerage
              costs for you to liquidate) rather than cash, but which will be
              taxable to the same extent as a redemption for cash; a fund
              generally won't make a redemption in kind unless your requests
              over a 90-day period total more than $250,000 or 1% of the value
              of a fund's net assets, whichever is less

           -  change, add or withdraw various services, fees and account
              policies (for example, we may adjust a fund's investment minimums
              at any time)


70 | Policies You Should Know About
<PAGE>

UNDERSTANDING DISTRIBUTIONS AND TAXES

           Each fund intends to distribute to its shareholders virtually all of
           its net earnings. Each fund can earn money in two ways: by receiving
           interest, dividends or other income from investments it holds and by
           selling investments for more than it paid for them. (Each fund's
           earnings are separate from any gains or losses stemming from your
           own purchase and sale of shares.) Each fund may not always pay a
           dividend or other distribution for a given period.

           DIVIDENDS AND DISTRIBUTIONS ARE PAID ANNUALLY IN DECEMBER AND, IF
           NECESSARY, MAY BE PAID AT OTHER TIMES AS WELL.

           Dividends or distributions declared and payable to shareholders of
           record in the last quarter of a given calendar year are treated for
           federal income tax purposes as if they were received on December 31
           of that year, provided such dividends or distributions are paid by
           the end of the following January.

           For federal income tax purposes, income and capital gains
           distributions are generally taxable to shareholders. However,
           dividends and distributions received by retirement plans qualifying
           for tax exemption under federal income tax laws generally will not
           be taxable.

            YOU CAN CHOOSE HOW TO RECEIVE YOUR DIVIDENDS AND DISTRIBUTIONS. You
            can have them all automatically reinvested in fund shares (at NAV),
            all deposited directly to your bank account or all sent to you by
            check, have one type reinvested and the other sent to you by check
            or have them invested in a different fund. Tell us your preference
            on your application. If you don't indicate a preference, your
            dividends and distributions will all be reinvested in shares of the
            fund without a sales charge (if applicable). Distributions are
            treated the same for federal income tax purposes whether you receive
            them in cash or reinvest them in additional shares. Under the terms
            of employer-sponsored qualified plans, and retirement plans,
            reinvestment (at NAV) is the only option.

           BUYING, SELLING OR EXCHANGING FUND SHARES WILL USUALLY HAVE FEDERAL
           INCOME TAX CONSEQUENCES FOR YOU (except in employer-sponsored
           qualified plans, IRAs or other tax-advantaged accounts). Your sale
           of shares may result in a capital




THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

Because each shareholder's tax situation is unique, ask your tax professional
about the tax consequences of your investments, including any state and local
tax consequences.
                     Understanding Distributions and Taxes  | 71
<PAGE>

           gain or loss. The gain or loss will be long-term or short-term
           depending on how long you owned the shares that were sold. For
           federal income tax purposes, an exchange is treated the same as a
           sale.

           If a fund's distributions exceed its income and capital gains
           realized in any year, such excess distributions will constitute a
           return of capital for federal income tax purposes. A return of
           capital generally will not be taxable to you at the time of the
           distribution but will reduce the cost basis of your shares and
           result in a higher reported capital gain or a lower reported capital
           loss when you sell your shares. However, if a fund has available
           capital loss carryforwards to offset its capital gains realized in
           any year, and its distributions exceed its income alone, all or a
           portion of the excess distributions may not be treated, for tax
           purposes, as a return of capital, and would be taxable to
           shareholders.

           THE FEDERAL INCOME TAX STATUS of a fund's earnings you receive and
           your own fund transactions generally depends on their type:


<TABLE>
<CAPTION>
GENERALLY TAXED AT LONG-TERM                          GENERALLY TAXED AT ORDINARY
CAPITAL GAIN RATES:                                   INCOME RATES:
<S>                                                   <C>
DISTRIBUTIONS FROM A FUND
- gains from the sale of                              -  gains from the sale of
  securities held (or treated as                         securities held by a fund for
  held) by a fund for more than                          one year or less
  one year                                            -  all other taxable income
- qualified dividend income
TRANSACTIONS INVOLVING FUND
SHARES
- gains from selling fund                             -  gains from selling fund
  shares held for more than                              shares held for one year or
  one year                                               less
</TABLE>


           ANY DIRECT INVESTMENTS IN FOREIGN SECURITIES BY A FUND MAY BE
           SUBJECT TO FOREIGN WITHHOLDING TAXES. In that case, a fund's yield
           on those securities would generally be decreased. Shareholders
           generally will not be entitled to claim a credit or deduction with
           respect to foreign taxes paid by a fund. In addition, any
           investments in foreign securities or foreign currencies may increase
           or accelerate a fund's recognition of ordinary income and may affect
           the timing or amount of the fund's distributions. If you invest in a
           fund through a taxable account, your after-tax return could be
           negatively impacted.


72 | Understanding Distributions and Taxes
<PAGE>

           Investments in certain debt obligations or other securities may
           cause a fund to recognize taxable income in excess of the cash
           generated by them. Thus, a fund could be required at times to
           liquidate other investments in order to satisfy its distribution
           requirements.

           For taxable years beginning before January 1, 2011, distributions to
           individuals and other noncorporate shareholders of investment income
           designated by a fund as derived from qualified dividend income are
           eligible for taxation for federal income tax purposes at the more
           favorable long-term capital gain rates. Qualified dividend income
           generally includes dividends received by a fund from domestic and
           some foreign corporations. It does not include income from
           investments in debt securities  or, generally, from real estate
           investment trusts. In addition, a fund must meet certain holding
           period and other requirements with respect to the dividend-paying
           stocks in its portfolio and the shareholder must meet certain
           holding period and other requirements with respect to a fund's
           shares for the lower tax rates to apply.

           For taxable years beginning before January 1, 2011, the maximum
           federal income tax rate imposed on long-term capital gains
           recognized by individuals and other noncorporate shareholders has
           been temporarily reduced to 15%, in general, with lower rates
           applying to taxpayers in the 10% and 15% rate brackets. For taxable
           years beginning on or after January 1, 2011, the maximum long-term
           capital gain rate is scheduled to return to 20%.

           YOUR FUND WILL SEND YOU DETAILED FEDERAL INCOME TAX INFORMATION
           EVERY JANUARY. These statements tell you the amount and the federal
           income tax classification of any dividends or distributions you
           received. They also have certain details on your purchases and sales
           of shares.

           IF YOU INVEST RIGHT BEFORE A FUND PAYS A DIVIDEND, you'll be getting
           some of your investment back as a taxable dividend. You can avoid
           this by investing after a fund pays a dividend. In tax-advantaged
           retirement accounts you generally do not need to worry about this.

           If a fund's distributions exceed its current and accumulated
           earnings and profits, the excess will be treated for federal income
           tax purposes as a tax-free return of capital to the extent of your
           basis in your shares and thereafter as a gain from the


                                     Understanding Distributions and Taxes  | 73
<PAGE>

           sale or exchange of your shares. Because a return of capital
           distribution reduces the basis of your shares, a return of capital
           distribution may result in a higher capital gain or a lower capital
           loss when you sell your shares.

           CORPORATIONS are taxed at the same rates on ordinary income and
           capital gains but may be eligible for a dividends-received deduction
           for a portion of the income dividends they receive from a fund,
           provided certain holding period and other requirements are met.

           The above discussion summarizes certain federal income tax
           consequences for shareholders who are US persons. If you are a
           non-US person, please consult your own tax advisor with respect to
           the US tax consequences to you of an investment in a fund. For more
           information, see "Taxes" in the Statement of Additional Information.



74 | Understanding Distributions and Taxes
<PAGE>

APPENDIX
--------------------------------------------------------------------------------
           Hypothetical Expense Summary


           Using the annual fund operating expense ratios presented in the fee
           tables in the fund prospectus, the Hypothetical Expense Summary
           shows the estimated fees and expenses, in actual dollars, that would
           be charged on a hypothetical investment of $10,000 in the fund held
           for the next 10 years and the impact of such fees and expenses on
           fund returns for each year and cumulatively, assuming a 5% return
           for each year. The historical rate of return for the fund may be
           higher or lower than 5% and, for money funds, is typically less than
           5%. The tables also assume that all dividends and distributions are
           reinvested and that Class B shares convert to Class A shares after
           six years. The annual fund expense ratios shown are net of any
           contractual fee waivers or expense reimbursements, if any, for the
           period of the contractual commitment. The tables reflect the maximum
           initial sales charge, if any, but do not reflect any contingent
           deferred sales charge or redemption fees, if any, which may be
           payable upon redemption. If contingent deferred sales charges or
           redemption fees were shown, the "Hypothetical Year-End Balance After
           Fees and Expenses" amounts shown would be lower and the "Annual Fees
           and Expenses" amounts shown would be higher. Also, please note that
           if you are investing through a third party provider, that provider
           may have fees and expenses separate from those of the fund that are
           not reflected here. Mutual fund fees and expenses fluctuate over
           time and actual expenses may be higher or lower than those shown.

           The Hypothetical Expense Summary should not be used or construed as
           an offer to sell, a solicitation of an offer to buy or a
           recommendation or endorsement of any specific mutual fund. You
           should carefully review the fund's prospectus to consider the
           investment objectives, risks, expenses and charges of the fund prior
           to investing.


                                                                  Appendix  | 75
<PAGE>

DWS Micro Cap Fund - Class A



<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               5.75%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        2.21%             -3.12%       $  9,687.96        $   786.20
   2           10.25%        2.21%             -0.42%       $  9,958.25        $   217.09
   3           15.76%        2.21%              2.36%       $ 10,236.09        $   223.15
   4           21.55%        2.21%              5.22%       $ 10,521.67        $   229.37
   5           27.63%        2.21%              8.15%       $ 10,815.23        $   235.77
   6           34.01%        2.21%             11.17%       $ 11,116.97        $   242.35
   7           40.71%        2.21%             14.27%       $ 11,427.14        $   249.11
   8           47.75%        2.21%             17.46%       $ 11,745.95        $   256.06
   9           55.13%        2.21%             20.74%       $ 12,073.67        $   263.21
  10           62.89%        2.21%             24.11%       $ 12,410.52        $   270.55
  TOTAL                                                                        $ 2,972.86
</TABLE>


DWS Micro Cap Fund - Class B




<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER        ANNUAL
              FEES AND        EXPENSE        FEES AND           FEES AND         FEES AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        3.04%              1.96%       $ 10,196.00        $   306.98
   2           10.25%        3.04%              3.96%       $ 10,395.84        $   313.00
   3           15.76%        3.04%              6.00%       $ 10,599.60        $   319.13
   4           21.55%        3.04%              8.07%       $ 10,807.35        $   325.39
   5           27.63%        3.04%             10.19%       $ 11,019.18        $   331.76
   6           34.01%        3.04%             12.35%       $ 11,235.15        $   338.27
   7           40.71%        2.21%             15.49%       $ 11,548.61        $   251.76
   8           47.75%        2.21%             18.71%       $ 11,870.82        $   258.78
   9           55.13%        2.21%             22.02%       $ 12,202.02        $   266.00
  10           62.89%        2.21%             25.42%       $ 12,542.45        $   273.43
  TOTAL                                                                        $ 2,984.50
</TABLE>



76 | Appendix
<PAGE>

DWS Micro Cap Fund - Class C



<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        2.96%              2.04%       $ 10,204.00        $   299.02
   2           10.25%        2.96%              4.12%       $ 10,412.16        $   305.12
   3           15.76%        2.96%              6.25%       $ 10,624.57        $   311.34
   4           21.55%        2.96%              8.41%       $ 10,841.31        $   317.70
   5           27.63%        2.96%             10.62%       $ 11,062.47        $   324.18
   6           34.01%        2.96%             12.88%       $ 11,288.15        $   330.79
   7           40.71%        2.96%             15.18%       $ 11,518.43        $   337.54
   8           47.75%        2.96%             17.53%       $ 11,753.40        $   344.42
   9           55.13%        2.96%             19.93%       $ 11,993.17        $   351.45
  10           62.89%        2.96%             22.38%       $ 12,237.83        $   358.62
  TOTAL                                                                        $ 3,280.18
</TABLE>


DWS Mid Cap Growth Fund - Class A




<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               5.75%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER        ANNUAL
              FEES AND        EXPENSE        FEES AND           FEES AND         FEES AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        1.37%             -2.33%       $  9,767.13        $   706.47
   2           10.25%        1.37%              1.22%       $ 10,121.67        $   136.24
   3           15.76%        1.37%              4.89%       $ 10,489.09        $   141.18
   4           21.55%        1.37%              8.70%       $ 10,869.85        $   146.31
   5           27.63%        1.37%             12.64%       $ 11,264.42        $   151.62
   6           34.01%        1.37%             16.73%       $ 11,673.32        $   157.12
   7           40.71%        1.37%             20.97%       $ 12,097.06        $   162.83
   8           47.75%        1.37%             25.36%       $ 12,536.18        $   168.74
   9           55.13%        1.37%             29.91%       $ 12,991.25        $   174.86
  10           62.89%        1.37%             34.63%       $ 13,462.83        $   181.21
  TOTAL                                                                        $ 2,126.58
</TABLE>



                                                                  Appendix  | 77
<PAGE>

DWS Mid Cap Growth Fund - Class B



<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        2.19%              2.81%       $ 10,281.00        $   222.08
   2           10.25%        2.19%              5.70%       $ 10,569.90        $   228.32
   3           15.76%        2.19%              8.67%       $ 10,866.91        $   234.73
   4           21.55%        2.19%             11.72%       $ 11,172.27        $   241.33
   5           27.63%        2.19%             14.86%       $ 11,486.21        $   248.11
   6           34.01%        2.19%             18.09%       $ 11,808.97        $   255.08
   7           40.71%        1.37%             22.38%       $ 12,237.64        $   164.72
   8           47.75%        1.37%             26.82%       $ 12,681.87        $   170.70
   9           55.13%        1.37%             31.42%       $ 13,142.22        $   176.89
  10           62.89%        1.37%             36.19%       $ 13,619.28        $   183.32
  TOTAL                                                                        $ 2,125.28
</TABLE>


DWS Mid Cap Growth Fund - Class C




<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER        ANNUAL
              FEES AND        EXPENSE        FEES AND           FEES AND         FEES AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        2.12%              2.88%       $ 10,288.00        $   215.05
   2           10.25%        2.12%              5.84%       $ 10,584.29        $   221.25
   3           15.76%        2.12%              8.89%       $ 10,889.12        $   227.62
   4           21.55%        2.12%             12.03%       $ 11,202.73        $   234.17
   5           27.63%        2.12%             15.25%       $ 11,525.37        $   240.92
   6           34.01%        2.12%             18.57%       $ 11,857.30        $   247.86
   7           40.71%        2.12%             21.99%       $ 12,198.79        $   254.99
   8           47.75%        2.12%             25.50%       $ 12,550.11        $   262.34
   9           55.13%        2.12%             29.12%       $ 12,911.56        $   269.89
  10           62.89%        2.12%             32.83%       $ 13,283.41        $   277.67
  TOTAL                                                                        $ 2,451.76
</TABLE>



78 | Appendix
<PAGE>

DWS Small Cap Growth Fund - Class A



<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               5.75%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER        ANNUAL
              FEES AND        EXPENSE        FEES AND           FEES AND         FEES AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        1.25%             -2.22%       $  9,778.44        $   695.02
   2           10.25%        1.35%              1.35%       $ 10,135.35        $   134.42
   3           15.76%        1.35%              5.05%       $ 10,505.29        $   139.32
   4           21.55%        1.35%              8.89%       $ 10,888.73        $   144.41
   5           27.63%        1.35%             12.86%       $ 11,286.17        $   149.68
   6           34.01%        1.35%             16.98%       $ 11,698.12        $   155.14
   7           40.71%        1.35%             21.25%       $ 12,125.10        $   160.81
   8           47.75%        1.35%             25.68%       $ 12,567.67        $   166.68
   9           55.13%        1.35%             30.26%       $ 13,026.39        $   172.76
  10           62.89%        1.35%             35.02%       $ 13,501.85        $   179.07
  TOTAL                                                                        $ 2,097.31
</TABLE>


DWS Small Cap Growth Fund - Class B




<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER        ANNUAL
              FEES AND        EXPENSE        FEES AND           FEES AND         FEES AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        2.00%              3.00%       $ 10,300.00        $   203.00
   2           10.25%        2.32%              5.76%       $ 10,576.04        $   242.16
   3           15.76%        2.32%              8.59%       $ 10,859.48        $   248.65
   4           21.55%        2.32%             11.51%       $ 11,150.51        $   255.32
   5           27.63%        2.32%             14.49%       $ 11,449.35        $   262.16
   6           34.01%        2.32%             17.56%       $ 12,756.19        $   269.18
   7           40.71%        1.35%             21.85%       $ 12,185.29        $   161.60
   8           47.75%        1.35%             26.30%       $ 12,630.05        $   167.50
   9           55.13%        1.35%             30.91%       $ 13,091.05        $   173.62
  10           62.89%        1.35%             35.69%       $ 13,568.87        $   179.95
  TOTAL                                                                        $ 2,163.14
</TABLE>



                                                                  Appendix  | 79
<PAGE>

DWS Small Cap Growth Fund - Class C



<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER        ANNUAL
              FEES AND        EXPENSE        FEES AND           FEES AND         FEES AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        2.00%              3.00%       $ 10,300.00        $   203.00
   2           10.25%        2.19%              5.89%       $ 10,589.43        $   228.74
   3           15.76%        2.19%              8.87%       $ 10,886.99        $   235.17
   4           21.55%        2.19%             11.93%       $ 11,192.92        $   241.78
   5           27.63%        2.19%             15.07%       $ 11,507.44        $   248.57
   6           34.01%        2.19%             18.31%       $ 11,830.80        $   255.55
   7           40.71%        2.19%             21.63%       $ 12,163.24        $   262.73
   8           47.75%        2.19%             25.05%       $ 12,505.03        $   270.12
   9           55.13%        2.19%             28.56%       $ 12,856.42        $   277.71
  10           62.89%        2.19%             32.18%       $ 13,217.69        $   285.51
  TOTAL                                                                        $ 2,508.88
</TABLE>



80 | Appendix
<PAGE>

TO GET MORE INFORMATION

SHAREHOLDER REPORTS - These include commentary from a fund's management team
about recent market conditions and the effects of a fund's strategies on its
performance. They also have detailed performance figures, a list of everything
a fund owns, and its financial statements. Shareholders get these reports
automatically.

STATEMENT OF ADDITIONAL INFORMATION (SAI) - This tells you more about a fund's
features and policies, including additional risk information. The SAI is
incorporated by reference into this document (meaning that it's legally part of
this prospectus).

For a free copy of any of these documents or to request other information about
a fund, call (800) 621-1048, or contact DWS Investments at the address listed
below. Each fund's SAI and shareholder reports are also available through the
DWS Investments Web site at www.dws-investments.com. These documents and other
information about each fund are available from the EDGAR Database on the SEC's
Internet site at www.sec.gov. If you like, you may obtain copies of this
information, after paying a copying fee, by e-mailing a request to
publicinfo@sec.gov or by writing the SEC at the address listed below. You can
also review and copy these documents and other information about each fund,
including each fund's SAI, at the SEC's Public Reference Room in Washington,
D.C. Information on the operation of the SEC's Public Reference Room may be
obtained by calling (800) SEC-0330.


<TABLE>
<CAPTION>
DWS INVESTMENTS      SEC                     DISTRIBUTOR
-----------------    --------------------    ------------------------------
<S>                  <C>                     <C>
PO Box 219151        100 F Street, N.E.      DWS Investments Distributors,
Kansas City, MO      Washington, D.C.        Inc.
64121-9151           20549-0102              222 South Riverside Plaza
WWW.DWS-             WWW.SEC.GOV             Chicago, IL 60606-5808
INVESTMENTS.COM      (800) SEC-0330          (800) 621-1148
(800) 621-1048
</TABLE>



<TABLE>
<S>                    <C>                            <C>
SEC FILE NUMBER:
DWS Advisor Funds               DWS Micro Cap Fund    811-04760
DWS Advisor Funds          DWS Mid Cap Growth Fund    811-04760
DWS Advisor Funds        DWS Small Cap Growth Fund    811-04760
</TABLE>





(02/01/09) DSAGF2-1              [RECYCLE GRAPHIC APPEARS HERE]
                                                                       [Logo]DWS
                                                                      INVESTMENT
                                                             Deutsche Bank Group




<PAGE>



                                FEBRUARY 1, 2009







                                   PROSPECTUS
                              ------------------
                              INSTITUTIONAL CLASS

                               DWS MICRO CAP FUND


                            DWS MID CAP GROWTH FUND


                           DWS SMALL CAP GROWTH FUND


As with all mutual funds, the Securities and Exchange Commission (SEC) does not
approve or disapprove these shares or determine whether the information in this
prospectus is truthful or complete. It is a criminal offense for anyone to
inform you otherwise.




                                                 RESHAPING INVESTING. [DWS Logo]
                                                             Deutsche Bank Group

<PAGE>

CONTENTS




<TABLE>
<S>      <C>
HOW EACH FUND WORKS
  4      DWS Micro Cap Fund
 13      DWS Mid Cap Growth Fund
 21      DWS Small Cap Growth Fund
 29      Other Policies and Secondary
         Risks
 31      Who Manages and Oversees
         the Funds
 34      Financial Highlights


</TABLE>
<TABLE>
<S>      <C>
HOW TO INVEST IN THE FUNDS
 39      Buying and Selling
         Institutional Class Shares
 45      Policies You Should Know
         About
 56      Understanding Distributions
         and Taxes
 60      Appendix
</TABLE>

<PAGE>

HOW EACH FUND WORKS

On the next few pages, you'll find information about each fund's investment
objective, the main strategies each uses to pursue that objective and the main
risks that could affect performance.

Whether you are considering investing in a fund or are already a shareholder,
you'll want to LOOK THIS INFORMATION OVER CAREFULLY. You may want to keep it on
hand for reference as well.

Remember that mutual funds are investments, not bank deposits. They're not
insured or guaranteed by the FDIC or any other government agency. Their share
prices will go up and down, and you could lose money by investing in them.

You can find DWS prospectuses on the Internet at WWW.DWS-INVESTMENTS.COM (the
Web site does not form a part of this prospectus).
<PAGE>


<TABLE>
<S>                       <C>
                            Institutional Class
  ticker symbol             MGMCX
    fund number             589

    DWS MICRO CAP FUND


</TABLE>

            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund seeks capital appreciation.

            Under normal circumstances, the fund invests at least 80% of its
            assets, determined at the time of purchase, in stocks and other
            securities with equity characteristics of US micro capitalization
            companies. For the purposes of this 80% limitation, the micro
            capitalization equity universe is defined as the bottom 5% of the
            total domestic equity market capitalization (at the time of initial
            investment) using a minimum market capitalization of $10 million.
            The fund may invest up to 20% of its total assets in the securities
            of foreign companies that would be considered to be in the bottom
            5% in terms of market capitalization in the US equity market
            (subject to a $10 million market capitalization minimum). The
            fund's equity investments are mainly common stocks, but may also
            include other types of equity securities, such as preferred stocks
            or convertible securities.

            The fund invests primarily in equity securities of US micro
            capitalization growth-oriented companies. Portfolio management
            focuses on individual security selection rather than industry
            selection. Portfolio management uses an active process, which
            combines financial analysis with company visits to evaluate
            management and strategies. Each portfolio manager has specific
            sector responsibilities with investment discretion over securities
            within their sectors.

            Company research lies at the heart of our investment process.
            Portfolio management uses a "bottom-up" approach to picking
            securities.

            -  Portfolio management focuses on undervalued stocks with
               fast-growing earnings that they believe have superior near-
               to-intermediate term performance potential.

4 | DWS Micro Cap Fund
<PAGE>

            -  Portfolio management emphasizes individual selection of smaller
               stocks across all economic sectors, early in their growth cycles
               and with the potential to be the blue chips of the future.

            -  Portfolio management generally seeks companies with a leading or
               dominant position in their niche markets, a high rate of return
               on invested capital and the ability to finance a major part of
               future growth from internal sources.

            The fund follows a disciplined selling process in order to lessen
            risk. A security may be sold if one or more of the following
            conditions are met:

            -  the stock price reaches portfolio management's expectations;

            -  there is a material change in the company's fundamentals;

            -  portfolio management believes other investments offer better
               opportunities; or

            -  the market capitalization of a stock distorts the weighted
               average market capitalization of the fund.

            The fund may invest up to 20% of its assets in high quality debt
            instruments and money market instruments with remaining maturities
            of one year or less, including repurchase agreements. The fund may
            invest up to 5% of its net assets in non-convertible bonds and
            preferred stocks that portfolio management believes to be of high
            quality.

            OTHER INVESTMENTS. The fund is permitted, but not required, to use
            various types of derivatives (contracts whose value is based on,
            for example, indices, currencies or securities). Derivatives may be
            used for hedging and for risk management or for non-hedging
            purposes to seek to enhance potential gains. The fund may use
            derivatives in circumstances where portfolio management believes
            they offer an economical means of gaining exposure to a particular
            asset class or to keep cash on hand to meet shareholder redemptions
            or other needs while maintaining exposure to the market.

            In particular, the fund may use futures and options and write
            covered call options.


                                                         DWS Micro Cap Fund  | 5
<PAGE>

            SECURITIES LENDING. The fund may lend its investment securities in
            an amount up to 33 1/3% of its total assets to approved
            institutional borrowers who need to borrow securities in order to
            complete certain transactions.


            THE MAIN RISKS OF INVESTING IN THE FUND

            There are several risk factors that could hurt the fund's
            performance, cause you to lose money or cause the fund's
            performance to trail that of other investments.

            STOCK MARKET RISK. The fund is affected by how the stock market
            performs. To the extent the fund invests in a particular
            capitalization or market sector, the fund's performance may be
            proportionately affected by that segment's general performance.
            When stock prices fall, you should expect the value of your
            investment to fall as well. Because a stock represents ownership in
            its issuer, stock prices can be hurt by poor management, shrinking
            product demand and other business risks. These factors may affect
            single companies as well as groups of companies. In addition,
            movements in financial markets may adversely affect a stock's
            price, regardless of how well the company performs. The market as a
            whole may not favor the types of investments the fund makes, which
            could affect the fund's ability to sell them at an attractive
            price.

            MICRO CAPITALIZATION COMPANY RISK. The fund's investments in micro
            capitalization companies will be more susceptible to share price
            fluctuations since micro capitalization company stocks tend to
            experience steeper fluctuations in price - down as well as up - than
            the stocks of larger companies. A shortage of reliable information -
            the same information gap that creates opportunity in micro
            capitalization company investing - can also pose added risk.
            Industry-wide reversals may have a greater impact on micro
            capitalization companies, since they lack a large company's
            financial resources. Micro capitalization companies may have limited
            product lines and markets. They may also have shorter operating
            histories and more volatile businesses and may be more dependent on
            key personnel. Finally, micro capitalization company stocks are
            typically less liquid than large company stocks. Particularly when
            they are performing poorly, a micro capitalization company's shares
            may be more difficult to sell.



THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

This fund is designed for investors with long-term goals who can tolerate
capital fluctuation in pursuit of capital appreciation.



6 | DWS Micro Cap Fund
<PAGE>

            GROWTH INVESTING RISK. Since growth stocks usually reinvest a large
            portion of earnings in their own businesses, they may lack the
            dividends associated with value stocks that might otherwise cushion
            their decline in a falling market. Earnings disappointments in
            growth stocks often result in sharp price declines because
            investors buy these stocks for their potential superior earnings
            growth. Growth stocks may also be out of favor for certain periods
            in relation to value stocks.

            SECURITY SELECTION RISK. A risk that pervades all investing is the
            risk that the securities in the fund's portfolio may decline in
            value.

            FOREIGN INVESTMENT RISK. Foreign investments involve certain
            special risks, including:

            -  POLITICAL RISK. Some foreign governments have limited the
               outflow of profits to investors abroad, imposed restrictions on
               the exchange or export of foreign currency, extended diplomatic
               disputes to include trade and financial relations, seized
               foreign investments and imposed higher taxes.

            -  INFORMATION RISK. Companies based in foreign markets are usually
               not subject to accounting, auditing and financial reporting
               standards and practices as stringent as those in the US.
               Therefore, their financial reports may present an incomplete,
               untimely or misleading picture of a company, as compared to the
               financial reports required in the US.

            -  LIQUIDITY RISK. Investments that trade less frequently can be
               more difficult or more costly to buy, or to sell, than more
               liquid or active investments. This liquidity risk is a factor of
               the trading volume of a particular investment, as well as the
               size and liquidity of the entire local market. On the whole,
               foreign exchanges are smaller and less liquid than US exchanges.
               This can make buying and selling certain investments more
               difficult and costly. Relatively small transactions in some
               instances can have a disproportionately large effect on the
               price and supply of securities. In certain situations, it may
               become virtually impossible to sell an investment in an orderly
               fashion at a price that approaches portfolio management's
               estimate of its value. For the same reason, it may at times be
               difficult to value the fund's foreign investments.

                                                         DWS Micro Cap Fund  | 7
<PAGE>

            -  REGULATORY RISK. There is generally less government regulation of
               foreign markets, companies and securities dealers than in the US.

            -  CURRENCY RISK. The fund invests in securities denominated in
               foreign currencies. Changes in exchange rates between foreign
               currencies and the US dollar may affect the US dollar value of
               foreign securities or the income or gain received on these
               securities.

            -  LIMITED LEGAL RECOURSE RISK. Legal remedies for investors may be
               more limited than the legal remedies available in the US.

            -  TRADING PRACTICE RISK. Brokerage commissions and other fees are
               generally higher for foreign investments than for US
               investments. The procedures and rules governing foreign
               transactions and custody may also involve delays in payment,
               delivery or recovery of money or investments.

            -  TAXES. Foreign withholding and certain other taxes may reduce
               the amount of income available to distribute to shareholders of
               the fund. In addition, special US tax considerations may apply
               to the fund's foreign investments.

            PRICING RISK. At times, market conditions may make it difficult to
            value some investments, and the fund may use certain valuation
            methodologies for some of its investments, such as fair value
            pricing. Given the subjective nature of such valuation
            methodologies, it is possible that the value determined for an
            investment may be different than the value realized upon such
            investment's sale. If the fund has valued its securities too
            highly, you may pay too much for fund shares when you buy into the
            fund. If the fund has underestimated the price of its securities,
            you may not receive the full market value when you sell your fund
            shares.

            SECURITIES LENDING RISK. Any loss in the market price of securities
            loaned by the fund that occurs during the term of the loan would be
            borne by the fund and would adversely affect the fund's
            performance. Also, there may be delays in recovery of securities
            loaned or even a loss of rights in the collateral should the
            borrower of the securities fail financially while the loan is
            outstanding. However, loans will be made only to borrowers selected
            by the fund's delegate after a review of relevant facts and
            circumstances, including the creditworthiness of the borrower.


8 | DWS Micro Cap Fund
<PAGE>

            Other factors that could affect performance include:

            -  portfolio management could be wrong in the analysis of
               industries, companies, economic trends, the relative
               attractiveness of different securities or other matters.

            -  derivatives could produce disproportionate losses due to a
               variety of factors, including the failure of the counterparty to
               meet its obligations or unexpected price or interest rate
               movements.


                                                         DWS Micro Cap Fund  | 9
<PAGE>

THE FUND'S PERFORMANCE HISTORY

While a fund's past performance (before and after taxes) isn't necessarily a
sign of how it will do in the future, it can be valuable for an investor to
know.

The bar chart shows how the performance of the fund's Institutional Class
shares has varied from year to year, which may give some idea of risk. The
table on the following page shows how fund performance compares to relevant
index performance (which, unlike fund performance, does not reflect fees or
expenses). The performance of the fund and the index information varies over
time. All figures assume reinvestment of dividends and distributions (in the
case of after-tax returns, reinvested net of assumed tax rates).

The table shows returns for Institutional Class shares on a before-tax and
after-tax basis. After-tax returns are estimates calculated using the
historical highest marginal individual federal income tax rates and do not
reflect the impact of state and local taxes. Actual after-tax returns depend on
an investor's tax situation and may differ from those shown in the table.
After-tax returns shown are not relevant for investors who hold their shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts.

The performance data for the period prior to July 10, 2006 provided in the bar
chart below and the table on the following page are those of the fund's
predecessor fund, DWS Micro Cap Fund, a series of DWS Investments Trust (the
"Predecessor Fund"). On July 10, 2006, the Predecessor Fund transferred its
assets to the fund, which is a series of DWS Advisor Funds. The fund assumed
the Predecessor Fund's liabilities.

DWS Micro Cap Fund

ANNUAL TOTAL RETURN (%) AS OF 12/31 EACH YEAR - Institutional Class



<TABLE>
<S>        <C>       <C>        <C>         <C>        <C>        <C>       <C>       <C>       <C>
77.53       3.22     15.37       -27.07     41.00      12.96       8.15      8.74     7.44       -43.30
1999       2000      2001        2002       2003       2004       2005      2006       2007     2008
</TABLE>





<TABLE>
<CAPTION>
FOR THE PERIODS INCLUDED IN THE BAR CHART:
<S>                                        <C>
BEST QUARTER: 29.74%, Q4 1999              WORST QUARTER: -30.07%, Q4 2008
</TABLE>

10 | DWS Micro Cap Fund
<PAGE>


AVERAGE ANNUAL TOTAL RETURNS (%) as of 12/31/2008



<TABLE>
<CAPTION>
                                               1 YEAR       5 YEARS      10 YEARS
<S>                                         <C>            <C>          <C>
 INSTITUTIONAL CLASS
   Return before Taxes                         -43.30        -4.14         5.81
   Return after Taxes on Distributions         -43.30        -5.94         4.19
   Return after Taxes on Distributions
   and Sale of Fund Shares                     -28.15*       -2.71*        3.79
 RUSSELL 2000 (Reg. TM) GROWTH INDEX
 (reflects no deductions for fees,
 expenses or taxes)                            -38.54        -2.35         -0.76
</TABLE>


 *   Return after Taxes on Distributions and Sale of Fund Shares is higher than
     other return figures for the same period due to a capital loss occurring
     upon redemption resulting in an assumed tax deduction for the shareholder.

     Total returns would have been lower if operating expenses hadn't been
 reduced.

 RUSSELL 2000 (Reg. TM) GROWTH INDEX is an unmanaged capitalization-weighted
 measure of 2,000 of the smallest capitalized US companies with a
 greater-than-average growth orientation and whose common stocks trade on the
 NYSE, NYSE Alternext US (formerly known as "AMEX") and Nasdaq.


--------------------------------------------------------------------------------
Current performance may be higher or lower than the performance data quoted
above. For more recent performance information, call your financial advisor or
(800) 730-1313 or visit our Web site at www.dws-investments.com.


--------------------------------------------------------------------------------
Return information assumes that fund shares were sold at the end of the period.


RETURN AFTER TAXES ON DISTRIBUTIONS reflects taxes only on the fund's
distributions and not on a shareholder's gain or loss from selling fund shares.


RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES reflects taxes on
both the fund's distributions and a shareholder's gain or loss from selling
fund shares.


                                                        DWS Micro Cap Fund  | 11
<PAGE>

HOW MUCH INVESTORS PAY

The table below describes the fees and expenses that you may pay if you buy and
hold fund shares. This information doesn't include any fees that may be charged
by your financial advisor.


<TABLE>
<CAPTION>
FEE TABLE
<S>                                       <C>
 SHAREHOLDER FEES, paid directly from your investment
 Sales Charge                                        None
 Redemption/Exchange Fee on shares
 owned less than 15 days (as % of
 redemption proceeds)1                                2.00%

 ANNUAL OPERATING EXPENSES, deducted from fund assets
 Management Fees2                                     1.10%
 Distribution/Service (12b-1) Fees                   None
 Other Expenses3                                      0.61
 TOTAL ANNUAL OPERATING EXPENSES4, 5                  1.71
</TABLE>


1   This fee is charged on all applicable redemptions or exchanges. Please see
   "Policies You Should Know About - Policies about transactions" for further
   information.

2   Through November 30, 2009, the Advisor has contractually agreed to waive a
   portion of its Investment Management Fee in the amount of 0.305% of the
   fund's average daily total net assets.

3   "Other Expenses" include an administrative services fee paid to the Advisor
   in the amount of 0.10%.

4   Through September 30, 2009, the Advisor has contractually agreed to waive
   all or a portion of its fees and reimburse or pay certain operating
   expenses of the fund to the extent necessary to maintain the fund's total
   operating expense at 1.44% for Institutional Class shares, excluding
   certain expenses such as extraordinary expenses, taxes, brokerage and
   interest.

5   Except as otherwise noted, the information in the table is based on amounts
   incurred during the fund's most recent fiscal year. It is important for you
   to understand that a decline in the fund's average net assets during the
   current fiscal year due to recent unprecedented market volatility or other
   factors could cause the fund's expense ratios for the fund's current fiscal
   year to be higher than the expense information presented.

Based on the costs above, this example helps you compare the expenses of the
fund's Institutional Class shares to those of other mutual funds. This example
assumes the expenses above remain the same. It also assumes that you invested
$10,000, earned 5% annual returns and reinvested all dividends and
distributions and sold your shares at the end of the period. This is only an
example; actual expenses will be different.


<TABLE>
<CAPTION>
EXAMPLE                    1 YEAR      3 YEARS      5 YEARS      10 YEARS
<S>                       <C>         <C>          <C>          <C>
 Institutional Class        $174         $539         $928       $2,019
</TABLE>



12 | DWS Micro Cap Fund
<PAGE>


<TABLE>
<S>                            <C>
                                 Institutional Class
  ticker symbol                  BTEAX
    fund number                  583

    DWS MID CAP GROWTH FUND


</TABLE>

            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund seeks long-term capital growth.

            Under normal circumstances, the fund invests at least 80% of its
            assets, determined at the time of purchase, in companies with
            market caps within the market capitalization range of the Russell
            Mid Cap Growth Index or securities with equity characteristics that
            provide exposure to those companies. The fund's equity investments
            are mainly common stocks, but may also include other types of
            equity securities such as preferred stocks or convertible
            securities.

            The fund invests primarily in equity securities of medium-sized
            growth-oriented companies. Portfolio management focuses on
            individual security selection rather than industry selection.
            Portfolio management uses an active process which combines
            financial analysis with company visits to evaluate management and
            strategies. Each portfolio manager has specific sector
            responsibilities with investment discretion over securities within
            their sectors.

            Company research lies at the heart of the investment process.
            Portfolio management uses a "bottom-up" approach to picking
            securities.

            -  Portfolio management focuses on undervalued stocks with
               fast-growing earnings and superior near-to-intermediate term
               performance potential.

            -  Portfolio management emphasizes individual selection of
               medium-sized stocks across all economic sectors, early in their
               growth cycles and with the potential to be the blue chips of the
               future.

            -  Portfolio management generally seeks companies with a leading or
               dominant position in their niche markets, a high rate of return
               on invested capital and the ability to finance a major part of
               future growth from internal sources.

                                                   DWS Mid Cap Growth Fund  | 13
<PAGE>

            The fund follows a disciplined selling process in order to lessen
            risk. A security may be sold if one or more of the following
            conditions are met:

            -  the stock price reaches portfolio management's expectations;

            -  there is a material change in the company's fundamentals;

            -  portfolio management believes other investments offer better
               opportunities; or

            -  the market capitalization of a stock distorts the weighted
               average market capitalization of the fund.

            The fund may invest up to 20% of its assets in stocks and other
            securities of companies based outside the US.

            OTHER INVESTMENTS. The fund is permitted, but not required, to use
            various types of derivatives (contracts whose value is based on,
            for example, indices, currencies or securities). Derivatives may be
            used for hedging and for risk management or for non-hedging
            purposes to seek to enhance potential gains. The fund may use
            derivatives in circumstances where portfolio management believes
            they offer an economical means of gaining exposure to a particular
            asset class or to keep cash on hand to meet shareholder redemptions
            or other needs while maintaining exposure to the market.

            In particular, the fund may use futures and options and write
            covered call options.

            SECURITIES LENDING. The fund may lend its investment securities in
            an amount up to 33 1/3% of its total assets to approved
            institutional borrowers who need to borrow securities in order to
            complete certain transactions.


            THE MAIN RISKS OF INVESTING IN THE FUND

            There are several risk factors that could hurt the fund's
            performance, cause you to lose money or cause the fund's
            performance to trail that of other investments.

            STOCK MARKET RISK. The fund is affected by how the stock market
            performs. To the extent the fund invests in a particular
            capitalization or market sector, the fund's performance may be
            proportionately affected by that segment's general performance.
            When stock prices fall, you should expect the value of your
            investment to fall as well. Because a stock



THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

This fund is designed for investors with long-term goals who can tolerate
capital fluctuation in pursuit of long-term capital growth.


14 | DWS Mid Cap Growth Fund
<PAGE>

            represents ownership in its issuer, stock prices can be hurt by
            poor management, shrinking product demand and other business risks.
            These factors may affect single companies as well as groups of
            companies. In addition, movements in financial markets may
            adversely affect a stock's price, regardless of how well the
            company performs. The market as a whole may not favor the types of
            investments the fund makes, which could affect the fund's ability
            to sell them at an attractive price.

            MEDIUM-SIZED COMPANY RISK. Medium-sized company stocks tend to
            experience steeper price fluctuations than stocks of larger
            companies. A shortage of reliable information can also pose added
            risk to stocks of medium sized companies. Industry-wide reversals
            may have a greater impact on medium-sized companies, since they
            usually lack the financial resources of larger companies.
            Medium-sized company stocks are typically less liquid than large
            company stocks. Accordingly, it may be harder to find buyers for
            medium-sized company shares.

            GROWTH INVESTING RISK. Since growth stocks usually reinvest a large
            portion of earnings in their own businesses, they may lack the
            dividends associated with value stocks that might otherwise cushion
            their decline in a falling market. Earnings disappointments in
            growth stocks often result in sharp price declines because
            investors buy these stocks for their potential superior earnings
            growth. Growth stocks may also be out of favor for certain periods
            in relation to value stocks.

            SECURITY SELECTION RISK. A risk that pervades all investing is the
            risk that the securities in the fund's portfolio may decline in
            value.

            FOREIGN INVESTMENT RISK. Foreign investments involve certain
            special risks, including:

            -  POLITICAL RISK. Some foreign governments have limited the
               outflow of profits to investors abroad, imposed restrictions on
               the exchange or export of foreign currency, extended diplomatic
               disputes to include trade and financial relations, seized
               foreign investments and imposed higher taxes.

                                                   DWS Mid Cap Growth Fund  | 15
<PAGE>

            -  INFORMATION RISK. Companies based in foreign markets are usually
               not subject to accounting, auditing and financial reporting
               standards and practices as stringent as those in the US.
               Therefore, their financial reports may present an incomplete,
               untimely or misleading picture of a company, as compared to the
               financial reports required in the US.

            -  LIQUIDITY RISK. Investments that trade less frequently can be
               more difficult or more costly to buy, or to sell, than more
               liquid or active investments. This liquidity risk is a factor of
               the trading volume of a particular investment, as well as the
               size and liquidity of the entire local market. On the whole,
               foreign exchanges are smaller and less liquid than US exchanges.
               This can make buying and selling certain investments more
               difficult and costly. Relatively small transactions in some
               instances can have a disproportionately large effect on the
               price and supply of securities. In certain situations, it may
               become virtually impossible to sell an investment in an orderly
               fashion at a price that approaches portfolio management's
               estimate of its value. For the same reason, it may at times be
               difficult to value the fund's foreign investments.

            -  REGULATORY RISK. There is generally less government regulation
               of foreign markets, companies and securities dealers than in the
               US.

            -  CURRENCY RISK. The fund invests in securities denominated in
               foreign currencies. Changes in exchange rates between foreign
               currencies and the US dollar may affect the US dollar value of
               foreign securities or the income or gain received on these
               securities.

            -  LIMITED LEGAL RECOURSE RISK. Legal remedies for investors may be
               more limited than the legal remedies available in the US.

            -  TRADING PRACTICE RISK. Brokerage commissions and other fees are
               generally higher for foreign investments than for US
               investments. The procedures and rules governing foreign
               transactions and custody may also involve delays in payment,
               delivery or recovery of money or investments.

            -  TAXES. Foreign withholding and certain other taxes may reduce
               the amount of income available to distribute to shareholders of
               the fund. In addition, special US tax considerations may apply
               to the fund's foreign investments.

16 | DWS Mid Cap Growth Fund
<PAGE>

            PRICING RISK. At times, market conditions may make it difficult to
            value some investments, and the fund may use certain valuation
            methodologies for some of its investments, such as fair value
            pricing. Given the subjective nature of such valuation
            methodologies, it is possible that the value determined for an
            investment may be different than the value realized upon such
            investment's sale. If the fund has valued its securities too
            highly, you may pay too much for fund shares when you buy into the
            fund. If the fund has underestimated the price of its securities,
            you may not receive the full market value when you sell your fund
            shares.

            SECURITIES LENDING RISK. Any loss in the market price of securities
            loaned by the fund that occurs during the term of the loan would be
            borne by the fund and would adversely affect the fund's
            performance. Also, there may be delays in recovery of securities
            loaned or even a loss of rights in the collateral should the
            borrower of the securities fail financially while the loan is
            outstanding. However, loans will be made only to borrowers selected
            by the fund's delegate after a review of relevant facts and
            circumstances, including the creditworthiness of the borrower.

            Other factors that could affect performance include:

            -  portfolio management could be wrong in the analysis of
               industries, companies, economic trends, the relative
               attractiveness of different securities or other matters.

            -  derivatives could produce disproportionate losses due to a
               variety of factors, including the failure of the counterparty to
               meet its obligations or unexpected price or interest rate
               movements.


                                                   DWS Mid Cap Growth Fund  | 17
<PAGE>

THE FUND'S PERFORMANCE HISTORY

While a fund's past performance (before and after taxes) isn't necessarily a
sign of how it will do in the future, it can be valuable for an investor to
know.

The bar chart shows how the performance of the fund's Institutional Class
shares has varied from year to year, which may give some idea of risk. The
table on the following page shows how fund performance compares to relevant
index performance (which, unlike fund performance, does not reflect fees or
expenses). The performance of the fund and the index information varies over
time. All figures assume reinvestment of dividends and distributions (in the
case of after-tax returns, reinvested net of assumed tax rates).

The table shows returns for Institutional Class shares on a before-tax and
after-tax basis. After-tax returns are estimates calculated using the
historical highest marginal individual federal income tax rates and do not
reflect the impact of state and local taxes. Actual after-tax returns depend on
an investor's tax situation and may differ from those shown in the table.
After-tax returns shown are not relevant for investors who hold their shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts.

Prior to August 31, 2000 the bar chart and table include the performance of
Equity Appreciation Fund, Institutional Class shares. On August 31, 2000 Equity
Appreciation Fund, Institutional Class shares became Mid Cap Fund,
Institutional shares.

DWS Mid Cap Growth Fund

ANNUAL TOTAL RETURN (%) AS OF 12/31 EACH YEAR - Institutional Class



<TABLE>
<S>      <C>      <C>       <C>       <C>      <C>      <C>      <C>        <C>       <C>
49.70    -1.31    -13.14    -20.26    28.67    10.07    12.61    11.00      8.14       -49.98
1999     2000     2001      2002      2003     2004     2005     2006       2007      2008
</TABLE>





<TABLE>
<CAPTION>
FOR THE PERIODS INCLUDED IN THE BAR CHART:
<S>                                        <C>
BEST QUARTER: 31.08%, Q4 1999              WORST QUARTER: -32.65%, Q4 2008
</TABLE>

18 | DWS Mid Cap Growth Fund
<PAGE>


AVERAGE ANNUAL TOTAL RETURNS (%) as of 12/31/2008



<TABLE>
<CAPTION>
                                                1 YEAR          5 YEARS        10 YEARS*
<S>                                         <C>              <C>             <C>
 INSTITUTIONAL CLASS
   Return before Taxes                          -49.98           -5.74           -0.20
   Return after Taxes on Distributions          -49.98           -6.12           -1.44
   Return after Taxes on Distributions
   and Sale of Fund Shares                      -32.49**         -4.40**         -0.19**
 RUSSELL MIDCAP (Reg. TM) GROWTH INDEX
 (reflects no deductions for fees,
 expenses or taxes)                             -44.32           -2.33           -0.19
</TABLE>


 *   Institutional Class of DWS Mid Cap Growth Fund commenced operations on
     August 31, 2000. Performance from January 1, 1999 through August 30, 2000
     reflects actual returns of Equity Appreciation Fund Institutional Class
     shares.

**   Return after Taxes on Distributions and Sale of Fund Shares is higher than
   other return figures for the same period due to a capital loss occurring
   upon redemption resulting in an assumed tax deduction for the shareholder.

     Total returns would have been lower if operating expenses hadn't been
 reduced.

 RUSSELL MIDCAP (Reg. TM) GROWTH INDEX is an unmanaged capitalization-weighted
 index of medium and medium/small companies in the Russell 1000 (Reg. TM) Index
 chosen for their growth orientation. Russell 1000 (Reg. TM) Index is an
 unmanaged price-only index of the 1,000 largest capitalized companies that are
 domiciled in the US and whose common stocks are traded.


--------------------------------------------------------------------------------
Current performance may be higher or lower than the performance data quoted
above. For more recent performance information, call your financial advisor or
(800) 730-1313 or visit our Web site at www.dws-investments.com.


--------------------------------------------------------------------------------
Return information assumes that fund shares were sold at the end of the period.


RETURN AFTER TAXES ON DISTRIBUTIONS reflects taxes only on the fund's
distributions and not on a shareholder's gain or loss from selling fund shares.


RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES reflects taxes on
both the fund's distributions and a shareholder's gain or loss from selling
fund shares.


                                                   DWS Mid Cap Growth Fund  | 19
<PAGE>

HOW MUCH INVESTORS PAY

The table below describes the fees and expenses that you may pay if you buy and
hold fund shares. This information doesn't include any fees that may be charged
by your financial advisor.


<TABLE>
<CAPTION>
FEE TABLE
<S>                                       <C>
 SHAREHOLDER FEES, paid directly from your investment
 Sales Charge                                        None
 Redemption/Exchange Fee on shares
 owned less than 15 days (as % of
 redemption proceeds)1                                2.00%

 ANNUAL OPERATING EXPENSES, deducted from fund assets
 Management Fees                                      0.63%
 Distribution/Service (12b-1) Fees                    None
 Other Expenses 2                                     0.41
 TOTAL ANNUAL OPERATING EXPENSES 3, 4                 1.04
</TABLE>


1   This fee is charged on all applicable redemptions or exchanges. Please see
   "Policies You Should Know About - Policies about transactions" for further
   information.

2   "Other Expenses" include an administrative services fee paid to the Advisor
   in the amount of 0.10%.

3   Through September 30, 2009, the Advisor has contractually agreed to waive
   all or a portion of its management fee and reimburse or pay operating
   expenses of the fund to the extent necessary to maintain the fund's total
   operating expenses at 1.18% for Institutional Class shares, excluding
   certain expenses such as extraordinary expenses, taxes, brokerage and
   interest.

4   Except as otherwise noted, the information in the table is based on amounts
   incurred during the fund's most recent fiscal year. It is important for you
   to understand that a decline in the fund's average net assets during the
   current fiscal year due to recent unprecedented market volatility or other
   factors could cause the fund's expense ratios for the fund's current fiscal
   year to be higher than the expense information presented.

Based on the costs above, this example helps you compare the expenses of the
fund's Institutional Class shares to those of other mutual funds. This example
assumes the expenses above remain the same. It also assumes that you invested
$10,000, earned 5% annual returns, reinvested all dividends and distributions
and sold your shares at the end of the period. This is only an example; actual
expenses will be different.


<TABLE>
<CAPTION>
EXAMPLE                    1 YEAR      3 YEARS      5 YEARS      10 YEARS
<S>                       <C>         <C>          <C>          <C>
 Institutional Class        $106         $331         $574       $1,271
</TABLE>



20 | DWS Mid Cap Growth Fund
<PAGE>


<TABLE>
<S>                              <C>
                                   Institutional Class
  ticker symbol                    SSDIX
    fund number                    1471

    DWS SMALL CAP GROWTH FUND


</TABLE>

            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund seeks long-term capital growth.

            Under normal circumstances, the fund invests at least 80% of its
            assets, determined at the time of purchase, in stocks and other
            securities with equity characteristics of US smaller capitalization
            companies. For purposes of this 80% investment limitation, the
            small capitalization equity universe is defined as the bottom 20%
            of the total domestic equity market capitalization (at the time of
            initial investment), using a minimum market capitalization of $10
            million. The fund may invest up to 20% of its assets in the stocks
            of non-US companies and large capitalization stocks. The fund may
            also invest in other types of equity securities such as preferred
            stocks or convertible securities.

            The fund invests primarily in equity securities of US smaller
            capitalization companies. Portfolio management focuses on
            individual security selection rather than industry selection.
            Portfolio management uses an active process which combines
            financial analysis with company visits to evaluate management and
            strategies. Each portfolio manager has specific sector
            responsibilities with investment discretion over the securities
            within sectors.

            Company research lies at the heart of our investment process.
            Portfolio management uses a "bottom-up" approach to picking
            securities.

            -  Portfolio management focuses on stocks with superior growth
               prospects and above average near-to-intermediate term
               performance potential.

            -  Portfolio management emphasizes individual selection of small
               company stocks across all economic sectors, early in their
               growth cycles and with the potential to be the blue chips of the
               future.

                                                 DWS Small Cap Growth Fund  | 21
<PAGE>

            -  Portfolio management generally seeks companies with a leading or
               dominant position in their niche markets, a high rate of return
               on invested capital and the ability to finance a major part of
               future growth from internal sources.

            Portfolio management looks primarily for financial attributes that
            set these companies apart:

            -  estimated above-average growth in revenues and earnings; and

            -  a balance sheet that can support this growth potential with
               sufficient working capital and manageable levels of debt.

            The fund follows a disciplined selling process in order to lessen
            risk. A security may be sold if one or more of the following
            conditions are met:

            -  the stock price reaches portfolio management's expectations;

            -  there is a material change in the company's fundamentals;

            -  portfolio management believes other investments offer better
               opportunities; or

            -  the market capitalization of a stock distorts the weighted
               average market capitalization of the fund.

            OTHER INVESTMENTS. The fund is permitted, but not required, to use
            various types of derivatives (contracts whose value is based on,
            for example, indices, currencies or securities). Derivatives may be
            used for hedging and for risk management or for non-hedging
            purposes to seek to enhance potential gains. The fund may use
            derivatives in circumstances where portfolio management believes
            they offer an economical means of gaining exposure to a particular
            asset class or to keep cash on hand to meet shareholder redemptions
            or other needs while maintaining exposure to the market.

            In particular, the fund may use futures and options and write
            covered call options.

            SECURITIES LENDING. The fund may lend its investment securities in
            an amount up to 33 1/3% of its total assets to approved
            institutional borrowers who need to borrow securities in order to
            complete certain transactions.


22 | DWS Small Cap Growth Fund
<PAGE>

            THE MAIN RISKS OF INVESTING IN THE FUND

            There are several risk factors that could hurt the fund's
            performance, cause you to lose money or cause the fund's
            performance to trail that of other investments.

            STOCK MARKET RISK. The fund is affected by how the stock market
            performs. To the extent the fund invests in a particular
            capitalization or market sector, the fund's performance may be
            proportionately affected by that segment's general performance.
            When stock prices fall, you should expect the value of your
            investment to fall as well. Because a stock represents ownership in
            its issuer, stock prices can be hurt by poor management, shrinking
            product demand and other business risks. These factors may affect
            single companies as well as groups of companies. In addition,
            movements in financial markets may adversely affect a stock's
            price, regardless of how well the company performs. The market as a
            whole may not favor the types of investments the fund makes, which
            could affect the fund's ability to sell them at an attractive
            price.

            SMALL COMPANY CAPITALIZATION RISK. Small company stocks tend to
            experience steeper price fluctuations than the stocks of larger
            companies. A shortage of reliable information can also pose added
            risk to small company stocks. Industry-wide reversals may have a
            greater impact on small companies, since they lack the financial
            resources of larger companies. Small company stocks are typically
            less liquid than large company stocks. Accordingly, it may be
            harder to find buyers for small company shares.

            GROWTH INVESTING RISK. Since growth stocks usually reinvest a large
            portion of earnings in their own businesses, they may lack the
            dividends associated with value stocks that might
            otherwise cushion their decline in a falling market. Earnings
            disappointments in growth stocks often result in sharp price
            declines because investors buy these stocks for their potential
            superior earnings growth. Growth stocks may also be out of favor
            for certain periods in relation to value stocks.

            SECURITY SELECTION RISK. A risk that pervades all investing is the
            risk that the securities in the fund's portfolio may decline in
            value.

            FOREIGN INVESTMENT RISK. Foreign investments involve certain
            special risks, including:




THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

This fund is designed for investors with long-term goals who can tolerate
capital fluctuation in pursuit of long-term capital growth.



                                                 DWS Small Cap Growth Fund  | 23
<PAGE>

            -  POLITICAL RISK. Some foreign governments have limited the outflow
               of profits to investors abroad, imposed restrictions on the
               exchange or export of foreign currency, extended diplomatic
               disputes to include trade and financial relations, seized foreign
               investments and imposed higher taxes.

            -  INFORMATION RISK. Companies based in foreign markets are usually
               not subject to accounting, auditing and financial reporting
               standards and practices as stringent as those in the US.
               Therefore, their financial reports may present an incomplete,
               untimely or misleading picture of a company, as compared to the
               financial reports required in the US.

            -  LIQUIDITY RISK. Investments that trade less frequently can be
               more difficult or more costly to buy, or to sell, than more
               liquid or active investments. This liquidity risk is a factor of
               the trading volume of a particular investment, as well as the
               size and liquidity of the entire local market. On the whole,
               foreign exchanges are smaller and less liquid than US exchanges.
               This can make buying and selling certain investments more
               difficult and costly. Relatively small transactions in some
               instances can have a disproportionately large effect on the
               price and supply of securities. In certain situations, it may
               become virtually impossible to sell an investment in an orderly
               fashion at a price that approaches portfolio management's
               estimate of its value. For the same reason, it may at times be
               difficult to value the fund's foreign investments.

            -  REGULATORY RISK. There is generally less government regulation
               of foreign markets, companies and securities dealers than in the
               US.

            -  CURRENCY RISK. The fund invests in securities denominated in
               foreign currencies. Changes in exchange rates between foreign
               currencies and the US dollar may affect the US dollar value of
               foreign securities or the income or gain received on these
               securities.

            -  LIMITED LEGAL RECOURSE RISK. Legal remedies for investors may be
               more limited than the legal remedies available in the US.

24 | DWS Small Cap Growth Fund
<PAGE>

            -  TRADING PRACTICE RISK. Brokerage commissions and other fees are
               generally higher for foreign investments than for US investments.
               The procedures and rules governing foreign transactions and
               custody may also involve delays in payment, delivery or recovery
               of money or investments.

            -  TAXES. Foreign withholding and certain other taxes may reduce
               the amount of income available to distribute to shareholders of
               the fund. In addition, special US tax considerations may apply
               to the fund's foreign investments.

            PRICING RISK. At times, market conditions may make it difficult to
            value some investments, and the fund may use certain valuation
            methodologies for some of its investments, such as fair value
            pricing. Given the subjective nature of such valuation
            methodologies, it is possible that the value determined for an
            investment may be different than the value realized upon such
            investment's sale. If the fund has valued its securities too
            highly, you may pay too much for fund shares when you buy into the
            fund. If the fund has underestimated the price of its securities,
            you may not receive the full market value when you sell your fund
            shares.

            SECURITIES LENDING RISK. Any loss in the market price of securities
            loaned by the fund that occurs during the term of the loan would be
            borne by the fund and would adversely affect the fund's
            performance. Also, there may be delays in recovery of securities
            loaned or even a loss of rights in the collateral should the
            borrower of the securities fail financially while the loan is
            outstanding. However, loans will be made only to borrowers selected
            by the fund's delegate after a review of relevant facts and
            circumstances, including the creditworthiness of the borrower.

            Other factors that could affect performance include:

            -  portfolio management could be wrong in the analysis of
               industries, companies, economic trends, the relative
               attractiveness of different securities or other matters.

            -  derivatives could produce disproportionate losses due to a
               variety of factors, including the failure of the counterparty to
               meet its obligations or unexpected price or interest rate
               movements.


                                                 DWS Small Cap Growth Fund  | 25
<PAGE>

THE FUND'S PERFORMANCE HISTORY

While a fund's past performance (before and after taxes) isn't necessarily a
sign of how it will do in the future, it can be valuable for an investor to
know.

The bar chart shows how the performance of the fund's Institutional Class
shares has varied from year to year, which may give some idea of risk. The
table on the following page shows how fund performance compares to relevant
index performance (which, unlike fund performance, does not reflect fees or
expenses). The performance of the fund and the index information varies over
time. All figures assume reinvestment of dividends and distributions (in the
case of after-tax returns, reinvested net of assumed tax rates).

The table shows returns for Institutional Class shares on a before-tax and
after-tax basis. After-tax returns are estimates calculated using the
historical highest marginal individual federal income tax rates and do not
reflect the impact of state and local taxes. Actual after-tax returns depend on
an investor's tax situation and may differ from those shown in the table.
After-tax returns shown are not relevant for investors who hold their shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts.

Institutional Class shares commenced operations on December 20, 2004.

DWS Small Cap Growth Fund

ANNUAL TOTAL RETURN (%) AS OF 12/31 EACH YEAR - Institutional Class



<TABLE>
<S>       <C>       <C>       <C>
 7.18      5.05      6.02      -50.32
2005      2006      2007      2008
</TABLE>





<TABLE>
<CAPTION>
FOR THE PERIODS INCLUDED IN THE BAR CHART:
<S>                                        <C>
BEST QUARTER: 11.65%, Q1 2006              WORST QUARTER: -32.45%, Q4 2008
</TABLE>



26 | DWS Small Cap Growth Fund
<PAGE>

AVERAGE ANNUAL TOTAL RETURNS (%) as of 12/31/2008


<TABLE>
<CAPTION>
                                                1 YEAR        SINCE INCEPTION*
<S>                                         <C>              <C>
 INSTITUTIONAL CLASS
   Return before Taxes                          -50.32             -11.75
   Return after Taxes on Distributions          -50.57             -12.36
   Return after Taxes on Distributions
   and Sale of Fund Shares                      -32.39**            -9.29**
 RUSSELL 2000 (Reg. TM) GROWTH INDEX
 (reflects no deductions for fees,
 expenses or taxes)                             -38.54              -6.12
</TABLE>


 *   Institutional Class commenced operations December 20, 2004. Index
     comparisons begin on December 31, 2004.

**   Return after Taxes on Distributions and Sale of Fund Shares is higher than
   other return figures for the same period due to a capital loss occurring
   upon redemption resulting in an assumed tax deduction for the shareholder.

     Total returns would have been lower if operating expenses hadn't been
reduced.

 RUSSELL 2000 (Reg. TM) GROWTH INDEX is an unmanaged capitalization-weighted
 measure of 2,000 of the smallest capitalized US companies with a
 greater-than-average growth orientation and whose common stocks trade on the
 NYSE, NYSE Alternext US (formerly known as "AMEX") and Nasdaq.


--------------------------------------------------------------------------------
Current performance may be higher or lower than the performance data quoted
above. For more recent performance information, call your financial advisor or
(800) 730-1313 or visit our Web site at www.dws-investments.com.


--------------------------------------------------------------------------------
Return information assumes that fund shares were sold at the end of the period.


RETURN AFTER TAXES ON DISTRIBUTIONS reflects taxes only on the fund's
distributions and not on a shareholder's gain or loss from selling fund shares.


RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES reflects taxes on
both the fund's distributions and a shareholder's gain or loss from selling
fund shares.


                                                 DWS Small Cap Growth Fund  | 27
<PAGE>

HOW MUCH INVESTORS PAY

The table below describes the fees and expenses that you may pay if you buy and
hold fund shares. This information doesn't include any fees that may be charged
by your financial advisor.


<TABLE>
<CAPTION>
FEE TABLE
<S>                                       <C>
 SHAREHOLDER FEES, paid directly from your investment
 Sales Charge                                        None
 Redemption/Exchange Fee on shares
 owned less than 15 days (as % of
 redemption proceeds)1                                2.00%

 ANNUAL OPERATING EXPENSES, deducted from fund assets
 Management Fees                                      0.65%
 Distribution/Service (12b-1) Fees                   None
 Other Expenses2                                      0.34
 TOTAL ANNUAL OPERATING EXPENSES3, 4                  0.99
</TABLE>


1   This fee is charged on all applicable redemptions or exchanges. Please see
   "Policies You Should Know About - Policies about transactions" for further
   information.

2   "Other Expenses" include an administrative services fee paid to the Advisor
   in the amount of 0.10%.

3   Through January 31, 2010, the Advisor has contractually agreed to waive all
   or a portion of its management fee and reimburse or pay operating expenses
   of the fund to the extent necessary to maintain the fund's total operating
   expenses at 1.00% for Institutional Class shares, excluding certain
   expenses such as extraordinary expenses, taxes, brokerage and interest.

4   Except as otherwise noted, the information in the table is based on amounts
   incurred during the fund's most recent fiscal year. It is important for you
   to understand that a decline in the fund's average net assets during the
   current fiscal year due to recent unprecedented market volatility or other
   factors could cause the fund's expense ratios for the fund's current fiscal
   year to be higher than the expense information presented.

Based on the costs above, this example helps you compare the expenses of the
fund's Institutional Class shares to those of other mutual funds. This example
assumes the expenses above remain the same. It also assumes that you invested
$10,000, earned 5% annual returns and reinvested all dividends and
distributions and sold your shares at the end of the period. This is only an
example; actual expenses will be different.


<TABLE>
<CAPTION>
EXAMPLE                    1 YEAR      3 YEARS      5 YEARS      10 YEARS
<S>                       <C>         <C>          <C>          <C>
 Institutional Class        $101         $315         $547       $1,213
</TABLE>



28 | DWS Small Cap Growth Fund
<PAGE>

OTHER POLICIES AND SECONDARY RISKS

           While the previous pages describe the main points of each fund's
           strategy and risks, there are a few other issues to know about:

           -  Although major changes tend to be infrequent, each fund's Board
              could change a fund's investment objective without seeking
              shareholder approval. The Board will provide shareholders with at
              least 60 days notice prior to making any changes to each fund's
              80% investment policy as described herein.

           -  As a temporary defensive measure, each fund could shift up to
              100% of assets into investments such as money market securities
              or other short-term securities that offer comparable levels of
              risk. This could prevent losses, but, while engaged in a
              temporary defensive position, a fund will not be pursuing its
              investment objective. However, portfolio management may choose
              not to use these strategies for various reasons, even in volatile
              market conditions.

           -  Each fund may trade actively. This could raise transaction costs
              (thus lowering return) and could mean increased taxable
              distributions to shareholders and distributions that will be
              taxable to shareholders at higher federal income tax rates.

           -  Certain DWS fund-of-funds are permitted to invest in each fund.
              As a result, a fund may have large inflows or outflows of cash
              from time to time. This could have adverse effects on a fund's
              performance if a fund were required to sell securities or invest
              cash at times when it otherwise would not do so. This activity
              could also accelerate the realization of capital gains and
              increase a fund's transaction costs. The Advisor will monitor the
              impact of these transactions and a fund may discontinue such
              arrangements if they are not deemed to be in the best interests
              of a fund.


           Secondary risks

           The risk disclosure below applies to each fund, unless otherwise
           noted.

           DERIVATIVES RISK. Risks associated with derivatives include the risk
           that the derivative is not well correlated with the security, index
           or currency to which it relates; the risk that derivatives may
           result in losses or missed opportunities; the risk that the fund
           will be unable to sell the derivative because of an illiquid


                                        Other Policies and Secondary Risks  | 29
<PAGE>

           secondary market; and the risk that the derivative transaction could
           expose the fund to the effects of leverage, which could increase the
           fund's exposure to the market and magnify potential losses. There is
           no guarantee that derivatives, to the extent employed, will have the
           intended effect, and their use could cause lower returns or even
           losses to the fund. The use of derivatives by the fund to hedge risk
           may reduce the opportunity for gain by offsetting the positive
           effect of favorable price movements.


           For more information

           This prospectus doesn't tell you about every policy or risk of
           investing in each fund.

           If you want more information on each fund's allowable securities and
           investment practices and the characteristics and risks of each one,
           you may want to request a copy of the Statement of Additional
           Information (the back cover tells you how to do this).

           Keep in mind that there is no assurance that a fund will achieve its
           objective.

           A complete list of each fund's portfolio holdings as of the
           month-end is posted on www.dws-investments.com on or about the 15th
           day of the following month. More frequent posting of portfolio
           holdings information may be made from time to time on
           www.dws-investments.com. The posted portfolio holdings information
           is available by fund and generally remains accessible at least until
           the date on which a fund files its Form N-CSR or N-Q with the
           Securities and Exchange Commission for the period that includes the
           date as of which the posted information is current. Each fund's
           Statement of Additional Information includes a description of a
           fund's policies and procedures with respect to the disclosure of a
           fund's portfolio holdings.


30 | Other Policies and Secondary Risks
<PAGE>

WHO MANAGES AND OVERSEES THE FUNDS


           The investment advisor

           Deutsche Investment Management Americas Inc. ("DIMA" or the
           "Advisor"), with headquarters at 345 Park Avenue, New York, NY
           10154, is the investment advisor for each fund. Under the oversight
           of the Board, the Advisor makes investment decisions, buys and sells
           securities for each fund and conducts research that leads to these
           purchase and sale decisions. The Advisor provides a full range of
           global investment advisory services to institutional and retail
           clients.

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

           Deutsche Asset Management is a global asset management organization
           that offers a wide range of investing expertise and resources,
           including hundreds of portfolio managers and analysts and an office
           network that reaches the world's major investment centers. This
           well-resourced global investment platform brings together a wide
           variety of experience and investment insight across industries,
           regions, asset classes and investing styles.

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


                                        Who Manages and Oversees the Funds  | 31
<PAGE>

           MANAGEMENT FEE. The Advisor receives a management fee from each
           fund. Below are the actual rates paid by each fund for the most
           recent fiscal year, as a percentage of each fund's average daily net
           assets.


<TABLE>
<CAPTION>
FUND NAME                                   FEE PAID
<S>                                       <C>
  DWS Micro Cap Fund                          0.88  %*
  DWS Mid Cap Growth Fund                     0.63  %
  DWS Small Cap Growth Fund                   0.65  %
</TABLE>


           *   Reflects the effects of expense limitations and/or fee waivers
then in effect.


           Effective October 1, 2008, DWS Micro Cap Fund pays the Advisor under
           the investment management agreement a fee, calculated daily and paid
           monthly, at the annual rate of 1.100% of the fund's average daily
           net assets up to $250 million, 0.950% of the next $250 million and
           0.800% thereafter.

           A discussion regarding the basis for the Board's approval of each
           fund's investment management agreement is contained in the most
           recent shareholder report for the annual period ended September 30
           (see "Shareholder reports" on the back cover).

           Under a separate administrative services agreement between each fund
           and the Advisor, each fund pays the Advisor a fee for providing most
           of each fund's administrative services.


32 | Who Manages and Oversees the Funds
<PAGE>

Portfolio management

Each fund is managed by a team of investment professionals who collaborate to
develop and implement each fund's investment strategy. Each portfolio manager
on the team has authority over all aspects of each fund's investment portfolio,
including but not limited to, purchase and sales of individual securities,
portfolio construction techniques, portfolio risk assessment, and the
management of daily cash flows in accordance with portfolio holdings.

The following people handle the day-to-day management of each fund:

Joseph Axtell, CFA
Managing Director of Deutsche Asset Management and Portfolio Manager of the
funds.
- Joined Deutsche Asset Management in 2001 and the funds in 2006.
- Senior analyst at Merrill Lynch Investment Managers for the international
     equity portion of a global balanced portfolio (1996-2001).
- Director, International Research at PCM International (1989-1996).
- Associate manager, structured debt and equity group at Prudential Capital
   Corporation (1988-1989).
- Analyst at Prudential-Bache Capital Funding in London (1987-1988).
- Equity analyst in the healthcare sector at Prudential Equity Management
   Associates (1985-1987).
- BS, Carlson School of Management, University of Minnesota.

Rafaelina M. Lee
Director of Deutsche Asset Management and Portfolio Manager of the funds.
- Joined Deutsche Asset Management in 1999 and the funds in 2008.
- Research analyst for US Micro, Small and Mid Cap Equity: New York.
- Over 20 years of investment industry experience in US portfolio strategy,
   Latin America market strategy and US equity research at JP Morgan
   Securities, UBS Securities and Goldman Sachs & Co.
- BA, Columbia University; MBA, Stern School of Business, New York University.

Jeffrey Saeger, CFA
Director of Deutsche Asset Management and Portfolio Manager of the funds.
- Joined Deutsche Asset Management in 1996 and the funds in 2009.
- Over 14 years of investment industry experience.
- BS, State University of New York at Fredonia.

Each fund's Statement of Additional Information provides additional information
about a portfolio manager's investments in each fund, a description of the
portfolio management compensation structure and information regarding other
accounts managed.


                                        Who Manages and Oversees the Funds  | 33
<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights are designed to help you understand recent financial
performance. The figures in the first part of each table are for a single
share. The total return figures represent the percentage that an investor in a
fund would have earned (or lost), assuming all dividends and distributions were
reinvested. This information has been audited by PricewaterhouseCoopers LLP,
independent registered public accounting firm, whose report, along with each
fund's financial statements, is included in each fund's annual report (see
"Shareholder reports" on the back cover). On July 10, 2006, DWS Micro Cap Fund
acquired all the assets and assumed all the liabilities of the Predecessor
Fund. The information contained in the following table for DWS Micro Cap Fund
for periods prior to July 10, 2006 has been derived from the Predecessor Fund's
financial statements.


34 | Financial Highlights
<PAGE>

DWS Micro Cap Fund - Institutional Class


<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER
30,                                     2008           2007             2006              2005           2004
<S>                                 <C>            <C>            <C>                 <C>            <C>
SELECTED PER SHARE DATA
-------------------------------------------------------------------------------------------------            -
NET ASSET VALUE, BEGINNING
OF PERIOD                            $  20.77       $  19.36         $  22.90          $  21.32       $  18.93
--------------------------------     --------       --------         --------          --------       --------
Income (loss) from
investment operations:
  Net investment income
  (loss)a                              (  .13)        (  .21)          (  .18)c          (  .28)        (  .26)
________________________________     ________       ________         ________          ________       ________
  Net realized and unrealized
  gain (loss)                          ( 3.97)          5.17              .24              4.01           2.65
--------------------------------     --------       --------         --------          --------       --------
  TOTAL FROM INVESTMENT
  OPERATIONS                           ( 4.10)          4.96              .06              3.73           2.39
________________________________     ________       ________         ________          ________       ________
Less distributions from:
  Net realized gains                   ( 2.87)        ( 3.55)          ( 3.60)           ( 2.15)             -
________________________________     ________       ________         ________          ________       ________
Redemption fees                           .00*           .00*             .00*              .00*             -
--------------------------------     --------       --------         --------          --------       --------
NET ASSET VALUE, END OF
PERIOD                               $  13.80       $  20.77         $  19.36          $  22.90       $  21.32
--------------------------------     --------       --------         --------          --------       --------
Total Return (%)b                      (22.22)         27.58           (  .63)c,d         18.14          12.63
--------------------------------     --------       --------         --------          --------       --------

RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
-------------------------------------------------------------------------------------------------     --------
Net assets, end of period
($ millions)                                9             17               30                41             44
________________________________     ________       ________         ________          ________       ________
Ratio of expenses before
expense reductions (%)                   1.86           1.71             2.00              1.99           1.90
________________________________     ________       ________         ________          ________       ________
Ratio of expenses after
expense reductions (%)                   1.46           1.39             1.50              1.49           1.49
________________________________     ________       ________         ________          ________       ________
Ratio of net investment
income (loss) (%)                      (  .79)        ( 1.04)          (  .84)c          ( 1.27)        ( 1.22)
________________________________     ________       ________         ________          ________       ________
Portfolio turnover rate (%)                59             73              100               108             99
--------------------------------     --------       --------         --------          --------       --------
</TABLE>


a   Based on average shares outstanding during the period.

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

c   Includes non-recurring income from the Advisor recorded as a result of an
   administrative proceeding regarding disclosure of brokerage allocation
   practices in connection with sales of DWS Funds. The non-recurring income
   resulted in an increase in net investment income of $0.061 per share and an
   increase in the ratio of net investment income of 0.29%. Excluding this
   non-recurring income, total return would have been 0.34% lower.

d   The Fund realized a gain of $18,520 on the disposal of an investment not
   adhering to the Fund's investment restrictions. Excluding this gain, total
   return would have been 0.02% lower.

*   Amount is less than $.005.

                                                      Financial Highlights  | 35
<PAGE>

DWS Mid Cap Growth Fund - Institutional Class


<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER
30,                                     2008           2007            2006            2005           2004
<S>                                 <C>            <C>            <C>              <C>            <C>
SELECTED PER SHARE DATA
----------------------------------------------------------------------------------------------            -
NET ASSET VALUE, BEGINNING
OF PERIOD                            $  19.41       $  15.95         $ 15.38        $  12.19       $  11.55
--------------------------------     --------       --------         -------        --------       --------
Income (loss) from
investment operations:
  Net investment income
  (loss)a                              (  .06)        (  .10)         (  .11)c        (  .08)        (  .08)
________________________________     ________       ________         _______        ________       ________
  Net realized and unrealized
  gain (loss)                          ( 4.76)          3.56             .68            3.27            .72
--------------------------------     --------       --------         -------        --------       --------
  TOTAL FROM INVESTMENT
  OPERATIONS                           ( 4.82)          3.46             .57            3.19            .64
________________________________     ________       ________         _______        ________       ________
Less distributions from:
  Net realized gains                   ( 2.50)             -               -               -              -
________________________________     ________       ________         _______        ________       ________
Redemption fees                           .00*           .00*            .00*            .00*             -
--------------------------------     --------       --------         -------        --------       --------
NET ASSET VALUE, END OF
PERIOD                               $  12.09       $  19.41         $ 15.95        $  15.38       $  12.19
--------------------------------     --------       --------         -------        --------       --------
Total Return (%)b                      (28.22)         21.69         3.71c             26.17           5.54
--------------------------------     --------       --------         -------        --------       --------

RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------     --------
Net assets, end of period
($ millions)                              117            387             412             417            328
________________________________     ________       ________         _______        ________       ________
Ratio of expenses before
expense reductions (%)                   1.04           1.03            1.08            1.06           1.10
________________________________     ________       ________         _______        ________       ________
Ratio of expenses after
expense reductions (%)                   1.00           1.00            1.04            1.00           1.00
________________________________     ________       ________         _______        ________       ________
Ratio of net investment
income (loss) (%)                      (  .37)        (  .52)         (  .65)c        (  .58)        (  .61)
________________________________     ________       ________         _______        ________       ________
Portfolio turnover rate (%)                82             56              53              83            116
--------------------------------     --------       --------         -------        --------       --------
</TABLE>


a   Based on average shares outstanding during the period.

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

c   Includes non-recurring income from the Advisor recorded as a result of an
   administrative proceeding regarding disclosure of brokerage allocation
   practices in connection with sales of DWS Funds. The non-recurring income
   resulted in an increase in net investment income of $0.002 per share and an
   increase in the ratio of net investment income of 0.01%. Excluding this
   non-recurring income, total return would have been 0.01% lower.

*   Amount is less than $.005.

36 | Financial Highlights
<PAGE>

DWS Small Cap Growth Fund - Institutional Class


<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30,                        2008           2007           2006           2005 a
<S>                                         <C>            <C>            <C>            <C>
SELECTED PER SHARE DATA
-------------------------------------------------------------------------           -              -
NET ASSET VALUE, BEGINNING OF PERIOD          $  26.56       $  23.71       $   25.01      $   23.88
-------------------------------------------   --------       --------       ---------      ---------
Income (loss) from investment
operations:
  Net investment income (loss)b                 (  .06)        (  .10)         (  .16)d       (  .15)
___________________________________________   ________       ________       _________      _________
  Net realized and unrealized gain (loss)       ( 7.90)          4.56             .82           1.28
-------------------------------------------   --------       --------       ---------      ---------
  TOTAL FROM INVESTMENT OPERATIONS              ( 7.96)          4.46             .66           1.13
___________________________________________   ________       ________       _________      _________
Less distributions from:
  Net realized gains                            (  .36)        ( 1.61)         ( 1.96)             -
___________________________________________   ________       ________       _________      _________
Redemption fees                                    .00***         .00***          .00***         .00***
-------------------------------------------   --------       --------       ---------      ---------
NET ASSET VALUE, END OF PERIOD                $  18.24       $  26.56       $   23.71      $   25.01
-------------------------------------------   --------       --------       ---------      ---------
Total Return (%)                                (30.31)         19.57      2.41c,d,e          4.73 c**
-------------------------------------------   --------       --------      ----------      ---------

RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
-------------------------------------------------------------------------  ----------      ---------
Net assets, end of period ($ millions)               5            116               5              4
___________________________________________   ________       ________      __________      _________
Ratio of expenses before expense
reductions (%)                                     .99            .91            1.10           1.12*
___________________________________________   ________       ________      __________      _________
Ratio of expenses after expense
reductions (%)                                     .99            .91            1.03           1.00*
___________________________________________   ________       ________      __________      _________
Ratio of net investment
income (loss) (%)                               (  .26)        (  .39)         (  .65)d       (  .78)*
___________________________________________   ________       ________      __________      _________
Portfolio turnover rate (%)                         82         64f                 74            119
-------------------------------------------   --------       --------      ----------      ---------
</TABLE>


a   For the period December 20, 2004 (commencement of operations of
   Institutional Class shares) to September 30, 2005.

b   Based on average shares outstanding during the period.

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

d   Includes non-recurring income from the Advisor recorded as a result of an
   administrative proceeding regarding disclosure of brokerage allocation
   practices in connection with sales of DWS Funds. The non-recurring income
   resulted in an increase in net investment income of $0.008 per share and an
   increase in the ratio of net investment income of 0.03%. Excluding this
   non-recurring income, total return would have been 0.03% lower.

e   The Fund realized a gain of $92,403 on the disposal of an investment not
   adhering to the Fund's investment restrictions. Excluding this gain, total
   return would have been 0.02% lower.

f   Excludes portfolio securities delivered as a result of processing
   redemption in-kind transactions.

*   Annualized

**   Not annualized

***   Amount is less than $.005.

                                                      Financial Highlights  | 37
<PAGE>

HOW TO INVEST IN THE FUNDS

THE FOLLOWING PAGES TELL YOU HOW TO INVEST IN A FUND AND WHAT TO EXPECT AS A
SHAREHOLDER. The following pages also tell you about many of the services,
choices and benefits of being a shareholder. You'll also find information on
how to check the status of your account using the method that's most convenient
for you.

If you're investing directly with DWS Investments, all of this information
applies to you. If you're investing through a "third party provider" - for
example, a workplace retirement plan, financial supermarket or financial
advisor - your provider may have its own policies or instructions and you
should follow those.

You can find out more about the topics covered here by speaking with your
FINANCIAL ADVISOR OR A REPRESENTATIVE OF YOUR WORKPLACE RETIREMENT PLAN OR
OTHER INVESTMENT PROVIDER.

<PAGE>

Buying and Selling INSTITUTIONAL CLASS Shares


           You may buy Institutional Class shares through your securities
           dealer or through any financial institution that is authorized to
           act as a shareholder servicing agent ("financial advisor"). Contact
           them for details on how to place and pay for your order. Your
           financial advisor may also receive compensation from the Advisor
           and/or its affiliates. For more information, please see "Financial
           intermediary support payments."

           You may also buy Institutional Class shares by sending your check
           (along with a completed account application) directly to DWS
           Investments Service Company (the "transfer agent"). Your purchase
           order may not be accepted if a fund withdraws the offering of fund
           shares, the sale of fund shares has been suspended or if it is
           determined that your purchase would be detrimental to the interests
           of a fund's shareholders.


           Eligibility requirements

           You may buy Institutional Class shares if you are any of the
           following:

           -  An eligible institution (e.g., a financial institution,
              corporation, trust, estate or educational, religious or
              charitable institution).

           -  An employee benefit plan with assets of at least $50 million.

           -  A registered investment advisor or financial planner purchasing
              on behalf of clients and charging an asset-based or
              hourly fee.

           -  A client of the private banking division of Deutsche Bank AG.

           -  A current or former director or trustee of the Deutsche or DWS
              mutual funds.

           -  An employee, the employee's spouse or life partner and children
              or stepchildren age 21 or younger of Deutsche Bank or its
              affiliates or a subadvisor to any fund in the DWS family of funds
              or a broker-dealer authorized to sell shares in the funds.


                             Buying and Selling Institutional Class Shares  | 39
<PAGE>

           Investment minimum

           Your initial investment must be for at least $1,000,000. There are
           no minimum subsequent investment requirements.

           The minimum initial investment is waived for:

           -  Shareholders with existing accounts prior to August 13, 2004 who
              met the previous minimum investment eligibility requirement.

           -  Investment advisory affiliates of Deutsche Bank Securities, Inc.,
              DWS funds or Deutsche funds purchasing shares for the accounts of
              their investment advisory clients.

           -  Employee benefit plans with assets of at least $50 million.

           -  Clients of the private banking division of Deutsche Bank AG.

           -  Institutional clients and qualified purchasers that are clients
              of a division of Deutsche Bank AG.

           -  A current or former director or trustee of the Deutsche or DWS
              funds.

           -  An employee, the employee's spouse or life partner and children
              or stepchildren age 21 or younger of Deutsche Bank or its
              affiliates or a subadvisor to any fund in the DWS family of funds
              or a broker-dealer authorized to sell shares of the funds.

           -  Registered investment advisors who trade through platforms
              approved by the Advisor and whose client assets in the aggregate
              meet or, in the Advisor's judgment, will meet within a reasonable
              period of time, the $1,000,000 minimum investment.

           -  Employee benefit plan platforms approved by the Advisor that
              invest in a fund through an omnibus account, and that meet or, in
              the Advisor's judgment, will meet within a reasonable period of
              time, the $1,000,000 minimum investment.

           Each fund reserves the right to modify the above eligibility
           requirements and investment minimum at any time. In addition, each
           fund, in its discretion, may waive the minimum initial investment
           for specific employee benefit plans (or family of plans) whose
           aggregate investment in Institutional Class shares of a fund equals
           or exceeds the minimum initial investment amount but where a
           particular account or program may not on its own meet such minimum
           amount.


40 | Buying and Selling Institutional Class Shares
<PAGE>

           How to contact the transfer agent


<TABLE>
<S>                       <C>
  BY PHONE:                (800) 730-1313
  FIRST INVESTMENTS        DWS Investments Service Company
  BY MAIL:                P.O. Box 219210
                          Kansas City, MO 64121-9210
  ADDITIONAL               DWS Investments Service Company
  INVESTMENTS BY          P.O. Box 219210
  MAIL:                   Kansas City, MO 64121-9210
  BY OVERNIGHT MAIL:       DWS Investments Service Company
                          210 West 10th Street
                          Kansas City, MO 64105-1614
</TABLE>


           You can reach the automated information line, 24 hours a day,
           7 days a week by calling (800) 621-1048.


           How to open your account

<TABLE>
<S>                  <C>
  MAIL:               Complete and sign the account application that
                     accompanies this prospectus. (You may obtain
                     additional applications by calling the transfer agent.)
                     Mail the completed application along with a check
                     payable to the fund you have selected to the transfer
                     agent. Be sure to include the fund number. The
                     applicable addresses are shown under "How to
                     contact the transfer agent."
  WIRE:               Call the transfer agent to set up a wire account.
  FUND NAME AND       Please use the complete fund name. Refer to the
  FUND NUMBER:       start of "The Fund's Main Investment Strategy" above
                     for the fund number.
</TABLE>


           Please note that your account cannot become activated until we
           receive a completed account application.


           How to BUY and SELL shares

           MAIL:

           BUYING: Send your check, payable to the fund you have selected, to
           the transfer agent. Be sure to include the fund number and your
           account number on your check. If you are investing in more than one
           fund, make your check payable to "DWS Investments" and include your
           account number, the names and numbers of each fund you have
           selected, and the dollar amount or percentage you would like
           invested in each fund. Mailing addresses are shown under "How to
           contact the transfer agent."


                             Buying and Selling Institutional Class Shares  | 41
<PAGE>

           SELLING: Send a signed letter to the transfer agent with your name,
           your fund number and account number, the fund's name, and either the
           number of shares you wish to sell or the dollar amount you wish to
           receive. In certain circumstances, a signature guarantee may be
           required to sell shares of the fund by mail. For information about a
           signature guarantee, see "Signature Guarantee." Unless exchanging
           into another DWS fund, you must submit a written authorization to
           sell shares in a retirement account.

           WIRE:

           BUYING: You may buy shares by wire only if your account is
           authorized to do so. Please note that you or your financial advisor
           must call Institutional Investment Services at (800) 730-1313 to
           notify us in advance of a wire transfer purchase. After you inform
           Institutional Investment Services of the amount of your purchase,
           you will receive a trade confirmation number. Instruct your bank to
           send payment by wire using the wire instructions noted below. All
           wires must be received by 4:00 p.m. Eastern time the next business
           day following your purchase. If your wire is not received by 4:00
           p.m. Eastern time on the next business day after the fund receives
           your request to purchase shares, your transaction will be canceled
           at your expense and risk.


<TABLE>
<S>                <C>
  BANK NAME:        State Street Bank Boston
  ROUTING NO:       011000028
  ATTN:             DWS Investments
  DDA NO:           9903-5552
  FBO:              (Account name) (Account number)
  CREDIT:           (Fund name, Fund number and, if applicable, class
                    name) (see "How to open your account")
</TABLE>


           Refer to your account statement for the account name and number.
           Wire transfers normally take two or more hours to complete. Wire
           transfers may be restricted on holidays and at certain other times.

           SELLING: You may sell shares by wire only if your account is
           authorized to do so. You will be paid for redeemed shares by wire
           transfer of funds to your financial advisor or bank upon receipt of
           a duly authorized redemption request as promptly as feasible. For
           your protection, you may not change the destination bank account
           over the phone. To sell by wire,


42 | Buying and Selling Institutional Class Shares
<PAGE>

           contact your financial advisor or Institutional Investment Services
           at (800) 730-1313. After you inform Institutional Investment
           Services of the amount of your redemption, you will receive a trade
           confirmation number. The minimum redemption by wire is $1,000. We
           must receive your order by 4:00 p.m. Eastern time to wire your
           account the next business day.

           TELEPHONE TRANSACTIONS:

           You may place orders to buy and sell over the phone by calling your
           financial advisor or Institutional Investment Services at (800)
           730-1313. If your shares are in an account with the transfer agent,
           you may (1) redeem by check in an amount up to $100,000, or by wire
           (minimum $1,000), or (2) exchange the shares for Institutional Class
           shares of another DWS fund by calling the transfer agent.

           You may make regular investments from a bank checking account. For
           more information on setting up an automatic investment plan or
           payroll investment plan, call Institutional Investment Services at
           (800) 730-1313.


           Financial intermediary support payments

            The Advisor, DWS Investments Distributors, Inc. (the "Distributor")
            and/or their affiliates may pay additional compensation, out of
            their own assets and not as an additional charge to each fund, to
            selected affiliated and unaffiliated brokers, dealers, participating
            insurance companies or other financial intermediaries ("financial
            advisors") in connection with the sale and/or distribution of fund
            shares or the retention and/ or servicing of fund investors and fund
            shares ("revenue sharing"). Such revenue sharing payments are in
            addition to any distribution or service fees payable under any Rule
            12b-1 or service plan of each fund, any record keeping/sub-transfer
            agency/networking fees payable by each fund (generally through the
            Distributor or an affiliate) and/or the Distributor to certain
            financial advisors for performing such services and any sales
            charge, commissions, non-cash compensation arrangements expressly
            permitted under applicable rules of the Financial Industry
            Regulatory Authority or other concessions described in the fee table
            or elsewhere in this prospectus or the Statement of Additional
            Information as payable to all financial advisors. For example, the
            Advisor, the Distributor and/or their affiliates may compensate
            financial advisors for providing a fund with "shelf space" or access
            to a third party platform or fund offering list or


                             Buying and Selling Institutional Class Shares  | 43
<PAGE>

           other marketing programs, including, without limitation, inclusion
           of the fund on preferred or recommended sales lists, mutual fund
           "supermarket" platforms and other formal sales programs; granting
           the Distributor access to the financial advisor's sales force;
           granting the Distributor access to the financial advisor's
           conferences and meetings; assistance in training and educating the
           financial advisor's personnel; and obtaining other forms of
           marketing support.

           The level of revenue sharing payments made to financial advisors may
           be a fixed fee or based upon one or more of the following factors:
           gross sales, current assets and/or number of accounts of each fund
           attributable to the financial advisor, the particular fund or fund
           type or other measures as agreed to by the Advisor, the Distributor
           and/or their affiliates and the financial advisors or any
           combination thereof. The amount of these revenue sharing payments is
           determined at the discretion of the Advisor, the Distributor and/or
           their affiliates from time to time, may be substantial, and may be
           different for different financial advisors based on, for example,
           the nature of the services provided by the financial advisor.

           The Advisor, the Distributor and/or their affiliates currently make
           revenue sharing payments from their own assets in connection with
           the sale and/or distribution of DWS fund shares or the retention
           and/or servicing of investors and DWS fund shares to financial
           advisors in amounts that generally range from .01% up to .50% of
           assets of each fund serviced and maintained by the financial
           advisor, .05% to .25% of sales of each fund attributable to the
           financial advisor, a flat fee of $13,350 up to $500,000, or any
           combination thereof. These amounts are subject to change at the
           discretion of the Advisor, the Distributor and/or their affiliates.
           Receipt of, or the prospect of receiving, this additional
           compensation may influence your financial advisor's recommendation
           of each fund or of any particular share class of each fund. You
           should review your financial advisor's compensation disclosure
           and/or talk to your financial advisor to obtain more information on
           how this compensation may have influenced your financial advisor's
           recommendation of each fund. Additional information regarding these
           revenue sharing payments is included in each fund's Statement of
           Additional Information, which is available to you on request at no
           charge (see the back cover of this prospectus for more information
           on how to request a copy of the Statement of Additional
           Information).


44 | Buying and Selling Institutional Class Shares
<PAGE>

           The Advisor, the Distributor and/or their affiliates may also make
           such revenue sharing payments to financial advisors under the terms
           discussed above in connection with the distribution of both DWS
           funds and non-DWS funds by financial advisors to retirement plans
           that obtain record keeping services from ADP, Inc. on the DWS
           Investments branded retirement plan platform (the "Platform") with
           the level of revenue sharing payments being based upon sales of both
           the DWS funds and the non-DWS funds by the financial advisor on the
           Platform or current assets of both the DWS funds and the non-DWS
           funds serviced and maintained by the financial advisor on the
           Platform.

           It is likely that broker-dealers that execute portfolio transactions
           for each fund will include firms that also sell shares of the DWS
           funds to their customers. However, the Advisor will not consider
           sales of DWS fund shares as a factor in the selection of
           broker-dealers to execute portfolio transactions for the DWS funds.
           Accordingly, the Advisor has implemented policies and procedures
           reasonably designed to prevent its traders from considering sales of
           DWS fund shares as a factor in the selection of broker-dealers to
           execute portfolio transactions for each fund. In addition, the
           Advisor, the Distributor and/or their affiliates will not use fund
           brokerage to pay for their obligation to provide additional
           compensation to financial advisors as described above.


POLICIES YOU SHOULD KNOW ABOUT

           Along with the information on the previous pages, the policies below
           may affect you as a shareholder. Some of this information, such as
           the section on distributions and taxes, applies to all investors,
           including those investing through a financial advisor.

           If you are investing through a financial advisor or through a
           retirement plan, check the materials you received from them about
           how to buy and sell shares because particular financial advisors or
           other intermediaries may adopt policies, procedures or limitations
           that are separate from those described by a fund. Please note that a
           financial advisor may charge fees separate from those charged by a
           fund and may be compensated by a fund.


                                            Policies You Should Know About  | 45
<PAGE>

           Keep in mind that the information in this prospectus applies only to
           the shares offered herein. Other share classes are described in
           separate prospectuses and have different fees, requirements and
           services.

           In order to reduce the amount of mail you receive and to help reduce
           expenses, we generally send a single copy of any shareholder report
           and prospectus to each household. If you do not want the mailing of
           these documents to be combined with those for other members of your
           household, please contact your financial advisor or call (800)
           730-1313.


           Policies about transactions

           EACH FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange
           is open. Each fund calculates its share price for each class every
           business day, as of the close of regular trading on the New York
           Stock Exchange (typically 4:00 p.m. Eastern time, but sometimes
           earlier, as in the case of scheduled half-day trading or unscheduled
           suspensions of trading). You can place an order to buy or sell
           shares at any time.

           To help the government fight the funding of terrorism and money
           laundering activities, federal law requires all financial
           institutions to obtain, verify and record information that
           identifies each person who opens an account. What this means to you:
           When you open an account, we will ask for your name, address, date
           of birth and other information that will allow us to identify you.
           Some or all of this information will be used to verify the identity
           of all persons opening an account.

           We might request additional information about you (which may include
           certain documents, such as articles of incorporation for companies)
           to help us verify your identity and, in some cases, the information
           and/or documents may be required to conduct the verification. The
           information and documents will be used solely to verify your
           identity.

           We will attempt to collect any missing required and requested
           information by contacting you or your financial advisor. If we are
           unable to obtain this information within the time frames established
           by each fund, then we may reject your application and order.


46 | Policies You Should Know About
<PAGE>

           Each fund will not invest your purchase until all required and
           requested identification information has been provided and your
           application has been submitted in "good order." After we receive all
           the information, your application is deemed to be in good order and
           we accept your purchase, you will receive the net asset value per
           share next calculated.

           If we are unable to verify your identity within time frames
           established by each fund, after a reasonable effort to do so, you
           will receive written notification.

           With certain limited exceptions, only US residents may invest in
           each fund.

           Because orders placed through a financial advisor must be forwarded
           to the transfer agent before they can be processed, you'll need to
           allow extra time. Your financial advisor should be able to tell you
           approximately when your order will be processed. It is the
           responsibility of your financial advisor to forward your order to
           the transfer agent in a timely manner.

           SUB-MINIMUM BALANCES. Each fund may redeem your shares and close
           your account on 60 days' notice if it fails to meet the minimum
           account balance requirement of $1,000,000 ($250,000 for shareholders
           with existing accounts prior to August 13, 2004) for any reason
           other than a change in market value.

           MARKET TIMING POLICIES AND PROCEDURES. Short-term and excessive
           trading of fund shares may present risks to long-term shareholders,
           including potential dilution in the value of fund shares,
           interference with the efficient management of a fund's portfolio
           (including losses on the sale of investments), taxable gains to
           remaining shareholders and increased brokerage and administrative
           costs. These risks may be more pronounced if a fund invests in
           certain securities, such as those that trade in foreign markets, are
           illiquid or do not otherwise have "readily available market
           quotations." Certain investors may seek to employ short-term trading
           strategies aimed at exploiting variations in portfolio valuation
           that arise from the nature of the securities held by a fund (e.g.,
           "time zone arbitrage"). Each fund discourages short-term and
           excessive trading and has adopted policies and procedures that are
           intended to detect and deter short-term and excessive trading.


                                            Policies You Should Know About  | 47
<PAGE>

           Pursuant to its policies, each fund will impose a 2% redemption fee
           on fund shares held for less than a specified holding period
           (subject to certain exceptions discussed below under "Redemption
           fees"). Each fund also reserves the right to reject or cancel a
           purchase or exchange order for any reason without prior notice. For
           example, a fund may in its discretion reject or cancel a purchase or
           an exchange order even if the transaction is not subject to the
           specific roundtrip transaction limitation described below if the
           Advisor believes that there appears to be a pattern of short-term or
           excessive trading activity by a shareholder or deems any other
           trading activity harmful or disruptive to a fund. Each fund, through
           its Advisor and transfer agent, will measure short-term and
           excessive trading by the number of roundtrip transactions within a
           shareholder's account during a rolling 12-month period. A
           "roundtrip" transaction is defined as any combination of purchase
           and redemption activity (including exchanges) of the same fund's
           shares. Each fund may take other trading activity into account if a
           fund believes such activity is of an amount or frequency that may be
           harmful to long-term shareholders or disruptive to portfolio
           management.

           Shareholders are limited to four roundtrip transactions in the same
           DWS fund (excluding money market funds) over a rolling 12-month
           period. Shareholders with four or more roundtrip transactions in the
           same DWS fund within a rolling 12-month period generally will be
           blocked from making additional purchases of, or exchanges into, that
           DWS fund. Each fund has sole discretion whether to remove a block
           from a shareholder's account. The rights of a shareholder to redeem
           shares of a DWS fund are not affected by the four roundtrip
           transaction limitation, but all redemptions remain subject to each
           fund's redemption fee policy (see "Redemption fees" described
           below).

           Each fund may make exceptions to the roundtrip transaction policy
           for certain types of transactions if, in the opinion of the Advisor,
           the transactions do not represent short-term or excessive trading or
           are not abusive or harmful to a fund, such as, but not limited to,
           systematic transactions, required minimum retirement distributions,
           transactions initiated by a fund or administrator and transactions
           by certain qualified funds-of-funds.

           In certain circumstances where shareholders hold shares of a fund
           through a financial intermediary, the fund may rely upon the
           financial intermediary's policy to deter short-term or excessive
           trading if the Advisor believes that the financial


48 | Policies You Should Know About
<PAGE>

           intermediary's policy is reasonably designed to detect and deter
           transactions that are not in the best interests of a fund. A
           financial intermediary's policy relating to short-term or excessive
           trading may be more or less restrictive than the DWS funds' policy,
           may permit certain transactions not permitted by the DWS funds'
           policies, or prohibit transactions not subject to the DWS funds'
           policies.

           The Advisor may also accept undertakings from a financial
           intermediary to enforce short-term or excessive trading policies on
           behalf of a fund that provide a substantially similar level of
           protection for each fund against such transactions. For example,
           certain financial intermediaries may have contractual, legal or
           operational restrictions that prevent them from blocking an account.
           In such instances, the financial intermediary may use alternate
           techniques that the Advisor considers to be a reasonable substitute
           for such a block.

           In addition, if a fund invests some portion of its assets in foreign
           securities, it has adopted certain fair valuation practices intended
           to protect the fund from "time zone arbitrage" with respect to its
           foreign securities holdings and other trading practices that seek to
           exploit variations in portfolio valuation that arise from the nature
           of the securities held by a fund. (See "How each fund calculates
           share price.")

           There is no assurance that these policies and procedures will be
           effective in limiting short-term and excessive trading in all cases.
           For example, the Advisor may not be able to effectively monitor,
           detect or limit short-term or excessive trading by underlying
           shareholders that occurs through omnibus accounts maintained by
           broker-dealers or other financial intermediaries. The Advisor
           reviews trading activity at the omnibus level to detect short-term
           or excessive trading. If the Advisor has reason to suspect that
           short-term or excessive trading is occurring at the omnibus level,
           the Advisor will contact the financial intermediary to request
           underlying shareholder level activity. Depending on the amount of
           fund shares held in such omnibus accounts (which may represent most
           of a fund's shares) short-term and/or excessive trading of fund
           shares could adversely affect long-term shareholders in a fund. If
           short-term or excessive trading is identified, the Advisor will take
           appropriate action.

           Each fund's market timing policies and procedures may be modified or
           terminated at any time.


                                            Policies You Should Know About  | 49
<PAGE>

           REDEMPTION FEES. Each fund imposes a redemption fee of 2% of the
           total redemption amount (calculated at net asset value) on all fund
           shares redeemed or exchanged within 15 days of buying them (either
           by purchase or exchange). The redemption fee is paid directly to
           each fund and is designed to encourage long-term investment and to
           offset transaction and other costs associated with short-term or
           excessive trading. For purposes of determining whether the
           redemption fee applies, shares held the longest time will be treated
           as being redeemed first and shares held the shortest time will be
           treated as being redeemed last.

           The redemption fee is applicable to fund shares purchased either
           directly or through a financial intermediary, such as a
           broker-dealer. Transactions through financial intermediaries
           typically are placed with a fund on an omnibus basis and include
           both purchase and sale transactions placed on behalf of multiple
           investors. These purchase and sale transactions are generally netted
           against one another and placed on an aggregate basis; consequently
           the identities of the individuals on whose behalf the transactions
           are placed generally are not known to a fund. For this reason, each
           fund has undertaken to notify financial intermediaries of their
           obligation to assess the redemption fee on customer accounts and to
           collect and remit the proceeds to each fund. However, due to
           operational requirements, the intermediaries' methods for tracking
           and calculating the fee may be inadequate or differ in some respects
           from each fund's.

           The redemption fee will not be charged in connection with the
           following exchange or redemption transactions: (i) transactions on
           behalf of participants in certain research wrap programs; (ii)
           transactions on behalf of a shareholder to return any excess IRA
           contributions to the shareholder; (iii) transactions on behalf of a
           shareholder to effect a required minimum distribution on an IRA;
           (iv) transactions on behalf of any mutual fund advised by the
           Advisor and its affiliates (e.g., "funds of funds") or, in the case
           of a master/feeder relationship, redemptions by the feeder fund from
           the master portfolio; (v) transactions on behalf of certain
           unaffiliated mutual funds operating as funds of funds; (vi)
           transactions following death or disability of any registered
           shareholder, beneficial owner or grantor of a living trust with
           respect to shares purchased before death or disability; (vii)
           transactions involving hardship of any registered shareholder;
           (viii) systematic transactions with pre-defined trade dates for
           purchases, exchanges or redemptions, such as automatic


50 | Policies You Should Know About
<PAGE>

           account rebalancing, or loan origination and repayments; (ix)
           transactions involving shares purchased through the reinvestment of
           dividends or other distributions; (x) transactions involving shares
           transferred from another account in the same fund or converted from
           another class of the same fund (the redemption fee period will carry
           over to the acquired shares); (xi) transactions initiated by a fund
           or administrator (e.g., redemptions for not meeting account
           minimums, to pay account fees funded by share redemptions, or in the
           event of the liquidation or merger of the fund); or (xii)
           transactions in cases when there are legal or contractual
           limitations or restrictions on the imposition of the redemption fee
           (as determined by a fund or its agents in their sole discretion). It
           is the policy of the DWS funds to permit approved fund platform
           providers to execute transactions with the funds without the
           imposition of a redemption fee if such providers have implemented
           alternative measures that are determined by the Advisor to provide
           controls on short-term and excessive trading that are comparable to
           the DWS funds' policies.

           THE AUTOMATED INFORMATION LINE IS AVAILABLE 24 HOURS A DAY BY
           CALLING (800) 621-1048. You can use our automated phone services to
           get information on DWS funds generally and on accounts held directly
           at DWS Investments.

            QUICKBUY AND QUICKSELL let you set up a link between a DWS fund
            account and a bank account. Once this link is in place, you can move
            money between the two with a phone call. You'll need to make sure
            your bank has Automated Clearing House (ACH) services. Transactions
            take two to three days to be completed and there is a $50 minimum
            and a $250,000 maximum. To set up QuickBuy or QuickSell on a new
            account, see the account application; to add it to an existing
            account, call (800) 730-1313.

           TELEPHONE AND ELECTRONIC TRANSACTIONS. Generally, you are
           automatically entitled to telephone and electronic transaction
           privileges, but you may elect not to have them when you open your
           account or by contacting Institutional Investment Services at (800)
           730-1313 at a later date.

           Since many transactions may be initiated by telephone or
           electronically, it's important to understand that as long as we take
           reasonable steps to ensure that an order to purchase or redeem
           shares is genuine, such as recording calls or requesting
           personalized security codes or other information, we are not



THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

The DWS Investments Web site can be a valuable resource for shareholders with
Internet access. Go to WWW.DWS-INVESTMENTS.COM to get up-to-date information,
review balances or even place orders for exchanges.

                                            Policies You Should Know About  | 51
<PAGE>

           responsible for any losses that may occur as a result. For
           transactions conducted over the Internet, we recommend the use of a
           secure Internet browser. In addition, you should verify the accuracy
           of your confirmation statements immediately after you receive them.

           EACH FUND DOES NOT ISSUE SHARE CERTIFICATES. However, if you
           currently have shares in certificated form, you must include the
           share certificates properly endorsed or accompanied by a duly
           executed stock power when exchanging or redeeming shares. You may
           not exchange or redeem shares in certificate form by telephone or
           via the Internet.

           WHEN YOU ASK US TO SEND OR RECEIVE A WIRE, please note that while we
           don't charge a fee to send or receive wires, it's possible that your
           bank may do so. Wire transactions are generally completed within 24
           hours. Each fund can only send wires of $1,000 or more and accept
           wires of $50 or more.

           EACH FUND ACCEPTS PAYMENT FOR SHARES ONLY IN US DOLLARS by a check
           drawn on a US bank, a bank or Federal Funds wire transfer or an
           electronic bank transfer. Each fund does not accept third party
           checks. A third party check is a check made payable to one or more
           parties and offered as payment to one or more other parties (e.g., a
           check made payable to you that you offer as payment to someone
           else). Checks should normally be payable to DWS Investments and
           drawn by you or a financial institution on your behalf with your
           name or account number included with the check.

           IF YOU PAY FOR SHARES BY CHECK and the check fails to clear, or if
           you order shares by phone and fail to pay for them by 4:00 p.m.
           Eastern time the next business day, we have the right to cancel your
           order, hold you liable or charge you or your account for any losses
           or fees the fund or its agents have incurred. To sell shares, you
           must state whether you would like to receive the proceeds by wire or
           check.

            SIGNATURE GUARANTEE. When you want to sell more than $100,000 worth
            of shares or send proceeds to a third party or to a new address,
            you'll usually need to place your order in writing and include a
            signature guarantee. However, if you want money wired to a bank
            account that is already on file with us, you don't need a signature
            guarantee. Also, generally you don't need a signature guarantee for
            an exchange, although we may require one in certain other
            circumstances.



THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

If you ever have difficulty placing an order by phone or Internet, you can send
us your order in writing.


52 | Policies You Should Know About
<PAGE>

           A signature guarantee is simply a certification of your signature -
           a valuable safeguard against fraud. You can get a signature
           guarantee from an eligible guarantor institution, including
           commercial banks, savings and loans, trust companies, credit unions,
           member firms of a national stock exchange or any member or
           participant of an approved signature guarantor program. Note that
           you can't get a signature guarantee from a notary public and we must
           be provided the original guarantee.

           SELLING SHARES OF TRUST ACCOUNTS AND BUSINESS OR ORGANIZATION
           ACCOUNTS may require additional documentation. Please call (800)
           730-1313 or contact your financial advisor for more information.

           MONEY FROM SHARES YOU SELL is normally sent out within one business
           day of when your order is processed (not when it is received),
           although it could be delayed for up to seven days. There are
           circumstances when it could be longer, including, but not limited
           to, when you are selling shares you bought recently by check  or ACH
           (the funds will be placed under a 10 calendar day hold to ensure
           good funds) or when unusual circumstances prompt the SEC to allow
           further delays. Certain expedited redemption processes (e.g.,
           redemption proceeds by wire) may also be delayed or unavailable when
           you are selling shares recently purchased or in the event of the
           closing of the Federal Reserve wire payment system. Each fund
           reserves the right to suspend or postpone redemptions as permitted
           pursuant to Section 22(e) of the Investment Company Act of 1940.
           Generally, those circumstances are when 1) the New York Stock
           Exchange is closed other than customary weekend or holiday closings;
           2) trading on the New York Stock Exchange is restricted; 3) an
           emergency exists which makes the disposal of securities owned by a
           fund or the fair determination of the value of a fund's net assets
           not reasonably practicable; or 4) the SEC, by order, permits the
           suspension of the right of redemption. Redemption payments by wire
           may also be delayed in the event of a non-routine closure of the
           Federal Reserve wire payment system. For additional rights reserved
           by each fund, please see "Other rights we reserve."

           You may obtain additional information about other ways to sell your
           shares by contacting your financial advisor.


                                            Policies You Should Know About  | 53
<PAGE>

           ACCOUNT STATEMENTS. We or your financial advisor will generally
           furnish you with a written confirmation of every transaction that
           affects your account balance. You will also receive periodic
           statements reflecting the balances in your account.


           How each fund calculates share price

           To calculate net asset value, or NAV, each share class uses the
           following equation:


<TABLE>
<S>                                                     <C> <C>
            TOTAL ASSETS - TOTAL LIABILITIES
           -----------------------------------------    =    NAV
               TOTAL NUMBER OF SHARES OUTSTANDING
</TABLE>


           The price at which you buy and sell shares is based on the NAV per
           share next calculated after the order is received and accepted by
           the transfer agent.

           EACH FUND CHARGES A REDEMPTION FEE EQUAL TO 2.00% of the value of
           shares redeemed or exchanged within 15 days of purchase. Please see
           "Policies about transactions - Redemption fees" for further
           information.

           WE TYPICALLY VALUE SECURITIES USING INFORMATION FURNISHED BY AN
           INDEPENDENT PRICING SERVICE OR MARKET QUOTATIONS, WHERE APPROPRIATE.
           However, we may use methods approved by the Board, such as a fair
           valuation model, which are intended to reflect fair value when
           pricing service information or market quotations are not readily
           available or when a security's value or a meaningful portion of the
           value of a fund's portfolio is believed to have been materially
           affected by a significant event, such as a natural disaster, an
           economic event like a bankruptcy filing, or a substantial
           fluctuation in domestic or foreign markets that has occurred between
           the close of the exchange or market on which the security is
           principally traded (for example, a foreign exchange or market) and
           the close of the New York Stock Exchange. In such a case, a fund's
           value for a security is likely to be different from the last quoted
           market price or pricing service information. In addition, due to the
           subjective and variable nature of fair value pricing, it is possible
           that the value determined for a particular asset may be materially
           different from the value realized upon such asset's sale. It is
           expected that the greater the percentage of fund assets that is
           invested in non-US securities, the more extensive will be a fund's
           use of fair value pricing. This is intended to reduce a fund's
           exposure to "time zone arbitrage" and other harmful trading
           practices. (See "Market timing policies and procedures.")


54 | Policies You Should Know About
<PAGE>

           TO THE EXTENT THAT A FUND INVESTS IN SECURITIES THAT ARE TRADED
           PRIMARILY IN FOREIGN MARKETS, the value of its holdings could change
           at a time when you aren't able to buy or sell fund shares. This is
           because some foreign markets are open on days or at times when a
           fund doesn't price its shares. (Note that prices for securities that
           trade on foreign exchanges can change significantly on days when the
           New York Stock Exchange is closed and you cannot buy or sell fund
           shares. Price changes in the securities a fund owns may ultimately
           affect the price of fund shares the next time the NAV is
           calculated.)


           Other rights we reserve

           You should be aware that we may do any of the following:

           -  withdraw or suspend the offering of shares at any time

           -  withhold a portion of your distributions and redemption proceeds
              if we have been notified by the IRS that you are subject to
              backup withholding or if you fail to provide us with the correct
              taxpayer ID number and certain certifications, including
              certification that you are not subject to backup withholding

           -  reject a new account application if you don't provide any
              required or requested identifying information, or for any other
              reason

           -  refuse, cancel, limit or rescind any purchase or exchange order,
              without prior notice; freeze any account (meaning you will not be
              able to purchase fund shares in your account); suspend account
              services; and/or involuntarily redeem your account if we think
              that the account is being used for fraudulent or illegal
              purposes; one or more of these actions will be taken when, at our
              sole discretion, they are deemed to be in a fund's best interests
              or when a fund is requested or compelled to do so by governmental
              authority or by applicable law

           -  close and liquidate your account if we are unable to verify your
              identity, or for other reasons; if we decide to close your
              account, your fund shares will be redeemed at the net asset value
              per share next calculated after we determine to close your
              account (less applicable redemption fee, if any); you may
              recognize a gain or loss on the redemption of your fund shares
              and you may incur a tax liability

                                            Policies You Should Know About  | 55
<PAGE>

            -  pay you for shares you sell by "redeeming in kind," that is, by
               giving you securities (which typically will involve brokerage
               costs for you to liquidate) rather than cash, but which will be
               taxable to the same extent as a redemption for cash; a fund
               generally won't make a redemption in kind unless your requests
               over a 90-day period total more than $250,000 or 1% of the value
               of a fund's net assets, whichever is less

           -  change, add or withdraw various services, fees and account
              policies (for example, we may adjust a fund's investment minimums
              at any time)


UNDERSTANDING DISTRIBUTIONS AND TAXES

           Each fund intends to distribute to its shareholders virtually all of
           its net earnings. Each fund can earn money in two ways: by receiving
           interest, dividends or other income from investments it holds and by
           selling investments for more than it paid for them. (Each fund's
           earnings are separate from any gains or losses stemming from your
           own purchase and sale of shares.) Each fund may not always pay a
           dividend or other distribution for a given period.

           DIVIDENDS AND DISTRIBUTIONS ARE PAID ANNUALLY IN DECEMBER AND, IF
           NECESSARY, MAY BE PAID AT OTHER TIMES AS WELL.

           Dividends or distributions declared and payable to shareholders of
           record in the last quarter of a given calendar year are treated for
           federal income tax purposes as if they were received on December 31
           of that year, provided such dividends or distributions are paid by
           the end of the following January.

           For federal income tax purposes, income and capital gains
           distributions are generally taxable to shareholders. However,
           dividends and distributions received by retirement plans qualifying
           for tax exemption under federal income tax laws generally will not
           be taxable.

           YOU CAN CHOOSE HOW TO RECEIVE YOUR DIVIDENDS AND DISTRIBUTIONS. You
           can have them all automatically reinvested in fund shares (at NAV),
           all deposited directly to your bank account or all sent to you by
           check, have one type reinvested and the other sent to you by check
           or have them invested in a different fund. Tell us your preference
           on your application. If you don't indicate a preference, your
           dividends and distributions will all be reinvested in shares of the
           fund without a sales charge (if applicable). Distributions are
           treated the same for federal




THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

Because each shareholder's tax situation is unique, ask your tax professional
about the tax consequences of your investments, including any state and local
tax consequences.

56 | Understanding Distributions and Taxes
<PAGE>

           income tax purposes whether you receive them in cash or reinvest
           them in additional shares. Under the terms of employer-sponsored
           qualified plans, and retirement plans, reinvestment (at NAV) is the
           only option.

           BUYING, SELLING OR EXCHANGING FUND SHARES WILL USUALLY HAVE FEDERAL
           INCOME TAX CONSEQUENCES FOR YOU (except in employer-sponsored
           qualified plans, IRAs or other tax-advantaged accounts). Your sale
           of shares may result in a capital gain or loss. The gain or loss
           will be long-term or short-term depending on how long you owned the
           shares that were sold. For federal income tax purposes, an exchange
           is treated the same as a sale.

           If a fund's distributions exceed its income and capital gains
           realized in any year, such excess distributions will constitute a
           return of capital for federal income tax purposes. A return of
           capital generally will not be taxable to you at the time of the
           distribution but will reduce the cost basis of your shares and
           result in a higher reported capital gain or a lower reported capital
           loss when you sell your shares. However, if a fund has available
           capital loss carryforwards to offset its capital gains realized in
           any year, and its distributions exceed its income alone, all or a
           portion of the excess distributions may not be treated, for tax
           purposes, as a return of capital, and would be taxable to
           shareholders.

           THE FEDERAL INCOME TAX STATUS of a fund's earnings you receive and
           your own fund transactions generally depends on their type:


<TABLE>
<CAPTION>
GENERALLY TAXED AT LONG-TERM                          GENERALLY TAXED AT ORDINARY
CAPITAL GAIN RATES:                                   INCOME RATES:
<S>                                                   <C>
DISTRIBUTIONS FROM A FUND
- gains from the sale of                              -  gains from the sale of
  securities held (or treated as                         securities held by a fund for
  held) by a fund for more than                          one year or less
  one year                                            -  all other taxable income
- qualified dividend income
TRANSACTIONS INVOLVING FUND
SHARES
- gains from selling fund                             -  gains from selling fund
  shares held for more than                              shares held for one year or
  one year                                               less
</TABLE>



                                     Understanding Distributions and Taxes  | 57
<PAGE>

           ANY DIRECT INVESTMENTS IN FOREIGN SECURITIES BY A FUND MAY BE
           SUBJECT TO FOREIGN WITHHOLDING TAXES. In that case, a fund's yield
           on those securities would generally be decreased. Shareholders
           generally will not be entitled to claim a credit or deduction with
           respect to foreign taxes paid by a fund. In addition, any
           investments in foreign securities or foreign currencies may increase
           or accelerate a fund's recognition of ordinary income and may affect
           the timing or amount of the fund's distributions. If you invest in a
           fund through a taxable account, your after-tax return could be
           negatively impacted.

           Investments in certain debt obligations or other securities may
           cause a fund to recognize taxable income in excess of the cash
           generated by them. Thus, a fund could be required at times to
           liquidate other investments in order to satisfy its distribution
           requirements.

           For taxable years beginning before January 1, 2011, distributions to
           individuals and other noncorporate shareholders of investment income
           designated by a fund as derived from qualified dividend income are
           eligible for taxation for federal income tax purposes at the more
           favorable long-term capital gain rates. Qualified dividend income
           generally includes dividends received by a fund from domestic and
           some foreign corporations. It does not include income from
           investments in debt securities  or, generally, from real estate
           investment trusts. In addition, a fund must meet certain holding
           period and other requirements with respect to the dividend-paying
           stocks in its portfolio and the shareholder must meet certain
           holding period and other requirements with respect to a fund's
           shares for the lower tax rates to apply.

           For taxable years beginning before January 1, 2011, the maximum
           federal income tax rate imposed on long-term capital gains
           recognized by individuals and other noncorporate shareholders has
           been temporarily reduced to 15%, in general, with lower rates
           applying to taxpayers in the 10% and 15% rate brackets. For taxable
           years beginning on or after January 1, 2011, the maximum long-term
           capital gain rate is scheduled to return to 20%.

           YOUR FUND WILL SEND YOU DETAILED FEDERAL INCOME TAX INFORMATION
           EVERY JANUARY. These statements tell you the amount and the federal
           income tax classification of any dividends or distributions you
           received. They also have certain details on your purchases and sales
           of shares.


58 | Understanding Distributions and Taxes
<PAGE>

           IF YOU INVEST RIGHT BEFORE A FUND PAYS A DIVIDEND, you'll be getting
           some of your investment back as a taxable dividend. You can avoid
           this by investing after a fund pays a dividend. In tax-advantaged
           retirement accounts you generally do not need to worry about this.

           If a fund's distributions exceed its current and accumulated
           earnings and profits, the excess will be treated for federal income
           tax purposes as a tax-free return of capital to the extent of your
           basis in your shares and thereafter as a gain from the sale or
           exchange of your shares. Because a return of capital distribution
           reduces the basis of your shares, a return of capital distribution
           may result in a higher capital gain or a lower capital loss when you
           sell your shares.

           CORPORATIONS are taxed at the same rates on ordinary income and
           capital gains but may be eligible for a dividends-received deduction
           for a portion of the income dividends they receive from a fund,
           provided certain holding period and other requirements are met.

           The above discussion summarizes certain federal income tax
           consequences for shareholders who are US persons. If you are a
           non-US person, please consult your own tax advisor with respect to
           the US tax consequences to you of an investment in a fund. For more
           information, see "Taxes" in the Statement of Additional Information.



                                     Understanding Distributions and Taxes  | 59
<PAGE>

APPENDIX
--------------------------------------------------------------------------------
           Hypothetical Expense Summary


           Using the annual fund operating expense ratios presented in the fee
           tables in the fund prospectus, the Hypothetical Expense Summary
           shows the estimated fees and expenses, in actual dollars, that would
           be charged on a hypothetical investment of $10,000 in the fund held
           for the next 10 years and the impact of such fees and expenses on
           fund returns for each year and cumulatively, assuming a 5% return
           for each year. The historical rate of return for the fund may be
           higher or lower than 5% and, for money funds, is typically less than
           5%. The tables also assume that all dividends and distributions are
           reinvested. The annual fund expense ratios shown are net of any
           contractual fee waivers or expense reimbursements, if any, for the
           period of the contractual commitment. The tables do not reflect
           redemption fees, if any, which may be payable upon redemption. If
           redemption fees were shown, the "Hypothetical Year-End Balance After
           Fees and Expenses" amounts shown would be lower and the "Annual Fees
           and Expenses" amounts shown would be higher. Also, please note that
           if you are investing through a third party provider, that provider
           may have fees and expenses separate from those of the fund that are
           not reflected here. Mutual fund fees and expenses fluctuate over
           time and actual expenses may be higher or lower than those shown.

           The Hypothetical Expense Summary should not be used or construed as
           an offer to sell, a solicitation of an offer to buy or a
           recommendation or endorsement of any specific mutual fund. You
           should carefully review the fund's prospectus to consider the
           investment objectives, risks, expenses and charges of the fund prior
           to investing.


60 | Appendix
<PAGE>

DWS Micro Cap Fund - Institutional Class



<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        1.71%              3.29%       $ 10,329.00        $   173.81
   2           10.25%        1.71%              6.69%       $ 10,668.82        $   179.53
   3           15.76%        1.71%             10.20%       $ 11,019.83        $   185.44
   4           21.55%        1.71%             13.82%       $ 11,382.38        $   191.54
   5           27.63%        1.71%             17.57%       $ 11,756.86        $   197.84
   6           34.01%        1.71%             21.44%       $ 12,143.66        $   204.35
   7           40.71%        1.71%             25.43%       $ 12,543.19        $   211.07
   8           47.75%        1.71%             29.56%       $ 12,955.86        $   218.02
   9           55.13%        1.71%             33.82%       $ 13,382.11        $   225.19
  10           62.89%        1.71%             38.22%       $ 13,822.38        $   232.60
  TOTAL                                                                        $ 2,019.39
</TABLE>


DWS Mid Cap Growth Fund - Institutional Class




<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER        ANNUAL
              FEES AND        EXPENSE        FEES AND           FEES AND         FEES AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        1.04%              3.96%       $ 10,396.00        $   106.06
   2           10.25%        1.04%              8.08%       $ 10,807.68        $   110.26
   3           15.76%        1.04%             12.36%       $ 11,235.67        $   114.63
   4           21.55%        1.04%             16.81%       $ 11,680.60        $   119.16
   5           27.63%        1.04%             21.43%       $ 12,143.15        $   123.88
   6           34.01%        1.04%             26.24%       $ 12,624.02        $   128.79
   7           40.71%        1.04%             31.24%       $ 13,123.93        $   133.89
   8           47.75%        1.04%             36.44%       $ 13,643.64        $   139.19
   9           55.13%        1.04%             41.84%       $ 14,183.93        $   144.70
  10           62.89%        1.04%             47.46%       $ 14,745.61        $   150.43
  TOTAL                                                                        $ 1,270.99
</TABLE>



                                                                  Appendix  | 61
<PAGE>

DWS Small Cap Growth Fund - Institutional Class



<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        0.99%              4.01%       $ 10,401.00        $   100.98
   2           10.25%        0.99%              8.18%       $ 10,818.08        $   105.03
   3           15.76%        0.99%             12.52%       $ 11,251.89        $   109.25
   4           21.55%        0.99%             17.03%       $ 11,703.09        $   113.63
   5           27.63%        0.99%             21.72%       $ 12,172.38        $   118.18
   6           34.01%        0.99%             26.60%       $ 12,660.49        $   122.92
   7           40.71%        0.99%             31.68%       $ 13,168.18        $   127.85
   8           47.75%        0.99%             36.96%       $ 13,696.22        $   132.98
   9           55.13%        0.99%             42.45%       $ 14,245.44        $   138.31
  10           62.89%        0.99%             48.17%       $ 14,816.68        $   143.86
  TOTAL                                                                        $ 1,212.99
</TABLE>



62 | Appendix
<PAGE>

TO GET MORE INFORMATION

SHAREHOLDER REPORTS - These include commentary from a fund's management team
about recent market conditions and the effects of a fund's strategies on its
performance. They also have detailed performance figures, a list of everything
a fund owns, and its financial statements. Shareholders get these reports
automatically.

STATEMENT OF ADDITIONAL INFORMATION (SAI) - This tells you more about a fund's
features and policies, including additional risk information. The SAI is
incorporated by reference into this document (meaning that it's legally part of
this prospectus).

For a free copy of any of these documents or to request other information about
a fund, call (800) 730-1313, or contact DWS Investments at the address listed
below. Each fund's SAI and shareholder reports are also available through the
DWS Investments Web site at www.dws-investments.com. These documents and other
information about each fund are available from the EDGAR Database on the SEC's
Internet site at www.sec.gov. If you like, you may obtain copies of this
information, after paying a copying fee, by e-mailing a request to
publicinfo@sec.gov or by writing the SEC at the address listed below. You can
also review and copy these documents and other information about each fund,
including each fund's SAI, at the SEC's Public Reference Room in Washington,
D.C. Information on the operation of the SEC's Public Reference Room may be
obtained by calling (800) SEC-0330.


<TABLE>
<CAPTION>
DWS INVESTMENTS      SEC                     DISTRIBUTOR
-----------------    --------------------    ------------------------------
<S>                  <C>                     <C>
PO Box 219210        100 F Street, N.E.      DWS Investments Distributors,
Kansas City, MO      Washington, D.C.        Inc.
64121-9210           20549-0102              222 South Riverside Plaza
WWW.DWS-             WWW.SEC.GOV             Chicago, IL 60606-5808
INVESTMENTS.COM      (800) SEC-0330          (800) 621-1148
(800) 730-1313
</TABLE>



<TABLE>
<S>                    <C>                            <C>
SEC FILE NUMBER:
DWS Advisor Funds               DWS Micro Cap Fund    811-04760
DWS Advisor Funds          DWS Mid Cap Growth Fund    811-04760
DWS Advisor Funds        DWS Small Cap Growth Fund    811-04760
</TABLE>





(02/01/09) DSAGF2-1-IN          [RECYCLE GRAPHIC APPEARS HERE]
                                                                       [Logo]DWS
                                                                      INVESTMENT
                                                             Deutsche Bank Group



<PAGE>


                                FEBRUARY 1, 2009







                                   PROSPECTUS
                              ------------------
                                    CLASS S

                               DWS MICRO CAP FUND


                            DWS MID CAP GROWTH FUND


                           DWS SMALL CAP GROWTH FUND


As with all mutual funds, the Securities and Exchange Commission (SEC) does not
approve or disapprove these shares or determine whether the information in this
prospectus is truthful or complete. It is a criminal offense for anyone to
inform you otherwise.



                                                 RESHAPING INVESTING. [DWS Logo]
                                                             Deutsche Bank Group


<PAGE>

CONTENTS




<TABLE>
<S>      <C>
HOW EACH FUND WORKS
  4      DWS Micro Cap Fund
 13      DWS Mid Cap Growth Fund
 21      DWS Small Cap Growth Fund
 29      Other Policies and Secondary
         Risks
 31      Who Manages and Oversees
         the Funds
 34      Financial Highlights


</TABLE>
<TABLE>
<S>      <C>
HOW TO INVEST IN THE FUNDS
 39      How to Buy Class S Shares
 40      How to Exchange or Sell
         Class S Shares
 43      Policies You Should Know
         About
 54      Understanding Distributions
         and Taxes
 59      Appendix
</TABLE>

<PAGE>

HOW EACH FUND WORKS

On the next few pages, you'll find information about each fund's investment
objective, the main strategies each uses to pursue that objective and the main
risks that could affect performance.

Whether you are considering investing in a fund or are already a shareholder,
you'll want to LOOK THIS INFORMATION OVER CAREFULLY. You may want to keep it on
hand for reference as well.

CLASS S shares are generally only available to new investors through fee-based
programs of investment dealers that have special agreements with each fund's
distributor, through certain group retirement plans and through certain
registered investment advisors. These dealers and advisors typically charge
ongoing fees for services they provide.

Remember that mutual funds are investments, not bank deposits. They're not
insured or guaranteed by the FDIC or any other government agency. Their share
prices will go up and down, and you could lose money by investing in them.

You can find DWS prospectuses on the Internet at WWW.DWS-INVESTMENTS.COM (the
Web site does not form a part of this prospectus).
<PAGE>


<TABLE>
<S>                       <C>
                            Class S
  ticker symbol             SMFSX
    fund number             2390

    DWS MICRO CAP FUND


</TABLE>

            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund seeks capital appreciation.

            Under normal circumstances, the fund invests at least 80% of its
            assets, determined at the time of purchase, in stocks and other
            securities with equity characteristics of US micro capitalization
            companies. For the purposes of this 80% limitation, the micro
            capitalization equity universe is defined as the bottom 5% of the
            total domestic equity market capitalization (at the time of initial
            investment) using a minimum market capitalization of $10 million.
            The fund may invest up to 20% of its total assets in the securities
            of foreign companies that would be considered to be in the bottom
            5% in terms of market capitalization in the US equity market
            (subject to a $10 million market capitalization minimum). The
            fund's equity investments are mainly common stocks, but may also
            include other types of equity securities, such as preferred stocks
            or convertible securities.

            The fund invests primarily in equity securities of US micro
            capitalization growth-oriented companies. Portfolio management
            focuses on individual security selection rather than industry
            selection. Portfolio management uses an active process, which
            combines financial analysis with company visits to evaluate
            management and strategies. Each portfolio manager has specific
            sector responsibilities with investment discretion over securities
            within their sectors.

            Company research lies at the heart of our investment process.
            Portfolio management uses a "bottom-up" approach to picking
            securities.

            -  Portfolio management focuses on undervalued stocks with
               fast-growing earnings that they believe have superior near-
               to-intermediate term performance potential.

4 | DWS Micro Cap Fund
<PAGE>

            -  Portfolio management emphasizes individual selection of smaller
               stocks across all economic sectors, early in their growth cycles
               and with the potential to be the blue chips of the future.

            -  Portfolio management generally seeks companies with a leading or
               dominant position in their niche markets, a high rate of return
               on invested capital and the ability to finance a major part of
               future growth from internal sources.

            The fund follows a disciplined selling process in order to lessen
            risk. A security may be sold if one or more of the following
            conditions are met:

            -  the stock price reaches portfolio management's expectations;

            -  there is a material change in the company's fundamentals;

            -  portfolio management believes other investments offer better
               opportunities; or

            -  the market capitalization of a stock distorts the weighted
               average market capitalization of the fund.

            The fund may invest up to 20% of its assets in high quality debt
            instruments and money market instruments with remaining maturities
            of one year or less, including repurchase agreements. The fund may
            invest up to 5% of its net assets in non-convertible bonds and
            preferred stocks that portfolio management believes to be of high
            quality.

            OTHER INVESTMENTS. The fund is permitted, but not required, to use
            various types of derivatives (contracts whose value is based on,
            for example, indices, currencies or securities). Derivatives may be
            used for hedging and for risk management or for non-hedging
            purposes to seek to enhance potential gains. The fund may use
            derivatives in circumstances where portfolio management believes
            they offer an economical means of gaining exposure to a particular
            asset class or to keep cash on hand to meet shareholder redemptions
            or other needs while maintaining exposure to the market.

            In particular, the fund may use futures and options and write
            covered call options.


                                                         DWS Micro Cap Fund  | 5
<PAGE>

            SECURITIES LENDING. The fund may lend its investment securities in
            an amount up to 33 1/3% of its total assets to approved
            institutional borrowers who need to borrow securities in order to
            complete certain transactions.


            THE MAIN RISKS OF INVESTING IN THE FUND

            There are several risk factors that could hurt the fund's
            performance, cause you to lose money or cause the fund's
            performance to trail that of other investments.

            STOCK MARKET RISK. The fund is affected by how the stock market
            performs. To the extent the fund invests in a particular
            capitalization or market sector, the fund's performance may be
            proportionately affected by that segment's general performance.
            When stock prices fall, you should expect the value of your
            investment to fall as well. Because a stock represents ownership in
            its issuer, stock prices can be hurt by poor management, shrinking
            product demand and other business risks. These factors may affect
            single companies as well as groups of companies. In addition,
            movements in financial markets may adversely affect a stock's
            price, regardless of how well the company performs. The market as a
            whole may not favor the types of investments the fund makes, which
            could affect the fund's ability to sell them at an attractive
            price.

            MICRO CAPITALIZATION COMPANY RISK. The fund's investments in micro
            capitalization companies will be more susceptible to share price
            fluctuations since micro capitalization company stocks tend to
            experience steeper fluctuations in price - down as well as up - than
            the stocks of larger companies. A shortage of reliable information -
            the same information gap that creates opportunity in micro
            capitalization company investing - can also pose added risk.
            Industry-wide reversals may have a greater impact on micro
            capitalization companies, since they lack a large company's
            financial resources. Micro capitalization companies may have limited
            product lines and markets. They may also have shorter operating
            histories and more volatile businesses and may be more dependent on
            key personnel. Finally, micro capitalization company stocks are
            typically less liquid than large company stocks. Particularly when
            they are performing poorly, a micro capitalization company's shares
            may be more difficult to sell.





THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

This fund is designed for investors with long-term goals who can tolerate
capital fluctuation in pursuit of capital appreciation.





6 | DWS Micro Cap Fund
<PAGE>

            GROWTH INVESTING RISK. Since growth stocks usually reinvest a large
            portion of earnings in their own businesses, they may lack the
            dividends associated with value stocks that might otherwise cushion
            their decline in a falling market. Earnings disappointments in
            growth stocks often result in sharp price declines because
            investors buy these stocks for their potential superior earnings
            growth. Growth stocks may also be out of favor for certain periods
            in relation to value stocks.

            SECURITY SELECTION RISK. A risk that pervades all investing is the
            risk that the securities in the fund's portfolio may decline in
            value.

            FOREIGN INVESTMENT RISK. Foreign investments involve certain
            special risks, including:

            -  POLITICAL RISK. Some foreign governments have limited the
               outflow of profits to investors abroad, imposed restrictions on
               the exchange or export of foreign currency, extended diplomatic
               disputes to include trade and financial relations, seized
               foreign investments and imposed higher taxes.

            -  INFORMATION RISK. Companies based in foreign markets are usually
               not subject to accounting, auditing and financial reporting
               standards and practices as stringent as those in the US.
               Therefore, their financial reports may present an incomplete,
               untimely or misleading picture of a company, as compared to the
               financial reports required in the US.

            -  LIQUIDITY RISK. Investments that trade less frequently can be
               more difficult or more costly to buy, or to sell, than more
               liquid or active investments. This liquidity risk is a factor of
               the trading volume of a particular investment, as well as the
               size and liquidity of the entire local market. On the whole,
               foreign exchanges are smaller and less liquid than US exchanges.
               This can make buying and selling certain investments more
               difficult and costly. Relatively small transactions in some
               instances can have a disproportionately large effect on the
               price and supply of securities. In certain situations, it may
               become virtually impossible to sell an investment in an orderly
               fashion at a price that approaches portfolio management's
               estimate of its value. For the same reason, it may at times be
               difficult to value the fund's foreign investments.

                                                         DWS Micro Cap Fund  | 7
<PAGE>

            -  REGULATORY RISK. There is generally less government regulation of
               foreign markets, companies and securities dealers than in the US.

            -  CURRENCY RISK. The fund invests in securities denominated in
               foreign currencies. Changes in exchange rates between foreign
               currencies and the US dollar may affect the US dollar value of
               foreign securities or the income or gain received on these
               securities.

            -  LIMITED LEGAL RECOURSE RISK. Legal remedies for investors may be
               more limited than the legal remedies available in the US.

            -  TRADING PRACTICE RISK. Brokerage commissions and other fees are
               generally higher for foreign investments than for US
               investments. The procedures and rules governing foreign
               transactions and custody may also involve delays in payment,
               delivery or recovery of money or investments.

            -  TAXES. Foreign withholding and certain other taxes may reduce
               the amount of income available to distribute to shareholders of
               the fund. In addition, special US tax considerations may apply
               to the fund's foreign investments.

            PRICING RISK. At times, market conditions may make it difficult to
            value some investments, and the fund may use certain valuation
            methodologies for some of its investments, such as fair value
            pricing. Given the subjective nature of such valuation
            methodologies, it is possible that the value determined for an
            investment may be different than the value realized upon such
            investment's sale. If the fund has valued its securities too
            highly, you may pay too much for fund shares when you buy into the
            fund. If the fund has underestimated the price of its securities,
            you may not receive the full market value when you sell your fund
            shares.

            SECURITIES LENDING RISK. Any loss in the market price of securities
            loaned by the fund that occurs during the term of the loan would be
            borne by the fund and would adversely affect the fund's
            performance. Also, there may be delays in recovery of securities
            loaned or even a loss of rights in the collateral should the
            borrower of the securities fail financially while the loan is
            outstanding. However, loans will be made only to borrowers selected
            by the fund's delegate after a review of relevant facts and
            circumstances, including the creditworthiness of the borrower.


8 | DWS Micro Cap Fund
<PAGE>

            Other factors that could affect performance include:

            -  portfolio management could be wrong in the analysis of
               industries, companies, economic trends, the relative
               attractiveness of different securities or other matters.

            -  derivatives could produce disproportionate losses due to a
               variety of factors, including the failure of the counterparty to
               meet its obligations or unexpected price or interest rate
               movements.


                                                         DWS Micro Cap Fund  | 9
<PAGE>

THE FUND'S PERFORMANCE HISTORY

While a fund's past performance (before and after taxes) isn't necessarily a
sign of how it will do in the future, it can be valuable for an investor to
know.

The bar chart shows how the performance of the fund's Class S shares has varied
from year to year, which may give some idea of risk. The table on the following
page shows how fund performance compares to relevant index performance (which,
unlike fund performance, does not reflect fees or expenses). The performance of
the fund and the index information varies over time. All figures assume
reinvestment of dividends and distributions (in the case of after-tax returns,
reinvested net of assumed tax rates).

The table shows returns for Class S shares on a before-tax and after-tax basis.
After-tax returns are estimates calculated using the historical highest
marginal individual federal income tax rates and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on an investor's tax
situation and may differ from those shown in the table. After-tax returns shown
are not relevant for investors who hold their shares through tax-deferred
arrangements, such as 401(k) plans or individual retirement accounts.

The performance data for the period prior to July 10, 2006 provided in the bar
chart below and the table on the following page are those of the fund's
predecessor fund, DWS Micro Cap Fund, a series of DWS Investments Trust (the
"Predecessor Fund"). On July 10, 2006, the Predecessor Fund transferred its
assets to the fund, which is a series of DWS Advisor Funds. The fund assumed
the Predecessor Fund's liabilities.

In addition, the inception date for Class S shares of the Predecessor Fund is
February 1, 2005. The inception date for Institutional Class shares of the
Predecessor Fund is December 18, 1996. In the bar chart and the table, the
performance figures for Class S of the Predecessor Fund before its inception
date are based on the historical performance of the original share class of the
Predecessor Fund (Institutional Class), adjusted to reflect the higher gross
total annual operating expenses of Class S.

DWS Micro Cap Fund

ANNUAL TOTAL RETURN (%) AS OF 12/31 EACH YEAR - Class S



<TABLE>
<S>      <C>     <C>      <C>       <C>      <C>      <C>     <C>       <C>       <C>
77.09    2.96    15.08    -27.25    40.65    12.68    7.93     8.59      7.44      -43.31
1999     2000    2001     2002      2003     2004     2005    2006      2007      2008
</TABLE>





<TABLE>
<CAPTION>
FOR THE PERIODS INCLUDED IN THE BAR CHART:
<S>                                        <C>
BEST QUARTER: 29.66%, Q4 1999              WORST QUARTER: -30.08%, Q4 2008
</TABLE>



10 | DWS Micro Cap Fund
<PAGE>

AVERAGE ANNUAL TOTAL RETURNS (%) as of 12/31/2008


<TABLE>
<CAPTION>
                                               1 YEAR       5 YEARS      10 YEARS
<S>                                         <C>            <C>          <C>
 CLASS S
   Return before Taxes                         -43.31        -4.26         5.61
   Return after Taxes on Distributions         -43.31        -6.45         3.78
   Return after Taxes on Distributions
   and Sale of Fund Shares                     -28.15*       -4.36*        3.28
 RUSSELL 2000 (Reg. TM) GROWTH INDEX
 (reflects no deductions for fees,
 expenses or taxes)                            -38.54        -2.35         -0.76
</TABLE>


 *   Return after Taxes on Distributions and Sale of Fund Shares is higher than
     other return figures for the same period due to a capital loss occurring
     upon redemption resulting in an assumed tax deduction for the shareholder.

     Total returns would have been lower if operating expenses hadn't been
reduced.

 RUSSELL 2000 (Reg. TM) GROWTH INDEX is an unmanaged capitalization-weighted
 measure of 2,000 of the smallest capitalized US companies with a
 greater-than-average growth orientation and whose common stocks trade on the
 NYSE, NYSE Alternext US (formerly known as "AMEX") and Nasdaq.


--------------------------------------------------------------------------------
Current performance may be higher or lower than the performance data quoted
above. For more recent performance information, call your financial advisor or
(800) 728-3337 or visit our Web site at www.dws-investments.com.


--------------------------------------------------------------------------------
Return information assumes that fund shares were sold at the end of the period.


RETURN AFTER TAXES ON DISTRIBUTIONS reflects taxes only on the fund's
distributions and not on a shareholder's gain or loss from selling fund shares.


RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES reflects taxes on
both the fund's distributions and a shareholder's gain or loss from selling
fund shares.


                                                        DWS Micro Cap Fund  | 11
<PAGE>

HOW MUCH INVESTORS PAY

The table below describes the fees and expenses that you may pay if you buy and
hold fund shares. This information doesn't include any fees that may be charged
by your financial advisor.


<TABLE>
<CAPTION>
FEE TABLE                                           CLASS S
<S>                                       <C>
 SHAREHOLDER FEES, paid directly from your investment
 Sales Charge                                        None
 Redemption/Exchange Fee on shares
 owned less than 15 days (as % of
 redemption proceeds)1                                2.00%

 ANNUAL OPERATING EXPENSES, deducted from fund assets
 Management Fee2                                      1.10%
 Distribution/Service (12b-1) Fee                    None
 Other Expenses3                                      0.87
 TOTAL ANNUAL OPERATING EXPENSES4, 5                  1.97
</TABLE>


1   This fee is charged on applicable redemptions or exchanges. Please see
   "Policies You Should Know About - Policies about transactions" for further
   information.

2   Through November 30, 2009, the Advisor has contractually agreed to waive a
   portion of its Investment Management Fee in the amount of 0.305% of the
   fund's average daily total net assets.

3   "Other Expenses" include an administrative services fee paid to the Advisor
   in the amount of 0.10%.

4   Through September 30, 2009, the Advisor has contractually agreed to waive
   all or a portion of its fees and reimburse or pay certain operating
   expenses of the fund to the extent necessary to maintain the fund's total
   operating expenses at 1.44% for Class S shares, excluding certain expenses
   such as extraordinary expenses, taxes, brokerage and interest.

5   Except as otherwise noted, the information in the table is based on amounts
   incurred during the fund's most recent fiscal year. It is important for you
   to understand that a decline in the fund's average net assets during the
   current fiscal year due to recent unprecedented market volatility or other
   factors could cause the fund's expense ratios for the fund's current fiscal
   year to be higher than the expense information presented.

Based on the costs above, this example helps you compare the expenses of the
share class to those of other mutual funds. This example assumes the expenses
above remain the same. It also assumes that you invested $10,000, earned 5%
annual returns and reinvested all dividends and distributions and sold your
shares at the end of the period. This is only an example; actual expenses will
be different.


<TABLE>
<CAPTION>
EXAMPLE               1 YEAR      3 YEARS      5 YEARS      10 YEARS
<S>                  <C>         <C>          <C>          <C>
 Class S shares        $200         $618       $1,062       $2,296
</TABLE>



12 | DWS Micro Cap Fund
<PAGE>


<TABLE>
<S>                            <C>
                                 Class S
  ticker symbol                  SMCSX
    fund number                  2383

    DWS MID CAP GROWTH FUND


</TABLE>

            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund seeks long-term capital growth.

            Under normal circumstances, the fund invests at least 80% of its
            assets, determined at the time of purchase, in companies with
            market caps within the market capitalization range of the Russell
            Mid Cap Growth Index or securities with equity characteristics that
            provide exposure to those companies. The fund's equity investments
            are mainly common stocks, but may also include other types of
            equity securities such as preferred stocks or convertible
            securities.

            The fund invests primarily in equity securities of medium-sized
            growth-oriented companies. Portfolio management focuses on
            individual security selection rather than industry selection.
            Portfolio management uses an active process which combines
            financial analysis with company visits to evaluate management and
            strategies. Each portfolio manager has specific sector
            responsibilities with investment discretion over securities within
            their sectors.

            Company research lies at the heart of the investment process.
            Portfolio management uses a "bottom-up" approach to picking
            securities.

            -  Portfolio management focuses on undervalued stocks with
               fast-growing earnings and superior near-to-intermediate term
               performance potential.

            -  Portfolio management emphasizes individual selection of
               medium-sized stocks across all economic sectors, early in their
               growth cycles and with the potential to be the blue chips of the
               future.

            -  Portfolio management generally seeks companies with a leading or
               dominant position in their niche markets, a high rate of return
               on invested capital and the ability to finance a major part of
               future growth from internal sources.

                                                   DWS Mid Cap Growth Fund  | 13
<PAGE>

            The fund follows a disciplined selling process in order to lessen
            risk. A security may be sold if one or more of the following
            conditions are met:

            -  the stock price reaches portfolio management's expectations;

            -  there is a material change in the company's fundamentals;

            -  portfolio management believes other investments offer better
               opportunities; or

            -  the market capitalization of a stock distorts the weighted
               average market capitalization of the fund.

            The fund may invest up to 20% of its assets in stocks and other
            securities of companies based outside the US.

            OTHER INVESTMENTS. The fund is permitted, but not required, to use
            various types of derivatives (contracts whose value is based on,
            for example, indices, currencies or securities). Derivatives may be
            used for hedging and for risk management or for non-hedging
            purposes to seek to enhance potential gains. The fund may use
            derivatives in circumstances where portfolio management believes
            they offer an economical means of gaining exposure to a particular
            asset class or to keep cash on hand to meet shareholder redemptions
            or other needs while maintaining exposure to the market.

            In particular, the fund may use futures and options and write
            covered call options.

            SECURITIES LENDING. The fund may lend its investment securities in
            an amount up to 33 1/3% of its total assets to approved
            institutional borrowers who need to borrow securities in order to
            complete certain transactions.




            THE MAIN RISKS OF INVESTING IN THE FUND

            There are several risk factors that could hurt the fund's
            performance, cause you to lose money or cause the fund's
            performance to trail that of other investments.

            STOCK MARKET RISK. The fund is affected by how the stock market
            performs. To the extent the fund invests in a particular
            capitalization or market sector, the fund's performance may be
            proportionately affected by that segment's general performance.
            When stock prices fall, you should expect the value of your
            investment to fall as well. Because a stock



THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

This fund is designed for investors with long-term goals who can tolerate
capital fluctuation in pursuit of long-term capital growth.



14 | DWS Mid Cap Growth Fund
<PAGE>

            represents ownership in its issuer, stock prices can be hurt by
            poor management, shrinking product demand and other business risks.
            These factors may affect single companies as well as groups of
            companies. In addition, movements in financial markets may
            adversely affect a stock's price, regardless of how well the
            company performs. The market as a whole may not favor the types of
            investments the fund makes, which could affect the fund's ability
            to sell them at an attractive price.

            MEDIUM-SIZED COMPANY RISK. Medium-sized company stocks tend to
            experience steeper price fluctuations than stocks of larger
            companies. A shortage of reliable information can also pose added
            risk to stocks of medium sized companies. Industry-wide reversals
            may have a greater impact on medium-sized companies, since they
            usually lack the financial resources of larger companies.
            Medium-sized company stocks are typically less liquid than large
            company stocks. Accordingly, it may be harder to find buyers for
            medium-sized company shares.

            GROWTH INVESTING RISK. Since growth stocks usually reinvest a large
            portion of earnings in their own businesses, they may lack the
            dividends associated with value stocks that might otherwise cushion
            their decline in a falling market. Earnings disappointments in
            growth stocks often result in sharp price declines because
            investors buy these stocks for their potential superior earnings
            growth. Growth stocks may also be out of favor for certain periods
            in relation to value stocks.

            SECURITY SELECTION RISK. A risk that pervades all investing is the
            risk that the securities in the fund's portfolio may decline in
            value.

            FOREIGN INVESTMENT RISK. Foreign investments involve certain
            special risks, including:

            -  POLITICAL RISK. Some foreign governments have limited the
               outflow of profits to investors abroad, imposed restrictions on
               the exchange or export of foreign currency, extended diplomatic
               disputes to include trade and financial relations, seized
               foreign investments and imposed higher taxes.

                                                   DWS Mid Cap Growth Fund  | 15
<PAGE>

            -  INFORMATION RISK. Companies based in foreign markets are usually
               not subject to accounting, auditing and financial reporting
               standards and practices as stringent as those in the US.
               Therefore, their financial reports may present an incomplete,
               untimely or misleading picture of a company, as compared to the
               financial reports required in the US.

            -  LIQUIDITY RISK. Investments that trade less frequently can be
               more difficult or more costly to buy, or to sell, than more
               liquid or active investments. This liquidity risk is a factor of
               the trading volume of a particular investment, as well as the
               size and liquidity of the entire local market. On the whole,
               foreign exchanges are smaller and less liquid than US exchanges.
               This can make buying and selling certain investments more
               difficult and costly. Relatively small transactions in some
               instances can have a disproportionately large effect on the
               price and supply of securities. In certain situations, it may
               become virtually impossible to sell an investment in an orderly
               fashion at a price that approaches portfolio management's
               estimate of its value. For the same reason, it may at times be
               difficult to value the fund's foreign investments.

            -  REGULATORY RISK. There is generally less government regulation
               of foreign markets, companies and securities dealers than in the
               US.

            -  CURRENCY RISK. The fund invests in securities denominated in
               foreign currencies. Changes in exchange rates between foreign
               currencies and the US dollar may affect the US dollar value of
               foreign securities or the income or gain received on these
               securities.

            -  LIMITED LEGAL RECOURSE RISK. Legal remedies for investors may be
               more limited than the legal remedies available in the US.

            -  TRADING PRACTICE RISK. Brokerage commissions and other fees are
               generally higher for foreign investments than for US
               investments. The procedures and rules governing foreign
               transactions and custody may also involve delays in payment,
               delivery or recovery of money or investments.

            -  TAXES. Foreign withholding and certain other taxes may reduce
               the amount of income available to distribute to shareholders of
               the fund. In addition, special US tax considerations may apply
               to the fund's foreign investments.


16 | DWS Mid Cap Growth Fund
<PAGE>

            PRICING RISK. At times, market conditions may make it difficult to
            value some investments, and the fund may use certain valuation
            methodologies for some of its investments, such as fair value
            pricing. Given the subjective nature of such valuation
            methodologies, it is possible that the value determined for an
            investment may be different than the value realized upon such
            investment's sale. If the fund has valued its securities too
            highly, you may pay too much for fund shares when you buy into the
            fund. If the fund has underestimated the price of its securities,
            you may not receive the full market value when you sell your fund
            shares.

            SECURITIES LENDING RISK. Any loss in the market price of securities
            loaned by the fund that occurs during the term of the loan would be
            borne by the fund and would adversely affect the fund's
            performance. Also, there may be delays in recovery of securities
            loaned or even a loss of rights in the collateral should the
            borrower of the securities fail financially while the loan is
            outstanding. However, loans will be made only to borrowers selected
            by the fund's delegate after a review of relevant facts and
            circumstances, including the creditworthiness of the borrower.

            Other factors that could affect performance include:

            -  portfolio management could be wrong in the analysis of
               industries, companies, economic trends, the relative
               attractiveness of different securities or other matters.

            -  derivatives could produce disproportionate losses due to a
               variety of factors, including the failure of the counterparty to
               meet its obligations or unexpected price or interest rate
               movements.


                                                   DWS Mid Cap Growth Fund  | 17
<PAGE>

THE FUND'S PERFORMANCE HISTORY

While a fund's past performance (before and after taxes) isn't necessarily a
sign of how it will do in the future, it can be valuable for an investor to
know.

The bar chart shows how the performance of the fund's Class S shares has varied
from year to year, which may give some idea of risk. The table on the following
page shows how fund performance compares to relevant index performance (which,
unlike fund performance, does not reflect fees or expenses). The performance of
the fund and the index information varies over time. All figures assume
reinvestment of dividends and distributions (in the case of after-tax returns,
reinvested net of assumed tax rates).

The table shows returns for Class S shares on a before-tax and after-tax basis.
After-tax returns are estimates calculated using the historical highest
marginal individual federal income tax rates and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on an investor's tax
situation and may differ from those shown in the table. After-tax returns shown
are not relevant for investors who hold their shares through tax-deferred
arrangements, such as 401(k) plans or individual retirement accounts.

The inception date for Class S shares of the fund is February 1, 2005. In the
bar chart and the table, the performance figures for Class S before its
inception date are based on the historical performance of the fund's original
share class (Investment Class), adjusted to reflect the higher gross total
annual operating expenses of Class S. Investment Class shares merged into Class
S shares on October 20, 2006.

DWS Mid Cap Growth Fund

ANNUAL TOTAL RETURN (%) AS OF 12/31 EACH YEAR - Class S



<TABLE>
<S>        <C>        <C>         <C>         <C>        <C>       <C>        <C>        <C>       <C>
49.68       -1.70      -13.37      -20.49     28.44       9.75     12.46      10.95       8.31      -50.05
1999       2000        2001        2002       2003       2004      2005       2006       2007      2008
</TABLE>





<TABLE>
<CAPTION>
FOR THE PERIODS INCLUDED IN THE BAR CHART:
<S>                                        <C>
BEST QUARTER: 29.95 %, Q4 1999             WORST QUARTER: -32.70%, Q4 2008
</TABLE>



18 | DWS Mid Cap Growth Fund
<PAGE>

AVERAGE ANNUAL TOTAL RETURNS (%) as of 12/31/2008


<TABLE>
<CAPTION>
                                               1 YEAR       5 YEARS      10 YEARS
<S>                                         <C>            <C>          <C>
 CLASS S
   Return before Taxes                         -50.05        -5.82        -0.36
   Return after Taxes on Distributions         -50.05        -6.84        -1.65
   Return after Taxes on Distributions
   and Sale of Fund Shares                     -32.53*       -5.46*       -1.02*
 RUSSELL MIDCAP (Reg. TM) GROWTH INDEX
 (reflects no deductions for fees,
 expenses or taxes)                            -44.32        -2.33        -0.19
</TABLE>


 *   Return after Taxes on Distributions and Sale of Fund Shares is higher than
     other return figures for the same period due to a capital loss occurring
     upon redemption resulting in an assumed tax deduction for the shareholder.

     Total returns would have been lower if operating expenses hadn't been
reduced.

 RUSSELL MIDCAP (Reg. TM) GROWTH INDEX is an unmanaged capitalization-weighted
 index of medium and medium/small companies in the Russell 1000 (Reg. TM) Index
 chosen for their growth orientation. Russell 1000 (Reg. TM) Index is an
 unmanaged price-only index of the 1,000 largest capitalized companies that are
 domiciled in the US and whose common stocks are traded.


--------------------------------------------------------------------------------
Current performance may be higher or lower than the performance data quoted
above. For more recent performance information, call your financial advisor or
(800) 728-3337 or visit our Web site at www.dws-investments.com.


--------------------------------------------------------------------------------
Return information assumes that fund shares were sold at the end of the period.


RETURN AFTER TAXES ON DISTRIBUTIONS reflects taxes only on the fund's
distributions and not on a shareholder's gain or loss from selling fund shares.


RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES reflects taxes on
both the fund's distributions and a shareholder's gain or loss from selling
fund shares.


                                                   DWS Mid Cap Growth Fund  | 19
<PAGE>

HOW MUCH INVESTORS PAY

The table below describes the fees and expenses that you may pay if you buy and
hold fund shares. This information doesn't include any fees that may be charged
by your financial advisor.


<TABLE>
<CAPTION>
FEE TABLE                                        CLASS S
<S>                                    <C>
 SHAREHOLDER FEES, paid directly from your investment
 Sales Charge                                     None
 Redemption/Exchange Fee on shares
 owned less than 15 days (as % of
 redemption proceeds)1                             2.00%

 ANNUAL OPERATING EXPENSES, deducted from fund assets
 Management Fee                                    0.63%
 Distribution/Service (12b-1) Fee                 None
 Other Expenses2                                   0.38
 TOTAL ANNUAL OPERATING EXPENSES3                  1.01
</TABLE>


1   This fee is charged on applicable redemptions or exchanges. Please see
   "Policies You Should Know About - Policies about transactions" for further
   information.

2   "Other Expenses" include an administrative services fee paid to the Advisor
   in the amount of 0.10%.

3   Except as otherwise noted, the information in the table is based on amounts
   incurred during the fund's most recent fiscal year. It is important for you
   to understand that a decline in the fund's average net assets during the
   current fiscal year due to recent unprecedented market volatility or other
   factors could cause the fund's expense ratios for the fund's current fiscal
   year to be higher than the expense information presented.

Based on the costs above, this example helps you compare the expenses of this
Fund's expenses to those of other mutual funds. This example assumes the
expenses above remain the same. It also assumes that you invested $10,000,
earned 5% annual returns, reinvested all dividends and distributions and sold
you shares at the end of the period. This is only an example; actual expenses
will be different.


<TABLE>
<CAPTION>
EXAMPLE               1 YEAR      3 YEARS      5 YEARS      10 YEARS
<S>                  <C>         <C>          <C>          <C>
 Class S shares        $103         $322         $558       $1,236
</TABLE>



20 | DWS Mid Cap Growth Fund
<PAGE>


<TABLE>
<S>                              <C>
                                   Class S
  ticker symbol                    SSDSX
    fund number                    2314

    DWS SMALL CAP GROWTH FUND


</TABLE>

            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund seeks long-term capital growth.

            Under normal circumstances, the fund invests at least 80% of its
            assets, determined at the time of purchase, in stocks and other
            securities with equity characteristics of US smaller capitalization
            companies. For purposes of this 80% investment limitation, the
            small capitalization equity universe is defined as the bottom 20%
            of the total domestic equity market capitalization (at the time of
            initial investment), using a minimum market capitalization of $10
            million. The fund may invest up to 20% of its assets in the stocks
            of non-US companies and large capitalization stocks. The fund may
            also invest in other types of equity securities such as preferred
            stocks or convertible securities.

            The fund invests primarily in equity securities of US smaller
            capitalization companies. Portfolio management focuses on
            individual security selection rather than industry selection.
            Portfolio management uses an active process which combines
            financial analysis with company visits to evaluate management and
            strategies. Each portfolio manager has specific sector
            responsibilities with investment discretion over the securities
            within sectors.

            Company research lies at the heart of our investment process.
            Portfolio management uses a "bottom-up" approach to picking
            securities.

            -  Portfolio management focuses on stocks with superior growth
               prospects and above average near-to-intermediate term
               performance potential.

            -  Portfolio management emphasizes individual selection of small
               company stocks across all economic sectors, early in their
               growth cycles and with the potential to be the blue chips of the
               future.

                                                 DWS Small Cap Growth Fund  | 21
<PAGE>

            -  Portfolio management generally seeks companies with a leading or
               dominant position in their niche markets, a high rate of return
               on invested capital and the ability to finance a major part of
               future growth from internal sources.

            Portfolio management looks primarily for financial attributes that
            set these companies apart:

            -  estimated above-average growth in revenues and earnings; and

            -  a balance sheet that can support this growth potential with
               sufficient working capital and manageable levels of debt.

            The fund follows a disciplined selling process in order to lessen
            risk. A security may be sold if one or more of the following
            conditions are met:

            -  the stock price reaches portfolio management's expectations;

            -  there is a material change in the company's fundamentals;

            -  portfolio management believes other investments offer better
               opportunities; or

            -  the market capitalization of a stock distorts the weighted
               average market capitalization of the fund.

            OTHER INVESTMENTS. The fund is permitted, but not required, to use
            various types of derivatives (contracts whose value is based on,
            for example, indices, currencies or securities). Derivatives may be
            used for hedging and for risk management or for non-hedging
            purposes to seek to enhance potential gains. The fund may use
            derivatives in circumstances where portfolio management believes
            they offer an economical means of gaining exposure to a particular
            asset class or to keep cash on hand to meet shareholder redemptions
            or other needs while maintaining exposure to the market.

            In particular, the fund may use futures and options and write
            covered call options.

            SECURITIES LENDING. The fund may lend its investment securities in
            an amount up to 33 1/3% of its total assets to approved
            institutional borrowers who need to borrow securities in order to
            complete certain transactions.


22 | DWS Small Cap Growth Fund
<PAGE>

            THE MAIN RISKS OF INVESTING IN THE FUND

            There are several risk factors that could hurt the fund's
            performance, cause you to lose money or cause the fund's
            performance to trail that of other investments.

            STOCK MARKET RISK. The fund is affected by how the stock market
            performs. To the extent the fund invests in a particular
            capitalization or market sector, the fund's performance may be
            proportionately affected by that segment's general performance.
            When stock prices fall, you should expect the value of your
            investment to fall as well. Because a stock represents ownership in
            its issuer, stock prices can be hurt by poor management, shrinking
            product demand and other business risks. These factors may affect
            single companies as well as groups of companies. In addition,
            movements in financial markets may adversely affect a stock's
            price, regardless of how well the company performs. The market as a
            whole may not favor the types of investments the fund makes, which
            could affect the fund's ability to sell them at an attractive
            price.

            SMALL COMPANY CAPITALIZATION RISK. Small company stocks tend to
            experience steeper price fluctuations than the stocks of larger
            companies. A shortage of reliable information can also pose added
            risk to small company stocks. Industry-wide reversals may have a
            greater impact on small companies, since they lack the financial
            resources of larger companies. Small company stocks are typically
            less liquid than large company stocks. Accordingly, it may be
            harder to find buyers for small company shares.

            GROWTH INVESTING RISK. Since growth stocks usually reinvest a large
            portion of earnings in their own businesses, they may lack the
            dividends associated with value stocks that might otherwise cushion
            their decline in a falling market. Earnings disappointments in
            growth stocks often result in sharp price declines because investors
            buy these stocks for their potential superior earnings growth.
            Growth stocks may also be out of favor for certain periods in
            relation to value stocks.

            SECURITY SELECTION RISK. A risk that pervades all investing is the
            risk that the securities in the fund's portfolio may decline in
            value.

            FOREIGN INVESTMENT RISK. Foreign investments involve certain
            special risks, including:



THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

This fund is designed for investors with long-term goals who can tolerate
capital fluctuation in pursuit of long-term capital growth.




                                                 DWS Small Cap Growth Fund  | 23
<PAGE>

            -  POLITICAL RISK. Some foreign governments have limited the outflow
               of profits to investors abroad, imposed restrictions on the
               exchange or export of foreign currency, extended diplomatic
               disputes to include trade and financial relations, seized foreign
               investments and imposed higher taxes.

            -  INFORMATION RISK. Companies based in foreign markets are usually
               not subject to accounting, auditing and financial reporting
               standards and practices as stringent as those in the US.
               Therefore, their financial reports may present an incomplete,
               untimely or misleading picture of a company, as compared to the
               financial reports required in the US.

            -  LIQUIDITY RISK. Investments that trade less frequently can be
               more difficult or more costly to buy, or to sell, than more
               liquid or active investments. This liquidity risk is a factor of
               the trading volume of a particular investment, as well as the
               size and liquidity of the entire local market. On the whole,
               foreign exchanges are smaller and less liquid than US exchanges.
               This can make buying and selling certain investments more
               difficult and costly. Relatively small transactions in some
               instances can have a disproportionately large effect on the
               price and supply of securities. In certain situations, it may
               become virtually impossible to sell an investment in an orderly
               fashion at a price that approaches portfolio management's
               estimate of its value. For the same reason, it may at times be
               difficult to value the fund's foreign investments.

            -  REGULATORY RISK. There is generally less government regulation
               of foreign markets, companies and securities dealers than in the
               US.

            -  CURRENCY RISK. The fund invests in securities denominated in
               foreign currencies. Changes in exchange rates between foreign
               currencies and the US dollar may affect the US dollar value of
               foreign securities or the income or gain received on these
               securities.

            -  LIMITED LEGAL RECOURSE RISK. Legal remedies for investors may be
               more limited than the legal remedies available in the US.

24 | DWS Small Cap Growth Fund
<PAGE>

            -  TRADING PRACTICE RISK. Brokerage commissions and other fees are
               generally higher for foreign investments than for US investments.
               The procedures and rules governing foreign transactions and
               custody may also involve delays in payment, delivery or recovery
               of money or investments.

            -  TAXES. Foreign withholding and certain other taxes may reduce
               the amount of income available to distribute to shareholders of
               the fund. In addition, special US tax considerations may apply
               to the fund's foreign investments.

            PRICING RISK. At times, market conditions may make it difficult to
            value some investments, and the fund may use certain valuation
            methodologies for some of its investments, such as fair value
            pricing. Given the subjective nature of such valuation
            methodologies, it is possible that the value determined for an
            investment may be different than the value realized upon such
            investment's sale. If the fund has valued its securities too
            highly, you may pay too much for fund shares when you buy into the
            fund. If the fund has underestimated the price of its securities,
            you may not receive the full market value when you sell your fund
            shares.

            SECURITIES LENDING RISK. Any loss in the market price of securities
            loaned by the fund that occurs during the term of the loan would be
            borne by the fund and would adversely affect the fund's
            performance. Also, there may be delays in recovery of securities
            loaned or even a loss of rights in the collateral should the
            borrower of the securities fail financially while the loan is
            outstanding. However, loans will be made only to borrowers selected
            by the fund's delegate after a review of relevant facts and
            circumstances, including the creditworthiness of the borrower.

            Other factors that could affect performance include:

            -  portfolio management could be wrong in the analysis of
               industries, companies, economic trends, the relative
               attractiveness of different securities or other matters.

            -  derivatives could produce disproportionate losses due to a
               variety of factors, including the failure of the counterparty to
               meet its obligations or unexpected price or interest rate
               movements.


                                                 DWS Small Cap Growth Fund  | 25
<PAGE>

THE FUND'S PERFORMANCE HISTORY

While a fund's past performance (before and after taxes) isn't necessarily a
sign of how it will do in the future, it can be valuable for an investor to
know.

The bar chart shows how the performance of the fund's Class S shares has varied
from year to year, which may give some idea of risk. The table on the following
page shows how fund performance compares to relevant index performance (which,
unlike fund performance, does not reflect fees or expenses). The performance of
the fund and the index information varies over time. All figures assume
reinvestment of dividends and distributions (in the case of after-tax returns,
reinvested net of assumed tax rates).

The table shows returns for Class S shares on a before-tax and after-tax basis.
After-tax returns are estimates calculated using the historical highest
marginal individual federal income tax rates and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on an investor's tax
situation and may differ from those shown in the table. After-tax returns shown
are not relevant for investors who hold their shares through tax-deferred
arrangements, such as 401(k) plans or individual retirement accounts.

Class S shares commenced operations on December 20, 2004.

DWS Small Cap Growth Fund

ANNUAL TOTAL RETURN (%) AS OF 12/31 EACH YEAR - Class S



<TABLE>
<S>       <C>       <C>       <C>
 7.18      5.05      5.85      -50.24
2005      2006      2007      2008
</TABLE>





<TABLE>
<CAPTION>
FOR THE PERIODS INCLUDED IN THE BAR CHART:
<S>                                        <C>
BEST QUARTER: 11.65%, Q1 2006              WORST QUARTER: -32.45%, Q4 2008
</TABLE>



26 | DWS Small Cap Growth Fund
<PAGE>

AVERAGE ANNUAL TOTAL RETURNS (%) as of 12/31/2008


<TABLE>
<CAPTION>
                                                1 YEAR        SINCE INCEPTION*
<S>                                         <C>              <C>
 CLASS S
   Return before Taxes                          -50.24             -11.75
   Return after Taxes on Distributions          -50.49             -12.36
   Return after Taxes on Distributions
   and Sale of Fund Shares                      -32.34**            -9.29**
 RUSSELL 2000 (Reg. TM) GROWTH INDEX
 (reflects no deductions for fees,
 expenses or taxes)                             -38.54              -6.12
</TABLE>


 *   Class S commenced operations on December 20, 2004. Index comparisons are
     as of December 31, 2004.

**   Return after Taxes on Distributions and Sale of Fund Shares is higher than
   other return figures for the same period due to a capital loss occurring
   upon redemption resulting in an assumed tax deduction for the shareholder.

     Total returns would have been lower if operating expenses hadn't been
reduced.

 RUSSELL 2000 (Reg. TM) GROWTH INDEX is an unmanaged capitalization-weighted
 measure of 2,000 of the smallest capitalized US companies with a
 greater-than-average growth orientation and whose common stocks trade on the
 NYSE, NYSE Alternext US (formerly known as "AMEX") and Nasdaq.


--------------------------------------------------------------------------------
Current performance may be higher or lower than the performance data quoted
above. For more recent performance information, call your financial advisor or
(800) 728-3337 or visit our Web site at www.dws-investments.com.


--------------------------------------------------------------------------------
Return information assumes that fund shares were sold at the end of the period.


RETURN AFTER TAXES ON DISTRIBUTIONS reflects taxes only on the fund's
distributions and not on a shareholder's gain or loss from selling fund shares.


RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES reflects taxes on
both the fund's distributions and a shareholder's gain or loss from selling
fund shares.


                                                 DWS Small Cap Growth Fund  | 27
<PAGE>

HOW MUCH INVESTORS PAY

The table below describes the fees and expenses that you may pay if you buy and
hold fund shares. This information doesn't include any fees that may be charged
by your financial advisor.


<TABLE>
<CAPTION>
FEE TABLE                                        CLASS S
<S>                                    <C>
 SHAREHOLDER FEES, paid directly from your investment
 Sales Charge                                     None
 Redemption/Exchange Fee on shares
 owned less than 15 days (as % of
 redemption proceeds)1                             2.00%

 ANNUAL OPERATING EXPENSES, deducted from fund assets
_Management Fee                                    0.65%
 Distribution/Service (12b-1) Fee                 None
 Other Expenses2                                   0.53
 TOTAL ANNUAL OPERATING EXPENSES3                  1.18
 Less Fee Waiver/Expense
 Reimbursement4                                    0.18
 NET ANNUAL FUND OPERATING
 EXPENSES4                                         1.00
</TABLE>


1   This fee is charged on applicable redemptions or exchanges. Please see
   "Policies You Should Know About - Policies about transactions" for further
   information.

2   "Other Expenses" include an administrative services fee paid to the Advisor
   in the amount of 0.10%.

3   Except as otherwise noted, the information in the table is based on amounts
   incurred during the fund's most recent fiscal year. It is important for you
   to understand that a decline in the fund's average net assets during the
   current fiscal year due to recent unprecedented market volatility or other
   factors could cause the fund's expense ratios for the fund's current fiscal
   year to be higher than the expense information presented.

4   Through January 31, 2010, the Advisor has contractually agreed to waive all
   or a portion of its management fee and reimburse or pay operating expenses
   of the fund to the extent necessary to maintain the fund's total operating
   expenses at 1.00% for Class S shares, excluding certain expenses such as
   extraordinary expense, taxes, brokerage and interest.

Based on the costs above (including one year of capped expenses in each
period), this example helps you compare the expenses of the fund to those of
other mutual funds. This example assumes the expenses above remain the same. It
also assumes that you invested $10,000, earned 5% annual returns and reinvested
all dividends and distributions and sold your shares at the end of the period.
This is only an example; actual expenses will be different.


<TABLE>
<CAPTION>
EXAMPLE               1 YEAR      3 YEARS      5 YEARS      10 YEARS
<S>                  <C>         <C>          <C>          <C>
 Class S shares        $102         $357         $632       $1,416
</TABLE>



28 | DWS Small Cap Growth Fund
<PAGE>

OTHER POLICIES AND SECONDARY RISKS

           While the previous pages describe the main points of each fund's
           strategy and risks, there are a few other issues to know about:

           -  Although major changes tend to be infrequent, each fund's Board
              could change a fund's investment objective without seeking
              shareholder approval. The Board will provide shareholders with at
              least 60 days notice prior to making any changes to each fund's
              80% investment policy as described herein.

           -  As a temporary defensive measure, each fund could shift up to
              100% of assets into investments such as money market securities
              or other short-term securities that offer comparable levels of
              risk. This could prevent losses, but, while engaged in a
              temporary defensive position, a fund will not be pursuing its
              investment objective. However, portfolio management may choose
              not to use these strategies for various reasons, even in volatile
              market conditions.

           -  Each fund may trade actively. This could raise transaction costs
              (thus lowering return) and could mean increased taxable
              distributions to shareholders and distributions that will be
              taxable to shareholders at higher federal income tax rates.

           -  Certain DWS fund-of-funds are permitted to invest in each fund.
              As a result, a fund may have large inflows or outflows of cash
              from time to time. This could have adverse effects on a fund's
              performance if a fund were required to sell securities or invest
              cash at times when it otherwise would not do so. This activity
              could also accelerate the realization of capital gains and
              increase a fund's transaction costs. The Advisor will monitor the
              impact of these transactions and a fund may discontinue such
              arrangements if they are not deemed to be in the best interests
              of a fund.


           Secondary risks

           The risk disclosure below applies to each fund, unless otherwise
           noted.

           DERIVATIVES RISK. Risks associated with derivatives include the risk
           that the derivative is not well correlated with the security, index
           or currency to which it relates; the risk that derivatives may
           result in losses or missed opportunities; the risk that the fund
           will be unable to sell the derivative because of an illiquid


                                        Other Policies and Secondary Risks  | 29
<PAGE>

           secondary market; and the risk that the derivative transaction could
           expose the fund to the effects of leverage, which could increase the
           fund's exposure to the market and magnify potential losses. There is
           no guarantee that derivatives, to the extent employed, will have the
           intended effect, and their use could cause lower returns or even
           losses to the fund. The use of derivatives by the fund to hedge risk
           may reduce the opportunity for gain by offsetting the positive
           effect of favorable price movements.


           For more information

           This prospectus doesn't tell you about every policy or risk of
           investing in each fund.

           If you want more information on each fund's allowable securities and
           investment practices and the characteristics and risks of each one,
           you may want to request a copy of the Statement of Additional
           Information (the back cover tells you how to do this).

           Keep in mind that there is no assurance that a fund will achieve its
           objective.

           A complete list of each fund's portfolio holdings as of the
           month-end is posted on www.dws-investments.com on or about the 15th
           day of the following month. More frequent posting of portfolio
           holdings information may be made from time to time on
           www.dws-investments.com. The posted portfolio holdings information
           is available by fund and generally remains accessible at least until
           the date on which a fund files its Form N-CSR or N-Q with the
           Securities and Exchange Commission for the period that includes the
           date as of which the posted information is current. Each fund's
           Statement of Additional Information includes a description of a
           fund's policies and procedures with respect to the disclosure of a
           fund's portfolio holdings.


30 | Other Policies and Secondary Risks
<PAGE>

WHO MANAGES AND OVERSEES THE FUNDS


           The investment advisor

           Deutsche Investment Management Americas Inc. ("DIMA" or the
           "Advisor"), with headquarters at 345 Park Avenue, New York, NY
           10154, is the investment advisor for each fund. Under the oversight
           of the Board, the Advisor makes investment decisions, buys and sells
           securities for each fund and conducts research that leads to these
           purchase and sale decisions. The Advisor provides a full range of
           global investment advisory services to institutional and retail
           clients.

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

           Deutsche Asset Management is a global asset management organization
           that offers a wide range of investing expertise and resources,
           including hundreds of portfolio managers and analysts and an office
           network that reaches the world's major investment centers. This
           well-resourced global investment platform brings together a wide
           variety of experience and investment insight across industries,
           regions, asset classes and investing styles.

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


                                        Who Manages and Oversees the Funds  | 31
<PAGE>

           MANAGEMENT FEE. The Advisor receives a management fee from each
           fund. Below are the actual rates paid by each fund for the most
           recent fiscal year, as a percentage of each fund's average daily net
           assets.


<TABLE>
<CAPTION>
FUND NAME                                   FEE PAID
<S>                                       <C>
  DWS Micro Cap Fund                           0.88%*
  DWS Mid Cap Growth Fund                     0.63  %
  DWS Small Cap Growth Fund                   0.65  %
</TABLE>


           *   Reflects the effects of expense limitations and/or fee waivers
then in effect.


           Effective October 1, 2008, DWS Micro Cap Fund pays the Advisor under
           the investment management agreement a fee, calculated daily and paid
           monthly, at the annual rate of 1.100% of the fund's average daily
           net assets up to $250 million, 0.950% of the next $250 million and
           0.800% thereafter.

           A discussion regarding the basis for the Board's approval of each
           fund's investment management agreement is contained in the most
           recent shareholder report for the annual period ended September 30
           (see "Shareholder reports" on the back cover).

           Under a separate administrative services agreement between each fund
           and the Advisor, each fund pays the Advisor a fee for providing most
           of each fund's administrative services.


32 | Who Manages and Oversees the Funds
<PAGE>

Portfolio management

Each fund is managed by a team of investment professionals who collaborate to
develop and implement each fund's investment strategy. Each portfolio manager
on the team has authority over all aspects of each fund's investment portfolio,
including but not limited to, purchase and sales of individual securities,
portfolio construction techniques, portfolio risk assessment, and the
management of daily cash flows in accordance with portfolio holdings.

The following people handle the day-to-day management of each fund:

Joseph Axtell, CFA
Managing Director of Deutsche Asset Management and Portfolio Manager of the
funds.
- Joined Deutsche Asset Management in 2001 and the funds in 2006.
- Senior analyst at Merrill Lynch Investment Managers for the international
     equity portion of a global balanced portfolio (1996-2001).
- Director, International Research at PCM International (1989-1996).
- Associate manager, structured debt and equity group at Prudential Capital
   Corporation (1988-1989).
- Analyst at Prudential-Bache Capital Funding in London (1987-1988).
- Equity analyst in the healthcare sector at Prudential Equity Management
   Associates (1985-1987).
- BS, Carlson School of Management, University of Minnesota.

Rafaelina M. Lee
Director of Deutsche Asset Management and Portfolio Manager of the funds.
- Joined Deutsche Asset Management in 1999 and the funds in 2008.
- Research analyst for US Micro, Small and Mid Cap Equity: New York.
- Over 20 years of investment industry experience in US portfolio strategy,
   Latin America market strategy and US equity research at JP Morgan
   Securities, UBS Securities and Goldman Sachs & Co.
- BA, Columbia University; MBA, Stern School of Business, New York University.

Jeffrey Saeger, CFA
Director of Deutsche Asset Management and Portfolio Manager of the funds.
- Joined Deutsche Asset Management in 1996 and the funds in 2009.
- Over 14 years of investment industry experience.
- BS, State University of New York at Fredonia.

Each fund's Statement of Additional Information provides additional information
about a portfolio manager's investments in each fund, a description of the
portfolio management compensation structure and information regarding other
accounts managed.


                                        Who Manages and Oversees the Funds  | 33
<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights are designed to help you understand recent financial
performance. The figures in the first part of each table are for a single
share. The total return figures represent the percentage that an investor in a
fund would have earned (or lost), assuming all dividends and distributions were
reinvested. This information has been audited by PricewaterhouseCoopers LLP,
independent registered public accounting firm, whose report, along with each
fund's financial statements, is included in each fund's annual report (see
"Shareholder reports" on the back cover). On July 10, 2006, DWS Micro Cap Fund
acquired all the assets and assumed all the liabilities of the Predecessor
Fund. The information contained in the following table for DWS Micro Cap Fund
for periods prior to July 10, 2006 has been derived from the Predecessor Fund's
financial statements.


34 | Financial Highlights
<PAGE>

DWS Micro Cap Fund - Class S


<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30,                        2008           2007            2006            2005 a
<S>                                         <C>            <C>            <C>              <C>
SELECTED PER SHARE DATA
-------------------------------------------------------------------------           -               -
NET ASSET VALUE, BEGINNING OF PERIOD          $  20.17       $  18.89        $  22.46        $  20.99
-------------------------------------------   --------       --------        --------        --------
Income (loss) from investment
operations:
  Net investment income (loss)b                 (  .13)        (  .20)         (  .20)d        (  .21)
___________________________________________   ________       ________        ________        ________
  Net realized and unrealized gain (loss)       ( 3.84)          5.03             .23            1.68
-------------------------------------------   --------       --------        --------        --------
  TOTAL FROM INVESTMENT OPERATIONS              ( 3.97)          4.83             .03            1.47
___________________________________________   ________       ________        ________        ________
Less distributions from:
  Net realized gains                            ( 2.87)        ( 3.55)         ( 3.60)              -
___________________________________________   ________       ________        ________        ________
Redemption fees                                    .00***         .00***          .00***          .00***
-------------------------------------------   --------       --------        --------        --------
NET ASSET VALUE, END OF PERIOD                $  13.33       $  20.17        $  18.89        $  22.46
-------------------------------------------   --------       --------        --------        --------
Total Return (%)c                               (22.20)         27.52          (  .85)d,e        7.00**
-------------------------------------------   --------       --------        --------        --------

RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
-------------------------------------------------------------------------    --------        --------
Net assets, end of period ($ millions)               8             11               1               5
___________________________________________   ________       ________        ________        ________
Ratio of expenses before expense
reductions (%)                                    2.12           1.93            2.21            2.23*
___________________________________________   ________       ________        ________        ________
Ratio of expenses after expense
reductions (%)                                    1.47           1.39            1.68            1.74*
___________________________________________   ________       ________        ________        ________
Ratio of net investment
income (loss) (%)                               (  .79)        ( 1.04)         ( 1.02)d        ( 1.46)*
___________________________________________   ________       ________        ________        ________
Portfolio turnover rate (%)                         59             73             100             108
-------------------------------------------   --------       --------        --------        --------
</TABLE>


a   For the period February 1, 2005 (commencement of operations of Class S
   shares) to September 30, 2005.

b   Based on average shares outstanding during the period.

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

d   Includes non-recurring income from the Advisor recorded as a result of an
   administrative proceeding regarding disclosure of brokerage allocation
   practices in connection with sales of DWS Funds. The non-recurring income
   resulted in an increase in net investment income of $0.061 per share and an
   increase in the ratio of net investment income of 0.29%. Excluding this
   non-recurring income, total return would have been 0.33% lower.

e   The Fund realized a gain of $18,520 on the disposal of an investment not
   adhering to the Fund's investment restrictions. Excluding this gain, total
   return would have been 0.02% lower.

*   Annualized

**   Not annualized

***   Amount is less than $.005.

                                                      Financial Highlights  | 35
<PAGE>

DWS Mid Cap Growth Fund - Class S

<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30,                        2008           2007           2006           2005 a
<S>                                         <C>            <C>            <C>            <C>
SELECTED PER SHARE DATA
-------------------------------------------------------------------------          -               -
NET ASSET VALUE, BEGINNING OF PERIOD          $  19.17       $  15.74       $  15.18       $   13.66
-------------------------------------------   --------       --------       --------       ---------
Income (loss) from investment
operations:
  Net investment income (loss)b                 (  .06)        (  .08)        (  .11)d        (  .06)
___________________________________________   ________       ________       ________       _________
  Net realized and unrealized gain (loss)       ( 4.69)          3.51            .67            1.58
-------------------------------------------   --------       --------       --------       ---------
  TOTAL FROM INVESTMENT OPERATIONS              ( 4.75)          3.43            .56            1.52
___________________________________________   ________       ________       ________       _________
Less distributions from:
  Net realized gains                            ( 2.50)             -              -               -
___________________________________________   ________       ________       ________       _________
Redemption fees                                    .00***         .00***         .00***          .00***
-------------------------------------------   --------       --------       --------       ---------
NET ASSET VALUE, END OF PERIOD                $  11.92       $  19.17       $  15.74       $   15.18
-------------------------------------------   --------       --------       --------       ---------
Total Return (%)c                               (28.21)       21.79c        3.69c,d          11.13 c**
-------------------------------------------   --------       --------       --------       ---------

RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
-------------------------------------------------------------------------   --------       ---------
Net assets, end of period ($ millions)             159            255            213             223
___________________________________________   ________       ________       ________       _________
Ratio of expenses before expense
reductions (%)                                    1.01            .99           1.11            1.13*
___________________________________________   ________       ________       ________       _________
Ratio of expenses after expense
reductions (%)                                    1.01            .94           1.08            1.06*
___________________________________________   ________       ________       ________       _________
Ratio of net investment
income (loss) (%)                               (  .38)        (  .46)        (  .69)d        (  .57)*
___________________________________________   ________       ________       ________       _________
Portfolio turnover rate (%)                         82             56             53              83
-------------------------------------------   --------       --------       --------       ---------
</TABLE>


a   For the period February 1, 2005 (commencement of operations of Class S
   shares) to September 30, 2005.

b   Based on average shares outstanding during period.

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

d   Includes non-recurring income from the Advisor recorded as a result of an
   administrative proceeding regarding disclosure of brokerage allocation
   practices in connection with sales of DWS Funds. The non-recurring income
   resulted in an increase in net investment income of $0.002 per share and an
   increase in the ratio of net investment income of 0.01%. Excluding this
   non-recurring income, total return would have been 0.01% lower.

*   Annualized

**   Not annualized

***   Amount is less than $.005.

36 | Financial Highlights
<PAGE>

DWS Small Cap Growth Fund - Class S


<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30,                        2008           2007           2006           2005 a
<S>                                         <C>            <C>            <C>            <C>
SELECTED PER SHARE DATA
-------------------------------------------------------------------------          -              -
NET ASSET VALUE, BEGINNING OF PERIOD          $  26.52       $  23.71       $  25.01       $  23.88
-------------------------------------------   --------       --------       --------       --------
Income (loss) from investment
operations:
  Net investment income (loss)b                 (  .06)        (  .12)        (  .17)d       (  .15)
___________________________________________   ________       ________       ________       ________
  Net realized and unrealized gain (loss)       ( 7.86)          4.54            .83           1.28
-------------------------------------------   --------       --------       --------       --------
  TOTAL FROM INVESTMENT OPERATIONS              ( 7.92)          4.42            .66           1.13
___________________________________________   ________       ________       ________       ________
Less distributions from:
Net realized gains                              (  .36)        ( 1.61)        ( 1.96)             -
-------------------------------------------   --------       --------       --------       --------
Redemption fees                                    .00***         .00***         .00***         .00***
-------------------------------------------   --------       --------       --------       --------
NET ASSET VALUE, END OF PERIOD                $  18.24       $  26.52       $  23.71       $  25.01
-------------------------------------------   --------       --------       --------       --------
Total Return (%)c                               (30.23)         19.43       2.41d,e            4.73**
-------------------------------------------   --------       --------       --------       --------

RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
-------------------------------------------------------------------------   --------       --------
Net assets, end of period ($ millions)              66            202             68             79
___________________________________________   ________       ________       ________       ________
Ratio of expenses before expense
reductions (%)                                    1.18           1.12           1.21           1.12*
___________________________________________   ________       ________       ________       ________
Ratio of expenses after expense
reductions (%)                                    1.00           1.00           1.03           1.00*
___________________________________________   ________       ________       ________       ________
Ratio of net investment
income (loss) (%)                               (  .27)        (  .48)        (  .65)d       (  .78)*
___________________________________________   ________       ________       ________       ________
Portfolio turnover rate (%)                         82         64f                74            119
-------------------------------------------   --------       --------       --------       --------
</TABLE>


a   For the period December 20, 2004 (commencement of operations of Class S
   shares) to September 30, 2005.

b   Based on average shares outstanding during the period.

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

d   Includes non-recurring income from the Advisor recorded as a result of an
   administrative proceeding regarding disclosure of brokerage allocation
   practices in connection with sales of DWS Funds. The non-recurring income
   resulted in an increase in net investment income of $0.008 per share and an
   increase in the ratio of net investment income of 0.03%. Excluding this
   non-recurring income, total return would have been 0.04% lower.

e   The Fund realized a gain of $92,403 on the disposal of an investment not
   adhering to the Fund's investment restrictions. Excluding this gain, total
   return would have been 0.02% lower.

f   Excludes portfolio securities delivered as a result of processing
   redemption in-kind transactions.

*   Annualized

**   Not annualized

***   Amount is less than $.005.

                                                      Financial Highlights  | 37
<PAGE>

HOW TO INVEST IN THE FUNDS
THE FOLLOWING PAGES TELL YOU HOW TO INVEST IN A FUND AND WHAT TO EXPECT AS A
SHAREHOLDER. The following pages also tell you about many of the services,
choices and benefits of being a shareholder. You'll also find information on
how to check the status of your account using the method that's most convenient
for you.

If you're investing directly with DWS Investments, all of this information
applies to you. If you're investing through a "third party provider" - for
example, a workplace retirement plan, financial supermarket or financial
advisor - your provider may have its own policies or instructions and you
should follow those.

Please remember, CLASS S shares are generally only available to new investors
through fee-based programs of investment dealers that have special agreements
with the funds' distributor, through certain group retirement plans and through
certain registered investment advisors. These dealers and advisors typically
charge ongoing fees for services they provide.

You can find out more about the topics covered here by speaking with your
FINANCIAL ADVISOR OR A REPRESENTATIVE OF YOUR WORKPLACE RETIREMENT PLAN OR
OTHER INVESTMENT PROVIDER.

<PAGE>

How to BUY Class S Shares



<TABLE>
<CAPTION>
 FIRST INVESTMENT                              ADDITIONAL INVESTMENTS
<S>                                           <C>
 $2,500 or more for regular accounts           $50 or more for regular accounts and
 $1,000 or more for IRAs and UTMAs/           IRAs
 UGMAs                                        $50 or more for an account with an
 $1,000 or more for an account with an        Automatic Investment Plan
 Automatic Investment Plan
 BY MAIL OR EXPRESS MAIL (SEE BELOW)
                                              Send a DWS Investments investment
 -  Fill out and sign an application
                                              slip or short note that includes:
 -  Send it to us at the appropriate
                                              -  fund and class name
  address, along with an investment
  check made payable to "DWS                  -  account number
  Investments"                                -  check made payable to "DWS
                                              Investments"
 BY WIRE
 -  Call (800) 728-3337 for instructions      -  Call (800) 728-3337 for instructions
 BY PHONE
 Not available                                -  Call (800) 728-3337 for instructions
 WITH AN AUTOMATIC INVESTMENT PLAN
 -  Fill in the information on your           -  To set up regular investments from a
  application including a check for the       bank checking account, call
  initial investment and a voided check       (800) 728-3337 (minimum $50)
 USING QuickBuy
 Not available                                -  Call (800) 728-3337 to make sure
                                              QuickBuy is set up on your account; if
                                              it is, you can request a transfer from
                                              your bank account of any amount
                                              between $50 and $250,000
 ON THE INTERNET
 -  Register at                               -  Call (800) 728-3337 to ensure you have
  www.dws-investments.com or log in if        electronic services
  already registered                          -  Register at www.dws-
 -  Print out a prospectus and a new          investments.com
  account application                         or log in if already registered
 -  Complete and return the application       -  Follow the instructions for buying
  with your check                             shares with money from your bank
                                              account
</TABLE>


--------------------------------------------------------------------------------
REGULAR MAIL:

First Investment: DWS Investments, PO Box 219356, Kansas City, MO 64121-9356
Additional Investments: DWS Investments, PO Box 219154, Kansas City, MO
64121-9154

EXPRESS, REGISTERED OR CERTIFIED MAIL:
DWS Investments, 210 West 10th Street, Kansas City, MO 64105-1614


                                                 How to Buy Class S Shares  | 39
<PAGE>

How to EXCHANGE or SELL Class S Shares



<TABLE>
<CAPTION>
 EXCHANGING INTO ANOTHER FUND                    SELLING SHARES
<S>                                             <C>
                                                 Some transactions, including most for
 -  Exchanges into existing accounts:
                                                over $100,000, can only be ordered in
  $50 minimum per fund
                                                writing with a signature guarantee;
 -  Exchanges into new accounts:
                                                please see "Signature Guarantee"
  $2,500 minimum per fund
  $1,000 minimum for IRAs and UTMAs/
  UGMAs
 BY PHONE                                        BY PHONE OR WIRE
 -  Call (800) 728-3337 for instructions        -  Call (800) 728-3337 for instructions
 USING THE AUTOMATED INFORMATION LINE
 -  Call (800) 728-3337 for instructions        -  Call (800) 728-3337 for instructions
 BY MAIL OR EXPRESS MAIL
 (see previous page for address)
 Your instructions should include:              Your instructions should include:
 -  the fund, class and account number          -  the fund, class and account number
  you're exchanging out of                      from which you want to sell shares
 -  the dollar amount or number of shares       -  the dollar amount or number of shares
  you want to exchange                          you want to sell
 -  the name and class of the fund you          -  your name(s), signature(s) and
  want to exchange into                         address, as they appear on your
                                                account
 -  your name(s), signature(s) and
  address, as they appear on your               -  a daytime telephone number
  account
 -  a daytime telephone number
 WITH AN AUTOMATIC EXCHANGE PLAN                 WITH AN AUTOMATIC WITHDRAWAL PLAN
 -  To set up regular exchanges from a          -  To set up regular cash payments from
  fund account, call (800) 728-3337             a DWS fund account, call
                                                (800) 728-3337
 USING QuickSell
 Not available                                  -  Call (800) 728-3337 to make sure
                                                QuickSell is set up on your account; if
                                                it is, you can request a transfer to your
                                                bank account of any amount between
                                                $50 and $250,000
 ON THE INTERNET
 -  Register at www.dws-                        -  Register at www.dws-
  investments.com or log in if already          investments.com or log in if already
  registered                                    registered
 -  Follow the instructions for making on-      -  Follow the instructions for making on-
  line exchanges                                line redemptions
</TABLE>


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

<TABLE>
<S>               <C>
TO REACH US:      WEB SITE: www.dws-investments.com
                  TELEPHONE REPRESENTATIVE: (800) 728-3337, M-F, 9 a.m. - 6 p.m. ET
                  TDD LINE: (800) 972-3006, M-F, 9 a.m.- 6 p.m. ET
</TABLE>



40 | How to Sell or Exchange Class S Shares
<PAGE>

           Financial intermediary support payments

           The Advisor, DWS Investments Distributors, Inc. (the "Distributor")
           and/or their affiliates may pay additional compensation, out of
           their own assets and not as an additional charge to each fund, to
           selected affiliated and unaffiliated brokers, dealers, participating
           insurance companies or other financial intermediaries ("financial
           advisors") in connection with the sale and/or distribution of fund
           shares or the retention and/or servicing of fund investors and fund
           shares ("revenue sharing"). Such revenue sharing payments are in
           addition to any distribution or service fees payable under any Rule
           12b-1 or service plan of each fund, any record keeping/sub-transfer
           agency/networking fees payable by each fund (generally through the
           Distributor or an affiliate) and/or the Distributor to certain
           financial advisors for performing such services and any sales
           charge, commissions, non-cash compensation arrangements expressly
           permitted under applicable rules of the Financial Industry
           Regulatory Authority or other concessions described in the fee table
           or elsewhere in this prospectus or the Statement of Additional
           Information as payable to all financial advisors. For example, the
           Advisor, the Distributor and/or their affiliates may compensate
           financial advisors for providing a fund with "shelf space" or access
           to a third party platform or fund offering list or other marketing
           programs, including, without limitation, inclusion of the fund on
           preferred or recommended sales lists, mutual fund "supermarket"
           platforms and other formal sales programs; granting the Distributor
           access to the financial advisor's sales force; granting the
           Distributor access to the financial advisor's conferences and
           meetings; assistance in training and educating the financial
           advisor's personnel; and obtaining other forms of marketing support.


           The level of revenue sharing payments made to financial advisors may
           be a fixed fee or based upon one or more of the following factors:
           gross sales, current assets and/or number of accounts of each fund
           attributable to the financial advisor, the particular fund or fund
           type or other measures as agreed to by the Advisor, the Distributor
           and/or their affiliates and the financial advisors or any
           combination thereof. The amount of these revenue sharing payments is
           determined at the discretion of the Advisor, the Distributor and/or
           their affiliates from time to time, may be substantial, and may be
           different for different financial advisors based on, for example,
           the nature of the services provided by the financial advisor.


                                    How to Sell or Exchange Class S Shares  | 41
<PAGE>

           The Advisor, the Distributor and/or their affiliates currently make
           revenue sharing payments from their own assets in connection with
           the sale and/or distribution of DWS fund shares or the retention
           and/or servicing of investors and DWS fund shares to financial
           advisors in amounts that generally range from .01% up to .50% of
           assets of each fund serviced and maintained by the financial
           advisor, .05% to .25% of sales of each fund attributable to the
           financial advisor, a flat fee of $13,350 up to $500,000, or any
           combination thereof. These amounts are subject to change at the
           discretion of the Advisor, the Distributor and/or their affiliates.
           Receipt of, or the prospect of receiving, this additional
           compensation may influence your financial advisor's recommendation
           of each fund or of any particular share class of each fund. You
           should review your financial advisor's compensation disclosure
           and/or talk to your financial advisor to obtain more information on
           how this compensation may have influenced your financial advisor's
           recommendation of each fund. Additional information regarding these
           revenue sharing payments is included in each fund's Statement of
           Additional Information, which is available to you on request at no
           charge (see the back cover of this prospectus for more information
           on how to request a copy of the Statement of Additional
           Information).

           The Advisor, the Distributor and/or their affiliates may also make
           such revenue sharing payments to financial advisors under the terms
           discussed above in connection with the distribution of both DWS
           funds and non-DWS funds by financial advisors to retirement plans
           that obtain record keeping services from ADP, Inc. on the DWS
           Investments branded retirement plan platform (the "Platform") with
           the level of revenue sharing payments being based upon sales of both
           the DWS funds and the non-DWS funds by the financial advisor on the
           Platform or current assets of both the DWS funds and the non-DWS
           funds serviced and maintained by the financial advisor on the
           Platform.

           It is likely that broker-dealers that execute portfolio transactions
           for each fund will include firms that also sell shares of the DWS
           funds to their customers. However, the Advisor will not consider
           sales of DWS fund shares as a factor in the selection of
           broker-dealers to execute portfolio transactions for the DWS funds.
           Accordingly, the Advisor has implemented policies and procedures
           reasonably designed to prevent its traders from considering sales of
           DWS fund shares as a factor in the selection of


42 | How to Sell or Exchange Class S Shares
<PAGE>

           broker-dealers to execute portfolio transactions for each fund. In
           addition, the Advisor, the Distributor and/or their affiliates will
           not use fund brokerage to pay for their obligation to provide
           additional compensation to financial advisors as described above.


POLICIES YOU SHOULD KNOW ABOUT

           Along with the information on the previous pages, the policies below
           may affect you as a shareholder. Some of this information, such as
           the section on distributions and taxes, applies to all investors,
           including those investing through a financial advisor.

           If you are investing through a financial advisor or through a
           retirement plan, check the materials you received from them about
           how to buy and sell shares because particular financial advisors or
           other intermediaries may adopt policies, procedures or limitations
           that are separate from those described by a fund. Please note that a
           financial advisor may charge fees separate from those charged by a
           fund and may be compensated by a fund.

           Keep in mind that the information in this prospectus applies only to
           the shares offered herein. Other share classes are described in
           separate prospectuses and have different fees, requirements and
           services.

           In order to reduce the amount of mail you receive and to help reduce
           expenses, we generally send a single copy of any shareholder report
           and prospectus to each household. If you do not want the mailing of
           these documents to be combined with those for other members of your
           household, please contact your financial advisor or call (800)
           728-3337.

           Policies about transactions

           EACH FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange
           is open. Each fund calculates its share price for each class every
           business day, as of the close of regular trading on the New York
           Stock Exchange (typically 4:00 p.m. Eastern time, but sometimes
           earlier, as in the case of scheduled half-day trading or unscheduled
           suspensions of trading). You can place an order to buy or sell
           shares at any time.




THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

Questions? You can speak to a DWS Investments representative between 9 a.m. and
6 p.m. Eastern time on any fund business day by calling (800) 728-3337.


                                            Policies You Should Know About  | 43
<PAGE>

           To help the government fight the funding of terrorism and money
           laundering activities, federal law requires all financial
           institutions to obtain, verify and record information that
           identifies each person who opens an account. What this means to you:
           When you open an account, we will ask for your name, address, date
           of birth and other information that will allow us to identify you.
           Some or all of this information will be used to verify the identity
           of all persons opening an account.

           We might request additional information about you (which may include
           certain documents, such as articles of incorporation for companies)
           to help us verify your identity and, in some cases, the information
           and/or documents may be required to conduct the verification. The
           information and documents will be used solely to verify your
           identity.

           We will attempt to collect any missing required and requested
           information by contacting you or your financial advisor. If we are
           unable to obtain this information within the time frames established
           by each fund, then we may reject your application and order.

           Each fund will not invest your purchase until all required and
           requested identification information has been provided and your
           application has been submitted in "good order." After we receive all
           the information, your application is deemed to be in good order and
           we accept your purchase, you will receive the net asset value per
           share next calculated.

           If we are unable to verify your identity within time frames
           established by each fund, after a reasonable effort to do so, you
           will receive written notification.

           With certain limited exceptions, only US residents may invest in
           each fund.

           Because orders placed through a financial advisor must be forwarded
           to the transfer agent before they can be processed, you'll need to
           allow extra time. Your financial advisor should be able to tell you
           approximately when your order will be processed. It is the
           responsibility of your financial advisor to forward your order to
           the transfer agent in a timely manner.


44 | Policies You Should Know About
<PAGE>

           INITIAL PURCHASE MINIMUMS. The minimum initial investment is $2,500,
           except for investments on behalf of participants in certain
           fee-based and wrap programs offered through certain financial
           intermediaries approved by the Advisor, for which there is no
           minimum initial investment; and fiduciary accounts such as IRAs and
           custodial accounts such as Uniform Gifts to Minors Act and Uniform
           Transfers to Minors Act accounts for which the minimum initial
           investment is $1,000 per account. In addition, the minimum initial
           investment is $1,000 if an automatic investment plan of $50 per
           month is established. Group retirement plans and certain other
           accounts have similar or lower minimum share balance requirements.

           SUB-MINIMUM BALANCES. Each fund may close your account and send you
           the proceeds if your balance falls below $2,500 ($1,000 with an
           Automatic Investment Plan funded with $50 or more per month in
           subsequent investments); $250 for retirement accounts. We will give
           you 60 days' notice (90 days for retirement accounts) so you can
           either increase your balance or close your account (these policies
           don't apply to investors with $100,000 or more in DWS fund shares,
           investors in certain fee-based and wrap programs offered through
           certain financial intermediaries approved by the Advisor, or group
           retirement plans and certain other accounts having lower minimum
           share balance requirements).

           Because of the high cost of servicing accounts with low balances, an
           account maintenance fee of $6.25 per quarter (for a $25 annual fee)
           will be assessed on accounts whose balances fail to meet the minimum
           initial investment requirement for a period of 90 days prior to the
           assessment date. The quarterly assessment will occur on or about the
           15th of the last month in each calendar quarter. Please note that
           the fee will be assessed on accounts that fall below the minimum for
           any reason, including due to market value fluctuations, redemptions
           or exchanges. The account maintenance fee will apply to all
           shareholders of the DWS Funds except for: accounts with an automatic
           investment plan, accounts held in an omnibus account through a
           financial services firm, accounts maintained on behalf of
           participants in certain fee based and wrap programs offered through
           certain financial intermediaries approved by the Advisor and
           participant level accounts in group retirement plans held on the
           records of a retirement plan record keeper.


                                            Policies You Should Know About  | 45
<PAGE>

           SUBSEQUENT INVESTMENTS. The minimum subsequent investment is $50.
           However, there is no minimum investment requirement for subsequent
           investments on behalf of participants in certain fee-based and wrap
           programs offered through certain financial intermediaries approved
           by the Advisor.

           MARKET TIMING POLICIES AND PROCEDURES. Short-term and excessive
           trading of fund shares may present risks to long-term shareholders,
           including potential dilution in the value of fund shares,
           interference with the efficient management of a fund's portfolio
           (including losses on the sale of investments), taxable gains to
           remaining shareholders and increased brokerage and administrative
           costs. These risks may be more pronounced if a fund invests in
           certain securities, such as those that trade in foreign markets, are
           illiquid or do not otherwise have "readily available market
           quotations." Certain investors may seek to employ short-term trading
           strategies aimed at exploiting variations in portfolio valuation
           that arise from the nature of the securities held by a fund (e.g.,
           "time zone arbitrage"). Each fund discourages short-term and
           excessive trading and has adopted policies and procedures that are
           intended to detect and deter short-term and excessive trading.

           Pursuant to its policies, each fund will impose a 2% redemption fee
           on fund shares held for less than a specified holding period
           (subject to certain exceptions discussed below under "Redemption
           fees"). Each fund also reserves the right to reject or cancel a
           purchase or exchange order for any reason without prior notice. For
           example, a fund may in its discretion reject or cancel a purchase or
           an exchange order even if the transaction is not subject to the
           specific roundtrip transaction limitation described below if the
           Advisor believes that there appears to be a pattern of short-term or
           excessive trading activity by a shareholder or deems any other
           trading activity harmful or disruptive to a fund. Each fund, through
           its Advisor and transfer agent, will measure short-term and
           excessive trading by the number of roundtrip transactions within a
           shareholder's account during a rolling 12-month period. A
           "roundtrip" transaction is defined as any combination of purchase
           and redemption activity (including exchanges) of the same fund's
           shares. Each fund may take other trading activity into account if a
           fund believes such activity is of an amount or frequency that may be
           harmful to long-term shareholders or disruptive to portfolio
           management.


46 | Policies You Should Know About
<PAGE>

           Shareholders are limited to four roundtrip transactions in the same
           DWS fund (excluding money market funds) over a rolling 12-month
           period. Shareholders with four or more roundtrip transactions in the
           same DWS fund within a rolling 12-month period generally will be
           blocked from making additional purchases of, or exchanges into, that
           DWS fund. Each fund has sole discretion whether to remove a block
           from a shareholder's account. The rights of a shareholder to redeem
           shares of a DWS fund are not affected by the four roundtrip
           transaction limitation, but all redemptions remain subject to each
           fund's redemption fee policy (see "Redemption fees" described
           below).

           Each fund may make exceptions to the roundtrip transaction policy
           for certain types of transactions if, in the opinion of the Advisor,
           the transactions do not represent short-term or excessive trading or
           are not abusive or harmful to a fund, such as, but not limited to,
           systematic transactions, required minimum retirement distributions,
           transactions initiated by a fund or administrator and transactions
           by certain qualified funds-of-funds.

           In certain circumstances where shareholders hold shares of a fund
           through a financial intermediary, the fund may rely upon the
           financial intermediary's policy to deter short-term or excessive
           trading if the Advisor believes that the financial intermediary's
           policy is reasonably designed to detect and deter transactions that
           are not in the best interests of a fund. A financial intermediary's
           policy relating to short-term or excessive trading may be more or
           less restrictive than the DWS funds' policy, may permit certain
           transactions not permitted by the DWS funds' policies, or prohibit
           transactions not subject to the DWS funds' policies.

           The Advisor may also accept undertakings from a financial
           intermediary to enforce short-term or excessive trading policies on
           behalf of a fund that provide a substantially similar level of
           protection for each fund against such transactions. For example,
           certain financial intermediaries may have contractual, legal or
           operational restrictions that prevent them from blocking an account.
           In such instances, the financial intermediary may use alternate
           techniques that the Advisor considers to be a reasonable substitute
           for such a block.


                                            Policies You Should Know About  | 47
<PAGE>

           In addition, if a fund invests some portion of its assets in foreign
           securities, it has adopted certain fair valuation practices intended
           to protect the fund from "time zone arbitrage" with respect to its
           foreign securities holdings and other trading practices that seek to
           exploit variations in portfolio valuation that arise from the nature
           of the securities held by a fund. (See "How each fund calculates
           share price.")

           There is no assurance that these policies and procedures will be
           effective in limiting short-term and excessive trading in all cases.
           For example, the Advisor may not be able to effectively monitor,
           detect or limit short-term or excessive trading by underlying
           shareholders that occurs through omnibus accounts maintained by
           broker-dealers or other financial intermediaries. The Advisor
           reviews trading activity at the omnibus level to detect short-term
           or excessive trading. If the Advisor has reason to suspect that
           short-term or excessive trading is occurring at the omnibus level,
           the Advisor will contact the financial intermediary to request
           underlying shareholder level activity. Depending on the amount of
           fund shares held in such omnibus accounts (which may represent most
           of a fund's shares) short-term and/or excessive trading of fund
           shares could adversely affect long-term shareholders in a fund. If
           short-term or excessive trading is identified, the Advisor will take
           appropriate action.

           Each fund's market timing policies and procedures may be modified or
           terminated at any time.

           REDEMPTION FEES. Each fund imposes a redemption fee of 2% of the
           total redemption amount (calculated at net asset value) on all fund
           shares redeemed or exchanged within 15 days of buying them (either
           by purchase or exchange). The redemption fee is paid directly to
           each fund and is designed to encourage long-term investment and to
           offset transaction and other costs associated with short-term or
           excessive trading. For purposes of determining whether the
           redemption fee applies, shares held the longest time will be treated
           as being redeemed first and shares held the shortest time will be
           treated as being redeemed last.

           The redemption fee is applicable to fund shares purchased either
           directly or through a financial intermediary, such as a
           broker-dealer. Transactions through financial intermediaries
           typically are placed with a fund on an omnibus basis and include
           both purchase and sale transactions placed on behalf of multiple
           investors. These purchase and sale transactions are generally


48 | Policies You Should Know About
<PAGE>

           netted against one another and placed on an aggregate basis;
           consequently the identities of the individuals on whose behalf the
           transactions are placed generally are not known to a fund. For this
           reason, each fund has undertaken to notify financial intermediaries
           of their obligation to assess the redemption fee on customer
           accounts and to collect and remit the proceeds to each fund.
           However, due to operational requirements, the intermediaries'
           methods for tracking and calculating the fee may be inadequate or
           differ in some respects from each fund's.

           The redemption fee will not be charged in connection with the
           following exchange or redemption transactions: (i) transactions on
           behalf of participants in certain research wrap programs; (ii)
           transactions on behalf of a shareholder to return any excess IRA
           contributions to the shareholder; (iii) transactions on behalf of a
           shareholder to effect a required minimum distribution on an IRA;
           (iv) transactions on behalf of any mutual fund advised by the
           Advisor and its affiliates (e.g., "funds of funds") or, in the case
           of a master/feeder relationship, redemptions by the feeder fund from
           the master portfolio; (v) transactions on behalf of certain
           unaffiliated mutual funds operating as funds of funds; (vi)
           transactions following death or disability of any registered
           shareholder, beneficial owner or grantor of a living trust with
           respect to shares purchased before death or disability; (vii)
           transactions involving hardship of any registered shareholder;
           (viii) systematic transactions with pre-defined trade dates for
           purchases, exchanges or redemptions, such as automatic account
           rebalancing, or loan origination and repayments; (ix) transactions
           involving shares purchased through the reinvestment of dividends or
           other distributions; (x) transactions involving shares transferred
           from another account in the same fund or converted from another
           class of the same fund (the redemption fee period will carry over to
           the acquired shares); (xi) transactions initiated by a fund or
           administrator (e.g., redemptions for not meeting account minimums,
           to pay account fees funded by share redemptions, or in the event of
           the liquidation or merger of the fund); or (xii) transactions in
           cases when there are legal or contractual limitations or
           restrictions on the imposition of the redemption fee (as determined
           by a fund or its agents in their sole discretion). It is the policy
           of the DWS funds to permit approved fund platform providers to
           execute transactions with


                                            Policies You Should Know About  | 49
<PAGE>

           the funds without the imposition of a redemption fee if such
           providers have implemented alternative measures that are determined
           by the Advisor to provide controls on short-term and excessive
           trading that are comparable to the DWS funds' policies.

           THE AUTOMATED INFORMATION LINE IS AVAILABLE 24 HOURS A DAY BY
           CALLING (800) 728-3337. You can use our automated phone services to
           get information on DWS funds generally and on accounts held directly
           at DWS Investments. You can also use this service to make exchanges
           and to purchase and sell shares.

           QUICKBUY AND QUICKSELL let you set up a link between a DWS fund
           account and a bank account. Once this link is in place, you can move
           money between the two with a phone call. You'll need to make sure
           your bank has Automated Clearing House (ACH) services. Transactions
           take two to three days to be completed and there is a $50 minimum
           and a $250,000 maximum. To set up QuickBuy or QuickSell on a new
           account, see the account application; to add it to an existing
           account, call (800) 728-3337.

           TELEPHONE AND ELECTRONIC TRANSACTIONS. Generally, you are
           automatically entitled to telephone and electronic transaction
           privileges, but you may elect not to have them when you open your
           account or by contacting Shareholder Services at (800) 728-3337 at a
           later date.

            Since many transactions may be initiated by telephone or
            electronically, it's important to understand that as long as we take
            reasonable steps to ensure that an order to purchase or redeem
            shares is genuine, such as recording calls or requesting person-
            alized security codes or other information, we are not responsible
            for any losses that may occur as a result. For transactions
            conducted over the Internet, we recommend the use of a secure
            Internet browser. In addition, you should verify the accuracy of
            your confirmation statements immediately after you receive them.

           EACH FUND DOES NOT ISSUE SHARE CERTIFICATES. However, if you
           currently have shares in certificated form, you must include the
           share certificates properly endorsed or accompanied by a duly
           executed stock power when exchanging or redeeming shares. You may
           not exchange or redeem shares in certificate form by telephone or
           via the Internet.



THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

The DWS Investments Web site can be a valuable resource for shareholders with
Internet access. Go to WWW.DWS-INVESTMENTS.COM to get up-to-date information,
review balances or even place orders for exchanges.

50 | Policies You Should Know About
<PAGE>

           WHEN YOU ASK US TO SEND OR RECEIVE A WIRE, please note that while we
           don't charge a fee to send or receive wires, it's possible that your
           bank may do so. Wire transactions are generally completed within 24
           hours. Each fund can only send wires of $1,000 or more and accept
           wires of $50 or more.

           EACH FUND ACCEPTS PAYMENT FOR SHARES ONLY IN US DOLLARS by a check
           drawn on a US bank, a bank or Federal Funds wire transfer or an
           electronic bank transfer. Each fund does not accept third party
           checks. A third party check is a check made payable to one or more
           parties and offered as payment to one or more other parties (e.g., a
           check made payable to you that you offer as payment to someone
           else). Checks should normally be payable to DWS Investments and
           drawn by you or a financial institution on your behalf with your
           name or account number included with the check.

           SIGNATURE GUARANTEE. When you want to sell more than $100,000 worth
           of shares or send proceeds to a third party or to a new address,
           you'll usually need to place your order in writing and include a
           signature guarantee. However, if you want money wired to a bank
           account that is already on file with us, you don't need a signature
           guarantee. Also, generally you don't need a signature guarantee for
           an exchange, although we may require one in certain other
           circumstances.

           A signature guarantee is simply a certification of your signature -
           a valuable safeguard against fraud. You can get a signature
           guarantee from an eligible guarantor institution, including
           commercial banks, savings and loans, trust companies, credit unions,
           member firms of a national stock exchange or any member or
           participant of an approved signature guarantor program. Note that
           you can't get a signature guarantee from a notary public and we must
           be provided the original guarantee.

           SELLING SHARES OF TRUST ACCOUNTS AND BUSINESS OR ORGANIZATION
           ACCOUNTS may require additional documentation. Please call (800)
           728-3337 or contact your financial advisor for more information.

           MONEY FROM SHARES YOU SELL is normally sent out within one business
           day of when your order is processed (not when it is received),
           although it could be delayed for up to seven days. There are
           circumstances when it could be longer, including, but not limited
           to, when you are selling shares you bought recently by check  or ACH
           (the funds will be placed under a 10 calendar day hold to ensure
           good funds) or when unusual circumstances



THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

If you ever have difficulty placing an order by phone or Internet, you can send
us your order in writing.



                                            Policies You Should Know About  | 51
<PAGE>

           prompt the SEC to allow further delays. Certain expedited redemption
           processes (e.g., redemption proceeds by wire) may also be delayed or
           unavailable when you are selling shares recently purchased or in the
           event of the closing of the Federal Reserve wire payment system.
           Each fund reserves the right to suspend or postpone redemptions as
           permitted pursuant to Section 22(e) of the Investment Company Act of
           1940. Generally, those circumstances are when 1) the New York Stock
           Exchange is closed other than customary weekend or holiday closings;
           2) trading on the New York Stock Exchange is restricted; 3) an
           emergency exists which makes the disposal of securities owned by a
           fund or the fair determination of the value of a fund's net assets
           not reasonably practicable; or 4) the SEC, by order, permits the
           suspension of the right of redemption. Redemption payments by wire
           may also be delayed in the event of a non-routine closure of the
           Federal Reserve wire payment system. For additional rights reserved
           by each fund, please see "Other rights we reserve."

           You may obtain additional information about other ways to sell your
           shares by contacting your financial advisor.


           How each fund calculates share price

           To calculate net asset value, or NAV, each share class uses the
           following equation:


<TABLE>
<S>                                                     <C> <C>
            TOTAL ASSETS - TOTAL LIABILITIES
           -----------------------------------------    =    NAV
               TOTAL NUMBER OF SHARES OUTSTANDING
</TABLE>


           The price at which you buy and sell shares is based on the NAV per
           share next calculated after the order is received and accepted by
           the transfer agent.

           EACH FUND CHARGES A REDEMPTION FEE EQUAL TO 2.00% of the value of
           shares redeemed or exchanged within 15 days of purchase. Please see
           "Policies about transactions - Redemption fees" for further
           information.

           WE TYPICALLY VALUE SECURITIES USING INFORMATION FURNISHED BY AN
           INDEPENDENT PRICING SERVICE OR MARKET QUOTATIONS, WHERE APPROPRIATE.
           However, we may use methods approved by the Board, such as a fair
           valuation model, which are intended to reflect fair value when
           pricing service information or market quotations are not readily
           available or when a security's value or a meaningful portion of the
           value of a fund's portfolio is believed


52 | Policies You Should Know About
<PAGE>

           to have been materially affected by a significant event, such as a
           natural disaster, an economic event like a bankruptcy filing, or a
           substantial fluctuation in domestic or foreign markets that has
           occurred between the close of the exchange or market on which the
           security is principally traded (for example, a foreign exchange or
           market) and the close of the New York Stock Exchange. In such a
           case, a fund's value for a security is likely to be different from
           the last quoted market price or pricing service information. In
           addition, due to the subjective and variable nature of fair value
           pricing, it is possible that the value determined for a particular
           asset may be materially different from the value realized upon such
           asset's sale. It is expected that the greater the percentage of fund
           assets that is invested in non-US securities, the more extensive
           will be a fund's use of fair value pricing. This is intended to
           reduce a fund's exposure to "time zone arbitrage" and other harmful
           trading practices. (See "Market timing policies and procedures.")

           TO THE EXTENT THAT A FUND INVESTS IN SECURITIES THAT ARE TRADED
           PRIMARILY IN FOREIGN MARKETS, the value of its holdings could change
           at a time when you aren't able to buy or sell fund shares. This is
           because some foreign markets are open on days or at times when a
           fund doesn't price its shares. (Note that prices for securities that
           trade on foreign exchanges can change significantly on days when the
           New York Stock Exchange is closed and you cannot buy or sell fund
           shares. Price changes in the securities a fund owns may ultimately
           affect the price of fund shares the next time the NAV is
           calculated.)


           Other rights we reserve

           You should be aware that we may do any of the following:

           -  withdraw or suspend the offering of shares at any time

           -  withhold a portion of your distributions and redemption proceeds
              if we have been notified by the IRS that you are subject to
              backup withholding or if you fail to provide us with the correct
              taxpayer ID number and certain certifications, including
              certification that you are not subject to backup withholding

           -  reject a new account application if you don't provide any
              required or requested identifying information, or for any other
              reason

                                            Policies You Should Know About  | 53
<PAGE>

            -  refuse, cancel, limit or rescind any purchase or exchange order,
               without prior notice; freeze any account (meaning you will not be
               able to purchase fund shares in your account); suspend account
               services; and/or involuntarily redeem your account if we think
               that the account is being used for fraudulent or illegal
               purposes; one or more of these actions will be taken when, at our
               sole discretion, they are deemed to be in a fund's best interests
               or when a fund is requested or compelled to do so by governmental
               authority or by applicable law

           -  close and liquidate your account if we are unable to verify your
              identity, or for other reasons; if we decide to close your
              account, your fund shares will be redeemed at the net asset value
              per share next calculated after we determine to close your
              account (less applicable redemption fee, if any); you may
              recognize a gain or loss on the redemption of your fund shares
              and you may incur a tax liability

           -  pay you for shares you sell by "redeeming in kind," that is, by
              giving you securities (which typically will involve brokerage
              costs for you to liquidate) rather than cash, but which will be
              taxable to the same extent as a redemption for cash; a fund
              generally won't make a redemption in kind unless your requests
              over a 90-day period total more than $250,000 or 1% of the value
              of a fund's net assets, whichever is less

           -  change, add or withdraw various services, fees and account
              policies (for example, we may adjust a fund's investment minimums
              at any time)


UNDERSTANDING DISTRIBUTIONS AND TAXES

           Each fund intends to distribute to its shareholders virtually all of
           its net earnings. Each fund can earn money in two ways: by receiving
           interest, dividends or other income from investments it holds and by
           selling investments for more than it paid for them. (Each fund's
           earnings are separate from any gains or losses stemming from your
           own purchase and sale of shares.) Each fund may not always pay a
           dividend or other distribution for a given period.

           DIVIDENDS AND DISTRIBUTIONS ARE PAID ANNUALLY IN DECEMBER AND, IF
           NECESSARY, MAY BE PAID AT OTHER TIMES AS WELL.



THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

Because each shareholder's tax situation is unique, ask your tax professional
about the tax consequences of your investments, including any state and local
tax consequences.


54 | Understanding Distributions and Taxes
<PAGE>

           Dividends or distributions declared and payable to shareholders of
           record in the last quarter of a given calendar year are treated for
           federal income tax purposes as if they were received on December 31
           of that year, provided such dividends or distributions are paid by
           the end of the following January.

           For federal income tax purposes, income and capital gains
           distributions are generally taxable to shareholders. However,
           dividends and distributions received by retirement plans qualifying
           for tax exemption under federal income tax laws generally will not
           be taxable.

           YOU CAN CHOOSE HOW TO RECEIVE YOUR DIVIDENDS AND DISTRIBUTIONS. You
           can have them all automatically reinvested in fund shares (at NAV),
           all deposited directly to your bank account or all sent to you by
           check, have one type reinvested and the other sent to you by check
           or have them invested in a different fund. Tell us your preference
           on your application. If you don't indicate a preference, your
           dividends and distributions will all be reinvested in shares of the
           fund without a sales charge (if applicable). Distributions are
           treated the same for federal income tax purposes whether you receive
           them in cash or reinvest them in additional shares. Under the terms
           of employer-sponsored qualified plans, and retirement plans,
           reinvestment (at NAV) is the only option.

           BUYING, SELLING OR EXCHANGING FUND SHARES WILL USUALLY HAVE FEDERAL
           INCOME TAX CONSEQUENCES FOR YOU (except in employer-sponsored
           qualified plans, IRAs or other tax-advantaged accounts). Your sale
           of shares may result in a capital gain or loss. The gain or loss
           will be long-term or short-term depending on how long you owned the
           shares that were sold. For federal income tax purposes, an exchange
           is treated the same as a sale.

           If a fund's distributions exceed its income and capital gains
           realized in any year, such excess distributions will constitute a
           return of capital for federal income tax purposes. A return of
           capital generally will not be taxable to you at the time of the
           distribution but will reduce the cost basis of your shares and
           result in a higher reported capital gain or a lower reported capital
           loss when you sell your shares. However, if a fund has available
           capital loss carryforwards to offset its capital gains


                                     Understanding Distributions and Taxes  | 55
<PAGE>

           realized in any year, and its distributions exceed its income alone,
           all or a portion of the excess distributions may not be treated, for
           tax purposes, as a return of capital, and would be taxable to
           shareholders.

           THE FEDERAL INCOME TAX STATUS of a fund's earnings you receive and
           your own fund transactions generally depends on their type:


<TABLE>
<CAPTION>
GENERALLY TAXED AT LONG-TERM                          GENERALLY TAXED AT ORDINARY
CAPITAL GAIN RATES:                                   INCOME RATES:
<S>                                                   <C>
DISTRIBUTIONS FROM A FUND
- gains from the sale of                              -  gains from the sale of
  securities held (or treated as                         securities held by a fund for
  held) by a fund for more than                          one year or less
  one year                                            -  all other taxable income
- qualified dividend income
TRANSACTIONS INVOLVING FUND
SHARES
- gains from selling fund                             -  gains from selling fund
  shares held for more than                              shares held for one year or
  one year                                               less
</TABLE>


           ANY DIRECT INVESTMENTS IN FOREIGN SECURITIES BY A FUND MAY BE
           SUBJECT TO FOREIGN WITHHOLDING TAXES. In that case, a fund's yield
           on those securities would generally be decreased. Shareholders
           generally will not be entitled to claim a credit or deduction with
           respect to foreign taxes paid by a fund. In addition, any
           investments in foreign securities or foreign currencies may increase
           or accelerate a fund's recognition of ordinary income and may affect
           the timing or amount of the fund's distributions. If you invest in a
           fund through a taxable account, your after-tax return could be
           negatively impacted.

           Investments in certain debt obligations or other securities may
           cause a fund to recognize taxable income in excess of the cash
           generated by them. Thus, a fund could be required at times to
           liquidate other investments in order to satisfy its distribution
           requirements.

           For taxable years beginning before January 1, 2011, distributions to
           individuals and other noncorporate shareholders of investment income
           designated by a fund as derived from qualified dividend income are
           eligible for taxation for federal income tax purposes at the more
           favorable long-term capital gain rates. Qualified dividend income
           generally includes dividends received by a fund from domestic and
           some foreign


56 | Understanding Distributions and Taxes
<PAGE>

           corporations. It does not include income from investments in debt
           securities  or, generally, from real estate investment trusts. In
           addition, a fund must meet certain holding period and other
           requirements with respect to the dividend-paying stocks in its
           portfolio and the shareholder must meet certain holding period and
           other requirements with respect to a fund's shares for the lower tax
           rates to apply.

           For taxable years beginning before January 1, 2011, the maximum
           federal income tax rate imposed on long-term capital gains
           recognized by individuals and other noncorporate shareholders has
           been temporarily reduced to 15%, in general, with lower rates
           applying to taxpayers in the 10% and 15% rate brackets. For taxable
           years beginning on or after January 1, 2011, the maximum long-term
           capital gain rate is scheduled to return to 20%.

           YOUR FUND WILL SEND YOU DETAILED FEDERAL INCOME TAX INFORMATION
           EVERY JANUARY. These statements tell you the amount and the federal
           income tax classification of any dividends or distributions you
           received. They also have certain details on your purchases and sales
           of shares.

           IF YOU INVEST RIGHT BEFORE A FUND PAYS A DIVIDEND, you'll be getting
           some of your investment back as a taxable dividend. You can avoid
           this by investing after a fund pays a dividend. In tax-advantaged
           retirement accounts you generally do not need to worry about this.

           If a fund's distributions exceed its current and accumulated
           earnings and profits, the excess will be treated for federal income
           tax purposes as a tax-free return of capital to the extent of your
           basis in your shares and thereafter as a gain from the sale or
           exchange of your shares. Because a return of capital distribution
           reduces the basis of your shares, a return of capital distribution
           may result in a higher capital gain or a lower capital loss when you
           sell your shares.

           CORPORATIONS are taxed at the same rates on ordinary income and
           capital gains but may be eligible for a dividends-received deduction
           for a portion of the income dividends they receive from a fund,
           provided certain holding period and other requirements are met.


                                     Understanding Distributions and Taxes  | 57
<PAGE>

           The above discussion summarizes certain federal income tax
           consequences for shareholders who are US persons. If you are a
           non-US person, please consult your own tax advisor with respect to
           the US tax consequences to you of an investment in a fund. For more
           information, see "Taxes" in the Statement of Additional Information.



58 | Understanding Distributions and Taxes
<PAGE>

APPENDIX
--------------------------------------------------------------------------------
           Hypothetical Expense Summary


           Using the annual fund operating expense ratios presented in the fee
           tables in the fund prospectus, the Hypothetical Expense Summary
           shows the estimated fees and expenses, in actual dollars, that would
           be charged on a hypothetical investment of $10,000 in the fund held
           for the next 10 years and the impact of such fees and expenses on
           fund returns for each year and cumulatively, assuming a 5% return
           for each year. The historical rate of return for the fund may be
           higher or lower than 5% and, for money funds, is typically less than
           5%. The tables also assume that all dividends and distributions are
           reinvested. The annual fund expense ratios shown are net of any
           contractual fee waivers or expense reimbursements, if any, for the
           period of the contractual commitment. The tables do not reflect
           redemption fees, if any, which may be payable upon redemption. If
           redemption fees were shown, the "Hypothetical Year-End Balance After
           Fees and Expenses" amounts shown would be lower and the "Annual Fees
           and Expenses" amounts shown would be higher. Also, please note that
           if you are investing through a third party provider, that provider
           may have fees and expenses separate from those of the fund that are
           not reflected here. Mutual fund fees and expenses fluctuate over
           time and actual expenses may be higher or lower than those shown.

           The Hypothetical Expense Summary should not be used or construed as
           an offer to sell, a solicitation of an offer to buy or a
           recommendation or endorsement of any specific mutual fund. You
           should carefully review the fund's prospectus to consider the
           investment objectives, risks, expenses and charges of the fund prior
           to investing.


                                                                  Appendix  | 59
<PAGE>

DWS Micro Cap Fund - Class S



<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        1.97%              3.03%       $ 10,303.00        $   199.98
   2           10.25%        1.97%              6.15%       $ 10,615.18        $   206.04
   3           15.76%        1.97%              9.37%       $ 10,936.82        $   212.29
   4           21.55%        1.97%             12.68%       $ 11,268.21        $   218.72
   5           27.63%        1.97%             16.10%       $ 11,609.63        $   225.35
   6           34.01%        1.97%             19.61%       $ 11,961.41        $   232.17
   7           40.71%        1.97%             23.24%       $ 12,323.84        $   239.21
   8           47.75%        1.97%             26.97%       $ 12,697.25        $   246.46
   9           55.13%        1.97%             30.82%       $ 13,081.97        $   253.93
  10           62.89%        1.97%             34.78%       $ 13,478.36        $   261.62
  TOTAL                                                                        $ 2,295.77
</TABLE>


DWS Mid Cap Growth Fund - Class S




<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER        ANNUAL
              FEES AND        EXPENSE        FEES AND           FEES AND         FEES AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        1.01%              3.99%       $ 10,399.00        $   103.01
   2           10.25%        1.01%              8.14%       $ 10,813.92        $   107.13
   3           15.76%        1.01%             12.45%       $ 11,245.40        $   111.40
   4           21.55%        1.01%             16.94%       $ 11,694.09        $   115.84
   5           27.63%        1.01%             21.61%       $ 12,160.68        $   120.47
   6           34.01%        1.01%             26.46%       $ 12,645.89        $   125.27
   7           40.71%        1.01%             31.50%       $ 13,150.46        $   130.27
   8           47.75%        1.01%             36.75%       $ 13,675.17        $   135.47
   9           55.13%        1.01%             42.21%       $ 14,220.81        $   140.87
  10           62.89%        1.01%             47.88%       $ 14,788.22        $   146.50
  TOTAL                                                                        $ 1,236.23
</TABLE>



60 | Appendix
<PAGE>

DWS Small Cap Growth Fund - Class S



<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        1.00%              4.00%       $ 10,400.00        $   102.00
   2           10.25%        1.18%              7.97%       $ 10,797.28        $   125.06
   3           15.76%        1.18%             12.10%       $ 11,209.74        $   129.84
   4           21.55%        1.18%             16.38%       $ 11,637.95        $   134.80
   5           27.63%        1.18%             20.83%       $ 12,082.52        $   139.95
   6           34.01%        1.18%             25.44%       $ 12,544.07        $   145.30
   7           40.71%        1.18%             30.23%       $ 13,023.25        $   150.85
   8           47.75%        1.18%             35.21%       $ 13,520.74        $   156.61
   9           55.13%        1.18%             40.37%       $ 14,037.23        $   162.59
  10           62.89%        1.18%             45.73%       $ 14,573.46        $   168.80
  TOTAL                                                                        $ 1,415.80
</TABLE>



                                                                  Appendix  | 61
<PAGE>

TO GET MORE INFORMATION

SHAREHOLDER REPORTS - These include commentary from a fund's management team
about recent market conditions and the effects of a fund's strategies on its
performance. They also have detailed performance figures, a list of everything
a fund owns, and its financial statements. Shareholders get these reports
automatically.

STATEMENT OF ADDITIONAL INFORMATION (SAI) - This tells you more about a fund's
features and policies, including additional risk information. The SAI is
incorporated by reference into this document (meaning that it's legally part of
this prospectus).

For a free copy of any of these documents or to request other information about
a fund, call (800) 728-3337, or contact DWS Investments at the address listed
below. Each fund's SAI and shareholder reports are also available through the
DWS Investments Web site at www.dws-investments.com. These documents and other
information about each fund are available from the EDGAR Database on the SEC's
Internet site at www.sec.gov. If you like, you may obtain copies of this
information, after paying a copying fee, by e-mailing a request to
publicinfo@sec.gov or by writing the SEC at the address listed below. You can
also review and copy these documents and other information about each fund,
including each fund's SAI, at the SEC's Public Reference Room in Washington,
D.C. Information on the operation of the SEC's Public Reference Room may be
obtained by calling (800) SEC-0330.


<TABLE>
<CAPTION>
DWS INVESTMENTS      SEC                     DISTRIBUTOR
-----------------    --------------------    ------------------------------
<S>                  <C>                     <C>
PO Box 219151        100 F Street, N.E.      DWS Investments Distributors,
Kansas City, MO      Washington, D.C.        Inc.
64121-9151           20549-0102              222 South Riverside Plaza
WWW.DWS-             WWW.SEC.GOV             Chicago, IL 60606-5808
INVESTMENTS.COM      (800) SEC-0330          (800) 621-1148
(800) 728-3337
</TABLE>



<TABLE>
<S>                    <C>                            <C>
SEC FILE NUMBER:
DWS Advisor Funds               DWS Micro Cap Fund    811-04760
DWS Advisor Funds          DWS Mid Cap Growth Fund    811-04760
DWS Advisor Funds        DWS Small Cap Growth Fund    811-04760
</TABLE>





(02/01/09) 314/383/390-2         [RECYCLE GRAPHIC APPEARS HERE]
                                                                       [Logo]DWS
                                                                      INVESTMENT
                                                             Deutsche Bank Group



<PAGE>


                                FEBRUARY 1, 2009







                                   PROSPECTUS
                              ------------------
                               CLASSES A, B AND C

                          DWS SHORT DURATION PLUS FUND

As with all mutual funds, the Securities and Exchange Commission (SEC) does not
approve or disapprove these shares or determine whether the information in this
prospectus is truthful or complete. It is a criminal offense for anyone to
inform you otherwise.




                                                 RESHAPING INVESTING. [DWS Logo]
                                                             Deutsche Bank Group


<PAGE>

CONTENTS




<TABLE>
<S>      <C>
HOW THE FUND WORKS
  4      The Fund's Main Investment
         Strategy
  8      The Main Risks of Investing in
         the Fund
 12      The Fund's Performance
         History
 15      How Much Investors Pay
 17      Other Policies and Secondary
         Risks
 18      Who Manages and Oversees
         the Fund
 22      Financial Highlights


</TABLE>
<TABLE>
<S>      <C>
HOW TO INVEST IN THE FUND
 27      Choosing a Share Class
 33      How to Buy Class A, B and C
         Shares
 34      How to Exchange or Sell
         Class A, B and C Shares
 37      Policies You Should Know
         About
 50      Understanding Distributions
         and Taxes
 54      Appendix
</TABLE>

<PAGE>

HOW THE FUND WORKS

On the next few pages, you'll find information about the fund's investment
objective, the main strategies it uses to pursue that objective and the main
risks that could affect performance.

Whether you are considering investing in the fund or are already a shareholder,
you'll want to LOOK THIS INFORMATION OVER CAREFULLY. You may want to keep it on
hand for reference as well.

CLASSES A, B AND C shares are generally intended for investors seeking the
advice and assistance of a financial advisor.

CLASS B shares were created especially for former CLASS B shareholders of DWS
Short Term Bond Fund. CLASS B shares are generally not available to new
investors.

Remember that mutual funds are investments, not bank deposits. They're not
insured or guaranteed by the FDIC or any other government agency. Their share
prices will go up and down, and you could lose money by investing in them.

You can find DWS prospectuses on the Internet at WWW.DWS-INVESTMENTS.COM (the
Web site does not form a part of this prospectus).
<PAGE>


<TABLE>
<S>                               <C>        <C>        <C>
                                   Class A    Class B    Class C
  ticker symbol                    PPIAX      PPLBX      PPLCX
    fund number                    418        618        718

    DWS SHORT DURATION PLUS FUND


</TABLE>

            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund's investment objective is to provide high income while
            also seeking to maintain a high degree of stability of
            shareholders' capital.

            The fund invests in securities of varying maturities and normally
            seeks to maintain an average portfolio duration of no longer than
            three years. The fund invests, under normal market conditions, at
            least 65% of its total assets in fixed income securities rated, at
            the time of purchase, within the top four long-term rating
            categories by a nationally recognized statistical rating
            organization (a "NRSRO") (or, if unrated, determined by the fund's
            investment advisor to be of similar quality).

            Fixed income securities in which the fund may invest include the
            following:

            -  US government securities that are issued or guaranteed by the US
               Treasury, or by agencies or instrumentalities of the US
               government. Securities issued by certain agencies and
               instrumentalities of the US government are not guaranteed by the
               US government and are supported solely by the credit of the
               agency or instrumentality.

            -  US dollar-denominated fixed income securities of domestic or
               foreign corporations, foreign governments or supranational
               entities, including adjustable rate loans that have a senior
               right to payment ("Bank Loans"). Because of limitations imposed
               by applicable law, the presence of the fund's investment
               advisor's affiliates in the Bank Loan market may restrict the
               fund's ability to acquire some Bank Loans, affect the timing of
               such acquisition or affect the price at which a Bank Loan is
               acquired.

            -  US dollar-denominated asset-backed securities issued by domestic
               or foreign entities.

4 | DWS Short Duration Plus Fund
<PAGE>

            -  Mortgage pass-through securities issued by governmental and
               non-governmental issuers.

            -  Collateralized mortgage obligations, real estate mortgage
               investment conduits and commercial mortgage-backed securities.

            -  Obligations issued or guaranteed, or backed by securities issued
               or guaranteed, by the US government, or any of its agencies or
               instrumentalities.

            -  Short-term investments, including money market mutual funds. The
               fund invests in short-term investments to meet shareholder
               withdrawals and other liquidity needs. Short-term investments
               will be rated at the time of purchase within one of the top two
               short-term rating categories by a NRSRO or, if unrated,
               determined by the fund's investment advisor to be of similar
               quality.

            The fund may invest up to 10% of its assets in US dollar-
            denominated, domestic and foreign below investment-grade fixed
            income securities (junk bonds) rated in the fifth and sixth
            long-term rating categories by a NRSRO (or, if unrated, determined
            by the fund's investment advisor to be of similar quality),
            including those whose issuers are located in countries with new or
            emerging securities markets. The fund considers an emerging
            securities market to be one where the sovereign debt issued by the
            government in local currency terms is rated below investment-grade.
            A portion of high yield securities purchased for the fund may
            consist of non-US dollar denominated, below investment-grade fixed
            income securities. Compared to investment-grade bonds, junk bonds
            may pay higher yields, have higher volatility and higher risk of
            default on payments of interest or principal.

            The fund can invest up to 15% of its net assets in illiquid
            securities.

            The fund may also invest in and utilize the following investments
            and investment techniques and practices: Rule 144A securities, to
            be announced (TBA) securities, when-issued and delayed delivery
            securities, repurchase agreements, reverse repurchase agreements
            and dollar rolls.

            The fund's investment strategy emphasizes a diversified exposure to
            higher yielding mortgage, corporate and asset-backed sectors of the
            investment-grade fixed income markets. The investment process
            focuses on a top-down approach, first


                                               DWS Short Duration Plus Fund  | 5
<PAGE>

            focusing on sector allocations, then using relative value analysis
            to select the best securities within each sector. To select
            securities, the fund's investment advisor analyzes such factors as
            credit quality, interest rate sensitivity and spread relationships
            between individual bonds.

            The fund primarily invests in fixed income securities that are
            rated, at the time of purchase, within the top four rating
            categories as rated by Moody's Investors Service, Inc., the
            Standard & Poor's Division of The McGraw-Hill Companies, Inc.,
            Fitch, Inc., or another NRSRO, or, if unrated, determined by the
            fund's investment advisor to be of similar quality.

            The fund's investment advisor normally targets an average portfolio
            duration of no longer than three years by investing in fixed income
            securities with short- to intermediate-term maturities. Generally,
            rates of short-term investments fluctuate less than rates of
            longer-term investments.

            DERIVATIVE INSTRUMENTS. The fund may invest in various instruments
            commonly known as "derivatives" to increase its exposure to certain
            groups of securities. The derivatives that the fund may use
            include, among others, futures contracts, forward contracts and
            options on forward contracts. The fund may use derivatives to keep
            cash on hand to meet shareholder redemptions, as a hedging strategy
            to maintain a specific portfolio duration, or to protect against
            market risk. When employing the global tactical asset allocation
            overlay strategy mentioned below (also known as integrated Global
            Alpha Platform or iGAP) the fund also may use derivatives for
            leveraging, which is a way to attempt to enhance returns. The fund
            will only use these instruments if portfolio management believes
            that their return potential more than compensates for the extra
            risks associated with using them.

            In an attempt to enhance return, the fund also employs a global
            tactical asset allocation overlay strategy (iGAP), which invests in
            instruments across domestic and international fixed income and
            currency markets.

            Through the global asset allocation investment strategy, the
            portfolio managers seek to enhance the fund's return by shifting
            investment weightings among global bond and currency markets in an
            effort to capture short- and medium-term market moves. The
            portfolio managers take the investment views of Deutsche Asset
            Management's bond, asset allocation and currency teams located
            around the world


6 | DWS Short Duration Plus Fund
<PAGE>

            and combine them using a structured, disciplined portfolio
            construction and risk management process. The end result is a
            portfolio of bond and currency positions intended to generate
            returns for the fund that exceed those that could be achieved
            without the global asset allocation strategy, although there can be
            no guarantee that such result will be achieved. Because the global
            asset allocation strategy focuses on short- and medium-term market
            moves, the managers expect to change the fund's investment
            weightings frequently.

            In implementing the global asset allocation strategy, the fund
            invests in options and futures based on any type of security or
            index, including options and futures traded on foreign exchanges.
            Some options and futures strategies, including selling futures,
            buying puts and writing calls, hedge the fund's investments against
            price fluctuations. Other strategies, including buying futures,
            writing puts and buying calls, tend to increase and will broaden
            the fund's market exposure. Options and futures may be combined
            with each other, or with forward contracts, in order to adjust the
            risk and return characteristics of an overall strategy.

            The fund may also enter into forward currency exchange contracts
            (agreements to exchange one currency for another at a future date),
            may buy and sell options and futures contracts relating to foreign
            currencies and may purchase securities indexed to foreign
            currencies. Currency management strategies allow the fund to shift
            investment exposure from one currency to another or to attempt to
            profit from anticipated declines in the value of a foreign currency
            relative to the US dollar. Successful implementation of the global
            asset allocation strategy depends on portfolio management's
            judgment as to the potential risks and rewards of implementing the
            different types of strategies.

            SECURITIES LENDING. The fund may lend its investment securities in
            an amount up to 33 1/3% of its total assets to approved
            institutional borrowers who need to borrow securities in order to
            complete certain transactions.


                                               DWS Short Duration Plus Fund  | 7
<PAGE>

            THE MAIN RISKS OF INVESTING IN THE FUND

            There are several risk factors that could hurt the fund's
            performance, cause you to lose money or cause the fund's
            performance to trail that of other investments.

            INTEREST RATE RISK. Generally, fixed income securities will
            decrease in value when interest rates rise. The longer the duration
            of the fund's securities, the more sensitive the fund will be to
            interest rate changes. (As a general rule, a 1% rise in interest
            rates means a 1% fall in value for every year of duration.) As
            interest rates decline, the issuers of securities held by the fund
            may prepay principal earlier than scheduled, forcing the fund to
            reinvest in lower-yielding securities and may reduce the fund's
            income. As interest rates increase, slower than expected principal
            payments may extend the average life of fixed income securities.
            This will have the effect of locking in a below-market interest
            rate, thereby further reducing the value of such a security.

            CREDIT RISK. A fund purchasing debt securities faces the risk that
            the creditworthiness of an issuer may decline, causing the value of
            the debt securities to decline. In addition, an issuer may not be
            able to make timely payments on the interest and/
            or principal on the debt security it has issued. Because the
            issuers of high-yield debt securities or junk bonds (debt
            securities rated below the fourth highest category) may be in
            uncertain financial health, the prices of their debt securities can
            be more vulnerable to bad economic news or even the expectation of
            bad news, than investment-grade debt securities. In some cases,
            debt securities, particularly high-yield debt securities, may
            decline in credit quality or go into default. Because the fund may
            invest in securities not paying current interest or in securities
            already in default, these risks may be more pronounced.

            MARKET RISK. Deteriorating market conditions might cause a general
            weakness in the market that reduces the prices of securities in
            that market. Developments in a particular class of debt securities
            or the stock market could also adversely affect the fund by
            reducing the relative attractiveness of debt securities as an
            investment. Also, to the extent that the fund emphasizes debt
            securities from any given industry, it could be hurt if that
            industry does not do well.


8 | DWS Short Duration Plus Fund
<PAGE>

            SECURITY SELECTION RISK. A risk that pervades all investing is the
            risk that the securities in the fund's portfolio may decline in
            value.

            LIQUIDITY RISK. Liquidity risk is the risk that a security cannot
            be sold quickly at a price that reflects the fund's estimate of its
            value.

            PRICING RISK. At times, market conditions may make it difficult to
            value some investments, and the fund may use certain valuation
            methodologies for some of its investments, such as fair value
            pricing. Given the subjective nature of such valuation
            methodologies, it is possible that the value determined for an
            investment may be different than the value realized upon such
            investment's sale. If the fund has valued its securities too
            highly, you may pay too much for fund shares when you buy into the
            fund. If the fund has underestimated the price of its securities,
            you may not receive the full market value when you sell your fund
            shares.

            SECURITIES LENDING RISK. Any loss in the market price of securities
            loaned by the fund that occurs during the term of the loan would be
            borne by the fund and would adversely affect the fund's
            performance. Also, there may be delays in recovery of securities
            loaned or even a loss of rights in the collateral should the
            borrower of the securities fail financially while the loan is
            outstanding. However, loans will be made only to borrowers selected
            by the fund's delegate after a review of relevant facts and
            circumstances, including the creditworthiness of the borrower.

            iGAP RISK. The success of the iGAP strategy depends, in part, on
            the Advisor's ability to analyze the correlation between various
            global markets and asset classes. If the Advisor's correlation
            analysis proves to be incorrect, losses to the fund may be
            significant and may substantially exceed the intended level of
            market exposure for the iGAP strategy.

            DERIVATIVES RISK. Risks associated with derivatives include the
            risk that the derivative is not well correlated with the security,
            index or currency to which it relates; the risk that derivatives
            may result in losses or missed opportunities; the risk that the
            fund will be unable to sell the derivative because of an illiquid
            secondary market; the risk that a counterparty is unwilling or
            unable to meet its obligation; and the risk that the derivative
            transaction could expose the fund to the effects of leverage, which
            could increase the fund's exposure to the market and


                                               DWS Short Duration Plus Fund  | 9
<PAGE>

            magnify potential losses. There is no guarantee that derivatives,
            to the extent employed, will have the intended effect, and their
            use could cause lower returns or even losses to the fund. The use
            of derivatives by the fund to hedge risk may reduce the opportunity
            for gain by offsetting the positive effect of favorable price
            movements.

            FOREIGN INVESTMENT RISK. Foreign investments involve certain
            special risks, including:

            -  POLITICAL RISK. Some foreign governments have limited the
               outflow of profits to investors abroad, imposed restrictions on
               the exchange or export of foreign currency, extended diplomatic
               disputes to include trade and financial relations, seized
               foreign investments and imposed higher taxes.

            -  INFORMATION RISK. Companies based in foreign markets are usually
               not subject to accounting, auditing and financial reporting
               standards and practices as stringent as those in the US.
               Therefore, their financial reports may present an incomplete,
               untimely or misleading picture of a company, as compared to the
               financial reports required in the US.

            -  LIQUIDITY RISK. Investments that trade less frequently can be
               more difficult or more costly to buy, or to sell, than more
               liquid or active investments. This liquidity risk is a factor of
               the trading volume of a particular investment, as well as the
               size and liquidity of the entire local market. On the whole,
               foreign exchanges are smaller and less liquid than US exchanges.
               This can make buying and selling certain investments more
               difficult and costly. Relatively small transactions in some
               instances can have a disproportionately large effect on the
               price and supply of securities. In certain situations, it may
               become virtually impossible to sell an investment in an orderly
               fashion at a price that approaches portfolio management's
               estimate of its value. For the same reason, it may at times be
               difficult to value the fund's foreign investments.

            -  REGULATORY RISK. There is generally less government regulation
               of foreign markets, companies and securities dealers than in the
               US.

10 | DWS Short Duration Plus Fund
<PAGE>

            -  CURRENCY RISK. The fund invests in securities denominated in
               foreign currencies. Changes in exchange rates between foreign
               currencies and the US dollar may affect the US dollar value of
               foreign securities or the income or gain received on these
               securities.

            -  LIMITED LEGAL RECOURSE RISK. Legal remedies for investors may be
               more limited than the legal remedies available in the US.

            -  TRADING PRACTICE RISK. Brokerage commissions and other fees are
               generally higher for foreign investments than for US
               investments. The procedures and rules governing foreign
               transactions and custody may also involve delays in payment,
               delivery or recovery of money or investments.

            -  TAXES. Foreign withholding and certain other taxes may reduce
               the amount of income available to distribute to shareholders of
               the fund. In addition, special US tax considerations may apply
               to the fund's foreign investments.


                                              DWS Short Duration Plus Fund  | 11
<PAGE>

THE FUND'S PERFORMANCE HISTORY

While a fund's past performance (before and after taxes) isn't necessarily a
sign of how it will do in the future, it can be valuable for an investor to
know.

The bar chart shows how the performance of the fund's Class A shares has varied
from year to year, which may give some idea of risk. The bar chart does not
reflect sales loads; if it did, total returns would be lower than those shown.
The table on the following page shows how fund performance compares to relevant
index performance (which, unlike fund performance, does not reflect fees or
expenses). The table includes the effects of maximum sales loads on fund
performance. The performance of the fund and the index information varies over
time. All figures assume reinvestment of dividends and distributions (in the
case of after-tax returns, reinvested net of assumed tax rates).

The table shows returns for Class A shares on a before-tax and after-tax basis.
After-tax returns are shown for Class A only and will vary for Class B and
Class C. After-tax returns are estimates calculated using the historical
highest marginal individual federal income tax rates and do not reflect the
impact of state and local taxes. Actual after-tax returns depend on an
investor's tax situation and may differ from those shown in the table.
After-tax returns shown are not relevant for investors who hold their shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts.

The inception dates for Class A, Class B and Class C shares are November 29,
2002, April 23, 2007 and February 3, 2003, respectively. In the bar chart, the
performance figures for Class A before its inception date are based on the
historical performance of the fund's original share class (Investment Class,
which was renamed Class S on October 23, 2006), adjusted to reflect the higher
gross total annual operating expenses of Class A. In the table, the performance
figures for each share class prior to its inception are based on the historical
performance of Class S shares, adjusted to reflect both the higher gross total
annual operating expenses and the current applicable sales charges of Classes
A, B or C. Class S shares are offered in a different prospectus, which is
available upon request. Prior to November 17, 2004, the fund had a different
objective, strategies, fees and expenses. Consequently, the fund's past
performance prior to this time may have been different if the current strategy
had been in place.


12 | DWS Short Duration Plus Fund
<PAGE>

DWS Short Duration Plus Fund

ANNUAL TOTAL RETURN (%) AS OF 12/31 EACH YEAR - CLASS A (Results do not reflect
sales loads; if they did, total returns would be lower than those shown.)



<TABLE>
<S>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>     <C>
 5.72      6.47      5.88      4.75      3.75     6.30       2.47      5.74     5.45    -7.13
1999      2000      2001      2002      2003      2004*     2005      2006      2007    2008
</TABLE>





<TABLE>
<CAPTION>
FOR THE PERIODS INCLUDED IN THE BAR CHART:
<S>                                        <C>
BEST QUARTER: 3.32% Q4 2004                WORST QUARTER: -5.14% Q4 2008
</TABLE>


 *   The return for the year 2004 includes the effect of the conversion of the
     fund from a stable value fund to a short-term bond fund. In the absence of
     such conversion, the return would have been lower.

                                              DWS Short Duration Plus Fund  | 13
<PAGE>

AVERAGE ANNUAL TOTAL RETURNS (%) as of 12/31/2008 (Fund returns include the
effects of maximum sales load.)


<TABLE>
<CAPTION>
                                              1 YEAR       5 YEARS      10 YEARS
<S>                                         <C>           <C>          <C>
 CLASS A
   Return before Taxes                         -9.68         1.87         3.58
   Return after Taxes on Distributions        -11.14         0.02         1.57
   Return after Taxes on Distributions
   and Sale of Fund Shares                     -7.28*        0.38*        1.74*
 CLASS B (Return before Taxes)                -10.47         1.12         2.71
 CLASS C (Return before Taxes)                 -7.74         1.72         3.11
 BARCLAYS CAPITAL 1-3 YEAR
 GOVERNMENT/CREDIT INDEX (reflects
 no deductions for fees, expenses or
 taxes)                                        4.97          3.81         4.79
</TABLE>


 *   Return after Taxes on Distributions and Sale of Fund Shares is higher than
     other return figures for the same period due to a capital loss occurring
     upon redemption resulting in an assumed tax deduction for the shareholder.

 In both the chart and the table, total returns would have been lower if
 operating expenses hadn't been reduced.

 BARCLAYS CAPITAL 1-3 YEAR GOVERNMENT/CREDIT INDEX (name changed from Lehman
 Brothers 1-3 Year Government/Credit Index effective November 3, 2008) is an
 unmanaged index consisting of all US government agency and Treasury
 securities, as well as all investment grade corporate debt securities with
 maturities of one to three years.


--------------------------------------------------------------------------------
Current performance may be higher or lower than the performance data quoted
above. For more recent performance information, call your financial advisor or
(800) 621-1048 or visit our Web site at www.dws-investments.com.


--------------------------------------------------------------------------------
Return information assumes that fund shares were sold at the end of the period.


RETURN AFTER TAXES ON DISTRIBUTIONS reflects taxes only on the fund's
distributions and not on a shareholder's gain or loss from selling fund shares.


RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES reflects taxes on
both the fund's distributions and a shareholder's gain or loss from selling
fund shares.


14 | DWS Short Duration Plus Fund
<PAGE>

HOW MUCH INVESTORS PAY

The table below describes the fees and expenses that you may pay if you buy and
hold fund shares. This information doesn't include any fees that may be charged
by your financial advisor.


<TABLE>
<CAPTION>
FEE TABLE                                        CLASS A         CLASS B       CLASS C
<S>                                         <C>                 <C>          <C>

 SHAREHOLDER FEES, paid directly from your investment
 Maximum Sales Charge (Load) Imposed
 on Purchases (as % of offering price)             2.75%1         None          None
 Maximum Deferred Sales Charge (Load)
 (as % of redemption proceeds)                   None2             4.00%         1.00%
 Redemption/Exchange fee on shares
 owned less than 15 days (as % of
 redemption proceeds)3                            2.00             2.00          2.00

 ANNUAL OPERATING EXPENSES, deducted from fund assets
 Management Fee                                   0.36  %          0.36%         0.36%
 Distribution/Service (12b-1) Fee                 0.23             0.98          1.00
 Other Expenses4                                  0.29             0.42          0.23
 TOTAL ANNUAL OPERATING EXPENSES5,6,7             0.88             1.76          1.59
</TABLE>


1   Because of rounding in the calculation of the offering price, the actual
   maximum front-end sales charge paid by an investor may be higher than the
   percentage noted (see "Choosing a Share Class - Class A shares").

2   The redemption of shares purchased at net asset value under the Large Order
   NAV Purchase Privilege (see "Choosing a Share Class - Class A shares") may
   be subject to a contingent deferred sales charge of 0.50% if redeemed
   within 12 months of purchase.

3   This fee is charged on all applicable redemptions or exchanges. Please see
   "Policies You Should Know About - Policies about transactions" for further
   information.

4   "Other Expenses" includes an administrative service fee paid to the Advisor
   in the amount of 0.10%.

5   The investment advisor has contractually agreed through April 22, 2010 to
   waive a portion of its fees and reimburse expenses so that total annual
   operating expenses will not exceed 0.94% for Class A, excluding certain
   expenses such as extraordinary expenses, taxes, brokerage and interest.

6   The investment advisor has contractually agreed through September 30, 2009
   to waive a portion of its fees and reimburse expenses so that total annual
   operating expenses will not exceed 1.64% for Class B, excluding certain
   expenses such as extraordinary expenses, taxes, brokerage and interest.
   Although there can be no assurances that the current waiver/expense
   reimbursement arrangement will be maintained beyond September 30, 2009, the
   Advisor has committed to review the continuance of waiver/
     expense reimbursement arrangements by September 30, 2009.

7   The investment advisor has voluntarily agreed to waive a portion of its
   fees and reimburse expenses so that total annual operating expenses will
   not exceed 0.86% and 1.61%, for Class A and Class C shares, respectively,
   excluding certain expenses such as extraordinary expenses, taxes, brokerage
   and interest. The investment advisor, at its discretion, may revise or
   discontinue this arrangement at any time.

                                              DWS Short Duration Plus Fund  | 15
<PAGE>

Based on the costs above, this example helps you compare the expenses of the
fund's Class A, B and C shares to those of other mutual funds. This example
assumes the expenses above remain the same. It also assumes that you invested
$10,000, earned 5% annual returns and reinvested all dividends and
distributions. This is only an example; actual expenses will be different.


<TABLE>
<CAPTION>
EXAMPLE                1 YEAR      3 YEARS      5 YEARS      10 YEARS
<S>                   <C>         <C>          <C>          <C>

 EXPENSES, assuming you sold your shares at the end of each period
 Class A shares         $362         $548       $  749       $1,329
 Class B shares*         579          854        1,154        1,626
 Class C shares          262          502          866        1,889

 EXPENSES, assuming you kept your shares
 Class A shares         $362         $548       $  749       $1,329
 Class B shares*         179          554          954        1,626
 Class C shares          162          502          866        1,889
</TABLE>


*   Reflects conversion of Class B to Class A shares, which pay lower fees.
   Conversion occurs six years after purchase.

16 | DWS Short Duration Plus Fund
<PAGE>

OTHER POLICIES AND SECONDARY RISKS

           While the previous pages describe the main points of the fund's
           strategy and risks, there are a few other issues to know about:

           -  Although major changes tend to be infrequent, the fund's Board
              could change the fund's investment objective without seeking
              shareholder approval.

           -  As a temporary defensive measure, the fund could shift up to 100%
              of assets into investments such as money market securities. This
              could prevent losses, but, while engaged in a temporary defensive
              position, the fund will not be pursuing its investment objective.
              However, portfolio management may choose not to use these
              strategies for various reasons, even in volatile market
              conditions.

           -  The fund may trade actively. This could raise transaction costs
              (thus lowering return) and could mean increased taxable
              distributions to shareholders and distributions that will be
              taxable to shareholders at higher federal income tax rates.

           -  Certain DWS fund-of-funds are permitted to invest in the fund. As
              a result, the fund may have large inflows or outflows of cash
              from time to time. This could have adverse effects on the fund's
              performance if the fund were required to sell securities or
              invest cash at times when it otherwise would not do so. This
              activity could also accelerate the realization of capital gains
              and increase the fund's transaction costs. The Advisor will
              monitor the impact of these transactions and the fund may
              discontinue such arrangements if they are not deemed to be in the
              best interests of the fund.

           Prior to January 13, 2006, the fund operated pursuant to a
           master/feeder structure under which the fund invested all of its
           assets in a master portfolio (the "Portfolio").


           Secondary risks

           IPO RISK. Securities purchased in initial public offerings (IPOs)
           may be very volatile. The price of such securities may rise and fall
           rapidly, often based, among other reasons, on investor perceptions
           rather than economic reasons. Additionally, investments in IPOs may
           magnify the fund's performance if it has a small asset base. The
           fund is less likely to experience a similar impact on its
           performance as its assets grow because it is unlikely that the fund
           will obtain proportionately larger IPO allocations.


                                        Other Policies and Secondary Risks  | 17
<PAGE>

           For more information

           This prospectus doesn't tell you about every policy or risk of
           investing in the fund.

           If you want more information on the fund's allowable securities and
           investment practices and the characteristics and risks of each one,
           you may want to request a copy of the Statement of Additional
           Information (the back cover tells you how to do this).

           Keep in mind that there is no assurance that the fund will achieve
           its objective.

           A complete list of the fund's portfolio holdings as of the month-end
           is posted on www.dws-investments.com on or about the 15th day of the
           following month. More frequent posting of portfolio holdings
           information may be made from time to time on
           www.dws-investments.com. The posted portfolio holdings information
           is available by fund and generally remains accessible at least until
           the date on which the fund files its Form N-CSR or N-Q with the
           Securities and Exchange Commission for the period that includes the
           date as of which the posted information is current. The fund's
           Statement of Additional Information includes a description of the
           fund's policies and procedures with respect to the disclosure of the
           fund's portfolio holdings.


WHO MANAGES AND OVERSEES THE FUND


           The investment advisor

           Deutsche Investment Management Americas Inc. ("DIMA" or the
           "Advisor"), with headquarters at 345 Park Avenue, New York, NY
           10154, is the investment advisor for the fund. Under the oversight
           of the Board, the Advisor makes investment decisions, buys and sells
           securities for the fund and conducts research that leads to these
           purchase and sale decisions. The Advisor provides a full range of
           global investment advisory services to institutional and retail
           clients.

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


18 | Who Manages and Oversees the Fund
<PAGE>

           Deutsche Asset Management is a global asset management organization
           that offers a wide range of investing expertise and resources,
           including hundreds of portfolio managers and analysts and an office
           network that reaches the world's major investment centers. This
           well-resourced global investment platform brings together a wide
           variety of experience and investment insight across industries,
           regions, asset classes and investing styles.

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

           MANAGEMENT FEE. The Advisor receives a management fee from the fund.
           Below is the actual rate paid by the fund for the most recent fiscal
           year, as a percentage of the fund's average daily net assets.


<TABLE>
<CAPTION>
FUND NAME                                     FEE PAID
<S>                                          <C>
  DWS Short Duration Plus Fund                  0.36%
</TABLE>


           A discussion regarding the basis for the Board's approval of the
           fund's investment management agreement is contained in the most
           recent shareholder report for the annual period ended September 30
           (see "Shareholder reports" on the back cover).

           Under a separate administrative services agreement between the fund
           and the Advisor, the fund pays the Advisor a fee for providing most
           of the fund's administrative services.


                                         Who Manages and Oversees the Fund  | 19
<PAGE>

Portfolio management

DWS Short Duration Plus Fund is managed by a team of investment professionals
who collaborate to develop and implement the fund's investment strategy. Each
portfolio manager has authority over all aspects of the fund's investment
portfolio, including, but not limited to, purchases and sales of individual
securities, portfolio construction techniques, portfolio risk assessment, and
the management of daily cash flows in accordance with portfolio holdings.

The following people handle the day-to-day management of the fund.

William Chepolis, CFA
Managing Director of Deutsche Asset Management and Portfolio Manager of the
fund.
-  Joined Deutsche Asset Management in 1998 after 13 years of experience as
   vice president and portfolio manager for Norwest Bank, where he managed the
   bank's fixed income and foreign exchange portfolios.
-  Portfolio Manager for Retail Fixed Income: New York.
-  Joined the fund in 2002.
-  BIS, University of Minnesota.

Matthew F. MacDonald
Director of Deutsche Asset Management and Portfolio Manager of the fund.
-  Joined Deutsche Asset Management and the fund in 2006 after 14 years of
   fixed income experience at Bank of America Global Structured Products and
   PPM America, Inc., where he was portfolio manager for public fixed income,
   including MBS, ABS, CDOs and corporate bonds; earlier, as an analyst for
   MBS, ABS and money markets; and originally, at Duff & Phelps Credit Rating
   Company.
-  Portfolio Manager for Retail Fixed Income: New York.
-  BA, Harvard University; MBA, University of Chicago Graduate School of
   Business.

Eric S. Meyer, CFA
Managing Director of Deutsche Asset Management and Portfolio Manager of the
fund.
-  Joined Deutsche Asset Management in 2006 after 16 years of experience in
   positions of increasing responsibility in corporate banking with First
   Chicago, Credit Agricole, and most recently, Bank of America's subsidiary,
   Flagship Capital Management. Prior to his corporate banking experience, he
   worked in trust management operations for 10 years at First Chicago and
   E.F. Hutton.
-  Head of US Loan Portfolio Management, High Yield Strategies: New York.
-  Joined the fund in 2008.
-  BA from State University of New York, Albany; MBA from Pace University.

Thomas Picciochi
Director of Deutsche Asset Management and Portfolio Manager of the fund.
-  Joined Deutsche Asset Management in 1999, formerly serving as portfolio
   manager for Absolute Return Strategies, after 13 years of experience in
   various research and analysis positions at State Street Global Advisors,
   FPL Energy, Barnett Bank, Trade Finance Corporation and Reserve Financial
   Management.
-  Senior Portfolio Manager for Quantitative Strategies: New York.
-  Joined the fund in 2007.
-  BA and MBA, University of Miami.

20 | Who Manages and Oversees the Fund
<PAGE>

Gary Sullivan, CFA
Director of Deutsche Asset Management and Portfolio Manager of the fund.
- Joined Deutsche Asset Management in 1996 and the fund in 2006. Served as the
   head of the High Yield group in Europe and as an Emerging Markets portfolio
   manager.
- Prior to that, four years at Citicorp as a research analyst and structurer of
   collateralized mortgage obligations. Prior to Citicorp, served as an
   officer in the US Army from 1988 to 1991.
- BS, United States Military Academy (West Point); MBA, New York University,
   Stern School of Business.

Robert Wang
Managing Director of Deutsche Asset Management and Portfolio Manager of the
fund.
- Joined Deutsche Asset Management in 1995 as portfolio manager for asset
   allocation after 13 years of experience of trading fixed income, foreign
   exchange and derivative products at J.P. Morgan.
- Global Head of Quantitative Strategies Portfolio Management: New York.
- Joined the fund in 2005.
- BS, The Wharton School, University of Pennsylvania.

The fund's Statement of Additional Information provides additional information
about a portfolio manager's investments in the fund, a description of the
portfolio management compensation structure and information regarding other
accounts managed.


                                         Who Manages and Oversees the Fund  | 21
<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights are designed to help you understand recent financial
performance. The figures in the first part of each table are for a single
share. The total return figures represent the percentage that an investor in
the fund would have earned (or lost), assuming all dividends and distributions
were reinvested. This information has been audited by PricewaterhouseCoopers
LLP, independent registered public accounting firm, whose report, along with
the fund's financial statements, is included in the fund's annual report (see
"Shareholder reports" on the back cover). Investors should note that the fund's
performance before November 17, 2004 was obtained while the fund had a
different investment objective and different investment strategies, fees and
expenses. Information for the periods ended prior to September 30, 2005 was
audited by a different independent registered public accounting firm.


22 | Financial Highlights
<PAGE>

DWS Short Duration Plus Fund - Class A


<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER
30,                                  2008          2007           2006            2005 a           2004
<S>                               <C>           <C>           <C>             <C>              <C>
SELECTED PER SHARE DATA
--------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD                          $  9.94       $  9.88        $  9.93         $  10.00         $ 10.00
------------------------------     -------       -------        -------         --------         -------
Income (loss) from
investment operations:
  Net investment income b              .38           .38            .35              .33             .38
______________________________     _______       _______        _______         ________         _______
  Net realized and unrealized
  gain (loss)                        ( .46)          .17            .10              .19          (  .00)*
------------------------------     -------       -------        -------         --------         -------
  TOTAL FROM INVESTMENT
  OPERATIONS                         ( .08)          .55            .45              .52             .38
______________________________     _______       _______        _______         ________         _______
Less distributions from:
  Net investment income              ( .47)        ( .43)         ( .38)          (  .34)         (  .38)
______________________________     _______       _______        _______         ________         _______
  Net realized gains                 ( .05)        ( .06)         ( .12)          (  .25)         (  .16)
______________________________     _______       _______        _______         ________         _______
  Reverse stock split c                  -             -              -                -             .16
______________________________     _______       _______        _______         ________         _______
  TOTAL DISTRIBUTIONS                ( .52)        ( .49)         ( .50)          (  .59)         (  .38)
______________________________     _______       _______        _______         ________         _______
Redemption fees                        .00*          .00*           .00*             .00*              -
------------------------------     -------       -------        -------         --------         -------
NET ASSET VALUE, END OF
PERIOD                             $  9.34       $  9.94        $  9.88         $   9.93         $ 10.00
------------------------------     -------       -------        -------         --------         -------
Total Return (%)d,e                  ( .88)         5.79           4.71             5.24            3.87
------------------------------     -------       -------        -------         --------         -------

RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
--------------------------------------------------------------------------------------------------------------
Net assets, end of period ($
millions)                              625           325             85              119             288
______________________________     _______       _______        _______         ________         _______
Ratio of expenses before
expense reductions                     .88           .93         1.34f            1.45f          1.50f
______________________________     _______       _______        _______         ________         _______
Ratio of expenses after
expense reductions                     .86           .86          .88f            .95f           1.25f
______________________________     _______       _______        _______         ________         _______
Ratio of net investment
income (%)                            3.89          3.83           3.61             3.21            3.86
______________________________     _______       _______        _______         ________         _______
Portfolio turnover rate                 83            57          129g               298             120
------------------------------     -------       -------        -------         --------         -------
</TABLE>


a   Effective November 17, 2004, the Fund converted from a stable value fund to
   a short-term bond fund. The return for the Fund includes a one-time
   adjustment of 2.7% related to the conversion and in the absence of the
   conversion, the return would have been lower.

b   Based on average share outstanding during the period.

c   See Note E in Notes to Financial Statements in the Annual Report to
shareholders.

d   Total return does not reflect the effect of any sales charges.

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

f   Includes expenses allocated from Scudder Limited-Duration Plus Portfolio.

g   On January 13, 2006, the Scudder Limited-Duration Plus Portfolio was
   closed. This ratio includes the purchase and sale of portfolio securities
   of the DWS Short Duration Plus Fund as a stand-alone fund in addition to
   the Scudder Limited-Duration Plus Portfolio.

*   Amount is less than $.005.

                                                      Financial Highlights  | 23
<PAGE>

DWS Short Duration Plus Fund - Class B


<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30,                             2008             2007 a
<S>                                              <C>              <C>
SELECTED PER SHARE DATA
------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD               $  9.94          $   9.97
---------------------------------------------      -------          --------
Income (loss) from investment operations:
  Net investment income b                              .30               .13
_____________________________________________      _______          ________
  Net realized and unrealized gain (loss)            ( .45)              .01
---------------------------------------------      -------          --------
  TOTAL FROM INVESTMENT OPERATIONS                   ( .15)              .14
_____________________________________________      _______          ________
Less distributions from:
  Net investment income                              ( .39)           (  .17)
_____________________________________________      _______          ________
  Net realized gains                                 ( .05)                -
_____________________________________________      _______          ________
  TOTAL DISTRIBUTIONS                                ( .44)           (  .17)
_____________________________________________      _______          ________
Redemption fees                                        .00***            .00***
---------------------------------------------      -------          --------
NET ASSET VALUE, END OF PERIOD                     $  9.35          $   9.94
---------------------------------------------      -------          --------
Total Return (%)c,d                                  (1.61)             1.39**
---------------------------------------------      -------          --------

RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
------------------------------------------------------------------------------------
Net assets, end of period ($ millions)                   4                 7
_____________________________________________      _______          ________
Ratio of expenses before expense reductions           1.76              1.82*
_____________________________________________      _______          ________
Ratio of expenses after expense reductions            1.67              1.72*
_____________________________________________      _______          ________
Ratio of net investment income (%)                    3.08              2.94*
_____________________________________________      _______          ________
Portfolio turnover rate                                 83                57
---------------------------------------------      -------          --------
</TABLE>


a   For the period April 23, 2007 (commencement of operations of Class B
   shares) to September 30, 2007.

b   Based on average shares outstanding during the period.

c   Total return does not reflect the effect of any sales charges.

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

*   Annualized

**   Not annualized

***   Amount is less than $.005.

24 | Financial Highlights
<PAGE>

DWS Short Duration Plus Fund - Class C


<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER
30,                                  2008           2007            2006            2005 a           2004
<S>                               <C>           <C>             <C>             <C>              <C>
SELECTED PER SHARE DATA
----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD                          $  9.92        $  9.87         $  9.93         $  10.00         $ 10.00
------------------------------     -------        -------         -------         --------         -------
Income (loss) from
investment operations:
  Net investment income b              .31            .31             .29              .26             .31
______________________________     _______        _______         _______         ________         _______
  Net realized and unrealized
  gain (loss)                        ( .45)           .17             .09              .19          (  .00)*
------------------------------     -------        -------         -------         --------         -------
  TOTAL FROM INVESTMENT
  OPERATIONS                         ( .14)           .48             .38              .45             .31
______________________________     _______        _______         _______         ________         _______
Less distributions from:
  Net investment income              ( .40)         ( .37)          ( .32)          (  .27)         (  .31)
______________________________     _______        _______         _______         ________         _______
  Net realized gains                 ( .05)         ( .06)          ( .12)          (  .25)         (  .16)
______________________________     _______        _______         _______         ________         _______
  Reverse stock split c                  -              -               -                -             .16
______________________________     _______        _______         _______         ________         _______
  TOTAL DISTRIBUTIONS                ( .45)         ( .43)          ( .44)          (  .52)         (  .31)
______________________________     _______        _______         _______         ________         _______
Redemption fees                        .00*           .00*            .00*             .00*              -
------------------------------     -------        -------         -------         --------         -------
NET ASSET VALUE, END OF
PERIOD                             $  9.33        $  9.92         $  9.87         $   9.93         $ 10.00
------------------------------     -------        -------         -------         --------         -------
Total Return (%)d                    (1.53)        4.98e           4.07e            4.47e          3.10e
------------------------------     -------        -------         -------         --------         -------

RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------------------------
Net assets, end of period ($
millions)                              176            130             100              139             257
______________________________     _______        _______         _______         ________         _______
Ratio of expenses before
expense reductions                    1.59           1.66          2.09f            2.19f          2.25f
______________________________     _______        _______         _______         ________         _______
Ratio of expenses after
expense reductions                    1.59           1.61          1.50f            1.57f          2.00f
______________________________     _______        _______         _______         ________         _______
Ratio of net investment
income (%)                            3.16           3.08            2.99             2.59            3.11
______________________________     _______        _______         _______         ________         _______
Portfolio turnover rate                 83             57           129g               298             120
------------------------------     -------        -------         -------         --------         -------
</TABLE>


a   Effective November 17, 2004, the Fund converted from a stable value fund to
   a short-term bond fund. The return for the Fund includes a one-time
   adjustment of 2.7% related to the conversion and in the absence of the
   conversion, the return would have been lower.

b   Based on average shares outstanding during the period.

c   See Note E in Notes to Financial Statements in the Annual Report to
shareholders.

d   Total return does not reflect the effect of sales charges.

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

f   Includes expenses allocated from Scudder Limited-Duration Plus Portfolio.

g   On January 13, 2006, the Scudder Limited-Duration Plus Portfolio was
   closed. This ratio includes the purchase and sale of portfolio securities
   of the DWS Short Duration Plus Fund as a stand-alone fund in addition to
   the Scudder Limited-Duration Plus Portfolio.

*   Amount is less than $.005.

                                                      Financial Highlights  | 25
<PAGE>

HOW TO INVEST IN THE FUND
This prospectus offers the share classes noted on the front cover. Each class
has its own fees and expenses, offering you a choice of cost structures. The
fund offers other classes of shares in a separate prospectus. These shares are
intended for investors seeking the advice and assistance of a financial
advisor, who will typically receive compensation for those services.

THE FOLLOWING PAGES TELL YOU HOW TO INVEST IN THE FUND AND WHAT TO EXPECT AS A
SHAREHOLDER. The following pages also tell you about many of the services,
choices and benefits of being a shareholder. You'll also find information on
how to check the status of your account using the method that's most convenient
for you.

If you're investing directly with DWS Investments, all of this information
applies to you. If you're investing through a "third party provider" - for
example, a workplace retirement plan, financial supermarket or financial
advisor - your provider may have its own policies or instructions and you
should follow those.

You can find out more about the topics covered here by speaking with your
FINANCIAL ADVISOR OR A REPRESENTATIVE OF YOUR WORKPLACE RETIREMENT PLAN OR
OTHER INVESTMENT PROVIDER.

Before you invest, take a moment to look over the characteristics of each share
class, so that you can be sure to choose the class that's right for you. YOU
MAY WANT TO ASK YOUR FINANCIAL ADVISOR TO HELP YOU WITH THIS DECISION.
<PAGE>

CHOOSING A SHARE CLASS

We describe each share class in detail on the following pages. But first, you
may want to look at the table below, which gives you a brief description and
comparison of the main features of each class. You should consult with your
financial advisor to determine which class of shares is appropriate for you.


<TABLE>
<CAPTION>
 CLASSES AND FEATURES                         POINTS TO HELP YOU COMPARE
<S>                                          <C>
 CLASS A
                                              -  Some investors may be able to reduce
 -  Sales charge of up to 2.75% charged
                                             or eliminate their sales charge; see
  when you buy shares
                                             "Class A shares"
 -  In most cases, no charge when you
                                             -  Total annual expenses are lower than
  sell shares
                                             those for Class B or Class C
 -  Up to 0.25% annual shareholder           -  Distributions are generally higher than
  servicing fee                              Class B or Class C
 CLASS B
 -  No sales charge when you buy shares       -  The deferred sales charge rate falls to
                                             zero after six years
 -  Deferred sales charge declining from
  4.00%, charged when you sell shares        -  Shares automatically convert to
  you bought within the last six years       Class A after six years, which means
                                             lower annual expenses going forward
 -  0.75% annual distribution fee and up
  to 0.25% annual shareholder servicing      -  Distributions are generally lower than
  fee                                        Class A
 CLASS C
 -  No sales charge when you buy shares       -  The deferred sales charge rate for one
                                             year is lower for Class C shares than
 -  Deferred sales charge of 1.00%,
                                             Class B shares, but your shares never
  charged when you sell shares you
                                             automatically convert to Class A, so
  bought within the last year
                                             annual expenses remain higher than
 -  0.75% annual distribution fee and up
                                             Class A
  to 0.25% annual shareholder servicing
                                             -  Distributions are generally lower than
  fee
                                             Class A
</TABLE>


Your financial advisor will typically be paid a fee when you buy shares and may
receive different levels of compensation depending upon which class of shares
you buy. The fund may pay financial advisors or other intermediaries
compensation for the services they provide to their clients. This compensation
may vary depending on the share class and fund you buy. Your financial advisor
may also receive compensation from the Advisor and/or its affiliates. Please
see "Financial intermediary support payments" for more information.



                                                    Choosing a Share Class  | 27
<PAGE>

           Class A shares

           Class A shares may make sense for long-term investors, especially
           those who are eligible for a reduced or eliminated sales charge.

           Class A shares have a 12b-1 plan, under which a shareholder
           servicing fee of up to 0.25% is deducted from class assets each
           year. Because the shareholder servicing fee is continuous in nature,
           it may, over time, increase the cost of your investment and may cost
           you more than paying other types of sales charges.

           Class A shares have an up-front sales charge that varies with the
           amount you invest:


<TABLE>
<CAPTION>
                              FRONT-END SALES           FRONT-END SALES
                               CHARGE AS A %         CHARGE AS A % OF YOUR
YOUR INVESTMENT            OF OFFERING PRICE 1,2         NET INVESTMENT 2
<S>                              <C>                       <C>
  Up to $100,000                 2.75%                     2.83%
$  100,000-$249,999              2.50                      2.56
  $250,000 or more              see below                 see below
</TABLE>


           1   The offering price includes the sales charge.

           2   Because of rounding in the calculation of the offering price,
               the actual front-end sales charge paid by an investor may be
               higher or lower than the percentages noted.


           YOU MAY BE ABLE TO LOWER YOUR CLASS A SALES CHARGE IF:

           -  you indicate your intent in writing to invest at least $100,000
              in Class A shares (including Class A shares in other retail DWS
              funds) over the next 24 months ("Letter of Intent")

           -  the amount of Class A shares you already own (including Class A
              shares in other retail DWS funds) plus the amount you're
              investing now in Class A shares is at least $100,000 ("Cumulative
              Discount")

           -  you are investing a total of $100,000 or more in Class A shares
              of several retail DWS funds on the same day ("Combined
              Purchases")

           The point of these three features is to let you count investments
           made at other times or in certain other funds for purposes of
           calculating your present sales charge. Any time you can use the
           privileges to "move" your investment into a lower sales charge
           category, it's generally beneficial for you to do so.


28 | Choosing a Share Class
<PAGE>

           For purposes of determining whether you are eligible for a reduced
           Class A sales charge, you and your immediate family (your spouse or
           life partner and your children or stepchildren age 21 or younger)
           may aggregate your investments in the DWS family of funds. This
           includes, for example, investments held in a retirement account, an
           employee benefit plan or at a financial advisor other than the one
           handling your current purchase. These combined investments will be
           valued at their current offering price to determine whether your
           current investment qualifies for a reduced sales charge.

           To receive a reduction in your Class A initial sales charge, you
           must let your financial advisor or Shareholder Services know at the
           time you purchase shares that you qualify for such a reduction. You
           may be asked by your financial advisor or Shareholder Services to
           provide account statements or other information regarding related
           accounts of you or your immediate family in order to verify your
           eligibility for a reduced sales charge.

           For more information about sales charge discounts, please visit
           www.dws-investments.com (click on the link entitled "Fund Sales
           Charge and Breakpoint Schedule"), consult with your financial
           advisor or refer to the section entitled "Purchase or Redemption of
           Shares" in the fund's Statement of Additional Information.

           IN CERTAIN CIRCUMSTANCES, YOU MAY BE ABLE TO BUY CLASS A SHARES
           WITHOUT A SALES CHARGE. For example, the sales charge will be waived
           if you are reinvesting dividends or distributions or if you are
           exchanging an investment in Class A shares of another fund in the
           DWS family of funds for an investment in Class A shares of the fund.
           In addition, a sales charge waiver may apply to transactions by
           certain retirement plans and certain other entities or persons
           (e.g., affiliated persons of Deutsche Asset Management or the DWS
           funds) and with respect to certain types of investments (e.g., an
           investment advisory or agency commission program under which you pay
           a fee to an investment advisor or other firm for portfolio
           management or brokerage services).

           Details regarding the types of investment programs and categories of
           investors eligible for a sales charge waiver are provided in the
           fund's Statement of Additional Information.


                                                    Choosing a Share Class  | 29
<PAGE>

           There are a number of additional provisions that apply in order to
           be eligible for a sales charge waiver. The fund may waive the sales
           charge for investors in other situations as well. Your financial
           advisor or Shareholder Services can answer your questions and help
           you determine if you are eligible.

           IF YOU'RE INVESTING $250,000 OR MORE, either as a lump sum or
           through one of the sales charge reduction features described above,
           you may be eligible to buy Class A shares without a sales charge
           ("Large Order NAV Purchase Privilege"). However, you may be charged
           a contingent deferred sales charge (CDSC) of 0.50% on any shares you
           sell within 12 months of owning them. This CDSC is waived under
           certain circumstances (see "Policies You Should Know About"). Your
           financial advisor or Shareholder Services can answer your questions
           and help you determine if you're eligible.


           Class B shares

           Class B shares may make sense for long-term investors who prefer to
           see all of their investment go to work right away and can accept
           somewhat higher annual expenses. Please note, however, that since
           not all DWS funds offer Class B shares, exchange options may be
           limited.

           With Class B shares, you pay no up-front sales charge to the fund.
           Class B shares have a 12b-1 plan, under which a distribution fee of
           0.75% and a shareholder servicing fee of up to 0.25% are deducted
           from class assets each year. This means the annual expenses for
           Class B shares are somewhat higher (and their performance
           correspondingly lower) compared to Class A shares. However, unlike
           Class A shares, your entire investment goes to work immediately.
           After six years, Class B shares automatically convert on a tax-free
           basis to Class A shares, which has the net effect of lowering the
           annual expenses from the seventh year on.


30 | Choosing a Share Class
<PAGE>

           Class B shares have a CDSC. This charge declines over the years you
           own shares and disappears completely after six years of ownership.
           But for any shares you sell within those six years, you may be
           charged as follows:


<TABLE>
<CAPTION>
    YEAR AFTER YOU BOUGHT SHARES               CDSC ON SHARES YOU SELL
<S>                                    <C>
  First year                           4.00%
  Second or third year                 3.00
  Fourth or fifth year                 2.00
  Sixth year                           1.00
  Seventh year and later               None (automatic conversion to Class A)
</TABLE>


           This CDSC is waived under certain circumstances (see "Policies You
           Should Know About"). Your financial advisor or Shareholder Services
           can answer your questions and help you determine if you're eligible.


           While Class B shares don't have any front-end sales charge, their
           higher annual expenses mean that over the years you could end up
           paying more than the equivalent of the maximum allowable front-end
           sales charge.

           If you are thinking of making a large purchase in Class B shares or
           if you already own a large amount of Class A shares of the fund or
           other DWS funds, it may be more cost efficient to purchase Class A
           shares instead. Orders to purchase Class B shares of $100,000 or
           more will be declined with the exception of orders received from
           financial representatives acting for clients whose shares are held
           in an omnibus account and certain employer-sponsored employee
           benefit plans.


           Class C shares

           Class C shares may appeal to investors who plan to sell some or all
           of their shares within six years of buying them or who aren't
           certain of their investment time horizon.

           With Class C shares, you pay no up-front sales charge to the fund.
           Class C shares have a 12b-1 plan, under which a distribution fee of
           0.75% and a shareholder servicing fee of up to 0.25% are deducted
           from class assets each year. Because of these fees, the annual
           expenses for Class C shares are similar to those of Class B shares,
           but higher than those for Class A shares (and the performance of
           Class C shares is correspondingly lower than that of Class A
           shares).


                                                    Choosing a Share Class  | 31
<PAGE>

           Unlike Class B shares, Class C shares do NOT automatically convert
           to Class A shares after six years, so they continue to have higher
           annual expenses.

           Class C shares have a CDSC, but only on shares you sell within one
           year of buying them:


<TABLE>
<CAPTION>
   YEAR AFTER YOU BOUGHT SHARES        CDSC ON SHARES YOU SELL
<S>                                   <C>
  First year                          1.00%
  Second year and later                         None
</TABLE>


           This CDSC is waived under certain circumstances (see "Policies You
           Should Know About"). Your financial advisor or Shareholder Services
           can answer your questions and help you determine if you're eligible.


           While Class C shares do not have an up-front sales charge, their
           higher annual expenses mean that, over the years, you could end up
           paying more than the equivalent of the maximum allowable up-front
           sales charge.

           Orders to purchase Class C shares of $250,000 or more will be
           declined with the exception of orders received from financial
           representatives acting for clients whose shares are held in an
           omnibus account and certain employer-sponsored employee benefit
           plans.


32 | Choosing a Share Class
<PAGE>

How to BUY Class A, B and C Shares



<TABLE>
<CAPTION>
 FIRST INVESTMENT                                ADDITIONAL INVESTMENTS
<S>                                             <C>
 $1,000 or more for most accounts                $50 or more for most accounts and IRAs
 $500 or more for IRAs                          $50 or more for an account with an
 $500 or more for an account with an            Automatic Investment Plan
 Automatic Investment Plan
 THROUGH A FINANCIAL ADVISOR
 -  To obtain an application, contact your      -  Contact your advisor using the
  advisor                                       method that's most convenient for you
 BY MAIL OR EXPRESS MAIL (SEE BELOW)
 -  Fill out and sign an application            -  Send a check payable to "DWS
                                                Investments" and an investment slip
 -  Send it to us at the appropriate
  address, along with an investment             -  If you don't have an investment slip,
  check made payable to "DWS                    include a letter with your name,
  Investments"                                  account number, the full name of the
                                                fund and the share class and your
                                                investment instructions
 BY WIRE
 -  Call (800) 621-1048 for instructions        -  Call (800) 621-1048 for instructions
 BY PHONE
 Not available                                  -  Call (800) 621-1048 for instructions
 WITH AN AUTOMATIC INVESTMENT PLAN
 -  Fill in the information on your             -  To set up regular investments from a
  application including a check for the         bank checking account call (800) 621-
  initial investment and a voided check         1048 ($50 minimum)
 USING QuickBuy
 Not available                                  -  Call (800) 621-1048 to make sure
                                                QuickBuy is set up on your account; if
                                                it is, you can request a transfer from
                                                your bank account of any amount
                                                between $50 and $250,000
 ON THE INTERNET
 Not available                                  -  Call (800) 621-1048 to ensure you have
                                                electronic services
                                                -  Register at www.dws-
                                                investments.com or log in if already
                                                registered
                                                -  Follow the instructions for buying
                                                shares with money from your bank
                                                account
</TABLE>


--------------------------------------------------------------------------------
REGULAR MAIL:

First Investment: DWS Investments, PO Box 219356, Kansas City, MO 64121-9356
Additional Investments: DWS Investments, PO Box 219154, Kansas City, MO
64121-9154

EXPRESS, REGISTERED OR CERTIFIED MAIL:
DWS Investments, 210 West 10th Street, Kansas City, MO 64105-1614

                                        How to Buy Class A, B and C Shares  | 33
<PAGE>

How to EXCHANGE or SELL Class A, B and C Shares

<TABLE>
<CAPTION>
 EXCHANGING INTO ANOTHER FUND                    SELLING SHARES
<S>                                             <C>
                                                 Some transactions, including most for
 -  Exchanges into existing accounts:
                                                over $100,000, can only be ordered in
  $50 minimum per fund
                                                writing with a signature guarantee;
 -  Exchanges into new accounts:
                                                please see "Signature Guarantee"
  $1,000 minimum per fund for most
  accounts
  $500 minimum for IRAs
 THROUGH A FINANCIAL ADVISOR
 -  Contact your advisor using the              -  Contact your advisor using the
  method that's most convenient for you         method that's most convenient for you
 BY PHONE                                        BY PHONE OR WIRE
 -  Call (800) 621-1048 for instructions        -  Call (800) 621-1048 for instructions
 BY MAIL OR EXPRESS MAIL
 (see previous page for address)
 Write a letter that includes:                  Write a letter that includes:
 -  the fund, class and account number          -  the fund, class and account number
  you're exchanging out of                      from which you want to sell shares
 -  the dollar amount or number of shares       -  the dollar amount or number of shares
  you want to exchange                          you want to sell
 -  the name and class of the fund you          -  your name(s), signature(s) and
  want to exchange into                         address, as they appear on your
                                                account
 -  your name(s), signature(s) and
  address, as they appear on your               -  a daytime telephone number
  account
 -  a daytime telephone number
 WITH AN AUTOMATIC EXCHANGE PLAN                 WITH AN AUTOMATIC WITHDRAWAL PLAN
 -  To set up regular exchanges from a          -  Call (800) 621-1048 (minimum $50)
  fund account, call (800) 621-1048
 USING QuickSell
 Not available                                  -  Call (800) 621-1048 to make sure
                                                QuickSell is set up on your account; if
                                                it is, you can request a transfer to your
                                                bank account of any amount between
                                                $50 and $250,000
 ON THE INTERNET
 -  Register at www.dws-                        -  Register at www.dws-
  investments.com or log in if already          investments.com or log in if already
  registered                                    registered
 -  Follow the instructions for making on-      -  Follow the instructions for making on-
  line exchanges                                line redemptions
</TABLE>


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

<TABLE>
<S>               <C>
TO REACH US:      WEB SITE: www.dws-investments.com
                  TELEPHONE REPRESENTATIVE: (800) 621-1048, M-F, 9 a.m. - 6 p.m. ET
                  TDD LINE: (800) 972-3006, M-F, 9 a.m. - 6 p.m. ET
</TABLE>



34 | How to Exchange or Sell Class A, B and C Shares
<PAGE>

           Financial intermediary support payments

           The Advisor, DWS Investments Distributors, Inc. (the "Distributor")
           and/or their affiliates may pay additional compensation, out of
           their own assets and not as an additional charge to the fund, to
           selected affiliated and unaffiliated brokers, dealers, participating
           insurance companies or other financial intermediaries ("financial
           advisors") in connection with the sale and/or distribution of fund
           shares or the retention and/or servicing of fund investors and fund
           shares ("revenue sharing"). Such revenue sharing payments are in
           addition to any distribution or service fees payable under any Rule
           12b-1 or service plan of the fund, any record keeping/sub-transfer
           agency/networking fees payable by the fund (generally through the
           Distributor or an affiliate) and/or the Distributor to certain
           financial advisors for performing such services and any sales
           charge, commissions, non-cash compensation arrangements expressly
           permitted under applicable rules of the Financial Industry
           Regulatory Authority or other concessions described in the fee table
           or elsewhere in this prospectus or the Statement of Additional
           Information as payable to all financial advisors. For example, the
           Advisor, the Distributor and/or their affiliates may compensate
           financial advisors for providing the fund with "shelf space" or
           access to a third party platform or fund offering list or other
           marketing programs, including, without limitation, inclusion of the
           fund on preferred or recommended sales lists, mutual fund
           "supermarket" platforms and other formal sales programs; granting
           the Distributor access to the financial advisor's sales force;
           granting the Distributor access to the financial advisor's
           conferences and meetings; assistance in training and educating the
           financial advisor's personnel; and obtaining other forms of
           marketing support.

           The level of revenue sharing payments made to financial advisors may
           be a fixed fee or based upon one or more of the following factors:
           gross sales, current assets and/or number of accounts of the fund
           attributable to the financial advisor, the particular fund or fund
           type or other measures as agreed to by the Advisor, the Distributor
           and/or their affiliates and the financial advisors or any
           combination thereof. The amount of these revenue sharing payments is
           determined at the discretion of the Advisor, the Distributor and/or
           their affiliates from time to time, may be substantial, and may be
           different for different financial advisors based on, for example,
           the nature of the services provided by the financial advisor.


                           How to Exchange or Sell Class A, B and C Shares  | 35
<PAGE>

           The Advisor, the Distributor and/or their affiliates currently make
           revenue sharing payments from their own assets in connection with
           the sale and/or distribution of DWS fund shares or the retention
           and/or servicing of investors and DWS fund shares to financial
           advisors in amounts that generally range from .01% up to .50% of
           assets of the fund serviced and maintained by the financial advisor,
           .05% to .25% of sales of the fund attributable to the financial
           advisor, a flat fee of $13,350 up to $500,000, or any combination
           thereof. These amounts are subject to change at the discretion of
           the Advisor, the Distributor and/or their affiliates. Receipt of, or
           the prospect of receiving, this additional compensation may
           influence your financial advisor's recommendation of the fund or of
           any particular share class of the fund. You should review your
           financial advisor's compensation disclosure and/or talk to your
           financial advisor to obtain more information on how this
           compensation may have influenced your financial advisor's
           recommendation of the fund. Additional information regarding these
           revenue sharing payments is included in the fund's Statement of
           Additional Information, which is available to you on request at no
           charge (see the back cover of this prospectus for more information
           on how to request a copy of the Statement of Additional
           Information).

           The Advisor, the Distributor and/or their affiliates may also make
           such revenue sharing payments to financial advisors under the terms
           discussed above in connection with the distribution of both DWS
           funds and non-DWS funds by financial advisors to retirement plans
           that obtain record keeping services from ADP, Inc. on the DWS
           Investments branded retirement plan platform (the "Platform") with
           the level of revenue sharing payments being based upon sales of both
           the DWS funds and the non-DWS funds by the financial advisor on the
           Platform or current assets of both the DWS funds and the non-DWS
           funds serviced and maintained by the financial advisor on the
           Platform.

           It is likely that broker-dealers that execute portfolio transactions
           for the fund will include firms that also sell shares of the DWS
           funds to their customers. However, the Advisor will not consider
           sales of DWS fund shares as a factor in the selection of
           broker-dealers to execute portfolio transactions for the DWS funds.
           Accordingly, the Advisor has implemented policies and procedures
           reasonably designed to prevent its traders from considering sales of
           DWS fund shares as a factor in the selection of


36 | How to Exchange or Sell Class A, B and C Shares
<PAGE>

           broker-dealers to execute portfolio transactions for the fund. In
           addition, the Advisor, the Distributor and/or their affiliates will
           not use fund brokerage to pay for their obligation to provide
           additional compensation to financial advisors as described above.


POLICIES YOU SHOULD KNOW ABOUT

           Along with the information on the previous pages, the policies below
           may affect you as a shareholder. Some of this information, such as
           the section on distributions and taxes, applies to all investors,
           including those investing through a financial advisor.

           If you are investing through a financial advisor or through a
           retirement plan, check the materials you received from them about
           how to buy and sell shares because particular financial advisors or
           other intermediaries may adopt policies, procedures or limitations
           that are separate from those described by the fund. Please note that
           a financial advisor may charge fees separate from those charged by
           the fund and may be compensated by the fund.

           Keep in mind that the information in this prospectus applies only to
           the shares offered herein. Other share classes are described in
           separate prospectuses and have different fees, requirements and
           services.

           In order to reduce the amount of mail you receive and to help reduce
           expenses, we generally send a single copy of any shareholder report
           and prospectus to each household. If you do not want the mailing of
           these documents to be combined with those for other members of your
           household, please contact your financial advisor or call (800)
           621-1048.


           Policies about transactions

           THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange
           is open. The fund calculates its share price for each class every
           business day, as of the close of regular trading on the New York
           Stock Exchange (typically 4:00 p.m. Eastern time, but sometimes
           earlier, as in the case of scheduled half-day trading or unscheduled
           suspensions of trading). You can place an order to buy or sell
           shares at any time.


                                            Policies You Should Know About  | 37
<PAGE>

           To help the government fight the funding of terrorism and money
           laundering activities, federal law requires all financial
           institutions to obtain, verify and record information that
           identifies each person who opens an account. What this means to you:
           When you open an account, we will ask for your name, address, date
           of birth and other information that will allow us to identify you.
           Some or all of this information will be used to verify the identity
           of all persons opening an account.

           We might request additional information about you (which may include
           certain documents, such as articles of incorporation for companies)
           to help us verify your identity and, in some cases, the information
           and/or documents may be required to conduct the verification. The
           information and documents will be used solely to verify your
           identity.

           We will attempt to collect any missing required and requested
           information by contacting you or your financial advisor. If we are
           unable to obtain this information within the time frames established
           by the fund, then we may reject your application and order.

           The fund will not invest your purchase until all required and
           requested identification information has been provided and your
           application has been submitted in "good order." After we receive all
           the information, your application is deemed to be in good order and
           we accept your purchase, you will receive the net asset value per
           share next calculated, less any applicable sales charge.

           If we are unable to verify your identity within time frames
           established by the fund, after a reasonable effort to do so, you
           will receive written notification.

           With certain limited exceptions, only US residents may invest in the
           fund.

           Because orders placed through a financial advisor must be forwarded
           to the transfer agent before they can be processed, you'll need to
           allow extra time. Your financial advisor should be able to tell you
           approximately when your order will be processed. It is the
           responsibility of your financial advisor to forward your order to
           the transfer agent in a timely manner.


38 | Policies You Should Know About
<PAGE>

           INITIAL PURCHASE MINIMUMS. The minimum initial investment for Class
           A, B and C shares is $1,000, except for investments on behalf of
           participants in certain fee-based and wrap programs offered through
           certain financial intermediaries approved by the Advisor, for which
           there is no minimum initial investment; and IRAs, for which the
           minimum initial investment is $500 per account. The minimum initial
           investment is $500 per account if you establish an automatic
           investment plan. Group retirement plans and certain other accounts
           have similar or lower minimum share balance requirements.

           SUB-MINIMUM BALANCES. The fund may close your account and send you
           the proceeds if your balance falls below $1,000 ($250 for retirement
           accounts and $500 for accounts with an Automatic Investment Plan
           funded with $50 or more per month in subsequent investments). We
           will give you 60 days' notice (90 days for retirement accounts) so
           you can either increase your balance or close your account (these
           policies don't apply to investors with $100,000 or more in DWS fund
           shares, investors in certain fee-based and wrap programs offered
           through certain financial intermediaries approved by the Advisor, or
           group retirement plans and certain other accounts having lower
           minimum share balance requirements).

           SUBSEQUENT INVESTMENTS. The minimum subsequent investment is $50.
           However, there is no minimum investment requirement for subsequent
           investments in Class A shares on behalf of participants in certain
           fee-based and wrap programs offered through certain financial
           intermediaries approved by the Advisor.

           MARKET TIMING POLICIES AND PROCEDURES. Short-term and excessive
           trading of fund shares may present risks to long-term shareholders,
           including potential dilution in the value of fund shares,
           interference with the efficient management of the fund's portfolio
           (including losses on the sale of investments), taxable gains to
           remaining shareholders and increased brokerage and administrative
           costs. These risks may be more pronounced if the fund invests in
           certain securities, such as those that trade in foreign markets, are
           illiquid or do not otherwise have "readily available market
           quotations." Certain investors may seek to employ short-term trading
           strategies aimed at exploiting variations in portfolio valuation
           that arise from the nature of the securities held by the fund (e.g.,
           "time zone arbitrage"). The fund discourages short-term and
           excessive trading and has adopted policies and procedures that are
           intended to detect and deter short-term and excessive trading.


                                            Policies You Should Know About  | 39
<PAGE>

           Pursuant to its policies, the fund will impose a 2% redemption fee
           on fund shares held for less than a specified holding period
           (subject to certain exceptions discussed below under "Redemption
           fees"). The fund also reserves the right to reject or cancel a
           purchase or exchange order for any reason without prior notice. For
           example, the fund may in its discretion reject or cancel a purchase
           or an exchange order even if the transaction is not subject to the
           specific roundtrip transaction limitation described below if the
           Advisor believes that there appears to be a pattern of short-term or
           excessive trading activity by a shareholder or deems any other
           trading activity harmful or disruptive to the fund. The fund,
           through its Advisor and transfer agent, will measure short-term and
           excessive trading by the number of roundtrip transactions within a
           shareholder's account during a rolling 12-month period. A
           "roundtrip" transaction is defined as any combination of purchase
           and redemption activity (including exchanges) of the same fund's
           shares. The fund may take other trading activity into account if the
           fund believes such activity is of an amount or frequency that may be
           harmful to long-term shareholders or disruptive to portfolio
           management.

           Shareholders are limited to four roundtrip transactions in the same
           DWS fund (excluding money market funds) over a rolling 12-month
           period. Shareholders with four or more roundtrip transactions in the
           same DWS fund within a rolling 12-month period generally will be
           blocked from making additional purchases of, or exchanges into, that
           DWS fund. The fund has sole discretion whether to remove a block
           from a shareholder's account. The rights of a shareholder to redeem
           shares of a DWS fund are not affected by the four roundtrip
           transaction limitation, but all redemptions remain subject to the
           fund's redemption fee policy (see "Redemption fees" described
           below).

           The fund may make exceptions to the roundtrip transaction policy for
           certain types of transactions if, in the opinion of the Advisor, the
           transactions do not represent short-term or excessive trading or are
           not abusive or harmful to the fund, such as, but not limited to,
           systematic transactions, required minimum retirement distributions,
           transactions initiated by the fund or administrator and transactions
           by certain qualified funds-of-funds.

40 | Policies You Should Know About
<PAGE>

           In certain circumstances where shareholders hold shares of the fund
           through a financial intermediary, the fund may rely upon the
           financial intermediary's policy to deter short-term or excessive
           trading if the Advisor believes that the financial intermediary's
           policy is reasonably designed to detect and deter transactions that
           are not in the best interests of the fund. A financial
           intermediary's policy relating to short-term or excessive trading
           may be more or less restrictive than the DWS funds' policy, may
           permit certain transactions not permitted by the DWS funds'
           policies, or prohibit transactions not subject to the DWS funds'
           policies.

           The Advisor may also accept undertakings from a financial
           intermediary to enforce short-term or excessive trading policies on
           behalf of the fund that provide a substantially similar level of
           protection for the fund against such transactions. For example,
           certain financial intermediaries may have contractual, legal or
           operational restrictions that prevent them from blocking an account.
           In such instances, the financial intermediary may use alternate
           techniques that the Advisor considers to be a reasonable substitute
           for such a block.

           In addition, if the fund invests some portion of its assets in
           foreign securities, it has adopted certain fair valuation practices
           intended to protect the fund from "time zone arbitrage" with respect
           to its foreign securities holdings and other trading practices that
           seek to exploit variations in portfolio valuation that arise from
           the nature of the securities held by the fund. (See "How the fund
           calculates share price.")

           There is no assurance that these policies and procedures will be
           effective in limiting short-term and excessive trading in all cases.
           For example, the Advisor may not be able to effectively monitor,
           detect or limit short-term or excessive trading by underlying
           shareholders that occurs through omnibus accounts maintained by
           broker-dealers or other financial intermediaries. The Advisor
           reviews trading activity at the omnibus level to detect short-term
           or excessive trading. If the Advisor has reason to suspect that
           short-term or excessive trading is occurring at the omnibus level,
           the Advisor will contact the financial intermediary to request
           underlying shareholder level activity. Depending on the amount of
           fund shares held in such omnibus accounts (which may represent most
           of the fund's shares) short-term and/or excessive trading of fund
           shares could adversely affect long-term shareholders in the fund. If
           short-term or excessive trading is identified, the Advisor will take
           appropriate action.


                                            Policies You Should Know About  | 41
<PAGE>

           The fund's market timing policies and procedures may be modified or
           terminated at any time.

           REDEMPTION FEES. The fund imposes a redemption fee of 2% of the
           total redemption amount (calculated at net asset value, without
           regard to the effect of any contingent deferred sales charge; any
           contingent deferred sales charge is also assessed on the total
           redemption amount without regard to the assessment of the 2%
           redemption fee) on all fund shares redeemed or exchanged within 15
           days of buying them (either by purchase or exchange). The redemption
           fee is paid directly to the fund and is designed to encourage
           long-term investment and to offset transaction and other costs
           associated with short-term or excessive trading. For purposes of
           determining whether the redemption fee applies, shares held the
           longest time will be treated as being redeemed first and shares held
           the shortest time will be treated as being redeemed last.

           The redemption fee is applicable to fund shares purchased either
           directly or through a financial intermediary, such as a
           broker-dealer. Transactions through financial intermediaries
           typically are placed with the fund on an omnibus basis and include
           both purchase and sale transactions placed on behalf of multiple
           investors. These purchase and sale transactions are generally netted
           against one another and placed on an aggregate basis; consequently
           the identities of the individuals on whose behalf the transactions
           are placed generally are not known to the fund. For this reason, the
           fund has undertaken to notify financial intermediaries of their
           obligation to assess the redemption fee on customer accounts and to
           collect and remit the proceeds to the fund. However, due to
           operational requirements, the intermediaries' methods for tracking
           and calculating the fee may be inadequate or differ in some respects
           from the fund's. Subject to approval by the Advisor or the fund's
           Board, intermediaries who transact business on an omnibus basis may
           implement the redemption fees according to their own operational
           guidelines (which may be different than the fund's policies) and
           remit the fees to the fund.

           The redemption fee will not be charged in connection with the
           following exchange or redemption transactions: (i) transactions on
           behalf of participants in certain research wrap programs; (ii)
           transactions on behalf of a shareholder to return any excess IRA
           contributions to the shareholder; (iii) transactions on behalf of a
           shareholder to effect a required minimum distribution on an IRA;
           (iv) transactions on behalf of any mutual fund advised by


42 | Policies You Should Know About
<PAGE>

           the Advisor and its affiliates (e.g., "funds of funds") or, in the
           case of a master/feeder relationship, redemptions by the feeder fund
           from the master portfolio; (v) transactions on behalf of certain
           unaffiliated mutual funds operating as funds of funds; (vi)
           transactions following death or disability of any registered
           shareholder, beneficial owner or grantor of a living trust with
           respect to shares purchased before death or disability; (vii)
           transactions involving hardship of any registered shareholder;
           (viii) systematic transactions with pre-defined trade dates for
           purchases, exchanges or redemptions, such as automatic account
           rebalancing, or loan origination and repayments; (ix) transactions
           involving shares purchased through the reinvestment of dividends or
           other distributions; (x) transactions involving shares transferred
           from another account in the same fund or converted from another
           class of the same fund (the redemption fee period will carry over to
           the acquired shares); (xi) transactions initiated by the fund or
           administrator (e.g., redemptions for not meeting account minimums,
           to pay account fees funded by share redemptions, or in the event of
           the liquidation or merger of the fund); or (xii) transactions in
           cases when there are legal or contractual limitations or
           restrictions on the imposition of the redemption fee (as determined
           by the fund or its agents in their sole discretion). It is the
           policy of the DWS funds to permit approved fund platform providers
           to execute transactions with the funds without the imposition of a
           redemption fee if such providers have implemented alternative
           measures that are determined by the Advisor to provide controls on
           short-term and excessive trading that are comparable to the DWS
           funds' policies.

           THE AUTOMATED INFORMATION LINE IS AVAILABLE 24 HOURS A DAY BY
           CALLING (800) 621-1048. You can use our automated phone services to
           get information on DWS funds generally and on accounts held directly
           at DWS Investments. You can also use this service to make exchanges
           and to purchase and sell shares.

           QUICKBUY AND QUICKSELL let you set up a link between a DWS fund
           account and a bank account. Once this link is in place, you can move
           money between the two with a phone call. You'll need to make sure
           your bank has Automated Clearing House (ACH) services. Transactions
           take two to three days to be completed and there is a $50 minimum
           and a $250,000 maximum. To set up QuickBuy or QuickSell on a new
           account, see the account application; to add it to an existing
           account, call (800) 621-1048.



THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

The DWS Investments Web site can be a valuable resource for shareholders with
Internet access. Go to WWW.DWS-INVESTMENTS.COM to get up-to-date information,
review balances or even place orders for exchanges.



                                            Policies You Should Know About  | 43
<PAGE>

           TELEPHONE AND ELECTRONIC TRANSACTIONS. Generally, you are
           automatically entitled to telephone and electronic transaction
           privileges, but you may elect not to have them when you open your
           account or by contacting Shareholder Services at (800) 621-1048 at a
           later date.

           Since many transactions may be initiated by telephone or
           electronically, it's important to understand that as long as we take
           reasonable steps to ensure that an order to purchase or redeem
           shares is genuine, such as recording calls or requesting
           personalized security codes or other information, we are not
           responsible for any losses that may occur as a result. For
           transactions conducted over the Internet, we recommend the use of a
           secure Internet browser. In addition, you should verify the accuracy
           of your confirmation statements immediately after you receive them.

           THE FUND DOES NOT ISSUE SHARE CERTIFICATES. However, if you
           currently have shares in certificated form, you must include the
           share certificates properly endorsed or accompanied by a duly
           executed stock power when exchanging or redeeming shares. You may
           not exchange or redeem shares in certificate form by telephone or
           via the Internet.

           WHEN YOU ASK US TO SEND OR RECEIVE A WIRE, please note that while we
           don't charge a fee to send or receive wires, it's possible that your
           bank may do so. Wire transactions are generally completed within 24
           hours. The fund can only send wires of $1,000 or more and accept
           wires of $50 or more.

           THE FUND ACCEPTS PAYMENT FOR SHARES ONLY IN US DOLLARS by a check
           drawn on a US bank, a bank or Federal Funds wire transfer or an
           electronic bank transfer. The fund does not accept third party
           checks. A third party check is a check made payable to one or more
           parties and offered as payment to one or more other parties (e.g., a
           check made payable to you that you offer as payment to someone
           else). Checks should normally be payable to DWS Investments and
           drawn by you or a financial institution on your behalf with your
           name or account number included with the check.

           SIGNATURE GUARANTEE. When you want to sell more than $100,000 worth
           of shares or send proceeds to a third party or to a new address,
           you'll usually need to place your order in writing and include a
           signature guarantee. However, if you want money


44 | Policies You Should Know About
<PAGE>

           wired to a bank account that is already on file with us, you don't
           need a signature guarantee. Also, generally you don't need a
           signature guarantee for an exchange, although we may require one in
           certain other circumstances.

           A signature guarantee is simply a certification of your signature -
           a valuable safeguard against fraud. You can get a signature
           guarantee from an eligible guarantor institution, including
           commercial banks, savings and loans, trust companies, credit unions,
           member firms of a national stock exchange or any member or
           participant of an approved signature guarantor program. Note that
           you can't get a signature guarantee from a notary public and we must
           be provided the original guarantee.

           SELLING SHARES OF TRUST ACCOUNTS AND BUSINESS OR ORGANIZATION
           ACCOUNTS may require additional documentation. Please call (800)
           621-1048 or contact your financial advisor for more information.

           WHEN YOU SELL SHARES THAT HAVE A CDSC, we calculate the CDSC as a
           percentage of what you paid for the shares or what you are selling
           them for - whichever results in the lower charge to you. In
           processing orders to sell shares, the shares with the lowest CDSC
           are sold first. Exchanges from one fund into another don't affect
           CDSCs; for each investment you make, the date you first bought
           shares is the date we use to calculate a CDSC on that particular
           investment.

           There are certain cases in which you may be exempt from a CDSC.
           These include:

           -  the death or disability of an account owner (including a joint
              owner). This waiver applies only under certain conditions. Please
              contact your financial advisor or Shareholder Services to
              determine if the conditions exist

           -  withdrawals made through an automatic withdrawal plan up to a
              maximum of 12% per year of the net asset value of the account

           -  withdrawals related to certain retirement or benefit plans

           -  redemptions for certain loan advances, hardship provisions or
              returns of excess contributions from retirement plans

           -  for Class A shares purchased through the Large Order NAV Purchase
              Privilege, redemption of shares whose dealer of record at the
              time of the investment notifies the Distributor that the dealer
              waives the applicable commission



THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

If you ever have difficulty placing an order by phone or Internet, you can send
us your order in writing.

                               Policies You Should Know About  | 45
<PAGE>

            -  for Class C shares, redemption of shares purchased through a
               dealer-sponsored asset allocation program maintained on an
               omnibus record-keeping system, provided the dealer of record has
               waived the advance of the first year distribution and service
               fees applicable to such shares and has agreed to receive such
               fees quarterly

           In each of these cases, there are a number of additional provisions
           that apply in order to be eligible for a CDSC waiver. Your financial
           advisor or Shareholder Services can answer your questions and help
           you determine if you are eligible.

           IF YOU SELL SHARES IN A DWS FUND AND THEN DECIDE TO INVEST WITH DWS
           INVESTMENTS AGAIN WITHIN SIX MONTHS, you may be able to take
           advantage of the "reinstatement feature." With this feature, you can
           put your money back into the same class of a DWS fund at its current
           net asset value and, for purposes of a sales charge, it will be
           treated as if it had never left DWS Investments.

           You'll be reimbursed (in the form of fund shares) for any CDSC you
           paid when you sold. Future CDSC calculations will be based on your
           original investment date, rather than your reinstatement date. There
           is also an option that lets investors who sold Class B shares buy
           Class A shares (if available) with no sales charge, although they
           won't be reimbursed for any CDSC they paid. You can only use the
           reinstatement feature once for any given group of shares. To take
           advantage of this feature, contact Shareholder Services or your
           financial advisor.

           MONEY FROM SHARES YOU SELL is normally sent out within one business
           day of when your order is processed (not when it is received),
           although it could be delayed for up to seven days. There are
           circumstances when it could be longer, including, but not limited
           to, when you are selling shares you bought recently by check  or ACH
           (the funds will be placed under a 10 calendar day hold to ensure
           good funds) or when unusual circumstances prompt the SEC to allow
           further delays. Certain expedited redemption processes (e.g.,
           redemption proceeds by wire) may also be delayed or unavailable when
           you are selling shares recently purchased or in the event of the
           closing of the Federal Reserve wire payment system. The fund
           reserves the right to suspend or postpone redemptions as permitted
           pursuant to Section 22(e) of the Investment Company Act of 1940.
           Generally, those circumstances are when 1) the New York Stock
           Exchange is closed other than customary weekend or holiday


46 | Policies You Should Know About
<PAGE>

           closings; 2) trading on the New York Stock Exchange is restricted;
           3) an emergency exists which makes the disposal of securities owned
           by the fund or the fair determination of the value of the fund's net
           assets not reasonably practicable; or 4) the SEC, by order, permits
           the suspension of the right of redemption. Redemption payments by
           wire may also be delayed in the event of a non-routine closure of
           the Federal Reserve wire payment system. For additional rights
           reserved by the fund, please see "Other rights we reserve."

           You may obtain additional information about other ways to sell your
           shares by contacting your financial advisor.


           How the fund calculates share price

           To calculate net asset value, or NAV, each share class uses the
           following equation:


<TABLE>
<S>                                                     <C> <C>
            TOTAL ASSETS - TOTAL LIABILITIES
           -----------------------------------------    =    NAV
               TOTAL NUMBER OF SHARES OUTSTANDING
</TABLE>


           The price at which you buy shares is based on the NAV per share
           calculated after the order is received and accepted by the transfer
           agent, although for Class A shares it will be adjusted to allow for
           any applicable sales charge (see "Choosing a Share Class"). The
           price at which you sell shares is also based on the NAV per share
           calculated after the order is received and accepted by the transfer
           agent, although a CDSC may be taken out of the proceeds (see
           "Choosing a Share Class").

           THE FUND CHARGES A REDEMPTION FEE EQUAL TO 2.00% of the value of
           shares redeemed or exchanged within 15 days of purchase. Please see
           "Policies about transactions - Redemption fees" for further
           information.

           WE TYPICALLY VALUE SECURITIES USING INFORMATION FURNISHED BY AN
           INDEPENDENT PRICING SERVICE OR MARKET QUOTATIONS, WHERE APPROPRIATE.
           However, we may use methods approved by the Board, such as a fair
           valuation model, which are intended to reflect fair value when
           pricing service information or market quotations are not readily
           available or when a security's value or a meaningful portion of the
           value of the fund's portfolio is believed to have been materially
           affected by a significant event, such as a natural disaster, an
           economic event like a bankruptcy filing, or a substantial
           fluctuation in domestic or foreign markets that has occurred between
           the close of the exchange or market


                                            Policies You Should Know About  | 47
<PAGE>

           on which the security is principally traded (for example, a foreign
           exchange or market) and the close of the New York Stock Exchange. In
           such a case, the fund's value for a security is likely to be
           different from the last quoted market price or pricing service
           information. In addition, due to the subjective and variable nature
           of fair value pricing, it is possible that the value determined for
           a particular asset may be materially different from the value
           realized upon such asset's sale. It is -expected that the greater
           the percentage of fund assets that is -invested in non-US
           securities, the more extensive will be the -fund's use of fair value
           pricing. This is intended to reduce the fund's exposure to "time
           zone arbitrage" and other harmful -trading practices. (See "Market
           -timing policies and procedures.")

           TO THE EXTENT THAT THE FUND INVESTS IN SECURITIES THAT ARE TRADED
           PRIMARILY IN FOREIGN MARKETS, the value of its holdings could change
           at a time when you aren't able to buy or sell fund shares. This is
           because some foreign markets are open on days or at times when the
           fund doesn't price its shares. (Note that prices for securities that
           trade on foreign exchanges can change significantly on days when the
           New York Stock Exchange is closed and you cannot buy or sell fund
           shares. Price changes in the securities the fund owns may ultimately
           affect the price of fund shares the next time the NAV is
           calculated.)


           Other rights we reserve

           You should be aware that we may do any of the following:

           -  withdraw or suspend the offering of shares at any time

           -  withhold a portion of your distributions and redemption proceeds
              if we have been notified by the IRS that you are subject to
              backup withholding or if you fail to provide us with the correct
              taxpayer ID number and certain certifications, including
              certification that you are not subject to backup withholding

           -  reject a new account application if you don't provide any
              required or requested identifying information, or for any other
              reason

48 | Policies You Should Know About
<PAGE>

            -  refuse, cancel, limit or rescind any purchase or exchange order,
               without prior notice; freeze any account (meaning you will not be
               able to purchase fund shares in your account); suspend account
               services; and/or involuntarily redeem your account if we think
               that the account is being used for fraudulent or illegal
               purposes; one or more of these actions will be taken when, at our
               sole discretion, they are deemed to be in the fund's best
               interests or when the fund is requested or compelled to do so by
               governmental authority or by applicable law

           -  close and liquidate your account if we are unable to verify your
              identity, or for other reasons; if we decide to close your
              account, your fund shares will be redeemed at the net asset value
              per share next calculated after we determine to close your
              account (less any applicable sales charges or redemption fees);
              you may recognize a gain or loss on the redemption of your fund
              shares and you may incur a tax liability

           -  pay you for shares you sell by "redeeming in kind," that is, by
              giving you securities (which typically will involve brokerage
              costs for you to liquidate) rather than cash, but which will be
              taxable to the same extent as a redemption for cash; the fund
              generally won't make a redemption in kind unless your requests
              over a 90-day period total more than $250,000 or 1% of the value
              of the fund's net assets, whichever is less

           -  change, add or withdraw various services, fees and account
              policies (for example, we may adjust the fund's investment
              minimums at any time)


                                            Policies You Should Know About  | 49
<PAGE>

UNDERSTANDING DISTRIBUTIONS AND TAXES

           The fund intends to distribute to its shareholders virtually all of
           its net earnings. The fund can earn money in two ways: by receiving
           interest, dividends or other income from investments it holds and by
           selling investments for more than it paid for them. (The fund's
           earnings are separate from any gains or losses stemming from your
           own purchase and sale of shares.) The fund may not always pay a
           dividend or other distribution for a given period.

           THE FUND INTENDS TO PAY INCOME DIVIDENDS TO ITS SHAREHOLDERS
           MONTHLY; short-term and long-term capital gains are paid in December
           or otherwise as needed.

           Dividends or distributions declared and payable to shareholders of
           record in the last quarter of a given calendar year are treated for
           federal income tax purposes as if they were received on December 31
           of that year, provided such dividends or distributions are paid by
           the end of the following January.

           For federal income tax purposes, income and capital gains
           distributions are generally taxable to shareholders. However,
           dividends and distributions received by retirement plans qualifying
           for tax exemption under federal income tax laws generally will not
           be taxable.

            YOU CAN CHOOSE HOW TO RECEIVE YOUR DIVIDENDS AND DISTRIBUTIONS. You
            can have them all automatically reinvested in fund shares (at NAV),
            all deposited directly to your bank account or all sent to you by
            check, have one type reinvested and the other sent to you by check
            or have them invested in a different fund. Tell us your preference
            on your application. If you don't indicate a preference, your
            dividends and distributions will all be reinvested in shares of the
            fund without a sales charge (if applicable). Distributions are
            treated the same for federal income tax purposes whether you receive
            them in cash or reinvest them in additional shares. Under the terms
            of employer-sponsored qualified plans, and retirement plans,
            reinvestment (at NAV) is the only option.

           BUYING, SELLING OR EXCHANGING FUND SHARES WILL USUALLY HAVE FEDERAL
           INCOME TAX CONSEQUENCES FOR YOU (except in employer-sponsored
           qualified plans, IRAs or other tax-advantaged accounts). Your sale
           of shares may result in a capital



THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

Because each shareholder's tax situation is unique, ask your tax professional
about the tax consequences of your investments, including any state and local
tax consequences.


50 | Understanding Distributions and Taxes
<PAGE>

           gain or loss. The gain or loss will be long-term or short-term
           depending on how long you owned the shares that were sold. For
           federal income tax purposes, an exchange is treated the same as a
           sale.

           THE FEDERAL INCOME TAX STATUS of the fund's earnings you receive and
           your own fund transactions generally depends on their type:


<TABLE>
<CAPTION>
GENERALLY TAXED AT LONG-TERM                          GENERALLY TAXED AT ORDINARY
CAPITAL GAIN RATES:                                   INCOME RATES:
<S>                                                   <C>
DISTRIBUTIONS FROM THE FUND
- gains from the sale of                              -  gains from the sale of
  securities held (or treated as                         securities held by the fund for
  held) by the fund for more                             one year or less
  than one year                                       -  all other taxable income
- qualified dividend income
TRANSACTIONS INVOLVING FUND
SHARES
- gains from selling fund                             -  gains from selling fund
  shares held for more than                              shares held for one year or
  one year                                               less
</TABLE>


           ANY DIRECT INVESTMENTS IN FOREIGN SECURITIES BY THE FUND MAY BE
           SUBJECT TO FOREIGN WITHHOLDING TAXES. In that case, the fund's yield
           on those securities would generally be decreased. Shareholders
           generally will not be entitled to claim a credit or deduction with
           respect to foreign taxes paid by the fund. In addition, any
           investments in foreign securities or foreign currencies may increase
           or accelerate the fund's recognition of ordinary income and may
           affect the timing or amount of the fund's distributions. If you
           invest in the fund through a taxable account, your after-tax return
           could be negatively impacted.

           Investments in certain debt obligations or other securities may
           cause the fund to recognize taxable income in excess of the cash
           generated by them. Thus, the fund could be required at times to
           liquidate other investments in order to satisfy its distribution
           requirements.

           For taxable years beginning before January 1, 2011, distributions to
           individuals and other noncorporate shareholders of investment income
           designated by the fund as derived from qualified dividend income are
           eligible for taxation for federal income tax purposes at the more
           favorable long-term capital gain rates. Qualified dividend income
           generally includes


                                     Understanding Distributions and Taxes  | 51
<PAGE>

           dividends received by the fund from domestic and some foreign
           corporations. It does not include income from investments in debt
           securities  or, generally, from real estate investment trusts. In
           addition, the fund must meet certain holding period and other
           requirements with respect to the dividend-paying stocks in its
           portfolio and the shareholder must meet certain holding period and
           other requirements with respect to the fund's shares for the lower
           tax rates to apply. The fund does not expect a significant portion
           of its distributions to constitute qualified dividend income.

           For taxable years beginning before January 1, 2011, the maximum
           federal income tax rate imposed on long-term capital gains
           recognized by individuals and other noncorporate shareholders has
           been temporarily reduced to 15%, in general, with lower rates
           applying to taxpayers in the 10% and 15% rate brackets. For taxable
           years beginning on or after January 1, 2011, the maximum long-term
           capital gain rate is scheduled to return to 20%.

           YOUR FUND WILL SEND YOU DETAILED FEDERAL INCOME TAX INFORMATION
           EVERY JANUARY. These statements tell you the amount and the federal
           income tax classification of any dividends or distributions you
           received. They also have certain details on your purchases and sales
           of shares.

           IF YOU INVEST RIGHT BEFORE THE FUND PAYS A DIVIDEND, you'll be
           getting some of your investment back as a taxable dividend. You can
           avoid this by investing after the fund pays a dividend. In tax-
           advantaged retirement accounts you generally do not need to worry
           about this.

           If the fund's distributions exceed its current and accumulated
           earnings and profits, the excess will be treated for federal income
           tax purposes as a tax-free return of capital to the extent of your
           basis in your shares and thereafter as a gain from the sale or
           exchange of your shares. Because a return of capital distribution
           reduces the basis of your shares, a return of capital distribution
           may result in a higher capital gain or a lower capital loss when you
           sell your shares.

           CORPORATIONS are taxed at the same rates on ordinary income and
           capital gains but may be eligible for a dividends-received deduction
           for a portion of the income dividends they receive from the fund,
           provided certain holding period and other requirements are met.


52 | Understanding Distributions and Taxes
<PAGE>

           The above discussion summarizes certain federal income tax
           consequences for shareholders who are US persons. If you are a
           non-US person, please consult your own tax advisor with respect to
           the US tax consequences to you of an investment in the fund. For
           more information, see "Taxes" in the Statement of Additional
           Information.


                                     Understanding Distributions and Taxes  | 53
<PAGE>

APPENDIX
--------------------------------------------------------------------------------
           Hypothetical Expense Summary


           Using the annual fund operating expense ratios presented in the fee
           tables in the fund prospectus, the Hypothetical Expense Summary
           shows the estimated fees and expenses, in actual dollars, that would
           be charged on a hypothetical investment of $10,000 in the fund held
           for the next 10 years and the impact of such fees and expenses on
           fund returns for each year and cumulatively, assuming a 5% return
           for each year. The historical rate of return for the fund may be
           higher or lower than 5% and, for money funds, is typically less than
           5%. The tables also assume that all dividends and distributions are
           reinvested and that Class B shares convert to Class A shares after
           six years. The annual fund expense ratios shown are net of any
           contractual fee waivers or expense reimbursements, if any, for the
           period of the contractual commitment. The tables reflect the maximum
           initial sales charge, if any, but do not reflect any contingent
           deferred sales charge or redemption fees, if any, which may be
           payable upon redemption. If contingent deferred sales charges or
           redemption fees were shown, the "Hypothetical Year-End Balance After
           Fees and Expenses" amounts shown would be lower and the "Annual Fees
           and Expenses" amounts shown would be higher. Also, please note that
           if you are investing through a third party provider, that provider
           may have fees and expenses separate from those of the fund that are
           not reflected here. Mutual fund fees and expenses fluctuate over
           time and actual expenses may be higher or lower than those shown.

           The Hypothetical Expense Summary should not be used or construed as
           an offer to sell, a solicitation of an offer to buy or a
           recommendation or endorsement of any specific mutual fund. You
           should carefully review the fund's prospectus to consider the
           investment objectives, risks, expenses and charges of the fund prior
           to investing.


54 | Appendix
<PAGE>

DWS Short Duration Plus Fund - Class A



<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               2.75%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        0.88%              1.26%       $ 10,125.67        $   362.34
   2           10.25%        0.88%              5.43%       $ 10,542.85        $    90.94
   3           15.76%        0.88%              9.77%       $ 10,977.21        $    94.69
   4           21.55%        0.88%             14.29%       $ 11,429.47        $    98.59
   5           27.63%        0.88%             19.00%       $ 11,900.37        $   102.65
   6           34.01%        0.88%             23.91%       $ 12,390.66        $   106.88
   7           40.71%        0.88%             29.01%       $ 12,901.16        $   111.28
   8           47.75%        0.88%             34.33%       $ 13,432.69        $   115.87
   9           55.13%        0.88%             39.86%       $ 13,986.11        $   120.64
  10           62.89%        0.88%             45.62%       $ 14,562.34        $   125.61
  TOTAL                                                                        $ 1,329.49
</TABLE>


DWS Short Duration Plus Fund - Class B




<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER        ANNUAL
              FEES AND        EXPENSE        FEES AND           FEES AND         FEES AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        1.76%              3.24%       $ 10,324.00        $   178.85
   2           10.25%        1.76%              6.58%       $ 10,658.50        $   184.65
   3           15.76%        1.76%             10.04%       $ 11,003.83        $   190.63
   4           21.55%        1.76%             13.60%       $ 11,360.36        $   196.80
   5           27.63%        1.76%             17.28%       $ 11,728.43        $   203.18
   6           34.01%        1.76%             21.08%       $ 12,108.43        $   209.76
   7           40.71%        0.88%             26.07%       $ 12,607.30        $   108.75
   8           47.75%        0.88%             31.27%       $ 13,126.72        $   113.23
   9           55.13%        0.88%             36.68%       $ 13,667.54        $   117.89
  10           62.89%        0.88%             42.31%       $ 14,230.65        $   122.75
  TOTAL                                                                        $ 1,626.49
</TABLE>

                                                               Appendix  | 55
<PAGE>


DWS Short Duration Plus Fund - Class C




<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER        ANNUAL
              FEES AND        EXPENSE        FEES AND           FEES AND         FEES AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        1.59%              3.41%       $ 10,341.00        $   161.71
   2           10.25%        1.59%              6.94%       $ 10,693.63        $   167.23
   3           15.76%        1.59%             10.58%       $ 11,058.28        $   172.93
   4           21.55%        1.59%             14.35%       $ 11,435.37        $   178.82
   5           27.63%        1.59%             18.25%       $ 11,825.31        $   184.92
   6           34.01%        1.59%             22.29%       $ 12,228.56        $   191.23
   7           40.71%        1.59%             26.46%       $ 12,645.55        $   197.75
   8           47.75%        1.59%             30.77%       $ 13,076.76        $   204.49
   9           55.13%        1.59%             35.23%       $ 13,522.68        $   211.47
  10           62.89%        1.59%             39.84%       $ 13,983.81        $   218.68
  TOTAL                                                                        $ 1,889.23
</TABLE>



56 | Appendix
<PAGE>

TO GET MORE INFORMATION

SHAREHOLDER REPORTS - These include commentary from the fund's management team
about recent market conditions and the effects of the fund's strategies on its
performance. They also have detailed performance figures, a list of everything
the fund owns, and its financial statements. Shareholders get these reports
automatically.

STATEMENT OF ADDITIONAL INFORMATION (SAI) - This tells you more about the
fund's features and policies, including additional risk information. The SAI is
incorporated by reference into this document (meaning that it's legally part of
this prospectus).

For a free copy of any of these documents or to request other information about
the fund, call (800) 621-1048, or contact DWS Investments at the address listed
below. The fund's SAI and shareholder reports are also available through the
DWS Investments Web site at www.dws-investments.com. These documents and other
information about the fund are available from the EDGAR Database on the SEC's
Internet site at www.sec.gov. If you like, you may obtain copies of this
information, after paying a copying fee, by e-mailing a request to
publicinfo@sec.gov or by writing the SEC at the address listed below. You can
also review and copy these documents and other information about the fund,
including the fund's SAI, at the SEC's Public Reference Room in Washington,
D.C. Information on the operation of the SEC's Public Reference Room may be
obtained by calling (800) SEC-0330.


<TABLE>
<CAPTION>
DWS INVESTMENTS      SEC                     DISTRIBUTOR
-----------------    --------------------    ------------------------------
<S>                  <C>                     <C>
PO Box 219151        100 F Street, N.E.      DWS Investments Distributors,
Kansas City, MO      Washington, D.C.        Inc.
64121-9151           20549-0102              222 South Riverside Plaza
WWW.DWS-             WWW.SEC.GOV             Chicago, IL 60606-5808
INVESTMENTS.COM      (800) SEC-0330          (800) 621-1148
(800) 621-1048
</TABLE>



<TABLE>
<S>                    <C>                               <C>
SEC FILE NUMBER:
DWS Advisor Funds        DWS Short Duration Plus Fund    811-04760
</TABLE>





(02/01/09) DSDP-1        [RECYCLE GRAPHIC APPEARS HERE]
                                                                       [Logo]DWS
                                                                      INVESTMENT
                                                             Deutsche Bank Group




<PAGE>


                                FEBRUARY 1, 2009







                                   PROSPECTUS
                              ------------------
                              INSTITUTIONAL CLASS

                          DWS SHORT DURATION PLUS FUND

As with all mutual funds, the Securities and Exchange Commission (SEC) does not
approve or disapprove these shares or determine whether the information in this
prospectus is truthful or complete. It is a criminal offense for anyone to
inform you otherwise.



                                                 RESHAPING INVESTING. [DWS Logo]
                                                             Deutsche Bank Group


<PAGE>

CONTENTS




<TABLE>
<S>      <C>
HOW THE FUND WORKS
  4      The Fund's Main Investment
         Strategy
  7      The Main Risks of Investing in
         the Fund
 12      The Fund's Performance
         History
 14      How Much Investors Pay
 15      Other Policies and Secondary
         Risks
 16      Who Manages and Oversees
         the Fund
 20      Financial Highlights


</TABLE>
<TABLE>
<S>      <C>
HOW TO INVEST IN THE FUND
 22      Buying and Selling
         Institutional Class Shares
 28      Policies You Should Know
         About
 39      Understanding Distributions
         and Taxes
 43      Appendix
</TABLE>

<PAGE>

HOW THE FUND WORKS

On the next few pages, you'll find information about the fund's investment
objective, the main strategies it uses to pursue that objective and the main
risks that could affect performance.

Whether you are considering investing in the fund or are already a shareholder,
you'll want to LOOK THIS INFORMATION OVER CAREFULLY. You may want to keep it on
hand for reference as well.

Remember that mutual funds are investments, not bank deposits. They're not
insured or guaranteed by the FDIC or any other government agency. Their share
prices will go up and down, and you could lose money by investing in them.

You can find DWS prospectuses on the Internet at WWW.DWS-INVESTMENTS.COM (the
Web site does not form a part of this prospectus).
<PAGE>


<TABLE>
<S>                                 <C>
                                      Institutional Class
  fund number                         1422

    DWS SHORT DURATION PLUS FUND


</TABLE>

            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund's investment objective is to provide high income while
            also seeking to maintain a high degree of stability of
            shareholders' capital.

            The fund invests in securities of varying maturities and normally
            seeks to maintain an average portfolio duration of no longer than
            three years. The fund invests, under normal market conditions, at
            least 65% of its total assets in fixed income securities rated, at
            the time of purchase, within the top four long-term rating
            categories by a nationally recognized statistical rating
            organization (a "NRSRO") (or, if unrated, determined by the fund's
            investment advisor to be of similar quality).

            Fixed income securities in which the fund may invest include the
            following:

            -  US government securities that are issued or guaranteed by the US
               Treasury, or by agencies or instrumentalities of the US
               government. Securities issued by certain agencies and
               instrumentalities of the US government are not guaranteed by the
               US government and are supported solely by the credit of the
               agency or instrumentality.

            -  US dollar-denominated fixed income securities of domestic or
               foreign corporations, foreign governments or supranational
               entities, including adjustable rate loans that have a senior
               right to payment ("Bank Loans"). Because of limitations imposed
               by applicable law, the presence of the fund's investment
               advisor's affiliates in the Bank Loan market may restrict the
               fund's ability to acquire some Bank Loans, affect the timing of
               such acquisition or affect the price at which a Bank Loan is
               acquired.

            -  US dollar-denominated asset-backed securities issued by domestic
               or foreign entities.

            -  Mortgage pass-through securities issued by governmental and
               non-governmental issuers.

4 | DWS Short Duration Plus Fund
<PAGE>

            -  Collateralized mortgage obligations, real estate mortgage
               investment conduits and commercial mortgage-backed securities.

            -  Obligations issued or guaranteed, or backed by securities issued
               or guaranteed, by the US government, or any of its agencies or
               instrumentalities.

            -  Short-term investments, including money market mutual funds. The
               fund invests in short-term investments to meet shareholder
               withdrawals and other liquidity needs. Short-term investments
               will be rated at the time of purchase within one of the top two
               short-term rating categories by a NRSRO or, if unrated,
               determined by the fund's investment advisor to be of similar
               quality.

            The fund may invest up to 10% of its assets in US dollar-
            denominated, domestic and foreign below investment-grade fixed
            income securities (junk bonds) rated in the fifth and sixth
            long-term rating categories by a NRSRO (or, if unrated, determined
            by the fund's investment advisor to be of similar quality),
            including those whose issuers are located in countries with new or
            emerging securities markets. The fund considers an emerging
            securities market to be one where the sovereign debt issued by the
            government in local currency terms is rated below investment-grade.
            A portion of high yield securities purchased for the fund may
            consist of non-US dollar denominated, below investment-grade fixed
            income securities. Compared to investment-grade bonds, junk bonds
            may pay higher yields, have higher volatility and higher risk of
            default on payments of interest or principal.

            The fund can invest up to 15% of its net assets in illiquid
            securities.

            The fund may also invest in and utilize the following investments
            and investment techniques and practices: Rule 144A securities, to
            be announced (TBA) securities, when-issued and delayed delivery
            securities, repurchase agreements, reverse repurchase agreements
            and dollar rolls.

            The fund's investment strategy emphasizes a diversified exposure to
            higher yielding mortgage, corporate and asset-backed sectors of the
            investment-grade fixed income markets. The investment process
            focuses on a top-down approach, first focusing on sector
            allocations, then using relative value


                                               DWS Short Duration Plus Fund  | 5
<PAGE>

            analysis to select the best securities within each sector. To
            select securities, the fund's investment advisor analyzes such
            factors as credit quality, interest rate sensitivity and spread
            relationships between individual bonds.

            The fund primarily invests in fixed income securities that are
            rated, at the time of purchase, within the top four rating
            categories as rated by Moody's Investors Service, Inc., the
            Standard & Poor's Division of The McGraw-Hill Companies, Inc.,
            Fitch, Inc., or another NRSRO, or, if unrated, determined by the
            fund's investment advisor to be of similar quality.

            The fund's investment advisor normally targets an average portfolio
            duration of no longer than three years by investing in fixed income
            securities with short- to intermediate-term maturities. Generally,
            rates of short-term investments fluctuate less than rates of
            longer-term investments.

            DERIVATIVE INSTRUMENTS. The fund may invest in various instruments
            commonly known as "derivatives" to increase its exposure to certain
            groups of securities. The derivatives that the fund may use
            include, among others, futures contracts, forward contracts and
            options on forward contracts. The fund may use derivatives to keep
            cash on hand to meet shareholder redemptions, as a hedging strategy
            to maintain a specific portfolio duration, or to protect against
            market risk. When employing the global tactical asset allocation
            overlay strategy mentioned below (also known as integrated Global
            Alpha Platform or iGAP) the fund also may use derivatives for
            leveraging, which is a way to attempt to enhance returns. The fund
            will only use these instruments if portfolio management believes
            that their return potential more than compensates for the extra
            risks associated with using them.

            In an attempt to enhance return, the fund also employs a global
            tactical asset allocation overlay strategy (iGAP), which invests in
            instruments across domestic and international fixed income and
            currency markets.

            Through the global asset allocation investment strategy, the
            portfolio managers seek to enhance the fund's return by shifting
            investment weightings among global bond and currency markets in an
            effort to capture short- and medium-term market moves. The
            portfolio managers take the investment views of Deutsche Asset
            Management's bond, asset allocation and currency teams located
            around the world and combine them using a structured, disciplined
            portfolio


6 | DWS Short Duration Plus Fund
<PAGE>

            construction and risk management process. The end result is a
            portfolio of bond and currency positions intended to generate
            returns for the fund that exceed those that could be achieved
            without the global asset allocation strategy, although there can be
            no guarantee that such result will be achieved. Because the global
            asset allocation strategy focuses on short- and medium-term market
            moves, the managers expect to change the fund's investment
            weightings frequently.

            In implementing the global asset allocation strategy, the fund
            invests in options and futures based on any type of security or
            index, including options and futures traded on foreign exchanges.
            Some options and futures strategies, including selling futures,
            buying puts and writing calls, hedge the fund's investments against
            price fluctuations. Other strategies, including buying futures,
            writing puts and buying calls, tend to increase and will broaden
            the fund's market exposure. Options and futures may be combined
            with each other, or with forward contracts, in order to adjust the
            risk and return characteristics of an overall strategy.

            The fund may also enter into forward currency exchange contracts
            (agreements to exchange one currency for another at a future date),
            may buy and sell options and futures contracts relating to foreign
            currencies and may purchase securities indexed to foreign
            currencies. Currency management strategies allow the fund to shift
            investment exposure from one currency to another or to attempt to
            profit from anticipated declines in the value of a foreign currency
            relative to the US dollar. Successful implementation of the global
            asset allocation strategy depends on portfolio management's
            judgment as to the potential risks and rewards of implementing the
            different types of strategies.

            SECURITIES LENDING. The fund may lend its investment securities in
            an amount up to 33 1/3% of its total assets to approved
            institutional borrowers who need to borrow securities in order to
            complete certain transactions.


            THE MAIN RISKS OF INVESTING IN THE FUND

            There are several risk factors that could hurt the fund's
            performance, cause you to lose money or cause the fund's
            performance to trail that of other investments.


                                               DWS Short Duration Plus Fund  | 7
<PAGE>

            INTEREST RATE RISK. Generally, fixed income securities will
            decrease in value when interest rates rise. The longer the duration
            of the fund's securities, the more sensitive the fund will be to
            interest rate changes. (As a general rule, a 1% rise in interest
            rates means a 1% fall in value for every year of duration.) As
            interest rates decline, the issuers of securities held by the fund
            may prepay principal earlier than scheduled, forcing the fund to
            reinvest in lower-yielding securities and may reduce the fund's
            income. As interest rates increase, slower than expected principal
            payments may extend the average life of fixed income securities.
            This will have the effect of locking in a below-market interest
            rate, thereby further reducing the value of such a security.

            CREDIT RISK. A fund purchasing debt securities faces the risk that
            the creditworthiness of an issuer may decline, causing the value of
            the debt securities to decline. In addition, an issuer may not be
            able to make timely payments on the interest and/
            or principal on the debt security it has issued. Because the
            issuers of high-yield debt securities or junk bonds (debt
            securities rated below the fourth highest category) may be in
            uncertain financial health, the prices of their debt securities can
            be more vulnerable to bad economic news or even the expectation of
            bad news, than investment-grade debt securities. In some cases,
            debt securities, particularly high-yield debt securities, may
            decline in credit quality or go into default. Because the fund may
            invest in securities not paying current interest or in securities
            already in default, these risks may be more pronounced.

            MARKET RISK. Deteriorating market conditions might cause a general
            weakness in the market that reduces the prices of securities in
            that market. Developments in a particular class of debt securities
            or the stock market could also adversely affect the fund by
            reducing the relative attractiveness of debt securities as an
            investment. Also, to the extent that the fund emphasizes debt
            securities from any given industry, it could be hurt if that
            industry does not do well.

            SECURITY SELECTION RISK. A risk that pervades all investing is the
            risk that the securities in the fund's portfolio may decline in
            value.

            LIQUIDITY RISK. Liquidity risk is the risk that a security cannot
            be sold quickly at a price that reflects the fund's estimate of its
            value.


8 | DWS Short Duration Plus Fund
<PAGE>

            PRICING RISK. At times, market conditions may make it difficult to
            value some investments, and the fund may use certain valuation
            methodologies for some of its investments, such as fair value
            pricing. Given the subjective nature of such valuation
            methodologies, it is possible that the value determined for an
            investment may be different than the value realized upon such
            investment's sale. If the fund has valued its securities too
            highly, you may pay too much for fund shares when you buy into the
            fund. If the fund has underestimated the price of its securities,
            you may not receive the full market value when you sell your fund
            shares.

            SECURITIES LENDING RISK. Any loss in the market price of securities
            loaned by the fund that occurs during the term of the loan would be
            borne by the fund and would adversely affect the fund's
            performance. Also, there may be delays in recovery of securities
            loaned or even a loss of rights in the collateral should the
            borrower of the securities fail financially while the loan is
            outstanding. However, loans will be made only to borrowers selected
            by the fund's delegate after a review of relevant facts and
            circumstances, including the creditworthiness of the borrower.

            iGAP RISK. The success of the iGAP strategy depends, in part, on
            the Advisor's ability to analyze the correlation between various
            global markets and asset classes. If the Advisor's correlation
            analysis proves to be incorrect, losses to the fund may be
            significant and may substantially exceed the intended level of
            market exposure for the iGAP strategy.

            DERIVATIVES RISK. Risks associated with derivatives include the
            risk that the derivative is not well correlated with the security,
            index or currency to which it relates; the risk that derivatives
            may result in losses or missed opportunities; the risk that the
            fund will be unable to sell the derivative because of an illiquid
            secondary market; the risk that a counterparty is unwilling or
            unable to meet its obligation; and the risk that the derivative
            transaction could expose the fund to the effects of leverage, which
            could increase the fund's exposure to the market and magnify
            potential losses. There is no guarantee that derivatives, to the
            extent employed, will have the intended effect, and their use could
            cause lower returns or even losses to the fund. The use of
            derivatives by the fund to hedge risk may reduce the opportunity
            for gain by offsetting the positive effect of favorable price
            movements.


                                               DWS Short Duration Plus Fund  | 9
<PAGE>

            FOREIGN INVESTMENT RISK. Foreign investments involve certain
            special risks, including:

            -  POLITICAL RISK. Some foreign governments have limited the
               outflow of profits to investors abroad, imposed restrictions on
               the exchange or export of foreign currency, extended diplomatic
               disputes to include trade and financial relations, seized
               foreign investments and imposed higher taxes.

            -  INFORMATION RISK. Companies based in foreign markets are usually
               not subject to accounting, auditing and financial reporting
               standards and practices as stringent as those in the US.
               Therefore, their financial reports may present an incomplete,
               untimely or misleading picture of a company, as compared to the
               financial reports required in the US.

            -  LIQUIDITY RISK. Investments that trade less frequently can be
               more difficult or more costly to buy, or to sell, than more
               liquid or active investments. This liquidity risk is a factor of
               the trading volume of a particular investment, as well as the
               size and liquidity of the entire local market. On the whole,
               foreign exchanges are smaller and less liquid than US exchanges.
               This can make buying and selling certain investments more
               difficult and costly. Relatively small transactions in some
               instances can have a disproportionately large effect on the
               price and supply of securities. In certain situations, it may
               become virtually impossible to sell an investment in an orderly
               fashion at a price that approaches portfolio management's
               estimate of its value. For the same reason, it may at times be
               difficult to value the fund's foreign investments.

            -  REGULATORY RISK. There is generally less government regulation
               of foreign markets, companies and securities dealers than in the
               US.

            -  CURRENCY RISK. The fund invests in securities denominated in
               foreign currencies. Changes in exchange rates between foreign
               currencies and the US dollar may affect the US dollar value of
               foreign securities or the income or gain received on these
               securities.

            -  LIMITED LEGAL RECOURSE RISK. Legal remedies for investors may be
               more limited than the legal remedies available in the US.

10 | DWS Short Duration Plus Fund
<PAGE>

            -  TRADING PRACTICE RISK. Brokerage commissions and other fees are
               generally higher for foreign investments than for US investments.
               The procedures and rules governing foreign transactions and
               custody may also involve delays in payment, delivery or recovery
               of money or investments.

            -  TAXES. Foreign withholding and certain other taxes may reduce
               the amount of income available to distribute to shareholders of
               the fund. In addition, special US tax considerations may apply
               to the fund's foreign investments.


                                              DWS Short Duration Plus Fund  | 11
<PAGE>

THE FUND'S PERFORMANCE HISTORY

While a fund's past performance (before and after taxes) isn't necessarily a
sign of how it will do in the future, it can be valuable for an investor to
know.

The bar chart shows how the performance of the fund's Class S shares has varied
from year to year, which may give some idea of risk. The table on the following
page shows how fund performance compares to relevant index performance (which,
unlike fund performance, does not reflect fees or expenses). The performance of
the fund and the index information varies over time. All figures assume
reinvestment of dividends and distributions (in the case of after-tax returns,
reinvested net of assumed tax rates).

The table shows returns for Class S shares on a before-tax and after-tax basis.
After-tax returns are estimates calculated using the historical highest
marginal individual federal income tax rates and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on an investor's tax
situation and may differ from those shown in the table. After-tax returns shown
are not relevant for investors who hold their shares through tax-deferred
arrangements, such as 401(k) plans or individual retirement accounts.

Institutional Class commenced operations on or about August 22, 2008. In the
bar chart and table, the performance figures reflect the historical performance
of the fund's original share class (Investment Class, which was renamed Class S
on October 23, 2006). Institutional Class shares are invested in the same
portfolio of securities as Class S shares and would have had substantially
similar performance. Performance would differ only to the extent that
Institutional Class shares and Class S shares do not have the same expenses.
Class S shares are offered in a separate prospectus, which is available upon
request. Prior to November 17, 2004, the fund had a different objective,
strategies, fees and expenses. Consequently, the fund's past performance prior
to this time may have been different if the current strategy had been in place.


DWS Short Duration Plus Fund

ANNUAL TOTAL RETURN (%) AS OF 12/31 EACH YEAR - Class S



<TABLE>
<S>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>     <C>
 5.99      6.74      6.14      5.01      4.01      6.53      2.56      5.73     5.48    -6.86
1999      2000      2001      2002      2003      2004*     2005      2006      2007    2008
</TABLE>





<TABLE>
<CAPTION>
FOR THE PERIODS INCLUDED IN THE BAR CHART:
<S>                                        <C>
BEST QUARTER: 3.35% Q4 2004                WORST QUARTER: -5.08% Q4 2008
</TABLE>


 *   The return for the year 2004 includes the effect of the conversion of the
     fund from a stable value fund to a short-term bond fund. In the absence of
     such conversion, the return would have been lower.

12 | DWS Short Duration Plus Fund
<PAGE>

AVERAGE ANNUAL TOTAL RETURNS (%) as of 12/31/2008


<TABLE>
<CAPTION>
                                              1 YEAR       5 YEARS      10 YEARS
<S>                                         <C>           <C>          <C>
 CLASS S
   Return before Taxes                         -6.86         2.57         4.06
   Return after Taxes on Distributions         -8.41         1.14         2.76
   Return after Taxes on Distributions
   and Sale of Fund Shares                     -4.41*        1.56*        2.97*
 BARCLAYS CAPITAL 1-3 YEAR
 GOVERNMENT/CREDIT INDEX (reflects
 no deductions for fees, expenses or
 taxes)                                        4.97          3.81         4.79
</TABLE>


 *   Return after Taxes on Distributions and Sale of Fund Shares is higher than
     other return figures for the same period due to a capital loss occurring
     upon redemption resulting in an assumed tax deduction for the shareholder.

 In both the chart and the table, total returns would have been lower if
 operating expenses hadn't been reduced.

 BARCLAYS CAPITAL 1-3 YEAR GOVERNMENT/CREDIT INDEX (name changed from Lehman
 Brothers 1-3 Year Government/Credit Index effective November 3, 2008) is an
 unmanaged index consisting of all US government agency and Treasury
 securities, as well as all investment grade corporate debt securities with
 maturities of one to three years.


--------------------------------------------------------------------------------
Current performance may be higher or lower than the performance data quoted
above. For more recent performance information, call your financial advisor or
(800) 730-1313 or visit our Web site at www.dws-investments.com.


--------------------------------------------------------------------------------
Return information assumes that fund shares were sold at the end of the period.


RETURN AFTER TAXES ON DISTRIBUTIONS reflects taxes only on the fund's
distributions and not on a shareholder's gain or loss from selling fund shares.


RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES reflects taxes on
both the fund's distributions and a shareholder's gain or loss from selling
fund shares.


                                              DWS Short Duration Plus Fund  | 13
<PAGE>

HOW MUCH INVESTORS PAY

The table below describes the fees and expenses that you may pay if you buy and
hold fund shares. This information doesn't include any fees that may be charged
by your financial advisor.


<TABLE>
<CAPTION>
FEE TABLE
<S>                                            <C>
 SHAREHOLDER FEES, paid directly from your investment
 Redemption/Exchange Fee on shares
 owned less than 15 days (as % of
 redemption proceeds)1                                      2.00%

 ANNUAL OPERATING EXPENSES, deducted from fund assets
 Management Fee                                             0.36%
 Distribution and/or Service (12b-1) Fees                   None
 Other Expenses 2                                           0.18
 TOTAL ANNUAL OPERATING EXPENSES 3                          0.54
</TABLE>


1   This fee is charged on all applicable redemptions or exchanges. Please see
   "Policies You Should Know About - Policies about transactions" for further
   information.

2   "Other Expenses" include an administrative services fee paid to the Advisor
   in the amount of 0.10%.

3   Through September 30, 2009, the Advisor has contractually agreed to waive
   all or a portion of its management fee and reimburse or pay operating
   expenses of the fund to the extent necessary to maintain the fund's total
   operating expenses at 0.64% for Institutional Class shares, excluding
   certain expenses such as extraordinary expenses, taxes, brokerage and
   interest. Although there can be no assurances that the current
   waiver/expense reimbursement arrangement will be maintained beyond
   September 30, 2009, the Advisor has committed to review the continuance of
   waiver/expense reimbursement arrangements by September 30, 2009.

Based on the costs above, this example helps you compare the expenses of the
fund's Institutional Class shares to those of other mutual funds. This example
assumes the expenses above remain the same. It also assumes that you invested
$10,000, earned 5% annual returns and reinvested all dividends and
distributions. This is only an example; actual expenses will be different.


<TABLE>
<CAPTION>
EXAMPLE                    1 YEAR      3 YEARS      5 YEARS      10 YEARS
<S>                       <C>         <C>          <C>          <C>
 Institutional Class         $55         $173         $302         $677
</TABLE>



14 | DWS Short Duration Plus Fund
<PAGE>

OTHER POLICIES AND SECONDARY RISKS

           While the previous pages describe the main points of the fund's
           strategy and risks, there are a few other issues to know about:

           -  Although major changes tend to be infrequent, the fund's Board
              could change the fund's investment objective without seeking
              shareholder approval.

           -  As a temporary defensive measure, the fund could shift up to 100%
              of assets into investments such as money market securities. This
              could prevent losses, but, while engaged in a temporary defensive
              position, the fund will not be pursuing its investment objective.
              However, portfolio management may choose not to use these
              strategies for various reasons, even in volatile market
              conditions.

           -  The fund may trade actively. This could raise transaction costs
              (thus lowering return) and could mean increased taxable
              distributions to shareholders and distributions that will be
              taxable to shareholders at higher federal income tax rates.

           -  Certain DWS fund-of-funds are permitted to invest in the fund. As
              a result, the fund may have large inflows or outflows of cash
              from time to time. This could have adverse effects on the fund's
              performance if the fund were required to sell securities or
              invest cash at times when it otherwise would not do so. This
              activity could also accelerate the realization of capital gains
              and increase the fund's transaction costs. The Advisor will
              monitor the impact of these transactions and the fund may
              discontinue such arrangements if they are not deemed to be in the
              best interests of the fund.

           Prior to January 13, 2006, the fund operated pursuant to a
           master/feeder structure under which the fund invested all of its
           assets in a master portfolio (the "Portfolio").


           Secondary risks

           IPO RISK. Securities purchased in initial public offerings (IPOs)
           may be very volatile. The price of such securities may rise and fall
           rapidly, often based, among other reasons, on investor perceptions
           rather than economic reasons. Additionally, investments in IPOs may
           magnify the fund's performance if it has a small asset base. The
           fund is less likely to experience a similar impact on its
           performance as its assets grow because it is unlikely that the fund
           will obtain proportionately larger IPO allocations.


           For more information

           This prospectus doesn't tell you about every policy or risk of
           investing in the fund.

           If you want more information on the fund's allowable securities and
           investment practices and the characteristics and risks of each one,
           you may want to request a copy of the Statement of Additional
           Information (the back cover tells you how to do this).


                                        Other Policies and Secondary Risks  | 15
<PAGE>

           Keep in mind that there is no assurance that the fund will achieve
           its objective.

           A complete list of the fund's portfolio holdings as of the month-end
           is posted on www.dws-investments.com on or about the 15th day of the
           following month. More frequent posting of portfolio holdings
           information may be made from time to time on
           www.dws-investments.com. The posted portfolio holdings information
           is available by fund and generally remains accessible at least until
           the date on which the fund files its Form N-CSR or N-Q with the
           Securities and Exchange Commission for the period that includes the
           date as of which the posted information is current. The fund's
           Statement of Additional Information includes a description of the
           fund's policies and procedures with respect to the disclosure of the
           fund's portfolio holdings.


WHO MANAGES AND OVERSEES THE FUND


           The investment advisor

           Deutsche Investment Management Americas Inc. ("DIMA" or the
           "Advisor"), with headquarters at 345 Park Avenue, New York, NY
           10154, is the investment advisor for the fund. Under the oversight
           of the Board, the Advisor makes investment decisions, buys and sells
           securities for the fund and conducts research that leads to these
           purchase and sale decisions. The Advisor provides a full range of
           global investment advisory services to institutional and retail
           clients.

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

           Deutsche Asset Management is a global asset management organization
           that offers a wide range of investing expertise and resources,
           including hundreds of portfolio managers and analysts and an office
           network that reaches the world's major investment centers. This
           well-resourced global investment platform brings together a wide
           variety of experience and investment insight across industries,
           regions, asset classes and investing styles.


16 | Who Manages and Oversees the Fund
<PAGE>

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

           MANAGEMENT FEE. The Advisor receives a management fee from the fund.
           Below are the actual rates paid by the fund for the most recent
           fiscal year, as a percentage of the fund's average daily net assets.



<TABLE>
<CAPTION>
FUND NAME                                     FEE PAID
<S>                                          <C>
  DWS Short Duration Plus Fund                  0.36%
</TABLE>


           A discussion regarding the basis for the Board's approval of the
           fund's investment management agreement is contained in the most
           recent shareholder report for the annual period ended September 30
           (see "Shareholder reports" on the back cover).

           Under a separate administrative services agreement between the fund
           and the Advisor, the fund pays the Advisor a fee for providing most
           of the fund's administrative services.


                                         Who Manages and Oversees the Fund  | 17
<PAGE>

Portfolio management

DWS Short Duration Plus Fund is managed by a team of investment professionals
who collaborate to develop and implement the fund's investment strategy. Each
portfolio manager has authority over all aspects of the fund's investment
portfolio, including, but not limited to, purchases and sales of individual
securities, portfolio construction techniques, portfolio risk assessment, and
the management of daily cash flows in accordance with portfolio holdings.

The following people handle the day-to-day management of the fund.

William Chepolis, CFA
Managing Director of Deutsche Asset Management and Portfolio Manager of the
fund.
-  Joined Deutsche Asset Management in 1998 after 13 years of experience as
   vice president and portfolio manager for Norwest Bank, where he managed the
   bank's fixed income and foreign exchange portfolios.
-  Portfolio Manager for Retail Fixed Income: New York.
-  Joined the fund in 2002.
-  BIS, University of Minnesota.

Matthew F. MacDonald
Director of Deutsche Asset Management and Portfolio Manager of the fund.
-  Joined Deutsche Asset Management and the fund in 2006 after 14 years of
   fixed income experience at Bank of America Global Structured Products and
   PPM America, Inc., where he was portfolio manager for public fixed income,
   including MBS, ABS, CDOs and corporate bonds; earlier, as an analyst for
   MBS, ABS and money markets; and originally, at Duff & Phelps Credit Rating
   Company.
-  Portfolio Manager for Retail Fixed Income: New York.
-  BA, Harvard University; MBA, University of Chicago Graduate School of
   Business.

Eric S. Meyer, CFA
Managing Director of Deutsche Asset Management and Portfolio Manager of the
fund.
-  Joined Deutsche Asset Management in 2006 after 16 years of experience in
   positions of increasing responsibility in corporate banking with First
   Chicago, Credit Agricole, and most recently, Bank of America's subsidiary,
   Flagship Capital Management. Prior to his corporate banking experience, he
   worked in trust management operations for 10 years at First Chicago and
   E.F. Hutton.
-  Head of US Loan Portfolio Management, High Yield Strategies: New York.
-  Joined the fund in 2008.
-  BA from State University of New York, Albany; MBA from Pace University.

Thomas Picciochi
Director of Deutsche Asset Management and Portfolio Manager of the fund.
-  Joined Deutsche Asset Management in 1999, formerly serving as portfolio
   manager for Absolute Return Strategies, after 13 years of experience in
   various research and analysis positions at State Street Global Advisors,
   FPL Energy, Barnett Bank, Trade Finance Corporation and Reserve Financial
   Management.
-  Senior Portfolio Manager for Quantitative Strategies: New York.
-  Joined the fund in 2007.
-  BA and MBA, University of Miami.

18 | Who Manages and Oversees the Fund
<PAGE>

Gary Sullivan, CFA
Director of Deutsche Asset Management and Portfolio Manager of the fund.
- Joined Deutsche Asset Management in 1996 and the fund in 2006. Served as the
   head of the High Yield group in Europe and as an Emerging Markets portfolio
   manager.
- Prior to that, four years at Citicorp as a research analyst and structurer of
   collateralized mortgage obligations. Prior to Citicorp, served as an
   officer in the US Army from 1988 to 1991.
- BS, United States Military Academy (West Point); MBA, New York University,
   Stern School of Business.

Robert Wang
Managing Director of Deutsche Asset Management and Portfolio Manager of the
fund.
- Joined Deutsche Asset Management in 1995 as portfolio manager for asset
   allocation after 13 years of experience of trading fixed income, foreign
   exchange and derivative products at J.P. Morgan.
- Global Head of Quantitative Strategies Portfolio Management: New York.
- Joined the fund in 2005.
- BS, The Wharton School, University of Pennsylvania.

The fund's Statement of Additional Information provides additional information
about a portfolio manager's investments in the fund, a description of the
portfolio management compensation structure and information regarding other
accounts managed.


                                         Who Manages and Oversees the Fund  | 19
<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights are designed to help you understand recent financial
performance. The figures in the first part of the table are for a single share.
The total return figures represent the percentage that an investor in the fund
would have earned (or lost), assuming all dividends and distributions were
reinvested. This information has been audited by PricewaterhouseCoopers LLP,
independent registered public accounting firm, whose report, along with the
fund's financial statements, is included in the fund's annual report (see
"Shareholder reports" on the back cover).


DWS Short Duration Plus Fund - Institutional Class


<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,                             2008 a
---------------------------------------------    -------------
<S>                                              <C>
SELECTED PER SHARE DATA
------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD               $   9.56
---------------------------------------------      --------
Income (loss) from investment operations:
  Net investment income b                               .04
_____________________________________________      ________
  Net realized and unrealized gain (loss)             ( .21)
---------------------------------------------      --------
  TOTAL FROM INVESTMENT OPERATIONS                    ( .17)
_____________________________________________      ________
Less distributions from:
  Net investment income                               ( .03)
_____________________________________________      ________
Redemption fees                                         .00***
_____________________________________________      ________
NET ASSET VALUE, END OF PERIOD                     $   9.36
---------------------------------------------      --------
Total Return (%)                                      (1.76)**
---------------------------------------------      --------

RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
------------------------------------------------------------------
Net assets, end of period ($ millions)                   50
_____________________________________________      ________
Ratio of expenses before expense reductions             .54*
_____________________________________________      ________
Ratio of expenses after expense reductions              .54*
_____________________________________________      ________
Ratio of net investment income (%)                     4.20*
_____________________________________________      ________
Portfolio turnover rate                                  83
---------------------------------------------      --------
</TABLE>


a   For the period from August 27, 2008 (commencement of operations of
   Institutional shares) to September 30, 2008.

b   Based on average shares outstanding during the period.

*   Annualized

**   Not annualized

***   Amount is less than $.005.

20 | Financial Highlights
<PAGE>

HOW TO INVEST IN THE FUND

THE FOLLOWING PAGES TELL YOU HOW TO INVEST IN THE FUND AND WHAT TO EXPECT AS A
SHAREHOLDER. The following pages also tell you about many of the services,
choices and benefits of being a shareholder. You'll also find information on
how to check the status of your account using the method that's most convenient
for you.

If you're investing directly with DWS Investments, all of this information
applies to you. If you're investing through a "third party provider" - for
example, a workplace retirement plan, financial supermarket or financial
advisor - your provider may have its own policies or instructions and you
should follow those.

You can find out more about the topics covered here by speaking with your
FINANCIAL ADVISOR OR A REPRESENTATIVE OF YOUR WORKPLACE RETIREMENT PLAN OR
OTHER INVESTMENT PROVIDER.

<PAGE>

Buying and Selling INSTITUTIONAL CLASS Shares


           You may buy Institutional Class shares through your securities
           dealer or through any financial institution that is authorized to
           act as a shareholder servicing agent ("financial advisor"). Contact
           them for details on how to place and pay for your order. Your
           financial advisor may also receive compensation from the Advisor
           and/or its affiliates. For more information, please see "Financial
           intermediary support payments."

           You may also buy Institutional Class shares by sending your check
           (along with a completed account application) directly to DWS
           Investments Service Company (the "transfer agent"). Your purchase
           order may not be accepted if the fund withdraws the offering of fund
           shares, the sale of fund shares has been suspended or if it is
           determined that your purchase would be detrimental to the interests
           of the fund's shareholders.


           Eligibility requirements

           You may buy Institutional Class shares if you are any of the
           following:

           -  An eligible institution (e.g., a financial institution,
              corporation, trust, estate or educational, religious or
              charitable institution).

           -  An employee benefit plan with assets of at least $50 million.

           -  A registered investment advisor or financial planner purchasing
              on behalf of clients and charging an asset-based or
              hourly fee.

           -  A client of the private banking division of Deutsche Bank AG.

           -  A current or former director or trustee of the Deutsche or DWS
              mutual funds.

           -  An employee, the employee's spouse or life partner and children
              or stepchildren age 21 or younger of Deutsche Bank or its
              affiliates or a subadvisor to any fund in the DWS family of funds
              or a broker-dealer authorized to sell shares in the funds.


22 | Buying and Selling Institutional Class Shares
<PAGE>

           Investment minimum

           Your initial investment must be for at least $1,000,000. There are
           no minimum subsequent investment requirements.

           The minimum initial investment is waived for:

           -  Shareholders with existing accounts prior to August 13, 2004 who
              met the previous minimum investment eligibility requirement.

           -  Investment advisory affiliates of Deutsche Bank Securities, Inc.,
              DWS funds or Deutsche funds purchasing shares for the accounts of
              their investment advisory clients.

           -  Employee benefit plans with assets of at least $50 million.

           -  Clients of the private banking division of Deutsche Bank AG.

           -  Institutional clients and qualified purchasers that are clients
              of a division of Deutsche Bank AG.

           -  A current or former director or trustee of the Deutsche or DWS
              funds.

           -  An employee, the employee's spouse or life partner and children
              or stepchildren age 21 or younger of Deutsche Bank or its
              affiliates or a subadvisor to any fund in the DWS family of funds
              or a broker-dealer authorized to sell shares of the funds.

           -  Registered investment advisors who trade through platforms
              approved by the Advisor and whose client assets in the aggregate
              meet or, in the Advisor's judgment, will meet within a reasonable
              period of time, the $1,000,000 minimum investment.

           -  Employee benefit plan platforms approved by the Advisor that
              invest in the fund through an omnibus account, and that meet or,
              in the Advisor's judgment, will meet within a reasonable period
              of time, the $1,000,000 minimum investment.

           The fund reserves the right to modify the above eligibility
           requirements and investment minimum at any time. In addition, the
           fund, in its discretion, may waive the minimum initial investment
           for specific employee benefit plans (or family of plans) whose
           aggregate investment in Institutional Class shares of the fund
           equals or exceeds the minimum initial investment amount but where a
           particular account or program may not on its own meet such minimum
           amount.


                             Buying and Selling Institutional Class Shares  | 23
<PAGE>

           How to contact the transfer agent


<TABLE>
<S>                       <C>
  BY PHONE:                (800) 730-1313
  FIRST INVESTMENTS        DWS Investments Service Company
  BY MAIL:                P.O. Box 219210
                          Kansas City, MO 64121-9210
  ADDITIONAL               DWS Investments Service Company
  INVESTMENTS BY          P.O. Box 219210
  MAIL:                   Kansas City, MO 64121-9210
  BY OVERNIGHT MAIL:       DWS Investments Service Company
                          210 West 10th Street
                          Kansas City, MO 64105-1614
</TABLE>


           You can reach the automated information line, 24 hours a day,
           7 days a week by calling (800) 621-1048.


           How to open your account

<TABLE>
<S>                  <C>
  MAIL:               Complete and sign the account application that
                     accompanies this prospectus. (You may obtain
                     additional applications by calling the transfer agent.)
                     Mail the completed application along with a check
                     payable to the fund you have selected to the transfer
                     agent. Be sure to include the fund number. The
                     applicable addresses are shown under "How to
                     contact the transfer agent."
  WIRE:               Call the transfer agent to set up a wire account.
  FUND NAME AND       Please use the complete fund name. Refer to the
  FUND NUMBER:       start of "The Fund's Main Investment Strategy" above
                     for the fund number.
</TABLE>


           Please note that your account cannot become activated until we
           receive a completed account application.


           How to BUY and SELL shares

           MAIL:

           BUYING: Send your check, payable to the fund you have selected, to
           the transfer agent. Be sure to include the fund number and your
           account number on your check. If you are investing in more than one
           fund, make your check payable to "DWS Investments" and include your
           account number, the names and numbers of each fund you have
           selected, and the dollar amount or percentage you would like
           invested in each fund. Mailing addresses are shown under "How to
           contact the transfer agent."


24 | Buying and Selling Institutional Class Shares
<PAGE>

           SELLING: Send a signed letter to the transfer agent with your name,
           your fund number and account number, the fund's name, and either the
           number of shares you wish to sell or the dollar amount you wish to
           receive. In certain circumstances, a signature guarantee may be
           required to sell shares of the fund by mail. For information about a
           signature guarantee, see "Signature Guarantee." Unless exchanging
           into another DWS fund, you must submit a written authorization to
           sell shares in a retirement account.

           WIRE:

           BUYING: You may buy shares by wire only if your account is
           authorized to do so. Please note that you or your financial advisor
           must call Institutional Investment Services at (800) 730-1313 to
           notify us in advance of a wire transfer purchase. After you inform
           Institutional Investment Services of the amount of your purchase,
           you will receive a trade confirmation number. Instruct your bank to
           send payment by wire using the wire instructions noted below. All
           wires must be received by 4:00 p.m. Eastern time the next business
           day following your purchase. If your wire is not received by 4:00
           p.m. Eastern time on the next business day after the fund receives
           your request to purchase shares, your transaction will be canceled
           at your expense and risk.


<TABLE>
<S>                <C>
  BANK NAME:        State Street Bank Boston
  ROUTING NO:       011000028
  ATTN:             DWS Investments
  DDA NO:           9903-5552
  FBO:              (Account name) (Account number)
  CREDIT:           (Fund name, Fund number and, if applicable, class
                   name) (see "How to open your account")
</TABLE>


           Refer to your account statement for the account name and number.
           Wire transfers normally take two or more hours to complete. Wire
           transfers may be restricted on holidays and at certain other times.

           SELLING: You may sell shares by wire only if your account is
           authorized to do so. You will be paid for redeemed shares by wire
           transfer of funds to your financial advisor or bank upon receipt of
           a duly authorized redemption request as promptly as feasible. For
           your protection, you may not change the destination bank account
           over the phone. To sell by wire,


                             Buying and Selling Institutional Class Shares  | 25
<PAGE>

           contact your financial advisor or Institutional Investment Services
           at (800) 730-1313. After you inform Institutional Investment
           Services of the amount of your redemption, you will receive a trade
           confirmation number. The minimum redemption by wire is $1,000. We
           must receive your order by 4:00 p.m. Eastern time to wire your
           account the next business day.

           TELEPHONE TRANSACTIONS:

           You may place orders to buy and sell over the phone by calling your
           financial advisor or Institutional Investment Services at (800)
           730-1313. If your shares are in an account with the transfer agent,
           you may (1) redeem by check in an amount up to $100,000, or by wire
           (minimum $1,000), or (2) exchange the shares for Institutional Class
           shares of another DWS fund by calling the transfer agent.

           You may make regular investments from a bank checking account. For
           more information on setting up an automatic investment plan or
           payroll investment plan, call Institutional Investment Services at
           (800) 730-1313.


           Financial intermediary support payments

           The Advisor, DWS Investments Distributors, Inc. (the "Distributor")
           and/or their affiliates may pay additional compensation, out of
           their own assets and not as an additional charge to the fund, to
           selected affiliated and unaffiliated brokers, dealers, participating
           insurance companies or other financial intermediaries ("financial
           advisors") in connection with the sale and/or distribution of fund
           shares or the retention and/
           or servicing of fund investors and fund shares ("revenue sharing").
           Such revenue sharing payments are in addition to any distribution or
           service fees payable under any Rule 12b-1 or service plan of the
           fund, any record keeping/sub-transfer agency/networking fees payable
           by the fund (generally through the Distributor or an affiliate)
           and/or the Distributor to certain financial advisors for performing
           such services and any sales charge, commissions, non-cash
           compensation arrangements expressly permitted under applicable rules
           of the Financial Industry Regulatory Authority or other concessions
           described in the fee table or elsewhere in this prospectus or the
           Statement of Additional Information as payable to all financial
           advisors. For example, the Advisor, the Distributor and/or their
           affiliates may compensate financial advisors for providing the fund
           with "shelf space" or access to a third party platform or fund
           offering list or


26 | Buying and Selling Institutional Class Shares
<PAGE>

           other marketing programs, including, without limitation, inclusion
           of the fund on preferred or recommended sales lists, mutual fund
           "supermarket" platforms and other formal sales programs; granting
           the Distributor access to the financial advisor's sales force;
           granting the Distributor access to the financial advisor's
           conferences and meetings; assistance in training and educating the
           financial advisor's personnel; and obtaining other forms of
           marketing support.

           The level of revenue sharing payments made to financial advisors may
           be a fixed fee or based upon one or more of the following factors:
           gross sales, current assets and/or number of accounts of the fund
           attributable to the financial advisor, the particular fund or fund
           type or other measures as agreed to by the Advisor, the Distributor
           and/or their affiliates and the financial advisors or any
           combination thereof. The amount of these revenue sharing payments is
           determined at the discretion of the Advisor, the Distributor and/or
           their affiliates from time to time, may be substantial, and may be
           different for different financial advisors based on, for example,
           the nature of the services provided by the financial advisor.

           The Advisor, the Distributor and/or their affiliates currently make
           revenue sharing payments from their own assets in connection with
           the sale and/or distribution of DWS fund shares or the retention
           and/or servicing of investors and DWS fund shares to financial
           advisors in amounts that generally range from .01% up to .50% of
           assets of the fund serviced and maintained by the financial advisor,
           .05% to .25% of sales of the fund attributable to the financial
           advisor, a flat fee of $13,350 up to $500,000, or any combination
           thereof. These amounts are subject to change at the discretion of
           the Advisor, the Distributor and/or their affiliates. Receipt of, or
           the prospect of receiving, this additional compensation may
           influence your financial advisor's recommendation of the fund or of
           any particular share class of the fund. You should review your
           financial advisor's compensation disclosure and/or talk to your
           financial advisor to obtain more information on how this
           compensation may have influenced your financial advisor's
           recommendation of the fund. Additional information regarding these
           revenue sharing payments is included in the fund's Statement of
           Additional Information, which is available to you on request at no
           charge (see the back cover of this prospectus for more information
           on how to request a copy of the Statement of Additional
           Information).


                             Buying and Selling Institutional Class Shares  | 27
<PAGE>

           The Advisor, the Distributor and/or their affiliates may also make
           such revenue sharing payments to financial advisors under the terms
           discussed above in connection with the distribution of both DWS
           funds and non-DWS funds by financial advisors to retirement plans
           that obtain record keeping services from ADP, Inc. on the DWS
           Investments branded retirement plan platform (the "Platform") with
           the level of revenue sharing payments being based upon sales of both
           the DWS funds and the non-DWS funds by the financial advisor on the
           Platform or current assets of both the DWS funds and the non-DWS
           funds serviced and maintained by the financial advisor on the
           Platform.

           It is likely that broker-dealers that execute portfolio transactions
           for the fund will include firms that also sell shares of the DWS
           funds to their customers. However, the Advisor will not consider
           sales of DWS fund shares as a factor in the selection of
           broker-dealers to execute portfolio transactions for the DWS funds.
           Accordingly, the Advisor has implemented policies and procedures
           reasonably designed to prevent its traders from considering sales of
           DWS fund shares as a factor in the selection of broker-dealers to
           execute portfolio transactions for the fund. In addition, the
           Advisor, the Distributor and/or their affiliates will not use fund
           brokerage to pay for their obligation to provide additional
           compensation to financial advisors as described above.


POLICIES YOU SHOULD KNOW ABOUT

           Along with the information on the previous pages, the policies below
           may affect you as a shareholder. Some of this information, such as
           the section on distributions and taxes, applies to all investors,
           including those investing through a financial advisor.

           If you are investing through a financial advisor or through a
           retirement plan, check the materials you received from them about
           how to buy and sell shares because particular financial advisors or
           other intermediaries may adopt policies, procedures or limitations
           that are separate from those described by the fund. Please note that
           a financial advisor may charge fees separate from those charged by
           the fund and may be compensated by the fund.


28 | Policies You Should Know About
<PAGE>

           Keep in mind that the information in this prospectus applies only to
           the shares offered herein. Other share classes are described in
           separate prospectuses and have different fees, requirements and
           services.

           In order to reduce the amount of mail you receive and to help reduce
           expenses, we generally send a single copy of any shareholder report
           and prospectus to each household. If you do not want the mailing of
           these documents to be combined with those for other members of your
           household, please contact your financial advisor or call (800)
           730-1313.


           Policies about transactions

           THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange
           is open. The fund calculates its share price for each class every
           business day, as of the close of regular trading on the New York
           Stock Exchange (typically 4:00 p.m. Eastern time, but sometimes
           earlier, as in the case of scheduled half-day trading or unscheduled
           suspensions of trading). You can place an order to buy or sell
           shares at any time.

           To help the government fight the funding of terrorism and money
           laundering activities, federal law requires all financial
           institutions to obtain, verify and record information that
           identifies each person who opens an account. What this means to you:
           When you open an account, we will ask for your name, address, date
           of birth and other information that will allow us to identify you.
           Some or all of this information will be used to verify the identity
           of all persons opening an account.

           We might request additional information about you (which may include
           certain documents, such as articles of incorporation for companies)
           to help us verify your identity and, in some cases, the information
           and/or documents may be required to conduct the verification. The
           information and documents will be used solely to verify your
           identity.

           We will attempt to collect any missing required and requested
           information by contacting you or your financial advisor. If we are
           unable to obtain this information within the time frames established
           by the fund, then we may reject your application and order.


                                            Policies You Should Know About  | 29
<PAGE>

           The fund will not invest your purchase until all required and
           requested identification information has been provided and your
           application has been submitted in "good order." After we receive all
           the information, your application is deemed to be in good order and
           we accept your purchase, you will receive the net asset value per
           share next calculated.

           If we are unable to verify your identity within time frames
           established by the fund, after a reasonable effort to do so, you
           will receive written notification.

           With certain limited exceptions, only US residents may invest in the
           fund.

           Because orders placed through a financial advisor must be forwarded
           to the transfer agent before they can be processed, you'll need to
           allow extra time. Your financial advisor should be able to tell you
           approximately when your order will be processed. It is the
           responsibility of your financial advisor to forward your order to
           the transfer agent in a timely manner.

           SUB-MINIMUM BALANCES. The fund may redeem your shares and close your
           account on 60 days' notice if it fails to meet the minimum account
           balance requirement of $1,000,000 for any reason other than a change
           in market value.

           MARKET TIMING POLICIES AND PROCEDURES. Short-term and excessive
           trading of fund shares may present risks to long-term shareholders,
           including potential dilution in the value of fund shares,
           interference with the efficient management of the fund's portfolio
           (including losses on the sale of investments), taxable gains to
           remaining shareholders and increased brokerage and administrative
           costs. These risks may be more pronounced if the fund invests in
           certain securities, such as those that trade in foreign markets, are
           illiquid or do not otherwise have "readily available market
           quotations." Certain investors may seek to employ short-term trading
           strategies aimed at exploiting variations in portfolio valuation
           that arise from the nature of the securities held by the fund (e.g.,
           "time zone arbitrage"). The fund discourages short-term and
           excessive trading and has adopted policies and procedures that are
           intended to detect and deter short-term and excessive trading.

           Pursuant to its policies, the fund will impose a 2% redemption fee
           on fund shares held for less than a specified holding period
           (subject to certain exceptions discussed below under "Redemption
           fees"). The fund also reserves the right to reject


30 | Policies You Should Know About
<PAGE>

           or cancel a purchase or exchange order for any reason without prior
           notice. For example, the fund may in its discretion reject or cancel
           a purchase or an exchange order even if the transaction is not
           subject to the specific roundtrip transaction limitation described
           below if the Advisor believes that there appears to be a pattern of
           short-term or excessive trading activity by a shareholder or deems
           any other trading activity harmful or disruptive to the fund. The
           fund, through its Advisor and transfer agent, will measure
           short-term and excessive trading by the number of roundtrip
           transactions within a shareholder's account during a rolling
           12-month period. A "roundtrip" transaction is defined as any
           combination of purchase and redemption activity (including
           exchanges) of the same fund's shares. The fund may take other
           trading activity into account if the fund believes such activity is
           of an amount or frequency that may be harmful to long-term
           shareholders or disruptive to portfolio management.

           Shareholders are limited to four roundtrip transactions in the same
           DWS fund (excluding money market funds) over a rolling 12-month
           period. Shareholders with four or more roundtrip transactions in the
           same DWS fund within a rolling 12-month period generally will be
           blocked from making additional purchases of, or exchanges into, that
           DWS fund. The fund has sole discretion whether to remove a block
           from a shareholder's account. The rights of a shareholder to redeem
           shares of a DWS fund are not affected by the four roundtrip
           transaction limitation, but all redemptions remain subject to the
           fund's redemption fee policy (see "Redemption fees" described
           below).

           The fund may make exceptions to the roundtrip transaction policy for
           certain types of transactions if, in the opinion of the Advisor, the
           transactions do not represent short-term or excessive trading or are
           not abusive or harmful to the fund, such as, but not limited to,
           systematic transactions, required minimum retirement distributions,
           transactions initiated by the fund or administrator and transactions
           by certain qualified funds-of-funds.

           In certain circumstances where shareholders hold shares of the fund
           through a financial intermediary, the fund may rely upon the
           financial intermediary's policy to deter short-term or excessive
           trading if the Advisor believes that the financial intermediary's
           policy is reasonably designed to detect and deter transactions that
           are not in the best interests of the fund. A financial
           intermediary's policy relating to short-term or excessive


                                            Policies You Should Know About  | 31
<PAGE>

           trading may be more or less restrictive than the DWS funds' policy,
           may permit certain transactions not permitted by the DWS funds'
           policies, or prohibit transactions not subject to the DWS funds'
           policies.

           The Advisor may also accept undertakings from a financial
           intermediary to enforce short-term or excessive trading policies on
           behalf of the fund that provide a substantially similar level of
           protection for the fund against such transactions. For example,
           certain financial intermediaries may have contractual, legal or
           operational restrictions that prevent them from blocking an account.
           In such instances, the financial intermediary may use alternate
           techniques that the Advisor considers to be a reasonable substitute
           for such a block.

           In addition, if the fund invests some portion of its assets in
           foreign securities, it has adopted certain fair valuation practices
           intended to protect the fund from "time zone arbitrage" with respect
           to its foreign securities holdings and other trading practices that
           seek to exploit variations in portfolio valuation that arise from
           the nature of the securities held by the fund. (See "How the fund
           calculates share price.")

           There is no assurance that these policies and procedures will be
           effective in limiting short-term and excessive trading in all cases.
           For example, the Advisor may not be able to effectively monitor,
           detect or limit short-term or excessive trading by underlying
           shareholders that occurs through omnibus accounts maintained by
           broker-dealers or other financial intermediaries. The Advisor
           reviews trading activity at the omnibus level to detect short-term
           or excessive trading. If the Advisor has reason to suspect that
           short-term or excessive trading is occurring at the omnibus level,
           the Advisor will contact the financial intermediary to request
           underlying shareholder level activity. Depending on the amount of
           fund shares held in such omnibus accounts (which may represent most
           of the fund's shares) short-term and/or excessive trading of fund
           shares could adversely affect long-term shareholders in the fund. If
           short-term or excessive trading is identified, the Advisor will take
           appropriate action.

           The fund's market timing policies and procedures may be modified or
           terminated at any time.

           REDEMPTION FEES. The fund imposes a redemption fee of 2% of the
           total redemption amount (calculated at net asset value) on all fund
           shares redeemed or exchanged within 15 days of buying them (either
           by purchase or exchange). The redemption


32 | Policies You Should Know About
<PAGE>

           fee is paid directly to the fund and is designed to encourage
           long-term investment and to offset transaction and other costs
           associated with short-term or excessive trading. For purposes of
           determining whether the redemption fee applies, shares held the
           longest time will be treated as being redeemed first and shares held
           the shortest time will be treated as being redeemed last.

           The redemption fee is applicable to fund shares purchased either
           directly or through a financial intermediary, such as a
           broker-dealer. Transactions through financial intermediaries
           typically are placed with the fund on an omnibus basis and include
           both purchase and sale transactions placed on behalf of multiple
           investors. These purchase and sale transactions are generally netted
           against one another and placed on an aggregate basis; consequently
           the identities of the individuals on whose behalf the transactions
           are placed generally are not known to the fund. For this reason, the
           fund has undertaken to notify financial intermediaries of their
           obligation to assess the redemption fee on customer accounts and to
           collect and remit the proceeds to the fund. However, due to
           operational requirements, the intermediaries' methods for tracking
           and calculating the fee may be inadequate or differ in some respects
           from the fund's.

           The redemption fee will not be charged in connection with the
           following exchange or redemption transactions: (i) transactions on
           behalf of participants in certain research wrap programs; (ii)
           transactions on behalf of a shareholder to return any excess IRA
           contributions to the shareholder; (iii) transactions on behalf of a
           shareholder to effect a required minimum distribution on an IRA;
           (iv) transactions on behalf of any mutual fund advised by the
           Advisor and its affiliates (e.g., "funds of funds") or, in the case
           of a master/feeder relationship, redemptions by the feeder fund from
           the master portfolio; (v) transactions on behalf of certain
           unaffiliated mutual funds operating as funds of funds; (vi)
           transactions following death or disability of any registered
           shareholder, beneficial owner or grantor of a living trust with
           respect to shares purchased before death or disability; (vii)
           transactions involving hardship of any registered shareholder;
           (viii) systematic transactions with pre-defined trade dates for
           purchases, exchanges or redemptions, such as automatic account
           rebalancing, or loan origination and repayments; (ix) transactions
           involving shares purchased through the reinvestment of dividends or
           other distributions; (x) transactions


                                            Policies You Should Know About  | 33
<PAGE>

           involving shares transferred from another account in the same fund
           or converted from another class of the same fund (the redemption fee
           period will carry over to the acquired shares); (xi) transactions
           initiated by the fund or administrator (e.g., redemptions for not
           meeting account minimums, to pay account fees funded by share
           redemptions, or in the event of the liquidation or merger of the
           fund); or (xii) transactions in cases when there are legal or
           contractual limitations or restrictions on the imposition of the
           redemption fee (as determined by the fund or its agents in their
           sole discretion). It is the policy of the DWS funds to permit
           approved fund platform providers to execute transactions with the
           funds without the imposition of a redemption fee if such providers
           have implemented alternative measures that are determined by the
           Advisor to provide controls on short-term and excessive trading that
           are comparable to the DWS funds' policies.

           THE AUTOMATED INFORMATION LINE IS AVAILABLE 24 HOURS A DAY BY
           CALLING (800) 621-1048. You can use our automated phone services to
           get information on DWS funds generally and on accounts held directly
           at DWS Investments.

           QUICKBUY AND QUICKSELL let you set up a link between a DWS fund
           account and a bank account. Once this link is in place, you can move
           money between the two with a phone call. You'll need to make sure
           your bank has Automated Clearing House (ACH) services. Transactions
           take two to three days to be completed and there is a $50 minimum
           and a $250,000 maximum. To set up QuickBuy or QuickSell on a new
           account, see the account application; to add it to an existing
           account, call (800) 730-1313.

           TELEPHONE AND ELECTRONIC TRANSACTIONS. Generally, you are
           automatically entitled to telephone and electronic transaction
           privileges, but you may elect not to have them when you open your
           account or by contacting Institutional Investment Services at (800)
           730-1313 at a later date.

           Since many transactions may be initiated by telephone or
           electronically, it's important to understand that as long as we take
           reasonable steps to ensure that an order to purchase or redeem
           shares is genuine, such as recording calls or requesting
           personalized security codes or other information, we are not
           responsible for any losses that may occur as a result. For


THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

The DWS Investments Web site can be a valuable resource for shareholders with
Internet access. Go to WWW.DWS-INVESTMENTS.COM to get up-to-date information,
review balances or even place orders for exchanges.


34 | Policies You Should Know About
<PAGE>

           transactions conducted over the Internet, we recommend the use of a
           secure Internet browser. In addition, you should verify the accuracy
           of your confirmation statements immediately after you receive them.

           THE FUND DOES NOT ISSUE SHARE CERTIFICATES.

           WHEN YOU ASK US TO SEND OR RECEIVE A WIRE, please note that while we
           don't charge a fee to send or receive wires, it's possible that your
           bank may do so. Wire transactions are generally completed within 24
           hours. The fund can only send wires of $1,000 or more and accept
           wires of $50 or more.

           THE FUND ACCEPTS PAYMENT FOR SHARES ONLY IN US DOLLARS by a check
           drawn on a US bank, a bank or Federal Funds wire transfer or an
           electronic bank transfer. The fund does not accept third party
           checks. A third party check is a check made payable to one or more
           parties and offered as payment to one or more other parties (e.g., a
           check made payable to you that you offer as payment to someone
           else). Checks should normally be payable to DWS Investments and
           drawn by you or a financial institution on your behalf with your
           name or account number included with the check.

           SIGNATURE GUARANTEE. When you want to sell more than $100,000 worth
           of shares or send proceeds to a third party or to a new address,
           you'll usually need to place your order in writing and include a
           signature guarantee. However, if you want money wired to a bank
           account that is already on file with us, you don't need a signature
           guarantee. Also, generally you don't need a signature guarantee for
           an exchange, although we may require one in certain other
           circumstances.

           A signature guarantee is simply a certification of your signature -
           a valuable safeguard against fraud. You can get a signature
           guarantee from an eligible guarantor institution, including
           commercial banks, savings and loans, trust companies, credit unions,
           member firms of a national stock exchange or any member or
           participant of an approved signature
           guarantor program. Note that you can't get a signature guarantee
           from a notary public and we must be provided the original guarantee.


           SELLING SHARES OF TRUST ACCOUNTS AND BUSINESS OR ORGANIZATION
           ACCOUNTS may require additional documentation. Please call (800)
           730-1313 or contact your financial advisor for more information.


THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

If you ever have difficulty placing an order by phone or Internet, you can send
us your order in writing.


                                            Policies You Should Know About  | 35
<PAGE>

           MONEY FROM SHARES YOU SELL is normally sent out within one business
           day of when your order is processed (not when it is received),
           although it could be delayed for up to seven days. There are
           circumstances when it could be longer, including, but not limited
           to, when you are selling shares you bought recently by check  or ACH
           (the funds will be placed under a 10 calendar day hold to ensure
           good funds) or when unusual circumstances prompt the SEC to allow
           further delays. Certain expedited redemption processes (e.g.,
           redemption proceeds by wire) may also be delayed or unavailable when
           you are selling shares recently purchased or in the event of the
           closing of the Federal Reserve wire payment system. The fund
           reserves the right to suspend or postpone redemptions as permitted
           pursuant to Section 22(e) of the Investment Company Act of 1940.
           Generally, those circumstances are when 1) the New York Stock
           Exchange is closed other than customary weekend or holiday closings;
           2) trading on the New York Stock Exchange is restricted; 3) an
           emergency exists which makes the disposal of securities owned by the
           fund or the fair determination of the value of the fund's net assets
           not reasonably practicable; or 4) the SEC, by order, permits the
           suspension of the right of redemption. Redemption payments by wire
           may also be delayed in the event of a non-routine closure of the
           Federal Reserve wire payment system. For additional rights reserved
           by the fund, please see "Other rights we reserve."

           You may obtain additional information about other ways to sell your
           shares by contacting your financial advisor.


           How the fund calculates share price

           To calculate net asset value, or NAV, each share class uses the
           following equation:


<TABLE>
<S>                                                     <C> <C>
            TOTAL ASSETS - TOTAL LIABILITIES
           -----------------------------------------    =    NAV
               TOTAL NUMBER OF SHARES OUTSTANDING
</TABLE>


           The price at which you buy and sell shares is based on the NAV per
           share next calculated after the order is received and accepted by
           the transfer agent.

           THE FUND CHARGES A REDEMPTION FEE EQUAL TO 2.00% of the value of
           shares redeemed or exchanged within 15 days of purchase. Please see
           "Policies about transactions - Redemption fees" for further
           information.


36 | Policies You Should Know About
<PAGE>

           WE TYPICALLY VALUE SECURITIES USING INFORMATION FURNISHED BY AN
           INDEPENDENT PRICING SERVICE OR MARKET QUOTATIONS, WHERE APPROPRIATE.
           However, we may use methods approved by the Board, such as a fair
           valuation model, which are intended to reflect fair value when
           pricing service information or market quotations are not readily
           available or when a security's value or a meaningful portion of the
           value of the fund's portfolio is believed to have been materially
           affected by a significant event, such as a natural disaster, an
           economic event like a bankruptcy filing, or a substantial
           fluctuation in domestic or foreign markets that has occurred between
           the close of the exchange or market on which the security is
           principally traded (for example, a foreign exchange or market) and
           the close of the New York Stock Exchange. In such a case, the fund's
           value for a security is likely to be different from the last quoted
           market price or pricing service information. In addition, due to the
           subjective and variable nature of fair value pricing, it is possible
           that the value determined for a particular asset may be materially
           different from the value realized upon such asset's sale. It is
           -expected that the greater the percentage of fund assets that is
           -invested in non-US securities, the more extensive will be the
           -fund's use of fair value pricing. This is intended to reduce the
           fund's exposure to "time zone arbitrage" and other harmful -trading
           practices. (See "Market -timing policies and procedures.")

           TO THE EXTENT THAT THE FUND INVESTS IN SECURITIES THAT ARE TRADED
           PRIMARILY IN FOREIGN MARKETS, the value of its holdings could change
           at a time when you aren't able to buy or sell fund shares. This is
           because some foreign markets are open on days or at times when the
           fund doesn't price its shares. (Note that prices for securities that
           trade on foreign exchanges can change significantly on days when the
           New York Stock Exchange is closed and you cannot buy or sell fund
           shares. Price changes in the securities the fund owns may ultimately
           affect the price of fund shares the next time the NAV is
           calculated.)


           Other rights we reserve

           You should be aware that we may do any of the following:

           -  withdraw or suspend the offering of shares at any time

                                            Policies You Should Know About  | 37
<PAGE>

            -  withhold a portion of your distributions and redemption proceeds
               if we have been notified by the IRS that you are subject to
               backup withholding or if you fail to provide us with the correct
               taxpayer ID number and certain certifications, including
               certification that you are not subject to backup withholding

           -  reject a new account application if you don't provide any
              required or requested identifying information, or for any other
              reason

           -  refuse, cancel, limit or rescind any purchase or exchange order,
              without prior notice; freeze any account (meaning you will not be
              able to purchase fund shares in your account); suspend account
              services; and/or involuntarily redeem your account if we think
              that the account is being used for fraudulent or illegal
              purposes; one or more of these actions will be taken when, at our
              sole discretion, they are deemed to be in the fund's best
              interests or when the fund is requested or compelled to do so by
              governmental authority or by applicable law

           -  close and liquidate your account if we are unable to verify your
              identity, or for other reasons; if we decide to close your
              account, your fund shares will be redeemed at the net asset value
              per share next calculated after we determine to close your
              account (less applicable redemption fee, if any); you may
              recognize a gain or loss on the redemption of your fund shares
              and you may incur a tax liability

           -  pay you for shares you sell by "redeeming in kind," that is, by
              giving you securities (which typically will involve brokerage
              costs for you to liquidate) rather than cash, but which will be
              taxable to the same extent as a redemption for cash; the fund
              generally won't make a redemption in kind unless your requests
              over a 90-day period total more than $250,000 or 1% of the value
              of the fund's net assets, whichever is less

           -  change, add or withdraw various services, fees and account
              policies (for example, we may adjust the fund's investment
              minimums at any time)


38 | Policies You Should Know About
<PAGE>

UNDERSTANDING DISTRIBUTIONS AND TAXES

           The fund intends to distribute to its shareholders virtually all of
           its net earnings. The fund can earn money in two ways: by receiving
           interest, dividends or other income from investments it holds and by
           selling investments for more than it paid for them. (The fund's
           earnings are separate from any gains or losses stemming from your
           own purchase and sale of shares.) The fund may not always pay a
           dividend or other distribution for a given period.

           THE FUND INTENDS TO PAY INCOME DIVIDENDS TO ITS SHAREHOLDERS
           MONTHLY; short-term and long-term capital gains are paid in December
           or otherwise as needed.

           Dividends or distributions declared and payable to shareholders of
           record in the last quarter of a given calendar year are treated for
           federal income tax purposes as if they were received on December 31
           of that year, provided such dividends or distributions are paid by
           the end of the following January.

           For federal income tax purposes, income and capital gains
           distributions are generally taxable to shareholders. However,
           dividends and distributions received by retirement plans qualifying
           for tax exemption under federal income tax laws generally will not
           be taxable.

            YOU CAN CHOOSE HOW TO RECEIVE YOUR DIVIDENDS AND DISTRIBUTIONS. You
            can have them all automatically reinvested in fund shares (at NAV),
            all deposited directly to your bank account or all sent to you by
            check, have one type reinvested and the other sent to you by check
            or have them invested in a different fund. Tell us your preference
            on your application. If you don't indicate a preference, your
            dividends and distributions will all be reinvested in shares of the
            fund without a sales charge (if applicable). Distributions are
            treated the same for federal income tax purposes whether you receive
            them in cash or reinvest them in additional shares. Under the terms
            of employer-sponsored qualified plans, and retirement plans,
            reinvestment (at NAV) is the only option.

           BUYING, SELLING OR EXCHANGING FUND SHARES WILL USUALLY HAVE FEDERAL
           INCOME TAX CONSEQUENCES FOR YOU (except in employer-sponsored
           qualified plans, IRAs or other tax-advantaged accounts). Your sale
           of shares may result in a capital



THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

Because each shareholder's tax situation is unique, ask your tax professional
about the tax consequences of your investments, including any state and local
tax consequences.

                                     Understanding Distributions and Taxes  | 39
<PAGE>

           gain or loss. The gain or loss will be long-term or short-term
           depending on how long you owned the shares that were sold. For
           federal income tax purposes, an exchange is treated the same as a
           sale.

           THE FEDERAL INCOME TAX STATUS of the fund's earnings you receive and
           your own fund transactions generally depends on their type:


<TABLE>
<CAPTION>
GENERALLY TAXED AT LONG-TERM                          GENERALLY TAXED AT ORDINARY
CAPITAL GAIN RATES:                                   INCOME RATES:
<S>                                                   <C>
DISTRIBUTIONS FROM THE FUND
- gains from the sale of                             -  gains from the sale of
  securities held (or treated as                         securities held by the fund for
  held) by the fund for more                             one year or less
  than one year                                       -  all other taxable income
- qualified dividend income
TRANSACTIONS INVOLVING FUND
SHARES
- gains from selling fund                             -  gains from selling fund
  shares held for more than                              shares held for one year or
  one year                                               less
</TABLE>


           ANY DIRECT INVESTMENTS IN FOREIGN SECURITIES BY THE FUND MAY BE
           SUBJECT TO FOREIGN WITHHOLDING TAXES. In that case, the fund's yield
           on those securities would generally be decreased. Shareholders
           generally will not be entitled to claim a credit or deduction with
           respect to foreign taxes paid by the fund. In addition, any
           investments in foreign securities or foreign currencies may increase
           or accelerate the fund's recognition of ordinary income and may
           affect the timing or amount of the fund's distributions. If you
           invest in the fund through a taxable account, your after-tax return
           could be negatively impacted.

           Investments in certain debt obligations or other securities may
           cause the fund to recognize taxable income in excess of the cash
           generated by them. Thus, the fund could be required at times to
           liquidate other investments in order to satisfy its distribution
           requirements.

           For taxable years beginning before January 1, 2011, distributions to
           individuals and other noncorporate shareholders of investment income
           designated by the fund as derived from qualified dividend income are
           eligible for taxation for federal income tax purposes at the more
           favorable long-term capital gain rates. Qualified dividend income
           generally includes


40 | Understanding Distributions and Taxes
<PAGE>

           dividends received by the fund from domestic and some foreign
           corporations. It does not include income from investments in debt
           securities  or, generally, from real estate investment trusts. In
           addition, the fund must meet certain holding period and other
           requirements with respect to the dividend-paying stocks in its
           portfolio and the shareholder must meet certain holding period and
           other requirements with respect to the fund's shares for the lower
           tax rates to apply. The fund does not expect a significant portion
           of its distributions to constitute qualified dividend income.

           For taxable years beginning before January 1, 2011, the maximum
           federal income tax rate imposed on long-term capital gains
           recognized by individuals and other noncorporate shareholders has
           been temporarily reduced to 15%, in general, with lower rates
           applying to taxpayers in the 10% and 15% rate brackets. For taxable
           years beginning on or after January 1, 2011, the maximum long-term
           capital gain rate is scheduled to return to 20%.

           YOUR FUND WILL SEND YOU DETAILED FEDERAL INCOME TAX INFORMATION
           EVERY JANUARY. These statements tell you the amount and the federal
           income tax classification of any dividends or distributions you
           received. They also have certain details on your purchases and sales
           of shares.

           IF YOU INVEST RIGHT BEFORE THE FUND PAYS A DIVIDEND, you'll be
           getting some of your investment back as a taxable dividend. You can
           avoid this by investing after the fund pays a dividend. In tax-
           advantaged retirement accounts you generally do not need to worry
           about this.

           If the fund's distributions exceed its current and accumulated
           earnings and profits, the excess will be treated for federal income
           tax purposes as a tax-free return of capital to the extent of your
           basis in your shares and thereafter as a gain from the sale or
           exchange of your shares. Because a return of capital distribution
           reduces the basis of your shares, a return of capital distribution
           may result in a higher capital gain or a lower capital loss when you
           sell your shares.

           CORPORATIONS are taxed at the same rates on ordinary income and
           capital gains but may be eligible for a dividends-received deduction
           for a portion of the income dividends they receive from the fund,
           provided certain holding period and other requirements are met.


                                     Understanding Distributions and Taxes  | 41
<PAGE>

           The above discussion summarizes certain federal income tax
           consequences for shareholders who are US persons. If you are a
           non-US person, please consult your own tax advisor with respect to
           the US tax consequences to you of an investment in the fund. For
           more information, see "Taxes" in the Statement of Additional
           Information.


42 | Understanding Distributions and Taxes
<PAGE>

APPENDIX
--------------------------------------------------------------------------------
           Hypothetical Expense Summary


           Using the annual fund operating expense ratios presented in the fee
           tables in the fund prospectus, the Hypothetical Expense Summary
           shows the estimated fees and expenses, in actual dollars, that would
           be charged on a hypothetical investment of $10,000 in the fund held
           for the next 10 years and the impact of such fees and expenses on
           fund returns for each year and cumulatively, assuming a 5% return
           for each year. The historical rate of return for the fund may be
           higher or lower than 5% and, for money funds, is typically less than
           5%. The tables also assume that all dividends and distributions are
           reinvested. The annual fund expense ratios shown are net of any
           contractual fee waivers or expense reimbursements, if any, for the
           period of the contractual commitment. The tables do not reflect
           redemption fees, if any, which may be payable upon redemption. If
           redemption fees were shown, the "Hypothetical Year-End Balance After
           Fees and Expenses" amounts shown would be lower and the "Annual Fees
           and Expenses" amounts shown would be higher. Also, please note that
           if you are investing through a third party provider, that provider
           may have fees and expenses separate from those of the fund that are
           not reflected here. Mutual fund fees and expenses fluctuate over
           time and actual expenses may be higher or lower than those shown.

           The Hypothetical Expense Summary should not be used or construed as
           an offer to sell, a solicitation of an offer to buy or a
           recommendation or endorsement of any specific mutual fund. You
           should carefully review the fund's prospectus to consider the
           investment objectives, risks, expenses and charges of the fund prior
           to investing.


                                                                  Appendix  | 43
<PAGE>

DWS Short Duration Plus Fund - Institutional Class



<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        0.54%              4.46%       $ 10,446.00         $  55.20
   2           10.25%        0.54%              9.12%       $ 10,911.89         $  57.67
   3           15.76%        0.54%             13.99%       $ 11,398.56         $  60.24
   4           21.55%        0.54%             19.07%       $ 11,906.94         $  62.92
   5           27.63%        0.54%             24.38%       $ 12,437.99         $  65.73
   6           34.01%        0.54%             29.93%       $ 12,992.72         $  68.66
   7           40.71%        0.54%             35.72%       $ 13,572.20         $  71.73
   8           47.75%        0.54%             41.78%       $ 14,177.52         $  74.92
   9           55.13%        0.54%             48.10%       $ 14,809.83         $  78.27
  10           62.89%        0.54%             54.70%       $ 15,470.35         $  81.76
  TOTAL                                                                         $ 677.10
</TABLE>



44 | Appendix
<PAGE>

TO GET MORE INFORMATION

SHAREHOLDER REPORTS - These include commentary from the fund's management team
about recent market conditions and the effects of the fund's strategies on its
performance. They also have detailed performance figures, a list of everything
the fund owns, and its financial statements. Shareholders get these reports
automatically.

STATEMENT OF ADDITIONAL INFORMATION (SAI) - This tells you more about the
fund's features and policies, including additional risk information. The SAI is
incorporated by reference into this document (meaning that it's legally part of
this prospectus).

For a free copy of any of these documents or to request other information about
the fund, call (800) 730-1313, or contact DWS Investments at the address listed
below. The fund's SAI and shareholder reports are also available through the
DWS Investments Web site at www.dws-investments.com. These documents and other
information about the fund are available from the EDGAR Database on the SEC's
Internet site at www.sec.gov. If you like, you may obtain copies of this
information, after paying a copying fee, by e-mailing a request to
publicinfo@sec.gov or by writing the SEC at the address listed below. You can
also review and copy these documents and other information about the fund,
including the fund's SAI, at the SEC's Public Reference Room in Washington,
D.C. Information on the operation of the SEC's Public Reference Room may be
obtained by calling (800) SEC-0330.


<TABLE>
<CAPTION>
DWS INVESTMENTS      SEC                     DISTRIBUTOR
-----------------    --------------------    ------------------------------
<S>                  <C>                     <C>
PO Box 219210        100 F Street, N.E.      DWS Investments Distributors,
Kansas City, MO      Washington, D.C.        Inc.
64121-9210           20549-0102              222 South Riverside Plaza
WWW.DWS-             WWW.SEC.GOV             Chicago, IL 60606-5808
INVESTMENTS.COM      (800) SEC-0330          (800) 621-1148
(800) 730-1313
</TABLE>



<TABLE>
<S>                    <C>                               <C>
SEC FILE NUMBER:
DWS Advisor Funds        DWS Short Duration Plus Fund    811-04760
</TABLE>





(02/01/09) DSDP-1-IN     [RECYCLE GRAPHIC APPEARS HERE]
                                                                       [Logo]DWS
                                                                      INVESTMENT
                                                             Deutsche Bank Group




<PAGE>


                                FEBRUARY 1, 2009







                                   PROSPECTUS
                              ------------------
                                    CLASS S

                          DWS SHORT DURATION PLUS FUND

As with all mutual funds, the Securities and Exchange Commission (SEC) does not
approve or disapprove these shares or determine whether the information in this
prospectus is truthful or complete. It is a criminal offense for anyone to
inform you otherwise.




                                                 RESHAPING INVESTING. [DWS Logo]
                                                             Deutsche Bank Group


<PAGE>

CONTENTS




<TABLE>
<S>      <C>
HOW THE FUND WORKS
  4      The Fund's Main Investment
         Strategy
  8      The Main Risks of Investing in
         the Fund
 12      The Fund's Performance
         History
 14      How Much Investors Pay
 15      Other Policies and Secondary
         Risks
 16      Who Manages and Oversees
         the Fund
 20      Financial Highlights


</TABLE>
<TABLE>
<S>      <C>
HOW TO INVEST IN THE FUND
 23      How to Buy Class S Shares
 24      How to Exchange or Sell
         Class S Shares
 27      Policies You Should Know
         About
 38      Understanding Distributions
         and Taxes
 43      Appendix
</TABLE>

<PAGE>

HOW THE FUND WORKS

On the next few pages, you'll find information about the fund's investment
objective, the main strategies it uses to pursue that objective and the main
risks that could affect performance.

Whether you are considering investing in the fund or are already a shareholder,
you'll want to LOOK THIS INFORMATION OVER CAREFULLY. You may want to keep it on
hand for reference as well.

CLASS S shares are generally only available to new investors through fee-based
programs of investment dealers that have special agreements with the fund's
distributor, through certain group retirement plans and through certain
registered investment advisors. These dealers and advisors typically charge
ongoing fees for services they provide.

Remember that mutual funds are investments, not bank deposits. They're not
insured or guaranteed by the FDIC or any other government agency. Their share
prices will go up and down, and you could lose money by investing in them.

You can find DWS prospectuses on the Internet at WWW.DWS-INVESTMENTS.COM (the
Web site does not form a part of this prospectus).
<PAGE>


<TABLE>
<S>                                 <C>
                                      Class S
  ticker symbol                       DBPIX
    fund number                       822

    DWS SHORT DURATION PLUS FUND


</TABLE>

            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund's investment objective is to provide high income while
            also seeking to maintain a high degree of stability of
            shareholders' capital.

            The fund invests in securities of varying maturities and normally
            seeks to maintain an average portfolio duration of no longer than
            three years. The fund invests, under normal market conditions, at
            least 65% of its total assets in fixed income securities rated, at
            the time of purchase, within the top four long-term rating
            categories by a nationally recognized statistical rating
            organization (a "NRSRO") (or, if unrated, determined by the fund's
            investment advisor to be of similar quality).

            Fixed income securities in which the fund may invest include the
            following:

            -  US government securities that are issued or guaranteed by the US
               Treasury, or by agencies or instrumentalities of the US
               government. Securities issued by certain agencies and
               instrumentalities of the US government are not guaranteed by the
               US government and are supported solely by the credit of the
               agency or instrumentality.

            -  US dollar-denominated fixed income securities of domestic or
               foreign corporations, foreign governments or supranational
               entities, including adjustable rate loans that have a senior
               right to payment ("Bank Loans"). Because of limitations imposed
               by applicable law, the presence of the fund's investment
               advisor's affiliates in the Bank Loan market may restrict the
               fund's ability to acquire some Bank Loans, affect the timing of
               such acquisition or affect the price at which a Bank Loan is
               acquired.

            -  US dollar-denominated asset-backed securities issued by domestic
               or foreign entities.

4 | DWS Short Duration Plus Fund
<PAGE>

            -  Mortgage pass-through securities issued by governmental and
               non-governmental issuers.

            -  Collateralized mortgage obligations, real estate mortgage
               investment conduits and commercial mortgage-backed securities.

            -  Obligations issued or guaranteed, or backed by securities issued
               or guaranteed, by the US government, or any of its agencies or
               instrumentalities.

            -  Short-term investments, including money market mutual funds. The
               fund invests in short-term investments to meet shareholder
               withdrawals and other liquidity needs. Short-term investments
               will be rated at the time of purchase within one of the top two
               short-term rating categories by a NRSRO or, if unrated,
               determined by the fund's investment advisor to be of similar
               quality.

            The fund may invest up to 10% of its assets in US dollar-
            denominated, domestic and foreign below investment-grade fixed
            income securities (junk bonds) rated in the fifth and sixth
            long-term rating categories by a NRSRO (or, if unrated, determined
            by the fund's investment advisor to be of similar quality),
            including those whose issuers are located in countries with new or
            emerging securities markets. The fund considers an emerging
            securities market to be one where the sovereign debt issued by the
            government in local currency terms is rated below investment-grade.
            A portion of high yield securities purchased for the fund may
            consist of non-US dollar denominated, below investment-grade fixed
            income securities. Compared to investment-grade bonds, junk bonds
            may pay higher yields, have higher volatility and higher risk of
            default on payments of interest or principal.

            The fund can invest up to 15% of its net assets in illiquid
            securities.

            The fund may also invest in and utilize the following investments
            and investment techniques and practices: Rule 144A securities, to
            be announced (TBA) securities, when-issued and delayed delivery
            securities, repurchase agreements, reverse repurchase agreements
            and dollar rolls.

            The fund's investment strategy emphasizes a diversified exposure to
            higher yielding mortgage, corporate and asset-backed sectors of the
            investment-grade fixed income markets. The investment process
            focuses on a top-down approach, first


                                               DWS Short Duration Plus Fund  | 5
<PAGE>

            focusing on sector allocations, then using relative value analysis
            to select the best securities within each sector. To select
            securities, the fund's investment advisor analyzes such factors as
            credit quality, interest rate sensitivity and spread relationships
            between individual bonds.

            The fund primarily invests in fixed income securities that are
            rated, at the time of purchase, within the top four rating
            categories as rated by Moody's Investors Service, Inc., the
            Standard & Poor's Division of The McGraw-Hill Companies, Inc.,
            Fitch, Inc., or another NRSRO, or, if unrated, determined by the
            fund's investment advisor to be of similar quality.

            The fund's investment advisor normally targets an average portfolio
            duration of no longer than three years by investing in fixed income
            securities with short- to intermediate-term maturities. Generally,
            rates of short-term investments fluctuate less than rates of
            longer-term investments.

            DERIVATIVE INSTRUMENTS. The fund may invest in various instruments
            commonly known as "derivatives" to increase its exposure to certain
            groups of securities. The derivatives that the fund may use
            include, among others, futures contracts, forward contracts and
            options on forward contracts. The fund may use derivatives to keep
            cash on hand to meet shareholder redemptions, as a hedging strategy
            to maintain a specific portfolio duration, or to protect against
            market risk. When employing the global tactical asset allocation
            overlay strategy mentioned below (also known as integrated Global
            Alpha Platform or iGAP) the fund also may use derivatives for
            leveraging, which is a way to attempt to enhance returns. The fund
            will only use these instruments if portfolio management believes
            that their return potential more than compensates for the extra
            risks associated with using them.

            In an attempt to enhance return, the fund also employs a global
            tactical asset allocation overlay strategy (iGAP), which invests in
            instruments across domestic and international fixed income and
            currency markets.

            Through the global asset allocation investment strategy, the
            portfolio managers seek to enhance the fund's return by shifting
            investment weightings among global bond and currency markets in an
            effort to capture short- and medium-term market moves. The
            portfolio managers take the investment views of Deutsche Asset
            Management's bond, asset allocation and currency teams located
            around the world


6 | DWS Short Duration Plus Fund
<PAGE>

            and combine them using a structured, disciplined portfolio
            construction and risk management process. The end result is a
            portfolio of bond and currency positions intended to generate
            returns for the fund that exceed those that could be achieved
            without the global asset allocation strategy, although there can be
            no guarantee that such result will be achieved. Because the global
            asset allocation strategy focuses on short- and medium-term market
            moves, the managers expect to change the fund's investment
            weightings frequently.

            In implementing the global asset allocation strategy, the fund
            invests in options and futures based on any type of security or
            index, including options and futures traded on foreign exchanges.
            Some options and futures strategies, including selling futures,
            buying puts and writing calls, hedge the fund's investments against
            price fluctuations. Other strategies, including buying futures,
            writing puts and buying calls, tend to increase and will broaden
            the fund's market exposure. Options and futures may be combined
            with each other, or with forward contracts, in order to adjust the
            risk and return characteristics of an overall strategy.

            The fund may also enter into forward currency exchange contracts
            (agreements to exchange one currency for another at a future date),
            may buy and sell options and futures contracts relating to foreign
            currencies and may purchase securities indexed to foreign
            currencies. Currency management strategies allow the fund to shift
            investment exposure from one currency to another or to attempt to
            profit from anticipated declines in the value of a foreign currency
            relative to the US dollar. Successful implementation of the global
            asset allocation strategy depends on portfolio management's
            judgment as to the potential risks and rewards of implementing the
            different types of strategies.

            SECURITIES LENDING. The fund may lend its investment securities in
            an amount up to 33 1/3% of its total assets to approved
            institutional borrowers who need to borrow securities in order to
            complete certain transactions.


                                               DWS Short Duration Plus Fund  | 7
<PAGE>

            THE MAIN RISKS OF INVESTING IN THE FUND

            There are several risk factors that could hurt the fund's
            performance, cause you to lose money or cause the fund's
            performance to trail that of other investments.

            INTEREST RATE RISK. Generally, fixed income securities will
            decrease in value when interest rates rise. The longer the duration
            of the fund's securities, the more sensitive the fund will be to
            interest rate changes. (As a general rule, a 1% rise in interest
            rates means a 1% fall in value for every year of duration.) As
            interest rates decline, the issuers of securities held by the fund
            may prepay principal earlier than scheduled, forcing the fund to
            reinvest in lower-yielding securities and may reduce the fund's
            income. As interest rates increase, slower than expected principal
            payments may extend the average life of fixed income securities.
            This will have the effect of locking in a below-market interest
            rate, thereby further reducing the value of such a security.

            CREDIT RISK. A fund purchasing debt securities faces the risk that
            the creditworthiness of an issuer may decline, causing the value of
            the debt securities to decline. In addition, an issuer may not be
            able to make timely payments on the interest and/
            or principal on the debt security it has issued. Because the
            issuers of high-yield debt securities or junk bonds (debt
            securities rated below the fourth highest category) may be in
            uncertain financial health, the prices of their debt securities can
            be more vulnerable to bad economic news or even the expectation of
            bad news, than investment-grade debt securities. In some cases,
            debt securities, particularly high-yield debt securities, may
            decline in credit quality or go into default. Because the fund may
            invest in securities not paying current interest or in securities
            already in default, these risks may be more pronounced.

            MARKET RISK. Deteriorating market conditions might cause a general
            weakness in the market that reduces the prices of securities in
            that market. Developments in a particular class of debt securities
            or the stock market could also adversely affect the fund by
            reducing the relative attractiveness of debt securities as an
            investment. Also, to the extent that the fund emphasizes debt
            securities from any given industry, it could be hurt if that
            industry does not do well.


8 | DWS Short Duration Plus Fund
<PAGE>

            SECURITY SELECTION RISK. A risk that pervades all investing is the
            risk that the securities in the fund's portfolio may decline in
            value.

            LIQUIDITY RISK. Liquidity risk is the risk that a security cannot
            be sold quickly at a price that reflects the fund's estimate of its
            value.

            PRICING RISK. At times, market conditions may make it difficult to
            value some investments, and the fund may use certain valuation
            methodologies for some of its investments, such as fair value
            pricing. Given the subjective nature of such valuation
            methodologies, it is possible that the value determined for an
            investment may be different than the value realized upon such
            investment's sale. If the fund has valued its securities too
            highly, you may pay too much for fund shares when you buy into the
            fund. If the fund has underestimated the price of its securities,
            you may not receive the full market value when you sell your fund
            shares.

            SECURITIES LENDING RISK. Any loss in the market price of securities
            loaned by the fund that occurs during the term of the loan would be
            borne by the fund and would adversely affect the fund's
            performance. Also, there may be delays in recovery of securities
            loaned or even a loss of rights in the collateral should the
            borrower of the securities fail financially while the loan is
            outstanding. However, loans will be made only to borrowers selected
            by the fund's delegate after a review of relevant facts and
            circumstances, including the creditworthiness of the borrower.

            iGAP RISK. The success of the iGAP strategy depends, in part, on
            the Advisor's ability to analyze the correlation between various
            global markets and asset classes. If the Advisor's correlation
            analysis proves to be incorrect, losses to thefund may be
            significant and may substantially exceed the intended level of
            market exposure for the iGAP strategy.

            DERIVATIVES RISK. Risks associated with derivatives include the
            risk that the derivative is not well correlated with the security,
            index or currency to which it relates; the risk that derivatives
            may result in losses or missed opportunities; the risk that the
            fund will be unable to sell the derivative because of an illiquid
            secondary market; the risk that a counterparty is unwilling or
            unable to meet its obligation; and the risk that the derivative
            transaction could expose the fund to the effects of leverage, which
            could increase the fund's exposure to the market and


                                               DWS Short Duration Plus Fund  | 9
<PAGE>

            magnify potential losses. There is no guarantee that derivatives,
            to the extent employed, will have the intended effect, and their
            use could cause lower returns or even losses to the fund. The use
            of derivatives by the fund to hedge risk may reduce the opportunity
            for gain by offsetting the positive effect of favorable price
            movements.

            FOREIGN INVESTMENT RISK. Foreign investments involve certain
            special risks, including:

            -  POLITICAL RISK. Some foreign governments have limited the
               outflow of profits to investors abroad, imposed restrictions on
               the exchange or export of foreign currency, extended diplomatic
               disputes to include trade and financial relations, seized
               foreign investments and imposed higher taxes.

            -  INFORMATION RISK. Companies based in foreign markets are usually
               not subject to accounting, auditing and financial reporting
               standards and practices as stringent as those in the US.
               Therefore, their financial reports may present an incomplete,
               untimely or misleading picture of a company, as compared to the
               financial reports required in the US.

            -  LIQUIDITY RISK. Investments that trade less frequently can be
               more difficult or more costly to buy, or to sell, than more
               liquid or active investments. This liquidity risk is a factor of
               the trading volume of a particular investment, as well as the
               size and liquidity of the entire local market. On the whole,
               foreign exchanges are smaller and less liquid than US exchanges.
               This can make buying and selling certain investments more
               difficult and costly. Relatively small transactions in some
               instances can have a disproportionately large effect on the
               price and supply of securities. In certain situations, it may
               become virtually impossible to sell an investment in an orderly
               fashion at a price that approaches portfolio management's
               estimate of its value. For the same reason, it may at times be
               difficult to value the fund's foreign investments.

            -  REGULATORY RISK. There is generally less government regulation
               of foreign markets, companies and securities dealers than in the
               US.

10 | DWS Short Duration Plus Fund
<PAGE>

            -  CURRENCY RISK. The fund invests in securities denominated in
               foreign currencies. Changes in exchange rates between foreign
               currencies and the US dollar may affect the US dollar value of
               foreign securities or the income or gain received on these
               securities.

            -  LIMITED LEGAL RECOURSE RISK. Legal remedies for investors may be
               more limited than the legal remedies available in the US.

            -  TRADING PRACTICE RISK. Brokerage commissions and other fees are
               generally higher for foreign investments than for US
               investments. The procedures and rules governing foreign
               transactions and custody may also involve delays in payment,
               delivery or recovery of money or investments.

            -  TAXES. Foreign withholding and certain other taxes may reduce
               the amount of income available to distribute to shareholders of
               the fund. In addition, special US tax considerations may apply
               to the fund's foreign investments.


                                              DWS Short Duration Plus Fund  | 11
<PAGE>

THE FUND'S PERFORMANCE HISTORY

While a fund's past performance (before and after taxes) isn't necessarily a
sign of how it will do in the future, it can be valuable for an investor to
know.

The bar chart shows how the performance of the fund's Class S shares has varied
from year to year, which may give some idea of risk. The table on the following
page shows how fund performance compares to relevant index performance (which,
unlike fund performance, does not reflect fees or expenses). The performance of
the fund and the index information varies over time. All figures assume
reinvestment of dividends and distributions (in the case of after-tax returns,
reinvested net of assumed tax rates).

The table shows returns for Class S shares on a before-tax and after-tax basis.
After-tax returns are estimates calculated using the historical highest
marginal individual federal income tax rates and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on an investor's tax
situation and may differ from those shown in the table. After-tax returns shown
are not relevant for investors who hold their shares through tax-deferred
arrangements, such as 401(k) plans or individual retirement accounts.

Prior to October 23, 2006, Class S was known as Investment Class. Prior to
November 17, 2004, the fund had a different objective, strategies, fees and
expenses. Consequently, the fund's past performance prior to this time may have
been different if the current strategy had been in place.

DWS Short Duration Plus Fund

ANNUAL TOTAL RETURN (%) AS OF 12/31 EACH YEAR - Class S



<TABLE>
<S>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>     <C>
 5.99      6.74      6.14      5.01      4.01      6.53      2.56      5.73     5.48    -6.86
1999      2000      2001      2002      2003      2004*     2005      2006      2007    2008
</TABLE>





<TABLE>
<CAPTION>
FOR THE PERIODS INCLUDED IN THE BAR CHART:
<S>                                        <C>
BEST QUARTER: 3.35% Q4 2004                WORST QUARTER: -5.08% Q4 2008
</TABLE>


 *   The return for the year 2004 includes the effect of the conversion of the
     fund from a stable value fund to a short-term bond fund. In the absence of
     such conversion, the return would have been lower.

12 | DWS Short Duration Plus Fund
<PAGE>

AVERAGE ANNUAL TOTAL RETURNS (%) as of 12/31/2008


<TABLE>
<CAPTION>
                                              1 YEAR       5 YEARS      10 YEARS
<S>                                         <C>           <C>          <C>
 CLASS S
   Return before Taxes                         -6.86         2.57         4.06
   Return after Taxes on Distributions         -8.41         1.14         2.76
   Return after Taxes on Distributions
   and Sale of Fund Shares                     -4.41*        1.56*        2.97*
 BARCLAYS CAPITAL 1-3 YEAR
 GOVERNMENT/CREDIT INDEX (reflects
 no deductions for fees, expenses or
 taxes)                                        4.97          3.81         4.79
</TABLE>


 *   Return after Taxes on Distributions and Sale of Fund Shares is higher than
     other return figures for the same period due to a capital loss occurring
     upon redemption resulting in an assumed tax deduction for the shareholder.

 In both the chart and the table, total returns would have been lower if
 operating expenses hadn't been reduced.

 BARCLAYS CAPITAL 1-3 YEAR GOVERNMENT/CREDIT INDEX (name changed from Lehman
 Brothers 1-3 Year Government/Credit Index effective November 3, 2008) is an
 unmanaged index consisting of all US government agency and Treasury
 securities, as well as all investment grade corporate debt securities with
 maturities of one to three years.


--------------------------------------------------------------------------------
Current performance may be higher or lower than the performance data quoted
above. For more recent performance information, call your financial advisor or
(800) 728-3337 or visit our Web site at www.dws-investments.com.


--------------------------------------------------------------------------------
Return information assumes that fund shares were sold at the end of the period.


RETURN AFTER TAXES ON DISTRIBUTIONS reflects taxes only on the fund's
distributions and not on a shareholder's gain or loss from selling fund shares.


RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES reflects taxes on
both the fund's distributions and a shareholder's gain or loss from selling
fund shares.


                                              DWS Short Duration Plus Fund  | 13
<PAGE>

HOW MUCH INVESTORS PAY

The table below describes the fees and expenses that you may pay if you buy and
hold fund shares. This information doesn't include any fees that may be charged
by your financial advisor.


<TABLE>
<CAPTION>
FEE TABLE                                            CLASS S
<S>                                        <C>
 SHAREHOLDER FEES, paid directly from your investment
 Redemption/Exchange Fee on shares
 owned less than 15 days (as % of
 redemption proceeds)1                                 2.00%

 ANNUAL OPERATING EXPENSES, deducted from fund assets
 Management Fee                                        0.36%
 Distribution/Service (12b-1) Fee                     None
 Other Expenses2                                       0.35
 TOTAL ANNUAL OPERATING EXPENSES 3, 4                  0.71
</TABLE>


1   This fee is charged on applicable redemptions or exchanges. Please see
   "Policies You Should Know About - Policies about transactions" for further
   information.

2   "Other Expenses" includes an administrative service fee paid to the Advisor
   in the amount of 0.10%.

3   The investment advisor has contractually agreed through September 30, 2009
   to waive a portion of its fees and reimburse expenses so that total annual
   operating expenses will not exceed 0.64% for Class S shares, excluding
   certain expenses such as extraordinary expenses, taxes, brokerage and
   interest.

4   In addition, the investment advisor has contractually agreed through April
   22, 2010 to waive a portion of its fees and reimburse expenses so that
   total annual operating expenses will not exceed 0.73% for Class S shares,
   excluding certain expenses such as extraordinary expenses, taxes, brokerage
   and interest.

Based on the costs above, this example helps you compare the expenses of the
fund's Class S shares to those of other mutual funds. This example assumes the
expenses above remain the same. It also assumes that you invested $10,000,
earned 5% annual returns and reinvested all dividends and distributions. This
is only an example; actual expenses will be different.


<TABLE>
<CAPTION>
EXAMPLE               1 YEAR      3 YEARS      5 YEARS      10 YEARS
<S>                  <C>         <C>          <C>          <C>
 Class S shares         $73         $227         $395         $883
</TABLE>



14 | DWS Short Duration Plus Fund
<PAGE>

OTHER POLICIES AND SECONDARY RISKS

           While the previous pages describe the main points of the fund's
           strategy and risks, there are a few other issues to know about:

           -  Although major changes tend to be infrequent, the fund's Board
              could change the fund's investment objective without seeking
              shareholder approval.

           -  As a temporary defensive measure, the fund could shift up to 100%
              of assets into investments such as money market securities. This
              could prevent losses, but, while engaged in a temporary defensive
              position, the fund will not be pursuing its investment objective.
              However, portfolio management may choose not to use these
              strategies for various reasons, even in volatile market
              conditions.

           -  The fund may trade actively. This could raise transaction costs
              (thus lowering return) and could mean increased taxable
              distributions to shareholders and distributions that will be
              taxable to shareholders at higher federal income tax rates.

           -  Certain DWS fund-of-funds are permitted to invest in the fund. As
              a result, the fund may have large inflows or outflows of cash
              from time to time. This could have adverse effects on the fund's
              performance if the fund were required to sell securities or
              invest cash at times when it otherwise would not do so. This
              activity could also accelerate the realization of capital gains
              and increase the fund's transaction costs. The Advisor will
              monitor the impact of these transactions and the fund may
              discontinue such arrangements if they are not deemed to be in the
              best interests of the fund.

           Prior to January 13, 2006, the fund operated pursuant to a
           master/feeder structure under which the fund invested all of its
           assets in a master portfolio (the "Portfolio").


           Secondary risks

           IPO RISK. Securities purchased in initial public offerings (IPOs)
           may be very volatile. The price of such securities may rise and fall
           rapidly, often based, among other reasons, on investor perceptions
           rather than economic reasons. Additionally, investments in IPOs may
           magnify the fund's performance if it has a small asset base. The
           fund is less likely to experience a similar impact on its
           performance as its assets grow because it is unlikely that the fund
           will obtain proportionately larger IPO allocations.


                                        Other Policies and Secondary Risks  | 15
<PAGE>

           For more information

           This prospectus doesn't tell you about every policy or risk of
           investing in the fund.

           If you want more information on the fund's allowable securities and
           investment practices and the characteristics and risks of each one,
           you may want to request a copy of the Statement of Additional
           Information (the back cover tells you how to do this).

           Keep in mind that there is no assurance that the fund will achieve
           its objective.

           A complete list of the fund's portfolio holdings as of the month-end
           is posted on www.dws-investments.com on or about the 15th day of the
           following month. More frequent posting of portfolio holdings
           information may be made from time to time on
           www.dws-investments.com. The posted portfolio holdings information
           is available by fund and generally remains accessible at least until
           the date on which the fund files its Form N-CSR or N-Q with the
           Securities and Exchange Commission for the period that includes the
           date as of which the posted information is current. The fund's
           Statement of Additional Information includes a description of the
           fund's policies and procedures with respect to the disclosure of the
           fund's portfolio holdings.


WHO MANAGES AND OVERSEES THE FUND


           The investment advisor

           Deutsche Investment Management Americas Inc. ("DIMA" or the
           "Advisor"), with headquarters at 345 Park Avenue, New York, NY
           10154, is the investment advisor for the fund. Under the oversight
           of the Board, the Advisor makes investment decisions, buys and sells
           securities for the fund and conducts research that leads to these
           purchase and sale decisions. The Advisor provides a full range of
           global investment advisory services to institutional and retail
           clients.

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


16 | Who Manages and Oversees the Fund
<PAGE>

           Deutsche Asset Management is a global asset management organization
           that offers a wide range of investing expertise and resources,
           including hundreds of portfolio managers and analysts and an office
           network that reaches the world's major investment centers. This
           well-resourced global investment platform brings together a wide
           variety of experience and investment insight across industries,
           regions, asset classes and investing styles.

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

           MANAGEMENT FEE. The Advisor receives a management fee from the fund.
           Below is the actual rate paid by the fund for the most recent fiscal
           year, as a percentage of the fund's average daily net assets.


<TABLE>
<CAPTION>
FUND NAME                                     FEE PAID
<S>                                          <C>
  DWS Short Duration Plus Fund                  0.36%
</TABLE>


           A discussion regarding the basis for the Board's approval of the
           fund's investment management agreement is contained in the most
           recent shareholder report for the annual period ended September 30
           (see "Shareholder reports" on the back cover).

           Under a separate administrative services agreement between the fund
           and the Advisor, the fund pays the Advisor a fee for providing most
           of the fund's administrative services.


                                         Who Manages and Oversees the Fund  | 17
<PAGE>

Portfolio management

DWS Short Duration Plus Fund is managed by a team of investment professionals
who collaborate to develop and implement the fund's investment strategy. Each
portfolio manager has authority over all aspects of the fund's investment
portfolio, including, but not limited to, purchases and sales of individual
securities, portfolio construction techniques, portfolio risk assessment, and
the management of daily cash flows in accordance with portfolio holdings.

The following people handle the day-to-day management of the fund.

William Chepolis, CFA
Managing Director of Deutsche Asset Management and Portfolio Manager of the
fund.
-  Joined Deutsche Asset Management in 1998 after 13 years of experience as
   vice president and portfolio manager for Norwest Bank, where he managed the
   bank's fixed income and foreign exchange portfolios.
-  Portfolio Manager for Retail Fixed Income: New York.
-  Joined the fund in 2002.
-  BIS, University of Minnesota.

Matthew F. MacDonald
Director of Deutsche Asset Management and Portfolio Manager of the fund.
-  Joined Deutsche Asset Management and the fund in 2006 after 14 years of
   fixed income experience at Bank of America Global Structured Products and
   PPM America, Inc., where he was portfolio manager for public fixed income,
   including MBS, ABS, CDOs and corporate bonds; earlier, as an analyst for
   MBS, ABS and money markets; and originally, at Duff & Phelps Credit Rating
   Company.
-  Portfolio Manager for Retail Fixed Income: New York.
-  BA, Harvard University; MBA, University of Chicago Graduate School of
   Business.

Eric S. Meyer, CFA
Managing Director of Deutsche Asset Management and Portfolio Manager of the
fund.
-  Joined Deutsche Asset Management in 2006 after 16 years of experience in
   positions of increasing responsibility in corporate banking with First
   Chicago, Credit Agricole, and most recently, Bank of America's subsidiary,
   Flagship Capital Management. Prior to his corporate banking experience, he
   worked in trust management operations for 10 years at First Chicago and
   E.F. Hutton.
-  Head of US Loan Portfolio Management, High Yield Strategies: New York.
-  Joined the fund in 2008.
-  BA from State University of New York, Albany; MBA from Pace University.

Thomas Picciochi
Director of Deutsche Asset Management and Portfolio Manager of the fund.
-  Joined Deutsche Asset Management in 1999, formerly serving as portfolio
   manager for Absolute Return Strategies, after 13 years of experience in
   various research and analysis positions at State Street Global Advisors,
   FPL Energy, Barnett Bank, Trade Finance Corporation and Reserve Financial
   Management.
-  Senior Portfolio Manager for Quantitative Strategies: New York.
-  Joined the fund in 2007.
-  BA and MBA, University of Miami.

18 | Who Manages and Oversees the Fund
<PAGE>

Gary Sullivan, CFA
Director of Deutsche Asset Management and Portfolio Manager of the fund.
- Joined Deutsche Asset Management in 1996 and the fund in 2006. Served as the
   head of the High Yield group in Europe and as an Emerging Markets portfolio
   manager.
- Prior to that, four years at Citicorp as a research analyst and structurer of
   collateralized mortgage obligations. Prior to Citicorp, served as an
   officer in the US Army from 1988 to 1991.
- BS, United States Military Academy (West Point); MBA, New York University,
   Stern School of Business.

Robert Wang
Managing Director of Deutsche Asset Management and Portfolio Manager of the
fund.
- Joined Deutsche Asset Management in 1995 as portfolio manager for asset
   allocation after 13 years of experience of trading fixed income, foreign
   exchange and derivative products at J.P. Morgan.
- Global Head of Quantitative Strategies Portfolio Management: New York.
- Joined the fund in 2005.
- BS, The Wharton School, University of Pennsylvania.

The fund's Statement of Additional Information provides additional information
about a portfolio manager's investments in the fund, a description of the
portfolio management compensation structure and information regarding other
accounts managed.


                                         Who Manages and Oversees the Fund  | 19
<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights are designed to help you understand recent financial
performance. The figures in the first part of the table are for a single share.
The total return figures represent the percentage that an investor in the fund
would have earned (or lost), assuming all dividends and distributions were
reinvested. This information has been audited by PricewaterhouseCoopers LLP,
independent registered public accounting firm, whose report, along with the
fund's financial statements, is included in the fund's annual report (see
"Shareholder reports" on the back cover). Investors should note that the fund's
performance before November 17, 2004 was obtained while the fund had a
different investment objective and different investment strategies, fees and
expenses. Information for the periods ended prior to September 30, 2005 was
audited by a different independent registered public accounting firm.


20 | Financial Highlights
<PAGE>

DWS Short Duration Plus Fund - Class S+


<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER
30,                                  2008          2007           2006            2005 a           2004
<S>                               <C>           <C>           <C>             <C>              <C>
SELECTED PER SHARE DATA
--------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD                          $  9.95       $  9.89        $  9.93         $  10.00         $ 10.00
------------------------------     -------       -------        -------         --------         -------
Income (loss) from
investment operations:
  Net investment income b              .40           .39            .35              .33             .40
______________________________     _______       _______        _______         ________         _______
  Net realized and unrealized
  gain (loss)                        ( .45)          .16            .11              .19          (  .00)*
------------------------------     -------       -------        -------         --------         -------
  TOTAL FROM INVESTMENT
  OPERATIONS                         ( .05)          .55            .46              .52             .40
______________________________     _______       _______        _______         ________         _______
Less distributions from:
  Net investment income              ( .49)        ( .43)         ( .38)          (  .34)         (  .40)
______________________________     _______       _______        _______         ________         _______
  Net realized gains                 ( .05)        ( .06)         ( .12)          (  .25)         (  .16)
______________________________     _______       _______        _______         ________         _______
  Reverse stock split c                  -             -              -                -             .16
______________________________     _______       _______        _______         ________         _______
  TOTAL DISTRIBUTIONS                ( .54)        ( .49)         ( .50)          (  .59)         (  .40)
______________________________     _______       _______        _______         ________         _______
Redemption fees                        .00*          .00*           .00*             .00*              -
------------------------------     -------       -------        -------         --------         -------
NET ASSET VALUE, END OF
PERIOD                             $  9.36       $  9.95        $  9.89         $   9.93         $ 10.00
------------------------------     -------       -------        -------         --------         -------
Total Return (%)d                    ( .62)         5.79           4.80             5.28            4.12
------------------------------     -------       -------        -------         --------         -------

RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
--------------------------------------------------------------------------------------------------------------
Net assets, end of period ($
millions)                              869           879            287              518           1,584
______________________________     _______       _______        _______         ________         _______
Ratio of expenses before
expense reductions                     .71           .79         1.27e            1.38e          1.50e
______________________________     _______       _______        _______         ________         _______
Ratio of expenses after
expense reductions                     .67           .73          .88e            .90e           1.00e
______________________________     _______       _______        _______         ________         _______
Ratio of net investment
income (%)                            4.08          3.97           3.61             3.26            4.11
______________________________     _______       _______        _______         ________         _______
Portfolio turnover rate                 83            57          129f               298             120
------------------------------     -------       -------        -------         --------         -------
</TABLE>


+  On October 23, 2006, Investment Class was renamed Class S.

a   Effective November 17, 2004, the Fund converted from a stable value fund to
   a short-term bond fund. The return for the Fund includes a one-time
   adjustment of 2.7% related to the conversion and in the absence of the
   conversion, the return would have been lower.

b   Based on average shares outstanding during the period.

c   See Note E in Notes to Financial Statements in the Annual Report to
shareholders.

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

e   Includes expenses allocated from Scudder Limited-Duration Plus Portfolio.

f   On January 13, 2006, the Scudder Limited-Duration Plus Portfolio was
   closed. This ratio includes the purchase and sale of portfolio securities
   of the DWS Short Duration Plus Fund as a stand-alone fund in addition to
   the Scudder Limited-Duration Plus Portfolio.

*   Amount is less than $.005.

                                                      Financial Highlights  | 21
<PAGE>

HOW TO INVEST IN THE FUND
THE FOLLOWING PAGES TELL YOU HOW TO INVEST IN THE FUND AND WHAT TO EXPECT AS A
SHAREHOLDER. The following pages also tell you about many of the services,
choices and benefits of being a shareholder. You'll also find information on
how to check the status of your account using the method that's most convenient
for you.

If you're investing directly with DWS Investments, all of this information
applies to you. If you're investing through a "third party provider" - for
example, a workplace retirement plan, financial supermarket or financial
advisor - your provider may have its own policies or instructions and you
should follow those.

Please remember, CLASS S shares are generally only available to new investors
through fee-based programs of investment dealers that have special agreements
with the fund's distributor, through certain group retirement plans and through
certain registered investment advisors. These dealers and advisors typically
charge ongoing fees for services they provide.

You can find out more about the topics covered here by speaking with your
FINANCIAL ADVISOR OR A REPRESENTATIVE OF YOUR WORKPLACE RETIREMENT PLAN OR
OTHER INVESTMENT PROVIDER.

<PAGE>

How to BUY Class S Shares



<TABLE>
<CAPTION>
 FIRST INVESTMENT                              ADDITIONAL INVESTMENTS
<S>                                           <C>
 $2,500 or more for regular accounts           $50 or more for regular accounts and
 $1,000 or more for IRAs and UTMAs/           IRAs
 UGMAs                                        $50 or more for an account with an
 $1,000 or more for an account with an        Automatic Investment Plan
 Automatic Investment Plan
 BY MAIL OR EXPRESS MAIL (SEE BELOW)
                                              Send a DWS Investments investment
 -  Fill out and sign an application
                                              slip or short note that includes:
 -  Send it to us at the appropriate
                                              -  fund and class name
  address, along with an investment
  check made payable to "DWS                  -  account number
  Investments"                                -  check made payable to "DWS
                                              Investments"
 BY WIRE
 -  Call (800) 728-3337 for instructions      -  Call (800) 728-3337 for instructions
 BY PHONE
 Not available                                -  Call (800) 728-3337 for instructions
 WITH AN AUTOMATIC INVESTMENT PLAN
 -  Fill in the information on your           -  To set up regular investments from a
  application including a check for the       bank checking account, call
  initial investment and a voided check       (800) 728-3337 (minimum $50)
 USING QuickBuy
 Not available                                -  Call (800) 728-3337 to make sure
                                              QuickBuy is set up on your account; if
                                              it is, you can request a transfer from
                                              your bank account of any amount
                                              between $50 and $250,000
 ON THE INTERNET
 -  Register at                               -  Call (800) 728-3337 to ensure you have
  www.dws-investments.com or log in if        electronic services
  already registered                          -  Register at www.dws-
 -  Print out a prospectus and a new          investments.com
  account application                         or log in if already registered
 -  Complete and return the application       -  Follow the instructions for buying
  with your check                             shares with money from your bank
                                              account
</TABLE>


--------------------------------------------------------------------------------
REGULAR MAIL:

First Investment: DWS Investments, PO Box 219356, Kansas City, MO 64121-9356
Additional Investments: DWS Investments, PO Box 219154, Kansas City, MO
64121-9154

EXPRESS, REGISTERED OR CERTIFIED MAIL:
DWS Investments, 210 West 10th Street, Kansas City, MO 64105-1614


                                                 How to Buy Class S Shares  | 23
<PAGE>

How to EXCHANGE or SELL Class S Shares



<TABLE>
<CAPTION>
 EXCHANGING INTO ANOTHER FUND                    SELLING SHARES
<S>                                             <C>
                                                 Some transactions, including most for
 -  Exchanges into existing accounts:
                                                over $100,000, can only be ordered in
  $50 minimum per fund
                                                writing with a signature guarantee;
 -  Exchanges into new accounts:
                                                please see "Signature Guarantee"
  $2,500 minimum per fund
  $1,000 minimum for IRAs and UTMAs/
  UGMAs
 BY PHONE                                        BY PHONE OR WIRE
 -  Call (800) 728-3337 for instructions        -  Call (800) 728-3337 for instructions
 USING THE AUTOMATED INFORMATION LINE
 -  Call (800) 728-3337 for instructions        -  Call (800) 728-3337 for instructions
 BY MAIL OR EXPRESS MAIL
 (see previous page for address)
 Your instructions should include:              Your instructions should include:
 -  the fund, class and account number          -  the fund, class and account number
  you're exchanging out of                      from which you want to sell shares
 -  the dollar amount or number of shares       -  the dollar amount or number of shares
  you want to exchange                          you want to sell
 -  the name and class of the fund you          -  your name(s), signature(s) and
  want to exchange into                         address, as they appear on your
                                                account
 -  your name(s), signature(s) and
  address, as they appear on your               -  a daytime telephone number
  account
 -  a daytime telephone number
 WITH AN AUTOMATIC EXCHANGE PLAN                 WITH AN AUTOMATIC WITHDRAWAL PLAN
 -  To set up regular exchanges from a          -  To set up regular cash payments from
  fund account, call (800) 728-3337             a DWS fund account, call
                                                (800) 728-3337
 USING QuickSell
 Not available                                  -  Call (800) 728-3337 to make sure
                                                QuickSell is set up on your account; if
                                                it is, you can request a transfer to your
                                                bank account of any amount between
                                                $50 and $250,000
 ON THE INTERNET
 -  Register at www.dws-                        -  Register at www.dws-
  investments.com or log in if already          investments.com or log in if already
  registered                                    registered
 -  Follow the instructions for making on-      -  Follow the instructions for making on-
  line exchanges                                line redemptions
</TABLE>


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

<TABLE>
<S>               <C>
TO REACH US:      WEB SITE: www.dws-investments.com
                  TELEPHONE REPRESENTATIVE: (800) 728-3337, M-F, 9 a.m. - 6 p.m. ET
                  TDD LINE: (800) 972-3006, M-F, 9 a.m.- 6 p.m. ET
</TABLE>



24 | How to Sell or Exchange Class S Shares
<PAGE>

           Financial intermediary support payments

           The Advisor, DWS Investments Distributors, Inc. (the "Distributor")
           and/or their affiliates may pay additional compensation, out of
           their own assets and not as an additional charge to the fund, to
           selected affiliated and unaffiliated brokers, dealers, participating
           insurance companies or other financial intermediaries ("financial
           advisors") in connection with the sale and/or distribution of fund
           shares or the retention and/or servicing of fund investors and fund
           shares ("revenue sharing"). Such revenue sharing payments are in
           addition to any distribution or service fees payable under any Rule
           12b-1 or service plan of the fund, any record keeping/sub-transfer
           agency/networking fees payable by the fund (generally through the
           Distributor or an affiliate) and/or the Distributor to certain
           financial advisors for performing such services and any sales
           charge, commissions, non-cash compensation arrangements expressly
           permitted under applicable rules of the Financial Industry
           Regulatory Authority or other concessions described in the fee table
           or elsewhere in this prospectus or the Statement of Additional
           Information as payable to all financial advisors. For example, the
           Advisor, the Distributor and/or their affiliates may compensate
           financial advisors for providing the fund with "shelf space" or
           access to a third party platform or fund offering list or other
           marketing programs, including, without limitation, inclusion of the
           fund on preferred or recommended sales lists, mutual fund
           "supermarket" platforms and other formal sales programs; granting
           the Distributor access to the financial advisor's sales force;
           granting the Distributor access to the financial advisor's
           conferences and meetings; assistance in training and educating the
           financial advisor's personnel; and obtaining other forms of
           marketing support.

           The level of revenue sharing payments made to financial advisors may
           be a fixed fee or based upon one or more of the following factors:
           gross sales, current assets and/or number of accounts of the fund
           attributable to the financial advisor, the particular fund or fund
           type or other measures as agreed to by the Advisor, the Distributor
           and/or their affiliates and the financial advisors or any
           combination thereof. The amount of these revenue sharing payments is
           determined at the discretion of the Advisor, the Distributor and/or
           their affiliates from time to time, may be substantial, and may be
           different for different financial advisors based on, for example,
           the nature of the services provided by the financial advisor.


                                    How to Sell or Exchange Class S Shares  | 25
<PAGE>

           The Advisor, the Distributor and/or their affiliates currently make
           revenue sharing payments from their own assets in connection with
           the sale and/or distribution of DWS fund shares or the retention
           and/or servicing of investors and DWS fund shares to financial
           advisors in amounts that generally range from .01% up to .50% of
           assets of the fund serviced and maintained by the financial advisor,
           .05% to .25% of sales of the fund attributable to the financial
           advisor, a flat fee of $13,350 up to $500,000, or any combination
           thereof. These amounts are subject to change at the discretion of
           the Advisor, the Distributor and/or their affiliates. Receipt of, or
           the prospect of receiving, this additional compensation may
           influence your financial advisor's recommendation of the fund or of
           any particular share class of the fund. You should review your
           financial advisor's compensation disclosure and/or talk to your
           financial advisor to obtain more information on how this
           compensation may have influenced your financial advisor's
           recommendation of the fund. Additional information regarding these
           revenue sharing payments is included in the fund's Statement of
           Additional Information, which is available to you on request at no
           charge (see the back cover of this prospectus for more information
           on how to request a copy of the Statement of Additional
           Information).

           The Advisor, the Distributor and/or their affiliates may also make
           such revenue sharing payments to financial advisors under the terms
           discussed above in connection with the distribution of both DWS
           funds and non-DWS funds by financial advisors to retirement plans
           that obtain record keeping services from ADP, Inc. on the DWS
           Investments branded retirement plan platform (the "Platform") with
           the level of revenue sharing payments being based upon sales of both
           the DWS funds and the non-DWS funds by the financial advisor on the
           Platform or current assets of both the DWS funds and the non-DWS
           funds serviced and maintained by the financial advisor on the
           Platform.

           It is likely that broker-dealers that execute portfolio transactions
           for the fund will include firms that also sell shares of the DWS
           funds to their customers. However, the Advisor will not consider
           sales of DWS fund shares as a factor in the selection of
           broker-dealers to execute portfolio transactions for the DWS funds.
           Accordingly, the Advisor has implemented policies and procedures
           reasonably designed to prevent its traders from considering sales of
           DWS fund shares as a factor in the selection of


26 | How to Sell or Exchange Class S Shares
<PAGE>

           broker-dealers to execute portfolio transactions for the fund. In
           addition, the Advisor, the Distributor and/or their affiliates will
           not use fund brokerage to pay for their obligation to provide
           additional compensation to financial advisors as described above.


POLICIES YOU SHOULD KNOW ABOUT

           Along with the information on the previous pages, the policies below
           may affect you as a shareholder. Some of this information, such as
           the section on distributions and taxes, applies to all investors,
           including those investing through a financial advisor.

           If you are investing through a financial advisor or through a
           retirement plan, check the materials you received from them about
           how to buy and sell shares because particular financial advisors or
           other intermediaries may adopt policies, procedures or limitations
           that are separate from those described by the fund. Please note that
           a financial advisor may charge fees separate from those charged by
           the fund and may be compensated by the fund.

           Keep in mind that the information in this prospectus applies only to
           the shares offered herein. Other share classes are described in
           separate prospectuses and have different fees, requirements and
           services.

           In order to reduce the amount of mail you receive and to help reduce
           expenses, we generally send a single copy of any shareholder report
           and prospectus to each household. If you do not want the mailing of
           these documents to be combined with those for other members of your
           household, please contact your financial advisor or call (800)
           728-3337.


           Policies about transactions

           THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange
           is open. The fund calculates its share price for each class every
           business day, as of the close of regular trading on the New York
           Stock Exchange (typically 4:00 p.m. Eastern time, but sometimes
           earlier, as in the case of scheduled half-day trading or unscheduled
           suspensions of trading). You can place an order to buy or sell
           shares at any time.




THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

Questions? You can speak to a DWS Investments representative between 9 a.m. and
6 p.m. Eastern time on any fund business day by calling (800) 728-3337.


                                            Policies You Should Know About  | 27
<PAGE>

           To help the government fight the funding of terrorism and money
           laundering activities, federal law requires all financial
           institutions to obtain, verify and record information that
           identifies each person who opens an account. What this means to you:
           When you open an account, we will ask for your name, address, date
           of birth and other information that will allow us to identify you.
           Some or all of this information will be used to verify the identity
           of all persons opening an account.

           We might request additional information about you (which may include
           certain documents, such as articles of incorporation for companies)
           to help us verify your identity and, in some cases, the information
           and/or documents may be required to conduct the verification. The
           information and documents will be used solely to verify your
           identity.

           We will attempt to collect any missing required and requested
           information by contacting you or your financial advisor. If we are
           unable to obtain this information within the time frames established
           by the fund, then we may reject your application and order.

           The fund will not invest your purchase until all required and
           requested identification information has been provided and your
           application has been submitted in "good order." After we receive all
           the information, your application is deemed to be in good order and
           we accept your purchase, you will receive the net asset value per
           share next calculated.

           If we are unable to verify your identity within time frames
           established by the fund, after a reasonable effort to do so, you
           will receive written notification.

           With certain limited exceptions, only US residents may invest in the
           fund.

           Because orders placed through a financial advisor must be forwarded
           to the transfer agent before they can be processed, you'll need to
           allow extra time. Your financial advisor should be able to tell you
           approximately when your order will be processed. It is the
           responsibility of your financial advisor to forward your order to
           the transfer agent in a timely manner.


28 | Policies You Should Know About
<PAGE>

           INITIAL PURCHASE MINIMUMS. The minimum initial investment is $2,500,
           except for investments on behalf of participants in certain
           fee-based and wrap programs offered through certain financial
           intermediaries approved by the Advisor, for which there is no
           minimum initial investment; and fiduciary accounts such as IRAs and
           custodial accounts such as Uniform Gifts to Minors Act and Uniform
           Transfers to Minors Act accounts for which the minimum initial
           investment is $1,000 per account. In addition, the minimum initial
           investment is $1,000 if an automatic investment plan of $50 per
           month is established. Group retirement plans and certain other
           accounts have similar or lower minimum share balance requirements.

           SUB-MINIMUM BALANCES. The fund may close your account and send you
           the proceeds if your balance falls below $2,500 ($1,000 with an
           Automatic Investment Plan funded with $50 or more per month in
           subsequent investments); $250 for retirement accounts. We will give
           you 60 days' notice (90 days for retirement accounts) so you can
           either increase your balance or close your account (these policies
           don't apply to investors with $100,000 or more in DWS fund shares,
           investors in certain fee-based and wrap programs offered through
           certain financial intermediaries approved by the Advisor, or group
           retirement plans and certain other accounts having lower minimum
           share balance requirements).

           Because of the high cost of servicing accounts with low balances, an
           account maintenance fee of $6.25 per quarter (for a $25 annual fee)
           will be assessed on accounts whose balances fail to meet the minimum
           initial investment requirement for a period of 90 days prior to the
           assessment date. The quarterly assessment will occur on or about the
           15th of the last month in each calendar quarter. Please note that
           the fee will be assessed on accounts that fall below the minimum for
           any reason, including due to market value fluctuations, redemptions
           or exchanges. The account maintenance fee will apply to all
           shareholders of the DWS Funds except for: accounts with an automatic
           investment plan, accounts held in an omnibus account through a
           financial services firm, accounts maintained on behalf of
           participants in certain fee based and wrap programs offered through
           certain financial intermediaries approved by the Advisor and
           participant level accounts in group retirement plans held on the
           records of a retirement plan record keeper.


                                            Policies You Should Know About  | 29
<PAGE>

           SUBSEQUENT INVESTMENTS. The minimum subsequent investment is $50.
           However, there is no minimum investment requirement for subsequent
           investments on behalf of participants in certain fee-based and wrap
           programs offered through certain financial intermediaries approved
           by the Advisor.

           MARKET TIMING POLICIES AND PROCEDURES. Short-term and excessive
           trading of fund shares may present risks to long-term shareholders,
           including potential dilution in the value of fund shares,
           interference with the efficient management of the fund's portfolio
           (including losses on the sale of investments), taxable gains to
           remaining shareholders and increased brokerage and administrative
           costs. These risks may be more pronounced if the fund invests in
           certain securities, such as those that trade in foreign markets, are
           illiquid or do not otherwise have "readily available market
           quotations." Certain investors may seek to employ short-term trading
           strategies aimed at exploiting variations in portfolio valuation
           that arise from the nature of the securities held by the fund (e.g.,
           "time zone arbitrage"). The fund discourages short-term and
           excessive trading and has adopted policies and procedures that are
           intended to detect and deter short-term and excessive trading.

           Pursuant to its policies, the fund will impose a 2% redemption fee
           on fund shares held for less than a specified holding period
           (subject to certain exceptions discussed below under "Redemption
           fees"). The fund also reserves the right to reject or cancel a
           purchase or exchange order for any reason without prior notice. For
           example, the fund may in its discretion reject or cancel a purchase
           or an exchange order even if the transaction is not subject to the
           specific roundtrip transaction limitation described below if the
           Advisor believes that there appears to be a pattern of short-term or
           excessive trading activity by a shareholder or deems any other
           trading activity harmful or disruptive to the fund. The fund,
           through its Advisor and transfer agent, will measure short-term and
           excessive trading by the number of roundtrip transactions within a
           shareholder's account during a rolling 12-month period. A
           "roundtrip" transaction is defined as any combination of purchase
           and redemption activity (including exchanges) of the same fund's
           shares. The fund may take other trading activity into account if the
           fund believes such activity is of an amount or frequency that may be
           harmful to long-term shareholders or disruptive to portfolio
           management.


30 | Policies You Should Know About
<PAGE>

           Shareholders are limited to four roundtrip transactions in the same
           DWS fund (excluding money market funds) over a rolling 12-month
           period. Shareholders with four or more roundtrip transactions in the
           same DWS fund within a rolling 12-month period generally will be
           blocked from making additional purchases of, or exchanges into, that
           DWS fund. The fund has sole discretion whether to remove a block
           from a shareholder's account. The rights of a shareholder to redeem
           shares of a DWS fund are not affected by the four roundtrip
           transaction limitation, but all redemptions remain subject to the
           fund's redemption fee policy (see "Redemption fees" described
           below).

           The fund may make exceptions to the roundtrip transaction policy for
           certain types of transactions if, in the opinion of the Advisor, the
           transactions do not represent short-term or excessive trading or are
           not abusive or harmful to the fund, such as, but not limited to,
           systematic transactions, required minimum retirement distributions,
           transactions initiated by the fund or administrator and transactions
           by certain qualified funds-of-funds.

           In certain circumstances where shareholders hold shares of the fund
           through a financial intermediary, the fund may rely upon the
           financial intermediary's policy to deter short-term or excessive
           trading if the Advisor believes that the financial intermediary's
           policy is reasonably designed to detect and deter transactions that
           are not in the best interests of the fund. A financial
           intermediary's policy relating to short-term or excessive trading
           may be more or less restrictive than the DWS funds' policy, may
           permit certain transactions not permitted by the DWS funds'
           policies, or prohibit transactions not subject to the DWS funds'
           policies.

           The Advisor may also accept undertakings from a financial
           intermediary to enforce short-term or excessive trading policies on
           behalf of the fund that provide a substantially similar level of
           protection for the fund against such transactions. For example,
           certain financial intermediaries may have contractual, legal or
           operational restrictions that prevent them from blocking an account.
           In such instances, the financial intermediary may use alternate
           techniques that the Advisor considers to be a reasonable substitute
           for such a block.


                                            Policies You Should Know About  | 31
<PAGE>

           In addition, if the fund invests some portion of its assets in
           foreign securities, it has adopted certain fair valuation practices
           intended to protect the fund from "time zone arbitrage" with respect
           to its foreign securities holdings and other trading practices that
           seek to exploit variations in portfolio valuation that arise from
           the nature of the securities held by the fund. (See "How the fund
           calculates share price.")

           There is no assurance that these policies and procedures will be
           effective in limiting short-term and excessive trading in all cases.
           For example, the Advisor may not be able to effectively monitor,
           detect or limit short-term or excessive trading by underlying
           shareholders that occurs through omnibus accounts maintained by
           broker-dealers or other financial intermediaries. The Advisor
           reviews trading activity at the omnibus level to detect short-term
           or excessive trading. If the Advisor has reason to suspect that
           short-term or excessive trading is occurring at the omnibus level,
           the Advisor will contact the financial intermediary to request
           underlying shareholder level activity. Depending on the amount of
           fund shares held in such omnibus accounts (which may represent most
           of the fund's shares) short-term and/or excessive trading of fund
           shares could adversely affect long-term shareholders in the fund. If
           short-term or excessive trading is identified, the Advisor will take
           appropriate action.

           The fund's market timing policies and procedures may be modified or
           terminated at any time.

           REDEMPTION FEES. The fund imposes a redemption fee of 2% of the
           total redemption amount (calculated at net asset value) on all fund
           shares redeemed or exchanged within 15 days of buying them (either
           by purchase or exchange). The redemption fee is paid directly to the
           fund and is designed to encourage long-term investment and to offset
           transaction and other costs associated with short-term or excessive
           trading. For purposes of determining whether the redemption fee
           applies, shares held the longest time will be treated as being
           redeemed first and shares held the shortest time will be treated as
           being redeemed last.

           The redemption fee is applicable to fund shares purchased either
           directly or through a financial intermediary, such as a
           broker-dealer. Transactions through financial intermediaries
           typically are placed with the fund on an omnibus basis and include
           both purchase and sale transactions placed on behalf of multiple
           investors. These purchase and sale transactions are generally


32 | Policies You Should Know About
<PAGE>

           netted against one another and placed on an aggregate basis;
           consequently the identities of the individuals on whose behalf the
           transactions are placed generally are not known to the fund. For
           this reason, the fund has undertaken to notify financial
           intermediaries of their obligation to assess the redemption fee on
           customer accounts and to collect and remit the proceeds to the fund.
           However, due to operational requirements, the intermediaries'
           methods for tracking and calculating the fee may be inadequate or
           differ in some respects from the fund's.

           The redemption fee will not be charged in connection with the
           following exchange or redemption transactions: (i) transactions on
           behalf of participants in certain research wrap programs; (ii)
           transactions on behalf of a shareholder to return any excess IRA
           contributions to the shareholder; (iii) transactions on behalf of a
           shareholder to effect a required minimum distribution on an IRA;
           (iv) transactions on behalf of any mutual fund advised by the
           Advisor and its affiliates (e.g., "funds of funds") or, in the case
           of a master/feeder relationship, redemptions by the feeder fund from
           the master portfolio; (v) transactions on behalf of certain
           unaffiliated mutual funds operating as funds of funds; (vi)
           transactions following death or disability of any registered
           shareholder, beneficial owner or grantor of a living trust with
           respect to shares purchased before death or disability; (vii)
           transactions involving hardship of any registered shareholder;
           (viii) systematic transactions with pre-defined trade dates for
           purchases, exchanges or redemptions, such as automatic account
           rebalancing, or loan origination and repayments; (ix) transactions
           involving shares purchased through the reinvestment of dividends or
           other distributions; (x) transactions involving shares transferred
           from another account in the same fund or converted from another
           class of the same fund (the redemption fee period will carry over to
           the acquired shares); (xi) transactions initiated by the fund or
           administrator (e.g., redemptions for not meeting account minimums,
           to pay account fees funded by share redemptions, or in the event of
           the liquidation or merger of the fund); or (xii) transactions in
           cases when there are legal or contractual limitations or
           restrictions on the imposition of the redemption fee (as determined
           by the fund or its agents in their sole discretion). It is the
           policy of the DWS funds to permit approved fund platform providers
           to execute transactions with


                                            Policies You Should Know About  | 33
<PAGE>

           the funds without the imposition of a redemption fee if such
           providers have implemented alternative measures that are determined
           by the Advisor to provide controls on short-term and excessive
           trading that are comparable to the DWS funds' policies.

           THE AUTOMATED INFORMATION LINE IS AVAILABLE 24 HOURS A DAY BY
           CALLING (800) 728-3337. You can use our automated phone services to
           get information on DWS funds generally and on accounts held directly
           at DWS Investments. You can also use this service to make exchanges
           and to purchase and sell shares.

           QUICKBUY AND QUICKSELL let you set up a link between a DWS fund
           account and a bank account. Once this link is in place, you can move
           money between the two with a phone call. You'll need to make sure
           your bank has Automated Clearing House (ACH) services. Transactions
           take two to three days to be completed and there is a $50 minimum
           and a $250,000 maximum. To set up QuickBuy or QuickSell on a new
           account, see the account application; to add it to an existing
           account, call (800) 728-3337.

           TELEPHONE AND ELECTRONIC TRANSACTIONS. Generally, you are
           automatically entitled to telephone and electronic transaction
           privileges, but you may elect not to have them when you open your
           account or by contacting Shareholder Services at (800) 728-3337 at a
           later date.

           Since many transactions may be initiated by telephone or
           electronically, it's important to understand that as long as we take
           reasonable steps to ensure that an order to purchase or redeem
           shares is genuine, such as recording calls or requesting person-
           alized security codes or other information, we are not responsible
           for any losses that may occur as a result. For transactions
           conducted over the Internet, we recommend the use of a secure
           Internet browser. In addition, you should verify the accuracy of
           your confirmation statements immediately after you receive them.

           THE FUND DOES NOT ISSUE SHARE CERTIFICATES. However, if you
           currently have shares in certificated form, you must include the
           share certificates properly endorsed or accompanied by a duly
           executed stock power when exchanging or redeeming shares. You may
           not exchange or redeem shares in certificate form by telephone or
           via the Internet.



THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

The DWS Investments Web site can be a valuable resource for shareholders with
Internet access. Go to WWW.DWS-INVESTMENTS.COM to get up-to-date information,
review balances or even place orders for exchanges.


34 | Policies You Should Know About
<PAGE>

           WHEN YOU ASK US TO SEND OR RECEIVE A WIRE, please note that while we
           don't charge a fee to send or receive wires, it's possible that your
           bank may do so. Wire transactions are generally completed within 24
           hours. The fund can only send wires of $1,000 or more and accept
           wires of $50 or more.

           THE FUND ACCEPTS PAYMENT FOR SHARES ONLY IN US DOLLARS by a check
           drawn on a US bank, a bank or Federal Funds wire transfer or an
           electronic bank transfer. The fund does not accept third party
           checks. A third party check is a check made payable to one or more
           parties and offered as payment to one or more other parties (e.g., a
           check made payable to you that you offer as payment to someone
           else). Checks should normally be payable to DWS Investments and
           drawn by you or a financial institution on your behalf with your
           name or account number included with the check.

           SIGNATURE GUARANTEE. When you want to sell more than $100,000 worth
           of shares or send proceeds to a third party or to a new address,
           you'll usually need to place your order in writing and include a
           signature guarantee. However, if you want money wired to a bank
           account that is already on file with us, you don't need a signature
           guarantee. Also, generally you don't need a signature guarantee for
           an exchange, although we may require one in certain other
           circumstances.

           A signature guarantee is simply a certification of your signature -
           a valuable safeguard against fraud. You can get a signature
           guarantee from an eligible guarantor institution, including
           commercial banks, savings and loans, trust companies, credit unions,
           member firms of a national stock exchange or any member or
           participant of an approved signature guarantor program. Note that
           you can't get a signature guarantee from a notary public and we must
           be provided the original guarantee.

           SELLING SHARES OF TRUST ACCOUNTS AND BUSINESS OR ORGANIZATION
           ACCOUNTS may require additional documentation. Please call (800)
           728-3337 or contact your financial advisor for more information.

           MONEY FROM SHARES YOU SELL is normally sent out within one business
           day of when your order is processed (not when it is received),
           although it could be delayed for up to seven days. There are
           circumstances when it could be longer, including, but not limited
           to, when you are selling shares you bought recently by check  or ACH
           (the funds will be placed under a 10 calendar day hold to ensure
           good funds) or when unusual circumstances




THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

If you ever have difficulty placing an order by phone or Internet, you can send
us your order in writing.

                                            Policies You Should Know About  | 35
<PAGE>

           prompt the SEC to allow further delays. Certain expedited redemption
           processes (e.g., redemption proceeds by wire) may also be delayed or
           unavailable when you are selling shares recently purchased or in the
           event of the closing of the Federal Reserve wire payment system. The
           fund reserves the right to suspend or postpone redemptions as
           permitted pursuant to Section 22(e) of the Investment Company Act of
           1940. Generally, those circumstances are when 1) the New York Stock
           Exchange is closed other than customary weekend or holiday closings;
           2) trading on the New York Stock Exchange is restricted; 3) an
           emergency exists which makes the disposal of securities owned by the
           fund or the fair determination of the value of the fund's net assets
           not reasonably practicable; or 4) the SEC, by order, permits the
           suspension of the right of redemption. Redemption payments by wire
           may also be delayed in the event of a non-routine closure of the
           Federal Reserve wire payment system. For additional rights reserved
           by the fund, please see "Other rights we reserve."

           You may obtain additional information about other ways to sell your
           shares by contacting your financial advisor.


           How the fund calculates share price

           To calculate net asset value, or NAV, each share class uses the
           following equation:


<TABLE>
<S>                                                     <C> <C>
            TOTAL ASSETS - TOTAL LIABILITIES
           -----------------------------------------    =    NAV
               TOTAL NUMBER OF SHARES OUTSTANDING
</TABLE>


           The price at which you buy and sell shares is based on the NAV per
           share next calculated after the order is received and accepted by
           the transfer agent.

           THE FUND CHARGES A REDEMPTION FEE EQUAL TO 2.00% of the value of
           shares redeemed or exchanged within 15 days of purchase. Please see
           "Policies about transactions - Redemption fees" for further
           information.

           WE TYPICALLY VALUE SECURITIES USING INFORMATION FURNISHED BY AN
           INDEPENDENT PRICING SERVICE OR MARKET QUOTATIONS, WHERE APPROPRIATE.
           However, we may use methods approved by the Board, such as a fair
           valuation model, which are intended to reflect fair value when
           pricing service information or market quotations are not readily
           available or when a security's value or a meaningful portion of the
           value of the fund's portfolio is


36 | Policies You Should Know About
<PAGE>

           believed to have been materially affected by a significant event,
           such as a natural disaster, an economic event like a bankruptcy
           filing, or a substantial fluctuation in domestic or foreign markets
           that has occurred between the close of the exchange or market on
           which the security is principally traded (for example, a foreign
           exchange or market) and the close of the New York Stock Exchange. In
           such a case, the fund's value for a security is likely to be
           different from the last quoted market price or pricing service
           information. In addition, due to the subjective and variable nature
           of fair value pricing, it is possible that the value determined for
           a particular asset may be materially different from the value
           realized upon such asset's sale. It is -expected that the greater
           the percentage of fund assets that is -invested in non-US
           securities, the more extensive will be the -fund's use of fair value
           pricing. This is intended to reduce the fund's exposure to "time
           zone arbitrage" and other harmful -trading practices. (See "Market
           -timing policies and procedures.")

           TO THE EXTENT THAT THE FUND INVESTS IN SECURITIES THAT ARE TRADED
           PRIMARILY IN FOREIGN MARKETS, the value of its holdings could change
           at a time when you aren't able to buy or sell fund shares. This is
           because some foreign markets are open on days or at times when the
           fund doesn't price its shares. (Note that prices for securities that
           trade on foreign exchanges can change significantly on days when the
           New York Stock Exchange is closed and you cannot buy or sell fund
           shares. Price changes in the securities the fund owns may ultimately
           affect the price of fund shares the next time the NAV is
           calculated.)


           Other rights we reserve

           You should be aware that we may do any of the following:

           -  withdraw or suspend the offering of shares at any time

           -  withhold a portion of your distributions and redemption proceeds
              if we have been notified by the IRS that you are subject to
              backup withholding or if you fail to provide us with the correct
              taxpayer ID number and certain certifications, including
              certification that you are not subject to backup withholding

           -  reject a new account application if you don't provide any
              required or requested identifying information, or for any other
              reason

                                            Policies You Should Know About  | 37
<PAGE>

            -  refuse, cancel, limit or rescind any purchase or exchange order,
               without prior notice; freeze any account (meaning you will not be
               able to purchase fund shares in your account); suspend account
               services; and/or involuntarily redeem your account if we think
               that the account is being used for fraudulent or illegal
               purposes; one or more of these actions will be taken when, at our
               sole discretion, they are deemed to be in the fund's best
               interests or when the fund is requested or compelled to do so by
               governmental authority or by applicable law

           -  close and liquidate your account if we are unable to verify your
              identity, or for other reasons; if we decide to close your
              account, your fund shares will be redeemed at the net asset value
              per share next calculated after we determine to close your
              account (less applicable redemption fee, if any); you may
              recognize a gain or loss on the redemption of your fund shares
              and you may incur a tax liability

           -  pay you for shares you sell by "redeeming in kind," that is, by
              giving you securities (which typically will involve brokerage
              costs for you to liquidate) rather than cash, but which will be
              taxable to the same extent as a redemption for cash; the fund
              generally won't make a redemption in kind unless your requests
              over a 90-day period total more than $250,000 or 1% of the value
              of the fund's net assets, whichever is less

           -  change, add or withdraw various services, fees and account
              policies (for example, we may adjust the fund's investment
              minimums at any time)


UNDERSTANDING DISTRIBUTIONS AND TAXES


           The fund intends to distribute to its shareholders virtually all of
           its net earnings. The fund can earn money in two ways: by receiving
           interest, dividends or other income from investments it holds and by
           selling investments for more than it paid for them. (The fund's
           earnings are separate from any gains or losses stemming from your
           own purchase and sale of shares.) The fund may not always pay a
           dividend or other distribution for a given period.

           THE FUND INTENDS TO PAY INCOME DIVIDENDS TO ITS SHAREHOLDERS
           MONTHLY; short-term and long-term capital gains are paid in December
           or otherwise as needed.



THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

Because each shareholder's tax situation is unique, ask your tax professional
about the tax consequences of your investments, including any state and local
tax consequences.


38 | Understanding Distributions and Taxes
<PAGE>

           Dividends or distributions declared and payable to shareholders of
           record in the last quarter of a given calendar year are treated for
           federal income tax purposes as if they were received on December 31
           of that year, provided such dividends or distributions are paid by
           the end of the following January.

           For federal income tax purposes, income and capital gains
           distributions are generally taxable to shareholders. However,
           dividends and distributions received by retirement plans qualifying
           for tax exemption under federal income tax laws generally will not
           be taxable.

           YOU CAN CHOOSE HOW TO RECEIVE YOUR DIVIDENDS AND DISTRIBUTIONS. You
           can have them all automatically reinvested in fund shares (at NAV),
           all deposited directly to your bank account or all sent to you by
           check, have one type reinvested and the other sent to you by check
           or have them invested in a different fund. Tell us your preference
           on your application. If you don't indicate a preference, your
           dividends and distributions will all be reinvested in shares of the
           fund without a sales charge (if applicable). Distributions are
           treated the same for federal income tax purposes whether you receive
           them in cash or reinvest them in additional shares. Under the terms
           of employer-sponsored qualified plans, and retirement plans,
           reinvestment (at NAV) is the only option.

           BUYING, SELLING OR EXCHANGING FUND SHARES WILL USUALLY HAVE FEDERAL
           INCOME TAX CONSEQUENCES FOR YOU (except in employer-sponsored
           qualified plans, IRAs or other tax-advantaged accounts). Your sale
           of shares may result in a capital gain or loss. The gain or loss
           will be long-term or short-term depending on how long you owned the
           shares that were sold. For federal income tax purposes, an exchange
           is treated the same as a sale.


                                     Understanding Distributions and Taxes  | 39
<PAGE>

           THE FEDERAL INCOME TAX STATUS of the fund's earnings you receive and
           your own fund transactions generally depends on their type:


<TABLE>
<CAPTION>
GENERALLY TAXED AT LONG-TERM                          GENERALLY TAXED AT ORDINARY
CAPITAL GAIN RATES:                                   INCOME RATES:
<S>                                                   <C>
DISTRIBUTIONS FROM THE FUND
- gains from the sale of                              -  gains from the sale of
  securities held (or treated as                         securities held by the fund for
  held) by the fund for more                             one year or less
  than one year                                       -  all other taxable income
- qualified dividend income
TRANSACTIONS INVOLVING FUND
SHARES
- gains from selling fund                             -  gains from selling fund
  shares held for more than                              shares held for one year or
  one year                                               less
</TABLE>


           ANY DIRECT INVESTMENTS IN FOREIGN SECURITIES BY THE FUND MAY BE
           SUBJECT TO FOREIGN WITHHOLDING TAXES. In that case, the fund's yield
           on those securities would generally be decreased. Shareholders
           generally will not be entitled to claim a credit or deduction with
           respect to foreign taxes paid by the fund. In addition, any
           investments in foreign securities or foreign currencies may increase
           or accelerate the fund's recognition of ordinary income and may
           affect the timing or amount of the fund's distributions. If you
           invest in the fund through a taxable account, your after-tax return
           could be negatively impacted.

           Investments in certain debt obligations or other securities may
           cause the fund to recognize taxable income in excess of the cash
           generated by them. Thus, the fund could be required at times to
           liquidate other investments in order to satisfy its distribution
           requirements.

           For taxable years beginning before January 1, 2011, distributions to
           individuals and other noncorporate shareholders of investment income
           designated by the fund as derived from qualified dividend income are
           eligible for taxation for federal income tax purposes at the more
           favorable long-term capital gain rates. Qualified dividend income
           generally includes dividends received by the fund from domestic and
           some foreign corporations. It does not include income from
           investments in debt securities  or, generally, from real estate
           investment trusts. In addition, the fund must meet certain holding
           period


40 | Understanding Distributions and Taxes
<PAGE>

           and other requirements with respect to the dividend-paying stocks in
           its portfolio and the shareholder must meet certain holding period
           and other requirements with respect to the fund's shares for the
           lower tax rates to apply. The fund does not expect a significant
           portion of its distributions to constitute qualified dividend
           income.

           For taxable years beginning before January 1, 2011, the maximum
           federal income tax rate imposed on long-term capital gains
           recognized by individuals and other noncorporate shareholders has
           been temporarily reduced to 15%, in general, with lower rates
           applying to taxpayers in the 10% and 15% rate brackets. For taxable
           years beginning on or after January 1, 2011, the maximum long-term
           capital gain rate is scheduled to return to 20%.

           YOUR FUND WILL SEND YOU DETAILED FEDERAL INCOME TAX INFORMATION
           EVERY JANUARY. These statements tell you the amount and the federal
           income tax classification of any dividends or distributions you
           received. They also have certain details on your purchases and sales
           of shares.

           IF YOU INVEST RIGHT BEFORE THE FUND PAYS A DIVIDEND, you'll be
           getting some of your investment back as a taxable dividend. You can
           avoid this by investing after the fund pays a dividend. In tax-
           advantaged retirement accounts you generally do not need to worry
           about this.

           If the fund's distributions exceed its current and accumulated
           earnings and profits, the excess will be treated for federal income
           tax purposes as a tax-free return of capital to the extent of your
           basis in your shares and thereafter as a gain from the sale or
           exchange of your shares. Because a return of capital distribution
           reduces the basis of your shares, a return of capital distribution
           may result in a higher capital gain or a lower capital loss when you
           sell your shares.

           CORPORATIONS are taxed at the same rates on ordinary income and
           capital gains but may be eligible for a dividends-received deduction
           for a portion of the income dividends they receive from the fund,
           provided certain holding period and other requirements are met.


                                     Understanding Distributions and Taxes  | 41
<PAGE>

           The above discussion summarizes certain federal income tax
           consequences for shareholders who are US persons. If you are a
           non-US person, please consult your own tax advisor with respect to
           the US tax consequences to you of an investment in the fund. For
           more information, see "Taxes" in the Statement of Additional
           Information.


42 | Understanding Distributions and Taxes
<PAGE>

APPENDIX
--------------------------------------------------------------------------------
           Hypothetical Expense Summary


           Using the annual fund operating expense ratios presented in the fee
           tables in the fund prospectus, the Hypothetical Expense Summary
           shows the estimated fees and expenses, in actual dollars, that would
           be charged on a hypothetical investment of $10,000 in the fund held
           for the next 10 years and the impact of such fees and expenses on
           fund returns for each year and cumulatively, assuming a 5% return
           for each year. The historical rate of return for the fund may be
           higher or lower than 5% and, for money funds, is typically less than
           5%. The tables also assume that all dividends and distributions are
           reinvested. The annual fund expense ratios shown are net of any
           contractual fee waivers or expense reimbursements, if any, for the
           period of the contractual commitment. The tables do not reflect
           redemption fees, if any, which may be payable upon redemption. If
           redemption fees were shown, the "Hypothetical Year-End Balance After
           Fees and Expenses" amounts shown would be lower and the "Annual Fees
           and Expenses" amounts shown would be higher. Also, please note that
           if you are investing through a third party provider, that provider
           may have fees and expenses separate from those of the fund that are
           not reflected here. Mutual fund fees and expenses fluctuate over
           time and actual expenses may be higher or lower than those shown.

           The Hypothetical Expense Summary should not be used or construed as
           an offer to sell, a solicitation of an offer to buy or a
           recommendation or endorsement of any specific mutual fund. You
           should carefully review the fund's prospectus to consider the
           investment objectives, risks, expenses and charges of the fund prior
           to investing.


                                                                  Appendix  | 43
<PAGE>

DWS Short Duration Plus Fund - Class S



<TABLE>
<CAPTION>
              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
<S>       <C>                <C>          <C>               <C>                <C>
   1            5.00%        0.71%              4.29%       $ 10,429.00         $  72.52
   2           10.25%        0.71%              8.76%       $ 10,876.40         $  75.63
   3           15.76%        0.71%             13.43%       $ 11,343.00         $  78.88
   4           21.55%        0.71%             18.30%       $ 11,829.62         $  82.26
   5           27.63%        0.71%             23.37%       $ 12,337.11         $  85.79
   6           34.01%        0.71%             28.66%       $ 12,866.37         $  89.47
   7           40.71%        0.71%             34.18%       $ 13,418.34         $  93.31
   8           47.75%        0.71%             39.94%       $ 13,993.98         $  97.31
   9           55.13%        0.71%             45.94%       $ 14,594.32         $ 101.49
  10           62.89%        0.71%             52.20%       $ 15,220.42         $ 105.84
  TOTAL                                                                         $ 882.50
</TABLE>



44 | Appendix
<PAGE>

TO GET MORE INFORMATION

SHAREHOLDER REPORTS - These include commentary from the fund's management team
about recent market conditions and the effects of the fund's strategies on its
performance. They also have detailed performance figures, a list of everything
the fund owns, and its financial statements. Shareholders get these reports
automatically.

STATEMENT OF ADDITIONAL INFORMATION (SAI) - This tells you more about the
fund's features and policies, including additional risk information. The SAI is
incorporated by reference into this document (meaning that it's legally part of
this prospectus).

For a free copy of any of these documents or to request other information about
the fund, call (800) 728-3337, or contact DWS Investments at the address listed
below. The fund's SAI and shareholder reports are also available through the
DWS Investments Web site at www.dws-investments.com. These documents and other
information about the fund are available from the EDGAR Database on the SEC's
Internet site at www.sec.gov. If you like, you may obtain copies of this
information, after paying a copying fee, by e-mailing a request to
publicinfo@sec.gov or by writing the SEC at the address listed below. You can
also review and copy these documents and other information about the fund,
including the fund's SAI, at the SEC's Public Reference Room in Washington,
D.C. Information on the operation of the SEC's Public Reference Room may be
obtained by calling (800) SEC-0330.


<TABLE>
<CAPTION>
DWS INVESTMENTS      SEC                     DISTRIBUTOR
-----------------    --------------------    ------------------------------
<S>                  <C>                     <C>
PO Box 219151        100 F Street, N.E.      DWS Investments Distributors,
Kansas City, MO      Washington, D.C.        Inc.
64121-9151           20549-0102              222 South Riverside Plaza
WWW.DWS-             WWW.SEC.GOV             Chicago, IL 60606-5808
INVESTMENTS.COM      (800) SEC-0330          (800) 621-1148
(800) 728-3337
</TABLE>



<TABLE>
<S>                    <C>                               <C>
SEC FILE NUMBER:
DWS Advisor Funds        DWS Short Duration Plus Fund    811-04760
</TABLE>





(02/01/09) 822-2         [RECYCLE GRAPHIC APPEARS HERE]
                                                                       [Logo]DWS
                                                                      INVESTMENT
                                                             Deutsche Bank Group




<PAGE>




                                DWS ADVISOR FUNDS


                             DWS Mid Cap Growth Fund
                Class A, Class B, Class C and Institutional Class

                            DWS Small Cap Growth Fund
                Class A, Class B, Class C and Institutional Class

                               DWS Micro Cap Fund
                Class A, Class B, Class C and Institutional Class








                       STATEMENT OF ADDITIONAL INFORMATION

                                February 1, 2009

This combined Statement of Additional Information ("SAI") is not a prospectus
and should be read in conjunction with the prospectuses, dated February 1, 2009,
for DWS Mid Cap Growth Fund, DWS Small Cap Growth Fund and DWS Micro Cap Fund
(each a "Fund" and collectively the "Funds), each a series of DWS Advisor Funds
(the "Trust")"), as amended from time to time, copies of which may be obtained
without charge by contacting DWS Investments Distributors, Inc., 222 South
Riverside Plaza, Chicago, Illinois 60606, (800) 621-1148 or from the firm from
which this SAI was obtained and is available along with other materials on the
Securities and Exchange Commission's Internet Web site (http://www.sec.gov).

Portions of the Annual Reports to Shareholders of each Fund, dated September 30,
2008, are incorporated herein by reference, as specified herein, and are deemed
to be part of this SAI. A copy of each Fund's Annual Report may be obtained
without charge by calling the Funds at the toll-free number (800) 621-1048.

This SAI is incorporated by reference into the corresponding prospectuses for
each class of shares of the Funds.



                                TABLE OF CONTENTS


                                                                            Page
                                                                            ----

INVESTMENT RESTRICTIONS.......................................................1

INVESTMENT POLICIES AND TECHNIQUES............................................4
         Portfolio Holdings..................................................33

MANAGEMENT OF THE FUNDS......................................................34
         Investment Advisor..................................................34

FUND SERVICE PROVIDERS.......................................................43
         Administrator.......................................................43
         Distributor.........................................................45
         Custodian...........................................................49
         Transfer Agent and Shareholder Service Agent........................49
         Legal Counsel.......................................................51
         Independent Registered Public Accounting Firm.......................51

PORTFOLIO TRANSACTIONS.......................................................51

PURCHASE AND REDEMPTION OF SHARES............................................55

DIVIDENDS....................................................................70

TAXES........................................................................71

NET ASSET VALUE..............................................................76

BOARD MEMBERS AND OFFICERS...................................................77

TRUST ORGANIZATION...........................................................88

PROXY VOTING GUIDELINES......................................................89

FINANCIAL STATEMENTS.........................................................90

ADDITIONAL INFORMATION.......................................................90

APPENDIX A -- PROXY VOTING GUIDELINES........................................91

APPENDIX B -- RATINGS OF INVESTMENTS........................................118


                             INVESTMENT RESTRICTIONS

Investment Restrictions

Except as otherwise indicated, each Fund's investment objective and policies are
not fundamental and may be changed without a vote of shareholders. There can be
no assurance that a Fund's objective will be met. Shareholders of a Fund will
receive 60 days' prior written notice with respect to any change in the
investment objective of a Fund.

Any investment restrictions herein which involve a maximum percentage of
securities or assets shall not be considered to be violated unless an excess
over the percentage occurs immediately after and is caused by an acquisition or
encumbrance of securities or assets of, or borrowings by, a Fund.

Each Fund has elected to be classified as a diversified series of DWS Advisor
Funds, an open-end investment management company. A diversified Fund may not,
with respect to 75% of total assets, invest more than 5% of total assets in the
securities of a single issuer (other than US government securities or securities
of investment companies) or invest in more than 10% of the outstanding voting
securities of such issuer (with certain exceptions).

As a matter of fundamental policy, each Fund may not (except that no investment
restriction of each Fund shall prevent the Fund from investing all of its assets
in an open-end investment company with substantially the same investment
objectives):

(1)      issue senior securities, except as permitted under the Investment
         Company Act of 1940, as amended (the "1940 Act"), and as interpreted or
         modified by regulatory authority having jurisdiction, from time to
         time.

(2)      borrow money, except as permitted under the 1940 Act, and as
         interpreted or modified by regulatory authority having jurisdiction,
         from time to time.

(3)      engage in the business of underwriting securities issued by others,
         except to the extent that a Fund may be deemed to be an underwriter in
         connection with the disposition of portfolio securities.

(4)      purchase or sell real estate, which term does not include securities of
         companies which deal in real estate or mortgages or investments secured
         by real estate or interests therein, except that the Fund reserves
         freedom of action to hold and to sell real estate acquired as a result
         of the Fund's ownership of securities.

(5)      make loans except as permitted under the 1940 Act, and as interpreted
         or modified by regulatory authority having jurisdiction, from time to
         time.

(6)      purchase or sell commodities, except as permitted by the 1940 Act, and
         as interpreted or modified by the regulatory authority having
         jurisdiction, from time to time.

(7)      concentrate its investments in a particular industry, as that term is
         used in the 1940 Act, and as interpreted or modified by regulatory
         authority having jurisdiction, from time to time.


A fundamental policy may not be changed without the approval of a majority of
the outstanding voting securities of a Fund which, under the 1940 Act and the
rules thereunder and as used in this SAI, means the lesser of (1) 67% or more of
the voting securities present at a meeting, if the holders of more than 50% of
the outstanding voting securities of a Fund are present or represented by proxy,
or (2) more than 50% of the outstanding voting securities of a Fund.

Non-fundamental Investment Restrictions for DWS Mid Cap Growth Fund and DWS
Small Cap Growth Fund. In order to comply with certain statutes and policies,
DWS Small Cap Growth Fund and DWS Mid Cap Growth Fund will not, as a matter of
nonfundamental operating policy:

(i)      borrow money (including through reverse repurchase or forward roll
         transactions), except that the Fund may borrow for temporary or
         emergency purposes up to 1/3 of its net assets;

(ii)     purchase any security or evidence of interest therein on margin, except
         that such short-term credit as may be necessary for the clearance of
         purchases and sales of securities may be obtained and except that
         deposits of initial deposit and variation margin may be made in
         connection with the purchase, ownership, holding or sale of futures;

(iii)    sell securities it does not own (short sales) such that the dollar
         amount of such short sales at any one time exceeds 25% of the net
         equity of the Fund, and the value of securities of any one issuer in
         which the Fund is short exceeds the lesser of 2.0% of the value of the
         Fund's net assets or 2.0% of the securities of any class of any US
         issuer, and provided that short sales may be made only in those
         securities which are fully listed on a national securities exchange or
         a foreign exchange (This provision does not include the sale of
         securities that the Fund contemporaneously owns or where the Fund has
         the right to obtain securities equivalent in kind and amount to those
         sold, i.e., short sales against the box.) (The Fund currently does not
         engage in short selling.);

(iv)     invest for the purpose of exercising control or management of another
         company;

(v)      purchase securities issued by any investment company except by purchase
         in the open market where no commission or profit to a sponsor or dealer
         results from such purchase other than the customary broker's
         commission, or except when such purchase, though not made in the open
         market, is part of a plan of merger or consolidation; provided,
         however, that securities of any investment company will not be
         purchased for the Fund if such purchase at the time thereof would
         cause: (a) more than 10% of the Fund's total assets (taken at the
         greater of cost or market value) to be invested in the securities of
         such issuers; (b) more than 5% of the Fund's total assets (taken at the
         greater of cost or market value) to be invested in any one investment
         company; or (c) more than 3% of the outstanding voting securities of
         any such issuer to be held for the Fund, unless permitted to exceed
         these limitations by an exemptive order of the Securities and Exchange
         Commission ("SEC"); provided further, that except in the case of a
         merger or consolidation, the Fund shall not purchase securities of any
         open-end investment company unless (1) the Advisor waives the
         investment advisory fee with respect to assets invested in other
         open-end investment companies and (2) the Fund incurs no sales charge
         in connection with the investment;

(vi)     invest more than 15% of the Fund's net assets (taken at the greater of
         cost or market value) in securities that are illiquid or not readily
         marketable (excluding Rule 144A securities deemed by the Board to be
         liquid);

(vii)    write puts and calls on securities unless each of the following
         conditions are met: (a) the security underlying the put or call is
         within the investment policies of the Fund and the option is issued by
         the Options Clearing Corporation ("OCC"), except for put and call
         options issued by non-US entities or listed on non-US securities or
         commodities exchanges; (b) the aggregate value of the obligations
         underlying the puts determined as of the date the options are sold
         shall not exceed 5% of the Fund's net assets; (c) the securities
         subject to the exercise of the call written by the Fund must be owned
         by the Fund at the time the call is sold and must continue to be owned
         by the Fund until the call has been exercised, has lapsed, or the Fund
         has purchased a closing call, and such purchase has been confirmed,
         thereby extinguishing the Fund's obligation to deliver securities
         pursuant to the call it has sold; and (d) at the time a put is written,
         the Fund establishes a segregated account with its custodian consisting
         of cash or liquid securities equal in value to the amount the Fund will
         be obligated to pay upon exercise of the put (this account must be
         maintained until the put is exercised, has expired, or the Fund has
         purchased a closing put, which is a put of the same series as the one
         previously written);

(viii)   buy and sell puts and calls on securities, stock index futures or
         options on stock index futures, or financial futures or options on
         financial futures, unless such options are written by other persons
         and: (a) the options or futures are offered through the facilities of a
         national securities association or are listed on a national securities
         or commodities exchange, except for put and call options issued by
         non-US entities or listed on non-US securities or commodities
         exchanges; (b) the aggregate premiums paid on all such options which
         are held at any time do not exceed 20% of the Fund's total net assets;
         and (c) the aggregate margin deposits required on all such futures or
         options thereon held at any time do not exceed 5% of the Fund's total
         assets;

(ix)     lend portfolio securities in an amount greater than 33 1/3% of its
         total assets; and

(x)      for DWS Small Cap Growth Fund only, acquire securities of registered
         open-end investment companies or registered unit investment trusts in
         reliance on Sections 12(d)(1)(F) or 12(d)(1)(G) of the 1940 Act.


Non-fundamental Investment Restrictions for DWS Micro Cap Fund. The
nonfundamental investment restrictions set forth below may be changed or amended
by the Trust's Board of Trustees without shareholder approval.

As a matter of non-fundamental policy, DWS Micro Fund may not:

(i)      Participate on a joint-and-several basis in any securities trading
         account. The "bunching" of orders for the sale or purchase of
         marketable portfolio securities with other accounts under the
         management of the Advisor to save commissions or to average prices
         among them is not deemed to result in a securities trading account.

(ii)     Purchase securities of other investment companies, except as permitted
         by the 1940 Act and the rules, regulations and any applicable exemptive
         order issued thereunder.

(iii)    Invest for the purpose of exercising control over or management of any
         company. (iv) Purchase any security, including any repurchase agreement
         maturing in more than seven days,
         which is illiquid, if more than 15% of the net assets of the Fund,
         taken at market value, would be invested in such securities.

(v)      Acquire securities of registered open-end investment companies or
         registered unit investment trusts in reliance on Sections 12(d)(1)(F)
         or 12(d)(1)(G) of the 1940 Act.

The staff of the SEC has taken the position that fixed time deposits maturing in
more than seven days that cannot be traded on a secondary market and
participation interests in loans are illiquid. Until such time (if any) as this
position changes, the Trust, on behalf of the Fund, will include such
investments in determining compliance with the 15% limitation on investments in
illiquid securities. Restricted securities (including commercial paper issued
pursuant to the Securities Act of 1933, as amended ("1933 Act"), which the Board
of Trustees has determined are readily marketable will not be deemed to be
illiquid for purposes of the 15% limitation.

"Value" for the purposes of the foregoing investment restrictions shall mean the
market value used in determining the Fund's net asset value.

There will be no violation of any investment restriction (except with respect to
fundamental investment restriction (1) above) if that restriction is complied
with at the time the relevant action is taken, notwithstanding a later change in
the market value of an investment, in net or total assets or in the change of
securities rating of the investment, or any other later change.

To meet federal income tax requirements for qualification as a regulated
investment company, each Fund must, among other things, limit its investments so
that at the close of each quarter of its taxable year (1) no more than 25% of
the value of its total assets is invested in the securities (other than
securities of the US Government or a regulated investment company) of a single
issuer or two or more issuers which the Fund controls and which are engaged in
the same, similar or related trades or businesses or in the securities of one or
more qualified publicly traded partnerships, and (2) at least 50% of the value
of its total assets is represented by cash, cash items (including receivables),
US Government securities, securities of other regulated investment companies and
other securities of any issuer that does not represent more than 5% of the value
of the Fund's total assets and not more than 10% of the issuer's outstanding
voting securities.

                       INVESTMENT POLICIES AND TECHNIQUES

Investment Techniques

Descriptions in this SAI of a particular investment practice or technique in
which a Fund may engage are meant to describe the spectrum of investments that
Deutsche Investment Management Americas Inc. (the "Advisor" or "DIMA") in its
discretion might, but is not required to, use in managing a Fund's portfolio
assets. The Advisor may in its discretion at any time employ such practice,
technique or instrument for one or more Funds but not for all funds advised by
it. Furthermore, it is possible that certain types of financial instruments or
investment techniques described herein may not be available, permissible,
economically feasible or effective for their intended purposes in all markets.
Certain practices, techniques or instruments may not be principal activities of
a Fund, but, to the extent employed, could from time to time have a material
impact on a Fund's performance.

Equity Securities

General. The Funds may invest in equity securities listed on any domestic or
non-US securities exchange or traded in the over-the-counter (or "OTC") market
as well as certain restricted or unlisted securities. As used herein, "equity
securities" includes common stock, preferred stock, trust or limited partnership
interests, rights and warrants (to subscribe to or purchase such securities) and
convertible securities (consisting of debt securities or preferred stock that
may be converted into common stock or that carry the right to purchase common
stock).

Asset-Backed Securities. Asset-backed securities may include pools of mortgages
("mortgage-backed securities"), loans, receivables or other assets. Payment of
principal and interest may be largely dependent upon the cash flows generated by
the assets backing the securities. For purposes of determining the percentage of
a Fund's total assets invested in securities of issuers having their principal
business activities in a particular industry, asset-backed securities will be
classified separately, based on the nature of the underlying assets, according
to the following categories: captive auto, diversified, retail and consumer
loans, captive equipment and business, business trade receivables, nuclear fuel
and capital and mortgage lending. Primarily, these securities may not have the
benefit of any security interest in the related assets. Credit card receivables
are generally unsecured and the debtors are entitled to the protection of a
number of state and federal consumer credit laws, many of which give such
debtors the right to set off certain amounts owed on the credit cards, thereby
reducing the balance due. There is the possibility that recoveries on
repossessed collateral may not, in some cases, be available to support payments
on these securities. Asset-backed securities are often backed by a pool of
assets representing the obligations of a number of different parties. To lessen
the effect of failures by obligors on underlying assets to make payments, the
securities may contain elements of credit support which fall into two
categories: (i) liquidity protection, and (ii) protection against losses
resulting from ultimate default by an obligor on the underlying assets.
Liquidity protection refers to the provision of advances, generally by the
entity administering the pool of assets, to ensure that the receipt of payments
on the underlying pool occurs in a timely fashion. Protection against losses
results from payment of the insurance obligations on at least a portion of the
assets in the pool. This protection may be provided through guarantees, policies
or letters of credit obtained by the issuer or sponsor from third parties,
through various means of structuring the transaction or through a combination of
such approaches. The funds will not pay any additional or separate fees for
credit support. The degree of credit support provided for each issue is
generally based on historical information respecting the level of credit risk
associated with the underlying assets. Delinquency or loss in excess of that
anticipated or failure of the credit support could adversely affect the return
on an investment in such a security. The availability of asset-backed securities
may be affected by legislative or regulatory developments. It is possible that
such developments may require the funds to dispose of any then existing holdings
of such securities.

Asset Segregation

Certain investment transactions expose the Funds to an obligation to make future
payments to third parties. Examples of these types of transactions, include, but
are not limited to, reverse repurchase agreements, short sales, dollar rolls,
when-issued, delayed-delivery or forward commitment transactions and certain
derivatives such as swaps, futures, forwards, and options. To the extent that a
Fund engages in such transactions, a Fund will (to the extent required by
applicable law) either (1) segregate cash or liquid assets in the prescribed
amount or (2) otherwise "cover" its future obligations under the transaction,
such as by holding an offsetting investment. If a Fund segregates sufficient
cash or other liquid assets or otherwise "covers" its obligations under such
transactions, a Fund will not consider the transactions to be borrowings for
purposes of its investment restrictions or "senior securities" under the 1940
Act, and therefore, such transactions will not be subject to the 300% asset
coverage requirement under the 1940 Act otherwise applicable to borrowings by a
Fund.

In some cases (e.g., with respect to futures and forwards that are contractually
required to "cash-settle"), a Fund will segregate cash or other liquid assets
with respect to the amount of the daily net (marked-to-market) obligation
arising from the transaction, rather than the notional amount of the underlying
contract. By segregating assets in an amount equal to the net obligation rather
than the notional amount, a Fund will have the ability to employ leverage to a
greater extent than if it set aside cash or other liquid assets equal to the
notional amount of the contract, which may increase the risk associated with
such transactions.

A Fund may utilize methods of segregating assets or otherwise "covering"
transactions that are currently or in the future permitted under the 1940 Act,
the rules and regulation thereunder, or orders issued by the SEC thereunder. For
these purposes, interpretations and guidance provided by the SEC staff may be
taken into account when deemed appropriate by a Fund.

Assets used as segregation or cover cannot be sold while the position in the
corresponding transaction is open, unless they are replaced with other
appropriate assets. As a result, the commitment of a large portion of a Fund's
assets for segregation and cover purposes could impede portfolio management or a
Fund's ability to meet redemption requests or other current obligations.

Segregating assets or otherwise "covering" for these purposes does not
necessarily limit the percentage of the assets of a Fund that may be at risk
with respect to certain derivative transactions.

Common Stocks. Common stocks, the most familiar type of equity securities,
represent an equity (i.e., ownership) interest in a corporation. They may or may
not pay dividends or carry voting rights. Common stock occupies the most junior
position in a company's capital structure. Although equity securities have a
history of long-term growth in value, their prices fluctuate based on changes in
a company's financial condition, as well as changes in overall market and
economic conditions. This affects the value of the shares of the Funds, and thus
the value of your investment. Smaller companies are especially sensitive to
these factors.

Warrants. The Funds may invest in warrants. Warrants are securities that give
the holder the right but not the obligation to buy a specified number of shares
of common stock at a specified price, which is often higher than the market
price at the time of issuance, for a specified period (or in perpetuity).
Warrants may be issued in units with other securities or separately, and may be
freely transferable and traded on exchanges. Investing in warrants can provide a
greater potential for profit or loss than an equivalent investment in the
underlying security and, thus, is a speculative investment. At the time of
issue, the cost of a warrant is substantially less than the cost of the
underlying security itself, and price movements in the underlying security are
generally magnified in the price movements of the warrant. This leveraging
effect enables the investor to gain exposure to the underlying security with a
relatively low capital investment. Such leveraging increases an investor's risk,
however, in the event of a decline in the value of the underlying security and
can result in a complete loss of the amount invested in the warrant.

While the market value of a warrant tends to be more volatile than that of the
securities underlying the warrant, changes in the market value of a warrant may
not necessarily correlate with that of the underlying security. A warrant ceases
to have value if it is not exercised prior to the expiration date, if any, to
which the warrant is subject. The purchase of warrants involves a risk that the
Funds could lose the purchase value of a warrant if the right to subscribe to
additional shares is not exercised prior to the warrant's expiration. Also, the
purchase of warrants involves the risk that the effective price paid for the
warrant added to the subscription price of the related security may exceed the
value of the subscribed security's market price, such as when there is no
movement in the level of the underlying security. The value of a warrant may
decline because of a decline in the value of the underlying security, the
passage of time, changes in interest rates or in the dividend or other policies
of the company whose equity underlies the warrant or a change in the perception
as to the future price of the underlying security, or any combination thereof.
Also, warrants do not entitle the holder to dividends or voting rights with
respect to the underlying securities and do not represent any rights in the
assets of the issuing company.

Preferred Stock. The Funds may invest in preferred stock. Preferred stock has a
preference (i.e., ranks higher) in liquidation (and generally dividends) over
common stock but is subordinated (i.e., ranks lower) in liquidation to fixed
income securities. Dividends on preferred stock may be cumulative, and in such
cases, all cumulative dividends usually must be paid prior to dividend payments
to common stockholders. Because of this preference, preferred stocks generally
entail less risk than common stocks. As a general rule the market value of
preferred stocks with fixed dividend rates and no conversion rights moves
inversely with interest rates and perceived credit risk, with the price
determined by the dividend rate. Some preferred stocks are convertible into
other securities (e.g., common stock) at a fixed price and ratio or upon the
occurrence of certain events. The market price of convertible preferred stocks
generally reflects an element of conversion value. Because many preferred stocks
lack a fixed maturity date, these securities generally fluctuate substantially
in value when interest rates change; such fluctuations often exceed those of
long-term bonds of the same issuer. Some preferred stocks pay an adjustable
dividend that may be based on an index, formula, auction procedure or other
dividend rate reset mechanism. In the absence of credit deterioration,
adjustable rate preferred stocks tend to have more stable market values than
fixed rate preferred stocks.

All preferred stocks are also subject to the same types of credit risks as
corporate bonds. In addition, because preferred stock is subordinate to debt
securities and other obligations of an issuer, deterioration in the credit
rating of the issuer will cause greater changes in the value of a preferred
stock than in a more senior debt security with similar yield characteristics.
Preferred stocks may be rated by the Standard & Poor's Division of The
McGraw-Hill Companies, Inc. ("S&P") and Moody's Investors Service, Inc.
("Moody's"), although there is no minimum rating which a preferred stock must
have to be an eligible investment for the Funds. Generally, however, the
preferred stocks in which the Funds invest will be rated at least CCC by S&P or
Caa by Moody's or, if unrated, of comparable quality in the opinion of the
Advisor. Preferred stocks rated CCC by S&P are regarded as predominantly
speculative with respect to the issuer's capacity to pay preferred stock
obligations and represent the highest degree of speculation among securities
rated between BB and CCC; preferred stocks rated Caa by Moody's are likely to be
in arrears on dividend payments. Moody's ratings with respect to preferred
stocks do not purport to indicate the future status of payments of dividends.

Convertible Securities. A convertible security is a bond or preferred stock
which may be converted at a stated price within a specific period of time into a
specified number of shares of common stock of the same or a different issuer.
Convertible securities are senior to common stock in a corporation's capital
structure, but are generally subordinate to non-convertible debt securities.
While providing a fixed income stream that is generally higher in yield than the
income derived from a common stock but lower than that afforded by a
non-convertible debt security, a convertible security also affords an investor
the opportunity, through its conversion feature, to participate in the capital
appreciation of common stock into which it is convertible.

The terms of any convertible security determine its ranking in a company's
capital structure. In the case of subordinated convertible debentures, the
holders' claims on assets and earnings are subordinated to the claims of other
creditors and are senior to the claims of preferred and common shareholders. In
the case of convertible preferred stock, the holders' claims on assets and
earnings are subordinated to the claims of all creditors and are senior to the
claims of common shareholders. In general, the market value of a convertible
security is the greater of its investment value (its value as a fixed income
security) or its conversion value (the value of the underlying shares of common
stock if the security is converted). As a fixed income security, the market
value of a convertible security generally increases when interest rates decline
and generally decreases when interest rates rise; however, the price of a
convertible security generally increases as the market value of the underlying
stock increases and generally decreases as the market value of the underlying
stock declines. Investments in convertible securities generally entail less risk
than investments in the common stock of the same issuer.

Medium-Capitalization and Small-Capitalization Stocks. Lesser known companies
with medium- and small-market capitalizations frequently offer greater growth
potential than larger, better-known and more mature companies. Investments in
medium- and small-capitalization companies involve considerations that are not
applicable to investing in securities of established, larger capitalization
issuers, including reduced and less reliable information about the issuer, less
stringent financial disclosure requirements, higher brokerage commissions and
fees, and greater market risk in general.

In addition, investing in the securities of these companies also involves the
possibility of greater portfolio price volatility. Among the reasons for the
greater price volatility of such companies are the less certain growth prospects
of medium and smaller firms, the greater illiquidity in the markets for the
stocks of such companies and the greater sensitivity of such companies to
changing economic conditions in their respective geographic regions.

For example, securities of these companies involve higher investment risk than
that normally associated with larger firms due to the greater business risks of
smaller size and limited product lines, markets, distribution channels and
financial and managerial resources.

In addition, many medium- and small-market capitalization companies are not
well-known to the investing public, do not have significant institutional
ownership and are followed by relatively few securities analysts. Also, the
securities of smaller capitalization companies traded on the OTC market may have
fewer market makers, wider spreads between their quoted bid and ask prices and
lower trading volumes, resulting in comparatively greater price volatility and
less liquidity than exists for securities of larger capitalization companies.

Small and Micro Capitalization Companies. Each Fund invests a portion of its
assets in smaller, lesser-known companies which the Advisor believes offer
greater growth potential than larger, more mature, better-known companies.
Investing in the securities of these companies, however, also involves
significantly greater risk and the possibility of greater portfolio price
volatility. Among the reasons for the greater price volatility of these small
companies and unseasoned stocks are the less certain growth prospects of smaller
firms, the lower degree of liquidity in the markets for such stocks and the
greater sensitivity of small companies to changing economic conditions in their
geographic region. For example, securities of these companies involve higher
investment risk than that normally associated with larger firms due to the
greater business risks of small size and limited product lines, markets,
distribution channels and financial and managerial resources and, therefore,
such securities may be subject to more abrupt or erratic market movements than
securities of larger, more established companies or the market averages in
general. Many smaller capitalization companies in which a Fund may invest are
not well known to the investing public, do not have significant institutional
ownership and are followed by relatively few securities analysts. As a result,
it may be difficult to obtain reliable information and financial data on such
companies and the securities of these small companies may not be readily
marketable, making it difficult to dispose of shares when desirable. As
mentioned above, the securities of smaller capitalization companies traded on
the OTC market may have fewer market makers, wider spreads between their quoted
bid and asked prices and lower trading volumes, resulting in comparatively
greater price volatility and less liquidity than exists for securities of larger
capitalization companies. An additional risk of investing in smaller emerging
companies is that smaller issuers may face increased difficulty in obtaining the
capital necessary to continue operations and thus may go into bankruptcy, which
could result in a complete loss of an investment. Furthermore, when the economy
enters into recession there tends to be a "flight to quality," which exacerbates
the increased risk and greater price volatility normally associated with smaller
companies.

Impact of Sub-Prime Mortgage Market. A Fund may invest in mortgage-backed,
asset-backed and other fixed-income securities whose value and liquidity may be
adversely affected by the critical downturn in the sub-prime mortgage lending
market in the US. Sub-prime loans, which, have higher interest rates, are made
to borrowers with low credit ratings or other factors that increase the risk of
default. Concerns about widespread defaults on sub-prime loans have also created
heightened volatility and turmoil in the general credit markets. As a result, a
Fund's investments in certain fixed-income securities may decline in value,
their market value may be more difficult to determine, and a Fund may have more
difficulty disposing of them.

Investing in Foreign Securities. Each Fund may invest up to 20% of its total
assets in foreign securities. Investors should realize that investing in
securities of foreign issuers involves considerations not typically associated
with investing in securities of companies organized and operated in the United
States. Investors should realize that the value of the Funds' foreign
investments may be adversely affected by changes in political or social
conditions, diplomatic relations, confiscatory taxation, expropriation,
nationalization, limitation on the removal of funds or assets, or imposition of
(or change in) exchange control or tax regulations in foreign countries. In
addition, changes in government administrations or economic or monetary policies
in the United States or abroad could result in appreciation or depreciation of
portfolio securities and could favorably or unfavorably affect the Funds'
operations. Furthermore, the economies of individual foreign nations may differ
from the US economy, whether favorably or unfavorably, in areas such as growth
of gross national product, rate of inflation, capital reinvestment, resource
self-sufficiency or balance of payments position. In addition, it may be more
difficult to obtain and enforce a judgment against a foreign issuer. In general,
less information is publicly available with respect to foreign issuers than is
available with respect to US companies. Most foreign companies are not subject
to the uniform accounting and financial reporting requirements applicable to
issuers in the United States. Any foreign investments made by the Funds must be
made in compliance with US and foreign currency restrictions and tax laws
restricting the amounts and types of foreign investments.

The Funds' foreign investments may be less liquid and their prices may be more
volatile than comparable investments in securities of US companies. The
settlement periods for foreign securities, which are often longer than those for
securities of US issuers, may affect portfolio liquidity. Furthermore, there may
be less government supervision and regulation of securities exchanges, brokers
and issuers in foreign countries than in the United States.

Trading in Foreign Securities. Trading in foreign securities may be completed at
times which vary from the closing of the New York Stock Exchange ("NYSE"). In
computing their net asset values, the Funds value foreign securities at the
latest closing price on the exchange on which they are traded immediately prior
to the closing of the NYSE. Foreign securities quoted in foreign currencies are
translated into US dollars at the foreign exchange rates.

Occasionally, events that affect values and exchange rates may occur between the
times at which such values and exchange rates are determined and the closing of
the NYSE. If such events materially affect the value of portfolio securities,
these securities may be valued at their fair value as determined in good faith
using methods approved by the Trustees.

US Dollar-Denominated Foreign Debt Securities. Each Fund may invest in the US
dollar-denominated debt securities of foreign companies. Investing in the
securities of foreign companies involves more risks than investing in securities
of US companies. Their value is subject to economic and political developments
in the countries where the companies operate and to changes in foreign currency
values. Values may also be affected by foreign tax laws, changes in foreign
economic or monetary policies, exchange control regulations and regulations
involving prohibitions on the repatriation of foreign currencies.

In addition, the relative performance of various countries' fixed income markets
historically has reflected wide variations relating to the unique
characteristics of each country's economy. Year-to-year fluctuations in certain
markets have been significant, and negative returns have been experienced in
various markets from time to time.

US Dollar-Denominated Foreign Government Debt Securities. Each Fund may invest
in US dollar-denominated foreign government debt securities which include debt
obligations issued or guaranteed by national, state or provincial governments or
similar political subdivisions and quasi-governmental and supranational entities
(collectively, "sovereign debt obligations"). Sovereign debt obligations,
especially those of developing countries, may involve a high degree of risk. The
issuer of such an obligation or the governmental authorities that control the
repayment of the obligation may be unable or unwilling to repay principal and
interest when due and may require renegotiation or rescheduling of debt
payments. In addition, prospects for repayment of principal and interest may
depend on political as well as economic factors.

Quasi-governmental and supranational entities include international
organizations designated or supported by governmental entities to promote
economic reconstruction or development and international banking institutions
and related government agencies. Examples include (but are not limited to) the
International Bank for Reconstruction and Development (the "World Bank"), the
Japanese Development Bank, the Asian Development Bank and the Inter-American
Development Bank. Currently, the Portfolio intends to invest only in obligations
issued or guaranteed by the Asian Development Bank, the Inter-American
Development Bank, the World Bank, the African Development Bank, the European
Coal and Steel Community, the European Economic Community, the European
Investment Bank and the Nordic Investment Bank. Foreign government securities
also include mortgage-related securities issued or guaranteed by national, state
or provincial governmental instrumentalities, including quasi-governmental
agencies.

Fixed Income Securities and Money Market Instruments

General. Each Fund may invest in a broad range of domestic and foreign fixed
income (debt) securities consistent with its investment objective and the 80%
investment policy for each Fund. Fixed income securities, including (but not
limited to) bonds, are used by issuers to borrow money from investors. The
issuer pays the investor a fixed or variable rate of interest and must repay the
amount borrowed at maturity. Some debt securities, such as zero coupon bonds, do
not pay current interest, but are purchased at a discount from their face
values.

The value of fixed income securities in a Fund's securities portfolio generally
varies inversely with changes in interest rates. Prices of fixed income
securities with longer effective maturities are more sensitive to interest rate
changes than those with shorter effective maturities.

In periods of declining interest rates, the yield (the income generated over a
stated period of time) of a Fund that invests in fixed income securities may
tend to be higher than prevailing market rates and, in periods of rising
interest rates, the yield of such Fund may tend to be lower. Also, when interest
rates are falling, the inflow of net new money to such a Fund from the
continuous sale of its shares will likely be invested in portfolio instruments
producing lower yields than the balance of the Fund's investment portfolio,
thereby reducing the yield of the Fund. In periods of rising interest rates, the
opposite can be true. To the extent a Fund invests in fixed income securities,
the net asset value can generally be expected to change as general levels of
interest rates fluctuate.

Fixed Income Security Risk. Fixed income securities generally expose a Fund to
four types of risk: (1) interest rate risk (the potential for fluctuations in
bond prices due to changing interest rates); (2) income risk (the potential for
a decline in the Fund's income due to falling market interest rates); (3) credit
risk (the possibility that a bond issuer will fail to make timely payments of
either interest or principal to the Fund); and (4) prepayment risk or call risk
(the likelihood that, during a period of falling interest rates, securities with
high stated interest rates will be prepaid, or "called" prior to maturity,
requiring the Fund to invest the proceeds at generally lower interest rates).

Short-Term Instruments. When a Fund experiences large cash inflows -- for
example, through the sale of securities -- and attractive investments are
unavailable in sufficient quantities, the Fund may hold short-term investments
(or shares of money market mutual funds) for a limited time pending availability
of such investments. Each Fund may invest up to 20% of its total assets in high
quality short-term investments with remaining maturities of 397 days or less, or
in money market mutual funds, to meet anticipated redemptions and expenses for
day-to-day operating purposes. In addition, when in the Advisor's opinion it is
advisable to adopt a temporary defensive position because of unusual and adverse
market or other conditions, up to 100% of a Fund's assets may be invested in
such short-term instruments.

Short-term instruments consist of foreign and domestic: (1) short-term
obligations of sovereign governments, their agencies, instrumentalities,
authorities or political subdivisions; (2) other short-term debt securities
rated AA or higher by S&P or Aa or higher by Moody's or, if unrated, are deemed
to be of comparable quality in the opinion of the Advisor; (3) commercial paper;
(4) bank obligations, including negotiable certificates of deposit, time
deposits and bankers' acceptances; and (5) repurchase agreements. At the time a
Fund invests in commercial paper, bank obligations or repurchase agreements, the
issuer or the issuer's parent must have outstanding debt rated AA or higher by
S&P or Aa or higher by Moody's; outstanding commercial paper or bank obligations
rated A-1 by S&P or Prime-1 by Moody's; or, if no such ratings are available,
the instrument must be deemed to be of comparable quality in the opinion of the
Advisor. These instruments may be denominated in US dollars or in foreign
currencies.

Other US government securities that the Funds may invest in include (but are not
limited to) securities issued or guaranteed by the Federal Housing
Administration, Farmers Home Loan Administration, Export-Import Bank of the US,
Small Business Administration, General Services Administration, Central Bank for
Cooperatives, Federal Farm Credit Banks, Federal Intermediate Credit Banks,
Federal Land Banks, Maritime Administration, Tennessee Valley Authority,
District of Columbia Armory Board and Student Loan Marketing Association.
Because the US government is not obligated by law to provide support to an
instrumentality it sponsors, a Fund will invest in obligations issued by such an
instrumentality only if the Advisor determines that the credit risk with respect
to the instrumentality does not make its securities unsuitable for investment by
a Fund.

Each Fund may also invest in separately traded principal and interest components
of securities guaranteed or issued by the US Government or its agencies,
instrumentalities or sponsored enterprises if such components trade
independently under the Separate Trading of Registered Interest and Principal of
Securities program ("STRIPS") or any similar program sponsored by the US
Government. STRIPS are sold as zero coupon securities. See " Zero Coupon
Securities and Deferred Interest Bonds."

Certificates of Deposit and Bankers' Acceptances. Certificates of deposit are
receipts issued by a depository institution in exchange for the deposit of
funds. The issuer agrees to pay the amount deposited plus interest to the bearer
of the receipt on the date specified on the certificate. The certificate usually
can be traded in the secondary market prior to maturity.

Bankers' acceptances typically arise from short-term credit arrangements
designed to enable businesses to obtain funds to finance commercial
transactions. Generally, an acceptance is a time draft drawn on a bank by an
exporter or an importer to obtain a stated amount of funds to pay for specific
merchandise. The draft is then "accepted" by a bank that, in effect,
unconditionally guarantees to pay the face value of the instrument on its
maturity date. The acceptance may then be held by the accepting bank as an
earning asset or it may be sold in the secondary market at the going rate of
discount for a specific maturity. Although maturities for acceptances can be as
long as 270 days, most acceptances have maturities of six months or less.

Commercial Paper. The Funds may invest in fixed rate or variable rate commercial
paper, issued by US or foreign entities. Commercial paper consists of short-term
(usually from 1 to 270 days) unsecured promissory notes issued by US or foreign
corporations in order to finance their current operations. Any commercial paper
issued by a foreign entity corporation and purchased by the Fund must be US
dollar-denominated and must not be subject to foreign withholding tax at the
time of purchase.

Commercial paper when purchased by the Funds must be rated in the highest
short-term rating category by any two nationally recognized statistical ratings
organizations ("NRSROs") (or one NRSRO if that NRSRO is the only such NRSRO
which rates such security) or, if not so rated, must be believed by the Advisor,
acting under the supervision of the Board of Trustees of the Funds, to be of
comparable quality. Investing in foreign commercial paper generally involves
risks similar to those described above relating to obligations of foreign banks
or foreign branches and subsidiaries of US and foreign banks.

The Funds may also invest in variable rate master demand notes. A variable rate
master demand note (which is a type of commercial paper) represents a direct
borrowing arrangement involving periodically fluctuating rates of interest under
a letter agreement between a commercial paper issuer and an institutional lender
pursuant to which the lender may determine to invest varying amounts.

For a description of commercial paper ratings, see Appendix B to this SAI.

US Government Securities. The Funds may invest in obligations issued or
guaranteed by the US government, which include: (1) direct obligations of the US
Treasury and (2) obligations issued by US government agencies and
instrumentalities. Included among direct obligations of the United States are
Treasury Bills, Treasury Notes and Treasury Bonds, which differ in terms of
their interest rates, maturities and dates of issuance. Treasury Bills have
maturities of less than one year, Treasury Notes have maturities of one to 10
years and Treasury Bonds generally have maturities of greater than 10 years at
the date of issuance. Included among the obligations issued by agencies and
instrumentalities of the United States are: instruments that are supported by
the full faith and credit of the US (such as certificates issued by the
Government National Mortgage Association ("GNMA" or "Ginnie Mae")); instruments
that are supported by the right of the issuer to borrow from the US Treasury
(such as securities of Federal Home Loan Banks); and instruments that are
supported solely by the credit of the instrumentality (such as Federal National
Mortgage Association ("FNMA" or "Fannie Mae") and Federal Home Loan Mortgage
Corporation ("FHLMC" or "Freddie Mac")).

Investments in American, European, Global and International Depository Receipts.
The Funds may invest in non-US securities in the form of American Depository
Receipts ("ADRs"), European Depository Receipts ("EDRs"), Global Depository
Receipts ("GDRs"), or International Depository Receipts ("IDRs"). ADRs are
receipts typically issued by a US bank or trust company which evidence ownership
of underlying securities issued by a foreign corporation. EDRs and IDRs are
receipts issued in Europe typically by non-US banking and trust companies that
evidence ownership of either foreign or US securities. GDRs are receipts issued
by either a US or non-US banking institution evidencing ownership of the
underlying non-US securities. Generally, ADRs, in registered form, are designed
for use in US securities markets and EDRs, GDRs and IDRs, in bearer form, are
designed for use in European and international securities markets. An ADR, EDR,
GDR or IDR may be denominated in a currency different from the currency in which
the underlying foreign security is denominated.

Zero Coupon Securities and Deferred Interest Bonds. The Funds may invest in zero
coupon securities and deferred interest bonds. Zero coupon and deferred interest
bonds are debt obligations which are issued at a significant discount from face
value. The original discount approximates the total amount of interest the bonds
will accrue and compound over the period until maturity or the first interest
accrual date at a rate of interest reflecting the market rate of the security at
the time of issuance. Zero coupon securities are redeemed at face value at their
maturity date without interim cash payments of interest or principal. The amount
of this discount is accrued over the life of the security, and the accrual
constitutes the income earned on the security for both accounting and tax
purposes. Because of these features, the market prices of zero coupon securities
are generally more volatile than the market prices of securities that have
similar maturity but that pay interest periodically.

While zero coupon bonds do not require the periodic payment of interest,
deferred interest bonds generally provide for a period of delay before the
regular payment of interest begins. Although this period of delay is different
for each deferred interest bond, a typical period is approximately one third of
the bond's term to maturity. Such investments benefit the issuer by mitigating
its initial need for cash to meet debt service, but some also provide a higher
rate of return to attract investors who are willing to defer receipt of such
cash.

The Funds will accrue income on such investments for tax and accounting
purposes, as required, which is distributable to shareholders and which, because
no cash is generally received at the time of accrual, may require the
liquidation of other portfolio securities to satisfy the Funds' distribution
obligations. See "Taxes."

Repurchase Agreements. The Funds may engage in repurchase agreement transactions
with member banks of the Federal Reserve System and certain non-bank dealers,
including governmental securities dealers approved by the Funds' Board of
Trustees. Under the terms of a typical repurchase agreement, a Fund would
acquire any underlying security for a relatively short period (usually not more
than one week), subject to an obligation of the seller to repurchase, and the
Fund to resell, the obligation at an agreed price and time, thereby determining
the yield during the Fund's holding period. This arrangement results in a fixed
rate of return that is not subject to market fluctuations during the Fund's
holding period. The value of the underlying securities will be at least equal at
all times to the total amount of the repurchase obligations, including interest.
A Fund bears a risk of loss in the event of default by or bankruptcy of the
other party to a repurchase agreement. A Fund may be delayed in, or prevented
from, exercising its rights to dispose of the collateralized securities. To the
extent that, in the meantime, the value of the securities repurchased had
decreased or the value of the securities had increased, the Fund could
experience a loss. The Advisor reviews the creditworthiness of those banks and
dealers with which the Funds enter into repurchase agreements and monitors on an
ongoing basis the value of the securities subject to repurchase agreements to
ensure that such value is maintained at the required level. A repurchase
agreement is considered to be a loan under the 1940 Act.

Reverse Repurchase Agreements. Each Fund may borrow funds for temporary or
emergency purposes, such as meeting larger than anticipated redemption requests,
and not for leverage, by among other things, agreeing to sell portfolio
securities to financial institutions such as member banks of the Federal Reserve
System and certain non-bank dealers and to repurchase them at a mutually agreed
date and price (a "reverse repurchase agreement"). At the time a Fund enters
into a reverse repurchase agreement, it will segregate cash or liquid securities
having a value equal to the repurchase price, including accrued interest. The
segregated assets will be marked-to-market daily and additional assets will be
segregated on any day in which the assets fall below the repurchase price (plus
accrued interest). A Fund's liquidity and ability to manage its assets might be
affected when it sets aside cash or portfolio securities to cover such
commitments. Reverse repurchase agreements involve the risk that the market
value of the securities sold by a Fund may decline below the repurchase price of
those securities. In the event the buyer of securities under a reverse
repurchase agreement files for bankruptcy or becomes insolvent, such buyer or
its trustee or receiver may receive an extension of time to determine whether to
enforce a Fund's obligation to repurchase the securities, and the Fund's use of
the proceeds of the reverse repurchase agreement may effectively be restricted
pending such decision. Reverse repurchase agreements are considered to be
borrowings by a Fund.

Mortgage Dollar Rolls. The Funds may enter into mortgage "dollar rolls" in which
a Fund sells securities for delivery in the current month and simultaneously
contracts to repurchase substantially similar (same type, coupon and maturity),
but not identical, securities on a specified future date. During the roll
period, the Fund forgoes principal and interest paid on the securities. The Fund
is compensated by the difference between the current sales price and the lower
forward price for the future purchase (often referred to as the "drop") or fee
income and by the interest earned on the cash proceeds of the initial sale. A
"covered roll" is a specific type of dollar roll for which there is an
offsetting cash position or a cash equivalent security position which matures on
or before the forward settlement date of the dollar roll transaction. The Funds
may enter into both covered and uncovered rolls. At the time a Fund enters into
a dollar roll transaction, it will segregate cash or liquid securities having a
value not less than the repurchase price (including accrued interest) and will
subsequently monitor the segregated assets to ensure that its value is
maintained.

Illiquid Securities. Historically, illiquid securities have included securities
subject to contractual or legal restrictions on resale because they have not
been registered under the 1933 Act, securities that are otherwise not readily
marketable and repurchase agreements having a maturity of longer than seven
days. Securities that have not been registered under the 1933 Act are referred
to as private placements or restricted securities and are purchased directly
from the issuer or in the secondary market. Non-publicly traded securities
(including Rule 144A securities, discussed in greater detail below) may involve
a high degree of business and financial risk and may result in substantial
losses. These securities may be less liquid than publicly traded securities, and
it may take longer to liquidate these positions than would be the case for
publicly traded securities. Companies whose securities are not publicly traded
may not be subject to the disclosure and other investor protection requirements
applicable to companies whose securities are publicly traded. Limitations on
resale may have an adverse effect on the marketability of portfolio securities,
and a mutual fund might be unable to dispose of restricted or other illiquid
securities promptly or at reasonable prices and might thereby experience
difficulty satisfying redemptions within seven days. An investment in illiquid
securities is subject to the risk that should a Fund desire to sell any of these
securities when a ready buyer is not available at a price that is deemed to be
representative of the securities' value, the value of the Fund's net assets
could be adversely affected.

Mutual funds do not typically hold a significant amount of these restricted or
other illiquid securities because of the potential for delays on resale and
uncertainty in valuation. A mutual fund might also have to register such
restricted securities in order to dispose of them, resulting in additional
expense and delay. Adverse market conditions could impede such a public offering
of securities.

A large institutional market has developed for certain securities that are not
registered under the 1933 Act, including repurchase agreements, commercial
paper, non-US securities, municipal securities and corporate bonds and notes.
Institutional investors depend on an efficient institutional market in which the
unregistered security can be readily resold or on an issuer's ability to honor a
demand for repayment. The fact that there are contractual or legal restrictions
on resale of such investments to the general public or to certain institutions
may not be indicative of their liquidity.

The SEC has adopted Rule 144A, which allows a broader institutional trading
market for securities otherwise subject to restriction on their resale to the
general public. Rule 144A establishes a "safe harbor" from the registration
requirements of the 1933 Act for resales of certain securities to qualified
institutional buyers ("Rule 144A Securities"). The Advisor anticipates that the
market for certain restricted securities such as institutional commercial paper
will expand further as a result of this regulation and the development of
automated systems for the trading, clearance and settlement of unregistered
securities of domestic and non-US issuers, such as the PORTAL System sponsored
by the Financial Industry Regulatory Authority ("FINRA").

An investment in Rule 144A Securities will be considered illiquid and therefore
subject to a Fund's limit on the purchase of illiquid securities unless the
Board determines or its delegates determine that the Rule 144A Securities are
liquid. In reaching liquidity decisions, the Board and its delegates may
consider, inter alia, the following factors: (i) the unregistered nature of the
security; (ii) the frequency of trades and quotes for the security; (iii) the
number of dealers wishing to purchase or sell the security and the number of
other potential purchasers; (iv) dealer undertakings to make a market in the
security; and (v) the nature of the security and the nature of the marketplace
trades (e.g., the time needed to dispose of the security, the method of
soliciting offers and the mechanics of the transfer).

Investing in Rule 144A Securities could have the effect of increasing the level
of illiquidity in a Fund to the extent that qualified institutional buyers are
unavailable or uninterested in purchasing such securities from the Fund. The
Board has adopted guidelines and delegated to the Advisor the daily function of
determining and monitoring the liquidity of Rule 144A Securities, although the
Board will retain ultimate responsibility for any liquidity determinations.

When-Issued and Delayed Delivery Securities. The Funds may purchase securities
on a when-issued or delayed delivery basis. Delivery of and payment for these
securities can take place a month or more after the date of the purchase
commitment. The payment obligation and the interest rate that will be received
on when-issued and delayed delivery securities are fixed at the time the buyer
enters into the commitment. Due to fluctuations in the value of securities
purchased or sold on a when-issued or delayed delivery basis, the yields
obtained on such securities may be higher or lower than the yields available in
the market on the dates when the investments are actually delivered to the
buyers. When-issued securities may include securities purchased on a "when, as,
and if-issued" basis, under which the issuance of the security depends on the
occurrence of a subsequent event, such as approval of a merger, corporate
reorganization or debt restructuring. The value of such securities is subject to
market fluctuation during this period and no interest or income, as applicable,
accrues to a Fund until settlement takes place.

At the time when a Fund makes the commitment to purchase securities on a
when-issued or delayed delivery basis, it will record the transaction, reflect
the value each day of such securities in determining its net asset value and, if
applicable, calculate the maturity for the purposes of average maturity from
that date. At the time of settlement a when-issued security may be valued at
less than the purchase price. To facilitate such acquisition, a Fund identifies
on its books cash or liquid assets in an amount at least equal to such
commitments. It may be expected that the Fund's net assets will fluctuate to a
greater degree when it sets aside portfolio securities to cover such purchase
commitments than when it sets aside cash. On delivery dates for such
transactions, the Fund will meet its obligations from maturities or sales of the
segregated securities and/or from cash flow. If a Fund chooses to dispose of the
right to acquire a when-issued security prior to its acquisition, it could, as
with the disposition of any other portfolio obligation, incur a gain or loss due
to market fluctuation. It is the current policy of the Funds not to enter into
when-issued commitments exceeding in the aggregate 15% for both DWS Mid Cap
Growth Fund and DWS Small Cap Growth Fund and 33 1/3% for DWS Micro Cap Fund in
each case, of the market value of the applicable Fund's total assets, less
liabilities other than the obligations created by when-issued commitments. When
a Fund engages in when-issued or delayed-delivery transactions, it relies on the
other party to consummate the trade. Failure of the seller to do so may result
in the Fund's incurring a loss or missing an opportunity to obtain a price
considered to be advantageous.

Lending of Portfolio Securities. Each Fund may lend its investment securities to
approved institutional borrowers who need to borrow securities in order to
complete certain transactions, such as covering short sales, avoiding failures
to deliver securities or completing arbitrage operations. By lending its
investment securities, a Fund attempts to increase its net investment income
through the receipt of interest on the loan. Any gain or loss in the market
price of the securities loaned that might occur during the term of the loan
would belong to a Fund. Each Fund may lend its investment securities so long as
the terms, structure and the aggregate amount of such loans are not inconsistent
with the 1940 Act or the rules and regulations or interpretations of the SEC
thereunder, which currently require, among other things, that (a) the borrower
pledge and maintain with a Fund collateral consisting of liquid, unencumbered
assets having a value at all times not less than 100% of the value of the
securities loaned, (b) the borrower add to such collateral whenever the price of
the securities loaned rises (i.e., the borrower "marks to the market" on a daily
basis), (c) the loan be made subject to termination by a Fund at any time, and
(d) a Fund receives reasonable interest on the loan (which may include a Fund
investing any cash collateral in interest bearing short-term investments), and
distributions on the loaned securities and any increase in their market value.
Each Fund will bear any losses incurred from the investment of the collateral it
receives. There may be risks of delay in recovery of the securities or even loss
of rights in the collateral should the borrower of the securities fail
financially. However, loans will be made only to borrowers selected by a Fund's
delegate after a commercially reasonable review of relevant facts and
circumstances, including the creditworthiness of the borrower.

Each Fund may pay negotiated fees in connection with loaned securities, pursuant
to written contracts. In addition, voting rights may pass with the loaned
securities, but if a material event occurs affecting an investment on loan, the
loan must be called and the securities voted. Pursuant to an exemptive order
granted by the SEC, cash collateral received by a Fund may be invested in a
money market fund managed by the Advisor (or one of its affiliates).


Payments received by a Fund in lieu of any dividends paid on the loaned
securities will not be treated as "qualified dividend income" for purposes of
determining what portion of a Fund's dividends received by individuals may be
taxed at the rates generally applicable to long-term capital gains. See "Taxes."

Impact of Large Redemptions and Purchases of Fund Shares. From time to time,
shareholders of a Fund (which may include affiliated and/or non-affiliated
registered investment companies that invest in a Fund) may make relatively large
redemptions or purchases of Fund shares. These transactions may cause a Fund to
have to sell securities or invest additional cash, as the case may be. While it
is impossible to predict the overall impact of these transactions over time,
there could be adverse effects on a Fund's performance to the extent a Fund may
be required to sell securities or invest cash at times when it would not
otherwise do so. These transactions could also accelerate the realization of
taxable income if sales of securities resulted in capital gains or other income
and could also increase transaction costs.

Investment Company Securities. A Fund may acquire securities of other investment
companies to the extent consistent with its investment objective and subject to
the limitations of the 1940 Act. A Fund will indirectly bear its proportionate
share of any management fees and other expenses paid by such other investment
companies.

For example, a Fund may invest in a variety of investment companies which seek
to track the composition and performance of specific indexes or a specific
portion of an index. These index-based investments hold substantially all of
their assets in securities representing their specific index. Accordingly, the
main risk of investing in index-based investments is the same as investing in a
portfolio of equity securities comprising the index. The market prices of
index-based investments will fluctuate in accordance with both changes in the
market value of their underlying portfolio securities and due to supply and
demand for the instruments on the exchanges on which they are traded (which may
result in their trading at a discount or premium to their NAVs). Index-based
investments may not replicate exactly the performance of their specified index
because of transaction costs and because of the temporary unavailability of
certain component securities of the index.

Examples of index-based investments include:

SPDRs(R): SPDRs, an acronym for "Standard & Poor's Depositary Receipts," are
based on the S&P 500 Composite Stock Price Index. They are issued by the SPDR
Trust, a unit investment trust that holds shares of substantially all the
companies in the S&P 500 in substantially the same weighting and seeks to
closely track the price performance and dividend yield of the Index.

MidCap SPDRs(R): MidCap SPDRs are based on the S&P MidCap 400 Index. They are
issued by the MidCap SPDR Trust, a unit investment trust that holds a portfolio
of securities consisting of substantially all of the common stocks in the S&P
MidCap 400 Index in substantially the same weighting and seeks to closely track
the price performance and dividend yield of the Index.

Select Sector SPDRs(R): Select Sector SPDRs are based on a particular sector or
group of industries that are represented by a specified Select Sector Index
within the Standard & Poor's Composite Stock Price Index. They are issued by The
Select Sector SPDR Trust, an open-end management investment company with nine
portfolios that each seeks to closely track the price performance and dividend
yield of a particular Select Sector Index.

DIAMONDS(SM): DIAMONDS are based on the Dow Jones Industrial Average(SM). They
are issued by the DIAMONDS Trust, a unit investment trust that holds a portfolio
of all the component common stocks of the Dow Jones Industrial Average and seeks
to closely track the price performance and dividend yield of the Dow.

Nasdaq-100 Shares: Nasdaq-100 Shares are based on the Nasdaq-100 Index. They are
issued by the Nasdaq-100 Trust, a unit investment trust that holds a portfolio
consisting of substantially all of the securities, in substantially the same
weighting, as the component stocks of the Nasdaq-100 Index and seeks to closely
track the price performance and dividend yield of the Index.

Derivative Securities -- DWS Mid Cap Growth Fund and DWS Small Cap Growth Fund

General. Each Fund may invest in various instruments that are commonly known as
"derivatives." Generally, a derivative is a financial arrangement, the value of
which is based on, or "derived" from, a traditional security, asset or market
index. Some derivatives, such as mortgage-related and other asset-backed
securities, are in many respects like any other investment, although they may be
more volatile and/or less liquid than more traditional debt securities. There
are, in fact, many different types of derivatives and many different ways to use
them. There is a range of risks associated with those uses. For example, a Fund
may use futures and options as a low-cost method of gaining exposure to a
particular securities market without investing directly in those securities; for
traditional hedging purposes to attempt to protect the Fund from exposure to
changing interest rates, securities prices or currency exchange rates; and for
cash management or other investment purposes. The use of derivatives may result
in leverage, which tends to magnify the effects of an instrument's price changes
as market conditions change. Leverage involves the use of a small amount of
money to control a large amount of financial assets and can, in some
circumstances, lead to significant losses. Each Fund will limit the leverage
created by its use of derivatives for investment purposes by "covering" such
positions as required by the SEC. The Advisor may use derivatives in
circumstances where the Advisor believes they offer an economical means of
gaining exposure to a particular asset class. Derivatives will not be used to
increase portfolio risk above the level that could be achieved using only
traditional investment securities or to acquire exposure to changes in the value
of assets or indexes that by themselves would not be purchased for a Fund. The
use of derivatives for non-hedging purposes may be considered speculative.

Each Fund's investment in options, futures, forward contracts and similar
strategies depend on the Advisor's judgment as to the potential risks and
rewards of different types of strategies. Options and futures can be volatile
investments, and may not perform as expected. If the Advisor applies a hedge at
an inappropriate time or judges price trends incorrectly, options and futures
strategies may lower a Fund's return. A Fund could also experience losses if the
prices of its options and futures positions were poorly correlated with its
other investments, or if it could not close out its positions because of an
illiquid secondary market. Options and futures traded on foreign exchanges
generally are not regulated by US authorities and may offer less liquidity and
less protection to a Fund in the event of default by the other party to the
contract.

Options on Securities. Each Fund may purchase and write (sell) put and call
options on stocks. A call option gives the purchaser of the option the right to
buy, and obligates the writer to sell, the underlying stock at the exercise
price at any time during the option period. Similarly, a put option gives the
purchaser of the option the right to sell, and obligates the writer to buy, the
underlying stock at the exercise price at any time during the option period.

Each Fund may write (sell) covered call and put options to a limited extent on
its portfolio securities ("covered options") in an attempt to increase income
through the premiums it receives for writing the option(s). However, in return
for the premium, the Fund may forgo the benefits of appreciation on securities
sold or may pay more than the market price on securities acquired pursuant to
call and put options written by the Fund.

A call option written by a Fund is "covered" if the Fund owns the underlying
security covered by the call or has an absolute and immediate right to acquire
that security without additional cash consideration (or for additional cash
consideration held in a segregated account by its custodian) upon conversion or
exchange of other securities held in its portfolio. A call option is also
covered if the Fund holds a call option on the same security and in the same
principal amount as the written call option where the exercise price of the call
option so held (a) is equal to or less than the exercise price of the written
call option or (b) is greater than the exercise price of the written call option
if the difference is segregated by the Fund in cash or liquid securities.

When a Fund writes a covered call option, it gives the purchaser of the option
the right to buy the underlying security at the price specified in the option
(the "exercise price") by exercising the option at any time during the option
period. If the option expires unexercised, the Fund will realize income in an
amount equal to the premium received for writing the option. If the option is
exercised, a decision over which the Fund has no control, the Fund must sell the
underlying security to the option holder at the exercise price. By writing a
covered call option, the Fund forgoes, in exchange for the premium less the
commission ("net premium"), the opportunity to profit during the option period
from an increase in the market value of the underlying security above the
exercise price. In addition, the Fund may continue to hold a stock which might
otherwise have been sold to protect against depreciation in the market price of
the stock.

A put option written by a Fund is "covered" when, among other things, cash or
liquid securities acceptable to the broker are placed in a segregated account to
fulfill the obligations undertaken. When a Fund writes a covered put option, it
gives the purchaser of the option the right to sell the underlying security to
the Fund at the specified exercise price at any time during the option period.
If the option expires unexercised, the Fund will realize income in the amount of
the net premium received for writing the option. If the put option is exercised,
a decision over which the Fund has no control, the Fund must purchase the
underlying security from the option holder at the exercise price. By writing a
covered put option, the Fund, in exchange for the net premium received, accepts
the risk of a decline in the market value of the underlying security below the
exercise price. A Fund will only write put options involving securities for
which a determination is made at the time the option is written that the Fund
wishes to acquire the securities at the exercise price.

A Fund may terminate its obligation as the writer of a call or put option by
purchasing an option with the same exercise price and expiration date as the
option previously written. This transaction is called a "closing purchase
transaction." A Fund will realize a profit or loss on a closing purchase
transaction if the amount paid to purchase an option is less or more, as the
case may be, than the amount received from the sale thereof. To close out a
position as a purchaser of an option, a Fund may enter into a "closing sale
transaction" which involves liquidating the Fund's position by selling the
option previously purchased. When a Fund cannot effect a closing purchase
transaction, it may be forced to incur brokerage commissions or dealer spreads
in selling securities it receives or it may be forced to hold underlying
securities until an option is exercised or expires.

When a Fund writes an option, an amount equal to the net premium received by the
Fund is included in the liability section of the Fund's Statement of Assets and
Liabilities as a deferred credit. The amount of the deferred credit will be
subsequently marked to market to reflect the current market value of the option
written. The current market value of a traded option is the last sale price or,
in the absence of a sale, the mean between the closing bid and asked price. If
an option expires on its stipulated expiration date or if a Fund enters into a
closing purchase transaction, the Fund will realize a gain (or loss if the cost
of the closing purchase transaction exceeds the premium received when the option
was sold), and the deferred credit related to such option will be eliminated. If
a call option is exercised, the Fund will realize a gain or loss from the sale
of the underlying security, and the proceeds of the sale will be increased by
the premium originally received. The writing of covered call options may be
deemed to involve the pledge of the securities against which the option is being
written. Securities against which call options are written will be identified on
a Fund's books.

Each Fund may also purchase call and put options on any securities in which it
may invest. A Fund would normally purchase a call option in anticipation of an
increase in the market value of such securities. The purchase of a call option
would entitle the Fund, in exchange for the premium paid, to purchase a security
at a specified price during the option period. The Fund would ordinarily have a
gain if the value of the securities increased above the exercise price
sufficiently to cover the premium, and would have a loss if the value of the
securities remained at or below the exercise price during the option period.

A Fund would normally purchase put options in anticipation of a decline in the
market value of securities in its portfolio ("protective puts") or securities of
the type in which it is permitted to invest. The purchase of a put option would
entitle a Fund, in exchange for the premium paid, to sell a security, which may
or may not be held by the Fund, at a specified price during the option period.
The purchase of protective puts is designed merely to offset or hedge against a
decline in the market value of the Fund. Put options also may be purchased by a
Fund for the purpose of affirmatively benefiting from a decline in the price of
securities that the Fund does not own. The Fund would ordinarily recognize a
gain if the value of the securities decreased below the exercise price
sufficiently to cover the premium and would recognize a loss if the value of the
securities remained at or above the exercise price. Gains and losses on the
purchase of protective put options would tend to be offset by countervailing
changes in the value of underlying portfolio securities.

The hours of trading for options on securities may not conform to the hours
during which the underlying securities are traded. To the extent that the option
markets close before the markets for the underlying securities, significant
price and rate movements can take place in the underlying securities markets
that cannot be reflected in the option markets. It is impossible to predict the
volume of trading that may exist in such options, and there can be no assurance
that viable exchange markets will develop or continue.

Each Fund may also engage in options transactions in the OTC market with
broker-dealers who make markets in these options. The ability to terminate OTC
option positions is more limited than with exchange-traded option positions
because the predominant market is the issuing broker, rather than an exchange,
and OTC options may involve the risk that broker-dealers participating in such
transactions will not fulfill their obligations. To reduce this risk, a Fund
will purchase such options only from broker-dealers who are primary US
government securities dealers recognized by the Federal Reserve Bank of New York
and who agree to (and are expected to be capable of) entering into closing
transactions, although there can be no guarantee that any such option will be
liquidated at a favorable price prior to expiration. The Advisor will monitor
the creditworthiness of dealers with whom a Fund enters into such options
transactions under the general supervision of the Fund's Board of Trustees.
Unless the Trustees conclude otherwise, each Fund intends to treat OTC options
purchased and the assets used to "cover" OTC options written as not readily
marketable and therefore subject to the Fund's limit on investments in illiquid
securities.

Options on Securities Indices. Each Fund may also purchase and write
exchange-listed and OTC put and call options on US and foreign securities
indices. A securities index measures the movement of a certain group of
securities by assigning relative values to the securities included in the index,
fluctuating with changes in the market values of such securities. Some
securities index options are based on a broad market index, such as the NYSE
Composite Index, or a narrower market index, such as the S&P 100. Indices may
also be based on a particular industry or market segment.

Options on securities indices are similar to options on securities except that
(1) the expiration cycles of securities index options are monthly, while those
of securities options are currently quarterly, and (2) the delivery requirements
are different. Instead of giving the right to take or make delivery of stock at
a specified price, an option on a securities index gives the holder the right to
receive a cash "exercise settlement amount" equal to (a) the amount, if any, by
which the fixed exercise price of the option exceeds (in the case of a put) or
is less than (in the case of a call) the closing value of the underlying index
on the date of exercise, multiplied by (b) a fixed "index multiplier." Receipt
of this cash amount will depend upon the closing level of the securities index
upon which the option is based being greater than, in the case of a call, or
less than, in the case of a put, the exercise price of the index and the
exercise price of the option times a specified multiple. The writer of the
option is obligated, in return for the premium received, to make delivery of
this amount. Securities index options may be offset by entering into closing
transactions as described above for securities options.

As discussed in "Options on Securities," a Fund would normally purchase a call
option in anticipation of an increase in the market value of the relevant index.
The purchase of a call option would entitle the Fund, in exchange for the
premium paid, to purchase the underlying securities at a specified price during
the option period. The Fund would ordinarily have a gain if the value of the
underlying securities increased above the exercise price sufficiently to cover
the premium and would have a loss if the value of the securities remained at or
below the exercise price during the option period.

As discussed in "Options on Securities," each Fund would normally purchase put
options in anticipation of a decline in the market value of the relevant index
("protective puts"). The purchase of a put option would entitle the Fund, in
exchange for the premium paid, to sell the underlying securities at a specified
price during the option period. The purchase of protective puts is designed
merely to offset or hedge against a decline in the market value of the index.
The Fund would ordinarily recognize a gain if the value of the index decreased
below the exercise price sufficiently to cover the premium and would recognize a
loss if the value of the index remained at or above the exercise price. Gains
and losses on the purchase of protective put options would tend to be offset by
countervailing changes in the value of the index.

Because the value of an index option depends upon movements in the level of the
index rather than the price of a particular stock, whether a Fund will realize a
gain or loss from the purchase or writing of options on an index depends upon
movements in the level of stock prices in the stock market generally or, in the
case of certain indices, in an industry or market segment, rather than movements
in the price of a particular stock. Accordingly, successful use by a Fund of
options on stock indices will be subject to the Advisor's ability to predict
correctly movements in the direction of the stock market generally or of a
particular industry. This requires different skills and techniques than
predicting changes in the price of individual stocks.

Options on securities indices entail risks in addition to the risks of options
on securities. The absence of a liquid secondary market to close out options
positions on securities indices is more likely to occur, although a Fund
generally will only purchase or write such an option if the Advisor believes the
option can be closed out. Use of options on securities indices also entails the
risk that trading in such options may be interrupted if trading in certain
securities included in the index is interrupted. A Fund will not purchase such
options unless the Advisor believes the market is sufficiently developed such
that the risk of trading in such options is no greater than the risk of trading
in options on securities.

Price movements in a Fund's investment portfolio may not correlate precisely
with movements in the level of an index and, therefore, the use of options on
indices cannot serve as a complete hedge. Because options on securities indices
require settlement in cash, the Advisor may be forced to liquidate portfolio
securities to meet settlement obligations. The Fund's activities in index
options may also be restricted by the requirements of the Internal Revenue Code
of 1986, as amended (the "Code"), for qualification as a regulated investment
company.

In addition, the hours of trading for options on the securities indices may not
conform to the hours during which the underlying securities are traded. To the
extent that the option markets close before the markets for the underlying
securities, significant price and rate movements can take place in the
underlying securities markets that cannot be reflected in the option markets. It
is impossible to predict the volume of trading that may exist in such options,
and there can be no assurance that viable exchange markets will develop or
continue.

Futures Contracts and Options on Futures Contracts - DWS Mid Cap Growth Fund and
DWS Small Cap Growth Fund

General. Each Fund may enter into futures contracts on securities, securities
indices, foreign currencies and interest rates, and purchase and write (sell)
options thereon which are traded on exchanges designated by the Commodity
Futures Trading Commission (the "CFTC") or, if consistent with CFTC regulations,
on foreign exchanges. These futures contracts are standardized contracts for the
future delivery of, among other things, a commodity, a non-US currency, an
interest rate sensitive security or, in the case of index futures contracts or
certain other futures contracts, a cash settlement with reference to a specified
multiplier times the change in the index. An option on a futures contract gives
the purchaser the right, in return for the premium paid, to assume a position in
a futures contract.

Each Fund may enter into futures contracts and options on futures contracts on
securities, securities indices and currencies both to manage its exposure to
changing interest rates, security prices and currency exchange rates and as an
efficient means of managing allocations between asset classes.

The successful use of futures contracts and options thereon draws upon the
Advisor's skill and experience with respect to such instruments and is subject
to special risk considerations. A liquid secondary market for any futures or
options contract may not be available when a futures or options position is
sought to be closed. In addition, there may be an imperfect correlation between
movements in the market value of the securities or currency held by the Fund and
the prices of the futures and options. Successful use of futures or options
contracts is further dependent on the Advisor's ability to predict correctly
movements in the securities or foreign currency markets and no assurance can be
given that its judgment will be correct.

Futures Contracts. Futures contracts are contracts to purchase or sell a fixed
amount of an underlying instrument, commodity or index at a fixed time and place
in the future. US futures contracts have been designed by exchanges that have
been designated "contracts markets" by the CFTC, and must be executed through a
futures commission merchant, or brokerage firm, which is a member of the
relevant contract market. Futures contracts trade on a number of exchange
markets, and, through their clearing corporations, the exchanges guarantee
performance of the contracts as between the clearing members of the exchange.
Each Fund may enter into contracts for the purchase or sale for future delivery
of fixed-income securities, foreign currencies, or financial indices, including
any index of US government securities, foreign government securities or
corporate debt securities. Each Fund may enter into futures contracts which are
based on debt securities that are backed by the full faith and credit of the US
government, such as long-term US Treasury Bonds, Treasury Notes and US Treasury
Bills. The Fund may also enter into futures contracts which are based on bonds
issued by governments other than the US government. Futures contracts on foreign
currencies may be used to hedge against securities that are denominated in
foreign currencies.

At the same time a futures contract is entered into, a Fund must allocate cash
or liquid securities as a deposit payment ("initial margin"). Daily thereafter,
the futures contract is valued and the payment of "variation margin" may be
required, since each day the Fund would provide or receive cash that reflects
any decline or increase in the contract's value.

At the time of delivery of securities pursuant to such a contract, adjustments
are made to recognize differences in value arising from the delivery of
securities with a different interest rate from that specified in the contract.
In some, but not many, cases, securities called for by a futures contract may
not have been issued when the contract was written.

Although futures contracts (other than those that settle in cash, such as index
futures) by their terms call for the actual delivery or acquisition of the
instrument underlying the contract, in most cases the contractual obligation is
fulfilled by offset before the date of the contract without a Fund's having to
make or take delivery of the instrument underlying the contract. The offsetting
of a contractual obligation is accomplished by entering into an opposite
position in an identical futures contract on the commodities exchange on which
the futures contract was entered into (or a linked exchange) calling for
delivery in the same month. Such a transaction, which is effected through a
member of an exchange, cancels the obligation to make or take delivery of the
instrument underlying the contract. Since all transactions in the futures market
are made, offset or fulfilled through a clearing house associated with the
exchange on which the contracts are traded, a Fund will incur brokerage fees
when it enters into futures contracts.

The purpose of the acquisition or sale of a futures contract, in cases where a
Fund holds or intends to acquire fixed-income securities, is to attempt to
protect the Fund from fluctuations in interest or foreign exchange rates without
actually buying or selling fixed-income securities or foreign currencies. For
example, if interest rates were expected to increase (which thus would cause the
prices of debt securities to decline), a Fund might enter into futures contracts
for the sale of debt securities. Such a sale would have much the same effect as
selling an equivalent value of the debt securities owned by a Fund. If interest
rates did increase, the value of the debt security in the Fund would decline,
but the value of the futures contracts to the Fund would increase at
approximately the same rate, thereby keeping the net asset value of the Fund
from declining as much as it otherwise would have. A Fund could accomplish
similar results by selling debt securities and investing in bonds with short
maturities when interest rates are expected to increase. However, since the
futures market is more liquid than the cash market, the use of futures contracts
as an investment technique allows a Fund to maintain a defensive position
without having to sell its portfolio securities.

Similarly, when it is expected that interest rates may decline (thus increasing
the value of debt securities), futures contracts may be purchased to attempt to
hedge against anticipated purchases of debt securities at higher prices. Since
the fluctuations in the value of futures contracts should be similar to those of
debt securities, a Fund could take advantage of the anticipated rise in the
value of debt securities without actually buying them until the market had
stabilized. At that time, the futures contracts could be liquidated and the Fund
could then buy debt securities on the cash market. The segregated assets
maintained to cover a Fund's obligations with respect to such futures contracts
will consist of cash or liquid securities acceptable to the broker from the
Fund's portfolio in an amount equal to the difference between the fluctuating
market value of such futures contracts and the aggregate value of the initial
and variation margin payments made by the Fund with respect to such futures
contracts.

The ordinary spreads between prices in the cash and futures market, due to
differences in the nature of those markets, are subject to distortions. First,
all participants in the futures market are subject to initial deposit and
variation margin requirements. Rather than meeting additional variation margin
requirements, investors may close futures contracts through offsetting
transactions, which could distort the normal relationship between the cash and
futures markets. Second, the liquidity of the futures market depends on most
participants' entering into offsetting transactions rather than making or taking
delivery. To the extent that many participants decide to make or take delivery,
liquidity in the futures market could be reduced, thus producing distortion.
Third, from the point of view of speculators, the margin deposit requirements in
the futures market are less onerous than margin requirements in the securities
market. Therefore, increased participation by speculators in the futures market
may cause temporary price distortions. Due to the possibility of distortion, a
correct forecast of securities price, general interest rate or currency exchange
rate trends by the Advisor may still not result in a successful transaction.

In addition, futures contracts entail significant risks. Although the Advisor
believes that use of such contracts will benefit a Fund, if the Advisor's
investment judgment about the general direction of interest rates or an index is
incorrect, the Fund's overall performance would be poorer than if it had not
entered into any such contract. For example, if a Fund has hedged against the
possibility of an increase in interest rates or a decrease in an index which
would adversely affect the value of securities held in its portfolio and
interest rates decrease or securities prices increase instead, the Fund will
lose part or all of the benefit of the increased value of its securities which
it has hedged because it will have offsetting losses in its futures positions.
In addition, in such situations, if the Fund has insufficient cash, it may have
to sell securities from its portfolio to meet daily variation margin
requirements. Such sales of securities may be, but will not necessarily be, at
increased prices which reflect the rising market. The Fund may have to sell
securities at a time when it may be disadvantageous to do so.

Options on Futures Contracts. Each Fund may purchase and write (sell) options on
futures contracts for hedging purposes. For example, as with the purchase of
futures contracts, when a Fund is not fully invested, it may purchase a call
option on an interest-rate-sensitive futures contract to hedge against a
potential price increase on debt securities due to declining interest rates.

The purchase of a call option on a futures contract is similar in some respects
to the purchase of a call option on an index or individual security. Depending
on the pricing of the option compared to either the price of the futures
contract upon which it is based or the price of the underlying debt securities,
it may or may not be less risky than ownership of the futures contract or
underlying debt securities.

The writing of a call option on a futures contract may constitute a partial
hedge against declining prices of the underlying portfolio securities which are
the same as or correlate with the security or foreign currency that is
deliverable upon exercise of the futures contract. If the futures price at
expiration of the option is below the price specified in the premium received
for writing the option ("exercise price"), a Fund will retain the full amount of
the net premium (the premium received for writing the option less any
commission), which provides a partial hedge against any decline that may have
occurred in the Fund's holdings.

The writing of a put option on an index futures contract may constitute a
partial hedge against increasing prices of the underlying securities or foreign
currency that are deliverable upon exercise of the futures contract. If the
futures price at expiration of the option is higher than the exercise price, a
Fund will retain the full amount of the option net premium, which provides a
partial hedge against any increase in the price of securities that the Fund
intends to purchase.

If a put or call option a Fund has written is exercised, the Fund will incur a
loss that will be reduced by the amount of the net premium it receives.
Depending on the degree of correlation between changes in the value of its
portfolio securities and changes in the value of its futures positions, the
Fund's losses from existing options on futures may to some extent be reduced or
increased by changes in the value of portfolio securities.

The purchase of a call or put option on a futures contract with respect to an
index is similar in some respects to the purchase of a call or protective put
option on an index. For example, a Fund may purchase a put option on an index
futures contract to hedge against the risk of lowering securities values.

The amount of risk a Fund assumes when it purchases an option on a futures
contract with respect to an index is the premium paid for the option plus
related transaction costs. In addition to the correlation risks discussed above,
the purchase of such an option also entails the risk that changes in the value
of the underlying futures contract will not be fully reflected in the value of
the option purchased.

Other Considerations. The Trust, on behalf of each Fund, has claimed exclusion
from the definition of the term "commodity pool operator" under the regulations
of the Commodity Futures Trading Commission. Therefore, each Fund is not subject
to commodity pool operator registration and regulation under the Commodity
Exchange Act. Futures and options on futures may be entered into for bona fide
hedging, risk management (including duration management) or other portfolio and
return enhancement management purposes to the extent consistent with the
exclusion from commodity pool operator registration. Typically, maintaining a
futures contract or selling an option thereon requires a Fund to deposit with a
financial intermediary as security for its obligations an amount of cash or
other specified assets (initial margin) which initially is typically 1% to 10%
of the face amount of the contract (but may be higher in some circumstances).
Additional cash or assets (variation margin) may be required to be deposited
thereafter on a daily basis as the marked to market value of the contract
fluctuates. The purchase of an option on financial futures involves payment of a
premium for the option without any further obligation on the part of the fund.
If a Fund exercises an option on a futures contract it will be obligated to post
initial margin (and potential subsequent variation margin) for the resulting
futures position just as it would for any position. Futures contracts and
options thereon are generally settled by entering into an offsetting transaction
but there can be no assurance that the position can be offset prior to
settlement at an advantageous price, nor that delivery will occur.

Futures Contracts on Securities Indices. Each Fund may also enter into futures
contracts providing for the making and acceptance of a cash settlement based
upon changes in the value of an index of US or non-US securities. This
investment technique may be used as a low-cost method of gaining exposure to a
particular securities market without investing directly in those securities, to
hedge against anticipated future changes in general market prices that otherwise
might either adversely affect the value of securities held by a Fund or
adversely affect the prices of securities which are intended to be purchased at
a later date for a Fund, or as an efficient means of managing allocation between
asset classes. A futures contract may also be entered into to close out or
offset an existing futures position.

When used for hedging purposes, each futures contract on a securities index
transaction involves the establishment of a position which the Advisor believes
will move in a direction opposite to that of the investment being hedged. If
these hedging transactions are successful, the futures positions taken for the
Fund will rise in value by an amount which approximately offsets the decline in
value of the portion of a Fund's investments that are being hedged. Should
general market prices move in an unexpected manner, the full anticipated
benefits of futures contracts may not be achieved or a loss may be realized.

Currency Exchange Contracts. Because each Fund may buy and sell securities
denominated in currencies other than the US dollar and may receive interest,
dividends and sale proceeds in currencies other than the US dollar, a Fund from
time to time may enter into currency exchange transactions to convert to and
from different foreign currencies and to convert foreign currencies to and from
the US dollar. A Fund either enters into these transactions on a spot (i.e.,
cash) basis at the spot rate prevailing in the foreign currency exchange market
or uses forward contracts to purchase or sell foreign currencies.

Forward Currency Exchange Contracts. A forward currency exchange contract is an
obligation by a Fund to purchase or sell a specific currency at a future date,
which may be any fixed number of days from the date of the contract. Forward
currency exchange contracts establish an exchange rate at a future date. These
contracts are transferable in the interbank market conducted directly between
currency traders (usually large commercial banks and brokerages) and their
customers. A forward currency exchange contract may not have a deposit
requirement and may be traded at a net price without commission. A Fund
maintains with its custodian a segregated account of cash or liquid securities
in an amount at least equal to its obligations under each forward currency
exchange contract. Neither spot transactions nor forward currency exchange
contracts eliminate fluctuations in the prices of a Fund's securities or in
foreign exchange rates, or prevent loss if the prices of these securities should
decline.

Each Fund may enter into foreign currency hedging transactions in an attempt to
protect against changes in currency exchange rates between the trade and
settlement dates of specific securities transactions or changes in currency
exchange rates that would adversely affect a portfolio position or an
anticipated investment position. Since consideration of the prospect for
currency parities will be incorporated into the Advisor's long-term investment
decisions, a Fund will not routinely enter into currency hedging transactions
with respect to security transactions; however, the Advisor believes that it is
important to have the flexibility to enter into currency hedging transactions
when it determines that the transactions would be in the Fund's best interest.
Although these transactions tend to minimize the risk of loss due to a decline
in the value of the hedged currency, they tend at the same time to limit any
potential gain that might be realized should the value of the hedged currency
increase. The precise matching of the forward contract amounts and the value of
the securities involved will not generally be possible because the future value
of such securities in foreign currencies will change as a consequence of market
movements in the value of such securities between the date the forward contract
is entered into and the date it matures. The projection of currency market
movements is extremely difficult, and the successful execution of a hedging
strategy is highly uncertain.

While these contracts are not presently regulated by the CFTC, the CFTC may in
the future assert authority to regulate forward contracts. In such event a
Fund's ability to utilize forward contracts may be restricted. Forward contracts
may reduce the potential gain from a positive change in the relationship between
the US dollar and foreign currencies. Unanticipated changes in currency prices
may result in poorer overall performance for the Fund than if it had not entered
into such contracts. The use of currency forward contracts may not eliminate
fluctuations in the underlying US dollar equivalent value of the prices of or
rates of return on a Fund's foreign currency denominated portfolio securities,
and the use of such techniques will subject the Fund to certain risks.

The matching of the increase in value of a forward contract and the decline in
the US dollar equivalent value of the foreign currency denominated asset that is
the subject of the hedge generally will not be precise. In addition, a Fund may
not always be able to enter into currency forward contracts at attractive prices
and this will limit the Fund's ability to use such contract to hedge or
cross-hedge its assets. Also, with regard to a Fund's use of cross-hedges, there
can be no assurance that historical correlations between the movement of certain
foreign currencies relative to the US dollar will continue. Thus, at any time
poor correlation may exist between movements in the exchange rates of the
foreign currencies underlying the Fund's cross-hedges and the movements in the
exchange rates of the foreign currencies in which the Fund's assets that are the
subject of such cross-hedges are denominated.

Options on Foreign Currencies. Each Fund may write covered put and call options
and purchase put and call options on foreign currencies for the purpose of
protecting against declines in the dollar value of portfolio securities and
against increases in the dollar cost of securities to be acquired. The Funds may
use options on currencies to cross-hedge, which involves writing or purchasing
options on one currency to hedge against changes in exchange rates for a
different but related currency. As with other types of options, however, the
writing of an option on foreign currency will constitute only a partial hedge up
to the amount of the premium received, and a Fund could be required to purchase
or sell foreign currencies at disadvantageous exchange rates, thereby incurring
losses. The purchase of an option on a foreign currency may be used to hedge
against fluctuations in exchange rates, although, in the event of exchange rate
movements adverse to a Fund's position, the Fund may forfeit the entire amount
of the premium plus related transaction costs. In addition each Fund may
purchase call options on a currency when the Advisor anticipates that the
currency will appreciate in value.

Each Fund may also write options on foreign currencies for the same types of
hedging purposes. For example, when a Fund anticipates a decline in the dollar
value of foreign currency denominated securities due to adverse fluctuations in
exchange rates, it could, instead of purchasing a put option, write a call
option on the relevant currency. If the expected decline occurs, the option will
most likely not be exercised, and the diminution in value of portfolio
securities will be offset by the amount of the premium received.

Similarly, instead of purchasing a call option to hedge against an anticipated
increase in the dollar cost of securities to be acquired, a Fund could write a
put option on the relevant currency which, if rates move in the manner
projected, will expire unexercised and allow the Fund to hedge such increased
cost up to the amount of the premium. As in the case of other types of options,
however, the writing of a foreign currency option will constitute only a partial
hedge up to the amount of the premium, and only if rates move in the expected
direction. If this does not occur, the option may be exercised and the Fund
would be required to purchase or sell the underlying currency at a loss which
may not be offset by the amount of the premium. Through the writing of options
on foreign currencies, a Fund also may be required to forgo all or a portion of
the benefits which might otherwise have been obtained from favorable movements
in exchange rates.

Each Fund may write covered call options on foreign currencies. A call option
written on a foreign currency by a Fund is "covered" if the Fund owns the
underlying foreign currency covered by the call or has an absolute and immediate
right to acquire that foreign currency without additional cash consideration (or
for additional cash consideration identified on the Fund's books) upon
conversion or exchange of other foreign currency held in its portfolio. A call
option is also covered if a Fund has a call on the same foreign currency and in
the same principal amount as the call written where the exercise price of the
call held (a) is equal to or less than the exercise price of the call written or
(b) is greater than the exercise price of the call written if the difference is
segregated by the Fund in cash or liquid securities.

Each Fund also may write call options on foreign currencies that are not covered
for cross-hedging purposes. A call option on a foreign currency is for
cross-hedging purposes if it is not covered, but is instead designed to provide
a hedge against a decline in the US dollar value of a security which the Fund
owns or has the right to acquire and which is denominated in the currency
underlying the option, due to an adverse change in the exchange rate. In such
circumstances, the Fund collateralizes the option by segregating cash or liquid
securities in an amount not less than the value of the underlying foreign
currency in US dollars marked to market daily.

There is no assurance that a liquid secondary market will exist for any
particular option, or at any particular time. If a Fund is unable to effect a
closing purchase transaction with respect to covered options it has written, the
Fund will not be able to sell the underlying currency or dispose of assets held
in a segregated account until the options expire or are exercised. Similarly, if
a Fund is unable to effect a closing sale transaction with respect to options it
has purchased, it will have to exercise the options in order to realize any
profit and will incur transaction costs upon the purchase or sale of underlying
currency. Each Fund pays brokerage commissions or spreads in connection with its
options transactions.

As in the case of forward contracts, certain options on foreign currencies are
traded over-the-counter and involve liquidity and credit risks which may not be
present in the case of exchange-traded currency options. In some circumstances,
a Fund's ability to terminate OTC options may be more limited than with
exchange-traded options. It is also possible that broker-dealers participating
in OTC options transactions will not fulfill their obligations. Each Fund
intends to treat OTC options as not readily marketable and, therefore, as
subject to the Fund's limitation with respect to illiquid securities.

Options on Securities, Securities Indices and Foreign Currencies -- DWS Micro
Cap Fund

General. The Fund may write covered put and call options and purchase put and
call options. Such options may relate to particular securities, to various stock
indices, or to currencies. The Fund may write call and put options which are
issued by the OCC or which are traded on US and non-US exchanges and
over-the-counter. These instruments may be considered derivative instruments.

Written Options. The Fund may write (sell) covered put and call options on
securities and enter into related closing transactions. The Fund may receive
fees (referred to as "premiums") for granting the rights evidenced by the
options. However, in return for the premium for a written call option, the Fund
assumes certain risks. For example, in the case of a written call option, the
Fund forfeits the right to any appreciation in the underlying security while the
option is outstanding. A put option gives to its purchaser the right to compel
the Fund to purchase an underlying security from the option holder at the
specified price at any time during the option period. In contrast, a call option
written by the Fund gives to its purchaser the right to compel the Fund to sell
an underlying security to the option holder at a specified price at any time
during the option period. Upon the exercise of a put option written by the Fund,
the Fund may suffer a loss equal to the difference between the price at which
the Fund is required to purchase the underlying security and its market value at
the time of the option exercise, less the premium received for writing the
option. All options written by the Fund are covered. In the case of a call
option, this means that the Fund will own the securities subject to the option
or an offsetting call option as long as the written option is outstanding, or
will have the absolute and immediate right to acquire other securities that are
the same as those subject to the written option. In the case of a put option,
this means that the Fund will deposit cash or liquid securities in a segregated
account with the custodian with a value at least equal to the exercise price of
the put option.

Purchased Options. The Fund may also purchase put and call options on
securities. A put option entitles the Fund to sell, and a call option entitles
the Fund to buy, a specified security at a specified price during the term of
the option. The advantage to the purchaser of a call option is that it may hedge
against an increase in the price of securities it ultimately wishes to buy. The
advantage to the purchaser of a put option is that it may hedge against a
decrease in the price of portfolio securities it ultimately wishes to sell.

The Fund may enter into closing transactions in order to offset an open option
position prior to exercise or expiration by selling an option it has purchased
or by entering into an offsetting option. If the Fund cannot affect closing
transactions, it may have to retain a security in its portfolio it would
otherwise sell, or deliver a security it would otherwise retain.

The Fund may purchase and sell options traded on US exchanges and, to the extent
permitted by law, options traded over-the-counter. The Fund may also purchase
and sell options traded on recognized foreign exchanges. There can be no
assurance that a liquid secondary market will exist for any particular option.
OTC options also involve the risk that a counterparty will fail to meet its
obligation under the option.

Options on Stock Indices or Currencies. The Fund may purchase and write
exchange-listed put and call options on stock indices to hedge against risks of
market-wide price movements. A stock index measures the movement of a certain
group of stocks by assigning relative values to the common stocks included in
the index. Examples of well-known stock indices are the S&P 500 Index and the
Wilshire 5000 Index. Options on stock indices are similar to options on
securities. However, because options on stock indices do not involve the
delivery of an underlying security, the option represents the holder's right to
obtain from the writer in cash a fixed multiple of the amount by which the
exercise price exceeds (in the case of a put) or is less than (in the case of a
call) the closing value of the underlying index on the exercise date. The Fund
may also purchase and write put and call options on currencies.

A call option on a securities index provides the holder with the right to
receive a cash payment upon exercise of the option if the market value of the
underlying index exceeds the option's exercise price. Conversely, a put option
on a securities index provides the holder with the right to receive a cash
payment upon exercise of the option if the market value of the underlying index
is less than the option's exercise price. The amount of any payment to the
option holder will be equal to the difference between the closing price of the
index at the time of exercise and the exercise price of the option expressed in
US dollars or a foreign currency, times a specified multiple. A put option on a
currency gives its holder the right to sell an amount (specified in units of the
underlying currency) of the underlying currency at the stated exercise price at
any time prior to the option's expiration. Conversely, a call option on a
currency gives its holder the right to purchase an amount (specified in units of
the underlying currency) of the underlying currency at the stated exercise price
at any time prior to the option's expiration.

When the Fund writes an option on a stock index, it will cover the option by
depositing cash or liquid securities or a combination of both in an amount equal
to the market value of the option in a segregated account, which will be marked
to market daily, with the Fund's custodian, and will maintain the account while
the option is open. Alternatively, and only in the case of a written call option
on a stock index, the Fund may cover the written option by owning an offsetting
call option. A call option on currency written by the Fund is covered if the
Fund owns an equal amount of the underlying currency.

Other Considerations. The Fund will engage in OTC options only with
broker-dealers deemed creditworthy by the Advisor. Closing transactions in
certain options are usually affected directly with the same broker-dealer that
effected the original option transaction. The Fund bears the risk that the
broker-dealer may fail to meet its obligations. There is no assurance that the
Fund will be able to close an unlisted option position. Furthermore, unlisted
options are not subject to the protections afforded purchasers of listed options
by the OCC, which performs the obligations of its members who fail to do so in
connection with the purchase or sale of options.

When the Fund purchases a put option, the premium paid by it is recorded as an
asset of the Fund. When the Fund writes an option, an amount equal to the net
premium (the premium less the commission paid by the Fund) received by the Fund
is included in the liability section of the Fund's statement of assets and
liabilities as a deferred credit. The amount of this asset or deferred credit
will be marked-to-market on an ongoing basis to reflect the current value of the
option purchased or written. The current value of a traded option is the last
sale price or, in the absence of a sale, the average of the closing bid and
asked prices. If an option purchased by the Fund expires unexercised, the Fund
realizes a loss equal to the premium paid. If the Fund enters into a closing
sale transaction on an option purchased by it, the Fund will realize a gain if
the premium received by the Fund on the closing transaction is more than the
premium paid to purchase the option, or a loss if it is less. If an option
written by the Fund expires on the stipulated expiration date or if the Fund
enters into a closing purchase transaction, it will realize a gain (or loss if
the cost of a closing purchase transaction exceeds the net premium received when
the option is sold), and the deferred credit related to such option will be
eliminated. If an option written by the Fund is exercised, the proceeds to the
Fund from the exercise will be increased by the net premium originally received,
and the Fund will realize a gain or loss.

There are several risks associated with transactions in options on securities,
securities indices and currencies. For example, there are significant
differences between the securities markets, currency markets and the
corresponding options markets that could result in imperfect correlations,
causing a given option transaction not to achieve its objectives. In addition, a
liquid secondary market for particular options, whether traded OTC or on a US or
non-US securities exchange, may be absent for reasons which include the
following: there may be insufficient trading interest in certain options;
restrictions may be imposed by an exchange on opening transactions or closing
transactions or both; trading halts, suspensions or other restrictions may be
imposed with respect to particular classes or series of options or underlying
securities; unusual or unforeseen circumstances may interrupt normal operations
on an exchange; the facilities of an exchange or the OCC may not at all times be
adequate to handle current trading volume; or one or more exchanges could, for
economic or other reasons, decide or be compelled at some future date to
discontinue the trading of options (or a particular class or series of options),
in which event the secondary market on that exchange (or in that class or series
of options) would cease to exist, although outstanding options that had been
issued by the OCC as a result of trades on that exchange would continue to be
exercisable in accordance with their terms.

The hours of trading for options may not conform to the hours during which the
underlying securities and currencies are traded. To the extent that the options
markets close before the markets for the underlying securities and currencies,
significant price and rate movements can take place in the underlying markets
that cannot be reflected in the options markets. The purchase of options is a
highly specialized activity that involves investment techniques and risks
different from those associated with ordinary portfolio securities transactions.

The risks described above also apply to options on futures, which are discussed
below.

Futures Contracts and  Options on Futures Contracts - DWS Micro Cap Fund

General. When deemed advisable by the Advisor, the Fund may enter into futures
contracts and purchase and write options on futures contracts to hedge against
changes in interest rates, securities prices or currency exchange rates or for
certain non-hedging purposes. The Fund may purchase and sell financial futures
contracts, including stock index futures, and purchase and write related
options. The Fund may engage in futures and related options transactions for
hedging and non-hedging purposes as defined in regulations of the CFTC.
Transactions in futures contracts and options on futures involve brokerage
costs, require margin deposits and, in the case of contracts and options
obligating the Fund to purchase securities, require the Fund to segregate cash
or liquid securities with a value equal to the amount of the Fund's obligations.

Futures Contracts. A futures contract may generally be described as an agreement
between two parties to buy and sell a particular financial instrument for an
agreed price during a designated month (or to deliver the final cash settlement
price, in the case of a contract relating to an index or otherwise not calling
for physical delivery at the end of trading in the contract). Futures contracts
obligate the long or short holder to take or make delivery of a specified
quantity of a commodity or financial instrument, such as a security or the cash
value of a securities index, during a specified future period at a specified
price.

When interest rates are rising or securities prices are falling, the Fund can
seek to offset a decline in the value of its current portfolio securities
through the sale of futures contracts. When interest rates are falling or
securities prices are rising, the Fund, through the purchase of futures
contracts, can attempt to secure better rates or prices than might later be
available in the market when it affects anticipated purchases.

Positions taken in the futures markets are not normally held to maturity but are
instead liquidated through offsetting transactions, which may result in a profit
or a loss. While futures contracts on securities will usually be liquidated in
this manner, the Fund may instead make, or take, delivery of the underlying
securities whenever it appears economically advantageous to do so. A clearing
corporation associated with the exchange on which futures on securities are
traded guarantees that, if still open, the sale or purchase will be performed on
the settlement date.

Hedging Strategies. Hedging, by use of futures contracts, seeks to establish
with more certainty the effective price and rate of return on portfolio
securities and securities that the Fund proposes to acquire. The Fund may, for
example, take a "short" position in the futures market by selling futures
contracts in order to hedge against an anticipated rise in interest rates or a
decline in market prices that would adversely affect the value of the Fund's
portfolio securities. Such futures contracts may include contracts for the
future delivery of securities held by the Fund or securities with
characteristics similar to those of the Fund's portfolio securities. If, in the
opinion of the Advisor, there is a sufficient degree of correlation between
price trends for the Fund's portfolio securities and futures contracts based on
other financial instruments, securities indices or other indices, the Fund may
also enter into such futures contracts as part of its hedging strategy. Although
under some circumstances prices of securities in the Fund's portfolio may be
more or less volatile than prices of such futures contracts, the Advisor will
attempt to estimate the extent of this volatility difference based on historical
patterns and compensate for any such differential by having the Fund enter into
a greater or lesser number of futures contracts or by attempting to achieve only
a partial hedge against price changes affecting the Fund's securities portfolio.
When hedging of this character is successful, any depreciation in the value of
portfolio securities will be substantially offset by appreciation in the value
of the futures position. On the other hand, any unanticipated appreciation in
the value of the Fund's portfolio securities would be substantially offset by a
decline in the value of the futures position.

On other occasions, the Fund may take a "long" position by purchasing futures
contracts. This would be done, for example, when the Fund anticipates the
subsequent purchase of particular securities when it has the necessary cash, but
expects the prices then available in the applicable market to be less favorable
than prices that are currently available.

Options on Futures Contracts. The acquisition of put and call options on futures
contracts will give the Fund the right (but not the obligation) for a specified
price to sell or to purchase, respectively, the underlying futures contract at
any time during the option period. As the purchaser of an option on a futures
contract, the Fund obtains the benefit of the futures position if prices move in
a favorable direction but limits its risk of loss in the event of an unfavorable
price movement to the loss of the premium and transaction costs.

The writing of a call option on a futures contract generates a premium that may
partially offset a decline in the value of the Fund's assets. By writing a call
option, the Fund becomes obligated, in exchange for the premium, to sell a
futures contract (if the option is exercised), which may have a value higher
than the exercise price. Conversely, the writing of a put option on a futures
contract generates a premium that may partially offset an increase in the price
of securities that the Fund intends to purchase. However, the Fund becomes
obligated to purchase a futures contract (if the option is exercised), which may
have a value lower than the exercise price. Thus, the loss incurred by the Fund
in writing options on futures is potentially unlimited and may exceed the amount
of the premium received. The Fund will incur transaction costs in connection
with the writing of options on futures.

The holder or writer of an option on a futures contract may terminate its
position by selling or purchasing an offsetting option on the same series. There
is no guarantee that such closing transactions can be affected. The Fund's
ability to establish and close out positions on such options will be subject to
the development and maintenance of a liquid market.

The Fund may use options on futures contracts solely for bona fide hedging or
other non-hedging purposes as described below.

Other Considerations. The Trust, on behalf of the Fund, has claimed exclusion
from the definition of the term "commodity pool operator" under the regulations
of the Commodity Futures Trading Commission. Therefore, the Fund is not subject
to commodity pool operator registration and regulation under the Commodity
Exchange Act. Futures and options on futures may be entered into for bona fide
hedging, risk management (including duration management) or other portfolio and
return enhancement management purposes to the extent consistent with the
exclusion from commodity pool operator registration. Typically, maintaining a
futures contract or selling an option thereon requires the Fund to deposit with
a financial intermediary as security for its obligations an amount of cash or
other specified assets (initial margin) which initially is typically 1% to 10%
of the face amount of the contract (but may be higher in some circumstances).
Additional cash or assets (variation margin) may be required to be deposited
thereafter on a daily basis as the marked to market value of the contract
fluctuates. The purchase of an option on financial futures involves payment of a
premium for the option without any further obligation on the part of the fund.
If the Fund exercises an option on a futures contract it will be obligated to
post initial margin (and potential subsequent variation margin) for the
resulting futures position just as it would for any position. Futures contracts
and options thereon are generally settled by entering into an offsetting
transaction but there can be no assurance that the position can be offset prior
to settlement at an advantageous price, nor that delivery will occur.


The Fund will engage in transactions in futures contracts and related options
only to the extent such transactions are consistent with the requirements of the
Code, for maintaining its qualification as a regulated investment company. See
"Taxes."

The Fund will be required, in connection with transactions in futures contracts
and the writing of options on futures contracts, to make margin deposits, which
will be held by its custodian for the benefit of the futures commission merchant
through whom the Fund engages in such futures and option transactions. These
transactions involve brokerage costs, require margin deposits and, in the case
of futures contracts and options obligating the Fund to purchase securities,
require the Fund to segregate cash or liquid securities in an account maintained
with its custodian to cover such contracts and options.

While transactions in futures contracts and options on futures may reduce
certain risks, such transactions themselves entail certain other risks. Thus,
unanticipated changes in interest rates or securities prices may result in a
poorer overall performance for the Fund than if it had not entered into any
futures contracts or options transactions. The other risks associated with the
use of futures contracts and options thereon are (i) imperfect correlation
between the change in market value of the securities held by the Fund and the
prices of the futures and options and (ii) the possible absence of a liquid
secondary market for a futures contract or option and the resulting inability to
close a futures position prior to its maturity date.

In the event of an imperfect correlation between a futures position and
portfolio position which is intended to be protected, the desired protection may
not be obtained and the Fund may be exposed to risk of loss. Investing in
contracts whose price behavior is expected to resemble that of the Fund's
underlying securities may minimize the risk of imperfect correlation. The Fund
will attempt to minimize the risk that it will be unable to close out futures
positions by entering into such transactions on a national exchange with an
active and liquid secondary market.

Limitations and Risks Associated with Transactions in Options, Futures Contracts
and Options on Futures Contracts -- DWS Micro Cap Fund

Options and futures transactions involve (1) liquidity risk that contractual
positions cannot be easily closed out in the event of market changes or
generally in the absence of a liquid secondary market, (2) correlation risk that
changes in the value of hedging positions may not match the securities market
fluctuations intended to be hedged, and (3) market risk that an incorrect
prediction of securities prices by the Advisor may cause the Fund to perform
worse than if such positions had not been taken. The ability to terminate
over-the-counter options is more limited than with exchange-traded options and
may involve the risk that the counterparty to the option will not fulfill its
obligations. In accordance with a position taken by the SEC, the Fund will limit
its investments in illiquid securities to 15% of the Fund's net assets.

Options and futures transactions are highly specialized activities which involve
investment techniques and risks that are different from those associated with
ordinary portfolio transactions. Gains and losses on investments in options and
futures depend on the Advisor's ability to predict the direction of stock prices
and other economic factors. The loss that may be incurred by the Fund in
entering into futures contracts and written options thereon is potentially
unlimited. There is no assurance that higher-than-anticipated trading activity
or other unforeseen events might not, at times, render certain facilities of an
options clearing entity or other entity performing the regulatory and liquidity
functions of an options clearing entity inadequate, and thereby result in the
institution by an exchange of special procedures that may interfere with the
timely execution of customers' orders. Most futures exchanges limit the amount
of fluctuation permitted in a futures contract's prices during a single trading
day. Once the limit has been reached, no further trades may be made that day at
a price beyond the limit. The price limit will not limit potential losses, and
may in fact prevent the prompt liquidation of futures positions, ultimately
resulting in further losses.

There is no limit on the percentage of the assets of the Fund that may be at
risk with respect to futures contracts and related options. The Fund may not
invest more than 25% of its total assets in purchased protective put options.
The Fund's transactions in options, futures contracts and options on futures
contracts may be limited by the requirements for qualification of the Fund as a
regulated investment company for tax purposes. See "Taxes" below. Options,
futures contracts and options on futures contracts are derivative instruments.


Other Investments and Investment Practices

Borrowing. Each Fund may borrow for temporary or emergency purposes. This
borrowing may be unsecured. Among the forms of borrowing in which a Fund may
engage is entering into reverse repurchase agreements. The 1940 Act requires a
Fund to maintain continuous asset coverage (that is, total assets including
borrowings, less liabilities exclusive of borrowings) of 300% of the amount
borrowed. If the asset coverage should decline below 300% as a result of market
fluctuations or for other reasons, the Fund is required to sell some of its
portfolio securities within three days to reduce its borrowings and restore the
300% asset coverage, even though it may be disadvantageous from an investment
standpoint to sell securities at that time. Borrowing may exaggerate the effect
on net asset value of any increase or decrease in the market value of the
portfolio. Money borrowed will be subject to interest costs which may or may not
be recovered by appreciation of the securities purchased. Each Fund also may be
required to maintain minimum average balances in connection with such borrowing
or to pay a commitment or other fee to maintain a line of credit; either of
these requirements would increase the cost of borrowing over the stated interest
rate. See "Investment Restrictions."

Temporary Defensive Investments. For temporary defensive purposes during periods
when the Advisor determines that conditions warrant, each Fund may invest up to
100% of its assets in cash and money market instruments, including securities
issued or guaranteed by the US Government, its agencies or instrumentalities;
certificates of deposit, time deposits, and bankers' acceptances issued by banks
or savings and loans associations having net assets of at least $500 million as
of the end of their most recent fiscal year; commercial paper rated at the time
of purchase at least A-1 by S&P or P-1 by Moody's, or unrated commercial paper
determined by the Advisor to be of comparable quality; repurchase agreements
involving any of the foregoing; and, to the extent permitted by applicable law,
shares of other investment companies investing solely in money market
instruments.

Investment of Uninvested Cash Balances. Each Fund may have cash balances that
have not been invested in portfolio securities ("Uninvested Cash"). Uninvested
Cash may result from a variety of sources, including dividends or interest
received from portfolio securities, unsettled securities transactions, reserves
held for investment strategy purposes, scheduled maturity of investments,
liquidation of investment securities to meet anticipated redemptions or dividend
payments, and new cash received from investors. Uninvested Cash may be invested
directly in money market instruments or other short-term debt obligations.
Pursuant to an exemptive order issued by the SEC, a Fund may use Uninvested Cash
to purchase shares of affiliated funds, including money market funds and the
Cash Management QP Trust, or entities for which the Advisor may act as
investment advisor now or in the future that operate as cash management
investment vehicles but are excluded from the definition of an investment
company pursuant to Section 3(c)(1) or 3(c)(7) of the 1940 Act (collectively,
the "Central Funds") in excess of the limitations of Section 12(d)(1) of the
1940 Act. Investment by a Fund in shares of the Central Funds will comply with
Rule 2a-7 under the 1940 Act and will be in accordance with a Fund's investment
policies and restrictions.

Each Fund will invest Uninvested Cash in Central Funds only to the extent that
the Fund's aggregate investment in the Central Funds does not exceed 25% of its
total assets. Purchases and sales of shares of Central Funds are made at net
asset value.

The following is a chart of the various types of securities and investment
strategies employed by the Funds. Unless otherwise indicated, each Fund is
permitted, but not obligated, to pursue any of the following strategies and does
not represent that these techniques are available now or will be available at
any time in the future. If a Fund's investment in a particular type of security
is limited to a certain percentage of a Fund's assets, that percentage
limitation is listed in the chart. Preceding the chart, there is a description
of how each type of security and investment strategy may be used by each Fund.
As a matter of non-fundamental operating policy, the Funds may be subject to
additional restrictions. See the section entitled "Investment Restrictions."

DWS Mid Cap Growth Fund and DWS Small Cap Growth Fund

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                                                                               DWS Mid Cap Growth    DWS Small Cap
INVESTMENT PRACTICE                                                                   Fund            Growth Fund
----------------------------------------------------------------------------------------------------------------------
KEY TO TABLE:

I        Permitted without stated limit

II       Permitted without stated limit, but not expected to be used to a significant extent

X        Not permitted

20% Italic type (e.g. 20%) represents an investment limitation as a percentage of net Fund assets; does not indicate
actual use

20% Roman type (e.g. 20%) represents an investment limitation as a percentage of total Fund assets; does not
indicate actual use
----------------------------------------------------------------------------------------------------------------------

EQUITY SECURITIES
----------------------------------------------------------------------------------------------------------------------
<S>                                                                                    <C>               <C>
Common Stock                                                                           I                   I
----------------------------------------------------------------------------------------------------------------------
Warrants                                                                               I                   I
----------------------------------------------------------------------------------------------------------------------
Preferred Stock                                                                        I                   I
----------------------------------------------------------------------------------------------------------------------
Convertible Securities                                                                 I                   I
----------------------------------------------------------------------------------------------------------------------
Medium Capitalization Stocks                                                          80%                 II
----------------------------------------------------------------------------------------------------------------------
Small Capitalization Stocks                                                            II                 80%
----------------------------------------------------------------------------------------------------------------------
Micro Capitalization Stocks                                                            II                 II
----------------------------------------------------------------------------------------------------------------------

FIXED INCOME SECURITIES & MONEY MARKET INSTRUMENTS
----------------------------------------------------------------------------------------------------------------------
Short-Term Instruments                                                                20%                 20%
----------------------------------------------------------------------------------------------------------------------
Obligations of Banks and Other Financial Institutions                                 20%                 20%
----------------------------------------------------------------------------------------------------------------------
Certificates of Deposit and Bankers' Acceptances                                      20%                 20%
----------------------------------------------------------------------------------------------------------------------
Commercial Paper                                                                      20%                 20%
----------------------------------------------------------------------------------------------------------------------
Variable Rate Master Demand Notes                                                     20%                 20%
----------------------------------------------------------------------------------------------------------------------
U.S. Government Securities                                                            20%                 20%
----------------------------------------------------------------------------------------------------------------------
Zero Coupon Securities and Deferred Interest Bonds                                    20%                 20%
----------------------------------------------------------------------------------------------------------------------

DERIVATIVE SECURITIES (OPTIONS)
----------------------------------------------------------------------------------------------------------------------
Options on Securities                                                                  I                   I
----------------------------------------------------------------------------------------------------------------------
Options on Securities Indices                                                          I                   I
----------------------------------------------------------------------------------------------------------------------
Options on Non-US Securities Indices                                                   I                   I
----------------------------------------------------------------------------------------------------------------------

DERIVATIVE SECURITIES (FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS)
----------------------------------------------------------------------------------------------------------------------
Futures Contracts                                                                      I                   I
----------------------------------------------------------------------------------------------------------------------
Futures Contracts on Securities Indices                                                I                   I
----------------------------------------------------------------------------------------------------------------------
Options on Futures Contracts (including Contracts on Security Indices)                 I                   I
----------------------------------------------------------------------------------------------------------------------

DERIVATIVE SECURITIES (HEDGING STRATEGIES)
----------------------------------------------------------------------------------------------------------------------
Hedging Strategies                                                                     I                   I
----------------------------------------------------------------------------------------------------------------------

MORTGAGE-BACKED AND ASSET-BACKED SECURITIES
----------------------------------------------------------------------------------------------------------------------
Government Guaranteed Mortgage-Backed Securities                                      20%                 20%
----------------------------------------------------------------------------------------------------------------------
Ginnie Mae Certificates                                                               20%                 20%
----------------------------------------------------------------------------------------------------------------------
Fannie Mae Certificates                                                               20%                 20%
----------------------------------------------------------------------------------------------------------------------
Freddie Mac Certificates                                                              20%                 20%
----------------------------------------------------------------------------------------------------------------------
Asset-Backed Securities                                                               20%                 20%
----------------------------------------------------------------------------------------------------------------------

SECURITIES OF NON-U.S. ISSUERS
----------------------------------------------------------------------------------------------------------------------
Foreign Securities & Depository Receipts                                              20%                 20%
(ADRs, EDRs, GDRs and IDRs)
----------------------------------------------------------------------------------------------------------------------
Foreign Corporate Debt Securities                                                     20%                 20%
----------------------------------------------------------------------------------------------------------------------
Foreign Government Debt Securities                                                    20%                 20%
----------------------------------------------------------------------------------------------------------------------

CURRENCY MANAGEMENT
----------------------------------------------------------------------------------------------------------------------
Currency Exchange Transactions                                                         II                 II
----------------------------------------------------------------------------------------------------------------------
Currency Hedging Transactions                                                          II                 II
----------------------------------------------------------------------------------------------------------------------
Cross Hedging                                                                          II                 II
----------------------------------------------------------------------------------------------------------------------
Forward Currency Exchange Contracts                                                    II                 II
----------------------------------------------------------------------------------------------------------------------
Options on Foreign Currencies                                                          II                 II
----------------------------------------------------------------------------------------------------------------------

OTHER INVESTMENTS AND INVESTMENT PRACTICES
----------------------------------------------------------------------------------------------------------------------
Illiquid Securities                                                                   15%                 15%
----------------------------------------------------------------------------------------------------------------------
When-Issued and Delayed Delivery Securities                                           15%                 15%
----------------------------------------------------------------------------------------------------------------------
Repurchase Agreements                                                                 20%                 20%
----------------------------------------------------------------------------------------------------------------------
Reverse Repurchase Agreements                                                       33 1/3%             33 1/3%
----------------------------------------------------------------------------------------------------------------------
Mortgage Dollar Rolls                                                               33 1/3%             33 1/3%
----------------------------------------------------------------------------------------------------------------------
Lending of Portfolio Securities                                                     33 1/3%             33 1/3%
----------------------------------------------------------------------------------------------------------------------
Borrowing                                                                           33 1/3%             33 1/3%
----------------------------------------------------------------------------------------------------------------------
Short Sales                                                                           25%                 25%
----------------------------------------------------------------------------------------------------------------------
Concentration in Any One Industry                                                     25%                 25%
----------------------------------------------------------------------------------------------------------------------
Other Investment Companies                                                            10%                 10%
----------------------------------------------------------------------------------------------------------------------
Temporary Defensive Investments                                                       100%               100%
----------------------------------------------------------------------------------------------------------------------

DWS Micro Cap Fund

------------------------------------------------------------------------------------------------------------------------
INVESTMENT PRACTICE                                                                       DWS Micro Cap Fund
------------------------------------------------------------------------------------------------------------------------
KEY TO TABLE:

I        Permitted without stated limit
II       Permitted without stated limit, but not expected to be used to a significant extent
X        Not permitted

20% Italic type (e.g.  20%) represents an investment limitation as a percentage of net Fund assets; does not indicate
actual use

20% Roman type (e.g.  20%) represents an investment limitation as a percentage of total Fund assets; does not indicate
actual use
------------------------------------------------------------------------------------------------------------------------
EQUITY SECURITIES
-------------------------------------------------------------------------------- ---------------------------------------
Common Stock                                                                     I
-------------------------------------------------------------------------------- ---------------------------------------
Warrants                                                                         I
-------------------------------------------------------------------------------- ---------------------------------------
Preferred Stock                                                                  5%
-------------------------------------------------------------------------------- ---------------------------------------
Convertible Securities                                                           I
-------------------------------------------------------------------------------- ---------------------------------------
Medium-Capitalization Stocks                                                     II
-------------------------------------------------------------------------------- ---------------------------------------
Small Capitalization Stocks                                                      I
-------------------------------------------------------------------------------- ---------------------------------------
Micro Capitalization Stocks                                                      At least 80%
-------------------------------------------------------------------------------- ---------------------------------------
FIXED INCOME SECURITIES & MONEY MARKET INSTRUMENTS
-------------------------------------------------------------------------------- ---------------------------------------
US Government Securities                                                         20%
-------------------------------------------------------------------------------- ---------------------------------------
Short-Term Instruments                                                           20%
-------------------------------------------------------------------------------- ---------------------------------------
Obligations of Banks and Other Financial Institutions                            20%
-------------------------------------------------------------------------------- ---------------------------------------
Certificates of Deposit and Bankers' Acceptances                                 20%
-------------------------------------------------------------------------------- ---------------------------------------
Commercial Paper                                                                 20%
-------------------------------------------------------------------------------- ---------------------------------------
Other Debt Obligations                                                           20%
------------------------------------------------------------------------------------------------------------------------
DERIVATIVE SECURITIES (OPTIONS)
-------------------------------------------------------------------------------- ---------------------------------------
Options on Securities                                                            I
-------------------------------------------------------------------------------- ---------------------------------------
Protective Puts                                                                  25%
-------------------------------------------------------------------------------- ---------------------------------------
Options on Securities Indices                                                    I
-------------------------------------------------------------------------------- ---------------------------------------
Options on Non-US Securities Indices                                             I
------------------------------------------------------------------------------------------------------------------------
DERIVATIVE SECURITIES (FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS)
-------------------------------------------------------------------------------- ---------------------------------------
Futures Contracts                                                                I
-------------------------------------------------------------------------------- ---------------------------------------
Futures Contracts on Securities Indices                                          I
-------------------------------------------------------------------------------- ---------------------------------------
Options on Futures Contracts (including Contracts on Securities Indices)         I
-------------------------------------------------------------------------------- ---------------------------------------
Purchased protective puts                                                        25%
------------------------------------------------------------------------------------------------------------------------
DERIVATIVE SECURITIES (HEDGING STRATEGIES)
-------------------------------------------------------------------------------- ---------------------------------------
Hedging Strategies                                                               I
------------------------------------------------------------------------------------------------------------------------
SECURITIES OF NON-US ISSUERS
-------------------------------------------------------------------------------- ---------------------------------------
Foreign Securities & Depository Receipts                                         20%
(ADRs, EDRs, GDRs and IDRs)
-------------------------------------------------------------------------------- ---------------------------------------
Foreign Corporate Debt Securities                                                20%
-------------------------------------------------------------------------------- ---------------------------------------
Foreign Government Debt Securities                                               20%
------------------------------------------------------------------------------------------------------------------------
CURRENCY MANAGEMENT
-------------------------------------------------------------------------------- ---------------------------------------
Currency Exchange Transactions                                                   II
-------------------------------------------------------------------------------- ---------------------------------------
Currency Hedging Transactions                                                    II
-------------------------------------------------------------------------------- ---------------------------------------
Cross Hedging                                                                    II
-------------------------------------------------------------------------------- ---------------------------------------
Forward Currency Exchange Contracts                                              II
-------------------------------------------------------------------------------- ---------------------------------------
Options on Foreign Currencies                                                    II
------------------------------------------------------------------------------------------------------------------------
OTHER INVESTMENTS AND INVESTMENT PRACTICES
-------------------------------------------------------------------------------- ---------------------------------------
Illiquid Securities                                                              15%
-------------------------------------------------------------------------------- ---------------------------------------
When-Issued and Delayed Delivery Securities                                      33 1/3%
-------------------------------------------------------------------------------- ---------------------------------------
Repurchase Agreements                                                            20%
-------------------------------------------------------------------------------- ---------------------------------------
Reverse Repurchase Agreements                                                    33%
-------------------------------------------------------------------------------- ---------------------------------------
Lending of Portfolio Securities                                                  33 1/3%
-------------------------------------------------------------------------------- ---------------------------------------
Borrowing                                                                        33 1/3%
-------------------------------------------------------------------------------- ---------------------------------------
Short Sales                                                                      II
-------------------------------------------------------------------------------- ---------------------------------------
Other Investment Companies                                                       10%
-------------------------------------------------------------------------------- ---------------------------------------
Temporary Defensive Investments                                                  100%
-------------------------------------------------------------------------------- ---------------------------------------
Non-Diversification                                                              25%
-------------------------------------------------------------------------------- ---------------------------------------
Concentration in Any One Industry                                                25%
-------------------------------------------------------------------------------- ---------------------------------------
</TABLE>

Portfolio Holdings

In addition to the public disclosure of Funds' portfolio holdings through
required SEC quarterly filings, each Fund may make its portfolio holdings
information publicly available on the DWS Funds' Web site as described in each
Fund's prospectus. Each Fund does not disseminate non-public information about
portfolio holdings except in accordance with policies and procedures adopted by
each Fund.

Each Fund's procedures permit non-public portfolio holdings information to be
shared with Deutsche Asset Management and its affiliates (collectively "DeAM"),
subadvisors, if any, custodians, independent registered public accounting firms,
attorneys, officers and trustees/directors and each of their respective
affiliates and advisers who require access to this information to fulfill their
duties to each Fund and are subject to the duties of confidentiality, including
the duty not to trade on non-public information, imposed by law or contract, or
by each Fund's procedures. This non-public information may also be disclosed,
subject to the requirements described below, to certain third parties, such as
securities lending agents, financial printers, proxy voting firms, mutual fund
analysts and rating and tracking agencies, or to shareholders in connection with
in-kind redemptions (collectively, "Authorized Third Parties").

Prior to any disclosure of each Fund's non-public portfolio holdings information
to Authorized Third Parties, a person authorized by each Fund's Trustees must
make a good faith determination in light of the facts then known that a Fund has
a legitimate business purpose for providing the information, that the disclosure
is in the best interest of each Fund, and that the recipient assents or
otherwise has a duty to keep the information confidential and to not trade based
on the information received while the information remains non-public. No
compensation is received by each Fund or DeAM for disclosing non-public holdings
information. Periodic reports regarding these procedures will be provided to
each Fund's Trustees.

Portfolio holdings information distributed by the trading desks of DeAM or a
subadvisor for the purpose of facilitating efficient trading of such securities
and receipt of relevant research is not subject to the foregoing requirements.
Non-public portfolio holding information does not include portfolio
characteristics (other than holdings or subsets of holdings) about each Fund and
information derived therefrom, including, but not limited to, how each Fund's
investments are divided among various sectors, industries, countries, value and
growth stocks, bonds, currencies and cash, types of bonds, bond maturities,
duration, bond coupons and bond credit quality ratings so long as the identity
of each Fund's holdings could not be derived from such information.

Registered investment companies that are subadvised by DeAM may be subject to
different portfolio holdings disclosure policies, and neither DeAM nor a Fund's
Trustees exercise control over such policies. In addition, separate account
clients of DeAM have access to their portfolio holdings and are not subject to a
Fund's portfolio holdings disclosure policy. The portfolio holdings of some of
the funds subadvised by DeAM and some of the separate accounts managed by DeAM
may substantially overlap with the portfolio holdings of a Fund.

DeAM also manages certain unregistered commingled trusts and creates model
portfolios, the portfolio holdings of which may substantially overlap with the
portfolio holdings of a Fund. To the extent that investors in these commingled
trusts or recipients of model portfolio holdings information may receive
portfolio holdings information of their trust or of a model portfolio on a
different basis from that on which fund's portfolio holdings information is made
public, DeAM has implemented procedures reasonably designed to encourage such
investors and recipients to keep such information confidential, and to prevent
those investors from trading on the basis of non-public holdings information.

There is no assurance that a Fund's policies and procedures with respect to the
disclosure of portfolio holdings information will protect a fund from the
potential misuse of portfolio holdings information by those in possession of
that information.

                             MANAGEMENT OF THE FUNDS

Investment Advisor

Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), which is
part of Deutsche Asset Management ("DeAM"), is the investment advisor for the
Funds. Under the supervision of the Board of Trustees of each Fund, DIMA, with
headquarters at 345 Park Avenue, New York, New York 10154, makes the Funds'
investment decisions, buys and sells securities for the Funds and conducts
research that leads to these purchase and sale decisions. The Advisor manages
each Fund's daily investment and business affairs subject to the policies
established by the Board of Trustees. DIMA and its predecessors have more than
80 years of experience managing mutual funds. DIMA provides a full range of
investment advisory services to institutional and retail clients. The Funds'
investment advisor is also responsible for selecting brokers and dealers and for
negotiating brokerage commissions and dealer charges. On December 31, 2006,
Deutsche Asset Management, Inc. ("DAMI") merged into DIMA. Prior to December 31,
2006 DAMI was the investment advisor to the Funds. As a result of the merger,
DIMA is now the investment advisor to the Funds.

DeAM is the marketing name in the US for the asset management activities of
Deutsche Bank AG, DIMA, Deutsche Bank Trust Company Americas and DWS Trust
Company. DeAM is a global asset management organization that offers a wide range
of investing expertise and resources, including hundreds of portfolio managers
and analysts and an office network that reaches the world's major investment
centers. This well-resourced global investment platform brings together a wide
variety of experience and investment insight, across industries, regions, asset
classes and investing styles. DIMA is an indirect, wholly owned subsidiary of
Deutsche Bank AG. Deutsche Bank AG is a major global banking institution that is
engaged in a wide range of financial services, including investment management,
mutual fund, retail, private and commercial banking, investment banking and
insurance. DWS Investments is part of Deutsche Bank's Asset Management division
and, within the US, represents the retail asset management activities of
Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Investment
Management Americas Inc. and DWS Trust Company.

The Advisor provides investment counsel for many individuals and institutions,
including insurance companies, industrial corporations, and financial and
banking organizations, as well as providing investment advice to open- and
closed-end SEC registered funds.

Each Fund is managed by a team of investment professionals, each of whom plays
an important role in a Fund's management process. Team members work together to
develop investment strategies and select securities for a Fund's portfolio. This
team works for the Advisor or its affiliates and is supported by a large staff
of economists, research analysts, traders and other investment specialists. The
Advisor or its affiliates believe(s) its team approach benefits fund investors
by bringing together many disciplines and leveraging its extensive resources.
Team members with primary responsibility for management of a Fund, as well as
team members who have other ongoing management responsibilities for each Fund,
are identified in each Fund's prospectus, as of the date of a Fund's prospectus.
Composition of the team may change over time, and fund shareholders and
investors will be notified of changes affecting individuals with primary fund
management responsibility.

Investment Management Agreement

Pursuant to an Investment Management Agreement between the Funds and DIMA (the
"Investment Management Agreement"), the Advisor provides continuing investment
management of the assets of the Funds. In addition to the investment management
of the assets of the Funds, the Advisor determines the investments to be made
for the Funds, including what portion of its assets remain uninvested in cash or
cash equivalents, and with whom the orders for investments are placed,
consistent with the Funds' policies as stated in their Prospectuses and SAIs, or
as adopted by the Funds' Board. The Advisor will also monitor, to the extent not
monitored by a Fund's administrator or other agent, the Funds' compliance with
its investment and tax guidelines and other compliance policies.

Pursuant to the Investment Management Agreement, (unless otherwise provided in
the Investment Management Agreement or as determined by the Funds' Board and to
the extent permitted by applicable law), the Advisor pays the compensation and
expenses of all the Board members, officers, and executive employees of each
Fund, including each Fund's share of payroll taxes, who are affiliated persons
of the Advisor.

The Investment Management Agreement provides that each Fund is generally
responsible for expenses that include: fees payable to the Advisor; outside
legal, accounting or auditing expenses, including with respect to expenses
related to negotiation, acquisition or distribution of portfolio investments;
maintenance of books and records that are maintained by the Fund, the Funds'
custodian, or other agents of the Fund; taxes and governmental fees; fees and
expenses of the Funds' accounting agent, custodian, sub-custodians,
depositories, transfer agents, dividend reimbursing agents and registrars;
payment for portfolio pricing or valuation services to pricing agents,
accountants, bankers and other specialists, if any; brokerage commissions or
other costs of acquiring or disposing of any portfolio securities or other
instruments of the Funds; and litigation expenses and other extraordinary
expenses not incurred in the ordinary course of the Fund's business.

The Investment Management Agreement allows the Advisor to delegate any of its
duties under the Investment Management Agreement to a subadvisor, subject to a
majority vote of the Board of each Fund, including a majority of the Board who
are not interested persons of a Fund, and, if required by applicable law,
subject to a majority vote of the Funds' shareholders.

The Investment Management Agreement provides that the Advisor shall not be
liable for any error of judgment or mistake of law or for any loss suffered by a
Fund in connection with matters to which the Investment Management Agreement
relates, except a loss resulting from willful malfeasance, bad faith or gross
negligence on the part of the Advisor in the performance of its duties or from
reckless disregard by the Advisor of its obligations and duties under the
Investment Management Agreement.

The Investment Management Agreement continues in effect from year to year only
if its continuance is approved annually by the vote of a majority of those
Trustees who are not parties to such Agreement or interested persons of the
Advisor or the Trust, cast in person at a meeting called for the purpose of
voting on such approval, and either by a vote of the Trust's Trustees or of a
majority of the outstanding voting securities of a Fund. The Investment
Management Agreement may be terminated at any time, without payment of penalty,
by either party or by vote of a majority of the outstanding voting securities of
a Fund on 60 days' written notice.

For all services provided under the Investment Management Agreement, each Fund
pays the Advisor a fee, computed daily and paid monthly, at the annual rate as a
percentage of net assets shown below:

Fund                                               Management Fee Rate
----                                               -------------------

DWS Mid Cap Growth Fund                           0.650% to $500 million
                                                  0.600% next $1 billion
                                                 0.550% next $2.5 billion
                                                 0.540% next $2.5 billion
                                                 0.530% next $2.5 billion
                                                 0.520% next $2.5 billion
                                                    0.510% thereafter

DWS Small Cap Growth Fund                                 0.650%


From September 19, 2005 through December 30, 2006 DWS Mid Cap Growth Fund was
obligated to pay the Advisor's predecessor a monthly fee at an annual rate of:

             Average Daily Net Assets         DWS Mid Cap Growth Fund
             ------------------------         -----------------------

                 $0 - $500 million                     0.65%
            $500 million - $1.5 billion                0.60%
            $1.5 billion - $4.0 billion                0.55%
            $4.0 billion - $6.5 billion                0.54%
            $6.5 billion - $9.0 billion                0.53%
           $9.0 billion - $11.5 billion                0.52%
                Over $11.5 billion                     0.51%

Effective October 1, 2008, DWS Micro Cap Fund pays the Advisor a graduated
investment management fee, based on the average daily net assets of the Fund,
computed daily and payable monthly, at the annual rates shown below:

DWS Micro Cap Fund                                1.100% to $250 million
                                                 0.950% next $250 million
                                                     0.800% thereafter

Prior to October 1, 2008, DWS Micro Cap Fund paid the Advisor a fee, computed
daily and paid monthly, at the annual rate as a percentage of net assets shown:

DWS Micro Cap Fund                               1.250% to $250 million
                                                1.100% next $250 million
                                                0.95% next $500 million
                                                    0.80% thereafter

Prior to July 1, 2006, DWS Micro Cap Fund paid the Advisor a monthly fee of
1.50% of average daily net assets.


DWS Mid Cap Growth Fund. For the fiscal year ended September 30, 2008, the Fund
paid the Advisor a fee in the amount of $5,468,392. For the fiscal year ended
September 30, 2007, the Fund paid the Advisor a fee in the amount of $7,925,087.
For the fiscal year ended September 30, 2006*, the Fund paid the Advisor's
predecessor an advisory fee of $8,308,591.

Through September 30, 2009, the Advisor has contractually agreed to waive all or
a portion of its management fee and reimburse or pay operating expenses of DWS
Mid Cap Growth Fund to the extent necessary to maintain the DWS Mid Cap Growth
Fund's total operating expenses at 2.18% for Class B shares and 1.18% for
Institutional Class shares, excluding certain expenses such as extraordinary
expenses, taxes, brokerage and interest. Through January 31, 2009, the Advisor
had contractually agreed to waive all or a portion of its management fee and
reimburse or pay operating expenses of DWS Mid Cap Growth Fund to the extent
necessary to maintain DWS Mid Cap Growth Fund's total operating expenses at
1.25% for Class A shares, 2.00% for Class B and C shares and 1.00% for
Institutional shares, excluding certain expenses such as extraordinary expenses,
taxes, brokerage and interest.

Only the Fund's Board of Trustees may change these contractual fee waivers.

DWS Small Cap Growth Fund. For the fiscal year ended September 30, 2008, the
Fund paid the Advisor a fee in the amount of $1,803,035. For the fiscal year
ended September 30, 2007, the Fund paid the Advisor a fee in the amount of
$2,813,970. For the fiscal year ended September 30, 2006*, the Fund paid the
Advisor's predecessor an advisory fee of $3,441,328.

Through January 31, 2010, the Advisor has contractually agreed to waive all or a
portion of its management fee and reimburse or pay operating expenses of DWS
Small Cap Growth Fund to the extent necessary to maintain DWS Small Cap Growth
Fund's total operating expenses at 1.25% for Class A shares, 2.00% for both
Class B and C shares, and 1.00% for Institutional Class shares, excluding
certain expenses such as extraordinary expenses, taxes, brokerage and interest.

Only the Fund's Board of Trustees may change these contractual fee waivers.

DWS Micro Cap Fund. For the fiscal year ended September 30, 2008, the Fund paid
the Advisor a fee in the amount of $649,327 (of which $191,833 was waived). For
the fiscal year ended September 30, 2007, the Fund paid the Advisor a fee in the
amount of $890,605 (of which $207,321 was waived). For the fiscal year ended
September 30, 2006 *, the Fund paid the Advisor's predecessor an advisory fee of
$1,464,791 (of which $342,282 was waived).

Through September 30, 2009, the Advisor has contractually agreed to waive all or
a portion of its fees and reimburse or pay certain operating expenses of DWS
Micro Cap Fund so that the total operating expenses will not exceed 1.69%,
2.44%, 2.44% and 1.44% for Class A, Class B, Class C and Institutional Class
shares, respectively, excluding certain expenses such as extraordinary expenses,
taxes, brokerage and interest.

Through November 30, 2009, the Advisor has contractually agreed to waive all or
a portion of its investment management fee in the amount of 0.305% of DWS Micro
Cap Fund's average daily total net assets. Through January 31, 2009, the Advisor
had contractually agreed to waive all or a portion of its fees and reimburse or
pay certain operating expenses of DWS Micro Cap Fund so that the total operating
expenses would not exceed 1.77%, 2.52%, 2.52% and 1.52% for Class A, Class B,
Class C and Institutional Class shares, respectively, excluding certain expenses
such as extraordinary expenses, taxes, brokerage and interest. The Advisor had
contractually agreed through January 31, 2008 to waive a portion of its fees and
reimburse expenses so that total annual operating expenses would not exceed
1.63%, 2.38% and 2.38% for Class A, Class B and Class C shares, respectively,
excluding certain expenses such as extraordinary expenses, taxes, brokerage,
interest and organizational and offering expenses, and proxy expenses.

Only the Fund's Board of Trustees may change these contractual fee waivers.

*        Prior to June 1, 2006 for DWS Mid Cap Growth Fund and DWS Small Cap
         Growth Fund and July 1, 2006 for DWS Micro Cap Fund, these fees
         included an administrative service fee.

In reviewing the terms of the Investment Management Agreement and in discussions
with the Advisor concerning such Investment Management Agreement, the Trustees
of the Trust who are not "interested persons" of the Advisor are represented by
independent counsel at a Fund's expense.

Under a separate agreement between Deutsche Bank AG and the Funds, Deutsche Bank
AG has granted a license to the Funds to utilize the trademark "DWS."

The Advisor may enter into arrangements with affiliates and third party service
providers to perform various administrative, back-office and other services
relating to client accounts. Such service providers may be located in the US or
in non-US jurisdictions.

Subadvisor Approval Policy. In addition, the Board and shareholders approved a
subadvisor approval policy for each Fund (the "Subadvisor Approval Policy"). The
Subadvisor Approval Policy permits the Advisor, subject to the approval of the
Board, including a majority of its independent board members, to appoint and
replace subadvisors and to amend sub-advisory contracts without obtaining
shareholder approval. Under the Subadvisor Approval Policy, the Board, including
its independent board members, will continue to evaluate and approve all new
sub-advisory contracts between the Advisor and any subadvisor, as well as all
changes to any existing sub-advisory contract. A Fund cannot implement the
Subadvisor Approval Policy without the SEC either adopting revisions to certain
rules (as it proposed to do in October 2003) or granting a Fund exemptive relief
from such existing rules. In the event that a Fund received exemptive relief or
the SEC adopted revisions to its current rules, the Fund and the Advisor would
be subject to certain conditions imposed by the SEC (and certain conditions that
may be imposed in the future within either exemptive relief or a rule) to ensure
that the interests of a Fund and its shareholders are adequately protected
whenever the Advisor acts under the Subadvisor Approval Policy, including any
shareholder notice requirements.


Compensation of Portfolio Managers

Portfolio managers are eligible for total compensation comprised of base salary
and discretionary incentive compensation.

Base Salary - Base salary generally represents a smaller percentage of portfolio
managers' total compensation than discretionary incentive compensation. Base
salary is linked to job function, responsibilities and financial services
industry peer comparison through the use of extensive market data surveys.

Discretionary Incentive Compensation - Generally, discretionary incentive
compensation comprises a greater proportion of total compensation as a portfolio
manager's seniority and compensation levels increase. Discretionary incentive
compensation is determined based on an analysis of a number of factors,
including among other things, the performance of Deutsche Bank, the performance
of the Asset Management division, and the employee's individual contribution. In
evaluating individual contribution, management will consider a combination of
quantitative and qualitative factors. A portion of the portfolio manager's
discretionary incentive compensation may be delivered in long-term equity
programs (usually in the form of Deutsche Bank equity) (the "Equity Plan"). Top
performing portfolio managers may earn discretionary incentive compensation that
is a multiple of their base salary.

o        The quantitative analysis of a portfolio manager's individual
         performance is based on, among other factors, performance of all of the
         accounts managed by the portfolio manager (which includes the fund and
         any other accounts managed by the portfolio manager) over a one-,
         three-, and five-year period relative to the appropriate Morningstar
         and Lipper peer group universes and/or benchmark index(es) with respect
         to each account. Additionally, the portfolio manager's
         retail/institutional asset mix is weighted, as appropriate for
         evaluation purposes. Generally the benchmark index used is a benchmark
         index set forth in the fund's prospectus to which the fund's
         performance is compared. Additional or different appropriate peer group
         or benchmark indices may also be used. Primary weight is given to
         pre-tax portfolio performance over three-year and five-year time
         periods (adjusted as appropriate if the portfolio manager has served
         for less than five years) with lesser consideration given to portfolio
         performance over a one-year period. The increase or decrease in a
         fund's assets due to the purchase or sale of fund shares is not
         considered a material factor.

o        The qualitative analysis of a portfolio manager's individual
         performance is based on, among other things, the results of an annual
         management and internal peer review process, and management's
         assessment of overall portfolio manager contributions to investor
         relations, the investment process and overall performance (distinct
         from fund and other account performance). Other factors, including
         contributions made to the investment team, as well as adherence to
         Compliance Policies and Procedures, Risk Management procedures, the
         firm's Code of Ethics and "living the values" of the Advisor are also
         factors.

The quantitative analysis of a portfolio manager's performance is given more
weight in determining discretionary incentive compensation than the qualitative
portion.

Certain portfolio managers may also participate in the Equity Plan. The amount
of equity awarded under the long-term equity programs is generally based on the
individual's total compensation package and may comprise from 0% to 30% of the
total compensation award. As discretionary incentive compensation increases, the
percentage of compensation awarded in Deutsche Bank equity also increases.
Portfolio managers may receive a portion of their equity compensation in the
form of shares in the proprietary mutual funds that they manage or support.

Fund Ownership of Portfolio Managers

The following table shows the dollar range of shares owned beneficially and of
record by each member of each Fund's portfolio management team in each Fund as
well as in all DWS Funds as a group (i.e., those funds advised by Deutsche Asset
Management or its affiliates), including investments by their immediate family
members sharing the same household and amounts invested through retirement and
deferred compensation plans. This information is provided as of each Fund's most
recent fiscal year end.

<TABLE>
<CAPTION>
                                                                                                 Dollar Range
                                                                                                  Of All DWS
Name of                         DWS                                      DWS Small Cap            Fund Shares
Portfolio Manager         Micro Cap Fund     DWS Mid Cap Growth Fund      Growth Fund                Owned
-----------------         --------------     -----------------------      -----------                -----
<S>                              <C>                      <C>                    <C>                    <C>
Joseph Axtell               $1 - $10,000          $1 - $10,000                $0             $100,001 - $500,000
Jeffrey Saeger                   $0                    $0                     $0              $50,001 - $100,000
Rafaelina M. Lee                 $0               $1 - $10,000                $0              $50,001 - $100,000

Conflicts of Interest

In addition to managing the assets of each Fund, the Fund's portfolio managers
may have responsibility for managing other client accounts of the Advisor or its
affiliates. The tables below show, for each portfolio manager, the number and
asset size of (1) SEC registered investment companies (or series thereof) other
than the Fund, (2) pooled investment vehicles that are not registered investment
companies and (3) other accounts (e.g., accounts managed for individuals or
organizations) managed by each portfolio manager. Total assets attributed to
each portfolio manager in the tables below include total assets of each account
managed by them, although the manager may only manage a portion of such
account's assets. The tables also show the number of performance based fee
accounts, as well as the total assets of the accounts for which the advisory fee
is based on the performance of the account. This information is provided as of a
Fund's most recent fiscal year end.

DWS Micro Cap Fund

Other SEC Registered Investment Companies Managed:

                                       Number of        Total Assets of    Number of Investment
                                      Registered          Registered         Company Accounts       Total Assets of
Name of                               Investment          Investment               with           Performance-Based
Portfolio Manager                      Companies           Companies       Performance-Based Fee     Fee Accounts
-----------------                      ---------           ---------       ---------------------     ------------

Joseph Axtell                              14           $6,365,261,650               0                    $0
Jeffrey Saeger                              2             $614,822,536               0                    $0
Rafaelina M. Lee                            0                       $0               0                    $0
DWS Mid Cap Growth Fund



Other SEC Registered Investment Companies Managed:

                                       Number of        Total Assets of    Number of Investment
                                      Registered          Registered         Company Accounts      Total Assets of
Name of                               Investment          Investment               with           Performance-Based
Portfolio Manager                      Companies           Companies       Performance-Based Fee     Fee Accounts
-----------------                      ---------           ---------       ---------------------     ------------

Joseph Axtell                              14           $5,858,010,964               0                    $0
Jeffrey Saeger                              2             $614,822,536               0                    $0
Rafaelina M. Lee                            0                       $0               0                    $0


DWS Small Cap Growth Fund

Other SEC Registered Investment Companies Managed:


                                       Number of        Total Assets of    Number of Investment
                                      Registered          Registered         Company Accounts      Total Assets of
Name of                               Investment          Investment               with           Performance-Based
Portfolio Manager                      Companies           Companies       Performance-Based Fee     Fee Accounts
-----------------                      ---------           ---------       ---------------------     ------------

Joseph Axtell                              14           $6,289,866,985               0                    $0
Jeffrey Saeger                              2             $614,822,536               0                    $0
Rafaelina M. Lee                            0                       $0               0                    $0



DWS Micro Cap Fund, DWS Mid Cap Growth Fund, and DWS Small Cap Growth Fund

Other Pooled Investment Vehicles Managed:

                                                                               Number of Pooled
                                      Number of                              Investment Vehicle
                                       Pooled          Total Assets of          Accounts with      Total Assets of
Name of                              Investment       Pooled Investment      Performance-Based    Performance-Based
Portfolio Manager                     Vehicles             Vehicles                 Fee              Fee Accounts
-----------------                     --------             --------                 ---              ------------

Joseph Axtell                             1               $3,953,600                 0                    $0
Jeffrey Saeger                            7             $160,345,886                 0                    $0
Rafaelina M. Lee                          0                       $0                 0                    $0



DWS Micro Cap Fund, DWS Mid Cap Growth Fund, and DWS Small Cap Growth Fund

Other Accounts Managed:

                                                                               Number of Other
                                                         Total Assets          Accounts with     Total Assets of
                                      Number of            of Other         Performance- Based      Performance-
Name of Portfolio Manager          Other Accounts          Accounts                 Fee          Based Fee Accounts
-------------------------          --------------          --------                 ---          ------------------

Joseph Axtell                             3               $234,032,700               0                   $0
Jeffrey Saeger                            2               $488,907,216               0                   $0
Rafaelina M. Lee                          0                         $0               0                   $0
</TABLE>

In addition to the accounts above, an investment professional may manage
accounts in a personal capacity that may include holdings that are similar to,
or the same as, those of the Funds. The Advisor has in place a Code of Ethics
that is designed to address conflicts of interest and that, among other things,
imposes restrictions on the ability of portfolio managers and other "access
persons" to invest in securities that may be recommended or traded in the Funds
and other client accounts.

Real, potential or apparent conflicts of interest may arise when a portfolio
manager has day-to-day portfolio management responsibilities with respect to
more than one fund or account, including the following:

o        Certain investments may be appropriate for each Fund and also for other
         clients advised by the Advisor, including other client accounts managed
         by each Fund's portfolio management team. Investment decisions for each
         Fund and other clients are made with a view to achieving their
         respective investment objectives and after consideration of such
         factors as their current holdings, availability of cash for investment
         and the size of their investments generally. A particular security may
         be bought or sold for only one client or in different amounts and at
         different times for more than one but less than all clients. Likewise,
         because clients of the Advisor may have differing investment
         strategies, a particular security may be bought for one or more clients
         when one or more other clients are selling the security. The investment
         results achieved for each Fund may differ from the results achieved for
         other clients of the Advisor. In addition, purchases or sales of the
         same security may be made for two or more clients on the same day. In
         such event, such transactions will be allocated among the clients in a
         manner believed by the Advisor to be most equitable to each client,
         generally utilizing a pro rata allocation methodology. In some cases,
         the allocation procedure could potentially have an adverse effect or
         positive effect on the price or amount of the securities purchased or
         sold by each Fund. Purchase and sale orders for each Fund may be
         combined with those of other clients of the Advisor in the interest of
         achieving the most favorable net results to each Fund and the other
         clients.

o        To the extent that a portfolio manager has responsibilities for
         managing multiple client accounts, a portfolio manager will need to
         divide time and attention among relevant accounts. The Advisor attempts
         to minimize these conflicts by aligning its portfolio management teams
         by investment strategy and by employing similar investment models
         across multiple client accounts.

o        In some cases, an apparent conflict may arise where the Advisor has an
         incentive, such as a performance-based fee, in managing one account and
         not with respect to other accounts it manages. The Advisor will not
         determine allocations based on whether it receives a performance-based
         fee from the client. Additionally, the Advisor has in place supervisory
         oversight processes to periodically monitor performance deviations for
         accounts with like strategies.

o        The Advisor and its affiliates and the investment team of each Fund may
         manage other mutual funds and separate accounts on a long-short basis.
         The simultaneous management of long and short portfolios creates
         potential conflicts of interest including the risk that short sale
         activity could adversely affect the market value of the long
         positions (and vice versa), the risk arising from sequential orders in
         long and short positions, and the risks associated with receiving
         opposing orders at the same time. The Advisor has adopted procedures
         that it believes are reasonably designed to mitigate these potential
         conflicts of interest. Included in these procedures are specific
         guidelines developed to ensure fair and equitable treatment for all
         clients whose accounts are managed by each Fund's portfolio management
         team. The Advisor and the portfolio management team have established
         monitoring procedures, a protocol for supervisory reviews, as well as
         compliance oversight to ensure that potential conflicts of interest
         relating to this type of activity are properly addressed.

The Advisor is owned by Deutsche Bank AG, a multi-national financial services
company. Therefore, the Advisor is affiliated with a variety of entities that
provide, and/or engage in commercial banking, insurance, brokerage, investment
banking, financial advisory, broker-dealer activities (including sales and
trading), hedge funds, real estate and private equity investing, in addition to
the provision of investment management services to institutional and individual
investors. Since Deutsche Bank AG, its affiliates, directors, officers and
employees (the "Firm") are engaged in businesses and have interests other than
managing asset management accounts, such other activities involve real,
potential or apparent conflicts of interest. These interests and activities
include potential advisory, transactional and financial activities and other
interests in securities and companies that may be directly or indirectly
purchased or sold by the Firm for its clients' advisory accounts. These are
considerations of which advisory clients should be aware and which may cause
conflicts that could be to the disadvantage of the Advisor's advisory clients.
The Advisor has instituted business and compliance policies, procedures and
disclosures that are designed to identify, monitor and mitigate conflicts of
interest and, as appropriate, to report them to the Fund's Board.


Codes of Ethics

The Funds, the Advisor and the Funds' principal underwriter have each adopted
codes of ethics ("Codes of Ethics") under rule 17j-1 under the 1940 Act. Board
members, Officers of the Trust and employees of the Advisor and principal
underwriter are permitted to make personal securities transactions, including
transactions in securities that may be purchased or held by a Fund, subject to
requirements and restrictions set forth in the applicable Code of Ethics. The
Advisor's Code of Ethics contains provisions and requirements designed to
identify and address certain conflicts of interest between personal investment
activities and the interests of each Fund. Among other things, the Advisor's
Code of Ethics prohibits certain types of transactions absent prior approval,
imposes time periods during which personal transactions may not be made in
certain securities, and requires the submission of duplicate broker
confirmations and quarterly reporting of securities transactions. Additional
restrictions apply to portfolio managers, traders, research analysts and others
involved in the investment advisory process. Exceptions to these and other
provisions of the Advisor's Code of Ethics may be granted in particular
circumstances after review by appropriate personnel.

Regulatory Matters and Legal Proceedings

On December 21, 2006, DeAM settled proceedings with the SEC and the New York
Attorney General on behalf of Deutsche Asset Management, Inc. ("DAMI") and DIMA,
the investment advisors to many of the DWS Investments funds, regarding
allegations of improper trading of fund shares at DeAM and at the legacy Scudder
and Kemper organizations prior to their acquisition by DeAM in April 2002. These
regulators alleged that although the prospectuses for certain funds in the
regulators' view indicated that the funds did not permit market timing, DAMI and
DIMA breached their fiduciary duty to those funds in that their efforts to limit
trading activity in the funds were not effective at certain times. The
regulators also alleged that DAMI and DIMA breached their fiduciary duty to
certain funds by entering into certain market timing arrangements with
investors. These trading arrangements originated in businesses that existed
prior to the currently constituted DeAM organization, which came together as a
result of various mergers of the legacy Scudder, Kemper and Deutsche fund
groups, and all of the arrangements were terminated prior to the start of the
regulatory investigations that began in the summer of 2003. No current DeAM
employee approved these trading arrangements. Under the terms of the
settlements, DAMI and DIMA neither admitted nor denied any wrongdoing.

The terms of the SEC settlement, which identified improper trading in the legacy
Deutsche and Kemper mutual funds only, provide for payment of disgorgement in
the amount of $17.2 million. The terms of the settlement with the New York
Attorney General provide for payment of disgorgement in the amount of $102.3
million, which is inclusive of the amount payable under the SEC settlement, plus
a civil penalty in the amount of $20 million. The total amount payable by DeAM,
approximately $122.3 million, will be distributed to shareholders of the
affected funds in accordance with a distribution plan to be developed by a
distribution consultant. The funds' investment advisors do not believe these
amounts will have a material adverse financial impact on them or materially
affect their ability to perform under their investment management agreements
with the DWS funds. The above-described amounts are not material to Deutsche
Bank, and have already been reserved.

Among the terms of the settled orders, DeAM is subject to certain undertakings
regarding the conduct of its business in the future, including formation of a
Code of Ethics Oversight Committee to oversee all matters relating to issues
arising under the advisors' Code of Ethics; establishment of an Internal
Compliance Controls Committee having overall compliance oversight responsibility
of the advisors; engagement of an Independent Compliance Consultant to conduct a
comprehensive review of the advisors' supervisory compliance and other policies
and procedures designed to prevent and detect breaches of fiduciary duty,
breaches of the Code of Ethics and federal securities law violations by the
advisors and their employees; and commencing in 2008, the advisors shall undergo
a compliance review by an independent third party.

In addition, DeAM is subject to certain further undertakings relating to the
governance of the mutual funds, including that at least 75% of the members of
the Boards of Trustees/Directors overseeing the DWS Funds continue to be
independent of DeAM; the Chairmen of the DWS Funds' Boards of Trustees/Directors
continue to be independent of DeAM; DeAM maintain existing management fee
reductions for certain funds for a period of five years and not increase
management fees for these certain funds during this period; the funds retain a
senior officer (or independent consultants, as applicable) responsible for
assisting in the review of fee arrangements and monitoring compliance by the
funds and the investment advisors with securities laws, fiduciary duties, codes
of ethics and other compliance policies, the expense of which shall be borne by
DeAM; and periodic account statements, fund prospectuses and the mutual funds'
web site contain additional disclosure and/or tools that assist investors in
understanding the fees and costs associated with an investment in the funds and
the impact of fees and expenses on fund returns.

DeAM has also settled proceedings with the Illinois Secretary of State regarding
market timing matters. The terms of the Illinois settlement provide for investor
education contributions totaling approximately $4 million and a payment in the
amount of $2 million to the Securities Audit and Enforcement Fund.

On September 28, 2006, the SEC and the National Association of Securities
Dealers ("NASD") (now known as the Financial Industry Regulatory Authority, or
"FINRA") announced final agreements in which Deutsche Investment Management
Americas Inc. ("DIMA"), Deutsche Asset Management, Inc. ("DAMI") and DWS Scudder
Distributors, Inc. (now known as DWS Investments Distributors, Inc. ("DIDI"))
settled administrative proceedings regarding disclosure of brokerage allocation
practices in connection with sales of the DWS Funds' (now known as the DWS
Investments Funds) shares during 2001-2003. The agreements with the SEC and NASD
are reflected in orders which state, among other things, that DIMA and DAMI
failed to disclose potential conflicts of interest to the funds' Boards and to
shareholders relating to DIDI's use of certain funds' brokerage commissions to
reduce revenue sharing costs to broker-dealer firms with whom it had
arrangements to market and distribute DWS Fund shares. These directed brokerage
practices were discontinued in October 2003.


Under the terms of the settlements, in which DIMA, DAMI and DIDI neither
admitted nor denied any of the regulators' findings, DIMA, DAMI and DIDI agreed
to pay disgorgement, prejudgment interest and civil penalties in the total
amount of $19.3 million. The portion of the settlements distributed to the funds
was approximately $17.8 million and was paid to the funds as prescribed by the
settlement orders based upon the amount of brokerage commissions from each fund
used to satisfy revenue sharing agreements with broker-dealers who sold fund
shares.

As part of the settlements, DIMA, DAMI and DIDI also agreed to implement certain
measures and undertakings relating to revenue sharing payments including making
additional disclosures in the funds' Prospectuses or Statements of Additional
Information, adopting or modifying relevant policies and procedures and
providing regular reporting to the fund Boards.

Additional information announced by DeAM regarding the terms of the settlements
is available at www.dws-investments.com/regulatory_settlements.

The matters alleged in the regulatory settlements described above also serve as
the general basis of a number of private class action lawsuits involving the DWS
funds. These lawsuits name as defendants various persons, including certain DWS
funds, the funds' investment advisors and their affiliates, and certain
individuals, including in some cases fund Trustees/Directors, officers, and
other parties. Each DWS fund's investment advisor has agreed to indemnify the
applicable DWS funds in connection with these lawsuits, or other lawsuits or
regulatory actions that may be filed making similar allegations.

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

                             FUND SERVICE PROVIDERS

Administrator

Pursuant to an administrative services agreement with the Advisor (the
"Administrative Services Agreement"), the Advisor provides most administrative
services to the Funds, including, among others, providing the Funds with
personnel, preparing and making required filings on behalf of the Funds,
maintaining books and records for the Funds, and monitoring the valuation of
Funds securities. For all services provided under the Administrative Services
Agreement, each Fund pays the Administrator a fee of 0.10% of the Fund's
respective average daily net assets.

Under the Administrative Services Agreement, DIMA is obligated on a continuous
basis to provide such administrative services as the Board of Trustees of the
Funds reasonably deems necessary for the proper administration of the Funds.
DIMA provides the Funds with personnel; arranges for the preparation and filing
of the Funds' tax returns; prepares and submits reports and meeting materials to
the Board and the Funds' shareholders; prepares and files updates to the Funds'
Prospectuses and SAIs as well as other reports required to be filed by the SEC;
maintains the Funds' records; provides each Fund with office space, equipment
and services; supervises, negotiates the contracts of and monitors the
performance of third parties contractors; oversees the tabulation of proxies;
monitors the valuation of portfolio securities and monitors compliance with
Board-approved valuation procedures; assists in establishing the accounting and
tax policies of each Fund; assists in the resolution of accounting issues that
may arise with respect to each Fund; establishes and monitors each Fund's
operating expense budgets; reviews and processes each Fund's bills; assists in
determining the amount of dividends and distributions available to be paid by
each Fund, prepares and arranges dividend notifications and provides information
to agents to effect payments thereof; provides to the Board periodic and special
reports; provides assistance with investor and public relations matters; and
monitors the registration of shares under applicable federal and state law.
Pursuant to the Administrative Services Agreement, the Advisor provides fund
accounting services for each Fund. The Administrative Services Agreement
provides that the Advisor will not be liable under the Administrative Services
Agreement except for willful misfeasance, bad faith or negligence in the
performance of its duties or from the reckless disregard by it of its duties and
obligations thereunder.


Pursuant to an agreement between the Administrator and SSB, the Administrator
has delegated certain administrative functions to SSB. The costs and expenses of
such delegation are borne by the Administrator, not by a Fund.

Prior to July 1, 2006, Investment Company Capital Corp. ("ICCC" ), was the
administrator for DWS Mid Cap Growth Fund and DWS Small Cap Growth Fund. ICCC
received a fee (the "Administrator Service Fee") of 0.40% for Class A, B, C, S
and Institutional Class shares of DWS Small Cap Growth Fund, 0.45% for Class S
and 0.40% for Class A, B, C and Institutional Class shares of DWS Mid Cap Growth
Fund. Effective June 1, 2006, the Administration Agreement with ICCC was
terminated and the Funds entered into an Administration Services Agreement with
DIMA.

Prior to July 1, 2006, DAMI was the administrator for DWS Micro Cap Fund. DAMI
received a fee of 0.22% of the average daily net assets of the Fund (the
"Administrator Service Fee"). Effective July 1, 2006 the Administration
Agreement with DAMI was terminated and the Fund entered into an Administration
Services Agreement with DIMA.

The following administrative services fees were paid to DIMA by the Funds:

<TABLE>
<CAPTION>
DWS Mid Cap Growth Fund                   Administrative Services Fee                 Unpaid at Fiscal Year End
-----------------------                   ---------------------------                 -------------------------
<S>                                                 <C>                                        <C>
2008                                                $869,732                                   $49,661
2007                                                $1,279,181                                    --
2006*                                               $416,391                                      --

DWS Small Cap Growth Fund                Administrative Services Fee               Unpaid at Fiscal Year End
-------------------------                ---------------------------               -------------------------

2008                                              $277,390                                  $11,527
2007                                                $432,919                                   --
2006*                                               $168,484                                   --


DWS Micro Cap Fund                       Administrative Services Fee               Unpaid at Fiscal Year End
------------------                       ---------------------------               -------------------------

2008                                               $51,946                                   $3,498
2007                                                $71,248                                    --
2006**                                              $23,088                                    --


*        For the period from June 1, 2006 through September 30, 2006.

**       For the period from July 1, 2006 through September 30, 2006

For the period October 1, 2005 through May 31, 2006 for both DWS Mid Cap Growth
Fund and DWS Small Cap Growth Fund and for the period October 1, 2005 through
June 30, 2006 for DWS Micro Cap Fund, the administrator service fees charged to
the Funds were as follows:

DWS Mid Cap Growth Fund                               Administrator Service Fee
-----------------------                               -------------------------

Class A                                                     $1,543,354
Class B                                                       $141,509
Class C                                                        $90,333
Institutional Class                                         $1,204,941

DWS Small Cap Growth Fund                             Administrator Service Fee
-------------------------                             -------------------------

Class A                                                       $231,533
Class B                                                        $20,688
Class C                                                        $27,470
Institutional Class                                            $13,015

DWS Micro Cap Fund                        Administrator Service Fee                          Waived
------------------                        -------------------------                          ------

Class A                                            $47,462                                  $37,604
Class B                                            $8,351                                    $6,738
Class C                                            $15,601                                  $12,602
Institutional Class                                $70,718                                  $54,154
</TABLE>


Pursuant to DeAM procedures approved by the Boards on behalf of the DWS funds,
proof of claim forms are routinely filed on behalf of the DWS funds by a third
party service provider, with certain limited exceptions. The Boards of the DWS
funds receive periodic reports regarding the implementation of these procedures.

Distributor

DWS Investments Distributors, Inc. ("DIDI" or the "Distributor") is the
principal distributor for shares of the Funds. DIDI is a registered
broker-dealer and is affiliated with DIMA. The principal business address of
DIDI is 222 South Riverside Plaza, Chicago, IL 60606.

The terms and conditions of the Distribution Agreement are exactly the same as
the Distribution Agreement with ICC Distributors, Inc., the former distributor
of the Funds. DIDI enters into a Selling Group Agreement with certain
broker-dealers (each a "Participating Dealer"). If a Participating Dealer
previously had agreements in place with DIDI and ICC Distributors, Inc., the
DIDI Agreement controls. If the Participating Dealer did not have an agreement
with DIDI, then the terms of the assigned ICC Distributors, Inc. agreement
remain in effect. These Selling Group Agreements may be terminated by their
terms or by the terms of the Distribution Agreement, as applicable. DIDI is a
wholly owned subsidiary of Deutsche Bank AG. The address for DIDI is 222 South
Riverside Plaza, Chicago, IL 60606.

Class A, B and C Shares Only. With respect to Class A, B and C shares of the
Funds, each Fund may enter into Shareholder Servicing Agreements with certain
financial institutions to act as Shareholder Servicing Agents, pursuant to which
the Distributor will allocate a portion of its distribution fee as compensation
for such financial institutions' ongoing shareholder services. The Funds may
also enter into Shareholder Servicing Agreements pursuant to which the Advisor
or its affiliates will provide compensation out of their own resources for
ongoing shareholder services. Currently, banking laws and regulations do not
prohibit a financial holding company affiliate from acting as distributor or
Shareholder Servicing Agent or in other capacities for investment companies.
Should future legislative, judicial or administrative action prohibit or
restrict the activities of the Shareholder Servicing Agents in connection with
the Shareholder Servicing Agreements, the Trust may be required to alter
materially or discontinue its arrangements with the Shareholder Servicing
Agents. Such financial institutions may impose separate fees in connection with
these services and investors should review the Prospectuses and this SAI in
conjunction with any such institution's fee schedule.

As compensation for providing distribution and shareholder services as described
above for the Class A shares, the Distributor receives an annual fee, paid
monthly, equal to 0.25% of the average daily net assets of the Class A shares.
With respect to the Class A shares, the Distributor expects to allocate up to
all of its fee to Participating Dealers and Shareholder Servicing Agents. As
compensation for providing distribution and shareholder services as described
above for the Class B and C shares, the Distributor receives an annual fee, paid
monthly, equal to 0.75% of their respective average daily net assets. In
addition, with respect to the Class B and C shares, the Distributor receives a
shareholder servicing fee at an annual rate of 0.25% of their respective average
daily net assets.

DIDI does not advance the first year distribution fee and service fee to firms
for sales of Class C shares to employer sponsored benefit plans using the
OmniPlus subaccount record keeping system made available through ADP, Inc. under
an alliance with DIDI and it affiliates. DIDI is compensated by a Fund for
services as distributor and principal underwriter for Class C shares.

Rule 12b-1 Plans

Pursuant to Rule 12b-1 under the 1940 Act, investment companies may pay
distribution expenses, directly or indirectly, only pursuant to a plan adopted
by the investment company's board and approved by its shareholders. The Funds
have adopted plans of distribution for their Class A, B and C Shares (the
"Plans"). Under each Plan, the Funds pay a fee to the Distributor for
distribution and other shareholder servicing assistance as set forth in the
Distribution Agreement, and the Distributor is authorized to make payments out
of its fee to Participating Dealers and Shareholder Servicing Agents. The Plans
will remain in effect from year to year as specifically approved (a) at least
annually by the Board of Trustees and (b) by the affirmative vote of a majority
of the Independent Trustees, by votes cast in person at a meeting called for
such purpose.

Shareholders of Class B and Class C of the Funds have approved Amended and
Restated Rule 12b-1 Plans (each, an "Amended Plan") for those classes. Under the
Amended Plan, each Fund will pay a shareholder servicing fee at an annual rate
of up to 0.25% of the average daily net assets of its Class B and Class C shares
to its Distributor in addition to a distribution fee at an annual rate of up to
0.75% of such assets. Pursuant to each Amended Plan, shareholder and
administrative services are provided to the Fund on behalf of its Class B and C
shareholders under each Fund's Services Agreement with its Distributor. Because
12b-1 fees are paid out of Fund assets on an ongoing basis, they will, over
time, increase the cost of an investment and may cost more than other types of
sales charges.

The Amended Plans for Class B and Class C shares provide alternative methods for
paying sales charges and may help the Funds grow or maintain asset levels to
provide operational efficiencies and economies of scale. Rule 12b-1 service
plans provide compensation to the Funds' Distributor for post-sales servicing.
Since each Distribution Agreement provides for fees payable as an expense of the
Class B shares and the Class C shares that are used by the Distributor to pay
for distribution and services for those classes, the agreement is approved and
reviewed separately for the Class B shares and the Class C shares in accordance
with Rule 12b-1 under the 1940 Act, which regulates the manner in which an
investment company may, directly or indirectly, bear the expenses of
distributing its shares. The Distribution Agreement may not be amended to
increase the fee to be paid by a Fund with respect to a class without approval
by a majority of the outstanding voting securities of such class of the Fund.
Similarly, the Services Agreement is approved and reviewed separately for the
Class A shares, Class B shares and Class C shares in accordance with Rule 12b-1.

If an Amended Plan is terminated in accordance with its terms, the obligation of
a Fund to make payments to the Distributor pursuant to the Amended Plan will
cease and that Fund will not be required to make any payments past the
termination date. Thus, there is no legal obligation for a Fund to pay any
expenses incurred by the Distributor other than fees already payable under an
Amended Plan, if for any reason the Amended Plan is terminated in accordance
with its terms. Future fees under the Amended Plan may or may not be sufficient
to reimburse the Distributor for its expenses incurred.

If a Rule 12b-1 Plan is terminated in accordance with its terms, the obligation
of the applicable Fund to make payments to DIDI pursuant to the Rule 12b-1 Plan
will cease and the Fund will not be required to make any payments not previously
accrued past the termination date. Thus, there is no legal obligation for a Fund
to pay any expenses incurred by DIDI other than fees previously accrued and
payable under a Rule 12b-1 Plan, if for any reason the Rule 12b-1 Plan is
terminated in accordance with its terms. Future fees under the Rule 12b-1 Plan
may or may not be sufficient to cover DIDI for its expenses incurred. On the
other hand, under certain circumstances, DIDI might collect in the aggregate
over certain periods more in fees under the Rule 12b-1 Plan than it has expended
over that same period in providing distribution services for a Fund. In
connection with Class B shares, for example, if shares of a Fund were to
appreciate (resulting in greater asset base against which Rule 12b-1 fees are
charged) and sales of the Fund's shares were to decline (resulting in lower
expenditures by DIDI under the Rule 12b-1 Plan), fees payable could exceed
expenditures. This may also happen over certain periods shorter than the life of
the Rule 12b-1 Plan simply due to the timing of expenses incurred by DIDI that
is not matched to the timing of revenues received (e.g., a sales commission may
be paid by DIDI related to an investment in year 1, while the Rule 12b-1 fee to
DIDI related to that investment may accrue during year 1 through year 6 prior to
conversion of the investment to Class A shares). As a result, if DIDI's expenses
are less than the Rule 12b-1 fees, DIDI will retain its full fees and make a
profit.

Under the Plans, amounts allocated to Participating Dealers and Shareholder
Servicing Agents may not exceed amounts payable to the Distributor under the
Plans. Payments under the Plans are made as described above regardless of the
Distributor's actual cost of providing distribution services and may be used to
pay the Distributor's overhead expenses. If the cost of providing distribution
services to the Class A Shares is less than 0.25% of such class's average daily
net assets for any period or if the cost of providing distribution services to
the Class B and C Shares is less than 0.75% of such class's average daily net
assets for any period, the unexpended portion of the distribution fees may be
retained by the Distributor. The Plans do not provide for any charges to a Fund
for excess amounts expended by the Distributor and, if any Plan is terminated in
accordance with its terms, the obligation of the Fund to make payments to the
Distributor pursuant to such Plan will cease and the Fund will not be required
to make any payments past the date the Distribution Agreement terminates with
respect to that class. In return for payments received pursuant to the Plans,
the Distributor pays the distribution-related expenses of the Funds, including
one or more of the following: advertising expenses; printing and mailing of
prospectuses to other than current shareholders; compensation to dealers and
sales personnel; and interest, carrying or other financing charges.

Expenses of the Funds paid in connection with the Rule 12b-1 Plans for each
class of shares are set forth below. A portion of the marketing and sales and
operating expenses shown below could be considered overhead expenses.



<TABLE>
<CAPTION>
-------------------- ------------ ----------------------------------------------------
                                   12b-1 Compensation to Underwriter for the Fiscal
                                             Year Ended September 30, 2008
                                             -----------------------------
-------------------- ------------ ----------------------------------------------------

                                      12b-1             12b-1             12b-1
                                   Distribution      Shareholder       Compensation
                                       Fees         Services Fees     Paid to Firms
                                       ----         -------------     -------------
-------------------- ------------ --------------- ------------------ -----------------
<S>                   <C>                      <C>           <C>               <C>
DWS Micro Cap Fund   Class A                  $0            $50,342           $50,926
-------------------- ------------ --------------- ------------------ -----------------
                     Class B             $21,266             $6,787            $9,875
-------------------- ------------ --------------- ------------------ -----------------
                     Class C             $50,730            $14,318           $66,351
-------------------- ------------ --------------- ------------------ -----------------
DWS Mid Cap Growth   Class A                  $0           $990,354        $1,028,881
Fund
-------------------- ------------ --------------- ------------------ -----------------
                     Class B            $185,940            $60,800          $107,201
-------------------- ------------ --------------- ------------------ -----------------
                     Class C            $178,484            $58,927          $229,275
-------------------- ------------ --------------- ------------------ -----------------
DWS Small Cap        Class A                  $0           $109,170           $85,110
Growth Fund
-------------------- ------------ --------------- ------------------ -----------------
                     Class B             $23,649             $7,729           $10,556
-------------------- ------------ --------------- ------------------ -----------------
                     Class C             $53,735            $16,832           $63,178
-------------------- ------------ --------------- ------------------ -----------------



-------------------- ------------  ---------------------------------------------------------------------------
                                                   Other Expenses Paid by Underwriter for the
                                                      Fiscal Year Ended September 30, 2008
                                                      ------------------------------------
-------------------- ------------  ---------------------------------------------------------------------------
                                   Advertising, Sales,
                                      Literature and                     Marketing    Postage
                                       Promotional        Prospectus     and Sales    and           Imputed
                                        Materials          Printing       Expenses     Mailing     Interest
                                        ---------          --------       --------     -------     --------
-------------------- ------------  --------------------- -------------- ------------- ----------- ------------
DWS Micro Cap Fund   Class A                    $31,657           $948        $7,473      $7,012           $0
-------------------- ------------  --------------------- -------------- ------------- ----------- ------------
                     Class B                       $471            $15          $126        $104       $5,467
-------------------- ------------  --------------------- -------------- ------------- ----------- ------------
                     Class C                     $5,013           $135        $1,207      $1,089           $0
-------------------- ------------  --------------------- -------------- ------------- ----------- ------------
DWS Mid Cap Growth   Class A                   $140,360         $5,052       $30,868     $27,896           $0
Fund
-------------------- ------------  --------------------- -------------- ------------- ----------- ------------
                     Class B                     $5,573           $210        $1,173      $1,072     $302,787
-------------------- ------------  --------------------- -------------- ------------- ----------- ------------
                     Class C                    $13,560           $522        $2,909      $2,626           $0
-------------------- ------------  --------------------- -------------- ------------- ----------- ------------
DWS Small Cap        Class A                    $89,506         $3,163       $20,306     $18,144           $0
Growth Fund
-------------------- ------------  --------------------- -------------- ------------- ----------- ------------
                     Class B                       $657            $12          $173        $151      $35,176
-------------------- ------------  --------------------- -------------- ------------- ----------- ------------
                     Class C                     $4,094           $120          $879        $838           $0
-------------------- ------------  --------------------- -------------- ------------- ----------- ------------
</TABLE>


During the fiscal year ended September 30, 2008, the Distributor received
commissions on the sale of the DWS Mid Cap Growth Fund's Class A and contingent
deferred sales charges on the DWS Mid Cap Growth Fund's Class A, Class B and
Class C shares as follows:

Class A Commissions                                          $12,478
Class A Contingent Deferred Sales Charge                          $7
Class B Contingent Deferred Sales Charge                     $43,502
Class C Contingent Deferred Sales Charge                      $1,476

During the fiscal year ended September 30, 2008, the Distributor received
commissions on the sale of the DWS Small Cap Growth Fund's Class A and
contingent deferred sales charges on the DWS Small Cap Growth Fund's Class A,
Class B and Class C shares as follows: and retained from such commissions and
sales charges the following amounts:

Class A Commissions                                           $1,961
Class A Contingent Deferred Sales Charge                          $0
Class B Contingent Deferred Sales Charge                      $8,753
Class C Contingent Deferred Sales Charge                        $291

During the fiscal year ended September 30, 2008, the Distributor received
commissions on the sale of DWS Micro Cap Fund's Class A and contingent deferred
sales charges on the DWS Micro Cap Fund's Class A, Class B and Class C shares as
follows:

Class A Commissions                                           $2,382
Class A Contingent Deferred Sales Charge                          $0
Class B Contingent Deferred Sales Charge                      $4,164
Class C Contingent Deferred Sales Charge                        $977

Custodian

Each Fund employs SSB, 225 Franklin Street, Boston, Massachusetts 02110 as
custodian. SSB has entered into agreements with foreign subcustodians approved
by the Trustees pursuant to Rule 17f-5 under the 1940 Act. SSB uses Deutsche
Bank AG, an affiliate of the Investment Advisor, as subcustodian ("DB
Subcustodian") in certain countries. To the extent a Fund holds any securities
in the countries in which SSB uses DB Subcustodian as a subcustodian, those
securities will be held by DB Subcustodian as part of a larger omnibus account
in the name of SSB (the "Omnibus Account"). For its services, DB Subcustodian
receives (1) an annual fee based on a percentage of the average daily net assets
of the Omnibus Account and (2) transaction charges with respect to transactions
that occur within the Omnibus Account.

Transfer Agent and Shareholder Service Agent

DWS Investments Service Company ("DISC") serves as transfer agent of the Funds
pursuant to a transfer agency agreement. Under its transfer agency agreement
with the Trust, DISC maintains the shareholder account records for the Funds,
handles certain communications between shareholders and the Trust and causes to
be distributed any dividends and distributions payable by the Trust. DISC may be
reimbursed by the Funds for its out-of-pocket expenses.

The Transfer Agent receives an annual service fee for each account of the Fund,
based on the type of account. For open retail accounts, the fee is a flat fee
ranging from $20.00 to $27.50 per account, for open wholesale money funds the
fee is $32.50 per account, while for certain retirement accounts serviced on the
recordkeeping system of ADP, Inc., the fee is a flat fee up to $3.60 per account
(as of 2007, indexed to inflation) plus an asset based fee of up to 0.25% of
average net assets. 1/12th of the annual service charge for each account is
charged and payable to the Transfer Agent each month. A fee is charged for any
account which at any time during the month had a share balance in the Fund.
Smaller fees are also charged for closed accounts for which information must be
retained on the Transfer Agent's system for up to 18 months after closing for
tax reporting purposes.

Certain out-of-pocket expenses incurred by the Transfer Agent, including
expenses of printing and mailing routine fund disclosure documents, costs of
record retention and transaction processing costs are reimbursed by the Fund or
are paid directly by the Fund. Certain additional out-of-pocket expenses,
including costs of computer hardware and software, third party record-keeping
and processing of proxy statements, may only be reimbursed by the Fund with the
prior approval of the Fund's Board.


For the fiscal year ended September 30, 2008, the amounts charged to the Funds
by DISC were as follows:

<TABLE>
<CAPTION>
                                                                                                       Amount Unpaid at
Fund                                        Class               Total           Amount Waived          September 30, 2008
----                                        -----               -----           -------------          ------------------
<S>                                        <C>               <C>                  <C>                      <C>
DWS Mid Cap Growth Fund                    Class A            $714,783             $496,741                 $29,232
DWS Mid Cap Growth Fund                    Class B             $91,199             $45,077                  $25,396
DWS Mid Cap Growth Fund                    Class C             $72,248             $28,250                  $18,135
DWS Mid Cap Growth Fund              Institutional Class      $378,314             $77,988                 $257,958

                                                                                                         Amount Unpaid at
Fund                                        Class               Total           Amount Waived          September 30, 2008
----                                        -----               -----           -------------          ------------------

DWS Small Cap Growth Fund                  Class A             $86,180             $48,552                  $7,162
DWS Small Cap Growth Fund                  Class B             $12,917             $10,092                  $1,851
DWS Small Cap Growth Fund                  Class C             $20,482             $13,366                  $2,817
DWS Small Cap Growth Fund            Institutional Class       $96,778                --                        --

Fund                                       Class                    Total                     Amount Waived
----                                       -----                    -----                     -------------

DWS Micro Cap Fund                        Class A                  $54,761                       $54,761
DWS Micro Cap Fund                        Class B                   $9,710                        $9,710
DWS Micro Cap Fund                        Class C                  $14,929                       $14,929
DWS Micro Cap Fund                     Institutional                $3,486                        $3,486
                                           Class

For the fiscal year ended September 30, 2007, the amounts charged to the Funds
by DISC were as follows:

Fund                                       Class                    Total                     Amount Waived
----                                       -----                    -----                     -------------

DWS Mid Cap Growth Fund                   Class A                 $908,565                             --
DWS Mid Cap Growth Fund                   Class B                 $142,290                       $58,052
DWS Mid Cap Growth Fund                   Class C                  $86,704                       $19,075
DWS Mid Cap Growth Fund                Institutional              $407,849                      $101,761
                                           Class

Fund                                       Class                     Total                    Amount Waived
----                                       -----                     -----                    -------------

DWS Small Cap Growth Fund                 Class A                 $116,123                       $90,316
DWS Small Cap Growth Fund                 Class B                  $20,981                       $13,242
DWS Small Cap Growth Fund                 Class C                  $27,598                       $15,087
DWS Small Cap Growth Fund              Institutional               $11,557                             --
                                           Class

Fund                                       Class                    Total                     Amount Waived
----                                       -----                    -----                     -------------

DWS Micro Cap Fund                        Class A                  $60,841                       $60,841
DWS Micro Cap Fund                        Class B                  $12,318                       $12,318
DWS Micro Cap Fund                        Class C                  $18,809                       $18,809
DWS Micro Cap Fund                     Institutional                $4,876                        $4,876
                                           Class

For the fiscal year ended September 30, 2006, the amounts charged to the Funds
by DISC were as follows:

Fund                                       Class                    Total                     Amount Waived

DWS Mid Cap Growth Fund                   Class A                 $297,719                      $171,409
DWS Mid Cap Growth Fund                   Class B                 $102,364                       $74,133
DWS Mid Cap Growth Fund                   Class C                  $32,244                       $12,018
DWS Mid Cap Growth Fund                Institutional               $76,042                       $10,774
                                           Class

Fund                                       Class                    Total                     Amount Waived

DWS Small Cap Growth Fund                 Class A                  $74,160                       $50,241
DWS Small Cap Growth Fund                 Class B                  $12,068                        $9,158
DWS Small Cap Growth Fund                 Class C                   $9,163                        $1,244
DWS Small Cap Growth Fund              Institutional                $1,543                             --
                                           Class

Fund                                       Class                    Total                     Amount Waived

DWS Micro Cap Fund                        Class A                  $18,172                       $17,122
DWS Micro Cap Fund                        Class B                   $3,690                        $3,145
DWS Micro Cap Fund                        Class C                   $3,796                        $3,121
DWS Micro Cap Fund                     Institutional                $6,930                        $5,726
                                           Class
</TABLE>

Pursuant to a sub-transfer agency agreement between DISC and DST Systems, Inc.
("DST"), DISC has delegated certain transfer agent, dividend paying agent and
shareholder servicing agent functions to DST. The costs and expenses of such
delegation are borne by DISC, not by the Funds.


Each Fund, or the Advisor (including any affiliate of the Advisor), or both, may
pay unaffiliated third parties for providing recordkeeping and other
administrative services with respect to beneficial owners of Fund shares whose
interests are generally held in an omnibus account.


Legal Counsel

Vedder Price P.C., 222 North LaSalle Street, Chicago, IL 60601, serves as legal
counsel to each Fund.

Ropes & Gray LLP, One International Place, Boston, Massachusetts 02110-2624,
serves as counsel to the Independent Trustees.

Independent Registered Public Accounting Firm

PricewaterhouseCoopers LLP, 125 High Street, Boston, MA 02110, acts as the
Independent Registered Public Accounting Firm for each Fund.

                             PORTFOLIO TRANSACTIONS

The Advisor is generally responsible for placing the orders for the purchase and
sale of portfolio securities, including the allocation of brokerage. With
respect to those funds for which a sub-investment advisor manages the fund's
investments, references in this section to the "Advisor" should be read to mean
the Sub-Advisor, except as noted below.

The policy of the Advisor in placing orders for the purchase and sale of
securities for the Funds is to seek best execution, taking into account such
factors, among others, as price; commission (where applicable); the
broker-dealer's ability to ensure that securities will be delivered on
settlement date; the willingness of the broker-dealer to commit its capital and
purchase a thinly traded security for its own inventory; whether the
broker-dealer specializes in block orders or large program trades; the
broker-dealer's knowledge of the market and the security; the broker-dealer's
ability to maintain confidentiality; the broker-dealer's ability to provide
access to new issues; the broker-dealer's ability to provide support when
placing a difficult trade; the financial condition of the broker-dealer; and
whether the broker-dealer has the infrastructure and operational capabilities to
execute and settle the trade. The Advisor seeks to evaluate the overall
reasonableness of brokerage commissions with commissions charged on comparable
transactions and compares the brokerage commissions (if any) paid by the Funds
to reported commissions paid by others. The Advisor routinely reviews commission
rates, execution and settlement services performed and makes internal and
external comparisons.

Commission rates on transactions in equity securities on US securities exchanges
are subject to negotiation. Commission rates on transactions in equity
securities on foreign securities exchanges are generally fixed. Purchases and
sales of fixed-income securities and certain over-the-counter securities are
effected on a net basis, without the payment of brokerage commissions.
Transactions in fixed income and certain over-the-counter securities are
generally placed by the Advisor with the principal market makers for these
securities unless the Advisor reasonably believes more favorable results are
available elsewhere. Transactions with dealers serving as market makers reflect
the spread between the bid and asked prices. Purchases of underwritten issues
will include an underwriting fee paid to the underwriter. Money market
instruments are normally purchased in principal transactions directly from the
issuer or from an underwriter or market maker.

It is likely that the broker-dealers selected based on the considerations
described in this section will include firms that also sell shares of the Funds
to their customers. However, the Advisor does not consider sales of shares of
the Funds as a factor in the selection of broker-dealers to execute portfolio
transactions for the Funds and, accordingly, has implemented policies and
procedures reasonably designed to prevent its traders from considering sales of
shares of the Funds as a factor in the selection of broker-dealers to execute
portfolio transactions for the Funds.

The Advisor is permitted by Section 28(e) of the Securities Exchange Act of
1934, as amended ("1934 Act"), when placing portfolio transactions for a Fund,
to cause the Fund to pay brokerage commissions in excess of that which another
broker-dealer might charge for executing the same transaction in order to obtain
research and brokerage services if the Advisor determines that such commissions
are reasonable in relation to the overall services provided. The Advisor may
from time to time, in reliance on Section 28(e) of the 1934 Act, execute
portfolio transactions with broker-dealers that provide research and brokerage
services to the Advisor. Consistent with the Advisor's policy regarding best
execution, where more than one broker is believed to be capable of providing
best execution for a particular trade, the Advisor may take into consideration
the receipt of research and brokerage services in selecting the broker-dealer to
execute the trade. Although certain research and brokerage services from
broker-dealers may be useful to a Fund and to the Advisor, it is the opinion of
the Advisor that such information only supplements its own research effort since
the information must still be analyzed, weighed and reviewed by the Advisor's
staff. To the extent that research and brokerage services of value are received
by the Advisor, the Advisor may avoid expenses that it might otherwise incur.
Research and brokerage services received from a broker-dealer may be useful to
the Advisor and its affiliates in providing investment management services to
all or some of its clients, which includes a Fund. Services received from
broker-dealers that executed securities transactions for a Portfolio will not
necessarily be used by the Advisor specifically to service such Fund.

Research and brokerage services provided by broker-dealers may include, but are
not limited to, information on the economy, industries, groups of securities,
individual companies, statistical information, accounting and tax law
interpretations, political developments, legal developments affecting portfolio
securities, technical market action, pricing and appraisal services, credit
analysis, risk measurement analysis, performance analysis and measurement and
analysis of corporate responsibility issues. Research and brokerage services are
typically received in the form of written or electronic reports, access to
specialized financial publications, telephone contacts and personal meetings
with security analysts, but may also be provided in the form of access to
various computer software and meetings arranged with corporate and industry
representatives.

The Advisor may also select broker-dealers and obtain from them research and
brokerage services that are used in connection with executing trades provided
that such services are consistent with interpretations under Section 28(e) of
the 1934 Act. Typically, these services take the form of computer software
and/or electronic communication services used by the Advisor to facilitate
trading activity with those broker-dealers.

Research and brokerage services may include products obtained from third parties
if the Advisor determines that such product or service constitutes brokerage and
research as defined in Section 28(e) and interpretations thereunder. Currently,
it is the Advisor's policy that Sub-Advisors may not execute portfolio
transactions on behalf of the Funds to obtain third party research and brokerage
services. The Advisor may, in the future, change this policy. Regardless,
certain Sub-Advisors may, as matter of internal policy, limit or preclude third
party research and brokerage services.

The Advisor may use brokerage commissions to obtain certain brokerage products
or services that have a mixed use (i.e., it also serves a function that does not
relate to the investment decision-making process). In those circumstances, the
Advisor will make a good faith judgment to evaluate the various benefits and
uses to which it intends to put the mixed use product or service and will pay
for that portion of the mixed use product or service that it reasonably believes
does not constitute research and brokerage services with its own resources.

DIMA will monitor regulatory developments and market practice in the use of
client commissions to obtain research and brokerage services and may adjust its
portfolio transactions policies in response thereto.

Investment decisions for each Fund and for other investment accounts managed by
the Advisor are made independently of each other in light of differing
conditions. However, the same investment decision may be made for two or more of
such accounts. In such cases, simultaneous transactions are inevitable. To the
extent permitted by law, the Advisor may aggregate the securities to be sold or
purchased for a Fund with those to be sold or purchased for other accounts in
executing transactions. Purchases or sales are then averaged as to price and
commission and allocated as to amount in a manner deemed equitable to each
account. While in some cases this practice could have a detrimental effect on
the price paid or received by, or on the size of the position obtained or
disposed of for, the Fund, in other cases it is believed that the ability to
engage in volume transactions will be beneficial to the Fund.

DIMA and its affiliates and the Funds' management team manage other mutual funds
and separate accounts, some of which use short sales of securities as a part of
its investment strategy. The simultaneous management of long and short
portfolios creates potential conflicts of interest including the risk that short
sale activity could adversely affect the market value of the long positions (and
vice versa), the risk arising from sequential orders in long and short
positions, and the risks associated with receiving opposing orders at the same
time.

DIMA has adopted procedures that it believes are reasonably designed to mitigate
these potential conflicts of interest. Incorporated in the procedures are
specific guidelines developed to ensure fair and equitable treatment for all
clients. DIMA and the investment team have established monitoring procedures and
a protocol for supervisory reviews, as well as compliance oversight to ensure
that potential conflicts of interest relating to this type of activity are
properly addressed.

Deutsche Bank AG or one of its affiliates (or in the case of a Sub-Advisor, the
Sub-Advisor or one of its affiliates) may act as a broker for the Funds and
receive brokerage commissions or other transaction-related compensation from the
Funds in the purchase and sale of securities, options or futures contracts when,
in the judgment of the Advisor, and in accordance with procedures approved by
the Funds' Boards, the affiliated broker will be able to obtain a price and
execution at least as favorable as those obtained from other qualified brokers
and if, in the transaction, the affiliated broker charges the Funds a rate
consistent with that charged to comparable unaffiliated customers in similar
transactions.

Pursuant to procedures determined by the Trustees and subject to the general
policies of the Fund and Section 17(e) of the 1940 Act, the Advisor may place
securities transactions with brokers with whom it is affiliated ("Affiliated
Brokers").


For the fiscal year ended September 30, 2006, each Fund paid the following in
brokerage commissions:

DWS Mid Cap Growth Fund                                    $1,801,405
DWS Small Cap Growth Fund                                  $1,190,469
DWS Micro Cap Fund                                           $389,581

For the fiscal year ended September 30, 2007, each Fund paid the following in
brokerage commissions:

DWS Mid Cap Growth Fund                                      $1,506,949
DWS Small Cap Growth Fund                                      $833,006
DWS Micro Cap Fund                                             $287,167

For the fiscal year ended September 30, 2008, each Fund paid the following in
brokerage commissions:

DWS Mid Cap Growth Fund                                      $1,570,661
DWS Small Cap Growth Fund                                      $695,353
DWS Micro Cap Fund                                             $191,235

Each Fund did not pay any affiliated brokerage commissions for its most recent
fiscal year end.

Securities of Regular Broker-Dealers. Each Fund is required to identify any
securities of its "regular brokers or dealers" (as such term is defined in the
1940 Act) which the Fund has acquired during its most recent fiscal year.

At September 30, 2008, the DWS Mid Cap Growth Fund held the following securities
of its regular brokers or dealers:

<TABLE>
<CAPTION>
Name of Regular Broker or Dealer or Parent (Issuer)            Value of Securities Owned as of September 30, 2008
---------------------------------------------------            --------------------------------------------------

<S>                                                                               <C>
Waddell & Reed Financial, Inc.                                                    $4,980,000
Northern Trust Corp.                                                              $4,563,000
E*Trade Financial Corp.                                                           $5,960,000
Affiliated Managers Group, Inc.                                                  $18,923,000
T. Rowe Price Group, Inc.                                                        $11,822,000
TD Ameritrade Holding Corp.                                                       $5,550,000

At September 30, 2008, the DWS Small Cap Growth Fund held the following
securities of its regular brokers or dealers:

Name of Regular Broker or Dealer or Parent (Issuer)            Value of Securities Owned as of September 30, 2008
---------------------------------------------------            --------------------------------------------------

Waddell & Reed Financial, Inc.                                                      $985,000
E*Trade Financial Corp.                                                           $1,200,000
FCStone Group Inc.                                                                $1,326,000

As of September 30, 2008, DWS Micro Cap Fund held the following securities of
its regular brokers or dealers:


Name of Regular Broker or Dealer or Parent (Issuer)            Value of Securities Owned as of September 30, 2008
---------------------------------------------------            --------------------------------------------------

FCStone Group Inc.                                                                  $500,000
</TABLE>


Portfolio Turnover

The portfolio turnover rates for the fiscal years ended 2008 and 2007 were as
follows:

                                        2008                2007
                                        ----                ----

DWS Mid Cap Growth Fund                 82%                  56%
DWS Small Cap Growth Fund               82%                  64%
DWS Micro Cap Fund                      59%                  73%

These rates will vary from year to year. High turnover rates increase
transaction costs and may increase net short-term capital gains. The Advisor
considers these effects when evaluating the anticipated benefits of short-term
investing.

                        PURCHASE AND REDEMPTION OF SHARES

General Information. Policies and procedures affecting transactions in Fund
shares can be changed at any time without notice, subject to applicable law.
Transactions may be contingent upon proper completion of application forms and
other documents by shareholders and their receipt by a Fund's agents.
Transaction delays in processing (and changing account features) due to
circumstances within or beyond the control of a Fund and its agents may occur.
Shareholders (or their financial service firms) are responsible for all losses
and fees resulting from bad checks, cancelled orders or the failure to
consummate transactions effected pursuant to instructions reasonably believed to
be genuine.

A distribution will be reinvested in shares of the same Fund and class if the
distribution check is returned as undeliverable.

Orders will be confirmed at a price based on the net asset value of each Fund
next determined after receipt in good order by DIDI of the order accompanied by
payment. Orders received by dealers or other financial services firms prior to
the determination of net asset value and received in good order by DIDI prior to
the determination of net asset value will be confirmed at a price based on the
net asset value next determined after receipt by DIDI ("trade date").

Certificates. Share certificates will not be issued. Share certificates now in a
shareholder's possession may be sent to the transfer agent for cancellation and
book-entry credit to such shareholder's account. Certain telephone and other
procedures require book-entry holdings. Shareholders with outstanding
certificates bear the risk of loss.

Use of Financial Services Firms. Investment dealers and other firms provide
varying arrangements for their clients to purchase and redeem each Fund's
shares, including higher minimum investments, and may assess transaction or
other fees. Firms may arrange with their clients for other investment or
administrative services. Such firms may independently establish and charge
additional amounts to their clients for such services. Firms also may hold each
Fund's shares in nominee or street name as agent for and on behalf of their
customers. In such instances, each Fund's transfer agent, DISC, will have no
information with respect to or control over the accounts of specific
shareholders. Such shareholders may obtain access to their accounts and
information about their accounts only from their firm. Certain of these firms
may receive compensation from each Fund through the Shareholder Service Agent
for record-keeping and other expenses relating to these nominee accounts. In
addition, certain privileges with respect to the purchase and redemption of
shares or the reinvestment of dividends may not be available through such firms.
Some firms may participate in a program allowing them access to their clients'
accounts for servicing including, without limitation, transfers of registration
and dividend payee changes, and may perform functions such as generation of
confirmation statements and disbursement of cash dividends Such firms, including
affiliates of DIDI, may receive compensation from each Fund through the
Shareholder Service Agent for these services.

Each Fund will be deemed to have received a purchase or redemption order when an
authorized broker, service organization or, if applicable, an authorized
designee, accepts the order. Shares of the Funds may be purchased or redeemed on
any business day at the net asset value next determined after receipt of the
order, in good order, by the Transfer Agent. Investors who invest through
authorized brokers, service organizations or their designated intermediaries
should submit purchase and redemption orders directly to their broker, service
organization or designated intermediary. The broker or intermediary may charge
you a transaction fee.

Each Fund has authorized one or more financial service institutions, including
certain members of FINRA other than the Distributor ("financial institutions"),
to accept purchase and redemption orders for the Funds' shares. Such financial
institutions may also designate other parties, including plan administrator
intermediaries, to accept purchase and redemption orders on each Fund's behalf.
Orders for purchases or redemptions will be deemed to have been received by a
Fund when such financial institutions or, if applicable, their authorized
designees accept the orders. Subject to the terms of the contract between a Fund
and the financial institution, ordinarily orders will be priced at a Fund's net
asset value next computed after acceptance by such financial institution or its
authorized designees and accepted by a Fund. Further, if purchases or
redemptions of a Fund's shares are arranged and settlement is made at an
investor's election through any other authorized financial institution, that
financial institution may, at its discretion, charge a fee for that service. The
Board of Trustees and the Distributor, also a Fund's principal underwriter, each
has the right to limit the amount of purchases by, and to refuse to sell to, any
person. The Trustees and the Distributor may suspend or terminate the offering
of shares of the Fund at any time for any reason.


DIDI has adopted an Incentive Plan (the "Plan") covering wholesalers that are
regional vice presidents ("DWS Investments Wholesalers"). Generally, DWS
Investments Wholesalers market shares of the DWS funds to financial advisors,
who in turn may recommend that investors purchase shares of a DWS fund. The Plan
is an incentive program that combines a monthly incentive component with a
quarterly strategic bonus component. Under the Plan, DWS Investments Wholesalers
will receive a monetary monthly incentive based on the amount of sales generated
from their marketing of the funds, and that incentive will differ depending on
the product category of the fund. Each fund is assigned to one of three product
categories -- "Strategic," "Tactical" or "all other funds" -- taking into
consideration, among other things, the following criteria, where applicable:

o        The Fund's consistency with DWS Investments' branding and long-term
         strategy;
o        The Fund's competitive performance;
o        The Fund's Morningstar rating;
o        The length of time the Fund's Portfolio Managers have managed the
         Fund/Strategy;
o        Market size for the fund category;
o        The Fund's size, including sales and redemptions of the Fund's shares.

This information and other factors are presented to a committee comprised of
representatives from various groups within DWS Investments, who review on a
quarterly basis the funds assigned to each product category described above, and
make any changes to those assignments at that time. No one factor, whether
positive or negative, determines a fund's placement in a given category; all
these factors together are considered, and the designation of funds in the
Strategic and Tactical categories represents management's judgment based on the
above criteria. In addition, management may consider a fund's profile over the
course of several review periods before making a change to its category
assignment. These category assignments will be posted quarterly to the DWS
funds' Web site at www.dws-investments.com, approximately one month after the
end of each quarter. DWS Investments Wholesalers receive the highest
compensation for Strategic funds, less for Tactical funds and the lowest for all
other funds. The level of compensation among these categories may differ
significantly.

The prospect of receiving, or the receipt of, additional compensation by a DWS
Investments Wholesaler under the Plan may provide an incentive to favor
marketing the Strategic or Tactical funds over all other funds. The Plan,
however, will not change the price that investors pay for shares of a fund. The
DWS Investments Compliance Department monitors DWS Investments Wholesaler sales
and other activity in an effort to detect unusual activity in the context of the
compensation structure under the Plan. However, investors may wish to take the
Plan and the product category of the fund into account when considering
purchasing a fund or evaluating any recommendations relating to fund shares.


Telephone and Electronic Transaction Procedures. Shareholders have various
telephone, Internet, wire and other electronic privileges available. Each Fund
or its agents may be liable for any losses, expenses or costs arising out of
fraudulent or unauthorized instructions pursuant to these privileges unless such
Fund or its agents reasonably believe, based upon reasonable verification
procedures, that the instructions were genuine. Verification procedures include
recording instructions, requiring certain identifying information before acting
upon instructions and sending written confirmations. During periods when it is
difficult to contact the Shareholder Service Agent, it may be difficult to use
telephone, wire and other privileges.

QuickBuy and QuickSell. QuickBuy and QuickSell permits the transfer of money via
the Automated Clearing House System (minimum $50 and maximum $250,000) from or
to a shareholder's bank, savings and loan, or credit union account in connection
with the purchase or redemption of Fund shares. Shares purchased by check or
through QuickBuy and QuickSell or Direct Deposit may not be redeemed under this
privilege until such Shares have been owned for at least 10 calendar days.
QuickBuy and QuickSell cannot be used with passbook savings accounts or for
certain tax-deferred plans.

Tax-Sheltered Retirement Plans. The Shareholder Service Agent provides
retirement plan services and documents and DIDI can establish investor accounts
in any of the following types of retirement plans:

o        Traditional, Roth and Education IRAs. This includes Savings Incentive
         Match Plan for Employees of Small Employers ("SIMPLE"), Simplified
         Employee Pension Plan ("SEP") IRA accounts and prototype documents.

o        403(b)(7) Custodial Accounts. This type of plan is available to
         employees of most non-profit organizations.

o        Prototype money purchase pension and profit-sharing plans may be
         adopted by employers.

Brochures describing these plans as well as model defined benefit plans, 457
plans, 401(k) plans, SIMPLE 401(k) plans and materials for establishing them are
available from the Shareholder Service Agent upon request. Additional fees and
transaction policies and procedures may apply to such plans. Investors should
consult with their own tax advisors before establishing a retirement plan.

Purchases

Each Fund reserves the right to withdraw all or any part of the offering made by
its Prospectuses and to reject purchase orders for any reason. Also, from time
to time, each Fund may temporarily suspend the offering of any class of its
shares to new investors. During the period of such suspension, persons who are
already shareholders of such class of such Fund may be permitted to continue to
purchase additional shares of such class and to have dividends reinvested.

To help the government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to obtain, verify
and record information that identifies each person who opens an account. For
more information, please see "Policies You Should Know About" in the Prospectus.

Financial Services Firms' Compensation. Banks and other financial services firms
may provide administrative services related to order placement and payment to
facilitate transactions in shares of each Fund for their clients, and DIDI may
pay them a transaction fee up to the level of the discount or commission
allowable or payable to dealers.

DIDI may, from time to time, pay or allow to firms a 1% commission on the amount
of shares of a Fund sold under the following conditions: (i) the purchased
shares are held in a DWS Investments IRA account, (ii) the shares are purchased
as a direct "roll over" of a distribution from a qualified retirement plan
account maintained on the subaccount record keeping system maintained for DWS
Investments-branded plans by ADP, Inc. under an alliance with DIDI and its
affiliates, (iii) the registered representative placing the trade is a member of
Executive Council, a group of persons designated by DIDI in acknowledgment of
their dedication to the employee benefit plan area; and (iv) the purchase is not
otherwise subject to a commission.


Upon notice to all dealers, DIDI may re-allow to dealers up to the full
applicable Class A sales charge during periods and for transactions specified in
such notice and such re-allowances may be based upon attainment of minimum sales
levels. During periods when 90% or more of the sales charge is re-allowed, such
dealers may be DIDI may at its discretion compensate investment dealers or other
financial services firms in connection with the sale of Class A shares of the
Funds in accordance with the Large Order NAV Purchase Privilege and one of the
two compensation schedules up to the following amounts:

<TABLE>
<CAPTION>

Compensation Schedule #1:                                                     Compensation Schedule #2:
Retail Sales and DWS Flex Plan(1)                                              DWS Retirement Plans(2)
---------------------------------                                              -----------------------

Amount of                              As a Percentage of Net     Amount of Shares      As a Percentage of Net
Shares Sold                                  Asset Value                Sold                  Asset Value
-----------                                  -----------                ----                  -----------
<S>                                       <C>                               <C>                         <C>
$1 million to $3 million                        1.00%
Over $3 million to $50 million                  0.50%              Over $3 million           0.00% - 0.50%
Over $50 million                                0.25%                     --                        --
</TABLE>

(1)       For purposes of determining the appropriate commission percentage to
          be applied to a particular sale under the foregoing schedule, DIDI
          will consider the cumulative amount invested by the purchaser in a
          Fund and other Funds listed under "Special Features -- Class A Shares
          -- Combined Purchases," including purchases pursuant to the "Combined
          Purchases," "Letter of Intent" and "Cumulative Discount" features
          referred to above.

(2)       Compensation Schedule 2 applies to employer sponsored employee benefit
          plans using the OmniPlus subaccount record keeping system made
          available through ADP, Inc. under an alliance with DIDI and its
          affiliates.


DIDI compensates firms for sales of Class B shares at the time of sale at a
commission rate of up to 3.75% of the amount of Class B shares purchased. DIDI
is compensated by the Fund for services as distributor and principal underwriter
for Class B shares. Except as provided below, for sales of Class C shares, DIDI
advances to firms the first year distribution fee at a rate of 0.75% of the
purchase price of such shares, and, for periods after the first year, DIDI
currently pays firms for sales of Class C shares a distribution fee, payable
quarterly, at an annual rate of 0.75% of net assets attributable to Class C
shares maintained and serviced by the firm. For sales of Class C shares to
employer sponsored employee benefit plans using the OmniPlus subaccount record
keeping system made available through ADP, Inc. under an alliance with DIDI and
its affiliates, DIDI does not advance the first year distribution fee and for
periods after the date of sale, DIDI currently pays firms a distribution fee,
payable quarterly, at an annual rate of 0.75% based on net assets as of the last
business day of the month attributable to Class C shares maintained and serviced
by the firm. DIDI is compensated by the Fund for services as distributor and
principal underwriter for Class C shares.

There is no sales charge for Institutional Class shares of each Fund.

Revenue Sharing

In light of recent regulatory developments, the Advisor, the Distributor and
their affiliates have undertaken to furnish certain additional information below
regarding the level of payments made by them to selected affiliated and
unaffiliated brokers, dealers, participating insurance companies or other
financial intermediaries ("financial advisors") in connection with the sale
and/or distribution of Fund shares or the retention and/or servicing of
investors and Fund shares ("revenue sharing").

The Advisor, the Distributor and/or their affiliates may pay additional
compensation, out of their own assets and not as an additional charge to each
Fund, to financial advisors in connection with the sale and/or distribution of
Fund shares or the retention and/or servicing of Fund investors and Fund shares.
Such revenue sharing payments are in addition to any distribution or service
fees payable under any Rule 12b-1 or service plan of any fund, any record
keeping/sub-transfer agency/networking fees payable by each Fund (generally
through the Distributor or an affiliate) and/or the Distributor to certain
financial advisors for performing such services and any sales charges,
commissions, non-cash compensation arrangements expressly permitted under
applicable rules of FINRA or other concessions described in the fee table or
elsewhere in the Prospectuses or the SAI as payable to all financial advisors.
For example, the Advisor, the Distributor and/or their affiliates may compensate
financial advisors for providing each Fund with "shelf space" or access to a
third party platform or fund offering list, or other marketing programs
including, without limitation, inclusion of each Fund on preferred or
recommended sales lists, mutual fund "supermarket" platforms and other formal
sales programs; granting the Distributor access to the financial advisor's sales
force; granting the Distributor access to the financial advisor's conferences
and meetings; assistance in training and educating the financial advisor's
personnel; and, obtaining other forms of marketing support. The level of revenue
sharing payments made to financial advisors may be a fixed fee or based upon one
or more of the following factors: gross sales, current assets and/or number of
accounts of each Fund attributable to the financial advisor, the particular fund
or fund type or other measures as agreed to by the Advisor, the Distributor
and/or their affiliates and the financial advisors or any combination thereof.
The amount of these payments is determined at the discretion of the Advisor, the
Distributor and/or their affiliates from time to time, may be substantial, and
may be different for different financial advisors based on, for example, the
nature of the services provided by the financial advisor.

The Advisor, the Distributor and/or their affiliates currently make revenue
sharing payments from their own assets in connection with the sale and/or
distribution of DWS Fund shares, or the retention and/or servicing of investors,
to financial advisors in amounts that generally range from .01% up to .50% of
assets of the Fund serviced and maintained by the financial advisor, .05% to
..25% of sales of the Fund attributable to the financial advisor, a flat fee of
$13,350 up to $500,000, or any combination thereof. These amounts are annual
figures typically paid on a quarterly basis and are subject to change at the
discretion of the Advisor, the Distributor and/or their affiliates. Receipt of,
or the prospect of receiving, this additional compensation, may influence your
financial advisor's recommendation of this Fund or of any particular share class
of the Fund. You should review your financial advisor's compensation disclosure
and/or talk to your financial advisor to obtain more information on how this
compensation may have influenced your financial advisor's recommendation of this
Fund.

The Advisor, the Distributor and/or their affiliates may also make such revenue
sharing payments to financial advisors under the terms discussed above in
connection with the distribution of both DWS funds and non-DWS funds by
financial advisors to retirement plans that obtain record keeping services from
ADP, Inc. on the DWS Scudder branded retirement plan platform (the "Platform")
with the level of revenue sharing payments being based upon sales of both the
DWS funds and the non-DWS funds by the financial advisor on the Platform or
current assets of both the DWS funds and the non-DWS funds serviced and
maintained by the financial advisor on the Platform.

As of the date hereof, each Fund has been advised that the Advisor, the
Distributor and their affiliates expect that the following firms will receive
revenue sharing payments at different points during the coming year as described
above:

Channel: Broker-Dealers and Financial Advisors
----------------------------------------------
AIG Advisors Group
Ameriprise
Cadaret, Grant & Co. Inc.
Capital Analyst, Incorporated
Citigroup Global Markets, Inc. (dba Smith Barney)
Commonwealth Equity Services, LLP (dba Commonwealth Financial Network)
Deutsche Bank Group
Ensemble Financial Services
First Clearing/Wachovia Securities
Fiserv Trust Company
HD Vest Investment Securities, Inc.
ING Group
John Hancock Distributors LLC
LPL Financial
M.L. Stern & Co.
Meridien Financial Group
Merrill Lynch, Pierce, Fenner & Smith Inc.
Morgan Stanley
Oppenheimer & Co., Inc.
Raymond James & Associates
Raymond James Financial Services
RBC Dain Rauscher, Inc
Securities America, Inc.
UBS Financial Services
Wachovia Securities
Wells Fargo Investments, LLC

Channel: Cash Product Platform
------------------------------
Allegheny Investments LTD
Bank of New York (Hare & Co.)
Bear, Stearns Securities Corp.
Brown Brothers Harriman
Brown Investment Advisory & Trust Company
Cadaret Grant & Co.
Chicago Mercantile Exchange
D.A. Davidson & Company
Deutsche Bank Group
Emmett A. Larkin Company
Fiduciary Trust Co. - International
First Southwest Company
Huntleigh Securities
Lincoln Investment Planning
LPL Financial
Mellon Financial Markets LLC
Penson Financial Services
Pershing Choice Platform
ProFunds Distributors, Inc.
Ridge Clearing & Outsourcing Solutions
Robert W. Baird & Co.
Romano Brothers and Company
SAMCO Capital Markets
Smith Moore & Company
Sungard Institutional Brokerage Inc.
US Bancorp
UBS Financial Services
William Blair & Company

Channel: Third Party Insurance Platforms
----------------------------------------
Allstate Life Insurance Company of New York
Ameritas Life Insurance Group
Annuity Investors Life Insurance Company
Columbus Life Insurance Company
Commonwealth Annuity and Life Insurance Company
Companion Life Insurance Company
Connecticut General Life Insurance Company
Farmers New World Life Insurance Company
Fidelity Security Life Insurance Company
First Allmerica Financial Life Insurance Company
First Great West Life and Annuity Company
Genworth Life Insurance Company of New York
Genworth Life and Annuity Insurance Company
Great West Life and Annuity Insurance Company
Hartford Life Insurance Company
Integrity Life Insurance Company
John Hancock Life Insurance companies
Kemper Investors Life Insurance Company
Lincoln Benefit Life Insurance Company
Lincoln Life & Annuity Company of New York
Lincoln National Life Insurance Company
Massachusetts Mutual Life Insurance Group
MetLife Group
Minnesota Life Insurance Company
National Life Insurance Company
National Integrity Life Insurance Company
Nationwide Group
New York Life Insurance and Annuity Corporation
Phoenix Life Insurance Company
Protective Life Insurance
Provident Mutual Life Insurance
Prudential Insurance Company of America
Sun Life Group
Symetra Life Insurance Company
Transamerica Life Insurance Company
Union Central Life Insurance Company
United of Omaha Life Insurance Company
United Investors Life Insurance Company
Western Southern Life Assurance Company

Any additions, modifications or deletions to the financial advisors identified
above that have occurred since the date hereof are not reflected.

The Advisor, the Distributor or their affiliates may enter into additional
revenue sharing arrangements or change or discontinue existing arrangements with
financial advisors at any time without notice.

The prospect of receiving, or the receipt of additional compensation or
promotional incentives described above by financial advisors may provide such
financial advisors and/or their salespersons with an incentive to favor sales of
shares of the DWS funds or a particular DWS fund over sales of shares of mutual
funds (or non-mutual fund investments) with respect to which the financial
advisor does not receive additional compensation or promotional incentives, or
receives lower levels of additional compensation or promotional incentives.
Similarly, financial advisors may receive different compensation or incentives
that may influence their recommendation of any particular share class of the
Fund or of other funds. These payment arrangements, however, will not change the
price that an investor pays for Fund shares or the amount that the Fund receives
to invest on behalf of an investor and will not increase Fund expenses. You may
wish to take such payment arrangements into account when considering and
evaluating any recommendations relating to Fund shares and you should discuss
this matter with your financial advisor and review your financial advisor's
disclosures.

It is likely that broker-dealers that execute portfolio transactions for the
Fund will include firms that also sell shares of the DWS funds to their
customers. However, the Advisor will not consider sales of DWS fund shares as a
factor in the selection of broker-dealers to execute portfolio transactions for
the DWS funds. Accordingly, the Advisor has implemented policies and procedures
reasonably designed to prevent its traders from considering sales of DWS fund
shares as a factor in the selection of broker-dealers to execute portfolio
transactions for the Fund. In addition, the Advisor, the Distributor and/or
their affiliates will not use fund brokerage to pay for their obligation to
provide additional compensation to financial advisors as described above.


Class A Purchases. The public offering price of Class A shares for purchasers
choosing the initial sales charge alternative is the net asset value plus a
sales charge, as set forth below.

<TABLE>
<CAPTION>
                                                                             Sales Charge
                                                                             ------------
                                                                                                Allowed to Dealers
                                                    As a Percentage of    As a Percentage of    as a Percentage of
Amount of Purchase                                   Offering Price*       Net Asset Value**      Offering Price
------------------                                   --------------        ---------------        --------------
<S>                                                        <C>                    <C>                   <C>
Less than $50,000                                          5.75%                  6.10%                 5.20%
$50,000 but less than $100,000                             4.50                   4.71                  4.00
$100,000 but less than $250,000                            3.50                   3.63                  3.00
$250,000 but less than $500,000                            2.60                   2.67                  2.25
$500,000 but less than $1 million                          2.00                   2.04                  1.75
$1 million and over                                        0.00***                0.00***               0.00****
</TABLE>

*        The offering price includes the sales charge.

**       Rounded to the nearest one-hundredth percent.

***      Redemption of shares may be subject to a contingent deferred sales
         charge as discussed below.

****     Commission is payable by DIDI as discussed below.

Class A Quantity Discounts. An investor or the investor's dealer or other
financial services firm must notify the Shareholder Service Agent or DIDI
whenever a quantity discount or reduced sales charge is applicable to a
purchase. In order to qualify for a lower sales charge, all orders from an
organized group will have to be placed through a single investment dealer or
other firm and identified as originating from a qualifying purchaser.

Combined Purchases. A Fund's Class A shares may be purchased at the rate
applicable to the sales charge discount bracket attained by combining same day
investments in Class A shares of any DWS Funds that bear a sales charge.

Letter of Intent. The reduced sales charges for Class A shares, as shown in the
applicable prospectus, also apply to the aggregate amount of purchases of Class
A shares of DWS Funds that bear a sales charge made by any purchaser within a
24-month period under a written Letter of Intent ("Letter") provided by DIDI.
The Letter, which imposes no obligation to purchase or sell additional Class A
shares, provides for a price adjustment depending upon the actual amount
purchased within such period. The Letter provides that the first purchase
following execution of the Letter must be at least 5% of the amount of the
intended purchase, and that 5% of the amount of the intended purchase normally
will be held in escrow in the form of shares pending completion of the intended
purchase. If the total investments under the Letter are less than the intended
amount and thereby qualify only for a higher sales charge than actually paid,
the appropriate number of escrowed shares are redeemed and the proceeds used
toward satisfaction of the obligation to pay the increased sales charge. The
Letter for an employer-sponsored employee benefit plan maintained on the
subaccount record keeping system available through ADP, Inc. under an alliance
with DIDI and its affiliates may have special provisions regarding payment of
any increased sales charge resulting from a failure to complete the intended
purchase under the Letter. A shareholder may include the value (at the maximum
offering price, which is determined by adding the maximum applicable sales load
charged to the net asset value) of all Class A shares of such DWS Funds held of
record as of the initial purchase date under the Letter as an "accumulation
credit" toward the completion of the Letter, but no price adjustment will be
made on such shares.

Class A Cumulative Discount. Class A shares of a Fund may also be purchased at
the rate applicable to the discount bracket attained by adding to the cost of
shares being purchased, the value of all Class A shares of DWS Funds that bear a
sales charge (computed at the maximum offering price at the time of the purchase
for which the discount is applicable) already owned by the investor or his or
her immediate family member (including the investor's spouse or life partner and
children or stepchildren age 21 or younger).

For purposes of the Combined Purchases, Letter of Intent and Cumulative Discount
features described above, employer sponsored employee benefit plans using the
Flex subaccount record keeping system available through ADP, Inc. under an
alliance with DIDI and its affiliates may include: (a) Money Market Funds as
"DWS Funds," (b) all classes of shares of any DWS Fund and (c) the value of any
other plan investments, such as guaranteed investment contracts and employer
stock, maintained on such subaccount record keeping system. Once eligible plan
assets under this provision reach the $1,000,000 threshold, a later decline in
assets below the $1,000,000 threshold will not affect the plan's ability to
continue to purchase Class A shares at net asset value.

Class A NAV Sales. Class A shares may be sold at net asset value to:

(a)      a current or former director or trustee of Deutsche or DWS mutual
         funds;

(b)      an employee (including the employee's spouse or life partner and
         children or stepchildren age 21 or younger) of Deutsche Bank or its
         affiliates or of a subadvisor to any fund in the DWS family of funds or
         of a broker-dealer authorized to sell shares of the Fund or service
         agents of the Funds;

(c)      certain professionals who assist in the promotion of DWS mutual funds
         pursuant to personal services contracts with DIDI, for themselves or
         members of their families. DIDI in its discretion may compensate
         financial services firms for sales of Class A shares under this
         privilege at a commission rate of 0.50% of the amount of Class A shares
         purchased;

(d)      any trust, pension, profit-sharing or other benefit plan for only such
         persons listed under the preceding paragraphs (a) and (b);

(e)      persons who purchase such shares through bank trust departments that
         process such trades through an automated, integrated mutual fund
         clearing program provided by a third party clearing firm;

(f)      selected employees (including their spouses or life partners and
         children or stepchildren age 21 or younger) of banks and other
         financial services firms that provide administrative services related
         to order placement and payment to facilitate transactions in shares of
         the Fund for their clients pursuant to an agreement with DIDI or one of
         its affiliates. Only those employees of such banks and other firms who
         as part of their usual duties provide services related to transactions
         in Fund shares qualify;

(g)      unit investment trusts sponsored by Ranson & Associates, Inc. and
         unitholders of unit investment trusts sponsored by Ranson & Associates,
         Inc. or its predecessors through reinvestment programs described in the
         prospectuses of such trusts that have such programs;

(h)      through certain investment advisors registered under the Investment
         Advisers Act of 1940 and other financial services firms acting solely
         as agent for their clients, that adhere to certain standards
         established by DIDI, including a requirement that such shares be sold
         for the benefit of their clients participating in an investment
         advisory program or agency commission program under which such clients
         pay a fee to the investment advisor or other firm for portfolio
         management or agency brokerage services. Such shares are sold for
         investment purposes and on the condition that they will not be resold
         except through redemption or repurchase by the Fund;

(i)      employer sponsored employee benefit plans using the Flex subaccount
         recordkeeping system ("Flex Plans") made available through ADP under an
         alliance with DIDI and its affiliates, established prior to October 1,
         2003, provided that the Flex Plan is a participant-directed plan that
         has not less than 200 eligible employees;

(j)      investors investing $1 million or more, either as a lump sum or through
         the "Combined Purchases," "Letter of Intent" and "Cumulative Discount"
         features referred to above (collectively, the "Large Order NAV Purchase
         Privilege"). The Large Order NAV Purchase Privilege is not available if
         another net asset value purchase privilege is available;

(k)      defined contribution investment only plans with a minimum of $1,000,000
         in plan assets regardless of the amount allocated to the DWS funds;

In addition, Class A shares may be sold at net asset value in connection with:

(l)      the acquisition of the assets of or merger or consolidation with
         another investment company, or to shareholders in connection with the
         investment or reinvestment of income and capital gain dividends, and
         under other circumstances deemed appropriate by DIDI and consistent
         with regulatory requirements; and

(m)      a direct "roll over" of a distribution from a Flex Plan or from
         participants in employer sponsored employee benefit plans maintained on
         the OmniPlus subaccount record keeping system made available through
         ADP, Inc. under an alliance with DIDI and its affiliates into a DWS
         Investments IRA;

(n)      reinvestment of fund dividends and distributions;

(o)      exchanging an investment in Class A shares of another fund in the DWS
         family of funds for an investment in the fund.

Class A shares also may be purchased at net asset value in any amount by members
of the plaintiff class in the proceeding known as Howard and Audrey Tabankin, et
al. v. Kemper Short-Term Global Income Fund, et al., Case No. 93 C 5231 (N.D.
IL). This privilege is generally non-transferable and continues for the lifetime
of individual class members and for a ten-year period for non-individual class
members. To make a purchase at net asset value under this privilege, the
investor must, at the time of purchase, submit a written request that the
purchase be processed at net asset value pursuant to this privilege specifically
identifying the purchaser as a member of the "Tabankin Class." Shares purchased
under this privilege will be maintained in a separate account that includes only
shares purchased under this privilege. For more details concerning this
privilege, class members should refer to the Notice of (i) Proposed Settlement
with Defendants; and (ii) Hearing to Determine Fairness of Proposed Settlement,
dated August 31, 1995, issued in connection with the aforementioned court
proceeding. For sales of Fund shares at net asset value pursuant to this
privilege, DIDI may in its discretion pay investment dealers and other financial
services firms a concession, payable quarterly, at an annual rate of up to 0.25%
of net assets attributable to such shares maintained and serviced by the firm. A
firm becomes eligible for the concession based upon assets in accounts
attributable to shares purchased under this privilege in the month after the
month of purchase and the concession continues until terminated by DIDI. The
privilege of purchasing Class A shares of the Fund at net asset value under this
privilege is not available if another net asset value purchase privilege also
applies.

Class B Purchases. Class B shares of a Fund are offered at net asset value. No
initial sales charge is imposed. Class B shares sold without an initial sales
charge allow the full amount of the investor's purchase payment to be invested
in Class B shares for his or her account. Class B shares have a contingent
deferred sales charge of 4.00% that declines over time (for shares sold within
six years of purchase) and Rule 12b-1 fees, as described in the Funds'
Prospectuses and SAI. Class B shares automatically convert to Class A shares
after six years.

Class C Shares. Class C shares of a Fund are offered at net asset value. No
initial sales charge is imposed, which allows the full amount of the investor's
purchase payment to be invested in Class C shares for his or her account. Class
C shares are subject to a contingent deferred sales charge of 1.00% (for shares
sold within one year of purchase) and Rule 12b-1 fees, as described in each
Fund's prospectus and SAI.

Multi-Class Suitability. DIDI has established the following procedures regarding
the purchase of Class A, Class B and Class C shares. Orders to purchase Class B
shares of $100,000 or more and orders to purchase Class C shares of $500,000 or
more will be declined with the exception of orders received from financial
representatives acting for clients whose shares are held in an omnibus account
and employer-sponsored employee benefit plans using the subaccount record
keeping system ("System") maintained for DWS Investments-branded plans on record
keeping systems made available through ADP, Inc. under an alliance with DIDI and
its affiliate ("DWS Investments Flex Plans").


The following provisions apply to DWS Investments Flex Plans.

a.       Class B Share DWS Investments Flex Plans. Class B shares have not been
         sold to DWS Investments Flex Plans that were established on the Flex
         System after October 1, 2003. Orders to purchase Class B shares for a
         DWS Investments Flex Plan established on the Flex System prior to
         October 1, 2003 that has regularly been purchasing Class B shares will
         be invested instead in Class A shares at net asset value when the
         combined subaccount value in DWS Funds or other eligible assets held by
         the plan is $100,000 or more. This provision will be imposed for the
         first purchase after eligible plan assets reach the $100,000 threshold.
         A later decline in assets below the $100,000 threshold will not affect
         the plan's ability to continue to purchase Class A shares at net asset
         value.

b.       Class C Share DWS Investments Flex Plans. Orders to purchase Class C
         shares for a DWS Investments Flex Plan, regardless of when such plan
         was established on the Flex System, will be invested instead in Class A
         shares at net asset value when the combined subaccount value in DWS
         Funds or other eligible assets held by the plan is $1,000,000 or more.
         This provision will be imposed for the first purchase after eligible
         plan assets reach the $1,000,000 threshold. A later decline in assets
         below the $1,000,000 threshold will not affect the plan's ability to
         continue to purchase Class A shares at net asset value.


The procedures above described in (a), (b) and (c) do not reflect in any way the
suitability of a particular class of shares for a particular investor and should
not be relied upon as such. A suitability determination must be made by
investors with the assistance of their financial representative.

Institutional Class Purchases. Information on how to buy Institutional Class
shares is set forth in the section entitled "Buying and Selling Shares" in a
Fund's prospectus. The following supplements that information. The minimum
initial investment for Institutional Class shares is $1,000,000. The minimum
initial investment may be waived in certain circumstances. The minimum amounts
may be changed at any time in management's discretion.


To sell shares in a retirement account other than an IRA, your request must be
made in writing, except for exchanges to other eligible funds in the DWS family
of funds, which can be requested by phone or in writing.

Automatic Investment Plan. A shareholder may purchase shares of each Fund
through an automatic investment plan. Investments are made automatically
(minimum $500 and maximum $250,000 for initial investments and a minimum of $50
and maximum of $250,000 for subsequent investments) from the shareholder's
account at a bank, savings and loan or credit union into the shareholder's Fund
account. Termination by a shareholder will become effective within thirty days
after the Shareholder Service Agent has received the request. A Fund may
immediately terminate a shareholder's automatic investment plan in the event
that any item is unpaid by the shareholder's financial institution.

Minimum Subsequent Investment Policies. For current shareholders of Class A, B
or C shares there is a $50 minimum investment requirement for subsequent
investments in a Fund. There is no minimum subsequent investment requirement in
Class A shares for investments on behalf of participants in certain fee-based
and wrap programs offered through financial intermediaries approved by the
Advisor. There is no minimum subsequent investment required for Institutional
Class shares.


Payroll Investment Plans. A shareholder may purchase shares through Payroll
Direct Deposit or Government Direct Deposit. Under these programs, all or a
portion of a shareholder's net pay or government check is invested each payment
period. A shareholder may terminate participation in these programs by giving
written notice to the shareholder's employer or government agency, as
appropriate. (A reasonable time to act is required.) A Fund is not responsible
for the efficiency of the employer or government agency making the payment or
any financial institutions transmitting payments.

It is our policy to offer purchase privileges to current or former directors or
trustees of the Deutsche or DWS Investments mutual funds, employees, their
spouses or life partners and children or step-children age 21 or younger of
Deutsche Bank or its affiliates or a sub-adviser to any fund in the DWS family
of funds or a broker-dealer authorized to sell shares of the funds. Qualified
individuals will generally be allowed to purchase shares in the class with the
lowest expense ratio, usually the Institutional Class shares. If a Fund does not
offer Institutional Class shares, these individuals will be allowed to buy Class
A shares at NAV. The Funds also reserve the right to waive the minimum account
balance requirement for employee and director accounts. Fees generally charged
to IRA accounts will be charged to accounts of employees and directors.

Expedited Purchase Procedures for Existing Shareholders. Shareholders of other
DWS Funds who have submitted an account application and have certified a tax
identification number, clients having a regular investment counsel account with
the Advisor or its affiliates and members of their immediate families, officers
and employees of the Advisor or of any affiliated organization and their
immediate families, members of FINRA, and banks may open an account by wire by
calling (800) 621-1048 for instructions. The investor must send a duly completed
and signed application to the applicable Fund promptly. A subsequent purchase
order may be placed by established shareholders (except by DWS Investments
Individual Retirement Account (IRA), DWS Simplified Profit Sharing and Money
Purchase Pension Plans, DWS Investments 401(k) and DWS Investments 403(b) Plan
holders), members of FINRA, and banks.

Redemptions

Redemption fee. Each Fund imposes a redemption fee of 2% of the total redemption
amount (calculated at net asset value, without regard to the effect of any
contingent deferred sales charge; any contingent deferred sales charge is also
assessed on the total redemption amount without regard to the assessment of the
2% redemption fee) on all Fund shares redeemed or exchanged within 15 days of
buying them (either by purchase or exchange). The redemption fee is paid
directly to the Fund, and is designed to encourage long-term investment and to
offset transaction and other costs associated with short-term or excessive
trading. For purposes of determining whether the redemption fee applies, shares
held the longest time will be treated as being redeemed first and shares held
the shortest time will be treated as being redeemed last. The redemption fee is
applicable to fund shares purchased either directly or through a financial
intermediary, such as a broker-dealer. Transactions through financial
intermediaries typically are placed with the fund on an omnibus basis and
include both purchase and sale transactions placed on behalf of multiple
investors. These purchase and sale transactions are generally netted against one
another and placed on an aggregate basis; consequently the identities of the
individuals on whose behalf the transactions are placed generally are not known
to the Funds. For this reason, the Funds have undertaken to notify financial
intermediaries of their obligation to assess the redemption fee on customer
accounts and to collect and remit the proceeds to the Funds. However, due to
operational requirements, the intermediaries' methods for tracking and
calculating the fee may be inadequate or differ in some respects from each Fund.

General. Policies and procedures affecting transactions in Fund shares can be
changed at any time without notice, subject to applicable law. Transactions may
be contingent upon proper completion of application forms and other documents by
shareholders and their receipt by a Fund's agents. Transaction delays in
processing (and changing account features) due to circumstances within or beyond
the control of a Fund and its agents may occur. Shareholders (or their financial
service firms) are responsible for all losses and fees resulting from bad
checks, cancelled orders or the failure to consummate transactions effected
pursuant to instructions reasonably believed to be genuine.

In addition, each fund reserves the right to suspend or postpone redemptions as
permitted pursuant to Section 22(e) of the Investment Company Act of 1940.
Generally, those circumstances are when 1) the New York Stock Exchange is closed
other than customary weekend or holiday closings; 2) trading on the New York
Stock Exchange is restricted; 3) an emergency exists which makes the disposal of
securities owned by a fund or the fair determination of the value of a fund's
net assets not reasonably practicable; or 4) the SEC, by order, permits the
suspension of the right of redemption. Redemption payments by wire may also be
delayed in the event of a non-routine closure of the Federal Reserve wire
payment system. A request for repurchase (confirmed redemption) may be
communicated by a shareholder through a financial services firm to DIDI, which
firm must promptly submit orders to be effective.

Redemption requests must be unconditional. Redemption requests (and a stock
power for certificated shares) must be duly endorsed by the account holder. As
specified in the Prospectuses, signatures may need to be guaranteed by a
commercial bank, trust company, savings and loan association, federal savings
bank, member firm of a national securities exchange or other financial
institution permitted by SEC rule. Additional documentation may be required,
particularly from institutional and fiduciary account holders, such as
corporations, custodians (e.g., under the Uniform Transfers to Minors Act),
executors, administrators, trustees or guardians.

If the proceeds of the redemption (prior to the imposition of any contingent
deferred sales charges) are $100,000 or less and the proceeds are payable to the
shareholder of record at the address of record, normally a telephone request or
a written request by any one account holder without a signature guarantee is
sufficient for redemptions by individual or joint account holders, and trust,
executor and guardian account holders, provided the trustee, executor or
guardian is named in the account registration. Other institutional account
holders may exercise this special privilege of redeeming shares by telephone
request or written request without signature guarantee subject to the same
conditions as individual account holders, provided that this privilege has been
pre-authorized by the institutional account holder by written instruction to the
Shareholder Service Agent with signatures guaranteed. This privilege may not be
used to redeem shares held in certificated form and may not be used if the
shareholder's account has had an address change within 15 days of the redemption
request.

Wires. Delivery of the proceeds of a wire redemption of $250,000 or more may be
delayed by a Fund for up to seven days if a Fund or the Shareholder Service
Agent deems it appropriate under then-current market conditions. The ability to
send wires is limited by the business hours and holidays of the firms involved.
Neither Fund is responsible for the efficiency of the federal wire system or the
account holder's financial services firm or bank. The account holder is
responsible for any charges imposed by the account holder's firm or bank. To
change the designated account to receive wire redemption proceeds, send a
written request to the Shareholder Service Agent with signatures guaranteed as
described above or contact the firm through which Fund shares were purchased.

Automatic Withdrawal Plan. The owner of $5,000 or more of a class of a Fund's
shares at the offering price (net asset value plus, in the case of Class A and
Class C shares, the initial sales charge) may provide for the payment from the
owner's account of any requested dollar amount to be paid to the owner or a
designated payee monthly, quarterly, semiannually or annually. The $5,000
minimum account size is not applicable to IRAs. The minimum periodic payment is
$50. The maximum annual rate at which shares subject to CDSC may be redeemed is
12% of the net asset value of the account. Shares are redeemed so that the payee
should receive payment approximately the first of the month. Investors using
this Plan must reinvest Fund distributions.

Non-retirement plan shareholders may establish an Automatic Withdrawal Plan (the
"Automatic Withdrawal Plan") to receive monthly, quarterly or periodic
redemptions from his or her account for any designated amount of $50 or more.
Shareholders may designate which day they want the automatic withdrawal to be
processed. The check amounts may be based on the redemption of a fixed dollar
amount, fixed share amount, percent of account value or declining balance. The
Automatic Withdrawal Plan provides for income dividends and capital gains
distributions, if any, to be reinvested in additional shares. Shares are then
liquidated as necessary to provide for withdrawal payments. Since the
withdrawals are in amounts selected by the investor and have no relationship to
yield or income, payments received cannot be considered as yield or income on
the investment and the resulting liquidations may deplete or possibly extinguish
the initial investment and any reinvested dividends and capital gains
distributions. Any such requests must be received by the transfer agent ten days
prior to the date of the first automatic withdrawal. An Automatic Withdrawal
Plan may be terminated at any time by the shareholder, the Trust or its agent on
written notice, and will be terminated when all Fund shares under the Automatic
Withdrawal Plan have been liquidated or upon receipt by the Trust of notice of
death of the shareholder.

The purchase of Class A shares while participating in an Automatic Withdrawal
Plan will ordinarily be disadvantageous to the investor because the investor
will be paying a sales charge on the purchase of shares at the same time that
the investor is redeeming shares upon which a sales charge may have already been
paid. Therefore, a Fund will not knowingly permit additional investments of less
than $2,000 if the investor is at the same time making systematic withdrawals.

Contingent Deferred Sales Charge (CDSC). The following example will illustrate
the operation of the CDSC. Assume that an investor makes a single purchase of
$10,000 of the Fund's Class B shares and that 16 months later the value of the
shares has grown by $1,000 through reinvested dividends and by an additional
$1,000 of share appreciation to a total of $12,000. If the investor were then to
redeem the entire $12,000 in share value, the CDSC would be payable only with
respect to $10,000 because neither the $1,000 of reinvested dividends nor the
$1,000 of share appreciation is subject to the charge. The charge would be at
the rate of 3.00% ($300) because it was in the second year after the purchase
was made.

The rate of the CDSC is determined by the length of the period of ownership.
Investments are tracked on a monthly basis. The period of ownership for this
purpose begins the first day of the month in which the order for the investment
is received. For example, an investment made in March of the year of investment
will be eligible for the second year's charge if redeemed on or after March of
the following year. In the event no specific order is requested when redeeming
shares subject to a CDSC, the redemption will be made first from shares
representing reinvested dividends and then from the earliest purchase of shares.
DIDI receives any CDSC directly. The charge will not be imposed upon redemption
of reinvested dividends or share appreciation.

The Class A CDSC will be waived in the event of:

(a)      redemptions by a participant-directed qualified retirement plan
         described in Code Section 401(a), a participant-directed non-qualified
         deferred compensation plan described in Code Section 457 or a
         participant-directed qualified retirement plan described in Code
         Section 403(b)(7) which is not sponsored by a K-12 school district;

(b)      redemptions by employer-sponsored employee benefit plans using the
         subaccount record keeping system made available through ADP, Inc. under
         an alliance with DIDI and its affiliates;

(c)      redemption of shares of a shareholder (including a registered joint
         owner) who has died or is disabled (under certain circumstances);

(d)      redemption of shares of a shareholder (including a registered joint
         owner) who after purchase of the shares being redeemed becomes totally
         disabled (as evidenced by a determination by the federal Social
         Security Administration);

(e)      redemptions under the Fund's Automatic Withdrawal Plan at a maximum of
         12% per year of the net asset value of the account;

(f)      redemptions of shares whose dealer of record at the time of the
         investment notifies DIDI that the dealer waives the discretionary
         commission applicable to such Large Order NAV Purchase; and

(g)      redemptions for certain loan advances, hardship provisions or returns
         of excess contributions from retirement plans.

The Class B CDSC will be waived for the circumstances set forth in items (c),
(d), (e) and (g) for Class A shares. In addition, this CDSC will be waived:

(h)      for redemptions made pursuant to any IRA systematic withdrawal based on
         the shareholder's life expectancy including, but not limited to,
         substantially equal periodic payments described in Internal Revenue
         Code Section 72(t)(2)(A)(iv) prior to age 59 1/2;

(i)      for redemptions to satisfy required minimum distributions after age 70
         1/2 from an IRA account (with the maximum amount subject to this waiver
         being based only upon the shareholder's DWS Investments IRA accounts);
         and

(j)      in connection with the following redemptions of shares held by employer
         sponsored employee benefit plans maintained on the subaccount record
         keeping system made available through ADP under an alliance with DIDI
         and its affiliates: (1) to satisfy participant loan advances (note that
         loan repayments constitute new purchases for purposes of the CDSC and
         the conversion privilege), (2) in connection with retirement
         distributions (limited at any one time to 12% of the total value of
         plan assets invested in the Fund), (3) in connection with distributions
         qualifying under the hardship provisions of the Internal Revenue Code,
         (4) representing returns of excess contributions to such plans and (5)
         in connection with direct "roll over" distributions from a Flex Plan
         into a DWS Investments IRA under the Class A net asset value purchase
         privilege.


The Class C CDSC will be waived for the circumstances set forth in items (b),
(c), (d), (e) and (g) for Class A shares and for the circumstances set forth in
items (h) and (i) for Class B shares. In addition, this CDSC will be waived for:

(k)      redemption of shares by an employer sponsored employee benefit plan
         that offers funds in addition to DWS Funds and whose dealer of record
         has waived the advance of the first year administrative service and
         distribution fees applicable to such shares and agrees to receive such
         fees quarterly; and


(l)      redemption of shares purchased through a dealer-sponsored asset
         allocation program maintained on an omnibus record-keeping system
         provided the dealer of record had waived the advance of the first year
         administrative services and distribution fees applicable to such shares
         and has agreed to receive such fees quarterly.


In-kind Redemptions. Each Fund reserves the right to honor any request for
redemption or repurchase by making payment in whole or in part in securities.
These securities will be chosen by a Fund and valued as they are for purposes of
computing the Fund's net asset value. A redeeming shareholder who receives such
securities will be subject to federal income tax in the same manner as if a cash
distribution had been received. A shareholder may incur transaction expenses in
converting these securities to cash.

Exchanges

Shareholders may request a taxable exchange of their shares for shares of the
corresponding class of certain other DWS funds without imposition of a sales
charge, subject to the provisions below. For purposes of calculating any CDSC,
amounts exchanged retain their original cost and purchase date.

Shareholders who exchange their shares out of a DWS money market fund (not
including shares acquired by dividend reinvestment or by exchange from Class A
shares of another DWS fund) into Class A shares of certain other DWS funds, will
generally be subject to the applicable sales charge.

Certain DWS funds may not be available to shareholders on an exchange. To learn
more about which DWS funds may be available on exchange, please contact your
financial services firm or visit our Web site at: www.dws-investments.com or
call (800) 621-1048.

Shareholders may obtain prospectus(es) of the DWS fund they are exchanging into
from dealers, other firms or DIDI.


Automatic Exchange Plan. The owner of $1,000 or more of any class of shares of a
DWS Fund may authorize the automatic exchange of a specified amount ($50
minimum) of such shares for shares of the same class of another such DWS Fund.
Exchanges will be made automatically until the shareholder or a Fund terminates
the privilege. Exchanges are subject to the terms and conditions described
above.

Multi-Class Conversions. For purposes of conversion to Class A shares, shares
purchased through the reinvestment of dividends and other distributions paid
with respect to Class B shares in a shareholder's Fund account will be converted
to Class A shares on a pro rata basis.

Purchases In-Kind

Each Fund may, at its own option, accept securities in payment for shares. The
securities delivered in payment for shares are valued by the method described
under "Net Asset Value" as of the day the Fund receives the securities. This may
be a taxable transaction to the shareholder. (Consult your tax advisor for
future tax guidance.) Securities may be accepted in payment for shares only if
they are, in the judgment of the Advisor, appropriate investments for the
applicable Fund. In addition, securities accepted in payment for shares must:
(1) meet the investment objective and policies of the acquiring Fund; (ii) be
acquired by the applicable Fund for investment and not for resale; (iii) be
liquid securities which are not restricted as to transfer either by law or
liquidity of the market; and (iv) if stock, have a value which is readily
ascertainable as evidenced by a listing on a stock exchange or over-the-counter
market or by readily available market quotations from a dealer in such
securities. Each Fund reserves the right to accept or reject at its own option
any and all securities offered in payment for its shares.

                                    DIVIDENDS

Each Fund intends to follow the practice of distributing all or substantially
all of its investment company taxable income (determined without regard to the
deduction for dividends paid), which includes taxable ordinary income and any
excess of net realized short-term capital gains over net realized long-term
capital losses. A Fund may follow the practice of distributing the entire excess
of net realized long-term capital gains over net realized short-term capital
losses. However, each Fund may retain all or part of such gain for reinvestment
after paying the related federal income taxes on such gain. Shareholders will
generally be required to include in their gross incomes their share of such
gains, but may be able to claim a credit against their federal tax liability for
the federal income tax paid by a fund on such gain. If a Fund does not
distribute the amount of capital gain and/or ordinary income required to be
distributed by an excise tax provision of the Code, the Fund may be subject to a
4% excise tax on the undistributed amounts. In certain circumstances, a Fund may
determine that it is in the interest of shareholders to distribute less than the
required amount.

Each Fund intends to distribute dividends from its net investment income,
excluding short-term capital gains, annually in December. Each Fund intends to
distribute net realized capital gains after utilization of capital loss
carryforwards, if any, in December to prevent application of a federal excise
tax. An additional distribution may be made, if necessary.

Any dividends or capital gains distributions declared in October, November or
December with a record date in such a month and paid during the following
January will be treated by shareholders for federal income tax purposes as if
received on December 31 of the calendar year declared.

The level of income dividends per share (as a percentage of net asset value)
will be lower for Class B and Class C shares than for Class A shares primarily
as a result of the higher distribution services fee applicable to Class B and
Class C shares. Distributions of capital gains, if any, will be paid in the same
amount for each class.

Income dividends and capital gain distributions, if any, of a Fund will be
credited to shareholder accounts in full and fractional shares of the same class
of the Fund at net asset value on the reinvestment date, except that, upon
written request to the Shareholder Service Agent, a shareholder may select one
of the following options:

(1)      To receive income including short-term capital gain dividends in cash
         and long-term capital gain dividends in shares of the same class of the
         Fund at net asset value; or

(2)      To receive income dividends and capital gain distributions in cash.

Dividends and distributions will be reinvested in shares of the same class of a
Fund unless shareholders indicate in writing that they wish to receive them in
cash or in shares of other DWS Funds with multiple classes of shares or DWS
Funds as provided in the Prospectuses. To use this privilege of investing
dividends of a Fund in shares of another DWS Fund, shareholders must maintain a
minimum account value of $1,000 in each Fund distributing the dividends. Each
Fund will reinvest dividend and distribution checks (and future dividends) in
shares of that same Fund and class if checks are returned as undeliverable.
Dividends and other distributions of each Fund in the aggregate amount of $10 or
less are automatically reinvested in shares of such Fund unless the shareholder
requests that such policy not be applied to the shareholder's account.

If an investment is in the form of a retirement plan, all dividends and capital
gains distributions must be reinvested into the shareholder's account.

If a shareholder has elected to reinvest any dividends and/or other
distributions, such distributions will be made in shares of that Fund and
confirmations will be mailed to each shareholder. If a shareholder has chosen to
receive cash, a check will be sent. Dividends of net investment income and
distributions of net realized capital gains are taxable for federal income tax
purposes, whether made in shares or cash.

Each dividend and distribution is accompanied by a brief explanation of the form
and character of the distribution. The characterization of dividends and
distributions on such correspondence may differ from the characterization for
federal tax purposes. In January of each year, each Fund issues to each
shareholder a statement of the federal income tax status of all dividends and
distributions in the prior calendar year.

Each Fund may at any time vary its foregoing dividend and distribution practices
and, therefore, reserves the right from time to time to either distribute or
retain for reinvestment such of its net investment income (which includes its
net short-term capital gains) and net long-term capital gains, if any, as its
Board determines appropriate under the then current circumstances. In
particular, and without limiting the foregoing, a Fund may make additional
dividends of net investment income or distributions of capital gain net income
in order to satisfy the minimum distribution requirements contained in the Code.

                                      TAXES

The following is intended to be a general summary of certain federal income tax
consequences of investing in a Fund. It is not intended as a complete discussion
of all such consequences, nor does it purport to deal with all categories of
investors or foreign, state or local taxes. Investors are therefore advised to
consult with their tax advisors before making an investment in a Fund. The
summary is based on the laws in effect on the date of this SAI and existing
judicial and administrative interpretations thereof, all of which are subject to
change, possibly with retroactive effect.

Taxation of the Funds. Each Fund has elected to be treated as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code") and has qualified as such since its inception. Each Fund
intends to continue to so qualify in each taxable year as required under the
Code in order to avoid payment of federal income tax at the Fund level. In order
to qualify as a regulated investment company, a Fund must meet certain
requirements regarding the source of its income, the diversification of its
assets, and the distribution of its income:

(a)      Each Fund must derive at least 90% of its gross income from dividends,
         interest, payments with respect to certain securities loans, and gains
         from the sale of stock, securities and foreign currencies, other income
         (including but not limited to gains from options, futures, or forward
         contracts) derived with respect to its business of investing in such
         stock, securities, or currencies and net income derived from interests
         in "qualified publicly traded partnerships" (i.e., partnerships that
         are traded on an established securities market or tradable on a
         secondary market, other than partnerships that derive 90% of their
         income from interest, dividends, capital gains, and other traditionally
         permitted mutual fund income).

(b)      Each Fund must diversify its holdings so that, at the end of each
         quarter of its taxable year, (i) at least 50% of the market value of
         the Fund's assets is represented by cash and cash items, US government
         securities, securities of other regulated investment companies, and
         other securities limited in respect of any one issuer of such other
         securities to a value not greater than 5% of the value of the Fund's
         total assets and to not more than 10% of the outstanding voting
         securities of such issuer, and (ii) not more than 25% of the value of
         its assets is invested in the securities (other than those of the US
         Government or other regulated investment companies) of any one issuer,
         of two or more issuers of which the Fund owns 20% or more of the voting
         stock and that are engaged in the same, similar, or related trades or
         businesses or in the securities of one or more qualified publicly
         traded partnership.

(c)      Each Fund is required to distribute to its shareholders at least 90% of
         its taxable and tax-exempt net investment income (including the excess
         of net short-term capital gain over net long-term capital losses) and
         generally is not subject to federal income tax to the extent that it
         distributes annually such net investment income and net realized
         capital gains in the manner required under the Code.

Fund investments in partnerships, including in qualified publicly traded
partnerships, may result in a Fund's being subject to state, local or foreign
income, franchise or withholding tax liabilities.

If for any taxable year a Fund does not qualify for the special federal income
tax treatment afforded regulated investment companies, all of its taxable income
will be subject to federal income tax at regular corporate rates (without any
deduction for distributions to its shareholders), and all distributions from
earnings and profits, including any distributions of net tax-exempt income and
net long-term capital gains, will be taxable to shareholders as ordinary income.
Such distributions would be eligible, provided certain holding period and other
conditions are satisfied; (i) to be treated as qualified dividend income with
respect to shareholders taxed as individuals, which is subject to reduced rates
of federal income taxation for taxable years beginning before January 1, 2011,
and (ii) for the dividends received deduction in the case of corporate
shareholders. In addition, a Fund could be required to recognize unrealized
gains, pay substantial taxes and interest and make substantial distributions
before requalifying as a regulated investment company that is accorded special
tax treatment.

Each Fund is subject to a 4% nondeductible federal excise tax on amounts
required to be, but that are not, distributed under a prescribed formula. The
formula requires payment to shareholders during a calendar year of distributions
representing at least 98% of a Fund's taxable ordinary income for the calendar
year and at least 98% of the excess of its capital gains over capital losses
realized during the one-year period ending October 31 (in most cases) of such
year as well as amounts that were neither distributed nor taxed to the Fund
during the prior calendar year. Although each Fund's distribution policies
should enable it to avoid federal excise tax liability, a Fund may retain (and
be subject to income or excise tax on) a portion of its capital gain or other
income if it appears to be in the best interest of the Fund.

Taxation of Distributions from the Funds. For federal income tax purposes,
distributions of net investment income are generally taxable as ordinary income.
Taxes on distributions of capital gains are determined by how long the Funds
owned (or is deemed to have owned) the investments that generated them, rather
than how long a shareholder has owned his or her shares. Distributions of net
capital gains (the excess of net long-term capital gain for the year over net
short-term capital loss) from the sale of investments that a Fund owned that are
properly designated by the Fund as capital gain dividends ("Capital Gain
Dividends") will be taxable as long-term capital gain. Distributions derived
from net short-term capital gain (the excess of net short-term capital gain for
the year over net long-term capital loss) from the sale of investments that a
Fund owned will be taxable as ordinary income. For taxable years beginning
before January 1, 2011, distributions of net investment income designated by a
Fund as derived from "qualified dividend income" will be taxed in the hands of
individuals and other non-corporate taxpayers at the rates applicable to
long-term capital gain, provided certain holding period and other requirements
are met at both the shareholder and Fund level.

Distributions are taxable to shareholders even if they are paid from income or
gains earned by a Fund before a shareholder's investment (and thus were included
in the price the shareholder paid for Fund shares). Distributions are taxable
whether shareholders receive them in cash or reinvest them in additional shares
through the reinvestment privilege. A shareholder whose distributions are
reinvested in shares will be treated as having received a dividend equal to the
fair market value of the new shares issued to the shareholder. Any gain or loss
resulting from the sale or exchange of Fund shares generally will be treated as
capital gain or loss for federal income tax purposes.

Federal long-term capital gain rates applicable to individuals and other
non-corporate taxpayers have been temporarily reduced -- to a maximum rate of
15% with lower rates applying to taxpayers in the in the 10% and 15% rate
federal income tax brackets -- for taxable years beginning before January 1,
2011. Long-term capital gain rates are currently scheduled to return to a
maximum rate of 20% for taxable years beginning after December 31, 2010.


For taxable years beginning before January 1, 2011, "qualified dividend income"
received by an individual and other non-corporate taxpayers will be taxed for
federal income tax purposes at the rates applicable to long-term capital gain
provided holding period and other requirements are met at both the shareholder
and Fund level. Qualified dividend income does not include interest from
fixed-income securities. In order for some portion of the dividends received by
a shareholder of a Fund to be qualified dividend income, the Fund must meet
holding period and other requirements with respect to some portion of the
dividend-paying stock in its portfolio and the shareholder must meet holding
period and other requirements with respect to the Fund's shares. A dividend will
not be treated as qualified dividend income (at either the Fund or shareholder
level) (1) if the dividend is received with respect to any share of stock held
for fewer than 61 days during the 121-day period beginning on the date which is
60 days before the date on which such share becomes ex-dividend with respect to
such dividend (or, in the case of certain preferred stock, for fewer than 91
days during the 181-day period beginning 90 days before such date), (2) to the
extent that the recipient is under an obligation (whether pursuant to a short
sale or otherwise) to make related payments with respect to positions in
substantially similar or related property, or (3) if the recipient elects to
have the dividend income treated as investment income for purposes of the
limitation on deductibility of investment interest. In order for a dividend paid
by a foreign corporation to constitute "qualified dividend income," the foreign
corporation must (1) be eligible for the benefits of a comprehensive income tax
treaty with the United States (or the stock on which the dividend is paid must
be readily tradable on an established securities market in the United States),
and (2) not be treated as a passive foreign investment company. For purposes of
determining the holding period of stock on which a dividend is received, such
holding period is reduced for any period the holder has an option to sell, is
under a contractual obligation to sell, or has made (and not closed) a short
sale of substantially identical stock or securities, and in certain other
circumstances. The above may cause a portion of the dividends received by each
Fund to not be eligible for treatment as qualified dividend income.


If the aggregate qualified dividends received by a Fund during any taxable year
are 95% or more of its gross income (excluding net long-term capital gain over
net short-term capital loss), then 100% of the Fund's dividends (other than
properly designated capital gain dividends) will be eligible to be treated as
qualified dividend income. For this purpose, the only gain included in the term
"gross income" is the excess of net short-term capital gain over net long-term
capital loss.

All distributions by a Fund result in a reduction in the net asset value of the
Fund's shares. Should a distribution reduce the net asset value below a
shareholder's cost basis, such distribution may nevertheless be taxable to the
shareholder as ordinary income, qualified dividend income or capital gain as
described above, even though, from an investment standpoint, it may constitute a
partial return of capital. In particular, investors should be careful to
consider the tax implications of buying shares just prior to a distribution. The
price of shares purchased at that time may include the amount of the forthcoming
distribution. Those purchasing Fund shares just prior to a distribution will
receive a partial return of capital upon the distribution, which may
nevertheless be taxable to them for federal income tax purposes.

Capital gains distributions may be reduced if a Fund has capital loss
carryforwards or post-October loss deferrals available. Any capital loss
carryforwards and any post-October loss deferrals to which a Fund is entitled
are disclosed in the Fund's annual and semi-annual reports to shareholders.

Sale or Redemption of Shares. The sale, exchange or redemption of shares of a
Fund may give rise to a gain or loss. In general, any gain or loss realized upon
a taxable disposition of shares will be treated as long-term capital gain or
loss if the shares have been held for more than one year. Otherwise, the gain or
loss on the taxable disposition of shares of a Fund will be treated as
short-term capital gain or loss. However, any loss realized upon a taxable
disposition of shares held for six months or less will be treated as long-term,
rather than short-term, to the extent of any long-term capital gain
distributions received (or deemed received) by the shareholder with respect to
the shares. All or a portion of any loss realized upon a taxable disposition of
shares of a Fund will be disallowed if other substantially identical shares of
the Fund are purchased within 30 days before or after the disposition. In such a
case, the basis of the newly purchased shares will be adjusted to reflect the
disallowed loss.

Dividends Received Deduction. Dividends from domestic corporations may comprise
a substantial part of each Fund's gross income. If any such dividends constitute
a portion of a Fund's gross income, a portion of the income distributions of the
Fund may be eligible for the 70% deduction for dividends received by corporate
shareholders. Shareholders will be informed of the portion of dividends which so
qualify. The dividends-received deduction is reduced to the extent the shares of
the Fund with respect to which the dividends are received are treated as
debt-financed under federal income tax law and is eliminated if either those
shares or the shares of the Fund are deemed to have been held by the Fund or the
shareholder, as the case may be, for fewer than 46 days during the 91-day period
beginning 45 days before the shares become ex-dividend (or in the case of
certain preferred stock, 91 days during the 181-day period beginning 90 days
before such date). For purposes of determining the holding period of stock on
which a dividend is received, such holding period is reduced for any period the
holder has an option to sell, is under a contractual obligation to sell, or has
made (and not closed) a short sale of substantially identical stock or
securities, and in certain other circumstances. This rule may cause a portion of
the dividends received by each Fund to not be eligible for the corporate
dividends-received deduction.

Foreign Taxation. Foreign withholding or other foreign taxes with respect to
income (possibly including, in some cases, capital gains) on certain foreign
securities may occur. These taxes may be reduced or eliminated under the terms
of an applicable US income tax treaty. As it is not expected that more than 50%
of the value of any of the Funds' total assets will consist of securities issued
by foreign corporations, the Funds will not be eligible to pass through to
shareholders their proportionate share of any foreign taxes paid, with the
result that shareholders will not be able to include in income and will not be
entitled to take any credits or deductions for, such foreign taxes.

Passive Foreign Investment Companies. If a Fund purchases shares in certain
foreign investment entities, called "passive foreign investment companies"
("PFICs"), it may be subject to U.S. federal income tax on a portion of any
"excess distribution" or gain from the disposition of such shares even if such
income is distributed as a taxable dividend by the Fund to its shareholders.
Additional charges in the nature of interest may be imposed on a Fund in respect
of deferred taxes arising from such distributions or gains.

If a Fund were to invest in a PFIC and elect to treat the PFIC as a "qualified
electing fund" under the Code, in lieu of the foregoing requirements, the Fund
might be required to include in income each year a portion of the ordinary
earnings and net capital gains of the qualified electing fund, even if not
distributed to the Fund, and such amounts would be subject to the 90% and excise
tax distribution requirements described above. In order to make this election, a
Fund would be required to obtain certain annual information from the PFICs in
which it invests, which may be difficult or impossible to obtain.

Alternatively, a Fund may make a mark-to-market election that will result in the
Fund being treated as if it had sold and repurchased its PFIC stock at the end
of each year. In such case, the Fund would report any such gains as ordinary
income and would deduct any such losses as ordinary losses to the extent of
previously recognized gains. The election must be made separately for each PFIC
owned by the Fund and, once made, would be effective for all subsequent taxable
years, unless revoked with the consent of the Internal Revenue Service (the
"IRS"). By making the election, a Fund could potentially ameliorate the adverse
tax consequences with respect to its ownership of shares in a PFIC, but in any
particular year may be required to recognize income in excess of the
distributions it receives from PFICs and its proceeds from dispositions of PFIC
stock. A Fund may have to distribute this "phantom" income and gain to satisfy
the 90% distribution requirement and to avoid imposition of the 4% excise tax.

Each Fund will make the appropriate tax elections, if possible, and take any
additional steps that are necessary to mitigate the effect of these rules.

Tax Effects of Certain Transactions. A Fund's use of options, futures contracts,
forward contracts (to the extent permitted) and certain other strategic
transactions will be subject to special tax rules (including mark-to-market,
constructive sale, straddle, wash sale, short sale and other rules), the effect
of which may be to accelerate income, defer losses, cause adjustments in the
holding periods of portfolio securities, convert capital gains into ordinary
income and convert short-term capital losses into long-term capital losses.
These rules could therefore affect the amount, timing and character of
distributions to investors.

A Fund's investment in so-called "section 1256 contracts," such as regulated
futures contracts, most foreign currency forward contracts traded in the
interbank market and options on most stock indices, are subject to special tax
rules. All section 1256 contracts held by a Fund at the end of its taxable year
are required to be marked to their market value, and any unrealized gain or loss
on those positions will be included in the Fund's income as if each position had
been sold for its fair market value at the end of the taxable year. The
resulting gain or loss will be combined with any gain or loss realized by the
Fund from positions in section 1256 contracts closed during the taxable year.
Provided such positions were held as capital assets and were not part of a
"hedging transaction" nor part of a "straddle," 60% of the resulting net gain or
loss will be treated as long-term capital gain or loss, and 40% of such net gain
or loss will be treated as short-term capital gain or loss, regardless of the
period of time the positions were actually held by the Fund.

As a result of entering into swap contracts, a Fund may make or receive periodic
net payments. A Fund may also make or receive a payment when a swap is
terminated prior to maturity through an assignment of the swap or other closing
transaction. Swap payments will generally constitute ordinary income or
deductions, while termination of a swap will generally result in capital gain or
loss (which will be a long-term capital gain or loss if the Fund has been a
party to the swap for more than one year). With respect to certain types of
swaps, a Fund may be required to currently recognize income or loss with respect
to future payments on such swaps or may elect under certain circumstances to
mark such swaps to market annually for tax purposes as ordinary income or loss.
The tax treatment of many types of credit default swaps is uncertain.

In general, gain or loss on a short sale is recognized when a Fund closes the
sale by delivering the borrowed property to the lender, not when the borrowed
property is sold. Gain or loss from a short sale is generally considered as
capital gain or loss to the extent that the property used to close the short
sale constitutes a capital asset in a Fund's hands. Except with respect to
certain situations where the property used by a Fund to close a short sale has a
long-term holding period on the date of the short sale, special rules would
generally treat the gains on short sales as short-term capital gains. These
rules may also terminate the running of the holding period of "substantially
identical property" held by a Fund. Moreover, a loss on a short sale will be
treated as a long-term capital loss if, on the date of the short sale,
"substantially identical property" has been held by a Fund for more than one
year. In general, a Fund will not be permitted to deduct payments made to
reimburse the lender of securities for dividends paid on borrowed stock if the
short sale is closed on or before the 45th day after the short sale is entered
into.

Transactions in foreign currencies, foreign investment currency-denominated debt
securities and certain foreign currency options, futures contracts, forward
contracts and similar instruments (to the extent permitted) may give rise to
ordinary income or loss to the extent such income or loss results from
fluctuations in the value of the foreign currency concerned.

A Fund's investment in zero coupon bonds and other debt obligations having
original issue discount may cause the Fund to recognize taxable income in excess
of any cash received from the investment.

Under current law, a Fund serves to block unrelated business taxable income
("UBTI") from being realized by its tax-exempt shareholders. Notwithstanding the
foregoing, a tax-exempt shareholder could realize UBTI by virtue of its
investment in a Fund if shares in the Fund constitute debt-financed property in
the hands of the tax-exempt shareholder within the meaning of Code Section
514(b). Certain types of income received by a Fund from real estate investment
trusts ("REITs"), real estate mortgage investment conduits ("REMICs"), taxable
mortgage pools or other investments may cause the Fund to designate some or all
of its distributions as "excess inclusion income." To Fund shareholders such
excess inclusion income may (1) constitute taxable income, as UBTI for those
shareholders who would otherwise be tax-exempt such as individual retirement
accounts, 401(k) accounts, Keogh plans, pension plans and certain charitable
entities; (2) not be offset by otherwise allowable deductions for tax purposes;
(3) not be eligible for reduced US withholding for non-US shareholders even from
tax treaty countries; and (4) cause the Fund to be subject to tax if certain
"disqualified organizations" as defined by the Code are Fund shareholders.

Other Tax Considerations. Under the backup withholding provisions of the Code,
redemption proceeds as well as distributions may be subject to federal income
tax withholding for certain shareholders, including those who fail to furnish a
Fund with their taxpayer identification numbers and certifications as to their
tax status.

Shareholders of a Fund may be subject to state and local taxes on distributions
received from the Fund and on redemptions of the Fund's shares.

Special tax rules apply to investments through defined contribution plans and
other tax-qualified plans. Shareholders should consult their tax advisors to
determine the suitability of shares of a Fund as an investment through such
plans and the precise effect of an investment on their particular tax situation.

If a shareholder recognizes a loss with respect to a Fund's shares of $2 million
or more for an individual shareholder or $10 million or more for a corporate
shareholder, the shareholder must file with the Internal Revenue Service a
disclosure statement on Form 8886. Direct shareholders of portfolio securities
are in many cases excepted from this reporting requirement, but under current
guidance, shareholders of a regulated investment company are not excepted. The
fact that a loss is reportable under these regulations does not affect the legal
determination of whether the taxpayer's treatment of the loss is proper.
Shareholders should consult their tax advisors to determine the applicability of
these regulations in light of their individual circumstances.

Taxation of Non-US Shareholders. Dividends paid by the Fund to non-US
shareholders are generally subject to withholding tax at a 30% rate or a reduced
rate specified by an applicable income tax treaty to the extent derived from
investment income and short-term capital gains. In order to obtain a reduced
rate of withholding, a non-US shareholder will be required to provide an IRS
Form W-8BEN certifying its entitlement to benefits under a treaty. The
withholding tax does not apply to regular dividends paid to a non-US shareholder
who provides a Form W-8ECI, certifying that the dividends are effectively
connected with the non-US shareholder's conduct of a trade or business within
the United States. Instead, the effectively connected dividends will be subject
to regular US income tax as if the non-US shareholder were a US shareholder. A
non-US corporation receiving effectively connected dividends may also be subject
to additional "branch profits tax" imposed at a rate of 30% (or lower treaty
rate). A non-US shareholder who fails to provide an IRS Form W-8BEN or other
applicable form may be subject to backup withholding at the appropriate rate.

In general, United States federal withholding tax will not apply to any gain or
income realized by a non-US shareholder in respect of any distributions of net
long-term capital gains over net short-term capital losses, exempt-interest
dividends, or upon the sale or other disposition of shares of a Fund.

A distribution from a Fund to foreign shareholders who have held more than 5% of
the Fund at any time during the one-year period ending on the date of
distribution is treated as real property gain subject to 35% withholding tax and
treated as income effectively connected to a US trade or business with certain
tax filing requirements applicable, if such distribution is attributable to a
distribution of real property gain received by the Fund from a REIT and if 50%
or more of the value of the Fund's assets are invested in REITs and other U.S.
real property holding corporations.

Special federal income tax rules apply to investments through defined
contribution plans and other tax-qualified plans. Shareholders should consult
their tax adviser to determine the suitability of shares of the Funds as an
investment through such plans and the precise effect of an investment on their
particular tax situation.

The foregoing is only a summary of certain material US federal income tax
consequences affecting the Funds and their shareholders. Current and prospective
shareholders are advised to consult their own tax advisors with respect to the
particular tax consequences to them of an investment in a Fund.

                                 NET ASSET VALUE

The net asset value per share of each Fund is computed as of the close of
regular trading on the Exchange on each day the Exchange is open for trading
(the "Value Time"). The Exchange is scheduled to be closed on the following
holidays: New Year's Day, Dr. Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas,
and on the preceding Friday or subsequent Monday when one of these holidays
falls on a Saturday or Sunday, respectively. Net asset value per share is
determined separately for each class of shares by dividing the value of the
total assets of the Fund attributable to the shares of that class, less all
liabilities attributable to that class, by the total number of shares of that
class outstanding. The per share net asset value may be lower for certain
classes of a Fund because of higher expenses borne by these classes.

An equity security is valued at its most recent sale price on the security's
primary exchange or OTC market as of the Value Time. Lacking any sales, the
security is valued at the calculated mean between the most recent bid quotation
and the most recent asked quotation (the "Calculated Mean") on such exchange or
OTC market as of the Value Time. If it is not possible to determine the
Calculated Mean, the security is valued at the most recent bid quotation on such
exchange or OTC market as of the Value Time. In the case of certain foreign
exchanges or OTC markets, the closing price reported by the exchange or OTC
market (which may sometimes be referred to as the "official close" or the
"official closing price" or other similar term) will be considered the most
recent sale price.

Debt securities are valued as follows. Money market instruments purchased with
an original or remaining maturity of 60 days or less, maturing at par, are
valued at amortized cost. Other money market instruments are valued based on
information obtained from an approved pricing agent or, if such information is
not readily available, by using matrix pricing techniques (formula driven
calculations based primarily on current market yields). Bank loans are valued at
prices supplied by an approved pricing agent (which are intended to reflect the
mean between the bid and asked prices), if available, and otherwise at the mean
of the most recent bid and asked quotations or evaluated prices, as applicable,
based on quotations or evaluated prices obtained from one or more
broker-dealers. Privately placed debt securities, other than Rule 144A debt
securities, initially are valued at cost and thereafter based on all relevant
factors including type of security, size of holding and restrictions on
disposition. Municipal debt securities are valued at prices supplied by an
approved pricing agent (which are intended to reflect the mean between the bid
and asked prices), if available, and otherwise at the mean of most recent bid
and asked quotations or evaluated price obtained from a broker-dealer. Other
debt securities are valued at prices supplied by an approved pricing agent, if
available, and otherwise at the most recent bid quotation or evaluated price, as
applicable, obtained from one or more broker-dealers. If it is not possible to
value a particular debt security pursuant to the above methods, the security is
valued on the basis of factors including (but not limited to) maturity, coupon,
creditworthiness, currency denomination, and the movement of the market in which
the security is normally traded.

An exchange-traded option contract on securities, currencies and other financial
instruments is valued at its most recent sale price on the relevant exchange.
Lacking any sales, the option contract is valued at the Calculated Mean. If it
is not possible to determine the Calculated Mean, the option contract is valued
at the most recent bid quotation in the case of a purchased option contract or
the most recent asked quotation in the case of a written option contract, in
each case as of the Value Time. An option contract on securities, currencies and
other financial instruments traded in the OTC market is valued on the Value Date
at the evaluated price provided by the broker-dealer with which it was traded.
Futures contracts (and options thereon) are valued at the most recent settlement
price, if available, on the exchange on which they are traded most extensively.
With the exception of stock index futures contracts that trade on the Chicago
Mercantile Exchange, closing settlement times are prior to the close of trading
on the Exchange. For stock index futures contracts that trade on the Chicago
Mercantile Exchange, closing settlement prices are normally available at
approximately 4:20 p.m. Eastern time. If no settlement price is available, the
last traded price on such exchange will be used.

If market quotations for Fund assets are not readily available or the value of a
Fund asset as determined in accordance with Board-approved procedures does not
represent the fair market value of the Fund asset, the value of the Fund asset
is taken to be an amount which, in the opinion of the applicable Fund's Pricing
Committee (or, in some cases, the Board's Valuation Committee), represents fair
market value. The value of other holdings is determined in a manner which is
intended to fairly reflect the fair market value of the asset on the valuation
date, based on valuation procedures adopted by the Funds' Board and overseen
primarily by the Funds' Pricing Committee.

                           BOARD MEMBERS AND OFFICERS

The following table presents certain information regarding the Board Members of
the Trust. Each Board Member's year of birth is set forth in parentheses after
his or her name. Unless otherwise noted, (i) each Board Member has engaged in
the principal occupation(s) noted in the table for at least the most recent five
years, although not necessarily in the same capacity, and (ii) the address of
each Board Member that is not an "interested person" (as defined in the 1940
Act) of the Trust or the Advisor (each, an "Independent Board Member") is c/o
Dawn-Marie Driscoll, PO Box 100176, Cape Coral, FL 33904. The term of office for
each Board Member is until the election and qualification of a successor, or
until such Board Member sooner dies, resigns, is removed or as otherwise
provided in the governing documents of the Trust. Because the Funds do not hold
an annual meeting of shareholders, each Board Member will hold office for an
indeterminate period. The Board Members may also serve in similar capacities
with other funds in the DWS fund complex.

Independent Board Members

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth, Position                                                                   Number of Funds
 with the Trust and Length of     Business Experience and                                        in DWS Fund
 Time Served(1)                   Directorships During the Past 5 Years                          Complex Overseen
--------------------------------------------------------------------------------------------------------------------
<S>                               <C>                                                                    <C>
Paul K. Freeman                   Consultant, World Bank/Inter-American Development Bank;               134
(1950)                            Governing Council of the Independent Directors Council
Chairperson since 2009, and       (governance, executive committees); formerly: Project Leader,
Board Member since 1993           International Institute for Applied Systems Analysis
                                  (1998-2001); Chief Executive Officer, The Eric Group, Inc.
                                  (environmental insurance) (1986-1998)
--------------------------------------------------------------------------------------------------------------------
John W. Ballantine (1946)         Retired; formerly: Executive Vice President and Chief Risk            134
Board Member since 1999           Management Officer, First Chicago NBD Corporation/The First
                                  National Bank of Chicago (1996-1998); Executive Vice
                                  President and Head of International Banking (1995-1996);
                                  Directorships: Healthways Inc. (provider of disease and care
                                  management services); Portland General Electric (utility
                                  company); Stockwell Capital Investments PLC (private equity);
                                  former Directorships: First Oak Brook Bancshares, Inc. and
                                  Oak Brook Bank
--------------------------------------------------------------------------------------------------------------------
 Henry P. Becton, Jr. (1943)      Vice Chair, WGBH Educational Foundation; Directorships:               134
 Board Member since               Association of Public Television Stations; Becton Dickinson
 1990                             and Company(2) (medical technology company); Belo
                                  Corporation(2) (media company); Boston Museum of Science;
                                  Public Radio International; PRX, The Public Radio Exchange;
                                  The PBS Foundation; former Directorships: American Public
                                  Television; Concord Academy; New England Aquarium; Mass.
                                  Corporation for Educational Telecommunications; Committee for
                                  Economic Development; Public Broadcasting Service
--------------------------------------------------------------------------------------------------------------------
Dawn-Marie Driscoll (1946)        President, Driscoll Associates (consulting firm); Executive           134
Board Member since 1987           Fellow, Center for Business Ethics, Bentley University;
                                  formerly: Partner, Palmer & Dodge (1988-1990); Vice President
                                  of Corporate Affairs and General Counsel, Filene's
                                  (1978-1988); Directorships: Trustee of 20 open-end mutual
                                  funds managed by Sun Capital Advisers, Inc. (since 2007);
                                  Director of ICI Mutual Insurance Company (since 2007);
                                  Advisory Board, Center for Business Ethics, Bentley
                                  University; Trustee, Southwest Florida Community Foundation
                                  (charitable organization); former Directorships: Investment
                                  Company Institute (audit, executive, nominating committees)
                                  and Independent Directors Council (governance, executive
                                  committees)
--------------------------------------------------------------------------------------------------------------------
Keith R. Fox (1954)               Managing General Partner, Exeter Capital Partners (a series           134
Board Member since                of private equity funds); Directorships: Progressive Holding
1996                              Corporation (kitchen goods importer and distributor); Natural
                                  History, Inc. (magazine publisher); Box Top Media Inc.
                                  (advertising); The Kennel Shop (retailer)
--------------------------------------------------------------------------------------------------------------------
Kenneth C. Froewiss               Clinical Professor of Finance, NYU Stern School of Business           134
(1945)                            (1997-present); Member, Finance Committee, Association for
Board Member since                Asian Studies (2002-present); Director, Mitsui Sumitomo
2001                              Insurance Group (US) (2004-present); prior thereto, Managing
                                  Director, J.P. Morgan (investment banking firm) (until 1996)
--------------------------------------------------------------------------------------------------------------------
Richard J. Herring                Jacob Safra Professor of International Banking and Professor,         134
(1946)                            Finance Department, The Wharton School, University of
Board Member since                Pennsylvania (since July 1972); Co-Director, Wharton
1990                              Financial Institutions Center (since July 2000); Director,
                                  Japan Equity Fund, Inc. (since September 2007), Thai Capital
                                  Fund, Inc. (since September 2007), Singapore Fund, Inc.
                                  (since September 2007); formerly: Vice Dean and Director,
                                  Wharton Undergraduate Division (July 1995-June 2000);
                                  Director, Lauder Institute of International Management
                                  Studies (July 2000-June 2006)
--------------------------------------------------------------------------------------------------------------------
William McClayton (1944)          Managing Director, Diamond Management & Technology                    134
Board Member since 2004           Consultants, Inc. (global management consulting firm)
                                  (2001-present); Directorship: Board of Managers, YMCA of
                                  Metropolitan Chicago; formerly: Senior Partner, Arthur
                                  Andersen LLP (accounting) (1966-2001); Trustee, Ravinia
                                  Festival
--------------------------------------------------------------------------------------------------------------------
Rebecca W. Rimel                  President and Chief Executive Officer, The Pew Charitable             134
(1951)                            Trusts (charitable organization) (1994 to present); Trustee,
Board Member since                Thomas Jefferson Foundation (charitable organization) (1994
1995                              to present); Trustee, Executive Committee, Philadelphia
                                  Chamber of Commerce (2001 to 2007); Trustee, Pro Publica
                                  (2007-present) (charitable organization); formerly: Executive
                                  Vice President, The Glenmede Trust Company (investment trust
                                  and wealth management) (1983 to 2004); Board Member, Investor
                                  Education (charitable organization) (2004-2005); Director,
                                  Viasys Health Care(2) (January 2007-June 2007)
--------------------------------------------------------------------------------------------------------------------
William N. Searcy, Jr.            Private investor since October 2003; Trustee of 20 open-end           134
(1946)                            mutual funds managed by Sun Capital Advisers, Inc. (since
Board Member since                October 1998); formerly: Pension & Savings Trust Officer,
1993                              Sprint Corporation(2) (telecommunications) (November
                                  1989-September 2003)
--------------------------------------------------------------------------------------------------------------------
Jean Gleason Stromberg            Retired; formerly: Consultant (1997-2001); Director, US               134
(1943)                            Government Accountability Office (1996-1997); Partner,
Board Member since                Fulbright & Jaworski, L.L.P. (law firm) (1978-1996);
1997                              Directorships: The William and Flora Hewlett Foundation;
                                  Business Leadership Council, Wellesley College; former
                                  Directorships: Service Source, Inc., Mutual Fund Directors
                                  Forum (2002-2004), American Bar Retirement Association
                                  (funding vehicle for retirement plans) (1987-1990 and
                                  1994-1996)
--------------------------------------------------------------------------------------------------------------------
Robert H. Wadsworth (1940)        President, Robert H. Wadsworth & Associates, Inc. (consulting         137
Board Member since 1999           firm) (1983 to present); Director, The Phoenix Boys Choir
                                  Association
--------------------------------------------------------------------------------------------------------------------

Interested Board Member

--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth, Position                                                                   Number of Funds
 with the Trust and Length of     Business Experience and                                        in DWS Fund
 Time Served(1)                   Directorships During the Past 5 Years                          Complex Overseen
--------------------------------------------------------------------------------------------------------------------
 Axel Schwarzer(3)                Managing Director(4), Deutsche Asset Management; Head of              134
 (1958)                           Deutsche Asset Management Americas; CEO of DWS Investments;
 Board Member since               formerly: board member of DWS Investments, Germany
 2006                             (1999-2005); Head of Sales and Product Management for the
                                  Retail and Private Banking Division of Deutsche Bank in
                                  Germany (1997-1999); various strategic and operational
                                  positions for Deutsche Bank Germany Retail and Private
                                  Banking Division in the field of investment funds, tax driven
                                  instruments and asset management for corporates (1989-1996)
--------------------------------------------------------------------------------------------------------------------

Officers(5)

--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth, Position
 with the Trust and Length of     Business Experience and
 Time Served(6)                   Directorships During the Past 5 Years
--------------------------------------------------------------------------------------------------------------------
 Michael G. Clark(7) (1965)       Managing Director(4), Deutsche Asset Management (2006-present); President of
 President, 2006-present          DWS family of funds; Director, ICI Mutual Insurance Company (since
                                  October 2007); formerly: Director of Fund Board Relations (2004-2006) and
                                  Director of Product Development (2000-2004), Merrill Lynch Investment Managers;
                                  Senior Vice President Operations, Merrill Lynch Asset Management (1999-2000)
--------------------------------------------------------------------------------------------------------------------
 John Millette(8) (1962)          Director(4), Deutsche Asset Management
 Vice President and Secretary,
 1999-present
--------------------------------------------------------------------------------------------------------------------
 Paul H. Schubert(7) (1963)       Managing Director(4), Deutsche Asset Management (since July 2004); formerly:
 Chief Financial Officer,         Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family
 2004-present                     of Funds (1998-2004); Vice President and Director of Mutual Fund Finance at UBS
 Treasurer, 2005-present          Global Asset Management (1994-1998)
--------------------------------------------------------------------------------------------------------------------
 Caroline Pearson(8) (1962)       Managing Director(4), Deutsche Asset Management
 Assistant Secretary,
 1997-present
--------------------------------------------------------------------------------------------------------------------
 Rita Rubin(9) (1970)             Vice President and Counsel, Deutsche Asset Management (since October 2007);
 Assistant Secretary,             formerly, Vice President, Morgan Stanley Investment Management (2004-2007);
 2009-present                     Attorney, Shearman & Sterling LLP (2004); Vice President and Associate General
                                  Counsel, UBS Global Asset Management (2001-2004)
--------------------------------------------------------------------------------------------------------------------
 Paul Antosca(8)                  Director(4), Deutsche Asset Management (since 2006); formerly: Vice President,
 (1957)                           The Manufacturers Life Insurance Company (U.S.A.) (1990-2006)
 Assistant Treasurer,
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Jack Clark (8)                   Director(4), Deutsche Asset Management (since 2007); formerly: Vice President,
 (1967)                           State Street Corporation (2002-2007)
 Assistant Treasurer,
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Diane Kenneally(8)               Director(4), Deutsche Asset Management
 (1966)
 Assistant Treasurer,
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Jason Vazquez(9) (1972)          Vice President, Deutsche Asset Management (since 2006); formerly: AML
 Anti-Money Laundering            Operations Manager for Bear Stearns (2004-2006); Supervising Compliance
 Compliance Officer,              Principal and Operations Manager for AXA Financial (1999-2004)
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Robert Kloby(9) (1962)           Managing Director(4), Deutsche Asset Management (2004-present); formerly: Chief
 Chief Compliance Officer,        Compliance Officer/Chief Risk Officer, Robeco USA (2000-2004); Vice President,
 2006-present                     The Prudential Insurance Company of America (1988-2000); E.F. Hutton and
                                  Company (1984-1988)
--------------------------------------------------------------------------------------------------------------------
 J. Christopher Jackson(9)        Director(4), Deutsche Asset Management (2006-present); formerly: Director,
 (1951)                           Senior Vice President, General Counsel, and Assistant Secretary, Hansberger
 Chief Legal Officer,             Global Investors, Inc. (1996-2006); Director, National Society of Compliance
 2006-present                     Professionals (2002-2005) (2006-2009)
--------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)      The length of time served represents the year in which the Board Member
         joined the board of one or more DWS funds currently overseen by the
         Board.

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

(3)      The mailing address of Axel Schwarzer is c/o Deutsche Investment
         Management Americas Inc., 345 Park Avenue, New York, New York 10154.
         Mr. Schwarzer is an interested Board Member by virtue of his positions
         with Deutsche Asset Management. As an interested person, Mr. Schwarzer
         receives no compensation from the Funds.

(4)      Executive title, not a board directorship.

(5)      As a result of their respective positions held with the Advisor, these
         individuals are considered "interested persons" of the Advisor within
         the meaning of the 1940 Act. Interested persons receive no compensation
         from the Funds.

(6)      The length of time served represents the year in which the officer was
         first elected in such capacity for one or more DWS funds.

(7)      Address:  345 Park Avenue, New York, New York 10154.

(8)      Address: One Beacon Street, Boston, Massachusetts 02108.

(9)      Address:  280 Park Avenue, New York, New York 10017.

Certain officers hold similar positions for other investment companies for which
DIMA or an affiliate serves as the Advisor.

Officer's Role with Principal Underwriter:  DWS Investments Distributors, Inc.

 Paul H. Schubert:                Vice President
 Jason Vazquez:                   Vice President and AML Compliance Officer
 Caroline Pearson:                Secretary

Board Members' Responsibilities. The officers of the Trust manage its day-to-day
operations under the direction of the Board. The primary responsibility of the
Board is to represent the interests of the Funds and to provide oversight of the
management of the Funds.

Board Committees. The Board has established the following standing committees:
Audit Committee, Nominating and Governance Committee, Contract Committee, Equity
Oversight Committee, Fixed-Income and Quant Oversight Committee, Marketing and
Shareholder Services Committee, and Operations Committee. For each committee,
the Board has adopted a written charter setting forth each committee's
responsibilities. Each committee was reconstituted effective April 1, 2008.

Audit Committee: The Audit Committee, which consists entirely of Independent
Board Members, assists the Board in fulfilling its responsibility for oversight
of (1) the integrity of the financial statements, (2) the Funds' accounting and
financial reporting policies and procedures, (3) the Funds' compliance with
legal and regulatory requirements related to accounting and financial reporting
and (4) the qualifications, independence and performance of the independent
registered public accounting firm for the Funds. It also approves and recommends
to the Board the appointment, retention or termination of the independent
registered public accounting firm for the Funds, reviews the scope of audit and
internal controls, considers and reports to the Board on matters relating to the
Funds' accounting and financial reporting practices, and performs such other
tasks as the full Board deems necessary or appropriate. The Audit Committee
receives annual representations from the independent registered public
accounting firm as to its independence. The members of the Audit Committee are
William McClayton (Chair), Kenneth C. Froewiss (Vice Chair), John W. Ballantine,
Henry P. Becton, Jr., Keith R. Fox and William N. Searcy, Jr. During the
calendar year 2008, the Audit Committee of the Funds' Board held six (6)
meetings.

Nominating and Governance Committee: The Nominating and Governance Committee,
which consists entirely of Independent Board Members, recommends individuals for
membership on the Board, nominates officers, Board and committee chairs, vice
chairs and committee members, and oversees the operations of the Board. The
Nominating and Governance Committee also reviews recommendations by shareholders
for candidates for Board positions. Shareholders may recommend candidates for
Board positions by forwarding their correspondence by US mail or courier service
to Dawn-Marie Driscoll, P.O. Box 100176, Cape Coral, FL 33904. The members of
the Nominating and Governance Committee are Henry P. Becton, Jr. (Chair),
Rebecca W. Rimel (Vice Chair), Paul K. Freeman and William McClayton. During the
calendar year 2008, the Nominating and Governance Committee of the Funds' Board
held four (4) meetings.

Contract Committee: The Contract Committee, which consists entirely of
Independent Board Members, reviews at least annually, (a) the Funds' financial
arrangements with DIMA and its affiliates, and (b) the Funds' expense ratios.
The members of the Contract Committee are Robert H. Wadsworth (Chair), Keith R.
Fox (Vice Chair), Henry P. Becton, Jr., Richard J. Herring, William McClayton
and Jean Gleason Stromberg. During the calendar year 2008, the Contract Review
Committee of the Funds' Board held seven (7) meetings.

Equity Oversight Committee: The Equity Oversight Committee reviews the
investment operations of those funds that primarily invest in equity securities
(except for those funds managed by a quantitative investment team). The members
of the Equity Oversight Committee are John W. Ballantine (Chair), William
McClayton (Vice Chair), Henry P. Becton, Jr., Keith R. Fox, Richard J. Herring
and Rebecca W. Rimel. During the calendar year 2008, the Equity Oversight
Committee of the Funds' Board held five (5) meetings.

Fixed-Income and Quant Oversight Committee: The Fixed-Income and Quant Oversight
Committee reviews the investment operations of those funds that primarily invest
in fixed-income securities or are managed by a quantitative investment team. The
members of the Fixed-Income and Quant Oversight Committee are William N. Searcy,
Jr. (Chair), Jean Gleason Stromberg (Vice Chair), Dawn-Marie Driscoll, Kenneth
C. Froewiss and Robert H. Wadsworth. During the calendar year 2008, the
Fixed-Income Oversight Committee of the Funds' Board held five (5) meetings.

Marketing and Shareholder Services Committee: The Marketing and Shareholder
Services Committee reviews the Funds' marketing program, sales practices and
literature and shareholder services. The members of the Marketing and
Shareholder Services Committee are Richard J. Herring (Chair), Dawn-Marie
Driscoll (Vice Chair), Rebecca W. Rimel, Jean Gleason Stromberg and Robert H.
Wadsworth. During the calendar year 2008, the Marketing/Distribution/Shareholder
Service Committee of the Funds' Board held four (4) meetings.

The Operations Committee: The Operations Committee reviews the administrative
operations, legal affairs and general compliance matters of the Funds. The
Operations Committee reviews administrative matters related to the operations of
the Funds, policies and procedures relating to portfolio transactions, custody
arrangements, fidelity bond and insurance arrangements, valuation of Fund assets
and securities and such other tasks as the full Board deems necessary or
appropriate. The Operations Committee also oversees the valuation of the Funds'
securities and other assets and determines, as needed, the fair value of Fund
securities or other assets under certain circumstances as described in the
Funds' Valuation Procedures. The Operations Committee has appointed a Valuation
Sub-Committee, which may make determinations of fair value required when the
Operations Committee is not in session. The members of the Operations Committee
are Dawn-Marie Driscoll (Chair), John W. Ballantine (Vice Chair), Kenneth C.
Froewiss, Rebecca W. Rimel and William N. Searcy, Jr. The members of the
Valuation Sub-Committee are Kenneth C. Froewiss (Chair), John W. Ballantine,
Dawn-Marie Driscoll (Alternate), Rebecca W. Rimel (Alternate) and William N.
Searcy, Jr. (Alternate). During the calendar year 2008, the Operations Committee
held four (4) meetings and the Valuation Sub-Committee held no meetings.

Ad Hoc Committees. In addition to the standing committees described above, from
time to time the Board may also form ad hoc committees to consider specific
issues.

Remuneration. Each Independent Board Member receives compensation from the Funds
for his or her services, which includes retainer fees and specified amounts for
various committee services and for the Board Chairperson. No additional
compensation is paid to any Independent Board Member for travel time to
meetings, attendance at directors' educational seminars or conferences, service
on industry or association committees, participation as speakers at directors'
conferences or service on special fund industry director task forces or
subcommittees. Independent Board Members do not receive any employee benefits
such as pension or retirement benefits or health insurance from the Funds or any
fund in the DWS fund complex.

Board Members who are officers, directors, employees or stockholders of Deutsche
Asset Management or its affiliates receive no direct compensation from the
Funds, although they are compensated as employees of Deutsche Asset Management,
or its affiliates, and as a result may be deemed to participate in fees paid by
the Funds. The following tables show compensation from the Funds and aggregate
compensation from all of the funds in the DWS fund complex received by each
Independent Board Member during the calendar year 2008. Mr. Schwarzer is an
interested person of the Funds and received no compensation from the Funds or
any fund in the DWS fund complex during the relevant periods.


<TABLE>
<CAPTION>
                                                        Aggregate               Aggregate
                                  Aggregate         Compensation from       Compensation from       Total Compensation
                              Compensation from    DWS Mid Cap Growth         DWS Small Cap         from Fund and DWS
  Name of Board Member        DWS Micro Cap Fund          Fund                 Growth Fund           Fund Complex(1)
  --------------------           ---------------          -----                ------------          ---------------
<S>                                   <C>               <C>                       <C>                   <C>
  John W. Ballantine                  $168              $1,097                    $437                  $237,500
  Henry P. Becton, Jr.(2)           $1,142                $215                    $557                  $246,000
  Dawn-Marie
  Driscoll(2)(3)                    $1,395                $241                    $667                  $292,500
  Keith R. Fox(2)                   $1,073                $207                    $527                  $229,500
  Paul K. Freeman                     $172              $1,168                    $461                  $255,000
  Kenneth C. Froewiss               $1,073                $207                    $527                  $226,750
  Richard J. Herring(2)             $1,142                $215                    $557                  $240,000
  William McClayton(4)                $170              $1,141                    $451                  $257,500
  Rebecca W. Rimel(2)               $1,073                $207                    $527                  $233,500
  William N. Searcy, Jr.            $1,142                $215                    $557                  $238,000
  Jean Gleason Stromberg            $1,073                $207                    $527                  $225,500
  Robert H. Wadsworth                 $170              $1,141                    $451                  $273,500

(1)      The DWS fund complex is composed of 136 funds as of December 31, 2008.

(2)      Aggregate compensation includes amounts paid to the Board Members for
         special meetings of ad hoc committees of the Board in connection with
         the consolidation of the DWS fund boards and various funds, meetings
         for considering fund expense simplification initiatives, and
         consideration of issues specific to the Funds' direct shareholders
         (i.e., those shareholders who did not purchase shares through financial
         intermediaries). Such amounts totaled $8,000 for Mr. Becton, $2,000 for
         Ms. Driscoll, $2,000 for Mr. Fox, $2,000 for Dr. Herring and $8,000 for
         Ms. Rimel. These meeting fees were borne by the funds.

(3)      Includes $70,000 in annual retainer fees received by Ms. Driscoll as
         Chairperson of DWS funds.

(4)      Includes $15,000 paid to Mr. McClayton for numerous special meetings of
         an ad hoc committee of the former Chicago Board in connection with
         board consolidation initiatives.

Board Member Ownership in the Fund

The following table shows the dollar range of equity securities beneficially
owned by each Board Member in the Funds and DWS fund complex as of December 31,
2008.

                                     Dollar Range of   Dollar Range       Dollar Range of     Aggregate Dollar Range
                                        Beneficial     of Beneficial        Beneficial          of Ownership in all
                                       Ownership in    Ownership in      Ownership in DWS        Funds Overseen by
                                      DWS Micro Cap     DWS Mid Cap      Small Cap Growth       Board Member in the
Board Member                               Fund         Growth Fund            Fund            DWS Fund Complex(1)
------------                               ----         -----------            ----            -------------------

Independent Board Member:
-------------------------

John W. Ballantine                         None            None                None                Over $100,000
Henry P. Becton, Jr.                       None        $1 - $10,000        $1 - $10,000            Over $100,000
Dawn-Marie Driscoll                        None            None            $1 - $10,000            Over $100,000
Keith R. Fox                               None            None                None                Over $100,000
Paul K. Freeman                            None            None                None                Over $100,000
Kenneth C. Froewiss                        None            None                None                Over $100,000
Richard J. Herring                         None            None                None                Over $100,000
William McClayton                      $1 - $10,000        None                None                Over $100,000
Rebecca W. Rimel                           None            None                None                Over $100,000
William N. Searcy, Jr.                     None            None                None                Over $100,000
Jean Gleason Stromberg                     None            None                None                Over $100,000
Robert H. Wadsworth                        None            None                None                Over $100,000

Interested Board Member:
------------------------

Axel Schwarzer                             None            None                None                Over $100,000

(1)      Securities beneficially owned as defined under the 1934 Act include
         direct and/or indirect ownership of securities where the Board Member's
         economic interest is tied to the securities, employment ownership and
         securities when the Board Member can exert voting power, and when the
         Board Member has authority to sell the securities. The dollar ranges
         are: None, $1-$10,000, $10,001-$50,000, $50,001-$100,000 and over
         $100,000.

Ownership in Securities of the Advisor and Related Companies

As reported to the Funds, the information in the following table reflects
ownership by the Independent Board Members and their immediate family members of
certain securities as of December 31, 2008. Immediate family members can be a
spouse, children residing in the same household including step and adoptive
children, and any dependents. The securities represent ownership in the Advisor
or principal underwriter of the Funds and any persons (other than a registered
investment company) directly or indirectly controlling, controlled by, or under
common control with the Advisor or principal underwriter of the Funds (including
Deutsche Bank AG).

                                                                                   Value of        Percent of
                                   Owner and                                     Securities on     Class on an
Independent                     Relationship to                     Title of     an Aggregate       Aggregate
Board Member                      Board Member         Company        Class          Basis            Basis
------------                      ------------         -------        -----          -----            -----

John W. Ballantine                                      None
Henry P. Becton, Jr.                                    None
Dawn-Marie Driscoll                                     None
Keith R. Fox                                            None
Paul K. Freeman                                         None
Kenneth C. Froewiss                                     None
Richard J. Herring                                      None
William McClayton                                       None
Rebecca W. Rimel                                        None
William N. Searcy, Jr.                                  None
Jean Gleason Stromberg                                  None
Robert H. Wadsworth                                     None

Securities Beneficially Owned

As of January 14, 2009, the Board Members and officers of the Trust owned, as a
group, less than 1% of the outstanding shares of each Fund.

To the best of each Fund's knowledge, as of January 14, 2009, no person owned of
record or beneficially 5% or more of any class of the Fund's outstanding shares,
except as noted below.

DWS Mid Cap Growth Fund

Name and Address of Investor Ownership                          Shares                      % of Total Shares
--------------------------------------                          ------                      -----------------

JENNIFER FERRARI TTEE                                        1,426,931.00                   7.39% of Class A
STATE STREET BANK AND TRUST
ADP 401K DAILY VALUATION PROD B
ROSELAND NJ  07068-1739

DWS TRUST COMPANY TTEE                                       9,223,445.42             98.48% of Institutional Class
FBO DB MATCHED SAVINGS PLAN
ATTN ASSET RECON DEPT # XXXXXX
SALEM NH  03079-1143

DWS Small Cap Growth Fund

Name and Address of Investor Ownership                          Shares                      % of Total Shares
--------------------------------------                          ------                      -----------------

MLPF&S FOR THE SOLE BENEFIT OF                                538,373.39                    26.69% of Class A
ITS CUSTOMERS
ATTN FUND ADM (97HB3)
JACKSONVILLE FL  32246-6484

HARTFORD LIFE INSURANCE COMPANY                               191,935.43                    9.52% of Class A
ATTN UIT OPERATIONS
HARTFORD CT  06104-2999

JENNIFER FERRARI TTEE                                         102,632.11                    5.09% of Class A
STATE STREET BANK AND TRUST
FBO ADP 401K DAILY VALUATION PROD B
ROSELAND NJ  07068-1739

STATE STREET BANK & TRUST CO                                  112,621.99              46.38% of Institutional Class
CUST FBO
DWS LIFECOMPASS 2020 FUND
QUINCY MA  02171-2105

STATE STREET BANK & TRUST CO                                   76,130.53              31.35% of Institutional Class
CUST FBO
DWS LIFECOMPASS 2015 FUND
QUINCY MA  02171-2105

STATE STREET BANK & TRUST CO                                   22,153.60              9.12% of Institutional Class
CUST FBO
DWS LIFECOMPASS RETIREMENT FUND
QUINCY MA  02171-2105

STATE STREET BANK & TRUST CO                                   18,476.26              7.61% of Institutional Class
CUST FBO
DWS LIFECOMPASS 2030 FUND
QUINCY MA  02171-2105

CHARLES SCHWAB & CO INC                                       460,061.95                    13.7% of Class S
REINVEST ACCOUNT
SAN FRANCISCO CA  94104-4151

DWS Micro Cap Fund

Name and Address of Investor Ownership                          Shares                      % of Total Shares
--------------------------------------                          ------                      -----------------

STATE STREET BANK & TRUST CO CUST                             107,513.91                    9.71% of Class A
FBO ADP/MORGAN STANLEY DW
WESTWOOD MA  02090-2318

DWS TRUST COMPANY                                              55,709.50                    5.03% of Class A
FBO PROVIDENCE SVC CORP
RETIREMENT SAVINGS PLAN
ATTN SHARE RECON DEPT #XXXXXX
SALEM NH  03079-1143

RIDGE CLEARING AND OUTSOURCING                                 8,944.16                     5.85% of Class B
FBO XXX-XXXXX-XX
JERSEY CITY NJ  07306-4001

MLPF&S FOR THE SOLE BENEFIT OF                                 47,845.47                    10.63% of Class C
ITS CUSTOMERS
ATTN FUND ADMINISTRATION
SEC #97JS4
JACKSONVILLE FL  32246

MORGAN STANLEY & CO.                                           39,570.71                    8.79% of Class C
HARBORSIDE FINANCIAL CENTER
PLAZA II 3RD FLOOR
JERSEY CITY NJ  07311

BROWN BROTHERS HARRIMAN & CO                                   25,435.70                    5.65% of Class C
AS CUST FBO 9050204
JERSEY CITY NJ  07310-1606

NATIONAL FINANCIAL SERVICES CORP                              390,947.07              48.07% of Institutional Class
FOR THE EXCLUSIVE BENEFIT OF OUR
NEW YORK NY  10281-1003

STATE STREET BANK & TRUST CO                                   92,701.21              11.4% of Institutional Class
CUST FBO
DWS LIFECOMPASS 2015 FUND
QUINCY MA  02171-2105

DWS TRUST COMPANY CUST                                         84,414.92              10.38% of Institutional Class
FBO THE THRIFT PLAN OF LONZA
ATTN ASSET RECON DEPT #XXXXXX
SALEM NH  03079-1143

STATE STREET BANK & TRUST CO                                   64,241.50               7.9% of Institutional Class
CUST FBO
DWS LIFECOMPASS 2020 FUND
QUINCY MA  02171-2105

CHARLES SCHWAB & CO INC                                        90,976.32                    16.88% of Class S
REINVEST ACCOUNT
SAN FRANCISCO CA  94104-4151

NFS LLC FBO                                                    35,302.70                    6.55% of Class S
BANK OF AMERICA NA
HARMAN INT'L IND DEF COMP TR
DALLAS TX  75283-1575

WTRISC                                                         33,589.40                    6.23% of Class S
FBO CORPORATE OFFICE PROPERTIES
TRUST EXECUTIVE DEFFERED COMP PLAN
PHOENIX AZ  85072-2129
</TABLE>


Agreement to Indemnify Independent Trustees for Certain Expenses

In connection with litigation or regulatory action related to possible improper
market timing or other improper trading activity or possible improper marketing
and sales activity in certain DWS Funds (the "Affected Funds"), DIMA has agreed
to indemnify and hold harmless the Affected Funds ("Fund Indemnification
Agreement") against any and all loss, damage, liability and expense, arising
from market timing or marketing and sales matters alleged in any enforcement
actions brought by governmental authorities involving or potentially affecting
the Affected Funds or DIMA ("Enforcement Actions") or that are the basis for
private actions brought by shareholders of the Affected Funds against the
Affected Funds, their directors and officers, DIMA and/or certain other parties
("Private Litigation"), or any proceedings or actions that may be threatened or
commenced in the future by any person (including governmental authorities),
arising from or similar to the matters alleged in the Enforcement Actions or
Private Litigation. In recognition of its undertaking to indemnify the Affected
Funds and in light of the rebuttable presumption generally afforded to
independent directors/trustees of investment companies that they have not
engaged in disabling conduct, DIMA has also agreed, subject to applicable law
and regulation, to indemnify certain (or, with respect to certain Affected
Funds, all) of the Independent Trustees of the Affected Funds, against certain
liabilities the Independent Trustees may incur from the matters alleged in any
Enforcement Actions or Private Litigation or arising from or similar to the
matters alleged in the Enforcement Actions or Private Litigation, and advance
expenses that may be incurred by the Independent Trustees in connection with any
Enforcement Actions or Private Litigation. DIMA is not, however, required to
provide indemnification and advancement of expenses: (1) with respect to any
proceeding or action which the Affected Funds' Board determines that the
Independent Trustees ultimately would not be entitled to indemnification or (2)
for any liability of the Independent Trustees to the Funds or their shareholders
to which the Independent Trustee would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the
Independent Trustee's duties as a director or trustee of the Affected Funds as
determined in a final adjudication in such action or proceeding. The estimated
amount of any expenses that may be advanced to the Independent Trustees or
indemnity that may be payable under the indemnity agreements is currently
unknown. These agreements by DIMA will survive the termination of the investment
management agreements between DIMA and the Affected Funds.


                               TRUST ORGANIZATION

Each Fund is a series of DWS Advisor Funds (the "Trust"), an open-end management
investment company. The Trust is a Massachusetts business trust organized under
the laws of Massachusetts and is governed by an Amended and Restated Declaration
of Trust dated June 2, 2008, as may be further amended from time to time (the
"Declaration of Trust"). Prior to July 10, 2006, DWS Micro Cap Fund was a series
of DWS Investments Trust, an open-end management investment company organized as
a Delaware statutory trust. On or about July 10, 2006, DWS Micro Cap Fund
acquired all the assets and assumed all the liabilities of DWS Micro Cap Fund, a
series of DWS Investment Trust (the "Micro Cap Predecessor Fund") in a
reorganization.

The Trust was organized on July 21, 1986 under the laws of The Commonwealth of
Massachusetts under the name BT Tax-Free Investment Trust and assumed its former
name of BT Investment Funds on May 16, 1988. The Trust's name was changed to
Scudder Advisor Funds effective May 16, 2003 and to DWS Advisor Funds effective
February 6, 2006. The Board of Trustees of the Trust is responsible for the
overall management and supervision of the affairs of the Trust. The Declaration
of Trust authorizes the Board of Trustees to create separate investment series
or portfolios of shares. Mid Cap Growth Fund currently offers five classes of
shares, Institutional Class and Class A, B, C and S shares. Small Cap Growth
Fund currently offers five classes of shares, Institutional Class and Class A,
B, C, and S shares. Micro Cap Fund currently offers five classes of shares,
Institutional Class and Class A, B, C and S shares. On July 14, 2006, Class AARP
shares of Mid Cap Growth Fund and Small Cap Growth Fund were merged into Class S
Shares of each Fund and are no longer available for investment. On October 23,
2006, Investment Class shares of Mid Cap Growth Fund, Small Cap Growth Fund and
Micro Cap Fund merged into Class S shares and are no longer available for
investment. Effective November 17, 2006, Class R shares of Mid Cap Growth Fund
and Small Cap Growth Fund converted into Class A shares and are no longer
available for investment. Each of the Funds is a separate series of the Trust.

Prior to March 28, 2002, Mid Cap Growth Fund and Small Cap Growth Fund invested
all of their investable assets in diversified open-end management investment
companies having the same investment objectives as each Fund. These investment
companies were Capital Appreciation Portfolio and Small Cap Portfolio,
respectively (each, a "Portfolio" and collectively, the "Portfolios"). Since
March 28, 2002 each Fund is now operating as a stand-alone mutual fund that
directly acquires and manages its own portfolio of securities. Mid Cap Growth
Fund and Small Cap Growth Fund may in the future seek to achieve their
investment objectives by investing all of their net assets in investment
companies having the same investment policies and restrictions as those
applicable to each Fund.

Each Fund generally is not required to hold meetings of its shareholders. Under
the Declaration of Trust, however, shareholder meetings will be held in
connection with the following matters to the extent and as provided in the
Declaration of Trust and as required by applicable law: (a) the election or
removal of trustees if a meeting is called for such purpose; (b) the termination
of the Trust or a Fund; (c) an amendment of the Declaration of Trust; (d) to the
same extent as stockholders of Massachusetts business corporation as to whether
or not a court action, proceeding or claims should or should not be brought or
maintained derivatively or as a class action on behalf of the Trust or any
series or class thereof or the Shareholders; and (e) such additional matters as
may be required by law, the Declaration of Trust, the By-laws of a Fund, or any
registration of a Fund with the SEC or any state, or as the Trustees may
determine to be necessary or desirable. Shareholders also vote upon changes in
fundamental policies or restrictions.

On any matter submitted to a vote of shareholders, all shares of the Trust
entitled to vote shall, except as otherwise provided in the Trust's By-Laws, be
voted in the aggregate as a single class without regard to series or classes of
shares, except (a) when required by applicable law or when the Trustees shall
have determined that the matter affects one or more series or classes of shares
materially differently, shares shall be voted by individual series or class; and
(b) when the Trustees have determined that the matter affects only the interests
of one or more series or classes, only shareholders of such series or classes
shall be entitled to vote thereon.

The Declaration of Trust provides that the Board of Trustees may, in its
discretion, establish minimum investment amounts for shareholder accounts,
impose fees on accounts that do not exceed a minimum investment amount and
involuntarily redeem shares in any such account in payment of such fees. The
Board of Trustees, in its sole discretion, also may cause the Trust to redeem
all of the shares of the Trust or one or more series or classes held by any
shareholder for any reason, to the extent permissible by the 1940 Act, including
(a) if the shareholder owns shares having an aggregate net asset value of less
than a specified minimum amount, (b) if a particular shareholder's ownership of
shares would disqualify a series from being a regulated investment company, (c)
upon a shareholder's failure to provide sufficient identification to permit the
Trust to verify the shareholder's identity, (d) upon a shareholder's failure to
pay for shares or meet or maintain the qualifications for ownership of a
particular class or series of shares, (e) if the Board of Trustees determines
(or pursuant to policies established by the Board it is determined) that share
ownership by a particular shareholder is not in the best interests of remaining
shareholders, (f) when a Fund is requested or compelled to do so by governmental
authority or applicable law and (g) upon a shareholder's failure to comply with
a request for information with respect to the direct or indirect ownership of
shares of the Trust. The Declaration of Trust also authorizes the Board of
Trustees to terminate a Fund or any class without shareholder approval, and the
Trust may suspend the right of shareholders to require the Trust to redeem
shares to the extent permissible under the 1940 Act.

Under Massachusetts law, shareholders of a Massachusetts business trust could,
under certain circumstances, be held personally liable for obligations of a
Fund. The Declaration of Trust, however, disclaims shareholder liability for
acts or obligations of the Fund and requires that notice of such disclaimer be
given in each agreement, obligation, or instrument entered into or executed by
the Fund or the Fund's trustees. Moreover, the Declaration of Trust provides for
indemnification out of Fund property for all losses and expenses of any
shareholder held personally liable for the obligations of the Fund and the Fund
may be covered by insurance which the Trustees consider adequate to cover
foreseeable tort claims. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is considered by the Advisor remote and
not material, since it is limited to circumstances in which a disclaimer is
inoperative and the Fund itself is unable to meet its obligations.

                             PROXY VOTING GUIDELINES

Each Fund has delegated proxy voting responsibilities to the Advisor, subject to
the Board's general oversight. The Advisor votes proxies pursuant to the proxy
voting policy and guidelines set forth in Appendix A to this SAI).

You may obtain information about how a Fund voted proxies related to its
portfolio securities during the 12-month period ended June 30 by visiting the
Securities and Exchange Commission's Web site at www.sec.gov or by visiting our
Web site at: www.dws-investments.com (click on "proxy voting" at the bottom of
the page).


                              FINANCIAL STATEMENTS

The financial statements, including the portfolio of investments, of DWS Mid Cap
Growth Fund, DWS Small Cap Growth Fund and DWS Micro Cap Fund, together with the
Report of Independent Registered Public Accounting Firm, Financial Highlights
and notes to financial statements in the Annual Report to the Shareholders of
each Fund dated September 30, 2008, are incorporated herein by reference and are
hereby deemed to be a part of this SAI.

A copy of the Funds' Reports to Shareholders may be obtained without charge by
contacting the Service Center at (800) 621-1048.

                             ADDITIONAL INFORMATION

The CUSIP numbers for each class of DWS Mid Cap Growth Fund are:

Class A:  23336Y508

Class B:  23336Y607

Class C:  23336Y706

Institutional Class: 23336Y805

The CUSIP numbers for each class of DWS Small Cap Growth Fund are:

Class A:  23336Y847

Class B:  23336Y839

Class C:  23336Y821

Institutional Class: 23336Y763

The CUSIP numbers for each class of DWS Micro Cap Fund are:

Class A:  23339E616

Class B:  23339E590

Class C:  23339E582

Institutional Class: 23339E566

Each Fund has a fiscal year ending September 30.

Many of the investment changes in a Fund will be made at prices different from
those prevailing at the time they may be reflected in a regular report to
shareholders of a Fund. These transactions will reflect investment decisions
made by the Advisor in light of a Fund's investment objective and policies, its
other portfolio holdings and tax considerations, and should not be construed as
recommendations for similar action by other investors.

Each Fund's prospectuses and this SAI omit certain information contained in the
Registration Statement and its amendments which each Fund has filed with the SEC
under the Securities Act of 1933 and reference is hereby made to the
Registration Statement for further information with respect to a Fund and the
securities offered hereby. The Registration Statement and its amendments are
available for inspection by the public at the offices of the SEC in Washington,
D.C.

                      APPENDIX A -- PROXY VOTING GUIDELINES

       Deutsche Asset Management ("AM") Proxy Voting Policy and Guidelines


I.       INTRODUCTION

AM has adopted and implemented the following policies and procedures, which it
believes are reasonably designed to ensure that proxies are voted in the best
economic interest of clients, in accordance with its fiduciary duties and local
regulation. These Proxy Voting Policies, Procedures and Guidelines shall apply
to all accounts managed by US domiciled advisers and to all US client accounts
managed by non US regional offices. Non US regional offices are required to
maintain procedures and to vote proxies as may be required by law on behalf of
their non US clients. In addition, AM's proxy policies reflect the fiduciary
standards and responsibilities for ERISA accounts.

The attached guidelines represent a set of global recommendations that were
determined by the Global Proxy Voting Sub-Committee ("the GPVSC"). These
guidelines were developed to provide AM with a comprehensive list of
recommendations that represent how AM will generally vote proxies for its
clients. The recommendations derived from the application of these guidelines
are not intended to influence the various AM legal entities either directly or
indirectly by parent or affiliated companies. In addition, the organizational
structures and documents of the various AM legal entities allows, where
necessary or appropriate, the execution by individual AM subsidiaries of the
proxy voting rights independently of any DB parent or affiliated company. This
applies in particular to non U.S. fund management companies. The individuals
that make proxy voting decisions are also free to act independently, subject to
the normal and customary supervision by the management/boards of these AM legal
entities.


II.      AM'S PROXY VOTING RESPONSIBILITIES

Proxy votes are the property of AM's advisory clients.(1) As such, AM's
authority and responsibility to vote such proxies depend upon its contractual
relationships with its clients. AM has delegated responsibility for effecting
its advisory clients' proxy votes to Institutional Shareholder Services ("ISS"),
an independent third-party proxy voting specialist. ISS votes AM's advisory
clients' proxies in accordance with AM's proxy guidelines or AM's specific
instructions. Where a client has given specific instructions as to how a proxy
should be voted, AM will notify ISS to carry out those instructions. Where no
specific instruction exists, AM will follow the procedures in voting the proxies
set forth in this document. Certain Taft-Hartley clients may direct AM to have
ISS vote their proxies in accordance with Taft Hartley voting Guidelines

_____________________

(1)      For purposes of these Policies and Procedures, "clients" refers to
         persons or entities: for which AM serves as investment adviser or
         sub-adviser; for which AM votes proxies; and that have an economic or
         beneficial ownership interest in the portfolio securities of issuers
         soliciting such proxies.

Clients may in certain instances contract with their custodial agent and notify
AM that they wish to engage in securities lending transactions. In such cases,
it is the responsibility of the custodian to deduct the number of shares that
are on loan so that they do not get voted twice.


III.     POLICIES

1.       Proxy voting activities are conducted in the best economic interest of
         clients

AM has adopted the following policies and procedures to ensure that proxies are
voted in accordance with the best economic interest of its clients, as
determined by AM in good faith after appropriate review.

2.       The Global Proxy Voting Sub-Committee

The Global Proxy Voting Sub-Committee (the "GPVSC") is an internal working group
established by the applicable AM's Investment Risk Oversight Committee pursuant
to a written charter. The GPVSC is responsible for overseeing AM's proxy voting
activities, including:

(i)    adopting, monitoring and updating guidelines, attached as Exhibit A (the
       "Guidelines"), that provide how AM will generally vote proxies pertaining
       to a comprehensive list of common proxy voting matters;

(ii)   voting proxies where (A) the issues are not covered by specific client
       instruction or the Guidelines; (B) the Guidelines specify that the issues
       are to be determined on a case-by-case basis; or (C) where an exception
       to the Guidelines may be in the best economic interest of AM's clients;
       and

(iii)  monitoring the Proxy Vendor Oversight's proxy voting activities (see
       below).

AM's Proxy Vendor Oversight, a function of AM's Operations Group, is responsible
for coordinating with ISS to administer AM's proxy voting process and for voting
proxies in accordance with any specific client instructions or, if there are
none, the Guidelines, and overseeing ISS' proxy responsibilities in this regard.

3.       Availability of Proxy Voting Policies and Procedures and proxy voting
         record

Copies of these Policies and Procedures, as they may be updated from time to
time, are made available to clients as required by law and otherwise at AM's
discretion. Clients may also obtain information on how their proxies were voted
by AM as required by law and otherwise at AM's discretion; however, AM must not
selectively disclose its investment company clients' proxy voting records. The
Proxy Vendor Oversight will make proxy voting reports available to advisory
clients upon request. The investment companies' proxy voting records will be
disclosed to shareholders by means of publicly-available annual filings of each
company's proxy voting record for 12-month periods ended June 30 (see
"Recordkeeping" below), if so required by relevant law.


IV.      PROCEDURES

The key aspects of AM's proxy voting process are as follows:

1.       The GPVSC's Proxy Voting Guidelines

The Guidelines set forth the GPVSC's standard voting positions on a
comprehensive list of common proxy voting matters. The GPVSC has developed, and
continues to update the Guidelines based on consideration of current corporate
governance principles, industry standards, client feedback, and the impact of
the matter on issuers and the value of the investments.

The GPVSC will review the Guidelines as necessary to support the best economic
interests of AM's clients and, in any event, at least annually. The GPVSC will
make changes to the Guidelines, whether as a result of the annual review or
otherwise, taking solely into account the best economic interests of clients.
Before changing the Guidelines, the GPVSC will thoroughly review and evaluate
the proposed change and the reasons therefore, and the GPVSC Chair will ask
GPVSC members whether anyone outside of the AM organization (but within Deutsche
Bank and its affiliates) or any entity that identifies itself as a AM advisory
client has requested or attempted to influence the proposed change and whether
any member has a conflict of interest with respect to the proposed change. If
any such matter is reported to the GPVSC Chair, the Chair will promptly notify
the Conflicts of Interest Management Sub-Committee (see below) and will defer
the approval, if possible. Lastly, the GPVSC will fully document its rationale
for approving any change to the Guidelines.

The Guidelines may reflect a voting position that differs from the actual
practices of the public company(ies) within the Deutsche Bank organization or of
the investment companies for which AM or an affiliate serves as investment
adviser or sponsor. Investment companies, particularly closed-end investment
companies, are different from traditional operating companies. These differences
may call for differences in voting positions on the same matter. Further, the
manner in which AM votes investment company proxies may differ from proposals
for which a AM-advised or sponsored investment company solicits proxies from its
shareholders. As reflected in the Guidelines, proxies solicited by closed-end
(and open-end) investment companies are generally voted in accordance with the
pre-determined guidelines of ISS. See Section IV.3.B.

Funds ("Underlying Funds") in which Topiary Fund Management Fund of Funds (each,
a "Fund") invest, may from time to time seek to revise their investment terms
(i.e. liquidity, fees, etc.) or investment structure. In such event, the
Underlying Funds may require approval/consent from its investors to effect the
relevant changes. Topiary Fund Management has adopted Proxy Voting Procedures
which outline the process for these approvals.

2.       Specific proxy voting decisions made by the GPVSC

The Proxy Vendor Oversight will refer to the GPVSC all proxy proposals (i) that
are not covered by specific client instructions or the Guidelines; or (ii) that,
according to the Guidelines, should be evaluated and voted on a case-by-case
basis.

Additionally, if, the Proxy Vendor Oversight, the GPVSC Chair or any member of
the GPVSC, a portfolio manager, a research analyst or a sub-adviser believes
that voting a particular proxy in accordance with the Guidelines may not be in
the best economic interests of clients, that individual may bring the matter to
the attention of the GPVSC Chair and/or the Proxy Vendor Oversight.(2)

_____________________

(2)      The Proxy Vendor Oversight generally monitors upcoming proxy
         solicitations for heightened attention from the press or the industry
         and for novel or unusual proposals or circumstances, which may prompt
         the Proxy Vendor Oversight to bring the solicitation to the attention
         of the GPVSC Chair. AM portfolio managers, AM research analysts and
         sub-advisers also may bring a particular proxy vote to the attention of
         the GPVSC Chair, as a result of their ongoing monitoring of portfolio
         securities held by advisory clients and/or their review of the periodic
         proxy voting record reports that the GPVSC Chair distributes to AM
         portfolio managers and AM research analysts.

If the Proxy Vendor Oversight refers a proxy proposal to the GPVSC or the GPVSC
determines that voting a particular proxy in accordance with the Guidelines is
not in the best economic interests of clients, the GPVSC will evaluate and vote
the proxy, subject to the procedures below regarding conflicts.

The GPVSC endeavors to hold meetings to decide how to vote particular proxies
sufficiently before the voting deadline so that the procedures below regarding
conflicts can be completed before the GPVSC's voting determination.

3.       Certain proxy votes may not be cast

In some cases, the GPVSC may determine that it is in the best economic interests
of its clients not to vote certain proxies. If the conditions below are met with
regard to a proxy proposal, AM will abstain from voting:

o        Neither the Guidelines nor specific client instructions cover an issue;

o        ISS does not make a recommendation on the issue;

o        The GPVSC cannot convene on the proxy proposal at issue to make a
         determination as to what would be in the client's best interest. (This
         could happen, for example, if the Conflicts of Interest Management
         Sub-committee found that there was a material conflict or if despite
         all best efforts being made, the GPVSC quorum requirement could not be
         met).

In addition, it is AM's policy not to vote proxies of issuers subject to laws of
those jurisdictions that impose restrictions upon selling shares after proxies
are voted, in order to preserve liquidity. In other cases, it may not be
possible to vote certain proxies, despite good faith efforts to do so. For
example, some jurisdictions do not provide adequate notice to shareholders so
that proxies may be voted on a timely basis. Voting rights on securities that
have been loaned to third-parties transfer to those third-parties, with loan
termination often being the only way to attempt to vote proxies on the loaned
securities. Lastly, the GPVSC may determine that the costs to the client(s)
associated with voting a particular proxy or group of proxies outweighs the
economic benefits expected from voting the proxy or group of proxies.

The Proxy Vendor Oversight will coordinate with the GPVSC Chair regarding any
specific proxies and any categories of proxies that will not or cannot be voted.
The reasons for not voting any proxy shall be documented.

4.       Conflict of Interest Procedures

A. Procedures to Address Conflicts of Interest and Improper Influence

Overriding Principle. In the limited circumstances where the GPVSC votes
proxies,(3) the GPVSC will vote those proxies in accordance with what it, in
good faith, determines to be the best economic interests of AM's clients.(4)

_____________________

(3)      As mentioned above, the GPVSC votes proxies (i) where neither a
         specific client instruction nor a Guideline directs how the proxy
         should be voted, (ii) where the Guidelines specify that an issue is to
         be determined on a case by case basis or (iii) where voting in
         accordance with the Guidelines may not be in the best economic
         interests of clients.

(4)      The Proxy Vendor Oversight, who serves as the non-voting secretary of
         the GPVSC, may receive routine calls from proxy solicitors and other
         parties interested in a particular proxy vote. Any contact that
         attempts to exert improper pressure or influence shall be reported to
         the Conflicts of Interest Management Sub-Committee.

Independence of the GPVSC. As a matter of Compliance policy, the GPVSC and the
Proxy Vendor Oversight are structured to be independent from other parts of
Deutsche Bank. Members of the GPVSC and the employee responsible for Proxy
Vendor Oversight are employees of AM. As such, they may not be subject to the
supervision or control of any employees of Deutsche Bank Corporate and
Investment Banking division ("CIB"). Their compensation cannot be based upon
their contribution to any business activity outside of AM without prior approval
of Legal and Compliance. They can have no contact with employees of Deutsche
Bank outside of the Private Client and Asset Management division ("PCAM")
regarding specific clients, business matters or initiatives without the prior
approval of Legal and Compliance. They furthermore may not discuss proxy votes
with any person outside of AM (and within AM only on a need to know basis).

Conflict Review Procedures. There will be a committee (the "Conflicts of
Interest Management Sub-Committee") established within AM that will monitor for
potential material conflicts of interest in connection with proxy proposals that
are to be evaluated by the GPVSC. Promptly upon a determination that a vote
shall be presented to the GPVSC, the GPVSC Chair shall notify the Conflicts of
Interest Management Sub-Committee. The Conflicts of Interest Management
Sub-Committee shall promptly collect and review any information deemed
reasonably appropriate to evaluate, in its reasonable judgment, if AM or any
person participating in the proxy voting process has, or has the appearance of,
a material conflict of interest. For the purposes of this policy, a conflict of
interest shall be considered "material" to the extent that a reasonable person
could expect the conflict to influence, or appear to influence, the GPVSC's
decision on the particular vote at issue. GPVSC should provide the Conflicts of
Interest Management Sub-Committee a reasonable amount of time (no less than 24
hours) to perform all necessary and appropriate reviews. To the extent that a
conflicts review can not be sufficiently completed by the Conflicts of Interest
Management Sub-Committee the proxies will be voted in accordance with the
standard guidelines.

The information considered by the Conflicts of Interest Management Sub-Committee
may include without limitation information regarding (i) AM client
relationships; (ii) any relevant personal conflict known by the Conflicts of
Interest Management Sub-Committee or brought to the attention of that
sub-committee; (iii) and any communications with members of the GPVSC (or anyone
participating or providing information to the GPVSC) and any person outside of
the AM organization (but within Deutsche Bank and its affiliates) or any entity
that identifies itself as a AM advisory client regarding the vote at issue. In
the context of any determination, the Conflicts of Interest Management
Sub-Committee may consult with, and shall be entitled to rely upon, all
applicable outside experts, including legal counsel.

Upon completion of the investigation, the Conflicts of Interest Management
Sub-Committee will document its findings and conclusions. If the Conflicts of
Interest Management Sub-Committee determines that (i) AM has a material conflict
of interest that would prevent it from deciding how to vote the proxies
concerned without further client consent or (ii) certain individuals should be
recused from participating in the proxy vote at issue, the Conflicts of Interest
Management Sub-Committee will so inform the GPVSC chair.

If notified that AM has a material conflict of interest as described above, the
GPVSC chair will obtain instructions as to how the proxies should be voted
either from (i) if time permits, the effected clients, or (ii) in accordance
with the standard guidelines. If notified that certain individuals should be
recused from the proxy vote at issue, the GPVSC Chair shall do so in accordance
with the procedures set forth below.

Note: Any AM employee who becomes aware of a potential, material conflict of
interest in respect of any proxy vote to be made on behalf of clients shall
notify Compliance. Compliance shall call a meeting of the conflict review
committee to evaluate such conflict and determine a recommended course of
action.

Procedures to be followed by the GPVSC. At the beginning of any discussion
regarding how to vote any proxy, the GPVSC Chair (or his or her delegate) will
inquire as to whether any GPVSC member (whether voting or ex officio) or any
person participating in the proxy voting process has a personal conflict of
interest or has actual knowledge of an actual or apparent conflict that has not
been reported to the Conflicts of Interest Management Sub-Committee.

The GPVSC Chair also will inquire of these same parties whether they have actual
knowledge regarding whether any director, officer or employee outside of the AM
organization (but within Deutsche Bank and its affiliates) or any entity that
identifies itself as a AM advisory client, has: (i) requested that AM, the Proxy
Vendor Oversight (or any member thereof) or a GPVSC member vote a particular
proxy in a certain manner; (ii) attempted to influence AM, the Proxy Vendor
Oversight (or any member thereof), a GPVSC member or any other person in
connection with proxy voting activities; or (iii) otherwise communicated with a
GPVSC member or any other person participating or providing information to the
GPVSC regarding the particular proxy vote at issue, and which incident has not
yet been reported to the Conflicts of Interest Management Sub- Committee.

If any such incidents are reported to the GPVSC Chair, the Chair will promptly
notify the Conflicts of Interest Management Sub-Committee and, if possible, will
delay the vote until the Conflicts of Interest Management Sub-Committee can
complete the conflicts report. If a delay is not possible, the Conflicts of
Interest Management Sub-Committee will instruct the GPVSC whether anyone should
be recused from the proxy voting process, or whether AM should vote the proxy in
accordance with the standard guidelines, seek instructions as to how to vote the
proxy at issue from ISS or, if time permits, the effected clients. These
inquiries and discussions will be properly reflected in the GPVSC's minutes.

Duty to Report. Any AM employee, including any GPVSC member (whether voting or
ex officio), that is aware of any actual or apparent conflict of interest
relevant to, or any attempt by any person outside of the AM organization (but
within Deutsche Bank and its affiliates) or any entity that identifies itself as
a AM advisory client to influence, how AM votes its proxies has a duty to
disclose the existence of the situation to the GPVSC Chair (or his or her
designee) and the details of the matter to the Conflicts of Interest Management
Sub-Committee. In the case of any person participating in the deliberations on a
specific vote, such disclosure should be made before engaging in any activities
or participating in any discussion pertaining to that vote.

Recusal of Members. The GPVSC will recuse from participating in a specific proxy
vote any GPVSC members (whether voting or ex officio) and/or any other person
who (i) are personally involved in a material conflict of interest; or (ii) who,
as determined by the Conflicts of Interest Management Sub-Committee, have actual
knowledge of a circumstance or fact that could effect their independent
judgment, in respect of such vote. The GPVSC will also exclude from
consideration the views of any person (whether requested or volunteered) if the
GPVSC or any member thereof knows, or if the Conflicts of Interest Management
Sub-Committee has determined, that such other person has a material conflict of
interest with respect to the particular proxy, or has attempted to influence the
vote in any manner prohibited by these policies.

If, after excluding all relevant GPVSC voting members pursuant to the paragraph
above, there are three or more GPVSC voting members remaining, those remaining
GPVSC members will determine how to vote the proxy in accordance with these
Policies and Procedures. If there are fewer than three GPVSC voting members
remaining, the GPVSC Chair will vote the proxy in accordance with the standard
guidelines, will obtain instructions as to how to have the proxy voted from, if
time permits, the effected clients and otherwise from ISS.

B.       Investment Companies and Affiliated Public Companies

Investment Companies. As reflected in the Guidelines, all proxies solicited by
open-end and closed-end investment companies are voted in accordance with the
pre-determined guidelines of ISS, unless the investment company client directs
AM to vote differently on a specific proxy or specific categories of proxies.
However, regarding investment companies for which AM or an affiliate serves as
investment adviser or principal underwriter, such proxies are voted in the same
proportion as the vote of all other shareholders (i.e., "mirror" or "echo"
voting). Master fund proxies solicited from feeder funds are voted in accordance
with applicable provisions of Section 12 of the Investment Company Act of 1940.

Subject to participation agreements with certain Exchange Traded Funds ("ETF")
issuers that have received exemptive orders from the U.S. Securities and
Exchange Commission allowing investing DWS funds to exceed the limits set forth
in Section 12(d)(1)(A) and (B) of the Investment Company Act of 1940, DeAM will
echo vote proxies for ETFs in which Deutsche Bank holds more than 25% of
outstanding voting shares globally when required to do so by participation
agreements and SEC orders.

Affiliated Public Companies. For proxies solicited by non-investment company
issuers of or within the Deutsche Bank organization, e.g., Deutsche bank itself,
these proxies will be voted in the same proportion as the vote of other
shareholders (i.e., "mirror" or "echo" voting).

Note: With respect to the QP Trust (not registered under the Investment Company
Act of 1940), the Fund is not required to engage in echo voting and the
investment adviser will use these Guidelines, and may determine, with respect to
the QP Trust, to vote contrary to the positions in the Guidelines, consistent
with the Fund's best interest.

C.       Other Procedures That Limit Conflicts of Interest

AM and other entities in the Deutsche Bank organization have adopted a number of
policies, procedures and internal controls that are designed to avoid various
conflicts of interest, including those that may arise in connection with proxy
voting, including:

o        Deutsche Bank Americas Restricted Activities Policy. This policy
         provides for, among other things, independence of AM employees from
         CIB, and information barriers between AM and other affiliates.
         Specifically, no AM employee may be subject to the supervision or
         control of any employee of CIB. No AM employee shall have his or her
         compensation based upon his or her contribution to any business
         activity within the Bank outside of the business of AM, without the
         prior approval of Legal or Compliance. Further, no employee of CIB
         shall have any input into the compensation of a AM employee without the
         prior approval of Legal or Compliance. Under the information barriers
         section of this policy, as a general rule, AM employees who are
         associated with the investment process should have no contact with
         employees of Deutsche Bank or its affiliates, outside of PCAM,
         regarding specific clients, business matters, or initiatives. Further,
         under no circumstances should proxy votes be discussed with any
         Deutsche Bank employee outside of AM (and should only be discussed on a
         need-to-know basis within AM).

Other relevant internal policies include the Deutsche Bank Americas Code of
Professional Conduct, the Deutsche Asset Management Information Sharing
Procedures, the Deutsche Asset Management Code of Ethics, the Sarbanes-Oxley
Senior Officer Code of Ethics, and the Deutsche Bank Group Code of Conduct. The
GPVSC expects that these policies, procedures and internal controls will greatly
reduce the chance that the GPVSC (or, its members) would be involved in, aware
of or influenced by, an actual or apparent conflict of interest.


V.       RECORDKEEPING

At a minimum, the following types of records must be properly maintained and
readily accessible in order to evidence compliance with this policy.

o        AM will maintain a record of each vote cast by AM that includes among
         other things, company name, meeting date, proposals presented, vote
         cast and shares voted.

o        The Proxy Vendor Oversight maintains records for each of the proxy
         ballots it votes. Specifically, the records include, but are not
         limited to:

         -        The proxy statement (and any additional solicitation
                  materials) and relevant portions of annual statements.

         -        Any additional information considered in the voting process
                  that may be obtained from an issuing company, its agents or
                  proxy research firms.

         -        Analyst worksheets created for stock option plan and share
                  increase analyses.

         -        Proxy Edge print-screen of actual vote election.

o        AM will retain these Policies and Procedures and the Guidelines; will
         maintain records of client requests for proxy voting information; and
         will retain any documents the Proxy Vendor Oversight or the GPVSC
         prepared that were material to making a voting decision or that
         memorialized the basis for a proxy voting decision.

o        The GPVSC also will create and maintain appropriate records documenting
         its compliance with these Policies and Procedures, including records of
         its deliberations and decisions regarding conflicts of interest and
         their resolution.

o        With respect to AM's investment company clients, ISS will create and
         maintain records of each company's proxy voting record for 12-month
         periods ended June 30. AM will compile the following information for
         each matter relating to a portfolio security considered at any
         shareholder meeting held during the period covered by the report and
         with respect to which the company was entitled to vote:

         -        The name of the issuer of the portfolio security;

         -        The exchange ticker symbol of the portfolio security (if
                  symbol is available through reasonably practicable means);

         -        The Council on Uniform Securities Identification Procedures
                  number for the portfolio security (if the number is available
                  through reasonably practicable means);

         -        The shareholder meeting date;

         -        A brief identification of the matter voted on;

         -        Whether the matter was proposed by the issuer or by a security
                  holder;

         -        Whether the company cast its vote on the matter;

         -        How the company cast its vote (e.g., for or against proposal,
                  or abstain; for or withhold regarding election of directors);
                  and

         -        Whether the company cast its vote for or against management.

Note: This list is intended to provide guidance only in terms of the records
that must be maintained in accordance with this policy. In addition, please note
that records must be maintained in accordance with the applicable AM Records
Management Policy.

With respect to electronically stored records, "properly maintained" is defined
as complete, authentic (unalterable) usable and backed-up. At a minimum, records
should be retained for a period of not less than six years (or longer, if
necessary to comply with applicable regulatory requirements), the first three
years in an appropriate AM office.


VI.      THE GPVSC'S OVERSIGHT ROLE

In addition to adopting the Guidelines and making proxy voting decisions on
matters referred to it as set forth above, the GPVSC will monitor the proxy
voting process by reviewing summary proxy information presented by ISS. The
GPVSC will use this review process to determine, among other things, whether any
changes should be made to the Guidelines. This review will take place at least
quarterly and will be documented in the GPVSC's minutes.


Attachment A - Global Proxy Voting Guidelines







                            Deutsche Asset Management

                         Global Proxy Voting Guidelines



                             As Amended October 2008


                                [GRAPHIC OMITTED]
Table of contents

I        Board Of Directors And Executives

         A        Election Of Directors

         B        Classified Boards Of Directors

         C        Board And Committee Independence

         D        Liability And Indemnification Of Directors

         E        Qualifications Of Directors

         F        Removal Of Directors And Filling Of Vacancies

         G        Proposals To Fix The Size Of The Board

         H        Proposals to Restrict Chief Executive Officer's Service on

                  Multiple Boards

         I        Proposals to Restrict Supervisory Board Members Service on

                  Multiple Boards

         J        Proposals to Establish Audit Committees

II       Capital Structure

         A        Authorization Of Additional Shares

         B        Authorization Of "Blank Check" Preferred Stock

         C        Stock Splits/Reverse Stock Splits

         D        Dual Class/Supervoting Stock

         E        Large Block Issuance

         F        Recapitalization Into A Single Class Of Stock

         G        Share Repurchases

         H        Reductions In Par Value

III      Corporate Governance Issues

         A        Confidential Voting

         B        Cumulative Voting

         C        Supermajority Voting Requirements

         D        Shareholder Right To Vote

IV       Compensation

         A        Establishment of a Remuneration Committee

         B        Executive And Director Stock Option Plans

         C        Employee Stock Option/Purchase Plans

         D        Golden Parachutes

         E        Proposals To Limit Benefits Or Executive Compensation

         F        Option Expensing

         G        Management board election and motion

         H        Remuneration (variable pay)

         I        Long-term incentive plans

         J        Shareholder Proposals Concerning "Pay For Superior
                  Performance"

         K        Executive Compensation Advisory

V        Anti-Takeover Related Issues

         A        Shareholder Rights Plans ("Poison Pills")

         B        Reincorporation

         C        Fair-Price Proposals

         D        Exemption From State Takeover Laws

         E        Non-Financial Effects Of Takeover Bids

VI       Mergers & Acquisitions

VII      Social & Political Issues

         A        Labor & Human Rights

         B        Diversity & Equality

         C        Health & Safety

         D        Government/Military

         E        Tobacco

VIII     Environmental Issues

IX       Miscellaneous Items

         A        Ratification Of Auditors

         B        Limitation Of Non-Audit Services Provided By Independent
                  Auditor

         C        Audit Firm Rotation

         D        Transaction Of Other Business

         E        Motions To Adjourn The Meeting

         F        Bundled Proposals

         G        Change Of Company Name

         H        Proposals Related To The Annual Meeting

         I        Reimbursement Of Expenses Incurred From Candidate Nomination

         J        Investment Company Proxies

         K        International Proxy Voting


These Guidelines may reflect a voting position that differs from the actual
practices of the public company (ies) within the Deutsche Bank organization or
of the investment companies for which AM or an affiliate serves as investment
adviser or sponsor.

NOTE: Because of the unique structure and regulatory scheme applicable to
closed-end investment companies, the voting guidelines (particularly those
related to governance issues) generally will be inapplicable to holdings of
closed-end investment companies. As a result, determinations on the appropriate
voting recommendation for closed-end investment company shares will be made on a
case-by-case basis.


I.       Board of Directors and Executives

A.       Election of Directors

Routine: AM Policy is to vote "for" the uncontested election of directors. Votes
for a director in an uncontested election will be withheld in cases where a
director has shown an inability to perform his/her duties in the best interests
of the shareholders.

Proxy contest: In a proxy contest involving election of directors, a
case-by-case voting decision will be made based upon analysis of the issues
involved and the merits of the incumbent and dissident slates of directors. AM
will incorporate the decisions of a third party proxy research vendor,
currently, Institutional Shareholder Services ("ISS") subject to review by the
Proxy Voting Sub-Committee (GPVSC) as set forth in the AM's Proxy Voting
Policies and Procedures.

Rationale: The large majority of corporate directors fulfill their fiduciary
obligation and in most cases support for management's nominees is warranted. As
the issues relevant to a contested election differ in each instance, those cases
must be addressed as they arise.

B.       Classified Boards of Directors

AM policy is to vote against proposals to classify the board and for proposals
to repeal classified boards and elect directors annually.

Rationale: Directors should be held accountable on an annual basis. By
entrenching the incumbent board, a classified board may be used as an
anti-takeover device to the detriment of the shareholders in a hostile take-over
situation.

C.       Board and Committee Independence

AM policy is to vote:

1.       "For" proposals that require that a certain percentage (majority up to
         66 2/3%) of members of a board of directors be comprised of independent
         or unaffiliated directors.

2.       "For" proposals that require all members of a company's compensation,
         audit, nominating, or other similar committees be comprised of
         independent or unaffiliated directors.

3.       "Against" shareholder proposals to require the addition of special
         interest, or constituency, representatives to boards of directors.

4.       "For" separation of the Chairman and CEO positions.

5.       "Against" proposals that require a company to appoint a Chairman who is
         an independent director.

Rationale: Board independence is a cornerstone of effective governance and
accountability. A board that is sufficiently independent from management assures
that shareholders' interests are adequately represented. However, the Chairman
of the board must have sufficient involvement in and experience with the
operations of the company to perform the functions required of that position and
lead the company.

No director qualifies as 'independent' unless the board of directors
affirmatively determines that the director has no material relationship with the
listed company (either directly or as a partner, shareholder or officer of an
organization that has a relationship with the company).

Whether a director is in fact not "independent" will depend on the laws and
regulations of the primary market for the security and the exchanges, if any, on
which the security trades.

D.       Liability and Indemnification of Directors

AM policy is to vote "for" management proposals to limit directors' liability
and to broaden the indemnification of directors, unless broader indemnification
or limitations on directors' liability would effect shareholders' interests in
pending litigation.

Rationale: While shareholders want directors and officers to be responsible for
their actions, it is not in the best interests of the shareholders for them to
be to risk averse. If the risk of personal liability is too great, companies may
not be able to find capable directors willing to serve. We support expanding
coverage only for actions taken in good faith and not for serious violations of
fiduciary obligation or negligence.

E.       Qualifications of Directors

AM policy is to follow management's recommended vote on either management or
shareholder proposals that set retirement ages for directors or require specific
levels of stock ownership by directors.

Rationale: As a general rule, the board of directors, and not the shareholders,
is most qualified to establish qualification policies.

F.       Removal of Directors and Filling of Vacancies

AM policy is to vote "against" proposals that include provisions that directors
may be removed only for cause or proposals that include provisions that only
continuing directors may fill board vacancies.

Rationale: Differing state statutes permit removal of directors with or without
cause. Removal of directors for cause usually requires proof of self-dealing,
fraud or misappropriation of corporate assets, limiting shareholders' ability to
remove directors except under extreme circumstances. Removal without cause
requires no such showing.

Allowing only incumbent directors to fill vacancies can serve as an
anti-takeover device, precluding shareholders from filling the board until the
next regular election.

G.       Proposals to Fix the Size of the Board

AM policy is to vote:

1.       "For" proposals to fix the size of the board unless: (a) no specific
         reason for the proposed change is given; or (b) the proposal is part of
         a package of takeover defenses.

2.       "Against" proposals allowing management to fix the size of the board
         without shareholder approval.

Rationale: Absent danger of anti-takeover use, companies should be granted a
reasonable amount of flexibility in fixing the size of its board.

H.       Proposals to Restrict Chief Executive Officer's Service on Multiple
         Boards

AM policy is to vote "For" proposals to restrict a Chief Executive Officer from
serving on more than three outside boards of directors.

Rationale: Chief Executive Officer must have sufficient time to ensure that
shareholders' interests are represented adequately.

Note: A director's service on multiple closed-end fund boards within a fund
complex are treated as service on a single Board for the purpose of the proxy
voting guidelines.

I.       Proposals to Restrict Supervisory Board Members Service on Multiple
         Boards (For FFT Securities)

AM policy is to vote "for" proposals to restrict a Supervisory Board Member from
serving on more than five supervisory boards.

Rationale: We consider a strong, independent and knowledgeable supervisory board
as important counter-balance to executive management to ensure that the
interests of shareholders are fully reflected by the company.

Full information should be disclosed in the annual reports and accounts to allow
all shareholders to judge the success of the supervisory board controlling their
company.

Supervisory Board Member must have sufficient time to ensure that shareholders'
interests are represented adequately.

Note: A director's service on multiple closed-end fund boards within a fund
complex are treated as service on a single Board for the purpose of the proxy
voting guidelines.

J.       Proposals to Establish Audit Committees (For FFT and U.S. Securities)
         AM policy is to vote "for" proposals that require the establishment of
         audit committees.

Rationale: The audit committee should deal with accounting and risk management
related questions, verifies the independence of the auditor with due regard to
possible conflicts of interest. It also should determine the procedure of the
audit process.


II.      Capital Structure

A.       Authorization of Additional Shares (For U.S. Securities)

AM policy is to vote "for" proposals to increase the authorization of existing
classes of stock that do not exceed a 3:1 ratio of shares authorized to shares
outstanding for a large cap company, and do not exceed a 4:1 ratio of shares
authorized to shares outstanding for a small-midcap company (companies having a
market capitalization under one billion U.S. dollars.).

Rationale: While companies need an adequate number of shares in order to carry
on business, increases requested for general financial flexibility must be
limited to protect shareholders from their potential use as an anti-takeover
device. Requested increases for specifically designated, reasonable business
purposes (stock split, merger, etc.) will be considered in light of those
purposes and the number of shares required.

B.       Authorization of "Blank Check" Preferred Stock (For U.S. Securities)

AM policy is to vote:

1.   "Against" proposals to create blank check preferred stock or to increase
     the number of authorized shares of blank check preferred stock unless the
     company expressly states that the stock will not be used for anti-takeover
     purposes and will not be issued without shareholder approval.

2.   "For" proposals mandating shareholder approval of blank check stock
     placement.

Rationale: Shareholders should be permitted to monitor the issuance of classes
of preferred stock in which the board of directors is given unfettered
discretion to set voting, dividend, conversion and other rights for the shares
issued.

C.       Stock Splits/Reverse Stock Splits

AM policy is to vote "for" stock splits if a legitimate business purpose is set
forth and the split is in the shareholders' best interests. A vote is cast "for"
a reverse stock split only if the number of shares authorized is reduced in the
same proportion as the reverse split or if the effective increase in authorized
shares (relative to outstanding shares) complies with the proxy guidelines for
common stock increases (see, Section II.A, above.)

Rationale: Generally, stock splits do not detrimentally effect shareholders.
Reverse stock splits, however, may have the same result as an increase in
authorized shares and should be analyzed accordingly.

D.       Dual Class/Supervoting Stock

AM policy is to vote "against" proposals to create or authorize additional
shares of super-voting stock or stock with unequal voting rights.

Rationale: The "one share, one vote" principal ensures that no shareholder
maintains a voting interest exceeding their equity interest in the company.

E.       Large Block Issuance (For U.S. Securities)

AM policy is to address large block issuances of stock on a case-by-case basis,
incorporating the recommendation of an independent third party proxy research
firm (currently ISS) subject to review by the GPVSC as set forth in AM's Proxy
Policies and Procedures.

Additionally, AM supports proposals requiring shareholder approval of large
block issuances.

Rationale: Stock issuances must be reviewed in light of the business
circumstances leading to the request and the potential impact on shareholder
value.

F.       Recapitalization into a Single Class of Stock

AM policy is to vote "for" recapitalization plans to provide for a single class
of common stock, provided the terms are fair, with no class of stock being
unduly disadvantaged.

Rationale: Consolidation of multiple classes of stock is a business decision
that may be left to the board and/management if there is no adverse effect on
shareholders.

G.       Share Repurchases

AM policy is to vote "for" share repurchase plans provided all shareholders are
able to participate on equal terms.

Rationale: Buybacks are generally considered beneficial to shareholders because
they tend to increase returns to the remaining shareholders.

H.       Reductions in Par Value

AM policy is to vote "for" proposals to reduce par value, provided a legitimate
business purpose is stated (e.g., the reduction of corporate tax
responsibility.)

Rationale: Usually, adjustments to par value are a routine financial decision
with no substantial impact on shareholders.


III.     Corporate Governance Issues

A.       Confidential Voting

AM policy is to vote "for" proposals to provide for confidential voting and
independent tabulation of voting results and to vote "against" proposals to
repeal such provisions.

Rationale: Confidential voting protects the privacy rights of all shareholders.
This is particularly important for employee-shareholders or shareholders with
business or other affiliations with the company, who may be vulnerable to
coercion or retaliation when opposing management. Confidential voting does not
interfere with the ability of corporations to communicate with all shareholders,
nor does it prohibit shareholders from making their views known directly to
management.

B.       Cumulative Voting (For U.S. Securities)

AM policy is to vote "against" shareholder proposals requesting cumulative
voting and "for"management proposals to eliminate it. The protections afforded
shareholders by cumulative voting are not necessary when a company has a history
of good performance and does not have a concentrated ownership interest.
Accordingly, a vote is cast "against" cumulative voting and "for" proposals to
eliminate it if:

a)       The company has a five year return on investment greater than the
         relevant industry index,

b)       All directors and executive officers as a group beneficially own less
         than 10% of the outstanding stock, and

c)       No shareholder (or voting block) beneficially owns 15% or more of the
         company.

Thus, failure of any one of the three criteria results in a vote for cumulative
voting in accordance with the general policy.

Rationale: Cumulative voting is a tool that should be used to ensure that
holders of a significant number of shares may have board representation;
however, the presence of other safeguards may make their use unnecessary.

C.       Supermajority Voting Requirements

AM policy is to vote "against" management proposals to require a supermajority
vote to amend the charter or bylaws and to vote "for" shareholder proposals to
modify or rescind existing supermajority requirements.

*Exception made when company holds a controlling position and seeks to lower
threshold to maintain control and/or make changes to corporate by-laws.

Rationale: Supermajority voting provisions violate the democratic principle that
a simple majority should carry the vote. Setting supermajority requirements may
make it difficult or impossible for shareholders to remove egregious by-law or
charter provisions. Occasionally, a company with a significant insider held
position might attempt to lower a supermajority threshold to make it easier for
management to approve provisions that may be detrimental to shareholders. In
that case, it may not be in the shareholders interests to lower the
supermajority provision.

D.       Shareholder Right to Vote

AM policy is to vote "against" proposals that restrict the right of shareholders
to call special meetings, amend the bylaws, or act by written consent. Policy is
to vote "for" proposals that remove such restrictions.

Rationale: Any reasonable means whereby shareholders can make their views known
to management or effect the governance process should be supported.


IV.      Compensation

Annual Incentive Plans or Bonus Plans are often submitted to shareholders for
approval. These plans typically award cash to executives based on company
performance. Deutsche Bank believes that the responsibility for executive
compensation decisions rest with the board of directors and/or the compensation
committee, and its policy is not to second-guess the board's award of cash
compensation amounts to executives unless a particular award or series of awards
is deemed excessive. If stock options are awarded as part of these bonus or
incentive plans, the provisions must meet Deutsche Bank's criteria regarding
stock option plans, or similar stock-based incentive compensation schemes, as
set forth below.

A.       Establishment of a Remuneration Committee (For FFT Securities)

AM policy is to vote "for" proposals that require the establishment of a
remuneration committee.

Rationale: Corporations should disclose in each annual report or proxy statement
their policies on remuneration. Essential details regarding executive
remuneration including share options, long-term incentive plans and bonuses,
should be disclosed in the annual report, so that investors can judge whether
corporate pay policies and practices meet the standard.

The remuneration committee shall not comprise any board members and should be
sensitive to the wider scene on executive pay. It should ensure that
performance-based elements of executive pay are designed to align the interests
of shareholders.

B.       Executive and Director Stock Option Plans

AM policy is to vote "for" stock option plans that meet the following criteria:

(1)      The resulting dilution of existing shares is less than (a) 15 percent
         of outstanding shares for large capital corporations or (b) 20 percent
         of outstanding shares for small-mid capital companies (companies having
         a market capitalization under one billion U.S. dollars.)

(2)      The transfer of equity resulting from granting options at less than FMV
         is no greater than 3% of the over-all market capitalization of large
         capital corporations, or 5% of market cap for small-mid capital
         companies.

(3)      The plan does not contain express repricing provisions and, in the
         absence of an express statement that options will not be repriced; the
         company does not have a history of repricing options.

(4)      The plan does not grant options on super-voting stock.

AM will support performance-based option proposals as long as a) they do not
mandate that all options granted by the company must be performance based, and
b) only certain high-level executives are subject to receive the performance
based options.

AM will support proposals to eliminate the payment of outside director pensions.

Rationale: Determining the cost to the company and to shareholders of
stock-based incentive plans raises significant issues not encountered with
cash-based compensation plans. These include the potential dilution of existing
shareholders' voting power, the transfer of equity out of the company resulting
from the grant and execution of options at less than FMV and the authority to
reprice or replace underwater options. Our stock option plan analysis model
seeks to allow reasonable levels of flexibility for a company yet still protect
shareholders from the negative impact of excessive stock compensation.
Acknowledging that small mid-capital corporations often rely more heavily on
stock option plans as their main source of executive compensation and may not be
able to compete with their large capital competitors with cash compensation, we
provide slightly more flexibility for those companies.

C.       Employee Stock Option/Purchase Plans

AM policy is to vote for employee stock purchase plans (ESPP's) when the plan
complies with Internal Revenue Code 423, allowing non-management employees to
purchase stock at 85% of FMV.

AM policy is to vote "for" employee stock option plans (ESOPs) provided they
meet the standards for stock option plans in general. However, when computing
dilution and transfer of equity, ESOPs are considered independently from
executive and director option plans.

Rationale: ESOPs and ESPP's encourage rank-and-file employees to acquire an
ownership stake in the companies they work for and have been shown to promote
employee loyalty and improve productivity.

D.       Golden Parachutes

AM policy is to vote "for" proposals to require shareholder approval of golden
parachutes and for proposals that would limit golden parachutes to no more than
three times base compensation. Policy is to vote "against" more restrictive
shareholder proposals to limit golden parachutes.

Rationale: In setting a reasonable limitation, AM considers that an effective
parachute should be less attractive than continued employment and that the IRS
has opined that amounts greater than three times annual salary, are excessive.

E.       Proposals to Limit Benefits or Executive Compensation

AM policy is to vote "against"

1.   Proposals to limit benefits, pensions or compensation and

2.   Proposals that request or require disclosure of executive compensation
     greater than the disclosure required by Securities and Exchange Commission
     (SEC) regulations.

Rationale: Levels of compensation and benefits are generally considered to be
day-to-day operations of the company, and are best left unrestricted by
arbitrary limitations proposed by shareholders.

F.       Option Expensing

AM policy is to support proposals requesting companies to expense stock options.

Rationale: Although companies can choose to expense options voluntarily, the
Financial Accounting Standards Board (FASB) does not yet require it, instead
allowing companies to disclose the theoretical value of options as a footnote.
Because the expensing of stock options lowers earnings, most companies elect not
to do so. Given the fact that options have become an integral component of
compensation and their exercise results in a transfer of shareholder value, AM
agrees that their value should not be ignored and treated as "no cost"
compensation. The expensing of stock options would promote more modest and
appropriate use of stock options in executive compensation plans and present a
more accurate picture of company operational earnings.

G.        Management board election and motion (For FFT Securities)

AM policy is to vote "against":

o        the election of board members with positions on either remuneration or
         audit committees;

o        the election of supervisory board members with too many supervisory
         board mandates;

o        "automatic" election of former board members into the supervisory
         board.

Rationale: Management as an entity, and each of its members, are responsible for
all actions of the company, and are - subject to applicable laws and regulations
- accountable to the shareholders as a whole for their actions.

Sufficient information should be disclosed in the annual company report and
account to allow shareholders to judge the success of the company.

H.       Remuneration (variable pay): (For FFT Securities)

Executive remuneration for Management Board

AM policy is to vote "for" remuneration for Management Board that is transparent
and linked to results.

Rationale: Executive compensation should motivate management and align the
interests of management with the shareholders. The focus should be on criteria
that prevent excessive remuneration; but enable the company to hire and retain
first-class professionals.

Shareholder interests are normally best served when management is remunerated to
optimise long-term returns. Criteria should include suitable measurements like
return on capital employed or economic value added.

Interests should generally also be correctly aligned when management own shares
in the company - even more so if these shares represent a substantial portion of
their own wealth.

Its disclosure shall differentiate between fixed pay, variable (performance
related) pay and long-term incentives, including stock option plans with
valuation ranges as well as pension and any other significant arrangements.

Executive remuneration for Supervisory Board

AM policy is to vote "for" remuneration for Supervisory Board that is at least
50% in fixed form.

Rationale: It would normally be preferable if performance linked compensation
were not based on dividend payments, but linked to suitable result based
parameters. Consulting and procurement services should also be published in the
company report.

I.       Long-term incentive plans (For FFT Securities)

AM policy is to vote "for" long-term incentive plans for members of a management
board that reward for above average company performance.

Rationale: Incentive plans will normally be supported if they:

o        directly align the interests of members of management boards with those
         of shareholders;

o        establish challenging performance criteria to reward only above average
         performance;

o        measure performance by total shareholder return in relation to the
         market or a range of comparable companies;

o        are long-term in nature and encourage long-term ownership of the shares
         once exercised through minimum holding periods;

o        do not allow a repricing of the exercise price in stock option plans.

J.       Shareholder Proposals Concerning "Pay for Superior Performance"

AM policy is to address pay for superior performance proposals on a case-by-case
basis, incorporating the recommendation of an independent third party proxy
research firm (currently ISS) subject to review by the GPVSC as set forth in
AM's Proxy Policies and Procedures.

Rationale: While AM agrees that compensation issues are better left to the
discretion of management, they appreciate the need to monitor for excessive
compensation practices on a case by case basis. If, after a review of the ISS
metrics, AM is comfortable with ISS's applying this calculation and will vote
according to their recommendation.

K.       Executive Compensation Advisory

AM policy is to follow management's recommended vote on shareholder proposals to
propose an advisory resolution seeking to ratify the compensation of the
company's named executive officers (NEOs) on an annual basis.

Rationale: AM believes that controls exist within senior management and
corporate compensation committees, ensuring fair compensation to executives.
This might allow shareholders to require approval for all levels of management's
compensation.

V.       Anti-Takeover Related Issues

A.       Shareholder Rights Plans ("Poison Pills")

AM policy is to vote "for" proposals to require shareholder ratification of
poison pills or that request boards to redeem poison pills, and to vote
"against" the adoption of poison pills if they are submitted for shareholder
ratification.

Rationale: Poison pills are the most prevalent form of corporate takeover
defenses and can be (and usually are) adopted without shareholder review or
consent. The potential cost of poison pills to shareholders during an attempted
takeover outweighs the benefits.

B.       Reincorporation

AM policy is to examine reincorporation proposals on a case-by-case basis. The
voting decision is based on: (1) differences in state law between the existing
state of incorporation and the proposed state of incorporation; and (2)
differences between the existing and the proposed charter/bylaws/articles of
incorporation and their effect on shareholder rights. If changes resulting from
the proposed reincorporation violate the corporate governance principles set
forth in these guidelines, the reincorporation will be deemed contrary to
shareholder's interests and a vote cast "against."

Rationale: Reincorporations can be properly analyzed only by looking at the
advantages and disadvantages to their shareholders. Care must be taken that
anti-takeover protection is not the sole or primary result of a proposed change.

C.       Fair-Price Proposals

AM policy is to vote "for" management fair-price proposals, provided that: (1)
the proposal applies only to two-tier offers; (2) the proposal sets an objective
fair-price test based on the highest price that the acquirer has paid for a
company's shares; (3) the supermajority requirement for bids that fail the
fair-price test is no higher than two-thirds of the outstanding shares; (4) the
proposal contains no other anti-takeover provisions or provisions that restrict
shareholders rights.

A vote is cast for shareholder proposals that would modify or repeal existing
fair-price requirements that do not meet these standards.

Rationale: While fair price provisions may be used as anti-takeover devices, if
adequate provisions are included, they provide some protection to shareholders
who have some say in their application and the ability to reject those
protections if desired.

D.       Exemption from state takeover laws

AM policy is to vote "for" shareholder proposals to opt out of state takeover
laws and to vote "against" management proposals requesting to opt out of state
takeover laws.

Rationale: Control share statutes, enacted at the state level, may harm
long-term share value by entrenching management. They also unfairly deny certain
shares their inherent voting rights.

E.       Non-financial Effects of Takeover Bids

Policy is to vote "against" shareholder proposals to require consideration of
non-financial effects of merger or acquisition proposals.

Rationale: Non-financial effects may often be subjective and are secondary to
AM's stated purpose of acting in its client's best economic interest.


VI.      Mergers & Acquisitions

Evaluation of mergers, acquisitions and other special corporate transactions
(i.e., takeovers, spin-offs, sales of assets, reorganizations, restructurings
and recapitalizations) are performed on a case-by-case basis incorporating
information from an independent proxy research source (currently ISS.)
Additional resources including portfolio management and research analysts may be
considered as set forth in AM's Policies and Procedures.


VII.     Social, Environmental & Political Issues

Social and environmental issues are becoming increasingly important to corporate
success. We incorporate social and environmental considerations into both our
investment decisions and our proxy voting decisions - particularly if the
financial performance of the company could be impacted.

With increasing frequency, shareholder proposals are submitted relating to
social and political responsibility issues. Almost universally, the company
management will recommend a vote "against" these proposals. These types of
proposals cover an extremely wide range of issues. Many of the issues tend to be
controversial and are subject to more than one reasonable, yet opposing, theory
of support. More so than with other types of proxy proposals, social and
political responsibility issues may not have a connection to the economic and
corporate governance principles effecting shareholders' interests. AM's policy
regarding social and political responsibility issues, as with any other issue,
is designed to protect our client shareholders' economic interests.

Occasionally, a distinction is made between a shareholder proposal requesting
direct action on behalf of the board and a request for a report on (or
disclosure of) some information. In order to avoid unduly burdening any company
with reporting requirements, AM's policy is to vote against shareholder
proposals that demand additional disclosure or reporting than is required by the
Securities and Exchange Commission unless it appears there is a legitimate issue
and the company has not adequately addressed shareholders' concerns.

A.       Labor & Human Rights

AM policy is to vote "against" adopting global codes of conduct or workplace
standards exceeding those mandated by law.

Rationale: Additional requirements beyond those mandated by law are deemed
unnecessary and potentially burdensome to companies

B.       Diversity & Equality

1.       AM policy is to vote "against" shareholder proposals to force equal
         employment opportunity, affirmative action or board diversity.

Rationale: Compliance with State and Federal legislation along with information
made available through filings with the EEOC provides sufficient assurance that
companies act responsibly and make information public.

2.       AM policy is also to vote "against" proposals to adopt the Mac Bride
         Principles. The Mac Bride Principles promote fair employment,
         specifically regarding religious discrimination.

Rationale: Compliance with the Fair Employment Act of 1989 makes adoption of the
Mac Bride Principles redundant. Their adoption could potentially lead to charges
of reverse discrimination.

C.       Health & Safety

1.       AM policy is to vote "against" adopting a pharmaceutical price
         restraint policy or reporting pricing policy changes.

Rationale: Pricing is an integral part of business for pharmaceutical companies
and should not be dictated by shareholders (particularly pursuant to an
arbitrary formula.) Disclosing pricing policies may also jeopardize a company's
competitive position in the marketplace.

2.       AM policy is to vote "against" shareholder proposals to control the use
         or labeling of and reporting on genetically engineered products.

Rationale: Additional requirements beyond those mandated by law are deemed
unnecessary and potentially burdensome to companies.

D.       Government/Military

1.       AM policy is to vote against shareholder proposals regarding the
         production or sale of military arms or nuclear or space-based weapons,
         including proposals seeking to dictate a company's interaction with a
         particular foreign country or agency.

Rationale: Generally, management is in a better position to determine what
products or industries a company can and should participate in. Regulation of
the production or distribution of military supplies is, or should be, a matter
of government policy.

2.       AM policy is to vote "against" shareholder proposals regarding
         political contributions and donations.

Rationale: The Board of Directors and Management, not shareholders, should
evaluate and determine the recipients of any contributions made by the company.

3.       AM policy is to vote "against" shareholder proposals regarding
         charitable contributions and donations.

Rationale: The Board of Directors and Management, not shareholders, should
evaluate and determine the recipients of any contributions made by the company.

E.       Tobacco

1.       AM policy is to vote "against" shareholder proposals requesting
         additional standards or reporting requirements for tobacco companies as
         well as "against" requesting companies to report on the intentional
         manipulation of nicotine content.

Rationale: Where a tobacco company's actions meet the requirements of legal and
industry standards, imposing additional burdens may detrimentally effect a
company's ability to compete. The disclosure of nicotine content information
could affect the company's rights in any pending or future litigation.

2.       Shareholder requests to spin-off or restructure tobacco businesses will
         be opposed.

Rationale: These decisions are more appropriately left to the Board and
management, and not to shareholder mandate.


VIII.    Environmental Issues

AM policy is to follow management's recommended vote on CERES Principles or
other similar environmental mandates (e.g., those relating to Greenhouse gas
emissions or the use of nuclear power).

Rationale: Environmental issues are extensively regulated by outside agencies
and compliance with additional requirements often involves significant cost to
companies.


IX.      Miscellaneous Items

A.       Ratification of Auditors

AM policy is to vote "for" a) the management recommended selection of auditors
and b) proposals to require shareholder approval of auditors.

Rationale: Absent evidence that auditors have not performed their duties
adequately, support for management's nomination is warranted.

B.       Limitation of non-audit services provided by independent auditor

AM policy is to support proposals limiting non-audit fees to 50% of the
aggregate annual fees earned by the firm retained as a company's independent
auditor.

Rationale: In the wake of financial reporting problems and alleged audit
failures at a number of companies, AM supports the general principle that
companies should retain separate firms for audit and consulting services to
avoid potential conflicts of interest. However, given the protections afforded
by the recently enacted Sarbanes-Oxley Act of 2002 (which requires Audit
Committee pre-approval for non-audit services and prohibits auditors from
providing specific types of services), and the fact that some non-audit services
are legitimate audit-related services, complete separation of audit and
consulting fees may not be warranted. A reasonable limitation is appropriate to
help ensure auditor independence and it is reasonable to expect that audit fees
exceed non-audit fees.

C.       Audit firm rotation

AM policy is to support proposals seeking audit firm rotation unless the
rotation period sought is less than five years.

Rationale: While the Sarbanes-Oxley Act mandates that the lead audit partner be
switched every five years, AM believes that rotation of the actual audit firm
would provide an even stronger system of checks and balances on the audit
function.

D.       Transaction of Other Business

AM policy is to vote against "transaction of other business" proposals.

Rationale: This is a routine item to allow shareholders to raise other issues
and discuss them at the meeting. As the nature of these issues may not be
disclosed prior to the meeting, we recommend a vote against these proposals.
This protects shareholders voting by proxy (and not physically present at a
meeting) from having action taken at the meeting that they did not receive
proper notification of or sufficient opportunity to consider.

E.       Motions to Adjourn the Meeting

AM Policy is to vote against proposals to adjourn the meeting.

Rationale: Management may seek authority to adjourn the meeting if a favorable
outcome is not secured. Shareholders should already have had enough information
to make a decision. Once votes have been cast, there is no justification for
management to continue spending time and money to press shareholders for
support.

F.       Bundled Proposals

AM policy is to vote against bundled proposals if any bundled issue would
require a vote against it if proposed individually.

Rationale: Shareholders should not be forced to "take the good with the bad" in
cases where the proposals could reasonably have been submitted separately.

G.       Change of Company Name

AM policy is to support management on proposals to change the company name.

Rationale: This is generally considered a business decision for a company.

H.       Proposals Related to the Annual Meeting

AM Policy is to vote in favor of management for proposals related to the conduct
of the annual meeting (meeting time, place, etc.)

Rationale: These are considered routine administrative proposals.

I.       Reimbursement of Expenses Incurred from Candidate Nomination

AM policy is to follow management's recommended vote on shareholder proposals
related to the amending of company bylaws to provide for the reimbursement of
reasonable expenses incurred in connection with nominating one or more
candidates in a contested election of directors to the corporation's board of
directors.

Rationale: Corporations should not be liable for costs associated with
shareholder proposals for directors.

J.       Investment Company Proxies

Proxies solicited by investment companies are voted in accordance with the
recommendations of an independent third party, currently ISS. However, regarding
investment companies for which AM or an affiliate serves as investment adviser
or principal underwriter, such proxies are voted in the same proportion as the
vote of all other shareholders. Proxies solicited by master funds from feeder
funds will be voted in accordance with applicable provisions of Section 12 of
the Investment Company Act of 1940.

Investment companies, particularly closed-end investment companies, are
different from traditional operating companies. These differences may call for
differences in voting positions on the same matter. For example, AM could vote
"for" staggered boards of closed-end investment companies, although AM generally
votes "against" staggered boards for operating companies. Further, the manner in
which AM votes investment company proxies may differ from proposals for which a
AM-advised investment company solicits proxies from its shareholders. As
reflected in the Guidelines, proxies solicited by closed-end (and open-end)
investment companies are voted in accordance with the pre-determined guidelines
of an independent third-party.

Subject to participation agreements with certain Exchange Traded Funds ("ETF")
issuers that have received exemptive orders from the U.S. Securities and
Exchange Commission allowing investing DWS funds to exceed the limits set forth
in Section 12(d)(1)(A) and (B) of the Investment Company Act of 1940, DeAM will
echo vote proxies for ETFs in which Deutsche Bank holds more than 25% of
outstanding voting shares globally when required to do so by participation
agreements and SEC orders.

Note: With respect to the QP Trust (not registered under the Investment Company
Act of 1940), the Fund is not required to engage in echo voting and the
investment adviser will use these Guidelines, and may determine, with respect to
the QP Trust, to vote contrary to the positions in the Guidelines, consistent
with the Fund's best interest.


K.       International Proxy Voting

The above guidelines pertain to issuers organized in the United States, Canada
and Germany. Proxies solicited by other issuers are voted in accordance with
international guidelines or the recommendation of ISS and in accordance with
applicable law and regulation.







--------------------------------------------------------------------------------
IMPORTANT: The information contained herein is the property of Deutsche Bank
Group and may not be copied, used or disclosed in whole or in part, stored in a
retrieval system or transmitted in any form or by any means (electronic,
mechanical, reprographic, recording or otherwise) without the prior written
permission of Deutsche Bank Group.
--------------------------------------------------------------------------------



                      APPENDIX B -- RATINGS OF INVESTMENTS

Description of Moody's Corporate Bond Ratings:

Aaa - Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt edge."
Interest payments are protected by a large or by an exceptionally stable margin
and principal is secure. While the various protective elements are likely to
change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.

Aa - Bonds rated Aa are judged to be of high quality by all standards. Together
with the Aaa group they comprise what are generally known as high-grade bonds.
They are rated lower than the best bonds because margins of protection may not
be as large as in Aaa securities or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than in Aaa securities.

A - Bonds rated A possess many favorable investment attributes and are to be
considered as upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.

Baa - Bonds rated Baa are considered as medium-grade obligations, i.e., they are
neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.

Ba - Bonds rated Ba are judged to have speculative elements. Their future cannot
be considered as well assured. Often the protection of interest and principal
payments may be very moderate and thereby not well safeguarded during both good
and bad times over the future. Uncertainty of position characterizes bonds in
this class.

B - Bonds rated B generally lack characteristics of a desirable investment.
Assurance of interest and principal payments or of maintenance of other terms of
the contract over any long period of time may be small.

Caa - Bonds rated Caa are of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or interest.

Ca - Bonds rated Ca represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked shortcomings.

C - Bonds rated C are the lowest-rated class of bonds and can be regarded as
having extremely poor prospects of ever attaining any real investment standing.

Moody's applies numerical modifiers, 1, 2, and 3, in each generic rating
classification from Aa through B in its corporate bond system. The modifier 1
indicates that the security ranks in the higher end of its generic rating
category; the modifier 2 indicates a mid-range ranking; and the modifier 3
indicates that the issue ranks in the lower end of its generic rating category.

Description of S&P Corporate Bond Ratings:

AAA - Debt rated AAA has the highest rating assigned by Standard & Poor's to a
debt obligation. Capacity to pay interest and repay principal is extremely
strong.

AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher-rated issues only in small degree.

A - Debt rated A has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.

BBB - Debt rated BBB is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to weakened capacity to pay interest and repay principal for debt
in this category than in higher-rated categories.

BB - Debt rated BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to
inadequate capacity to timely meet interest and principal payments.

B - Debt rated B has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The B rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied BB- rating.

CCC - Debt rated CCC has a currently identifiable vulnerability to default, and
is dependent upon favorable business, financial and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, it is not likely to have the
capacity to pay interest and repay principal.

CC - Debt rated CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC debt rating.

C - The rating C is typically applied to debt subordinated to senior debt which
is assigned an actual or implied CCC- debt rating. The C rating may be used to
cover a situation where a bankruptcy petition has been filed but debt service
payments are continued.

CI - The rating CI is reserved for income bonds on which no interest is being
paid.

D - Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The D rating will also be used upon the
filing of a bankruptcy petition if debt service payments are jeopardized.

Description of S&P Commercial Paper Ratings:


Commercial paper rated A-1 by S&P indicates that the degree of safety regarding
timely payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted A-1+.

Description of Moody's Commercial Paper Ratings:

The rating Prime-1 is the highest commercial paper rating assigned by Moody's.
Issuers rated Prime-1 (or related supporting institutions) are considered to
have a superior capacity for repayment of short-term promissory obligations.

S&P's Commercial Paper Ratings:

A is the highest commercial paper rating category utilized by S&P, which uses
the numbers 1, 1, 2 and 3 to denote relative strength within its A
classification. Commercial paper issues rated A by S&P have the following
characteristics: Liquidity ratios are better than industry average. Long-term
debt ratings are A or better. The issuer has access to at least two additional
channels of borrowing. Basic earnings and cash flow are in an upward tread.
Typically, the issuer is a strong company in a well-established industry and has
superior management.

Moody's Commercial Paper Ratings:

Issuers rated Prime-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1 repayment
capacity will normally be evidenced by the following characteristics: leading
market positions in well-established industries; high rates of return on funds
employed; conservative capitalization structures with moderate reliance on debt
and ample asset protection; broad margins in earnings coverage of fixed
financial charges and high internal cash generation; well-established access to
a range of financial markets and assured sources of alternate liquidity.

Issuers rated Prime-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will normally
be evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.

Issuers rated Prime-3 (or related supporting institutions) have an acceptable
capacity for repayment of short-term promissory obligations. The effect of
industry characteristics and market composition may be more pronounced.
Variability in earnings and profitability may result in changes in the level of
debt protection measurements and the requirement for relatively high financial
leverage. Adequate alternate liquidity is maintained.



                                             STATEMENT OF ADDITIONAL INFORMATION


INVESTMENT ADVISOR AND ADMINISTRATOR
Deutsche Investment Management Americas Inc.
345 Park Avenue
New York, NY 10154

CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110

DISTRIBUTOR
DWS Investments Distributors, Inc.
222 South Riverside Plaza
Chicago, IL 60606

TRANSFER AGENT
DWS Investments Service Company
222 South Riverside Plaza
Chicago, IL 60606

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Pricewaterhousecoopers LLP
125 High Street
Boston, MA 02110

LEGAL COUNSEL
Vedder Price P.C.
222 North LaSalle Street
Chicago, IL 60601

TRUSTEE COUNSEL
Ropes & Gray LLP
One International Place
Boston, Massachusetts 02110-2624

No person has been authorized to give any information or to make any
representations other than those contained in the Trust's Prospectuses, its SAI
or its official sales literature in connection with the offering of the Trust's
shares and, if given or made, such other information or representations must not
be relied on as having been authorized by the Trust. Neither the Prospectuses
nor this SAI constitutes an offer in any state in which, or to any person to
whom, such offer may not lawfully be made.

<PAGE>



                                DWS ADVISOR FUNDS


                             DWS Mid Cap Growth Fund
                            DWS Small Cap Growth Fund
                               DWS Micro Cap Fund

                                 Class S shares

                                February 1, 2009

                       STATEMENT OF ADDITIONAL INFORMATION


This combined Statement of Additional Information ("SAI") is not a prospectus
and should be read in conjunction with the prospectus, dated February 1, 2009,
for DWS Micro Cap Fund, DWS Mid Cap Growth Fund, and DWS Small Cap Growth Fund
(each a "Fund" and collectively the "Funds"), each a series of DWS Advisor
Funds, (the "Trust"), as amended from time to time, copies of which may be
obtained without charge by contacting DWS Investments Distributors, Inc., 222
South Riverside Plaza, Chicago, Illinois 60606, (800) 621-1148 or from the firm
from which this SAI was obtained and is available along with other materials on
the Securities and Exchange Commission's Internet Web site (http://www.sec.gov).

Portions of the Annual Reports to Shareholders of each Fund, dated September 30,
2008, are incorporated herein by reference, as specified herein, and are deemed
to be part of this SAI. A copy of each Fund's Annual Report may be obtained
without charge by calling the Fund at the toll-free number (800) 728-3337.

This SAI is incorporated by reference into the corresponding prospectus for
Class S shares of the Funds.


                                TABLE OF CONTENTS
                                                                          Page
                                                                          ----

INVESTMENT RESTRICTIONS......................................................1


INVESTMENT POLICIES AND TECHNIQUES...........................................4

   Portfolio Holdings.......................................................32

MANAGEMENT OF THE FUNDS.....................................................33

   Investment Advisor.......................................................33

FUND SERVICE PROVIDERS......................................................42

   Administrator............................................................42
   Distributor..............................................................44
   Custodian................................................................45
   Transfer Agent and Shareholder Service Agent.............................45
   Legal Counsel............................................................46
   Independent Registered Public Accounting Firm............................46

PORTFOLIO TRANSACTIONS......................................................46


PURCHASE AND REDEMPTION OF SHARES...........................................50


DIVIDENDS...................................................................60


TAXES.......................................................................61


NET ASSET VALUE.............................................................67


BOARD MEMBERS AND OFFICERS..................................................68


TRUST ORGANIZATION..........................................................79


PROXY VOTING GUIDELINES.....................................................80


FINANCIAL STATEMENTS........................................................80


ADDITIONAL INFORMATION......................................................80


APPENDIX A -- PROXY VOTING GUIDELINES.......................................82


APPENDIX B -- RATINGS OF INVESTMENTS.......................................109




                             INVESTMENT RESTRICTIONS

Investment Restrictions

Except as otherwise indicated, each Fund's investment objective and policies are
not fundamental and may be changed without a vote of shareholders. There can be
no assurance that a Fund's objective will be met. Shareholders of a Fund will
receive 60 days' prior written notice with respect to any change in the
investment objective of a Fund.

Any investment restrictions herein which involve a maximum percentage of
securities or assets shall not be considered to be violated unless an excess
over the percentage occurs immediately after and is caused by an acquisition or
encumbrance of securities or assets of, or borrowings by, a Fund.

Each Fund has elected to be classified as a diversified series of DWS Advisor
Funds, an open-end investment management company. A diversified Fund may not,
with respect to 75% of total assets, invest more than 5% of total assets in the
securities of a single issuer (other than US government securities or securities
of investment companies) or invest in more than 10% of the outstanding voting
securities of such issuer (with certain exceptions).

As a matter of fundamental policy, each Fund may not (except that no investment
restriction of each Fund shall prevent the Fund from investing all of its assets
in an open-end investment company with substantially the same investment
objectives):

(1)      issue senior securities, except as permitted under the Investment
         Company Act of 1940, as amended (the "1940 Act"), and as interpreted or
         modified by regulatory authority having jurisdiction, from time to
         time.

(2)      borrow money, except as permitted under the 1940 Act, and as
         interpreted or modified by regulatory authority having jurisdiction,
         from time to time.

(3)      engage in the business of underwriting securities issued by others,
         except to the extent that a Fund may be deemed to be an underwriter in
         connection with the disposition of portfolio securities.

(4)      purchase or sell real estate, which term does not include securities of
         companies which deal in real estate or mortgages or investments secured
         by real estate or interests therein, except that the Fund reserves
         freedom of action to hold and to sell real estate acquired as a result
         of the Fund's ownership of securities.

(5)      make loans except as permitted under the 1940 Act, and as interpreted
         or modified by regulatory authority having jurisdiction, from time to
         time.

(6)      purchase or sell commodities, except as permitted by the 1940 Act, and
         as interpreted or modified by the regulatory authority having
         jurisdiction, from time to time.

(7)      concentrate its investments in a particular industry, as that term is
         used in the 1940 Act, and as interpreted or modified by regulatory
         authority having jurisdiction, from time to time.

A fundamental policy may not be changed without the approval of a majority of
the outstanding voting securities of a Fund which, under the 1940 Act and the
rules thereunder and as used in this SAI, means the lesser of (1) 67% or more of
the voting securities present at a meeting, if the holders of more than 50% of
the outstanding voting securities of a Fund are present or represented by proxy,
or (2) more than 50% of the outstanding voting securities of a Fund.

Non-fundamental Investment Restrictions for DWS Mid Cap Growth Fund and DWS
Small Cap Growth Fund. In order to comply with certain statutes and policies,
DWS Small Cap Growth Fund and DWS Mid Cap Growth Fund will not, as a matter of
nonfundamental operating policy:


(i)      borrow money (including through reverse repurchase or forward roll
         transactions), except that the Fund may borrow for temporary or
         emergency purposes up to 1/3 of its net assets;

(ii)     purchase any security or evidence of interest therein on margin, except
         that such short-term credit as may be necessary for the clearance of
         purchases and sales of securities may be obtained and except that
         deposits of initial deposit and variation margin may be made in
         connection with the purchase, ownership, holding or sale of futures;

(iii)    sell securities it does not own (short sales) such that the dollar
         amount of such short sales at any one time exceeds 25% of the net
         equity of the Fund, and the value of securities of any one issuer in
         which the Fund is short exceeds the lesser of 2.0% of the value of the
         Fund's net assets or 2.0% of the securities of any class of any US
         issuer, and provided that short sales may be made only in those
         securities which are fully listed on a national securities exchange or
         a foreign exchange (This provision does not include the sale of
         securities that the Fund contemporaneously owns or where the Fund has
         the right to obtain securities equivalent in kind and amount to those
         sold, i.e., short sales against the box.) (The Fund currently does not
         engage in short selling.);

(iv)     invest for the purpose of exercising control or management of another
         company;

(v)      purchase securities issued by any investment company except by purchase
         in the open market where no commission or profit to a sponsor or dealer
         results from such purchase other than the customary broker's
         commission, or except when such purchase, though not made in the open
         market, is part of a plan of merger or consolidation; provided,
         however, that securities of any investment company will not be
         purchased for the Fund if such purchase at the time thereof would
         cause: (a) more than 10% of the Fund's total assets (taken at the
         greater of cost or market value) to be invested in the securities of
         such issuers; (b) more than 5% of the Fund's total assets (taken at the
         greater of cost or market value) to be invested in any one investment
         company; or (c) more than 3% of the outstanding voting securities of
         any such issuer to be held for the Fund, unless permitted to exceed
         these limitations by an exemptive order of the Securities and Exchange
         Commission ("SEC"); provided further, that except in the case of a
         merger or consolidation, the Fund shall not purchase securities of any
         open-end investment company unless (1) the Advisor waives the
         investment advisory fee with respect to assets invested in other
         open-end investment companies and (2) the Fund incurs no sales charge
         in connection with the investment;

(vi)     invest more than 15% of the Fund's net assets (taken at the greater of
         cost or market value) in securities that are illiquid or not readily
         marketable (excluding Rule 144A securities deemed by the Board to be
         liquid);

(vii)    write puts and calls on securities unless each of the following
         conditions are met: (a) the security underlying the put or call is
         within the investment policies of the Fund and the option is issued by
         the Options Clearing Corporation ("OCC"), except for put and call
         options issued by non-US entities or listed on non-US securities or
         commodities exchanges; (b) the aggregate value of the obligations
         underlying the puts determined as of the date the options are sold
         shall not exceed 5% of the Fund's net assets; (c) the securities
         subject to the exercise of the call written by the Fund must be owned
         by the Fund at the time the call is sold and must continue to be owned
         by the Fund until the call has been exercised, has lapsed, or the Fund
         has purchased a closing call, and such purchase has been confirmed,
         thereby extinguishing the Fund's obligation to deliver securities
         pursuant to the call it has sold; and (d) at the time a put is written,
         the Fund establishes a segregated account with its custodian consisting
         of cash or liquid securities equal in value to the amount the Fund will
         be obligated to pay upon exercise of the put (this account must be
         maintained until the put is exercised, has expired, or the Fund has
         purchased a closing put, which is a put of the same series as the one
         previously written);
(viii)   buy and sell puts and calls on securities, stock index futures or
         options on stock index futures, or financial futures or options on
         financial futures, unless such options are written by other persons
         and: (a) the options or futures are offered through the facilities of a
         national securities association or are listed on a national securities
         or commodities exchange, except for put and call options issued by
         non-US entities or listed on non-US securities or commodities
         exchanges; (b) the aggregate premiums paid on all such options which
         are held at any time do not exceed 20% of the Fund's total net assets;
         and (c) the aggregate margin deposits required on all such futures or
         options thereon held at any time do not exceed 5% of the Fund's total
         assets;


(ix)     lend portfolio securities in an amount greater than 33 1/3% of its
         total assets; and

(x)      for DWS Small Cap Growth Fund only, acquire securities of registered
         open-end investment companies or registered unit investment trusts in
         reliance on Sections 12(d)(1)(F) or 12(d)(1)(G) of the 1940 Act.


Non-fundamental Investment Restrictions for DWS Micro Cap Fund. The
nonfundamental investment restrictions set forth below may be changed or amended
by the Trust's Board of Trustees without shareholder approval.

As a matter of nonfundamental policy, DWS Micro Cap Fund may not:

(i)      Participate on a joint-and-several basis in any securities trading
         account. The "bunching" of orders for the sale or purchase of
         marketable portfolio securities with other accounts under the
         management of the Advisor to save commissions or to average prices
         among them is not deemed to result in a securities trading account.

(ii)     Purchase securities of other investment companies, except as permitted
         by the 1940 Act and the rules, regulations and any applicable exemptive
         order issued thereunder.

(iii)    Invest for the purpose of exercising control over or management of any
         company.

(iv)     Purchase any security, including any repurchase agreement maturing in
         more than seven days, which is illiquid, if more than 15% of the net
         assets of the Fund, taken at market value, would be invested in such
         securities.

(v)      Acquire securities of registered open-end investment companies or
         registered unit investment trusts in reliance on Sections 12(d)(1)(F)
         or 12(d)(1)(G) of the 1940 Act.

The staff of the SEC has taken the position that fixed time deposits maturing in
more than seven days that cannot be traded on a secondary market and
participation interests in loans are illiquid. Until such time (if any) as this
position changes, the Trust, on behalf of the Fund, will include such
investments in determining compliance with the 15% limitation on investments in
illiquid securities. Restricted securities (including commercial paper issued
pursuant to the Securities Act of 1933, as amended ("1933 Act"), which the Board
of Trustees has determined are readily marketable will not be deemed to be
illiquid for purposes of the 15% limitation.

"Value" for the purposes of the foregoing investment restrictions shall mean the
market value used in determining the Fund's net asset value.

There will be no violation of any investment restriction (except with respect to
fundamental investment restriction (1) above) if that restriction is complied
with at the time the relevant action is taken, notwithstanding a later change in
the market value of an investment, in net or total assets or in the change of
securities rating of the investment, or any other later change.

To meet federal income tax requirements for qualification as a regulated
investment company, each Fund must, among other things, limit its investments so
that at the close of each quarter of its taxable year (1) no more than 25% of
the value of its total assets is invested in the securities (other than
securities of the US Government or a regulated investment company) of a single
issuer or two or more issuers which the Fund controls and which are engaged in
the same, similar or related trades or businesses or in the securities of one or
more qualified publicly traded partnerships, and (2) at least 50% of the value
of its total assets is represented by cash, cash items (including receivables),
US Government securities, securities of other regulated investment companies and
other securities of any issuer that does not represent more than 5% of the value
of the Fund's total assets and not more than 10% of the issuer's outstanding
voting securities.

                       INVESTMENT POLICIES AND TECHNIQUES

Investment Techniques

Descriptions in this SAI of a particular investment practice or technique in
which a Fund may engage are meant to describe the spectrum of investments that
Deutsche Investment Management Americas Inc. (the "Advisor" or "DIMA") in its
discretion might, but is not required to, use in managing a Fund's portfolio
assets. The Advisor may in its discretion at any time employ such practice,
technique or instrument for one or more Funds but not for all funds advised by
it. Furthermore, it is possible that certain types of financial instruments or
investment techniques described herein may not be available, permissible,
economically feasible or effective for their intended purposes in all markets.
Certain practices, techniques or instruments may not be principal activities of
a Fund, but, to the extent employed, could from time to time have a material
impact on a Fund's performance.

Equity Securities

General. Each Fund may invest in equity securities listed on any domestic or
non-US securities exchange or traded in the over-the-counter (or "OTC") market
as well as certain restricted or unlisted securities. As used herein, "equity
securities" includes common stock, preferred stock, trust or limited partnership
interests, rights and warrants (to subscribe to or purchase such securities) and
convertible securities (consisting of debt securities or preferred stock that
may be converted into common stock or that carry the right to purchase common
stock).

Asset-Backed Securities. Asset-backed securities may include pools of mortgages
("mortgage-backed securities"), loans, receivables or other assets. Payment of
principal and interest may be largely dependent upon the cash flows generated by
the assets backing the securities. For purposes of determining the percentage of
a Fund's total assets invested in securities of issuers having their principal
business activities in a particular industry, asset-backed securities will be
classified separately, based on the nature of the underlying assets, according
to the following categories: captive auto, diversified, retail and consumer
loans, captive equipment and business, business trade receivables, nuclear fuel
and capital and mortgage lending. Primarily, these securities may not have the
benefit of any security interest in the related assets. Credit card receivables
are generally unsecured and the debtors are entitled to the protection of a
number of state and federal consumer credit laws, many of which give such
debtors the right to set off certain amounts owed on the credit cards, thereby
reducing the balance due. There is the possibility that recoveries on
repossessed collateral may not, in some cases, be available to support payments
on these securities. Asset-backed securities are often backed by a pool of
assets representing the obligations of a number of different parties. To lessen
the effect of failures by obligors on underlying assets to make payments, the
securities may contain elements of credit support which fall into two
categories: (i) liquidity protection, and (ii) protection against losses
resulting from ultimate default by an obligor on the underlying assets.
Liquidity protection refers to the provision of advances, generally by the
entity administering the pool of assets, to ensure that the receipt of payments
on the underlying pool occurs in a timely fashion. Protection against losses
results from payment of the insurance obligations on at least a portion of the
assets in the pool. This protection may be provided through guarantees, policies
or letters of credit obtained by the issuer or sponsor from third parties,
through various means of structuring the transaction or through a combination of
such approaches. The funds will not pay any additional or separate fees for
credit support. The degree of credit support provided for each issue is
generally based on historical information respecting the level of credit risk
associated with the underlying assets. Delinquency or loss in excess of that
anticipated or failure of the credit support could adversely affect the return
on an investment in such a security. The availability of asset-backed securities
may be affected by legislative or regulatory developments. It is possible that
such developments may require the funds to dispose of any then existing holdings
of such securities.

Asset Segregation

Certain investment transactions expose the Funds to an obligation to make future
payments to third parties. Examples of these types of transactions, include, but
are not limited to, reverse repurchase agreements, short sales, dollar rolls,
when-issued, delayed-delivery or forward commitment transactions and certain
derivatives such as swaps, futures, forwards, and options. To the extent that a
Fund engages in such transactions, a Fund will (to the extent required by
applicable law) either (1) segregate cash or liquid assets in the prescribed
amount or (2) otherwise "cover" its future obligations under the transaction,
such as by holding an offsetting investment. If a Fund segregates sufficient
cash or other liquid assets or otherwise "covers" its obligations under such
transactions, a Fund will not consider the transactions to be borrowings for
purposes of its investment restrictions or "senior securities" under the 1940
Act, and therefore, such transactions will not be subject to the 300% asset
coverage requirement under the 1940 Act otherwise applicable to borrowings by a
Fund.

In some cases (e.g., with respect to futures and forwards that are contractually
required to "cash-settle"), a Fund will segregate cash or other liquid assets
with respect to the amount of the daily net (marked-to-market) obligation
arising from the transaction, rather than the notional amount of the underlying
contract. By segregating assets in an amount equal to the net obligation rather
than the notional amount, a Fund will have the ability to employ leverage to a
greater extent than if it set aside cash or other liquid assets equal to the
notional amount of the contract, which may increase the risk associated with
such transactions.

A Fund may utilize methods of segregating assets or otherwise "covering"
transactions that are currently or in the future permitted under the 1940 Act,
the rules and regulation thereunder, or orders issued by the SEC thereunder. For
these purposes, interpretations and guidance provided by the SEC staff may be
taken into account when deemed appropriate by a Fund.

Assets used as segregation or cover cannot be sold while the position in the
corresponding transaction is open, unless they are replaced with other
appropriate assets. As a result, the commitment of a large portion of a Fund's
assets for segregation and cover purposes could impede portfolio management or a
Fund's ability to meet redemption requests or other current obligations.

Segregating assets or otherwise "covering" for these purposes does not
necessarily limit the percentage of the assets of a Fund that may be at risk
with respect to certain derivative transactions.

Common Stocks. Common stocks, the most familiar type of equity securities,
represent an equity (i.e., ownership) interest in a corporation. They may or may
not pay dividends or carry voting rights. Common stock occupies the most junior
position in a company's capital structure. Although equity securities have a
history of long-term growth in value, their prices fluctuate based on changes in
a company's financial condition, as well as changes in overall market and
economic conditions. This affects the value of the shares of a Fund, and thus
the value of your investment. Smaller companies are especially sensitive to
these factors.

Warrants. Each Fund may invest in warrants. Warrants are securities that give
the holder the right but not the obligation to buy a specified number of shares
of common stock at a specified price, which is often higher than the market
price at the time of issuance, for a specified period (or in perpetuity).
Warrants may be issued in units with other securities or separately, and may be
freely transferable and traded on exchanges. Investing in warrants can provide a
greater potential for profit or loss than an equivalent investment in the
underlying security and, thus, is a speculative investment. At the time of
issue, the cost of a warrant is substantially less than the cost of the
underlying security itself, and price movements in the underlying security are
generally magnified in the price movements of the warrant. This leveraging
effect enables the investor to gain exposure to the underlying security with a
relatively low capital investment. Such leveraging increases an investor's risk,
however, in the event of a decline in the value of the underlying security and
can result in a complete loss of the amount invested in the warrant.

While the market value of a warrant tends to be more volatile than that of the
securities underlying the warrant, changes in the market value of a warrant may
not necessarily correlate with that of the underlying security. A warrant ceases
to have value if it is not exercised prior to the expiration date, if any, to
which the warrant is subject. The purchase of warrants involves a risk that a
Fund could lose the purchase value of a warrant if the right to subscribe to
additional shares is not exercised prior to the warrant's expiration. Also, the
purchase of warrants involves the risk that the effective price paid for the
warrant added to the subscription price of the related security may exceed the
value of the subscribed security's market price, such as when there is no
movement in the level of the underlying security. The value of a warrant may
decline because of a decline in the value of the underlying security, the
passage of time, changes in interest rates or in the dividend or other policies
of the company whose equity underlies the warrant or a change in the perception
as to the future price of the underlying security, or any combination thereof.
Also, warrants do not entitle the holder to dividends or voting rights with
respect to the underlying securities and do not represent any rights in the
assets of the issuing company.

Preferred Stock. Each Fund may invest in preferred stock. Preferred stock has a
preference (i.e., ranks higher) in liquidation (and generally dividends) over
common stock but is subordinated (i.e., ranks lower) in liquidation to fixed
income securities. Dividends on preferred stock may be cumulative, and in such
cases, all cumulative dividends usually must be paid prior to dividend payments
to common stockholders. Because of this preference, preferred stocks generally
entail less risk than common stocks. As a general rule the market value of
preferred stocks with fixed dividend rates and no conversion rights moves
inversely with interest rates and perceived credit risk, with the price
determined by the dividend rate. Some preferred stocks are convertible into
other securities (e.g., common stock) at a fixed price and ratio or upon the
occurrence of certain events. The market price of convertible preferred stocks
generally reflects an element of conversion value. Because many preferred stocks
lack a fixed maturity date, these securities generally fluctuate substantially
in value when interest rates change; such fluctuations often exceed those of
long-term bonds of the same issuer. Some preferred stocks pay an adjustable
dividend that may be based on an index, formula, auction procedure or other
dividend rate reset mechanism. In the absence of credit deterioration,
adjustable rate preferred stocks tend to have more stable market values than
fixed rate preferred stocks.

All preferred stocks are also subject to the same types of credit risks as
corporate bonds. In addition, because preferred stock is subordinate to debt
securities and other obligations of an issuer, deterioration in the credit
rating of the issuer will cause greater changes in the value of a preferred
stock than in a more senior debt security with similar yield characteristics.
Preferred stocks may be rated by the Standard & Poor's Division of The
McGraw-Hill Companies, Inc. ("S&P") and Moody's Investors Service, Inc.
("Moody's"), although there is no minimum rating which a preferred stock must
have to be an eligible investment for a Fund. Generally, however, the preferred
stocks in which a Fund invests will be rated at least CCC by S&P or Caa by
Moody's or, if unrated, of comparable quality in the opinion of the Advisor.
Preferred stocks rated CCC by S&P are regarded as predominantly speculative with
respect to the issuer's capacity to pay preferred stock obligations and
represent the highest degree of speculation among securities rated between BB
and CCC; preferred stocks rated Caa by Moody's are likely to be in arrears on
dividend payments. Moody's ratings with respect to preferred stocks do not
purport to indicate the future status of payments of dividends.

Convertible Securities. A convertible security is a bond or preferred stock
which may be converted at a stated price within a specific period of time into a
specified number of shares of common stock of the same or a different issuer.
Convertible securities are senior to common stock in a corporation's capital
structure, but are generally subordinate to non-convertible debt securities.
While providing a fixed income stream that is generally higher in yield than the
income derived from a common stock but lower than that afforded by a
non-convertible debt security, a convertible security also affords an investor
the opportunity, through its conversion feature, to participate in the capital
appreciation of common stock into which it is convertible.

The terms of any convertible security determine its ranking in a company's
capital structure. In the case of subordinated convertible debentures, the
holders' claims on assets and earnings are subordinated to the claims of other
creditors and are senior to the claims of preferred and common shareholders. In
the case of convertible preferred stock, the holders' claims on assets and
earnings are subordinated to the claims of all creditors and are senior to the
claims of common shareholders. In general, the market value of a convertible
security is the greater of its investment value (its value as a fixed income
security) or its conversion value (the value of the underlying shares of common
stock if the security is converted). As a fixed income security, the market
value of a convertible security generally increases when interest rates decline
and generally decreases when interest rates rise; however, the price of a
convertible security generally increases as the market value of the underlying
stock increases and generally decreases as the market value of the underlying
stock declines. Investments in convertible securities generally entail less risk
than investments in the common stock of the same issuer.

Medium-Capitalization and Small-Capitalization Stocks. Lesser-known companies
with medium- and small-market capitalizations frequently offer greater growth
potential than larger, better-known and more mature companies. Investments in
medium- and small-capitalization companies involve considerations that are not
applicable to investing in securities of established, larger capitalization
issuers, including reduced and less reliable information about the issuer, less
stringent financial disclosure requirements, higher brokerage commissions and
fees, and greater market risk in general.

In addition, investing in the securities of these companies also involves the
possibility of greater portfolio price volatility. Among the reasons for the
greater price volatility of such companies are the less certain growth prospects
of medium and smaller firms, the greater illiquidity in the markets for the
stocks of such companies and the greater sensitivity of such companies to
changing economic conditions in their respective geographic regions.

For example, securities of these companies involve higher investment risk than
that normally associated with larger firms due to the greater business risks of
smaller size and limited product lines, markets, distribution channels and
financial and managerial resources.

In addition, many medium- and small-market capitalization companies are not well
known to the investing public, do not have significant institutional ownership
and are followed by relatively few securities analysts. Also, the securities of
smaller capitalization companies traded on the over-the-counter ("OTC") market
may have fewer market makers, wider spreads between their quoted bid and ask
prices and lower trading volumes, resulting in comparatively greater price
volatility and less liquidity than exists for securities of larger
capitalization companies.

Small and Micro Capitalization Companies. Each Fund invests a portion of its
assets in smaller, lesser-known companies which the Advisor believes offer
greater growth potential than larger, more mature, better-known companies.
Investing in the securities of these companies, however, also involves
significantly greater risk and the possibility of greater portfolio price
volatility. Among the reasons for the greater price volatility of these small
companies and unseasoned stocks are the less certain growth prospects of smaller
firms, the lower degree of liquidity in the markets for such stocks and the
greater sensitivity of small companies to changing economic conditions in their
geographic region. For example, securities of these companies involve higher
investment risk than that normally associated with larger firms due to the
greater business risks of small size and limited product lines, markets,
distribution channels and financial and managerial resources and, therefore,
such securities may be subject to more abrupt or erratic market movements than
securities of larger, more established companies or the market averages in
general. Many smaller capitalization companies in which a Fund may invest are
not well known to the investing public, do not have significant institutional
ownership and are followed by relatively few securities analysts. As a result,
it may be difficult to obtain reliable information and financial data on such
companies and the securities of these small companies may not be readily
marketable, making it difficult to dispose of shares when desirable. As
mentioned above, the securities of smaller capitalization companies traded on
the OTC market may have fewer market makers, wider spreads between their quoted
bid and asked prices and lower trading volumes, resulting in comparatively
greater price volatility and less liquidity than exists for securities of larger
capitalization companies. An additional risk of investing in smaller emerging
companies is that smaller issuers may face increased difficulty in obtaining the
capital necessary to continue operations and thus may go into bankruptcy, which
could result in a complete loss of an investment. Furthermore, when the economy
enters into recession there tends to be a "flight to quality," which exacerbates
the increased risk and greater price volatility normally associated with smaller
companies.

Impact of Sub-Prime Mortgage Market. A Fund may invest in mortgage-backed,
asset-backed and other fixed-income securities whose value and liquidity may be
adversely affected by the critical downturn in the sub-prime mortgage lending
market in the US. Sub-prime loans, which, have higher interest rates, are made
to borrowers with low credit ratings or other factors that increase the risk of
default. Concerns about widespread defaults on sub-prime loans have also created
heightened volatility and turmoil in the general credit markets. As a result, a
Fund's investments in certain fixed-income securities may decline in value,
their market value may be more difficult to determine, and a Fund may have more
difficulty disposing of them.

Investing in Foreign Securities. Each Fund may invest up to 20% of its total
assets in foreign securities. Investors should realize that investing in
securities of foreign issuers involves considerations not typically associated
with investing in securities of companies organized and operated in the United
States. Investors should realize that the value of the Fund's foreign
investments may be adversely affected by changes in political or social
conditions, diplomatic relations, confiscatory taxation, expropriation,
nationalization, limitation on the removal of funds or assets, or imposition of
(or change in) exchange control or tax regulations in foreign countries. In
addition, changes in government administrations or economic or monetary policies
in the United States or abroad could result in appreciation or depreciation of
portfolio securities and could favorably or unfavorably affect a Fund's
operations. Furthermore, the economies of individual foreign nations may differ
from the US economy, whether favorably or unfavorably, in areas such as growth
of gross national product, rate of inflation, capital reinvestment, resource
self-sufficiency or balance of payments position. In addition, it may be more
difficult to obtain and enforce a judgment against a foreign issuer. In general,
less information is publicly available with respect to foreign issuers than is
available with respect to US companies. Most foreign companies are not subject
to the uniform accounting and financial reporting requirements applicable to
issuers in the United States. Any foreign investments made by a Fund must be
made in compliance with US and foreign currency restrictions and tax laws
restricting the amounts and types of foreign investments.

A Fund's foreign investments may be less liquid and their prices may be more
volatile than comparable investments in securities of US companies. The
settlement periods for foreign securities, which are often longer than those for
securities of US issuers, may affect portfolio liquidity. Furthermore, there may
be less government supervision and regulation of securities exchanges, brokers
and issuers in foreign countries than in the United States.

Trading in Foreign Securities. Trading in foreign securities may be completed at
times which vary from the closing of the New York Stock Exchange ("NYSE"). In
computing their net asset values, the Fund values foreign securities at the
latest closing price on the exchange on which they are traded immediately prior
to the closing of the NYSE. Foreign securities quoted in foreign currencies are
translated into US dollars at the foreign exchange rates.

Occasionally, events that affect values and exchange rates may occur between the
times at which such values and exchange rates are determined and the closing of
the NYSE. If such events materially affect the value of portfolio securities,
these securities may be valued at their fair value as determined in good faith
using methods approved by the Trustees.

US Dollar-Denominated Foreign Debt Securities. Each Fund may invest in the US
dollar-denominated debt securities of foreign companies. Investing in the
securities of foreign companies involves more risks than investing in securities
of US companies. Their value is subject to economic and political developments
in the countries where the companies operate and to changes in foreign currency
values. Values may also be affected by foreign tax laws, changes in foreign
economic or monetary policies, exchange control regulations and regulations
involving prohibitions on the repatriation of foreign currencies.

In addition, the relative performance of various countries' fixed income markets
historically has reflected wide variations relating to the unique
characteristics of each country's economy. Year-to-year fluctuations in certain
markets have been significant, and negative returns have been experienced in
various markets from time to time.

US Dollar-Denominated Foreign Government Debt Securities. Each Fund may invest
in US dollar-denominated foreign government debt securities which include debt
obligations issued or guaranteed by national, state or provincial governments or
similar political subdivisions and quasi-governmental and supranational entities
(collectively, "sovereign debt obligations"). Sovereign debt obligations,
especially those of developing countries, may involve a high degree of risk. The
issuer of such an obligation or the governmental authorities that control the
repayment of the obligation may be unable or unwilling to repay principal and
interest when due and may require renegotiation or rescheduling of debt
payments. In addition, prospects for repayment of principal and interest may
depend on political as well as economic factors.

Quasi-governmental and supranational entities include international
organizations designated or supported by governmental entities to promote
economic reconstruction or development and international banking institutions
and related government agencies. Examples include (but are not limited to) the
International Bank for Reconstruction and Development (the "World Bank"), the
Japanese Development Bank, the Asian Development Bank and the Inter-American
Development Bank. Currently, the Portfolio intends to invest only in obligations
issued or guaranteed by the Asian Development Bank, the Inter-American
Development Bank, the World Bank, the African Development Bank, the European
Coal and Steel Community, the European Economic Community, the European
Investment Bank and the Nordic Investment Bank. Foreign government securities
also include mortgage-related securities issued or guaranteed by national, state
or provincial governmental instrumentalities, including quasi-governmental
agencies.

Fixed Income Securities and Money Market Instruments

General. Each Fund may invest in a broad range of domestic and foreign fixed
income (debt) securities consistent with its investment objective and 80%
investment policy for each Fund. Fixed income securities, including (but not
limited to) bonds, are used by issuers to borrow money from investors. The
issuer pays the investor a fixed or variable rate of interest and must repay the
amount borrowed at maturity. Some debt securities, such as zero coupon bonds, do
not pay current interest, but are purchased at a discount from their face
values.

The value of fixed income securities in a Fund's securities portfolio generally
varies inversely with changes in interest rates. Prices of fixed income
securities with longer effective maturities are more sensitive to interest rate
changes than those with shorter effective maturities.

In periods of declining interest rates, the yield (the income generated over a
stated period of time) of a Fund that invests in fixed income securities may
tend to be higher than prevailing market rates and, in periods of rising
interest rates, the yield of such Fund may tend to be lower. Also, when interest
rates are falling, the inflow of net new money to such a Fund from the
continuous sale of its shares will likely be invested in portfolio instruments
producing lower yields than the balance of the Fund's investment portfolio,
thereby reducing the yield of the Fund. In periods of rising interest rates, the
opposite can be true. To the extent a Fund invests in fixed income securities,
the net asset value can generally be expected to change as general levels of
interest rates fluctuate.

Fixed Income Security Risk. Fixed income securities generally expose a Fund to
four types of risk: (1) interest rate risk (the potential for fluctuations in
bond prices due to changing interest rates); (2) income risk (the potential for
a decline in the Fund's income due to falling market interest rates); (3) credit
risk (the possibility that a bond issuer will fail to make timely payments of
either interest or principal to the Fund); and (4) prepayment risk or call risk
(the likelihood that, during a period of falling interest rates, securities with
high stated interest rates will be prepaid, or "called" prior to maturity,
requiring the Fund to invest the proceeds at generally lower interest rates).

Short-Term Instruments. When a Fund experiences large cash inflows -- for
example, through the sale of securities -- and attractive investments are
unavailable in sufficient quantities, the Fund may hold short-term investments
(or shares of money market mutual funds) for a limited time pending availability
of such investments. Each Fund may invest up to 20% of its total assets in high
quality short-term investments with remaining maturities of 397 days or less, or
in money market mutual funds, to meet anticipated redemptions and expenses for
day-to-day operating purposes. In addition, when in the Advisor's opinion it is
advisable to adopt a temporary defensive position because of unusual and adverse
market or other conditions, up to 100% of a Fund's assets may be invested in
such short-term instruments.

Short-term instruments consist of foreign and domestic: (1) short-term
obligations of sovereign governments, their agencies, instrumentalities,
authorities or political subdivisions; (2) other short-term debt securities
rated AA or higher by S&P or Aa or higher by Moody's or, if unrated, are deemed
to be of comparable quality in the opinion of the Advisor; (3) commercial paper;
(4) bank obligations, including negotiable certificates of deposit, time
deposits and bankers' acceptances; and (5) repurchase agreements. At the time a
Fund invests in commercial paper, bank obligations or repurchase agreements, the
issuer or the issuer's parent must have outstanding debt rated AA or higher by
S&P or Aa or higher by Moody's; outstanding commercial paper or bank obligations
rated A-1 by S&P or Prime-1 by Moody's; or, if no such ratings are available,
the instrument must be deemed to be of comparable quality in the opinion of the
Advisor. These instruments may be denominated in US dollars or in foreign
currencies.

Other US government securities that the Funds may invest in include (but are not
limited to) securities issued or guaranteed by the Federal Housing
Administration, Farmers Home Loan Administration, Export-Import Bank of the US,
Small Business Administration, General Services Administration, Central Bank for
Cooperatives, Federal Farm Credit Banks, Federal Intermediate Credit Banks,
Federal Land Banks, Maritime Administration, Tennessee Valley Authority,
District of Columbia Armory Board and Student Loan Marketing Association.
Because the US government is not obligated by law to provide support to an
instrumentality it sponsors, a Fund will invest in obligations issued by such an
instrumentality only if the Advisor determines that the credit risk with respect
to the instrumentality does not make its securities unsuitable for investment by
a Fund.

Each Fund may also invest in separately traded principal and interest components
of securities guaranteed or issued by the US Government or its agencies,
instrumentalities or sponsored enterprises if such components trade
independently under the Separate Trading of Registered Interest and Principal of
Securities program ("STRIPS") or any similar program sponsored by the US
Government. STRIPS are sold as zero coupon securities. See "Zero Coupon
Securities and Deferred Interest Bonds."

Certificates of Deposit and Bankers' Acceptances. Certificates of deposit are
receipts issued by a depository institution in exchange for the deposit of
funds. The issuer agrees to pay the amount deposited plus interest to the bearer
of the receipt on the date specified on the certificate. The certificate usually
can be traded in the secondary market prior to maturity.

Bankers' acceptances typically arise from short-term credit arrangements
designed to enable businesses to obtain funds to finance commercial
transactions. Generally, an acceptance is a time draft drawn on a bank by an
exporter or an importer to obtain a stated amount of funds to pay for specific
merchandise. The draft is then "accepted" by a bank that, in effect,
unconditionally guarantees to pay the face value of the instrument on its
maturity date. The acceptance may then be held by the accepting bank as an
earning asset or it may be sold in the secondary market at the going rate of
discount for a specific maturity. Although maturities for acceptances can be as
long as 270 days, most acceptances have maturities of six months or less.

Commercial Paper. Each Fund may invest in fixed rate or variable rate commercial
paper, issued by US or foreign entities. Commercial paper consists of short-term
(usually from 1 to 270 days) unsecured promissory notes issued by US or foreign
corporations in order to finance their current operations. Any commercial paper
issued by a foreign entity corporation and purchased by a Fund must be US
dollar-denominated and must not be subject to foreign withholding tax at the
time of purchase.

Commercial paper when purchased by a Fund must be rated in the highest
short-term rating category by any two nationally recognized statistical ratings
organizations ("NRSROs") (or one NRSRO if that NRSRO is the only such NRSRO
which rates such security) or, if not so rated, must be believed by the Advisor,
acting under the supervision of the Board of Trustees of the Fund, to be of
comparable quality. Investing in foreign commercial paper generally involves
risks similar to those described above relating to obligations of foreign banks
or foreign branches and subsidiaries of US and foreign banks.

Each Fund may also invest in variable rate master demand notes. A variable rate
master demand note (which is a type of commercial paper) represents a direct
borrowing arrangement involving periodically fluctuating rates of interest under
a letter agreement between a commercial paper issuer and an institutional lender
pursuant to which the lender may determine to invest varying amounts.

For a description of commercial paper ratings, see the Appendix to this SAI.

US Government Securities. Each Fund may invest in obligations issued or
guaranteed by the US government, which include: (1) direct obligations of the US
Treasury and (2) obligations issued by US government agencies and
instrumentalities. Included among direct obligations of the United States are
Treasury Bills, Treasury Notes and Treasury Bonds, which differ in terms of
their interest rates, maturities and dates of issuance. Treasury Bills have
maturities of less than one year, Treasury Notes have maturities of one to 10
years and Treasury Bonds generally have maturities of greater than 10 years at
the date of issuance. Included among the obligations issued by agencies and
instrumentalities of the United States are: instruments that are supported by
the full faith and credit of the US (such as certificates issued by the
Government National Mortgage Association ("GNMA" or "Ginnie Mae")); instruments
that are supported by the right of the issuer to borrow from the US Treasury
(such as securities of Federal Home Loan Banks); and instruments that are
supported solely by the credit of the instrumentality (such as Federal National
Mortgage Association ("FNMA" or "Fannie Mae") and Federal Home Loan Mortgage
Corporation ("FHLMC" or "Freddie Mac")).

Investments in American, European, Global and International Depository Receipts.
Each Fund may invest in non-US securities in the form of American Depository
Receipts ("ADRs"), European Depository Receipts ("EDRs"), Global Depository
Receipts ("GDRs"), or International Depository Receipts ("IDRs"). ADRs are
receipts typically issued by a US bank or trust company which evidence ownership
of underlying securities issued by a foreign corporation. EDRs and IDRs are
receipts issued in Europe typically by non-US banking and trust companies that
evidence ownership of either foreign or US securities. GDRs are receipts issued
by either a US or non-US banking institution evidencing ownership of the
underlying non-US securities. Generally, ADRs, in registered form, are designed
for use in US securities markets and EDRs, GDRs and IDRs, in bearer form, are
designed for use in European and international securities markets. An ADR, EDR,
GDR or IDR may be denominated in a currency different from the currency in which
the underlying foreign security is denominated.

Zero Coupon Securities and Deferred Interest Bonds. Each Fund may invest in zero
coupon securities and deferred interest bonds. Zero coupon and deferred interest
bonds are debt obligations which are issued at a significant discount from face
value. The original discount approximates the total amount of interest the bonds
will accrue and compound over the period until maturity or the first interest
accrual date at a rate of interest reflecting the market rate of the security at
the time of issuance. Zero coupon securities are redeemed at face value at their
maturity date without interim cash payments of interest or principal. The amount
of this discount is accrued over the life of the security, and the accrual
constitutes the income earned on the security for both accounting and tax
purposes. Because of these features, the market prices of zero coupon securities
are generally more volatile than the market prices of securities that have
similar maturity but that pay interest periodically.

While zero coupon bonds do not require the periodic payment of interest,
deferred interest bonds generally provide for a period of delay before the
regular payment of interest begins. Although this period of delay is different
for each deferred interest bond, a typical period is approximately one third of
the bond's term to maturity. Such investments benefit the issuer by mitigating
its initial need for cash to meet debt service, but some also provide a higher
rate of return to attract investors who are willing to defer receipt of such
cash.

A Fund will accrue income on such investments for tax and accounting purposes,
as required, which is distributable to shareholders and which, because no cash
is generally received at the time of accrual, may require the liquidation of
other portfolio securities to satisfy the Fund's distribution obligations. See
"Taxes."

Repurchase Agreements. Each Fund may engage in repurchase agreement transactions
with member banks of the Federal Reserve System and certain non-bank dealers,
including governmental securities dealers approved by the Fund's Board of
Trustees. Under the terms of a typical repurchase agreement, a Fund would
acquire any underlying security for a relatively short period (usually not more
than one week), subject to an obligation of the seller to repurchase, and the
Fund to resell, the obligation at an agreed price and time, thereby determining
the yield during a Fund's holding period. This arrangement results in a fixed
rate of return that is not subject to market fluctuations during a Fund's
holding period. The value of the underlying securities will be at least equal at
all times to the total amount of the repurchase obligations, including interest.
A Fund bears a risk of loss in the event of default by or bankruptcy of the
other party to a repurchase agreement. A Fund may be delayed in, or prevented
from, exercising its rights to dispose of the collateralized securities. To the
extent that, in the meantime, the value of the securities repurchased had
decreased or the value of the securities had increased, the Fund could
experience a loss. The Advisor reviews the creditworthiness of those banks and
dealers with which the Funds enter into repurchase agreements and monitors on an
ongoing basis the value of the securities subject to repurchase agreements to
ensure that such value is maintained at the required level. A repurchase
agreement is considered to be a loan under the 1940 Act.

Reverse Repurchase Agreements. Each Fund may borrow funds for temporary or
emergency purposes, such as meeting larger than anticipated redemption requests,
and not for leverage, by among other things, agreeing to sell portfolio
securities to financial institutions such as member banks of the Federal Reserve
System and certain non-bank dealers and to repurchase them at a mutually agreed
date and price (a "reverse repurchase agreement"). At the time a Fund enters
into a reverse repurchase agreement, it will segregate cash or liquid securities
having a value equal to the repurchase price, including accrued interest. The
segregated assets will be marked-to-market daily and additional assets will be
segregated on any day in which the assets fall below the repurchase price (plus
accrued interest). A Fund's liquidity and ability to manage its assets might be
affected when it sets aside cash or portfolio securities to cover such
commitments. Reverse repurchase agreements involve the risk that the market
value of the securities sold by a Fund may decline below the repurchase price of
those securities. In the event the buyer of securities under a reverse
repurchase agreement files for bankruptcy or becomes insolvent, such buyer or
its trustee or receiver may receive an extension of time to determine whether to
enforce the Fund's obligation to repurchase the securities, and the Fund's use
of the proceeds of the reverse repurchase agreement may effectively be
restricted pending such decision. Reverse repurchase agreements are considered
to be borrowings by the Funds.

Mortgage Dollar Rolls. Each Fund may enter into mortgage "dollar rolls" in which
a Fund sells securities for delivery in the current month and simultaneously
contracts to repurchase substantially similar (same type, coupon and maturity),
but not identical, securities on a specified future date. During the roll
period, a Fund forgoes principal and interest paid on the securities. A Fund is
compensated by the difference between the current sales price and the lower
forward price for the future purchase (often referred to as the "drop") or fee
income and by the interest earned on the cash proceeds of the initial sale. A
"covered roll" is a specific type of dollar roll for which there is an
offsetting cash position or a cash equivalent security position which matures on
or before the forward settlement date of the dollar roll transaction. The Funds
may enter into both covered and uncovered rolls. At the time a Fund enters into
a dollar roll transaction, it will segregate cash or liquid securities having a
value not less than the repurchase price (including accrued interest) and will
subsequently monitor the segregated assets to ensure that its value is
maintained.

Illiquid Securities. Historically, illiquid securities have included securities
subject to contractual or legal restrictions on resale because they have not
been registered under the 1933 Act, securities that are otherwise not readily
marketable and repurchase agreements having a maturity of longer than seven
days. Securities that have not been registered under the 1933 Act are referred
to as private placements or restricted securities and are purchased directly
from the issuer or in the secondary market. Non-publicly traded securities
(including Rule 144A securities, discussed in greater detail below) may involve
a high degree of business and financial risk and may result in substantial
losses. These securities may be less liquid than publicly traded securities, and
it may take longer to liquidate these positions than would be the case for
publicly traded securities. Companies whose securities are not publicly traded
may not be subject to the disclosure and other investor protection requirements
applicable to companies whose securities are publicly traded. Limitations on
resale may have an adverse effect on the marketability of portfolio securities,
and a mutual fund might be unable to dispose of restricted or other illiquid
securities promptly or at reasonable prices and might thereby experience
difficulty satisfying redemptions within seven days. An investment in illiquid
securities is subject to the risk that should a Fund desire to sell any of these
securities when a ready buyer is not available at a price that is deemed to be
representative of the securities' value, the value of a Fund's net assets could
be adversely affected.

Mutual funds do not typically hold a significant amount of these restricted or
other illiquid securities because of the potential for delays on resale and
uncertainty in valuation. A mutual fund might also have to register such
restricted securities in order to dispose of them, resulting in additional
expense and delay. Adverse market conditions could impede such a public offering
of securities.

A large institutional market has developed for certain securities that are not
registered under the 1933 Act, including repurchase agreements, commercial
paper, non-US securities, municipal securities and corporate bonds and notes.
Institutional investors depend on an efficient institutional market in which the
unregistered security can be readily resold or on an issuer's ability to honor a
demand for repayment. The fact that there are contractual or legal restrictions
on resale of such investments to the general public or to certain institutions
may not be indicative of their liquidity.

The SEC has adopted Rule 144A, which allows a broader institutional trading
market for securities otherwise subject to restriction on their resale to the
general public. Rule 144A establishes a "safe harbor" from the registration
requirements of the 1933 Act for resales of certain securities to qualified
institutional buyers ("Rule 144A Securities"). The Advisor anticipates that the
market for certain restricted securities such as institutional commercial paper
will expand further as a result of this regulation and the development of
automated systems for the trading, clearance and settlement of unregistered
securities of domestic and non-US issuers, such as the PORTAL System sponsored
by the Financial Industry Regulatory Authority ("FINRA").

An investment in Rule 144A Securities will be considered illiquid and therefore
subject to a Fund's limit on the purchase of illiquid securities unless the
Board determines or its delegates determine that the Rule 144A Securities are
liquid. In reaching liquidity decisions, the Board and its delegates may
consider, inter alia, the following factors: (i) the unregistered nature of the
security; (ii) the frequency of trades and quotes for the security; (iii) the
number of dealers wishing to purchase or sell the security and the number of
other potential purchasers; (iv) dealer undertakings to make a market in the
security; and (v) the nature of the security and the nature of the marketplace
trades (e.g., the time needed to dispose of the security, the method of
soliciting offers and the mechanics of the transfer).

Investing in Rule 144A Securities could have the effect of increasing the level
of illiquidity in a Fund to the extent that qualified institutional buyers are
unavailable or uninterested in purchasing such securities from the Fund. The
Board has adopted guidelines and delegated to the Advisor the daily function of
determining and monitoring the liquidity of Rule 144A Securities, although the
Board will retain ultimate responsibility for any liquidity determinations.

When-Issued and Delayed Delivery Securities. A Fund may purchase securities on a
when-issued or delayed delivery basis. Delivery of and payment for these
securities can take place a month or more after the date of the purchase
commitment. The payment obligation and the interest rate that will be received
on when-issued and delayed delivery securities are fixed at the time the buyer
enters into the commitment. Due to fluctuations in the value of securities
purchased or sold on a when-issued or delayed delivery basis, the yields
obtained on such securities may be higher or lower than the yields available in
the market on the dates when the investments are actually delivered to the
buyers. When-issued securities may include securities purchased on a "when, as,
and if-issued" basis, under which the issuance of the security depends on the
occurrence of a subsequent event, such as approval of a merger, corporate
reorganization or debt restructuring. The value of such securities is subject to
market fluctuation during this period and no interest or income, as applicable,
accrues to a Fund until settlement takes place.

At the time when a Fund makes the commitment to purchase securities on a
when-issued or delayed delivery basis, it will record the transaction, reflect
the value each day of such securities in determining its net asset value and, if
applicable, calculate the maturity for the purposes of average maturity from
that date. At the time of settlement a when-issued security may be valued at
less than the purchase price. To facilitate such acquisition, a Fund identifies
on its books cash or liquid assets in an amount at least equal to such
commitments. It may be expected that a Fund's net assets will fluctuate to a
greater degree when it sets aside portfolio securities to cover such purchase
commitments than when it sets aside cash. On delivery dates for such
transactions, a Fund will meet its obligations from maturities or sales of the
segregated securities and/or from cash flow. If a Fund chooses to dispose of the
right to acquire a when-issued security prior to its acquisition, it could, as
with the disposition of any other portfolio obligation, incur a gain or loss due
to market fluctuation. It is the current policy of each Fund not to enter into
when-issued commitments exceeding in the aggregate 15% for both Mid Cap Growth
Fund and Small Cap Growth Fund and 33 (1)/3% for Micro Cap Fund in each case, of
the market value of the applicable Fund's total assets, less liabilities other
than the obligations created by when-issued commitments. When a Fund engages in
when-issued or delayed-delivery transactions, it relies on the other party to
consummate the trade. Failure of the seller to do so may result in the Fund's
incurring a loss or missing an opportunity to obtain a price considered to be
advantageous.

Lending of Portfolio Securities. Each Fund may lend its investment securities to
approved institutional borrowers who need to borrow securities in order to
complete certain transactions, such as covering short sales, avoiding failures
to deliver securities or completing arbitrage operations. By lending its
investment securities, a Fund attempts to increase its net investment income
through the receipt of interest on the loan. Any gain or loss in the market
price of the securities loaned that might occur during the term of the loan
would belong to a Fund. Each Fund may lend its investment securities so long as
the terms, structure and the aggregate amount of such loans are not inconsistent
with the 1940 Act or the rules and regulations or interpretations of the SEC
thereunder, which currently require, among other things, that (a) the borrower
pledge and maintain with a Fund collateral consisting of liquid, unencumbered
assets having a value at all times not less than 100% of the value of the
securities loaned, (b) the borrower add to such collateral whenever the price of
the securities loaned rises (i.e., the borrower "marks to the market" on a daily
basis), (c) the loan be made subject to termination by a Fund at any time, and
(d) a Fund receives reasonable interest on the loan (which may include a Fund
investing any cash collateral in interest bearing short-term investments), and
distributions on the loaned securities and any increase in their market value.
Each Fund will bear any losses incurred from the investment of the collateral it
receives. There may be risks of delay in recovery of the securities or even loss
of rights in the collateral should the borrower of the securities fail
financially. However, loans will be made only to borrowers selected by a Fund's
delegate after a commercially reasonable review of relevant facts and
circumstances, including the creditworthiness of the borrower.

Each Fund may pay negotiated fees in connection with loaned securities, pursuant
to written contracts. In addition, voting rights may pass with the loaned
securities, but if a material event occurs affecting an investment on loan, the
loan must be called and the securities voted. Pursuant to an exemptive order
granted by the SEC, cash collateral received by a Fund may be invested in a
money market fund managed by the Advisor (or one of its affiliates).

Payments received by a Fund in lieu of any dividends paid on the loaned
securities will not be treated as "qualified dividend income" for purposes of
determining what portion of a Fund's dividends received by individuals may be
taxed at the rates generally applicable to long-term capital gains. See "Taxes."

Impact of Large Redemptions and Purchases of Fund Shares. From time to time,
shareholders of a Fund (which may include affiliated and/or non-affiliated
registered investment companies that invest in a Fund) may make relatively large
redemptions or purchases of Fund shares. These transactions may cause a Fund to
have to sell securities or invest additional cash, as the case may be. While it
is impossible to predict the overall impact of these transactions over time,
there could be adverse effects on a Fund's performance to the extent that a Fund
may be required to sell securities or invest cash at times when it would not
otherwise do so. These transactions could also accelerate the realization of
taxable income if sales of securities resulted in capital gains or other income
and could also increase transaction costs.

Investment Company Securities. A Fund may acquire securities of other investment
companies to the extent consistent with its investment objective and subject to
the limitations of the 1940 Act. A Fund will indirectly bear its proportionate
share of any management fees and other expenses paid by such other investment
companies.

For example, a Fund may invest in a variety of investment companies which seek
to track the composition and performance of specific indexes or a specific
portion of an index. These index-based investments hold substantially all of
their assets in securities representing their specific index. Accordingly, the
main risk of investing in index-based investments is the same as investing in a
portfolio of equity securities comprising the index. The market prices of
index-based investments will fluctuate in accordance with both changes in the
market value of their underlying portfolio securities and due to supply and
demand for the instruments on the exchanges on which they are traded (which may
result in their trading at a discount or premium to their NAVs). Index-based
investments may not replicate exactly the performance of their specified index
because of transaction costs and because of the temporary unavailability of
certain component securities of the index.

Examples of index-based investments include:

SPDRs(R): SPDRs, an acronym for "Standard & Poor's Depositary Receipts," are
based on the S&P 500 Composite Stock Price Index. They are issued by the SPDR
Trust, a unit investment trust that holds shares of substantially all the
companies in the S&P 500 in substantially the same weighting and seeks to
closely track the price performance and dividend yield of the Index.

MidCap SPDRs(R): MidCap SPDRs are based on the S&P MidCap 400 Index. They are
issued by the MidCap SPDR Trust, a unit investment trust that holds a portfolio
of securities consisting of substantially all of the common stocks in the S&P
MidCap 400 Index in substantially the same weighting and seeks to closely track
the price performance and dividend yield of the Index.

Select Sector SPDRs(R): Select Sector SPDRs are based on a particular sector or
group of industries that are represented by a specified Select Sector Index
within the Standard & Poor's Composite Stock Price Index. They are issued by The
Select Sector SPDR Trust, an open-end management investment company with nine
portfolios that each seeks to closely track the price performance and dividend
yield of a particular Select Sector Index.

DIAMONDS(SM): DIAMONDS are based on the Dow Jones Industrial Average(SM). They
are issued by the DIAMONDS Trust, a unit investment trust that holds a portfolio
of all the component common stocks of the Dow Jones Industrial Average and seeks
to closely track the price performance and dividend yield of the Dow.

Nasdaq-100 Shares: Nasdaq-100 Shares are based on the Nasdaq-100 Index. They are
issued by the Nasdaq-100 Trust, a unit investment trust that holds a portfolio
consisting of substantially all of the securities, in substantially the same
weighting, as the component stocks of the Nasdaq-100 Index and seeks to closely
track the price performance and dividend yield of the Index.

Derivative Securities -- DWS Small Cap Growth Fund and DWS Mid Cap Growth Fund

General. Each Fund may invest in various instruments that are commonly known as
"derivatives." Generally, a derivative is a financial arrangement, the value of
which is based on, or "derived" from, a traditional security, asset or market
index. Some derivatives, such as mortgage-related and other asset-backed
securities, are in many respects like any other investment, although they may be
more volatile and/or less liquid than more traditional debt securities. There
are, in fact, many different types of derivatives and many different ways to use
them. There is a range of risks associated with those uses. For example, a Fund
may use futures and options as a low-cost method of gaining exposure to a
particular securities market without investing directly in those securities; for
traditional hedging purposes to attempt to protect the Fund from exposure to
changing interest rates, securities prices or currency exchange rates; and for
cash management or other investment purposes. The use of derivatives may result
in leverage, which tends to magnify the effects of an instrument's price changes
as market conditions change. Leverage involves the use of a small amount of
money to control a large amount of financial assets and can, in some
circumstances, lead to significant losses. Each Fund will limit the leverage
created by its use of derivatives for investment purposes by "covering" such
positions as required by the SEC. The Advisor may use derivatives in
circumstances where the Advisor believes they offer an economical means of
gaining exposure to a particular asset class. Derivatives will not be used to
increase portfolio risk above the level that could be achieved using only
traditional investment securities or to acquire exposure to changes in the value
of assets or indexes that by themselves would not be purchased for each Fund.
The use of derivatives for non-hedging purposes may be considered speculative.

Each Fund's investment in options, futures, forward contracts and similar
strategies depend on the Advisor's judgment as to the potential risks and
rewards of different types of strategies. Options and futures can be volatile
investments, and may not perform as expected. If the Advisor applies a hedge at
an inappropriate time or judges price trends incorrectly, options and futures
strategies may lower each Fund's return. Each Fund could also experience losses
if the prices of its options and futures positions were poorly correlated with
its other investments, or if it could not close out its positions because of an
illiquid secondary market. Options and futures traded on foreign exchanges
generally are not regulated by US authorities and may offer less liquidity and
less protection to each Fund in the event of default by the other party to the
contract.

Options on Securities. Each Fund may purchase and write (sell) put and call
options on stocks. A call option gives the purchaser of the option the right to
buy, and obligates the writer to sell, the underlying stock at the exercise
price at any time during the option period. Similarly, a put option gives the
purchaser of the option the right to sell, and obligates the writer to buy, the
underlying stock at the exercise price at any time during the option period.

Each Fund may write (sell) covered call and put options to a limited extent on
its portfolio securities ("covered options") in an attempt to increase income
through the premiums it receives for writing the option(s). However, in return
for the premium, a Fund may forgo the benefits of appreciation on securities
sold or may pay more than the market price on securities acquired pursuant to
call and put options written by each Fund.

A call option written by each Fund is "covered" if each Fund owns the underlying
security covered by the call or has an absolute and immediate right to acquire
that security without additional cash consideration (or for additional cash
consideration held in a segregated account by its custodian) upon conversion or
exchange of other securities held in its portfolio. A call option is also
covered if a Fund holds a call option on the same security and in the same
principal amount as the written call option where the exercise price of the call
option so held (a) is equal to or less than the exercise price of the written
call option or (b) is greater than the exercise price of the written call option
if the difference is segregated by each Fund in cash or liquid securities.

When each Fund writes a covered call option, it gives the purchaser of the
option the right to buy the underlying security at the price specified in the
option (the "exercise price") by exercising the option at any time during the
option period. If the option expires unexercised, each Fund will realize income
in an amount equal to the premium received for writing the option. If the option
is exercised, a decision over which each Fund has no control, each Fund must
sell the underlying security to the option holder at the exercise price. By
writing a covered call option, a Fund foregoes, in exchange for the premium less
the commission ("net premium"), the opportunity to profit during the option
period from an increase in the market value of the underlying security above the
exercise price. In addition, each Fund may continue to hold a stock which might
otherwise have been sold to protect against depreciation in the market price of
the stock.

A put option written by each Fund is "covered" when, among other things, cash or
liquid securities acceptable to the broker are placed in a segregated account to
fulfill the obligations undertaken. When each Fund writes a covered put option,
it gives the purchaser of the option the right to sell the underlying security
to each Fund at the specified exercise price at any time during the option
period. If the option expires unexercised, each Fund will realize income in the
amount of the net premium received for writing the option. If the put option is
exercised, a decision over which each Fund has no control, each Fund must
purchase the underlying security from the option holder at the exercise price.
By writing a covered put option, each Fund, in exchange for the net premium
received, accepts the risk of a decline in the market value of the underlying
security below the exercise price. Each Fund will only write put options
involving securities for which a determination is made at the time the option is
written that the Fund wishes to acquire the securities at the exercise price.

Each Fund may terminate its obligation as the writer of a call or put option by
purchasing an option with the same exercise price and expiration date as the
option previously written. This transaction is called a "closing purchase
transaction." Each Fund will realize a profit or loss on a closing purchase
transaction if the amount paid to purchase an option is less or more, as the
case may be, than the amount received from the sale thereof. To close out a
position as a purchaser of an option, each Fund may enter into a "closing sale
transaction" which involves liquidating each Fund's position by selling the
option previously purchased. When each Fund cannot effect a closing purchase
transaction, it may be forced to incur brokerage commissions or dealer spreads
in selling securities it receives or it may be forced to hold underlying
securities until an option is exercised or expires.

When each Fund writes an option, an amount equal to the net premium received by
each Fund is included in the liability section of each Fund's Statement of
Assets and Liabilities as a deferred credit. The amount of the deferred credit
will be subsequently marked to market to reflect the current market value of the
option written. The current market value of a traded option is the last sale
price or, in the absence of a sale, the mean between the closing bid and asked
price. If an option expires on its stipulated expiration date or if each Fund
enters into a closing purchase transaction, each Fund will realize a gain (or
loss if the cost of the closing purchase transaction exceeds the premium
received when the option was sold), and the deferred credit related to such
option will be eliminated. If a call option is exercised, each Fund will realize
a gain or loss from the sale of the underlying security, and the proceeds of the
sale will be increased by the premium originally received. The writing of
covered call options may be deemed to involve the pledge of the securities
against which the option is being written. Securities against which call options
are written will be identified on the Fund's books.

Each Fund may also purchase call and put options on any securities in which it
may invest. Each Fund would normally purchase a call option in anticipation of
an increase in the market value of such securities. The purchase of a call
option would entitle each Fund, in exchange for the premium paid, to purchase a
security at a specified price during the option period. Each Fund would
ordinarily have a gain if the value of the securities increased above the
exercise price sufficiently to cover the premium, and would have a loss if the
value of the securities remained at or below the exercise price during the
option period.

Each Fund would normally purchase put options in anticipation of a decline in
the market value of securities in its portfolio ("protective puts") or
securities of the type in which it is permitted to invest. The purchase of a put
option would entitle each Fund, in exchange for the premium paid, to sell a
security, which may or may not be held by the Fund, at a specified price during
the option period. The purchase of protective puts is designed merely to offset
or hedge against a decline in the market value of each Fund. Put options also
may be purchased by each Fund for the purpose of affirmatively benefiting from a
decline in the price of securities that each Fund does not own. Each Fund would
ordinarily recognize a gain if the value of the securities decreased below the
exercise price sufficiently to cover the premium and would recognize a loss if
the value of the securities remained at or above the exercise price. Gains and
losses on the purchase of protective put options would tend to be offset by
countervailing changes in the value of underlying portfolio securities.

The hours of trading for options on securities may not conform to the hours
during which the underlying securities are traded. To the extent that the option
markets close before the markets for the underlying securities, significant
price and rate movements can take place in the underlying securities markets
that cannot be reflected in the option markets. It is impossible to predict the
volume of trading that may exist in such options, and there can be no assurance
that viable exchange markets will develop or continue.

Each Fund may also engage in options transactions in the OTC market with
broker-dealers who make markets in these options. The ability to terminate OTC
option positions is more limited than with exchange-traded option positions
because the predominant market is the issuing broker, rather than an exchange,
and OTC options may involve the risk that broker-dealers participating in such
transactions will not fulfill their obligations. To reduce this risk, each Fund
will purchase such options only from broker-dealers who are primary US
government securities dealers recognized by the Federal Reserve Bank of New York
and who agree to (and are expected to be capable of) entering into closing
transactions, although there can be no guarantee that any such option will be
liquidated at a favorable price prior to expiration. The Advisor will monitor
the creditworthiness of dealers with whom each Fund enters into such options
transactions under the general supervision of each Fund's Board of Trustees.
Unless the Trustees conclude otherwise, each Fund intends to treat OTC options
purchased and the assets used to "cover" OTC options written as not readily
marketable and therefore subject to each Fund's limit on investments in illiquid
securities.

Options on Securities Indices. Each Fund may also purchase and write
exchange-listed and OTC put and call options on US and foreign securities
indices. A securities index measures the movement of a certain group of
securities by assigning relative values to the securities included in the index,
fluctuating with changes in the market values of such securities. Some
securities index options are based on a broad market index, such as the NYSE
Composite Index, or a narrower market index, such as the S&P 100. Indices may
also be based on a particular industry or market segment.

Options on securities indices are similar to options on securities except that
(1) the expiration cycles of securities index options are monthly, while those
of securities options are currently quarterly, and (2) the delivery requirements
are different. Instead of giving the right to take or make delivery of stock at
a specified price, an option on a securities index gives the holder the right to
receive a cash "exercise settlement amount" equal to (a) the amount, if any, by
which the fixed exercise price of the option exceeds (in the case of a put) or
is less than (in the case of a call) the closing value of the underlying index
on the date of exercise, multiplied by (b) a fixed "index multiplier." Receipt
of this cash amount will depend upon the closing level of the securities index
upon which the option is based being greater than, in the case of a call, or
less than, in the case of a put, the exercise price of the index and the
exercise price of the option times a specified multiple. The writer of the
option is obligated, in return for the premium received, to make delivery of
this amount. Securities index options may be offset by entering into closing
transactions as described above for securities options.

As discussed in "Options on Securities," each Fund would normally purchase a
call option in anticipation of an increase in the market value of the relevant
index. The purchase of a call option would entitle each Fund, in exchange for
the premium paid, to purchase the underlying securities at a specified price
during the option period. Each Fund would ordinarily have a gain if the value of
the underlying securities increased above the exercise price sufficiently to
cover the premium and would have a loss if the value of the securities remained
at or below the exercise price during the option period.

As discussed in "Options on Securities," each Fund would normally purchase put
options in anticipation of a decline in the market value of the relevant index
("protective puts"). The purchase of a put option would entitle each Fund, in
exchange for the premium paid, to sell the underlying securities at a specified
price during the option period. The purchase of protective puts is designed
merely to offset or hedge against a decline in the market value of the index.
Each Fund would ordinarily recognize a gain if the value of the index decreased
below the exercise price sufficiently to cover the premium and would recognize a
loss if the value of the index remained at or above the exercise price. Gains
and losses on the purchase of protective put options would tend to be offset by
countervailing changes in the value of the index.

Because the value of an index option depends upon movements in the level of the
index rather than the price of a particular stock, whether each Fund will
realize a gain or loss from the purchase or writing of options on an index
depends upon movements in the level of stock prices in the stock market
generally or, in the case of certain indices, in an industry or market segment,
rather than movements in the price of a particular stock. Accordingly,
successful use by each Fund of options on stock indices will be subject to the
Advisor's ability to predict correctly movements in the direction of the stock
market generally or of a particular industry. This requires different skills and
techniques than predicting changes in the price of individual stocks.

Options on securities indices entail risks in addition to the risks of options
on securities. The absence of a liquid secondary market to close out options
positions on securities indices is more likely to occur, although each Fund
generally will only purchase or write such an option if the Advisor believes the
option can be closed out. Use of options on securities indices also entails the
risk that trading in such options may be interrupted if trading in certain
securities included in the index is interrupted. Each Fund will not purchase
such options unless the Advisor believes the market is sufficiently developed
such that the risk of trading in such options is no greater than the risk of
trading in options on securities.

Price movements in each Fund's investment portfolio may not correlate precisely
with movements in the level of an index and, therefore, the use of options on
indices cannot serve as a complete hedge. Because options on securities indices
require settlement in cash, the Advisor may be forced to liquidate portfolio
securities to meet settlement obligations. Each Fund's activities in index
options may also be restricted by the requirements of the Internal Revenue Code
of 1986, as amended (the "Code"), for qualification as a regulated investment
company.

In addition, the hours of trading for options on the securities indices may not
conform to the hours during which the underlying securities are traded. To the
extent that the option markets close before the markets for the underlying
securities, significant price and rate movements can take place in the
underlying securities markets that cannot be reflected in the option markets. It
is impossible to predict the volume of trading that may exist in such options,
and there can be no assurance that viable exchange markets will develop or
continue.

Futures Contracts and Options on Futures Contracts - DWS Mid Cap Growth Fund and
DWS Small Cap Growth Fund

General. Each Fund may enter into futures contracts on securities, securities
indices, foreign currencies and interest rates, and purchase and write (sell)
options thereon which are traded on exchanges designated by the Commodity
Futures Trading Commission (the "CFTC") or, if consistent with CFTC regulations,
on foreign exchanges. These futures contracts are standardized contracts for the
future delivery of, among other things, a commodity, a non-US currency, an
interest rate sensitive security or, in the case of index futures contracts or
certain other futures contracts, a cash settlement with reference to a specified
multiplier times the change in the index. An option on a futures contract gives
the purchaser the right, in return for the premium paid, to assume a position in
a futures contract.

Each Fund may enter into futures contracts and options on futures contracts on
securities, securities indices and currencies both to manage its exposure to
changing interest rates, security prices and currency exchange rates and as an
efficient means of managing allocations between asset classes.

The successful use of futures contracts and options thereon draws upon the
Advisor's skill and experience with respect to such instruments and is subject
to special risk considerations. A liquid secondary market for any futures or
options contract may not be available when a futures or options position is
sought to be closed. In addition, there may be an imperfect correlation between
movements in the market value of the securities or currency held by each Fund
and the prices of the futures and options. Successful use of futures or options
contracts is further dependent on the Advisor's ability to predict correctly
movements in the securities or foreign currency markets and no assurance can be
given that its judgment will be correct.

Futures Contracts. Futures contracts are contracts to purchase or sell a fixed
amount of an underlying instrument, commodity or index at a fixed time and place
in the future. US futures contracts have been designed by exchanges that have
been designated "contracts markets" by the CFTC, and must be executed through a
futures commission merchant, or brokerage firm, which is a member of the
relevant contract market. Futures contracts trade on a number of exchange
markets, and, through their clearing corporations, the exchanges guarantee
performance of the contracts as between the clearing members of the exchange.
Each Fund may enter into contracts for the purchase or sale for future delivery
of fixed-income securities, foreign currencies, or financial indices, including
any index of US government securities, foreign government securities or
corporate debt securities. Each Fund may enter into futures contracts which are
based on debt securities that are backed by the full faith and credit of the US
government, such as long-term US Treasury Bonds, Treasury Notes and US Treasury
Bills. Each Fund may also enter into futures contracts which are based on bonds
issued by governments other than the US government. Futures contracts on foreign
currencies may be used to hedge against securities that are denominated in
foreign currencies.

At the same time a futures contract is entered into, the Fund must allocate cash
or liquid securities as a deposit payment ("initial margin"). Daily thereafter,
the futures contract is valued and the payment of "variation margin" may be
required, since each day each Fund would provide or receive cash that reflects
any decline or increase in the contract's value.

At the time of delivery of securities pursuant to such a contract, adjustments
are made to recognize differences in value arising from the delivery of
securities with a different interest rate from that specified in the contract.
In some, but not many, cases, securities called for by a futures contract may
not have been issued when the contract was written.

Although futures contracts (other than those that settle in cash, such as index
futures) by their terms call for the actual delivery or acquisition of the
instrument underlying the contract, in most cases the contractual obligation is
fulfilled by offset before the date of the contract without each Fund's having
to make or take delivery of the instrument underlying the contract. The
offsetting of a contractual obligation is accomplished by entering into an
opposite position in an identical futures contract on the commodities exchange
on which the futures contract was entered into (or a linked exchange) calling
for delivery in the same month. Such a transaction, which is effected through a
member of an exchange, cancels the obligation to make or take delivery of the
instrument underlying the contract. Since all transactions in the futures market
are made, offset or fulfilled through a clearing house associated with the
exchange on which the contracts are traded, each Fund will incur brokerage fees
when it enters into futures contracts.

The purpose of the acquisition or sale of a futures contract, in cases where
each Fund holds or intends to acquire fixed-income securities, is to attempt to
protect each Fund from fluctuations in interest or foreign exchange rates
without actually buying or selling fixed-income securities or foreign
currencies. For example, if interest rates were expected to increase (which thus
would cause the prices of debt securities to decline), each Fund might enter
into futures contracts for the sale of debt securities. Such a sale would have
much the same effect as selling an equivalent value of the debt securities owned
by each Fund. If interest rates did increase, the value of the debt security in
each Fund would decline, but the value of the futures contracts to each Fund
would increase at approximately the same rate, thereby keeping the net asset
value of each Fund from declining as much as it otherwise would have. Each Fund
could accomplish similar results by selling debt securities and investing in
bonds with short maturities when interest rates are expected to increase.
However, since the futures market is more liquid than the cash market, the use
of futures contracts as an investment technique allows each Fund to maintain a
defensive position without having to sell its portfolio securities.

Similarly, when it is expected that interest rates may decline (thus increasing
the value of debt securities), futures contracts may be purchased to attempt to
hedge against anticipated purchases of debt securities at higher prices. Since
the fluctuations in the value of futures contracts should be similar to those of
debt securities, each Fund could take advantage of the anticipated rise in the
value of debt securities without actually buying them until the market had
stabilized. At that time, the futures contracts could be liquidated and each
Fund could then buy debt securities on the cash market. The segregated assets
maintained to cover each Fund's obligations with respect to such futures
contracts will consist of cash or liquid securities acceptable to the broker
from each Fund's portfolio in an amount equal to the difference between the
fluctuating market value of such futures contracts and the aggregate value of
the initial and variation margin payments made by each Fund with respect to such
futures contracts.

The ordinary spreads between prices in the cash and futures market, due to
differences in the nature of those markets, are subject to distortions. First,
all participants in the futures market are subject to initial deposit and
variation margin requirements. Rather than meeting additional variation margin
requirements, investors may close futures contracts through offsetting
transactions, which could distort the normal relationship between the cash and
futures markets. Second, the liquidity of the futures market depends on most
participants' entering into offsetting transactions rather than making or taking
delivery. To the extent that many participants decide to make or take delivery,
liquidity in the futures market could be reduced, thus producing distortion.
Third, from the point of view of speculators, the margin deposit requirements in
the futures market are less onerous than margin requirements in the securities
market. Therefore, increased participation by speculators in the futures market
may cause temporary price distortions. Due to the possibility of distortion, a
correct forecast of securities price, general interest rate or currency exchange
rate trends by the Advisor may still not result in a successful transaction.

In addition, futures contracts entail significant risks. Although the Advisor
believes that use of such contracts will benefit each Fund, if the Advisor's
investment judgment about the general direction of interest rates or an index is
incorrect, each Fund's overall performance would be poorer than if it had not
entered into any such contract. For example, if each Fund has hedged against the
possibility of an increase in interest rates or a decrease in an index which
would adversely affect the value of securities held in its portfolio and
interest rates decrease or securities prices increase instead, each Fund will
lose part or all of the benefit of the increased value of its securities which
it has hedged because it will have offsetting losses in its futures positions.
In addition, in such situations, if each Fund has insufficient cash, it may have
to sell securities from its portfolio to meet daily variation margin
requirements. Such sales of securities may be, but will not necessarily be, at
increased prices which reflect the rising market. Each Fund may have to sell
securities at a time when it may be disadvantageous to do so.

Options on Futures Contracts. Each Fund may purchase and write (sell) options on
futures contracts for hedging purposes. For example, as with the purchase of
futures contracts, when each Fund is not fully invested, it may purchase a call
option on an interest-rate-sensitive futures contract to hedge against a
potential price increase on debt securities due to declining interest rates.

The purchase of a call option on a futures contract is similar in some respects
to the purchase of a call option on an index or individual security. Depending
on the pricing of the option compared to either the price of the futures
contract upon which it is based or the price of the underlying debt securities,
it may or may not be less risky than ownership of the futures contract or
underlying debt securities.

The writing of a call option on a futures contract may constitute a partial
hedge against declining prices of the underlying portfolio securities which are
the same as or correlate with the security or foreign currency that is
deliverable upon exercise of the futures contract. If the futures price at
expiration of the option is below the price specified in the premium received
for writing the option ("exercise price"), each Fund will retain the full amount
of the net premium (the premium received for writing the option less any
commission), which provides a partial hedge against any decline that may have
occurred in the Fund's holdings.

The writing of a put option on an index futures contract may constitute a
partial hedge against increasing prices of the underlying securities or foreign
currency that are deliverable upon exercise of the futures contract. If the
futures price at expiration of the option is higher than the exercise price, the
Fund will retain the full amount of the option net premium, which provides a
partial hedge against any increase in the price of securities that each Fund
intends to purchase.

If a put or call option each Fund has written is exercised, each Fund will incur
a loss that will be reduced by the amount of the net premium it receives.
Depending on the degree of correlation between changes in the value of its
portfolio securities and changes in the value of its futures positions, a Fund's
losses from existing options on futures may to some extent be reduced or
increased by changes in the value of portfolio securities.

The purchase of a call or put option on a futures contract with respect to an
index is similar in some respects to the purchase of a call or protective put
option on an index. For example, each Fund may purchase a put option on an index
futures contract to hedge against the risk of lowering securities values.

The amount of risk each Fund assumes when it purchases an option on a futures
contract with respect to an index is the premium paid for the option plus
related transaction costs. In addition to the correlation risks discussed above,
the purchase of such an option also entails the risk that changes in the value
of the underlying futures contract will not be fully reflected in the value of
the option purchased.

Other Considerations. The Trust, on behalf of each Fund, has claimed exclusion
from the definition of the term "commodity pool operator" under the regulations
of the Commodity Futures Trading Commission. Therefore, each Fund is not subject
to commodity pool operator registration and regulation under the Commodity
Exchange Act. Futures and options on futures may be entered into for bona fide
hedging, risk management (including duration management) or other portfolio and
return enhancement management purposes to the extent consistent with the
exclusion from commodity pool operator registration. Typically, maintaining a
futures contract or selling an option thereon requires a Fund to deposit with a
financial intermediary as security for its obligations an amount of cash or
other specified assets (initial margin) which initially is typically 1% to 10%
of the face amount of the contract (but may be higher in some circumstances).
Additional cash or assets (variation margin) may be required to be deposited
thereafter on a daily basis as the marked to market value of the contract
fluctuates. The purchase of an option on financial futures involves payment of a
premium for the option without any further obligation on the part of the fund.
If a Fund exercises an option on a futures contract it will be obligated to post
initial margin (and potential subsequent variation margin) for the resulting
futures position just as it would for any position. Futures contracts and
options thereon are generally settled by entering into an offsetting transaction
but there can be no assurance that the position can be offset prior to
settlement at an advantageous price, nor that delivery will occur.

Futures Contracts on Securities Indices. Each Fund may also enter into futures
contracts providing for the making and acceptance of a cash settlement based
upon changes in the value of an index of US or non-US securities. This
investment technique may be used as a low-cost method of gaining exposure to a
particular securities market without investing directly in those securities, to
hedge against anticipated future changes in general market prices that otherwise
might either adversely affect the value of securities held by each Fund or
adversely affect the prices of securities which are intended to be purchased at
a later date for each Fund, or as an efficient means of managing allocation
between asset classes. A futures contract may also be entered into to close out
or offset an existing futures position.

When used for hedging purposes, each futures contract on a securities index
transaction involves the establishment of a position which the Advisor believes
will move in a direction opposite to that of the investment being hedged. If
these hedging transactions are successful, the futures positions taken for each
Fund will rise in value by an amount which approximately offsets the decline in
value of the portion of each Fund's investments that are being hedged. Should
general market prices move in an unexpected manner, the full anticipated
benefits of futures contracts may not be achieved or a loss may be realized.

Currency Exchange Contracts. Because each Fund may buy and sell securities
denominated in currencies other than the US dollar and may receive interest,
dividends and sale proceeds in currencies other than the US dollar, the Fund
from time to time may enter into currency exchange transactions to convert to
and from different foreign currencies and to convert foreign currencies to and
from the US dollar. Each Fund either enters into these transactions on a spot
(i.e., cash) basis at the spot rate prevailing in the foreign currency exchange
market or uses forward contracts to purchase or sell foreign currencies.

Forward Currency Exchange Contracts. A forward currency exchange contract is an
obligation by each Fund to purchase or sell a specific currency at a future
date, which may be any fixed number of days from the date of the contract.
Forward currency exchange contracts establish an exchange rate at a future date.
These contracts are transferable in the interbank market conducted directly
between currency traders (usually large commercial banks and brokerages) and
their customers. A forward currency exchange contract may not have a deposit
requirement and may be traded at a net price without commission. Each Fund
maintains with its custodian a segregated account of cash or liquid securities
in an amount at least equal to its obligations under each forward currency
exchange contract. Neither spot transactions nor forward currency exchange
contracts eliminate fluctuations in the prices of each Fund's securities or in
foreign exchange rates, or prevent loss if the prices of these securities should
decline.

Each Fund may enter into foreign currency hedging transactions in an attempt to
protect against changes in currency exchange rates between the trade and
settlement dates of specific securities transactions or changes in currency
exchange rates that would adversely affect a portfolio position or an
anticipated investment position. Since consideration of the prospect for
currency parities will be incorporated into the Advisor's long-term investment
decisions, each Fund will not routinely enter into currency hedging transactions
with respect to security transactions; however, the Advisor believes that it is
important to have the flexibility to enter into currency hedging transactions
when it determines that the transactions would be in each Fund's best interest.
Although these transactions tend to minimize the risk of loss due to a decline
in the value of the hedged currency, they tend at the same time to limit any
potential gain that might be realized should the value of the hedged currency
increase. The precise matching of the forward contract amounts and the value of
the securities involved will not generally be possible because the future value
of such securities in foreign currencies will change as a consequence of market
movements in the value of such securities between the date the forward contract
is entered into and the date it matures. The projection of currency market
movements is extremely difficult, and the successful execution of a hedging
strategy is highly uncertain.

While these contracts are not presently regulated by the CFTC, the CFTC may in
the future assert authority to regulate forward contracts. In such event each
Fund's ability to utilize forward contracts may be restricted. Forward contracts
may reduce the potential gain from a positive change in the relationship between
the US dollar and foreign currencies. Unanticipated changes in currency prices
may result in poorer overall performance for each Fund than if it had not
entered into such contracts. The use of currency forward contracts may not
eliminate fluctuations in the underlying US dollar equivalent value of the
prices of or rates of return on each Fund's foreign currency denominated
portfolio securities, and the use of such techniques will subject each Fund to
certain risks.

The matching of the increase in value of a forward contract and the decline in
the US dollar equivalent value of the foreign currency denominated asset that is
the subject of the hedge generally will not be precise. In addition, each Fund
may not always be able to enter into currency forward contracts at attractive
prices and this will limit each Fund's ability to use such contract to hedge or
cross-hedge its assets. Also, with regard to each Fund's use of cross-hedges,
there can be no assurance that historical correlations between the movement of
certain foreign currencies relative to the US dollar will continue. Thus, at any
time poor correlation may exist between movements in the exchange rates of the
foreign currencies underlying each Fund's cross-hedges and the movements in the
exchange rates of the foreign currencies in which each Fund's assets that are
the subject of such cross-hedges are denominated.

Options on Foreign Currencies. Each Fund may write covered put and call options
and purchase put and call options on foreign currencies for the purpose of
protecting against declines in the dollar value of portfolio securities and
against increases in the dollar cost of securities to be acquired. Each Fund may
use options on currencies to cross-hedge, which involves writing or purchasing
options on one currency to hedge against changes in exchange rates for a
different but related currency. As with other types of options, however, the
writing of an option on foreign currency will constitute only a partial hedge up
to the amount of the premium received, and each Fund could be required to
purchase or sell foreign currencies at disadvantageous exchange rates, thereby
incurring losses. The purchase of an option on a foreign currency may be used to
hedge against fluctuations in exchange rates, although, in the event of exchange
rate movements adverse to each Fund's position, each Fund may forfeit the entire
amount of the premium plus related transaction costs. In addition a Fund may
purchase call options on a currency when the Advisor anticipates that the
currency will appreciate in value.

Each Fund may also write options on foreign currencies for the same types of
hedging purposes. For example, when each Fund anticipates a decline in the
dollar value of foreign currency denominated securities due to adverse
fluctuations in exchange rates, it could, instead of purchasing a put option,
write a call option on the relevant currency. If the expected decline occurs,
the option will most likely not be exercised, and the diminution in value of
portfolio securities will be offset by the amount of the premium received.

Similarly, instead of purchasing a call option to hedge against an anticipated
increase in the dollar cost of securities to be acquired, each Fund could write
a put option on the relevant currency which, if rates move in the manner
projected, will expire unexercised and allow each Fund to hedge such increased
cost up to the amount of the premium. As in the case of other types of options,
however, the writing of a foreign currency option will constitute only a partial
hedge up to the amount of the premium, and only if rates move in the expected
direction. If this does not occur, the option may be exercised and each Fund
would be required to purchase or sell the underlying currency at a loss which
may not be offset by the amount of the premium. Through the writing of options
on foreign currencies, each Fund also may be required to forgo all or a portion
of the benefits which might otherwise have been obtained from favorable
movements in exchange rates.

Each Fund may write covered call options on foreign currencies. A call option
written on a foreign currency by each Fund is "covered" if each Fund owns the
underlying foreign currency covered by the call or has an absolute and immediate
right to acquire that foreign currency without additional cash consideration (or
for additional cash consideration identified on each Fund's books) upon
conversion or exchange of other foreign currency held in its portfolio. A call
option is also covered if the Fund has a call on the same foreign currency and
in the same principal amount as the call written where the exercise price of the
call held (a) is equal to or less than the exercise price of the call written or
(b) is greater than the exercise price of the call written if the difference is
segregated by each Fund in cash or liquid securities.

Each Fund also may write call options on foreign currencies that are not covered
for cross-hedging purposes. A call option on a foreign currency is for
cross-hedging purposes if it is not covered, but is instead designed to provide
a hedge against a decline in the US dollar value of a security which each Fund
owns or has the right to acquire and which is denominated in the currency
underlying the option, due to an adverse change in the exchange rate. In such
circumstances, each Fund collateralizes the option by segregating cash or liquid
securities in an amount not less than the value of the underlying foreign
currency in US dollars marked to market daily.

There is no assurance that a liquid secondary market will exist for any
particular option, or at any particular time. If each Fund is unable to effect a
closing purchase transaction with respect to covered options it has written,
each Fund will not be able to sell the underlying currency or dispose of assets
held in a segregated account until the options expire or are exercised.
Similarly, if each Fund is unable to effect a closing sale transaction with
respect to options it has purchased, it will have to exercise the options in
order to realize any profit and will incur transaction costs upon the purchase
or sale of underlying currency. Each Fund pays brokerage commissions or spreads
in connection with its options transactions.

As in the case of forward contracts, certain options on foreign currencies are
traded over-the-counter and involve liquidity and credit risks which may not be
present in the case of exchange-traded currency options. In some circumstances,
each Fund's ability to terminate OTC options may be more limited than with
exchange-traded options. It is also possible that broker-dealers participating
in OTC options transactions will not fulfill their obligations. Each Fund
intends to treat OTC options as not readily marketable and, therefore, as
subject to the Fund's limitation with respect to illiquid securities.

Options on Securities, Securities Indices and Foreign Currencies -- DWS Micro
Cap Fund

General. The Fund may write covered put and call options and purchase put and
call options. Such options may relate to particular securities, to various stock
indices, or to currencies. The Fund may write call and put options which are
issued by the OCC or which are traded on US and non-US exchanges and
over-the-counter. These instruments may be considered derivative instruments.

Written Options. The Fund may write (sell) covered put and call options on
securities and enter into related closing transactions. The Fund may receive
fees (referred to as "premiums") for granting the rights evidenced by the
options. However, in return for the premium for a written call option, the Fund
assumes certain risks. For example, in the case of a written call option, the
Fund forfeits the right to any appreciation in the underlying security while the
option is outstanding. A put option gives to its purchaser the right to compel
the Fund to purchase an underlying security from the option holder at the
specified price at any time during the option period. In contrast, a call option
written by the Fund gives to its purchaser the right to compel the Fund to sell
an underlying security to the option holder at a specified price at any time
during the option period. Upon the exercise of a put option written by the Fund,
the Fund may suffer a loss equal to the difference between the price at which
the Fund is required to purchase the underlying security and its market value at
the time of the option exercise, less the premium received for writing the
option. All options written by the Fund are covered. In the case of a call
option, this means that the Fund will own the securities subject to the option
or an offsetting call option as long as the written option is outstanding, or
will have the absolute and immediate right to acquire other securities that are
the same as those subject to the written option. In the case of a put option,
this means that the Fund will deposit cash or liquid securities in a segregated
account with the custodian with a value at least equal to the exercise price of
the put option.

Purchased Options. The Fund may also purchase put and call options on
securities. A put option entitles the Fund to sell, and a call option entitles
the Fund to buy, a specified security at a specified price during the term of
the option. The advantage to the purchaser of a call option is that it may hedge
against an increase in the price of securities it ultimately wishes to buy. The
advantage to the purchaser of a put option is that it may hedge against a
decrease in the price of portfolio securities it ultimately wishes to sell.

The Fund may enter into closing transactions in order to offset an open option
position prior to exercise or expiration by selling an option it has purchased
or by entering into an offsetting option. If the Fund cannot affect closing
transactions, it may have to retain a security in its portfolio it would
otherwise sell, or deliver a security it would otherwise retain.

The Fund may purchase and sell options traded on US exchanges and, to the extent
permitted by law, options traded over-the-counter. The Fund may also purchase
and sell options traded on recognized foreign exchanges. There can be no
assurance that a liquid secondary market will exist for any particular option.
OTC options also involve the risk that a counterparty will fail to meet its
obligation under the option.

Options on Stock Indices or Currencies. The Fund may purchase and write
exchange-listed put and call options on stock indices to hedge against risks of
market-wide price movements. A stock index measures the movement of a certain
group of stocks by assigning relative values to the common stocks included in
the index. Examples of well-known stock indices are the S&P 500 Index and the
Wilshire 5000 Index. Options on stock indices are similar to options on
securities. However, because options on stock indices do not involve the
delivery of an underlying security, the option represents the holder's right to
obtain from the writer in cash a fixed multiple of the amount by which the
exercise price exceeds (in the case of a put) or is less than (in the case of a
call) the closing value of the underlying index on the exercise date. The Fund
may also purchase and write put and call options on currencies.

A call option on a securities index provides the holder with the right to
receive a cash payment upon exercise of the option if the market value of the
underlying index exceeds the option's exercise price. Conversely, a put option
on a securities index provides the holder with the right to receive a cash
payment upon exercise of the option if the market value of the underlying index
is less than the option's exercise price. The amount of any payment to the
option holder will be equal to the difference between the closing price of the
index at the time of exercise and the exercise price of the option expressed in
US dollars or a foreign currency, times a specified multiple. A put option on a
currency gives its holder the right to sell an amount (specified in units of the
underlying currency) of the underlying currency at the stated exercise price at
any time prior to the option's expiration. Conversely, a call option on a
currency gives its holder the right to purchase an amount (specified in units of
the underlying currency) of the underlying currency at the stated exercise price
at any time prior to the option's expiration.

When the Fund writes an option on a stock index, it will cover the option by
depositing cash or liquid securities or a combination of both in an amount equal
to the market value of the option in a segregated account, which will be marked
to market daily, with the Fund's custodian, and will maintain the account while
the option is open. Alternatively, and only in the case of a written call option
on a stock index, the Fund may cover the written option by owning an offsetting
call option. A call option on currency written by the Fund is covered if the
Fund owns an equal amount of the underlying currency.

Other Considerations. The Fund will engage in OTC options only with
broker-dealers deemed creditworthy by the Advisor. Closing transactions in
certain options are usually affected directly with the same broker-dealer that
effected the original option transaction. The Fund bears the risk that the
broker-dealer may fail to meet its obligations. There is no assurance that the
Fund will be able to close an unlisted option position. Furthermore, unlisted
options are not subject to the protections afforded purchasers of listed options
by the OCC, which performs the obligations of its members who fail to do so in
connection with the purchase or sale of options.

When the Fund purchases a put option, the premium paid by it is recorded as an
asset of the Fund. When the Fund writes an option, an amount equal to the net
premium (the premium less the commission paid by the Fund) received by the Fund
is included in the liability section of the Fund's statement of assets and
liabilities as a deferred credit. The amount of this asset or deferred credit
will be marked-to-market on an ongoing basis to reflect the current value of the
option purchased or written. The current value of a traded option is the last
sale price or, in the absence of a sale, the average of the closing bid and
asked prices. If an option purchased by the Fund expires unexercised, the Fund
realizes a loss equal to the premium paid. If the Fund enters into a closing
sale transaction on an option purchased by it, the Fund will realize a gain if
the premium received by the Fund on the closing transaction is more than the
premium paid to purchase the option, or a loss if it is less. If an option
written by the Fund expires on the stipulated expiration date or if the Fund
enters into a closing purchase transaction, it will realize a gain (or loss if
the cost of a closing purchase transaction exceeds the net premium received when
the option is sold), and the deferred credit related to such option will be
eliminated. If an option written by the Fund is exercised, the proceeds to the
Fund from the exercise will be increased by the net premium originally received,
and the Fund will realize a gain or loss.

There are several risks associated with transactions in options on securities,
securities indices and currencies. For example, there are significant
differences between the securities markets, currency markets and the
corresponding options markets that could result in imperfect correlations,
causing a given option transaction not to achieve its objectives. In addition, a
liquid secondary market for particular options, whether traded OTC or on a US or
non-US securities exchange, may be absent for reasons which include the
following: there may be insufficient trading interest in certain options;
restrictions may be imposed by an exchange on opening transactions or closing
transactions or both; trading halts, suspensions or other restrictions may be
imposed with respect to particular classes or series of options or underlying
securities; unusual or unforeseen circumstances may interrupt normal operations
on an exchange; the facilities of an exchange or the OCC may not at all times be
adequate to handle current trading volume; or one or more exchanges could, for
economic or other reasons, decide or be compelled at some future date to
discontinue the trading of options (or a particular class or series of options),
in which event the secondary market on that exchange (or in that class or series
of options) would cease to exist, although outstanding options that had been
issued by the OCC as a result of trades on that exchange would continue to be
exercisable in accordance with their terms.

The hours of trading for options may not conform to the hours during which the
underlying securities and currencies are traded. To the extent that the options
markets close before the markets for the underlying securities and currencies,
significant price and rate movements can take place in the underlying markets
that cannot be reflected in the options markets. The purchase of options is a
highly specialized activity that involves investment techniques and risks
different from those associated with ordinary portfolio securities transactions.

The risks described above also apply to options on futures, which are discussed
below.

Futures Contracts and Options on Futures Contracts - DWS Micro Cap Fund

General. When deemed advisable by the Advisor, the Fund may enter into futures
contracts and purchase and write options on futures contracts to hedge against
changes in interest rates, securities prices or currency exchange rates or for
certain non-hedging purposes. The Fund may purchase and sell financial futures
contracts, including stock index futures, and purchase and write related
options. The Fund may engage in futures and related options transactions for
hedging and non-hedging purposes as defined in regulations of the CFTC.
Transactions in futures contracts and options on futures involve brokerage
costs, require margin deposits and, in the case of contracts and options
obligating the Fund to purchase securities, require the Fund to segregate cash
or liquid securities with a value equal to the amount of the Fund's obligations.

Futures Contracts. A futures contract may generally be described as an agreement
between two parties to buy and sell a particular financial instrument for an
agreed price during a designated month (or to deliver the final cash settlement
price, in the case of a contract relating to an index or otherwise not calling
for physical delivery at the end of trading in the contract). Futures contracts
obligate the long or short holder to take or make delivery of a specified
quantity of a commodity or financial instrument, such as a security or the cash
value of a securities index, during a specified future period at a specified
price.

When interest rates are rising or securities prices are falling, the Fund can
seek to offset a decline in the value of its current portfolio securities
through the sale of futures contracts. When interest rates are falling or
securities prices are rising, the Fund, through the purchase of futures
contracts, can attempt to secure better rates or prices than might later be
available in the market when it affects anticipated purchases.

Positions taken in the futures markets are not normally held to maturity but are
instead liquidated through offsetting transactions, which may result in a profit
or a loss. While futures contracts on securities will usually be liquidated in
this manner, the Fund may instead make, or take, delivery of the underlying
securities whenever it appears economically advantageous to do so. A clearing
corporation associated with the exchange on which futures on securities are
traded guarantees that, if still open, the sale or purchase will be performed on
the settlement date.

Hedging Strategies. Hedging, by use of futures contracts, seeks to establish
with more certainty the effective price and rate of return on portfolio
securities and securities that the Fund proposes to acquire. The Fund may, for
example, take a "short" position in the futures market by selling futures
contracts in order to hedge against an anticipated rise in interest rates or a
decline in market prices that would adversely affect the value of the Fund's
portfolio securities. Such futures contracts may include contracts for the
future delivery of securities held by the Fund or securities with
characteristics similar to those of the Fund's portfolio securities. If, in the
opinion of the Advisor, there is a sufficient degree of correlation between
price trends for the Fund's portfolio securities and futures contracts based on
other financial instruments, securities indices or other indices, the Fund may
also enter into such futures contracts as part of its hedging strategy. Although
under some circumstances prices of securities in the Fund's portfolio may be
more or less volatile than prices of such futures contracts, the Advisor will
attempt to estimate the extent of this volatility difference based on historical
patterns and compensate for any such differential by having the Fund enter into
a greater or lesser number of futures contracts or by attempting to achieve only
a partial hedge against price changes affecting the Fund's securities portfolio.
When hedging of this character is successful, any depreciation in the value of
portfolio securities will be substantially offset by appreciation in the value
of the futures position. On the other hand, any unanticipated appreciation in
the value of the Fund's portfolio securities would be substantially offset by a
decline in the value of the futures position.

On other occasions, the Fund may take a "long" position by purchasing futures
contracts. This would be done, for example, when the Fund anticipates the
subsequent purchase of particular securities when it has the necessary cash, but
expects the prices then available in the applicable market to be less favorable
than prices that are currently available.

Options on Futures Contracts. The acquisition of put and call options on futures
contracts will give the Fund the right (but not the obligation) for a specified
price to sell or to purchase, respectively, the underlying futures contract at
any time during the option period. As the purchaser of an option on a futures
contract, the Fund obtains the benefit of the futures position if prices move in
a favorable direction but limits its risk of loss in the event of an unfavorable
price movement to the loss of the premium and transaction costs.

The writing of a call option on a futures contract generates a premium that may
partially offset a decline in the value of the Fund's assets. By writing a call
option, the Fund becomes obligated, in exchange for the premium, to sell a
futures contract (if the option is exercised), which may have a value higher
than the exercise price. Conversely, the writing of a put option on a futures
contract generates a premium that may partially offset an increase in the price
of securities that the Fund intends to purchase. However, the Fund becomes
obligated to purchase a futures contract (if the option is exercised), which may
have a value lower than the exercise price. Thus, the loss incurred by the Fund
in writing options on futures is potentially unlimited and may exceed the amount
of the premium received. The Fund will incur transaction costs in connection
with the writing of options on futures.

The holder or writer of an option on a futures contract may terminate its
position by selling or purchasing an offsetting option on the same series. There
is no guarantee that such closing transactions can be affected. The Fund's
ability to establish and close out positions on such options will be subject to
the development and maintenance of a liquid market.

The Fund may use options on futures contracts solely for bona fide hedging or
other non-hedging purposes as described below.

Other Considerations. The Trust, on behalf of the Fund, has claimed exclusion
from the definition of the term "commodity pool operator" under the regulations
of the Commodity Futures Trading Commission. Therefore, the Fund is not subject
to commodity pool operator registration and regulation under the Commodity
Exchange Act. Futures and options on futures may be entered into for bona fide
hedging, risk management (including duration management) or other portfolio and
return enhancement management purposes to the extent consistent with the
exclusion from commodity pool operator registration. Typically, maintaining a
futures contract or selling an option thereon requires the Fund to deposit with
a financial intermediary as security for its obligations an amount of cash or
other specified assets (initial margin) which initially is typically 1% to 10%
of the face amount of the contract (but may be higher in some circumstances).
Additional cash or assets (variation margin) may be required to be deposited
thereafter on a daily basis as the marked to market value of the contract
fluctuates. The purchase of an option on financial futures involves payment of a
premium for the option without any further obligation on the part of the fund.
If the Fund exercises an option on a futures contract it will be obligated to
post initial margin (and potential subsequent variation margin) for the
resulting futures position just as it would for any position. Futures contracts
and options thereon are generally settled by entering into an offsetting
transaction but there can be no assurance that the position can be offset prior
to settlement at an advantageous price, nor that delivery will occur.

The Fund will engage in transactions in futures contracts and related options
only to the extent such transactions are consistent with the requirements of the
Code, for maintaining its qualification as a regulated investment company. See
"Taxes."

The Fund will be required, in connection with transactions in futures contracts
and the writing of options on futures contracts, to make margin deposits, which
will be held by its custodian for the benefit of the futures commission merchant
through whom the Fund engages in such futures and option transactions. These
transactions involve brokerage costs, require margin deposits and, in the case
of futures contracts and options obligating the Fund to purchase securities,
require the Fund to segregate cash or liquid securities in an account maintained
with its custodian to cover such contracts and options.

While transactions in futures contracts and options on futures may reduce
certain risks, such transactions themselves entail certain other risks. Thus,
unanticipated changes in interest rates or securities prices may result in a
poorer overall performance for the Fund than if it had not entered into any
futures contracts or options transactions. The other risks associated with the
use of futures contracts and options thereon are (i) imperfect correlation
between the change in market value of the securities held by the Fund and the
prices of the futures and options and (ii) the possible absence of a liquid
secondary market for a futures contract or option and the resulting inability to
close a futures position prior to its maturity date.

In the event of an imperfect correlation between a futures position and
portfolio position which is intended to be protected, the desired protection may
not be obtained and the Fund may be exposed to risk of loss. Investing in
contracts whose price behavior is expected to resemble that of the Fund's
underlying securities may minimize the risk of imperfect correlation. The Fund
will attempt to minimize the risk that it will be unable to close out futures
positions by entering into such transactions on a national exchange with an
active and liquid secondary market.

Limitations and Risks Associated with Transactions in Options, Futures Contracts
and Options on Futures Contracts -- DWS Micro Cap Fund

Options and futures transactions involve (1) liquidity risk that contractual
positions cannot be easily closed out in the event of market changes or
generally in the absence of a liquid secondary market, (2) correlation risk that
changes in the value of hedging positions may not match the securities market
fluctuations intended to be hedged, and (3) market risk that an incorrect
prediction of securities prices by the Advisor may cause the Fund to perform
worse than if such positions had not been taken. The ability to terminate
over-the-counter options is more limited than with exchange-traded options and
may involve the risk that the counterparty to the option will not fulfill its
obligations. In accordance with a position taken by the SEC, the Fund will limit
its investments in illiquid securities to 15% of the Fund's net assets.

Options and futures transactions are highly specialized activities which involve
investment techniques and risks that are different from those associated with
ordinary portfolio transactions. Gains and losses on investments in options and
futures depend on the Advisor's ability to predict the direction of stock prices
and other economic factors. The loss that may be incurred by the Fund in
entering into futures contracts and written options thereon is potentially
unlimited. There is no assurance that higher-than-anticipated trading activity
or other unforeseen events might not, at times, render certain facilities of an
options clearing entity or other entity performing the regulatory and liquidity
functions of an options clearing entity inadequate, and thereby result in the
institution by an exchange of special procedures that may interfere with the
timely execution of customers' orders. Most futures exchanges limit the amount
of fluctuation permitted in a futures contract's prices during a single trading
day. Once the limit has been reached, no further trades may be made that day at
a price beyond the limit. The price limit will not limit potential losses, and
may in fact prevent the prompt liquidation of futures positions, ultimately
resulting in further losses.

There is no limit on the percentage of the assets of the Fund that may be at
risk with respect to futures contracts and related options. The Fund may not
invest more than 25% of its total assets in purchased protective put options.
The Fund's transactions in options, futures contracts and options on futures
contracts may be limited by the requirements for qualification of the Fund as a
regulated investment company for tax purposes. See "Taxes" below. Options,
futures contracts and options on futures contracts are derivative instruments.



Other Investments and Investment Practices

Borrowing. Each Fund may borrow for temporary or emergency purposes. This
borrowing may be unsecured. Among the forms of borrowing in which a Fund may
engage is entering into reverse repurchase agreements. The 1940 Act requires a
Fund to maintain continuous asset coverage (that is, total assets including
borrowings, less liabilities exclusive of borrowings) of 300% of the amount
borrowed. If the asset coverage should decline below 300% as a result of market
fluctuations or for other reasons, the Fund is required to sell some of its
portfolio securities within three days to reduce its borrowings and restore the
300% asset coverage, even though it may be disadvantageous from an investment
standpoint to sell securities at that time. Borrowing may exaggerate the effect
on net asset value of any increase or decrease in the market value of the
portfolio. Money borrowed will be subject to interest costs which may or may not
be recovered by appreciation of the securities purchased. Each Fund also may be
required to maintain minimum average balances in connection with such borrowing
or to pay a commitment or other fee to maintain a line of credit; either of
these requirements would increase the cost of borrowing over the stated interest
rate. See "Investment Restrictions."

Temporary Defensive Investments. For temporary defensive purposes during periods
when the Advisor determines that conditions warrant, each Fund may invest up to
100% of its assets in cash and money market instruments, including securities
issued or guaranteed by the US Government, its agencies or instrumentalities;
certificates of deposit, time deposits, and bankers' acceptances issued by banks
or savings and loans associations having net assets of at least $500 million as
of the end of their most recent fiscal year; commercial paper rated at the time
of purchase at least A-1 by S&P or P-1 by Moody's, or unrated commercial paper
determined by the Advisor to be of comparable quality; repurchase agreements
involving any of the foregoing; and, to the extent permitted by applicable law,
shares of other investment companies investing solely in money market
instruments.

Investment of Uninvested Cash. The Funds may have cash balances that have not
been invested in portfolio securities ("Uninvested Cash"). Uninvested Cash may
result from a variety of sources, including dividends or interest received from
portfolio securities, unsettled securities transactions, reserves held for
investment strategy purposes, scheduled maturity of investments, liquidation of
investment securities to meet anticipated redemptions or dividend payments, and
new cash received from investors. Uninvested Cash may be invested directly in
money market instruments or other short-term debt obligations. Pursuant to an
exemptive order issued by the SEC, the Funds may use Uninvested Cash to purchase
shares of affiliated funds, including money market funds and the Cash Management
QP Trust, or entities for which the Advisor may act as investment advisor now or
in the future that operate as cash management investment vehicles but are
excluded from the definition of an investment company pursuant to Section
3(c)(1) or 3(c)(7) of the 1940 Act (collectively, the "Central Funds") in excess
of the limitations of Section 12(d)(1) of the 1940 Act. Investment by the Funds
in shares of the Central Funds will comply with rule 2a-7 under the 1940 Act and
will be in accordance with the Funds' investment policies and restrictions.

Each Fund will invest Uninvested Cash in Central Funds only to the extent that
its aggregate investment in the Central Funds does not exceed 25% of its total
assets. Purchases and sales of shares of Central Funds are made at net asset
value.

The following is a chart of the various types of securities and investment
strategies employed by the Funds. Unless otherwise indicated, each Fund is
permitted, but not obligated, to pursue any of the following strategies and does
not represent that these techniques are available now or will be available at
any time in the future. If a Fund's investment in a particular type of security
is limited to a certain percentage of a Fund's assets, that percentage
limitation is listed in the chart. Preceding the chart, there is a description
of how each type of security and investment strategy may be used by a Fund. As a
matter of nonfundamental operating policy, each Fund may be subject to
additional restrictions. See the section entitled "Investment Restriction."

DWS Mid Cap Growth Fund and DWS Small Cap Growth Fund
<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------------
                                                                                 DWS Mid Cap Growth DWS Small Cap Growth
INVESTMENT PRACTICE                                                                     Fund                Fund
--------------------------------------------------------------------------------------------------------------------------
KEY TO TABLE:

I        Permitted without stated limit
II       Permitted without stated limit, but not expected to be used to a significant extent
X        Not permitted

20% Italic type (e.g.  20%) represents an investment limitation as a percentage of net Fund assets; does not indicate
actual use

20% Roman type (e.g.  20%) represents an investment limitation as a percentage of total Fund assets; does not indicate
actual use
--------------------------------------------------------------------------------------------------------------------------
EQUITY SECURITIES
--------------------------------------------------------------------------------------------------------------------------
<S>                                                                                     <C>                  <C>
Common Stock                                                                             I                    I
--------------------------------------------------------------------------------------------------------------------------
Warrants                                                                                 I                    I
--------------------------------------------------------------------------------------------------------------------------
Preferred Stock                                                                          I                    I
--------------------------------------------------------------------------------------------------------------------------
Convertible Securities                                                                   I                    I
--------------------------------------------------------------------------------------------------------------------------
Medium Capitalization Stocks                                                            80%                  II
--------------------------------------------------------------------------------------------------------------------------
Small Capitalization Stocks                                                              II                  80%
--------------------------------------------------------------------------------------------------------------------------
Micro Capitalization Stocks                                                              II                  II
--------------------------------------------------------------------------------------------------------------------------
FIXED INCOME SECURITIES & MONEY MARKET INSTRUMENTS
--------------------------------------------------------------------------------------------------------------------------
Short-Term Instruments                                                                  20%                  20%
--------------------------------------------------------------------------------------------------------------------------
Obligations of Banks and Other Financial Institutions                                   20%                  20%
--------------------------------------------------------------------------------------------------------------------------
Certificates of Deposit and Bankers' Acceptances                                        20%                  20%
--------------------------------------------------------------------------------------------------------------------------
Commercial Paper                                                                        20%                  20%
--------------------------------------------------------------------------------------------------------------------------
Variable Rate Master Demand Notes                                                       20%                  20%
--------------------------------------------------------------------------------------------------------------------------
US Government Securities                                                                20%                  20%
--------------------------------------------------------------------------------------------------------------------------
Zero Coupon Securities and Deferred Interest Bonds                                      20%                  20%
--------------------------------------------------------------------------------------------------------------------------
DERIVATIVE SECURITIES (OPTIONS)
--------------------------------------------------------------------------------------------------------------------------
Options on Securities                                                                    I                    I
--------------------------------------------------------------------------------------------------------------------------
Options on Securities Indices                                                            I                    I
--------------------------------------------------------------------------------------------------------------------------
Options on Non-US Securities Indices                                                     I                    I
--------------------------------------------------------------------------------------------------------------------------
DERIVATIVE SECURITIES (FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS)
--------------------------------------------------------------------------------------------------------------------------
Futures Contracts                                                                        I                    I
--------------------------------------------------------------------------------------------------------------------------
Futures Contracts on Securities Indices                                                  I                    I
--------------------------------------------------------------------------------------------------------------------------
Options on Futures Contracts (including Contracts on Security Indices)                   I                    I
--------------------------------------------------------------------------------------------------------------------------
DERIVATIVE SECURITIES (HEDGING STRATEGIES)
--------------------------------------------------------------------------------------------------------------------------
Hedging Strategies                                                                       I                    I
--------------------------------------------------------------------------------------------------------------------------
MORTGAGE-BACKED AND ASSET-BACKED SECURITIES
--------------------------------------------------------------------------------------------------------------------------
Government Guaranteed Mortgage-Backed Securities                                        20%                  20%
--------------------------------------------------------------------------------------------------------------------------
Ginnie Mae Certificates                                                                 20%                  20%
--------------------------------------------------------------------------------------------------------------------------
Fannie Mae Certificates                                                                 20%                  20%
--------------------------------------------------------------------------------------------------------------------------
Freddie Mac Certificates                                                                20%                  20%
--------------------------------------------------------------------------------------------------------------------------
Asset-Backed Securities                                                                 20%                  20%
--------------------------------------------------------------------------------------------------------------------------
SECURITIES OF NON-US ISSUERS
--------------------------------------------------------------------------------------------------------------------------
Foreign Securities & Depository Receipts                                                20%                  20%
(ADRs, EDRs, GDRs and IDRs)
--------------------------------------------------------------------------------------------------------------------------
Foreign Corporate Debt Securities                                                       20%                  20%
--------------------------------------------------------------------------------------------------------------------------
Foreign Government Debt Securities                                                      20%                  20%
--------------------------------------------------------------------------------------------------------------------------
CURRENCY MANAGEMENT
--------------------------------------------------------------------------------------------------------------------------
Currency Exchange Transactions                                                           II                  II
--------------------------------------------------------------------------------------------------------------------------
Currency Hedging Transactions                                                            II                  II
--------------------------------------------------------------------------------------------------------------------------
Cross Hedging                                                                            II                  II
--------------------------------------------------------------------------------------------------------------------------
Forward Currency Exchange Contracts                                                      II                  II
--------------------------------------------------------------------------------------------------------------------------
Options on Foreign Currencies                                                            II                  II
--------------------------------------------------------------------------------------------------------------------------
OTHER INVESTMENTS AND INVESTMENT PRACTICES
--------------------------------------------------------------------------------------------------------------------------
Illiquid Securities                                                                     15%                  15%
--------------------------------------------------------------------------------------------------------------------------
When-Issued and Delayed Delivery Securities                                             15%                  15%
--------------------------------------------------------------------------------------------------------------------------
Repurchase Agreements                                                                   20%                  20%
--------------------------------------------------------------------------------------------------------------------------
Reverse Repurchase Agreements                                                         33 1/3%              33 1/3%
--------------------------------------------------------------------------------------------------------------------------
Mortgage Dollar Rolls                                                                 33 1/3%              33 1/3%
--------------------------------------------------------------------------------------------------------------------------
Lending of Portfolio Securities                                                       33 1/3%              33 1/3%
--------------------------------------------------------------------------------------------------------------------------
Borrowing                                                                             33 1/3%              33 1/3%
--------------------------------------------------------------------------------------------------------------------------
Short Sales                                                                             25%                  25%
--------------------------------------------------------------------------------------------------------------------------
Concentration in Any One Industry                                                       25%                  25%
--------------------------------------------------------------------------------------------------------------------------
Other Investment Companies                                                              10%                  10%
--------------------------------------------------------------------------------------------------------------------------
Temporary Defensive Investments                                                         100%                100%
--------------------------------------------------------------------------------------------------------------------------

DWS Micro Cap Fund

--------------------------------------------------------------------------------------------------------------------------
INVESTMENT PRACTICE                                                                        DWS Micro Cap Fund
--------------------------------------------------------------------------------------------------------------------------
KEY TO TABLE:

I        Permitted without stated limit
II       Permitted without stated limit, but not expected to be used to a significant extent
X        Not permitted

20% Italic type (e.g.  20%) represents an investment limitation as a percentage of net Fund assets; does not indicate
actual use

20% Roman type (e.g.  20%) represents an investment limitation as a percentage of total Fund assets; does not indicate
actual use
--------------------------------------------------------------------------------------------------------------------------
EQUITY SECURITIES
--------------------------------------------------------------------------------- ----------------------------------------
Common Stock                                                                      I
--------------------------------------------------------------------------------- ----------------------------------------
Warrants                                                                          I
--------------------------------------------------------------------------------- ----------------------------------------
Preferred Stock                                                                   5%
--------------------------------------------------------------------------------- ----------------------------------------
Convertible Securities                                                            I
--------------------------------------------------------------------------------- ----------------------------------------
Medium-Capitalization Stocks                                                      II
--------------------------------------------------------------------------------- ----------------------------------------
Small Capitalization Stocks                                                       I
--------------------------------------------------------------------------------- ----------------------------------------
Micro Capitalization Stocks                                                       At least 80%
--------------------------------------------------------------------------------------------------------------------------
FIXED INCOME SECURITIES & MONEY MARKET INSTRUMENTS
--------------------------------------------------------------------------------- ----------------------------------------
US Government Securities                                                          20%
--------------------------------------------------------------------------------- ----------------------------------------
Short-Term Instruments                                                            20%
--------------------------------------------------------------------------------- ----------------------------------------
Obligations of Banks and Other Financial Institutions                             20%
--------------------------------------------------------------------------------- ----------------------------------------
Certificates of Deposit and Bankers' Acceptances                                  20%
--------------------------------------------------------------------------------- ----------------------------------------
Commercial Paper                                                                  20%
--------------------------------------------------------------------------------- ----------------------------------------
Other Debt Obligations                                                            20%
--------------------------------------------------------------------------------------------------------------------------
DERIVATIVE SECURITIES (OPTIONS)
--------------------------------------------------------------------------------- ----------------------------------------
Options on Securities                                                             I
--------------------------------------------------------------------------------- ----------------------------------------
Protective Puts                                                                   25%
--------------------------------------------------------------------------------- ----------------------------------------
Options on Securities Indices                                                     I
--------------------------------------------------------------------------------- ----------------------------------------
Options on Non-US Securities Indices                                              I
--------------------------------------------------------------------------------- ----------------------------------------
DERIVATIVE SECURITIES (FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS)
--------------------------------------------------------------------------------- ----------------------------------------
Futures Contracts                                                                 I
--------------------------------------------------------------------------------- ----------------------------------------
Futures Contracts on Securities Indices                                           I
--------------------------------------------------------------------------------- ----------------------------------------
Options on Futures Contracts (including Contracts on Securities Indices)          I
--------------------------------------------------------------------------------- ----------------------------------------
Purchased protective puts                                                         25%
--------------------------------------------------------------------------------------------------------------------------
DERIVATIVE SECURITIES (HEDGING STRATEGIES)
--------------------------------------------------------------------------------- ----------------------------------------
Hedging Strategies                                                                I
--------------------------------------------------------------------------------------------------------------------------
SECURITIES OF NON-US ISSUERS
--------------------------------------------------------------------------------- ----------------------------------------
Foreign Securities & Depository Receipts                                          20%
(ADRs, EDRs, GDRs and IDRs)
--------------------------------------------------------------------------------- ----------------------------------------
Foreign Corporate Debt Securities                                                 20%
--------------------------------------------------------------------------------- ----------------------------------------
Foreign Government Debt Securities                                                20%
--------------------------------------------------------------------------------------------------------------------------
CURRENCY MANAGEMENT
--------------------------------------------------------------------------------- ----------------------------------------
Currency Exchange Transactions                                                    II
--------------------------------------------------------------------------------- ----------------------------------------
Currency Hedging Transactions                                                     II
--------------------------------------------------------------------------------- ----------------------------------------
Cross Hedging                                                                     II
--------------------------------------------------------------------------------- ----------------------------------------
Forward Currency Exchange Contracts                                               II
--------------------------------------------------------------------------------- ----------------------------------------
Options on Foreign Currencies                                                     II
--------------------------------------------------------------------------------------------------------------------------
OTHER INVESTMENTS AND INVESTMENT PRACTICES
--------------------------------------------------------------------------------- ----------------------------------------
Illiquid Securities                                                               15%
--------------------------------------------------------------------------------- ----------------------------------------
When-Issued and Delayed Delivery Securities                                       33 1/3%
--------------------------------------------------------------------------------- ----------------------------------------
Repurchase Agreements                                                             20%
--------------------------------------------------------------------------------- ----------------------------------------
Reverse Repurchase Agreements                                                     33%
--------------------------------------------------------------------------------- ----------------------------------------
Lending of Portfolio Securities                                                   33 1/3%
--------------------------------------------------------------------------------- ----------------------------------------
Borrowing                                                                         33 1/3%
--------------------------------------------------------------------------------- ----------------------------------------
Short Sales                                                                       II
--------------------------------------------------------------------------------- ----------------------------------------
Other Investment Companies                                                        10%
--------------------------------------------------------------------------------- ----------------------------------------
Temporary Defensive Investments                                                   100%
--------------------------------------------------------------------------------- ----------------------------------------
Non-Diversification                                                               25%
--------------------------------------------------------------------------------- ----------------------------------------
Concentration in Any One Industry                                                 25%
--------------------------------------------------------------------------------- ----------------------------------------
</TABLE>

Portfolio Holdings

In addition to the public disclosure of Funds' portfolio holdings through
required SEC quarterly filings, each Fund may make its portfolio holdings
information publicly available on the DWS Funds' Web site as described in each
Fund's prospectus. Each Fund does not disseminate non-public information about
portfolio holdings except in accordance with policies and procedures adopted by
each Fund.

Each Fund's procedures permit non-public portfolio holdings information to be
shared with Deutsche Asset Management and its affiliates (collectively "DeAM"),
subadvisors, if any, custodians, independent registered public accounting firms,
attorneys, officers and trustees/directors and each of their respective
affiliates and advisers who require access to this information to fulfill their
duties to each Fund and are subject to the duties of confidentiality, including
the duty not to trade on non-public information, imposed by law or contract, or
by each Fund's procedures. This non-public information may also be disclosed,
subject to the requirements described below, to certain third parties, such as
securities lending agents, financial printers, proxy voting firms, mutual fund
analysts and rating and tracking agencies, or to shareholders in connection with
in-kind redemptions (collectively, "Authorized Third Parties").

Prior to any disclosure of each Fund's non-public portfolio holdings information
to Authorized Third Parties, a person authorized by each Fund's Trustees must
make a good faith determination in light of the facts then known that a Fund has
a legitimate business purpose for providing the information, that the disclosure
is in the best interest of each Fund, and that the recipient assents or
otherwise has a duty to keep the information confidential and to not trade based
on the information received while the information remains non-public. No
compensation is received by each Fund or DeAM for disclosing non-public holdings
information. Periodic reports regarding these procedures will be provided to
each Fund's Trustees.

Portfolio holdings information distributed by the trading desks of DeAM or a
subadvisor for the purpose of facilitating efficient trading of such securities
and receipt of relevant research is not subject to the foregoing requirements.
Non-public portfolio holding information does not include portfolio
characteristics (other than holdings or subsets of holdings) about each Fund and
information derived therefrom, including, but not limited to, how each Fund's
investments are divided among various sectors, industries, countries, value and
growth stocks, bonds, currencies and cash, types of bonds, bond maturities,
duration, bond coupons and bond credit quality ratings so long as the identity
of each Fund's holdings could not be derived from such information.

Registered investment companies that are subadvised by DeAM may be subject to
different portfolio holdings disclosure policies, and neither DeAM or its
affiliated nor a Fund's Trustees exercise control over such policies. In
addition, separate account clients of DeAM have access to their portfolio
holdings and are not subject to a Fund's portfolio holdings disclosure policy.
The portfolio holdings of some of the funds subadvised by DeAM and some of the
separate accounts managed by DeAM may substantially overlap with the portfolio
holdings of a Fund.

DeAM also manages certain unregistered commingled trusts and creates model
portfolios, the portfolio holdings of which may substantially overlap with the
portfolio holdings of the Funds. To the extent that investors in these
commingled trusts or recipients of model portfolio holdings information may
receive portfolio holdings information of their trust or of a model portfolio on
a different basis from that on which fund portfolio holdings information is made
public, DeAM has implemented procedures reasonably designed to encourage such
investors and recipients to keep such information confidential, and to prevent
those investors from trading on the basis of non-public holdings information.

There is no assurance that a Fund's policies and procedures with respect to the
disclosure of portfolio holdings information will protect a Fund from the
potential misuse of portfolio holdings information by those in possession of
that information.

                             MANAGEMENT OF THE FUNDS

Investment Advisor

Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), which is
part of Deutsche Asset Management ("DeAM"), is the investment advisor for the
Funds. Under the supervision of the Board of Trustees of each Fund, DIMA, with
headquarters at 345 Park Avenue, New York, New York 10154, makes the Funds'
investment decisions, buys and sells securities for the Funds and conducts
research that leads to these purchase and sale decisions. The Advisor manages
each Fund's daily investment and business affairs subject to the policies
established by the Board of Trustees. DIMA and its predecessors have more than
80 years of experience managing mutual funds. DIMA provides a full range of
investment advisory services to institutional and retail clients. The Funds'
investment advisor is also responsible for selecting brokers and dealers and for
negotiating brokerage commissions and dealer charges. On December 31, 2006,
Deutsche Asset Management, Inc. ("DAMI") merged into DIMA. Prior to December 31,
2006 DAMI was the investment advisor to the Funds. As a result of the merger,
DIMA is now the investment advisor to the Funds.

DeAM is the marketing name in the US for the asset management activities of
Deutsche Bank AG, DIMA, Deutsche Bank Trust Company Americas and DWS Trust
Company. DeAM is a global asset management organization that offers a wide range
of investing expertise and resources, including hundreds of portfolio managers
and analysts and an office network that reaches the world's major investment
centers. This well-resourced global investment platform brings together a wide
variety of experience and investment insight, across industries, regions, asset
classes and investing styles. DIMA is an indirect, wholly-owned subsidiary of
Deutsche Bank AG. Deutsche Bank AG is a major global banking institution that is
engaged in a wide range of financial services, including investment management,
mutual fund, retail, private and commercial banking, investment banking and
insurance. DWS Investments is part of Deutsche Bank's Asset Management division
and, within the US, represents the retail asset management activities of
Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Investment
Management Americas Inc. and DWS Trust Company.

The Advisor provides investment counsel for many individuals and institutions,
including insurance companies, industrial corporations, and financial and
banking organizations, as well as providing investment advice to open- and
closed-end SEC registered funds.

Each Fund is managed by a team of investment professionals, each of whom plays
an important role in a Fund's management process. Team members work together to
develop investment strategies and select securities for a Fund's portfolio. This
team works for the Advisor or its affiliates and is supported by a large staff
of economists, research analysts, traders and other investment specialists. The
Advisor or its affiliates believe(s) its team approach benefits fund investors
by bringing together many disciplines and leveraging its extensive resources.
Team members with primary responsibility for management of a Fund, as well as
team members who have other ongoing management responsibilities for each Fund,
are identified in each Fund's prospectus, as of the date of a Fund's prospectus.
Composition of the team may change over time, and fund shareholders and
investors will be notified of changes affecting individuals with primary fund
management responsibility.

Investment Management Agreement


Pursuant to an Investment Management Agreement between the Funds and DIMA (the
"Investment Management Agreement"), the Advisor provides continuing investment
management of the assets of the Funds. In addition to the investment management
of the assets of the Funds, the Advisor determines the investments to be made
for the Funds, including what portion of its assets remain uninvested in cash or
cash equivalents, and with whom the orders for investments are placed,
consistent with the Funds' policies as stated in their Prospectuses and SAIs, or
as adopted by the Funds' Board. The Advisor will also monitor, to the extent not
monitored by the Fund's administrator or other agent, the Funds' compliance with
its investment and tax guidelines and other compliance policies.

Pursuant to the Investment Management Agreement (unless otherwise provided in
the Investment Management Agreement or as determined by the Funds' Board and to
the extent permitted by applicable law), DIMA pays the compensation and expenses
of all the Trustees, officers, and executive employees of the Funds, including
the Funds' share of payroll taxes, who are affiliated persons of DIMA.

The Investment Management Agreement provides that the Funds are generally
responsible for expenses that include: fees payable to DIMA; outside legal,
accounting or auditing expenses including with respect to expenses related to
negotiation, acquisition or distribution of portfolio investments; maintenance
of books and records that are maintained by the Funds, the Funds' custodian, or
other agents of the Funds; taxes and governmental fees; fees and expenses of the
Funds' accounting agent, custodian, sub-custodians, depositories, transfer
agents, dividend reimbursing agents and registrars; payments for portfolio
pricing or valuation services to pricing agents, accountants, bankers and other
specialists, if any; brokerage commissions or other costs of acquiring or
disposing of any Funds' security or other instruments of the Funds; and
litigation expenses and other extraordinary expenses not incurred in the
ordinary course of the Funds' business.

The Investment Management Agreement allows the Advisor to delegate any of its
duties under the Investment Management Agreement to a subadvisor, subject to a
majority vote of the Board of Trustees, including a majority of the Board of
Trustees who are not interested persons of the Trust, and, if required by
applicable law, subject to a majority vote of each Fund's shareholders.

The Investment Management Agreement provides that DIMA shall not be liable for
any error of judgment or mistake of law or for any loss suffered by each Fund in
connection with matters to which the Investment Management Agreement relates,
except a loss resulting from willful malfeasance, bad faith or gross negligence
on the part of DIMA in the performance of its duties or from reckless disregard
by DIMA of its obligations and duties under the Investment Management Agreement.

The Investment Management Agreement continues in effect from year to year only
if its continuance is approved annually by the vote of a majority of those
Trustees who are not parties to such Agreement or interested persons of the
Advisor or the Trust, cast in person at a meeting called for the purpose of
voting on such approval, and either by a vote of the Trust's Trustees or of a
majority of the outstanding voting securities of a Fund. The Investment
Management Agreement may be terminated at any time, without payment of penalty,
by either party or by vote of a majority of the outstanding voting securities of
the Funds on 60 days' written notice.

For all services provided under the Investment Management Agreement, each Fund
pays the Advisor a fee, computed daily and paid monthly, at the annual rate as a
percentage of net assets shown below:

<TABLE>
<CAPTION>
Fund                                                                               Management Fee Rate
----                                                                               -------------------

<S>                                                                                    <C>
DWS Mid Cap Growth Fund                                                         0.650% to $500 million
                                                                                0.600% next $1 billion
                                                                                0.550% next $2.5 billion
                                                                                0.540% next $2.5 billion
                                                                                0.530% next $2.5 billion
                                                                                0.520% next $2.5 billion
                                                                                    0.510% thereafter
                                                                                   0.510% thereafter

DWS Small Cap Growth Fund                                                                0.650%

From September 19, 2005 through December 30, 2006, DWS Mid Cap Growth Fund paid
the Advisor's predecessor a monthly fee at an annual rate of:

                      Average Daily Net Assets                                   DWS Mid Cap Growth Fund
                      ------------------------                                   -----------------------

                    to $500 million                                                        0.65%
                    over $500 million - $1.5 billion                                       0.60%
                    over $1.5 billion - $4 billion                                         0.55%
                    over 4 billion - $6.5 billion                                          0.54%
                    over $6.5 billion - $9 billion                                         0.53%
                    over $9 billion - $11.5 billion                                        0.52%
                    over $11.5 billion                                                     0.51%


Effective October 1, 2008, DWS Micro Cap Fund pays the Advisor a graduated
investment management fee, based on the average daily net assets of the Fund,
computed daily and payable monthly, at the annual rates shown below:

DWS Micro Cap Fund                                                                1.100% to $250 million
                                                                                 0.950% next $250 million
                                                                                     0.800% thereafter

Prior to October 1, 2008, DWS Micro Cap Fund paid the Advisor a fee, computed
daily and paid monthly, at the annual rate as a percentage of net assets shown
below:

DWS Micro Cap Fund                                                               1.250% to $250 million
                                                                                1.100% next $250 million
                                                                                 0.95% next $500 million
                                                                                    0.80% thereafter
</TABLE>








Prior to July 1, 2006, DWS Micro Cap Fund paid the Advisor a monthly fee of
1.50% of average daily net assets.


DWS Mid Cap Growth Fund. For the fiscal year ended September 30, 2008, the Fund
paid the Advisor a fee in the amount of $5,468,392. For the fiscal year ended
September 30, 2007, the Fund paid the Advisor a fee in the amount of $7,925,087.
For the fiscal years ended September 30, 2006*, the Fund paid the Advisor's
predecessor an advisory fee of $8,308,591.

Through January 31, 2009, the Advisor had contractually agreed to waive all or a
portion of its management fee and reimburse or pay operating expenses of DWS Mid
Cap Growth Fund to the extent necessary to maintain DWS Mid Cap Growth Fund's
total operating expenses at 1.05% for Class S shares, excluding certain expenses
such as extraordinary expenses, taxes, brokerage and interest. The Advisor had
contractually agreed through September 30, 2007, to waive a portion of its fees
and reimburse expenses so that total operating expenses would not exceed 0.94%,
excluding certain expenses such as extraordinary expenses, taxes, brokerage,
interest, and organization and offering expenses, and proxy expenses.

Only the Fund's Board of Trustees may change these contractual fee waivers.

DWS Small Cap Growth Fund. For the fiscal year ended September 30, 2008, the
Fund paid the Advisor a fee in the amount of $1,803,035. For the fiscal year
ended September 30, 2007, the Fund paid the Advisor a fee in the amount of
$2,813,970. For the fiscal year ended September 30, 2006*, the Fund paid the
Advisor's predecessor an advisory fee of $3,441,328.

Through January 31, 2010, the Advisor has contractually agreed to waive all or a
portion of its management fee and reimburse or pay operating expenses of DWS
Small Cap Growth Fund to the extent necessary to maintain DWS Small Cap Growth
Fund's total operating expenses at 1.00% for Class S shares, excluding certain
expenses such as extraordinary expenses, taxes, brokerage and interest.

Only the Fund's Board of Trustees may change these contractual fee waivers.

DWS Micro Cap Fund. For the fiscal year ended September 30, 2008, the Fund paid
the Advisor a fee in the amount of $649,327 (of which $191,833 was waived). For
the fiscal year ended September 30, 2007, the Fund paid the Advisor a fee in the
amount of $890,605 (of which $207,321 was waived). For the fiscal year ended
September 30, 2006*, the Fund paid the Advisor's predecessor an advisory fee of
$1,464,791 (of which $342,282 was waived).

Through November 30, 2009, the Advisor has contractually agreed to waive all or
a portion of its investment management fee in the amount of 0.305% of DWS Micro
Cap Fund's average daily total net assets. Through September 30, 2009, the
Advisor has contractually agreed to waive all or a portion of its fees and
reimburse or pay certain operating expenses of DWS Micro Cap Fund so that the
total operating expenses will not exceed 1.44% for Class S shares, excluding
certain expenses such as extraordinary expenses, taxes, brokerage and interest.
Through November 30, 2009, the Advisor has contractually agreed to waive all or
a portion of its Investment Management Fee in the amount of 0.305% of DWS Micro
Cap Fund's average daily total net assets. Through January 31, 2009, the Advisor
had contractually agreed to waive all or a portion of its fees and reimburse or
pay certain operating expenses of DWS Micro Cap Fund so that the total operating
expenses would not exceed 1.52% for Class S shares, excluding certain expenses
such as extraordinary expenses, taxes, brokerage and interest. Through January
31, 2008, the Advisor had contractually agreed to waive a portion of its fees
and reimburse expenses so that total annual operating expenses would not exceed
1.38% for Class S shares, excluding certain expenses such as extraordinary
expenses, taxes, brokerage, interest, organization and offering expenses, and
proxy expenses.

Only the Fund's Board of Trustees may change these contractual fee waivers.

*       Prior to June 1, 2006 for DWS Mid Cap Growth Fund and DWS Small Cap
        Growth Fund and July 1, 2006 for DWS Micro Cap Fund, these fees included
        an administrative service fee.

In reviewing the terms of the Investment Management Agreement and in discussions
with the Advisor concerning such Investment Management Agreement, the Trustees
of the Trust who are not "interested persons" of the Advisor are represented by
independent counsel at a Fund's expense.

The Advisor may enter into arrangements with affiliates and third party service
providers to perform various administrative, back-office and other services
relating to client accounts. Such service providers may be located in the US or
in non-US jurisdictions.


Under a separate agreement between Deutsche Bank AG and the Funds, Deutsche Bank
AG has granted a license to the Funds to utilize the trademark "DWS."

Subadvisor Approval Policy. In addition, the Board and shareholders approved a
subadvisor approval policy for each Fund (the "Subadvisor Approval Policy"). The
Subadvisor Approval Policy permits the Advisor, subject to the approval of the
Board, including a majority of its independent board members, to appoint and
replace subadvisors and to amend sub-advisory contracts without obtaining
shareholder approval. Under the Subadvisor Approval Policy, the Board, including
its independent board members, will continue to evaluate and approve all new
sub-advisory contracts between the Advisor and any subadvisor, as well as all
changes to any existing sub-advisory contract. A Fund cannot implement the
Subadvisor Approval Policy without the SEC either adopting revisions to certain
rules (as it proposed to do in October 2003) or granting a Fund exemptive relief
from such existing rules. In the event that a Fund received exemptive relief or
the SEC adopted revisions to its current rules, the Fund and the Advisor would
be subject to certain conditions imposed by the SEC (and certain conditions that
may be imposed in the future within either exemptive relief or a rule) to ensure
that the interests of a Fund and its shareholders are adequately protected
whenever the Advisor acts under the Subadvisor Approval Policy, including any
shareholder notice requirements.

Compensation of Portfolio Managers

Portfolio managers are eligible for total compensation comprised of base salary
and discretionary incentive compensation.

Base Salary - Base salary generally represents a smaller percentage of portfolio
managers' total compensation than discretionary incentive compensation. Base
salary is linked to job function, responsibilities and financial services
industry peer comparison through the use of extensive market data surveys.

Discretionary Incentive Compensation - Generally, discretionary incentive
compensation comprises a greater proportion of total compensation as a portfolio
manager's seniority and compensation levels increase. Discretionary incentive
compensation is determined based on an analysis of a number of factors,
including among other things, the performance of Deutsche Bank, the performance
of the Asset Management division, and the employee's individual contribution. In
evaluating individual contribution, management will consider a combination of
quantitative and qualitative factors. A portion of the portfolio manager's
discretionary incentive compensation may be delivered in long-term equity
programs (usually in the form of Deutsche Bank equity) (the "Equity Plan"). Top
performing portfolio managers may earn discretionary incentive compensation that
is a multiple of their base salary.

o        The quantitative analysis of a portfolio manager's individual
         performance is based on, among other factors, performance of all of the
         accounts managed by the portfolio manager (which includes the fund and
         any other accounts managed by the portfolio manager) over a one-,
         three-, and five-year period relative to the appropriate Morningstar
         and Lipper peer group universes and/or benchmark index(es) with respect
         to each account. Additionally, the portfolio manager's
         retail/institutional asset mix is weighted, as appropriate for
         evaluation purposes. Generally the benchmark index used is a benchmark
         index set forth in the fund's prospectus to which the fund's
         performance is compared. Additional or different appropriate peer group
         or benchmark indices may also be used. Primary weight is given to
         pre-tax portfolio performance over three-year and five-year time
         periods (adjusted as appropriate if the portfolio manager has served
         for less than five years) with lesser consideration given to portfolio
         performance over a one-year period. The increase or decrease in a
         fund's assets due to the purchase or sale of fund shares is not
         considered a material factor.

o        The qualitative analysis of a portfolio manager's individual
         performance is based on, among other things, the results of an annual
         management and internal peer review process, and management's
         assessment of overall portfolio manager contributions to investor
         relations, the investment process and overall performance (distinct
         from fund and other account performance). Other factors, including
         contributions made to the investment team, as well as adherence to
         Compliance Policies and Procedures, Risk Management procedures, the
         firm's Code of Ethics and "living the values" of the Advisor are also
         factors.

The quantitative analysis of a portfolio manager's performance is given more
weight in determining discretionary incentive compensation than the qualitative
portion.

Certain portfolio managers may also participate in the Equity Plan. The amount
of equity awarded under the long-term equity programs is generally based on the
individual's total compensation package and may comprise from 0% to 30% of the
total compensation award. As discretionary incentive compensation increases, the
percentage of compensation awarded in Deutsche Bank equity also increases.
Portfolio managers may receive a portion of their equity compensation in the
form of shares in the proprietary mutual funds that they manage or support.

Fund Ownership of Portfolio Managers

The following table shows the dollar range of shares owned beneficially and of
record by each member of each Fund's portfolio management team in each Fund as
well as in all DWS Funds as a group (i.e., those funds advised by Deutsche Asset
Management or its affiliates), including investments by their immediate family
members sharing the same household and amounts invested through retirement and
deferred compensation plans. This information is provided as of each Fund's most
recent fiscal year end.

<TABLE>
<CAPTION>
                                                                                                Dollar Range
                                                                                                 Of All DWS
Name of                         DWS                                  DWS Small Cap Growth        Fund Shares
Portfolio Manager         Micro Cap Fund     DWS Mid Cap Growth Fund         Fund                   Owned
-----------------         --------------     -----------------------         ----                   -----

<S>                        <C>  <C>               <C>  <C>                    <C>            <C>        <C>
Joseph Axtell              $1 - $10,000           $1 - $10,000                $0             $100,001 - $500,000
Jeffrey Saeger                  $0                     $0                     $0             $50,001 - $100,000
Rafaelina M. Lee                $0                $1 - $10,000                $0             $50,001 - $100,000

Conflicts of Interest

In addition to managing the assets of each Fund, the Fund's portfolio managers
may have responsibility for managing other client accounts of the Advisor or its
affiliates. The tables below show, for each portfolio manager, the number and
asset size of (1) SEC registered investment companies (or series thereof) other
than the Fund, (2) pooled investment vehicles that are not registered investment
companies and (3) other accounts (e.g., accounts managed for individuals or
organizations) managed by each portfolio manager. Total assets attributed to
each portfolio manager in the tables below include total assets of each account
managed by them, although the manager may only manage a portion of such
account's assets. The tables also show the number of performance based fee
accounts, as well as the total assets of the accounts for which the advisory fee
is based on the performance of the account. This information is provided as of a
Fund's most recent fiscal year end.

DWS Micro Cap Fund

Other SEC Registered Investment Companies Managed:

                                       Number of        Total Assets of    Number of Investment
                                      Registered          Registered         Company Accounts       Total Assets of
Name of                               Investment          Investment               with           Performance- Based
Portfolio Manager                      Companies           Companies       Performance-Based Fee     Fee Accounts
-----------------                      ---------           ---------       ---------------------         --------

Joseph Axtell                              14           $6,365,261,650               0                    $0
Jeffrey Saeger                              2             $614,822,536               0                    $0
Rafaelina M. Lee                            0                       $0               0                    $0

DWS Mid Cap Growth Fund

Other SEC Registered Investment Companies Managed:

                                       Number of        Total Assets of    Number of Investment
                                      Registered          Registered         Company Accounts       Total Assets of
Name of                               Investment          Investment               with           Performance- Based
Portfolio Manager                      Companies           Companies       Performance-Based Fee     Fee Accounts
-----------------                      ---------           ---------       ---------------------         --------

Joseph Axtell                              14           $5,858,010,964               0                    $0
Jeffrey Saeger                              2             $614,822,536               0                    $0
Rafaelina M. Lee                            0                       $0               0                    $0

DWS Small Cap Growth Fund

Other SEC Registered Investment Companies Managed:

                                       Number of        Total Assets of    Number of Investment
                                      Registered          Registered         Company Accounts       Total Assets of
Name of                               Investment          Investment               with           Performance- Based
Portfolio Manager                      Companies           Companies       Performance-Based Fee     Fee Accounts
-----------------                      ---------           ---------       ---------------------         --------

Joseph Axtell                              14           $6,289,866,985               0                    $0
Jeffrey Saeger                              2             $614,822,536               0                    $0
Rafaelina M. Lee                            0                       $0               0                    $0

DWS Micro Cap Fund, DWS Mid Cap Growth Fund, and DWS Small Cap Growth Fund

Other Pooled Investment Vehicles Managed:

                                                                              Number of Pooled
                                      Number of                              Investment Vehicle
                                       Pooled          Total Assets of         Accounts with        Total Assets of
Name of                              Investment       Pooled Investment      Performance-Based    Performance- Based
Portfolio Manager                     Vehicles             Vehicles                 Fee              Fee Accounts
-----------------                     --------             --------                 ---              ------------

Joseph Axtell                             1               $3,953,600                 0                    $0
Jeffrey Saeger                            7             $160,345,886                 0                    $0
Rafaelina M. Lee                          0                       $0                 0                    $0

DWS Micro Cap Fund, DWS Mid Cap Growth Fund, and DWS Small Cap Growth Fund

Other Accounts Managed:

                                                                              Number of Other
                                                                               Accounts with      Total Assets of
                                      Number of     Total Assets of Other   Performance- Based      Performance-
Name of Portfolio Manager          Other Accounts          Accounts                 Fee          Based Fee Accounts
-------------------------                --------          --------                 ---                    --------

Joseph Axtell                             3               $234,032,700               0                   $0
Jeffrey Saeger                            2               $488,907,216               0                   $0
Rafaelina M. Lee                          0                         $0               0                   $0
</TABLE>

In addition to the accounts above, an investment professional may manage
accounts in a personal capacity that may include holdings that are similar to,
or the same as, those of the Funds. The Advisor has in place a Code of Ethics
that is designed to address conflicts of interest and that, among other things,
imposes restrictions on the ability of portfolio managers and other "access
persons" to invest in securities that may be recommended or traded in the Funds
and other client accounts.

Real, potential or apparent conflicts of interest may arise when a portfolio
manager has day-to-day portfolio management responsibilities with respect to
more than one fund or account, including the following:

o        Certain investments may be appropriate for each Fund and also for other
         clients advised by the Advisor, including other client accounts managed
         by each Fund's portfolio management team. Investment decisions for each
         Fund and other clients are made with a view to achieving their
         respective investment objectives and after consideration of such
         factors as their current holdings, availability of cash for investment
         and the size of their investments generally. A particular security may
         be bought or sold for only one client or in different amounts and at
         different times for more than one but less than all clients. Likewise,
         because clients of the Advisor may have differing investment
         strategies, a particular security may be bought for one or more clients
         when one or more other clients are selling the security. The investment
         results achieved for each Fund may differ from the results achieved for
         other clients of the Advisor. In addition, purchases or sales of the
         same security may be made for two or more clients on the same day. In
         such event, such transactions will be allocated among the clients in a
         manner believed by the Advisor to be most equitable to each client,
         generally utilizing a pro rata allocation methodology. In some cases,
         the allocation procedure could potentially have an adverse effect or
         positive effect on the price or amount of the securities purchased or
         sold by each Fund. Purchase and sale orders for each Fund may be
         combined with those of other clients of the Advisor in the interest of
         achieving the most favorable net results to each Fund and the other
         clients.

o        To the extent that a portfolio manager has responsibilities for
         managing multiple client accounts, a portfolio manager will need to
         divide time and attention among relevant accounts. The Advisor attempts
         to minimize these conflicts by aligning its portfolio management teams
         by investment strategy and by employing similar investment models
         across multiple client accounts.

o        In some cases, an apparent conflict may arise where the Advisor has an
         incentive, such as a performance-based fee, in managing one account and
         not with respect to other accounts it manages. The Advisor will not
         determine allocations based on whether it receives a performance-based
         fee from the client. Additionally, the Advisor has in place supervisory
         oversight processes to periodically monitor performance deviations for
         accounts with like strategies.

o        The Advisor and its affiliates and the investment team of each Fund may
         manage other mutual funds and separate accounts on a long-short basis.
         The simultaneous management of long and short portfolios creates
         potential conflicts of interest including the risk that short sale
         activity could adversely affect the market value of the long
         positions (and vice versa), the risk arising from sequential orders in
         long and short positions, and the risks associated with receiving
         opposing orders at the same time. The Advisor has adopted procedures
         that it believes are reasonably designed to mitigate these potential
         conflicts of interest. Included in these procedures are specific
         guidelines developed to ensure fair and equitable treatment for all
         clients whose accounts are managed by each Fund's portfolio management
         team. The Advisor and the portfolio management team have established
         monitoring procedures, a protocol for supervisory reviews, as well as
         compliance oversight to ensure that potential conflicts of interest
         relating to this type of activity are properly addressed.

The Advisor is owned by Deutsche Bank AG, a multi-national financial services
company. Therefore, the Advisor is affiliated with a variety of entities that
provide, and/or engage in commercial banking, insurance, brokerage, investment
banking, financial advisory, broker-dealer activities (including sales and
trading), hedge funds, real estate and private equity investing, in addition to
the provision of investment management services to institutional and individual
investors. Since Deutsche Bank AG, its affiliates, directors, officers and
employees (the "Firm") are engaged in businesses and have interests other than
managing asset management accounts, such other activities involve real,
potential or apparent conflicts of interest. These interests and activities
include potential advisory, transactional and financial activities and other
interests in securities and companies that may be directly or indirectly
purchased or sold by the Firm for its clients' advisory accounts. These are
considerations of which advisory clients should be aware and which may cause
conflicts that could be to the disadvantage of the Advisor's advisory clients.
The Advisor has instituted business and compliance policies, procedures and
disclosures that are designed to identify, monitor and mitigate conflicts of
interest and, as appropriate, to report them to the Fund's Board.


Codes of Ethics

The Funds, the Advisor and the Funds' principal underwriter have each adopted
codes of ethics ("Code of Ethics") under rule 17j-1 under the 1940 Act. Board
members, Officers of the Trust and employees of the Advisor and principal
underwriter are permitted to make personal securities transactions, including
transactions in securities that may be purchased or held by a Fund, subject to
requirements and restrictions set forth in the applicable Code of Ethics. The
Advisor's Code of Ethics contains provisions and requirements designed to
identify and address certain conflicts of interest between personal investment
activities and the interests of each Fund. Among other things, the Advisor's
Code of Ethics prohibits certain types of transactions absent prior approval,
imposes time periods during which personal transactions may not be made in
certain securities, and requires the submission of duplicate broker
confirmations and quarterly reporting of securities transactions. Additional
restrictions apply to portfolio managers, traders, research analysts and others
involved in the investment advisory process. Exceptions to these and other
provisions of the Advisor's Code of Ethics may be granted in particular
circumstances after review by appropriate personnel.

Regulatory Matters and Legal Proceedings

On December 21, 2006, DeAM settled proceedings with the SEC and the New York
Attorney General on behalf of Deutsche Asset Management, Inc. ("DAMI") and DIMA,
the investment advisors to many of the DWS Investments funds, regarding
allegations of improper trading of fund shares at DeAM and at the legacy Scudder
and Kemper organizations prior to their acquisition by DeAM in April 2002. These
regulators alleged that although the prospectuses for certain funds in the
regulators' view indicated that the funds did not permit market timing, DAMI and
DIMA breached their fiduciary duty to those funds in that their efforts to limit
trading activity in the funds were not effective at certain times. The
regulators also alleged that DAMI and DIMA breached their fiduciary duty to
certain funds by entering into certain market timing arrangements with
investors. These trading arrangements originated in businesses that existed
prior to the currently constituted DeAM organization, which came together as a
result of various mergers of the legacy Scudder, Kemper and Deutsche fund
groups, and all of the arrangements were terminated prior to the start of the
regulatory investigations that began in the summer of 2003. No current DeAM
employee approved these trading arrangements. Under the terms of the
settlements, DAMI and DIMA neither admitted nor denied any wrongdoing.

The terms of the SEC settlement, which identified improper trading in the legacy
Deutsche and Kemper mutual funds only, provide for payment of disgorgement in
the amount of $17.2 million. The terms of the settlement with the New York
Attorney General provide for payment of disgorgement in the amount of $102.3
million, which is inclusive of the amount payable under the SEC settlement, plus
a civil penalty in the amount of $20 million. The total amount payable by DeAM,
approximately $122.3 million, will be distributed to shareholders of the
affected funds in accordance with a distribution plan to be developed by a
distribution consultant. The funds' investment advisors do not believe these
amounts will have a material adverse financial impact on them or materially
affect their ability to perform under their investment management agreements
with the DWS funds. The above-described amounts are not material to Deutsche
Bank, and have already been reserved.

Among the terms of the settled orders, DeAM is subject to certain undertakings
regarding the conduct of its business in the future, including formation of a
Code of Ethics Oversight Committee to oversee all matters relating to issues
arising under the advisors' Code of Ethics; establishment of an Internal
Compliance Controls Committee having overall compliance oversight responsibility
of the advisors; engagement of an Independent Compliance Consultant to conduct a
comprehensive review of the advisors' supervisory compliance and other policies
and procedures designed to prevent and detect breaches of fiduciary duty,
breaches of the Code of Ethics and federal securities law violations by the
advisors and their employees; and commencing in 2008, the advisors shall undergo
a compliance review by an independent third party.

In addition, DeAM is subject to certain further undertakings relating to the
governance of the mutual funds, including that at least 75% of the members of
the Boards of Trustees/Directors overseeing the DWS Funds continue to be
independent of DeAM; the Chairmen of the DWS Funds' Boards of Trustees/Directors
continue to be independent of DeAM; DeAM maintain existing management fee
reductions for certain funds for a period of five years and not increase
management fees for these certain funds during this period; the funds retain a
senior officer (or independent consultants, as applicable) responsible for
assisting in the review of fee arrangements and monitoring compliance by the
funds and the investment advisors with securities laws, fiduciary duties, codes
of ethics and other compliance policies, the expense of which shall be borne by
DeAM; and periodic account statements, fund prospectuses and the mutual funds'
web site contain additional disclosure and/or tools that assist investors in
understanding the fees and costs associated with an investment in the funds and
the impact of fees and expenses on fund returns.

DeAM has also settled proceedings with the Illinois Secretary of State regarding
market timing matters. The terms of the Illinois settlement provide for investor
education contributions totaling approximately $4 million and a payment in the
amount of $2 million to the Securities Audit and Enforcement Fund.

On September 28, 2006, the SEC and the National Association of Securities
Dealers ("NASD") (now known as the Financial Industry Regulatory Authority, or
"FINRA") announced final agreements in which Deutsche Investment Management
Americas Inc. ("DIMA"), Deutsche Asset Management, Inc. ("DAMI") and DWS Scudder
Distributors, Inc. (now known as DWS Investments Distributors, Inc. ("DIDI"))
settled administrative proceedings regarding disclosure of brokerage allocation
practices in connection with sales of the DWS Funds' (now known as the DWS
Investments Funds) shares during 2001-2003. The agreements with the SEC and NASD
are reflected in orders which state, among other things, that DIMA and DAMI
failed to disclose potential conflicts of interest to the funds' Boards and to
shareholders relating to DIDI's use of certain funds' brokerage commissions to
reduce revenue sharing costs to broker-dealer firms with whom it had
arrangements to market and distribute DWS Fund shares. These directed brokerage
practices were discontinued in October 2003.


Under the terms of the settlements, in which DIMA, DAMI and DIDI neither
admitted nor denied any of the regulators' findings, DIMA, DAMI and DIDI agreed
to pay disgorgement, prejudgment interest and civil penalties in the total
amount of $19.3 million. The portion of the settlements distributed to the funds
was approximately $17.8 million and was paid to the funds as prescribed by the
settlement orders based upon the amount of brokerage commissions from each fund
used to satisfy revenue sharing agreements with broker-dealers who sold fund
shares.

As part of the settlements, DIMA, DAMI and DIDI also agreed to implement certain
measures and undertakings relating to revenue sharing payments including making
additional disclosures in the funds' Prospectuses or Statements of Additional
Information, adopting or modifying relevant policies and procedures and
providing regular reporting to the fund Boards.

Additional information announced by DeAM regarding the terms of the settlements
is available at www.dws-investments.com/regulatory_settlements.

The matters alleged in the regulatory settlements described above also serve as
the general basis of a number of private class action lawsuits involving the DWS
funds. These lawsuits name as defendants various persons, including certain DWS
funds, the funds' investment advisors and their affiliates, and certain
individuals, including in some cases fund Trustees/Directors, officers, and
other parties. Each DWS fund's investment advisor has agreed to indemnify the
applicable DWS funds in connection with these lawsuits, or other lawsuits or
regulatory actions that may be filed making similar allegations.

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

                             FUND SERVICE PROVIDERS

Administrator

Pursuant to an administrative services agreement with the Advisor (the
"Administrative Services Agreement"), the Advisor provides most administrative
services to the Funds, including, among others, providing the Funds with
personnel, preparing and making required filings on behalf of the Funds,
maintaining books and records for the Funds, and monitoring the valuation of
Funds securities. For all services provided under the Administrative Services
Agreement, each Fund pays the Administrator a fee of 0.10% of the Fund's
respective average daily net assets.

Under the Administrative Services Agreement, DIMA is obligated on a continuous
basis to provide such administrative services as the Board of Trustees of the
Funds reasonably deems necessary for the proper administration of the Funds.
DIMA provides the Funds with personnel; arranges for the preparation and filing
of the Funds' tax returns; prepares and submits reports and meeting materials to
the Board and the shareholders; prepares and files updates to the Funds'
prospectus and SAI as well as other reports required to be filed by the SEC;
maintains the Funds' records; provides each Fund with office space, equipment
and services; supervises, negotiates the contracts of and monitors the
performance of third parties contractors; oversees the tabulation of proxies;
monitors the valuation of portfolio securities and monitors compliance with
Board-approved valuation procedures; assists in establishing the accounting and
tax policies of each Fund; assists in the resolution of accounting issues that
may arise with respect to each Fund; establishes and monitors each Fund's
operating expense budgets; reviews and processes each Fund's bills; assists in
determining the amount of dividends and distributions available to be paid by
each Fund, prepares and arranges dividend notifications and provides information
to agents to effect payments thereof; provides to the Board periodic and special
reports; provides assistance with investor and public relations matters; and
monitors the registration of shares under applicable federal and state law. The
Administrative Services Agreement provides that the Advisor will not be liable
under the Administrative Services Agreement except for willful misfeasance, bad
faith or negligence in the performance of its duties or from the reckless
disregard by it of its duties and obligations thereunder.

Pursuant to an agreement between the Administrator and SSB, the Administrator
has delegated certain administrative functions to SSB. The costs and expenses of
such delegation are borne by the Administrator, not by a Fund.

Prior to July 1, 2006, Investment Company Capital Corp. ("ICCC"), was the
administrator for DWS Mid Cap Growth Fund and DWS Small Cap Growth Fund. ICCC
received a fee (the "Administrator Services Fee") of 0.40% of the average daily
net assets for Class AARP and S shares of DWS Small Cap Growth Fund and 0.65% of
the average daily net assets for Class AARP and 0.45% for Class S shares of DWS
Mid Cap Growth Fund. Effective June 1, 2006, the Administration Agreement with
ICCC was terminated and the Funds entered into an Administrative Services
Agreement with DIMA.

Prior to July 1, 2006, DAMI was the Administrator for DWS Micro Cap Fund. DAMI
received a fee of 0.22% of the average daily net assets of the Fund (the
"Administrator Service Fee"). Effective July 1, 2006 the Administration
Agreement with DAMI was terminated and the Fund entered into an Administrative
Services Agreement with DIMA.

The following administrative services fees were paid to DIMA by the Funds:

<TABLE>
<CAPTION>
DWS Mid Cap Growth Fund                   Administrative Services Fee               Unpaid at Fiscal Year End
-----------------------                   ---------------------------               -------------------------

<S>                                                 <C>                                      <C>
2008                                                $869,732                                 $49,661
2007                                                $1,279,181                                  --
2006*                                               $416,391                                    --


DWS Small Cap Growth Fund                Administrative Services Fee               Unpaid at Fiscal Year End
-------------------------                ---------------------------               -------------------------

2008                                              $277,390                                  $11,527
2007                                                $432,919                                   --
2006*                                               $168,484                                   --


DWS Micro Cap Fund                       Administrative Services Fee               Unpaid at Fiscal Year End
------------------                       ---------------------------               -------------------------

2008                                               $51,946                                  $3,498
2007                                                $71,248                                    --
2006**                                              $23,088                                    --

*        For the period from June 1, 2006 through September 30, 2006.

**       For the period from July 1, 2006 through September 30, 2006

For the period October 1, 2005 through May 31, 2006 for both DWS Mid Cap Growth
Fund and DWS Small Cap Growth Fund and for the period October 1, 2005 through
June 30, 2006 for DWS Micro Cap Fund, the administrator service fees charged to
the Funds were as follows:

DWS Mid Cap Growth Fund                    Administrator Service Fee                        Waived
-----------------------                    -------------------------                        ------

Class S                                             $683,715                              $ 66,407


DWS Small Cap Growth Fund                 Administrator Service Fee                         Waived
-------------------------                 -------------------------                         ------

Class S                                             $204,560                              $  3,533


DWS Micro Cap Fund                        Administrator Service Fee                         Waived
------------------                        -------------------------                         ------

Class S                                             $  3,581                              $  1,383
</TABLE>




Pursuant to DeAM procedures approved by the Boards on behalf of the DWS funds,
proof of claim forms are routinely filed on behalf of the DWS funds by a third
party service provider, with certain limited exceptions. The Boards of the DWS
funds receive periodic reports regarding the implementation of these procedures.

Distributor

DWS Investments Distributors, Inc. ("DIDI") is the principal distributor for
shares of each Fund. DIDI is a registered broker-dealer and is affiliated with
DIMA. The principal business address of DIDI is 222 South Riverside Plaza,
Chicago, IL 60606.

DIDI serves as the distributor of the Funds' shares pursuant to the Distribution
Agreement. The terms and conditions of the Distribution Agreement are exactly
the same as the Distribution Agreement with ICC Distributors, Inc., the former
distributor of the Funds. DIDI enters into a Selling Group Agreement with
certain broker-dealers (each a "Participating Dealer"). If a Participating
Dealer previously had agreements in place with DIDI and ICC Distributors, Inc.,
the DIDI Agreement controls. If the Participating Dealer did not have an
agreement with DIDI, then the terms of the assigned ICC Distributors, Inc.
agreement remain in effect. These Selling Group Agreements may be terminated by
their terms or by the terms of the Distribution Agreement, as applicable. DIDI
is a wholly owned subsidiary of Deutsche Bank AG. The address for DIDI is 222
South Riverside Plaza, Chicago, IL 60606.

Under the underwriting agreement, each Fund is responsible for: the payment of
all fees and expenses in connection with the preparation and filing with the SEC
of its registration statement and prospectus and any amendments and supplements
thereto; the registration and qualification of shares for sale in the various
states, including registering the Fund as a broker or dealer in various states,
as required; the fees and expenses of preparing, printing and mailing
prospectuses annually to existing shareholders (see below for expenses relating
to prospectuses paid by the Distributor); notices, proxy statements, reports or
other communications to shareholders of the Fund; the cost of printing and
mailing confirmations of purchases of shares and any prospectuses accompanying
such confirmations; any issuance taxes and/or any initial transfer taxes; a
portion of shareholder toll-free telephone charges and expenses of shareholder
service representatives; the cost of wiring funds for share purchases and
redemptions (unless paid by the shareholder who initiates the transaction); the
cost of printing and postage of business reply envelopes; and a portion of the
cost of computer terminals used by both the Fund and the Distributor.

The Distributor will pay for printing and distributing prospectuses or reports
prepared for its use in connection with the offering of each Fund's shares to
the public and preparing, printing and mailing any other literature or
advertising in connection with the offering of shares of the fund to the public.
The Distributor will pay all fees and expenses in connection with its
qualification and registration as a broker or dealer under federal and state
laws, a portion of the cost of toll-free telephone service and expenses of
shareholder service representatives, a portion of the cost of computer
terminals, and expenses of any activity which is primarily intended to result in
the sale of shares issued by the fund, unless a Rule 12b-1 Plan is in effect
which provides that a Fund shall bear some or all of such expenses.

Although the Funds do not currently have a 12b-1 Plan for these classes, and the
Trustees of each Trust have no current intention of adopting one, each Fund will
also pay those fees and expenses permitted to be paid or assumed by the
applicable Trust pursuant to a 12b-1 Plan, if any, adopted by the Trust,
notwithstanding any other provision to the contrary in the underwriting
agreement.

The Distributor currently offers shares of each Fund on a continuous basis to
investors in all states in which shares of the Fund may from time to time be
registered or where permitted by applicable law. The underwriting agreement
provides that the Distributor accepts orders for shares at net asset value
because no sales commission or load is charged to the investor. The Distributor
has made no firm commitment to acquire shares of any of the Funds.

Custodian

Each Fund employs SSB, 225 Franklin Street, Boston, Massachusetts 02110 as
custodian. SSB has entered into agreements with foreign subcustodians approved
by the Trustees pursuant to Rule 17f-5 under the 1940 Act. SSB uses Deutsche
Bank AG, an affiliate of the Investment Advisor, as subcustodian ("DB
Subcustodian") in certain countries. To the extent a Fund holds any securities
in the countries in which SSB uses DB Subcustodian as a subcustodian, those
securities will be held by DB Subcustodian as part of a larger omnibus account
in the name of SSB (the "Omnibus Account"). For its services, DB Subcustodian
receives (1) an annual fee based on a percentage of the average daily net assets
of the Omnibus Account and (2) transaction charges with respect to transactions
that occur within the Omnibus Account.

Transfer Agent and Shareholder Service Agent

DWS Investments Service Company ("DISC"), a subsidiary of the Advisor, serves as
transfer agent for each Fund pursuant to a transfer agency agreement. Under its
transfer agency agreement with the applicable Trust, DISC maintains the
shareholder account records for each Fund, handles certain communications
between shareholders and the applicable Trust and causes to be distributed any
dividends and distributions payable by the applicable Trust. DISC may be
reimbursed by the Fund for its out-of-pocket expenses.

The Transfer Agent receives an annual service fee for each account of the Fund,
based on the type of account. For open retail accounts, the fee is a flat fee
ranging from $20.00 to $27.50 per account, for open wholesale money funds the
fee is $32.50 per account, while for certain retirement accounts serviced on the
recordkeeping system of ADP, Inc., the fee is a flat fee up to $3.60 per account
(as of 2007, indexed to inflation) plus an asset based fee of up to 0.25% of
average net assets. 1/12th of the annual service charge for each account is
charged and payable to the Transfer Agent each month. A fee is charged for any
account which at any time during the month had a share balance in the Fund.
Smaller fees are also charged for closed accounts for which information must be
retained on the Transfer Agent's system for up to 18 months after closing for
tax reporting purposes.

Certain out-of-pocket expenses incurred by the Transfer Agent, including
expenses of printing and mailing routine fund disclosure documents, costs of
record retention and transaction processing costs are reimbursed by the Fund or
are paid directly by the Fund. Certain additional out-of-pocket expenses,
including costs of computer hardware and software, third party record-keeping
and processing of proxy statements, may only be reimbursed by the Fund with the
prior approval of the Fund's Board.


For the fiscal year ended September 30, 2008, the amounts charged to the Funds
by DISC were as follows:

<TABLE>
<CAPTION>
                                                                                                       Amount Unpaid at
Fund                                 Class                   Total            Amount Waived           September 30, 2008
----                                 -----                   -----            -------------           ------------------

<S>                                    <C>                    <C>                     <C>                      <C>
DWS Mid Cap Growth Fund              Class S               $402,898                   --                    $93,394
DWS Small Cap Growth Fund            Class S               $233,721                $227,410                 $6,311
DWS Micro Cap Fund                   Class S               $14,429                 $14,429                    --

For the fiscal year ended September 30, 2007, the amounts charged to the Funds
by DISC were as follows:

Fund                                       Class                    Total                     Amount Waived
----                                       -----                    -----                     -------------

DWS Mid Cap Growth Fund                   Class S                 $491,600                      $125,996
DWS Small Cap Growth Fund                 Class S                 $547,476                      $349,346
DWS Micro Cap Fund                        Class S                  $13,100                       $13,100

For the fiscal year ended September 30, 2006, the amounts charged to the Funds
by DISC were as follows:

Fund                                       Class                    Total                     Amount Waived
----                                       -----                    -----                     -------------

DWS Mid Cap Growth Fund                   Class S                 $142,347                             --
DWS Small Cap Growth Fund                 Class S                  $89,186                       $72,933
DWS Micro Cap Fund                        Class S                     $612                          $529
</TABLE>

Pursuant to a sub-transfer agency agreement between DISC and DST Systems, Inc.
("DST"), DISC has delegated certain transfer agent, dividend paying agent and
shareholder servicing agent functions to DST. The costs and expenses of such
delegation are borne by DISC, not by the Funds.

Each Fund, or the Advisor (including any affiliate of the Advisor), or both, may
pay unaffiliated third parties for providing recordkeeping and other
administrative services with respect to accounts of participants in retirement
plans or other beneficial owners of Fund shares whose interests are generally
held in an omnibus account.

Legal Counsel

Vedder Price P.C., 222 North LaSalle Street, Chicago, IL 60601, serves as legal
counsel to each Fund.

Ropes & Gray LLP, One International Place, Boston, Massachusetts 02110-2624,
serves as counsel to the Independent Trustees.

Independent Registered Public Accounting Firm

PricewaterhouseCoopers LLP, 125 High Street, Boston, MA 02110, acts as the
Independent Registered Public Accounting Firm for each Fund.

                             PORTFOLIO TRANSACTIONS

The Advisor is generally responsible for placing the orders for the purchase and
sale of portfolio securities, including the allocation of brokerage. With
respect to those funds for which a sub-investment advisor manages the fund's
investments, references in this section to the "Advisor" should be read to mean
the Sub-Advisor, except as noted below.

The policy of the Advisor in placing orders for the purchase and sale of
securities for the Funds is to seek best execution, taking into account such
factors, among others, as price; commission (where applicable); the
broker-dealer's ability to ensure that securities will be delivered on
settlement date; the willingness of the broker-dealer to commit its capital and
purchase a thinly traded security for its own inventory; whether the
broker-dealer specializes in block orders or large program trades; the
broker-dealer's knowledge of the market and the security; the broker-dealer's
ability to maintain confidentiality; the broker-dealer's ability to provide
access to new issues; the broker-dealer's ability to provide support when
placing a difficult trade; the financial condition of the broker-dealer; and
whether the broker-dealer has the infrastructure and operational capabilities to
execute and settle the trade. The Advisor seeks to evaluate the overall
reasonableness of brokerage commissions with commissions charged on comparable
transactions and compares the brokerage commissions (if any) paid by the Funds
to reported commissions paid by others. The Advisor routinely reviews commission
rates, execution and settlement services performed and makes internal and
external comparisons.

Commission rates on transactions in equity securities on U.S. securities
exchanges are subject to negotiation. Commission rates on transactions in equity
securities on foreign securities exchanges are generally fixed. Purchases and
sales of fixed-income securities and certain over-the-counter securities are
effected on a net basis, without the payment of brokerage commissions.
Transactions in fixed income and certain over-the-counter securities are
generally placed by the Advisor with the principal market makers for these
securities unless the Advisor reasonably believes more favorable results are
available elsewhere. Transactions with dealers serving as market makers reflect
the spread between the bid and asked prices. Purchases of underwritten issues
will include an underwriting fee paid to the underwriter. Money market
instruments are normally purchased in principal transactions directly from the
issuer or from an underwriter or market maker.

It is likely that the broker-dealers selected based on the considerations
described in this section will include firms that also sell shares of the Funds
to their customers. However, the Advisor does not consider sales of shares of
the Funds as a factor in the selection of broker-dealers to execute portfolio
transactions for the Funds and, accordingly, has implemented policies and
procedures reasonably designed to prevent its traders from considering sales of
shares of the Funds as a factor in the selection of broker-dealers to execute
portfolio transactions for the Funds.

The Advisor is permitted by Section 28(e) of the Securities Exchange Act of
1934, as amended ("1934 Act"), when placing portfolio transactions for a Fund,
to cause the Fund to pay brokerage commissions in excess of that which another
broker-dealer might charge for executing the same transaction in order to obtain
research and brokerage services if the Advisor determines that such commissions
are reasonable in relation to the overall services provided. The Advisor may
from time to time, in reliance on Section 28(e) of the 1934 Act, execute
portfolio transactions with broker-dealers that provide research and brokerage
services to the Advisor. Consistent with the Advisor's policy regarding best
execution, where more than one broker is believed to be capable of providing
best execution for a particular trade, the Advisor may take into consideration
the receipt of research and brokerage services in selecting the broker-dealer to
execute the trade. Although certain research and brokerage services from
broker-dealers may be useful to a Fund and to the Advisor, it is the opinion of
the Advisor that such information only supplements its own research effort since
the information must still be analyzed, weighed and reviewed by the Advisor's
staff. To the extent that research and brokerage services of value are received
by the Advisor, the Advisor may avoid expenses that it might otherwise incur.
Research and brokerage services received from a broker-dealer may be useful to
the Advisor and its affiliates in providing investment management services to
all or some of its clients, which includes a Fund. Services received from
broker-dealers that executed securities transactions for a Portfolio will not
necessarily be used by the Advisor specifically to service such Fund.

Research and brokerage services provided by broker-dealers may include, but are
not limited to, information on the economy, industries, groups of securities,
individual companies, statistical information, accounting and tax law
interpretations, political developments, legal developments affecting portfolio
securities, technical market action, pricing and appraisal services, credit
analysis, risk measurement analysis, performance analysis and measurement and
analysis of corporate responsibility issues. Research and brokerage services are
typically received in the form of written or electronic reports, access to
specialized financial publications, telephone contacts and personal meetings
with security analysts, but may also be provided in the form of access to
various computer software and meetings arranged with corporate and industry
representatives.

The Advisor may also select broker-dealers and obtain from them research and
brokerage services that are used in connection with executing trades provided
that such services are consistent with interpretations under Section 28(e) of
the 1934 Act. Typically, these services take the form of computer software
and/or electronic communication services used by the Advisor to facilitate
trading activity with those broker-dealers.

Research and brokerage services may include products obtained from third parties
if the Advisor determines that such product or service constitutes brokerage and
research as defined in Section 28(e) and interpretations thereunder. Currently,
it is the Advisor's policy that Sub-Advisors may not execute portfolio
transactions on behalf of the Funds to obtain third party research and brokerage
services. The Advisor may, in the future, change this policy. Regardless,
certain Sub-Advisors may, as matter of internal policy, limit or preclude third
party research and brokerage services.

The Advisor may use brokerage commissions to obtain certain brokerage products
or services that have a mixed use (i.e., it also serves a function that does not
relate to the investment decision-making process). In those circumstances, the
Advisor will make a good faith judgment to evaluate the various benefits and
uses to which it intends to put the mixed use product or service and will pay
for that portion of the mixed use product or service that it reasonably believes
does not constitute research and brokerage services with its own resources.

DIMA will monitor regulatory developments and market practice in the use of
client commissions to obtain research and brokerage services and may adjust its
portfolio transactions policies in response thereto.

Investment decisions for each Fund and for other investment accounts managed by
the Advisor are made independently of each other in light of differing
conditions. However, the same investment decision may be made for two or more of
such accounts. In such cases, simultaneous transactions are inevitable. To the
extent permitted by law, the Advisor may aggregate the securities to be sold or
purchased for a Fund with those to be sold or purchased for other accounts in
executing transactions. Purchases or sales are then averaged as to price and
commission and allocated as to amount in a manner deemed equitable to each
account. While in some cases this practice could have a detrimental effect on
the price paid or received by, or on the size of the position obtained or
disposed of for, the Fund, in other cases it is believed that the ability to
engage in volume transactions will be beneficial to the Fund.

DIMA and its affiliates and the Funds' management team manage other mutual funds
and separate accounts, some of which use short sales of securities as a part of
its investment strategy. The simultaneous management of long and short
portfolios creates potential conflicts of interest including the risk that short
sale activity could adversely affect the market value of the long positions (and
vice versa), the risk arising from sequential orders in long and short
positions, and the risks associated with receiving opposing orders at the same
time.

DIMA has adopted procedures that it believes are reasonably designed to mitigate
these potential conflicts of interest. Incorporated in the procedures are
specific guidelines developed to ensure fair and equitable treatment for all
clients. DIMA and the investment team have established monitoring procedures and
a protocol for supervisory reviews, as well as compliance oversight to ensure
that potential conflicts of interest relating to this type of activity are
properly addressed.

Deutsche Bank AG or one of its affiliates (or in the case of a Sub-Advisor, the
Sub-Advisor or one of its affiliates) may act as a broker for the Funds and
receive brokerage commissions or other transaction-related compensation from the
Funds in the purchase and sale of securities, options or futures contracts when,
in the judgment of the Advisor, and in accordance with procedures approved by
the Funds' Boards, the affiliated broker will be able to obtain a price and
execution at least as favorable as those obtained from other qualified brokers
and if, in the transaction, the affiliated broker charges the Funds a rate
consistent with that charged to comparable unaffiliated customers in similar
transactions.

Pursuant to procedures determined by the Trustees and subject to the general
policies of each Fund and Section 17(e) of the 1940 Act, the Advisor may place
securities transactions with brokers with whom it is affiliated ("Affiliated
Brokers").

For the fiscal year ended September 30, 2006, each Fund paid the following in
brokerage commissions:

DWS Mid Cap Growth Fund                                      $1,801,405
DWS Small Cap Growth Fund                                    $1,190,469
DWS Micro Cap Fund                                             $389,581

For the fiscal year ended September 30, 2007, each Fund paid the following in
brokerage commissions:

DWS Mid Cap Growth Fund                                      $1,506,949
DWS Small Cap Growth Fund                                      $833,006
DWS Micro Cap Fund                                             $287,167

For the fiscal year ended September 30, 2008, each Fund paid the following in
brokerage commissions:

DWS Mid Cap Growth Fund                                      $1,570,661
DWS Small Cap Growth Fund                                      $695,353
DWS Micro Cap Fund                                             $191,235

Each Fund did not pay any affiliated brokerage commissions for its most recent
fiscal year end.

Securities of Regular Broker-Dealers. Each Fund is required to identify any
securities of its "regular brokers or dealers" (as such term is defined in the
1940 Act) which the Fund has acquired during its most recent fiscal year.

At September 30, 2008, the DWS Mid Cap Growth Fund held the following securities
of its regular brokers or dealers:


<TABLE>
<CAPTION>
Name of Regular Broker or Dealer or Parent (Issuer)            Value of Securities Owned as of September 30, 2008
---------------------------------------------------            --------------------------------------------------

<S>                                                                               <C>
Waddell & Reed Financial, Inc.                                                    $4,980,000
Northern Trust Corp.                                                              $4,563,000
E*Trade Financial Corp.                                                           $5,960,000
Affiliated Managers Group, Inc.                                                  $18,923,000
T. Rowe Price Group, Inc.                                                        $11,822,000
TD Ameritrade Holding Corp.                                                       $5,550,000


At September 30, 2008, the DWS Small Cap Growth Fund held the following
securities of its regular brokers or dealers:

Name of Regular Broker or Dealer or Parent (Issuer)            Value of Securities Owned as of September 30, 2008
---------------------------------------------------            --------------------------------------------------

Waddell & Reed Financial, Inc.                                                      $985,000
E*Trade Financial Corp.                                                           $1,200,000
FCStone Group Inc.                                                                $1,326,000

As of September 30, 2008, DWS Micro Cap Fund held the following securities of
its regular brokers or dealers:

Name of Regular Broker or Dealer or Parent (Issuer)            Value of Securities Owned as of September 30, 2008
---------------------------------------------------            --------------------------------------------------

FCStone Group Inc.                                                                  $500,000

Portfolio Turnover

The portfolio turnover rates for the fiscal years ended 2008 and 2007 were as
follows:

                                             2008                      2007
                                             ----                      ----

DWS Mid Cap Growth Fund                      82%                       56%
DWS Small Cap Growth Fund                    82%                       64%
DWS Micro Cap Fund                           59%                       73%
</TABLE>

These rates will vary from year to year. High turnover rates increase
transaction costs and may increase net short-term capital gains. The Advisor
considers these effects when evaluating the anticipated benefits of short-term
investing.

                        PURCHASE AND REDEMPTION OF SHARES

General Information

Policies and procedures affecting transactions in fund shares can be changed at
any time without notice, subject to applicable law. Transactions may be
contingent upon proper completion of application forms and other documents by
shareholders and their receipt by the fund's agents. Transaction delays in
processing (and changing account features) due to circumstances within or beyond
the control of the fund and its agents may occur. Shareholders (or their
financial service firms) are responsible for all losses and fees resulting from
bad checks, cancelled orders or the failure to consummate transactions effected
pursuant to instructions reasonably believed to be genuine.

A distribution will be reinvested in shares of the same fund and class if the
distribution check is returned as undeliverable.

Orders will be confirmed at a price based on the net asset value of the fund
next determined after receipt in good order by DIDI of the order accompanied by
payment. Orders received by dealers or other financial services firms prior to
the determination of net asset value and received in good order by DIDI prior to
the determination of net asset value will be confirmed at a price based on the
net asset value next determined after receipt by DIDI ("trade date").

Certificates. Share certificates will not be issued. Share certificates now in a
shareholder's possession may be sent to the transfer agent for cancellation and
book-entry credit to such shareholder's account. Certain telephone and other
procedures require book-entry holdings. Shareholders with outstanding
certificates bear the risk of loss.

Additional Minimum Balance Policies. For fiduciary accounts such as IRAs, and
custodial accounts such as Uniform Gifts to Minor Act and Uniform Transfers to
Minor Act accounts, the minimum balance is $1,000 for Class S. A shareholder may
open an account with at least $1,000, if an automatic investment plan (AIP) of
$50/month is established. DWS Investments group retirement plans and certain
other accounts have similar or lower minimum share balance requirements.

Shareholders with a combined household account balance in any of the DWS Funds
of $100,000 or more, as well as group retirement and certain other accounts,
will not be subject to an automatic redemption.

Fiduciary (e.g., IRA or Roth IRA) and custodial accounts (e.g., UGMA or UTMA)
with balances below $1,000 are subject to automatic redemption following 60
days' written notice to applicable shareholders.

Use of Financial Services Firms. Investment dealers and other firms provide
varying arrangements for their clients to purchase and redeem the Fund's shares,
including higher minimum investments, and may assess transaction or other fees.
Firms may arrange with their clients for other investment or administrative
services. Such firms may independently establish and charge additional amounts
to their clients for such services. Firms also may hold a Fund's shares in
nominee or street name as agent for and on behalf of their customers. In such
instances, the Fund's transfer agent, DWS Investments Service Corporation (the
"Transfer Agent"), will have no information with respect to or control over the
accounts of specific shareholders. Such shareholders may obtain access to their
accounts and information about their accounts only from their firm. Certain of
these firms may receive compensation from the Funds through the Shareholder
Service Agent for record-keeping and other expenses relating to these nominee
accounts. In addition, certain privileges with respect to the purchase and
redemption of shares or the reinvestment of dividends may not be available
through such firms. Some firms may participate in a program allowing them access
to their clients' accounts for servicing including, without limitation,
transfers of registration and dividend payee changes; and may perform functions
such as generation of confirmation statements and disbursement of cash
dividends. Such firms, including affiliates of DIDI, may receive compensation
from the fund through the Shareholder Service Agent for these services.

The Funds have authorized one or more financial service institutions, including
certain members of FINRA other than the Distributor ("financial institutions"),
to accept purchase and redemption orders for the Funds' shares. Such financial
institutions may also designate other parties, including plan administrator
intermediaries, to accept purchase and redemption orders on the Funds' behalf.
Orders for purchases or redemptions will be deemed to have been received by the
Funds when such financial institutions or, if applicable, their authorized
designees accept the orders. Subject to the terms of the contract between the
Funds and the financial institution, ordinarily orders will be priced at the
Funds' net asset value next computed after acceptance by such financial
institution or its authorized designees and accepted by the Funds. Further, if
purchases or redemptions of the Funds' shares are arranged and settlement is
made at an investor's election through any other authorized financial
institution, that financial institution may, at its discretion, charge a fee for
that service. The Board of Trustees and the Distributor, also the Funds'
principal underwriter, each has the right to limit the amount of purchases by,
and to refuse to sell to, any person. The Trustees and the Distributor may
suspend or terminate the offering of shares of the Funds at any time for any
reason.

DIDI has adopted an Incentive Plan (the "Plan") covering wholesalers that are
regional vice presidents ("DWS Investments Wholesalers"). Generally, DWS
Investments Wholesalers market shares of the DWS funds to financial advisors,
who in turn may recommend that investors purchase shares of a DWS fund. The Plan
is an incentive program that combines a monthly incentive component with a
quarterly strategic bonus component. Under the Plan, DWS Investments Wholesalers
will receive a monetary monthly incentive based on the amount of sales generated
from their marketing of the funds, and that incentive will differ depending on
the product category of the fund. Each fund is assigned to one of three product
categories -- "Strategic," "Tactical" or "all other funds" -- taking into
consideration, among other things, the following criteria, where applicable:

o        The Fund's consistency with DWS Investments' branding and long-term
         strategy;
o        The Fund's competitive performance;
o        The Fund's Morningstar rating;
o        The length of time the Fund's Portfolio Managers have managed the
         Fund/Strategy;
o        Market size for the fund category;
o        The Fund's size, including sales and redemptions of the Fund's shares.

This information and other factors are presented to a committee comprised of
representatives from various groups within DWS Investments, who review on a
quarterly basis the funds assigned to each product category described above, and
make any changes to those assignments at that time. No one factor, whether
positive or negative, determines a fund's placement in a given category; all
these factors together are considered, and the designation of funds in the
Strategic and Tactical categories represents management's judgment based on the
above criteria. In addition, management may consider a fund's profile over the
course of several review periods before making a change to its category
assignment. These category assignments will be posted quarterly to the DWS
funds' Web site at www.dws-investments.com, approximately one month after the
end of each quarter. DWS Investments Wholesalers receive the highest
compensation for Strategic funds, less for Tactical funds and the lowest for all
other funds. The level of compensation among these categories may differ
significantly.

The prospect of receiving, or the receipt of, additional compensation by a DWS
Investments Wholesaler under the Plan may provide an incentive to favor
marketing the Strategic or Tactical funds over all other funds. The Plan,
however, will not change the price that investors pay for shares of a fund. The
DWS Investments Compliance Department monitors DWS Investments Wholesaler sales
and other activity in an effort to detect unusual activity in the context of the
compensation structure under the Plan. However, investors may wish to take the
Plan and the product category of the fund into account when considering
purchasing a fund or evaluating any recommendations relating to fund shares.

Telephone and Electronic Transaction Procedures. Shareholders have various
telephone, Internet, wire and other electronic privileges available. The fund or
its agents may be liable for any losses, expenses or costs arising out of
fraudulent or unauthorized instructions pursuant to these privileges unless the
fund or its agents reasonably believe, based upon reasonable verification
procedures, that the instructions were genuine. Verification procedures include
recording instructions, requiring certain identifying information before acting
upon instructions and sending written confirmations. During periods when it is
difficult to contact the Shareholder Service Agent, it may be difficult to use
telephone, wire and other privileges.

QuickBuy and QuickSell. QuickBuy and QuickSell permits the transfer of money via
the Automated Clearing House System (minimum $50 and maximum $250,000) from or
to a shareholder's bank, savings and loan, or credit union account in connection
with the purchase or redemption of Fund shares. Shares purchased by check or
through QuickBuy and QuickSell or Direct Deposit may not be redeemed under this
privilege until such Shares have been owned for at least 10 calendar days.
QuickBuy and QuickSell cannot be used with passbook savings accounts or for
certain tax-deferred plans.

Dividend Payment Option. Investors may have dividends and distributions
automatically deposited to their predesignated bank account through DWS
Investments' Dividend Payment Option request form. Shareholders whose
predesignated checking account of record is with a member bank of Automated
Clearing House Network (ACH) can have income and capital gain distributions
automatically deposited to their personal bank account usually within three
business days after a Fund pays its distribution. A Dividend Payment Option
request form can be obtained by visiting our Web site at:
www.dws-investments.com or calling (800) 728-3337. Confirmation Statements will
be mailed to shareholders as notification that distributions have been
deposited.

Tax-Sheltered Retirement Plans. The Shareholder Service Agent provides
retirement plan services and documents and DIDI can establish investor accounts
in any of the following types of retirement plans:

o        Traditional, Roth and Education IRAs. This includes Savings Incentive
         Match Plan for Employees of Small Employers ("SIMPLE"), Simplified
         Employee Pension Plan ("SEP") IRA accounts and prototype documents.

o        403(b)(7) Custodial Accounts. This type of plan is available to
         employees of most non-profit organizations.

o        Prototype money purchase pension and profit-sharing plans may be
         adopted by employers.

Brochures describing these plans as well as model defined benefit plans, target
benefit plans, 457 plans, 401(k) plans, simple 401(k) plans and materials for
establishing them are available from the Shareholder Service Agent upon request.
Additional fees and transaction policies and procedures may apply to such plans.
Investors should consult with their own tax advisors before establishing a
retirement plan.

Purchases

Each Fund reserves the right to withdraw all or any part of the offering made by
its prospectus and to reject purchase orders for any reason. Also, from time to
time, a Fund may temporarily suspend the offering of any class of its shares to
new investors. During the period of such suspension, persons who are already
shareholders of such class of such fund may be permitted to continue to purchase
additional shares of such class and to have dividends reinvested.

To help the government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to obtain, verify
and record information that identifies each person who opens an account. For
more information, please see "Policies You Should Know About" in the prospectus.

Each Fund may waive the minimum for purchases by trustees, directors, officers
or employees of the fund or the Advisor and its affiliates.

Eligible Class S Investors

A.        The following investors may purchase Class S shares of DWS Funds
          either (i) directly from DWS Investments Distributors, Inc. ("DIDI"),
          the Fund's principal underwriter; or (ii) through an intermediary
          relationship with a financial services firm established with respect
          to the DWS Funds as of December 31, 2004.

          1.      Existing shareholders of Class S shares of any DWS Fund as of
                  December 31, 2004, and household members residing at the same
                  address.

          2.      Shareholders of Class S of any DWS Fund who became Class S
                  shareholders in connection with the consolidation of Class
                  AARP and Class S on July 17, 2006 and household members
                  residing at the same address.

          3.      Shareholders who have owned Class S shares continuously since
                  December 31, 2004 and household members residing at the same
                  address may open new accounts for Class S shares of any DWS
                  Fund.

          4.      Any participant who has owned Class S shares of any DWS Fund
                  through an employee sponsored retirement, employee stock,
                  bonus, pension or profit sharing plan continuously since
                  December 31, 2004 may open a new individual account for Class
                  S shares of any DWS Fund.

          5.      Any participant who owns Class S shares of any DWS Fund
                  through a retirement, employee stock, bonus, pension or profit
                  sharing plan may complete a direct rollover to an IRA account
                  that will hold Class S shares. This applies to individuals who
                  begin their retirement plan investments with a DWS Fund at any
                  time, including after December 31, 2004.

          6.      Officers, Fund Trustees and Directors, and full-time employees
                  and their family members, of the Advisor and its affiliates.

          7.      Class S shares are available to any accounts managed by the
                  Advisor, any advisory products offered by the Advisor or DIDI
                  and to DWS Allocation Series or other fund of funds managed by
                  the Advisor or its affiliates.

          8.      Shareholders of Class S of DWS Emerging Markets Equity Fund
                  who became shareholders of the fund in connection with the
                  fund's acquisition of Scudder New Asia Fund, Inc. on April 17,
                  2006.

          9.      Shareholders of Class S of any DWS Fund who became Class S
                  shareholders in connection with the consolidation of Class M
                  and Class S on August 18, 2006 and household members residing
                  at the same address.

          10.     Shareholders of Class S of any DWS Fund who became Class S
                  shareholders in connection with the renaming or conversion of
                  Investment Class to Class S on October 23, 2006.

B. The following additional investors may purchase Class S shares of DWS Funds.

          1.      Broker-dealers, banks and registered investment advisors
                  ("RIAs") may purchase Class S shares in connection with a
                  comprehensive or "wrap" fee program or other fee based
                  program.

          2.      Any group retirement, employee stock, bonus, pension or
                  profit-sharing plans.

          3.      Persons who purchase shares as part of an investment only
                  placement in a 529 College Savings Plan.

          4.      Persons who purchase shares through a Health Savings Account
                  or a Voluntary Employees' Benefit Association ("VEBA") Trust.

DIDI may, at its discretion, require appropriate documentation that shows an
investor is eligible to purchase Class S shares.

Clients having a regular investment counsel account with the Advisor or its
affiliates and members of their immediate families, officers and employees of
the Advisor or of any affiliated organization and members of their immediate
families, members of FINRA and banks may, if they prefer, subscribe initially
for at least $2,500 for Class S through DeAM Investor Services, Inc. by letter
or telephone.

Automatic Investment Plan. A shareholder may purchase shares of the fund through
an automatic investment plan. Investments are made automatically (minimum $1,000
and maximum $250,000 for initial investments and a minimum of $50 and maximum of
$250,000 for subsequent investments) from the shareholder's account at a bank,
savings and loan or credit union into the shareholder's fund account.
Termination by a shareholder will become effective within thirty days after the
Shareholder Service Agent has received the request. A Fund may immediately
terminate a shareholder's automatic investment plan in the event that any item
is unpaid by the shareholder's financial institution.

Minimum Subsequent Investment Policies. For current shareholders there is a $50
minimum investment requirement for subsequent investments in a Fund. There is no
minimum subsequent investment requirement for investments on behalf of
participants in certain fee-based and wrap programs offered through financial
intermediaries approved by the Advisor.

Payroll Investment Plans. A shareholder may purchase shares through Payroll
Direct Deposit or Government Direct Deposit. Under these programs, all or a
portion of a shareholder's net pay or government check is invested each payment
period. A shareholder may terminate participation in these programs by giving
written notice to the shareholder's employer or government agency, as
appropriate. (A reasonable time to act is required.) A Fund is not responsible
for the efficiency of the employer or government agency making the payment or
any financial institutions transmitting payments.

Expedited Purchase Procedures for Existing Shareholders. Shareholders of other
DWS funds who have submitted an account application and have certified a tax
identification number, clients having a regular investment counsel account with
the Advisor or its affiliates and members of their immediate families, officers
and employees of the Advisor or of any affiliated organization and their
immediate families, members of FINRA, and banks may open an account by wire by
calling (800) 728-3337 for instructions. The investor must send a duly completed
and signed application to the applicable Fund promptly. A subsequent purchase
order may be placed by established shareholders (except by DWS Investments
Individual Retirement Account (IRA), DWS Simplified Profit Sharing and Money
Purchase Pension Plans, DWS Investments 401(k) and DWS Investments 403(b) Plan
holders), members of FINRA, and banks.

Revenue Sharing

In light of recent regulatory developments, the Advisor, the Distributor and
their affiliates have undertaken to furnish certain additional information below
regarding the level of payments made by them to selected affiliated and
unaffiliated brokers, dealers, participating insurance companies or other
financial intermediaries ("financial advisors") in connection with the sale
and/or distribution of Fund shares or the retention and/or servicing of
investors and Fund shares ("revenue sharing").

The Advisor, the Distributor and/or their affiliates may pay additional
compensation, out of their own assets and not as an additional charge to each
Fund, to financial advisors in connection with the sale and/or distribution of
Fund shares or the retention and/or servicing of Fund investors and Fund shares.
Such revenue sharing payments are in addition to any distribution or service
fees payable under any Rule 12b-1 or service plan of any fund, any record
keeping/sub-transfer agency/networking fees payable by each Fund (generally
through the Distributor or an affiliate) and/or the Distributor to certain
financial advisors for performing such services and any sales charges,
commissions, non-cash compensation arrangements expressly permitted under
applicable rules of FINRA or other concessions described in the fee table or
elsewhere in the Prospectuses or the SAI as payable to all financial advisors.
For example, the Advisor, the Distributor and/or their affiliates may compensate
financial advisors for providing each Fund with "shelf space" or access to a
third party platform or fund offering list, or other marketing programs
including, without limitation, inclusion of each Fund on preferred or
recommended sales lists, mutual fund "supermarket" platforms and other formal
sales programs; granting the Distributor access to the financial advisor's sales
force; granting the Distributor access to the financial advisor's conferences
and meetings; assistance in training and educating the financial advisor's
personnel; and, obtaining other forms of marketing support. The level of revenue
sharing payments made to financial advisors may be a fixed fee or based upon one
or more of the following factors: gross sales, current assets and/or number of
accounts of each Fund attributable to the financial advisor, the particular fund
or fund type or other measures as agreed to by the Advisor, the Distributor
and/or their affiliates and the financial advisors or any combination thereof.
The amount of these payments is determined at the discretion of the Advisor, the
Distributor and/or their affiliates from time to time, may be substantial, and
may be different for different financial advisors based on, for example, the
nature of the services provided by the financial advisor.

The Advisor, the Distributor and/or their affiliates currently make revenue
sharing payments from their own assets in connection with the sale and/or
distribution of DWS Fund shares, or the retention and/or servicing of investors,
to financial advisors in amounts that generally range from .01% up to .50% of
assets of the Fund serviced and maintained by the financial advisor, .05% to
..25% of sales of the Fund attributable to the financial advisor, a flat fee of
$13,350 up to $500,000, or any combination thereof. These amounts are annual
figures typically paid on a quarterly basis and are subject to change at the
discretion of the Advisor, the Distributor and/or their affiliates. Receipt of,
or the prospect of receiving, this additional compensation, may influence your
financial advisor's recommendation of this Fund or of any particular share class
of the Fund. You should review your financial advisor's compensation disclosure
and/or talk to your financial advisor to obtain more information on how this
compensation may have influenced your financial advisor's recommendation of this
Fund.

The Advisor, the Distributor and/or their affiliates may also make such revenue
sharing payments to financial advisors under the terms discussed above in
connection with the distribution of both DWS funds and non-DWS funds by
financial advisors to retirement plans that obtain record keeping services from
ADP, Inc. on the DWS Scudder branded retirement plan platform (the "Platform")
with the level of revenue sharing payments being based upon sales of both the
DWS funds and the non-DWS funds by the financial advisor on the Platform or
current assets of both the DWS funds and the non-DWS funds serviced and
maintained by the financial advisor on the Platform.

As of the date hereof, each Fund has been advised that the Advisor, the
Distributor and their affiliates expect that the following firms will receive
revenue sharing payments at different points during the coming year as described
above:

Channel: Broker-Dealers and Financial Advisors
----------------------------------------------
AIG Advisors Group
Ameriprise
Cadaret, Grant & Co. Inc.
Capital Analyst, Incorporated
Citigroup Global Markets, Inc. (dba Smith Barney)
Commonwealth Equity Services, LLP (dba Commonwealth Financial Network)
Deutsche Bank Group
Ensemble Financial Services
First Clearing/Wachovia Securities
Fiserv Trust Company
HD Vest Investment Securities, Inc.
ING Group
John Hancock Distributors LLC
LPL Financial
M.L. Stern & Co.
Meridien Financial Group
Merrill Lynch, Pierce, Fenner & Smith Inc.
Morgan Stanley
Oppenheimer & Co., Inc.
Raymond James & Associates
Raymond James Financial Services
RBC Dain Rauscher, Inc
Securities America, Inc.
UBS Financial Services
Wachovia Securities
Wells Fargo Investments, LLC

Channel: Cash Product Platform
------------------------------
Allegheny Investments LTD
Bank of New York (Hare & Co.)
Bear, Stearns Securities Corp.
Brown Brothers Harriman
Brown Investment Advisory & Trust Company
Cadaret Grant & Co.
Chicago Mercantile Exchange
D.A. Davidson & Company
Deutsche Bank Group
Emmett A. Larkin Company
Fiduciary Trust Co. - International
First Southwest Company
Huntleigh Securities
Lincoln Investment Planning
LPL Financial
Mellon Financial Markets LLC
Penson Financial Services
Pershing Choice Platform
ProFunds Distributors, Inc.
Ridge Clearing & Outsourcing Solutions
Robert W. Baird & Co.
Romano Brothers and Company
SAMCO Capital Markets
Smith Moore & Company
Sungard Institutional Brokerage Inc.
US Bancorp
UBS Financial Services
William Blair & Company

Channel: Third Party Insurance Platforms
----------------------------------------
Allstate Life Insurance Company of New York
Ameritas Life Insurance Group
Annuity Investors Life Insurance Company
Columbus Life Insurance Company
Commonwealth Annuity and Life Insurance Company
Companion Life Insurance Company
Connecticut General Life Insurance Company
Farmers New World Life Insurance Company
Fidelity Security Life Insurance Company
First Allmerica Financial Life Insurance Company
First Great West Life and Annuity Company
Genworth Life Insurance Company of New York
Genworth Life and Annuity Insurance Company
Great West Life and Annuity Insurance Company
Hartford Life Insurance Company
Integrity Life Insurance Company
John Hancock Life Insurance companies
Kemper Investors Life Insurance Company
Lincoln Benefit Life Insurance Company
Lincoln Life & Annuity Company of New York
Lincoln National Life Insurance Company
Massachusetts Mutual Life Insurance Group
MetLife Group
Minnesota Life Insurance Company
National Life Insurance Company
National Integrity Life Insurance Company
Nationwide Group
New York Life Insurance and Annuity Corporation
Phoenix Life Insurance Company
Protective Life Insurance
Provident Mutual Life Insurance
Prudential Insurance Company of America
Sun Life Group
Symetra Life Insurance Company
Transamerica Life Insurance Company
Union Central Life Insurance Company
United of Omaha Life Insurance Company
United Investors Life Insurance Company
Western Southern Life Assurance Company


Any additions, modifications or deletions to the financial advisors identified
above that have occurred since the date hereof are not reflected.

The Advisor, the Distributor or their affiliates may enter into additional
revenue sharing arrangements or change or discontinue existing arrangements with
financial advisors at any time without notice.

The prospect of receiving, or the receipt of additional compensation or
promotional incentives described above by financial advisors may provide such
financial advisors and/or their salespersons with an incentive to favor sales of
shares of the DWS funds or a particular DWS fund over sales of shares of mutual
funds (or non-mutual fund investments) with respect to which the financial
advisor does not receive additional compensation or promotional incentives, or
receives lower levels of additional compensation or promotional incentives.
Similarly, financial advisors may receive different compensation or incentives
that may influence their recommendation of any particular share class of the
Fund or of other funds. These payment arrangements, however, will not change the
price that an investor pays for Fund shares or the amount that the Fund receives
to invest on behalf of an investor and will not increase Fund expenses. You may
wish to take such payment arrangements into account when considering and
evaluating any recommendations relating to Fund shares and you should discuss
this matter with your financial advisor and review your financial advisor's
disclosures.

It is likely that broker-dealers that execute portfolio transactions for the
Fund will include firms that also sell shares of the DWS funds to their
customers. However, the Advisor will not consider sales of DWS fund shares as a
factor in the selection of broker-dealers to execute portfolio transactions for
the DWS funds. Accordingly, the Advisor has implemented policies and procedures
reasonably designed to prevent its traders from considering sales of DWS fund
shares as a factor in the selection of broker-dealers to execute portfolio
transactions for the Fund. In addition, the Advisor, the Distributor and/or
their affiliates will not use fund brokerage to pay for their obligation to
provide additional compensation to financial advisors as described above.

Redemptions

Redemption fee. Each Fund imposes a redemption fee of 2% of the total redemption
amount (calculated at net asset value) on all fund shares redeemed or exchanged
within 15 days of buying them (either by purchase or exchange). The redemption
fee is paid directly to the fund, and is designed to encourage long-term
investment and to offset transaction and other costs associated with short-term
or excessive trading. For purposes of determining whether the redemption fee
applies, shares held the longest time will be treated as being redeemed first
and shares held the shortest time will be treated as being redeemed last. The
redemption fee is applicable to fund shares purchased either directly or through
a financial intermediary, such as a broker-dealer. Transactions through
financial intermediaries typically are placed with the fund on an omnibus basis
and include both purchase and sale transactions placed on behalf of multiple
investors. These purchase and sale transactions are generally netted against one
another and placed on an aggregate basis; consequently the identities of the
individuals on whose behalf the transactions are placed generally are not known
to the fund. For this reason, the fund has undertaken to notify financial
intermediaries of their obligation to assess the redemption fee on customer
accounts and to collect and remit the proceeds to the fund. However, due to
operational requirements, the intermediaries' methods for tracking and
calculating the fee may be inadequate or differ in some respects from the Funds.

General. Policies and procedures affecting transactions in Fund shares can be
changed at any time without notice, subject to applicable law. Transactions may
be contingent upon proper completion of application forms and other documents by
shareholders and their receipt by the Fund's agents. Transaction delays in
processing (and changing account features) due to circumstances within or beyond
the control of a Fund and its agents may occur. Shareholders (or their financial
service firms) are responsible for all losses and fees resulting from bad
checks, cancelled orders or the failure to consummate transactions effected
pursuant to instructions reasonably believed to be genuine.

In addition, each fund reserves the right to suspend or postpone redemptions as
permitted pursuant to Section 22(e) of the Investment Company Act of 1940.
Generally, those circumstances are when 1) the New York Stock Exchange is closed
other than customary weekend or holiday closings; 2) trading on the New York
Stock Exchange is restricted; 3) an emergency exists which makes the disposal of
securities owned by a fund or the fair determination of the value of a fund's
net assets not reasonably practicable; or 4) the SEC, by order, permits the
suspension of the right of redemption. Redemption payments by wire may also be
delayed in the event of a non-routine closure of the Federal Reserve wire
payment system. A request for repurchase (confirmed redemption) may be
communicated by a shareholder through a financial services firm to DIDI, which
firms must promptly submit orders to be effective.

Redemption requests must be unconditional. Redemption requests (and a stock
power for certificated shares) must be duly endorsed by the account holder. As
specified in the prospectus, signatures may need to be guaranteed by a
commercial bank, trust company, savings and loan association, federal savings
bank, member firm of a national securities exchange or other financial
institution permitted by SEC rule. Additional documentation may be required,
particularly from institutional and fiduciary account holders, such as
corporations, custodians (e.g., under the Uniform Transfers to Minors Act),
executors, administrators, trustees or guardians.

If the proceeds of the redemption are $100,000 or less and the proceeds are
payable to the shareholder of record at the address of record, normally a
telephone request or a written request by any one account holder without a
signature guarantee is sufficient for redemptions by individual or joint account
holders, and trust, executor and guardian account holders, provided the trustee,
executor or guardian is named in the account registration. Other institutional
account holders may exercise this special privilege of redeeming shares by
telephone request or written request without signature guarantee subject to the
same conditions as individual account holders, provided that this privilege has
been pre-authorized by the institutional account holder by written instruction
to the Shareholder Service Agent with signatures guaranteed. This privilege may
not be used to redeem shares held in certificated form and may not be used if
the shareholder's account has had an address change within 15 days of the
redemption request.

Wires. Delivery of the proceeds of a wire redemption of $250,000 or more may be
delayed by a Fund for up to seven days if the Fund or the Shareholder Service
Agent deems it appropriate under then-current market conditions. The ability to
send wires is limited by the business hours and holidays of the firms involved.
Each Fund is not responsible for the efficiency of the federal wire system or
the account holder's financial services firm or bank. The account holder is
responsible for any charges imposed by the account holder's firm or bank. To
change the designated account to receive wire redemption proceeds, send a
written request to the Fund Shareholder Service Agent with signatures guaranteed
as described above or contact the firm through which fund shares were purchased.

Automatic Withdrawal Plan. An owner of $5,000 or more of a class of a Fund's
shares at the offering price may provide for the payment from the owner's
account of any requested dollar amount to be paid to the owner or a designated
payee monthly, quarterly, semiannually or annually. The $5,000 minimum account
size is not applicable to IRAs. The minimum periodic payment is $50. Shares are
redeemed so that the payee should receive payment approximately on the first of
the month. Investors using this Plan must reinvest fund distributions.

Non-retirement plan shareholders may establish an Automatic Withdrawal Plan (the
"Automatic Withdrawal Plan") to receive monthly, quarterly or periodic
redemptions from his or her account for any designated amount of $50 or more.
Shareholders may designate which day they want the automatic withdrawal to be
processed. The check amounts may be based on the redemption of a fixed dollar
amount, fixed share amount, percent of account value or declining balance. The
Automatic Withdrawal Plan provides for income dividends and capital gains
distributions, if any, to be reinvested in additional shares. Shares are then
liquidated as necessary to provide for withdrawal payments. Since the
withdrawals are in amounts selected by the investor and have no relationship to
yield or income, payments received cannot be considered as yield or income on
the investment and the resulting liquidations may deplete or possibly extinguish
the initial investment and any reinvested dividends and capital gains
distributions. Any such requests must be received by the Fund's transfer agent
ten days prior to the date of the first automatic withdrawal. An Automatic
Withdrawal Plan may be terminated at any time by the shareholder, the Trust or
its agent on written notice, and will be terminated when all shares of a Fund
under the Automatic Withdrawal Plan have been liquidated or upon receipt by the
Trust of notice of death of the shareholder.

In-kind Redemptions. Each Fund reserves the right to honor any request for
redemption or repurchase by making payment in whole or in part in securities.
These securities will be chosen by a Fund and valued as they are for purposes of
computing a Fund's net asset value. A redeeming shareholder who receives such
securities will be subject to federal income tax in the same manner as if a cash
distribution had been received. A shareholder may incur transaction expenses in
converting these securities to cash.

Exchanges

Shareholders may request a taxable exchange of their shares for shares of the
corresponding class of certain other DWS funds without imposition of a sales
charge, subject to the provisions below. For purposes of calculating any CDSC,
amounts exchanged retain their original cost and purchase date.

Shareholders who exchange their shares out of a DWS money market fund (not
including shares acquired by dividend reinvestment or by exchange from Class A
shares of another DWS fund) into Class A shares of certain other DWS funds, will
generally be subject to the applicable sales charge.

Certain DWS funds may not be available to shareholders on an exchange. To learn
more about which DWS funds may be available on exchange, please contact your
financial services firm or visit our Web site at: www.dws-investments.com or
call (800) 728-3337.

Shareholders may obtain prospectus(es) of the DWS fund they are exchanging into
from dealers, other firms or DIDI.

Automatic Exchange Plan. The owner of $1,000 or more of any class of shares of a
DWS fund may authorize the automatic exchange of a specified amount ($50
minimum) of such shares for shares of the same class of another such DWS fund.
Exchanges will be made automatically until the shareholder or the fund
terminates the privilege. Exchanges are subject to the terms and conditions
described above.

Purchases In-Kind

Each Fund may, at its own option, accept securities in payment for shares. The
securities delivered in payment for shares are valued by the method described
under "Net Asset Value" as of the day the Fund receives the securities. This may
be a taxable transaction to the shareholder. (Consult your tax advisor for
future tax guidance.) Securities may be accepted in payment for shares only if
they are, in the judgment of the Advisor, appropriate investments for a Fund. In
addition, securities accepted in payment for shares must: (1) meet the
investment objective and policies of the acquiring Fund; (ii) be acquired by the
Fund for investment and not for resale; (iii) be liquid securities which are not
restricted as to transfer either by law or liquidity of the market; and (iv) if
stock, have a value which is readily ascertainable as evidenced by a listing on
a stock exchange or OTC market or by readily available market quotations from a
dealer in such securities. Each Fund reserves the right to accept or reject at
its own option any and all securities offered in payment for its shares.

                                    DIVIDENDS

Each Fund intends to follow the practice of distributing all or substantially
all of its investment company taxable income (determined without regard to the
deduction for dividends paid), which includes taxable ordinary income and any
excess of net realized short-term capital gains over net realized long-term
capital losses. A Fund may follow the practice of distributing the entire excess
of net realized long-term capital gains over net realized short-term capital
losses. However, each Fund may retain all or part of such gain for reinvestment
after paying the related federal income taxes on such gain. Shareholders will
generally be required to include in their gross incomes their share of such
gains, but may be able to claim a credit against their federal tax liability for
the federal income tax paid by a fund on such gain. If a Fund does not
distribute the amount of capital gain and/or ordinary income required to be
distributed by an excise tax provision of the Code, the Fund may be subject to a
4% excise tax on the undistributed amounts. In certain circumstances, a Fund may
determine that it is in the interest of shareholders to distribute less than the
required amount.

Each Fund intends to distribute dividends from its net investment income,
excluding short-term capital gains, annually in December. Each Fund intends to
distribute net realized capital gains after utilization of capital loss
carryforwards, if any, in December to prevent application of a federal excise
tax. An additional distribution may be made, if necessary.

Any dividends or capital gains distributions declared in October, November or
December with a record date in such a month and paid during the following
January will be treated by shareholders for federal income tax purposes as if
received on December 31 of the calendar year declared.

Dividends paid by each Fund with respect to each class of its shares will be
calculated in the same manner, at the same time and on the same day.

Income dividends and capital gain distributions, if any, of a Fund will be
credited to shareholder accounts in full and fractional shares of the same class
of the Fund at net asset value on the reinvestment date, except that, upon
written request to the Shareholder Service Agent, a shareholder may select one
of the following options:

(1)      To receive income including short-term capital gain dividends in cash
         and long-term capital gain dividends in shares of the same class of the
         Fund at net asset value; or

(2)      To receive income dividends and capital gain distributions in cash.

Dividends and distributions will be reinvested in shares of the same class of a
Fund unless shareholders indicate in writing that they wish to receive them in
cash or in shares of other DWS Funds with multiple classes of shares or DWS
Funds as provided in the Prospectuses. To use this privilege of investing
dividends of a Fund in shares of another DWS Fund, shareholders must maintain a
minimum account value of $1,000 in each Fund distributing the dividends. Each
Fund will reinvest dividend and distribution checks (and future dividends) in
shares of that same Fund and class if checks are returned as undeliverable.
Dividends and other distributions of each Fund in the aggregate amount of $10 or
less are automatically reinvested in shares of such Fund unless the shareholder
requests that such policy not be applied to the shareholder's account.

If an investment is in the form of a retirement plan, all dividends and capital
gains distributions must be reinvested into the shareholder's account.

If a shareholder has elected to reinvest any dividends and/or other
distributions, such distributions will be made in shares of that Fund and
confirmations will be mailed to each shareholder. If a shareholder has chosen to
receive cash, a check will be sent. Dividends of net investment income and
distributions of net realized capital gains are taxable for federal income tax
purposes, whether made in shares or cash.

Each dividend and distribution is accompanied by a brief explanation of the form
and character of the distribution. The characterization of dividends and
distributions on such correspondence may differ from the characterization for
federal tax purposes. In January of each year, each Fund issues to each
shareholder a statement of the federal income tax status of all dividends and
distributions in the prior calendar year.

Each Fund may at any time vary its foregoing dividend and distribution practices
and, therefore, reserves the right from time to time to either distribute or
retain for reinvestment such of its net investment income (which includes its
net short-term capital gains) and net long-term capital gains, if any, as its
Board determines appropriate under the then current circumstances. In
particular, and without limiting the foregoing, a Fund may make additional
dividends of net investment income or distributions of capital gain net income
in order to satisfy the minimum distribution requirements contained in the Code.

                                      TAXES

The following is intended to be a general summary of certain federal income tax
consequences of investing in a Fund. It is not intended as a complete discussion
of all such consequences, nor does it purport to deal with all categories of
investors or foreign, state or local taxes. Investors are therefore advised to
consult with their tax advisors before making an investment in a Fund. The
summary is based on the laws in effect on the date of this SAI and existing
judicial and administrative interpretations thereof, all of which are subject to
change, possibly with retroactive effect.

Taxation of the Funds. Each Fund has elected to be treated as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code") and has qualified as such since its inception. Each Fund
intends to continue to so qualify in each taxable year as required under the
Code in order to avoid payment of federal income tax at the Fund level. In order
to qualify as a regulated investment company, a Fund must meet certain
requirements regarding the source of its income, the diversification of its
assets, and the distribution of its income:

(a)      Each Fund must derive at least 90% of its gross income from dividends,
         interest, payments with respect to certain securities loans, and gains
         from the sale of stock, securities and foreign currencies, other income
         (including but not limited to gains from options, futures, or forward
         contracts) derived with respect to its business of investing in such
         stock, securities, or currencies and net income derived from interests
         in "qualified publicly traded partnerships" (i.e., partnerships that
         are traded on an established securities market or tradable on a
         secondary market, other than partnerships that derive 90% of their
         income from interest, dividends, capital gains, and other traditionally
         permitted mutual fund income).

(b)      Each Fund must diversify its holdings so that, at the end of each
         quarter of its taxable year, (i) at least 50% of the market value of
         the Fund's assets is represented by cash and cash items, US government
         securities, securities of other regulated investment companies, and
         other securities limited in respect of any one issuer of such other
         securities to a value not greater than 5% of the value of the Fund's
         total assets and to not more than 10% of the outstanding voting
         securities of such issuer, and (ii) not more than 25% of the value of
         its assets is invested in the securities (other than those of the US
         Government or other regulated investment companies) of any one issuer,
         of two or more issuers of which the Fund owns 20% or more of the voting
         stock and that are engaged in the same, similar, or related trades or
         businesses or in the securities of one or more qualified publicly
         traded partnership.

(c)      Each Fund is required to distribute to its shareholders at least 90% of
         its taxable and tax-exempt net investment income (including the excess
         of net short-term capital gain over net long-term capital losses) and
         generally is not subject to federal income tax to the extent that it
         distributes annually such net investment income and net realized
         capital gains in the manner required under the Code.

Fund investments in partnerships, including in qualified publicly traded
partnerships, may result in a Fund's being subject to state, local or foreign
income, franchise or withholding tax liabilities.

If for any taxable year a Fund does not qualify for the special federal income
tax treatment afforded regulated investment companies, all of its taxable income
will be subject to federal income tax at regular corporate rates (without any
deduction for distributions to its shareholders), and all distributions from
earnings and profits, including any distributions of net tax-exempt income and
net long-term capital gains, will be taxable to shareholders as ordinary income.
Such distributions would be eligible, provided certain holding period and other
conditions are satisfied; (i) to be treated as qualified dividend income with
respect to shareholders taxed as individuals, which is subject to reduced rates
of federal income taxation for taxable years beginning before January 1, 2011,
and (ii) for the dividends received deduction in the case of corporate
shareholders. In addition, a Fund could be required to recognize unrealized
gains, pay substantial taxes and interest and make substantial distributions
before requalifying as a regulated investment company that is accorded special
tax treatment.

Each Fund is subject to a 4% nondeductible federal excise tax on amounts
required to be, but that are not, distributed under a prescribed formula. The
formula requires payment to shareholders during a calendar year of distributions
representing at least 98% of a Fund's taxable ordinary income for the calendar
year and at least 98% of the excess of its capital gains over capital losses
realized during the one-year period ending October 31 (in most cases) of such
year as well as amounts that were neither distributed nor taxed to the Fund
during the prior calendar year. Although each Fund's distribution policies
should enable it to avoid federal excise tax liability, a Fund may retain (and
be subject to income or excise tax on) a portion of its capital gain or other
income if it appears to be in the best interest of the Fund.

Taxation of Distributions from the Funds. For federal income tax purposes,
distributions of net investment income are generally taxable as ordinary income.
Taxes on distributions of capital gains are determined by how long the Funds
owned (or is deemed to have owned) the investments that generated them, rather
than how long a shareholder has owned his or her shares. Distributions of net
capital gains (the excess of net long-term capital gain for the year over net
short-term capital loss) from the sale of investments that a Fund owned that are
properly designated by the Fund as capital gain dividends ("Capital Gain
Dividends") will be taxable as long-term capital gain. Distributions derived
from net short-term capital gain (the excess of net short-term capital gain for
the year over net long-term capital loss) from the sale of investments that a
Fund owned will be taxable as ordinary income. For taxable years beginning
before January 1, 2011, distributions of net investment income designated by a
Fund as derived from "qualified dividend income" will be taxed in the hands of
individuals and other non-corporate taxpayers at the rates applicable to
long-term capital gain, provided certain holding period and other requirements
are met at both the shareholder and Fund level.

Distributions are taxable to shareholders even if they are paid from income or
gains earned by a Fund before a shareholder's investment (and thus were included
in the price the shareholder paid for Fund shares). Distributions are taxable
whether shareholders receive them in cash or reinvest them in additional shares
through the reinvestment privilege. A shareholder whose distributions are
reinvested in shares will be treated as having received a dividend equal to the
fair market value of the new shares issued to the shareholder. Any gain or loss
resulting from the sale or exchange of Fund shares generally will be treated as
capital gain or loss for federal income tax purposes.

Federal long-term capital gain rates applicable to individuals and other
non-corporate taxpayers have been temporarily reduced -- to a maximum rate of
15% with lower rates applying to taxpayers in the in the 10% and 15% rate
federal income tax brackets -- for taxable years beginning before January 1,
2011. Long-term capital gain rates are currently scheduled to return to a
maximum rate of 20% for taxable years beginning after December 31, 2010.

For taxable years beginning before January 1, 2011, "qualified dividend income"
received by an individual and other non-corporate taxpayers will be taxed for
federal income tax purposes at the rates applicable to long-term capital gain
provided holding period and other requirements are met at both the shareholder
and Fund level. Qualified dividend income does not include interest from
fixed-income securities. In order for some portion of the dividends received by
a shareholder of a Fund to be qualified dividend income, the Fund must meet
holding period and other requirements with respect to some portion of the
dividend-paying stock in its portfolio and the shareholder must meet holding
period and other requirements with respect to the Fund's shares. A dividend will
not be treated as qualified dividend income (at either the Fund or shareholder
level) (1) if the dividend is received with respect to any share of stock held
for fewer than 61 days during the 121-day period beginning on the date which is
60 days before the date on which such share becomes ex-dividend with respect to
such dividend (or, in the case of certain preferred stock, for fewer than 91
days during the 181-day period beginning 90 days before such date), (2) to the
extent that the recipient is under an obligation (whether pursuant to a short
sale or otherwise) to make related payments with respect to positions in
substantially similar or related property, or (3) if the recipient elects to
have the dividend income treated as investment income for purposes of the
limitation on deductibility of investment interest. In order for a dividend paid
by a foreign corporation to constitute "qualified dividend income," the foreign
corporation must (1) be eligible for the benefits of a comprehensive income tax
treaty with the United States (or the stock on which the dividend is paid must
be readily tradable on an established securities market in the United States),
and (2) not be treated as a passive foreign investment company. For purposes of
determining the holding period of stock on which a dividend is received, such
holding period is reduced for any period the holder has an option to sell, is
under a contractual obligation to sell, or has made (and not closed) a short
sale of substantially identical stock or securities, and in certain other
circumstances. The above may cause a portion of the dividends received by each
Fund to not be eligible for treatment as qualified dividend income.

If the aggregate qualified dividends received by a Fund during any taxable year
are 95% or more of its gross income (excluding net long-term capital gain over
net short-term capital loss), then 100% of the Fund's dividends (other than
properly designated capital gain dividends) will be eligible to be treated as
qualified dividend income. For this purpose, the only gain included in the term
"gross income" is the excess of net short-term capital gain over net long-term
capital loss.

All distributions by a Fund result in a reduction in the net asset value of the
Fund's shares. Should a distribution reduce the net asset value below a
shareholder's cost basis, such distribution may nevertheless be taxable to the
shareholder as ordinary income, qualified dividend income or capital gain as
described above, even though, from an investment standpoint, it may constitute a
partial return of capital. In particular, investors should be careful to
consider the tax implications of buying shares just prior to a distribution. The
price of shares purchased at that time may include the amount of the forthcoming
distribution. Those purchasing Fund shares just prior to a distribution will
receive a partial return of capital upon the distribution, which may
nevertheless be taxable to them for federal income tax purposes.

Capital gains distributions may be reduced if a Fund has capital loss
carryforwards or post-October loss deferrals available. Any capital loss
carryforwards and any post-October loss deferrals to which a Fund is entitled
are disclosed in the Fund's annual and semi-annual reports to shareholders.

Sale or Redemption of Shares. The sale, exchange or redemption of shares of a
Fund may give rise to a gain or loss. In general, any gain or loss realized upon
a taxable disposition of shares will be treated as long-term capital gain or
loss if the shares have been held for more than one year. Otherwise, the gain or
loss on the taxable disposition of shares of a Fund will be treated as
short-term capital gain or loss. However, any loss realized upon a taxable
disposition of shares held for six months or less will be treated as long-term,
rather than short-term, to the extent of any long-term capital gain
distributions received (or deemed received) by the shareholder with respect to
the shares. All or a portion of any loss realized upon a taxable disposition of
shares of a Fund will be disallowed if other substantially identical shares of
the Fund are purchased within 30 days before or after the disposition. In such a
case, the basis of the newly purchased shares will be adjusted to reflect the
disallowed loss.

Dividends Received Deduction. Dividends from domestic corporations may comprise
a substantial part of each Fund's gross income. If any such dividends constitute
a portion of a Fund's gross income, a portion of the income distributions of the
Fund may be eligible for the 70% deduction for dividends received by corporate
shareholders. Shareholders will be informed of the portion of dividends which so
qualify. The dividends-received deduction is reduced to the extent the shares of
the Fund with respect to which the dividends are received are treated as
debt-financed under federal income tax law and is eliminated if either those
shares or the shares of the Fund are deemed to have been held by the Fund or the
shareholder, as the case may be, for fewer than 46 days during the 91-day period
beginning 45 days before the shares become ex-dividend (or in the case of
certain preferred stock, 91 days during the 181-day period beginning 90 days
before such date). For purposes of determining the holding period of stock on
which a dividend is received, such holding period is reduced for any period the
holder has an option to sell, is under a contractual obligation to sell, or has
made (and not closed) a short sale of substantially identical stock or
securities, and in certain other circumstances. This rule may cause a portion of
the dividends received by each Fund to not be eligible for the corporate
dividends-received deduction.

Foreign Taxation. Foreign withholding or other foreign taxes with respect to
income (possibly including, in some cases, capital gains) on certain foreign
securities may occur. These taxes may be reduced or eliminated under the terms
of an applicable US income tax treaty. As it is not expected that more than 50%
of the value of any of the Funds' total assets will consist of securities issued
by foreign corporations, the Funds will not be eligible to pass through to
shareholders their proportionate share of any foreign taxes paid, with the
result that shareholders will not be able to include in income and will not be
entitled to take any credits or deductions for, such foreign taxes.

Passive Foreign Investment Companies. If a Fund purchases shares in certain
foreign investment entities, called "passive foreign investment companies"
("PFICs"), it may be subject to U.S. federal income tax on a portion of any
"excess distribution" or gain from the disposition of such shares even if such
income is distributed as a taxable dividend by the Fund to its shareholders.
Additional charges in the nature of interest may be imposed on a Fund in respect
of deferred taxes arising from such distributions or gains.

If a Fund were to invest in a PFIC and elect to treat the PFIC as a "qualified
electing fund" under the Code, in lieu of the foregoing requirements, the Fund
might be required to include in income each year a portion of the ordinary
earnings and net capital gains of the qualified electing fund, even if not
distributed to the Fund, and such amounts would be subject to the 90% and excise
tax distribution requirements described above. In order to make this election, a
Fund would be required to obtain certain annual information from the PFICs in
which it invests, which may be difficult or impossible to obtain.

Alternatively, a Fund may make a mark-to-market election that will result in the
Fund being treated as if it had sold and repurchased its PFIC stock at the end
of each year. In such case, the Fund would report any such gains as ordinary
income and would deduct any such losses as ordinary losses to the extent of
previously recognized gains. The election must be made separately for each PFIC
owned by the Fund and, once made, would be effective for all subsequent taxable
years, unless revoked with the consent of the Internal Revenue Service (the
"IRS"). By making the election, a Fund could potentially ameliorate the adverse
tax consequences with respect to its ownership of shares in a PFIC, but in any
particular year may be required to recognize income in excess of the
distributions it receives from PFICs and its proceeds from dispositions of PFIC
stock. A Fund may have to distribute this "phantom" income and gain to satisfy
the 90% distribution requirement and to avoid imposition of the 4% excise tax.

Each Fund will make the appropriate tax elections, if possible, and take any
additional steps that are necessary to mitigate the effect of these rules.

Tax Effects of Certain Transactions. A Fund's use of options, futures contracts,
forward contracts (to the extent permitted) and certain other strategic
transactions will be subject to special tax rules (including mark-to-market,
constructive sale, straddle, wash sale, short sale and other rules), the effect
of which may be to accelerate income, defer losses, cause adjustments in the
holding periods of portfolio securities, convert capital gains into ordinary
income and convert short-term capital losses into long-term capital losses.
These rules could therefore affect the amount, timing and character of
distributions to investors.

A Fund's investment in so-called "section 1256 contracts," such as regulated
futures contracts, most foreign currency forward contracts traded in the
interbank market and options on most stock indices, are subject to special tax
rules. All section 1256 contracts held by a Fund at the end of its taxable year
are required to be marked to their market value, and any unrealized gain or loss
on those positions will be included in the Fund's income as if each position had
been sold for its fair market value at the end of the taxable year. The
resulting gain or loss will be combined with any gain or loss realized by the
Fund from positions in section 1256 contracts closed during the taxable year.
Provided such positions were held as capital assets and were not part of a
"hedging transaction" nor part of a "straddle," 60% of the resulting net gain or
loss will be treated as long-term capital gain or loss, and 40% of such net gain
or loss will be treated as short-term capital gain or loss, regardless of the
period of time the positions were actually held by the Fund.

As a result of entering into swap contracts, a Fund may make or receive periodic
net payments. A Fund may also make or receive a payment when a swap is
terminated prior to maturity through an assignment of the swap or other closing
transaction. Periodic net payments will generally constitute ordinary income or
deductions, while termination of a swap will generally result in capital gain or
loss (which will be a long-term capital gain or loss if the Fund has been a
party to the swap for more than one year). With respect to certain types of
swaps, a Fund may be required to currently recognize income or loss with respect
to future payments on such swaps or may elect under certain circumstances to
mark such swaps to market annually for tax purposes as ordinary income or loss.
The tax treatment of many types of credit default swaps is uncertain.

In general, gain or loss on a short sale is recognized when a Fund closes the
sale by delivering the borrowed property to the lender, not when the borrowed
property is sold. Gain or loss from a short sale is generally considered as
capital gain or loss to the extent that the property used to close the short
sale constitutes a capital asset in the Fund's hands. Except with respect to
certain situations where the property used by a Fund to close a short sale has a
long-term holding period on the date of the short sale, special rules would
generally treat the gains on short sales as short-term capital gains. These
rules may also terminate the running of the holding period of "substantially
identical property" held by a Fund. Moreover, a loss on a short sale will be
treated as a long-term capital loss if, on the date of the short sale,
"substantially identical property" has been held by a Fund for more than one
year. In general, a Fund will not be permitted to deduct payments made to
reimburse the lender of securities for dividends paid on borrowed stock if the
short sale is closed on or before the 45th day after the short sale is entered
into.

Transactions in foreign currencies, foreign investment currency-denominated debt
securities and certain foreign currency options, futures contracts, forward
contracts and similar instruments (to the extent permitted) may give rise to
ordinary income or loss to the extent such income or loss results from
fluctuations in the value of the foreign currency concerned.

A Fund's investment in zero coupon bonds and other debt obligations having
original issue discount may cause the Fund to recognize taxable income in excess
of any cash received from the investment.

Under current law, a Fund serves to block unrelated business taxable income
("UBTI") from being realized by its tax-exempt shareholders. Notwithstanding the
foregoing, a tax-exempt shareholder could realize UBTI by virtue of its
investment in a Fund if shares in the Fund constitute debt-financed property in
the hands of the tax-exempt shareholder within the meaning of Code Section
514(b). Certain types of income received by a Fund from real estate investment
trusts ("REITs"), real estate mortgage investment conduits ("REMICs"), taxable
mortgage pools or other investments may cause the Fund to designate some or all
of its distributions as "excess inclusion income." To Fund shareholders such
excess inclusion income may (1) constitute taxable income, as UBTI for those
shareholders who would otherwise be tax-exempt such as individual retirement
accounts, 401(k) accounts, Keogh plans, pension plans and certain charitable
entities; (2) not be offset by otherwise allowable deductions for tax purposes;
(3) not be eligible for reduced US withholding for non-US shareholders even from
tax treaty countries; and (4) cause the Fund to be subject to tax if certain
"disqualified organizations" as defined by the Code are Fund shareholders.

Other Tax Considerations. Under the backup withholding provisions of the Code,
redemption proceeds as well as distributions may be subject to federal income
tax withholding for certain shareholders, including those who fail to furnish a
Fund with their taxpayer identification numbers and certifications as to their
tax status.

Shareholders of a Fund may be subject to state and local taxes on distributions
received from the Fund and on redemptions of the Fund's shares.

Special tax rules apply to investments through defined contribution plans and
other tax-qualified plans. Shareholders should consult their tax advisors to
determine the suitability of shares of a Fund as an investment through such
plans and the precise effect of an investment on their particular tax situation.

If a shareholder recognizes a loss with respect to a Fund's shares of $2 million
or more for an individual shareholder or $10 million or more for a corporate
shareholder, the shareholder must file with the Internal Revenue Service a
disclosure statement on Form 8886. Direct shareholders of portfolio securities
are in many cases excepted from this reporting requirement, but under current
guidance, shareholders of a regulated investment company are not excepted. The
fact that a loss is reportable under these regulations does not affect the legal
determination of whether the taxpayer's treatment of the loss is proper.
Shareholders should consult their tax advisors to determine the applicability of
these regulations in light of their individual circumstances.

Taxation of Non-US Shareholders. Dividends paid by a Fund to non-US shareholders
are generally subject to withholding tax at a 30% rate or a reduced rate
specified by an applicable income tax treaty to the extent derived from
investment income and short-term capital gains. In order to obtain a reduced
rate of withholding, a non-US shareholder will be required to provide an IRS
Form W-8BEN certifying its entitlement to benefits under a treaty. The
withholding tax does not apply to regular dividends paid to a non-US shareholder
who provides a Form W-8ECI, certifying that the dividends are effectively
connected with the non-US shareholder's conduct of a trade or business within
the United States. Instead, the effectively connected dividends will be subject
to regular US income tax as if the non-US shareholder were a US shareholder. A
non-US corporation receiving effectively connected dividends may also be subject
to additional "branch profits tax" imposed at a rate of 30% (or lower treaty
rate). A non-US shareholder who fails to provide an IRS Form W-8BEN or other
applicable form may be subject to backup withholding at the appropriate rate.

In general, United States federal withholding tax will not apply to any gain or
income realized by a non-US shareholder in respect of any distributions of net
long-term capital gains over net short-term capital losses, exempt-interest
dividends, or upon the sale or other disposition of shares of a Fund.

A distribution from a Fund to foreign shareholders who have held more than 5% of
the Fund at any time during the one-year period ending on the date of
distribution is treated as real property gain subject to 35% withholding tax and
treated as income effectively connected to a US trade or business with certain
tax filing requirements applicable, if such distribution is attributable to a
distribution of real property gain received by the Fund from a REIT and if 50%
or more of the value of the Fund's assets are invested in REITs and other U.S.
real property holding corporations.

Special federal income tax rules apply to investments through defined
contribution plans and other tax-qualified plans. Shareholders should consult
their tax adviser to determine the suitability of shares of the Funds as an
investment through such plans and the precise effect of an investment on their
particular tax situation.

The foregoing is only a summary of certain material US federal income tax
consequences affecting the Funds and their shareholders. Current and prospective
shareholders are advised to consult their own tax advisors with respect to the
particular tax consequences to them of an investment in a Fund.

                                 NET ASSET VALUE

The net asset value of shares of each Fund is computed as of the close of
regular trading on the Exchange on each day the Exchange is open for trading
(the "Value Time"). The Exchange is scheduled to be closed on the following
holidays: New Year's Day, Dr. Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas,
and on the preceding Friday or subsequent Monday when one of these holidays
falls on a Saturday or Sunday, respectively. Net asset value per share is
determined separately for each class of shares by dividing the value of the
total assets of the fund attributable to the shares of that class, less all
liabilities attributable to that class, by the total number of shares of that
class outstanding. The per share net asset value may be lower for certain
classes of the fund because of higher expenses borne by these classes.

An equity security is valued at its most recent sale price on the security's
primary exchange or OTC market as of the Value Time. Lacking any sales, the
security is valued at the calculated mean between the most recent bid quotation
and the most recent asked quotation (the "Calculated Mean") on such exchange or
OTC market as of the Value Time. If it is not possible to determine the
Calculated Mean, the security is valued at the most recent bid quotation on such
exchange or OTC market as of the Value Time. In the case of certain foreign
exchanges or OTC markets, the closing price reported by the exchange or OTC
market (which may sometimes be referred to as the "official close" or the
"official closing price" or other similar term) will be considered the most
recent sale price.

Debt securities are valued as follows. Money market instruments purchased with
an original or remaining maturity of 60 days or less, maturing at par, are
valued at amortized cost. Other money market instruments are valued based on
information obtained from an approved pricing agent or, if such information is
not readily available, by using matrix pricing techniques (formula driven
calculations based primarily on current market yields). Bank loans are valued at
prices supplied by an approved pricing agent (which are intended to reflect the
mean between the bid and asked prices), if available, and otherwise at the mean
of the most recent bid and asked quotations or evaluated prices, as applicable,
based on quotations or evaluated prices obtained from one or more
broker-dealers. Privately placed debt securities, other than Rule 144A debt
securities, initially are valued at cost and thereafter based on all relevant
factors including type of security, size of holding and restrictions on
disposition. Municipal debt securities are valued at prices supplied by an
approved pricing agent (which are intended to reflect the mean between the bid
and asked prices), if available, and otherwise at the mean of the most recent
bid and asked quotations or evaluated price obtained from a broker-dealer. Other
debt securities are valued at prices supplied by an approved pricing agent, if
available, and otherwise at the most recent bid quotation or evaluated price, as
applicable, obtained from one or more broker-dealers. If it is not possible to
value a particular debt security pursuant to the above methods, the security is
valued on the basis of factors including (but not limited to) maturity, coupon,
creditworthiness, currency denomination, and the movement of the market in which
the security is normally traded.

An exchange-traded option contract on securities, currencies and other financial
instruments is valued at its most recent sale price on the relevant exchange.
Lacking any sales, the option contract is valued at the Calculated Mean. If it
is not possible to determine the Calculated Mean, the option contract is valued
at the most recent bid quotation in the case of a purchased option contract or
the most recent asked quotation in the case of a written option contract, in
each case as of the Value Time. An option contract on securities, currencies and
other financial instruments traded in the OTC market is valued on the Value Date
at the evaluated price provided by the broker-dealer with which it was traded.
Futures contracts (and options thereon) are valued at the most recent settlement
price, if available, on the exchange on which they are traded most extensively.
With the exception of stock index futures contracts which trade on the Chicago
Mercantile Exchange, closing settlement times are prior to the close of trading
on the Exchange. For stock index futures contracts which trade on the Chicago
Mercantile Exchange, closing settlement prices are normally available at
approximately 4:20 p.m. Eastern time. If no settlement price is available, the
last traded price on such exchange will be used.

If market quotations for a portfolio asset are not readily available or the
value of a portfolio asset as determined in accordance with Board approved
procedures does not represent the fair market value of the portfolio asset, the
value of the portfolio asset is taken to be an amount which, in the opinion of
each Fund's Pricing Committee (or, in some cases, the Board's Valuation
Committee), represents fair market value. The value of other portfolio holdings
owned by a Fund is determined in a manner which is intended to fairly reflect
the fair market value of the asset on the valuation date, based on valuation
procedures adopted by each Fund's Board and overseen primarily by each Fund's
Pricing Committee.

                           BOARD MEMBERS AND OFFICERS

The following table presents certain information regarding the Board Members of
the Trust. Each Board Member's year of birth is set forth in parentheses after
his or her name. Unless otherwise noted, (i) each Board Member has engaged in
the principal occupation(s) noted in the table for at least the most recent five
years, although not necessarily in the same capacity, and (ii) the address of
each Board Member that is not an "interested person" (as defined in the 1940
Act) of the Trust or the Advisor (each, an "Independent Board Member") is c/o
Dawn-Marie Driscoll, PO Box 100176, Cape Coral, FL 33904. The term of office for
each Board Member is until the election and qualification of a successor, or
until such Board Member sooner dies, resigns, is removed or as otherwise
provided in the governing documents of the Trust. Because the Funds do not hold
an annual meeting of shareholders, each Board Member will hold office for an
indeterminate period. The Board Members may also serve in similar capacities
with other funds in the DWS fund complex.

Independent Board Members

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth, Position                                                                   Number of Funds
 with the Trust and Length of     Business Experience and                                        in DWS Fund
 Time Served(1)                   Directorships During the Past 5 Years                          Complex Overseen
--------------------------------------------------------------------------------------------------------------------
<S>                                      <C>                                                               <C>
Paul K. Freeman                   Consultant, World Bank/Inter-American Development Bank;               134
(1950)                            Governing Council of the Independent Directors Council
Chairperson since 2009, and       (governance, executive committees); formerly: Project Leader,
Board Member since 1993           International Institute for Applied Systems Analysis
                                  (1998-2001); Chief Executive Officer, The Eric Group, Inc.
                                  (environmental insurance) (1986-1998)
--------------------------------------------------------------------------------------------------------------------
John W. Ballantine (1946)         Retired; formerly: Executive Vice President and Chief Risk            134
Board Member since 1999           Management Officer, First Chicago NBD Corporation/The First
                                  National Bank of Chicago (1996-1998); Executive Vice
                                  President and Head of International Banking (1995-1996);
                                  Directorships: Healthways Inc. (provider of disease and care
                                  management services); Portland General Electric (utility
                                  company); Stockwell Capital Investments PLC (private equity);
                                  former Directorships: First Oak Brook Bancshares, Inc. and
                                  Oak Brook Bank
--------------------------------------------------------------------------------------------------------------------
 Henry P. Becton, Jr. (1943)      Vice Chair, WGBH Educational Foundation; Directorships:               134
 Board Member since               Association of Public Television Stations; Becton Dickinson
 1990                             and Company(2) (medical technology company); Belo
                                  Corporation(2) (media company); Boston Museum
                                  of Science; Public Radio International; PRX,
                                  The Public Radio Exchange; The PBS Foundation;
                                  former Directorships: American Public
                                  Television; Concord Academy; New England
                                  Aquarium; Mass. Corporation for Educational
                                  Telecommunications; Committee for Economic
                                  Development; Public Broadcasting Service
--------------------------------------------------------------------------------------------------------------------
Dawn-Marie Driscoll (1946)        President, Driscoll Associates (consulting firm); Executive           134
Board Member since 1987           Fellow, Center for Business Ethics, Bentley University;
                                  formerly: Partner, Palmer & Dodge (1988-1990); Vice President
                                  of Corporate Affairs and General Counsel, Filene's
                                  (1978-1988); Directorships: Trustee of 20 open-end mutual
                                  funds managed by Sun Capital Advisers, Inc. (since 2007);
                                  Director of ICI Mutual Insurance Company (since 2007);
                                  Advisory Board, Center for Business Ethics,
                                  Bentley University; Trustee, Southwest Florida
                                  Community Foundation (charitable
                                  organization); former Directorships:
                                  Investment Company Institute (audit,
                                  executive, nominating committees) and
                                  Independent Directors Council (governance,
                                  executive
                                  committees)
--------------------------------------------------------------------------------------------------------------------
Keith R. Fox (1954)               Managing General Partner, Exeter Capital Partners (a series           134
Board Member since                of private equity funds); Directorships: Progressive Holding
1996                              Corporation (kitchen goods importer and distributor); Natural
                                  History, Inc. (magazine publisher); Box Top Media Inc.
                                  (advertising); The Kennel Shop (retailer)
--------------------------------------------------------------------------------------------------------------------
Kenneth C. Froewiss               Clinical Professor of Finance, NYU Stern School of Business           134
(1945)                            (1997-present); Member, Finance Committee, Association for
Board Member since                Asian Studies (2002-present); Director, Mitsui Sumitomo
2001                              Insurance Group (US) (2004-present); prior thereto, Managing
                                  Director, J.P. Morgan (investment banking firm) (until 1996)
--------------------------------------------------------------------------------------------------------------------
Richard J. Herring                Jacob Safra Professor of International Banking and Professor,         134
(1946)                            Finance Department, The Wharton School, University of
Board Member since                Pennsylvania (since July 1972); Co-Director, Wharton
1990                              Financial Institutions Center (since July 2000); Director,
                                  Japan Equity Fund, Inc. (since September 2007), Thai Capital
                                  Fund, Inc. (since September 2007), Singapore Fund, Inc.
                                  (since September 2007); formerly: Vice Dean and Director,
                                  Wharton Undergraduate Division (July 1995-June 2000);
                                  Director, Lauder Institute of International Management
                                  Studies (July 2000-June 2006)
--------------------------------------------------------------------------------------------------------------------
William McClayton (1944)          Managing Director, Diamond Management & Technology                    134
Board Member since 2004           Consultants, Inc. (global management consulting firm)
                                  (2001-present); Directorship: Board of Managers, YMCA of
                                  Metropolitan Chicago; formerly: Senior Partner, Arthur
                                  Andersen LLP (accounting) (1966-2001); Trustee, Ravinia
                                  Festival
--------------------------------------------------------------------------------------------------------------------
Rebecca W. Rimel                  President and Chief Executive Officer, The Pew Charitable             134
(1951)                            Trusts (charitable organization) (1994 to present); Trustee,
Board Member since                Thomas Jefferson Foundation (charitable organization) (1994
1995                              to present); Trustee, Executive Committee, Philadelphia
                                  Chamber of Commerce (2001 to 2007); Trustee,
                                  Pro Publica (2007-present) (charitable
                                  organization); formerly: Executive Vice
                                  President, The Glenmede Trust Company
                                  (investment trust and wealth management) (1983
                                  to 2004); Board Member, Investor Education
                                  (charitable organization) (2004-2005);
                                  Director, Viasys Health Care(2) (January
                                  2007-June 2007)
--------------------------------------------------------------------------------------------------------------------
William N. Searcy, Jr.            Private investor since October 2003; Trustee of 20 open-end           134
(1946)                            mutual funds managed by Sun Capital Advisers, Inc. (since
Board Member since                October 1998); formerly: Pension & Savings Trust Officer,
1993                              Sprint Corporation(2) (telecommunications) (November
                                  1989-September 2003)
-------------------------------------------------------------------------------------------------------------------
Jean Gleason Stromberg            Retired; formerly: Consultant (1997-2001); Director, US               134
(1943)                            Government Accountability Office (1996-1997); Partner,
Board Member since                Fulbright & Jaworski, L.L.P. (law firm) (1978-1996);
1997                              Directorships: The William and Flora Hewlett Foundation;
                                  Business Leadership Council, Wellesley College; former
                                  Directorships: Service Source, Inc., Mutual Fund Directors
                                  Forum (2002-2004), American Bar Retirement Association
                                  (funding vehicle for retirement plans) (1987-1990 and
                                  1994-1996)
--------------------------------------------------------------------------------------------------------------------
Robert H. Wadsworth (1940)        President, Robert H. Wadsworth & Associates, Inc. (consulting         137
Board Member since 1999           firm) (1983 to present); Director, The Phoenix Boys Choir
                                  Association
--------------------------------------------------------------------------------------------------------------------

Interested Board Member

--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth, Position                                                                   Number of Funds
 with the Trust and Length of     Business Experience and                                        in DWS Fund
 Time Served(1)                   Directorships During the Past 5 Years                          Complex Overseen
--------------------------------------------------------------------------------------------------------------------
 Axel Schwarzer(3)                Managing Director(4), Deutsche Asset Management; Head of              134
 (1958)                           Deutsche Asset Management Americas; CEO of DWS Investments;
 Board Member since               formerly: board member of DWS Investments, Germany
 2006                             (1999-2005); Head of Sales and Product Management for the
                                  Retail and Private Banking Division of
                                  Deutsche Bank in Germany (1997-1999); various
                                  strategic and operational positions for
                                  Deutsche Bank Germany Retail and Private
                                  Banking Division in the field of investment
                                  funds, tax driven instruments and asset
                                  management for corporates (1989-1996)
--------------------------------------------------------------------------------------------------------------------

Officers(5)

--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth, Position
 with the Trust and Length of     Business Experience and
 Time Served(6)                   Directorships During the Past 5 Years
--------------------------------------------------------------------------------------------------------------------
 Michael G. Clark(7) (1965)       Managing Director(4), Deutsche Asset Management (2006-present); President of
 President, 2006-present          DWS family of funds; Director, ICI Mutual Insurance Company (since
                                  October 2007); formerly: Director of Fund Board Relations (2004-2006) and
                                  Director of Product Development (2000-2004), Merrill Lynch Investment Managers;
                                  Senior Vice President Operations, Merrill Lynch Asset Management (1999-2000)
--------------------------------------------------------------------------------------------------------------------
 John Millette(8) (1962)          Director(4), Deutsche Asset Management
 Vice President and Secretary,
 1999-present
--------------------------------------------------------------------------------------------------------------------
 Paul H. Schubert(7) (1963)       Managing Director(4), Deutsche Asset Management (since July 2004); formerly:
 Chief Financial Officer,         Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family
 2004-present                     of Funds (1998-2004); Vice President and Director of Mutual Fund Finance at UBS
 Treasurer, 2005-present          Global Asset Management (1994-1998)
--------------------------------------------------------------------------------------------------------------------
 Caroline Pearson(8) (1962)       Managing Director(4), Deutsche Asset Management
 Assistant Secretary,
 1997-present
--------------------------------------------------------------------------------------------------------------------
 Rita Rubin(9) (1970)             Vice President and Counsel, Deutsche Asset Management (since October 2007);
 Assistant Secretary,             formerly, Vice President, Morgan Stanley Investment Management (2004-2007);
 2009-present                     Attorney, Shearman & Sterling LLP (2004); Vice President and Associate General
                                  Counsel, UBS Global Asset Management (2001-2004)
--------------------------------------------------------------------------------------------------------------------
 Paul Antosca(8)                  Director(4), Deutsche Asset Management (since 2006); formerly: Vice President,
 (1957)                           The Manufacturers Life Insurance Company (U.S.A.) (1990-2006)
 Assistant Treasurer,
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Jack Clark (8)                   Director(4), Deutsche Asset Management (since 2007); formerly: Vice President,
 (1967)                           State Street Corporation (2002-2007)
 Assistant Treasurer,
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Diane Kenneally(8)               Director(4), Deutsche Asset Management
 (1966)
 Assistant Treasurer,
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Jason Vazquez(9) (1972)          Vice President, Deutsche Asset Management (since 2006); formerly: AML
 Anti-Money Laundering            Operations Manager for Bear Stearns (2004-2006); Supervising Compliance
 Compliance Officer,              Principal and Operations Manager for AXA Financial (1999-2004)
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Robert Kloby(9) (1962)           Managing Director(4), Deutsche Asset Management (2004-present); formerly: Chief
 Chief Compliance Officer,        Compliance Officer/Chief Risk Officer, Robeco USA (2000-2004); Vice President,
 2006-present                     The Prudential Insurance Company of America (1988-2000); E.F. Hutton and
                                  Company (1984-1988)
--------------------------------------------------------------------------------------------------------------------
 J. Christopher Jackson(9)        Director(4), Deutsche Asset Management (2006-present); formerly: Director,
 (1951)                           Senior Vice President, General Counsel, and Assistant Secretary, Hansberger
 Chief Legal Officer,             Global Investors, Inc. (1996-2006); Director, National Society of Compliance
 2006-present                     Professionals (2002-2005) (2006-2009)
--------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)      The length of time served represents the year in which the Board Member
         joined the board of one or more DWS funds currently overseen by the
         Board.

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

(3)      The mailing address of Axel Schwarzer is c/o Deutsche Investment
         Management Americas Inc., 345 Park Avenue, New York, New York 10154.
         Mr. Schwarzer is an interested Board Member by virtue of his positions
         with Deutsche Asset Management. As an interested person, Mr. Schwarzer
         receives no compensation from the Funds.

(4)      Executive title, not a board directorship.

(5)      As a result of their respective positions held with the Advisor, these
         individuals are considered "interested persons" of the Advisor within
         the meaning of the 1940 Act. Interested persons receive no compensation
         from the Funds.

(6)      The length of time served represents the year in which the officer was
         first elected in such capacity for one or more DWS funds.

(7)      Address:  345 Park Avenue, New York, New York 10154.

(8)      Address: One Beacon Street, Boston, Massachusetts 02108.

(9)      Address:  280 Park Avenue, New York, New York 10017.

Certain officers hold similar positions for other investment companies for which
DIMA or an affiliate serves as the Advisor.

   Officer's Role with Principal Underwriter: DWS Investments Distributors, Inc.

 Paul H. Schubert:                   Vice President
 Jason Vazquez:                      Vice President and AML Compliance Officer
 Caroline Pearson:                   Secretary

Board Members' Responsibilities. The officers of the Trust manage its day-to-day
operations under the direction of the Board. The primary responsibility of the
Board is to represent the interests of the Funds and to provide oversight of the
management of the Funds.

Board Committees. The Board has established the following standing committees:
Audit Committee, Nominating and Governance Committee, Contract Committee, Equity
Oversight Committee, Fixed-Income and Quant Oversight Committee, Marketing and
Shareholder Services Committee, and Operations Committee. For each committee,
the Board has adopted a written charter setting forth each committee's
responsibilities. Each committee was reconstituted effective April 1, 2008.

Audit Committee: The Audit Committee, which consists entirely of Independent
Board Members, assists the Board in fulfilling its responsibility for oversight
of (1) the integrity of the financial statements, (2) the Funds' accounting and
financial reporting policies and procedures, (3) the Funds' compliance with
legal and regulatory requirements related to accounting and financial reporting
and (4) the qualifications, independence and performance of the independent
registered public accounting firm for the Funds. It also approves and recommends
to the Board the appointment, retention or termination of the independent
registered public accounting firm for the Funds, reviews the scope of audit and
internal controls, considers and reports to the Board on matters relating to the
Funds' accounting and financial reporting practices, and performs such other
tasks as the full Board deems necessary or appropriate. The Audit Committee
receives annual representations from the independent registered public
accounting firm as to its independence. The members of the Audit Committee are
William McClayton (Chair), Kenneth C. Froewiss (Vice Chair), John W. Ballantine,
Henry P. Becton, Jr., Keith R. Fox and William N. Searcy, Jr. During the
calendar year 2008, the Audit Committee of the Funds' Board held six (6)
meetings.

Nominating and Governance Committee: The Nominating and Governance Committee,
which consists entirely of Independent Board Members, recommends individuals for
membership on the Board, nominates officers, Board and committee chairs, vice
chairs and committee members, and oversees the operations of the Board. The
Nominating and Governance Committee also reviews recommendations by shareholders
for candidates for Board positions. Shareholders may recommend candidates for
Board positions by forwarding their correspondence by US mail or courier service
to Dawn-Marie Driscoll, P.O. Box 100176, Cape Coral, FL 33904. The members of
the Nominating and Governance Committee are Henry P. Becton, Jr. (Chair),
Rebecca W. Rimel (Vice Chair), Paul K. Freeman and William McClayton. During the
calendar year 2008, the Nominating and Governance Committee of the Funds' Board
held four (4) meetings.

Contract Committee: The Contract Committee, which consists entirely of
Independent Board Members, reviews at least annually, (a) the Funds' financial
arrangements with DIMA and its affiliates, and (b) the Funds' expense ratios.
The members of the Contract Committee are Robert H. Wadsworth (Chair), Keith R.
Fox (Vice Chair), Henry P. Becton, Jr., Richard J. Herring, William McClayton
and Jean Gleason Stromberg. During the calendar year 2008, the Contract Review
Committee of the Funds' Board held seven (7) meetings.

Equity Oversight Committee: The Equity Oversight Committee reviews the
investment operations of those funds that primarily invest in equity securities
(except for those funds managed by a quantitative investment team). The members
of the Equity Oversight Committee are John W. Ballantine (Chair), William
McClayton (Vice Chair), Henry P. Becton, Jr., Keith R. Fox, Richard J. Herring
and Rebecca W. Rimel. During the calendar year 2008, the Equity Oversight
Committee of the Funds' Board held five (5) meetings.

Fixed-Income and Quant Oversight Committee: The Fixed-Income and Quant Oversight
Committee reviews the investment operations of those funds that primarily invest
in fixed-income securities or are managed by a quantitative investment team. The
members of the Fixed-Income and Quant Oversight Committee are William N. Searcy,
Jr. (Chair), Jean Gleason Stromberg (Vice Chair), Dawn-Marie Driscoll, Kenneth
C. Froewiss and Robert H. Wadsworth. During the calendar year 2008, the
Fixed-Income Oversight Committee of the Funds' Board held five (5) meetings.

Marketing and Shareholder Services Committee: The Marketing and Shareholder
Services Committee reviews the Funds' marketing program, sales practices and
literature and shareholder services. The members of the Marketing and
Shareholder Services Committee are Richard J. Herring (Chair), Dawn-Marie
Driscoll (Vice Chair), Rebecca W. Rimel, Jean Gleason Stromberg and Robert H.
Wadsworth. During the calendar year 2008, the Marketing/Distribution/Shareholder
Service Committee of the Funds' Board held four (4) meetings.

The Operations Committee: The Operations Committee reviews the administrative
operations, legal affairs and general compliance matters of the Funds. The
Operations Committee reviews administrative matters related to the operations of
the Funds, policies and procedures relating to portfolio transactions, custody
arrangements, fidelity bond and insurance arrangements, valuation of Fund assets
and securities and such other tasks as the full Board deems necessary or
appropriate. The Operations Committee also oversees the valuation of the Funds'
securities and other assets and determines, as needed, the fair value of Fund
securities or other assets under certain circumstances as described in the
Funds' Valuation Procedures. The Operations Committee has appointed a Valuation
Sub-Committee, which may make determinations of fair value required when the
Operations Committee is not in session. The members of the Operations Committee
are Dawn-Marie Driscoll (Chair), John W. Ballantine (Vice Chair), Kenneth C.
Froewiss, Rebecca W. Rimel and William N. Searcy, Jr. The members of the
Valuation Sub-Committee are Kenneth C. Froewiss (Chair), John W. Ballantine,
Dawn-Marie Driscoll (Alternate), Rebecca W. Rimel (Alternate) and William N.
Searcy, Jr. (Alternate). During the calendar year 2008, the Operations Committee
held four (4) meetings and the Valuation Sub-Committee held no meetings.

Ad Hoc Committees. In addition to the standing committees described above, from
time to time the Board may also form ad hoc committees to consider specific
issues.

Remuneration. Each Independent Board Member receives compensation from the Funds
for his or her services, which includes retainer fees and specified amounts for
various committee services and for the Board Chairperson. No additional
compensation is paid to any Independent Board Member for travel time to
meetings, attendance at directors' educational seminars or conferences, service
on industry or association committees, participation as speakers at directors'
conferences or service on special fund industry director task forces or
subcommittees. Independent Board Members do not receive any employee benefits
such as pension or retirement benefits or health insurance from the Funds or any
fund in the DWS fund complex.

Board Members who are officers, directors, employees or stockholders of Deutsche
Asset Management or its affiliates receive no direct compensation from the
Funds, although they are compensated as employees of Deutsche Asset Management,
or its affiliates, and as a result may be deemed to participate in fees paid by
the Funds. The following tables show compensation from the Funds and aggregate
compensation from all of the funds in the DWS fund complex received by each
Independent Board Member during the calendar year 2008. Mr. Schwarzer is an
interested person of the Funds and received no compensation from the Funds or
any fund in the DWS fund complex during the relevant periods.


<TABLE>
<CAPTION>
                                                        Aggregate               Aggregate
                                  Aggregate         Compensation from       Compensation from       Total Compensation
                              Compensation from    DWS Mid Cap Growth         DWS Small Cap         from Fund and DWS
 Name of Board Member        DWS Micro Cap Fund          Fund                 Growth Fund           Fund Complex(1)
  --------------------          ---------------          -----                ------------          ---------------

<S>                                   <C>               <C>                       <C>                   <C>
  John W. Ballantine                  $168              $1,097                    $437                  $237,500
  Henry P. Becton, Jr.(2)           $1,142                $215                    $557                  $246,000
  Dawn-Marie Driscoll(2)(3)         $1,395                $241                    $667                  $292,500
  Keith R. Fox(2)                   $1,073                $207                    $527                  $229,500
  Paul K. Freeman                     $172              $1,168                    $461                  $255,000
  Kenneth C. Froewiss               $1,073                $207                    $527                  $226,750
  Richard J. Herring(2)             $1,142                $215                    $557                  $240,000
  William McClayton(4)                $170              $1,141                    $451                  $257,500
  Rebecca W. Rimel(2)               $1,073                $207                    $527                  $233,500
  William N. Searcy, Jr.            $1,142                $215                    $557                  $238,000
  Jean Gleason Stromberg            $1,073                $207                    $527                  $225,500
  Robert H. Wadsworth                 $170              $1,141                    $451                  $273,500

(1)      The DWS fund complex is composed of 136 funds as of December 31, 2008.

(2)      Aggregate compensation includes amounts paid to the Board Members for
         special meetings of ad hoc committees of the Board in connection with
         the consolidation of the DWS fund boards and various funds, meetings
         for considering fund expense simplification initiatives, and
         consideration of issues specific to the Funds' direct shareholders
         (i.e., those shareholders who did not purchase shares through financial
         intermediaries). Such amounts totaled $8,000 for Mr. Becton, $2,000 for
         Ms. Driscoll, $2,000 for Mr. Fox, $2,000 for Dr. Herring and $8,000 for
         Ms. Rimel. These meeting fees were borne by the funds.

(3)      Includes $70,000 in annual retainer fees received by Ms. Driscoll as
         Chairperson of DWS funds.

(4)      Includes $15,000 paid to Mr. McClayton for numerous special meetings of
         an ad hoc committee of the former Chicago Board in connection with
         board consolidation initiatives.

Board Member Ownership in the Fund

The following table shows the dollar range of equity securities beneficially
owned by each Board Member in the Funds and DWS fund complex as of December 31,
2008.

                                     Dollar Range of   Dollar Range       Dollar Range of     Aggregate Dollar Range
                                        Beneficial     of Beneficial        Beneficial          of Ownership in all
                                       Ownership in    Ownership in      Ownership in DWS        Funds Overseen by
                                      DWS Micro Cap     DWS Mid Cap      Small Cap Growth       Board Member in the
Board Member                               Fund         Growth Fund            Fund            DWS Fund Complex(1)
------------                               ----         -----------            ----            ---------------------

Independent Board Member:

John W. Ballantine                         None            None                None                Over $100,000
Henry P. Becton, Jr.                       None        $1 - $10,000        $1 - $10,000            Over $100,000
Dawn-Marie Driscoll                        None            None            $1 - $10,000            Over $100,000
Keith R. Fox                               None            None                None                Over $100,000
Paul K. Freeman                            None            None                None                Over $100,000
Kenneth C. Froewiss                        None            None                None                Over $100,000
Richard J. Herring                         None            None                None                Over $100,000
William McClayton                      $1 - $10,000        None                None                Over $100,000
Rebecca W. Rimel                           None            None                None                Over $100,000
William N. Searcy, Jr.                     None            None                None                Over $100,000
Jean Gleason Stromberg                     None            None                None                Over $100,000
Robert H. Wadsworth                        None            None                None                Over $100,000

Interested Board Member:

Axel Schwarzer                             None            None                None                Over $100,000

(1)      Securities beneficially owned as defined under the 1934 Act include
         direct and/or indirect ownership of securities where the Board Member's
         economic interest is tied to the securities, employment ownership and
         securities when the Board Member can exert voting power, and when the
         Board Member has authority to sell the securities. The dollar ranges
         are: None, $1-$10,000, $10,001-$50,000, $50,001-$100,000 and over
         $100,000.


Ownership in Securities of the Advisor and Related Companies

As reported to the Funds, the information in the following table reflects
ownership by the Independent Board Members and their immediate family members of
certain securities as of December 31, 2008. Immediate family members can be a
spouse, children residing in the same household including step and adoptive
children, and any dependents. The securities represent ownership in the Advisor
or principal underwriter of the Funds and any persons (other than a registered
investment company) directly or indirectly controlling, controlled by, or under
common control with the Advisor or principal underwriter of the Funds (including
Deutsche Bank AG).


                                                                                   Value of        Percent of
                                   Owner and                                     Securities on     Class on an
Independent                     Relationship to                     Title of     an Aggregate       Aggregate
Board Member                      Board Member         Company        Class          Basis            Basis
------------                      ------------         -------        -----          -----            -----

John W. Ballantine                                      None
Henry P. Becton, Jr.                                    None
Dawn-Marie Driscoll                                     None
Keith R. Fox                                            None
Paul K. Freeman                                         None
Kenneth C. Froewiss                                     None
Richard J. Herring                                      None
William McClayton                                       None
Rebecca W. Rimel                                        None
William N. Searcy, Jr.                                  None
Jean Gleason Stromberg                                  None
Robert H. Wadsworth                                     None

Securities Beneficially Owned

As of January 14, 2009, the Board Members and officers of the Trust owned, as a
group, less than 1% of the outstanding shares of each Fund.

To the best of each Fund's knowledge, as of January 14, 2009, no person owned of
record or beneficially 5% or more of any class of the Fund's outstanding shares,
except as noted below.

DWS Mid Cap Growth Fund

Name and Address of Investor Ownership                          Shares                      % of Total Shares
--------------------------------------                          ------                      -----------------

JENNIFER FERRARI TTEE                                        1,426,931.00                   7.39% of Class A
STATE STREET BANK AND TRUST
ADP 401K DAILY VALUATION PROD B
ROSELAND NJ  07068-1739

DWS TRUST COMPANY TTEE                                       9,223,445.42             98.48% of Institutional Class
FBO DB MATCHED SAVINGS PLAN
ATTN ASSET RECON DEPT # XXXXXX
SALEM NH  03079-1143

DWS Small Cap Growth Fund

Name and Address of Investor Ownership                          Shares                      % of Total Shares
--------------------------------------                          ------                      -----------------

MLPF&S FOR THE SOLE BENEFIT OF                                538,373.39                    26.69% of Class A
ITS CUSTOMERS
ATTN FUND ADM (97HB3)
JACKSONVILLE FL  32246-6484

HARTFORD LIFE INSURANCE COMPANY                               191,935.43                    9.52% of Class A
ATTN UIT OPERATIONS
HARTFORD CT  06104-2999

JENNIFER FERRARI TTEE                                         102,632.11                    5.09% of Class A
STATE STREET BANK AND TRUST
FBO ADP 401K DAILY VALUATION PROD B
ROSELAND NJ  07068-1739

STATE STREET BANK & TRUST CO                                  112,621.99              46.38% of Institutional Class
CUST FBO
DWS LIFECOMPASS 2020 FUND
QUINCY MA  02171-2105

STATE STREET BANK & TRUST CO                                   76,130.53              31.35% of Institutional Class
CUST FBO
DWS LIFECOMPASS 2015 FUND
QUINCY MA  02171-2105

STATE STREET BANK & TRUST CO                                   22,153.60              9.12% of Institutional Class
CUST FBO
DWS LIFECOMPASS RETIREMENT FUND
QUINCY MA  02171-2105

STATE STREET BANK & TRUST CO                                   18,476.26              7.61% of Institutional Class
CUST FBO
DWS LIFECOMPASS 2030 FUND
QUINCY MA  02171-2105

CHARLES SCHWAB & CO INC                                       460,061.95                    13.7% of Class S
REINVEST ACCOUNT
SAN FRANCISCO CA  94104-4151

DWS Micro Cap Fund

Name and Address of Investor Ownership                          Shares                      % of Total Shares
--------------------------------------                          ------                      -----------------

STATE STREET BANK & TRUST CO CUST                             107,513.91                    9.71% of Class A
FBO ADP/MORGAN STANLEY DW
WESTWOOD MA  02090-2318

DWS TRUST COMPANY                                              55,709.50                    5.03% of Class A
FBO PROVIDENCE SVC CORP
RETIREMENT SAVINGS PLAN
ATTN SHARE RECON DEPT #XXXXXX
SALEM NH  03079-1143

RIDGE CLEARING AND OUTSOURCING                                 8,944.16                     5.85% of Class B
FBO XXX-XXXXX-XX
JERSEY CITY NJ  07306-4001

MLPF&S FOR THE SOLE BENEFIT OF                                 47,845.47                    10.63% of Class C
ITS CUSTOMERS
ATTN FUND ADMINISTRATION
SEC #97JS4
JACKSONVILLE FL  32246

MORGAN STANLEY & CO.                                           39,570.71                    8.79% of Class C
HARBORSIDE FINANCIAL CENTER
PLAZA II 3RD FLOOR
JERSEY CITY NJ  07311

BROWN BROTHERS HARRIMAN & CO                                   25,435.70                    5.65% of Class C
AS CUST FBO 9050204
JERSEY CITY NJ  07310-1606

NATIONAL FINANCIAL SERVICES CORP                              390,947.07              48.07% of Institutional Class
FOR THE EXCLUSIVE BENEFIT OF OUR
NEW YORK NY  10281-1003

STATE STREET BANK & TRUST CO                                   92,701.21              11.4% of Institutional Class
CUST FBO
DWS LIFECOMPASS 2015 FUND
QUINCY MA  02171-2105

DWS TRUST COMPANY CUST                                         84,414.92              10.38% of Institutional Class
FBO THE THRIFT PLAN OF LONZA
ATTN ASSET RECON DEPT #XXXXXX
SALEM NH  03079-1143

STATE STREET BANK & TRUST CO                                   64,241.50               7.9% of Institutional Class
CUST FBO
DWS LIFECOMPASS 2020 FUND
QUINCY MA  02171-2105

CHARLES SCHWAB & CO INC                                        90,976.32                    16.88% of Class S
REINVEST ACCOUNT
SAN FRANCISCO CA  94104-4151

NFS LLC FBO                                                    35,302.70                    6.55% of Class S
BANK OF AMERICA NA
HARMAN INT'L IND DEF COMP TR
DALLAS TX  75283-1575

WTRISC                                                         33,589.40                    6.23% of Class S
FBO CORPORATE OFFICE PROPERTIES
TRUST EXECUTIVE DEFFERED COMP PLAN
PHOENIX AZ  85072-2129
</TABLE>


         Agreement to Indemnify Independent Trustees for Certain Expenses

In connection with litigation or regulatory action related to possible improper
market timing or other improper trading activity or possible improper marketing
and sales activity in certain DWS Funds (the "Affected Funds"), DIMA has agreed
to indemnify and hold harmless the Affected Funds ("Fund Indemnification
Agreement") against any and all loss, damage, liability and expense, arising
from market timing or marketing and sales matters alleged in any enforcement
actions brought by governmental authorities involving or potentially affecting
the Affected Funds or DIMA ("Enforcement Actions") or that are the basis for
private actions brought by shareholders of the Affected Funds against the
Affected Funds, their directors and officers, DIMA and/or certain other parties
("Private Litigation"), or any proceedings or actions that may be threatened or
commenced in the future by any person (including governmental authorities),
arising from or similar to the matters alleged in the Enforcement Actions or
Private Litigation. In recognition of its undertaking to indemnify the Affected
Funds and in light of the rebuttable presumption generally afforded to
independent directors/trustees of investment companies that they have not
engaged in disabling conduct, DIMA has also agreed, subject to applicable law
and regulation, to indemnify certain (or, with respect to certain Affected
Funds, all) of the Independent Trustees of the Affected Funds, against certain
liabilities the Independent Trustees may incur from the matters alleged in any
Enforcement Actions or Private Litigation or arising from or similar to the
matters alleged in the Enforcement Actions or Private Litigation, and advance
expenses that may be incurred by the Independent Trustees in connection with any
Enforcement Actions or Private Litigation. DIMA is not, however, required to
provide indemnification and advancement of expenses: (1) with respect to any
proceeding or action which the Affected Funds' Board determines that the
Independent Trustees ultimately would not be entitled to indemnification or (2)
for any liability of the Independent Trustees to the Funds or their shareholders
to which the Independent Trustee would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the
Independent Trustee's duties as a director or trustee of the Affected Funds as
determined in a final adjudication in such action or proceeding. The estimated
amount of any expenses that may be advanced to the Independent Trustees or
indemnity that may be payable under the indemnity agreements is currently
unknown. These agreements by DIMA will survive the termination of the investment
management agreements between DIMA and the Affected Funds.

                               TRUST ORGANIZATION

Each Fund is a series of DWS Advisor Funds (the "Trust"), an open-end management
investment company. The Trust is a Massachusetts business trust organized under
the laws of Massachusetts and is governed by an Amended and Restated Declaration
of Trust dated June 2, 2008, as may be further amended from time to time (the
"Declaration of Trust"). Prior to July 10, 2006, DWS Micro Cap Fund was a series
of DWS Investments Trust, an open-end management investment company organized as
a Delaware statutory trust. On or about July 10, 2006, DWS Micro Cap Fund
acquired all the assets and assumed all the liabilities of DWS Micro Cap Fund, a
series of DWS Investment Trust (the "Micro Cap Predecessor Fund") in a
reorganization.

The Trust was organized on July 21, 1986 under the laws of The Commonwealth of
Massachusetts under the name BT Tax-Free Investment Trust and assumed its former
name of BT Investment Funds on May 16, 1988. The Trust's name was changed to
Scudder Advisor Funds effective May 16, 2003 and to DWS Advisor Funds effective
February 6, 2006. The Board of Trustees of the Trust is responsible for the
overall management and supervision of the affairs of the Trust. The Declaration
of Trust authorizes the Board of Trustees to create separate investment series
or portfolios of shares. Mid Cap Growth Fund currently offers five classes of
shares, Institutional Class and Class A, B, C and S shares. Small Cap Growth
Fund currently offers five classes of shares, Institutional Class and Class A,
B, C, and S shares. Micro Cap Fund currently offers five classes of shares,
Institutional Class and Class A, B, C and S shares. On July 14, 2006, Class AARP
shares of Mid Cap Growth Fund and Small Cap Growth Fund were merged into Class S
Shares of each Fund and are no longer available for investment. On October 23,
2006, Investment Class shares of Mid Cap Growth Fund, Small Cap Growth Fund and
Micro Cap Fund merged into Class S shares and are no longer available for
investment. Effective November 17, 2006, Class R shares of Mid Cap Growth Fund
and Small Cap Growth Fund converted into Class A shares and are no longer
available for investment. Each of the Funds is a separate series of the Trust.

Prior to March 28, 2002, Mid Cap Growth Fund and Small Cap Growth Fund invested
all of their investable assets in diversified open-end management investment
companies having the same investment objectives as each Fund. These investment
companies were Capital Appreciation Portfolio and Small Cap Portfolio,
respectively (each, a "Portfolio" and collectively, the "Portfolios"). Since
March 28, 2002, each Fund is now operating as a stand-alone mutual fund that
directly acquires and manages its own portfolio of securities. Mid Cap Growth
Fund and Small Cap Growth Fund may in the future seek to achieve their
investment objectives by investing all of their net assets in investment
companies having the same investment policies and restrictions as those
applicable to each Fund.

Each Fund generally is not required to hold meetings of its shareholders. Under
the Declaration of Trust, however, shareholder meetings will be held in
connection with the following matters to the extent and as provided in the
Declaration of Trust and as required by applicable law: (a) the election or
removal of trustees if a meeting is called for such purpose; (b) the termination
of the Trust or a Fund; (c) an amendment of the Declaration of Trust; (d) to the
same extent as stockholders of Massachusetts business corporation as to whether
or not a court action, proceeding or claims should or should not be brought or
maintained derivatively or as a class action on behalf of the Trust or any
series or class thereof or the Shareholders; and (e) such additional matters as
may be required by law, the Declaration of Trust, the By-laws of a Fund, or any
registration of a Fund with the SEC or any state, or as the Trustees may
determine to be necessary or desirable. Shareholders also vote upon changes in
fundamental policies or restrictions.

On any matter submitted to a vote of shareholders, all shares of the Trust
entitled to vote shall, except as otherwise provided in the Trust's By-Laws, be
voted in the aggregate as a single class without regard to series or classes of
shares, except (a) when required by applicable law or when the Trustees shall
have determined that the matter affects one or more series or classes of shares
materially differently, shares shall be voted by individual series or class; and
(b) when the Trustees have determined that the matter affects only the interests
of one or more series or classes, only shareholders of such series or classes
shall be entitled to vote thereon.

The Declaration of Trust provides that the Board of Trustees may, in its
discretion, establish minimum investment amounts for shareholder accounts,
impose fees on accounts that do not exceed a minimum investment amount and
involuntarily redeem shares in any such account in payment of such fees. The
Board of Trustees, in its sole discretion, also may cause the Trust to redeem
all of the shares of the Trust or one or more series or classes held by any
shareholder for any reason, to the extent permissible by the 1940 Act, including
(a) if the shareholder owns shares having an aggregate net asset value of less
than a specified minimum amount, (b) if a particular shareholder's ownership of
shares would disqualify a series from being a regulated investment company, (c)
upon a shareholder's failure to provide sufficient identification to permit the
Trust to verify the shareholder's identity, (d) upon a shareholder's failure to
pay for shares or meet or maintain the qualifications for ownership of a
particular class or series of shares, (e) if the Board of Trustees determines
(or pursuant to policies established by the Board it is determined) that share
ownership by a particular shareholder is not in the best interests of remaining
shareholders, (f) when a Fund is requested or compelled to do so by governmental
authority or applicable law and (g) upon a shareholder's failure to comply with
a request for information with respect to the direct or indirect ownership of
shares of the Trust. The Declaration of Trust also authorizes the Board of
Trustees to terminate a Fund or any class without shareholder approval, and the
Trust may suspend the right of shareholders to require the Trust to redeem
shares to the extent permissible under the 1940 Act.

Under Massachusetts law, shareholders of a Massachusetts business trust could,
under certain circumstances, be held personally liable for obligations of a
Fund. The Declaration of Trust, however, disclaims shareholder liability for
acts or obligations of the Fund and requires that notice of such disclaimer be
given in each agreement, obligation, or instrument entered into or executed by
the Fund or the Fund's trustees. Moreover, the Declaration of Trust provides for
indemnification out of Fund property for all losses and expenses of any
shareholder held personally liable for the obligations of the Fund and the Fund
may be covered by insurance which the Trustees consider adequate to cover
foreseeable tort claims. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is considered by the Advisor remote and
not material, since it is limited to circumstances in which a disclaimer is
inoperative and the Fund itself is unable to meet its obligations.

                             PROXY VOTING GUIDELINES

Each Fund has delegated proxy voting responsibilities to the Advisor, subject to
the Board's general oversight. The Advisor votes proxies pursuant to the proxy
voting policy and guidelines set forth in Appendix A to this SAI).

You may obtain information about how a Fund voted proxies related to its
portfolio securities during the 12-month period ended June 30 by visiting the
Securities and Exchange Commission's Web site at www.sec.gov or by visiting our
Web site at: www.dws-investments.com (click on "proxy voting" at the bottom of
the page).

                              FINANCIAL STATEMENTS

The financial statements, including the portfolio of investments, of DWS Mid Cap
Growth Fund, DWS Small Cap Growth Fund and DWS Micro Cap Fund, together with the
Report of Independent Registered Public Accounting Firm, Financial Highlights
and notes to financial statements in the Annual Report to the Shareholders of
each Fund dated September 30, 2008, are incorporated herein by reference and are
hereby deemed to be a part of this SAI.

                             ADDITIONAL INFORMATION

The CUSIP number of DWS Small Cap Growth Fund Class S is 23336Y 771.

The CUSIP number of DWS Mid Cap Growth Fund Class S is 23336Y 862.

The CUSIP number of DWS Micro Cap Fund Class S is 23339E 574.

Each Fund has a fiscal year end of September 30.

Many of the investment changes in a Fund will be made at prices different from
those prevailing at the time they may be reflected in a regular report to
shareholders of a Fund. These transactions will reflect investment decisions
made by the Advisor in light of a Fund's investment objective and policies, its
other portfolio holdings and tax considerations, and should not be construed as
recommendations for similar action by other investors.

The Funds' Prospectuses and this SAI omit certain information contained in the
Registration Statement which each Fund has filed with the SEC under the
Securities Act and Reference is hereby made to the Registration Statement for
further information with respect to a Fund and the securities offered hereby.
This Registration Statement and its amendments are available for inspection by
the public at the SEC in Washington, D.C.





                      APPENDIX A -- PROXY VOTING GUIDELINES

          Deutsche Asset Management ("AM") Proxy Voting Policy and Guidelines


I.       INTRODUCTION

AM has adopted and implemented the following policies and procedures, which it
believes are reasonably designed to ensure that proxies are voted in the best
economic interest of clients, in accordance with its fiduciary duties and local
regulation. These Proxy Voting Policies, Procedures and Guidelines shall apply
to all accounts managed by US domiciled advisers and to all US client accounts
managed by non US regional offices. Non US regional offices are required to
maintain procedures and to vote proxies as may be required by law on behalf of
their non US clients. In addition, AM's proxy policies reflect the fiduciary
standards and responsibilities for ERISA accounts.

The attached guidelines represent a set of global recommendations that were
determined by the Global Proxy Voting Sub-Committee ("the GPVSC"). These
guidelines were developed to provide AM with a comprehensive list of
recommendations that represent how AM will generally vote proxies for its
clients. The recommendations derived from the application of these guidelines
are not intended to influence the various AM legal entities either directly or
indirectly by parent or affiliated companies. In addition, the organizational
structures and documents of the various AM legal entities allows, where
necessary or appropriate, the execution by individual AM subsidiaries of the
proxy voting rights independently of any DB parent or affiliated company. This
applies in particular to non U.S. fund management companies. The individuals
that make proxy voting decisions are also free to act independently, subject to
the normal and customary supervision by the management/boards of these AM legal
entities.


II.      AM'S PROXY VOTING RESPONSIBILITIES

Proxy votes are the property of AM's advisory clients.(1) As such, AM's
authority and responsibility to vote such proxies depend upon its contractual
relationships with its clients. AM has delegated responsibility for effecting
its advisory clients' proxy votes to Institutional Shareholder Services ("ISS"),
an independent third-party proxy voting specialist. ISS votes AM's advisory
clients' proxies in accordance with AM's proxy guidelines or AM's specific
instructions. Where a client has given specific instructions as to how a proxy
should be voted, AM will notify ISS to carry out those instructions. Where no
specific instruction exists, AM will follow the procedures in voting the proxies
set forth in this document. Certain Taft-Hartley clients may direct AM to have
ISS vote their proxies in accordance with Taft Hartley voting Guidelines

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

(1)       For purposes of these Policies and Procedures, "clients" refers to
          persons or entities: for which AM serves as investment adviser or
          sub-adviser; for which AM votes proxies; and that have an economic or
          beneficial ownership interest in the portfolio securities of issuers
          soliciting such proxies.

Clients may in certain instances contract with their custodial agent and notify
AM that they wish to engage in securities lending transactions. In such cases,
it is the responsibility of the custodian to deduct the number of shares that
are on loan so that they do not get voted twice.


III.     POLICIES


1.       Proxy voting activities are conducted in the best economic interest of
         clients

AM has adopted the following policies and procedures to ensure that proxies are
voted in accordance with the best economic interest of its clients, as
determined by AM in good faith after appropriate review.


2.       The Global Proxy Voting Sub-Committee

The Global Proxy Voting Sub-Committee (the "GPVSC") is an internal working group
established by the applicable AM's Investment Risk Oversight Committee pursuant
to a written charter. The GPVSC is responsible for overseeing AM's proxy voting
activities, including:

(i)      adopting, monitoring and updating guidelines, attached as Exhibit A
         (the "Guidelines"), that provide how AM will generally vote proxies
         pertaining to a comprehensive list of common proxy voting matters;

(ii)     voting proxies where (A) the issues are not covered by specific client
         instruction or the Guidelines; (B) the Guidelines specify that the
         issues are to be determined on a case-by-case basis; or (C) where an
         exception to the Guidelines may be in the best economic interest of
         AM's clients; and

(iii)    monitoring the Proxy Vendor Oversight's proxy voting activities (see
         below).

AM's Proxy Vendor Oversight, a function of AM's Operations Group, is responsible
for coordinating with ISS to administer AM's proxy voting process and for voting
proxies in accordance with any specific client instructions or, if there are
none, the Guidelines, and overseeing ISS' proxy responsibilities in this regard.


3.       Availability of Proxy Voting Policies and Procedures and proxy voting
         record

Copies of these Policies and Procedures, as they may be updated from time to
time, are made available to clients as required by law and otherwise at AM's
discretion. Clients may also obtain information on how their proxies were voted
by AM as required by law and otherwise at AM's discretion; however, AM must not
selectively disclose its investment company clients' proxy voting records. The
Proxy Vendor Oversight will make proxy voting reports available to advisory
clients upon request. The investment companies' proxy voting records will be
disclosed to shareholders by means of publicly-available annual filings of each
company's proxy voting record for 12-month periods ended June 30 (see
"Recordkeeping" below), if so required by relevant law.


IV.      PROCEDURES

The key aspects of AM's proxy voting process are as follows:


1.       The GPVSC's Proxy Voting Guidelines

The Guidelines set forth the GPVSC's standard voting positions on a
comprehensive list of common proxy voting matters. The GPVSC has developed, and
continues to update the Guidelines based on consideration of current corporate
governance principles, industry standards, client feedback, and the impact of
the matter on issuers and the value of the investments.

The GPVSC will review the Guidelines as necessary to support the best economic
interests of AM's clients and, in any event, at least annually. The GPVSC will
make changes to the Guidelines, whether as a result of the annual review or
otherwise, taking solely into account the best economic interests of clients.
Before changing the Guidelines, the GPVSC will thoroughly review and evaluate
the proposed change and the reasons therefore, and the GPVSC Chair will ask
GPVSC members whether anyone outside of the AM organization (but within Deutsche
Bank and its affiliates) or any entity that identifies itself as a AM advisory
client has requested or attempted to influence the proposed change and whether
any member has a conflict of interest with respect to the proposed change. If
any such matter is reported to the GPVSC Chair, the Chair will promptly notify
the Conflicts of Interest Management Sub-Committee (see below) and will defer
the approval, if possible. Lastly, the GPVSC will fully document its rationale
for approving any change to the Guidelines.

The Guidelines may reflect a voting position that differs from the actual
practices of the public company(ies) within the Deutsche Bank organization or of
the investment companies for which AM or an affiliate serves as investment
adviser or sponsor. Investment companies, particularly closed-end investment
companies, are different from traditional operating companies. These differences
may call for differences in voting positions on the same matter. Further, the
manner in which AM votes investment company proxies may differ from proposals
for which a AM-advised or sponsored investment company solicits proxies from its
shareholders. As reflected in the Guidelines, proxies solicited by closed-end
(and open-end) investment companies are generally voted in accordance with the
pre-determined guidelines of ISS. See Section IV.3.B.

Funds ("Underlying Funds") in which Topiary Fund Management Fund of Funds (each,
a "Fund") invest, may from time to time seek to revise their investment terms
(i.e. liquidity, fees, etc.) or investment structure. In such event, the
Underlying Funds may require approval/consent from its investors to effect the
relevant changes. Topiary Fund Management has adopted Proxy Voting Procedures
which outline the process for these approvals.


2.       Specific proxy voting decisions made by the GPVSC

The Proxy Vendor Oversight will refer to the GPVSC all proxy proposals (i) that
are not covered by specific client instructions or the Guidelines; or (ii) that,
according to the Guidelines, should be evaluated and voted on a case-by-case
basis.

Additionally, if, the Proxy Vendor Oversight, the GPVSC Chair or any member of
the GPVSC, a portfolio manager, a research analyst or a sub-adviser believes
that voting a particular proxy in accordance with the Guidelines may not be in
the best economic interests of clients, that individual may bring the matter to
the attention of the GPVSC Chair and/or the Proxy Vendor Oversight.(2)

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

(2)       The Proxy Vendor Oversight generally monitors upcoming proxy
          solicitations for heightened attention from the press or the industry
          and for novel or unusual proposals or circumstances, which may prompt
          the Proxy Vendor Oversight to bring the solicitation to the attention
          of the GPVSC Chair. AM portfolio managers, AM research analysts and
          sub-advisers also may bring a particular proxy vote to the attention
          of the GPVSC Chair, as a result of their ongoing monitoring of
          portfolio securities held by advisory clients and/or their review of
          the periodic proxy voting record reports that the GPVSC Chair
          distributes to AM portfolio managers and AM research analysts.

If the Proxy Vendor Oversight refers a proxy proposal to the GPVSC or the GPVSC
determines that voting a particular proxy in accordance with the Guidelines is
not in the best economic interests of clients, the GPVSC will evaluate and vote
the proxy, subject to the procedures below regarding conflicts.

The GPVSC endeavors to hold meetings to decide how to vote particular proxies
sufficiently before the voting deadline so that the procedures below regarding
conflicts can be completed before the GPVSC's voting determination.


3.       Certain proxy votes may not be cast

In some cases, the GPVSC may determine that it is in the best economic interests
of its clients not to vote certain proxies. If the conditions below are met with
regard to a proxy proposal, AM will abstain from voting:

o        Neither the Guidelines nor specific client instructions cover an issue;

o        ISS does not make a recommendation on the issue;

o        The GPVSC cannot convene on the proxy proposal at issue to make a
         determination as to what would be in the client's best interest. (This
         could happen, for example, if the Conflicts of Interest Management
         Sub-committee found that there was a material conflict or if despite
         all best efforts being made, the GPVSC quorum requirement could not be
         met).

In addition, it is AM's policy not to vote proxies of issuers subject to laws of
those jurisdictions that impose restrictions upon selling shares after proxies
are voted, in order to preserve liquidity. In other cases, it may not be
possible to vote certain proxies, despite good faith efforts to do so. For
example, some jurisdictions do not provide adequate notice to shareholders so
that proxies may be voted on a timely basis. Voting rights on securities that
have been loaned to third-parties transfer to those third-parties, with loan
termination often being the only way to attempt to vote proxies on the loaned
securities. Lastly, the GPVSC may determine that the costs to the client(s)
associated with voting a particular proxy or group of proxies outweighs the
economic benefits expected from voting the proxy or group of proxies.

The Proxy Vendor Oversight will coordinate with the GPVSC Chair regarding any
specific proxies and any categories of proxies that will not or cannot be voted.
The reasons for not voting any proxy shall be documented.


4.       Conflict of Interest Procedures

A. Procedures to Address Conflicts of Interest and Improper Influence

Overriding Principle. In the limited circumstances where the GPVSC votes
proxies,(3) the GPVSC will vote those proxies in accordance with what it, in
good faith, determines to be the best economic interests of AM's clients.(4)

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

(3)       As mentioned above, the GPVSC votes proxies (i) where neither a
          specific client instruction nor a Guideline directs how the proxy
          should be voted, (ii) where the Guidelines specify that an issue is to
          be determined on a case by case basis or (iii) where voting in
          accordance with the Guidelines may not be in the best economic
          interests of clients.

(4)       The Proxy Vendor Oversight, who serves as the non-voting secretary of
          the GPVSC, may receive routine calls from proxy solicitors and other
          parties interested in a particular proxy vote. Any contact that
          attempts to exert improper pressure or influence shall be reported to
          the Conflicts of Interest Management Sub-Committee.

Independence of the GPVSC. As a matter of Compliance policy, the GPVSC and the
Proxy Vendor Oversight are structured to be independent from other parts of
Deutsche Bank. Members of the GPVSC and the employee responsible for Proxy
Vendor Oversight are employees of AM. As such, they may not be subject to the
supervision or control of any employees of Deutsche Bank Corporate and
Investment Banking division ("CIB"). Their compensation cannot be based upon
their contribution to any business activity outside of AM without prior approval
of Legal and Compliance. They can have no contact with employees of Deutsche
Bank outside of the Private Client and Asset Management division ("PCAM")
regarding specific clients, business matters or initiatives without the prior
approval of Legal and Compliance. They furthermore may not discuss proxy votes
with any person outside of AM (and within AM only on a need to know basis).

Conflict Review Procedures. There will be a committee (the "Conflicts of
Interest Management Sub-Committee") established within AM that will monitor for
potential material conflicts of interest in connection with proxy proposals that
are to be evaluated by the GPVSC. Promptly upon a determination that a vote
shall be presented to the GPVSC, the GPVSC Chair shall notify the Conflicts of
Interest Management Sub-Committee. The Conflicts of Interest Management
Sub-Committee shall promptly collect and review any information deemed
reasonably appropriate to evaluate, in its reasonable judgment, if AM or any
person participating in the proxy voting process has, or has the appearance of,
a material conflict of interest. For the purposes of this policy, a conflict of
interest shall be considered "material" to the extent that a reasonable person
could expect the conflict to influence, or appear to influence, the GPVSC's
decision on the particular vote at issue. GPVSC should provide the Conflicts of
Interest Management Sub-Committee a reasonable amount of time (no less than 24
hours) to perform all necessary and appropriate reviews. To the extent that a
conflicts review can not be sufficiently completed by the Conflicts of Interest
Management Sub-Committee the proxies will be voted in accordance with the
standard guidelines.

The information considered by the Conflicts of Interest Management Sub-Committee
may include without limitation information regarding (i) AM client
relationships; (ii) any relevant personal conflict known by the Conflicts of
Interest Management Sub-Committee or brought to the attention of that
sub-committee; (iii) and any communications with members of the GPVSC (or anyone
participating or providing information to the GPVSC) and any person outside of
the AM organization (but within Deutsche Bank and its affiliates) or any entity
that identifies itself as a AM advisory client regarding the vote at issue. In
the context of any determination, the Conflicts of Interest Management
Sub-Committee may consult with, and shall be entitled to rely upon, all
applicable outside experts, including legal counsel.

Upon completion of the investigation, the Conflicts of Interest Management
Sub-Committee will document its findings and conclusions. If the Conflicts of
Interest Management Sub-Committee determines that (i) AM has a material conflict
of interest that would prevent it from deciding how to vote the proxies
concerned without further client consent or (ii) certain individuals should be
recused from participating in the proxy vote at issue, the Conflicts of Interest
Management Sub-Committee will so inform the GPVSC chair.

If notified that AM has a material conflict of interest as described above, the
GPVSC chair will obtain instructions as to how the proxies should be voted
either from (i) if time permits, the effected clients, or (ii) in accordance
with the standard guidelines. If notified that certain individuals should be
recused from the proxy vote at issue, the GPVSC Chair shall do so in accordance
with the procedures set forth below.

Note: Any AM employee who becomes aware of a potential, material conflict of
interest in respect of any proxy vote to be made on behalf of clients shall
notify Compliance. Compliance shall call a meeting of the conflict review
committee to evaluate such conflict and determine a recommended course of
action.

Procedures to be followed by the GPVSC. At the beginning of any discussion
regarding how to vote any proxy, the GPVSC Chair (or his or her delegate) will
inquire as to whether any GPVSC member (whether voting or ex officio) or any
person participating in the proxy voting process has a personal conflict of
interest or has actual knowledge of an actual or apparent conflict that has not
been reported to the Conflicts of Interest Management Sub-Committee.

The GPVSC Chair also will inquire of these same parties whether they have actual
knowledge regarding whether any director, officer or employee outside of the AM
organization (but within Deutsche Bank and its affiliates) or any entity that
identifies itself as a AM advisory client, has: (i) requested that AM, the Proxy
Vendor Oversight (or any member thereof) or a GPVSC member vote a particular
proxy in a certain manner; (ii) attempted to influence AM, the Proxy Vendor
Oversight (or any member thereof), a GPVSC member or any other person in
connection with proxy voting activities; or (iii) otherwise communicated with a
GPVSC member or any other person participating or providing information to the
GPVSC regarding the particular proxy vote at issue, and which incident has not
yet been reported to the Conflicts of Interest Management Sub- Committee.

If any such incidents are reported to the GPVSC Chair, the Chair will promptly
notify the Conflicts of Interest Management Sub-Committee and, if possible, will
delay the vote until the Conflicts of Interest Management Sub-Committee can
complete the conflicts report. If a delay is not possible, the Conflicts of
Interest Management Sub-Committee will instruct the GPVSC whether anyone should
be recused from the proxy voting process, or whether AM should vote the proxy in
accordance with the standard guidelines, seek instructions as to how to vote the
proxy at issue from ISS or, if time permits, the effected clients. These
inquiries and discussions will be properly reflected in the GPVSC's minutes.

Duty to Report. Any AM employee, including any GPVSC member (whether voting or
ex officio), that is aware of any actual or apparent conflict of interest
relevant to, or any attempt by any person outside of the AM organization (but
within Deutsche Bank and its affiliates) or any entity that identifies itself as
a AM advisory client to influence, how AM votes its proxies has a duty to
disclose the existence of the situation to the GPVSC Chair (or his or her
designee) and the details of the matter to the Conflicts of Interest Management
Sub-Committee. In the case of any person participating in the deliberations on a
specific vote, such disclosure should be made before engaging in any activities
or participating in any discussion pertaining to that vote.

Recusal of Members. The GPVSC will recuse from participating in a specific proxy
vote any GPVSC members (whether voting or ex officio) and/or any other person
who (i) are personally involved in a material conflict of interest; or (ii) who,
as determined by the Conflicts of Interest Management Sub-Committee, have actual
knowledge of a circumstance or fact that could effect their independent
judgment, in respect of such vote. The GPVSC will also exclude from
consideration the views of any person (whether requested or volunteered) if the
GPVSC or any member thereof knows, or if the Conflicts of Interest Management
Sub-Committee has determined, that such other person has a material conflict of
interest with respect to the particular proxy, or has attempted to influence the
vote in any manner prohibited by these policies.

If, after excluding all relevant GPVSC voting members pursuant to the paragraph
above, there are three or more GPVSC voting members remaining, those remaining
GPVSC members will determine how to vote the proxy in accordance with these
Policies and Procedures. If there are fewer than three GPVSC voting members
remaining, the GPVSC Chair will vote the proxy in accordance with the standard
guidelines, will obtain instructions as to how to have the proxy voted from, if
time permits, the effected clients and otherwise from ISS.

B.       Investment Companies and Affiliated Public Companies

Investment Companies. As reflected in the Guidelines, all proxies solicited by
open-end and closed-end investment companies are voted in accordance with the
pre-determined guidelines of ISS, unless the investment company client directs
AM to vote differently on a specific proxy or specific categories of proxies.
However, regarding investment companies for which AM or an affiliate serves as
investment adviser or principal underwriter, such proxies are voted in the same
proportion as the vote of all other shareholders (i.e., "mirror" or "echo"
voting). Master fund proxies solicited from feeder funds are voted in accordance
with applicable provisions of Section 12 of the Investment Company Act of 1940.

Subject to participation agreements with certain Exchange Traded Funds ("ETF")
issuers that have received exemptive orders from the U.S. Securities and
Exchange Commission allowing investing DWS funds to exceed the limits set forth
in Section 12(d)(1)(A) and (B) of the Investment Company Act of 1940, DeAM will
echo vote proxies for ETFs in which Deutsche Bank holds more than 25% of
outstanding voting shares globally when required to do so by participation
agreements and SEC orders.

Affiliated Public Companies. For proxies solicited by non-investment company
issuers of or within the Deutsche Bank organization, e.g., Deutsche bank itself,
these proxies will be voted in the same proportion as the vote of other
shareholders (i.e., "mirror" or "echo" voting).

Note: With respect to the QP Trust (not registered under the Investment Company
Act of 1940), the Fund is not required to engage in echo voting and the
investment adviser will use these Guidelines, and may determine, with respect to
the QP Trust, to vote contrary to the positions in the Guidelines, consistent
with the Fund's best interest.

C.       Other Procedures That Limit Conflicts of Interest

AM and other entities in the Deutsche Bank organization have adopted a number of
policies, procedures and internal controls that are designed to avoid various
conflicts of interest, including those that may arise in connection with proxy
voting, including:

o        Deutsche Bank Americas Restricted Activities Policy. This policy
         provides for, among other things, independence of AM employees from
         CIB, and information barriers between AM and other affiliates.
         Specifically, no AM employee may be subject to the supervision or
         control of any employee of CIB. No AM employee shall have his or her
         compensation based upon his or her contribution to any business
         activity within the Bank outside of the business of AM, without the
         prior approval of Legal or Compliance. Further, no employee of CIB
         shall have any input into the compensation of a AM employee without the
         prior approval of Legal or Compliance. Under the information barriers
         section of this policy, as a general rule, AM employees who are
         associated with the investment process should have no contact with
         employees of Deutsche Bank or its affiliates, outside of PCAM,
         regarding specific clients, business matters, or initiatives. Further,
         under no circumstances should proxy votes be discussed with any
         Deutsche Bank employee outside of AM (and should only be discussed on a
         need-to-know basis within AM).

Other relevant internal policies include the Deutsche Bank Americas Code of
Professional Conduct, the Deutsche Asset Management Information Sharing
Procedures, the Deutsche Asset Management Code of Ethics, the Sarbanes-Oxley
Senior Officer Code of Ethics, and the Deutsche Bank Group Code of Conduct. The
GPVSC expects that these policies, procedures and internal controls will greatly
reduce the chance that the GPVSC (or, its members) would be involved in, aware
of or influenced by, an actual or apparent conflict of interest.


V.       RECORDKEEPING

At a minimum, the following types of records must be properly maintained and
readily accessible in order to evidence compliance with this policy.

o        AM will maintain a record of each vote cast by AM that includes among
         other things, company name, meeting date, proposals presented, vote
         cast and shares voted.

o        The Proxy Vendor Oversight maintains records for each of the proxy
         ballots it votes. Specifically, the records include, but are not
         limited to:

         -        The proxy statement (and any additional solicitation
                  materials) and relevant portions of annual statements.

         -        Any additional information considered in the voting process
                  that may be obtained from an issuing company, its agents or
                  proxy research firms.

         -        Analyst worksheets created for stock option plan and share
                  increase analyses.

         -        Proxy Edge print-screen of actual vote election.

o        AM will retain these Policies and Procedures and the Guidelines; will
         maintain records of client requests for proxy voting information; and
         will retain any documents the Proxy Vendor Oversight or the GPVSC
         prepared that were material to making a voting decision or that
         memorialized the basis for a proxy voting decision.

o        The GPVSC also will create and maintain appropriate records documenting
         its compliance with these Policies and Procedures, including records of
         its deliberations and decisions regarding conflicts of interest and
         their resolution.

o        With respect to AM's investment company clients, ISS will create and
         maintain records of each company's proxy voting record for 12-month
         periods ended June 30. AM will compile the following information for
         each matter relating to a portfolio security considered at any
         shareholder meeting held during the period covered by the report and
         with respect to which the company was entitled to vote:

         -        The name of the issuer of the portfolio security;

         -        The exchange ticker symbol of the portfolio security (if
                  symbol is available through reasonably practicable means);

         -        The Council on Uniform Securities Identification Procedures
                  number for the portfolio security (if the number is available
                  through reasonably practicable means);

         -        The shareholder meeting date;

         -        A brief identification of the matter voted on;

         -        Whether the matter was proposed by the issuer or by a security
                  holder;

         -        Whether the company cast its vote on the matter;

         -        How the company cast its vote (e.g., for or against proposal,
                  or abstain; for or withhold regarding election of directors);
                  and

         -        Whether the company cast its vote for or against management.

Note: This list is intended to provide guidance only in terms of the records
that must be maintained in accordance with this policy. In addition, please note
that records must be maintained in accordance with the applicable AM Records
Management Policy.

With respect to electronically stored records, "properly maintained" is defined
as complete, authentic (unalterable) usable and backed-up. At a minimum, records
should be retained for a period of not less than six years (or longer, if
necessary to comply with applicable regulatory requirements), the first three
years in an appropriate AM office.


VI.      THE GPVSC'S OVERSIGHT ROLE

In addition to adopting the Guidelines and making proxy voting decisions on
matters referred to it as set forth above, the GPVSC will monitor the proxy
voting process by reviewing summary proxy information presented by ISS. The
GPVSC will use this review process to determine, among other things, whether any
changes should be made to the Guidelines. This review will take place at least
quarterly and will be documented in the GPVSC's minutes.



Attachment A - Global Proxy Voting Guidelines







                            Deutsche Asset Management

                         Global Proxy Voting Guidelines



                             As Amended October 2008


                                                        [GRAPHIC OMITTED]


Table of contents

I        Board Of Directors And Executives

         A        Election Of Directors

         B        Classified Boards Of Directors

         C        Board And Committee Independence

         D        Liability And Indemnification Of Directors

         E        Qualifications Of Directors

         F        Removal Of Directors And Filling Of Vacancies

         G        Proposals To Fix The Size Of The Board

         H        Proposals to Restrict Chief Executive Officer's Service on
                  Multiple Boards

         I        Proposals to Restrict Supervisory Board Members Service on
                  Multiple Boards

         J        Proposals to Establish Audit Committees

II       Capital Structure

         A        Authorization Of Additional Shares

         B        Authorization Of "Blank Check" Preferred Stock

         C        Stock Splits/Reverse Stock Splits

         D        Dual Class/Supervoting Stock

         E        Large Block Issuance

         F        Recapitalization Into A Single Class Of Stock

         G        Share Repurchases

         H        Reductions In Par Value

III      Corporate Governance Issues

         A        Confidential Voting

         B        Cumulative Voting

         C        Supermajority Voting Requirements

         D        Shareholder Right To Vote

IV       Compensation

         A        Establishment of a Remuneration Committee

         B        Executive And Director Stock Option Plans

         C        Employee Stock Option/Purchase Plans

         D        Golden Parachutes

         E        Proposals To Limit Benefits Or Executive Compensation

         F        Option Expensing

         G        Management board election and motion

         H        Remuneration (variable pay)

         I        Long-term incentive plans

         J        Shareholder Proposals Concerning "Pay For Superior
                  Performance"

         K        Executive Compensation Advisory

V        Anti-Takeover Related Issues

         A        Shareholder Rights Plans ("Poison Pills")

         B        Reincorporation

         C        Fair-Price Proposals

         D        Exemption From State Takeover Laws

         E        Non-Financial Effects Of Takeover Bids

VI       Mergers & Acquisitions

VII      Social & Political Issues

         A        Labor & Human Rights

         B        Diversity & Equality

         C        Health & Safety

         D        Government/Military

         E        Tobacco

VIII     Environmental Issues

IX       Miscellaneous Items

         A        Ratification Of Auditors

         B        Limitation Of Non-Audit Services Provided By Independent
                  Auditor

         C        Audit Firm Rotation

         D        Transaction Of Other Business

         E        Motions To Adjourn The Meeting

         F        Bundled Proposals

         G        Change Of Company Name

         H        Proposals Related To The Annual Meeting

         I        Reimbursement Of Expenses Incurred From Candidate Nomination

         J        Investment Company Proxies

         K        International Proxy Voting



These Guidelines may reflect a voting position that differs from the actual
practices of the public company (ies) within the Deutsche Bank organization or
of the investment companies for which AM or an affiliate serves as investment
adviser or sponsor.

NOTE: Because of the unique structure and regulatory scheme applicable to
closed-end investment companies, the voting guidelines (particularly those
related to governance issues) generally will be inapplicable to holdings of
closed-end investment companies. As a result, determinations on the appropriate
voting recommendation for closed-end investment company shares will be made on a
case-by-case basis.


I.       Board of Directors and Executives


A.       Election of Directors

Routine: AM Policy is to vote "for" the uncontested election of directors. Votes
for a director in an uncontested election will be withheld in cases where a
director has shown an inability to perform his/her duties in the best interests
of the shareholders.

Proxy contest: In a proxy contest involving election of directors, a
case-by-case voting decision will be made based upon analysis of the issues
involved and the merits of the incumbent and dissident slates of directors. AM
will incorporate the decisions of a third party proxy research vendor,
currently, Institutional Shareholder Services ("ISS") subject to review by the
Proxy Voting Sub-Committee (GPVSC) as set forth in the AM's Proxy Voting
Policies and Procedures.

Rationale: The large majority of corporate directors fulfill their fiduciary
obligation and in most cases support for management's nominees is warranted. As
the issues relevant to a contested election differ in each instance, those cases
must be addressed as they arise.


B.       Classified Boards of Directors

AM policy is to vote against proposals to classify the board and for proposals
to repeal classified boards and elect directors annually.

Rationale: Directors should be held accountable on an annual basis. By
entrenching the incumbent board, a classified board may be used as an
anti-takeover device to the detriment of the shareholders in a hostile take-over
situation.


C.       Board and Committee Independence

AM policy is to vote:

1.       "For" proposals that require that a certain percentage (majority up to
         66 2/3%) of members of a board of directors be comprised of independent
         or unaffiliated directors.

2.       "For" proposals that require all members of a company's compensation,
         audit, nominating, or other similar committees be comprised of
         independent or unaffiliated directors.

3.       "Against" shareholder proposals to require the addition of special
         interest, or constituency, representatives to boards of directors.

4.       "For" separation of the Chairman and CEO positions.

5.       "Against" proposals that require a company to appoint a Chairman who is
         an independent director.

Rationale: Board independence is a cornerstone of effective governance and
accountability. A board that is sufficiently independent from management assures
that shareholders' interests are adequately represented. However, the Chairman
of the board must have sufficient involvement in and experience with the
operations of the company to perform the functions required of that position and
lead the company.

No director qualifies as 'independent' unless the board of directors
affirmatively determines that the director has no material relationship with the
listed company (either directly or as a partner, shareholder or officer of an
organization that has a relationship with the company).

Whether a director is in fact not "independent" will depend on the laws and
regulations of the primary market for the security and the exchanges, if any, on
which the security trades.

D.       Liability and Indemnification of Directors

AM policy is to vote "for" management proposals to limit directors' liability
and to broaden the indemnification of directors, unless broader indemnification
or limitations on directors' liability would effect shareholders' interests in
pending litigation.

Rationale: While shareholders want directors and officers to be responsible for
their actions, it is not in the best interests of the shareholders for them to
be to risk averse. If the risk of personal liability is too great, companies may
not be able to find capable directors willing to serve. We support expanding
coverage only for actions taken in good faith and not for serious violations of
fiduciary obligation or negligence.


E.       Qualifications of Directors

AM policy is to follow management's recommended vote on either management or
shareholder proposals that set retirement ages for directors or require specific
levels of stock ownership by directors.

Rationale: As a general rule, the board of directors, and not the shareholders,
is most qualified to establish qualification policies.


F.       Removal of Directors and Filling of Vacancies

AM policy is to vote "against" proposals that include provisions that directors
may be removed only for cause or proposals that include provisions that only
continuing directors may fill board vacancies.

Rationale: Differing state statutes permit removal of directors with or without
cause. Removal of directors for cause usually requires proof of self-dealing,
fraud or misappropriation of corporate assets, limiting shareholders' ability to
remove directors except under extreme circumstances. Removal without cause
requires no such showing.

Allowing only incumbent directors to fill vacancies can serve as an
anti-takeover device, precluding shareholders from filling the board until the
next regular election.


G.       Proposals to Fix the Size of the Board

AM policy is to vote:

1.        "For" proposals to fix the size of the board unless: (a) no specific
          reason for the proposed change is given; or (b) the proposal is part
          of a package of takeover defenses.

2.        "Against" proposals allowing management to fix the size of the board
          without shareholder approval.

Rationale: Absent danger of anti-takeover use, companies should be granted a
reasonable amount of flexibility in fixing the size of its board.


H.       Proposals to Restrict Chief Executive Officer's Service on Multiple
         Boards

AM policy is to vote "For" proposals to restrict a Chief Executive Officer from
serving on more than three outside boards of directors.

Rationale: Chief Executive Officer must have sufficient time to ensure that
shareholders' interests are represented adequately.

Note: A director's service on multiple closed-end fund boards within a fund
complex are treated as service on a single Board for the purpose of the proxy
voting guidelines.


I. Proposals to Restrict Supervisory Board Members Service on Multiple Boards
(For FFT Securities)

AM policy is to vote "for" proposals to restrict a Supervisory Board Member from
serving on more than five supervisory boards.

Rationale: We consider a strong, independent and knowledgeable supervisory board
as important counter-balance to executive management to ensure that the
interests of shareholders are fully reflected by the company.

Full information should be disclosed in the annual reports and accounts to allow
all shareholders to judge the success of the supervisory board controlling their
company.

Supervisory Board Member must have sufficient time to ensure that shareholders'
interests are represented adequately.

Note: A director's service on multiple closed-end fund boards within a fund
complex are treated as service on a single Board for the purpose of the proxy
voting guidelines.


J.       Proposals to Establish Audit Committees (For FFT and U.S. Securities)

AM policy is to vote "for" proposals that require the establishment of audit
committees.

Rationale: The audit committee should deal with accounting and risk management
related questions, verifies the independence of the auditor with due regard to
possible conflicts of interest. It also should determine the procedure of the
audit process.


II.      Capital Structure


A.       Authorization of Additional Shares (For U.S. Securities)

AM policy is to vote "for" proposals to increase the authorization of existing
classes of stock that do not exceed a 3:1 ratio of shares authorized to shares
outstanding for a large cap company, and do not exceed a 4:1 ratio of shares
authorized to shares outstanding for a small-midcap company (companies having a
market capitalization under one billion U.S. dollars.).

Rationale: While companies need an adequate number of shares in order to carry
on business, increases requested for general financial flexibility must be
limited to protect shareholders from their potential use as an anti-takeover
device. Requested increases for specifically designated, reasonable business
purposes (stock split, merger, etc.) will be considered in light of those
purposes and the number of shares required.


B.       Authorization of "Blank Check" Preferred Stock (For U.S. Securities)

AM policy is to vote:

1.       "Against" proposals to create blank check preferred stock or to
         increase the number of authorized shares of blank check preferred stock
         unless the company expressly states that the stock will not be used for
         anti-takeover purposes and will not be issued without shareholder
         approval.

2.       "For" proposals mandating shareholder approval of blank check stock
         placement.

Rationale: Shareholders should be permitted to monitor the issuance of classes
of preferred stock in which the board of directors is given unfettered
discretion to set voting, dividend, conversion and other rights for the shares
issued.


C.       Stock Splits/Reverse Stock Splits

AM policy is to vote "for" stock splits if a legitimate business purpose is set
forth and the split is in the shareholders' best interests. A vote is cast "for"
a reverse stock split only if the number of shares authorized is reduced in the
same proportion as the reverse split or if the effective increase in authorized
shares (relative to outstanding shares) complies with the proxy guidelines for
common stock increases (see, Section II.A, above.)

Rationale: Generally, stock splits do not detrimentally effect shareholders.
Reverse stock splits, however, may have the same result as an increase in
authorized shares and should be analyzed accordingly.


D.       Dual Class/Supervoting Stock

AM policy is to vote "against" proposals to create or authorize additional
shares of super-voting stock or stock with unequal voting rights.

Rationale: The "one share, one vote" principal ensures that no shareholder
maintains a voting interest exceeding their equity interest in the company.


E.       Large Block Issuance (For U.S. Securities)

AM policy is to address large block issuances of stock on a case-by-case basis,
incorporating the recommendation of an independent third party proxy research
firm (currently ISS) subject to review by the GPVSC as set forth in AM's Proxy
Policies and Procedures.

Additionally, AM supports proposals requiring shareholder approval of large
block issuances.

Rationale: Stock issuances must be reviewed in light of the business
circumstances leading to the request and the potential impact on shareholder
value.


F.       Recapitalization into a Single Class of Stock

AM policy is to vote "for" recapitalization plans to provide for a single class
of common stock, provided the terms are fair, with no class of stock being
unduly disadvantaged.

Rationale: Consolidation of multiple classes of stock is a business decision
that may be left to the board and/management if there is no adverse effect on
shareholders.


G.       Share Repurchases

AM policy is to vote "for" share repurchase plans provided all shareholders are
able to participate on equal terms.

Rationale: Buybacks are generally considered beneficial to shareholders because
they tend to increase returns to the remaining shareholders.


H.       Reductions in Par Value

AM policy is to vote "for" proposals to reduce par value, provided a legitimate
business purpose is stated (e.g., the reduction of corporate tax
responsibility.)

Rationale: Usually, adjustments to par value are a routine financial decision
with no substantial impact on shareholders.


III.     Corporate Governance Issues


A.       Confidential Voting

AM policy is to vote "for" proposals to provide for confidential voting and
independent tabulation of voting results and to vote "against" proposals to
repeal such provisions.

Rationale: Confidential voting protects the privacy rights of all shareholders.
This is particularly important for employee-shareholders or shareholders with
business or other affiliations with the company, who may be vulnerable to
coercion or retaliation when opposing management. Confidential voting does not
interfere with the ability of corporations to communicate with all shareholders,
nor does it prohibit shareholders from making their views known directly to
management.


B.       Cumulative Voting (For U.S. Securities)

AM policy is to vote "against" shareholder proposals requesting cumulative
voting and "for" management proposals to eliminate it. The protections afforded
shareholders by cumulative voting are not necessary when a company has a history
of good performance and does not have a concentrated ownership interest.
Accordingly, a vote is cast "against" cumulative voting and "for" proposals to
eliminate it if:

a)        The company has a five year return on investment greater than the
          relevant industry index,

b)       All directors and executive officers as a group beneficially own less
         than 10% of the outstanding stock, and

c)        No shareholder (or voting block) beneficially owns 15% or more of the
          company.

Thus, failure of any one of the three criteria results in a vote for cumulative
voting in accordance with the general policy.

Rationale: Cumulative voting is a tool that should be used to ensure that
holders of a significant number of shares may have board representation;
however, the presence of other safeguards may make their use unnecessary.


C.       Supermajority Voting Requirements

AM policy is to vote "against" management proposals to require a supermajority
vote to amend the charter or bylaws and to vote "for" shareholder proposals to
modify or rescind existing supermajority requirements.

*Exception made when company holds a controlling position and seeks to lower
threshold to maintain control and/or make changes to corporate by-laws.

Rationale: Supermajority voting provisions violate the democratic principle that
a simple majority should carry the vote. Setting supermajority requirements may
make it difficult or impossible for shareholders to remove egregious by-law or
charter provisions. Occasionally, a company with a significant insider held
position might attempt to lower a supermajority threshold to make it easier for
management to approve provisions that may be detrimental to shareholders. In
that case, it may not be in the shareholders interests to lower the
supermajority provision.


D.       Shareholder Right to Vote

AM policy is to vote "against" proposals that restrict the right of shareholders
to call special meetings, amend the bylaws, or act by written consent. Policy is
to vote "for" proposals that remove such restrictions.

Rationale: Any reasonable means whereby shareholders can make their views known
to management or effect the governance process should be supported.


IV.      Compensation

Annual Incentive Plans or Bonus Plans are often submitted to shareholders for
approval. These plans typically award cash to executives based on company
performance. Deutsche Bank believes that the responsibility for executive
compensation decisions rest with the board of directors and/or the compensation
committee, and its policy is not to second-guess the board's award of cash
compensation amounts to executives unless a particular award or series of awards
is deemed excessive. If stock options are awarded as part of these bonus or
incentive plans, the provisions must meet Deutsche Bank's criteria regarding
stock option plans, or similar stock-based incentive compensation schemes, as
set forth below.


A.       Establishment of a Remuneration Committee (For FFT Securities)

AM policy is to vote "for" proposals that require the establishment of a
remuneration committee.

Rationale: Corporations should disclose in each annual report or proxy statement
their policies on remuneration. Essential details regarding executive
remuneration including share options, long-term incentive plans and bonuses,
should be disclosed in the annual report, so that investors can judge whether
corporate pay policies and practices meet the standard.

The remuneration committee shall not comprise any board members and should be
sensitive to the wider scene on executive pay. It should ensure that
performance-based elements of executive pay are designed to align the interests
of shareholders.


B.       Executive and Director Stock Option Plans

AM policy is to vote "for" stock option plans that meet the following criteria:

(1)       The resulting dilution of existing shares is less than (a) 15 percent
          of outstanding shares for large capital corporations or (b) 20 percent
          of outstanding shares for small-mid capital companies (companies
          having a market capitalization under one billion U.S. dollars.)

(2)       The transfer of equity resulting from granting options at less than
          FMV is no greater than 3% of the over-all market capitalization of
          large capital corporations, or 5% of market cap for small-mid capital
          companies.

(3)       The plan does not contain express repricing provisions and, in the
          absence of an express statement that options will not be repriced; the
          company does not have a history of repricing options.

(4)       The plan does not grant options on super-voting stock.

AM will support performance-based option proposals as long as a) they do not
mandate that all options granted by the company must be performance based, and
b) only certain high-level executives are subject to receive the performance
based options.

AM will support proposals to eliminate the payment of outside director pensions.

Rationale: Determining the cost to the company and to shareholders of
stock-based incentive plans raises significant issues not encountered with
cash-based compensation plans. These include the potential dilution of existing
shareholders' voting power, the transfer of equity out of the company resulting
from the grant and execution of options at less than FMV and the authority to
reprice or replace underwater options. Our stock option plan analysis model
seeks to allow reasonable levels of flexibility for a company yet still protect
shareholders from the negative impact of excessive stock compensation.
Acknowledging that small mid-capital corporations often rely more heavily on
stock option plans as their main source of executive compensation and may not be
able to compete with their large capital competitors with cash compensation, we
provide slightly more flexibility for those companies.


C.       Employee Stock Option/Purchase Plans

AM policy is to vote for employee stock purchase plans (ESPP's) when the plan
complies with Internal Revenue Code 423, allowing non-management employees to
purchase stock at 85% of FMV.

AM policy is to vote "for" employee stock option plans (ESOPs) provided they
meet the standards for stock option plans in general. However, when computing
dilution and transfer of equity, ESOPs are considered independently from
executive and director option plans.

Rationale: ESOPs and ESPP's encourage rank-and-file employees to acquire an
ownership stake in the companies they work for and have been shown to promote
employee loyalty and improve productivity.


D.       Golden Parachutes

AM policy is to vote "for" proposals to require shareholder approval of golden
parachutes and for proposals that would limit golden parachutes to no more than
three times base compensation. Policy is to vote "against" more restrictive
shareholder proposals to limit golden parachutes.

Rationale: In setting a reasonable limitation, AM considers that an effective
parachute should be less attractive than continued employment and that the IRS
has opined that amounts greater than three times annual salary, are excessive.


E.       Proposals to Limit Benefits or Executive Compensation

AM policy is to vote "against"

1.        Proposals to limit benefits, pensions or compensation and

2.        Proposals that request or require disclosure of executive compensation
          greater than the disclosure required by Securities and Exchange
          Commission (SEC) regulations.

Rationale: Levels of compensation and benefits are generally considered to be
day-to-day operations of the company, and are best left unrestricted by
arbitrary limitations proposed by shareholders.


F.       Option Expensing

AM policy is to support proposals requesting companies to expense stock options.

Rationale: Although companies can choose to expense options voluntarily, the
Financial Accounting Standards Board (FASB) does not yet require it, instead
allowing companies to disclose the theoretical value of options as a footnote.
Because the expensing of stock options lowers earnings, most companies elect not
to do so. Given the fact that options have become an integral component of
compensation and their exercise results in a transfer of shareholder value, AM
agrees that their value should not be ignored and treated as "no cost"
compensation. The expensing of stock options would promote more modest and
appropriate use of stock options in executive compensation plans and present a
more accurate picture of company operational earnings.


G.       Management board election and motion (For FFT Securities)

AM policy is to vote "against":

o        the election of board members with positions on either remuneration or
         audit committees;

o        the election of supervisory board members with too many supervisory
         board mandates;

o        "automatic" election of former board members into the supervisory
         board.

Rationale: Management as an entity, and each of its members, are responsible for
all actions of the company, and are - subject to applicable laws and regulations
- accountable to the shareholders as a whole for their actions.

Sufficient information should be disclosed in the annual company report and
account to allow shareholders to judge the success of the company.


H.       Remuneration (variable pay): (For FFT Securities)

Executive remuneration for Management Board

AM policy is to vote "for" remuneration for Management Board that is transparent
and linked to results.

Rationale: Executive compensation should motivate management and align the
interests of management with the shareholders. The focus should be on criteria
that prevent excessive remuneration; but enable the company to hire and retain
first-class professionals.

Shareholder interests are normally best served when management is remunerated to
optimise long-term returns. Criteria should include suitable measurements like
return on capital employed or economic value added.

Interests should generally also be correctly aligned when management own shares
in the company - even more so if these shares represent a substantial portion of
their own wealth.

Its disclosure shall differentiate between fixed pay, variable (performance
related) pay and long-term incentives, including stock option plans with
valuation ranges as well as pension and any other significant arrangements.

Executive remuneration for Supervisory Board

AM policy is to vote "for" remuneration for Supervisory Board that is at least
50% in fixed form.

Rationale: It would normally be preferable if performance linked compensation
were not based on dividend payments, but linked to suitable result based
parameters. Consulting and procurement services should also be published in the
company report.


I.       Long-term incentive plans (For FFT Securities)

AM policy is to vote "for" long-term incentive plans for members of a management
board that reward for above average company performance.

Rationale: Incentive plans will normally be supported if they:

o        directly align the interests of members of management boards with those
         of shareholders;

o        establish challenging performance criteria to reward only above average
         performance;

o        measure performance by total shareholder return in relation to the
         market or a range of comparable companies;

o        are long-term in nature and encourage long-term ownership of the shares
         once exercised through minimum holding periods;

o        do not allow a repricing of the exercise price in stock option plans.


J.       Shareholder Proposals Concerning "Pay for Superior Performance"

AM policy is to address pay for superior performance proposals on a case-by-case
basis, incorporating the recommendation of an independent third party proxy
research firm (currently ISS) subject to review by the GPVSC as set forth in
AM's Proxy Policies and Procedures.

Rationale: While AM agrees that compensation issues are better left to the
discretion of management, they appreciate the need to monitor for excessive
compensation practices on a case by case basis. If, after a review of the ISS
metrics, AM is comfortable with ISS's applying this calculation and will vote
according to their recommendation.


K.       Executive Compensation Advisory

AM policy is to follow management's recommended vote on shareholder proposals to
propose an advisory resolution seeking to ratify the compensation of the
company's named executive officers (NEOs) on an annual basis.

Rationale: AM believes that controls exist within senior management and
corporate compensation committees, ensuring fair compensation to executives.
This might allow shareholders to require approval for all levels of management's
compensation.


V.       Anti-Takeover Related Issues


A.       Shareholder Rights Plans ("Poison Pills")

AM policy is to vote "for" proposals to require shareholder ratification of
poison pills or that request boards to redeem poison pills, and to vote
"against" the adoption of poison pills if they are submitted for shareholder
ratification.

Rationale: Poison pills are the most prevalent form of corporate takeover
defenses and can be (and usually are) adopted without shareholder review or
consent. The potential cost of poison pills to shareholders during an attempted
takeover outweighs the benefits.


B.       Reincorporation

AM policy is to examine reincorporation proposals on a case-by-case basis. The
voting decision is based on: (1) differences in state law between the existing
state of incorporation and the proposed state of incorporation; and (2)
differences between the existing and the proposed charter/bylaws/articles of
incorporation and their effect on shareholder rights. If changes resulting from
the proposed reincorporation violate the corporate governance principles set
forth in these guidelines, the reincorporation will be deemed contrary to
shareholder's interests and a vote cast "against."

Rationale: Reincorporations can be properly analyzed only by looking at the
advantages and disadvantages to their shareholders. Care must be taken that
anti-takeover protection is not the sole or primary result of a proposed change.


C.       Fair-Price Proposals

AM policy is to vote "for" management fair-price proposals, provided that: (1)
the proposal applies only to two-tier offers; (2) the proposal sets an objective
fair-price test based on the highest price that the acquirer has paid for a
company's shares; (3) the supermajority requirement for bids that fail the
fair-price test is no higher than two-thirds of the outstanding shares; (4) the
proposal contains no other anti-takeover provisions or provisions that restrict
shareholders rights.

A vote is cast for shareholder proposals that would modify or repeal existing
fair-price requirements that do not meet these standards.

Rationale: While fair price provisions may be used as anti-takeover devices, if
adequate provisions are included, they provide some protection to shareholders
who have some say in their application and the ability to reject those
protections if desired.


D.       Exemption from state takeover laws

AM policy is to vote "for" shareholder proposals to opt out of state takeover
laws and to vote "against" management proposals requesting to opt out of state
takeover laws.

Rationale: Control share statutes, enacted at the state level, may harm
long-term share value by entrenching management. They also unfairly deny certain
shares their inherent voting rights.


E.       Non-financial Effects of Takeover Bids

Policy is to vote "against" shareholder proposals to require consideration of
non-financial effects of merger or acquisition proposals.

Rationale: Non-financial effects may often be subjective and are secondary to
AM's stated purpose of acting in its client's best economic interest.


VI.      Mergers & Acquisitions

Evaluation of mergers, acquisitions and other special corporate transactions
(i.e., takeovers, spin-offs, sales of assets, reorganizations, restructurings
and recapitalizations) are performed on a case-by-case basis incorporating
information from an independent proxy research source (currently ISS.)
Additional resources including portfolio management and research analysts may be
considered as set forth in AM's Policies and Procedures.


VII.     Social, Environmental & Political Issues

Social and environmental issues are becoming increasingly important to corporate
success. We incorporate social and environmental considerations into both our
investment decisions and our proxy voting decisions - particularly if the
financial performance of the company could be impacted.

With increasing frequency, shareholder proposals are submitted relating to
social and political responsibility issues. Almost universally, the company
management will recommend a vote "against" these proposals. These types of
proposals cover an extremely wide range of issues. Many of the issues tend to be
controversial and are subject to more than one reasonable, yet opposing, theory
of support. More so than with other types of proxy proposals, social and
political responsibility issues may not have a connection to the economic and
corporate governance principles effecting shareholders' interests. AM's policy
regarding social and political responsibility issues, as with any other issue,
is designed to protect our client shareholders' economic interests.

Occasionally, a distinction is made between a shareholder proposal requesting
direct action on behalf of the board and a request for a report on (or
disclosure of) some information. In order to avoid unduly burdening any company
with reporting requirements, AM's policy is to vote against shareholder
proposals that demand additional disclosure or reporting than is required by the
Securities and Exchange Commission unless it appears there is a legitimate issue
and the company has not adequately addressed shareholders' concerns.


A.       Labor & Human Rights

AM policy is to vote "against" adopting global codes of conduct or workplace
standards exceeding those mandated by law.

Rationale: Additional requirements beyond those mandated by law are deemed
unnecessary and potentially burdensome to companies


B.       Diversity & Equality

1.       AM policy is to vote "against" shareholder proposals to force equal
         employment opportunity, affirmative action or board diversity.

Rationale: Compliance with State and Federal legislation along with information
made available through filings with the EEOC provides sufficient assurance that
companies act responsibly and make information public.

2.        AM policy is also to vote "against" proposals to adopt the Mac Bride
          Principles. The Mac Bride Principles promote fair employment,
          specifically regarding religious discrimination.

Rationale: Compliance with the Fair Employment Act of 1989 makes adoption of the
Mac Bride Principles redundant. Their adoption could potentially lead to charges
of reverse discrimination.


C.       Health & Safety

1.        AM policy is to vote "against" adopting a pharmaceutical price
          restraint policy or reporting pricing policy changes.

Rationale: Pricing is an integral part of business for pharmaceutical companies
and should not be dictated by shareholders (particularly pursuant to an
arbitrary formula.) Disclosing pricing policies may also jeopardize a company's
competitive position in the marketplace.

2.        AM policy is to vote "against" shareholder proposals to control the
          use or labeling of and reporting on genetically engineered products.

Rationale: Additional requirements beyond those mandated by law are deemed
unnecessary and potentially burdensome to companies.


D.       Government/Military

1.        AM policy is to vote against shareholder proposals regarding the
          production or sale of military arms or nuclear or space-based weapons,
          including proposals seeking to dictate a company's interaction with a
          particular foreign country or agency.

Rationale: Generally, management is in a better position to determine what
products or industries a company can and should participate in. Regulation of
the production or distribution of military supplies is, or should be, a matter
of government policy.

2. AM policy is to vote "against" shareholder proposals regarding political
contributions and donations.

Rationale: The Board of Directors and Management, not shareholders, should
evaluate and determine the recipients of any contributions made by the company.

3. AM policy is to vote "against" shareholder proposals regarding charitable
contributions and donations.

Rationale: The Board of Directors and Management, not shareholders, should
evaluate and determine the recipients of any contributions made by the company.


E.       Tobacco

1.        AM policy is to vote "against" shareholder proposals requesting
          additional standards or reporting requirements for tobacco companies
          as well as "against" requesting companies to report on the intentional
          manipulation of nicotine content.

Rationale: Where a tobacco company's actions meet the requirements of legal and
industry standards, imposing additional burdens may detrimentally effect a
company's ability to compete. The disclosure of nicotine content information
could affect the company's rights in any pending or future litigation.

2.       Shareholder requests to spin-off or restructure tobacco businesses will
         be opposed.

Rationale: These decisions are more appropriately left to the Board and
management, and not to shareholder mandate.


VIII.    Environmental Issues

AM policy is to follow management's recommended vote on CERES Principles or
other similar environmental mandates (e.g., those relating to Greenhouse gas
emissions or the use of nuclear power).

Rationale: Environmental issues are extensively regulated by outside agencies
and compliance with additional requirements often involves significant cost to
companies.


IX.      Miscellaneous Items


A.       Ratification of Auditors

AM policy is to vote "for" a) the management recommended selection of auditors
and b) proposals to require shareholder approval of auditors.

Rationale: Absent evidence that auditors have not performed their duties
adequately, support for management's nomination is warranted.


B.       Limitation of non-audit services provided by independent auditor

AM policy is to support proposals limiting non-audit fees to 50% of the
aggregate annual fees earned by the firm retained as a company's independent
auditor.

Rationale: In the wake of financial reporting problems and alleged audit
failures at a number of companies, AM supports the general principle that
companies should retain separate firms for audit and consulting services to
avoid potential conflicts of interest. However, given the protections afforded
by the recently enacted Sarbanes-Oxley Act of 2002 (which requires Audit
Committee pre-approval for non-audit services and prohibits auditors from
providing specific types of services), and the fact that some non-audit services
are legitimate audit-related services, complete separation of audit and
consulting fees may not be warranted. A reasonable limitation is appropriate to
help ensure auditor independence and it is reasonable to expect that audit fees
exceed non-audit fees.


C.       Audit firm rotation

AM policy is to support proposals seeking audit firm rotation unless the
rotation period sought is less than five years.

Rationale: While the Sarbanes-Oxley Act mandates that the lead audit partner be
switched every five years, AM believes that rotation of the actual audit firm
would provide an even stronger system of checks and balances on the audit
function.


D.       Transaction of Other Business

AM policy is to vote against "transaction of other business" proposals.

Rationale: This is a routine item to allow shareholders to raise other issues
and discuss them at the meeting. As the nature of these issues may not be
disclosed prior to the meeting, we recommend a vote against these proposals.
This protects shareholders voting by proxy (and not physically present at a
meeting) from having action taken at the meeting that they did not receive
proper notification of or sufficient opportunity to consider.


E.       Motions to Adjourn the Meeting

AM Policy is to vote against proposals to adjourn the meeting.

Rationale: Management may seek authority to adjourn the meeting if a favorable
outcome is not secured. Shareholders should already have had enough information
to make a decision. Once votes have been cast, there is no justification for
management to continue spending time and money to press shareholders for
support.


F.       Bundled Proposals

AM policy is to vote against bundled proposals if any bundled issue would
require a vote against it if proposed individually.

Rationale: Shareholders should not be forced to "take the good with the bad" in
cases where the proposals could reasonably have been submitted separately.


G.       Change of Company Name

AM policy is to support management on proposals to change the company name.

Rationale: This is generally considered a business decision for a company.


H.       Proposals Related to the Annual Meeting

AM Policy is to vote in favor of management for proposals related to the conduct
of the annual meeting (meeting time, place, etc.)

Rationale: These are considered routine administrative proposals.


I.       Reimbursement of Expenses Incurred from Candidate Nomination

AM policy is to follow management's recommended vote on shareholder proposals
related to the amending of company bylaws to provide for the reimbursement of
reasonable expenses incurred in connection with nominating one or more
candidates in a contested election of directors to the corporation's board of
directors.

Rationale: Corporations should not be liable for costs associated with
shareholder proposals for directors.


J.       Investment Company Proxies

Proxies solicited by investment companies are voted in accordance with the
recommendations of an independent third party, currently ISS. However, regarding
investment companies for which AM or an affiliate serves as investment adviser
or principal underwriter, such proxies are voted in the same proportion as the
vote of all other shareholders. Proxies solicited by master funds from feeder
funds will be voted in accordance with applicable provisions of Section 12 of
the Investment Company Act of 1940.

Investment companies, particularly closed-end investment companies, are
different from traditional operating companies. These differences may call for
differences in voting positions on the same matter. For example, AM could vote
"for" staggered boards of closed-end investment companies, although AM generally
votes "against" staggered boards for operating companies. Further, the manner in
which AM votes investment company proxies may differ from proposals for which a
AM-advised investment company solicits proxies from its shareholders. As
reflected in the Guidelines, proxies solicited by closed-end (and open-end)
investment companies are voted in accordance with the pre-determined guidelines
of an independent third-party.

Subject to participation agreements with certain Exchange Traded Funds ("ETF")
issuers that have received exemptive orders from the U.S. Securities and
Exchange Commission allowing investing DWS funds to exceed the limits set forth
in Section 12(d)(1)(A) and (B) of the Investment Company Act of 1940, DeAM will
echo vote proxies for ETFs in which Deutsche Bank holds more than 25% of
outstanding voting shares globally when required to do so by participation
agreements and SEC orders.

Note: With respect to the QP Trust (not registered under the Investment Company
Act of 1940), the Fund is not required to engage in echo voting and the
investment adviser will use these Guidelines, and may determine, with respect to
the QP Trust, to vote contrary to the positions in the Guidelines, consistent
with the Fund's best interest.


K.       International Proxy Voting

The above guidelines pertain to issuers organized in the United States, Canada
and Germany. Proxies solicited by other issuers are voted in accordance with
international guidelines or the recommendation of ISS and in accordance with
applicable law and regulation.





                      APPENDIX B -- RATINGS OF INVESTMENTS

Description of Moody's Corporate Bond Ratings:

Aaa - Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt edge."
Interest payments are protected by a large or by an exceptionally stable margin
and principal is secure. While the various protective elements are likely to
change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.

Aa - Bonds rated Aa are judged to be of high quality by all standards. Together
with the Aaa group they comprise what are generally known as high-grade bonds.
They are rated lower than the best bonds because margins of protection may not
be as large as in Aaa securities or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than in Aaa securities.

A - Bonds rated A possess many favorable investment attributes and are to be
considered as upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.

Baa - Bonds rated Baa are considered as medium-grade obligations, i.e. they are
neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.

Ba - Bonds rated Ba are judged to have speculative elements. Their future cannot
be considered as well assured. Often the protection of interest and principal
payments may be very moderate and thereby not well safeguarded during both good
and bad times over the future. Uncertainty of position characterizes bonds in
this class.

B - Bonds rated B generally lack characteristics of a desirable investment.
Assurance of interest and principal payments or of maintenance of other terms of
the contract over any long period of time may be small.

Caa - Bonds rated Caa are of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or interest.

Ca - Bonds rated Ca represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked shortcomings.

C - Bonds rated C are the lowest-rated class of bonds and can be regarded as
having extremely poor prospects of ever attaining any real investment standing.

Moody's applies numerical modifiers, 1, 2, and 3, in each generic rating
classification from Aa through B in its corporate bond system. The modifier 1
indicates that the security ranks in the higher end of its generic rating
category; the modifier 2 indicates a mid-range ranking; and the modifier 3
indicates that the issue ranks in the lower end of its generic rating category.

Description of S&P Corporate Bond Ratings:

AAA - Debt rated AAA has the highest rating assigned by Standard & Poor's to a
debt obligation. Capacity to pay interest and repay principal is extremely
strong.

AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher-rated issues only in small degree.

A - Debt rated A has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.

BBB - Debt rated BBB is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to weakened capacity to pay interest and repay principal for debt
in this category than in higher-rated categories.

BB - Debt rated BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to
inadequate capacity to timely meet interest and principal payments.

B - Debt rated B has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The B rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied BB- rating.

CCC - Debt rated CCC has a currently identifiable vulnerability to default, and
is dependent upon favorable business, financial and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, it is not likely to have the
capacity to pay interest and repay principal.

CC - Debt rated CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC debt rating.

C - The rating C is typically applied to debt subordinated to senior debt which
is assigned an actual or implied CCC- debt rating. The C rating may be used to
cover a situation where a bankruptcy petition has been filed but debt service
payments are continued.

CI - The rating CI is reserved for income bonds on which no interest is being
paid.

D - Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The D rating will also be used upon the
filing of a bankruptcy petition if debt service payments are jeopardized.

Description of S&P Commercial Paper Ratings:

Commercial paper rated A-1 by S&P indicates that the degree of safety regarding
timely payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted A-1+.

Description of Moody's Commercial Paper Ratings:

The rating Prime-1 is the highest commercial paper rating assigned by Moody's.
Issuers rated Prime-1 (or related supporting institutions) are considered to
have a superior capacity for repayment of short-term promissory obligations.

S&P's Commercial Paper Ratings:

A is the highest commercial paper rating category utilized by S&P, which uses
the numbers 1, 1, 2 and 3 to denote relative strength within its A
classification. Commercial paper issues rated A by S&P have the following
characteristics: Liquidity ratios are better than industry average. Long-term
debt ratings are A or better. The issuer has access to at least two additional
channels of borrowing. Basic earnings and cash flow are in an upward tread.
Typically, the issuer is a strong company in a well-established industry and has
superior management.

Moody's Commercial Paper Ratings:

Issuers rated Prime-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1 repayment
capacity will normally be evidenced by the following characteristics: leading
market positions in well-established industries; high rates of return on funds
employed; conservative capitalization structures with moderate reliance on debt
and ample asset protection; broad margins in earnings coverage of fixed
financial charges and high internal cash generation; well-established access to
a range of financial markets and assured sources of alternate liquidity.

Issuers rated Prime-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will normally
be evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.

Issuers rated Prime-3 (or related supporting institutions) have an acceptable
capacity for repayment of short-term promissory obligations. The effect of
industry characteristics and market composition may be more pronounced.
Variability in earnings and profitability may result in changes in the level of
debt protection measurements and the requirement for relatively high financial
leverage. Adequate alternate liquidity is maintained.



                           STATEMENT OF ADDITIONAL INFORMATION

INVESTMENT ADVISOR AND ADMINISTRATOR
Deutsche Investment Management Americas, Inc.
345 Park Avenue
New York, NY 10154

CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110

DISTRIBUTOR
DWS Investments Distributors, Inc.
222 South Riverside Plaza
Chicago, IL 60606

TRANSFER AGENT
DWS Investments Service Company
222 South Riverside Plaza
Chicago, IL 60606

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
125 High Street
Boston, MA 02110

LEGAL COUNSEL
Vedder Price P.C.
222 North LaSalle Street
Chicago, IL 60601

TRUSTEE COUNSEL
Ropes & Gray LLP
One International Place
Boston, Massachusetts 02110-2624

No person has been authorized to give any information or to make any
representations other than those contained in each Fund's Prospectuses, its SAI
or its official sales literature in connection with the offering of the Funds'
shares and, if given or made, such other information or representations must not
be relied on as having been authorized by the Trust. Neither the Prospectuses
nor this SAI constitutes an offer in any state in which, or to any person to
whom, such offer may not lawfully be made.






<PAGE>




                                DWS ADVISOR FUNDS


                          DWS Short Duration Plus Fund
                     (Class A, B, C and Institutional Class)








                       STATEMENT OF ADDITIONAL INFORMATION

                                February 1, 2009


This Statement of Additional  Information ("SAI") is not a prospectus and should
be read in conjunction  with the  prospectuses  dated February 1, 2009 (Class A,
Class B and Class C Shares and  Institutional  Class),  as amended  from time to
time,  for DWS Short  Duration Plus Fund (the  "Fund"),  a series of DWS Advisor
Funds  (the  "Trust"),  copies  of  which  may be  obtained  without  charge  by
contacting  DWS  Investments  Distributors,  Inc.,  222 South  Riverside  Plaza,
Chicago,  Illinois 60606,  (800) 621-1148,  or from the firm from which this SAI
was obtained and are available  along with other materials on the Securities and
Exchange Commission's Internet Web site (http://www.sec.gov).

Portions of the Annual  Report to  Shareholders,  dated  September  30, 2008 are
incorporated  herein by reference  and are deemed to be part of this SAI. A copy
of the Fund's Annual Report may be obtained  without  charge by calling the Fund
at the toll-free number (800) 621-1048.

This SAI is incorporated by reference into the  corresponding  prospectuses  for
each class of shares of the Fund.

Class B shares have been created especially for former shareholders of DWS Short
Term Bond Fund. Class B shares are generally not available to new investors.











                                TABLE OF CONTENTS

                                                                           Page
                                                                           ----

INVESTMENT RESTRICTIONS......................................................2

INVESTMENT POLICIES AND TECHNIQUES...........................................4

MANAGEMENT OF THE FUND......................................................38
   Investment Advisor.......................................................38

FUND SERVICE PROVIDERS......................................................46
   Administrator............................................................46
   Distributor..............................................................47
   Custodian................................................................52
   Transfer Agent...........................................................52
   Legal Counsel............................................................53
   Independent Registered Public Accounting Firm............................53

PORTFOLIO TRANSACTIONS......................................................53

PURCHASE AND REDEMPTION OF SHARES...........................................65

DIVIDENDS...................................................................70

TAXES.......................................................................71

NET ASSET VALUE.............................................................77

BOARD MEMBERS AND OFFICERS..................................................78

TRUST ORGANIZATION..........................................................87

PROXY VOTING GUIDELINES.....................................................89

FINANCIAL STATEMENTS........................................................89

ADDITIONAL INFORMATION......................................................89

APPENDIX A -- PROXY VOTING GUIDELINES.......................................90

APPENDIX B -- RATINGS OF INVESTMENTS.......................................117





                             INVESTMENT RESTRICTIONS

Except as otherwise indicated,  the Fund's investment objective and policies are
not  fundamental  and may be changed by the Board of Trustees  without a vote of
shareholders. There can be no assurance that the Fund's objective will be met.

Any  investment  restrictions  herein  which  involve  a maximum  percentage  of
securities  or assets shall not be  considered  to be violated  unless an excess
over the percentage occurs  immediately after and is caused by an acquisition or
encumbrance of securities or assets of, or borrowings by, the Fund.

The Fund has elected to be classified as a diversified,  as that term is used in
the  Investment  Company Act of 1940,  as amended (the "1940 Act"),  series of a
separate open-end  management  investment  company.  A diversified Fund may not,
with respect to 75% of total assets,  invest more than 5% of total assets in the
securities of a single issuer (other than US government securities or securities
of investment  companies) or invest in more than 10% of the  outstanding  voting
securities of such issuer.



As a matter of fundamental policy, the Fund may not:

(1)   borrow money,  except as permitted  under the 1940 Act, and as interpreted
      or modified by  regulatory  authority  having  jurisdiction,  from time to
      time;

(2)   issue senior  securities,  except as permitted  under the 1940 Act, and as
      interpreted or modified by regulatory authority having jurisdiction,  from
      time to time;

(3)   concentrate its investments in a particular industry, as that term is used
      in the 1940 Act, and as  interpreted  or modified by regulatory  authority
      having jurisdiction, from time to time;

(4)   engage in the business of underwriting securities issued by others, except
      to the  extent  that  the  Fund  may be  deemed  to be an  underwriter  in
      connection with the disposition of portfolio securities;

(5)   purchase or sell real estate,  which term does not include  securities  of
      companies which deal in real estate or mortgages or investments secured by
      real estate or interests therein, except that the Fund reserves freedom of
      action to hold and to sell real estate  acquired as a result of the Fund's
      ownership of securities;

(6)   purchase or sell commodities,  except as permitted by the 1940 Act, and as
      interpreted or modified by the regulatory  authority having  jurisdiction,
      from time to time; and

(7)   make loans except as permitted  under the 1940 Act, and as  interpreted or
      modified by regulatory authority having jurisdiction, from time to time.


A     fundamental  policy may not be changed  without the approval of a majority
      of the outstanding voting securities of the Fund which, under the 1940 Act
      and the rules  thereunder and as used in this SAI, means the lesser of (1)
      67% or more of the voting securities present at a meeting,  if the holders
      of more  than 50% of the  outstanding  voting  securities  of the Fund are
      present or represented by proxy,  or (2) more than 50% of the  outstanding
      voting securities of the Fund.

Non-Fundamental Restrictions

In order to comply with certain statutes and policies and for other reasons, the
Fund will not,  as a matter  of  operating  policy  (these  restrictions  may be
changed by a vote of the Trustees of the Trust without shareholder approval):

i.    purchase  any security or evidence of interest  therein on margin,  except
      that short-term credits necessary for the clearance of purchases and sales
      of securities may be obtained and deposits of initial and variation margin
      may be made in connection with the purchase, ownership, holding or sale of
      futures contracts;

ii.   sell securities it does not own (short sales).  (This restriction does not
      preclude  short sales  "against the box" (that is, sales of securities (a)
      the Fund  contemporaneously  owns or (b)  where  the Fund has the right to
      obtain securities  equivalent in kind and amount to those sold). (The Fund
      has no current intention to engage in short selling);

iii.  purchase  securities issued by any investment company except to the extent
      permitted  by  the  1940  Act  (including  any  exemptions  or  exclusions
      therefrom),  except  that this  limitation  does not  apply to  securities
      received or acquired as  dividends,  through  offers of exchange,  or as a
      result of  reorganization,  consolidation  or merger;  iv. lend  portfolio
      securities in an amount greater than 33 1/3% of its total assets;

v.    invest  more than 15% of the Fund's net  assets  (taken at the  greater of
      cost or market  value) in  securities  that are  illiquid  or not  readily
      marketable  (excluding Rule 144A securities  deemed by the Fund's Board of
      Trustees to be liquid); and

vi.   acquire  securities  of  registered  open-end   investment   companies  or
      registered unit investment  trusts in reliance on Sections  12(d)(1)(F) or
      12(d)(1)(G) of the 1940 Act.

An investment restriction will not be considered violated if that restriction is
complied with at the time the relevant action is taken,  notwithstanding a later
change in the market  value of an  investment,  in net or total assets or in the
change of securities rating of the investment or any other later change.

To meet  federal  income  tax  requirements  for  qualification  as a  regulated
investment company,  the Fund must, among other things, limit its investments so
that at the close of each  quarter of its  taxable  year (1) no more than 25% of
the  value of its  total  assets  is  invested  in the  securities  (other  than
securities of the US Government or a regulated  investment  company) of a single
issuer or two or more issuers  which the Fund  controls and which are engaged in
the same, similar or related trades or businesses or in the securities of one or
more qualified publicly traded  partnerships,  and (2) at least 50% of the value
of its total assets is represented by cash, cash items (including  receivables),
US Government securities, securities of other regulated investment companies and
other securities of any issuer that does not represent more than 5% of the value
of the Fund's  total  assets and not more than 10% of the  issuer's  outstanding
voting securities.

Master/feeder Fund Structure. The Board of Trustees has the discretion to retain
the current  distribution  arrangement  for the Fund while investing in a master
fund in a master/feeder fund structure as described below.

A master/feeder fund structure is one in which a fund (a "feeder fund"), instead
of investing  directly in a portfolio of securities,  invests most or all of its
investment  assets in a separate  registered  investment  company  (the  "master
fund") with  substantially  the same  investment  objective  and policies as the
feeder  fund.  Such a  structure  permits  the  pooling of assets of two or more
feeder funds,  preserving  separate  identities or distribution  channels at the
feeder  fund  level.  Based on the  premise  that  certain  of the  expenses  of
operating an investment  portfolio are  relatively  fixed,  a larger  investment
portfolio may eventually  achieve a lower ratio of operating expenses to average
net assets. An existing  investment  company is able to convert to a feeder fund
by  selling  all  of  its  investments,   which  involves  brokerage  and  other
transaction  costs and realization of a taxable gain or loss, or by contributing
its assets to the master  fund and  avoiding  transaction  costs and,  if proper
procedures are followed, the realization of taxable gain or loss.

For purposes of the Fund's concentration  limitation discussed above,  financial
institutions  include  companies  within the financial  services  industry.  The
Advisor, as later defined,  deems the financial services industry to include the
group of industries within the financial services sector.

                       INVESTMENT POLICIES AND TECHNIQUES

Investment Techniques

Descriptions  in this SAI of a  particular  investment  practice or technique in
which the Fund may engage are meant to describe the spectrum of investments that
Deutsche  Investment  Management  Americas Inc. ("DIMA" or the "Advisor") in its
discretion  might,  but is not required to, use in managing the Fund's portfolio
assets.  The Advisor  may in its  discretion  at any time employ such  practice,
technique or instrument  for one or more funds,  including the Fund, but not for
all funds  advised by it.  Furthermore,  it is possible  that  certain  types of
financial  instruments  or  investment  techniques  described  herein may not be
available,  permissible,  economically  feasible or effective for their intended
purposes in all markets. Certain practices, techniques or instruments may not be
principal  activities of the Fund, but, to the extent employed,  could from time
to time have a material impact on the Fund's performance.

Asset  Segregation  Certain  investment  transactions  expose  the  Fund  to  an
obligation to make future payments to third parties.  Examples of these types of
transactions,  include,  but are not limited to, reverse repurchase  agreements,
short sales, dollar rolls,  when-issued,  delayed-delivery or forward commitment
transactions  and certain  derivatives  such as swaps,  futures,  forwards,  and
options. To the extent that the Fund engages in such transactions, the Fund will
(to the extent  required by applicable  law) either (1) segregate cash or liquid
assets in the prescribed amount or (2) otherwise "cover" its future  obligations
under the transaction,  such as by holding an offsetting investment. If the Fund
segregates  sufficient  cash or other liquid  assets or  otherwise  "covers" its
obligations under such transactions, the Fund will not consider the transactions
to be  borrowings  for  purposes  of  its  investment  restrictions  or  "senior
securities"  under the 1940 Act, and therefore,  such  transactions  will not be
subject  to the 300% asset  coverage  requirement  under the 1940 Act  otherwise
applicable to borrowings by the Fund.

In some cases (e.g., with respect to futures and forwards that are contractually
required to "cash-settle"),  the Fund will segregate cash or other liquid assets
with  respect  to the  amount  of the daily  net  (marked-to-market)  obligation
arising from the transaction,  rather than the notional amount of the underlying
contract.  By segregating assets in an amount equal to the net obligation rather
than the notional amount, the Fund will have the ability to employ leverage to a
greater  extent than if it set aside cash or other  liquid  assets  equal to the
notional  amount of the contract,  which may increase the risk  associated  with
such transactions.

The Fund may  utilize  methods of  segregating  assets or  otherwise  "covering"
transactions  that are currently or in the future  permitted under the 1940 Act,
the rules and  regulation  thereunder,  or orders issued by the  Securities  and
Exchange Commission ("SEC") thereunder. For these purposes,  interpretations and
guidance  provided  by the SEC  staff  may be taken  into  account  when  deemed
appropriate by the Fund.

Assets used as  segregation  or cover  cannot be sold while the  position in the
corresponding   transaction  is  open,  unless  they  are  replaced  with  other
appropriate assets. As a result, the commitment of a large portion of the Fund's
assets for segregation and cover purposes could impede  portfolio  management or
the Fund's ability to meet redemption requests or other current obligations.

Segregating  assets  or  otherwise   "covering"  for  these  purposes  does  not
necessarily  limit the  percentage of the assets of the Fund that may be at risk
with respect to certain derivative transactions.

Short-Term Instruments

When the Fund experiences large cash inflows -- for example, through the sale of
securities  --  and  attractive   investments   are  unavailable  in  sufficient
quantities,  the Fund may hold short-term investments (or shares of money market
mutual funds) for a limited time pending  availability of such  investments.  In
addition,  when in the  Advisor's  opinion it is  advisable to adopt a temporary
defensive position because of unusual and adverse market or other conditions, up
to 100% of the Fund's assets may be invested in such short-term instruments.

Short-term   instruments  consist  of  foreign  and  domestic:   (1)  short-term
obligations  of sovereign  governments  and their  agencies,  instrumentalities,
authorities or political  subdivisions;  (2) other  short-term  debt  securities
rated AA or higher by S&P or Aa or higher by Moody's or, if  unrated,  deemed to
be of comparable  quality in the opinion of the Advisor;  (3) commercial  paper;
(4)  bank  obligations,  including  negotiable  certificates  of  deposit,  time
deposits and bankers' acceptances;  and (5) repurchase  agreements.  At the time
the Fund invests in commercial paper, bank obligations or repurchase agreements,
the issuer or the issuer's parent must have  outstanding debt rated AA or higher
by the Standard & Poor's Division of The McGraw-Hill Companies,  Inc. ("S&P") or
Aa or  higher  by  Moody's  Investors  Service,  Inc.  ("Moody's");  outstanding
commercial paper or bank obligations rated A-1 by S&P or Prime-1 by Moody's; or,
if no such  ratings  are  available,  the  instrument  must be  deemed  to be of
comparable  quality in the  opinion of the  Advisor.  These  instruments  may be
denominated in US dollars or in foreign currencies.

Other US  government  securities  the Fund may  invest in  include  (but are not
limited  to)   securities   issued  or   guaranteed   by  the  Federal   Housing
Administration, Farmers Home Loan Administration,  Export-Import Bank of the US,
Small Business Administration, General Services Administration, Central Bank for
Cooperatives,  Federal Farm Credit  Banks,  Federal  Intermediate  Credit Banks,
Federal  Land  Banks,  Maritime  Administration,   Tennessee  Valley  Authority,
District  of  Columbia  Armory  Board and Student  Loan  Marketing  Association.
Because  the US  government  is not  obligated  by law to provide  support to an
instrumentality it sponsors,  the Fund will invest in obligations issued by such
an  instrumentality  only if the  Advisor  determines  that the credit risk with
respect  to the  instrumentality  does not make its  securities  unsuitable  for
investment by the Fund.

The Fund may also invest in separately traded principal and interest  components
of  securities  guaranteed  or  issued  by the US  government  or its  agencies,
instrumentalities   or   sponsored   enterprises   if  such   components   trade
independently under the Separate Trading of Registered Interest and Principal of
Securities  program  ("STRIPS")  or  any  similar  program  sponsored  by the US
Government.  STRIPS  may be sold as zero  coupon  securities.  See "Zero  Coupon
Securities and Deferred Interest Bonds."

US  Government  Securities.  The  Fund  may  invest  in  obligations  issued  or
guaranteed  by the US government  including:  (1) direct  obligations  of the US
Treasury   and  (2)   obligations   issued  by  US   government   agencies   and
instrumentalities.  Included  among  direct  obligations  of the US are Treasury
Bills,  Treasury  Notes  and  Treasury  Bonds,  which  differ  in terms of their
interest rates, maturities and dates of issuance. Treasury Bills have maturities
of less than one year,  Treasury  Notes have  maturities  of one to 10 years and
Treasury Bonds generally have maturities of greater than 10 years at the date of
issuance.    Included   among   the   obligations   issued   by   agencies   and
instrumentalities  of the United States are:  instruments  that are supported by
the full faith and credit of the United States (such as  certificates  issued by
the  Government  National  Mortgage   Association  ("GNMA"  or  "Ginnie  Mae"));
instruments  that are supported by the right of the issuer to borrow from the US
Treasury (such as securities of Federal Home Loan Banks);  and instruments  that
are  supported  solely by the credit of the agency or  instrumentality  (such as
Federal National Mortgage  Association ("FNMA" or "Fannie Mae") and Federal Home
Loan Mortgage Corporation ("FHLMC" or "Freddie Mac")).

Certificates  of  Deposit  and  Bankers'  Acceptances.  The Fund may  invest  in
certificates  of deposit and bankers'  acceptances.  Certificates of deposit are
receipts  issued by a  depository  institution  in  exchange  for the deposit of
funds. The issuer agrees to pay the amount deposited plus interest to the bearer
of the receipt on the date specified on the certificate. The certificate usually
can be traded in the secondary  market prior to maturity.  Bankers'  acceptances
typically  arise  from  short-term  credit   arrangements   designed  to  enable
businesses to obtain funds to finance  commercial  transactions.  Generally,  an
acceptance  is a time draft  drawn on a bank by an  exporter  or an  importer to
obtain a stated  amount of funds to pay for specific  merchandise.  The draft is
then "accepted" by a bank that, in effect, unconditionally guarantees to pay the
face value of the  instrument on its maturity  date.  The acceptance may then be
held  by the  accepting  bank  as an  earning  asset  or it may be  sold  in the
secondary market at the going rate of discount for a specific maturity. Although
maturities for  acceptances can be as long as 270 days,  most  acceptances  have
maturities of six months or less.

Commercial  Paper. The Fund may invest in commercial  paper. The Fund may invest
in fixed  rate or  variable  rate  commercial  paper,  issued  by US or  foreign
entities.  Commercial paper consists of short-term  (usually from 1 to 270 days)
unsecured  promissory  notes  issued by US or foreign  corporations  in order to
finance  their  current  operations.  Any  commercial  paper issued by a foreign
entity corporation and purchased by the Fund must be US  dollar-denominated  and
must not be subject to foreign withholding tax at the time of purchase.

Commercial  paper,  when  purchased  by the Fund,  must be rated in the  highest
short-term  rating category by any two NRSROs (or one NRSRO if that NRSRO is the
only such NRSRO which rates such security) or, if not so rated, must be believed
by the  Advisor,  acting under the  supervision  of the Board of Trustees of the
Fund,  to be of  comparable  quality.  Investing  in  foreign  commercial  paper
generally   involves  risks  similar  to  those   described  below  relating  to
obligations  of foreign  banks or foreign  branches and  subsidiaries  of US and
foreign banks.

The Fund may also invest in variable rate master  demand notes.  A variable rate
master  demand note (which is a type of  commercial  paper)  represents a direct
borrowing arrangement involving periodically fluctuating rates of interest under
a letter agreement between a commercial paper issuer and an institutional lender
pursuant to which the lender may determine to invest varying amounts.

For a description of commercial paper ratings, see the Appendix to this SAI.

US  Dollar-Denominated  Foreign Fixed Income Securities.  The Fund may invest in
the  dollar-denominated  debt securities of foreign companies.  Investing in the
securities of foreign companies involves more risks than investing in securities
of US companies.  Their value is subject to economic and political  developments
in the countries where the companies  operate and to changes in foreign currency
values.  Values may also be  affected  by foreign  tax laws,  changes in foreign
economic or monetary  policies,  exchange  control  regulations  and regulations
involving prohibitions on the repatriation of foreign currencies.

In addition, the relative performance of various countries' fixed income markets
historically   has   reflected   wide   variations   relating   to  the   unique
characteristics of each country's economy.  Year-to-year fluctuations in certain
markets have been  significant,  and negative  returns have been  experienced in
various markets from time to time.

US Dollar-Denominated  Sovereign and Supranational Fixed Income Securities.  The
Fund may invest in US  dollar-denominated  foreign  government debt  securities,
which  include debt  obligations  issued or  guaranteed  by  national,  state or
provincial  governments or similar political subdivisions and quasi-governmental
and  supranational  entities   (collectively,   "sovereign  debt  obligations").
Sovereign debt obligations may involve a high degree of risk. The issuer of such
an obligation or the governmental  authorities that control the repayment of the
obligation  may be unable or unwilling to repay  principal and interest when due
and may require  renegotiations  or rescheduling of debt payments.  In addition,
prospects  for  repayment of  principal  and interest may depend on political as
well as economic factors.  Quasi-governmental and supranational entities include
international  organizations designated or supported by governmental entities to
promote  economic   reconstruction  or  development  and  international  banking
institutions  and related  government  agencies.  Examples  include (but are not
limited to) the  International  Bank for  Reconstruction  and  Development  (the
"World Bank"), the Japanese Development Bank, the Asian Development Bank and the
Inter-American  Development  Bank.  Foreign  government  securities also include
mortgage-related   securities  issued  or  guaranteed  by  national,   state  or
provincial   governmental   instrumentalities,    including   quasi-governmental
agencies.

Put Bonds.  A put bond (also referred to as a tender option or third party bond)
is a bond created by coupling an  intermediate or long-term fixed rate bond with
an agreement  giving the holder the option of tendering  the bond to receive its
par value. As consideration for providing this tender option, the sponsor of the
bond (usually a bank,  broker-dealer or other financial  intermediary)  receives
periodic fees that equal the difference between the bond's fixed coupon rate and
the rate  (determined  by a remarketing  or similar  agent) that would cause the
bond,  coupled  with the tender  option,  to trade at par.  By paying the tender
offer fees, the Fund in effect holds a demand  obligation that bears interest at
the prevailing short-term rate.

In   selecting   put  bonds,   the   Advisor   takes  into   consideration   the
creditworthiness of the issuers of the underlying bonds and the creditworthiness
of the  providers  of the tender  option  features.  A sponsor may  withdraw the
tender option feature if the issuer of the underlying  bond defaults on interest
or principal payments or the bond's rating is downgraded.

Bank Loans.  The Fund may also invest in bank loans,  which are typically senior
debt  obligations  of borrowers  (issuers) and as such, are considered to hold a
senior  position in the capital  structure  of the  borrower.  These may include
loans which hold the most senior position, that hold an equal ranking with other
senior debt, or loans that are, in the judgment of the Advisor,  in the category
of senior debt of the borrower.  This capital structure position generally gives
the  holders of these  loans a priority  claim on some or all of the  borrower's
assets  in the  event of a  default.  In most  cases,  these  loans  are  either
partially or fully  collateralized by the assets of a corporation,  partnership,
limited  liability  company or other business  entity,  or by cash flow that the
Advisor  believes has a market value at the time of  acquisition  that equals or
exceeds  the  principal  amount of the  loan.  These  loans are often  issued in
connection  with   recapitalizations,   acquisitions,   leveraged  buy-outs  and
refinancings.  It is  important to note that Moody's and S&P may rate bank loans
higher  than high yield  bonds of the same  issuer to reflect  their more senior
position.  The Fund may  invest  in both  fixed-  and  floating-rate  loans.  In
addition,  bank loans can trade either as an  "assignment"  or  "participation."
When the Fund buys an assignment, it is essentially becoming a party to the bank
agreement.  The vast majority of all trades are  assignments and would therefore
generally represent the preponderance of bank loans held by the Fund. In certain
cases, the Fund may buy bank loans on a participation basis; if for example, the
Fund did not want to become party to the bank agreement.  However, in all cases,
the Fund will not purchase  bank loans where  Deutsche  Bank,  or an  affiliate,
serves as an agent bank.

Participations  and  assignments   involve  credit  risk,  interest  rate  risk,
liquidity  risk,  and the  risk of  being a  lender.  If the  Fund  purchases  a
participation, it may only be able to enforce its rights through the lender, and
may assume the credit risk of both the lender and the borrower.

Investments  in loans through  direct  assignment  of a financial  institution's
interests with respect to a loan may involve additional risks. For example, if a
loan is foreclosed, the purchaser could become part owner of any collateral, and
would bear the costs and liabilities associated with owning and disposing of the
collateral.  In addition,  it is at least  conceivable that under emerging legal
theories of lender liability, a purchaser could be held liable as a co-lender.

In the case of loans administered by a bank or other financial  institution that
acts as agent for all holders,  if assets held by the agent for the benefit of a
purchaser  are  determined  to be subject to the claims of the  agent's  general
creditors,  the  purchaser  might incur  certain  costs and delays in  realizing
payment on the loan or loan  participation  and could suffer a loss of principal
or interest.

In the case of loan  participations  where a bank or other  lending  institution
serves as  financial  intermediary  between  the Fund and the  borrower,  if the
participation does not shift to the Fund the direct debtor-creditor relationship
with  the  borrower,  interpretations  of the  SEC  require  the  Fund,  in some
circumstances,  to treat both the lending bank or other lending  institution and
the borrower as issuers for purposes of the Fund's investment policies. Treating
a financial  intermediary as an issuer of  indebtedness  may restrict the Fund's
ability to invest in indebtedness related to a single financial intermediary, or
a group of intermediaries  engaged in the same industry,  even if the underlying
borrowers represent many different companies and industries.

Variable  and  Floating  Rate  Instruments.  The Fund may invest in  variable or
floating  rate  instruments  and  variable  rate demand  instruments,  including
variable amount master demand notes.  These  instruments  will normally  involve
industrial  development  or revenue bonds that provide that the rate of interest
is set as a specific  percentage  of a  designated  base rate (such as the prime
rate) at a major  commercial  bank.  In  addition,  the  interest  rate on these
securities may be reset daily, weekly or on some other reset period and may have
a floor or ceiling on interest rate changes.  The Fund can demand payment of the
obligation at all times or at stipulated dates on short notice (not to exceed 30
days) at par plus accrued  interest.  Generally,  changes in interest rates will
have a  smaller  effect on the  market  value of these  instruments  than on the
market  value  of  fixed  income  securities  and,  thus,  may  allow  for  less
opportunity for capital appreciation or depreciation.

Debt  instruments  purchased by the Fund may be  structured  to have variable or
floating  interest rates.  These  instruments may include variable amount master
demand notes that permit the  indebtedness  to vary in addition to providing for
periodic  adjustments  in the  interest  rates.  The Advisor  will  consider the
earning  power,  cash  flows  and other  liquidity  ratios  of the  issuers  and
guarantors  of such  instruments  and, if the  instrument is subject to a demand
feature,  will  continuously  monitor their financial ability to meet payment on
demand. Where necessary to ensure that a variable or floating rate instrument is
equivalent  to the  quality  standards  applicable  to the Fund's  fixed  income
investments, the issuer's obligation to pay the principal of the instrument will
be backed  by an  unconditional  bank  letter or line of  credit,  guarantee  or
commitment  to lend.  Any bank  providing  such a bank  letter,  line of credit,
guarantee or loan commitment will meet the Fund's  investment  quality standards
relating to investments in bank obligations.  The Advisor will also continuously
monitor the creditworthiness of issuers of such instruments to determine whether
the Fund should continue to hold the investments.

Other  variable and  floating  rate  instruments  include but are not limited to
corporates, ABS, CMBS, MBS, CMOs, government and agency securities.

The absence of an active secondary market for certain variable and floating rate
notes could make it difficult to dispose of the instruments,  and the Fund could
suffer a loss if the issuer  defaults or during periods in which the Fund is not
entitled to exercise its demand rights.

Variable and floating rate  instruments  held by the Fund will be subject to the
Fund's limitation on investments in illiquid  securities when a reliable trading
market for the instruments does not exist and the Fund may not demand payment of
the principal amount of such instruments within seven days.

Warrants. The Fund may invest in warrants. Warrants generally entitle the holder
to buy a specified number of shares of common stock at a specified price,  which
is often higher than the market  price at the time of issuance,  for a period of
years or in perpetuity. Warrants may be issued in units with other securities or
separately,  and may be freely  transferable and traded on exchanges.  While the
market value of a warrant tends to be more volatile than that of the  securities
underlying the warrant, the market value of a warrant may not necessarily change
with that of the  underlying  security.  A warrant ceases to have value if it is
not exercised prior to any expiration date to which the warrant is subject.  The
purchase of warrants involves a risk that the Fund could lose the purchase value
of a warrant if the right to subscribe  to  additional  shares is not  exercised
prior to the warrant's  expiration.  Also, the purchase of warrants involves the
risk that the  effective  price paid for the warrant  added to the  subscription
price of the related security may exceed the value of the subscribed  security's
market price,  such as when there is no movement in the level of the  underlying
security.

Municipal  Securities.  The Fund may  invest  to a limited  extent in  municipal
securities.  Municipal  securities consist of bonds, notes and other instruments
issued  by or on  behalf  of  states,  territories  and  possessions  of  the US
(including the District of Columbia) and their political subdivisions,  agencies
or  instrumentalities,  the  interest  on which is exempt from  regular  federal
income tax (i.e., excluded from gross income for federal income tax purposes but
not necessarily  exempt from the federal  alternative  minimum tax or from state
and local  taxes).  Municipal  securities  may also be issued on a taxable basis
(i.e., the interest on such securities is not exempt from regular federal income
tax).

Municipal  securities  are  often  issued to obtain  funds  for  various  public
purposes,  including the construction of a wide range of public  facilities such
as bridges, highways, housing, hospitals, mass transportation,  schools, streets
and water and sewer works. Other public purposes for which municipal  securities
may be issued include  refunding  outstanding  obligations,  obtaining funds for
general  operating  expenses,  and  obtaining  funds  to  lend to  other  public
institutions  and  facilities.   Municipal   securities  also  include  "private
activity" or industrial  development  bonds, which are issued by or on behalf of
public  authorities  to provide  financing  aid to acquire sites or construct or
equip  facilities   within  a  municipality  for  privately  or  publicly  owned
corporations.

The  two  principal   classifications  of  municipal   securities  are  "general
obligations" and "revenue  obligations".  General obligations are secured by the
issuer's  pledge of its full faith and credit for the payment of  principal  and
interest although the characteristics and enforcement of general obligations may
vary  according  to  the  law  applicable  to  the  particular  issuer.  Revenue
obligations,  which  include,  but are not limited to, private  activity  bonds,
resource  recovery bonds,  certificates of participation  and certain  municipal
notes,  are not backed by the credit and taxing  authority of the issuer and are
payable solely from the revenues derived from a particular  facility or class of
facilities  or, in some cases,  from the  proceeds of a special  excise or other
specific revenue source. Nevertheless, the obligations of the issuer may also be
backed by a letter of credit,  guarantee or insurance.  General  obligations and
revenue  obligations may be issued in a variety of forms,  including  commercial
paper,  fixed,  variable and floating  rate  securities,  tender  option  bonds,
auction rate bonds and capital appreciation bonds.

In addition to general obligations and revenue obligations,  there are a variety
of hybrid and special  types of municipal  securities.  There are also  numerous
differences  in the  credit  backing of  municipal  securities  both  within and
between these two principal classifications.

For  the  purpose  of  applying   the  Fund's   investment   restrictions,   the
identification  of the  issuer of a  municipal  security  which is not a general
obligation is made by the Advisor based on the  characteristics of the municipal
security,  the most important of which is the source of funds for the payment of
principal and interest on such securities.

One or a small number of  institutional  investors such as the Fund may purchase
an entire issue of municipal  securities.  Thus, the issue may not be said to be
publicly  offered.  Unlike some  securities  that are not  publicly  offered,  a
secondary  market exists for many  municipal  securities  that were not publicly
offered initially and such securities can be readily marketable.

The obligations of an issuer to pay the principal of and interest on a municipal
security are subject to the provisions of bankruptcy,  insolvency and other laws
affecting the rights and remedies of creditors,  such as the Federal  Bankruptcy
Act,  and laws,  if any,  that may be enacted by Congress or state  legislatures
extending  the time for payment of  principal  or  interest  or  imposing  other
constraints  upon  the  enforcement  of such  obligations.  There  is  also  the
possibility  that,  because  of  litigation  or other  conditions,  the power or
ability of the issuer to pay when due  principal  of or  interest on a municipal
security may be materially affected.

Municipal  Leases,   Certificates  of  Participation  and  other   Participation
Interests.  A  municipal  lease  is an  obligation  in the  form of a  lease  or
installment  purchase  contract that is issued by a state or local government to
acquire  equipment and  facilities.  Income from such  obligations  is generally
exempt from state and local  taxes in the state of issuance  (as well as regular
federal  income tax).  Municipal  leases  frequently  involve  special risks not
normally  associated  with  general  obligation  or  revenue  bonds.  Leases and
installment  purchase or conditional  sale contracts (which normally provide for
title to the leased asset to pass  eventually to the  governmental  issuer) have
evolved as a means for  governmental  issuers to acquire  property and equipment
without meeting the constitutional  and statutory  requirements for the issuance
of debt. The debt issuance  limitations are deemed to be inapplicable because of
the  inclusion in many leases or contracts of  `non-appropriation'  clauses that
relieve the governmental  issuer of any obligation to make future payments under
the lease or  contract  unless  money is  appropriated  for such  purpose by the
appropriate  legislative  body on a yearly or other  periodic  basis.  Thus, the
Fund's  investment in municipal  leases will be subject to the special risk that
the governmental issuer may not appropriate funds for lease payments.

In addition,  such leases or contracts may be subject to the temporary abatement
of payments in the event the issuer is prevented from  maintaining  occupancy of
the leased premises or utilizing the leased equipment.  Although the obligations
may be secured by the leased  equipment or  facilities,  the  disposition of the
property in the event of  nonappropriation or foreclosure might prove difficult,
time consuming and costly, and result in an unsatisfactory or delayed recoupment
of the Fund's original investment.

Certificates of participation represent undivided interests in municipal leases,
installment  purchase  contracts  or other  instruments.  The  certificates  are
typically  issued by a trust or other entity that has received an  assignment of
the payments to be made by the state or political  subdivision under such leases
or installment purchase contracts.

Certain  municipal lease  obligations and certificates of  participation  may be
deemed  illiquid for the purpose of the Fund's  limitations  on  investments  in
illiquid  securities.  Other  municipal lease  obligations  and  certificates of
participation acquired by the Fund may be determined by the Advisor, pursuant to
guidelines adopted by the Trustees of the Trust, to be liquid securities for the
purpose of the Fund's  limitation  on  investments  in illiquid  securities.  In
determining  the liquidity of municipal lease  obligations  and  certificates of
participation, the Advisor will consider a variety of factors including: (1) the
willingness  of  dealers  to bid for the  security;  (2) the  number of  dealers
willing to purchase  or sell the  obligation  and the number of other  potential
buyers;  (3) the frequency of trades or quotes for the  obligation;  and (4) the
nature of the marketplace trades. In addition, the Advisor will consider factors
unique  to  particular  lease  obligations  and  certificates  of  participation
affecting the marketability thereof. These include the general  creditworthiness
of the issuer, the importance to the issuer of the property covered by the lease
and the likelihood that the  marketability  of the obligation will be maintained
throughout  the time the obligation is held by the Fund. The Fund may not invest
more than 5% of its net assets in municipal leases.

The  Fund  may  purchase  participations  in  municipal  securities  held  by  a
commercial bank or other financial institution.  Such participations provide the
Fund with the right to a pro rata undivided interest in the underlying municipal
securities. In addition, such participations generally provide the Fund with the
right to demand payment,  on not more than seven days notice, of all or any part
of the Fund's participation interest in the underlying municipal security,  plus
accrued interest.

Municipal Notes. Municipal securities in the form of notes generally are used to
provide for short-term  capital needs, in anticipation of an issuer's receipt of
other revenues or financing, and typically have maturities of up to three years.
Such instruments may include Tax Anticipation Notes, Revenue Anticipation Notes,
Bond  Anticipation  Notes, Tax and Revenue  Anticipation  Notes and Construction
Loan Notes.  Tax  Anticipation  Notes are issued to finance the working  capital
needs of governments.  Generally, they are issued in anticipation of various tax
revenues,  such as income,  sales,  property,  use and business  taxes,  and are
payable from these specific future taxes.  Revenue Anticipation Notes are issued
in  expectation of receipt of other kinds of revenue,  such as federal  revenues
available under federal revenue sharing programs.  Bond  Anticipation  Notes are
issued to provide  interim  financing  until  long-term  bond  financing  can be
arranged.  In most cases,  the long-term bonds then provide the funds needed for
repayment of the notes. Tax and Revenue  Anticipation  Notes combine the funding
sources  of  both  Tax  Anticipation  Notes  and  Revenue   Anticipation  Notes.
Construction Loan Notes are sold to provide construction financing.  These notes
are secured by mortgage notes insured by the Federal Housing Authority; however,
the proceeds from the insurance may be less than the economic  equivalent of the
payment of  principal  and  interest  on the  mortgage  note if there has been a
default.  The obligations of an issuer of municipal notes are generally  secured
by the anticipated revenues from taxes, grants or bond financing.  An investment
in such instruments, however, presents a risk that the anticipated revenues will
not be  received  or that such  revenues  will be  insufficient  to satisfy  the
issuer's  payment  obligations  under  the  notes  or that  refinancing  will be
otherwise unavailable.

Tax-Exempt  Commercial  Paper.  Issues of tax-exempt  commercial paper typically
represent short-term,  unsecured, negotiable promissory notes. These obligations
are issued by state and local  governments and their agencies to finance working
capital needs of municipalities or to provide interim construction financing and
are  paid  from  general  revenues  of  municipalities  or are  refinanced  with
long-term debt. In most cases,  tax-exempt commercial paper is backed by letters
of credit,  lending  agreements,  note  repurchase  agreements  or other  credit
facility agreements offered by banks or other institutions.

Pre-Refunded  Municipal  Securities.  The principal of and interest on municipal
securities  that have been  pre-refunded  are no longer  paid from the  original
revenue source for the securities.  Instead,  after  pre-refunding the source of
such payments of the principal of and interest on these securities are typically
paid from an escrow fund  consisting of obligations  issued or guaranteed by the
US  Government.  The assets in the escrow fund are derived  from the proceeds of
refunding  bonds  issued  by  the  same  issuer  as the  pre-refunded  municipal
securities. Issuers of municipal securities use this advance refunding technique
to obtain  more  favorable  terms with  respect to  securities  that are not yet
subject to call or  redemption  by the issuer.  For example,  advance  refunding
enables an issuer to refinance debt at lower market interest rates,  restructure
debt to improve cash flow or eliminate restrictive covenants in the indenture or
other governing instrument for the pre-refunded  municipal securities.  However,
except for a change in the revenue  source  from which  principal  and  interest
payments are made, the pre-refunded  municipal  securities remain outstanding on
their  original  terms  until  they  mature  or  are  redeemed  by  the  issuer.
Pre-refunded  municipal  securities  are  usually  purchased  at a  price  which
represents a premium over their face value.

Tender Option Bonds.  A tender  option bond is a municipal  security  (generally
held pursuant to a custodial  arrangement) having a relatively long maturity and
bearing interest at a fixed rate substantially higher than prevailing short-term
tax-exempt rates. The bond is typically issued in conjunction with the agreement
of a third party, such as a bank,  broker-dealer or other financial institution,
pursuant to which such institution  grants the security  holders the option,  at
periodic  intervals,  to tender their  securities to the institution and receive
the face value thereof.

As consideration for providing the option,  the financial  institution  receives
periodic fees equal to the  difference  between the bond's fixed coupon rate and
the  rate,  as  determined  by a  remarketing  or  similar  agent at or near the
commencement of such period,  that would cause the securities,  coupled with the
tender option,  to trade at par on the date of such  determination.  Thus, after
payment of this fee, the security holder  effectively  holds a demand obligation
that bears interest at the prevailing short-term tax-exempt rate.

However,  an institution  will not be obligated to accept  tendered bonds in the
event of certain  defaults  or a  significant  downgrade  in the  credit  rating
assigned to the issuer of the bond.  The  liquidity of a tender option bond is a
function  of the  credit  quality  of both the  bond  issuer  and the  financial
institution  providing  liquidity.  Tender  option bonds are deemed to be liquid
unless, in the opinion of the Advisor, the credit quality of the bond issuer and
the  financial  institution  is deemed,  in light of the Fund's  credit  quality
requirements, to be inadequate. The Fund intends to invest only in tender option
bonds the interest on which will,  in the opinion of bond  counsel,  counsel for
the issuer of interests  therein or counsel  selected by the Advisor,  be exempt
from regular federal income tax. However, because there can be no assurance that
the Internal Revenue Service (the "IRS") will agree with such counsel's  opinion
in any particular case, there is a risk that the Fund will not be considered the
owner of such  tender  option  bonds and thus will not be entitled to treat such
interest as exempt from such tax. Additionally, the federal income tax treatment
of  certain  other  aspects  of these  investments,  including  the  proper  tax
treatment of tender option bonds and the associated fees, in relation to various
regulated  investment  company tax  provisions  is unclear.  The Fund intends to
manage its  portfolio in a manner  designed to eliminate or minimize any adverse
impact from the tax rules applicable to these investments.

Auction Rate  Securities.  Auction rate  securities in which the Fund may invest
consist  of  auction  rate  municipal  securities  and  auction  rate  preferred
securities  issued by closed-end  investment  companies that invest primarily in
municipal securities. Provided that the auction mechanism is successful, auction
rate  securities  usually permit the holder to sell the securities in an auction
at par value at specified intervals. The dividend is reset by "Dutch" auction in
which  bids are made by  broker-dealers  and  other  institutions  for a certain
amount of securities at a specified  minimum yield. The dividend rate set by the
auction is the lowest  interest  or  dividend  rate that  covers all  securities
offered  for sale.  While  this  process  is  designed  to permit  auction  rate
securities  to be traded at par value,  there is the risk that an  auction  will
fail due to insufficient demand for the securities.

Dividends on auction rate preferred  securities  issued by a closed-end fund may
be  designated  as  exempt  from  federal  income  tax to the  extent  they  are
attributable to tax-exempt  interest income earned by the Fund on the securities
in its  portfolio  and  distributed  to  holders  of the  preferred  securities,
provided  that the preferred  securities  are treated as equity  securities  for
federal  income tax  purposes  and the  closed-end  fund  complies  with certain
requirements under the Internal Revenue Code of 1986, as amended (the "Code").

The Fund's investments in auction rate preferred  securities of closed-end funds
are subject to  limitations  on  investments  in other US registered  investment
companies,  which  limitations  are prescribed by the Investment  Company Act of
1940,  as amended  (the "1940  Act").  These  limitations  include  prohibitions
against  acquiring  more than 3% of the  voting  securities  of any  other  such
investment  company,  and  investing  more  than  5% of  the  Fund's  assets  in
securities of any one such investment  company or more than 10% of its assets in
securities of all such investment companies.

Private  Activity  Bonds.  Certain  types  of  municipal  securities,  generally
referred to as industrial  development  bonds (and referred to under current tax
law as private activity bonds), are issued by or on behalf of public authorities
to obtain funds for privately operated housing facilities, airport, mass transit
or port  facilities,  sewage  disposal,  solid waste disposal or hazardous waste
treatment or disposal  facilities and certain local facilities for water supply,
gas or electricity. Other types of industrial development bonds, the proceeds of
which  are  used for the  construction,  equipment,  repair  or  improvement  of
privately operated industrial or commercial facilities, may constitute municipal
securities,  although the current federal tax laws place substantial limitations
on the size of such issues.  The payment of the  principal  and interest on such
bonds is generally  dependent  solely on the ability of the  facility's  user to
meet its  financial  obligations  and the pledge,  if any, of real and  personal
property so financed as security for such  payment.  The  interest  from certain
private  activity bonds owned by the Fund  (including  the Fund's  distributions
attributable  to such  interest)  may be a  preference  item for purposes of the
alternative minimum tax.

Fixed Income Security Risk. Fixed income securities generally expose the Fund to
four types of risk:  (1) interest rate risk (the potential for  fluctuations  in
bond prices due to changing interest rates);  (2) income risk (the potential for
a decline in the Fund's income due to falling market interest rates); (3) credit
risk (the  possibility  that a bond issuer will fail to make timely  payments of
either interest or principal to the Fund);  and (4) prepayment risk or call risk
(the likelihood that, during a period of falling interest rates, securities with
high stated  interest  rates will be prepaid,  or  "called"  prior to  maturity,
requiring the Fund to invest the proceeds at generally lower interest rates).

Impact of Sub-Prime  Mortgage  Market.  The Fund may invest in  mortgage-backed,
asset-backed and other fixed-income  securities whose value and liquidity may be
adversely  affected by the critical  downturn in the sub-prime  mortgage lending
market in the US. Sub-prime loans,  which,  have higher interest rates, are made
to borrowers  with low credit ratings or other factors that increase the risk of
default. Concerns about widespread defaults on sub-prime loans have also created
heightened  volatility and turmoil in the general credit  markets.  As a result,
the Fund's investments in certain fixed-income  securities may decline in value,
their market value may be more  difficult  to  determine,  and the Fund may have
more difficulty disposing of them.

Foreign  Securities  Risk.  The Fund may  invest a portion  of its  assets in US
dollar-denominated  and non-US  dollar-denominated  debt  securities  of foreign
companies.  Investing in the securities of foreign companies involves more risks
than investing in securities of US companies. Their value is subject to economic
and political  developments in the countries where the companies  operate and to
changes in foreign currency  values.  Values may also be affected by foreign tax
laws,  changes  in foreign  economic  or  monetary  policies,  exchange  control
regulations  and  regulations  involving  prohibitions  on the  repatriation  of
foreign currencies.

In general, less information may be available about foreign companies than about
US  companies,  and  foreign  companies  are  generally  not subject to the same
accounting,  auditing and  financial  reporting  standards as are US  companies.
Foreign  securities  markets may be less  liquid and subject to less  regulation
than the US securities markets. The costs of investing outside the United States
frequently  are higher  than those in the United  States.  These  costs  include
relatively higher brokerage commissions and foreign custody expenses.

Mortgage-Backed and Asset-Backed Securities

Mortgage-Backed Securities. The Fund may invest in mortgage-backed securities. A
mortgage-backed  security  consists of a pool of  mortgage  loans  evidenced  by
promissory  notes  secured by first  mortgages  or first deeds of trust or other
similar  security  instruments  creating  a  first  lien on  owner-occupied  and
non-owner-occupied  one-unit to four-unit  residential  properties,  multifamily
(i.e.,  five or more  units)  properties,  agricultural  properties,  commercial
properties and mixed use properties.

The  investment  characteristics  of adjustable  and fixed rate  mortgage-backed
securities differ from those of traditional fixed-income  securities.  The major
differences  include the payment of interest and  principal  on  mortgage-backed
securities on a more frequent  (usually monthly)  schedule,  and the possibility
that  principal may be prepaid at any time due to  prepayments on the underlying
mortgage loans or other assets.  These  differences can result in  significantly
greater  price  and  yield   volatility  than  is  the  case  with   traditional
fixed-income  securities.  As a result,  if the Fund  purchases  mortgage-backed
securities at a premium,  a  faster-than-expected  prepayment rate will decrease
both  the  market  value  and the  yield  to  maturity  from  those  which  were
anticipated.  A  prepayment  rate that is  slower  than  expected  will have the
opposite effect of increasing yield to maturity and market value. Conversely, if
the    Fund    purchases    mortgage-backed    securities    at   a    discount,
faster-than-expected   prepayments  will  increase,  while  slower-than-expected
prepayments  will decrease,  yield to maturity and market values.  To the extent
that the Fund  invests in  mortgage-backed  securities,  the Advisor may seek to
manage  these  potential  risks by  investing  in a variety  of  mortgage-backed
securities and by using certain hedging techniques.

Mortgage-backed  securities may be issued or guaranteed by GNMA,  Fannie Mae and
FHLMC or Freddie Mac,  but also may be issued or  guaranteed  by other  issuers,
including private companies.  GNMA is a government-owned  corporation that is an
agency of the U.S.  Department of Housing and Urban Development.  It guarantees,
with the full faith and credit of the United States,  full and timely payment of
all monthly  principal  and interest on its  mortgage-backed  securities.  Until
recently, FNMA and FHLMC were  government-sponsored  corporations owned entirely
by private  stockholders.  Both issue  mortgage-related  securities that contain
guarantees  as to timely  payment of  interest  and  principal  but that are not
backed by the full  faith and  credit of the U.S.  government.  The value of the
companies'  securities  fell sharply in 2008 due to concerns  that the firms did
not have sufficient capital to offset losses. In mid-2008, the U.S. Treasury was
authorized to increase the size of home loans that FNMA and FHLMC could purchase
in certain  residential  areas and, until 2009, to lend FNMA and FHLMC emergency
funds and to purchase the companies'  stock.  More recently,  in September 2008,
the  U.S.   Treasury   announced   that  FNMA  and  FHLMC  had  been  placed  in
conservatorship by the Federal Housing Finance Agency ("FHFA"),  a newly created
independent regulator.  In addition to placing the companies in conservatorship,
the U.S. Treasury announced three additional steps that it intended to take with
respect to FNMA and FHLMC.  First, the U.S.  Treasury has entered into preferred
stock purchase  agreements  ("PSPAs")  under which,  if the FHFA determines that
FNMA's or FHLMC's  liabilities have exceeded its assets under generally accepted
accounting  principles,  the U.S.  Treasury will  contribute cash capital to the
company in an amount equal to the difference between liabilities and assets. The
PSPAs are designed to provide protection to the senior and subordinated debt and
the  mortgage-backed  securities  issued  by FNMA and  FHLMC.  Second,  the U.S.
Treasury  established a new secured lending credit facility that is available to
FNMA and FHLMC  until  December  2009.  Third,  the U.S.  Treasury  initiated  a
temporary program to purchase FNMA and FHLMC mortgage-backed  securities,  which
is expected to continue  until December 2009. No assurance can be given that the
U.S.  Treasury  initiatives  discussed  above  with  respect  to  the  debt  and
mortgage-backed securities issued by FNMA and FHLMC will be successful.

Asset-Backed Securities. The Fund may invest in securities generally referred to
as asset-backed  securities.  Asset-backed securities are secured by and payable
from, or directly or indirectly  represent  undivided  fractional  interests in,
pools  of  corporate,   consumer  and/or  commercial  loans  held  in  a  trust.
Asset-backed  securities may provide periodic  payments that consist of interest
and/or principal payments.  Consequently,  the life of an asset-backed  security
can vary with the  prepayment  and loss  experience  of the  underlying  assets.
Payments of  principal  and  interest  are  typically  supported by some form of
credit enhancement,  such as a letter of credit,  surety bond, limited guarantee
or senior/subordination.  The degree of credit enhancement varies, but generally
amounts  to only a  fraction  of the  asset-backed  security's  par value  until
exhausted.  If the credit  enhancement  is  exhausted,  certificate  holders may
experience losses or delays in payment if the required payments of principal and
interest are not made to the trust with  respect to the  underlying  loans.  The
value of the  securities  also may fluctuate  because of changes in the market's
perception of  creditworthiness  of the servicing  agent for the loan pool,  the
originator  of the  loans or the  financial  institution  providing  the  credit
enhancement.  Asset-backed  securities are ultimately  dependent upon payment of
business,  government,  corporate  and consumer  loans,  leases,  etc.,  and the
certificate  holder generally has no recourse against the entity that originated
the loans.

Asset-backed    securities   have   structural    characteristics   similar   to
mortgage-backed securities.  Asset-backed securities include assets such as (but
not limited to) motor vehicle installment sale contracts, other installment sale
contracts,  home  equity  loans,  leases of various  types of real and  personal
property,  and receivables from revolving credit (credit card) agreements.  Such
assets  are   securitized   through  the  use  of  trusts  or  special   purpose
corporations.   Payments  or   distributions   of  principal   and  interest  on
asset-backed  securities  may be  guaranteed  up to  certain  amounts  and for a
certain time period by a letter of credit or a pool insurance policy issued by a
financial institution unaffiliated with the issuer, or other credit enhancements
may be present.

Asset-backed  securities present certain additional risks that are not presented
by  mortgage-backed  securities.  Primarily,  these  securities  do not have the
benefit of the same type of security interest in the related collateral.  Credit
card  receivables are generally  unsecured,  and the debtors are entitled to the
protection of a number of state and federal  consumer credit laws, many of which
give such  debtors  the right to avoid  payment of certain  amounts  owed on the
credit  cards,  thereby  reducing  the balance due.  Most issuers of  automobile
receivables   permit  the  servicer  to  retain  possession  of  the  underlying
obligations.  If the servicer were to sell these  obligations  to another party,
there is a risk that the purchaser would acquire an interest superior to that of
the holders of the related automobile receivables.  In addition,  because of the
large  number  of  vehicles   involved  in  a  typical  issuance  and  technical
requirements  under  state laws,  the trustee for the holders of the  automobile
receivables  may not have a proper  security  interest in all of the obligations
backing such receivables. Therefore, there is the possibility that recoveries on
repossessed  collateral may not, in some cases, be available to support payments
on these securities.

The market for  privately  issued  asset-backed  securities  is smaller and less
liquid  than  the  market  for US  government  mortgage-backed  securities.  The
asset-backed  securities in which the Fund may invest are limited to those which
usually are readily  marketable,  dollar-denominated  and rated BBB  category or
higher by S&P or Baa category or higher by Moody's.

The yield characteristics of the mortgage- and asset-backed  securities in which
the Fund may invest differ from those of traditional debt securities.  Among the
major  differences  are that  interest  and  principal  payments  are made  more
frequently on the mortgage- and asset-backed  securities  (usually  monthly) and
that  principal  may be  prepaid  at any  time  because  the  underlying  assets
generally may be prepaid at any time. As a result,  if the Fund purchases  these
securities  at a premium,  a prepayment  rate that is faster than  expected will
reduce their yield,  while a prepayment  rate that is slower than  expected will
have the opposite effect of increasing yield. Conversely,  if the Fund purchases
these securities at a discount,  faster-than-expected prepayments will increase,
while   slower-than-expected   prepayments  will  reduce,  the  yield  on  these
securities.  Amounts  available  for  reinvestment  by the Fund are likely to be
greater during a period of declining interest rates and, as a result, are likely
to be reinvested at lower interest rates than during a period of rising interest
rates.

Mortgage-Backed  Securities  and  Asset-Backed  Securities  -- Types  of  Credit
Support. Mortgage-backed securities and asset-backed securities are often backed
by a pool of  assets  representing  the  obligations  of a number  of  different
parties.  To lessen the effect of failure by  obligors on  underlying  assets to
make payments,  such  securities may contain  elements of credit  support.  Such
credit  support  falls into two  categories:  (1) liquidity  protection  and (2)
protection  against losses  resulting from ultimate default by an obligor on the
underlying  assets.  Liquidity  protection  refers to the provision of advances,
generally  by the entity  administering  the pool of assets,  to ensure that the
pass-through  of payments due on the underlying pool occurs in a timely fashion.
Protection   against  losses   resulting  from  ultimate  default  enhances  the
likelihood of ultimate  payment of the  obligations on at least a portion of the
assets  in the  pool.  Such  protection  may  be  provided  through  guarantees,
insurance  policies or letters of credit  obtained by the issuer or sponsor from
third parties; through various means of structuring the transaction;  or through
a combination of such approaches.  The Fund may pay any additional fees for such
credit support,  although the existence of credit support may increase the price
of a security.

The ratings of mortgage-backed  securities and asset-backed securities for which
third-party  credit  enhancement  provides  liquidity  protection  or protection
against  losses  from  default  are  generally   dependent  upon  the  continued
creditworthiness of the provider of the credit enhancement.  The ratings of such
securities  could be subject to reduction in the event of  deterioration  in the
creditworthiness  of the credit  enhancement  provider  even in cases  where the
delinquency  and loss experience on the underlying pool of assets is better than
expected.

Examples of credit  support  arising  out of the  structure  of the  transaction
include "senior-subordinated  securities" (multiple class securities with one or
more classes subordinate to other classes as to the payment of principal thereof
and interest thereon, with the result that defaults on the underlying assets are
borne  first by the  holders of the  subordinated  class),  creation of "reserve
funds"  (where  cash or  investments,  sometimes  funded  from a portion  of the
payments on the underlying  assets,  are held in reserve  against future losses)
and "over-collateralization"  (where the scheduled payments on, or the principal
amount of, the  underlying  assets exceed those  required to make payment of the
securities  and pay any servicing or other fees).  The degree of credit  support
provided  for each  issue is  generally  based on  historical  information  with
respect  to the level of credit  risk  associated  with the  underlying  assets.
Delinquency  or loss in  excess of that  which is  anticipated  could  adversely
affect the return on an investment in such a security.

Government  Guaranteed  Mortgage-Backed  Securities.  The Fund's  investments in
mortgage-backed securities may include securities issued or guaranteed by the US
government or one of its agencies,  authorities,  instrumentalities or sponsored
enterprises,  such as Ginnie Mae,  Fannie Mae and Freddie Mac. There are several
types of guaranteed  mortgage-backed  securities currently available,  including
guaranteed  mortgage  pass-through  certificates and multiple class  securities,
which include guaranteed Real Estate Mortgage  Investment  Conduit  Certificates
("REMIC   Certificates"),   collateralized  mortgage  obligations  and  stripped
mortgage-backed  securities.  The Fund is  permitted to invest in other types of
mortgage-backed  securities  that may be  available  in the future to the extent
consistent with its investment policies and objective.

Ginnie Mae Certificates.  Ginnie Mae is a wholly owned corporate instrumentality
of the United States within the Department of Housing and Urban Development. The
National Housing Act of 1934, as amended (the "Housing Act"),  authorizes Ginnie
Mae to  guarantee  the  timely  payment  of the  principal  of and  interest  on
certificates that are based on and backed by a pool of mortgage loans insured by
the Federal  Housing  Administration  under the  Housing  Act, or Title V of the
Housing Act of 1949 ("FHA  Loans"),  or guaranteed by the Department of Veterans
Affairs  under  the  Servicemen's  Readjustment  Act of 1944,  as  amended  ("VA
Loans"),  or by pools of other eligible mortgage loans. The Housing Act provides
that the full faith and credit of the US government is pledged to the payment of
all amounts  that may be required to be paid under any Ginnie Mae  guaranty.  In
order to meet its obligations  under such guaranty,  Ginnie Mae is authorized to
borrow from the US Treasury with no limitations as to amount.

The Ginnie Mae  Certificates in which the Fund invests will represent a pro rata
interest  in one or more pools of the  following  types of mortgage  loans:  (1)
fixed-rate  level payment  mortgage  loans;  (2)  fixed-rate  graduated  payment
mortgage loans;  (3) fixed-rate  growing equity  mortgage loans;  (4) fixed-rate
mortgage loans secured by  manufactured  (mobile)  homes;  (5) mortgage loans on
multifamily  residential  properties under  construction;  (6) mortgage loans on
completed  multifamily  projects;  (7)  fixed-rate  mortgage  loans  as to which
escrowed funds are used to reduce the  borrower's  monthly  payments  during the
early years of the  mortgage  loans ("buy down"  mortgage  loans);  (8) mortgage
loans that  provide for  adjustments  in payments  based on periodic  changes in
interest  rates  or in  other  payment  terms  of the  mortgage  loans;  and (9)
mortgage-backed serial notes.

Fannie  Mae  Certificates.  Fannie  Mae  is a  federally  chartered  corporation
(currently in conservatorship (see additional  information above) organized and
existing under the Federal National  Mortgage  Association  Charter Act of 1938.
The obligations of Fannie Mae are  obligations  solely of Fannie Mae and are not
backed by the full faith and credit of the US government.

Each Fannie Mae  Certificate  will  represent a pro rata interest in one or more
pools of FHA Loans,  VA Loans or  conventional  mortgage  loans (i.e.,  mortgage
loans that are not  insured or  guaranteed  by any  governmental  agency) of the
following  types:  (1) fixed-rate  level payment  mortgage loans; (2) fixed-rate
growing equity mortgage loans; (3) fixed-rate  graduated payment mortgage loans;
(4) variable rate mortgage loans;  (5) other adjustable rate mortgage loans; and
(6) fixed-rate and adjustable mortgage loans secured by multifamily projects.

Freddie  Mac  Certificates.  Freddie Mac is a  federally  chartered  corporation
(currently in conservatorship (see additional  information above)) of the United
States  created  pursuant to the Emergency  Home Finance Act of 1970, as amended
(the "FHLMC Act").  The  obligations  of Freddie Mac are  obligations  solely of
Freddie  Mac  and  are  not  backed  by the  full  faith  and  credit  of the US
government.

Freddie Mac  Certificates  represent a pro rata  interest in a group of mortgage
loans (a "Freddie Mac Certificate group") purchased by Freddie Mac. The mortgage
loans  underlying  the Freddie Mac  Certificates  will consist of  fixed-rate or
adjustable  rate mortgage  loans with original  terms to maturity of between ten
and thirty years,  substantially all of which are secured by first liens on one-
to four-family  residential  properties or multifamily  projects.  Each mortgage
loan must meet the  applicable  standards  set forth in the FHLMC Act. A Freddie
Mac Certificate group may include whole loans,  participating interests in whole
loans and  undivided  interests  in whole  loans and  participations  comprising
another Freddie Mac Certificate group.

Multiple Class Mortgage-Backed Securities. The Fund may invest in multiple class
mortgage-backed   securities  including   collateralized   mortgage  obligations
("CMOs") and REMIC Certificates. These securities may be issued by US government
agencies  and  instrumentalities  such as Fannie Mae or Freddie Mac or by trusts
formed by private  originators of, or investors in,  mortgage  loans,  including
savings and loan  associations,  mortgage bankers,  commercial banks,  insurance
companies,  investment banks and special purpose  subsidiaries of the foregoing.
In general,  CMOs are debt obligations of a legal entity that are collateralized
by a pool of mortgage loans or mortgage-backed  securities the payments on which
are  used  to  make  payments  on the  CMOs or  multiple  class  mortgage-backed
securities.  REMIC Certificates  represent  beneficial  ownership interests in a
REMIC trust,  generally  consisting of mortgage loans or Fannie Mae, Freddie Mac
or Ginnie Mae guaranteed mortgage-backed securities (the "Mortgage Assets"). The
obligations of Fannie Mae or Freddie Mac under their respective  guaranty of the
REMIC  Certificates  are  obligations  solely  of  Fannie  Mae or  Freddie  Mac,
respectively.  Although investors may purchase  beneficial  interests in REMICs,
which are known as "regular"  interests or "residual"  interests,  the Fund does
not intend to purchase such residual interests in REMICs.

Fannie  Mae  REMIC   Certificates   are  issued  and  guaranteed  as  to  timely
distribution  of principal and interest by Fannie Mae.  These  certificates  are
obligations solely of Fannie Mae and are not backed by the full faith and credit
of the US  government.  In addition,  Fannie Mae will be obligated to distribute
the principal  balance of each class of REMIC  Certificates in full,  whether or
not sufficient funds are otherwise available.

Freddie  Mac  guarantees  the timely  payment of  interest  on Freddie Mac REMIC
Certificates  and also  guarantees  the payment of  principal  as  payments  are
required  to be  made  on the  underlying  mortgage  participation  certificates
("PCs").  These  certificates are obligations  solely of Freddie Mac and are not
backed  by the  full  faith  and  credit  of the US  government.  PCs  represent
undivided  interests  in  specified  level  payment  residential   mortgages  or
participations  therein  purchased by Freddie Mac and placed in a PC pool.  With
respect to principal payments on PCs, Freddie Mac generally  guarantees ultimate
collection of all  principal of the related  mortgage  loans  without  offset or
deduction.  Freddie Mac also  guarantees  timely payment of principal of certain
PCs.

CMOs and REMIC  Certificates are issued in multiple classes.  Each class of CMOs
or REMIC Certificates, often referred to as a "tranche," is issued at a specific
adjustable  or fixed  interest  rate and must be fully retired no later than its
final distribution date. Principal  prepayments on the underlying mortgage loans
or the Mortgage Assets underlying the CMOs or REMIC  Certificates may cause some
or all of the classes of CMOs or REMIC Certificates to be retired  substantially
earlier  than their final  distribution  dates.  Generally,  interest is paid or
accrues on all classes of CMOs or REMIC Certificates on a monthly basis.

The principal of and interest on the Mortgage  Assets may be allocated among the
several  tranches in various ways. In certain  structures  (known as "sequential
pay" CMOs or REMIC Certificates), payments of principal, including any principal
prepayments, on the Mortgage Assets generally are applied to the classes of CMOs
or REMIC Certificates in the order of their respective final distribution dates.
Thus, no payment of principal  will be made on any class of sequential  pay CMOs
or  REMIC   Certificates  until  all  other  classes  having  an  earlier  final
distribution  date  have been paid in full.  Additional  structures  of CMOs and
REMIC  Certificates  include,  among  others,  "parallel  pay"  CMOs  and  REMIC
Certificates.  Parallel  pay CMOs or REMIC  Certificates  are  those  which  are
structured to apply principal payments and prepayments of the Mortgage Assets to
two or more classes  concurrently on a proportionate or disproportionate  basis.
These  simultaneous  payments  are taken into account in  calculating  the final
distribution date of each class.

A wide variety of REMIC Certificates may be issued in parallel pay or sequential
pay structures.  These securities  include accrual  certificates  (also known as
"Z-Bonds"),  which only  accrue  interest  at a  specified  rate until all other
certificates having an earlier final distribution date have been retired and are
converted  thereafter to an interest-paying  security,  and planned amortization
class  ("PAC")  certificates,  which are  parallel pay REMIC  Certificates  that
generally require that specified amounts of principal be applied on each payment
date to one or more classes or REMIC Certificates (the "PAC Certificates"), even
though all other  principal  payments and prepayments of the Mortgage Assets are
then  required  to  be  applied  to  one  or  more  other  classes  of  the  PAC
Certificates.   The  scheduled  principal  payments  for  the  PAC  Certificates
generally have the highest  priority on each payment date after interest due has
been paid to all classes entitled to receive interest currently.  Shortfalls, if
any,  are  added  to the  amount  payable  on the  next  payment  date.  The PAC
Certificate  payment  schedule is taken into  account in  calculating  the final
distribution date of each class of PAC. In order to create PAC tranches,  one or
more tranches  generally  must be created that absorb most of the  volatility in
the underlying  Mortgage  Assets.  These tranches tend to have market prices and
yields that are much more volatile than other PAC classes.

Stripped Mortgage-Backed Securities. The Fund may purchase stripped
mortgage-backed securities ("SMBS"), which are derivative multiclass mortgage
securities. Although the market for such securities is increasingly liquid,
certain SMBS may not be readily marketable and will be considered illiquid for
purposes of the Fund's limitation on investments in illiquid securities. The
market value of the class consisting entirely of principal payments generally is
highly volatile in response to changes in interest rates. The yields on a class
of SMBS that receives all or most of the interest from the Mortgage Assets are
generally higher than prevailing market yields on other mortgage-backed
securities because their cash flow patterns are more volatile and there is a
greater risk that the initial investment will not be fully recouped.

Adjustable Rate  Mortgages-Interest  Rate Indices.  Adjustable rate mortgages in
which the Fund  invests may be adjusted on the basis of one of several  indices.
The One Year Treasury Index is the figure derived from the average weekly quoted
yield on US Treasury Securities adjusted to a constant maturity of one year. The
Cost of Funds Index  reflects  the  monthly  weighted  average  cost of funds of
savings and loan  associations  and savings banks whose home offices are located
in Arizona, California and Nevada (the "FHLB Eleventh District") that are member
institutions  of the Federal Home Loan Bank of San  Francisco  (the "FHLB of San
Francisco"),  as computed from statistics tabulated and published by the FHLB of
San Francisco.  The FHLB of San Francisco  normally  announces the Cost of Funds
Index on the last working day of the month following the month in which the cost
of funds was incurred.

A number of factors  affect the  performance  of the Cost of Funds Index and may
cause the Cost of Funds Index to move in a manner  different  from indices based
upon specific  interest rates,  such as the One Year Treasury Index.  Because of
the various  origination  dates and maturities of the  liabilities of members of
the FHLB Eleventh  District  upon which the Cost of Funds Index is based,  among
other  things,  the Cost of Funds  Index may not  reflect  at any given time the
average   prevailing  market  interest  rates  on  new  liabilities  of  similar
maturities.  There  can be no  assurance  that  the  Cost of  Funds  Index  will
necessarily  move in the  same  direction  or at the  same  rate  as  prevailing
interest  rates  since as longer  term  deposits  or  borrowings  mature and are
renewed  at market  interest  rates,  the Cost of Funds  Index will rise or fall
depending  upon the  differential  between  the  prior and the new rates on such
deposits and  borrowings.  In addition,  dislocations  in the thrift industry in
recent  years have caused and may  continue to cause the cost of funds of thrift
institutions to change for reasons unrelated to changes in general interest rate
levels.  Furthermore,  any  movement  in the Cost of Funds  Index as compared to
other  indices  based upon  specific  interest  rates may be affected by changes
instituted by the FHLB of San Francisco in the method used to calculate the Cost
of Funds Index. To the extent that the Cost of Funds Index may reflect  interest
changes  on a more  delayed  basis  than  other  indices,  in a period of rising
interest  rates,  any  increase  may produce a higher  yield later than would be
produced by such other indices, and in a period of declining interest rates, the
Cost of Funds Index may remain higher than other market  interest  rates,  which
may result in a higher level of principal  prepayments  on mortgage  loans which
adjust in  accordance  with the Cost of Funds  Index than  mortgage  loans which
adjust in accordance with other indices.

LIBOR,  the London  interbank  offered  rate, is the interest rate that the most
creditworthy  international banks dealing in US dollar-denominated  deposits and
loans  charge  each  other for  large  dollar-denominated  loans.  LIBOR is also
usually the base rate for large  dollar-denominated  loans in the  international
market.  LIBOR is  generally  quoted for loans having rate  adjustments  at one,
three, six or twelve month intervals.

Zero Coupon  Securities and Deferred Interest Bonds. The Fund may invest in zero
coupon  securities  that are  "stripped"  US  Treasury  notes  and  bonds and in
deferred  interest  bonds.  Zero coupon  securities  are the separate  income or
principal  components of a debt  instrument.  Zero coupon and deferred  interest
bonds are debt obligations which are issued at a significant  discount from face
value. The original discount approximates the total amount of interest the bonds
will accrue and compound  over the period until  maturity or the first  interest
accrual date at a rate of interest reflecting the market rate of the security at
the time of issuance. Zero coupon securities are redeemed at face value at their
maturity date without interim cash payments of interest or principal. The amount
of this  discount  is accrued  over the life of the  security,  and the  accrual
constitutes  the  income  earned on the  security  for both  accounting  and tax
purposes. Because of these features, the market prices of zero coupon securities
are generally  more  volatile  than the market  prices of  securities  that have
similar maturity but that pay interest periodically.

While zero  coupon  bonds do not  require  the  periodic  payment  of  interest,
deferred  interest  bonds  generally  provide  for a period of delay  before the
regular payment of interest  begins.  Although this period of delay is different
for each deferred interest bond, a typical period is approximately  one-third of
the bond's term to maturity.  Such investments  benefit the issuer by mitigating
its initial need for cash to meet debt  service,  but some also provide a higher
rate of return to attract  investors  who are  willing to defer  receipt of such
cash.

The Fund will accrue income on such investments for tax and accounting purposes,
as required,  which is distributable to shareholders and which,  because no cash
is generally  received at the time of accrual,  may require the  liquidation  of
other portfolio securities to satisfy the Fund's distribution  obligations.  See
"Taxes."

Illiquid Securities.  Historically, illiquid securities have included securities
subject to  contractual  or legal  restrictions  on resale because they have not
been  registered  under the Securities Act of 1933, as amended (the "1933 Act"),
securities which are otherwise not readily marketable and repurchase  agreements
having a maturity  of longer  than seven  days.  Securities  which have not been
registered  under  the  1933  Act  are  referred  to as  private  placements  or
restricted  securities  and are  purchased  directly  from the  issuer or in the
secondary  market.   Non-publicly   traded   securities   (including  Rule  144A
Securities)  may involve a high degree of business  and  financial  risk and may
result in substantial losses.  These securities may be less liquid than publicly
traded  securities,  and it may take longer to liquidate  these  positions  than
would be the case for publicly traded securities. Companies whose securities are
not  publicly  traded may not be subject to the  disclosure  and other  investor
protection  requirements  applicable to companies whose  securities are publicly
traded. Limitations on resale may have an adverse effect on the marketability of
portfolio  securities and a mutual fund might be unable to dispose of restricted
or other illiquid  securities promptly or at reasonable prices and might thereby
experience difficulty satisfying redemptions within seven days. An investment in
illiquid  securities  is subject to the risk that should the Fund desire to sell
any of these  securities  when a ready buyer is not available at a price that is
deemed to be  representative  of their value, the value of the Fund's net assets
could be adversely affected.

Mutual funds do not typically hold a significant  amount of these  restricted or
other  illiquid  securities  because of the  potential  for delays on resale and
uncertainty  in  valuation.  A mutual  fund  might  also have to  register  such
restricted  securities  in order to dispose  of them,  resulting  in  additional
expense and delay. Adverse market conditions could impede such a public offering
of securities.

A large  institutional  market has developed for certain securities that are not
registered  under  the  1933  Act,  including  but  not  limited  to  repurchase
agreements,  commercial  paper,  non-US  securities,  municipal  securities  and
corporate  bonds and  notes.  Institutional  investors  depend  on an  efficient
institutional market in which the unregistered security can be readily resold or
on an issuer's ability to honor a demand for repayment.  The fact that there are
contractual or legal  restrictions on resale of such  investments to the general
public or to certain institutions may not be indicative of their liquidity.

The SEC has adopted Rule 144A, which allows a broader institutional trading
market for securities otherwise subject to restriction on their resale to the
general public. Rule 144A establishes a "safe harbor" from the registration
requirements of the 1933 Act for resales of certain securities to qualified
institutional buyers. The Advisor anticipates that the market for certain
restricted securities such as institutional commercial paper will expand further
as a result of this regulation and the development of automated systems for the
trading, clearance and settlement of unregistered securities of domestic and
non-US issuers, such as the PORTAL System sponsored by Financial Industry
Regulatory Authority ("FINRA").

An investment in Rule 144A Securities will be considered  illiquid and therefore
subject to the Fund's  limit on the purchase of illiquid  securities  unless the
Board or its delegates  determines that the Rule 144A Securities are liquid.  In
reaching liquidity  decisions,  the Board and its delegates may consider,  inter
alia, the following factors:  (i) the unregistered nature of the security;  (ii)
the frequency of trades and quotes for the security; (iii) the number of dealers
wishing to  purchase  or sell the  security  and the  number of other  potential
purchasers;  (iv) dealer undertakings to make a market in the security;  and (v)
the nature of the security and the nature of the marketplace  trades (e.g.,  the
time needed to dispose of the security,  the method of soliciting offers and the
mechanics of the transfer).

Investing in Rule 144A Securities  could have the effect of increasing the level
of illiquidity in the Fund to the extent that qualified institutional buyers are
unavailable or  uninterested  in purchasing  such  securities from the Fund. The
Board has adopted  guidelines and delegated to the Advisor the daily function of
determining and monitoring the liquidity of Rule 144A  Securities,  although the
Board will retain ultimate responsibility for any liquidity determinations.

TBA  Purchase  Commitments.  The Fund may enter into "To Be  Announced"  ("TBA")
purchase  commitments to purchase securities for a fixed price at a future date,
typically not exceeding  75-90 days. TBA purchase  commitments may be considered
securities  in  themselves,  and  involve  a risk of loss  if the  value  of the
security to be purchased  declines  prior to settlement  date,  which risk is in
addition  to the risk of  decline  in the  value  of the  Fund's  other  assets.
Unsettled TBA purchase commitments are valued at the current market value of the
underlying securities.  To facilitate such acquisitions,  the Fund identifies on
its book cash or liquid assets in an amount at least equal to such  commitments.
It may be expected that the Fund's net assets will fluctuate to a greater degree
when it sets aside portfolio  securities to cover such purchase commitments than
when it sets aside cash. On delivery dates for such transactions,  the Fund will
meet its  obligations  from  maturities  or sales of the  segregated  securities
and/or from cash flow. If the Fund chooses to dispose of the TBA security  prior
to its  settlement,  it could,  as with the  disposition of any other  portfolio
obligation, incur a gain or loss due to market fluctuation.

When-Issued and Delayed Delivery Securities. The Fund may purchase securities on
a  when-issued  or delayed  delivery  basis.  Delivery  of and payment for these
securities  can  take  place a month  or more  after  the  date of the  purchase
commitment.  The payment  obligation and the interest rate that will be received
on when-issued and delayed  delivery  securities are fixed at the time the buyer
enters  into the  commitment.  Due to  fluctuations  in the value of  securities
purchased  or sold on a  when-issued  or  delayed  delivery  basis,  the  yields
obtained on such securities may be higher or lower than the yields  available in
the market on the dates  when the  investments  are  actually  delivered  to the
buyers.  When-issued  securities may include securities purchased on a "when, as
and if issued"  basis,  under which the issuance of the security  depends on the
occurrence  of a  subsequent  event,  such as  approval  of a merger,  corporate
reorganization or debt restructuring. The value of such securities is subject to
market  fluctuation during this period and no interest or income, as applicable,
accrues to the Fund until settlement takes place.

At  the  time  the  Fund  makes  the  commitment  to  purchase  securities  on a
when-issued or delayed delivery basis, it will record the  transaction,  reflect
the value each day of such securities in determining its net asset value and, if
applicable,  calculate  the maturity for the purposes of average  maturity  from
that date.  At the time of  settlement a  when-issued  security may be valued at
less  than  the  purchase  price.  To  facilitate  such  acquisitions,  the Fund
identifies  on its books  cash or liquid  assets in an amount at least  equal to
such  commitments.  It may be expected that the Fund's net assets will fluctuate
to a greater  degree  when it sets  aside  portfolio  securities  to cover  such
purchase  commitments  than when it sets aside cash. On delivery  dates for such
transactions, the Fund will meet its obligations from maturities or sales of the
segregated  securities  and/or from cash flow. If the Fund chooses to dispose of
the right to acquire a when-issued security prior to its acquisition,  it could,
as with the disposition of any other portfolio obligation,  incur a gain or loss
due to market  fluctuation.  It is the  current  policy of the Fund not to enter
into when-issued  commitments exceeding in the aggregate 15% of the market value
of the Fund's total assets,  less liabilities other than the obligations created
by   when-issued   commitments.   When  the  Fund  engages  in   when-issued  or
delayed-delivery  transactions,  it relies on the other party to consummate  the
trade.  Failure of the seller to do so may result in the Fund's incurring a loss
or missing an opportunity to obtain a price considered advantageous.

Additional US Government Obligations.  The Fund may invest in obligations issued
or  guaranteed  by US government  agencies or  instrumentalities.  US government
securities  are  high-quality  debt  securities  issued or  guaranteed by the US
Treasury  or by an  agency  or  instrumentality  of  the  US  government.  These
obligations  may or may not be  backed by the "full  faith  and  credit"  of the
United States. In the case of securities not backed by the full faith and credit
of the United  States,  the Fund must look  principally to the federal agency or
instrumentality  issuing or guaranteeing  the obligation for ultimate  repayment
and may not be able to assert a claim  against the United  States  itself in the
event the agency or instrumentality does not meet its commitments. Securities in
which the Fund may  invest  that are not  backed by the full faith and credit of
the United States include  obligations of the Tennessee Valley Authority and the
US Postal Service, each of which has the right to borrow from the US Treasury to
meet its obligations,  and obligations of the Federal Farm Credit System and the
Federal Home Loan Banks,  both of whose obligations may be satisfied only by the
individual credit of the issuing agency.  Securities that are backed by the full
faith and credit of the United States  include  obligations of GNMA, the Farmers
Home Administration and the Export-Import Bank.

Lower-Rated  Debt  Securities  ("Junk  Bonds").  The  Fund  may  invest  in debt
securities  rated in the fifth and sixth  long-term  rating  categories  by S&P,
Moody's and Fitch Inc.  ("Fitch"),  or comparably  rated by another NRSRO, or if
not rated by a NRSRO, of comparable  quality as determined by the Advisor in its
sole discretion.

These  securities,  often  referred  to as  "junk  bonds"  or "high  yield  debt
securities," are considered  speculative  and, while generally  offering greater
income than  investments in higher quality  securities,  involve greater risk of
loss of principal and income, including the possibility of default or bankruptcy
of the issuers of such securities, and have greater price volatility, especially
during periods of economic uncertainty or change. These lower quality bonds tend
to be  affected  by  economic  changes and  short-term  corporate  and  industry
developments, as well as public perception of those changes and developments, to
a greater  extent than higher  quality  securities,  which  react  primarily  to
fluctuations in the general level of interest rates.

In addition,  the market for lower-rated debt securities may be thinner and less
active than that for higher-rated  debt  securities,  which can adversely affect
the prices at which the former are sold. If market quotations are not available,
lower-rated  debt  securities  will be  valued  in  accordance  with  procedures
established  by the Board of Trustees of the Fund,  including the use of outside
pricing services.  Judgment plays a greater role in valuing high yield corporate
debt securities than is the case for securities for which more external  sources
for quotations and last sale  information  is available.  Adverse  publicity and
changing investor perception may also affect the availability of outside pricing
services to value  lower-rated debt securities and the Fund's ability to dispose
of these  securities.  In addition,  such securities  generally present a higher
degree of credit risk.  Issuers of lower-rated  debt securities are often highly
leveraged and may not have more  traditional  methods of financing  available to
them so that their  ability  to service  their  obligations  during an  economic
downturn or during  sustained  periods of rising interest rates may be impaired.
The risk of loss due to default by such issuers is significantly greater because
below  investment  grade  securities  generally are unsecured and frequently are
subordinated to the prior payment of senior indebtedness.

Since the risk of  default  is  higher  for  lower-rated  debt  securities,  the
Advisor's  research and credit  analysis  are an  especially  important  part of
managing  securities of this type held by the Fund. In  considering  investments
for the Fund,  the Advisor will attempt to identify  those issuers of high yield
debt  securities  whose  financial   conditions  are  adequate  to  meet  future
obligations,  have  improved  or are  expected  to  improve in the  future.  The
Advisor's  analysis focuses on relative values based on such factors as interest
on dividend coverage, asset coverage,  earnings prospects and the experience and
managerial strength of the issuer.

While the market for high yield  corporate debt securities has been in existence
for many years and has weathered  previous economic  downturns,  past experience
may not provide an accurate  indication of future  performance of the high yield
bond market, especially during periods of economic recession.

The Fund may choose,  at its expense or in  conjunction  with others,  to pursue
litigation  or  otherwise  exercise  its rights as a security  holder to seek to
protect  the  interest of security  holders if it  determines  this to be in the
interest of the Fund.

The Fund may invest in an affiliated mutual fund to gain exposure to lower rated
debt securities. The affiliated fund is permitted to invest in securities of
lower credit ratings than the Fund could invest in if it makes direct purchases
of high yield debt securities.

Inverse Floaters. The Fund may invest in inverse floaters.  Inverse floaters are
debt  instruments  with a  floating  rate of  interest  that  bears  an  inverse
relationship to changes in short-term market interest rates. Investments in this
type of  security  involve  special  risks as compared  to  investments  in, for
example, a fixed rate municipal security.  The Fund could lose money and its NAV
could  decline if  movements  in  interest  rates are  incorrectly  anticipated.
Moreover,  the markets for securities of this type may be less developed and may
have less liquidity than the markets for more traditional municipal securities.

Securities of Foreign Issuers

Investment in Emerging Markets. The Fund may invest to varying degrees in one or
more countries with emerging securities  markets.  These countries are generally
located in Latin America,  Europe,  the Middle East, Africa and Asia.  Political
and economic structures in many of these countries may be undergoing significant
evolution  and rapid  development,  and  these  countries  may lack the  social,
political and economic  stability  characteristic  of more developed  countries.
Certain of these  countries  may have in the past  failed to  recognize  private
property rights and, at times, may have nationalized, or expropriated the assets
of  private  companies.  As  a  result,  these  risks,  including  the  risk  of
nationalization  or  expropriation  of assets,  may be heightened.  In addition,
unanticipated  political  or social  developments  may  affect  the value of the
Fund's investments in these countries, as well as the availability of additional
investments  in  these  countries.  The  small  size  and  inexperience  of  the
securities  markets in  certain of these  countries  and the  limited  volume of
trading in securities  in these  countries  may make the Fund's  investments  in
these  countries  illiquid and more  volatile than  investments  in most Western
European countries,  and the Fund may be required to establish special custodial
or  other  arrangements  before  making  certain  investments  in some of  these
countries.  There may be little  financial or accounting  information  available
with  respect to issuers  located  in  certain  of these  countries,  and may be
difficult as a result to assess the value or prospects of an investment in those
countries.  The laws of some foreign  countries may limit the Fund's  ability to
invest in securities of certain issuers located in those countries.

Derivatives

General.  The Fund may invest in various  instruments that are commonly known as
"derivatives." Generally, a derivative is a financial arrangement,  the value of
which is based on, or "derived"  from, a traditional  security,  asset or market
index.  There  are,  in  fact,  many  different  types of  derivatives  and many
different  ways to use them.  There are a range of risks  associated  with those
uses. For example,  the Fund may use futures and options as a low-cost method of
gaining exposure to a particular securities market without investing directly in
those securities and for traditional  hedging purposes to attempt to protect the
Fund from exposure to changing  interest  rates,  securities  prices or currency
exchange rates and for cash management or other  investment  purposes.  The Fund
may use derivatives for non-hedging purpose,  such as to enhance return. The use
of derivatives may result in leverage,  which tends to magnify the effects of an
instrument's  price changes as market conditions  change.  Leverage involves the
use of a small amount of money to control a large  amount of  financial  assets,
and can in some  circumstances  lead to significant  losses. The Advisor may use
derivatives in circumstances where the Advisor believes they offer an economical
means of gaining  exposure to a particular  asset class.  The use of derivatives
for non-hedging purposes may be considered speculative.

The Fund's  investments  in  options,  futures,  forward  contracts  and similar
strategies  depend  on the  Advisor's  judgment  as to the  potential  risks and
rewards of different  types of  strategies.  Options and futures can be volatile
investments,  and may not perform as expected. If the Advisor applies a hedge at
an inappropriate  time or judges price trends  incorrectly,  options and futures
strategies may lower the Fund's return. The Fund could also experience losses if
the prices of its options and futures  positions were poorly correlated with its
other  investments,  or if it could not close out its  positions  because  of an
illiquid  secondary  market.  Options  and futures  traded on foreign  exchanges
generally are not regulated by US authorities,  and may offer less liquidity and
less  protection  to the Fund in the event of default by the other  party to the
contract.



Options  on  Securities.  The Fund may  purchase  and write  (sell) put and call
options on securities. A call option gives the purchaser of the option the right
to buy,  and  obligates  the  writer to sell,  the  underlying  security  at the
exercise  price at any time during the option  period.  Similarly,  a put option
gives the purchaser of the option the right to sell, and obligates the writer to
buy, the underlying security at the exercise price at any time during the option
period.

The Fund may write (sell)  covered  call and put options to a limited  extent on
its portfolio  securities  ("covered  options") in an attempt to increase income
through the premiums it receives for writing the option(s).  However,  in return
for the premium,  the Fund may forgo the benefits of  appreciation on securities
sold or may pay more than the market price on  securities  acquired  pursuant to
call and put options written by the Fund.

A call option  written by the Fund is "covered" if the Fund owns the  underlying
security  covered by the call or has an absolute and immediate  right to acquire
that security  without  additional  cash  consideration  (or for additional cash
consideration  held in a segregated account by its custodian) upon conversion or
exchange  of other  securities  held in its  portfolio.  A call  option  is also
covered if the Fund  holds a call  option on the same  security  and in the same
principal amount as the written call option where the exercise price of the call
option so held (a) is equal to or less than the  exercise  price of the  written
call option or (b) is greater than the exercise price of the written call option
if the difference is segregated by the Fund in cash or liquid securities.

When the Fund writes a covered call option, it gives the purchaser of the option
the right to buy the  underlying  security at the price  specified in the option
(the  "exercise  price") by exercising  the option at any time during the option
period.  If the option expires  unexercised,  the Fund will realize income in an
amount equal to the premium  received  for writing the option.  If the option is
exercised,  a decision over which a Fund has no control,  the Fund must sell the
underlying  security to the option  holder at the exercise  price.  By writing a
covered  call  option,  the Fund  forgoes,  in exchange for the premium less the
commission ("net  premium"),  the opportunity to profit during the option period
from an  increase  in the  market  value of the  underlying  security  above the
exercise  price.  In addition,  the Fund may  continue to hold a security  which
might  otherwise have been sold to protect  against  depreciation  in the market
price of the security.

A put option written by the Fund is "covered" when, among other things,  cash or
liquid securities acceptable to the broker are placed in a segregated account to
fulfill the obligations  undertaken.  When the Fund writes a covered put option,
it gives the purchaser of the option the right to sell the  underlying  security
to the  Fund at the  specified  exercise  price at any time  during  the  option
period. If the option expires  unexercised,  the Fund will realize income in the
amount of the net premium received for writing the option.  If the put option is
exercised, a decision over which the Fund has no control, the Fund must purchase
the underlying security from the option holder at the exercise price. By writing
a covered  put option,  the Fund,  in  exchange  for the net  premium  received,
accepts  the risk of a decline in the market  value of the  underlying  security
below  the  exercise  price.  The Fund will only  write  put  options  involving
securities for which a  determination  is made at the time the option is written
that the Fund wishes to acquire the securities at the exercise price.

The Fund may terminate  its  obligation as the writer of a call or put option by
purchasing an option with the same  exercise  price and  expiration  date as the
option  previously  written.  This  transaction  is called a  "closing  purchase
transaction."  The Fund will  realize  a profit  or loss on a  closing  purchase
transaction  if the amount paid to  purchase  an option is less or more,  as the
case may be,  than the amount  received  from the sale  thereof.  To close out a
position as a purchaser  of an option,  the Fund may enter into a "closing  sale
transaction,"  which  involves  liquidating  the Fund's  position by selling the
option  previously  purchased.  When the Fund cannot  effect a closing  purchase
transaction,  it may be forced to incur brokerage  commissions or dealer spreads
in  selling  securities  it  receives  or it may be  forced  to hold  underlying
securities until an option is exercised or expires.

When the Fund writes an option,  an amount equal to the net premium  received by
the Fund is included in the liability  section of the Fund's Statement of Assets
and Liabilities as a deferred credit.  The amount of the deferred credit will be
subsequently  marked to market to reflect the current market value of the option
written.  The current market value of a traded option is the last sale price or,
in the absence of a sale,  the mean between the closing bid and asked price.  If
an option expires on its stipulated expiration date or if the Fund enters into a
closing purchase transaction,  the Fund will realize a gain (or loss if the cost
of a closing purchase  transaction  exceeds the premium received when the option
was sold), and the deferred credit related to such option will be eliminated. If
a call option is  exercised,  the Fund will realize a gain or loss from the sale
of the  underlying  security,  and the proceeds of the sale will be increased by
the premium  originally  received.  The writing of covered  call  options may be
deemed to involve the pledge of the securities against which the option is being
written. Securities against which call options are written will be identified on
the Fund's books.

The Fund may also purchase call and put options on any securities in which it
may invest. The Fund would normally purchase a call option in anticipation of an
increase in the market value of such securities. The purchase of a call option
would entitle the Fund, in exchange for the premium paid, to purchase a security
at a specified price during the option period. The Fund would ordinarily have a
gain if the value of the securities increased above the exercise price
sufficiently to cover the premium and would have a loss if the value of the
securities remained at or below the exercise price during the option period.

The Fund would normally purchase put options in anticipation of a decline in the
market value of securities in its portfolio ("protective puts") or securities of
the type in which it is permitted to invest.  The purchase of a put option would
entitle the Fund, in exchange for the premium  paid,  to sell a security,  which
may or may not be held  by the  Fund at a  specified  price  during  the  option
period.  The purchase of protective  puts is designed  merely to offset or hedge
against a decline  in the  market  value of the Fund.  Put  options  also may be
purchased by the Fund for the purpose of affirmatively benefiting from a decline
in the price of securities that the Fund does not own. The Fund would ordinarily
recognize a gain if the value of the  securities  decreased  below the  exercise
price  sufficiently to cover the premium and would recognize a loss if the value
of the securities  remained at or above the exercise price.  Gains and losses on
the purchase of protective put options would tend to be offset by countervailing
changes in the value of underlying portfolio securities.

The hours of trading for options on securities  and  securities  indices may not
conform to the hours during which the underlying  securities are traded.  To the
extent that the option  markets  close  before the  markets  for the  underlying
securities,  significant  price  and  rate  movements  can  take  place  in  the
underlying securities markets that cannot be reflected in the option markets. It
is  impossible  to predict the volume of trading that may exist in such options,
and there can be no  assurance  that viable  exchange  markets  will  develop or
continue.

The Fund may also engage in options transactions in the over-the-counter ("OTC")
market with  broker-dealers  who make markets in these  options.  The ability to
terminate OTC option positions is more limited than with exchange-traded  option
positions  because the  predominant  market is the issuing broker rather than an
exchange,  and may involve the risk that  broker-dealers  participating  in such
transactions will not fulfill their  obligations.  To reduce this risk, the Fund
will  purchase  such  options  only  from  broker-dealers  who  are  primary  US
government securities dealers recognized by the Federal Reserve Bank of New York
and who agree to (and are  expected  to be capable  of)  entering  into  closing
transactions,  although  there can be no guarantee  that any such option will be
liquidated at a favorable  price prior to  expiration.  The Advisor will monitor
the  creditworthiness  of dealers  with whom the Fund enters  into such  options
transactions  under the general  supervision  of the Fund's  Board of  Trustees.
Unless the Trustees  conclude  otherwise,  the Fund intends to treat OTC options
purchased  and the assets  used to "cover"  OTC  options  written as not readily
marketable  and,  therefore,  subject  to the  Fund's  limit on  investments  in
illiquid securities.

Options  on   Securities   Indices.   The  Fund  may  also  purchase  and  write
exchange-listed and OTC put and call options on securities indices. A securities
index  measures  the  movement of a certain  group of  securities  by  assigning
relative  values to the securities  included in the index,  which will fluctuate
with changes in the market values of the securities  included in the index. Some
securities  index  options are based on a broad market  index,  such as the NYSE
Composite  Index, or a narrower market index,  such as the S&P 100.  Indices may
also be based on a particular industry or market segment.

Options on securities  indices are similar to options on securities  except that
(1) the expiration  cycles of securities index options are monthly,  while those
of securities options are currently quarterly, and (2) the delivery requirements
are different.  Instead of giving the right to take or make delivery of stock at
a specified price, an option on a securities index gives the holder the right to
receive a cash "exercise  settlement amount" equal to (a) the amount, if any, by
which the fixed  exercise  price of the option exceeds (in the case of a put) or
is less than (in the case of a call) the closing value of the  underlying  index
on the date of exercise,  multiplied by (b) a fixed "index multiplier."  Receipt
of this cash amount will depend upon the closing level of the  securities  index
upon which the option is based being  greater  than,  in the case of a call,  or
less  than,  in the  case of a put,  the  exercise  price of the  index  and the
exercise  price of the  option  times a  specified  multiple.  The writer of the
option is  obligated,  in return for the premium  received,  to make delivery of
this amount.  Securities  index  options may be offset by entering  into closing
transactions as described above for securities options.

As discussed in "Options on Securities," the Fund would normally purchase a call
option in anticipation of an increase in the market value of the relevant index.
The  purchase  of a call option  would  entitle  the Fund,  in exchange  for the
premium paid, to purchase the underlying  securities at a specified price during
the option  period.  The Fund would  ordinarily  have a gain if the value of the
underlying  securities  increased above the exercise price sufficiently to cover
the premium and would have a loss if the value of the securities  remained at or
below the exercise price during the option period.

As discussed in "Options on  Securities,"  the Fund would normally  purchase put
options in  anticipation  of a decline in the market value of the relevant index
("protective  puts").  The purchase of a put option would  entitle the Fund,  in
exchange for the premium paid, to sell the underlying  securities at a specified
price  during the option  period.  The purchase of  protective  puts is designed
merely to offset or hedge  against a decline in the  market  value of the index.
The Fund would  ordinarily  recognize a gain if the value of the index decreased
below the exercise price sufficiently to cover the premium and would recognize a
loss if the value of the index  remained at or above the exercise  price.  Gains
and  losses  on the  purchase  of  protective  puts  would  tend to be offset by
countervailing changes in the value of the index.

Because the value of an index option  depends upon movements in the level of the
index rather than the price of a particular stock, whether the Fund will realize
a gain or loss from the purchase or writing of options on an index  depends upon
movements in the level of stock prices in the stock market  generally or, in the
case of certain indices, in an industry or market segment, rather than movements
in the price of a particular stock.  Accordingly,  successful use by the Fund of
options on stock  indices  will be subject to the  Advisor's  ability to predict
correctly  movements  in the  direction  of the stock  market  generally or of a
particular  industry.   This  requires  different  skills  and  techniques  than
predicting changes in the price of individual stocks.

Options on securities  indices  entail risks in addition to the risks of options
on  securities.  The absence of a liquid  secondary  market to close out options
positions  on  securities  indices is more  likely to occur,  although  the Fund
generally will only purchase or write such an option if the Advisor believes the
option can be closed out. Use of options on securities  indices also entails the
risk that  trading  in such  options  may be  interrupted  if trading in certain
securities included in the index is interrupted. The Fund will not purchase such
options unless the Advisor  believes the market is  sufficiently  developed such
that the risk of trading in such  options is no greater than the risk of trading
in options on securities.

Price movements in the Fund's investment  portfolio may not correlate  precisely
with  movements in the level of an index and,  therefore,  the use of options on
indices cannot serve as a complete hedge.  Because options on securities indices
require  settlement  in cash,  the Advisor may be forced to liquidate  portfolio
securities  to meet  settlement  obligations.  The  Fund's  activities  in index
options  may  also  be  restricted  by  the   requirements   of  the  Code,  for
qualification as a regulated investment company.

Hedging  Strategies.  The Fund may use certain strategies designed to adjust the
overall risk of its investment  portfolio.  These "hedging"  strategies  involve
derivative contracts,  including (but not limited to) US Treasury and Eurodollar
futures  contracts  and  exchange-traded  put and call  options on such  futures
contracts.  New financial products and risk management techniques continue to be
developed and may be used if consistent with the Fund's investment objective and
policies.  Among  other  purposes,  these  hedging  strategies  may be  used  to
effectively  maintain  desired  portfolio  duration or to protect against market
risk should the Fund reallocate its  investments  among different types of fixed
income securities.

The Fund might not use any  hedging  strategies,  and there can be no  assurance
that any strategy used will succeed. If the Advisor is incorrect in its judgment
on market values,  interest  rates or other economic  factors in using a hedging
strategy,  the Fund may have lower net income and a net loss on the  investment.
Each of these strategies  involves certain risks, which include: o the fact that
the skills needed to use hedging  instruments are different from those needed to
select securities for the Fund;

o the possibility of imperfect correlation, or even no correlation,  between the
price movements of hedging  instruments and price movements of the securities or
currencies being hedged;

o     possible  constraints  placed on the Fund's  ability to  purchase  or sell
      portfolio  investments at advantageous  times due to the need for the Fund
      to maintain "cover" or to segregate securities; and

o     the possibility that the Fund will be unable to close out or liquidate its
      hedged position.

A hedge is designed to offset a loss in a portfolio  position with a gain in the
hedged position.  At the same time,  however,  a properly  correlated hedge will
result in a gain in the portfolio  position being offset by a loss in the hedged
position.  As a  result,  the use of  options,  futures  and  currency  exchange
transactions  for  hedging  purposes  could  limit  any  potential  gain from an
increase in the value of the position hedged. With respect to futures contracts,
since the value of portfolio securities will far exceed the value of the futures
contracts  sold by the Fund,  an increase in the value of the futures  contracts
could only  mitigate,  but not totally  offset,  the decline in the value of the
Fund's assets.

To the extent that the Fund engages in the strategies  described above, the Fund
may experience losses greater than if these strategies had not been utilized. In
addition to the risks described above,  these instruments may be illiquid and/or
subject  to trading  limits,  and the Fund may be unable to close out a position
without incurring substantial losses, if at all. The Fund is also subject to the
risk of default by a counterparty to an off-exchange transaction.  See "Illiquid
Securities."

Currency  Management  Techniques.  The instruments  involved in currency-related
transactions may be considered derivative  instruments.  The Fund may enter into
currency-related  transactions to attempt to protect against an anticipated rise
in the US dollar price of securities  that it intends to purchase.  In addition,
the Fund may enter  into  currency-related  transactions  to  attempt to protect
against  the  decline in value of its  foreign  currency  denominated  or quoted
portfolio  securities,  or a decline in the value of  anticipated  dividends  or
interest  from such  securities,  due to a decline  in the value of the  foreign
currency against the US dollar.  The forecasting of currency market movements is
extremely  difficult  and  there  can  be no  assurance  that  currency  hedging
strategies  will be  successful.  If the Advisor is incorrect  in its  forecast,
currency hedging  strategies may result in investment  performance worse than if
the  strategies  were  not  attempted.   In  addition,   forward  contracts  and
over-the-counter  currency  options may be illiquid  and are subject to the risk
that the counterparty will default on its obligations.

Forward Foreign Currency Exchange Contracts. The Fund may exchange currencies in
the normal  course of managing its  investments  in foreign  securities  and may
incur costs in doing so because a foreign  exchange  dealer may charge a fee for
conversion.  The Fund may conduct foreign  currency  exchange  transactions on a
"spot" basis (i.e.,  for prompt  delivery and settlement) at the prevailing spot
rate for purchasing or selling currency in the foreign currency exchange market.
The Fund  also may  enter  into  forward  foreign  currency  exchange  contracts
("forward  currency   contracts")  or  other  contracts  to  purchase  and  sell
currencies for settlement at a future date. A foreign exchange  dealer,  in that
situation,  will expect to realize a profit based on the difference  between the
price at which a foreign currency is sold to the Fund and the price at which the
dealer will cover the purchase in the foreign currency market.  Foreign exchange
transactions  are entered into at prices quoted by dealers,  which may include a
mark-up over the price that the dealer must pay for the currency.

A forward  currency  contract  involves  an  obligation  to  purchase  or sell a
specific  currency at a future date,  which may be any fixed number of days from
the date of the contract agreed upon by the parties,  at a price set at the time
of the contract.  These contracts are traded in the interbank  market  conducted
directly between  currency  traders  (usually large commercial  banks) and their
customers.  A forward  contract  generally  has no deposit  requirement,  and no
commissions are generally charged at any stage for trades,  but currency dealers
seek to obtain a "spread" or profit on each transaction.

At the  maturity  of a  forward  contract,  the Fund may  either  accept or make
delivery of the currency  specified in the contract or, at or prior to maturity,
enter into a closing purchase  transaction  involving the purchase or sale of an
offsetting contract.

The Fund may use forward  currency  transactions  in an attempt to hedge against
losses,  or where possible,  to add to investment  returns.  For the purposes of
hedging,  when the Fund  enters  into a contract  for the  purchase or sale of a
security  denominated in a foreign  currency,  or when the Fund  anticipates the
receipt  in a foreign  currency  of  dividend  or  interest  payments  on such a
security which it holds, the Fund may desire to "lock in" the US dollar price of
the security or the US dollar  equivalent of such dividend or interest  payment,
as the case may be. By  entering  into a forward  contract  for the  purchase or
sale,  for a fixed  amount of US  dollars,  of the  amount of  foreign  currency
involved in the underlying transactions, the Fund will attempt to protect itself
against  an adverse  change in the  relationship  between  the US dollar and the
subject  foreign  currency  during  the  period  between  the date on which  the
security is purchased or sold,  or on which the dividend or interest  payment is
declared, and the date on which such payments are made or received.

Additionally,  when  management  of the Fund  believes  that the  currency  of a
particular  foreign  country  may suffer a  substantial  decline  against the US
dollar,  it may cause the Fund to enter into a forward  contract to sell,  for a
fixed amount of US dollars,  the amount of foreign  currency  approximating  the
value of some or all of the  Fund's  portfolio  securities  denominated  in such
foreign  currency.  The precise matching of the forward contract amounts and the
value of the  securities  involved  will not  generally be possible  because the
future  value  of  such  securities  in  foreign  currencies  will  change  as a
consequence  of market  movements in the value of those  securities  between the
date on which the contract is entered into and the date it matures.

Using  forward  currency  contracts  in an attempt  to protect  the value of the
Fund's  portfolio  securities  against a decline in the value of a currency does
not eliminate fluctuations in the underlying prices of the securities. It simply
establishes  a rate of exchange  which the Fund can achieve at some future point
in time. The precise  projection of short-term  currency market movements is not
possible,  and short-term hedging provides a means of fixing the dollar value of
only a portion of the Fund's foreign assets.

The Fund will cover the amount of its commitments to purchase foreign currencies
under forward currency  contracts with liquid  securities.  If the value of such
securities  declines  below the value of the Fund's  commitments  under  forward
currency  contracts,  additional liquid securities will be used as cover so that
the value of such  securities  will equal the amount of the Fund's  commitments.
The securities will be marked-to-market on a daily basis.

The Fund generally will not enter into a forward currency contract with a term
of  greater  than one  year.  The  forecasting  of  short-term  currency  market
movements is extremely difficult and there can be no assurance that short-term
hedging strategies will be successful.

While the Fund will enter into forward  currency  contracts  to reduce  currency
exchange rate risks, transactions in such contracts involve certain other risks.
Thus,  while the Fund may  benefit  from  currency  transactions,  unanticipated
changes in currency  prices may result in a poorer overall  performance  for the
Fund than if it had not engaged in any such transactions. Moreover, there may be
an imperfect  correlation between the Fund's holdings of securities  denominated
in a particular  currency and forward  contracts  entered into by the Fund. Such
imperfect  correlation  may cause the Fund to sustain  losses which will prevent
the Fund from  achieving a complete  hedge or expose the Fund to risk of foreign
currency exchange loss. Forward currency contracts may be considered  derivative
instruments.

Futures Contracts and Related Options

General.  The Fund may enter into futures  contracts on  securities,  securities
indices,  foreign  currencies and interest rates,  and purchase and write (sell)
options  thereon  which are  traded on  exchanges  designated  by the  Commodity
Futures Trading Commission (the "CFTC") or, if consistent with CFTC regulations,
on foreign exchanges. These futures contracts are standardized contracts for the
future  delivery of, among other  things,  a commodity,  a non-US  currency,  an
interest rate sensitive  security or, in the case of index futures  contracts or
certain other futures contracts, a cash settlement with reference to a specified
multiplier  times the change in the index. An option on a futures contract gives
the purchaser the right, in return for the premium paid, to assume a position in
a futures contract.

The Fund may enter into futures  contracts  and options on futures  contracts on
securities, securities indices and currencies to manage its exposure to changing
interest  rates,  security  prices and currency  exchange rates, as an efficient
means of managing allocations between asset classes and to enhance return.

The  successful  use of futures  contracts  and options  thereon  draws upon the
Advisor's skill and experience with respect to such  instruments and are subject
to special risk  considerations.  A liquid  secondary  market for any futures or
options  contract  may not be  available  when a futures or options  position is
sought to be closed. In addition,  there may be an imperfect correlation between
movements in the  securities or currency in the Fund.  Successful use of futures
or options  contracts is further  dependent on the Advisor's  ability to predict
correctly  movements  in the  securities  or  foreign  currency  markets  and no
assurance can be given that its judgment will be correct.

The Fund has claimed  exclusion from the definition of the term  "commodity pool
operator"  under the regulations of the Commodity  Futures  Trading  Commission.
Therefore,  the Fund is not subject to commodity pool operator  registration and
regulation under the Commodity  Exchange Act. Futures and options on futures may
be entered  into for bona fide  hedging,  risk  management  (including  duration
management) or other portfolio and return enhancement management purposes to the
extent consistent with the exclusion from commodity pool operator  registration.
Typically,  maintaining a futures contract or selling an option thereon requires
the  Fund  to  deposit  with  a  financial  intermediary  as  security  for  its
obligations an amount of cash or other specified assets (initial margin),  which
initially is typically 1% to 10% of the face amount of the contract  (but may be
higher in some circumstances).  Additional cash or assets (variation margin) may
be required to be deposited  thereafter on a daily basis as the marked to market
value of the contract fluctuates. The purchase of an option on financial futures
involves  payment of a premium for the option without any further  obligation on
the part of the Fund. If the Fund  exercises an option on a futures  contract it
will be obligated to post initial  margin (and  potential  subsequent  variation
margin) for the  resulting  futures  position just as it would for any position.
Futures  contracts and options thereon are generally settled by entering into an
offsetting  transaction,  but there can be no assurance that the position can be
offset prior to  settlement  at an  advantageous  price,  nor that delivery will
occur.

Futures  Contracts.  Futures contracts are contracts to purchase or sell a fixed
amount of an underlying instrument, commodity or index at a fixed time and place
in the future.  US futures  contracts have been designed by exchanges which have
been designated  "contracts markets" by the CFTC, and must be executed through a
futures  commission  merchant,  or  brokerage  firm,  which is a  member  of the
relevant  contract  market.  Futures  contracts  trade on a number  of  exchange
markets,  and,  through their  clearing  corporations,  the exchanges  guarantee
performance  of the  contracts as between the clearing  members of the exchange.
The Fund may enter into  contracts for the purchase or sale for future  delivery
of fixed-income securities,  foreign currencies, or financial indices, including
any  index  of  US  government  securities,  foreign  government  securities  or
corporate debt securities.  The Fund may enter into futures  contracts which are
based on debt  securities that are backed by the full faith and credit of the US
government,  such as long-term US Treasury Bonds, Treasury Notes and US Treasury
Bills.  The Fund may also enter into futures  contracts which are based on bonds
issued by governments other than the US government. Futures contracts on foreign
currencies  may be used to hedge  against  securities  that are  denominated  in
foreign currencies.

At the same time a futures contract is entered into, the Fund must allocate cash
or liquid securities as a deposit payment ("initial margin").  Daily thereafter,
the  futures  contract is valued and the  payment of  "variation  margin" may be
required,  since each day the Fund would  provide or receive cash that  reflects
any decline or increase in the contract's value.

At the time of delivery of securities  pursuant to such a contract,  adjustments
are  made to  recognize  differences  in value  arising  from  the  delivery  of
securities  with a different  interest rate from that specified in the contract.
In some, but not many,  cases,  securities  called for by a futures contract may
not have been issued when the contract was written.

Although futures  contracts (other than those that settle in cash, such as index
futures)  by their  terms call for the actual  delivery  or  acquisition  of the
instrument underlying the contract, in most cases the contractual  obligation is
fulfilled by offset before the date of the contract without the Fund's having to
make or take delivery of the instrument underlying the contract.  The offsetting
of a  contractual  obligation  is  accomplished  by  entering  into an  opposite
position in an identical  futures contract on the commodities  exchange on which
the  futures  contract  was  entered  into (or a linked  exchange)  calling  for
delivery  in the same month.  Such a  transaction,  which is effected  through a
member of an exchange,  cancels the  obligation  to make or take delivery of the
instrument underlying the contract. Since all transactions in the futures market
are  made,  offset or  fulfilled  through a  clearinghouse  associated  with the
exchange on which the contracts are traded,  the Fund will incur  brokerage fees
when it enters into futures contracts.

The purpose of the acquisition or sale of a futures contract, in cases where the
Fund  holds or  intends to  acquire  fixed-income  securities,  is to attempt to
protect the Fund from fluctuations in interest or foreign exchange rates without
actually buying or selling  fixed-income  securities or foreign currencies.  For
example, if interest rates were expected to increase (which thus would cause the
prices of debt  securities  to  decline),  the Fund  might  enter  into  futures
contracts for the sale of debt securities.  Such a sale would have much the same
effect as selling an equivalent  value of the debt securities owned by the Fund.
If interest rates did increase, the value of the debt security in the Fund would
decline,  but the value of the futures  contracts to the Fund would  increase at
approximately  the same rate,  thereby  keeping  the net asset value of the Fund
from declining as much as it otherwise would have.

Similarly,  when it is expected that interest rates may decline (thus increasing
the value of debt securities),  futures contracts may be purchased to attempt to
hedge against anticipated  purchases of debt securities at higher prices.  Since
the fluctuations in the value of futures contracts should be similar to those of
debt  securities,  the Fund could take advantage of the anticipated  rise in the
value of debt  securities  without  actually  buying  them  until the market had
stabilized. At that time, the futures contracts could be liquidated and the Fund
could  then buy  debt  securities  on the cash  market.  The  segregated  assets
maintained  to  cover  the  Fund's  obligations  with  respect  to such  futures
contracts  will consist of cash or liquid  securities  acceptable  to the broker
from its portfolio in an amount equal to the difference  between the fluctuating
market value of such futures  contracts and the  aggregate  value of the initial
and  variation  margin  payments  made by the Fund with  respect to such futures
contracts.

The  ordinary  spreads  between  prices in the cash and futures  market,  due to
differences in the nature of those markets,  are subject to distortions.  First,
all  participants  in the  futures  market are  subject to initial  deposit  and
variation margin  requirements.  Rather than meeting additional variation margin
requirements,   investors  may  close  futures  contracts   through   offsetting
transactions,  which could distort the normal relationship  between the cash and
futures  markets.  Second,  the liquidity of the futures  market depends on most
participants entering into offsetting  transactions rather than making or taking
delivery.  To the extent that many participants decide to make or take delivery,
liquidity in the futures  market could be reduced,  thus  producing  distortion.
Third, from the point of view of speculators, the margin deposit requirements in
the futures market are less onerous than margin  requirements  in the securities
market. Therefore,  increased participation by speculators in the futures market
may cause temporary price distortions.  Due to the possibility of distortion,  a
correct forecast of securities price, general interest rate or currency exchange
rate trends by the Advisor may still not result in a successful transaction.

In addition,  futures contracts entail significant  risks.  Although the Advisor
believes  that use of such  contracts  will benefit the Fund,  if the  Advisor's
investment judgment about the general direction of interest rates or an index is
incorrect,  the Fund's  overall  performance  would be poorer than if it had not
entered into any such contract.  For example, if the Fund has hedged against the
possibility  of an increase  in  interest  rates or a decrease in an index which
would  adversely  affect  the  value of  securities  held in its  portfolio  and
interest rates decrease or securities  prices  increase  instead,  the Fund will
lose part or all of the benefit of the increased  value of its securities  which
it has hedged because it will have offsetting  losses in its futures  positions.
In addition, in such situations,  if the Fund has insufficient cash, it may have
to  sell  securities   from  its  portfolio  to  meet  daily  variation   margin
requirements.  Such sales of  securities  may, but will not  necessarily,  be at
increased  prices  which  reflect the rising  market.  The Fund may have to sell
securities at a time when it may be disadvantageous to do so.

Futures  Contracts on Securities  Indices.  The Fund may also enter into futures
contracts  providing for the making and  acceptance of a cash  settlement  based
upon  changes  in  the  value  of an  index  of US or  non-US  securities.  This
investment  technique may be used as a low-cost method of gaining  exposure to a
particular  securities market without investing  directly in those securities or
to hedge  against  anticipated  future  changes in general  market  prices  that
otherwise might either adversely affect the value of securities held by the Fund
or adversely  affect the prices of securities which are intended to be purchased
at a later date for the Fund or as an  efficient  means of  managing  allocation
between asset classes.  A futures contract may also be entered into to close out
or offset an existing futures position.

When used for hedging  purposes,  each futures  contract on a  securities  index
transaction  involves the establishment of a position which the Advisor believes
will move in a direction  opposite to that of the  investment  being hedged.  If
these hedging  transactions are successful,  the futures positions taken for the
Fund will rise in value by an amount which approximately  offsets the decline in
value of the portion of the Fund's  investments  that are being  hedged.  Should
general  market  prices  move in an  unexpected  manner,  the  full  anticipated
benefits of futures contracts may not be achieved or a loss may be realized.

Options on Futures Contracts (including Futures Contracts on Securities
Indices). The Fund may purchase and write (sell) options on futures contracts
for hedging purposes. For example, as with the purchase of futures contracts,
when the Fund is not fully invested it may purchase a call option on an interest
rate sensitive futures contract to hedge against a potential price increase on
debt securities due to declining interest rates.

The purchase of a call option on a futures  contract is similar in some respects
to the purchase of a call option on an index or individual  security.  Depending
on the  pricing  of the  option  compared  to either  the  price of the  futures
contract upon which it is based or the price of the underlying debt  securities,
it may or may not be less  risky  than  ownership  of the  futures  contract  or
underlying debt securities.

The  writing of a call option on a futures  contract  may  constitute  a partial
hedge against declining prices of the underlying  portfolio securities which are
the  same  as or  correlate  with  the  security  or  foreign  currency  that is
deliverable  upon  exercise of the  futures  contract.  If the futures  price at
expiration  of the option is below the price  specified in the premium  received
for writing the option ("exercise price"),  the Fund will retain the full amount
of the net  premium  (the  premium  received  for  writing  the option  less any
commission),  which  provides a partial  hedge against any decline that may have
occurred in the Fund's holdings.

The  writing of a put  option on an index  futures  contract  may  constitute  a
partial hedge against increasing prices of the underlying  securities or foreign
currency  that are  deliverable  upon exercise of the futures  contract.  If the
futures price at expiration of the option is higher than the exercise price, the
Fund will retain the full  amount of the option net  premium,  which  provides a
partial  hedge  against  any  increase  in the price of  securities  that a Fund
intends to purchase.

If a put or call option the Fund has written is exercised, the Fund will incur a
loss  that  will be  reduced  by the  amount  of the net  premium  it  receives.
Depending  on the  degree of  correlation  between  changes  in the value of its
portfolio  securities  and  changes in the value of its futures  positions,  the
Fund's losses from existing  options on futures may to some extent be reduced or
increased by changes in the value of portfolio securities.

The  purchase of a call or put option on a futures  contract  with respect to an
index is similar in some  respects to the purchase of a call or  protective  put
option on an index. For example,  the Fund may purchase a put option on an index
futures contract to hedge against the risk of lowering securities values.

The amount of risk the Fund  assumes  when it  purchases  an option on a futures
contract  with  respect  to an index is the  premium  paid for the  option  plus
related transaction costs. In addition to the correlation risks discussed above,
the  purchase of such an option also  entails the risk that changes in the value
of the underlying  futures  contract will not be fully reflected in the value of
the option purchased.

Swaps.  The Fund may  enter  into  currency  and  other  types of swaps  and the
purchase or sale of related caps, floors and collars.  The Fund expects to enter
into these transactions primarily to preserve a return or spread on a particular
investment  or  portion  of  its   portfolio,   to  protect   against   currency
fluctuations,  as a duration  management  technique  or to protect  against  any
increase in the price of securities the Fund  anticipates  purchasing at a later
date.  The Fund will not sell interest rate caps or floors where it does not own
securities  or other  instruments  providing  the income  stream the Fund may be
obligated  to pay.  Interest  rate swaps  involve the  exchange by the Fund with
another party of their respective commitments to pay or receive interest,  e.g.,
an exchange of floating  rate payments for fixed rate payments with respect to a
notional  amount of principal.  A currency swap is an agreement to exchange cash
flows on a notional amount of two or more currencies based on the relative value
differential  among them and an index swap is an agreement to swap cash flows on
a notional amount based on changes in the values of the reference  indices.  The
purchase  of a cap  entitles  the  purchaser  to receive  payments on a notional
principal  amount from the party selling such cap to the extent that a specified
index exceeds a predetermined  interest rate or amount.  The purchase of a floor
entitles the purchaser to receive  payments on a notional  principal amount from
the party selling such floor to the extent that a specified  index falls below a
predetermined  interest rate or amount. A collar is a combination of a cap and a
floor that preserves a certain return within a  predetermined  range of interest
rates or values.

Swaps  have  special  risks  associated   including   possible  default  by  the
counterparty  to the  transaction,  illiquidity  and,  where  swaps are used for
hedges,  the risk that the use of a swap could result in losses  greater than if
the swap had not  been  employed.  Whether  the use of swap  agreements  will be
successful in furthering its  investment  objective will depend on the Advisor's
ability to correctly  predict whether certain types of investments are likely to
produce greater returns than other  investments.  Certain swap agreements may be
considered to be illiquid  because they are two party contracts and because they
may have terms of greater than seven days. Moreover,  the Fund bears the risk of
loss of the amount  expected to be received  under a swap agreement in the event
of the default or bankruptcy of a swap agreement counterparty.

Credit  Default  Swaps.  The Fund may  invest up to 15% of its  total  assets in
credit default swaps. A credit default swap is a contract  between a buyer and a
seller of protection against a pre-defined credit event. The buyer of protection
pays the  seller a fixed  regular  fee  provided  that no event of default on an
underlying reference obligation has occurred. If an event of default occurs, the
seller  must pay the buyer  the full  notional  value,  or "par  value."  of the
reference  obligation in exchange for the reference  obligation.  Credit default
swaps are used as a means of "buying"  credit  protection,  i.e.,  attempting to
mitigate the risk of default or credit quality  deterioration in some portion of
the Fund's holdings,  or "selling" credit protection,  i.e.,  attempting to gain
exposure  to an  underlying  issuer's  credit  quality  characteristics  without
directly  investing in that issuer.  No more than 5% of the Fund's assets may be
invested in credit  default swaps for purposes of buying credit  protection  for
non-hedging  purposes.  Where  the Fund is a seller  of  credit  protection,  it
effectively adds leverage to its portfolio because, in addition to its total net
assets, the Fund would be subject to investment  exposure on the notional amount
of the  swap.  The Fund  will  only  sell  credit  protection  with  respect  to
securities  in which  it  would  be  authorized  to  invest  directly.  The Fund
currently  considers  credit  default swaps to be illiquid and treats the market
value of the contract as illiquid for purposes of  determining  compliance  with
the Fund's restrictions on investing in illiquid securities.

If the Fund is a buyer of a credit default swap and no event of default  occurs,
the Fund will lose its investment and recover nothing. However, if the Fund is a
buyer and an event of default  occurs,  the Fund will receive the full  notional
value of the reference obligation that may have little or no value. As a seller,
the Fund  receives  a fixed  rate of  income  through  the term of the  contract
(typically  between  six  months  and three  years),  provided  that there is no
default event. If an event of default occurs,  the seller must pay the buyer the
full notional  value of the reference  obligation.  Credit default swaps involve
greater  risks  than  if the  Fund  had  invested  in the  reference  obligation
directly.

The Fund may use credit default swaps to gain exposure to particular  issuers or
particular  markets  through  investments in portfolios of credit default swaps,
such  as  Dow  Jones  CDX.NA.HY  certificates.   By  investing  in  certificates
representing  interests in a basket of credit default swaps,  the Fund is taking
credit risk with respect to an entity or group of entities and providing  credit
protection  to the swap  counterparties.  For example,  the CDX EM is a tradable
basket of 19 credit  default  swaps on country  credits which seeks to replicate
the returns on the indices of a broad group of emerging markets  countries.  The
credits  are a subset of the  countries  represented  by the  JPMorgan  Emerging
Markets Bond Index Global  Diversified.  By purchasing  interests in CDX EM, the
Fund is gaining emerging markets  exposure through a single  investment.  Unlike
other types of credit  default  swaps which are generally  considered  illiquid,
credit default swap certificates generally can be sold within seven days and are
not subject to the Fund's restrictions on investing in illiquid securities.

Other Considerations. The Fund will determine that the price fluctuations in the
futures  contracts  and options on futures  used by it for hedging  purposes are
substantially related to price fluctuations in securities or instruments held by
the Fund or securities or instruments which it expects to purchase.

The Fund will be required,  in connection with transactions in futures contracts
and the writing of options on futures contracts, to make margin deposits,  which
will be held by its custodian for the benefit of the futures commission merchant
through  whom the Fund engages in such  futures and option  transactions.  These
transactions  involve brokerage costs,  require margin deposits and, in the case
of futures  contracts and options  obligating  the Fund to purchase  securities,
require the Fund to segregate cash or liquid securities in an account maintained
with its custodian to cover such contracts and options.

While  transactions  in futures  contracts  and  options  on futures  may reduce
certain risks,  such transactions  themselves entail certain other risks.  Thus,
unanticipated  changes in interest  rates or  securities  prices may result in a
poorer  overall  performance  for the Fund than if it had not  entered  into any
futures contracts or options  transactions.  The other risks associated with the
use of futures  contracts  and  options  thereon are (i)  imperfect  correlation
between the change in market  value of the  securities  held by the Fund and the
prices of the  futures and  options  and (ii) the  possible  absence of a liquid
secondary market for a futures contract or option and the resulting inability to
close a futures position prior to its maturity date.

In the  event  of an  imperfect  correlation  between  a  futures  position  and
portfolio position which is intended to be protected, the desired protection may
not be  obtained  and the  Fund  may be  exposed  to risk of  loss.  The risk of
imperfect  correlation  may be minimized  by investing in contracts  whose price
behavior is expected to resemble that of the Fund's underlying  securities.  The
Fund  will  attempt  to  minimize  the risk  that it will be unable to close out
futures positions by entering into such transactions on a national exchange with
an active and liquid secondary market.

Limitations and Risks Associated with Transactions in Options, Futures
Contracts and Options on Futures Contracts

Options and futures  transactions  involve (1) liquidity  risk that  contractual
positions  cannot  be  easily  closed  out in the  event of  market  changes  or
generally in the absence of a liquid secondary market, (2) correlation risk that
changes in the value of hedging  positions may not match the  securities  market
fluctuations  intended  to be  hedged,  and (3)  market  risk that an  incorrect
prediction  of  securities  prices by the  Advisor may cause the Fund to perform
worse than if such  positions  had not been  taken.  The  ability  to  terminate
over-the-counter  options is more limited than with exchange  traded options and
may  involve the risk that the  counterparty  to the option will not fulfill its
obligations. In accordance with a position taken by the SEC, the Fund will limit
its investments in illiquid securities to 15% of the Fund's net assets.

Options and futures transactions are highly specialized activities which involve
investment  techniques and risks that are different from those  associated  with
ordinary portfolio transactions.  Gains and losses on investments in options and
futures  depend on the  Advisor's  ability to predict the  direction of interest
rates, security prices, currencies and other economic factors. The loss that may
be incurred by the Fund in entering into futures  contracts and written  options
thereon  is  potentially  unlimited.  There is no  assurance  that  higher  than
anticipated  trading  activity or other  unforeseen  events might not, at times,
render  certain  facilities  of an  options  clearing  entity  or  other  entity
performing the regulatory and liquidity  functions of an options clearing entity
inadequate,  and  thereby  result in the  institution  by an exchange of special
procedures which may interfere with the timely  execution of customers'  orders.
Most futures  exchanges  limit the amount of fluctuation  permitted in a futures
contract's  prices during a single  trading day. Once the limit has been reached
no further  trades may be made that day at a price  beyond the limit.  The price
limit  will not limit  potential  losses,  and may in fact  prevent  the  prompt
liquidation of futures positions, ultimately resulting in further losses.

Global Asset Allocation  Strategy ("GAA  Strategy").  In connection with the GAA
Strategy and in addition to the securities  described above, the Fund may invest
in indexed  securities,  futures  contracts on  securities  indices,  securities
representing  securities of foreign issuers (e.g., ADRs, GDRs and EDRs), options
on stocks, options on futures contracts,  foreign currency exchange transactions
and options on foreign currencies.  These are discussed below, to the extent not
already described above.

Indexed Securities.  The indexed securities in which the Fund may invest include
debt  securities  whose value at  maturity is  determined  by  reference  to the
relative  prices of various  currencies  or to the price of a stock  index.  The
value of such securities depends on the price of foreign currencies,  securities
indices  or other  financial  values  or  statistics.  These  securities  may be
positively or negatively indexed;  that is, their value may increase or decrease
if the underlying instrument appreciates.

Securities Representing Securities of Foreign Issuers. The Fund's investments in
the  securities  of  foreign  issuers  may be made  directly  or in the  form of
American Depositary Receipts ("ADRs"),  Global Depositary Receipts ("GDRs," also
referred to as International Depositary Receipts or "IDRs"), European Depositary
Receipts ("EDRs") or other similar securities representing securities of foreign
issuers.  These  securities  may not  necessarily  be  denominated  in the  same
currency  as the  securities  they  represent,  and  while  designed  for use as
alternatives  to the purchase of the  underlying  securities  in their  national
markets and currencies,  are subject to the same risks as the foreign securities
to which they relate.

ADRs  are  receipts,  typically  issued  by a US bank or  trust  company,  which
evidence  ownership of underlying  securities  issued by a foreign  corporation.
EDRs,  which  are  sometimes  referred  to as  Continental  Depository  Receipts
("CDRs"), are receipts issued in Europe, and GDRs or IDRs are issued outside the
United States.  EDRs (CDRs) and GDRs (IDRs) are typically issued by non-US banks
and trust  companies  and  evidence  ownership  of either  foreign  or  domestic
securities.  Generally,  ADRs in  registered  form  are  designed  for use in US
securities markets,  and EDRs (CDRs) and GDRs (IDRs) in bearer form are designed
for use in European and non-US securities markets, respectively. For purposes of
the Fund's investment policies, depository receipts generally are deemed to have
the same  classification  as the underlying  securities they represent.  Thus, a
depository  receipt  representing  ownership  of common stock will be treated as
common stock.

ADRs are publicly traded on exchanges or  over-the-counter  in the United States
and are issued through "sponsored" or "unsponsored" arrangements. In a sponsored
ADR arrangement, the foreign issuer assumes the obligation to pay some or all of
the depository's transaction fees, whereas under an unsponsored arrangement, the
foreign issuer assumes no obligations and the depository's  transaction fees are
paid directly by the ADR holders. In addition,  less information is available in
the United States about an unsponsored ADR than about a sponsored ADR.

Investments  in foreign  securities  incur higher costs than  investments  in US
securities,  including higher costs in making securities transactions as well as
foreign  government taxes which may reduce the investment return of the Fund. In
addition,  foreign  investments  may  include  risks  associated  with  currency
exchange rates,  less complete  information  about  additional  companies,  less
market liquidity and political instability.

Repurchase Agreements.  The Fund may engage in repurchase agreement transactions
with member banks of the Federal  Reserve System and certain  non-bank  dealers,
including  governmental  securities  dealers approved by the Fund's Board. Under
the  terms of a  typical  repurchase  agreement,  the  Fund  would  acquire  any
underlying  security  for a relatively  short period  (usually not more than one
week),  subject to an  obligation of the seller to  repurchase,  and the Fund to
resell,  the  obligation at an agreed price and time,  thereby  determining  the
yield during the Fund's holding period. This arrangement results in a fixed rate
of return that is not subject to market  fluctuations  during the Fund's holding
period.  The value of the  underlying  securities  will be at least equal at all
times to the total amount of the repurchase obligations, including interest. The
Fund bears a risk of loss in the event of default by or  bankruptcy of the other
party to a repurchase agreement.  The Fund may be delayed in, or prevented from,
exercising its rights to dispose of the collateralized securities. To the extent
that, in the meantime,  the value of the securities repurchased had decreased or
the value of the securities had increased, the Fund could experience a loss. The
Advisor reviews the  creditworthiness  of those banks and dealers with which the
Fund enters into  repurchase  agreements  and  monitors on an ongoing  basis the
value of the  securities  subject to repurchase  agreements to ensure that it is
maintained at the required  level. A repurchase  agreement is considered to be a
loan under the 1940 Act.

Reverse  Repurchase  Agreements.  The Fund may  borrow  funds for  temporary  or
emergency purposes, such as meeting larger than anticipated redemption requests,
and not for  leverage,  by,  among  other  things,  agreeing  to sell  portfolio
securities to financial institutions such as member banks of the Federal Reserve
System and certain  non-bank dealers and to repurchase them at a mutually agreed
date and price (a "reverse repurchase  agreement").  At the time the Fund enters
into a reverse repurchase  agreement it will segregate cash or liquid securities
having a value equal to the repurchase price,  including  accrued interest.  The
segregated assets will be  marked-to-market  daily and additional assets will be
segregated on any day in which the assets fall below the repurchase  price (plus
accrued  interest).  The Fund's liquidity and ability to manage its assets might
be  affected  when it sets  aside  cash or  portfolio  securities  to cover such
commitments.  Reverse  repurchase  agreements  involve  the risk that the market
value of the securities sold by the Fund may decline below the repurchase  price
of those  securities.  In the  event  the  buyer of  securities  under a reverse
repurchase  agreement files for bankruptcy or becomes  insolvent,  such buyer or
its trustee or receiver may receive an extension of time to determine whether to
enforce the Fund's  obligation to repurchase the securities,  and the Fund's use
of  the  proceeds  of  the  reverse  repurchase  agreement  may  effectively  be
restricted pending such decision.  Reverse repurchase  agreements are considered
to be borrowings by the Fund.

Mortgage Dollar Rolls.  The Fund may enter into mortgage "dollar rolls" in which
the Fund sells  securities for delivery in the current month and  simultaneously
contracts to repurchase  substantially  similar (same dealer,  type,  coupon and
maturity), but not identical,  securities on a specified future date. During the
roll period, the Fund forgoes principal and interest paid on the securities. The
Fund is compensated  by the  difference  between the current sales price and the
lower forward price for the future purchase (often referred to as the "drop") or
fee income and by the interest  earned on the cash proceeds of the initial sale.
A  "covered  roll" is a  specific  type of  dollar  roll for  which  there is an
offsetting cash position or a cash equivalent security position which matures on
or before the forward  settlement date of the dollar roll transaction.  The Fund
may enter into both  covered and  uncovered  rolls.  At the time the Fund enters
into a dollar roll transaction,  it will segregate,  with an approved custodian,
cash or liquid  securities  having a value not less  than the  repurchase  price
(including accrued interest) and will subsequently monitor the segregated assets
to ensure that its value is maintained.

Borrowing.  The Fund may not borrow  money,  except as permitted  under the 1940
Act, and as interpreted or modified by regulatory authority having jurisdiction,
from  time to  time.  Under  the 1940  Act,  the Fund is  required  to  maintain
continuous  asset  coverage of 300% with respect to such  borrowings and to sell
(within three days) sufficient portfolio holdings to restore such coverage if it
should decline to less than 300% due to market  fluctuations or otherwise,  even
if such  liquidation  of the  Fund's  holdings  may be  disadvantageous  from an
investment standpoint.

Leveraging  by means of borrowing may  exaggerate  the effect of any increase or
decrease in the value of the Fund's securities and the Fund's NAV per share, and
money  borrowed by the Fund will be subject to interest  and other costs  (which
may include  commitment  fees  and/or the cost of  maintaining  minimum  average
balances) that may exceed the income received from the securities purchased with
the borrowed funds.

Lending of Portfolio Securities.  The Fund may lend its investment securities to
approved  institutional  borrowers  who need to  borrow  securities  in order to
complete certain  transactions,  such as covering short sales, avoiding failures
to deliver  securities  or  completing  arbitrage  operations.  By  lending  its
investment  securities,  the Fund attempts to increase its net investment income
through  the  receipt of  interest  on the loan.  Any gain or loss in the market
price of the  securities  loaned  that might  occur  during the term of the loan
would belong to the Fund. The Fund may lend its investment securities so long as
the terms, structure and the aggregate amount of such loans are not inconsistent
with the 1940 Act or the rules and  regulations  or  interpretations  of the SEC
thereunder,  which currently require,  among other things, that (a) the borrower
pledge and maintain with the Fund collateral consisting of liquid,  unencumbered
assets  having  a value at all  times  not less  than  100% of the  value of the
securities loaned, (b) the borrower add to such collateral whenever the price of
the securities loaned rises (i.e., the borrower "marks to the market" on a daily
basis), (c) the loan be made subject to termination by the Fund at any time, and
(d) the Fund  receives  reasonable  interest  on the loan (which may include the
Fund investing any cash collateral in interest bearing short-term  investments),
and  distributions  on the loaned  securities  and any  increase in their market
value.  The Fund  will  bear any  losses  incurred  from the  investment  of the
collateral  it  receives.  There  may be  risks  of  delay  in  recovery  of the
securities or even loss of rights in the  collateral  should the borrower of the
securities  fail  financially.  However,  loans  will be made only to  borrowers
selected  by the  Fund's  delegate  after a  commercially  reasonable  review of
relevant  facts  and  circumstances,   including  the  creditworthiness  of  the
borrower.

The Fund may pay negotiated fees in connection with loaned securities,  pursuant
to  written  contracts.  In  addition,  voting  rights  may pass with the loaned
securities,  but if a material event occurs affecting an investment on loan, the
loan must be called and the  securities  voted.  Pursuant to an exemptive  order
granted by the SEC,  cash  collateral  received by the Fund may be invested in a
money market fund managed by the Advisor (or one of its affiliates).

Other  Investment  Companies.  Securities of other  investment  companies may be
acquired by the Fund to the extent  permitted  under the 1940 Act,  that is, the
Fund may  invest a maximum  of up to 10% of its total  assets in  securities  of
other investment  companies so long as not more than 3% of the total outstanding
voting stock of any one investment company is held by the Fund. In addition, not
more than 5% of the Fund's total assets may be invested in the securities of any
one investment company. The Fund may be permitted to exceed these limitations by
an exemptive order of the SEC.  Pursuant to exemptive orders granted by the SEC,
the Fund may invest up to 25% of its total  assets in  affiliated  money  market
funds. It should be noted that investment  companies incur certain expenses such
as management, custodian, and transfer agency fees, and therefore any investment
by the Fund in shares of other  investment  companies  would be  subject to such
duplicate expenses. The Fund will indirectly bear its proportionate share of any
management  or other fees paid by investment  companies in which it invests,  in
addition  to its own fees.  No  advisory  fee is charged on assets  invested  in
affiliated money market funds.

Investment of  Uninvested  Cash  Balances.  The Fund may have cash balances that
have not been invested in portfolio securities  ("Uninvested Cash").  Uninvested
Cash may result  from a variety of  sources,  including  dividends  or  interest
received from portfolio securities, unsettled securities transactions,  reserves
held for  investment  strategy  purposes,  scheduled  maturity  of  investments,
liquidation  of  investment  securities  to  meet  anticipated  redemptions  and
dividend payments, and new cash received from investors.  Uninvested Cash may be
invested  directly  in  money  market   instruments  or  other  short-term  debt
obligations.  Pursuant to an Exemptive Order issued by the SEC, the Fund may use
Uninvested Cash to purchase shares of affiliated  funds,  including money market
funds and Cash Management QP Trust, or entities for which the Advisor may act as
investment  advisor  now  or in the  future  that  operate  as  cash  management
investment vehicles but are excluded from the definition of "investment company"
pursuant  to  Section  3(c)(1) or  3(c)(7)  of the 1940 Act  (collectively,  the
"Central  Funds") in excess of the  limitations of Section  12(d)(1) of the 1940
Act. Investment by the Fund in shares of the Central Funds will comply with Rule
2a-7 under the 1940 Act and will be in  accordance  with the  Fund's  investment
policies and restrictions.

The Fund will invest  Uninvested  Cash in Central  Funds only to the extent that
the Fund's aggregate  investment in the Central Funds does not exceed 25% of its
total  assets.  Purchases  and sales of shares of Central  Funds are made at net
asset value.


Impact of Large  Redemptions  and  Purchases of Fund Shares.  From time to time,
shareholders  of the Fund (which may include  affiliated  and/or  non-affiliated
registered  investment  companies  that invest in the Fund) may make  relatively
large redemptions or purchases of Fund shares.  These transactions may cause the
Fund to have to sell securities or invest  additional  cash, as the case may be.
While it is impossible to predict the overall impact of these  transactions over
time,  there could be adverse  effects on the Fund's  performance  to the extent
that the Fund may be required to sell securities or invest cash at times when it
would  not  otherwise  do so.  These  transactions  could  also  accelerate  the
realization of taxable  income if sales of securities  resulted in capital gains
or other income and could also increase  transaction costs, which may impact the
Fund's expense ratio.

Rating Services

The ratings of rating services represent their opinions as to the quality of the
securities that they undertake to rate. It should be emphasized,  however,  that
ratings are relative and subjective  and are not absolute  standards of quality.
Although  these  ratings are an initial  criterion  for  selection  of portfolio
investments,  the Advisor  also makes its own  evaluation  of these  securities,
subject to review by the Board of Trustees of the Trust.  After  purchase by the
Fund, an obligation may cease to be rated or its rating may be reduced below the
minimum required for purchase by the Fund.  Neither event would require the Fund
to eliminate the obligation  from its  portfolio,  but the Advisor will consider
such an event in its  determination  of whether the Fund should continue to hold
the  obligation.  A  description  of the  ratings  referred to herein and in the
prospectuses is set forth in the Appendix of this SAI.

The  following  is a chart of the various  types of  securities  and  investment
strategies  employed by the Fund.  Unless otherwise  indicated,  the Fund is not
obligated to pursue any of the following  strategies and does not represent that
these  techniques  are  available  now or will be  available  at any time in the
future.  If the Fund's investment in a particular type of security is limited to
a certain percentage of the Fund's assets, that percentage  limitation is listed
in the chart.  Above,  there is a  description  of how each type of security and
investment  strategy  may be used by the  Fund.  As a matter  of  nonfundamental
operating policy,  the Fund may be subject to additional  restrictions.  See the
section entitled "Investment Restrictions."


<TABLE>
<CAPTION>
 INVESTMENT PRACTICE                                       DWS Short Duration Plus Fund

 -------------------------------------------------------------------------------------------------------------------
 KEY TO TABLE:

+     Permitted without stated limit
o     Permitted without stated limit, but not expected to be used to a
      significant extent
X     Not permitted

 20% Italic type (e.g. 20%) represents an investment limitation as a percentage of net fund assets; does not
 indicate actual use

 20% Roman type (e.g. 20%) represents an investment limitation as a percentage of total fund assets; does not
 indicate actual use
 -------------------------------------------------------------------------------------------------------------------
 EQUITY SECURITIES
 -------------------------------------------------------- ----------------------------------------------------------
<S>                                                                                   <C>
 Common Stock                                                                         X
-------------------------------------------------------- ----------------------------------------------------------
 Warrants                                                                            20%
 -------------------------------------------------------- ----------------------------------------------------------
 Preferred Stock                                                                      X
 -------------------------------------------------------- ----------------------------------------------------------
 Convertible Securities                                                               X
 -------------------------------------------------------------------------------------------------------------------
 FIXED INCOME SECURITIES & MONEY MARKET INSTRUMENTS
 -------------------------------------------------------- ----------------------------------------------------------
 Short-Term Instruments                                                               +
 -------------------------------------------------------- ----------------------------------------------------------
 Obligations of Banks and Other Financial Institutions                                +

 -------------------------------------------------------- ----------------------------------------------------------
 Certificates of Deposit and Banker's Acceptances                                     +

 -------------------------------------------------------- ----------------------------------------------------------
 Commercial Paper                                                                     +

 -------------------------------------------------------- ----------------------------------------------------------
 Variable Rate Master Demand Notes                                                    +
 -------------------------------------------------------- ----------------------------------------------------------
 US Government Securities                                                             +
 -------------------------------------------------------- ----------------------------------------------------------
 Corporate Debt Securities                                                            +
 -------------------------------------------------------- ----------------------------------------------------------
 Custodial Receipts                                                                   o
 -------------------------------------------------------- ----------------------------------------------------------
 Zero Coupon Securities and Deferred Interest Bonds                                   +
 -------------------------------------------------------- ----------------------------------------------------------
 Variable Rate Securities                                                             +
 -------------------------------------------------------- ----------------------------------------------------------
 Warrants                                                                             +
 -------------------------------------------------------- ----------------------------------------------------------
 Inverse Floating Rate Securities                                                     o
 -------------------------------------------------------- ----------------------------------------------------------
 Lower-Rated Debt Securities                                                         10%
 -------------------------------------------------------- ----------------------------------------------------------
 Registered Loans                                                                     X
 -------------------------------------------------------- ----------------------------------------------------------
 Put Bonds                                                                            +
 -------------------------------------------------------- ----------------------------------------------------------
 Bank Loans                                                                           +
 -------------------------------------------------------- ----------------------------------------------------------
 Other Debt Obligations                                                               +
 -------------------------------------------------------------------------------------------------------------------
 MUNICIPAL SECURITIES
 -------------------------------------------------------- ----------------------------------------------------------
 Municipal Notes                                                                      o
 -------------------------------------------------------- ----------------------------------------------------------
 Tax Anticipation Notes                                                               o
 -------------------------------------------------------- ----------------------------------------------------------
 Revenue Anticipation Notes                                                           o
-------------------------------------------------------- ----------------------------------------------------------
 Bond Anticipation Notes                                                              o
 -------------------------------------------------------- ----------------------------------------------------------
 Tax and Revenue Anticipation Notes                                                   o
 -------------------------------------------------------- ----------------------------------------------------------
 Construction Loan Notes                                                              o
 -------------------------------------------------------- ----------------------------------------------------------
 Miscellaneous, Temporary and Anticipatory Instruments                                o
 -------------------------------------------------------- ----------------------------------------------------------
 Tax-Exempt Commercial Paper                                                          o
 -------------------------------------------------------- ----------------------------------------------------------
 Municipal Securities                                                                 o
 -------------------------------------------------------- ----------------------------------------------------------
 General Obligation Bonds                                                             o
 -------------------------------------------------------- ----------------------------------------------------------
 Revenue Bonds                                                                        o
 -------------------------------------------------------- ----------------------------------------------------------
 Private Activity Bonds                                                               o
 -------------------------------------------------------- ----------------------------------------------------------
 Tender Option Bonds                                                                  o
 -------------------------------------------------------- ----------------------------------------------------------
 Municipal Leases, Certificates of Participation and
 Other Participation Interests                                                       5%
 -------------------------------------------------------- ----------------------------------------------------------
 Pre-Refunded Securities                                                              o
 ------------------------------------------------------- ----------------------------------------------------------
 Auction Rate Securities                                                              o
 -------------------------------------------------------- ----------------------------------------------------------
 Pay-in-Kind Securities                                                               o
 -------------------------------------------------------------------------------------------------------------------
 DERIVATIVE SECURITIES (OPTIONS)
 -------------------------------------------------------- ----------------------------------------------------------
 Options on Securities                                                                +
 -------------------------------------------------------- ----------------------------------------------------------
 Options on Securities Indices                                                        +
 -------------------------------------------------------- ----------------------------------------------------------
 Options on Non-US Securities Indices                                                 +
 -------------------------------------------------------------------------------------------------------------------
 DERIVATIVE SECURITIES (FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS)
 --------------------------------------------------------- ---------------------------------------------------------
 Futures Contracts                                                                    +
 --------------------------------------------------------- ---------------------------------------------------------
 Futures Contracts on Securities Indices, Foreign
 Currency and Interest Rates                                                          +
 --------------------------------------------------------- ---------------------------------------------------------
 Options on Futures Contracts (including Contracts on
 Securities Indices)                                                                  +
 -------------------------------------------------------------------------------------------------------------------
 DERIVATIVE SECURITIES (HEDGING STRATEGIES)
 -------------------------------------------------------- ----------------------------------------------------------
 Hedging Strategies                                                                   +
 -------------------------------------------------------- ----------------------------------------------------------
 Swap Agreements                                                                      +
 -------------------------------------------------------- ----------------------------------------------------------
 Credit Default Swaps                                                                15%
 -------------------------------------------------------------------------------------------------------------------
 MORTGAGE-BACKED AND ASSET-BACKED SECURITIES
 -------------------------------------------------------- ----------------------------------------------------------
 Government Guaranteed Mortgage-Backed Securities                                     +
 -------------------------------------------------------- ----------------------------------------------------------
 Ginnie Mae Certificates                                                              +
 -------------------------------------------------------- ----------------------------------------------------------
 Fannie Mae Certificates                                                              +
 -------------------------------------------------------- ----------------------------------------------------------
 Freddie Mac Certificates                                                             +
 -------------------------------------------------------- ----------------------------------------------------------
 Multi-Class Mortgage-Backed Securities (CMOs and
 REMICs)                                                                              +
 -------------------------------------------------------- ----------------------------------------------------------
 Privately Issued Commercial Mortgage-Backed Securities                               +
 -------------------------------------------------------- ----------------------------------------------------------
 Agency Commercial Mortgage-Backed Securities                                         +
 -------------------------------------------------------- ----------------------------------------------------------
 Mortgage Pass-Through Securities                                                     +
 -------------------------------------------------------- ----------------------------------------------------------
 Stripped Mortgage-Backed Securities                                                  +
 -------------------------------------------------------- ----------------------------------------------------------
 Adjustable Rate Mortgages                                                            +
-------------------------------------------------------- ----------------------------------------------------------
 Asset-Backed Securities                                                              +
 -------------------------------------------------------------------------------------------------------------------
 SECURITIES OF NON-US ISSUERS
 -------------------------------------------------------- ----------------------------------------------------------
 Foreign Securities and Depository Receipts (ADRs,                                  +(1)
 EDRs, GDRs and IDRs)
 -------------------------------------------------------- ----------------------------------------------------------
 Foreign Corporate Debt Securities                                                  +(1)
 -------------------------------------------------------- ----------------------------------------------------------
 Foreign Government Debt Securities                                                 +(1)
 -------------------------------------------------------- ----------------------------------------------------------
 Investments in Emerging Markets                                                      +
 -------------------------------------------------------------------------------------------------------------------
 CURRENCY MANAGEMENT
 -------------------------------------------------------- ----------------------------------------------------------
 Currency Exchange Transactions                                                       +
 -------------------------------------------------------- ----------------------------------------------------------
 Currency Hedging Transactions                                                        +
 -------------------------------------------------------- ----------------------------------------------------------
 Cross Hedging                                                                        X
  -------------------------------------------------------- ----------------------------------------------------------
 Options on Foreign Currencies                                                        +
 -------------------------------------------------------------------------------------------------------------------
 OTHER INVESTMENTS AND INVESTMENT PRACTICES
 -------------------------------------------------------- ----------------------------------------------------------
 Illiquid Securities                                                                 15%
 -------------------------------------------------------- ----------------------------------------------------------
 TBA Commitments                                                                      +
 -------------------------------------------------------- ----------------------------------------------------------

 When-Issued and Delayed Delivery Securities                                         15%
 -------------------------------------------------------- ----------------------------------------------------------
 Repurchase Agreements                                                                +
 -------------------------------------------------------- ----------------------------------------------------------
 Reverse Repurchase Agreements                                                       5%
 -------------------------------------------------------- ----------------------------------------------------------
 Mortgage Dollar Rolls                                                               5%
  -------------------------------------------------------- ----------------------------------------------------------
 Lending of Portfolio Securities                                                   33 1/3%
 -------------------------------------------------------- ----------------------------------------------------------
 Borrowing                                                                         33 1/3%
 -------------------------------------------------------- ----------------------------------------------------------
 Short Sales                                                                          +
 -------------------------------------------------------- ----------------------------------------------------------
 Other Investment Companies                                                      limits vary
 -------------------------------------------------------- ----------------------------------------------------------
 Temporary Defensive Investments                                                      +
 -------------------------------------------------------- ----------------------------------------------------------
 Dow Jones CDX.NA.HY.3 and similar products                                           +
 -------------------------------------------------------- ----------------------------------------------------------
 Concentration of Investment in Any One Industry                                     25%
 -------------------------------------------------------- ----------------------------------------------------------
</TABLE>

(1) May be denominated in any currency.

Portfolio Holdings

In addition to the public disclosure of Fund portfolio holdings through required
SEC  quarterly  filings,  the Fund may make its portfolio  holdings  information
publicly  available  on the DWS  Funds'  Web  site as  described  in the  Fund's
prospectus. The Fund does not disseminate non-public information about portfolio
holdings except in accordance with policies and procedures adopted by the Fund.

The Fund's  procedures permit non-public  portfolio  holdings  information to be
shared with Deutsche Asset Management and its affiliates  (collectively "DeAM"),
subadvisors, if any, custodians, independent registered public accounting firms,
attorneys,   officers  and  trustees/directors  and  each  of  their  respective
affiliates and advisers who require access to this  information to fulfill their
duties to the Fund and are subject to the duties of  confidentiality,  including
the duty not to trade on non-public information,  imposed by law or contract, or
by the Fund's  procedures.  This  non-public  information may also be disclosed,
subject to the requirements  described below, to certain third parties,  such as
securities lending agents,  financial printers,  proxy voting firms, mutual fund
analysts and rating and tracking agencies, or to shareholders in connection with
in-kind redemptions (collectively, "Authorized Third Parties").

Prior to any disclosure of the Fund's non-public  portfolio holdings information
to Authorized  Third Parties,  a person  authorized by the Fund's  Trustees must
make a good faith  determination  in light of the facts then known that the Fund
has a  legitimate  business  purpose for  providing  the  information,  that the
disclosure is in the best interest of the Fund,  and that the recipient  assents
or otherwise has a duty to keep the  information  confidential  and to not trade
based on the information  received while the information remains non-public.  No
compensation is received by the Fund or DeAM for disclosing  non-public holdings
information. Periodic reports regarding these procedures will be provided to the
Fund's Trustees.

Portfolio  holdings  information  distributed  by the trading desks of DeAM or a
subadvisor for the purpose of facilitating  efficient trading of such securities
and receipt of relevant  research is not subject to the foregoing  requirements.
Non-public   portfolio   holding   information   does  not   include   portfolio
characteristics  (other than holdings or subsets of holdings) about the Fund and
information  derived  therefrom,  including,  but not limited to, how the Fund's
investments are divided among various sectors, industries,  countries, value and
growth stocks,  bonds,  currencies and cash,  types of bonds,  bond  maturities,
duration,  bond coupons and bond credit quality  ratings so long as the identity
of the Fund's holdings could not be derived from such information.

Registered  investment  companies  that are subadvised by DeAM may be subject to
different  portfolio  holdings  disclosure  policies,  and neither  DeAM nor the
Fund's  Trustees  exercise  control over such  policies.  In addition,  separate
account  clients of DeAM have  access to their  portfolio  holdings  and are not
subject  to the Fund's  portfolio  holdings  disclosure  policy.  The  portfolio
holdings  of some of the  funds  subadvised  by DeAM  and  some of the  separate
accounts managed by DeAM may substantially  overlap with the portfolio  holdings
of the Fund.

DeAM also  manages  certain  unregistered  commingled  trusts and creates  model
portfolios,  the portfolio holdings of which may substantially  overlap with the
portfolio holdings of the Fund. To the extent that investors in these commingled
trusts  or  recipients  of model  portfolio  holdings  information  may  receive
portfolio  holdings  information  of their  trust or of a model  portfolio  on a
different basis from that on which Fund portfolio  holdings  information is made
public,  DeAM has implemented  procedures  reasonably designed to encourage such
investors and recipients to keep such information  confidential,  and to prevent
those investors from trading on the basis of non-public holdings information.

There is no assurance that the Fund's  policies and  procedures  with respect to
the disclosure of portfolio holdings  information will protect the Fund from the
potential  misuse of portfolio  holdings  information  by those in possession of
that information.

                             MANAGEMENT OF THE FUND

Investment Advisor

DIMA, which is part of Deutsche Asset Management,  is the investment advisor for
the Fund. Under the supervision of the Board of Trustees of the Fund, DIMA, with
headquarters  at 345 Park  Avenue,  New York,  New York 10154,  makes the Fund's
investment  decisions,  buys and  sells  securities  for the  Fund and  conducts
research  that leads to these  purchase  and sale  decisions.  DIMA  manages the
Fund's daily investment and business affairs subject to the policies established
by the Fund's Board of  Trustees.  DIMA and its  predecessors  have more than 80
years of  experience  managing  mutual  funds.  DIMA  provides  a full  range of
investment  advisory services to institutional and retail clients.  DIMA is also
responsible  for  selecting  brokers and dealers and for  negotiating  brokerage
commissions and dealer charges.

DeAM is the  marketing  name in the US for the asset  management  activities  of
Deutsche  Bank AG,  DIMA,  Deutsche  Bank Trust  Company  Americas and DWS Trust
Company. DeAM is a global asset management organization that offers a wide range
of investing  expertise and resources,  including hundreds of portfolio managers
and analysts and an office  network  that reaches the world's  major  investment
centers.  This well-resourced  global investment platform brings together a wide
variety of experience and investment insight, across industries,  regions, asset
classes and investing styles.  DIMA is an indirect,  wholly-owned  subsidiary of
Deutsche Bank AG. Deutsche Bank AG is a major global banking institution that is
engaged in a wide range of financial services,  including investment management,
mutual fund,  retail,  private and commercial  banking,  investment  banking and
insurance.  DWS Investments is part of Deutsche Bank's Asset Management division
and,  within  the US,  represents  the retail  asset  management  activities  of
Deutsche  Bank AG,  Deutsche Bank Trust Company  Americas,  Deutsche  Investment
Management Americas Inc. and DWS Trust Company.

The Advisor provides  investment  counsel for many individuals and institutions,
including  insurance  companies,  industrial  corporations,  and  financial  and
banking  organizations,  as well as  providing  investment  advice  to open- and
closed-end SEC registered funds.

The Fund is managed by a team of investment professionals, each of whom plays an
important role in the Fund's management  process.  Team members work together to
develop  investment  strategies and select  securities for the Fund's portfolio.
This team works for the Advisor or its  affiliates  and is  supported by a large
staff  of  economists,   research   analysts,   traders  and  other   investment
specialists. The Advisor or its affiliates believe(s) its team approach benefits
fund  investors  by  bringing  together  many  disciplines  and  leveraging  its
extensive resources.  Team members with primary responsibility for management of
the  Fund,  as  well  as  team  members  who  have  other   ongoing   management
responsibilities  for the Fund, are identified in the Fund's  prospectus,  as of
the date of the Fund's prospectus. Composition of the team may change over time,
and fund  shareholders  and  investors  will be  notified  of changes  affecting
individuals with primary fund management responsibility.

Investment Management Agreement

Pursuant to an  Investment  Management  Agreement  (the  "Investment  Management
Agreement")  between the Fund and the Advisor,  the Advisor provides  continuing
investment  management of the assets of the Fund. In addition to the  investment
management of the assets of the Fund, the Advisor  determines the investments to
be made for the Fund,  including what portion of its assets remain uninvested in
cash or cash  equivalents,  and with whom the orders for investments are placed,
consistent with the Fund's policies as stated in its  prospectuses and this SAI,
or as adopted by the Fund's Board. The Advisor also monitors,  to the extent not
monitored by the Fund's administrator or other agent, the Fund's compliance with
its investment and tax guidelines and other compliance policies.

The Advisor  provides  assistance to the Fund's Board in valuing the  securities
and other  instruments  held by the Fund, to the extent  reasonably  required by
valuation policies and procedures that may be adopted by the Fund.

Pursuant to the Investment Management  Agreement,  (unless otherwise provided in
the agreement or as  determined by the Fund's Board and to the extent  permitted
by applicable  law), the Advisor pays the  compensation  and expenses of all the
Board  members,  officers,  and executive  employees of the Fund,  including the
Fund's share of payroll taxes, who are affiliated persons of the Advisor.

The  Investment  Management  Agreement  provides  that  the  Fund  is  generally
responsible  for expenses  that  include:  fees payable to the Advisor;  outside
legal,  accounting  or auditing  expenses,  including  with  respect to expenses
related to negotiation,  acquisition or  distribution of portfolio  investments;
maintenance  of books and records that are  maintained  by the Fund,  the Fund's
custodian,  or other agents of the Fund; taxes and  governmental  fees; fees and
expenses   of  the   Fund's   accounting   agent,   custodian,   sub-custodians,
depositories,  transfer  agents,  dividend  reimbursing  agents and  registrars;
payment  for  portfolio  pricing  or  valuation   services  to  pricing  agents,
accountants,  bankers and other specialists,  if any;  brokerage  commissions or
other costs of  acquiring  or disposing  of any  portfolio  securities  or other
instruments  of the  Fund;  and  litigation  expenses  and  other  extraordinary
expenses not incurred in the ordinary course of the Fund's business.

The Investment  Management  Agreement  allows the Advisor to delegate any of its
duties under the  Agreement to a  subadvisor,  subject to a majority vote of the
Board of the Fund,  including  a  majority  of the Board who are not  interested
persons of the Fund, and, if required by applicable  law,  subject to a majority
vote of the Fund's shareholders.

The  Investment  Management  Agreement  provides  that the Advisor  shall not be
liable for any error of judgment  or mistake of law or for any loss  suffered by
the Fund in  connection  with matters to which the agreement  relates,  except a
loss resulting from willful  malfeasance,  bad faith or gross  negligence on the
part of the Advisor in the performance of its duties or from reckless  disregard
by the Advisor of its obligations and duties under the agreement.

The Investment  Management Agreement will continue from year to year only if its
continuance is approved annually by the vote of a majority of those Trustees who
are not parties to such Investment Management Agreement or interested persons of
the Advisor or the Trust,  cast in person at a meeting called for the purpose of
voting on such  approval,  and either by a vote of the Trust's  Trustees or of a
majority of the outstanding voting securities.

The  Investment  Management  Agreement may be  terminated  at any time,  without
payment of penalty,  by either party or by vote of a majority of the outstanding
voting securities of the Fund on 60 days' written notice.

In addition,  the Board and  shareholders  have  approved a subadvisor  approval
policy for the Fund (the "Subadvisor Approval Policy").  The Subadvisor Approval
Policy  permits the Advisor,  subject to the approval of the Board,  including a
majority of its independent  Board Members,  to appoint and replace  subadvisors
and to amend  sub-advisory  contracts  without obtaining  shareholder  approval.
Under the Subadvisor Approval Policy, the Board, including its independent board
members,  will continue to evaluate and approve any new  sub-advisory  contracts
between the Advisor and any  subadvisor,  as well as all changes to any existing
sub-advisory  contract. The Fund cannot implement the Subadvisor Approval Policy
without  the SEC either  adopting  revisions  to certain  existing  rules (as it
proposed to do in October 2003) or granting the Fund exemptive  relief from such
existing rules. In the event that the Fund received  exemptive relief or the SEC
adopted  revisions  to its  current  rules,  the Fund and the  Advisor  would be
subject to certain  conditions  imposed by the SEC (and certain  conditions that
may be imposed in the future within either exemptive relief or a rule) to ensure
that the interests of the Fund and its  shareholders  are  adequately  protected
whenever the Advisor acts under the Subadvisor  Approval  Policy,  including any
shareholder notice requirements.

Effective  April 23,  2007,  for all  services  provided  under  the  Investment
Management Agreement, the Fund pays the Advisor a fee, calculated daily and paid
monthly, at the annual rates shown below:

Average Daily Net Assets                                Fee Rate
------------------------                                --------

$0 - $1.5 billion                                        0.365%
$1.5 billion - $2 billion                                0.340%
$2 billion - $3 billion                                  0.315%
$3 billion - $4 billion                                  0.300%
$4 billion - $5 billion                                  0.285%
$5 billion - $6 billion                                  0.270%
Over $6 billion                                          0.255%

Prior to April 23, 2007, the Fund paid the Advisor or the predecessor investment
advisor,  Deutsche Asset Management,  Inc.  ("DAMI"),  a fee, computed daily and
paid monthly, at the annual rate as a percentage of net assets shown below:

Average Daily Net Assets                                Fee Rate
------------------------                                --------

$0 - $500 million                                        0.500%
$500 million - $1 billion                                0.485%
$1 billion - $2 billion                                  0.470%
Over $2 billion                                          0.455%


Prior to the  implementation of the above fee schedule,  the Fund's advisory fee
was equal to an annual  rate of 0.70% of the Fund's  average  daily net  assets,
computed and accrued daily and paid monthly.

The Advisor has  contractually  agreed through April 22, 2010 to waive a portion
of its fees and reimburse  expenses so that total annual operating expenses will
not exceed 0.94% for Class A, excluding  certain  expenses such as extraordinary
expenses, taxes, brokerage and interest.

The Advisor has contractually agreed through September 30, 2009 to waive a
portion of its fees and reimburse expenses so that total annual operating
expenses will not exceed 1.64% for Class B, excluding certain expenses such as
extraordinary expenses, taxes, brokerage and interest. Although there can be no
assurances that the current waiver/expense reimbursement arrangement will be
maintained beyond September 30, 2009, the Advisor has committed to review the
continuance of waiver/ expense reimbursement arrangements by September 30, 2009.

The Advisor has voluntarily  agreed to waive a portion of its fees and reimburse
expenses  so that total  annual  operating  expenses  will not exceed  0.86% and
1.61%, for Class A and Class C shares, respectively,  excluding certain expenses
such as extraordinary  expenses,  taxes, brokerage and interest. The Advisor, at
its discretion, may revise or discontinue this arrangement at any time.

The Advisor has contractually agreed through September 30, 2009, to waive all or
a portion of its management fee and reimburse or pay operating expenses of the
Fund to the extent necessary to maintain the Fund's total operating expenses at
0.64% for Institutional Class shares, excluding certain expenses such as
extraordinary expenses, taxes, brokerage and interest. Although there can be no
assurances that the current waiver/expense reimbursement arrangement will be
maintained beyond September 30, 2009, the Advisor has committed to review the
continuance of waiver/ expense reimbursement arrangements by September 30, 2009.

The  total  advisory  fees  charged  to or paid by the Fund or  PreservationPlus
Income Portfolio (the "Portfolio") (the master portfolio in which, until January
13, 2006, the Fund  previously  invested all of its assets) for each of the last
three fiscal years ended September 30 are shown in the table below.

         2008                  2007 (1)              2006(2), **
         ----                  --------              -----------

      $5,813,897              $3,286,584             $3,970,632

(1)   Charged to the Fund.

(2)   For the period from October 1, 2005 through January 13, 2006, the advisory
      fee charged to the Portfolio was $1,517,873, of which $625,126 was waived.
      For the period  January 14, 2006 through  September 30, 2006, the advisory
      fee charged to the Fund was $2,452,759.

** Prior to July 1, 2006, these fees included an administrative service fee.

In reviewing the terms of the Investment Management Agreement and in discussions
with the Advisor concerning such Investment Management  Agreement,  the Trustees
of the Trust who are not "interested  persons" of the Advisor are represented by
independent counsel at the Fund's expense.
Under a separate agreement between Deutsche Bank AG and the Fund, Deutsche Bank
AG has granted a license to the Fund to utilize the trademark "DWS."

The Advisor may enter into arrangements with affiliates and third party service
providers to perform various administrative, back-office and other services
relating to client accounts. Such service providers may be located in the US or
in non-US jurisdictions.

Compensation of Portfolio Managers

Portfolio managers are eligible for total compensation  comprised of base salary
and discretionary incentive compensation.

Base Salary - Base salary generally represents a smaller percentage of portfolio
managers' total compensation than  discretionary  incentive  compensation.  Base
salary  is linked  to job  function,  responsibilities  and  financial  services
industry peer comparison through the use of extensive market data surveys.

Discretionary  Incentive  Compensation  -  Generally,   discretionary  incentive
compensation comprises a greater proportion of total compensation as a portfolio
manager's  seniority and compensation levels increase.  Discretionary  incentive
compensation  is  determined  based  on an  analysis  of a  number  of  factors,
including among other things,  the performance of Deutsche Bank, the performance
of the Asset Management division, and the employee's individual contribution. In
evaluating  individual  contribution,  management will consider a combination of
quantitative  and  qualitative  factors.  A portion of the  portfolio  manager's
discretionary  incentive  compensation  may be  delivered  in  long-term  equity
programs (usually in the form of Deutsche Bank equity) (the "Equity Plan").  Top
performing portfolio managers may earn discretionary incentive compensation that
is a multiple of their base salary.

o     The quantitative analysis of a portfolio manager's individual  performance
      is based on,  among  other  factors,  performance  of all of the  accounts
      managed by the portfolio  manager  (which  includes the fund and any other
      accounts  managed  by the  portfolio  manager)  over a one-,  three-,  and
      five-year  period  relative to the approriate  Morningstar and Lipper peer
      group universes and/or  benchmark  index(es) with respect to each account.
      Additionally,  the portfolio manager's  retail/institutional  asset mix is
      weighted, as appropriate for evaluation purposes.  Generally the benchmark
      index  used is a  benchmark  index set forth in the fund's  prospectus  to
      which  the  fund's  performance  is  compared.   Additional  or  different
      appropriate  peer group or  benchmark  indices  may also be used.  Primary
      weight is given to  pre-tax  portfolio  performance  over  three-year  and
      five-year time periods  (adjusted as appropriate if the portfolio  manager
      has served for less than five years) with  lesser  consideration  given to
      portfolio  performance over a one-year period. The increase or decrease in
      a  fund's  assets  due to the  purchase  or  sale of  fund  shares  is not
      considered a material factor.

o     The qualitative analysis of a portfolio manager's  individual  performance
      is based on, among other things,  the results of an annual  management and
      internal  peer review  process,  and  management's  assessment  of overall
      portfolio  manager  contributions  to investor  relations,  the investment
      process  and overall  performance  (distinct  from fund and other  account
      performance).   Other  factors,   including   contributions  made  to  the
      investment  team,  as  well  as  adherence  to  Compliance   Policies  and
      Procedures,  Risk  Management  procedures,  the firm's  Code of Ethics and
      "living the values" of the Advisor are also factors.

The  quantitative  analysis of a portfolio  manager's  performance is given more
weight in determining  discretionary incentive compensation than the qualitative
portion.

Certain  portfolio  managers may also participate in the Equity Plan. The amount
of equity awarded under the long-term  equity programs is generally based on the
individual's total  compensation  package and may comprise from 0% to 30% of the
total compensation award. As discretionary incentive compensation increases, the
percentage  of  compensation  awarded in Deutsche  Bank  equity also  increases.
Portfolio  managers  may receive a portion of their equity  compensation  in the
form of shares in the proprietary mutual funds that they manage or support.

Fund Ownership of Portfolio Managers

The following table shows the dollar range of shares owned  beneficially  and of
record by the Fund's portfolio  managers in the Fund as well as in all DWS Funds
as a group  (i.e.,  those funds  advised by  Deutsche  Asset  Management  or its
affiliates), including investments by their immediate family members sharing the
same household and amounts invested through retirement and deferred compensation
plans.  This  information  is provided as of the Fund's most recent  fiscal year
end.

<TABLE>
<CAPTION>
                                                        Dollar Range of                    Dollar Range of All DWS
Name of Portfolio Manager                              Fund Shares Owned                      Fund Shares Owned
-------------------------                              -----------------                      -----------------

<S>                                                           <C>                                    <C>
Eric Meyer                                                    $0                                     $0
Gary Sullivan                                                 $0                             $50,001 - $100,000
Matthew MacDonald                                      $10,001 - $50,000                      $10,001 - $50,000
Robert Wang                                              $1 - $10,000                        $100,001 - $500,000
Thomas Picciochi                                       $10,001 - $50,000                     $100,001 - $500,000
William Chepolis                                      $50,001 - $100,000                     $100,001 - $500,000

Conflicts of Interest

In addition to managing the assets of the Fund,  the Fund's  portfolio  managers
may have responsibility for managing other client accounts of the Advisor or its
affiliates.  The tables below show, for each portfolio  manager,  the number and
asset size of (1) SEC registered  investment companies (or series thereof) other
than the Fund, (2) pooled investment vehicles that are not registered investment
companies and (3) other  accounts  (e.g.,  accounts  managed for  individuals or
organizations)  managed by the portfolio manager. Total assets attributed to the
portfolio  managers in the tables  below  include  total  assets of each account
managed  by them,  although  the  managers  may only  manage a  portion  of such
account's  assets.  The  tables  also show the number of  performance  based fee
accounts, as well as the total assets of the accounts for which the advisory fee
is based on the performance of the account.  This  information is provided as of
the Fund's most recent fiscal year end.

Other SEC Registered Investment Companies Managed:

                                                                                 Number of
                                     Number of         Total Assets of          Investment          Total Assets of
                                     Registered           Registered         Company Accounts        Performance-
                                     Investment           Investment         with Performance-         Based Fee
Name of Portfolio Manager            Companies            Companies              Based Fee             Accounts
-------------------------            ---------            ---------              ---------             --------

Eric Meyer                                 1              $54,313,957                0                    $0
Gary Sullivan                             11           $5,122,259,104                0                    $0
Matthew MacDonald                         14           $7,186,736,667                0                    $0
Robert Wang                               43          $12,522,105,162                0                    $0
Thomas Picciochi                          12           $5,591,208,443                0                    $0
William Chepolis                          16           $7,253,596,672                0                    $0

Other Pooled Investment Vehicles Managed:

                                                                              Number of Pooled
                                                                                 Investment
                                      Number of                               Vehicle Accounts      Total Assets of
                                       Pooled          Total Assets of              with             Performance-
                                     Investment       Pooled Investment         Performance-           Based Fee
Name of Portfolio Manager             Vehicles             Vehicles              Based Fee             Accounts
-------------------------             --------             --------              ---------             --------

Eric Meyer                                  5           $1,701,178,221               1               $261,474,067
Gary Sullivan                               0                       $0               0                         $0
Matthew MacDonald                           0                       $0               0                         $0
Robert Wang                                36           $1,018,472,589               1               $125,426,656
Thomas Picciochi                           11             $644,711,755               1               $125,426,656
William Chepolis                            0                       $0               0                         $0
Other Accounts Managed:


                                                                                 Number of
                                                                               Other Accounts       Total Assets of
                                      Number of                                     with             Performance-
                                        Other          Total Assets of          Performance-           Based Fee
Name of Portfolio Manager             Accounts          Other Accounts           Based Fee             Accounts
-------------------------             --------          --------------           ---------             --------

Eric Meyer                                  0                       $0               0                         $0
Gary Sullivan                               0                       $0               0                         $0
Matthew MacDonald                           1             $116,697,183               0                         $0
Robert Wang                                49           $8,290,933,067               8               $219,246,360
Thomas Picciochi                           14             $944,218,197               8               $219,246,360
William Chepolis                            1             $116,697,183               0                         $0
</TABLE>

In  addition  to the  accounts  above,  an  investment  professional  may manage
accounts in a personal  capacity that may include  holdings that are similar to,
or the same as,  those of the Fund.  The  Advisor  has in place a Code of Ethics
that is designed to address  conflicts of interest and that, among other things,
imposes  restrictions  on the ability of portfolio  managers  and other  "access
persons" to invest in securities  that may be  recommended or traded in the Fund
and other client accounts.

Real,  potential  or apparent  conflicts  of interest may arise when a portfolio
manager has day-to-day  portfolio  management  responsibilities  with respect to
more than one fund or account, including the following:

o     Certain  investments  may be  appropriate  for the Fund and also for other
      clients advised by the Advisor, including other client accounts managed by
      the Fund's portfolio  management team.  Investment  decisions for the Fund
      and other  clients  are made  with a view to  achieving  their  respective
      investment  objectives  and after  consideration  of such factors as their
      current  holdings,  availability  of cash for  investment  and the size of
      their investments  generally.  A particular security may be bought or sold
      for only one client or in  different  amounts and at  different  times for
      more than one but less than all clients.  Likewise, because clients of the
      Advisor may have differing  investment  strategies,  a particular security
      may be bought for one or more clients  when one or more other  clients are
      selling the security.  The  investment  results  achieved for the Fund may
      differ from the results  achieved  for other  clients of the  Advisor.  In
      addition,  purchases or sales of the same  security may be made for two or
      more  clients on the same day. In such event,  such  transactions  will be
      allocated among the clients in a manner believed by the Advisor to be most
      equitable  to each  client,  generally  utilizing  a pro  rata  allocation
      methodology.  In some cases,  the allocation  procedure could  potentially
      have an adverse  effect or  positive  effect on the price or amount of the
      securities purchased or sold by the Fund. Purchase and sale orders for the
      Fund may be  combined  with those of other  clients of the  Advisor in the
      interest of achieving  the most  favorable net results to the Fund and the
      other clients.

o     To the extent that a portfolio manager has  responsibilities  for managing
      multiple client accounts, a portfolio manager will need to divide time and
      attention among relevant accounts.  The Advisor attempts to minimize these
      conflicts  by  aligning  its  portfolio  management  teams  by  investment
      strategy and by employing similar investment models across multiple client
      accounts.

o     In some  cases,  an apparent  conflict  may arise where the Advisor has an
      incentive,  such as a  performance-based  fee, in managing one account and
      not with  respect to other  accounts  it  manages.  The  Advisor  will not
      determine allocations based on whether it receives a performance-based fee
      from the  client.  Additionally,  the  Advisor  has in  place  supervisory
      oversight  processes to periodically  monitor  performance  deviations for
      accounts with like strategies.

o     The Advisor and its affiliates  and the  investment  team of the Funds may
      manage other mutual funds and separate accounts on a long-short basis. The
      simultaneous  management of long and short  portfolios  creates  potential
      conflicts of interest  including the risk that short sale  activity  could
      adversely affect the market value of the long  positions(and  vice versa),
      the risk arising from sequential  orders in long and short positions,  and
      the risks associated with receiving  opposing orders at the same time. The
      Advisor has adopted procedures that it believes are reasonably designed to
      mitigate  these  potential  conflicts  of  interest.   Included  in  these
      procedures are specific guidelines  developed to ensure fair and equitable
      treatment  for all  clients  whose  accounts  are  managed by each  Fund's
      portfolio  management team. The Advisor and the portfolio  management team
      have  established  monitoring  procedures,   a  protocol  for  supervisory
      reviews,  as  well  as  compliance  oversight  to  ensure  that  potential
      conflicts  of  interest  relating to this type of  activity  are  properly
      addressed.

The Advisor is owned by Deutsche Bank AG, a  multi-national  financial  services
company.  Therefore,  the Advisor is affiliated  with a variety of entities that
provide, and/or engage in commercial banking, insurance,  brokerage,  investment
banking,  financial  advisory,  broker-dealer  activities  (including  sales and
trading),  hedge funds, real estate and private equity investing, in addition to
the provision of investment  management services to institutional and individual
investors.  Since  Deutsche  Bank AG, its  affiliates,  directors,  officers and
employees (the "Firm") are engaged in businesses  and have interests  other than
managing  asset  management  accounts,   such  other  activities  involve  real,
potential or apparent  conflicts of interest.  These  interests  and  activities
include potential  advisory,  transactional  and financial  activities and other
interests  in  securities  and  companies  that may be  directly  or  indirectly
purchased  or sold by the Firm for its  clients'  advisory  accounts.  These are
considerations  of which  advisory  clients  should be aware and which may cause
conflicts that could be to the disadvantage of the Advisor's  advisory  clients.
The Advisor has  instituted  business and  compliance  policies,  procedures and
disclosures  that are  designed to identify,  monitor and mitigate  conflicts of
interest and, as appropriate, to report them to the Fund's Board.


Codes of Ethics

The Fund,  the Advisor and the Fund's  principal  underwriter  have each adopted
codes of ethics under rule 17j-1 under the 1940 Act. Board members,  officers of
the Trust and employees of the Advisor and principal  underwriter  are permitted
to make personal securities  transactions,  including transactions in securities
that  may be  purchased  or  held  by the  Fund,  subject  to  requirements  and
restrictions  set forth in the applicable Code of Ethics.  The Advisor's Code of
Ethics  contains  provisions and  requirements  designed to identify and address
certain  conflicts of interest  between personal  investment  activities and the
interests  of the  Fund.  Among  other  things,  the  Advisor's  Code of  Ethics
prohibits  certain types of  transactions  absent prior  approval,  imposes time
periods  during  which  personal   transactions  may  not  be  made  in  certain
securities,  and requires the submission of duplicate broker  confirmations  and
quarterly reporting of securities transactions. Additional restrictions apply to
portfolio  managers,  traders,  research  analysts  and others  involved  in the
investment  advisory  process.  Exceptions to these and other  provisions of the
Advisor's Code of Ethics may be granted in particular circumstances after review
by appropriate personnel.

Regulatory Matters and Legal Proceedings

On December 21, 2006,  DeAM  settled  proceedings  with the SEC and the New York
Attorney General on behalf of DAMI and DIMA, the investment  advisors to many of
the DWS Investments  funds,  regarding  allegations of improper  trading of fund
shares at DeAM and at the legacy Scudder and Kemper organizations prior to their
acquisition by DeAM in April 2002.  These  regulators  alleged that although the
prospectuses  for certain funds in the regulators' view indicated that the funds
did not permit market  timing,  DAMI and DIMA breached  their  fiduciary duty to
those funds in that their  efforts to limit  trading  activity in the funds were
not effective at certain times.  The regulators  also alleged that DAMI and DIMA
breached  their  fiduciary duty to certain funds by entering into certain market
timing  arrangements with investors.  These trading  arrangements  originated in
businesses that existed prior to the currently  constituted  DeAM  organization,
which came together as a result of various mergers of the legacy Scudder, Kemper
and Deutsche fund groups,  and all of the arrangements  were terminated prior to
the start of the regulatory  investigations that began in the summer of 2003. No
current DeAM employee  approved these trading  arrangements.  Under the terms of
the settlements, DAMI and DIMA neither admitted nor denied any wrongdoing.

The terms of the SEC settlement, which identified improper trading in the legacy
Deutsche and Kemper mutual funds only,  provide for payment of  disgorgement  in
the  amount  of $17.2  million.  The terms of the  settlement  with the New York
Attorney  General  provide for payment of  disgorgement  in the amount of $102.3
million, which is inclusive of the amount payable under the SEC settlement, plus
a civil penalty in the amount of $20 million.  The total amount payable by DeAM,
approximately  $122.3  million,  will  be  distributed  to  shareholders  of the
affected  funds in  accordance  with a  distribution  plan to be  developed by a
distribution  consultant.  The funds'  investment  advisors do not believe these
amounts  will have a material  adverse  financial  impact on them or  materially
affect their ability to perform  under their  investment  management  agreements
with the DWS funds.  The  above-described  amounts are not  material to Deutsche
Bank, and have already been reserved.

Among the terms of the settled orders,  DeAM is subject to certain  undertakings
regarding  the conduct of its business in the future,  including  formation of a
Code of Ethics  Oversight  Committee  to oversee all matters  relating to issues
arising  under  the  advisors'  Code of  Ethics;  establishment  of an  Internal
Compliance Controls Committee having overall compliance oversight responsibility
of the advisors; engagement of an Independent Compliance Consultant to conduct a
comprehensive review of the advisors' supervisory  compliance and other policies
and  procedures  designed to prevent  and detect  breaches  of  fiduciary  duty,
breaches  of the Code of Ethics and federal  securities  law  violations  by the
advisors and their employees; and commencing in 2008, the advisors shall undergo
a compliance review by an independent third party.

In addition,  DeAM is subject to certain  further  undertakings  relating to the
governance  of the mutual funds,  including  that at least 75% of the members of
the Boards of Trustees  overseeing  the DWS Funds  continue to be independent of
DeAM;  the  Chairmen  of the  DWS  Funds'  Boards  of  Trustees  continue  to be
independent  of DeAM;  DeAM maintain  existing  management  fee  reductions  for
certain  funds for a period of five years and not increase  management  fees for
these  certain funds during this period;  the funds retain a senior  officer (or
independent consultants,  as applicable) responsible for assisting in the review
of fee  arrangements  and monitoring  compliance by the funds and the investment
advisors  with  securities  laws,  fiduciary  duties,  codes of ethics and other
compliance  policies,  the expense of which shall be borne by DeAM; and periodic
account  statements,  fund  prospectuses  and the mutual funds' web site contain
additional  disclosure  and/or tools that assist investors in understanding  the
fees and costs associated with an investment in the funds and the impact of fees
and expenses on fund returns.

DeAM has also settled proceedings with the Illinois Secretary of State regarding
market timing matters. The terms of the Illinois settlement provide for investor
education contributions totaling approximately $4 million and a payment in the
amount of $2 million to the Securities Audit and Enforcement Fund.

On  September  28,  2006,  the SEC and the National  Association  of  Securities
Dealers ("NASD") (now known as the Financial Industry Regulatory  Authority,  or
"FINRA")  announced  final  agreements in which Deutsche  Investment  Management
Americas Inc. ("DIMA"), Deutsche Asset Management, Inc. ("DAMI") and DWS Scudder
Distributors,  Inc. (now known as DWS Investments  Distributors,  Inc. ("DIDI"))
settled administrative  proceedings regarding disclosure of brokerage allocation
practices  in  connection  with  sales of the DWS  Funds'  (now known as the DWS
Investments Funds) shares during 2001-2003. The agreements with the SEC and NASD
are  reflected  in orders which state,  among other  things,  that DIMA and DAMI
failed to disclose  potential  conflicts of interest to the funds' Boards and to
shareholders  relating to DIDI's use of certain funds' brokerage  commissions to
reduce  revenue  sharing  costs  to   broker-dealer   firms  with  whom  it  had
arrangements to market and distribute DWS Fund shares.  These directed brokerage
practices were discontinued in October 2003.


Under  the  terms of the  settlements,  in  which  DIMA,  DAMI and DIDI  neither
admitted nor denied any of the regulators' findings,  DIMA, DAMI and DIDI agreed
to pay  disgorgement,  prejudgment  interest  and civil  penalties  in the total
amount of $19.3 million. The portion of the settlements distributed to the funds
was  approximately  $17.8 million and was paid to the funds as prescribed by the
settlement orders based upon the amount of brokerage  commissions from each fund
used to satisfy revenue sharing  agreements  with  broker-dealers  who sold fund
shares.

As part of the settlements, DIMA, DAMI and DIDI also agreed to implement certain
measures and undertakings  relating to revenue sharing payments including making
additional  disclosures in the funds'  Prospectuses  or Statements of Additional
Information,   adopting  or  modifying  relevant  policies  and  procedures  and
providing regular reporting to the fund Boards.

Additional  information announced by DeAM regarding the terms of the settlements
is available at www.dws-investments.com/regulatory_settlements.

The matters alleged in the regulatory  settlements described above also serve as
the general basis of a number of private class action lawsuits involving the DWS
funds. These lawsuits name as defendants various persons,  including certain DWS
funds,  the  funds'  investment  advisors  and  their  affiliates,  and  certain
individuals, including in some cases fund Trustees, officers, and other parties.
Each DWS fund's  investment  advisor has agreed to indemnify the  applicable DWS
funds in connection with these lawsuits, or other lawsuits or regulatory actions
that may be filed making similar allegations.

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

                             FUND SERVICE PROVIDERS

Administrator

Pursuant to an administrative  services agreement (the "Administrative  Services
Agreement"),  DIMA provides most administrative  services to the Fund including,
among others,  providing the Fund with personnel,  preparing and making required
filings on behalf of the Fund,  maintaining  books and records for the Fund, and
monitoring the valuation of Fund securities. For all services provided under the
Administrative  Services  Agreement,  the Fund  pays  DIMA a fee of 0.10% of the
Fund's  average daily net assets.  DIMA pays the  accounting  agency fees out of
such Administrative Services Agreement fee.

Under  the  Administrative  Services  Agreement,  DIMA,  as  administrator,   is
obligated on a continuous basis to provide such  administrative  services as the
Board of the Fund reasonably  deems necessary for the proper  administration  of
the Fund.  DIMA provides the Fund with  personnel;  arranges for the preparation
and filing of the Fund's tax returns;  prepares and submits  reports and meeting
materials to the Board and the  shareholders;  prepares and files updates to the
Fund's prospectuses and SAI as well as other reports required to be filed by the
SEC;  maintains  the  Fund's  records;  provides  the Fund  with  office  space,
equipment and services; supervises, negotiates the contracts of and monitors the
performance  of third parties  contractors;  oversees the tabulation of proxies;
monitors the  valuation of portfolio  securities  and monitors  compliance  with
Board-approved valuation procedures;  assists in establishing the accounting and
tax policies of the Fund;  assists in the  resolution of accounting  issues that
may arise  with  respect  to the  Fund;  establishes  and  monitors  the  Fund's
operating  expense budgets;  reviews and processes the Fund's bills;  assists in
determining  the amount of dividends and  distributions  available to be paid by
the Fund, prepares and arranges dividend  notifications and provides information
to agents to effect payments thereof; provides to the Board periodic and special
reports;  provides  assistance with investor and public relations  matters;  and
monitors the registration of shares under applicable federal and state law. DIMA
also performs certain fund accounting services under the Administrative Services
Agreement.  The Administrative Services Agreement provides that DIMA will not be
liable  under  the   Administrative   Services   Agreement  except  for  willful
misfeasance,  bad faith or negligence in the  performance  of its duties or from
the reckless disregard by it of its duties and obligations thereunder.

For the fiscal year ended  September  30,  2008,  DIMA  received  $1,601,239  as
compensation for adminstrative services, of which $144,196 is unpaid.

For the period ended September 30, 2007, DIMA received $803,530 as compensation
for adminstrative services.

For the period from July 1, 2006 through  September  30, 2006,  DIMA received an
administration fee of $122,624.

Prior to July 1, 2006, ICCC received a fee of 0.35% of the Fund's average daily
net assets for serving as administrator of the Fund. For the year ended
September 30, 2006*, ICCC earned $1,672,070 as compensation for administrative
and other services provided to the Fund. During the same period, ICCC waived
$680,008 to the Fund to cover expenses. For the year ended September 30, 2006**,
ICCC earned $108,420 for administrative and other services provided to the
Portfolio.

*        For the period October 1, 2005 through June 30, 2006.

**       For the period October 1, 2005 through January 13, 2006.

Pursuant to an  agreement  between the  Administrator  and State Street Bank and
Trust Company ("SSB"),  the Administrator  has delegated certain  administrative
functions  to SSB. The costs and  expenses of such  delegation  are borne by the
Administrator, not by the Fund.

Various third-party service providers (the "Service  Providers"),  some of which
are affiliated with the Advisor,  provide certain  services to the Fund pursuant
to separate agreements with the Fund.

The  fees  paid by the  Fund to DIMA  pursuant  to the  Administrative  Services
Agreement  are  reduced by the amount of any  credits  received  from the Fund's
custodian for cash balances.

Pursuant to DeAM  procedures  approved by the Boards on behalf of the DWS funds,
proof of claim forms are  routinely  filed on behalf of the DWS funds by a third
party service provider,  with certain limited exceptions.  The Boards of the DWS
funds receive periodic reports regarding the implementation of these procedures.

Distributor

DIDI, an affiliate of the Advisor,  is the principal  distributor  for shares of
the Fund. DIDI is a registered broker-dealer.  The principal business address of
DIDI is 222 South Riverside Plaza, Chicago, IL 60606-5808.

Rule 12b-1 Plans

The Fund may enter into  Shareholder  Servicing  Agreements  with respect to its
Class  A  Shares  with  certain  financial  institutions  to act as  Shareholder
Servicing  Agents,  pursuant to which the Distributor will allocate a portion of
its distribution fee as compensation  for such financial  institutions'  ongoing
shareholder  services.  The Fund may enter into Shareholder Servicing Agreements
with  respect  to its  Class A Shares  pursuant  to  which  the  Advisor  or its
affiliates  will provide  compensation  out of their own  resources  for ongoing
shareholder services.  Currently, banking laws and regulations do not prohibit a
financial  holding  company  affiliate from acting as distributor or Shareholder
Servicing Agent or in other capacities for investment  companies.  Should future
legislative,   judicial  or  administrative  action  prohibit  or  restrict  the
activities  of  the  Shareholder   Servicing   Agents  in  connection  with  the
Shareholder Servicing Agreements,  the Trust may be required to alter materially
or discontinue its  arrangements  with the Shareholder  Servicing  Agents.  Such
financial  institutions  may  impose  separate  fees in  connection  with  these
services  and  investors   should  review  the  prospectuses  and  this  SAI  in
conjunction with any such institution's fee schedule.

Although  Institutional  Class shares of the Fund do not have a 12b-1 Plan,  and
the Trustees  have no current  intention of adopting one, the Fund will also pay
those fees and expenses permitted to be paid or assumed by the Trust pursuant to
a 12b-1 Plan, if any, adopted by the Trust,  notwithstanding any other provision
to the contrary in the Distribution Agreement.

Class A Shares are sold subject to a  distribution  plan  adopted in  accordance
with Rule 12b-1 under the 1940 Act (the "Class A Distribution  Plan"). Under the
Class A Distribution  Plan,  Class A Shares will pay a fee to the Distributor in
an amount  computed at an annual  rate of up to 0.25% of the  average  daily net
assets of Class A Shares.

The Fund has adopted a plan of distribution for its Class B shares (the "Class B
Plan"). Under the Class B Plan, the Fund will pay a shareholder servicing fee at
an annual  rate of up to 0.25% of the  average  daily net  assets of its Class B
shares to its Distributor in addition to a distribution fee at an annual rate of
up to  0.75% of such  assets.  Pursuant  to the  Class B Plan,  shareholder  and
administrative  services  are  provided  to the Fund on  behalf  of its  Class B
shareholders under the Fund's Services Agreement with its Distributor.

Shareholders  of Class C of the Fund have  approved an Amended and Restated Rule
12b-1 Plan (the "Amended Plan" and,  together with the Class A Distribution Plan
and the  Class B Plan,  the  "Distribution  Plans")  for that  class.  Under the
Amended Plan, the Fund will pay a shareholder servicing fee at an annual rate of
up to 0.25%  of the  average  daily  net  assets  of its  Class C shares  to its
Distributor in addition to a  distribution  fee at an annual rate of up to 0.75%
of such assets.  Pursuant to the Amended Plan,  shareholder  and  administrative
services  are provided to the Fund on behalf of its Class C  shareholders  under
the Fund's Service Agreement with its Distributor.

Because 12b-1 fees are paid out of Fund assets on an ongoing  basis,  they will,
over time, increase the cost of an investment and may cost more than other types
of sales charges.

The Class B Plan and the  Amended  Plan for Class C shares  provide  alternative
methods for paying  sales  charges and may help the Fund grow or maintain  asset
levels to provide  operational  efficiencies and economies of scale.  Rule 12b-1
service plans provide  compensation  to the Fund's  Distributor  for  post-sales
servicing.  Since the  Distribution  Agreement  provides  for fees payable as an
expense  of Class B and C shares  that  are used by the  Distributor  to pay for
distribution  and  services  for those  classes,  the  agreement is approved and
reviewed for Class B and C shares in  accordance  with Rule 12b-1 under the 1940
Act, which regulates the manner in which an investment  company may, directly or
indirectly,  bear the  expenses of  distributing  its shares.  The  Distribution
Agreement  may not be  amended to  increase  the fee to be paid by the Fund with
respect to a class  without  approval  by a majority of the  outstanding  voting
securities  of such class of the Fund.  Similarly,  the  Services  Agreement  is
approved  and  reviewed  separately  for the Class A shares,  Class B shares and
Class C shares in accordance with Rule 12b-1.

The  Distributor  uses these fees to finance any activity  which is  principally
intended  to result in the sale of Class A  Shares,  Class B Shares  and Class C
Shares of the Fund. If a Distribution  Plan is terminated in accordance with its
terms,  the  obligation  of the Fund to make  payments  to DIDI  pursuant to the
Distribution  Plan  will  cease and the Fund  will not be  required  to make any
payments not previously  accrued past the termination  date.  Thus,  there is no
legal  obligation  for the Fund to pay any expenses  incurred by DIDI other than
fees  previously  accrued and payable  under an  Distribution  Plan,  if for any
reason the Distribution Plan is terminated in accordance with its terms.  Future
fees under the Distribution  Plan may or may not be sufficient to reimburse DIDI
for its expenses incurred.

Prior to the shareholders  approving a Distribution Plan, the Fund had adopted a
service  plan for its Class C  shares,  under  which  the Fund  paid  Investment
Company Capital Corp. ("ICCC") service fees at an aggregate annual rate of up to
0.25% of the class's  average daily net assets.  ICCC provided  information  and
administrative  services to the Fund.  ICCC in turn had various  agreements with
financial services firms to provide personal services and/or account maintenance
services  to their  customers  and paid  these  fees  based  upon the  assets of
shareholder accounts the firms serviced. For the fiscal year ended September 30,
2006 the Fund incurred $286,411,  of which $286,411,  was waived, in shareholder
servicing fees for Class C shares.



Expenses of the Fund paid in connection with the Rule 12b-1 Plans for each class
of  shares  are set  forth  below.  A  portion  of the  marketing  and sales and
operating expenses shown below could be considered overhead expenses.


<TABLE>
<CAPTION>
-------------------- ------------ ----------------------------------------------------
                                       12b-1 Compensation to Underwriter for the
                                         Fiscal Year Ended September 30, 2008
-------------------- ------------ --------------- ------------------ -----------------
                                                        12b-1
                                       12b-1         Shareholder            12b-1
                                   Distribution    Administrative      Compensation
                                       Fees         Services Fees     Paid to Firms
-------------------- ------------ --------------- ------------------ -----------------
<S>                                           <C>        <C>                 <C>
DWS Short Duration   Class A                  $0         $1,248,111          $745,975
Plus Fund
-------------------- ------------ --------------- ------------------ -----------------
                     Class B             $40,632            $12,599           $13,975
-------------------- ------------ --------------- ------------------ -----------------
                     Class C          $1,215,296           $408,722        $1,742,287
-------------------- ------------ --------------- ------------------ -----------------


-------------------- ------------  --------------------------------------------------------------------------
                                                  Other Expenses Paid by Underwriter for the
                                                     Fiscal Year Ended September 30, 2008
-------------------- ------------  -------------------- ------------- -------------- ----------- ------------
                                      Advertising,
                                    Sales, Literature                   Marketing     Postage
                                     and Promotional      Prospectus    and Sales       and        Imputed
                                        Materials         Printing      Expenses      Mailing     Interest
-------------------- ------------  -------------------- ------------- -------------- ----------- ------------
DWS Short Duration   Class A                $2,048,787       $86,538       $419,236    $378,227           $0
Plus Fund
-------------------- ------------  -------------------- ------------- -------------- ----------- ------------
                     Class B                      $471           $10           $119        $120      $49,503
-------------------- ------------  -------------------- ------------- -------------- ----------- ------------
                     Class C                  $322,184       $12,857        $68,897     $62,792           $0
-------------------- ------------  -------------------- ------------- -------------- ----------- ------------




DIDI no longer advances the first year distribution fee and service fee to firms
for sales of Class C shares to  employer-sponsored  employee benefit plans using
the OmniPlus  subaccount  record keeping system made available through ADP, Inc.
under an alliance with DIDI and its affiliates.

The table below sets forth,  for the fiscal year ended  September 30, 2006,  the
distribution and shareholder servicing fees paid by the Fund:

                       Distribution Fee        Amount Waived     Shareholder Servicing Fee     Amount Waived
                       ----------------        -------------     -------------------------     -------------

Class A                     $241,808                $225,120                N/A                     N/A
Class C                     $884,793                $143,884              $286,411                $286,411

During the fiscal  year ended  September  30,  2006,  the  Distributor  received
commissions  on the sale of the Fund's  Class A shares and  contingent  deferred
sales charges on the Fund's Class A and Class C shares as follows:

Class A Commissions                                  $10,618
Class A Contingent Deferred Sales Charge             $3,391
Class C Contingent Deferred Sales Charge             $10,163

The table below sets forth,  for the fiscal year ended  September 30, 2007,  the
distribution and shareholder servicing fees paid by the Fund:


                                            Unpaid as of                                     Unpaid as of
                     Distribution Fee    September 30, 2007  Shareholder Servicing Fee     September 30, 2007
                     ----------------    ------------------  -------------------------     ------------------

Class A                      N/A                      N/A               $382,555                  $78,476
Class B                   24,790                   $4,300                 $8,263                     $290
Class C                 $786,484                  $78,319               $260,688                  $34,631

During the fiscal  year ended  September  30,  2007,  the  Distributor  received
commissions  on the sale of the Fund's  Class A shares and  contingent  deferred
sales charges on the Fund's Class A, Class B and Class C shares as follows:

Class A Commissions                                  $319
Class A Contingent Deferred Sales Charge             $49,756
Class B Contingent Deferred Sales Charge             $9,228
Class C Contingent Deferred Sales Charge             $3,763

* Institutional Class shares commenced operations on or about August 22, 2008.

The table below sets forth,  for the fiscal year ended  September 30, 2008,  the
distribution and shareholder servicing fees paid by the Fund:


                                            Unpaid as of                                     Unpaid as of
                     Distribution Fee    September 30, 2008  Shareholder Servicing Fee     September 30, 2008
                     ----------------    ------------------  -------------------------     ------------------

Class A                      N/A                      N/A             $1,190,158                 $105,166
Class B                   40,724                   $2,539                $12,743                   $1,056
Class C               $1,212,154                 $109,615               $406,162                  $36,328

During the fiscal  year ended  September  30,  2008,  the  Distributor  received
commissions  on the sale of the Fund's  Class A shares and  contingent  deferred
sales charges on the Fund's Class A, Class B and Class C shares as follows:

Class A Commissions                                  $77,519
Class A Contingent Deferred Sales Charge             $14,935
Class B Contingent Deferred Sales Charge             $12,862
Class C Contingent Deferred Sales Charge             $60,233
</TABLE>


Custodian

The Fund  employs  SSB,  225 Franklin  Street,  Boston,  Massachusetts  02110 as
custodian.  SSB has entered into agreements with foreign subcustodians  approved
by the  Trustees  pursuant to Rule 17f-5 under the 1940 Act.  SSB uses  Deutsche
Bank AG, an affiliate of the Advisor,  as subcustodian  ("DB  Subcustodian")  in
certain countries.  To the extent the Fund holds any securities in the countries
in which SSB uses DB Subcustodian as a  subcustodian,  those  securities will be
held by DB  Subcustodian  as part of a larger omnibus account in the name of SSB
(the "Omnibus  Account").  For its  services,  DB  Subcustodian  receives (1) an
annual fee based on a percentage  of the average daily net assets of the Omnibus
Account and (2)  transaction  charges  with respect to  transactions  that occur
within the Omnibus Account.

Transfer Agent

DWS Investments  Service  Company  ("DISC") serves as the Fund's Transfer Agent.
DISC is located at 222 South Riverside Plaza, Chicago, IL 60606-5808.  Under its
transfer agency agreement with the Trust, DISC maintains the shareholder account
records for the Fund, handles certain  communications  between  shareholders and
the Trust and causes to be distributed any dividends and  distributions  payable
by the Trust. DISC may be reimbursed by the Fund for its out-of-pocket expenses.

The Transfer  Agent receives an annual service fee for each account of the Fund,
based on the type of account.  For open retail  accounts,  the fee is a flat fee
ranging from $20.00 to $27.50 per account,  for open  wholesale  money funds the
fee is $32.50 per account, while for certain retirement accounts serviced on the
recordkeeping system of ADP, Inc., the fee is a flat fee up to $3.60 per account
(as of 2007,  indexed to  inflation)  plus an asset  based fee of up to 0.25% of
average  net assets.  1/12th of the annual  service  charge for each  account is
charged and payable to the Transfer  Agent each month.  A fee is charged for any
account  which at any time  during  the month had a share  balance  in the Fund.
Smaller fees are also charged for closed accounts for which  information must be
retained on the Transfer  Agent's  system for up to 18 months after  closing for
tax reporting purposes.

Certain  out-of-pocket  expenses  incurred  by  the  Transfer  Agent,  including
expenses of printing and mailing  routine fund  disclosure  documents,  costs of
record retention and transaction  processing costs are reimbursed by the Fund or
are paid  directly  by the  Fund.  Certain  additional  out-of-pocket  expenses,
including costs of computer  hardware and software,  third party  record-keeping
and processing of proxy statements,  may only be reimbursed by the Fund with the
prior approval of the Fund's Board.

Pursuant to a sub-transfer  agency agreement between DISC and DST Systems,  Inc.
("DST"),  DISC has delegated  certain transfer agent,  dividend paying agent and
shareholder  servicing  agent  functions  to DST. The costs and expenses of such
delegation are borne by DISC, not by the Funds.

For the year ended  September 30, 2008,  the amount  charged to the Fund by DISC
aggregated $1,276,419 of which $433,770 was waived. For the year ended September
30, 2007,  the amount charged to the Fund by DISC  aggregated  $870,766 of which
$459,329 was waived.  For the year ended  September 30, 2006, the amount charged
to the Fund by DISC aggregated $68,819 of which $68,819 was waived.



Legal Counsel

Vedder Price P.C., 222 North LaSalle Street, Chicago,  Illinois 60601, serves as
counsel to the Fund.

Ropes & Gray LLP, One International  Place,  Boston,  Massachusetts  02110-2624,
serves as counsel to the Independent Trustees.


Independent Registered Public Accounting Firm

PricewaterhouseCoopers   LLP,  125  High  Street,  Boston,  MA  02110,  acts  as
Independent  Registered  Public  Accounting Firm of the Fund for the fiscal year
ended September 30, 2008.

                             PORTFOLIO TRANSACTIONS

The Advisor is generally responsible for placing the orders for the purchase and
sale of portfolio securities, including the allocation of brokerage.

The  policy of the  Advisor  in  placing  orders  for the  purchase  and sale of
securities  for the Funds is to seek best  execution,  taking into  account such
factors,   among  others,   as  price;   commission  (where   applicable);   the
broker-dealer's   ability  to  ensure  that  securities  will  be  delivered  on
settlement date; the willingness of the  broker-dealer to commit its capital and
purchase  a  thinly  traded   security  for  its  own  inventory;   whether  the
broker-dealer   specializes  in  block  orders  or  large  program  trades;  the
broker-dealer's  knowledge of the market and the security;  the  broker-dealer's
ability to  maintain  confidentiality;  the  broker-dealer's  ability to provide
access to new  issues;  the  broker-dealer's  ability  to provide  support  when
placing a difficult trade;  the financial  condition of the  broker-dealer;  and
whether the broker-dealer has the infrastructure and operational capabilities to
execute  and  settle  the trade.  The  Advisor  seeks to  evaluate  the  overall
reasonableness of brokerage  commissions with commissions  charged on comparable
transactions  and compares the brokerage  commissions (if any) paid by the Funds
to reported commissions paid by others. The Advisor routinely reviews commission
rates,  execution  and  settlement  services  performed  and makes  internal and
external comparisons.

Commission rates on transactions in equity securities on US securities exchanges
are  subject  to  negotiation.   Commission  rates  on  transactions  in  equity
securities on foreign  securities  exchanges are generally fixed.  Purchases and
sales of  fixed-income  securities and certain  over-the-counter  securities are
effected  on  a  net  basis,  without  the  payment  of  brokerage  commissions.
Transactions  in  fixed  income  and  certain  over-the-counter  securities  are
generally  placed by the  Advisor  with the  principal  market  makers for these
securities  unless the Advisor  reasonably  believes more favorable  results are
available elsewhere.  Transactions with dealers serving as market makers reflect
the spread between the bid and asked prices.  Purchases of  underwritten  issues
will  include  an  underwriting  fee  paid  to  the  underwriter.  Money  market
instruments are normally purchased in principal  transactions  directly from the
issuer or from an underwriter or market maker.

It is  likely  that the  broker-dealers  selected  based  on the  considerations
described in this section will include  firms that also sell shares of the Funds
to their  customers.  However,  the Advisor does not consider sales of shares of
the Funds as a factor in the selection of  broker-dealers  to execute  portfolio
transactions  for the Funds  and,  accordingly,  has  implemented  policies  and
procedures  reasonably designed to prevent its traders from considering sales of
shares of the Funds as a factor in the  selection of  broker-dealers  to execute
portfolio transactions for the Funds.

The Advisor is  permitted  by Section  28(e) of the  Securities  Exchange Act of
1934, as amended ("1934 Act"), when placing  portfolio  transactions for a Fund,
to cause the Fund to pay brokerage  commissions  in excess of that which another
broker-dealer might charge for executing the same transaction in order to obtain
research and brokerage  services if the Advisor determines that such commissions
are  reasonable in relation to the overall  services  provided.  The Advisor may
from  time to time,  in  reliance  on  Section  28(e) of the 1934  Act,  execute
portfolio  transactions with  broker-dealers that provide research and brokerage
services to the Advisor.  Consistent  with the Advisor's  policy  regarding best
execution,  where more than one broker is  believed  to be capable of  providing
best execution for a particular  trade, the Advisor may take into  consideration
the receipt of research and brokerage services in selecting the broker-dealer to
execute  the trade.  Although  certain  research  and  brokerage  services  from
broker-dealers may be useful to a Fund and to the Advisor,  it is the opinion of
the Advisor that such information only supplements its own research effort since
the  information  must still be analyzed,  weighed and reviewed by the Advisor's
staff. To the extent that research and brokerage  services of value are received
by the Advisor,  the Advisor may avoid expenses that it might  otherwise  incur.
Research and brokerage  services  received from a broker-dealer may be useful to
the Advisor and its affiliates in providing  investment  management  services to
all or some of its  clients,  which  includes  a Fund.  Services  received  from
broker-dealers  that executed  securities  transactions for a Portfolio will not
necessarily be used by the Advisor specifically to service such Fund.

Research and brokerage services provided by broker-dealers may include,  but are
not limited to,  information on the economy,  industries,  groups of securities,
individual   companies,   statistical   information,   accounting  and  tax  law
interpretations,  political developments, legal developments affecting portfolio
securities,  technical  market action,  pricing and appraisal  services,  credit
analysis,  risk measurement  analysis,  performance analysis and measurement and
analysis of corporate responsibility issues. Research and brokerage services are
typically  received  in the form of written  or  electronic  reports,  access to
specialized  financial  publications,  telephone  contacts and personal meetings
with  security  analysts,  but may also be  provided  in the form of  access  to
various  computer  software and meetings  arranged  with  corporate and industry
representatives.

The Advisor may also select  broker-dealers  and obtain from them  research  and
brokerage  services that are used in connection  with executing  trades provided
that such services are consistent  with  interpretations  under Section 28(e) of
the 1934 Act.  Typically,  these  services  take the form of  computer  software
and/or  electronic  communication  services  used by the  Advisor to  facilitate
trading activity with those broker-dealers.

Research and brokerage services may include products obtained from third parties
if the Advisor determines that such product or service constitutes brokerage and
research as defined in Section 28(e) and interpretations thereunder. Currently,
it is the Advisor's policy that Sub-Advisors may not execute portfolio
transactions on behalf of the Funds to obtain third party research and brokerage
services. The Advisor may, in the future, change this policy. Regardless,
certain Sub-Advisors may, as matter of internal policy, limit or preclude third
party research and brokerage services.

The Advisor may use brokerage  commissions to obtain certain brokerage  products
or services that have a mixed use (i.e., it also serves a function that does not
relate to the investment  decision-making process). In those circumstances,  the
Advisor  will make a good faith  judgment to evaluate  the various  benefits and
uses to which it  intends to put the mixed use  product or service  and will pay
for that portion of the mixed use product or service that it reasonably believes
does not constitute research and brokerage services with its own resources.

DIMA will  monitor  regulatory  developments  and market  practice in the use of
client  commissions to obtain research and brokerage services and may adjust its
portfolio transactions policies in response thereto.

Investment  decisions for each Fund and for other investment accounts managed by
the  Advisor  are  made  independently  of each  other  in  light  of  differing
conditions. However, the same investment decision may be made for two or more of
such accounts. In such cases,  simultaneous  transactions are inevitable. To the
extent  permitted by law, the Advisor may aggregate the securities to be sold or
purchased  for a Fund with those to be sold or purchased  for other  accounts in
executing  transactions.  Purchases  or sales are then  averaged as to price and
commission  and  allocated  as to amount in a manner  deemed  equitable  to each
account.  While in some cases this practice  could have a detrimental  effect on
the price  paid or  received  by,  or on the size of the  position  obtained  or
disposed of for,  the Fund,  in other  cases it is believed  that the ability to
engage in volume transactions will be beneficial to the Fund.

DIMA and its affiliates and the Funds' management team manage other mutual funds
and separate accounts,  some of which use short sales of securities as a part of
its  investment  strategy.  The  simultaneous   management  of  long  and  short
portfolios creates potential conflicts of interest including the risk that short
sale activity could adversely affect the market value of the long positions (and
vice  versa),  the  risk  arising  from  sequential  orders  in long  and  short
positions,  and the risks associated with receiving  opposing orders at the same
time.

DIMA has adopted procedures that it believes are reasonably designed to mitigate
these  potential  conflicts  of interest.  Incorporated  in the  procedures  are
specific  guidelines  developed to ensure fair and  equitable  treatment for all
clients. DIMA and the investment team have established monitoring procedures and
a protocol for supervisory  reviews,  as well as compliance  oversight to ensure
that  potential  conflicts  of interest  relating  to this type of activity  are
properly addressed.

Deutsche Bank AG or one of its affiliates (or in the case of a Sub-Advisor,  the
Sub-Advisor  or one of its  affiliates)  may act as a  broker  for the  Fund and
receive brokerage commissions or other transaction-related compensation from the
Fund in the purchase and sale of securities,  options or futures contracts when,
in the judgment of the Advisor,  and in accordance with  procedures  approved by
the  Fund's  Board,  the  affiliated  broker  will be able to obtain a price and
execution at least as favorable as those obtained from other  qualified  brokers
and if,  in the  transaction,  the  affiliated  broker  charges  the Fund a rate
consistent  with that charged to  comparable  unaffiliated  customers in similar
transactions.

For  the  fiscal  year  ended  September  30,  2008,  the  Fund  paid  brokerage
commissions in the amount of $77,356.

For  the  fiscal  year  ended  September  30,  2007,  the  Fund  paid  brokerage
commissions in the amount of $106,407.

For  the  fiscal  year  ended  September  30,  2006,  the  Fund  paid  brokerage
commissions in the amount of $91,836.

Securities  of Regular  Broker-Dealers.  The Fund is required  to  identify  any
securities  of its "regular  brokers or dealers" (as such term is defined in the
1940 Act) that the Fund has acquired  during the most recent  fiscal year. As of
September 30, 2008, the Fund did not hold any securities of its regular  brokers
or dealers.


Portfolio Turnover

Portfolio  turnover  rate is  defined  by the SEC as the ratio of the  lesser of
sales or purchases to the monthly average value of such securities  owned during
the year,  excluding all securities  whose  remaining  maturities at the time of
acquisition were one year or less.

Higher levels of activity by the Fund result in higher transaction costs and may
also  result  in  taxes on  realized  capital  gains  to be borne by the  Fund's
shareholders.  Purchases and sales are made whenever necessary, in the Advisor's
discretion, to meet the Fund's objective.

Portfolio  turnover rate measures the frequency that the Fund sells and replaces
the value of its securities  within a given period.  A 100% annual turnover rate
would occur,  for example,  if all portfolio  securities  (excluding  short-term
obligations)  were  replaced  once in a  period  of one  year,  or if 10% of the
portfolio  securities were replaced ten times in one year. The rate of portfolio
turnover of the Fund may exceed that of certain other mutual funds with the same
investment objectives.  High turnover can increase the Fund's transaction costs,
thereby lowering its returns.  For the fiscal years ended September 30, 2007 and
September 30, 2008, the Fund's turnover rates were 57% and 83%, respectively.

                        PURCHASE AND REDEMPTION OF SHARES

General Information

Policies and procedures affecting  transactions in Fund shares can be changed at
any  time  without  notice,  subject  to  applicable  law.  Transactions  may be
contingent  upon proper  completion of application  forms and other documents by
shareholders  and their  receipt by the  Fund's  agents.  Transaction  delays in
processing (and changing account features) due to circumstances within or beyond
the  control  of the Fund and its  agents  may  occur.  Shareholders  (or  their
financial  service firms) are responsible for all losses and fees resulting from
bad checks,  cancelled orders or the failure to consummate transactions effected
pursuant to instructions reasonably believed to be genuine.

A  distribution  will be  reinvested in shares of the same Fund and class if the
distribution check is returned as undeliverable.

Orders  will be  confirmed  at a price  based on the net asset value of the Fund
(including any applicable  sales charge) next  determined  after receipt in good
order by DIDI(or the "Distributor") of the order accompanied by payment.  Orders
received by dealers or other financial services firms prior to the determination
of net asset value and received in good order by DIDI prior to the determination
of net asset  value will be  confirmed  at a price  based on the net asset value
next determined after receipt by DIDI ("trade date").

Certificates. Share certificates will not be issued. Share certificates now in a
shareholder's  possession may be sent to the transfer agent for cancellation and
book-entry  credit to such  shareholder's  account.  Certain telephone and other
procedures   require   book-entry   holdings.   Shareholders   with  outstanding
certificates bear the risk of loss.

Use of Financial  Services  Firms.  Investment  dealers and other firms  provide
varying arrangements for their clients to purchase and redeem the Fund's shares,
including higher minimum investments,  and may assess transaction or other fees.
Firms may arrange  with their  clients for other  investment  or  administrative
services.  Such firms may independently  establish and charge additional amounts
to their  clients for such  services.  Firms also may hold the Fund's  shares in
nominee or street  name as agent for and on behalf of their  customers.  In such
instances,  the Fund's  transfer  agent,  DISC",  will have no information  with
respect  to  or  control  over  the  accounts  of  specific  shareholders.  Such
shareholders  may obtain access to their  accounts and  information  about their
accounts only from their firm.  Certain of these firms may receive  compensation
from the Fund through the Shareholder Service Agent for record-keeping and other
expenses relating to these nominee  accounts.  In addition,  certain  privileges
with respect to the purchase and  redemption  of shares or the  reinvestment  of
dividends may not be available through such firms. Some firms may participate in
a  program  allowing  them  access to their  clients'  accounts  for  servicing,
including,  without  limitation,  transfers of  registration  and dividend payee
changes, and may perform functions such as generation of confirmation statements
and disbursement of cash dividends.  Such firms,  including  affiliates of DIDI,
may receive compensation from the Fund through the Shareholder Service Agent for
these services.

The Fund has authorized one or more financial  service  institutions,  including
certain members of FINRA other than the Distributor ("financial  institutions"),
to accept purchase and redemption  orders for the Fund's shares.  Such financial
institutions  may also  designate  other parties,  including plan  administrator
intermediaries,  to accept purchase and redemption  orders on the Fund's behalf.
Orders for purchases or redemptions  will be deemed to have been received by the
Fund when  such  financial  institutions  or, if  applicable,  their  authorized
designees  accept the orders.  Subject to the terms of the contract  between the
Fund and the  financial  institution,  ordinarily  orders  will be priced at the
Fund's  net  asset  value  next  computed  after  acceptance  by such  financial
institution or its authorized  designees and accepted by the Fund.  Further,  if
purchases or  redemptions  of the Fund's  shares are arranged and  settlement is
made  at  an  investor's   election  through  any  other  authorized   financial
institution, that financial institution may, at its discretion, charge a fee for
that  service.  The  Board of  Trustees  and the  Distributor,  also the  Fund's
principal  underwriter,  each has the right to limit the amount of purchases by,
and to refuse to sell to, any  person.  The  Trustees  and the  Distributor  may
suspend  or  terminate  the  offering  of shares of the Fund at any time for any
reason.

DIDI has adopted an Incentive Plan (the "Plan")  covering  wholesalers  that are
regional  vice  presidents  ("DWS  Investments  Wholesalers").   Generally,  DWS
Investments  Wholesalers  market shares of the DWS funds to financial  advisors,
who in turn may recommend that investors purchase shares of a DWS fund. The Plan
is an  incentive  program that  combines a monthly  incentive  component  with a
quarterly strategic bonus component. Under the Plan, DWS Investments Wholesalers
will receive a monetary monthly incentive based on the amount of sales generated
from their marketing of the funds,  and that incentive will differ  depending on
the product  category of the fund. Each fund is assigned to one of three product
categories  --  "Strategic,"  "Tactical"  or "all  other  funds" -- taking  into
consideration, among other things, the following criteria, where applicable:

o     The  Fund's  consistency  with DWS  Investments'  branding  and  long-term
      strategy;
o     The Fund's competitive performance;
o     The Fund's Morningstar rating;
o     The length of time the Fund's Portfolio Managers have managed the
      Fund/Strategy;
o     Market size for the fund category;
o     The Fund's size, including sales and redemptions of the Fund's shares.

This  information  and other factors are  presented to a committee  comprised of
representatives  from various  groups  within DWS  Investments,  who review on a
quarterly basis the funds assigned to each product category described above, and
make any  changes to those  assignments  at that time.  No one  factor,  whether
positive or negative,  determines a fund's  placement in a given  category;  all
these  factors  together are  considered,  and the  designation  of funds in the
Strategic and Tactical categories represents  management's judgment based on the
above criteria.  In addition,  management may consider a fund's profile over the
course  of  several  review  periods  before  making  a change  to its  category
assignment.  These  category  assignments  will be posted  quarterly  to the DWS
funds' Web site at  www.dws-investments.com,  approximately  one month after the
end  of  each  quarter.   DWS  Investments   Wholesalers   receive  the  highest
compensation for Strategic funds, less for Tactical funds and the lowest for all
other  funds.  The level of  compensation  among  these  categories  may  differ
significantly.

The prospect of receiving,  or the receipt of, additional  compensation by a DWS
Investments  Wholesaler  under  the  Plan  may  provide  an  incentive  to favor
marketing  the  Strategic  or  Tactical  funds over all other  funds.  The Plan,
however,  will not change the price that investors pay for shares of a fund. The
DWS Investments  Compliance Department monitors DWS Investments Wholesaler sales
and other activity in an effort to detect unusual activity in the context of the
compensation  structure under the Plan. However,  investors may wish to take the
Plan  and the  product  category  of the  fund  into  account  when  considering
purchasing a fund or evaluating any recommendations relating to fund shares.

Telephone  and  Electronic  Transaction  Procedures.  Shareholders  have various
telephone, Internet, wire and other electronic privileges available. The Fund or
its agents will not be liable for any losses,  expenses or costs  arising out of
fraudulent or unauthorized instructions pursuant to these privileges if the Fund
or its agents reasonably believe, based upon reasonable verification procedures,
that the instructions were genuine.  Verification  procedures  include recording
instructions,  requiring  certain  identifying  information  before  acting upon
instructions  and  sending  written  confirmations.  During  periods  when it is
difficult to contact the  Shareholder  Service Agent, it may be difficult to use
telephone, wire and other privileges.

QuickBuy and QuickSell. QuickBuy and QuickSell permits the transfer of money via
the Automated  Clearing House System (minimum $50 and maximum  $250,000) from or
to a shareholder's bank, savings and loan, or credit union account in connection
with the purchase or  redemption  of Fund shares.  Shares  purchased by check or
through  QuickBuy and QuickSell or Direct Deposit may not be redeemed under this
privilege  until  such  Shares  have been owned for at least 10  calendar  days.
QuickBuy and  QuickSell  cannot be used with  passbook  savings  accounts or for
certain tax-deferred plans.

Dividend  Payment  Option.   Investors  may  have  dividends  and  distributions
automatically   deposited  to  their  predesignated  bank  account  through  DWS
Investments'   Dividend   Payment  Option  request  form.   Shareholders   whose
predesignated  checking  account  of record is with a member  bank of  Automated
Clearing  House  Network  (ACH) can have income and capital  gain  distributions
automatically  deposited to their  personal  bank account  usually  within three
business days after the Fund pays its  distribution.  A Dividend  Payment Option
request    form   can   be   obtained    by   visiting    our   Web   site   at:
www.dws-investments.com or calling (800) 621-1048.  Confirmation Statements will
be  mailed  to  shareholders  as  notification  that   distributions  have  been
deposited.

Tax-Sheltered   Retirement   Plans.  The  Shareholder   Service  Agent  provides
retirement plan services and documents and DIDI can establish  investor accounts
in any of the following types of retirement plans:

o     Traditional, Roth and Education IRAs. This includes Savings Incentive
      Match Plan for Employees of Small Employers ("SIMPLE"), Simplified
      Employee Pension Plan ("SEP") IRA accounts and prototype documents.

o     403(b)(7) Custodial Accounts. This type of plan is available to employees
      of most non-profit organizations.

o     Prototype money purchase pension and profit-sharing plans may be adopted
      by employers.

Brochures  describing these plans as well as model defined benefit plans, target
benefit plans,  457 plans,  401(k) plans,  simple 401(k) plans and materials for
establishing them are available from the Shareholder Service Agent upon request.
Additional fees and transaction policies and procedures may apply to such plans.
Investors  should  consult with their own tax  advisors  before  establishing  a
retirement plan.

Purchases

The Fund  reserves the right to withdraw all or any part of the offering made by
the prospectuses  and to reject purchase orders for any reason.  Also, from time
to time,  the Fund may  temporarily  suspend  the  offering  of any class of its
shares to new investors.  During the period of such suspension,  persons who are
already  shareholders  of such class of the Fund may be permitted to continue to
purchase additional shares of such class and to have dividends reinvested.

To help the  government  fight the  funding of  terrorism  and money  laundering
activities,  federal law requires all financial  institutions to obtain,  verify
and record  information  that identifies  each person who opens an account.  For
more   information,   please  see  "Policies  You  Should  Know  About"  in  the
prospectuses.

Financial Services Firms' Compensation. Banks and other financial services firms
may provide  administrative  services  related to order placement and payment to
facilitate  transactions  in shares of the Fund for their clients,  and DIDI may
pay  them a  transaction  fee up to the  level  of the  discount  or  commission
allowable or payable to dealers.

In  addition  to  the  discounts  or  commissions  described  herein  and in the
prospectuses,  DIDI, the Advisor,  or its affiliates may pay or allow additional
discounts,  commissions or promotional incentives, in the form of cash, to firms
that sell shares of the Fund.  In some  instances,  such  amounts may be offered
only to certain  firms that sell or are expected to sell during  specified  time
periods  certain  minimum  amounts  of  shares  of  the  Fund,  or  other  funds
underwritten by DIDI.

Upon  notice  to all  dealers,  DIDI  may  re-allow  to  dealers  up to the full
applicable Class A sales charge during periods and for transactions specified in
such notice and such re-allowances may be based upon attainment of minimum sales
levels. During periods when 90% or more of the sales charge is re-allowed,  such
dealers  may be deemed to be  underwriters  as that term is  defined in the 1933
Act.

DIDI may at its  discretion  compensate  investment  dealers or other  financial
services  firms in  connection  with  the sale of Class A shares  of the Fund in
accordance  with the Large  Order NAV  Purchase  Privilege  and one of the three
compensation schedules up to the following amounts:

<TABLE>
<CAPTION>
                Compensation Schedule #1:                       Compensation Schedule #2: DWS Scudder
         Retail Sales and DWS Scudder Flex Plan(1)                        Retirement Plans(2)
         --------------------------------------                           ------------------
                                                                                            As a
            Amount of              As a Percentage of Net         Amount of           Percentage of Net
           Shares Sold                   Asset Value             Shares Sold             Asset Value
           -----------                   -----------             -----------             -----------
<S>                                             <C>             <C>                             <C>

$250,000 to $50 million                     0.50%           Over $3 million              0.00%-0.50%
Over $50 million                            0.25%                     --                       --


      Compensation Schedule #3: DWS Scudder Choice Plan(3)
      ----------------------------------------------------
            Amount of                 As a Percentage of Net
           Shares Sold                      Asset Value
           -----------                      -----------

All amounts                                    0.85%
</TABLE>

(1)   For purposes of determining  the appropriate  commission  percentage to be
      applied to a  particular  sale  under the  foregoing  schedule,  DIDI will
      consider the cumulative  amount  invested by the purchaser in the Fund and
      other DWS Funds including purchases pursuant to the "Combined  Purchases,"
      "Letter of Intent" and "Cumulative Discount" features referred to below.

(2)   Compensation  Schedule 2 applies to employer  sponsored  employee  benefit
      plans using the OmniPlus  subaccount  record keeping system made available
      through ADP, Inc. under an alliance with DIDI and its affiliates.

(3)   DIDI compensates UBS Financial 0.50%.


DIDI  compensates  firms  for  sales of Class B shares  at the time of sale at a
commission rate of up to 3.75% of the amount of Class B shares  purchased.  DIDI
is compensated by the Fund for services as distributor and principal underwriter
for Class B shares.  Except as provided below, for sales of Class C shares, DIDI
advances  to firms the  first  year  distribution  fee at a rate of 0.75% of the
purchase  price of such  shares,  and,  for periods  after the first year,  DIDI
currently  pays firms for sales of Class C shares a  distribution  fee,  payable
quarterly,  at an annual  rate of 0.75% of net  assets  attributable  to Class C
shares  maintained  and  serviced  by the  firm.  For sales of Class C shares to
employer sponsored  employee benefit plans using the OmniPlus  subaccount record
keeping system made available  through ADP, Inc. under an alliance with DIDI and
its affiliates,  DIDI does not advance the first year  distribution  fee and for
periods after the date of sale,  DIDI currently  pays firms a distribution  fee,
payable quarterly, at an annual rate of 0.75% based on net assets as of the last
business day of the month attributable to Class C shares maintained and serviced
by the firm.  DIDI is compensated  by the Fund for services as  distributor  and
principal underwriter for Class C shares.

Revenue Sharing

In light of recent  regulatory  developments,  the Advisor,  the Distributor and
their affiliates have undertaken to furnish certain additional information below
regarding  the  level  of  payments  made  by them to  selected  affiliated  and
unaffiliated  brokers,  dealers,  participating  insurance  companies  or  other
financial  intermediaries  ("financial  advisors") in  connection  with the sale
and/or  distribution  of  Fund  shares  or the  retention  and/or  servicing  of
investors and Fund shares ("revenue sharing").

The  Advisor,  the  Distributor  and/or  their  affiliates  may  pay  additional
compensation,  out of their own assets and not as an  additional  charge to each
Fund, to financial  advisors in connection with the sale and/or  distribution of
Fund shares or the retention and/or servicing of Fund investors and Fund shares.
Such revenue  sharing  payments are in addition to any  distribution  or service
fees  payable  under any Rule  12b-1 or  service  plan of any fund,  any  record
keeping/sub-transfer  agency/networking  fees  payable  by each Fund  (generally
through the  Distributor  or an  affiliate)  and/or the  Distributor  to certain
financial   advisors  for  performing  such  services  and  any  sales  charges,
commissions,   non-cash  compensation  arrangements  expressly  permitted  under
applicable  rules of FINRA or other  concessions  described  in the fee table or
elsewhere in the  Prospectuses or the SAI as payable to all financial  advisors.
For example, the Advisor, the Distributor and/or their affiliates may compensate
financial  advisors for  providing  each Fund with "shelf  space" or access to a
third  party  platform  or fund  offering  list,  or  other  marketing  programs
including,   without  limitation,   inclusion  of  each  Fund  on  preferred  or
recommended sales lists,  mutual fund  "supermarket"  platforms and other formal
sales programs; granting the Distributor access to the financial advisor's sales
force;  granting the Distributor access to the financial  advisor's  conferences
and meetings;  assistance  in training and  educating  the  financial  advisor's
personnel; and, obtaining other forms of marketing support. The level of revenue
sharing payments made to financial advisors may be a fixed fee or based upon one
or more of the following factors:  gross sales,  current assets and/or number of
accounts of each Fund attributable to the financial advisor, the particular fund
or fund type or other  measures  as agreed to by the  Advisor,  the  Distributor
and/or their affiliates and the financial  advisors or any combination  thereof.
The amount of these payments is determined at the discretion of the Advisor, the
Distributor  and/or their affiliates from time to time, may be substantial,  and
may be different for different  financial  advisors  based on, for example,  the
nature of the services provided by the financial advisor.

The Advisor,  the  Distributor  and/or their  affiliates  currently make revenue
sharing  payments  from  their own  assets in  connection  with the sale  and/or
distribution of DWS Fund shares, or the retention and/or servicing of investors,
to financial  advisors in amounts that  generally  range from .01% up to .50% of
assets of the Fund serviced and  maintained by the  financial  advisor,  .05% to
..25% of sales of the Fund attributable to the financial  advisor,  a flat fee of
$13,350 up to $500,000,  or any  combination  thereof.  These amounts are annual
figures  typically  paid on a  quarterly  basis and are subject to change at the
discretion of the Advisor, the Distributor and/or their affiliates.  Receipt of,
or the prospect of receiving,  this additional compensation,  may influence your
financial advisor's recommendation of this Fund or of any particular share class
of the Fund. You should review your financial advisor's compensation  disclosure
and/or talk to your  financial  advisor to obtain more  information  on how this
compensation may have influenced your financial advisor's recommendation of this
Fund.

The Advisor,  the Distributor and/or their affiliates may also make such revenue
sharing  payments  to  financial  advisors  under the terms  discussed  above in
connection  with  the  distribution  of both  DWS  funds  and  non-DWS  funds by
financial  advisors to retirement plans that obtain record keeping services from
ADP, Inc. on the DWS Scudder branded  retirement plan platform (the  "Platform")
with the level of revenue  sharing  payments  being based upon sales of both the
DWS funds and the  non-DWS  funds by the  financial  advisor on the  Platform or
current  assets  of both  the DWS  funds  and the  non-DWS  funds  serviced  and
maintained by the financial advisor on the Platform.

As of the date  hereof,  each  Fund  has been  advised  that  the  Advisor,  the
Distributor  and their  affiliates  expect that the following firms will receive
revenue sharing payments at different points during the coming year as described
above:

Channel: Broker-Dealers and Financial Advisors
----------------------------------------------
AIG Advisors Group
Ameriprise
Cadaret, Grant & Co. Inc.
Capital Analyst, Incorporated
Citigroup Global Markets, Inc. (dba Smith Barney)
Commonwealth Equity Services, LLP (dba Commonwealth Financial Network)
Deutsche Bank Group
Ensemble Financial Services
First Allied Securities
First Clearing/Wachovia Securities
HD Vest Investment Securities, Inc.
ING Advisors Network
John Hancock Distributors LLC
LPL Financial
M.L. Stern & Co.
Meridien Financial Group
Merrill Lynch, Pierce, Fenner & Smith Inc.
Morgan Stanley
Oppenheimer & Co., Inc.
PlanMember Services
Raymond James & Associates
Raymond James Financial Services
RBC Dain Rauscher, Inc
Securities America, Inc.
UBS Financial Services
Wells Fargo Investments, LLC

Channel: Cash Product Platform
------------------------------
Allegheny Investments LTD
Bank of New York (Hare & Co.)
Brown Brothers Harriman
Brown Investment Advisory & Trust Company
Cadaret Grant & Co.
Chicago Mercantile Exchange
D.A. Davidson & Company
Deutsche Bank Group
Emmett A. Larkin Company
Fiduciary Trust Co. - International
First Southwest Company
J.P. Morgan Clearing Corp.
Legent Clearing LLC
Lincoln Investment Planning
LPL Financial
Mellon Financial Markets LLC
Mesirow Financial, Inc.
Penson Financial Services
Pershing Choice Platform
ProFunds Distributors, Inc.
Ridge Clearing & Outsourcing Solutions
Robert W. Baird & Co.
Romano Brothers and Company
SAMCO Capital Markets
Smith Moore & Company
Sungard Institutional Brokerage Inc.
Treasury Curve LLC
US Bancorp
UBS Financial Services
William Blair & Company

Channel: Third Party Insurance Platforms
----------------------------------------
Allstate Life Insurance Company of New York
Ameritas Life Insurance Group
Annuity Investors Life Insurance Company
Columbus Life Insurance Company
Commonwealth Annuity and Life Insurance Company
Companion Life Insurance Company
Connecticut General Life Insurance Company
Farmers New World Life Insurance Company
Fidelity Security Life Insurance Company
First Allmerica Financial Life Insurance Company
First Great West Life and Annuity Company
Genworth Life Insurance Company of New York
Genworth Life and Annuity Insurance Company
Great West Life and Annuity Insurance Company
Hartford Life Insurance Company
Integrity Life Insurance Company
John Hancock Life Insurance companies
Kemper Investors Life Insurance Company
Lincoln Benefit Life Insurance Company
Lincoln Life & Annuity Company of New York
Lincoln National Life Insurance Company
Massachusetts Mutual Life Insurance Group
MetLife Group
Minnesota Life Insurance Company
National Life Insurance Company
National Integrity Life Insurance Company
Nationwide Group
New York Life Insurance and Annuity Corporation
Phoenix Life Insurance Company
Protective Life Insurance
Provident Mutual Life Insurance
Prudential Insurance Company of America
Sun Life Group
Symetra Life Insurance Company
Transamerica Life Insurance Company
Union Central Life Insurance Company
United of Omaha Life Insurance Company
United Investors Life Insurance Company
Western Southern Life Assurance Company

Any additions,  modifications or deletions to the financial advisors  identified
above that have occurred since the date hereof are not reflected.

The Advisor,  the  Distributor  or their  affiliates  may enter into  additional
revenue sharing arrangements or change or discontinue existing arrangements with
financial advisors at any time without notice.

The  prospect  of  receiving,  or the  receipt  of  additional  compensation  or
promotional  incentives  described above by financial  advisors may provide such
financial advisors and/or their salespersons with an incentive to favor sales of
shares of the DWS funds or a particular  DWS fund over sales of shares of mutual
funds (or  non-mutual  fund  investments)  with  respect to which the  financial
advisor does not receive additional compensation or promotional  incentives,  or
receives  lower levels of additional  compensation  or  promotional  incentives.
Similarly,  financial advisors may receive different  compensation or incentives
that may influence  their  recommendation  of any particular  share class of the
Fund or of other funds. These payment arrangements, however, will not change the
price that an investor pays for Fund shares or the amount that the Fund receives
to invest on behalf of an investor and will not increase Fund expenses.  You may
wish to take  such  payment  arrangements  into  account  when  considering  and
evaluating  any  recommendations  relating to Fund shares and you should discuss
this matter with your  financial  advisor  and review your  financial  advisor's
disclosures.

It is likely that  broker-dealers  that execute  portfolio  transactions for the
Fund  will  include  firms  that  also  sell  shares  of the DWS  funds to their
customers.  However, the Advisor will not consider sales of DWS fund shares as a
factor in the selection of broker-dealers to execute portfolio  transactions for
the DWS funds. Accordingly,  the Advisor has implemented policies and procedures
reasonably  designed to prevent its traders from  considering  sales of DWS fund
shares as a factor in the  selection  of  broker-dealers  to  execute  portfolio
transactions  for the Fund. In addition,  the Advisor,  the  Distributor  and/or
their  affiliates  will not use fund  brokerage to pay for their  obligation  to
provide additional compensation to financial advisors as described above.


Class A Purchases.  The public  offering  price of Class A shares for purchasers
choosing  the initial  sales  charge  alternative  is the net asset value plus a
sales charge, as set forth below.


<TABLE>
<CAPTION>
                                                                       Sales Charge

                                      As a Percentage of      As a Percentage of Net       Allowed to Dealers as a
Amount of Purchase                   Offering Price*(,) **         Asset Value**         Percentage of Offering Price
------------------                   ---------------------         -------------         ----------------------------

<S>                                            <C>                       <C>                          <C>
Less than $100,000                             2.75%                     2.83%                        2.25%
$100,000 but less than $250,000                2.50                      2.56                         2.00
$250,000 and over                              0.00****                  0.00****                     0.00*****
</TABLE>

*     The Offering Price includes the sales charge.

**    Because of rounding in the calculation of the offering price, the actual
      maximum front-end sales charge paid by an investor may be higher or lower
      than the percentages noted above.

***   Rounded to the nearest one-hundredth percent.

****  Redemption of shares may be subject to a contingent deferred sales charge
      as discussed below.

***** Commission is payable by DIDI as discussed above.

Class A  Quantity  Discounts.  An  investor  or the  investor's  dealer or other
financial  services  firm must  notify  the  Shareholder  Service  Agent or DIDI
whenever  a  quantity  discount  or  reduced  sales  charge is  applicable  to a
purchase.  In order to qualify  for a lower  sales  charge,  all orders  from an
organized  group will have to be placed  through a single  investment  dealer or
other firm and identified as originating from a qualifying purchaser.

Combined  Purchases.  The  Fund's  Class A shares may be  purchased  at the rate
applicable to the sales charge discount  bracket  attained by combining same day
investments in Class A shares of any DWS Funds that bear a sales charge.

Letter of Intent.  The reduced sales charges for Class A shares, as shown in the
applicable prospectus,  also apply to the aggregate amount of purchases of Class
A shares of DWS Funds that bear a sales  charge made by any  purchaser  within a
24-month  period under a written Letter of Intent  ("Letter")  provided by DIDI.
The Letter,  which imposes no obligation to purchase or sell additional  Class A
shares,  provides  for a price  adjustment  depending  upon  the  actual  amount
purchased  within  such  period.  The Letter  provides  that the first  purchase
following  execution  of the  Letter  must be at least 5% of the  amount  of the
intended  purchase,  and that 5% of the amount of the intended purchase normally
will be held in escrow in the form of shares pending  completion of the intended
purchase.  If the total  investments under the Letter are less than the intended
amount and thereby  qualify only for a higher sales charge than  actually  paid,
the  appropriate  number of escrowed  shares are redeemed and the proceeds  used
toward  satisfaction  of the obligation to pay the increased  sales charge.  The
Letter  for  an  employer-sponsored  employee  benefit  plan  maintained  on the
subaccount  record keeping system available  through ADP, Inc. under an alliance
with DIDI and its affiliates may have special  provisions  regarding  payment of
any  increased  sales charge  resulting  from a failure to complete the intended
purchase under the Letter.  A shareholder  may include the value (at the maximum
offering price,  which is determined by adding the maximum applicable sales load
charged to the net asset  value) of all Class A shares of such DWS Funds held of
record as of the  initial  purchase  date under the  Letter as an  "accumulation
credit" toward the  completion of the Letter,  but no price  adjustment  will be
made on such shares.

Class A Cumulative Discount. Class A shares of the Fund may also be purchased at
the rate  applicable to the discount  bracket  attained by adding to the cost of
shares being purchased, the value of all Class A shares of DWS Funds that bear a
sales charge (computed at the maximum offering price at the time of the purchase
for which the discount is  applicable)  already  owned by the investor or his or
her immediate  family members  (including the investor's  spouse or life partner
and children or stepchildren age 21 or younger).

For purposes of the Combined Purchases, Letter of Intent and Cumulative Discount
features  described above,  employer  sponsored employee benefit plans using the
Flex  subaccount  record  keeping  system  available  through ADP, Inc. under an
alliance  with DIDI and its  affiliates  may include:  (a) Money Market Funds as
"DWS Funds",  (b) all classes of shares of any DWS Fund and (c) the value of any
other plan  investments,  such as guaranteed  investment  contracts and employer
stock,  maintained on such subaccount record keeping system.  Once eligible plan
assets under this provision reach the $1,000,000  threshold  ($250,000 threshold
in the case of DWS Short  Duration  Plus Fund for the Large  Order NAV  Purchase
Privilege),  a later decline in assets below the $1,000,000  threshold ($250,000
threshold  in the case of DWS Short  Duration  Plus  Fund)  will not  affect the
plan's ability to continue to purchase Class A shares at net asset value.

Class A NAV Sales. Class A shares may be sold at net asset value to:

(a)   a current or former director or trustee of Deutsche or DWS mutual funds;

(b)   an employee  (including the employee's spouse or life partner and children
      or  stepchildren  age 21 or younger) of Deutsche Bank or its affiliates or
      of a  subadvisor  to  any  fund  in  the  DWS  family  of  funds  or  of a
      broker-dealer  authorized to sell shares of the Fund or service  agents of
      the Funds;

(c)   certain  professionals  who assist in the  promotion  of DWS mutual  funds
      pursuant to personal  services  contracts  with DIDI,  for  themselves  or
      members of their families. DIDI in its discretion may compensate financial
      services  firms  for sales of Class A shares  under  this  privilege  at a
      commission rate of 0.50% of the amount of Class A shares purchased;

(d)   any trust,  pension,  profit-sharing  or other  benefit plan for only such
      persons listed under the preceding paragraphs (a) and (b);

(e)   persons who  purchase  such shares  through  bank trust  departments  that
      process such trades through an automated,  integrated mutual fund clearing
      program provided by a third party clearing firm;

(f)   selected employees  (including their spouses or life partners and children
      or stepchildren  age 21 or younger) of banks and other financial  services
      firms that provide administrative  services related to order placement and
      payment to facilitate transactions in shares of the Fund for their clients
      pursuant to an agreement  with DIDI or one of its  affiliates.  Only those
      employees  of such banks and other firms who as part of their usual duties
      provide services related to transactions in Fund shares qualify;

(g)   unit  investment  trusts  sponsored  by  Ranson  &  Associates,  Inc.  and
      unitholders of unit  investment  trusts  sponsored by Ranson & Associates,
      Inc. or its predecessors  through  reinvestment  programs described in the
      prospectuses of such trusts that have such programs;

(h)   through  certain  investment  advisors  registered  under  the  Investment
      Advisers Act of 1940 and other  financial  services firms acting solely as
      agent for their clients,  that adhere to certain standards  established by
      DIDI,  including a requirement that such shares be sold for the benefit of
      their clients  participating  in an investment  advisory program or agency
      commission  program  under which such clients pay a fee to the  investment
      advisor  or other  firm  for  portfolio  management  or  agency  brokerage
      services.  Such  shares  are  sold  for  investment  purposes  and  on the
      condition  that they  will not be  resold  except  through  redemption  or
      repurchase by the Fund;

(i)   employer  sponsored  employee  benefit  plans  using  the Flex  subaccount
      recordkeeping system ("Flex Plans") made available through ADP, Inc. under
      an alliance with DIDI and its affiliates,  established prior to October 1,
      2003, provided that the Flex Plan is a participant-directed  plan that has
      not less than 200 eligible employees;

(j)   investors  investing $250,000 or more, either as a lump sum or through the
      "Combined   Purchases,"  "Letter  of  Intent"  and  "Cumulative  Discount"
      features  referred to above  (collectively,  the "Large Order NAV Purchase
      Privilege").  The Large Order NAV Purchase  Privilege is not  available if
      another net asset value purchase privilege is available;

(k)   defined contribution investment only plans with a minimum of $1,000,000 in
      plan assets regardless of the amount allocated to the DWS funds;

In addition, Class A shares may be sold at net asset value in connection with:

(l)   the acquisition of the assets of or merger or  consolidation  with another
      investment  company,  or to shareholders in connection with the investment
      or  reinvestment  of income and capital  gain  dividends,  and under other
      circumstances  deemed  appropriate by DIDI and consistent  with regulatory
      requirements; and

(m)   a  direct  "roll  over"  of a  distribution  from  a  Flex  Plan  or  from
      participants in employer  sponsored  employee  benefit plans maintained on
      the OmniPlus  subaccount record keeping system made available through ADP,
      Inc. under an alliance with DIDI and its affiliates into a DWS Investments
      IRA;

(n)   reinvestment of fund dividends and distributions;

(o)   exchanging  an  investment  in Class A shares of  another  fund in the DWS
      family of funds for an investment in the fund.

Class A shares also may be purchased at net asset value in any amount by members
of the plaintiff class in the proceeding known as Howard and Audrey Tabankin, et
al. v. Kemper  Short-Term  Global  Income Fund, et al., Case No. 93 C 5231 (N.D.
IL). This privilege is generally non-transferable and continues for the lifetime
of individual class members and for a ten-year period for  non-individual  class
members.  To make a  purchase  at net asset  value  under  this  privilege,  the
investor  must,  at the time of  purchase,  submit a  written  request  that the
purchase be processed at net asset value pursuant to this privilege specifically
identifying the purchaser as a member of the "Tabankin  Class." Shares purchased
under this privilege will be maintained in a separate account that includes only
shares  purchased  under  this  privilege.  For  more  details  concerning  this
privilege,  class members should refer to the Notice of (i) Proposed  Settlement
with Defendants;  and (ii) Hearing to Determine Fairness of Proposed Settlement,
dated  August 31,  1995,  issued in  connection  with the  aforementioned  court
proceeding.  For  sales of Fund  shares  at net  asset  value  pursuant  to this
privilege, DIDI may in its discretion pay investment dealers and other financial
services firms a concession, payable quarterly, at an annual rate of up to 0.25%
of net assets attributable to such shares maintained and serviced by the firm. A
firm  becomes  eligible  for  the  concession  based  upon  assets  in  accounts
attributable  to shares  purchased  under this  privilege in the month after the
month of purchase and the  concession  continues  until  terminated by DIDI. The
privilege of purchasing Class A shares of the Fund at net asset value under this
privilege is not available if another net asset value  purchase  privilege  also
applies.

Class B Purchases. Class B shares of the Fund are offered at net asset value. No
initial  sales charge is imposed.  Class B shares sold without an initial  sales
charge allow the full amount of the investor's  purchase  payment to be invested
in Class B shares  for his or her  account.  Class B  shares  have a  contingent
deferred  sales charge of 4.00% that  declines over time (for shares sold within
six  years  of  purchase)  and Rule  12b-1  fees,  as  described  in the  Funds'
prospectuses  and SAI.  Class B shares  automatically  convert to Class A shares
after six years.

Class B shares have been created  especially for former Class B shareholders  of
DWS Short Term Bond  Fund.  Class B shares of DWS Short  Duration  Plus Fund are
closed to new  investors  except as  described  below.  Unless  you fit into the
investor  eligibility  categories described below, you may not invest in Class B
shares of the fund.

You may purchase  Class B shares of the Fund through your  existing fund account
and reinvest  dividends and capital  gains if you are a  shareholder  of Class B
shares of the Fund who became a shareholder  of the Fund in connection  with the
Fund's acquisition of DWS Short Term Bond Fund on April 23, 2007.

New accounts may be opened for:

o     transfers of shares from existing accounts in this Fund (including IRA
      rollovers);

o     any group retirement, employee stock bonus, pension or profit sharing plan
      that offers the Fund as an investment option as of April 23, 2007;

o     purchases  through  any  comprehensive  or "wrap" fee program or other fee
      based program that offers the Fund as an investment option as of April 23,
      2007; or

o     accounts  managed by DIMA, any advisory  products  offered by DIMA or DIDI
      and for the funds of DWS Allocation  Series or other fund of funds managed
      by DIMA or its affiliates.

Except as otherwise noted, these restrictions apply to investments made directly
with  DIDI,  the  fund's  principal   underwriter  or  through  an  intermediary
relationship with a financial  services firm established with respect to the DWS
Funds.  Institutions that maintain omnibus account  arrangements are not allowed
to open new Class B subaccounts for new investors, unless the investor is one of
the types listed above.  Once an account is closed,  new  investments in Class B
will  not be  accepted  unless  you  satisfy  one of  the  investor  eligibility
categories listed above.

Exchanges  will not be permitted  into Class B unless the exchange is being made
into an existing fund account.

Class C Purchases. Class C shares of the Fund are offered at net asset value. No
initial sales charge is imposed,  which allows the full amount of the investor's
purchase payment to be invested in Class C shares for his or her account.  Class
C shares are subject to a contingent  deferred sales charge of 1.00% (for shares
sold within one year of  purchase)  and Rule 12b-1  fees,  as  described  in the
Fund's prospectus and SAI.

Institutional  Class Purchases.  Information on how to buy  Institutional  Class
shares is set forth in the section  entitled  "Buying and Selling Shares" in the
Fund's  prospectus.  The following  supplements  that  information.  The minimum
initial  investment for  Institutional  Class shares is $1,000,000.  The minimum
initial investment may be waived in certain  circumstances.  The minimum amounts
may be changed at any time in management's discretion.


Multi-Class Suitability. DIDI has established the following procedures regarding
the purchase of Class A, Class B and Class C shares.  Orders to purchase Class B
shares of $100,000 or more and orders to purchase  Class C shares of $250,000 or
more will be declined  with the  exception  of orders  received  from  financial
representatives  acting for clients whose shares are held in an omnibus  account
and  employer-sponsored  employee  benefit  plans  using the  subaccount  record
keeping system ("System") maintained for DWS Investments-branded plans on record
keeping systems made available through ADP, Inc. under an alliance with DIDI and
its affiliate ("DWS Investments Flex Plans").


The following provisions apply to DWS Investments Flex Plans.

a.    Class B Share DWS  Investments  Flex  Plans.  Class B shares have not been
      sold to DWS  Investments  Flex Plans that were  established  on the System
      after  October  1,  2003.  Orders  to  purchase  Class B shares  for a DWS
      Investments  Flex Plan  established on the System prior to October 1, 2003
      that has regularly been purchasing Class B shares will be invested instead
      in Class A shares at net asset value when the combined subaccount value in
      DWS Funds or other  eligible  assets held by the plan is $100,000 or more.
      This  provision will be imposed for the first purchase after eligible plan
      assets reach the $100,000  threshold.  A later decline in assets below the
      $100,000  threshold  will not  affect the plan's  ability to  continue  to
      purchase Class A shares at net asset value.

b.    Class C Share DWS  Investments  Flex  Plans.  Orders to  purchase  Class C
      shares for a DWS Investments  Flex Plan,  regardless of when such plan was
      established on the System,  will be invested  instead in Class A shares at
      net asset value when the combined  subaccount  value in DWS Funds or other
      eligible  assets held by the plan is  $1,000,000 or more.  This  provision
      will be imposed for the first  purchase  after  eligible plan assets reach
      the $1,000,000  threshold.  A later decline in assets below the $1,000,000
      threshold will not affect the plan's ability to continue to purchase Class
      A shares at net asset value.

The procedures  above do not reflect in any way the  suitability of a particular
class of shares for a particular investor and should not be relied upon as such.
A suitability  determination  must be made by investors  with the  assistance of
their financial representative.

Automatic Investment Plan. A shareholder may purchase shares of the Fund through
an automatic investment plan.  Investments are made automatically  (minimum $500
and maximum  $250,000 for initial  investments  and a minimum of $50 and maximum
$250,000 for subsequent  investments) from the shareholder's  account at a bank,
savings  and  loan  or  credit  union  into  the  shareholder's   Fund  account.
Termination by a shareholder  will become effective within thirty days after the
Shareholder  Service  Agent has received the request.  The Fund may  immediately
terminate a shareholder's  automatic  investment plan in the event that any item
is unpaid by the shareholder's financial institution.

Minimum Subsequent  Investment Policies.  For current shareholders of Class A, B
or C  shares  there  is a $50  minimum  investment  requirement  for  subsequent
investments in the Fund. There is no minimum subsequent  investment  requirement
in Class A shares for investments on behalf of participants in certain fee-based
and wrap  programs  offered  through  financial  intermediaries  approved by the
Advisor.  There is no minimum subsequent  investment  required for Institutional
Class shares.

Payroll  Investment  Plans. A shareholder  may purchase  shares through  Payroll
Direct Deposit or Government  Direct  Deposit.  Under these  programs,  all or a
portion of a shareholder's  net pay or government check is invested each payment
period.  A shareholder may terminate  participation  in these programs by giving
written  notice  to  the  shareholder's   employer  or  government   agency,  as
appropriate. (A reasonable time to act is required.) The Fund is not responsible
for the  efficiency of the employer or  government  agency making the payment or
any financial institutions transmitting payments.

Expedited Purchase Procedures for Existing  Shareholders.  Shareholders of other
DWS Funds who have  submitted an account  application  and have  certified a tax
identification  number, clients having a regular investment counsel account with
the Advisor or its affiliates and members of their immediate families,  officers
and  employees  of the  Advisor  or of any  affiliated  organization  and  their
immediate  families,  members of FINRA, and banks may open an account by wire by
calling (800) 621-1048 for instructions. The investor must send a duly completed
and signed application to the Fund promptly.  A subsequent purchase order may be
placed  by  established  shareholders  (except  by  DWS  Investments  Individual
Retirement  Account  (IRA),  DWS  Simplified  Profit  Sharing and Money Purchase
Pension Plans, DWS Investments  401(k) and DWS Investments 403(b) Plan holders),
members of FINRA, and banks.

Redemptions

Redemption fee. The Fund imposes a redemption fee of 2% of the total  redemption
amount  (calculated  at net asset  value,  without  regard to the  effect of any
contingent  deferred sales charge; any contingent  deferred sales charge is also
assessed on the total redemption  amount without regard to the assessment of the
2% redemption  fee) on all Fund shares  redeemed or exchanged  within 15 days of
buying  them  (either by  purchase  or  exchange).  The  redemption  fee is paid
directly to the Fund, and is designed to encourage  long-term  investment and to
offset  transaction  and other costs  associated  with  short-term  or excessive
trading. For purposes of determining whether the redemption fee applies,  shares
held the longest  time will be treated as being  redeemed  first and shares held
the shortest time will be treated as being  redeemed last. The redemption fee is
applicable  to Fund  shares  purchased  either  directly  or through a financial
intermediary,   such  as  a  broker-dealer.   Transactions   through   financial
intermediaries  typically  are  placed  with the Fund on an  omnibus  basis  and
include  both  purchase  and sale  transactions  placed on  behalf  of  multiple
investors. These purchase and sale transactions are generally netted against one
another and placed on an aggregate  basis;  consequently  the  identities of the
individuals on whose behalf the  transactions are placed generally are not known
to the Fund.  For this  reason,  the Fund has  undertaken  to  notify  financial
intermediaries  of their  obligation  to assess the  redemption  fee on customer
accounts  and to collect  and remit the  proceeds to the Fund.  However,  due to
operational   requirements,   the  intermediaries'   methods  for  tracking  and
calculating  the fee may be  inadequate  or  differ  in some  respects  from the
Fund's.

General.  Policies and procedures  affecting  transactions in Fund shares can be
changed at any time without notice,  subject to applicable law. Transactions may
be contingent upon proper completion of application forms and other documents by
shareholders  and their  receipt by the  Fund's  agents.  Transaction  delays in
processing (and changing account features) due to circumstances within or beyond
the  control  of the Fund and its  agents  may  occur.  Shareholders  (or  their
financial  service firms) are responsible for all losses and fees resulting from
bad checks,  cancelled orders or the failure to consummate transactions effected
pursuant to instructions reasonably believed to be genuine.

In addition,  the fund reserves the right to suspend or postpone  redemptions as
permitted  pursuant  to Section  22(e) of the  Investment  Company  Act of 1940.
Generally, those circumstances are when 1) the New York Stock Exchange is closed
other than  customary  weekend or holiday  closings;  2) trading on the New York
Stock Exchange is restricted; 3) an emergency exists which makes the disposal of
securities owned by a fund or the fair  determination of the value of the fund's
net assets not  reasonably  practicable;  or 4) the SEC,  by order,  permits the
suspension of the right of redemption.  Redemption  payments by wire may also be
delayed  in the event of a  non-routine  closure  of the  Federal  Reserve  wire
payment system.

A  request  for  repurchase  (confirmed  redemption)  may be  communicated  by a
shareholder through a financial services firm to DIDI, which firms must promptly
submit orders to be effective.

Redemption  requests  must be  unconditional.  Redemption  requests (and a stock
power for certificated  shares) must be duly endorsed by the account holder.  As
specified  in the  prospectuses,  signatures  may  need  to be  guaranteed  by a
commercial bank, trust company,  savings and loan  association,  federal savings
bank,  member  firm  of  a  national  securities  exchange  or  other  financial
institution  permitted by SEC rule.  Additional  documentation  may be required,
particularly  from   institutional  and  fiduciary  account  holders,   such  as
corporations,  custodians  (e.g.,  under the Uniform  Transfers  to Minors Act),
executors, administrators, trustees or guardians.

If the proceeds of the  redemption  (prior to the  imposition of any  contingent
deferred  sales charge) are $100,000 or less and the proceeds are payable to the
shareholder of record at the address of record,  normally a telephone request or
a written  request by any one account  holder  without a signature  guarantee is
sufficient  for  redemptions  by individual or joint account  holders and trust,
executor  and  guardian  account  holders,  provided  the  trustee,  executor or
guardian  is named in the  account  registration.  Other  institutional  account
holders may  exercise  this special  privilege of redeeming  shares by telephone
request or  written  request  without  signature  guarantee  subject to the same
conditions as individual account holders,  provided that this privilege has been
pre-authorized by the institutional account holder by written instruction to the
Shareholder Service Agent with signatures guaranteed.  This privilege may not be
used to  redeem  shares  held in  certificated  form  and may not be used if the
shareholder's account has had an address change within 15 days of the redemption
request.

Wires.  Delivery of the proceeds of a wire redemption of $250,000 or more may be
delayed by the Fund for up to seven days if the Fund or the Shareholder  Service
Agent deems it appropriate under then-current market conditions.  The ability to
send wires is limited by the business hours and holidays of the firms  involved.
The Fund is not responsible for the efficiency of the federal wire system or the
account  holder's  financial  services  firm or  bank.  The  account  holder  is
responsible  for any charges  imposed by the account  holder's  firm or bank. To
change the  designated  account  to receive  wire  redemption  proceeds,  send a
written request to the Fund Shareholder Service Agent with signatures guaranteed
as described above or contact the firm through which Fund shares were purchased.

Automatic  Withdrawal Plan. The owner of $5,000 or more of a class of the Fund's
shares at the  offering  price (net  asset  value  plus,  in the case of Class A
shares,  the initial  sales charge) may provide for the payment from the owner's
account of any  requested  dollar amount to be paid to the owner or a designated
payee monthly,  quarterly,  semiannually or annually. The $5,000 minimum account
size is not applicable to IRAs. The minimum periodic payment is $50. The maximum
annual  rate at which  shares  subject to CDSC may be redeemed is 12% of the net
asset value of the account. Shares are redeemed so that the payee should receive
payment  approximately  the first of the month.  Investors  using this Plan must
reinvest Fund distributions.

Non-retirement plan shareholders may establish an Automatic Withdrawal Plan (the
"Plan") to receive  monthly,  quarterly or periodic  redemptions from his or her
account for any  designated  amount of $50 or more.  Shareholders  may designate
which day they want the automatic withdrawal to be processed.  The check amounts
may be based on the  redemption  of a fixed dollar  amount,  fixed share amount,
percent of account  value or  declining  balance.  The Plan  provides for income
dividends  and  capital  gains  distributions,  if  any,  to  be  reinvested  in
additional  shares.  Shares are then  liquidated  as  necessary  to provide  for
withdrawal  payments.  Since the  withdrawals  are in  amounts  selected  by the
investor and have no relationship to yield or income,  payments  received cannot
be  considered  as  yield  or  income  on  the   investment  and  the  resulting
liquidations may deplete or possibly  extinguish the initial  investment and any
reinvested dividends and capital gains distributions.  Any such requests must be
received by the transfer agent ten days prior to the date of the first automatic
withdrawal.  An Automatic  Withdrawal  Plan may be terminated at any time by the
shareholder,  the Trust or its agent on written  notice,  and will be terminated
when all Fund shares under the Plan have been  liquidated or upon receipt by the
Trust of notice of death of the shareholder.

Contingent  Deferred Sales Charge (CDSC).  The rate of the CDSC is determined by
the  length of the period of  ownership.  Investments  are  tracked on a monthly
basis.  The period of  ownership  for this  purpose  begins the first day of the
month in which  the  order for the  investment  is  received.  For  example,  an
investment  made in March of the year of  investment  will be  eligible  for the
second year's charge if redeemed on or after March of the following year. In the
event no specific order is requested  when  redeeming  shares subject to a CDSC,
the redemption will be made first from shares representing  reinvested dividends
and then from the earliest purchase of shares.  DIDI receives any CDSC directly.
The charge will not be imposed upon redemption of reinvested  dividends or share
appreciation.

The Class A CDSC will be waived in the event of:

(a)   redemptions by a participant-directed  qualified retirement plan described
      in Code Section  401(a),  a  participant-directed  non-qualified  deferred
      compensation plan described in Code Section 457 or a  participant-directed
      qualified retirement plan described in Code Section 403(b)(7) which is not
      sponsored by a K-12 school district;

(b)   redemptions  by  employer-sponsored   employee  benefit  plans  using  the
      subaccount record keeping system made available through ADP, Inc. under an
      alliance with DIDI and its affiliates;

(c)   redemption of shares of a shareholder (including a registered joint owner)
      who has died or is disabled (under certain circumstances);

(d)   redemption of shares of a shareholder (including a registered joint owner)
      who after purchase of the shares being redeemed  becomes totally  disabled
      (as  evidenced  by  a   determination   by  the  federal  Social  Security
      Administration);

(e)   redemptions under the Fund's Automatic Withdrawal Plan at a maximum of 12%
      per year of the net asset value of the account;

(f)   redemptions of shares whose dealer of record at the time of the investment
      notifies  DIDI  that  the  dealer  waives  the  discretionary   commission
      applicable to such Large Order NAV Purchase; and

(g)   redemptions for certain loan advances,  hardship  provisions or returns of
      excess contributions from retirement plans.

The Class B CDSC will be waived  for the  circumstances  set forth in items (c),
(d), (e) and (g) for Class A shares. In addition, this CDSC will be waived:

(h)   for redemptions  made pursuant to any IRA systematic  withdrawal  based on
      the  shareholder's  life  expectancy   including,   but  not  limited  to,
      substantially  equal periodic payments  described in Internal Revenue Code
      Section 72(t)(2)(A)(iv) prior to age 59 1/2;

(i)   for redemptions to satisfy required minimum distributions after age 70 1/2
      from an IRA account (with the maximum  amount subject to this waiver being
      based only upon the shareholder's DWS Investments IRA accounts); and

(j)   in connection  with the following  redemptions  of shares held by employer
      sponsored  employee  benefit  plans  maintained on the  subaccount  record
      keeping system made available  through ADP under an alliance with DIDI and
      its affiliates:  (1) to satisfy  participant loan advances (note that loan
      repayments  constitute  new  purchases  for  purposes  of the CDSC and the
      conversion  privilege),  (2) in connection with  retirement  distributions
      (limited at any one time to 12% of the total value of plan assets invested
      in the Fund),  (3) in connection with  distributions  qualifying under the
      hardship provisions of the Internal Revenue Code, (4) representing returns
      of excess  contributions  to such plans and (5) in connection  with direct
      "roll  over"  distributions  from a Flex Plan into a DWS  Investments  IRA
      under the Class A net asset value purchase privilege.

The Class C CDSC will be waived  for the  circumstances  set forth in items (b),
(c), (d), (e) and (g) for Class A shares and for the  circumstances set forth in
items (h) and (i) for Class B shares. In addition, this CDSC will be waived for:

(k)   redemption of shares by an employer  sponsored  employee benefit plan that
      offers  funds in  addition  to DWS Funds and  whose  dealer of record  has
      waived  the  advance  of  the  first  year   administrative   service  and
      distribution  fees  applicable  to such shares and agrees to receive  such
      fees quarterly; and

(l)   redemption of shares purchased through a dealer-sponsored asset allocation
      program maintained on an omnibus record-keeping system provided the dealer
      of record had waived the advance of the first year administrative services
      and distribution  fees applicable to such shares and has agreed to receive
      such fees quarterly.

In-kind  Redemptions.  The Fund  reserves  the  right to honor any  request  for
redemption or repurchase  by making  payment in whole or in part in  securities.
These  securities will be chosen by the Fund and valued as they are for purposes
of computing  the Fund's net asset value.  A shareholder  may incur  transaction
expenses in converting these securities to cash.

Sale or Redemption of Shares. The sale,  exchange or redemption of shares of the
Fund may give rise to a gain or loss equal to the difference  between the amount
realized and the basis in such  shares.  In general,  any gain or loss  realized
upon a taxable  disposition of shares will be treated as long-term  capital gain
or loss if the shares have been held for more than one year. Otherwise, the gain
or loss on the  taxable  disposition  of shares of the Fund will be  treated  as
short-term  capital  gain or loss.  However,  any loss  realized  upon a taxable
disposition  of shares held for six months or less will be treated as long-term,
rather  than   short-term,   to  the  extent  of  any  long-term   capital  gain
distributions  received (or deemed  received) by the shareholder with respect to
the shares. All or a portion of any loss realized upon a taxable  disposition of
shares of the Fund will be disallowed if other substantially identical shares of
the Fund are purchased within 30 days before or after the disposition. In such a
case,  the basis of the newly  purchased  shares will be adjusted to reflect the
disallowed loss.

Exchanges

Shareholders  may request a taxable  exchange of their  shares for shares of the
corresponding  class of certain  other DWS funds  without  imposition of a sales
charge,  subject to the provisions  below. For purposes of calculating any CDSC,
amounts exchanged retain their original cost and purchase date.

Shareholders  who  exchange  their  shares out of a DWS money  market  fund (not
including  shares acquired by dividend  reinvestment or by exchange from Class A
shares of another DWS fund) into Class A shares of certain other DWS funds, will
generally be subject to the applicable sales charge.

Certain DWS funds may not be available to shareholders on an exchange.  To learn
more about which DWS funds may be  available on  exchange,  please  contact your
financial  services  firm or visit our Web site at:  www.dws-investments.com  or
call (800) 621-1048.

Shareholders may obtain  prospectus(es) of the DWS fund they are exchanging into
from dealers, other firms or DIDI.


Automatic Exchange Plan. The owner of $1,000 or more of any class of shares of a
DWS fund may  authorize  the  automatic  exchange  of a  specified  amount  ($50
minimum) of such  shares for shares of the same class of another  such DWS fund.
Exchanges will be made automatically  until the shareholder or a fund terminates
the  privilege.  Exchanges  are  subject to the terms and  conditions  described
above.

                                    DIVIDENDS

The Fund intends to follow the practice of distributing substantially all of its
investment  company taxable income  (determined  without regard to the deduction
for dividends  paid),  which includes  taxable ordinary income and any excess of
net  realized  short-term  capital  gains over net  realized  long-term  capital
losses.  The Fund may follow the practice of  distributing  the entire excess of
net  realized  long-term  capital  gains over net  realized  short-term  capital
losses.  However, the Fund may retain all or part of such gain for reinvestment,
after paying the related  federal income taxes on such gain.  Shareholders  will
generally  be  required to include in their  gross  incomes  their share of such
gains,  but may be able to claim a  credit  against  their  federal  income  tax
liability for the federal  income tax paid by the Fund on such gain. If the Fund
does not distribute the amount of capital gain and/or  ordinary  income required
to be  distributed  by an excise  tax  provision  of the  Code,  the Fund may be
subject  to  a  4%  excise  tax  on  the  undistributed   amounts.   In  certain
circumstances, the Fund may determine that it is in the interest of shareholders
to distribute less than the required amount.

Any dividends or capital gains  distributions  declared in October,  November or
December  with a record  date in such a month  and  paid  during  the  following
January  will be treated  for  federal  income tax  purposes  as if  received by
shareholders on December 31 of the calendar year declared.

Prior to August 28, 2006, net investment income was declared as a daily dividend
and  distributed  to  shareholders  monthly.  Effective  August  28,  2006,  net
investment income is declared and distributed to shareholders  monthly. The Fund
expects  to  distribute  net  capital  gains,  if  any,   annually.   Additional
distributions may be made if necessary.

Income and  capital  gain  dividends,  if any,  of the Fund will be  credited to
shareholder accounts in full and fractional Shares of the same class of the Fund
at net asset value on the reinvestment  date,  except that, upon written request
to the Shareholder  Service Agent, a shareholder may select one of the following
options:

1.    To receive income and short-term  capital gain  distributions  in cash and
      long-term  capital gain  distributions  in shares of the same class of the
      fund at net asset value; or

2.    To receive income and capital gain distributions in cash.

Dividends  will be  reinvested  in shares of the same  class of the Fund  unless
shareholders  indicate in writing that they wish to receive  them in cash.  If a
shareholder  has elected to reinvest any dividends  and/or other  distributions,
such  distributions  will be made in  shares  of the same  class of the Fund and
confirmations will be mailed to each shareholder. If a shareholder has chosen to
receive cash, a check will be sent. The Fund will reinvest  dividend checks (and
future dividends) in shares of the same Fund and class if checks are returned as
undeliverable.  Dividends and other  distributions  of the Fund in the aggregate
amount of $10 or less are automatically  reinvested in shares of the Fund unless
the  shareholder  requests in writing that a check be issued for that particular
distribution.

Distributions  of net  investment  income  and net  realized  capital  gains are
taxable for federal income tax purposes, whether made in shares or cash.

Each  distribution  is  accompanied  by a  brief  explanation  of the  form  and
character of the  distribution.  The  characterization  of distributions on such
correspondence  may differ  from the  characterization  for  federal  income tax
purposes.  In  January  of each  year  the Fund  issues  to each  shareholder  a
statement  of the federal  income tax status of all  distributions  in the prior
calendar year.

The Fund may at any time vary its foregoing dividend  practices and,  therefore,
reserves  the  right  from  time to time to  either  distribute  or  retain  for
reinvestment  such of its net investment  income (which  includes net short-term
capital gains) and net long-term  capital gains, if any, as its Board determines
appropriate  under the then current  circumstances.  In particular,  and without
limiting  the  foregoing,  the  Fund may make  additional  distributions  of net
investment  income  or net  capital  gains  in  order  to  satisfy  the  minimum
distribution requirements contained in the Code.



                                      TAXES

The following is intended to be a general  summary of certain federal income tax
consequences  of  investing  in the  Fund.  It is  not  intended  as a  complete
discussion  of all such  consequences,  nor  does it  purport  to deal  with all
categories of investors,  some of which may be subject to special tax rules,  or
foreign,  state or local taxes.  Investors are therefore advised to consult with
their tax advisors before making an investment in the Fund. The summary is based
on the  laws in  effect  on the  date of this  SAI  and  existing  judicial  and
administrative  interpretations  thereof,  all of which are  subject  to change,
possibly with retroactive effect.

Taxation of the Fund

The Fund intends to continue to qualify to be treated as a regulated  investment
company under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"),  in each taxable  year . In order to qualify as a regulated  investment
company,  the Fund must meet certain  requirements  regarding  the source of its
income, the diversification of its assets, and the distribution of its income:

(a)   The Fund must  derive at least 90% of its gross  income  for each  taxable
      year (i) from  dividends,  interest,  payments  with  respect  to  certain
      securities  loans,  gains  from the sale or other  disposition  of  stock,
      securities  and foreign  currencies,  and other income  (including but not
      limited to gains from options, futures, or forward contracts) derived with
      respect  to its  business  of  investing  in such  stock,  securities,  or
      currencies  and (ii) net  income  derived  from  interests  in  "qualified
      publicly traded  partnerships"  (i.e.,  partnerships that are traded on an
      established securities market or readily tradable on a secondary market or
      the substantial equivalent thereof other than partnerships that derive 90%
      or more of their gross income from the qualifying  income described in (i)
      above);

(b)   The Fund must  diversify  its holdings so that, at the end of each quarter
      of its taxable  year,  (i) at least 50% of the market  value of the Fund's
      total  assets  is  represented  by cash  and  cash  items,  US  government
      securities,  securities of other regulated investment companies, and other
      securities  limited in respect of any one issuer of such other  securities
      to a value not greater than 5% of the value of the Fund's total assets and
      to not more than 10% of the outstanding  voting securities of such issuer,
      and (ii) not more than 25% of the value of its total assets is invested in
      the securities  (other than those of the US Government or other  regulated
      investment  companies) of any one issuer,  of two or more  issuers,  or of
      which the Fund owns 20% or more of the voting  stock and which are engaged
      in the same, similar, or related trades or businesses or in the securities
      of one or more qualified publicly traded partnerships.

(c)   The Fund is required to distribute to its shareholders at least 90% of its
      investment  company  taxable  income  (as that term is defined in the Code
      without  regard to the deduction for dividends  paid - generally,  taxable
      ordinary  income and the excess of net  short-term  capital  gain over net
      long-term capital  losses)and net tax-exempt income interest and generally
      is not  subject to federal  income tax to the extent  that it  distributes
      annually such net  investment  income and net realized  capital gains (net
      long-term capital gains in excess of net short-term capital losses) in the
      manner required under the Code.

Fund  investments  in  partnerships,  including  in  qualified  publicly  traded
partnerships,  may result in the Fund being  subject to state,  local or foreign
income, franchise or withholding tax liabilities.

If the Fund  retains for  investment  an amount equal to all or a portion of its
net  long-term  capital  gains in excess of its net  short-term  capital  losses
(including  any capital loss  carryovers),  it will be subject to federal income
tax at regular  corporate  rates,  currently  at a maximum  rate of 35%,  on the
amount retained. In that event, the Fund will designate such retained amounts as
undistributed  capital  gains in a notice  to its  shareholders  who (a) will be
required to include in income for US federal  income tax purposes,  as long-term
capital gains, their proportionate shares of the undistributed  amount, (b) will
be entitled to credit their proportionate shares of the 35% tax paid by the Fund
on the undistributed amount against their US federal income tax liabilities,  if
any, and to claim refunds to the extent their credits exceed their  liabilities,
if any,  and (c) will be entitled to  increase  their tax basis,  for US federal
income tax  purposes,  in their shares by an amount  equal to to the  difference
between the amount of undistributed  capital gains included in the shareholder's
gross income under clause (a) and the tax deemed paid by the  shareholder  under
clasuse (b).

The Code imposes a 4% nondeductible federal excise tax on the Fund to the extent
it does not  distribute  by the end of any calendar year at least the sum of (i)
98% of its  ordinary  taxable  income for that  calendar  year,  (ii) 98% of its
capital gain net income (both  long-term and short-term) for the one-year period
ending,  as a general  rule,  on October 31 of that year and (iii)  amounts that
were neither  distributed  nor taxed to the Fund during the prior calendar year.
For this  purpose,  however,  any  ordinary  income or  capital  gain net income
retained by the Fund that is subject to corporate  income tax will be considered
to have been distributed by year-end. In addition, the minimum amounts that must
be  distributed  in any year to  avoid  the  excise  tax  will be  increased  or
decreased to reflect any underdistribution or overdistribution,  as the case may
be, from the previous year.  Although the Fund's  distribution  policies  should
enable it to avoid federal  excise tax  liability,  the Fund may retain,  and be
subject  to income or excise  tax on, a portion  of its  capital  gains or other
income if it appears to be in the interest of the Fund.

If for any taxable year the Fund does not qualify for the special federal income
tax treatment afforded regulated investment companies, all of its taxable income
will be subject to federal  income tax at regular  corporate  rates (without any
deduction for  distributions  made to its  shareholders),  and all distributions
from earnings and profits,  including any distributions of net tax-exempt income
and net long-term  capital gains,  would be taxable to  shareholders as ordinary
income.  Such distributions  would be eligible,  provided certain holding period
and other  requirements are satisfied,  (i) to be treated as qualified  dividend
income, which is subject to reduced rates of federal income taxation for taxable
years  beginning  before January 1, 2011, in the case of  shareholders  taxed as
individuals  and  (ii)  for the  dividends  received  deduction  in the  case of
corporate  shareholders.  In  addition,  the Fund could be required to recognize
unrealized  gains,  pay  substantial  taxes and  interest  and make  substantial
distributions  before  requalifying  as a regulated  investment  company that is
accorded special federal income tax treatment.

Taxation of Fund Distributions

Distributions  from  the Fund  generally  will be  taxable  to  shareholders  as
ordinary  income  to the  extent  derived  from net  investment  income  and net
short-term  capital  gains (that is, the excess of net  short-term  capital gain
over net long-term  capital loss).  Distributions of net capital gains (that is,
the excess of net  long-term  capital  gain over net  short-term  capital  loss)
properly designated as capital gain dividends will be taxable to shareholders as
long-term capital gain, regardless of how long a shareholder has held the shares
in the Fund.

Long-term  capital gain rates  applicable to individuals  have been  temporarily
reduced,  to a maximum  rate of 15% with a lower rates  applying to taxpayers in
the 10% and 15% rate federal  income tax brackets  for taxable  years  beginning
before January 1, 2011.

For  taxable  years  beginning  before  January  1, 2011,  distributions  of net
investment  income  designed  by the Fund as derived  from  "qualified  dividend
income" received by an individual or other  noncorporate  taxpayer will be taxed
at the rates  applicable  to long-term  capital gain  assuming  certain  holding
period and other  requirements  are met. For this purpose,  "qualified  dividend
income"  generally  means  income  from  dividends  received by the Fund from US
corporations  and  qualified  foreign  corporations,   provided  that  the  Fund
satisfies  certain  holding period  requirements in respect of the stock of such
corporations  and has not hedged  its  position  in the stock in  certain  ways.
However,  qualified dividend income does not include any dividends received from
tax-exempt  corporations and generally does not include dividends  received from
real estate investment trusts. Also, dividends received by the Fund from another
regulated investment company generally are qualified dividend income only to the
extent the  dividend  distributions  are made out of qualified  dividend  income
received by such other regulated  investment  company. In the case of securities
lending  transactions,  payments in lieu of dividends are not qualified dividend
income. If a shareholder elects to treat Fund dividends as investment income for
purposes of the limitation on the  deductibility  of investment  interest,  such
dividends would not be a qualified  dividend income. The Fund does not expect to
generate substantial amounts of qualified dividend income.

Dividends received deduction.  Dividends from domestic corporations may comprise
a part of the Fund's gross income. If any such dividends constitute a portion of
the Fund's gross income,  a portion of the income  distributions of the Fund may
be eligible  for the 70%  deduction  for  dividends  received  by  corporations.
Shareholders will be informed of the portion of dividends which so qualify.  The
dividends-received  deduction  is  reduced  to the extent the shares of the Fund
with respect to which the  dividends  are received are treated as  debt-financed
under  federal  income tax law and is  eliminated  if either those shares or the
shares of the Fund are deemed to have been held by the Fund or the  shareholder,
as the case may be, for less than 46 days during the 91-day period  beginning 45
days before the shares become  ex-dividend  or in the case of certain  preferred
stock, 91 days during the 181-day period beginning 90 days before such date) The
Fund does not expect a significant  portion of its  distributions to qualify for
the dividends received deduction.

Capital gains  distributions  may be reduced if Fund capital loss  carryforwards
are available.  Any capital loss carryforwards to which the Fund is entitled are
disclosed in the Fund's annual and semi-annual reports to shareholders.

All  distributions  by the Fund result in a reduction  in the net asset value of
the Fund's  shares.  Should a  distribution  reduce the net asset  value below a
shareholder's cost basis, such distribution would nevertheless be taxable to the
shareholder as ordinary  income,  qualified  dividend  income or capital gain as
described above, even though, from an investment standpoint, it may constitute a
partial  return of  capital.  In  particular,  investors  should be  careful  to
consider the tax implications of buying shares just prior to a distribution. The
price of shares  purchased at that time  includes the amount of the  forthcoming
distribution.  Those  purchasing  Fund shares just prior to a distribution  will
receive  a  partial  return  of  capital  upon  the  distribution,   which  will
nevertheless be taxable to them for federal income tax purposes.

Sale or  redemption of shares.  The sale,  exchange or redemption of Fund shares
may give rise to a gain or loss.  In general,  any gain or loss  realized upon a
taxable  disposition of shares will be treated as long-term capital gain or loss
if the shares have been held for more than one year. Otherwise, the gain or loss
on the  taxable  disposition  of  Fund  shares  will  generally  be  treated  as
short-term  capital  gain or loss.  However,  any loss  realized  upon a taxable
disposition  of shares held for six months or less will be treated as long-term,
rather  than   short-term,   to  the  extent  of  any  long-term   capital  gain
distributions  received (or deemed  received) by the shareholder with respect to
the shares. All or a portion of any loss realized upon a taxable  disposition of
Fund  shares  will  be   disallowed  if  other  shares  of  the  Fund  or  other
substantially  identical stock or securities are purchased within 30 days before
or after the disposition. In such a case, the basis of the newly purchased stock
or securities will be adjusted to reflect the disallowed loss.

Under certain circumstances,  shareholders of the Fund may exchange their shares
for shares of the same class of certain other funds (the  "reinvested  shares").
If a  shareholder  (other than a  shareholder  who holds his or here shares in a
tax-exempt  account) makes such an exchange,  the  shareholder  will recognize a
capital gain or loss for federal income tax purposes  measured by the difference
between  the  value of the  reinvested  shares  and the  basis of the  exchanged
shares.  Upon the exchange of shares (or the reinvestment in shares of the Fund)
that were  purchased  subject to a sales  charge and held for less than 91 days,
the lesser of (i) the sales charge incurred on the exchanged  shares or (ii) the
sales  charge  waived on the  reinvested  shares is included in the basis of the
reinvested shares and is not included in the basis of the exchanged shares.

Foreign  Taxation.  Foreign  withholding  or other foreign taxes with respect to
income  (possibly  including,  in some cases,  capital gains) on certain foreign
securities may occur.  These taxes may be reduced or eliminated  under the terms
of an applicable US income tax treaty.  As it is not expected that more than 50%
of the value of the Fund's  total assets will  consist of  securities  issued by
foreign  corporations,  the Fund will not be  eligible  to pass  through  to its
shareholders  their  proportionate  share of any foreign taxes paid by the Fund,
with the result that shareholders will not be required to include in income, and
will not be entitled to take any credits or deductions for such foreign taxes.

Tax Effects of Certain Transactions

The Fund's use of  options,  futures  contracts  and forward  contracts  (to the
extent permitted) will be subject to special federal income tax rules (including
mark-to-market,  constructive  sale,  straddle,  wash sale, short sale and other
rules),  the effect of which may be to accelerate  income,  defer losses,  cause
adjustments  in the holding  periods of portfolio  securities,  convert  capital
gains  into  ordinary  income  and  affect  whether  cpaital  gain  or  loss  is
characterized as long-term or short-term. These rules could therefore affect the
amount, timing and character of distributions to investors. These rules also (a)
will require the Fund to  mark-to-market  certain  types of the positions in its
portfolio (i.e.,  treat them as if they were closed out at the end of each year)
and (b) may cause the Fund to recognize income without receiving cash with which
to pay  dividends  or make  distributions  in amounts  necessary  to satisfy the
distribution requirements for avoiding federal income and excise taxes. The Fund
will monitor its  transactions,  make the appropriate tax elections and make the
appropriate  entries in its books and records in order to mitigate the effect of
these rules and prevent  disqualification of the Fund as a regulated  investment
company.

Transactions in foreign currencies, foreign investment currency-denominated debt
securities and certain foreign  currency  options,  futures  contracts,  forward
contracts and similar  instruments  (to the extent  permitted)  may give rise to
ordinary  income  or  loss to the  extent  such  income  or  loss  results  from
fluctuations in the value of the foreign currency concerned.

The Fund's  investment in "section 1256  contracts,"  such as regulated  futures
contracts,  most foreign  currency  forward  contracts  traded in the  interbank
market and options on most stock indices,  are subject to special federal income
tax rules. All section 1256 contracts held by the Fund at the end of its taxable
year are required to be marked to their market value, and any unrealized gain or
loss on  those  positions  will be  included  in the  Fund's  income  as if each
position had been sold for its fair market value at the end of the taxable year.
The  resulting  gain or loss will be combined  with any gain or loss realized by
the Fund from  positions in section  1256  contracts  closed  during the taxable
year. Provided such positions were held as capital assets and were not part of a
"hedging transaction" nor part of a "straddle," 60% of the resulting net gain or
loss will be treated as long-term capital gain or loss, and 40% of such net gain
or loss will be treated as  short-term  capital gain or loss,  regardless of the
period of time the positions were actually held by the Fund.

As a result  of  entering  into  swap  contracts,  the Fund may make or  receive
periodic net  payments.  The Fund may also make or receive a payment when a swap
is  terminated  prior to  maturity  through an  assignment  of the swap or other
closing  transaction.  Periodic net payments will generally  constitute ordinary
income or  deductions,  while  termination  of a swap will  generally  result in
capital gain or loss (which will be a long-term capital gain or loss if the Fund
has been a party to the swap for more than one  year).  With  respect to certain
types of swaps,  the Fund may be required to currently  recognize income as loss
with  respect  to  future  payments  on such  swaps or may elect  under  certain
circumstances  to mark such  swaps to market  annually  for  federal  income tax
purposes as ordinary  income or loss.  The federal  income tax treatment of many
types of credit default swaps is uncertain.

If the Fund invests in certain pay-in-kind  securities,  zero coupon securities,
deferred interest securities or, in general,  any other securities with original
issue  discount  (or with market  discount of the Fund elects to include  market
discount in income  currently),  the Fund must accrue income on such investments
for each  taxable  year,  which  generally  will be prior to the  receipt of the
corresponding cash payments.  However, the Fund must distribute to shareholders,
at least annually,  all or substantially  all of its investment  company taxable
income  (determined  without  regard  to  the  deduction  for  dividends  paid),
including  such  accrued  income,  to avoid  federal  income and  excise  taxes.
Therefore,  the Fund may  have to  dispose  of its  portfolio  securities  under
disadvantageous  circumstances  to generate cash, or may have to leverage itself
by borrowing the cash, to satisfy these distribution requirements.

The Fund may also acquire market  discount  bonds.  A market  discount bond is a
security  acquired in the secondary market at a price below its redemption value
(or its adjusted issue price if it is also an original issue discount  bond). If
the Fund  invests in a market  discount  bond,  it will be required to treat any
gain  recognized  on the  disposition  of such market  discount bond as ordinary
income  (instead of capital gain) to the extent of the accrued  market  discount
unless the Fund elects to include the market discount in income as it accrues.

The Fund's  investment in  lower-rated  or unrated debt  securities  may present
issues  for the  Fund if the  issuers  of  these  securities  default  on  their
obligations  because the  federal  income tax  consequences  to a holder if such
securities are not certain.

Certain types of income received by the Fund from real estate investment trusts,
REMICs,  taxable  mortgage  pools or other  investments  may  cause  the Fund to
designate some or all of its distributions as "excess inclusion income." To Fund
shareholders such excess inclusion income may (1) constitute  taxable income, as
unrelated  business  taxable income  ("UBTI") for those  shareholders  who would
otherwise be tax-exempt such as individual retirement accounts, 401(k) accounts,
Keogh plans, pension plans and certain charitable entities; (2) not be offset by
otherwise  allowable  deductions  for federal  income tax  purposes;  (3) not be
eligible for reduced US withholding for non-US shareholders even from tax treaty
countries;  and (4) cause the Fund to be subject to tax if certain "disqualified
organizations" as defined by the Code are Fund shareholders.

In  addition,  a  tax-exempt  shareholder  could  realize  UBTI by virtue of its
investment in the Fund if shares in the Fund constitute  debt-financed  property
in the hands of the tax-exempt  shareholder within the meaning of Section 514(b)
of the Code. If a charitable  remainder  trust (as defined in Section 664 of the
Code)  realizes any UBTI for a taxable  year, it may be subject to a 100% excise
tax on such UBTI. Charitable remainder trusts and other tax-exempt investors are
urged to consult their tax advisors concerning the tax consequences of investing
in the Fund.

Other Tax Considerations

Under the backup withholding provisions of the Code, redemption proceeds as well
as  distributions  may be subject to federal income tax  withholding for certain
shareholders,  including  those who fail to furnish the Fund with their  correct
taxpayer  identification  numbers  and  certifications  as to their tax  status.
Certain  shareholders are exempt from backup withholding.  Backup withholding is
not an  additional  tax  and any  amount  withheld  may be  credited  against  a
shareholder's  US  federal  income  tax  liability,   provided  the  appropriate
information is furnished to the IRS.

Shareholders   of  the  Fund  may  be  subject  to  state  and  local  taxes  on
distributions received from the Fund and on redemptions of the Fund's shares.

Special tax rules apply to investments  through defined  contribution  plans and
other  tax-qualified  plans.  Shareholders  should consult their tax advisers to
determine the  suitability  of shares of the Fund as an investment  through such
plans and the precise effect of an investment on their particular tax situation.

Treasury  Regulations  provide  that if a  shareholder  recognizes  a loss  with
respect to Fund  shares of $2 million  or more in a single  taxable  year (or $4
million or more in any  combination of taxable years) for  shareholders  who are
individuals,  S  corporations  or  trusts,  or $10  million  or more in a single
taxable year ($20  million or more in any  combination  of taxable  years) for a
corporate  shareholder,  the  shareholder  must file  with the IRS a  disclosure
statement on Form 8886. Direct shareholders of portfolio  securities are in many
cases  excepted from this  reporting  requirement,  but under current  guidance,
shareholders of a regulated investment company are not excepted. Future guidance
may extend the current exception from this reporting requirement to shareholders
of  most  or all  regulated  investment  companies.  The  fact  that  a loss  is
reportable under these  regulations  does not affect the legal  determination of
whether the taxpayer's treatment of loss is proper.  Shareholders should consult
their tax advisors to determine the  applicability of these regulations in light
of their particular circumstances.



Non-US Shareholders

In  general,  dividends  paid  by the  Fund to a  shareholder  that is not a "US
person"  within  the  meaning  of the Code (a  "foreign  person")  to the extent
derived from net investment income and net short-term  capital gains of the Fund
are subject to  withholding  of US federal income tax at a rate of 30% (or lower
applicable  treaty  rate)  even if they are  funded by income or gains  (such as
portfolio  interest,  short-term  capital gains, or foreign-source  dividend and
interest  income)  that,  if paid to a  foreign  person  directly,  would not be
subject to  withholding.  However,  for the taxable years of the Fund  beginning
before  January 1, 2010,  the Fund will not be required to withhold  any amounts
(i) with respect to distributions  (other than distributions to a foreign person
(w) that has not provided a satisfactory  statement that the beneficial owner is
not a US person,  (x) to the extent that the dividend is attributable to certain
interest  on an  obligation  if the  foreign  person  is the  issuer or is a 10%
shareholder  of the issuer,  (y) that is within certain  foreign  countries that
have  inadequate  information  exchange  with the United  States,  or (z) to the
extent the dividend is attributable to interest paid by a person that is related
to the person of the  foreign  person  and the  foreign  person is a  controlled
foreign  corporation)  derived from the US source  interest income that would be
subject to US federal  income tax if earned  directly by an  individual  foreign
person, to the extent such  distributions  are properly  designated by the Fund,
and  (ii)  with  respect  to  distributions  (other  that  distributions  to  an
individual  foreign  person who is present in the United  States for a period or
periods  aggregating  183 days or more during the year of  distribution)  of net
short-term  capital  gains in excess of net  long-term  capital  losses,  to the
extent such distributions are properly designated by the Fund.  Depending on the
circumstances,  the Fund may make such designations with respect to all, some or
none of its potentially eligible dividends and/or treat such dividends, in whole
or in part, as  ineligible  for this  exemption  from  withholding.  In order to
qualify  for this  exemption  from  withholding,  a foreign  person will need to
comply with applicable certification  requirements relating to its non-US status
(including,  in general,  furnishing an Internal  Revenue Service Form W-8BEN or
substitute  form).  In the case of shares  held  through  an  intermediary,  the
intermediary may withhold even if the Fund makes a designation with respect to a
payment. Foreign persons should consult their intermediaries with respect to the
application of these rules to their accounts.

If a  beneficial  holder who is a foreign  person has a trade or business in the
United States,  and the dividends are effectively  connected with the conduct by
the beneficial holder of a trade or business in the United States,  the dividend
will be subject to US federal  income  taxation on a net basis at regular income
tax rates.



Every non-US shareholder is urged to consult his own tax advisor with respect to
his own circumstances.

The  foregoing  is  only a  summary  of  certain  material  federal  income  tax
consequences affecting the Fund. Prospective shareholders are advised to consult
their own tax advisors with respect to the particular tax  consequences  to them
of an investment in the Fund.

                                 NET ASSET VALUE

The net asset value of Shares of the Fund is computed as of the close of regular
trading on the New York Stock Exchange ("the Exchange") on each day the Exchange
is open for trading (the "Value  Time").  The Exchange is scheduled to be closed
on the following  holidays:  New Year's Day, Dr.  Martin  Luther King,  Jr. Day,
Presidents'  Day,  Good  Friday,  Memorial  Day,  Independence  Day,  Labor Day,
Thanksgiving  and Christmas,  and on the preceding  Friday or subsequent  Monday
when one of these  holidays  falls on a Saturday  or Sunday,  respectively.  Net
asset  value  per share is  determined  separately  for each  class of shares by
dividing the value of the total assets of the Fund attributable to the shares of
that class, less all liabilities attributable to that class, by the total number
of shares of that class outstanding.  The per share net asset value may be lower
for  certain  classes  of the Fund  because  of higher  expenses  borne by these
classes.

An equity  security is valued at its most  recent  sale price on the  security's
primary  exchange  or  over-the-counter  ("OTC")  market as of the  Value  Time.
Lacking any sales,  the  security is valued at the  calculated  mean between the
most recent bid quotation and the most recent asked  quotation (the  "Calculated
Mean")  on such  exchange  or OTC  market  as of the  Value  Time.  If it is not
possible to determine the  Calculated  Mean,  the security is valued at the most
recent bid quotation on such exchange or OTC market as of the Value Time. In the
case of certain foreign exchanges or OTC markets,  the closing price reported by
the exchange or OTC market  (which may sometimes be referred to as the "official
close" or the "official closing price" or other similar term) will be considered
the most recent sale price.

Debt securities are valued as follows.  Money market instruments  purchased with
an  original or  remaining  maturity  of 60 days or less,  maturing at par,  are
valued at amortized  cost.  Other money market  instruments  are valued based on
information  obtained from an approved  pricing agent or, if such information is
not readily  available,  by using  matrix  pricing  techniques  (formula  driven
calculations based primarily on current market yields). Bank loans are valued at
prices supplied by an approved  pricing agent (which are intended to reflect the
mean between the bid and asked prices), if available,  and otherwise at the mean
of the most recent bid and asked quotations or evaluated  prices, as applicable,
based  on   quotations   or  evaluated   prices   obtained   from  one  or  more
broker-dealers.  Privately  placed  debt  securities,  other than Rule 144A debt
securities,  initially are valued at cost and  thereafter  based on all relevant
factors  including  type  of  security,  size of  holding  and  restrictions  on
disposition.  Municipal  debt  securities  are valued at prices  supplied  by an
approved  pricing  agent (which are intended to reflect the mean between the bid
and asked  prices),  if available,  and otherwise at the mean of the most recent
bid and asked quotations or evaluated price obtained from a broker-dealer. Other
debt securities not addressed above are valued at prices supplied by an approved
pricing agent,  if available,  and otherwise at the most recent bid quotation or
evaluated price, as applicable, obtained from one or more broker-dealers.  If it
is not  possible  to value a  particular  debt  security  pursuant  to the above
methods,  the  security  is valued on the basis of  factors  including  (but not
limited to) maturity, coupon,  creditworthiness,  currency denomination, and the
movement of the market in which the security is normally traded.

An exchange-traded option contract on securities, currencies and other financial
instruments  is valued at its most recent sale price on the  relevant  exchange.
Lacking any sales,  the option contract is valued at the Calculated  Mean. If it
is not possible to determine the Calculated  Mean, the option contract is valued
at the most recent bid quotation in the case of a purchased  option  contract or
the most recent asked  quotation in the case of a written  option  contract,  in
each case as of the Value Time. An option contract on securities, currencies and
other financial instruments traded in the OTC market is valued on the Value Date
at the evaluated price provided by the  broker-dealer  with which it was traded.
Futures contracts (and options thereon) are valued at the most recent settlement
price, if available,  on the exchange on which they are traded most extensively.
With the exception of stock index futures  contracts  which trade on the Chicago
Mercantile Exchange,  closing settlement times are prior to the close of trading
on the  Exchange.  For stock index futures  contracts  that trade on the Chicago
Mercantile  Exchange,  closing  settlement  prices  are  normally  available  at
approximately  4:20 p.m. Eastern time. If no settlement price is available,  the
last traded price on such  exchange  will be used.  If market  quotations  for a
portfolio  asset are not readily  available or the value of a portfolio asset as
determined in accordance with  Board-approved  procedures does not represent the
fair market value of the portfolio  asset,  the value of the portfolio  asset is
taken to be an amount which, in the opinion of the Fund's Pricing Committee (or,
in some cases, the Board's Valuation  Committee),  represents fair market value.
The  value of other  portfolio  holdings  owned by the Fund is  determined  in a
manner which is intended to fairly reflect the fair market value of the asset on
the valuation date,  based on valuation  procedures  adopted by the Fund's Board
and overseen primarily by the Fund's Pricing Committee.

                           BOARD MEMBERS AND OFFICERS


The following table presents certain information  regarding the Board Members of
the Trust.  Each Board Member's year of birth is set forth in parentheses  after
his or her name.  Unless  otherwise  noted, (i) each Board Member has engaged in
the principal occupation(s) noted in the table for at least the most recent five
years,  although not  necessarily in the same capacity,  and (ii) the address of
each Board  Member  that is not an  "interested  person" (as defined in the 1940
Act) of the Trust or the Advisor (each,  an  "Independent  Board Member") is c/o
Dawn-Marie Driscoll, PO Box 100176, Cape Coral, FL 33904. The term of office for
each Board  Member is until the election and  qualification  of a successor,  or
until  such Board  Member  sooner  dies,  resigns,  is  removed or as  otherwise
provided in the governing documents of the Trust. Because the Fund does not hold
an annual  meeting of  shareholders,  each Board  Member will hold office for an
indeterminate  period.  The Board  Members may also serve in similar  capacities
with other funds in the DWS fund complex.

Independent Board Members

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth, Position                                                                   Number of Funds
 with the Trust and Length of     Business Experience and                                        in DWS Fund
 Time Served(1)                   Directorships During the Past 5 Years                          Complex Overseen
--------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>                                               <C>
Paul K. Freeman                   Consultant, World Bank/Inter-American Development Bank;               134
(1950)                            Governing Council of the Independent Directors Council
Chairperson since 2009, and       (governance, executive committees); formerly: Project Leader,
Board Member since 1993           International Institute for Applied Systems Analysis
                                  (1998-2001); Chief Executive Officer, The Eric Group, Inc.
                                  (environmental insurance) (1986-1998)
-------------------------------------------------------------------------------------------------------------------
John W. Ballantine (1946)         Retired; formerly: Executive Vice President and Chief Risk            134
Board Member since 1999           Management Officer, First Chicago NBD Corporation/The First
                                  National Bank of Chicago (1996-1998); Executive Vice
                                  President and Head of International Banking (1995-1996);
                                  Directorships: Healthways Inc. (provider of disease and care
                                  management services); Portland General Electric (utility
                                  company); Stockwell Capital Investments PLC (private equity);
                                  former Directorships: First Oak Brook Bancshares, Inc. and
                                  Oak Brook Bank
--------------------------------------------------------------------------------------------------------------------
 Henry P. Becton, Jr. (1943)      Vice Chair, WGBH Educational Foundation; Directorships:               134
 Board Member since               Association of Public Television Stations; Becton Dickinson
 1990                             and Company(2) (medical technology company); Belo
                                  Corporation(2) (media company); Boston Museum
                                  of Science; Public Radio International; PRX,
                                  The Public Radio Exchange; The PBS Foundation;
                                  former Directorships: American Public
                                  Television; Concord Academy; New England
                                  Aquarium; Mass. Corporation for Educational
                                  Telecommunications; Committee for Economic
                                  Development; Public Broadcasting Service
--------------------------------------------------------------------------------------------------------------------
Dawn-Marie Driscoll (1946)        President, Driscoll Associates (consulting firm); Executive           134
Board Member since 1987           Fellow, Center for Business Ethics, Bentley University;
                                  formerly: Partner, Palmer & Dodge (1988-1990); Vice President
                                  of Corporate Affairs and General Counsel, Filene's
                                  (1978-1988); Directorships: Trustee of 20 open-end mutual
                                  funds managed by Sun Capital Advisers, Inc. (since 2007);
                                  Director of ICI Mutual Insurance Company (since 2007);
                                  Advisory Board, Center for Business Ethics,
                                  Bentley University; Trustee, Southwest Florida
                                  Community Foundation (charitable
                                  organization); former Directorships:
                                  Investment Company Institute (audit,
                                  executive, nominating committees) and
                                  Independent Directors Council (governance,
                                  executive
                                  committees)
--------------------------------------------------------------------------------------------------------------------
Keith R. Fox (1954)               Managing General Partner, Exeter Capital Partners (a series           134
Board Member since                of private equity funds); Directorships: Progressive Holding
1996                              Corporation (kitchen goods importer and distributor); Natural
                                  History, Inc. (magazine publisher); Box Top Media Inc.
                                  (advertising); The Kennel Shop (retailer)
--------------------------------------------------------------------------------------------------------------------
Kenneth C. Froewiss               Clinical Professor of Finance, NYU Stern School of Business           134
(1945)                            (1997-present); Member, Finance Committee, Association for
Board Member since                Asian Studies (2002-present); Director, Mitsui Sumitomo
2001                              Insurance Group (US) (2004-present); prior thereto, Managing
                                  Director, J.P. Morgan (investment banking firm) (until 1996)
--------------------------------------------------------------------------------------------------------------------
Richard J. Herring                Jacob Safra Professor of International Banking and Professor,         134
(1946)                            Finance Department, The Wharton School, University of
Board Member since                Pennsylvania (since July 1972); Co-Director, Wharton
1990                              Financial Institutions Center (since July 2000); Director,
                                  Japan Equity Fund, Inc. (since September 2007), Thai Capital
                                  Fund, Inc. (since September 2007), Singapore Fund, Inc.
                                  (since September 2007); formerly: Vice Dean and Director,
                                  Wharton Undergraduate Division (July 1995-June 2000);
                                  Director, Lauder Institute of International Management
                                  Studies (July 2000-June 2006)
--------------------------------------------------------------------------------------------------------------------
William McClayton (1944)          Managing Director, Diamond Management & Technology                    134
Board Member since 2004           Consultants, Inc. (global management consulting firm)
                                  (2001-present); Directorship: Board of Managers, YMCA of
                                  Metropolitan Chicago; formerly: Senior Partner, Arthur
                                  Andersen LLP (accounting) (1966-2001); Trustee, Ravinia
                                  Festival
--------------------------------------------------------------------------------------------------------------------
Rebecca W. Rimel                  President and Chief Executive Officer, The Pew Charitable             134
(1951)                            Trusts (charitable organization) (1994 to present); Trustee,
Board Member since                Thomas Jefferson Foundation (charitable organization) (1994
1995                              to present); Trustee, Executive Committee, Philadelphia
                                  Chamber of Commerce (2001 to 2007); Trustee,
                                  Pro Publica (2007-present) (charitable
                                  organization); formerly: Executive Vice
                                  President, The Glenmede Trust Company
                                  (investment trust and wealth management) (1983
                                  to 2004); Board Member, Investor Education
                                  (charitable organization) (2004-2005);
                                  Director, Viasys Health Care(2) (January
                                  2007-June 2007)
--------------------------------------------------------------------------------------------------------------------
William N. Searcy, Jr.            Private investor since October 2003; Trustee of 20 open-end           134
(1946)                            mutual funds managed by Sun Capital Advisers, Inc. (since
Board Member since                October 1998); formerly: Pension & Savings Trust Officer,
1993                              Sprint Corporation(2) (telecommunications) (November
                                  1989-September 2003)
--------------------------------------------------------------------------------------------------------------------
Jean Gleason Stromberg            Retired; formerly: Consultant (1997-2001); Director, US               134
(1943)                            Government Accountability Office (1996-1997); Partner,
Board Member since                Fulbright & Jaworski, L.L.P. (law firm) (1978-1996);
1997                              Directorships: The William and Flora Hewlett Foundation;
                                  Business Leadership Council, Wellesley College; former
                                  Directorships: Service Source, Inc., Mutual Fund Directors
                                  Forum (2002-2004), American Bar Retirement Association
                                  (funding vehicle for retirement plans) (1987-1990 and
                                  1994-1996)
--------------------------------------------------------------------------------------------------------------------
Robert H. Wadsworth (1940)        President, Robert H. Wadsworth & Associates, Inc. (consulting         137
Board Member since 1999           firm) (1983 to present); Director, The Phoenix Boys Choir
                                  Association
--------------------------------------------------------------------------------------------------------------------

Interested Board Member


--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth, Position                                                                   Number of Funds
 with the Trust and Length of     Business Experience and                                        in DWS Fund
 Time Served(1)                   Directorships During the Past 5 Years                          Complex Overseen
--------------------------------------------------------------------------------------------------------------------
 Axel Schwarzer(3)                Managing Director(4), Deutsche Asset Management; Head of              134
 (1958)                           Deutsche Asset Management Americas; CEO of DWS Investments;
 Board Member since               formerly: board member of DWS Investments, Germany
 2006                             (1999-2005); Head of Sales and Product Management for the
                                  Retail and Private Banking Division of
                                  Deutsche Bank in Germany (1997-1999); various
                                  strategic and operational positions for
                                  Deutsche Bank Germany Retail and Private
                                  Banking Division in the field of investment
                                  funds, tax driven instruments and asset
                                  management for corporates (1989-1996)
--------------------------------------------------------------------------------------------------------------------

Officers(5)


--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth, Position
 with the Trust and Length of     Business Experience and
 Time Served(6)                   Directorships During the Past 5 Years
--------------------------------------------------------------------------------------------------------------------
 Michael G. Clark(7) (1965)       Managing Director(4), Deutsche Asset Management (2006-present); President of
 President, 2006-present          DWS family of funds; Director, ICI Mutual Insurance Company (since
                                  October 2007); formerly: Director of Fund Board Relations (2004-2006) and
                                  Director of Product Development (2000-2004), Merrill Lynch Investment Managers;
                                  Senior Vice President Operations, Merrill Lynch Asset Management (1999-2000)
--------------------------------------------------------------------------------------------------------------------
 John Millette(8) (1962)          Director(4), Deutsche Asset Management
 Vice President and Secretary,
 1999-present
--------------------------------------------------------------------------------------------------------------------
 Paul H. Schubert(7) (1963)       Managing Director(4), Deutsche Asset Management (since July 2004); formerly:
 Chief Financial Officer,         Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family
 2004-present                     of Funds (1998-2004); Vice President and Director of Mutual Fund Finance at UBS
 Treasurer, 2005-present          Global Asset Management (1994-1998)
--------------------------------------------------------------------------------------------------------------------
 Caroline Pearson(8) (1962)       Managing Director(4), Deutsche Asset Management
 Assistant Secretary,
 1997-present
--------------------------------------------------------------------------------------------------------------------
 Rita Rubin(9) (1970)             Vice President and Counsel, Deutsche Asset Management (since October 2007);
 Assistant Secretary,             formerly, Vice President, Morgan Stanley Investment Management (2004-2007);
 2009-present                     Attorney, Shearman & Sterling LLP (2004); Vice President and Associate General
                                  Counsel, UBS Global Asset Management (2001-2004)
--------------------------------------------------------------------------------------------------------------------
 Paul Antosca(8)                  Director(4), Deutsche Asset Management (since 2006); formerly: Vice President,
 (1957)                           The Manufacturers Life Insurance Company (U.S.A.) (1990-2006)
 Assistant Treasurer,
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Jack Clark (8)                   Director(4), Deutsche Asset Management (since 2007); formerly: Vice President,
 (1967)                           State Street Corporation (2002-2007)
 Assistant Treasurer,
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Diane Kenneally(8)               Director(4), Deutsche Asset Management
 (1966)
 Assistant Treasurer,
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Jason Vazquez(9) (1972)          Vice President, Deutsche Asset Management (since 2006); formerly: AML
 Anti-Money Laundering            Operations Manager for Bear Stearns (2004-2006); Supervising Compliance
 Compliance Officer,              Principal and Operations Manager for AXA Financial (1999-2004)
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Robert Kloby(9) (1962)           Managing Director(4), Deutsche Asset Management (2004-present); formerly: Chief
 Chief Compliance Officer,        Compliance Officer/Chief Risk Officer, Robeco USA (2000-2004); Vice President,
 2006-present                     The Prudential Insurance Company of America (1988-2000); E.F. Hutton and
                                  Company (1984-1988)
--------------------------------------------------------------------------------------------------------------------
 J. Christopher Jackson(9)        Director(4), Deutsche Asset Management (2006-present); formerly: Director,
 (1951)                           Senior Vice President, General Counsel, and Assistant Secretary, Hansberger
 Chief Legal Officer,             Global Investors, Inc. (1996-2006); Director, National Society of Compliance
 2006-present                     Professionals (2002-2005) (2006-2009)
--------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)   The length of time served  represents  the year in which the Board  Member
      joined the board of one or more DWS funds currently overseen by the Board.

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

(3)   The  mailing  address  of  Axel  Schwarzer  is  c/o  Deutsche   Investment
      Management  Americas Inc., 345 Park Avenue,  New York, New York 10154. Mr.
      Schwarzer is an interested  Board Member by virtue of his  positions  with
      Deutsche Asset Management. As an interested person, Mr. Schwarzer receives
      no compensation from the Fund.

(4)   Executive title, not a board directorship.

(5)   As a result of their  respective  positions  held with the Advisor,  these
      individuals are considered  "interested persons" of the Advisor within the
      meaning of the 1940 Act.  Interested  persons receive no compensation from
      the Fund.

(6)   The length of time  served  represents  the year in which the  officer was
      first elected in such capacity for one or more DWS funds.

(7)   Address: 345 Park Avenue, New York, New York 10154.

(8)   Address: One Beacon Street, Boston, Massachusetts 02108.

(9)      Address:  280 Park Avenue, New York, New York 10017.

Certain officers hold similar positions for other investment companies for which
DIMA or an affiliate serves as the Advisor.

Officer's Role with Principal Underwriter:  DWS Investments Distributors, Inc.

 Paul H. Schubert:                    Vice President
 Jason Vazquez:                       Vice President and AML Compliance Officer
 Caroline Pearson:                    Secretary

Board Members' Responsibilities. The officers of the Trust manage its day-to-day
operations under the direction of the Board. The primary  responsibility  of the
Board is to represent the interests of the Fund and to provide  oversight of the
management of the Fund.

Board Committees.  The Board has established the following standing  committees:
Audit Committee, Nominating and Governance Committee, Contract Committee, Equity
Oversight Committee,  Fixed-Income and Quant Oversight Committee,  Marketing and
Shareholder Services Committee,  and Operations  Committee.  For each committee,
the  Board  has  adopted  a  written  charter  setting  forth  each  committee's
responsibilities. Each committee was reconstituted effective April 1, 2008.

Audit  Committee:  The Audit Committee,  which consists  entirely of Independent
Board Members,  assists the Board in fulfilling its responsibility for oversight
of (1) the integrity of the financial statements,  (2) the Fund's accounting and
financial  reporting  policies and  procedures,  (3) the Fund's  compliance with
legal and regulatory  requirements related to accounting and financial reporting
and (4) the  qualifications,  independence  and  performance of the  independent
registered  public accounting firm for the Fund. It also approves and recommends
to the  Board the  appointment,  retention  or  termination  of the  independent
registered public  accounting firm for the Fund,  reviews the scope of audit and
internal controls, considers and reports to the Board on matters relating to the
Fund's  accounting and financial  reporting  practices,  and performs such other
tasks as the full Board deems  necessary  or  appropriate.  The Audit  Committee
receives  annual   representations   from  the  independent   registered  public
accounting firm as to its  independence.  The members of the Audit Committee are
William McClayton (Chair), Kenneth C. Froewiss (Vice Chair), John W. Ballantine,
Henry P.  Becton,  Jr.,  Keith R. Fox and  William  N.  Searcy,  Jr.  During the
calendar  year  2008,  the Audit  Committee  of the  Fund's  Board  held six (6)
meetings.

Nominating and Governance  Committee:  The Nominating and Governance  Committee,
which consists entirely of Independent Board Members, recommends individuals for
membership on the Board,  nominates  officers,  Board and committee chairs, vice
chairs and committee  members,  and oversees the  operations  of the Board.  The
Nominating and Governance Committee also reviews recommendations by shareholders
for candidates for Board positions.  Shareholders  may recommend  candidates for
Board positions by forwarding their correspondence by US mail or courier service
to Dawn-Marie  Driscoll,  P.O. Box 100176,  Cape Coral, FL 33904. The members of
the  Nominating  and  Governance  Committee  are Henry P. Becton,  Jr.  (Chair),
Rebecca W. Rimel (Vice Chair), Paul K. Freeman and William McClayton. During the
calendar year 2008, the Nominating and Governance  Committee of the Fund's Board
held four (4) meetings.

Contract  Committee:   The  Contract  Committee,   which  consists  entirely  of
Independent Board Members,  reviews at least annually,  (a) the Fund's financial
arrangements  with DIMA and its  affiliates,  and (b) the Fund's expense ratios.
The members of the Contract Committee are Robert H. Wadsworth (Chair),  Keith R.
Fox (Vice Chair),  Henry P. Becton,  Jr., Richard J. Herring,  William McClayton
and Jean Gleason  Stromberg.  During the calendar year 2008, the Contract Review
Committee of the Fund's Board held seven (7) meetings.

Equity  Oversight   Committee:   The  Equity  Oversight  Committee  reviews  the
investment  operations of those funds that primarily invest in equity securities
(except for those funds managed by a quantitative  investment team). The members
of the  Equity  Oversight  Committee  are John W.  Ballantine  (Chair),  William
McClayton (Vice Chair),  Henry P. Becton,  Jr., Keith R. Fox, Richard J. Herring
and  Rebecca W.  Rimel.  During the  calendar  year 2008,  the Equity  Oversight
Committee of the Fund's Board held five (5) meetings.

Fixed-Income and Quant Oversight Committee: The Fixed-Income and Quant Oversight
Committee reviews the investment operations of those funds that primarily invest
in fixed-income securities or are managed by a quantitative investment team. The
members of the Fixed-Income and Quant Oversight Committee are William N. Searcy,
Jr. (Chair), Jean Gleason Stromberg (Vice Chair),  Dawn-Marie Driscoll,  Kenneth
C.  Froewiss  and Robert H.  Wadsworth.  During  the  calendar  year  2008,  the
Fixed-Income Oversight Committee of the Fund's Board held five (5) meetings.

Marketing and  Shareholder  Services  Committee:  The Marketing and  Shareholder
Services  Committee  reviews the Fund's marketing  program,  sales practices and
literature  and  shareholder   services.   The  members  of  the  Marketing  and
Shareholder  Services  Committee  are  Richard J.  Herring  (Chair),  Dawn-Marie
Driscoll (Vice Chair),  Rebecca W. Rimel,  Jean Gleason  Stromberg and Robert H.
Wadsworth. During the calendar year 2008, the Marketing/Distribution/Shareholder
Service Committee of the Fund's Board held four (4) meetings.

The Operations  Committee:  The Operations  Committee reviews the administrative
operations,  legal  affairs  and  general  compliance  matters of the Fund.  The
Operations Committee reviews administrative matters related to the operations of
the Fund,  policies and procedures relating to portfolio  transactions,  custody
arrangements, fidelity bond and insurance arrangements, valuation of Fund assets
and  securities  and such  other  tasks as the full  Board  deems  necessary  or
appropriate.  The Operations Committee also oversees the valuation of the Fund's
securities and other assets and  determines,  as needed,  the fair value of Fund
securities  or other  assets  under  certain  circumstances  as described in the
Fund's Valuation Procedures.  The Operations Committee has appointed a Valuation
Sub-Committee,  which may make  determinations  of fair value  required when the
Operations  Committee is not in session. The members of the Operations Committee
are Dawn-Marie  Driscoll  (Chair),  John W. Ballantine (Vice Chair),  Kenneth C.
Froewiss,  Rebecca  W.  Rimel and  William N.  Searcy,  Jr.  The  members of the
Valuation  Sub-Committee  are Kenneth C. Froewiss  (Chair),  John W. Ballantine,
Dawn-Marie  Driscoll  (Alternate),  Rebecca W. Rimel  (Alternate) and William N.
Searcy, Jr. (Alternate). During the calendar year 2008, the Operations Committee
held  four  (4)  meetings  and the  Valuation  Sub-Committee  did not  hold  any
meetings.

Ad Hoc Committees.  In addition to the standing committees described above, from
time to time the Board  may also form ad hoc  committees  to  consider  specific
issues.

Remuneration. Each Independent Board Member receives compensation from the Fund
for his or her services, which includes retainer fees and specified amounts for
various committee services and for the Board Chairperson. No additional
compensation is paid to any Independent Board Member for travel time to
meetings, attendance at directors' educational seminars or conferences, service
on industry or association committees, participation as speakers at directors'
conferences or service on special fund industry director task forces or
subcommittees. Independent Board Members do not receive any employee benefits
such as pension or retirement benefits or health insurance from the Fund or any
fund in the DWS fund complex.

Board Members who are officers, directors, employees or stockholders of Deutsche
Asset Management or its affiliates receive no direct compensation from the Fund,
although they are compensated as employees of Deutsche Asset Management,  or its
affiliates,  and as a result  may be deemed to  participate  in fees paid by the
Fund.  The  following  tables  show  compensation  from the  Fund and  aggregate
compensation  from all of the  funds in the DWS fund  complex  received  by each
Independent  Board Member  during the calendar  year 2008.  Mr.  Schwarzer is an
interested  person of the Fund and received no compensation from the Fund or any
fund in the DWS fund complex during the relevant periods.


<TABLE>
<CAPTION>
                                      Aggregate Compensation             Total Compensation
                                           from DWS Short                  from Fund and
  Name of Board Member                   Duration Plus Fund              DWS Fund Complex(1)
  --------------------                   ------------------              -------------------

<S>                                             <C>                             <C>
  John W. Ballantine                            $2,299                          $237,500
  Henry P. Becton, Jr.(2)                         $138                          $246,000
  Dawn-Marie Driscoll(2)(3)                       $146                          $292,500
  Keith R. Fox(2)                                 $136                          $229,500
  Paul K. Freeman                               $2,456                          $255,000
  Kenneth C. Froewiss                             $136                          $226,750
  Richard J. Herring(2)                           $138                          $240,000
  William McClayton((4))                        $2,396                          $257,500
  Rebecca W. Rimel(2)                             $136                          $233,500
  William N. Searcy, Jr.                          $138                          $238,000
  Jean Gleason Stromberg                          $136                          $225,500
  Robert H. Wadsworth                           $2,396                          $273,500

(1)   The DWS fund complex is composed of 136 funds as of December 31, 2008.

(2)   Aggregate  compensation  includes  amounts  paid to the Board  Members for
      special  meetings of ad hoc committees of the Board in connection with the
      consolidation  of the DWS fund  boards and  various  funds,  meetings  for
      considering fund expense simplification initiatives,  and consideration of
      issues   specific  to  the  Fund's  direct   shareholders   (i.e.,   those
      shareholders    who   did   not   purchase   shares   through    financial
      intermediaries).  Such amounts  totaled $8,000 for Mr. Becton,  $2,000 for
      Ms.  Driscoll,  $2,000 for Mr. Fox,  $2,000 for Dr. Herring and $8,000 for
      Ms. Rimel. These meeting fees were borne by the funds.

(3)   Includes  $70,000 in annual  retainer  fees  received  by Ms.  Driscoll as
      Chairperson of DWS funds.

(4)   Includes $15,000 paid to Mr. McClayton for numerous special meetings of an
      ad hoc  committee of the former  Chicago  Board in  connection  with board
      consolidation initiatives.

Board Member Ownership in the Fund

The  following  table shows the dollar range of equity  securities  beneficially
owned by each Board  Member in the Fund and DWS fund  complex as of December 31,
2008.

                                            Dollar Range of Beneficial            Aggregate Dollar Range of
                                                     Ownership               Ownership in all Funds Overseen by
                                                   in DWS Short                         Board Member
Board Member                                    Duration Plus Fund              in the DWS Fund Complex(1)
------------                                    ------------------              ----------------------------

Independent Board Member:

John W. Ballantine                                     None                                Over $100,000
Henry P. Becton, Jr.                             $10,001 - $50,000                         Over $100,000
Dawn-Marie Driscoll                                $1 - $10,000                            Over $100,000
Keith R. Fox                                           None                                Over $100,000
Paul K. Freeman                                        None                                Over $100,000
Kenneth C. Froewiss                              $10,001 - $50,000                         Over $100,000
Richard J. Herring                                     None                                Over $100,000
William McClayton                                      None                                Over $100,000
Rebecca W. Rimel                                       None                                Over $100,000
William N. Searcy, Jr.                          $50,001 - $100,000                         Over $100,000
Jean Gleason Stromberg                                 None                                Over $100,000
Robert H. Wadsworth                                    None                                Over $100,000

Interested Board Member:

Axel Schwarzer                                         None                                Over $100,000

(1)   Securities beneficially owned as defined under the 1934 Act include direct
      and/or indirect  ownership of securities where the Board Member's economic
      interest is tied to the  securities,  employment  ownership and securities
      when the Board  Member can exert voting  power,  and when the Board Member
      has  authority  to sell the  securities.  The  dollar  ranges  are:  None,
      $1-$10,000, $10,001-$50,000, $50,001-$100,000 and over $100,000.

Ownership in Securities of the Advisor and Related Companies

As  reported  to the Fund,  the  information  in the  following  table  reflects
ownership by the Independent Board Members and their immediate family members of
certain  securities as of December 31, 2008.  Immediate  family members can be a
spouse,  children  residing in the same  household  including  step and adoptive
children, and any dependents.  The securities represent ownership in the Advisor
or principal  underwriter  of the Fund and any persons  (other than a registered
investment company) directly or indirectly controlling,  controlled by, or under
common control with the Advisor or principal  underwriter of the Fund (including
Deutsche Bank AG).


                                                                                   Value of        Percent of
                                   Owner and                                     Securities on     Class on an
Independent                     Relationship to                     Title of     an Aggregate       Aggregate
Board Member                      Board Member         Company        Class          Basis            Basis
------------                      ------------         -------        -----          -----            -----

John W. Ballantine                                      None
Henry P. Becton, Jr.                                    None
Dawn-Marie Driscoll                                     None
Keith R. Fox                                            None
Paul K. Freeman                                         None
Kenneth C. Froewiss                                     None
Richard J. Herring                                      None
William McClayton                                       None
Rebecca W. Rimel                                        None
William N. Searcy, Jr.                                  None
Jean Gleason Stromberg                                  None
Robert H. Wadsworth                                     None


Securities Beneficially Owned

As of January 14, 2009, the Board Members and officers of the Trust owned, as a
group, less than 1% of the outstanding shares of the Fund.

To the best of the Fund's knowledge,  as of January 14, 2009, no person owned of
record or beneficially 5% or more of any class of the Fund's outstanding shares,
except as noted below.

DWS Short Duration Plus Fund

Name and Address of Investor Ownership                          Shares                      % of Total Shares
--------------------------------------                          ------                      -----------------

CHARLES SCHWAB & CO                                          26,417,273.46                  43.22% of Class A
MUTUAL FUNDS DEPT
SAN FRANCISCO CA  94104-4151

WELLS FARGO INVESTMENTS LLC                                  4,768,709.15                    7.8% of Class A
FBO CUSTOMER ACCOUNTS
ATTN MUTUAL FUND OPERATIONS
MINNEAPOLIS MN  55402-2323

MLPF&S FOR THE SOLE BENEFIT OF                                 24,082.47                    6.48% of Class B
ITS CUSTOMERS
ATTN FUND ADMINISTRATION #97D64
JACKSONVILLE FL  32246-6484

MLPF&S FOR THE SOLE BENEFIT OF                               2,682,371.27                   15.11% of Class C
ITS CUSTOMERS
ATTN FUND ADMINISTRATION 9K551
JACKSONVILLE FL  32246-6484

MORGAN STANLEY & CO.                                         1,854,244.25                   10.44% of Class C
HARBORSIDE FINANCIAL CENTER
PLAZA II 3RD FLOOR
JERSEY CITY NJ  07311

STATE STREET BANK & TRUST CO CUST                            3,063,510.67             76.37% of Institutional Class
FBO DWS VALUE BUILDER FUND CUST
QUINCY MA  02171-2105

STATE STREET BANK & TRUST CO                                  681,930.05               17% of Institutional Class
CUST FBO
DWS LIFECOMPASS RETIREMENT FUND
QUINCY MA  02171-2105

CHARLES SCHWAB & CO                                          8,940,030.60                   10.75% of Class S
OMNIBUS ACCOUNT REINVEST
ATTN: MUTUAL FUND ACCT MGMT TEAM
SAN FRANCISCO CA  94104-4151

LPL FINANCIAL                                                4,916,782.04                   5.91% of Class S
FBO CUSTOMER ACCOUNTS
ATTN MUTUAL FUND OPERATIONS
SAN DIEGO CA  92150-9046
</TABLE>


Agreement to Indemnify Independent Trustees for Certain Expenses

In connection with litigation or regulatory  action related to possible improper
market timing or other improper trading activity or possible improper  marketing
and sales activity in certain DWS Funds (the "Affected Funds"),  DIMA has agreed
to  indemnify  and hold  harmless  the  Affected  Funds  ("Fund  Indemnification
Agreement")  against any and all loss,  damage,  liability and expense,  arising
from market  timing or marketing and sales  matters  alleged in any  enforcement
actions brought by governmental  authorities  involving or potentially affecting
the  Affected  Funds or DIMA  ("Enforcement  Actions") or that are the basis for
private  actions  brought by  shareholders  of the  Affected  Funds  against the
Affected Funds, their directors and officers,  DIMA and/or certain other parties
("Private Litigation"),  or any proceedings or actions that may be threatened or
commenced  in the future by any  person  (including  governmental  authorities),
arising  from or similar to the matters  alleged in the  Enforcement  Actions or
Private Litigation.  In recognition of its undertaking to indemnify the Affected
Funds  and  in  light  of  the  rebuttable  presumption  generally  afforded  to
independent  directors/trustees  of  investment  companies  that  they  have not
engaged in disabling  conduct,  DIMA has also agreed,  subject to applicable law
and  regulation,  to  indemnify  certain (or,  with respect to certain  Affected
Funds, all) of the Independent  Trustees of the Affected Funds,  against certain
liabilities the  Independent  Trustees may incur from the matters alleged in any
Enforcement  Actions or  Private  Litigation  or arising  from or similar to the
matters alleged in the Enforcement  Actions or Private  Litigation,  and advance
expenses that may be incurred by the Independent Trustees in connection with any
Enforcement  Actions or Private  Litigation.  DIMA is not, however,  required to
provide  indemnification  and  advancement of expenses:  (1) with respect to any
proceeding  or action  which  the  Affected  Funds'  Board  determines  that the
Independent  Trustees ultimately would not be entitled to indemnification or (2)
for any liability of the Independent Trustees to the Funds or their shareholders
to which the Independent Trustee would otherwise be subject by reason of willful
misfeasance,   bad  faith,   gross  negligence  or  reckless  disregard  of  the
Independent  Trustee's  duties as a director or trustee of the Affected Funds as
determined in a final  adjudication in such action or proceeding.  The estimated
amount of any  expenses  that may be  advanced  to the  Independent  Trustees or
indemnity  that may be  payable  under the  indemnity  agreements  is  currently
unknown. These agreements by DIMA will survive the termination of the investment
management agreements between DIMA and the Affected Funds.

                               TRUST ORGANIZATION

The Fund is a series of DWS Advisor Funds (the "Trust"),  an open-end management
investment company. The Trust is a Massachusetts  business trust organized under
the laws of  Massachusetts  on July 21, 1986,  and is governed by an Amended and
Restated  Declaration of Trust that was approved by  shareholders  in the second
quarter of 2006, as may be further  amended from time to time (the  "Declaration
of Trust").  The Trust was organized under the name BT Tax-Free Investment Trust
and assumed its former name of BT Investment  Funds on May 16, 1988. The Trust's
name was  changed to Scudder  Advisor  Funds  effective  May 16, 2003 and to DWS
Advisor  Funds as of February 6, 2006.  All shares  issued and  outstanding  are
fully paid and non-assessable,  transferable,  have no pre-emptive or conversion
rights (except as may be determined by the Board of Trustees) and are redeemable
as described in the SAI and the Fund's  prospectus.  Each share has equal rights
with each other  share of the same  class of the Fund as to  voting,  dividends,
exchanges, conversion features and liquidation. Shareholders are entitled to one
vote for each full share held and fractional votes for fractional shares held.

The Fund generally is not required to hold meetings of its  shareholders.  Under
the  Declaration  of  Trust,  however,  shareholder  meetings  will  be  held in
connection  with the  following  matters to the extent  and as  provided  in the
Declaration  of Trust and as required by  applicable  law:  (a) the  election or
removal of trustees if a meeting is called for such purpose; (b) the termination
of the Trust or the Fund; (c) an amendment of the Declaration of Trust;  and (d)
such  additional  matters  as may be  required  by  law or as the  Trustees  may
determine to be necessary or desirable.  Shareholders  also vote upon changes in
fundamental policies or restrictions.

The Declaration of Trust provides that shareholder  meeting quorum  requirements
shall be established  in the Trust's  By-laws.  The By-laws  currently in effect
provide that the presence in person or by proxy of the holders of thirty percent
of the shares entitled to vote at a meeting (or of an individual series or class
if required to vote separately) shall constitute a quorum for the transaction of
business at meetings of shareholders of the Trust.

On any  matter  submitted  to a vote of  shareholders,  all  shares of the Trust
entitled to vote shall,  except as otherwise provided in the Trust's By-Laws, be
voted in the aggregate as a single class without  regard to series or classes of
shares,  except (a) when required by applicable  law or when the Trustees  shall
have  determined that the matter affects one or more series or classes of shares
materially differently, shares shall be voted by individual series or class; and
(b) when the Trustees have determined that the matter affects only the interests
of one or more series or classes,  only  shareholders  of such series or classes
shall be entitled to vote thereon.

The  Declaration  of Trust  provides  that the  Board of  Trustees  may,  in its
discretion,  establish  minimum  investment  amounts for  shareholder  accounts,
impose  fees on  accounts  that do not  exceed a minimum  investment  amount and
involuntarily  redeem  shares in any such  account in payment of such fees.  The
Board of Trustees,  in its sole  discretion,  also may cause the Trust to redeem
all of the  shares of the Trust or one or more  series  or  classes  held by any
shareholder for any reason, to the extent permissible by the 1940 Act, including
(a) if the  shareholder  owns shares having an aggregate net asset value of less
than a specified minimum amount, (b) if a particular  shareholder's ownership of
shares would disqualify a series from being a regulated  investment company, (c)
upon a shareholder's failure to provide sufficient  identification to permit the
Trust to verify the shareholder's  identity, (d) upon a shareholder's failure to
pay for  shares  or meet or  maintain  the  qualifications  for  ownership  of a
particular  class or series of shares,  (e) if the Board of Trustees  determines
(or pursuant to policies  established by the Board it is determined)  that share
ownership by a particular  shareholder is not in the best interests of remaining
shareholders,  (f)  when  the  Fund  is  requested  or  compelled  to  do  so by
governmental authority or applicable law and (g) upon a shareholder's failure to
comply with a request  for  information  with  respect to the direct or indirect
ownership of shares of the Trust.  The  Declaration of Trust also authorizes the
Board  of  Trustees  to  terminate  the Fund or any  class  of the Fund  without
shareholder  approval,  and the Trust may suspend the right of  shareholders  to
require the Trust to redeem shares to the extent permissible under the 1940 Act.

Upon the  termination  of the Trust or any series,  after  paying or  adequately
providing for the payment of all liabilities which may include the establishment
of a liquidating  trust or similar  vehicle,  and upon receipt of such releases,
indemnities   and  refunding   agreements  as  they  deem  necessary  for  their
protection, the Trustees may distribute the remaining Trust property or property
of the series,  in cash or in kind or partly each,  to the  shareholders  of the
Trust or the series involved,  ratably  according to the number of shares of the
Trust or such  series  held by the  several  shareholders  of the  Trust or such
series on the date of termination,  except to the extent  otherwise  required or
permitted by the  preferences  and special or relative  rights and privileges of
any classes of shares of a series  involved,  provided that any  distribution to
the  shareholders  of a  particular  class  of  shares  shall  be  made  to such
shareholders  pro rata in  proportion to the number of shares of such class held
by  each  of  them.  The  composition  of any  such  distribution  (e.g.,  cash,
securities  or  other  assets)  shall  be  determined  by the  Trust in its sole
discretion, and may be different among shareholders (including differences among
shareholders in the same series or class).

Under Massachusetts law,  shareholders of a Massachusetts  business trust could,
under certain  circumstances,  be held  personally  liable for  obligations of a
Fund. The Declaration of Trust,  however,  disclaims  shareholder  liability for
acts or obligations  of the Fund and requires that notice of such  disclaimer be
given in each agreement,  obligation,  or instrument entered into or executed by
the Fund or the Fund's trustees. Moreover, the Declaration of Trust provides for
indemnification  out of  Fund  property  for  all  losses  and  expenses  of any
shareholder held personally  liable for the obligations of the Fund and the Fund
may be  covered by  insurance  which the  Trustees  consider  adequate  to cover
foreseeable  tort claims.  Thus, the risk of a shareholder  incurring  financial
loss on account of shareholder liability is considered by the Advisor remote and
not  material,  since it is limited to  circumstances  in which a disclaimer  is
inoperative and the Fund itself is unable to meet its obligations.

                             PROXY VOTING GUIDELINES

The Fund has delegated proxy voting responsibilities to the Advisor,  subject to
the Board's general  oversight.  The Advisor votes proxies pursuant to the proxy
voting policy and guidelines (set forth in Appendix A to this SAI).

You may  obtain  information  about  how a fund  voted  proxies  related  to its
portfolio  securities  during the 12-month  period ended June 30 by visiting the
SEC's   Web   site  at   www.sec.gov   or  by   visiting   our  Web   site   at:
www.dws-investments.com (click on "proxy voting" at the bottom of the page).



                              FINANCIAL STATEMENTS

The financial  statements  for the Fund for the fiscal year ended  September 30,
2008 are  incorporated  herein by reference to the Annual Report to shareholders
of the Fund  dated  September  30,  2008.  A copy of the  Annual  Report  may be
obtained without charge by contacting the Fund.

                             ADDITIONAL INFORMATION

The CUSIP numbers for each class of the Fund are:

Class A:  23336Y748

Class B:  23336Y623

Class C:  23336Y730

Institutional Class:  23336Y565

The Fund has a fiscal year ending September 30.

Many of the investment changes in the Fund will be made at prices different from
those  prevailing  at the time  they may be  reflected  in a  regular  report to
shareholders of the Fund. These transactions will reflect  investment  decisions
made by the Advisor in light of the Fund's  investment  objective  and policies,
its other portfolio holdings and tax considerations, and should not be construed
as recommendations for similar action by other investors.

The Fund's prospectuses and this SAI omit certain  information  contained in the
Registration  Statement and its amendments which the Fund has filed with the SEC
under  the  Securities  Act  of  1933  and  reference  is  hereby  made  to  the
Registration  Statement for further  information  with respect to a Fund and the
securities  offered hereby.  The  Registration  Statement and its amendments are
available for  inspection by the public at the offices of the SEC in Washington,
D.C.



<PAGE>



                      APPENDIX A -- PROXY VOTING GUIDELINES

          Deutsche Asset Management ("AM") Proxy Voting Policy and Guidelines


I.       INTRODUCTION

AM has adopted and implemented the following  policies and procedures,  which it
believes  are  reasonably  designed to ensure that proxies are voted in the best
economic interest of clients,  in accordance with its fiduciary duties and local
regulation.  These Proxy Voting Policies,  Procedures and Guidelines shall apply
to all accounts  managed by US domiciled  advisers and to all US client accounts
managed by non US  regional  offices.  Non US regional  offices are  required to
maintain  procedures  and to vote proxies as may be required by law on behalf of
their non US clients.  In addition,  AM's proxy  policies  reflect the fiduciary
standards and responsibilities for ERISA accounts.

The  attached  guidelines  represent a set of global  recommendations  that were
determined  by the  Global  Proxy  Voting  Sub-Committee  ("the  GPVSC").  These
guidelines  were  developed  to  provide  AM  with  a   comprehensive   list  of
recommendations  that  represent  how AM will  generally  vote  proxies  for its
clients.  The  recommendations  derived from the application of these guidelines
are not intended to influence the various AM legal entities  either  directly or
indirectly by parent or affiliated  companies.  In addition,  the organizational
structures  and  documents  of the  various  AM  legal  entities  allows,  where
necessary or  appropriate,  the execution by individual AM  subsidiaries  of the
proxy voting rights  independently of any DB parent or affiliated company.  This
applies in particular to non U.S. fund  management  companies.  The  individuals
that make proxy voting decisions are also free to act independently,  subject to
the normal and customary  supervision by the management/boards of these AM legal
entities.


II.      AM'S PROXY VOTING RESPONSIBILITIES

Proxy  votes  are the  property  of AM's  advisory  clients.(1)  As  such,  AM's
authority and  responsibility  to vote such proxies depend upon its  contractual
relationships  with its clients.  AM has delegated  responsibility for effecting
its advisory clients' proxy votes to Institutional Shareholder Services ("ISS"),
an  independent  third-party  proxy voting  specialist.  ISS votes AM's advisory
clients'  proxies in  accordance  with AM's proxy  guidelines  or AM's  specific
instructions.  Where a client has given specific  instructions as to how a proxy
should be voted,  AM will notify ISS to carry out those  instructions.  Where no
specific instruction exists, AM will follow the procedures in voting the proxies
set forth in this document.  Certain  Taft-Hartley clients may direct AM to have
ISS vote their proxies in accordance with Taft Hartley voting Guidelines

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

(1) For purposes of these Policies and Procedures,  "clients"  refers to persons
or entities: for which AM serves as investment adviser or sub-adviser; for which
AM votes proxies;  and that have an economic or beneficial ownership interest in
the portfolio securities of issuers soliciting such proxies.

Clients may in certain instances  contract with their custodial agent and notify
AM that they wish to engage in securities lending  transactions.  In such cases,
it is the  responsibility  of the  custodian to deduct the number of shares that
are on loan so that they do not get voted twice.


III.     POLICIES


1. Proxy  voting  activities  are  conducted  in the best  economic  interest of
clients

AM has adopted the following  policies and procedures to ensure that proxies are
voted  in  accordance  with  the  best  economic  interest  of its  clients,  as
determined by AM in good faith after appropriate review.


2.       The Global Proxy Voting Sub-Committee

The Global Proxy Voting Sub-Committee (the "GPVSC") is an internal working group
established by the applicable AM's Investment Risk Oversight  Committee pursuant
to a written charter.  The GPVSC is responsible for overseeing AM's proxy voting
activities, including:

(i)   adopting,  monitoring and updating guidelines,  attached as Exhibit A (the
      "Guidelines"),  that provide how AM will generally vote proxies pertaining
      to a comprehensive list of common proxy voting matters;

(ii)  voting  proxies  where (A) the issues are not covered by  specific  client
      instruction or the Guidelines;  (B) the Guidelines specify that the issues
      are to be determined on a case-by-case basis; or (C) where an exception to
      the Guidelines may be in the best economic interest of AM's clients; and

(iii) monitoring  the Proxy  Vendor  Oversight's  proxy voting  activities  (see
      below).

AM's Proxy Vendor Oversight, a function of AM's Operations Group, is responsible
for coordinating with ISS to administer AM's proxy voting process and for voting
proxies in accordance  with any specific  client  instructions  or, if there are
none, the Guidelines, and overseeing ISS' proxy responsibilities in this regard.


3.    Availability  of Proxy  Voting  Policies and  Procedures  and proxy voting
      record

Copies of these  Policies  and  Procedures,  as they may be updated from time to
time,  are made  available  to clients as required by law and  otherwise at AM's
discretion.  Clients may also obtain information on how their proxies were voted
by AM as required by law and otherwise at AM's discretion;  however, AM must not
selectively  disclose its investment company clients' proxy voting records.  The
Proxy  Vendor  Oversight  will make proxy voting  reports  available to advisory
clients upon request.  The  investment  companies'  proxy voting records will be
disclosed to shareholders by means of publicly-available  annual filings of each
company's  proxy  voting  record  for  12-month   periods  ended  June  30  (see
"Recordkeeping" below), if so required by relevant law.


IV.      PROCEDURES

The key aspects of AM's proxy voting process are as follows:


1.    The GPVSC's Proxy Voting Guidelines

The  Guidelines  set  forth  the  GPVSC's   standard   voting   positions  on  a
comprehensive list of common proxy voting matters. The GPVSC has developed,  and
continues to update the Guidelines based on  consideration of current  corporate
governance  principles,  industry standards,  client feedback, and the impact of
the matter on issuers and the value of the investments.

The GPVSC will review the  Guidelines  as necessary to support the best economic
interests of AM's clients and, in any event, at least  annually.  The GPVSC will
make  changes to the  Guidelines,  whether  as a result of the annual  review or
otherwise,  taking solely into account the best  economic  interests of clients.
Before  changing the Guidelines,  the GPVSC will thoroughly  review and evaluate
the  proposed  change and the  reasons  therefore,  and the GPVSC Chair will ask
GPVSC members whether anyone outside of the AM organization (but within Deutsche
Bank and its affiliates) or any entity that  identifies  itself as a AM advisory
client has requested or attempted to influence  the proposed  change and whether
any member has a conflict of interest  with respect to the proposed  change.  If
any such matter is reported to the GPVSC Chair,  the Chair will promptly  notify
the Conflicts of Interest  Management  Sub-Committee  (see below) and will defer
the approval,  if possible.  Lastly, the GPVSC will fully document its rationale
for approving any change to the Guidelines.

The  Guidelines  may  reflect a voting  position  that  differs  from the actual
practices of the public company(ies) within the Deutsche Bank organization or of
the  investment  companies  for which AM or an  affiliate  serves as  investment
adviser or sponsor.  Investment  companies,  particularly  closed-end investment
companies, are different from traditional operating companies. These differences
may call for differences in voting  positions on the same matter.  Further,  the
manner in which AM votes  investment  company  proxies may differ from proposals
for which a AM-advised or sponsored investment company solicits proxies from its
shareholders.  As reflected in the Guidelines,  proxies  solicited by closed-end
(and open-end)  investment  companies are generally voted in accordance with the
pre-determined guidelines of ISS. See Section IV.3.B.

Funds ("Underlying Funds") in which Topiary Fund Management Fund of Funds (each,
a "Fund") invest,  may from time to time seek to revise their  investment  terms
(i.e.  liquidity,  fees,  etc.) or  investment  structure.  In such  event,  the
Underlying Funds may require  approval/consent  from its investors to effect the
relevant  changes.  Topiary Fund Management has adopted Proxy Voting  Procedures
which outline the process for these approvals.


2.    Specific proxy voting decisions made by the GPVSC

The Proxy Vendor  Oversight will refer to the GPVSC all proxy proposals (i) that
are not covered by specific client instructions or the Guidelines; or (ii) that,
according to the  Guidelines,  should be evaluated  and voted on a  case-by-case
basis.

Additionally,  if, the Proxy Vendor Oversight,  the GPVSC Chair or any member of
the GPVSC, a portfolio  manager,  a research  analyst or a sub-adviser  believes
that voting a particular  proxy in accordance  with the Guidelines may not be in
the best economic interests of clients,  that individual may bring the matter to
the attention of the GPVSC Chair and/or the Proxy Vendor Oversight.(2)

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

(2)   The Proxy Vendor Oversight generally monitors upcoming proxy solicitations
      for  heightened  attention from the press or the industry and for novel or
      unusual  proposals  or  circumstances,  which may prompt the Proxy  Vendor
      Oversight to bring the  solicitation  to the attention of the GPVSC Chair.
      AM portfolio  managers,  AM research  analysts and  sub-advisers  also may
      bring a particular  proxy vote to the  attention of the GPVSC Chair,  as a
      result  of  their  ongoing  monitoring  of  portfolio  securities  held by
      advisory  clients  and/or their review of the periodic proxy voting record
      reports that the GPVSC Chair  distributes to AM portfolio  managers and AM
      research analysts.

If the Proxy Vendor  Oversight refers a proxy proposal to the GPVSC or the GPVSC
determines  that voting a particular  proxy in accordance with the Guidelines is
not in the best economic interests of clients,  the GPVSC will evaluate and vote
the proxy, subject to the procedures below regarding conflicts.

The GPVSC  endeavors to hold meetings to decide how to vote  particular  proxies
sufficiently  before the voting deadline so that the procedures  below regarding
conflicts can be completed before the GPVSC's voting determination.


3.    Certain proxy votes may not be cast

In some cases, the GPVSC may determine that it is in the best economic interests
of its clients not to vote certain proxies. If the conditions below are met with
regard  to a  proxy  proposal,  AM will  abstain  from  voting:  o  Neither  the
Guidelines nor specific client  instructions cover an issue; o ISS does not make
a recommendation  on the issue; o The GPVSC cannot convene on the proxy proposal
at issue  to make a  determination  as to what  would  be in the  client's  best
interest.  (This  could  happen,  for  example,  if the  Conflicts  of  Interest
Management  Sub-committee found that there was a material conflict or if despite
all best efforts being made, the GPVSC quorum requirement could not be met).

In addition, it is AM's policy not to vote proxies of issuers subject to laws of
those  jurisdictions that impose  restrictions upon selling shares after proxies
are  voted,  in order to  preserve  liquidity.  In  other  cases,  it may not be
possible  to vote  certain  proxies,  despite  good faith  efforts to do so. For
example,  some  jurisdictions  do not provide adequate notice to shareholders so
that proxies may be voted on a timely basis.  Voting  rights on securities  that
have been loaned to  third-parties  transfer to those  third-parties,  with loan
termination  often  being the only way to attempt to vote  proxies on the loaned
securities.  Lastly,  the GPVSC may  determine  that the costs to the  client(s)
associated  with voting a  particular  proxy or group of proxies  outweighs  the
economic benefits expected from voting the proxy or group of proxies.

The Proxy Vendor Oversight will coordinate with the GPVSC Chair regarding any
specific proxies and any categories of proxies that will not or cannot be voted.
The reasons for not voting any proxy shall be documented.


4.    Conflict of Interest Procedures

A. Procedures to Address Conflicts of Interest and Improper Influence

Overriding  Principle.  In the  limited  circumstances  where  the  GPVSC  votes
proxies,(3)  the GPVSC will vote those  proxies in  accordance  with what it, in
good faith, determines to be the best economic interests of AM's clients.(4)

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

(3)   As mentioned  above,  the GPVSC votes proxies (i) where neither a specific
      client  instruction nor a Guideline directs how the proxy should be voted,
      (ii) where the  Guidelines  specify that an issue is to be determined on a
      case by case basis or (iii) where voting in accordance with the Guidelines
      may not be in the best economic interests of clients.

(4)   The Proxy Vendor Oversight,  who serves as the non-voting secretary of the
      GPVSC,  may receive routine calls from proxy  solicitors and other parties
      interested in a particular  proxy vote. Any contact that attempts to exert
      improper  pressure or  influence  shall be reported  to the  Conflicts  of
      Interest Management Sub-Committee.

Independence of the GPVSC. As a matter of Compliance  policy,  the GPVSC and the
Proxy Vendor  Oversight  are  structured to be  independent  from other parts of
Deutsche  Bank.  Members  of the GPVSC and the  employee  responsible  for Proxy
Vendor  Oversight are  employees of AM. As such,  they may not be subject to the
supervision  or  control  of  any  employees  of  Deutsche  Bank  Corporate  and
Investment  Banking division ("CIB").  Their  compensation  cannot be based upon
their contribution to any business activity outside of AM without prior approval
of Legal and  Compliance.  They can have no contact  with  employees of Deutsche
Bank  outside of the  Private  Client  and Asset  Management  division  ("PCAM")
regarding  specific clients,  business matters or initiatives  without the prior
approval of Legal and Compliance.  They  furthermore may not discuss proxy votes
with any person outside of AM (and within AM only on a need to know basis).

Conflict  Review  Procedures.  There  will be a  committee  (the  "Conflicts  of
Interest Management Sub-Committee")  established within AM that will monitor for
potential material conflicts of interest in connection with proxy proposals that
are to be  evaluated by the GPVSC.  Promptly  upon a  determination  that a vote
shall be presented to the GPVSC,  the GPVSC Chair shall notify the  Conflicts of
Interest  Management   Sub-Committee.   The  Conflicts  of  Interest  Management
Sub-Committee   shall  promptly  collect  and  review  any  information   deemed
reasonably  appropriate to evaluate,  in its reasonable  judgment,  if AM or any
person  participating in the proxy voting process has, or has the appearance of,
a material conflict of interest.  For the purposes of this policy, a conflict of
interest shall be considered  "material" to the extent that a reasonable  person
could  expect the conflict to  influence,  or appear to  influence,  the GPVSC's
decision on the particular vote at issue.  GPVSC should provide the Conflicts of
Interest  Management  Sub-Committee a reasonable amount of time (no less than 24
hours) to perform all necessary and  appropriate  reviews.  To the extent that a
conflicts review can not be sufficiently  completed by the Conflicts of Interest
Management  Sub-Committee  the  proxies  will be  voted in  accordance  with the
standard guidelines.

The information considered by the Conflicts of Interest Management Sub-Committee
may   include   without   limitation   information   regarding   (i)  AM  client
relationships;  (ii) any relevant  personal  conflict  known by the Conflicts of
Interest   Management   Sub-Committee  or  brought  to  the  attention  of  that
sub-committee; (iii) and any communications with members of the GPVSC (or anyone
participating  or providing  information to the GPVSC) and any person outside of
the AM organization  (but within Deutsche Bank and its affiliates) or any entity
that identifies  itself as a AM advisory client  regarding the vote at issue. In
the  context  of  any  determination,   the  Conflicts  of  Interest  Management
Sub-Committee  may  consult  with,  and  shall be  entitled  to rely  upon,  all
applicable outside experts, including legal counsel.

Upon  completion  of the  investigation,  the  Conflicts of Interest  Management
Sub-Committee  will document its findings and  conclusions.  If the Conflicts of
Interest Management Sub-Committee determines that (i) AM has a material conflict
of  interest  that  would  prevent  it from  deciding  how to vote  the  proxies
concerned without further client consent or (ii) certain  individuals  should be
recused from participating in the proxy vote at issue, the Conflicts of Interest
Management Sub-Committee will so inform the GPVSC chair.

If notified that AM has a material  conflict of interest as described above, the
GPVSC  chair will  obtain  instructions  as to how the  proxies  should be voted
either from (i) if time  permits,  the effected  clients,  or (ii) in accordance
with the standard  guidelines.  If notified that certain  individuals  should be
recused from the proxy vote at issue,  the GPVSC Chair shall do so in accordance
with the procedures set forth below.

Note:  Any AM employee who becomes  aware of a potential,  material  conflict of
interest  in respect  of any proxy  vote to be made on behalf of  clients  shall
notify  Compliance.  Compliance  shall  call a meeting  of the  conflict  review
committee  to evaluate  such  conflict  and  determine a  recommended  course of
action.

Procedures  to be  followed by the GPVSC.  At the  beginning  of any  discussion
regarding how to vote any proxy,  the GPVSC Chair (or his or her delegate)  will
inquire as to whether  any GPVSC  member  (whether  voting or ex officio) or any
person  participating  in the proxy  voting  process has a personal  conflict of
interest or has actual knowledge of an actual or apparent  conflict that has not
been reported to the Conflicts of Interest Management Sub-Committee.

The GPVSC Chair also will inquire of these same parties whether they have actual
knowledge regarding whether any director,  officer or employee outside of the AM
organization  (but within  Deutsche Bank and its  affiliates) or any entity that
identifies itself as a AM advisory client, has: (i) requested that AM, the Proxy
Vendor  Oversight  (or any member  thereof) or a GPVSC  member vote a particular
proxy in a certain  manner;  (ii)  attempted to  influence  AM, the Proxy Vendor
Oversight  (or any  member  thereof),  a GPVSC  member  or any  other  person in
connection with proxy voting activities;  or (iii) otherwise communicated with a
GPVSC member or any other person  participating or providing  information to the
GPVSC regarding the particular  proxy vote at issue,  and which incident has not
yet been reported to the Conflicts of Interest Management Sub- Committee.

If any such  incidents are reported to the GPVSC Chair,  the Chair will promptly
notify the Conflicts of Interest Management Sub-Committee and, if possible, will
delay the vote until the  Conflicts  of Interest  Management  Sub-Committee  can
complete the  conflicts  report.  If a delay is not  possible,  the Conflicts of
Interest Management  Sub-Committee will instruct the GPVSC whether anyone should
be recused from the proxy voting process, or whether AM should vote the proxy in
accordance with the standard guidelines, seek instructions as to how to vote the
proxy at  issue  from ISS or,  if time  permits,  the  effected  clients.  These
inquiries and discussions will be properly reflected in the GPVSC's minutes.

Duty to Report.  Any AM employee,  including any GPVSC member (whether voting or
ex  officio),  that is aware of any  actual or  apparent  conflict  of  interest
relevant to, or any attempt by any person  outside of the AM  organization  (but
within Deutsche Bank and its affiliates) or any entity that identifies itself as
a AM  advisory  client  to  influence,  how AM votes its  proxies  has a duty to
disclose  the  existence  of the  situation  to the  GPVSC  Chair (or his or her
designee) and the details of the matter to the Conflicts of Interest  Management
Sub-Committee. In the case of any person participating in the deliberations on a
specific vote, such disclosure  should be made before engaging in any activities
or participating in any discussion pertaining to that vote.

Recusal of Members. The GPVSC will recuse from participating in a specific proxy
vote any GPVSC members  (whether  voting or ex officio)  and/or any other person
who (i) are personally involved in a material conflict of interest; or (ii) who,
as determined by the Conflicts of Interest Management Sub-Committee, have actual
knowledge  of a  circumstance  or  fact  that  could  effect  their  independent
judgment,   in  respect  of  such  vote.   The  GPVSC  will  also  exclude  from
consideration the views of any person (whether  requested or volunteered) if the
GPVSC or any member  thereof knows,  or if the Conflicts of Interest  Management
Sub-Committee has determined,  that such other person has a material conflict of
interest with respect to the particular proxy, or has attempted to influence the
vote in any manner prohibited by these policies.

If, after excluding all relevant GPVSC voting members  pursuant to the paragraph
above, there are three or more GPVSC voting members  remaining,  those remaining
GPVSC  members will  determine  how to vote the proxy in  accordance  with these
Policies  and  Procedures.  If there are fewer than three GPVSC  voting  members
remaining,  the GPVSC Chair will vote the proxy in accordance  with the standard
guidelines,  will obtain instructions as to how to have the proxy voted from, if
time permits, the effected clients and otherwise from ISS.

B.    Investment Companies and Affiliated Public Companies

Investment Companies.  As reflected in the Guidelines,  all proxies solicited by
open-end and closed-end  investment  companies are voted in accordance  with the
pre-determined  guidelines of ISS, unless the investment  company client directs
AM to vote  differently on a specific  proxy or specific  categories of proxies.
However,  regarding  investment companies for which AM or an affiliate serves as
investment adviser or principal underwriter,  such proxies are voted in the same
proportion  as the vote of all  other  shareholders  (i.e.,  "mirror"  or "echo"
voting). Master fund proxies solicited from feeder funds are voted in accordance
with applicable provisions of Section 12 of the Investment Company Act of 1940.

Subject to  participation  agreements with certain Exchange Traded Funds ("ETF")
issuers  that  have  received  exemptive  orders  from the U.S.  Securities  and
Exchange  Commission allowing investing DWS funds to exceed the limits set forth
in Section  12(d)(1)(A) and (B) of the Investment Company Act of 1940, DeAM will
echo  vote  proxies  for ETFs in which  Deutsche  Bank  holds  more  than 25% of
outstanding  voting  shares  globally  when  required to do so by  participation
agreements and SEC orders.

Affiliated Public Companies. For proxies solicited by non-investment company
issuers of or within the Deutsche Bank organization, e.g., Deutsche bank itself,
these proxies will be voted in the same proportion as the vote of other
shareholders (i.e., "mirror" or "echo" voting).

Note: With respect to the QP Trust (not registered under the Investment Company
Act of 1940), the Fund is not required to engage in echo voting and the
investment adviser will use these Guidelines, and may determine, with respect to
the QP Trust, to vote contrary to the positions in the Guidelines, consistent
with the Fund's best interest.

C.    Other Procedures That Limit Conflicts of Interest

AM and other entities in the Deutsche Bank organization have adopted a number of
policies, procedures and internal controls that are designed to avoid various
conflicts of interest, including those that may arise in connection with proxy
voting, including:

o     Deutsche Bank Americas Restricted  Activities Policy. This policy provides
      for,  among other  things,  independence  of AM  employees  from CIB,  and
      information barriers between AM and other affiliates.  Specifically, no AM
      employee may be subject to the  supervision  or control of any employee of
      CIB. No AM employee shall have his or her  compensation  based upon his or
      her  contribution to any business  activity within the Bank outside of the
      business  of AM,  without  the  prior  approval  of Legal  or  Compliance.
      Further,  no employee of CIB shall have any input into the compensation of
      a AM employee without the prior approval of Legal or Compliance. Under the
      information  barriers  section  of this  policy,  as a  general  rule,  AM
      employees who are associated  with the  investment  process should have no
      contact with  employees  of Deutsche  Bank or its  affiliates,  outside of
      PCAM,  regarding  specific  clients,  business  matters,  or  initiatives.
      Further,  under no circumstances  should proxy votes be discussed with any
      Deutsche  Bank  employee  outside of AM (and should only be discussed on a
      need-to-know basis within AM).

Other  relevant  internal  policies  include the Deutsche  Bank Americas Code of
Professional   Conduct,  the  Deutsche  Asset  Management   Information  Sharing
Procedures,  the Deutsche Asset  Management Code of Ethics,  the  Sarbanes-Oxley
Senior Officer Code of Ethics, and the Deutsche Bank Group Code of Conduct.  The
GPVSC expects that these policies, procedures and internal controls will greatly
reduce the chance that the GPVSC (or, its  members)  would be involved in, aware
of or influenced by, an actual or apparent conflict of interest.


V.    RECORDKEEPING

At a minimum,  the following  types of records must be properly  maintained  and
readily  accessible in order to evidence  compliance with this policy.

o     AM will  maintain  a record of each vote  cast by AM that  includes  among
      other things,  company name, meeting date, proposals presented,  vote cast
      and shares voted.

o     The Proxy Vendor Oversight maintains records for each of the proxy ballots
      it votes. Specifically, the records include, but are not limited to:

      -     The proxy statement (and any additional  solicitation materials) and
            relevant portions of annual statements. - Any additional information
            considered  in the  voting  process  that  may be  obtained  from an
            issuing company, its agents or proxy research firms.

      -     Analyst  worksheets created for stock option plan and share increase
            analyses.

      -     Proxy Edge print-screen of actual vote election.

o     AM will retain these  Policies and  Procedures  and the  Guidelines;  will
      maintain records of client requests for proxy voting information; and will
      retain any documents the Proxy Vendor Oversight or the GPVSC prepared that
      were material to making a voting decision or that  memorialized  the basis
      for a proxy voting decision.

o     The GPVSC also will create and maintain  appropriate  records  documenting
      its compliance  with these Policies and Procedures,  including  records of
      its deliberations and decisions  regarding conflicts of interest and their
      resolution.

o     With  respect to AM's  investment  company  clients,  ISS will  create and
      maintain  records of each  company's  proxy  voting  record  for  12-month
      periods ended June 30. AM will compile the following  information for each
      matter  relating to a portfolio  security  considered  at any  shareholder
      meeting  held during the period  covered by the report and with respect to
      which the company was entitled to vote:

      -     The name of the issuer of the portfolio security;

      -     The exchange  ticker symbol of the portfolio  security (if symbol is
            available through reasonably practicable means);

      -     The Council on Uniform Securities  Identification  Procedures number
            for the  portfolio  security  (if the  number is  available  through
            reasonably practicable means);

      -     The shareholder meeting date;

      -     A brief identification of the matter voted on;

      -     Whether  the  matter  was  proposed  by the  issuer or by a security
            holder;

      -     Whether the company cast its vote on the matter;

      -     How the company  cast its vote (e.g.,  for or against  proposal,  or
            abstain; for or withhold regarding election of directors); and

      -     Whether the company cast its vote for or against management.

Note:  This list is  intended to provide  guidance  only in terms of the records
that must be maintained in accordance with this policy. In addition, please note
that records must be  maintained in  accordance  with the  applicable AM Records
Management Policy.

With respect to electronically stored records,  "properly maintained" is defined
as complete, authentic (unalterable) usable and backed-up. At a minimum, records
should be  retained  for a period of not less  than six  years  (or  longer,  if
necessary to comply with applicable  regulatory  requirements),  the first three
years in an appropriate AM office.


      VI.   THE GPVSC'S OVERSIGHT ROLE

In addition to adopting the  Guidelines  and making  proxy  voting  decisions on
matters  referred  to it as set forth  above,  the GPVSC will  monitor the proxy
voting  process by reviewing  summary  proxy  information  presented by ISS. The
GPVSC will use this review process to determine, among other things, whether any
changes should be made to the  Guidelines.  This review will take place at least
quarterly and will be documented in the GPVSC's minutes.



<PAGE>



Attachment A - Global Proxy Voting Guidelines







                            Deutsche Asset Management

                         Global Proxy Voting Guidelines



                             As Amended October 2008


                                                        [GRAPHIC OMITTED]




<PAGE>


Table of contents


I     Board Of Directors And Executives

      A     Election Of Directors

      B     Classified Boards Of Directors

      C     Board And Committee Independence

      D     Liability And Indemnification Of Directors

      E     Qualifications Of Directors

      F     Removal Of Directors And Filling Of Vacancies

      G     Proposals To Fix The Size Of The Board

      H     Proposals to Restrict Chief Executive  Officer's Service on Multiple
            Boards

      I     Proposals to Restrict  Supervisory Board Members Service on Multiple
            Boards

      J     Proposals to Establish Audit Committees

II    Capital Structure

      A     Authorization Of Additional Shares

      B     Authorization Of "Blank Check" Preferred Stock

      C     Stock Splits/Reverse Stock Splits

      D     Dual Class/Supervoting Stock

      E     Large Block Issuance

      F     Recapitalization Into A Single Class Of Stock

      G     Share Repurchases

      H     Reductions In Par Value

III   Corporate Governance Issues

      A     Confidential Voting

      B     Cumulative Voting

      C     Supermajority Voting Requirements

      D     Shareholder Right To Vote

IV    Compensation

      A     Establishment of a Remuneration Committee

      B     Executive And Director Stock Option Plans

      C     Employee Stock Option/Purchase Plans

      D     Golden Parachutes

      E     Proposals To Limit Benefits Or Executive Compensation

      F     Option Expensing

      G     Management board election and motion

      H     Remuneration (variable pay)

      I     Long-term incentive plans

      J     Shareholder Proposals Concerning "Pay For Superior Performance"

      K     Executive Compensation Advisory

V     Anti-Takeover Related Issues

      A     Shareholder Rights Plans ("Poison Pills")

      B     Reincorporation

      C     Fair-Price Proposals

      D     Exemption From State Takeover Laws

      E     Non-Financial Effects Of Takeover Bids

VI    Mergers & Acquisitions

VII   Social & Political Issues

      A     Labor & Human Rights

      B     Diversity & Equality

      C     Health & Safety

      D     Government/Military

      E     Tobacco

VIII  Environmental Issues

IX    Miscellaneous Items

      A     Ratification Of Auditors

      B     Limitation Of Non-Audit Services Provided By Independent Auditor

      C     Audit Firm Rotation

      D     Transaction Of Other Business

      E     Motions To Adjourn The Meeting

      F     Bundled Proposals

      G     Change Of Company Name

      H     Proposals Related To The Annual Meeting

      I     Reimbursement Of Expenses Incurred From Candidate Nomination

      J     Investment Company Proxies

      K     International Proxy Voting





<PAGE>



These  Guidelines  may reflect a voting  position  that  differs from the actual
practices of the public company (ies) within the Deutsche Bank  organization  or
of the  investment  companies for which AM or an affiliate  serves as investment
adviser or sponsor.

NOTE:  Because of the unique  structure  and  regulatory  scheme  applicable  to
closed-end  investment  companies,  the voting  guidelines  (particularly  those
related to governance  issues)  generally  will be  inapplicable  to holdings of
closed-end investment companies. As a result,  determinations on the appropriate
voting recommendation for closed-end investment company shares will be made on a
case-by-case basis.

I.    Board of Directors and Executives


A.    Election of Directors

Routine: AM Policy is to vote "for" the uncontested election of directors. Votes
for a director  in an  uncontested  election  will be  withheld in cases where a
director has shown an inability to perform  his/her duties in the best interests
of the shareholders.

Proxy  contest:   In  a  proxy  contest  involving  election  of  directors,   a
case-by-case  voting  decision  will be made based upon  analysis  of the issues
involved and the merits of the incumbent and dissident  slates of directors.  AM
will  incorporate  the  decisions  of  a  third  party  proxy  research  vendor,
currently,  Institutional  Shareholder Services ("ISS") subject to review by the
Proxy  Voting  Sub-Committee  (GPVSC)  as set  forth  in the AM's  Proxy  Voting
Policies and Procedures.

Rationale:  The large majority of corporate  directors  fulfill their  fiduciary
obligation and in most cases support for management's nominees is warranted.  As
the issues relevant to a contested election differ in each instance, those cases
must be addressed as they arise.


B.    Classified Boards of Directors

AM policy is to vote against  proposals to classify the board and for  proposals
to repeal classified boards and elect directors annually.

Rationale:  Directors  should  be  held  accountable  on  an  annual  basis.  By
entrenching  the  incumbent  board,  a  classified  board  may  be  used  as  an
anti-takeover device to the detriment of the shareholders in a hostile take-over
situation.


C.    Board and Committee Independence

AM policy is to vote:

1.    "For" proposals that require that a certain percentage  (majority up to 66
      2/3%) of members of a board of directors be  comprised of  independent  or
      unaffiliated directors.

2.    "For"  proposals  that  require all  members of a company's  compensation,
      audit, nominating, or other similar committees be comprised of independent
      or unaffiliated directors.

3.    "Against"  shareholder  proposals  to  require  the  addition  of  special
      interest, or constituency, representatives to boards of directors.

4.    "For" separation of the Chairman and CEO positions.

5.    "Against" proposals that require a company to appoint a Chairman who is an
      independent director.

Rationale:  Board  independence  is a cornerstone  of effective  governance  and
accountability. A board that is sufficiently independent from management assures
that shareholders' interests are adequately  represented.  However, the Chairman
of the  board  must  have  sufficient  involvement  in and  experience  with the
operations of the company to perform the functions required of that position and
lead the company.

No  director   qualifies  as   'independent'   unless  the  board  of  directors
affirmatively determines that the director has no material relationship with the
listed company  (either  directly or as a partner,  shareholder or officer of an
organization that has a relationship with the company).

Whether a  director  is in fact not  "independent"  will  depend on the laws and
regulations of the primary market for the security and the exchanges, if any, on
which the security trades.

D.    Liability and Indemnification of Directors

AM policy is to vote "for" management  proposals to limit  directors'  liability
and to broaden the indemnification of directors,  unless broader indemnification
or limitations on directors' liability would effect  shareholders'  interests in
pending litigation.

Rationale:  While shareholders want directors and officers to be responsible for
their actions,  it is not in the best interests of the  shareholders for them to
be to risk averse. If the risk of personal liability is too great, companies may
not be able to find capable  directors  willing to serve.  We support  expanding
coverage only for actions taken in good faith and not for serious  violations of
fiduciary obligation or negligence.


E.    Qualifications of Directors

AM policy is to follow  management's  recommended  vote on either  management or
shareholder proposals that set retirement ages for directors or require specific
levels of stock ownership by directors.

Rationale: As a general rule, the board of directors,  and not the shareholders,
is most qualified to establish qualification policies.


F.    Removal of Directors and Filling of Vacancies

AM policy is to vote "against"  proposals that include provisions that directors
may be removed only for cause or proposals  that  include  provisions  that only
continuing directors may fill board vacancies.

Rationale:  Differing state statutes permit removal of directors with or without
cause.  Removal of directors for cause usually  requires proof of  self-dealing,
fraud or misappropriation of corporate assets, limiting shareholders' ability to
remove  directors  except under  extreme  circumstances.  Removal  without cause
requires no such showing.

Allowing  only   incumbent   directors  to  fill   vacancies  can  serve  as  an
anti-takeover device,  precluding  shareholders from filling the board until the
next regular election.


G.    Proposals to Fix the Size of the Board

AM policy is to vote:

1.    "For"  proposals  to fix the size of the  board  unless:  (a) no  specific
      reason for the proposed  change is given; or (b) the proposal is part of a
      package of takeover defenses.

2.    "Against"  proposals  allowing  management  to fix the  size of the  board
      without shareholder approval.

Rationale:  Absent danger of  anti-takeover  use,  companies should be granted a
reasonable amount of flexibility in fixing the size of its board.


H.    Proposals to Restrict Chief Executive Officer's Service on Multiple Boards

AM policy is to vote "For" proposals to restrict a Chief Executive  Officer from
serving on more than three outside boards of directors.

Rationale:  Chief  Executive  Officer must have  sufficient  time to ensure that
shareholders' interests are represented adequately.

Note:  A director's  service on multiple  closed-end  fund boards  within a fund
complex  are  treated as service on a single  Board for the purpose of the proxy
voting guidelines.


I.    Proposals to Restrict Supervisory Board Members Service on Multiple Boards
      (For FFT Securities)

AM policy is to vote "for" proposals to restrict a Supervisory Board Member from
serving on more than five supervisory boards.

Rationale: We consider a strong, independent and knowledgeable supervisory board
as  important  counter-balance  to  executive  management  to  ensure  that  the
interests of shareholders are fully reflected by the company.

Full information should be disclosed in the annual reports and accounts to allow
all shareholders to judge the success of the supervisory board controlling their
company.

Supervisory Board Member must have sufficient time to ensure that  shareholders'
interests are represented adequately.

Note:  A director's  service on multiple  closed-end  fund boards  within a fund
complex  are  treated as service on a single  Board for the purpose of the proxy
voting guidelines.


J.    Proposals to Establish Audit Committees (For FFT and U.S. Securities)

AM policy is to vote "for"  proposals  that require the  establishment  of audit
committees.

Rationale:  The audit committee  should deal with accounting and risk management
related  questions,  verifies the independence of the auditor with due regard to
possible  conflicts of interest.  It also should  determine the procedure of the
audit process.


II.   Capital Structure


A.    Authorization of Additional Shares (For U.S. Securities)

AM policy is to vote "for" proposals to increase the  authorization  of existing
classes of stock that do not exceed a 3:1 ratio of shares  authorized  to shares
outstanding  for a large cap  company,  and do not  exceed a 4:1 ratio of shares
authorized to shares outstanding for a small-midcap  company (companies having a
market capitalization under one billion U.S. dollars.).

Rationale:  While  companies need an adequate number of shares in order to carry
on business,  increases  requested  for general  financial  flexibility  must be
limited to protect  shareholders  from their  potential use as an  anti-takeover
device.  Requested  increases for specifically  designated,  reasonable business
purposes  (stock  split,  merger,  etc.)  will be  considered  in light of those
purposes and the number of shares required.


B.    Authorization of "Blank Check" Preferred Stock (For U.S. Securities)

AM policy is to vote:

1.    "Against"  proposals to create blank check  preferred stock or to increase
      the number of authorized  shares of blank check preferred stock unless the
      company expressly states that the stock will not be used for anti-takeover
      purposes and will not be issued without shareholder approval.

2.    "For"  proposals  mandating  shareholder  approval  of blank  check  stock
      placement.

Rationale:  Shareholders  should be permitted to monitor the issuance of classes
      of preferred  stock in which the board of  directors  is given  unfettered
      discretion to set voting,  dividend,  conversion  and other rights for the
      shares issued.


C.    Stock Splits/Reverse Stock Splits

AM policy is to vote "for" stock splits if a legitimate  business purpose is set
forth and the split is in the shareholders' best interests. A vote is cast "for"
a reverse stock split only if the number of shares  authorized is reduced in the
same proportion as the reverse split or if the effective  increase in authorized
shares  (relative to outstanding  shares) complies with the proxy guidelines for
common stock increases (see, Section II.A, above.)

Rationale:  Generally,  stock splits do not detrimentally  effect  shareholders.
Reverse  stock  splits,  however,  may have the same  result as an  increase  in
authorized shares and should be analyzed accordingly.


D.    Dual Class/Supervoting Stock

AM policy is to vote  "against"  proposals  to  create or  authorize  additional
shares of super-voting stock or stock with unequal voting rights.

Rationale:  The "one share,  one vote"  principal  ensures  that no  shareholder
maintains a voting interest exceeding their equity interest in the company.


E.    Large Block Issuance (For U.S. Securities)

AM policy is to address large block issuances of stock on a case-by-case  basis,
incorporating  the  recommendation  of an independent third party proxy research
firm  (currently  ISS) subject to review by the GPVSC as set forth in AM's Proxy
Policies and Procedures.

Additionally,  AM supports  proposals  requiring  shareholder  approval of large
block issuances.

Rationale:   Stock   issuances  must  be  reviewed  in  light  of  the  business
circumstances  leading to the request and the  potential  impact on  shareholder
value.


F.    Recapitalization into a Single Class of Stock

AM policy is to vote "for"  recapitalization plans to provide for a single class
of common  stock,  provided  the terms  are fair,  with no class of stock  being
unduly disadvantaged.

Rationale:  Consolidation  of multiple  classes of stock is a business  decision
that may be left to the board  and/management  if there is no adverse  effect on
shareholders.


G.    Share Repurchases

AM policy is to vote "for" share  repurchase plans provided all shareholders are
able to participate on equal terms.

Rationale:  Buybacks are generally considered beneficial to shareholders because
they tend to increase returns to the remaining shareholders.


H.    Reductions in Par Value

AM policy is to vote "for" proposals to reduce par value,  provided a legitimate
business   purpose  is  stated   (e.g.,   the   reduction   of   corporate   tax
responsibility.)

Rationale:  Usually,  adjustments to par value are a routine financial  decision
with no substantial impact on shareholders.


III.  Corporate Governance Issues


A.    Confidential Voting

AM policy is to vote "for"  proposals  to provide  for  confidential  voting and
independent  tabulation  of voting  results and to vote  "against"  proposals to
repeal such provisions.

Rationale:  Confidential voting protects the privacy rights of all shareholders.
This is particularly  important for  employee-shareholders  or shareholders with
business  or other  affiliations  with the  company,  who may be  vulnerable  to
coercion or retaliation when opposing  management.  Confidential voting does not
interfere with the ability of corporations to communicate with all shareholders,
nor does it  prohibit  shareholders  from making  their views known  directly to
management.


B.    Cumulative Voting (For U.S. Securities)

AM policy  is to vote  "against"  shareholder  proposals  requesting  cumulative
voting and "for" management  proposals to eliminate it. The protections afforded
shareholders by cumulative voting are not necessary when a company has a history
of good  performance  and  does  not  have a  concentrated  ownership  interest.
Accordingly,  a vote is cast "against"  cumulative voting and "for" proposals to
eliminate it if:

a)    The company has a five year return on investment greater than the relevant
      industry index,

b)    All directors and executive officers as a group beneficially own less than
      10% of the outstanding stock, and

c)    No  shareholder  (or voting  block)  beneficially  owns 15% or more of the
      company.

Thus,  failure of any one of the three criteria results in a vote for cumulative
voting in accordance with the general policy.

Rationale:  Cumulative  voting  is a tool that  should  be used to  ensure  that
holders  of a  significant  number  of  shares  may have  board  representation;
however, the presence of other safeguards may make their use unnecessary.


C.    Supermajority Voting Requirements

AM policy is to vote "against"  management  proposals to require a supermajority
vote to amend the charter or bylaws and to vote "for"  shareholder  proposals to
modify or rescind existing supermajority requirements.

*Exception  made when company  holds a  controlling  position and seeks to lower
threshold to maintain control and/or make changes to corporate by-laws.

Rationale: Supermajority voting provisions violate the democratic principle that
a simple majority should carry the vote. Setting supermajority  requirements may
make it difficult or impossible for  shareholders to remove  egregious by-law or
charter  provisions.  Occasionally,  a company with a  significant  insider held
position might attempt to lower a supermajority  threshold to make it easier for
management to approve  provisions  that may be detrimental to  shareholders.  In
that  case,  it  may  not  be  in  the  shareholders   interests  to  lower  the
supermajority provision.


D.    Shareholder Right to Vote

AM policy is to vote "against" proposals that restrict the right of shareholders
to call special meetings, amend the bylaws, or act by written consent. Policy is
to vote "for" proposals that remove such restrictions.

Rationale:  Any reasonable means whereby shareholders can make their views known
to management or effect the governance process should be supported.


IV.   Compensation

Annual  Incentive Plans or Bonus Plans are often  submitted to shareholders  for
approval.  These  plans  typically  award  cash to  executives  based on company
performance.  Deutsche  Bank  believes  that the  responsibility  for  executive
compensation  decisions rest with the board of directors and/or the compensation
committee,  and its  policy is not to  second-guess  the  board's  award of cash
compensation amounts to executives unless a particular award or series of awards
is deemed  excessive.  If stock  options  are  awarded as part of these bonus or
incentive  plans,  the provisions must meet Deutsche  Bank's criteria  regarding
stock option plans, or similar stock-based  incentive  compensation  schemes, as
set forth below.


A.    Establishment of a Remuneration Committee (For FFT Securities)

AM policy  is to vote  "for"  proposals  that  require  the  establishment  of a
remuneration committee.

Rationale: Corporations should disclose in each annual report or proxy statement
their  policies  on  remuneration.   Essential   details   regarding   executive
remuneration  including  share options,  long-term  incentive plans and bonuses,
should be disclosed in the annual  report,  so that  investors can judge whether
corporate pay policies and practices meet the standard.

The  remuneration  committee  shall not comprise any board members and should be
sensitive  to  the  wider  scene  on  executive   pay.  It  should  ensure  that
performance-based  elements of executive pay are designed to align the interests
of shareholders.


B.    Executive and Director Stock Option Plans

AM policy is to vote "for" stock option plans that meet the following criteria:

(1)   The resulting  dilution of existing  shares is less than (a) 15 percent of
      outstanding  shares for large  capital  corporations  or (b) 20 percent of
      outstanding  shares for small-mid  capital  companies  (companies having a
      market capitalization under one billion U.S. dollars.)

(2)   The transfer of equity resulting from granting options at less than FMV is
      no greater than 3% of the over-all market  capitalization of large capital
      corporations, or 5% of market cap for small-mid capital companies.

(3)   The plan does not contain express repricing provisions and, in the absence
      of an express  statement  that options  will not be repriced;  the company
      does not have a history of repricing options.

(4)   The plan does not grant options on super-voting stock.

AM will  support  performance-based  option  proposals as long as a) they do not
mandate that all options granted by the company must be performance  based,  and
b) only certain  high-level  executives  are subject to receive the  performance
based options.

AM will support proposals to eliminate the payment of outside director pensions.

Rationale:   Determining  the  cost  to  the  company  and  to  shareholders  of
stock-based  incentive  plans raises  significant  issues not  encountered  with
cash-based  compensation plans. These include the potential dilution of existing
shareholders'  voting power, the transfer of equity out of the company resulting
from the grant and  execution  of options at less than FMV and the  authority to
reprice or replace  underwater  options.  Our stock option plan  analysis  model
seeks to allow reasonable  levels of flexibility for a company yet still protect
shareholders   from  the  negative  impact  of  excessive  stock   compensation.
Acknowledging  that small  mid-capital  corporations  often rely more heavily on
stock option plans as their main source of executive compensation and may not be
able to compete with their large capital competitors with cash compensation,  we
provide slightly more flexibility for those companies.


C.    Employee Stock Option/Purchase Plans

AM policy is to vote for employee  stock  purchase  plans (ESPP's) when the plan
complies with Internal Revenue Code 423,  allowing  non-management  employees to
purchase stock at 85% of FMV.

AM policy is to vote "for"  employee  stock option plans  (ESOPs)  provided they
meet the standards for stock option plans in general.  However,  when  computing
dilution  and  transfer  of  equity,  ESOPs are  considered  independently  from
executive and director option plans.

Rationale:  ESOPs and ESPP's  encourage  rank-and-file  employees  to acquire an
ownership  stake in the  companies  they work for and have been shown to promote
employee loyalty and improve productivity.


D.    Golden Parachutes

AM policy is to vote "for" proposals to require  shareholder  approval of golden
parachutes and for proposals that would limit golden  parachutes to no more than
three times base  compensation.  Policy is to vote  "against"  more  restrictive
shareholder proposals to limit golden parachutes.

Rationale:  In setting a reasonable  limitation,  AM considers that an effective
parachute  should be less attractive than continued  employment and that the IRS
has opined that amounts greater than three times annual salary, are excessive.


E.    Proposals to Limit Benefits or Executive Compensation

AM policy is to vote "against"

1.    Proposals to limit benefits, pensions or compensation and

2.    Proposals  that request or require  disclosure  of executive  compensation
      greater than the disclosure required by Securities and Exchange Commission
      (SEC) regulations.

Rationale:  Levels of compensation  and benefits are generally  considered to be
day-to-day  operations  of the  company,  and  are  best  left  unrestricted  by
arbitrary limitations proposed by shareholders.


F.    Option Expensing

AM policy is to support proposals requesting companies to expense stock options.

Rationale:  Although  companies can choose to expense options  voluntarily,  the
Financial  Accounting  Standards  Board (FASB) does not yet require it,  instead
allowing  companies to disclose the theoretical  value of options as a footnote.
Because the expensing of stock options lowers earnings, most companies elect not
to do so.  Given the fact that  options  have  become an integral  component  of
compensation and their exercise  results in a transfer of shareholder  value, AM
agrees  that  their  value  should  not be  ignored  and  treated  as "no  cost"
compensation.  The  expensing  of stock  options  would  promote more modest and
appropriate use of stock options in executive  compensation  plans and present a
more accurate picture of company operational earnings.


G.    Management board election and motion (For FFT Securities)

AM policy is to vote "against":

o     the election of board  members with  positions on either  remuneration  or
      audit committees;

o     the election of supervisory  board members with too many supervisory board
      mandates;

o     "automatic" election of former board members into the supervisory board.

Rationale: Management as an entity, and each of its members, are responsible for
all actions of the company, and are - subject to applicable laws and regulations
- accountable to the shareholders as a whole for their actions.

Sufficient  information  should be  disclosed in the annual  company  report and
account to allow shareholders to judge the success of the company.


H.    Remuneration (variable pay): (For FFT Securities)

Executive remuneration for Management Board

AM policy is to vote "for" remuneration for Management Board that is transparent
and linked to results.

Rationale:  Executive  compensation  should  motivate  management  and align the
interests of management with the  shareholders.  The focus should be on criteria
that prevent excessive  remuneration;  but enable the company to hire and retain
first-class professionals.

Shareholder interests are normally best served when management is remunerated to
optimise long-term returns.  Criteria should include suitable  measurements like
return on capital employed or economic value added.

Interests should generally also be correctly  aligned when management own shares
in the company - even more so if these shares represent a substantial portion of
their own wealth.

Its disclosure  shall  differentiate  between fixed pay,  variable  (performance
related)  pay and  long-term  incentives,  including  stock  option  plans  with
valuation ranges as well as pension and any other significant arrangements.

Executive remuneration for Supervisory Board

AM policy is to vote "for"  remuneration for Supervisory  Board that is at least
50% in fixed form.

Rationale:  It would normally be preferable if performance  linked  compensation
were not based on  dividend  payments,  but  linked  to  suitable  result  based
parameters.  Consulting and procurement services should also be published in the
company report.


I.    Long-term incentive plans (For FFT Securities)

AM policy is to vote "for" long-term incentive plans for members of a management
board that reward for above average company performance.

Rationale:  Incentive plans will normally be supported if they: o directly align
the  interests of members of  management  boards with those of  shareholders;  o
establish  challenging   performance  criteria  to  reward  only  above  average
performance;  o measure  performance by total shareholder  return in relation to
the market or a range of  comparable  companies;  o are  long-term in nature and
encourage  long-term  ownership  of the shares once  exercised  through  minimum
holding  periods;  o do not allow a  repricing  of the  exercise  price in stock
option plans.


J.    Shareholder Proposals Concerning "Pay for Superior Performance"

AM policy is to address pay for superior performance proposals on a case-by-case
basis,  incorporating  the  recommendation  of an independent  third party proxy
research  firm  (currently  ISS)  subject to review by the GPVSC as set forth in
AM's Proxy Policies and Procedures.

Rationale:  While AM agrees  that  compensation  issues are  better  left to the
discretion  of  management,  they  appreciate  the need to monitor for excessive
compensation  practices  on a case by case basis.  If, after a review of the ISS
metrics,  AM is comfortable  with ISS's applying this  calculation and will vote
according to their recommendation.


K.    Executive Compensation Advisory

AM policy is to follow management's recommended vote on shareholder proposals to
propose  an  advisory  resolution  seeking  to ratify  the  compensation  of the
company's named executive officers (NEOs) on an annual basis.

Rationale:  AM  believes  that  controls  exist  within  senior  management  and
corporate  compensation  committees,  ensuring fair  compensation to executives.
This might allow shareholders to require approval for all levels of management's
compensation.


V.    Anti-Takeover Related Issues


A.    Shareholder Rights Plans ("Poison Pills")

AM policy is to vote "for"  proposals  to require  shareholder  ratification  of
poison  pills  or that  request  boards  to  redeem  poison  pills,  and to vote
"against"  the adoption of poison pills if they are  submitted  for  shareholder
ratification.

Rationale:  Poison  pills  are the most  prevalent  form of  corporate  takeover
defenses  and can be (and usually are)  adopted  without  shareholder  review or
consent.  The potential cost of poison pills to shareholders during an attempted
takeover outweighs the benefits.


B.    Reincorporation

AM policy is to examine  reincorporation  proposals on a case-by-case basis. The
voting  decision is based on: (1)  differences in state law between the existing
state  of  incorporation  and  the  proposed  state  of  incorporation;  and (2)
differences  between the existing and the  proposed  charter/bylaws/articles  of
incorporation and their effect on shareholder  rights. If changes resulting from
the proposed  reincorporation  violate the corporate  governance  principles set
forth in these  guidelines,  the  reincorporation  will be  deemed  contrary  to
shareholder's interests and a vote cast "against."

Rationale:  Reincorporations  can be  properly  analyzed  only by looking at the
advantages  and  disadvantages  to their  shareholders.  Care must be taken that
anti-takeover protection is not the sole or primary result of a proposed change.


C.    Fair-Price Proposals

AM policy is to vote "for" management fair-price  proposals,  provided that: (1)
the proposal applies only to two-tier offers; (2) the proposal sets an objective
fair-price  test based on the  highest  price that the  acquirer  has paid for a
company's  shares;  (3) the  supermajority  requirement  for bids  that fail the
fair-price test is no higher than two-thirds of the outstanding  shares; (4) the
proposal contains no other anti-takeover  provisions or provisions that restrict
shareholders rights.

A vote is cast for  shareholder  proposals that would modify or repeal  existing
fair-price requirements that do not meet these standards.

Rationale:  While fair price provisions may be used as anti-takeover devices, if
adequate  provisions are included,  they provide some protection to shareholders
who  have  some  say in  their  application  and the  ability  to  reject  those
protections if desired.


D.    Exemption from state takeover laws

AM policy is to vote "for"  shareholder  proposals to opt out of state  takeover
laws and to vote "against"  management  proposals requesting to opt out of state
takeover laws.

Rationale:  Control  share  statutes,  enacted  at the  state  level,  may  harm
long-term share value by entrenching management. They also unfairly deny certain
shares their inherent voting rights.


E.    Non-financial Effects of Takeover Bids

Policy is to vote "against"  shareholder  proposals to require  consideration of
non-financial effects of merger or acquisition proposals.

Rationale:  Non-financial  effects may often be subjective  and are secondary to
AM's stated purpose of acting in its client's best economic interest.


VI.   Mergers & Acquisitions

Evaluation of mergers,  acquisitions  and other special  corporate  transactions
(i.e., takeovers,  spin-offs, sales of assets,  reorganizations,  restructurings
and  recapitalizations)  are  performed on a  case-by-case  basis  incorporating
information  from  an  independent   proxy  research  source   (currently  ISS.)
Additional resources including portfolio management and research analysts may be
considered as set forth in AM's Policies and Procedures.


VII.  Social, Environmental & Political Issues

Social and environmental issues are becoming increasingly important to corporate
success.  We incorporate social and environmental  considerations  into both our
investment  decisions  and our proxy  voting  decisions  -  particularly  if the
financial performance of the company could be impacted.

With  increasing  frequency,  shareholder  proposals are  submitted  relating to
social and political  responsibility  issues.  Almost  universally,  the company
management  will  recommend a vote  "against"  these  proposals.  These types of
proposals cover an extremely wide range of issues. Many of the issues tend to be
controversial and are subject to more than one reasonable,  yet opposing, theory
of  support.  More so than  with  other  types of proxy  proposals,  social  and
political  responsibility  issues may not have a connection  to the economic and
corporate governance principles effecting shareholders'  interests.  AM's policy
regarding social and political  responsibility  issues, as with any other issue,
is designed to protect our client shareholders' economic interests.

Occasionally,  a distinction is made between a shareholder  proposal  requesting
direct  action  on  behalf  of the  board  and a  request  for a  report  on (or
disclosure of) some information.  In order to avoid unduly burdening any company
with  reporting  requirements,  AM's  policy  is  to  vote  against  shareholder
proposals that demand additional disclosure or reporting than is required by the
Securities and Exchange Commission unless it appears there is a legitimate issue
and the company has not adequately addressed shareholders' concerns.


A.    Labor & Human Rights

AM policy is to vote  "against"  adopting  global  codes of conduct or workplace
standards exceeding those mandated by law.

Rationale:  Additional  requirements  beyond  those  mandated  by law are deemed
unnecessary and potentially burdensome to companies


B.    Diversity & Equality

1.    AM  policy  is to vote  "against"  shareholder  proposals  to force  equal
      employment opportunity, affirmative action or board diversity.

Rationale:  Compliance with State and Federal legislation along with information
made available through filings with the EEOC provides sufficient  assurance that
companies act responsibly and make information public.

2.    AM  policy  is also to vote  "against"  proposals  to adopt  the Mac Bride
      Principles. The Mac Bride Principles promote fair employment, specifically
      regarding religious discrimination.

Rationale: Compliance with the Fair Employment Act of 1989 makes adoption of the
Mac Bride Principles redundant. Their adoption could potentially lead to charges
of reverse discrimination.


C.    Health & Safety

1.    AM policy is to vote "against"  adopting a pharmaceutical  price restraint
      policy or reporting pricing policy changes.

Rationale:  Pricing is an integral part of business for pharmaceutical companies
and  should  not  be  dictated  by  shareholders  (particularly  pursuant  to an
arbitrary formula.)  Disclosing pricing policies may also jeopardize a company's
competitive position in the marketplace.

2.    AM policy is to vote "against" shareholder proposals to control the use or
      labeling of and reporting on genetically engineered products.

Rationale:  Additional  requirements  beyond  those  mandated  by law are deemed
unnecessary and potentially burdensome to companies.


D.    Government/Military

1.    AM  policy  is  to  vote  against  shareholder   proposals  regarding  the
      production  or sale of military  arms or nuclear or  space-based  weapons,
      including  proposals  seeking to dictate a  company's  interaction  with a
      particular foreign country or agency.

Rationale:  Generally,  management  is in a better  position to  determine  what
products or industries a company can and should  participate  in.  Regulation of
the production or distribution  of military  supplies is, or should be, a matter
of government policy.

2.    AM policy is to vote "against"  shareholder  proposals regarding political
      contributions and donations.

Rationale:  The Board of Directors  and  Management,  not  shareholders,  should
evaluate and determine the recipients of any contributions made by the company.

3.    AM policy is to vote "against"  shareholder proposals regarding charitable
      contributions and donations.

Rationale:  The Board of Directors  and  Management,  not  shareholders,  should
evaluate and determine the recipients of any contributions made by the company.


E.    Tobacco

1.    AM policy is to vote "against" shareholder proposals requesting additional
      standards  or  reporting  requirements  for tobacco  companies  as well as
      "against" requesting  companies to report on the intentional  manipulation
      of nicotine content.

Rationale:  Where a tobacco company's actions meet the requirements of legal and
industry  standards,  imposing  additional  burdens may  detrimentally  effect a
company's  ability to compete.  The disclosure of nicotine  content  information
could affect the company's rights in any pending or future litigation.

2.    Shareholder requests to spin-off or restructure tobacco businesses will be
      opposed.

Rationale:  These  decisions  are  more  appropriately  left  to the  Board  and
management, and not to shareholder mandate.


VIII. Environmental Issues

AM policy is to follow management's recommended vote on CERES Principles or
other similar  environmental  mandates  (e.g.,  those relating to Greenhouse gas
emissions or the use of nuclear power).

Rationale:  Environmental  issues are extensively  regulated by outside agencies
and compliance with additional  requirements often involves  significant cost to
companies.


IX.   Miscellaneous Items


A.    Ratification of Auditors

AM policy is to vote "for" a) the management  recommended  selection of auditors
and b) proposals to require shareholder approval of auditors.

Rationale:  Absent  evidence  that  auditors  have not  performed  their  duties
adequately, support for management's nomination is warranted.


B.    Limitation of non-audit services provided by independent auditor

AM  policy  is to  support  proposals  limiting  non-audit  fees  to  50% of the
aggregate  annual  fees earned by the firm  retained as a company's  independent
auditor.

Rationale:  In the  wake of  financial  reporting  problems  and  alleged  audit
failures at a number of  companies,  AM  supports  the  general  principle  that
companies  should retain  separate  firms for audit and  consulting  services to
avoid potential conflicts of interest.  However,  given the protections afforded
by the  recently  enacted  Sarbanes-Oxley  Act of  2002  (which  requires  Audit
Committee  pre-approval  for  non-audit  services and  prohibits  auditors  from
providing specific types of services), and the fact that some non-audit services
are  legitimate  audit-related  services,   complete  separation  of  audit  and
consulting fees may not be warranted.  A reasonable limitation is appropriate to
help ensure auditor  independence and it is reasonable to expect that audit fees
exceed non-audit fees.


C.    Audit firm rotation

AM policy is to  support  proposals  seeking  audit  firm  rotation  unless  the
rotation period sought is less than five years.

Rationale:  While the Sarbanes-Oxley Act mandates that the lead audit partner be
switched  every five years,  AM believes  that rotation of the actual audit firm
would  provide  an even  stronger  system of checks  and  balances  on the audit
function.


D.    Transaction of Other Business

AM policy is to vote against "transaction of other business" proposals.

Rationale:  This is a routine item to allow  shareholders  to raise other issues
and  discuss  them at the  meeting.  As the  nature of these  issues  may not be
disclosed  prior to the meeting,  we recommend a vote against  these  proposals.
This  protects  shareholders  voting by proxy (and not  physically  present at a
meeting)  from  having  action  taken at the  meeting  that they did not receive
proper notification of or sufficient opportunity to consider.


E.    Motions to Adjourn the Meeting

AM Policy is to vote against proposals to adjourn the meeting.

Rationale:  Management  may seek authority to adjourn the meeting if a favorable
outcome is not secured. Shareholders should already have had enough information
to make a decision. Once votes have been cast, there is no justification for
management to continue spending time and money to press shareholders for
support.


F.    Bundled Proposals

AM policy is to vote  against  bundled  proposals  if any  bundled  issue  would
require a vote against it if proposed individually.

Rationale:  Shareholders should not be forced to "take the good with the bad" in
cases where the proposals could reasonably have been submitted separately.


G.    Change of Company Name

AM policy is to support management on proposals to change the company name.

Rationale: This is generally considered a business decision for a company.


H.    Proposals Related to the Annual Meeting

AM Policy is to vote in favor of management for proposals related to the conduct
of the annual meeting (meeting time, place, etc.)

Rationale: These are considered routine administrative proposals.


I.    Reimbursement of Expenses Incurred from Candidate Nomination

AM policy is to follow  management's  recommended vote on shareholder  proposals
related to the amending of company  bylaws to provide for the  reimbursement  of
reasonable   expenses  incurred  in  connection  with  nominating  one  or  more
candidates in a contested  election of directors to the  corporation's  board of
directors.

Rationale:   Corporations  should  not  be  liable  for  costs  associated  with
shareholder proposals for directors.


J.    Investment Company Proxies

Proxies  solicited by  investment  companies  are voted in  accordance  with the
recommendations of an independent third party, currently ISS. However, regarding
investment  companies for which AM or an affiliate serves as investment  adviser
or principal  underwriter,  such proxies are voted in the same proportion as the
vote of all other  shareholders.  Proxies  solicited by master funds from feeder
funds will be voted in accordance  with  applicable  provisions of Section 12 of
the Investment Company Act of 1940.

Investment  companies,   particularly   closed-end  investment  companies,   are
different from traditional  operating companies.  These differences may call for
differences in voting positions on the same matter.  For example,  AM could vote
"for" staggered boards of closed-end investment companies, although AM generally
votes "against" staggered boards for operating companies. Further, the manner in
which AM votes investment  company proxies may differ from proposals for which a
AM-advised  investment  company  solicits  proxies  from  its  shareholders.  As
reflected in the  Guidelines,  proxies  solicited by closed-end  (and  open-end)
investment companies are voted in accordance with the pre-determined  guidelines
of an independent third-party.

Subject to  participation  agreements with certain Exchange Traded Funds ("ETF")
issuers  that  have  received  exemptive  orders  from the U.S.  Securities  and
Exchange  Commission allowing investing DWS funds to exceed the limits set forth
in Section  12(d)(1)(A) and (B) of the Investment Company Act of 1940, DeAM will
echo  vote  proxies  for ETFs in which  Deutsche  Bank  holds  more  than 25% of
outstanding  voting  shares  globally  when  required to do so by  participation
agreements and SEC orders.

Note: With respect to the QP Trust (not registered under the Investment  Company
Act of  1940),  the  Fund is not  required  to  engage  in echo  voting  and the
investment adviser will use these Guidelines, and may determine, with respect to
the QP Trust,  to vote contrary to the positions in the  Guidelines,  consistent
with the Fund's best interest.


K.    International Proxy Voting

The above guidelines  pertain to issuers organized in the United States,  Canada
and Germany.  Proxies  solicited by other issuers are voted in  accordance  with
international  guidelines or the  recommendation  of ISS and in accordance  with
applicable law and regulation.





                      APPENDIX B -- RATINGS OF INVESTMENTS

Description of Moody's Corporate Bond Ratings

Aaa -- Bonds  rated Aaa are  judged to be of the best  quality.  They  carry the
smallest degree of investment risk and are generally referred to as "gilt edge."
Interest payments are protected by a large or by an exceptionally  stable margin
and  principal is secure.  While the various  protective  elements are likely to
change,  such  changes  as can be  visualized  are most  unlikely  to impair the
fundamentally strong position of such issues.

Aa -- Bonds rated Aa are judged to be of high quality by all standards. Together
with the Aaa group they comprise what are generally  known as high-grade  bonds.
They are rated lower than the best bonds because  margins of protection  may not
be as large as in Aaa securities or fluctuation of protective elements may be of
greater  amplitude  or  there  may be  other  elements  present  which  make the
long-term risks appear somewhat larger than in Aaa securities.

A -- Bonds rated A possess many  favorable  investment  attributes and are to be
considered  as  upper-medium-grade  obligations.   Factors  giving  security  to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.

Baa -- Bonds rated Baa are considered as medium-grade obligations, i.e. they are
neither highly  protected nor poorly  secured.  Interest  payments and principal
security appear adequate for the present but certain protective  elements may be
lacking or may be  characteristically  unreliable over any great length of time.
Such  bonds  lack  outstanding  investment  characteristics  and  in  fact  have
speculative characteristics as well.

Ba -- Bonds  rated Ba are  judged to have  speculative  elements.  Their  future
cannot be  considered  as well  assured.  Often the  protection  of interest and
principal  payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future.  Uncertainty of position  characterizes
bonds in this class.

B -- Bonds rated B generally  lack  characteristics  of a desirable  investment.
Assurance of interest and principal payments or of maintenance of other terms of
the contract over any long period of time may be small.

Caa -- Bonds  rated Caa are of poor  standing.  Such issues may be in default or
there may be present elements of danger with respect to principal or interest.

Ca -- Bonds  rated Ca  represent  obligations  which are  speculative  in a high
degree. Such issues are often in default or have other marked shortcomings.

C -- Bonds rated C are the  lowest-rated  class of bonds and issued so rated can
be  regarded as having  extremely  poor  prospects  of ever  attaining  any real
investment standing.

Moody's  applies  numerical  modifiers,  1, 2,  and 3, in  each  generic  rating
classification  from Aa through B in its corporate  bond system.  The modifier 1
indicates  that the  security  ranks in the  higher  end of its  generic  rating
category;  the  modifier 2  indicates a mid-range  ranking;  and the  modifier 3
indicates that the issue ranks in the lower end of its generic rating category.

Description of S&P's Corporate Bond Ratings

AAA  --  Debt  rated  AAA  has  the  highest  rating  assigned  by S&P to a debt
obligation. Capacity to pay interest and repay principal is extremely strong.

AA -- Debt  rated  AA has a very  strong  capacity  to pay  interest  and  repay
principal and differs from the higher-rated issues only in small degree.

A -- Debt rated A has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.

BBB -- Debt rated BBB is regarded as having an adequate capacity to pay interest
and  repay  principal.   Whereas  it  normally  exhibits   adequate   protection
parameters,  adverse  economic  conditions  or changing  circumstances  are more
likely to lead to weakened capacity to pay interest and repay principal for debt
in this category than in higher-rated categories.

BB -- Debt  rate BB has less  near-term  vulnerability  to  default  than  other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse  business,  financial,  or  economic  conditions  which  could  lead  to
inadequate capacity to meet timely interest and principal payments.

B -- Debt rated B has a greater  vulnerability  to default but currently has the
capacity to meet interest payments and principal  repayments.  Adverse business,
financial,  or economic conditions will likely impair capacity or willingness to
pay interest and repay  principal.  The B rating  category is also used for debt
subordinated to senior debt that is assigned an actual or implied BB- rating.

CCC -- Debt rated CCC has a currently identifiable vulnerability to default, and
is dependent upon favorable business, financial, and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, it is not likely to have the
capacity to pay interest and repay principal.

CC -- Debt rated CC is  typically  applied to debt  subordinated  to senior debt
which is assigned an actual or implied CCC debt rating.

C -- The rating C is typically applied to debt subordinated to senior debt which
is assigned an actual or implied CCC- debt  rating.  The C rating may be used to
cover a situation  where a  bankruptcy  petition has been filed but debt service
payments are continued.

CI -- The rating CI is reserved  for income  bonds on which no interest is being
paid.

D -- Debt  rated D is in payment  default.  The D rating  category  is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired,  unless S&P believes that such payments
will be made during such grace  period.  The D rating will also be used upon the
filing of a bankruptcy petition if debt service payments are jeopardized.

Plus (+) or minus (-):  The  ratings  from "AA" to "CCC" may be  modified by the
addition  of a plus or minus  sign to show  relative  standing  within the major
rating categories.

Fitch's Long-Term Debt Ratings
Investment Grade

AAA Highest  credit  quality.  "AAA" ratings  denote the lowest  expectation  of
credit risk. They are assigned only in case of exceptionally strong capacity for
timely payment of financial commitments.  This capacity is highly unlikely to be
adversely affected by foreseeable events.

AA Very high credit  quality.  "AA"  ratings  denote a very low  expectation  of
credit risk.  They indicate very strong capacity for timely payment of financial
commitments.  This  capacity  is not  significantly  vulnerable  to  foreseeable
events.

A High credit quality.  "A" ratings denote a low expectation of credit risk. The
capacity for timely payment of financial  commitments is considered strong. This
capacity may, nevertheless, be more vulnerable to changes in circumstances or in
economic conditions than is the case for higher ratings.

BBB
Good credit quality. "BBB" ratings indicate that there is currently a low
expectation of credit risk. The capacity for timely payment of financial
commitments is considered adequate, but adverse changes in circumstances and in
economic conditions are more likely to impair this capacity. This is the lowest
investment-grade category.

Speculative Grade

BB Speculative. "BB" ratings indicate that there is a possibility of credit risk
developing,  particularly  as the result of adverse  economic  change over time;
however,  business or financial alternatives may be available to allow financial
commitments  to be met.  Securities  rated in this  category are not  investment
grade.

B Highly  speculative.  "B" ratings  indicate  that  significant  credit risk is
present,  but a limited  margin of safety  remains.  Financial  commitments  are
currently being met; however,  capacity for continued payment is contingent upon
a sustained, favorable business and economic environment.

CCC,  CC, C High  default  risk.  Default is a real  possibility.  Capacity  for
meeting  financial  commitments  is solely  reliant  upon  sustained,  favorable
business or economic developments.  A "CC" rating indicates that default of some
kind appears probable. "C" ratings signal imminent default.

DDD, DD, D Default.  The ratings of  obligations  in this  category are based on
their prospects for achieving  partial or full recovery in a  reorganization  or
liquidation  of  the  obligor.   While  expected   recovery  values  are  highly
speculative  and cannot be estimated with any precision,  the following serve as
general  guidelines.  "DDD" obligations have the highest potential for recovery,
around  90%-100% of  outstanding  amounts and accrued  interest.  "DD" indicates
potential  recoveries  in the  range  of  50%-90%  and "D" the  lowest  recovery
potential, i.e., below 50%.

Entities  rated  in  this  category  have  defaulted  on  some  or all of  their
obligations.  Entities  rated "DDD" have the highest  prospect for resumption of
performance  or  continued  operation  with or  without a formal  reorganization
process.  Entities  rated  "DD"  and  "D"  are  generally  undergoing  a  formal
reorganization or liquidation process;  those rated "DD" are likely to satisfy a
higher portion of their outstanding obligations, while entities rated "D" have a
poor prospect of repaying all obligations.

Notes:

"+" or "-" may be appended to a rating to denote  relative  status  within major
rating  categories.  Such  suffixes  are not added to the "AAA"  category  or to
categories below "CCC".

"NR"  indicates that Fitch Ratings does not publicly rate the issuer or issue in
question.

"Withdrawn":  A rating is  withdrawn  when  Fitch  Ratings  deems the  amount of
information  available  to  be  inadequate  for  rating  purposes,  or  when  an
obligation matures, is called, or refinanced.

Rating Watch:  Ratings are placed on Rating Watch to notify investors that there
is a reasonable  probability of a rating change and the likely direction of such
change.  These are  designated as  "Positive,"  indicating a potential  upgrade,
"Negative," for a potential downgrade,  or "Evolving," if ratings may be raised,
lowered or  maintained.  Rating  Watch is typically  resolved  over a relatively
short period.

A Rating  Outlook  indicates the direction a rating is likely to move over a one
to two-year period. Outlooks may be positive, stable, or negative. A positive or
negative Rating Outlook does not imply a rating change is inevitable. Similarly,
ratings for which outlooks are "stable"  could be upgraded or downgraded  before
an outlook  moves to  positive  or negative  if  circumstances  warrant  such an
action. Occasionally,  Fitch may be unable to identify the fundamental trend and
in these cases, the Rating Outlook may be described as "evolving."

Description of Moody's Short-Term Debt Ratings

Issuers  rated  Prime-1 (or  related  supporting  institutions)  have a superior
capacity for repayment of short-term promissory  obligations.  Prime-1 repayment
capacity will normally be evidenced by the  following  characteristics:  leading
market positions in well-established  industries;  high rates of return on funds
employed;  conservative capitalization structures with moderate reliance on debt
and  ample  asset  protection;  broad  margins  in  earnings  coverage  of fixed
financial charges and high internal cash generation;  well-established access to
a range of financial markets and assured sources of alternate liquidity.

Issuers  rated  Prime-2  (or  related  supporting  institutions)  have a  strong
capacity for repayment of short-term promissory obligations.  This will normally
be evidenced by many of the characteristics  cited above but to a lesser degree.
Earnings  trends and  coverage  ratios,  while  sound,  will be more  subject to
variation. Capitalization characteristics,  while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.

Issuers rates Prime-3 (or related  supporting  institutions)  have an acceptable
capacity  for  repayment of  short-term  promissory  obligations.  The effect of
industry   characteristics  and  market  composition  may  be  more  pronounced.
Variability in earnings and  profitability may result in changes in the level of
debt protection  measurements  and the requirement for relatively high financial
leverage. Adequate alternate liquidity is maintained.

Description of S&P Short-Term Issuer Credit Ratings

A-1  An  obligor  rated  "A-1"  has  STRONG   capacity  to  meet  its  financial
commitments.  It is rated in the highest  category by Standard & Poor's.  Within
this  category,  certain  obligors  are  designated  with a plus sign (+).  This
indicates  that the  obligor's  capacity to meet its  financial  commitments  is
EXTREMELY STRONG.

A-2 An obligor  rated  "A-2" has  SATISFACTORY  capacity  to meet its  financial
commitments.  However, it is somewhat more susceptible to the adverse effects of
changes in  circumstances  and economic  conditions than obligors in the highest
rating category.

A-3 An  obligor  rated  "A-3"  has  ADEQUATE  capacity  to  meet  its  financial
obligations.  However, adverse economic conditions or changing circumstances are
more likely to lead to a weakened  capacity of the obligor to meet its financial
commitments.

Description of Fitch's Commercial Paper Ratings

F1 Highest credit quality.  Indicates the strongest  capacity for timely payment
of  financial  commitments;  may have an added "+" to denote  any  exceptionally
strong credit feature.

F2
Good credit quality. A satisfactory capacity for timely payment of financial
commitments, but the margin of safety is not as great as in the case of the
higher ratings.

F3 Fair credit quality. The capacity for timely payment of financial commitments
is adequate;  however,  near-term adverse changes could result in a reduction to
non-investment grade.

B Speculative.  Minimal  capacity for timely  payment of financial  commitments,
plus  vulnerability  to  near-term  adverse  changes in  financial  and economic
conditions.

C High  default  risk.  Default  is a real  possibility.  Capacity  for  meeting
financial commitments is solely reliant upon a sustained, favorable business and
economic environment.

D
Default. Denotes actual or imminent payment default.

Notes

"+" or "-" may be  appended to an "F1" rating  class to denote  relative  status
within the category.

"NR"  indicates that Fitch Ratings does not publicly rate the issuer or issue in
question.

"Withdrawn":  A rating is  withdrawn  when  Fitch  Ratings  deems the  amount of
information  available  to  be  inadequate  for  rating  purposes,  or  when  an
obligation matures, is called, or refinanced.  Rating Watch:  Ratings are placed
on Rating

Watch to notify  investors  that there is a reasonable  probability  of a rating
change  and the  likely  direction  of such  change.  These  are  designated  as
"Positive,"  indicating  a  potential  upgrade,   "Negative,"  for  a  potential
downgrade,  or  "Evolving,"  if ratings  may be raised,  lowered or  maintained.
Rating Watch is typically resolved over a relatively short period.




<PAGE>


         STATEMENT OF ADDITIONAL INFORMATION

              February 1, 2009



Investment Advisor
DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC.
345 Park Avenue
New York, NY 10154

Administrator
DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC.
345 Park Avenue
New York, NY 10154

Transfer Agent
DWS INVESTMENTS SERVICE COMPANY
222 South Riverside Plaza
Chicago, IL 60606-5808

Custodian
STATE STREET BANK AND TRUST COMPANY
225 Franklin Street
Boston, MA 02110

Distributor
DWS INVESTMENTS DISTRIBUTORS, INC.
222 South Riverside Plaza
Chicago, IL 60606-5808

Independent Registered Public Accounting Firm
PRICEWATERHOUSECOOPERS LLP
125 High Street
Boston, MA 02110

Legal Counsel
VedderPrice P.C.
222 North LaSalle Street
Chicago, IL 60601


Trustee Counsel
Ropes & Gray LLP
One International Place
Boston, MA 02110-2624

No  person  has  been  authorized  to  give  any  information  or  to  make  any
representations  other than those contained in the Fund's prospectuses,  its SAI
or the Fund's  official sales  literature in connection with the offering of the
Fund's shares and, if given or made, such other  information or  representations
must not be  relied on as having  been  authorized  by the  Trust.  Neither  the
prospectuses  nor this SAI constitute an offer in any state in which,  or to any
person to whom, such offer may not lawfully be made.




<PAGE>







                                DWS ADVISOR FUNDS


                          DWS Short Duration Plus Fund
                                     Class S








                       STATEMENT OF ADDITIONAL INFORMATION

                                February 1, 2009

This Statement of Additional Information ("SAI") is not a prospectus and should
be read in conjunction with the prospectus dated February 1, 2009, as amended
from time to time, for DWS Short Duration Plus Fund (the "Fund"), a series of
DWS Advisor Funds (the "Trust"), copies of which may be obtained without charge
by contacting DWS Investments Distributors, Inc., 222 South Riverside Plaza,
Chicago, Illinois 60606, (800) 621-1148, or from the firm from which this SAI
was obtained and are available along with other materials on the Securities and
Exchange Commission's Internet Web site (http://www.sec.gov).

Portions of the Annual Report to Shareholders, dated September 30, 2008 are
incorporated herein by reference and are deemed to be part of this SAI. A copy
of the Fund's Annual Report may be obtained without charge by calling the Fund
at the toll-free number (800) 621-1048. This SAI is incorporated by reference
into the prospectus for the Fund.













                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

INVESTMENT RESTRICTIONS.......................................................1

INVESTMENT POLICIES AND TECHNIQUES............................................3

MANAGEMENT OF THE FUND.......................................................37
   Investment Advisor........................................................37

FUND SERVICE PROVIDERS.......................................................45
   Administrator.............................................................45
   Distributor...............................................................47
   Custodian.................................................................47
   Transfer Agent............................................................48
   Service Plan..............................................................48
   Legal Counsel.............................................................49
   Independent Registered Public Accounting Firm.............................49

PORTFOLIO TRANSACTIONS.......................................................49

PURCHASE AND REDEMPTION OF SHARES............................................51

DIVIDENDS....................................................................61

TAXES........................................................................62

NET ASSET VALUE..............................................................68

BOARD MEMBERS AND OFFICERS...................................................69

TRUST ORGANIZATION...........................................................78

PROXY VOTING GUIDELINES......................................................80

FINANCIAL STATEMENTS.........................................................80

ADDITIONAL INFORMATION.......................................................80

APPENDIX A -- PROXY VOTING GUIDELINES........................................81

APPENDIX B -- RATINGS OF INVESTMENTS........................................108



                             INVESTMENT RESTRICTIONS

Except as otherwise indicated, the Fund's investment objective and policies are
not fundamental and may be changed by the Board of Trustees without a vote of
shareholders. There can be no assurance that the Fund's objective will be met.

Any investment restrictions herein which involve a maximum percentage of
securities or assets shall not be considered to be violated unless an excess
over the percentage occurs immediately after and is caused by an acquisition or
encumbrance of securities or assets of, or borrowings by, the Fund.

The Fund has elected to be classified as a diversified, as that term is used in
the Investment Company Act of 1940, as amended (the "1940 Act"), series of a
separate open-end investment management company. A diversified Fund may not,
with respect to 75% of total assets, invest more than 5% of total assets in the
securities of a single issuer (other than US government securities or securities
of investment companies) or invest in more than 10% of the outstanding voting
securities of such issuer.

As a matter of fundamental policy, the Fund may not:

(1)      borrow money, except as permitted under the 1940 Act, and as
         interpreted or modified by regulatory authority having jurisdiction,
         from time to time;

(2)      issue senior  securities,  except as permitted  under the 1940 Act, and
         as  interpreted  or modified by  regulatory  authority
         having jurisdiction, from time to time;

(3)      concentrate  its  investments in a particular  industry,  as that term
         is used in the 1940 Act, and as interpreted or modified
         by regulatory authority having jurisdiction, from time to time;

(4)      engage in the business of underwriting securities issued by others,
         except to the extent that the Fund may be deemed to be an underwriter
         in connection with the disposition of portfolio securities;

(5)      purchase or sell real estate, which term does not include (a)
         securities of companies which deal in real estate or mortgages or (b)
         investments secured by real estate or interests therein, except that
         the Fund reserves freedom of action to hold and to sell real estate
         acquired as a result of the Fund's ownership of securities;

(6)      purchase  or sell  commodities,  except as  permitted  by the 1940 Act,
         and as  interpreted  or  modified  by the  regulatory
         authority having jurisdiction, from time to time; and

(7)      make  loans,  except as  permitted  under the 1940  Act,  and as
         interpreted  or  modified  by  regulatory  authority  having
         jurisdiction, from time to time.

A fundamental policy may not be changed without the approval of a majority of
the outstanding voting securities of the Fund which, under the 1940 Act and the
rules thereunder and as used in this SAI, means the lesser of (1) 67% or more of
the voting securities present at a meeting, if the holders of more than 50% of
the outstanding voting securities of the Fund are present or represented by
proxy, or (2) more than 50% of the outstanding voting securities of the Fund.

Non-Fundamental Restrictions

In order to comply with certain statutes and policies and for other reasons, the
Fund will not, as a matter of operating policy (these restrictions may be
changed by a vote of the Trustees of the Trust without shareholder approval):

(i)      purchase any security or evidence of interest therein on margin, except
         that short-term credits necessary for the clearance
         of purchases and sales of securities may be obtained and deposits of
         initial and variation margin may be made in connection with the
         purchase, ownership, holding or sale of futures contracts;

(ii)     sell securities it does not own (short sales). (This restriction does
         not preclude short sales "against the box" (that is, sales of
         securities (a) the Fund contemporaneously owns or (b) where the Fund
         has the right to obtain securities equivalent in kind and amount to
         those sold). (The Fund has no current intention to engage in short
         selling);

(iii)    purchase securities issued by any investment company except to the
         extent permitted by the 1940 Act (including any exemptions or
         exclusions therefrom), except that this limitation does not apply to
         securities received or acquired as dividends, through offers of
         exchange, or as a result of reorganization, consolidation or merger;

(iv)     lend portfolio securities in an amount greater than 33 1/3% of its
         total assets;

(v)      invest more than 15% of the Fund's net assets (taken at the greater of
         cost or market value) in securities that are illiquid or not readily
         marketable (excluding Rule 144A securities deemed by the Fund's Board
         of Trustees to be liquid); and

(vi)     acquire securities of registered open-end investment companies or
         registered unit investment trusts in reliance on Sections 12(d)(1)(F)
         or 12(d)(1)(G) of the 1940 Act.

An investment restriction will not be considered violated if that restriction is
complied with at the time the relevant action is taken, notwithstanding a later
change in the market value of an investment, in net or total assets or in the
change of securities rating of the investment or any other later change.

To meet federal income tax requirements for qualification as a regulated
investment company, the Fund must, among other things, limit its investments so
that at the close of each quarter of its taxable year (1) no more than 25% of
the value of its total assets is invested in the securities (other than
securities of the US Government or a regulated investment company) of a single
issuer or two or more issuers which the Fund controls and which are engaged in
the same, similar or related trades or businesses or in the securities of one or
more qualified publicly traded partnerships, and (2) at least 50% of the value
of its total assets is represented by cash, cash items (including receivables),
US Government securities, securities of other regulated investment companies and
other securities of any issuer that does not represent more than 5% of the value
of the Fund's total assets and not more than 10% of the issuer's outstanding
voting securities.

Master/feeder Fund Structure. The Board of Trustees has the discretion to retain
the current distribution arrangement for the Fund while investing in a master
fund in a master/feeder fund structure as described below.

A master/feeder fund structure is one in which a fund (a "feeder fund"), instead
of investing directly in a portfolio of securities, invests most or all of its
investment assets in a separate registered investment company (the "master
fund") with substantially the same investment objective and policies as the
feeder fund. Such a structure permits the pooling of assets of two or more
feeder funds, preserving separate identities or distribution channels at the
feeder fund level. Based on the premise that certain of the expenses of
operating an investment portfolio are relatively fixed, a larger investment
portfolio may eventually achieve a lower ratio of operating expenses to average
net assets. An existing investment company is able to convert to a feeder fund
by selling all of its investments, which involves brokerage and other
transaction costs and realization of a taxable gain or loss, or by contributing
its assets to the master fund and avoiding transaction costs and, if proper
procedures are followed, the realization of taxable gain or loss.

For purposes of the Fund's concentration limitation discussed above, financial
institutions include companies within the financial services industry. The
Advisor, as later defined, deems the financial services industry to include the
group of industries within the financial services sector.

                       INVESTMENT POLICIES AND TECHNIQUES

Investment Techniques

Descriptions in this SAI of a particular investment practice or technique in
which the Fund may engage are meant to describe the spectrum of investments that
Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor") in its
discretion might, but is not required to, use in managing the Fund's portfolio
assets. The Advisor may in its discretion at any time employ such practice,
technique or instrument for one or more funds, including the Fund, but not for
all funds advised by it. Furthermore, it is possible that certain types of
financial instruments or investment techniques described herein may not be
available, permissible, economically feasible or effective for their intended
purposes in all markets. Certain practices, techniques or instruments may not be
principal activities of the Fund, but, to the extent employed, could from time
to time have a material impact on the Fund's performance.

Asset Segregation Certain investment transactions expose the Fund to an
obligation to make future payments to third parties. Examples of these types of
transactions, include, but are not limited to, reverse repurchase agreements,
short sales, dollar rolls, when-issued, delayed-delivery or forward commitment
transactions and certain derivatives such as swaps, futures, forwards, and
options. To the extent that the Fund engages in such transactions, the Fund will
(to the extent required by applicable law) either (1) segregate cash or liquid
assets in the prescribed amount or (2) otherwise "cover" its future obligations
under the transaction, such as by holding an offsetting investment. If the Fund
segregates sufficient cash or other liquid assets or otherwise "covers" its
obligations under such transactions, the Fund will not consider the transactions
to be borrowings for purposes of its investment restrictions or "senior
securities" under the 1940 Act, and therefore, such transactions will not be
subject to the 300% asset coverage requirement under the 1940 Act otherwise
applicable to borrowings by the Fund.

In some cases (e.g., with respect to futures and forwards that are contractually
required to "cash-settle"), the Fund will segregate cash or other liquid assets
with respect to the amount of the daily net (marked-to-market) obligation
arising from the transaction, rather than the notional amount of the underlying
contract. By segregating assets in an amount equal to the net obligation rather
than the notional amount, the Fund will have the ability to employ leverage to a
greater extent than if it set aside cash or other liquid assets equal to the
notional amount of the contract, which may increase the risk associated with
such transactions.

The Fund may utilize methods of segregating assets or otherwise "covering"
transactions that are currently or in the future permitted under the 1940 Act,
the rules and regulation thereunder, or orders issued by the Securities and
Exchange Commission ("SEC") thereunder. For these purposes, interpretations and
guidance provided by the SEC staff may be taken into account when deemed
appropriate by the Fund.

Assets used as segregation or cover cannot be sold while the position in the
corresponding transaction is open, unless they are replaced with other
appropriate assets. As a result, the commitment of a large portion of the Fund's
assets for segregation and cover purposes could impede portfolio management or
the Fund's ability to meet redemption requests or other current obligations.

Segregating assets or otherwise "covering" for these purposes does not
necessarily limit the percentage of the assets of the Fund that may be at risk
with respect to certain derivative transactions.

Short-Term Instruments

When the Fund experiences large cash inflows -- for example, through the sale of
securities -- and attractive investments are unavailable in sufficient
quantities, the Fund may hold short-term investments (or shares of money market
mutual funds) for a limited time pending availability of such investments. In
addition, when in the Advisor's opinion it is advisable to adopt a temporary
defensive position because of unusual and adverse market or other conditions, up
to 100% of the Fund's assets may be invested in such short-term instruments.

Short-term instruments consist of foreign and domestic: (1) short-term
obligations of sovereign governments and their agencies, instrumentalities,
authorities or political subdivisions; (2) other short-term debt securities
rated AA or higher by S&P or Aa or higher by Moody's or, if unrated, deemed to
be of comparable quality in the opinion of the Advisor; (3) commercial paper;
(4) bank obligations, including negotiable certificates of deposit, time
deposits and bankers' acceptances; and (5) repurchase agreements. At the time
the Fund invests in commercial paper, bank obligations or repurchase agreements,
the issuer or the issuer's parent must have outstanding debt rated AA or higher
by the Standard & Poor's Division of The McGraw-Hill Companies, Inc. ("S&P") or
Aa or higher by Moody's Investors Service, Inc. ("Moody's"); outstanding
commercial paper or bank obligations rated A-1 by S&P or Prime-1 by Moody's; or,
if no such ratings are available, the instrument must be deemed to be of
comparable quality in the opinion of the Advisor. These instruments may be
denominated in US dollars or in foreign currencies.

Other US government securities the Fund may invest in include (but are not
limited to) securities issued or guaranteed by the Federal Housing
Administration, Farmers Home Loan Administration, Export-Import Bank of the US,
Small Business Administration, General Services Administration, Central Bank for
Cooperatives, Federal Farm Credit Banks, Federal Intermediate Credit Banks,
Federal Land Banks, Maritime Administration, Tennessee Valley Authority,
District of Columbia Armory Board and Student Loan Marketing Association.
Because the US government is not obligated by law to provide support to an
instrumentality it sponsors, the Fund will invest in obligations issued by such
an instrumentality only if the Advisor determines that the credit risk with
respect to the instrumentality does not make its securities unsuitable for
investment by the Fund.

The Fund may also invest in separately traded principal and interest components
of securities guaranteed or issued by the US government or its agencies,
instrumentalities or sponsored enterprises if such components trade
independently under the Separate Trading of Registered Interest and Principal of
Securities program ("STRIPS") or any similar program sponsored by the US
Government. STRIPS may be sold as zero coupon securities. See "Zero Coupon
Securities and Deferred Interest Bonds."

US Government Securities. The Fund may invest in obligations issued or
guaranteed by the US government including: (1) direct obligations of the US
Treasury and (2) obligations issued by US government agencies and
instrumentalities. Included among direct obligations of the US are Treasury
Bills, Treasury Notes and Treasury Bonds, which differ in terms of their
interest rates, maturities and dates of issuance. Treasury Bills have maturities
of less than one year, Treasury Notes have maturities of one to 10 years and
Treasury Bonds generally have maturities of greater than 10 years at the date of
issuance. Included among the obligations issued by agencies and
instrumentalities of the United States are: instruments that are supported by
the full faith and credit of the United States (such as certificates issued by
the Government National Mortgage Association ("GNMA" or "Ginnie Mae"));
instruments that are supported by the right of the issuer to borrow from the US
Treasury (such as securities of Federal Home Loan Banks); and instruments that
are supported solely by the credit of the agency or instrumentality (such as
Federal National Mortgage Association ("FNMA" or "Fannie Mae") and Federal Home
Loan Mortgage Corporation ("FHLMC" or "Freddie Mac")).

Certificates of Deposit and Bankers' Acceptances. The Fund may invest in
certificates of deposit and bankers' acceptances. Certificates of deposit are
receipts issued by a depository institution in exchange for the deposit of
funds. The issuer agrees to pay the amount deposited plus interest to the bearer
of the receipt on the date specified on the certificate. The certificate usually
can be traded in the secondary market prior to maturity. Bankers' acceptances
typically arise from short-term credit arrangements designed to enable
businesses to obtain funds to finance commercial transactions. Generally, an
acceptance is a time draft drawn on a bank by an exporter or an importer to
obtain a stated amount of funds to pay for specific merchandise. The draft is
then "accepted" by a bank that, in effect, unconditionally guarantees to pay the
face value of the instrument on its maturity date. The acceptance may then be
held by the accepting bank as an earning asset or it may be sold in the
secondary market at the going rate of discount for a specific maturity. Although
maturities for acceptances can be as long as 270 days, most acceptances have
maturities of six months or less.

Commercial Paper. The Fund may invest in commercial paper. The Fund may invest
in fixed rate or variable rate commercial paper, issued by US or foreign
entities. Commercial paper consists of short-term (usually from 1 to 270 days)
unsecured promissory notes issued by US or foreign corporations in order to
finance their current operations. Any commercial paper issued by a foreign
entity corporation and purchased by the Fund must be US dollar-denominated and
must not be subject to foreign withholding tax at the time of purchase.

Commercial paper, when purchased by the Fund, must be rated in the highest
short-term rating category by any two NRSROs (or one NRSRO if that NRSRO is the
only such NRSRO which rates such security) or, if not so rated, must be believed
by the Advisor, acting under the supervision of the Board of Trustees of the
Fund, to be of comparable quality. Investing in foreign commercial paper
generally involves risks similar to those described below relating to
obligations of foreign banks or foreign branches and subsidiaries of US and
foreign banks.

The Fund may also invest in variable rate master demand notes. A variable rate
master demand note (which is a type of commercial paper) represents a direct
borrowing arrangement involving periodically fluctuating rates of interest under
a letter agreement between a commercial paper issuer and an institutional lender
pursuant to which the lender may determine to invest varying amounts.

For a description of commercial paper ratings, see the Appendix to this SAI.

US Dollar-Denominated Foreign Fixed Income Securities. The Fund may invest in
the dollar-denominated debt securities of foreign companies. Investing in the
securities of foreign companies involves more risks than investing in securities
of US companies. Their value is subject to economic and political developments
in the countries where the companies operate and to changes in foreign currency
values. Values may also be affected by foreign tax laws, changes in foreign
economic or monetary policies, exchange control regulations and regulations
involving prohibitions on the repatriation of foreign currencies.

In addition, the relative performance of various countries' fixed income markets
historically has reflected wide variations relating to the unique
characteristics of each country's economy. Year-to-year fluctuations in certain
markets have been significant, and negative returns have been experienced in
various markets from time to time.

US Dollar-Denominated Sovereign and Supranational Fixed Income Securities. The
Fund may invest in US dollar-denominated foreign government debt securities,
which include debt obligations issued or guaranteed by national, state or
provincial governments or similar political subdivisions and quasi-governmental
and supranational entities (collectively, "sovereign debt obligations").
Sovereign debt obligations may involve a high degree of risk. The issuer of such
an obligation or the governmental authorities that control the repayment of the
obligation may be unable or unwilling to repay principal and interest when due
and may require renegotiations or rescheduling of debt payments. In addition,
prospects for repayment of principal and interest may depend on political as
well as economic factors. Quasi-governmental and supranational entities include
international organizations designated or supported by governmental entities to
promote economic reconstruction or development and international banking
institutions and related government agencies. Examples include (but are not
limited to) the International Bank for Reconstruction and Development (the
"World Bank"), the Japanese Development Bank, the Asian Development Bank and the
Inter-American Development Bank. Foreign government securities also include
mortgage-related securities issued or guaranteed by national, state or
provincial governmental instrumentalities, including quasi-governmental
agencies.

Put Bonds. A put bond (also referred to as a tender option or third party bond)
is a bond created by coupling an intermediate or long-term fixed rate bond with
an agreement giving the holder the option of tendering the bond to receive its
par value. As consideration for providing this tender option, the sponsor of the
bond (usually a bank, broker-dealer or other financial intermediary) receives
periodic fees that equal the difference between the bond's fixed coupon rate and
the rate (determined by a remarketing or similar agent) that would cause the
bond, coupled with the tender option, to trade at par. By paying the tender
offer fees, the Fund in effect holds a demand obligation that bears interest at
the prevailing short-term rate.

In selecting put bonds, the Advisor takes into consideration the
creditworthiness of the issuers of the underlying bonds and the creditworthiness
of the providers of the tender option features. A sponsor may withdraw the
tender option feature if the issuer of the underlying bond defaults on interest
or principal payments or the bond's rating is downgraded.

Bank Loans. The Fund may also invest in bank loans, which are typically senior
debt obligations of borrowers (issuers) and as such, are considered to hold a
senior position in the capital structure of the borrower. These may include
loans which hold the most senior position, that hold an equal ranking with other
senior debt, or loans that are, in the judgment of the Advisor, in the category
of senior debt of the borrower. This capital structure position generally gives
the holders of these loans a priority claim on some or all of the borrower's
assets in the event of a default. In most cases, these loans are either
partially or fully collateralized by the assets of a corporation, partnership,
limited liability company or other business entity, or by cash flow that the
Advisor believes has a market value at the time of acquisition that equals or
exceeds the principal amount of the loan. These loans are often issued in
connection with recapitalizations, acquisitions, leveraged buy-outs and
refinancings. It is important to note that Moody's and S&P may rate bank loans
higher than high yield bonds of the same issuer to reflect their more senior
position. The Fund may invest in both fixed- and floating-rate loans. In
addition, bank loans can trade either as an "assignment" or "participation."
When the Fund buys an assignment, it is essentially becoming a party to the bank
agreement. The vast majority of all trades are assignments and would therefore
generally represent the preponderance of bank loans held by the Fund. In certain
cases, the Fund may buy bank loans on a participation basis, if for example, the
Fund did not want to become party to the bank agreement. However, in all cases,
the Fund will not purchase bank loans where Deutsche Bank, or an affiliate,
serves as an agent bank.

Participations and assignments involve credit risk, interest rate risk,
liquidity risk, and the risk of being a lender. If the Fund purchases a
participation, it may only be able to enforce its rights through the lender, and
may assume the credit risk of both the lender and the borrower.

Investments in loans through direct assignment of a financial institution's
interests with respect to a loan may involve additional risks. For example, if a
loan is foreclosed, the purchaser could become part owner of any collateral, and
would bear the costs and liabilities associated with owning and disposing of the
collateral. In addition, it is at least conceivable that under emerging legal
theories of lender liability, a purchaser could be held liable as a co-lender.

In the case of loans administered by a bank or other financial institution that
acts as agent for all holders, if assets held by the agent for the benefit of a
purchaser are determined to be subject to the claims of the agent's general
creditors, the purchaser might incur certain costs and delays in realizing
payment on the loan or loan participation and could suffer a loss of principal
or interest.

In the case of loan participations where a bank or other lending institution
serves as financial intermediary between the Fund and the borrower, if the
participation does not shift to the Fund the direct debtor-creditor relationship
with the borrower, interpretations of the SEC require the Fund, in some
circumstances, to treat both the lending bank or other lending institution and
the borrower as issuers for purposes of the Fund's investment policies. Treating
a financial intermediary as an issuer of indebtedness may restrict the Fund's
ability to invest in indebtedness related to a single financial intermediary, or
a group of intermediaries engaged in the same industry, even if the underlying
borrowers represent many different companies and industries.

Variable and Floating Rate Instruments. The Fund may invest in variable or
floating rate instruments and variable rate demand instruments, including
variable amount master demand notes. These instruments will normally involve
industrial development or revenue bonds that provide that the rate of interest
is set as a specific percentage of a designated base rate (such as the prime
rate) at a major commercial bank. In addition, the interest rate on these
securities may be reset daily, weekly or on some other reset period and may have
a floor or ceiling on interest rate changes. The Fund can demand payment of the
obligation at all times or at stipulated dates on short notice (not to exceed 30
days) at par plus accrued interest. Generally, changes in interest rates will
have a smaller effect on the market value of these instruments than on the
market value of fixed income securities and, thus, may allow for less
opportunity for capital appreciation or depreciation.

Debt instruments purchased by the Fund may be structured to have variable or
floating interest rates. These instruments may include variable amount master
demand notes that permit the indebtedness to vary in addition to providing for
periodic adjustments in the interest rates. The Advisor will consider the
earning power, cash flows and other liquidity ratios of the issuers and
guarantors of such instruments and, if the instrument is subject to a demand
feature, will continuously monitor their financial ability to meet payment on
demand. Where necessary to ensure that a variable or floating rate instrument is
equivalent to the quality standards applicable to the Fund's fixed income
investments, the issuer's obligation to pay the principal of the instrument will
be backed by an unconditional bank letter or line of credit, guarantee or
commitment to lend. Any bank providing such a bank letter, line of credit,
guarantee or loan commitment will meet the Fund's investment quality standards
relating to investments in bank obligations. The Advisor will also continuously
monitor the creditworthiness of issuers of such instruments to determine whether
the Fund should continue to hold the investments.

Other variable and floating rate instruments include but are not limited to
corporates, ABS, CMBS, MBS, CMOs, government and agency securities.

The absence of an active secondary market for certain variable and floating rate
notes could make it difficult to dispose of the instruments, and the Fund could
suffer a loss if the issuer defaults or during periods in which the Fund is not
entitled to exercise its demand rights.

Variable and floating rate instruments held by the Fund will be subject to the
Fund's limitation on investments in illiquid securities when a reliable trading
market for the instruments does not exist and the Fund may not demand payment of
the principal amount of such instruments within seven days.

Warrants. The Fund may invest in warrants. Warrants generally entitle the holder
to buy a specified number of shares of common stock at a specified price, which
is often higher than the market price at the time of issuance, for a period of
years or in perpetuity. Warrants may be issued in units with other securities or
separately, and may be freely transferable and traded on exchanges. While the
market value of a warrant tends to be more volatile than that of the securities
underlying the warrant, the market value of a warrant may not necessarily change
with that of the underlying security. A warrant ceases to have value if it is
not exercised prior to any expiration date to which the warrant is subject. The
purchase of warrants involves a risk that the Fund could lose the purchase value
of a warrant if the right to subscribe to additional shares is not exercised
prior to the warrant's expiration. Also, the purchase of warrants involves the
risk that the effective price paid for the warrant added to the subscription
price of the related security may exceed the value of the subscribed security's
market price, such as when there is no movement in the level of the underlying
security.

Municipal Securities. The Fund may invest to a limited extent in municipal
securities. Municipal securities consist of bonds, notes and other instruments
issued by or on behalf of states, territories and possessions of the US
(including the District of Columbia) and their political subdivisions, agencies
or instrumentalities, the interest on which is exempt from regular federal
income tax (i.e., excluded from gross income for federal income tax purposes but
not necessarily exempt from the federal alternative minimum tax or from state
and local taxes). Municipal securities may also be issued on a taxable basis
(i.e., the interest on such securities is not exempt from regular federal income
tax).

Municipal securities are often issued to obtain funds for various public
purposes, including the construction of a wide range of public facilities such
as bridges, highways, housing, hospitals, mass transportation, schools, streets
and water and sewer works. Other public purposes for which municipal securities
may be issued include refunding outstanding obligations, obtaining funds for
general operating expenses, and obtaining funds to lend to other public
institutions and facilities. Municipal securities also include "private
activity" or industrial development bonds, which are issued by or on behalf of
public authorities to provide financing aid to acquire sites or construct or
equip facilities within a municipality for privately or publicly owned
corporations.

The two principal classifications of municipal securities are "general
obligations" and "revenue obligations". General obligations are secured by the
issuer's pledge of its full faith and credit for the payment of principal and
interest although the characteristics and enforcement of general obligations may
vary according to the law applicable to the particular issuer. Revenue
obligations, which include, but are not limited to, private activity bonds,
resource recovery bonds, certificates of participation and certain municipal
notes, are not backed by the credit and taxing authority of the issuer and are
payable solely from the revenues derived from a particular facility or class of
facilities or, in some cases, from the proceeds of a special excise or other
specific revenue source. Nevertheless, the obligations of the issuer may also be
backed by a letter of credit, guarantee or insurance. General obligations and
revenue obligations may be issued in a variety of forms, including commercial
paper, fixed, variable and floating rate securities, tender option bonds,
auction rate bonds and capital appreciation bonds.

In addition to general obligations and revenue obligations, there are a variety
of hybrid and special types of municipal securities. There are also numerous
differences in the credit backing of municipal securities both within and
between these two principal classifications.

For the purpose of applying the Fund's investment restrictions, the
identification of the issuer of a municipal security which is not a general
obligation is made by the Advisor based on the characteristics of the municipal
security, the most important of which is the source of funds for the payment of
principal and interest on such securities.

One or a small number of institutional investors such as the Fund may purchase
an entire issue of municipal securities. Thus, the issue may not be said to be
publicly offered. Unlike some securities that are not publicly offered, a
secondary market exists for many municipal securities that were not publicly
offered initially and such securities can be readily marketable.

The obligations of an issuer to pay the principal of and interest on a municipal
security are subject to the provisions of bankruptcy, insolvency and other laws
affecting the rights and remedies of creditors, such as the Federal Bankruptcy
Act, and laws, if any, that may be enacted by Congress or state legislatures
extending the time for payment of principal or interest or imposing other
constraints upon the enforcement of such obligations. There is also the
possibility that, because of litigation or other conditions, the power or
ability of the issuer to pay when due principal of or interest on a municipal
security may be materially affected.

Municipal Leases, Certificates of Participation and other Participation
Interests. A municipal lease is an obligation in the form of a lease or
installment purchase contract that is issued by a state or local government to
acquire equipment and facilities. Income from such obligations is generally
exempt from state and local taxes in the state of issuance (as well as regular
federal income tax). Municipal leases frequently involve special risks not
normally associated with general obligation or revenue bonds. Leases and
installment purchase or conditional sale contracts (which normally provide for
title to the leased asset to pass eventually to the governmental issuer) have
evolved as a means for governmental issuers to acquire property and equipment
without meeting the constitutional and statutory requirements for the issuance
of debt. The debt issuance limitations are deemed to be inapplicable because of
the inclusion in many leases or contracts of `non-appropriation' clauses that
relieve the governmental issuer of any obligation to make future payments under
the lease or contract unless money is appropriated for such purpose by the
appropriate legislative body on a yearly or other periodic basis. Thus, the
Fund's investment in municipal leases will be subject to the special risk that
the governmental issuer may not appropriate funds for lease payments.

In addition, such leases or contracts may be subject to the temporary abatement
of payments in the event the issuer is prevented from maintaining occupancy of
the leased premises or utilizing the leased equipment. Although the obligations
may be secured by the leased equipment or facilities, the disposition of the
property in the event of nonappropriation or foreclosure might prove difficult,
time consuming and costly, and result in an unsatisfactory or delayed recoupment
of the Fund's original investment.

Certificates of participation represent undivided interests in municipal leases,
installment purchase contracts or other instruments. The certificates are
typically issued by a trust or other entity that has received an assignment of
the payments to be made by the state or political subdivision under such leases
or installment purchase contracts.

Certain municipal lease obligations and certificates of participation may be
deemed illiquid for the purpose of the Fund's limitations on investments in
illiquid securities. Other municipal lease obligations and certificates of
participation acquired by the Fund may be determined by the Advisor, pursuant to
guidelines adopted by the Trustees of the Trust, to be liquid securities for the
purpose of the Fund's limitation on investments in illiquid securities. In
determining the liquidity of municipal lease obligations and certificates of
participation, the Advisor will consider a variety of factors including: (1) the
willingness of dealers to bid for the security; (2) the number of dealers
willing to purchase or sell the obligation and the number of other potential
buyers; (3) the frequency of trades or quotes for the obligation; and (4) the
nature of the marketplace trades. In addition, the Advisor will consider factors
unique to particular lease obligations and certificates of participation
affecting the marketability thereof. These include the general creditworthiness
of the issuer, the importance to the issuer of the property covered by the lease
and the likelihood that the marketability of the obligation will be maintained
throughout the time the obligation is held by the Fund. The Fund may not invest
more than 5% of its net assets in municipal leases.

The Fund may purchase participations in municipal securities held by a
commercial bank or other financial institution. Such participations provide the
Fund with the right to a pro rata undivided interest in the underlying municipal
securities. In addition, such participations generally provide the Fund with the
right to demand payment, on not more than seven days notice, of all or any part
of the Fund's participation interest in the underlying municipal security, plus
accrued interest.

Municipal Notes. Municipal securities in the form of notes generally are used to
provide for short-term capital needs, in anticipation of an issuer's receipt of
other revenues or financing, and typically have maturities of up to three years.
Such instruments may include Tax Anticipation Notes, Revenue Anticipation Notes,
Bond Anticipation Notes, Tax and Revenue Anticipation Notes and Construction
Loan Notes. Tax Anticipation Notes are issued to finance the working capital
needs of governments. Generally, they are issued in anticipation of various tax
revenues, such as income, sales, property, use and business taxes, and are
payable from these specific future taxes. Revenue Anticipation Notes are issued
in expectation of receipt of other kinds of revenue, such as federal revenues
available under federal revenue sharing programs. Bond Anticipation Notes are
issued to provide interim financing until long-term bond financing can be
arranged. In most cases, the long-term bonds then provide the funds needed for
repayment of the notes. Tax and Revenue Anticipation Notes combine the funding
sources of both Tax Anticipation Notes and Revenue Anticipation Notes.
Construction Loan Notes are sold to provide construction financing. These notes
are secured by mortgage notes insured by the Federal Housing Authority; however,
the proceeds from the insurance may be less than the economic equivalent of the
payment of principal and interest on the mortgage note if there has been a
default. The obligations of an issuer of municipal notes are generally secured
by the anticipated revenues from taxes, grants or bond financing. An investment
in such instruments, however, presents a risk that the anticipated revenues will
not be received or that such revenues will be insufficient to satisfy the
issuer's payment obligations under the notes or that refinancing will be
otherwise unavailable.

Tax-Exempt Commercial Paper. Issues of tax-exempt commercial paper typically
represent short-term, unsecured, negotiable promissory notes. These obligations
are issued by state and local governments and their agencies to finance working
capital needs of municipalities or to provide interim construction financing and
are paid from general revenues of municipalities or are refinanced with
long-term debt. In most cases, tax-exempt commercial paper is backed by letters
of credit, lending agreements, note repurchase agreements or other credit
facility agreements offered by banks or other institutions.

Pre-Refunded Municipal Securities. The principal of and interest on municipal
securities that have been pre-refunded are no longer paid from the original
revenue source for the securities. Instead, after pre-refunding the source of
such payments of the principal of and interest on these securities are typically
paid from an escrow fund consisting of obligations issued or guaranteed by the
US Government. The assets in the escrow fund are derived from the proceeds of
refunding bonds issued by the same issuer as the pre-refunded municipal
securities. Issuers of municipal securities use this advance refunding technique
to obtain more favorable terms with respect to securities that are not yet
subject to call or redemption by the issuer. For example, advance refunding
enables an issuer to refinance debt at lower market interest rates, restructure
debt to improve cash flow or eliminate restrictive covenants in the indenture or
other governing instrument for the pre-refunded municipal securities. However,
except for a change in the revenue source from which principal and interest
payments are made, the pre-refunded municipal securities remain outstanding on
their original terms until they mature or are redeemed by the issuer.
Pre-refunded municipal securities are usually purchased at a price which
represents a premium over their face value.

Tender Option Bonds. A tender option bond is a municipal security (generally
held pursuant to a custodial arrangement) having a relatively long maturity and
bearing interest at a fixed rate substantially higher than prevailing short-term
tax-exempt rates. The bond is typically issued in conjunction with the agreement
of a third party, such as a bank, broker-dealer or other financial institution,
pursuant to which such institution grants the security holders the option, at
periodic intervals, to tender their securities to the institution and receive
the face value thereof.

As consideration for providing the option, the financial institution receives
periodic fees equal to the difference between the bond's fixed coupon rate and
the rate, as determined by a remarketing or similar agent at or near the
commencement of such period, that would cause the securities, coupled with the
tender option, to trade at par on the date of such determination. Thus, after
payment of this fee, the security holder effectively holds a demand obligation
that bears interest at the prevailing short-term tax-exempt rate.

However, an institution will not be obligated to accept tendered bonds in the
event of certain defaults or a significant downgrade in the credit rating
assigned to the issuer of the bond. The liquidity of a tender option bond is a
function of the credit quality of both the bond issuer and the financial
institution providing liquidity. Tender option bonds are deemed to be liquid
unless, in the opinion of the Advisor, the credit quality of the bond issuer and
the financial institution is deemed, in light of the Fund's credit quality
requirements, to be inadequate. The Fund intends to invest only in tender option
bonds the interest on which will, in the opinion of bond counsel, counsel for
the issuer of interests therein or counsel selected by the Advisor, be exempt
from regular federal income tax. However, because there can be no assurance that
the Internal Revenue Service (the "IRS") will agree with such counsel's opinion
in any particular case, there is a risk that the Fund will not be considered the
owner of such tender option bonds and thus will not be entitled to treat such
interest as exempt from such tax. Additionally, the federal income tax treatment
of certain other aspects of these investments, including the proper tax
treatment of tender option bonds and the associated fees, in relation to various
regulated investment company tax provisions is unclear. The Fund intends to
manage its portfolio in a manner designed to eliminate or minimize any adverse
impact from the tax rules applicable to these investments.

Auction Rate Securities. Auction rate securities in which the Fund may invest
consist of auction rate municipal securities and auction rate preferred
securities issued by closed-end investment companies that invest primarily in
municipal securities. Provided that the auction mechanism is successful, auction
rate securities usually permit the holder to sell the securities in an auction
at par value at specified intervals. The dividend is reset by "Dutch" auction in
which bids are made by broker-dealers and other institutions for a certain
amount of securities at a specified minimum yield. The dividend rate set by the
auction is the lowest interest or dividend rate that covers all securities
offered for sale. While this process is designed to permit auction rate
securities to be traded at par value, there is the risk that an auction will
fail due to insufficient demand for the securities.

Dividends on auction rate preferred securities issued by a closed-end fund may
be designated as exempt from federal income tax to the extent they are
attributable to tax-exempt interest income earned by the fund on the securities
in its portfolio and distributed to holders of the preferred securities,
provided that the preferred securities are treated as equity securities for
federal income tax purposes and the closed-end fund complies with certain
requirements under the Internal Revenue Code of 1986, as amended (the "Code").

The Fund's investments in auction rate preferred securities of closed-end funds
are subject to limitations on investments in other US registered investment
companies, which limitations are prescribed by the Investment Company Act of
1940, as amended (the "1940 Act"). These limitations include prohibitions
against acquiring more than 3% of the voting securities of any other such
investment company, and investing more than 5% of the Fund's assets in
securities of any one such investment company or more than 10% of its assets in
securities of all such investment companies.

Private Activity Bonds. Certain types of municipal securities, generally
referred to as industrial development bonds (and referred to under current tax
law as private activity bonds), are issued by or on behalf of public authorities
to obtain funds for privately-operated housing facilities, airport, mass transit
or port facilities, sewage disposal, solid waste disposal or hazardous waste
treatment or disposal facilities and certain local facilities for water supply,
gas or electricity. Other types of industrial development bonds, the proceeds of
which are used for the construction, equipment, repair or improvement of
privately operated industrial or commercial facilities, may constitute municipal
securities, although the current federal tax laws place substantial limitations
on the size of such issues. The payment of the principal and interest on such
bonds is generally dependent solely on the ability of the facility's user to
meet its financial obligations and the pledge, if any, of real and personal
property so financed as security for such payment. The interest from certain
private activity bonds owned by the Fund (including the Fund's distributions
attributable to such interest) may be a preference item for purposes of the
alternative minimum tax.

Fixed Income Security Risk. Fixed income securities generally expose the Fund to
four types of risk: (1) interest rate risk (the potential for fluctuations in
bond prices due to changing interest rates); (2) income risk (the potential for
a decline in the Fund's income due to falling market interest rates); (3) credit
risk (the possibility that a bond issuer will fail to make timely payments of
either interest or principal to the Fund); and (4) prepayment risk or call risk
(the likelihood that, during a period of falling interest rates, securities with
high stated interest rates will be prepaid, or "called" prior to maturity,
requiring the Fund to invest the proceeds at generally lower interest rates).

Impact of Sub-Prime Mortgage Market. The Fund may invest in mortgage-backed,
asset-backed and other fixed-income securities whose value and liquidity may be
adversely affected by the critical downturn in the sub-prime mortgage lending
market in the US. Sub-prime loans, which, have higher interest rates, are made
to borrowers with low credit ratings or other factors that increase the risk of
default. Concerns about widespread defaults on sub-prime loans have also created
heightened volatility and turmoil in the general credit markets. As a result,
the Fund's investments in certain fixed-income securities may decline in value,
their market value may be more difficult to determine, and the Fund may have
more difficulty disposing of them.

Foreign Securities Risk. The Fund may invest a portion of its assets in US
dollar-denominated and non-US dollar-denominated debt securities of foreign
companies. Investing in the securities of foreign companies involves more risks
than investing in securities of US companies. Their value is subject to economic
and political developments in the countries where the companies operate and to
changes in foreign currency values. Values may also be affected by foreign tax
laws, changes in foreign economic or monetary policies, exchange control
regulations and regulations involving prohibitions on the repatriation of
foreign currencies.

In general, less information may be available about foreign companies than about
US companies, and foreign companies are generally not subject to the same
accounting, auditing and financial reporting standards as are US companies.
Foreign securities markets may be less liquid and subject to less regulation
than the US securities markets. The costs of investing outside the United States
frequently are higher than those in the United States. These costs include
relatively higher brokerage commissions and foreign custody expenses.

Mortgage-Backed and Asset-Backed Securities

Mortgage-Backed Securities. The Fund may invest in mortgage-backed securities. A
mortgage-backed security consists of a pool of mortgage loans evidenced by
promissory notes secured by first mortgages or first deeds of trust or other
similar security instruments creating a first lien on owner-occupied and
non-owner-occupied one-unit to four-unit residential properties, multifamily
(i.e., five or more units) properties, agricultural properties, commercial
properties and mixed use properties.

The investment characteristics of adjustable and fixed rate mortgage-backed
securities differ from those of traditional fixed-income securities. The major
differences include the payment of interest and principal on mortgage-backed
securities on a more frequent (usually monthly) schedule, and the possibility
that principal may be prepaid at any time due to prepayments on the underlying
mortgage loans or other assets. These differences can result in significantly
greater price and yield volatility than is the case with traditional
fixed-income securities. As a result, if the Fund purchases mortgage-backed
securities at a premium, a faster-than-expected prepayment rate will decrease
both the market value and the yield to maturity from those which were
anticipated. A prepayment rate that is slower than expected will have the
opposite effect of increasing yield to maturity and market value. Conversely, if
the Fund purchases mortgage-backed securities at a discount,
faster-than-expected prepayments will increase, while slower-than-expected
prepayments will decrease, yield to maturity and market values. To the extent
that the Fund invests in mortgage-backed securities, the Advisor may seek to
manage these potential risks by investing in a variety of mortgage-backed
securities and by using certain hedging techniques.

Mortgage-backed securities may be issued or guaranteed by GNMA, Fannie Mae and
FHLMC or Freddie Mac, but also may be issued or guaranteed by other issuers,
including private companies. GNMA is a government-owned corporation that is an
agency of the U.S. Department of Housing and Urban Development. It guarantees,
with the full faith and credit of the United States, full and timely payment of
all monthly principal and interest on its mortgage-backed securities. Until
recently, FNMA and FHLMC were government-sponsored corporations owned entirely
by private stockholders. Both issue mortgage-related securities that contain
guarantees as to timely payment of interest and principal but that are not
backed by the full faith and credit of the U.S. government. The value of the
companies' securities fell sharply in 2008 due to concerns that the firms did
not have sufficient capital to offset losses. In mid-2008, the U.S. Treasury was
authorized to increase the size of home loans that FNMA and FHLMC could purchase
in certain residential areas and, until 2009, to lend FNMA and FHLMC emergency
funds and to purchase the companies' stock. More recently, in September 2008,
the U.S. Treasury announced that FNMA and FHLMC had been placed in
conservatorship by the Federal Housing Finance Agency ("FHFA"), a newly created
independent regulator. In addition to placing the companies in conservatorship,
the U.S. Treasury announced three additional steps that it intended to take with
respect to FNMA and FHLMC. First, the U.S. Treasury has entered into preferred
stock purchase agreements ("PSPAs") under which, if the FHFA determines that
FNMA's or FHLMC's liabilities have exceeded its assets under generally accepted
accounting principles, the U.S. Treasury will contribute cash capital to the
company in an amount equal to the difference between liabilities and assets. The
PSPAs are designed to provide protection to the senior and subordinated debt and
the mortgage-backed securities issued by FNMA and FHLMC. Second, the U.S.
Treasury established a new secured lending credit facility that is available to
FNMA and FHLMC until December 2009. Third, the U.S. Treasury initiated a
temporary program to purchase FNMA and FHLMC mortgage-backed securities, which
is expected to continue until December 2009. No assurance can be given that the
U.S. Treasury initiatives discussed above with respect to the debt and
mortgage-backed securities issued by FNMA and FHLMC will be successful.

Asset-Backed Securities. The Fund may invest in securities generally referred to
as asset-backed securities. Asset-backed securities are secured by and payable
from, or directly or indirectly represent undivided fractional interests in,
pools of corporate, consumer and/or commercial loans held in a trust.
Asset-backed securities may provide periodic payments that consist of interest
and/or principal payments. Consequently, the life of an asset-backed security
can vary with the prepayment and loss experience of the underlying assets.
Payments of principal and interest are typically supported by some form of
credit enhancement, such as a letter of credit, surety bond, limited guarantee
or senior/subordination. The degree of credit enhancement varies, but generally
amounts to only a fraction of the asset-backed security's par value until
exhausted. If the credit enhancement is exhausted, certificate holders may
experience losses or delays in payment if the required payments of principal and
interest are not made to the trust with respect to the underlying loans. The
value of the securities also may fluctuate because of changes in the market's
perception of creditworthiness of the servicing agent for the loan pool, the
originator of the loans or the financial institution providing the credit
enhancement. Asset-backed securities are ultimately dependent upon payment of
business, government, corporate and consumer loans, leases, etc., and the
certificate holder generally has no recourse against the entity that originated
the loans.

Asset-backed securities have structural characteristics similar to
mortgage-backed securities. Asset-backed securities include assets such as (but
not limited to) motor vehicle installment sale contracts, other installment sale
contracts, home equity loans, leases of various types of real and personal
property, and receivables from revolving credit (credit card) agreements. Such
assets are securitized through the use of trusts or special purpose
corporations. Payments or distributions of principal and interest on
asset-backed securities may be guaranteed up to certain amounts and for a
certain time period by a letter of credit or a pool insurance policy issued by a
financial institution unaffiliated with the issuer, or other credit enhancements
may be present.

Asset-backed securities present certain additional risks that are not presented
by mortgage-backed securities. Primarily, these securities do not have the
benefit of the same type of security interest in the related collateral. Credit
card receivables are generally unsecured, and the debtors are entitled to the
protection of a number of state and federal consumer credit laws, many of which
give such debtors the right to avoid payment of certain amounts owed on the
credit cards, thereby reducing the balance due. Most issuers of automobile
receivables permit the servicer to retain possession of the underlying
obligations. If the servicer were to sell these obligations to another party,
there is a risk that the purchaser would acquire an interest superior to that of
the holders of the related automobile receivables. In addition, because of the
large number of vehicles involved in a typical issuance and technical
requirements under state laws, the trustee for the holders of the automobile
receivables may not have a proper security interest in all of the obligations
backing such receivables. Therefore, there is the possibility that recoveries on
repossessed collateral may not, in some cases, be available to support payments
on these securities.

The market for privately issued asset-backed securities is smaller and less
liquid than the market for US government mortgage-backed securities. The
asset-backed securities in which the Fund may invest are limited to those which
usually are readily marketable, dollar-denominated and rated BBB category or
higher by S&P or Baa category or higher by Moody's.

The yield characteristics of the mortgage- and asset-backed securities in which
the Fund may invest differ from those of traditional debt securities. Among the
major differences are that interest and principal payments are made more
frequently on the mortgage- and asset-backed securities (usually monthly) and
that principal may be prepaid at any time because the underlying assets
generally may be prepaid at any time. As a result, if the Fund purchases these
securities at a premium, a prepayment rate that is faster than expected will
reduce their yield, while a prepayment rate that is slower than expected will
have the opposite effect of increasing yield. Conversely, if the Fund purchases
these securities at a discount, faster-than-expected prepayments will increase,
while slower-than-expected prepayments will reduce, the yield on these
securities. Amounts available for reinvestment by the Fund are likely to be
greater during a period of declining interest rates and, as a result, are likely
to be reinvested at lower interest rates than during a period of rising interest
rates.

Mortgage-Backed Securities and Asset-Backed Securities -- Types of Credit
Support. Mortgage-backed securities and asset-backed securities are often backed
by a pool of assets representing the obligations of a number of different
parties. To lessen the effect of failure by obligors on underlying assets to
make payments, such securities may contain elements of credit support. Such
credit support falls into two categories: (1) liquidity protection and (2)
protection against losses resulting from ultimate default by an obligor on the
underlying assets. Liquidity protection refers to the provision of advances,
generally by the entity administering the pool of assets, to ensure that the
pass-through of payments due on the underlying pool occurs in a timely fashion.
Protection against losses resulting from ultimate default enhances the
likelihood of ultimate payment of the obligations on at least a portion of the
assets in the pool. Such protection may be provided through guarantees,
insurance policies or letters of credit obtained by the issuer or sponsor from
third parties; through various means of structuring the transaction; or through
a combination of such approaches. The Fund may pay any additional fees for such
credit support, although the existence of credit support may increase the price
of a security.

The ratings of mortgage-backed securities and asset-backed securities for which
third-party credit enhancement provides liquidity protection or protection
against losses from default are generally dependent upon the continued
creditworthiness of the provider of the credit enhancement. The ratings of such
securities could be subject to reduction in the event of deterioration in the
creditworthiness of the credit enhancement provider even in cases where the
delinquency and loss experience on the underlying pool of assets is better than
expected.

Examples of credit support arising out of the structure of the transaction
include "senior-subordinated securities" (multiple class securities with one or
more classes subordinate to other classes as to the payment of principal thereof
and interest thereon, with the result that defaults on the underlying assets are
borne first by the holders of the subordinated class), creation of "reserve
funds" (where cash or investments, sometimes funded from a portion of the
payments on the underlying assets, are held in reserve against future losses)
and "over-collateralization" (where the scheduled payments on, or the principal
amount of, the underlying assets exceed those required to make payment of the
securities and pay any servicing or other fees). The degree of credit support
provided for each issue is generally based on historical information with
respect to the level of credit risk associated with the underlying assets.
Delinquency or loss in excess of that which is anticipated could adversely
affect the return on an investment in such a security.

Government Guaranteed Mortgage-Backed Securities. The Fund's investments in
mortgage-backed securities may include securities issued or guaranteed by the US
government or one of its agencies, authorities, instrumentalities or sponsored
enterprises, such as Ginnie Mae, Fannie Mae and Freddie Mac. There are several
types of guaranteed mortgage-backed securities currently available, including
guaranteed mortgage pass-through certificates and multiple class securities,
which include guaranteed Real Estate Mortgage Investment Conduit Certificates
("REMIC Certificates"), collateralized mortgage obligations and stripped
mortgage-backed securities. The Fund is permitted to invest in other types of
mortgage-backed securities that may be available in the future to the extent
consistent with its investment policies and objective.

Ginnie Mae Certificates. Ginnie Mae is a wholly owned corporate instrumentality
of the United States within the Department of Housing and Urban Development. The
National Housing Act of 1934, as amended (the "Housing Act"), authorizes Ginnie
Mae to guarantee the timely payment of the principal of and interest on
certificates that are based on and backed by a pool of mortgage loans insured by
the Federal Housing Administration under the Housing Act, or Title V of the
Housing Act of 1949 ("FHA Loans"), or guaranteed by the Department of Veterans
Affairs under the Servicemen's Readjustment Act of 1944, as amended ("VA
Loans"), or by pools of other eligible mortgage loans. The Housing Act provides
that the full faith and credit of the US government is pledged to the payment of
all amounts that may be required to be paid under any Ginnie Mae guaranty. In
order to meet its obligations under such guaranty, Ginnie Mae is authorized to
borrow from the US Treasury with no limitations as to amount.

The Ginnie Mae Certificates in which the Fund invests will represent a pro rata
interest in one or more pools of the following types of mortgage loans: (1)
fixed-rate level payment mortgage loans; (2) fixed-rate graduated payment
mortgage loans; (3) fixed-rate growing equity mortgage loans; (4) fixed-rate
mortgage loans secured by manufactured (mobile) homes; (5) mortgage loans on
multifamily residential properties under construction; (6) mortgage loans on
completed multifamily projects; (7) fixed-rate mortgage loans as to which
escrowed funds are used to reduce the borrower's monthly payments during the
early years of the mortgage loans ("buy down" mortgage loans); (8) mortgage
loans that provide for adjustments in payments based on periodic changes in
interest rates or in other payment terms of the mortgage loans; and (9)
mortgage-backed serial notes.

Fannie Mae Certificates. Fannie Mae is a federally chartered corporation
(currently in conservatorship (see additional information above)) organized and
existing under the Federal National Mortgage Association Charter Act of 1938.
The obligations of Fannie Mae are obligations solely of Fannie Mae and are not
backed by the full faith and credit of the US government.

Each Fannie Mae Certificate will represent a pro rata interest in one or more
pools of FHA Loans, VA Loans or conventional mortgage loans (i.e., mortgage
loans that are not insured or guaranteed by any governmental agency) of the
following types: (1) fixed-rate level payment mortgage loans; (2) fixed-rate
growing equity mortgage loans; (3) fixed-rate graduated payment mortgage loans;
(4) variable rate mortgage loans; (5) other adjustable rate mortgage loans; and
(6) fixed-rate and adjustable mortgage loans secured by multifamily projects.

Freddie Mac Certificates. Freddie Mac is a federally chartered corporation
(currently in conservatorship (see additional information above)) of the United
States created pursuant to the Emergency Home Finance Act of 1970, as amended
(the "FHLMC Act"). The obligations of Freddie Mac are obligations solely of
Freddie Mac and are not backed by the full faith and credit of the US
government.

Freddie Mac Certificates represent a pro rata interest in a group of mortgage
loans (a "Freddie Mac Certificate group") purchased by Freddie Mac. The mortgage
loans underlying the Freddie Mac Certificates will consist of fixed-rate or
adjustable rate mortgage loans with original terms to maturity of between ten
and thirty years, substantially all of which are secured by first liens on one-
to four-family residential properties or multifamily projects. Each mortgage
loan must meet the applicable standards set forth in the FHLMC Act. A Freddie
Mac Certificate group may include whole loans, participating interests in whole
loans and undivided interests in whole loans and participations comprising
another Freddie Mac Certificate group.

Multiple Class Mortgage-Backed Securities. The Fund may invest in multiple class
mortgage-backed securities including collateralized mortgage obligations
("CMOs") and REMIC Certificates. These securities may be issued by US government
agencies and instrumentalities such as Fannie Mae or Freddie Mac or by trusts
formed by private originators of, or investors in, mortgage loans, including
savings and loan associations, mortgage bankers, commercial banks, insurance
companies, investment banks and special purpose subsidiaries of the foregoing.
In general, CMOs are debt obligations of a legal entity that are collateralized
by a pool of mortgage loans or mortgage-backed securities the payments on which
are used to make payments on the CMOs or multiple class mortgage-backed
securities. REMIC Certificates represent beneficial ownership interests in a
REMIC trust, generally consisting of mortgage loans or Fannie Mae, Freddie Mac
or Ginnie Mae guaranteed mortgage-backed securities (the "Mortgage Assets"). The
obligations of Fannie Mae or Freddie Mac under their respective guaranty of the
REMIC Certificates are obligations solely of Fannie Mae or Freddie Mac,
respectively. Although investors may purchase beneficial interests in REMICs,
which are known as "regular" interests or "residual" interests, the Fund does
not intend to purchase such residual interests in REMICs.

Fannie Mae REMIC Certificates are issued and guaranteed as to timely
distribution of principal and interest by Fannie Mae. These certificates are
obligations solely of Fannie Mae and are not backed by the full faith and credit
of the US government. In addition, Fannie Mae will be obligated to distribute
the principal balance of each class of REMIC Certificates in full, whether or
not sufficient funds are otherwise available.

Freddie Mac guarantees the timely payment of interest on Freddie Mac REMIC
Certificates and also guarantees the payment of principal as payments are
required to be made on the underlying mortgage participation certificates
("PCs"). These certificates are obligations solely of Freddie Mac and are not
backed by the full faith and credit of the US government. PCs represent
undivided interests in specified level payment residential mortgages or
participations therein purchased by Freddie Mac and placed in a PC pool. With
respect to principal payments on PCs, Freddie Mac generally guarantees ultimate
collection of all principal of the related mortgage loans without offset or
deduction. Freddie Mac also guarantees timely payment of principal of certain
PCs.

CMOs and REMIC Certificates are issued in multiple classes. Each class of CMOs
or REMIC Certificates, often referred to as a "tranche," is issued at a specific
adjustable or fixed interest rate and must be fully retired no later than its
final distribution date. Principal prepayments on the underlying mortgage loans
or the Mortgage Assets underlying the CMOs or REMIC Certificates may cause some
or all of the classes of CMOs or REMIC Certificates to be retired substantially
earlier than their final distribution dates. Generally, interest is paid or
accrues on all classes of CMOs or REMIC Certificates on a monthly basis.

The principal of and interest on the Mortgage Assets may be allocated among the
several tranches in various ways. In certain structures (known as "sequential
pay" CMOs or REMIC Certificates), payments of principal, including any principal
prepayments, on the Mortgage Assets generally are applied to the classes of CMOs
or REMIC Certificates in the order of their respective final distribution dates.
Thus, no payment of principal will be made on any class of sequential pay CMOs
or REMIC Certificates until all other classes having an earlier final
distribution date have been paid in full. Additional structures of CMOs and
REMIC Certificates include, among others, "parallel pay" CMOs and REMIC
Certificates. Parallel pay CMOs or REMIC Certificates are those which are
structured to apply principal payments and prepayments of the Mortgage Assets to
two or more classes concurrently on a proportionate or disproportionate basis.
These simultaneous payments are taken into account in calculating the final
distribution date of each class.

A wide variety of REMIC Certificates may be issued in parallel pay or sequential
pay structures. These securities include accrual certificates (also known as
"Z-Bonds"), which only accrue interest at a specified rate until all other
certificates having an earlier final distribution date have been retired and are
converted thereafter to an interest-paying security, and planned amortization
class ("PAC") certificates, which are parallel pay REMIC Certificates that
generally require that specified amounts of principal be applied on each payment
date to one or more classes or REMIC Certificates (the "PAC Certificates"), even
though all other principal payments and prepayments of the Mortgage Assets are
then required to be applied to one or more other classes of the PAC
Certificates. The scheduled principal payments for the PAC Certificates
generally have the highest priority on each payment date after interest due has
been paid to all classes entitled to receive interest currently. Shortfalls, if
any, are added to the amount payable on the next payment date. The PAC
Certificate payment schedule is taken into account in calculating the final
distribution date of each class of PAC. In order to create PAC tranches, one or
more tranches generally must be created that absorb most of the volatility in
the underlying Mortgage Assets. These tranches tend to have market prices and
yields that are much more volatile than other PAC classes.

Stripped Mortgage-Backed Securities. The Fund may purchase stripped
mortgage-backed securities ("SMBS"), which are derivative multiclass mortgage
securities. Although the market for such securities is increasingly liquid,
certain SMBS may not be readily marketable and will be considered illiquid for
purposes of the Fund's limitation on investments in illiquid securities. The
market value of the class consisting entirely of principal payments generally is
highly volatile in response to changes in interest rates. The yields on a class
of SMBS that receives all or most of the interest from the Mortgage Assets are
generally higher than prevailing market yields on other mortgage-backed
securities because their cash flow patterns are more volatile and there is a
greater risk that the initial investment will not be fully recouped.

Adjustable Rate Mortgages-Interest Rate Indices. Adjustable rate mortgages in
which the Fund invests may be adjusted on the basis of one of several indices.
The One Year Treasury Index is the figure derived from the average weekly quoted
yield on US Treasury Securities adjusted to a constant maturity of one year. The
Cost of Funds Index reflects the monthly weighted average cost of funds of
savings and loan associations and savings banks whose home offices are located
in Arizona, California and Nevada (the "FHLB Eleventh District") that are member
institutions of the Federal Home Loan Bank of San Francisco (the "FHLB of San
Francisco"), as computed from statistics tabulated and published by the FHLB of
San Francisco. The FHLB of San Francisco normally announces the Cost of Funds
Index on the last working day of the month following the month in which the cost
of funds was incurred.

A number of factors affect the performance of the Cost of Funds Index and may
cause the Cost of Funds Index to move in a manner different from indices based
upon specific interest rates, such as the One Year Treasury Index. Because of
the various origination dates and maturities of the liabilities of members of
the FHLB Eleventh District upon which the Cost of Funds Index is based, among
other things, the Cost of Funds Index may not reflect at any given time the
average prevailing market interest rates on new liabilities of similar
maturities. There can be no assurance that the Cost of Funds Index will
necessarily move in the same direction or at the same rate as prevailing
interest rates since as longer term deposits or borrowings mature and are
renewed at market interest rates, the Cost of Funds Index will rise or fall
depending upon the differential between the prior and the new rates on such
deposits and borrowings. In addition, dislocations in the thrift industry in
recent years have caused and may continue to cause the cost of funds of thrift
institutions to change for reasons unrelated to changes in general interest rate
levels. Furthermore, any movement in the Cost of Funds Index as compared to
other indices based upon specific interest rates may be affected by changes
instituted by the FHLB of San Francisco in the method used to calculate the Cost
of Funds Index. To the extent that the Cost of Funds Index may reflect interest
changes on a more delayed basis than other indices, in a period of rising
interest rates, any increase may produce a higher yield later than would be
produced by such other indices, and in a period of declining interest rates, the
Cost of Funds Index may remain higher than other market interest rates, which
may result in a higher level of principal prepayments on mortgage loans which
adjust in accordance with the Cost of Funds Index than mortgage loans which
adjust in accordance with other indices.

LIBOR, the London interbank offered rate, is the interest rate that the most
creditworthy international banks dealing in US dollar-denominated deposits and
loans charge each other for large dollar-denominated loans. LIBOR is also
usually the base rate for large dollar-denominated loans in the international
market. LIBOR is generally quoted for loans having rate adjustments at one,
three, six or twelve month intervals.

Zero Coupon Securities and Deferred Interest Bonds. The Fund may invest in zero
coupon securities that are "stripped" US Treasury notes and bonds and in
deferred interest bonds. Zero coupon securities are the separate income or
principal components of a debt instrument. Zero coupon and deferred interest
bonds are debt obligations which are issued at a significant discount from face
value. The original discount approximates the total amount of interest the bonds
will accrue and compound over the period until maturity or the first interest
accrual date at a rate of interest reflecting the market rate of the security at
the time of issuance. Zero coupon securities are redeemed at face value at their
maturity date without interim cash payments of interest or principal. The amount
of this discount is accrued over the life of the security, and the accrual
constitutes the income earned on the security for both accounting and tax
purposes. Because of these features, the market prices of zero coupon securities
are generally more volatile than the market prices of securities that have
similar maturity but that pay interest periodically.

While zero coupon bonds do not require the periodic payment of interest,
deferred interest bonds generally provide for a period of delay before the
regular payment of interest begins. Although this period of delay is different
for each deferred interest bond, a typical period is approximately one-third of
the bond's term to maturity. Such investments benefit the issuer by mitigating
its initial need for cash to meet debt service, but some also provide a higher
rate of return to attract investors who are willing to defer receipt of such
cash.

The Fund will accrue income on such investments for tax and accounting purposes,
as required, which is distributable to shareholders and which, because no cash
is generally received at the time of accrual, may require the liquidation of
other portfolio securities to satisfy the Fund's distribution obligations. See
"Taxes."

Illiquid Securities. Historically, illiquid securities have included securities
subject to contractual or legal restrictions on resale because they have not
been registered under the Securities Act of 1933, as amended (the "1933 Act"),
securities which are otherwise not readily marketable and repurchase agreements
having a maturity of longer than seven days. Securities which have not been
registered under the 1933 Act are referred to as private placements or
restricted securities and are purchased directly from the issuer or in the
secondary market. Non-publicly traded securities (including Rule 144A
Securities) may involve a high degree of business and financial risk and may
result in substantial losses. These securities may be less liquid than publicly
traded securities, and it may take longer to liquidate these positions than
would be the case for publicly traded securities. Companies whose securities are
not publicly traded may not be subject to the disclosure and other investor
protection requirements applicable to companies whose securities are publicly
traded. Limitations on resale may have an adverse effect on the marketability of
portfolio securities and a mutual fund might be unable to dispose of restricted
or other illiquid securities promptly or at reasonable prices and might thereby
experience difficulty satisfying redemptions within seven days. An investment in
illiquid securities is subject to the risk that should the Fund desire to sell
any of these securities when a ready buyer is not available at a price that is
deemed to be representative of their value, the value of the Fund's net assets
could be adversely affected.

Mutual funds do not typically hold a significant amount of these restricted or
other illiquid securities because of the potential for delays on resale and
uncertainty in valuation. A mutual fund might also have to register such
restricted securities in order to dispose of them, resulting in additional
expense and delay. Adverse market conditions could impede such a public offering
of securities.

A large institutional market has developed for certain securities that are not
registered under the 1933 Act, including but not limited to repurchase
agreements, commercial paper, non-US securities, municipal securities and
corporate bonds and notes. Institutional investors depend on an efficient
institutional market in which the unregistered security can be readily resold or
on an issuer's ability to honor a demand for repayment. The fact that there are
contractual or legal restrictions on resale of such investments to the general
public or to certain institutions may not be indicative of their liquidity.

The SEC has adopted Rule 144A, which allows a broader institutional trading
market for securities otherwise subject to restriction on their resale to the
general public. Rule 144A establishes a "safe harbor" from the registration
requirements of the 1933 Act for resales of certain securities to qualified
institutional buyers. The Advisor anticipates that the market for certain
restricted securities such as institutional commercial paper will expand further
as a result of this regulation and the development of automated systems for the
trading, clearance and settlement of unregistered securities of domestic and
non-US issuers, such as the PORTAL System sponsored by Financial Industry
Regulatory Authority ("FINRA").

An investment in Rule 144A Securities will be considered illiquid and therefore
subject to the Fund's limit on the purchase of illiquid securities unless the
Board or its delegates determines that the Rule 144A Securities are liquid. In
reaching liquidity decisions, the Board and its delegates may consider, inter
alia, the following factors: (i) the unregistered nature of the security; (ii)
the frequency of trades and quotes for the security; (iii) the number of dealers
wishing to purchase or sell the security and the number of other potential
purchasers; (iv) dealer undertakings to make a market in the security; and (v)
the nature of the security and the nature of the marketplace trades (e.g., the
time needed to dispose of the security, the method of soliciting offers and the
mechanics of the transfer).

Investing in Rule 144A Securities could have the effect of increasing the level
of illiquidity in the Fund to the extent that qualified institutional buyers are
unavailable or uninterested in purchasing such securities from the Fund. The
Board has adopted guidelines and delegated to the Advisor the daily function of
determining and monitoring the liquidity of Rule 144A Securities, although the
Board will retain ultimate responsibility for any liquidity determinations.

TBA Purchase Commitments. The Fund may enter into "To Be Announced" ("TBA")
purchase commitments to purchase securities for a fixed price at a future date,
typically not exceeding 75-90 days. TBA purchase commitments may be considered
securities in themselves, and involve a risk of loss if the value of the
security to be purchased declines prior to settlement date, which risk is in
addition to the risk of decline in the value of the Fund's other assets.
Unsettled TBA purchase commitments are valued at the current market value of the
underlying securities. To facilitate such acquisitions, the Fund identifies on
its book cash or liquid assets in an amount at least equal to such commitments.
It may be expected that the Fund's net assets will fluctuate to a greater degree
when it sets aside portfolio securities to cover such purchase commitments than
when it sets aside cash. On delivery dates for such transactions, the Fund will
meet its obligations from maturities or sales of the segregated securities
and/or from cash flow. If the Fund chooses to dispose of the TBA security prior
to its settlement, it could, as with the disposition of any other portfolio
obligation, incur a gain or loss due to market fluctuation.

When-Issued and Delayed Delivery Securities. The Fund may purchase securities on
a when-issued or delayed delivery basis. Delivery of and payment for these
securities can take place a month or more after the date of the purchase
commitment. The payment obligation and the interest rate that will be received
on when-issued and delayed delivery securities are fixed at the time the buyer
enters into the commitment. Due to fluctuations in the value of securities
purchased or sold on a when-issued or delayed delivery basis, the yields
obtained on such securities may be higher or lower than the yields available in
the market on the dates when the investments are actually delivered to the
buyers. When-issued securities may include securities purchased on a "when, as
and if issued" basis, under which the issuance of the security depends on the
occurrence of a subsequent event, such as approval of a merger, corporate
reorganization or debt restructuring. The value of such securities is subject to
market fluctuation during this period and no interest or income, as applicable,
accrues to the Fund until settlement takes place.

At the time the Fund makes the commitment to purchase securities on a
when-issued or delayed delivery basis, it will record the transaction, reflect
the value each day of such securities in determining its net asset value and, if
applicable, calculate the maturity for the purposes of average maturity from
that date. At the time of settlement a when-issued security may be valued at
less than the purchase price. To facilitate such acquisitions, the Fund
identifies on its books cash or liquid assets in an amount at least equal to
such commitments. It may be expected that the Fund's net assets will fluctuate
to a greater degree when it sets aside portfolio securities to cover such
purchase commitments than when it sets aside cash. On delivery dates for such
transactions, the Fund will meet its obligations from maturities or sales of the
segregated securities and/or from cash flow. If the Fund chooses to dispose of
the right to acquire a when-issued security prior to its acquisition, it could,
as with the disposition of any other portfolio obligation, incur a gain or loss
due to market fluctuation. It is the current policy of the Fund not to enter
into when-issued commitments exceeding in the aggregate 15% of the market value
of the Fund's total assets, less liabilities other than the obligations created
by when-issued commitments. When the Fund engages in when-issued or
delayed-delivery transactions, it relies on the other party to consummate the
trade. Failure of the seller to do so may result in the Fund's incurring a loss
or missing an opportunity to obtain a price considered advantageous.

Additional US Government Obligations. The Fund may invest in obligations issued
or guaranteed by US government agencies or instrumentalities. US government
securities are high-quality debt securities issued or guaranteed by the US
Treasury or by an agency or instrumentality of the US government. These
obligations may or may not be backed by the "full faith and credit" of the
United States. In the case of securities not backed by the full faith and credit
of the United States, the Fund must look principally to the federal agency or
instrumentality issuing or guaranteeing the obligation for ultimate repayment
and may not be able to assert a claim against the United States itself in the
event the agency or instrumentality does not meet its commitments. Securities in
which the Fund may invest that are not backed by the full faith and credit of
the United States include obligations of the Tennessee Valley Authority and the
US Postal Service, each of which has the right to borrow from the US Treasury to
meet its obligations, and obligations of the Federal Farm Credit System and the
Federal Home Loan Banks, both of whose obligations may be satisfied only by the
individual credit of the issuing agency. Securities that are backed by the full
faith and credit of the United States include obligations of GNMA, the Farmers
Home Administration and the Export-Import Bank.

Lower-Rated Debt Securities ("Junk Bonds"). The Fund may invest in debt
securities rated in the fifth and sixth long-term rating categories by S&P,
Moody's and Fitch Inc. ("Fitch"), or comparably rated by another NRSRO, or if
not rated by a NRSRO, of comparable quality as determined by the Advisor in its
sole discretion.

These securities, often referred to as "junk bonds" or "high yield debt
securities," are considered speculative and, while generally offering greater
income than investments in higher quality securities, involve greater risk of
loss of principal and income, including the possibility of default or bankruptcy
of the issuers of such securities, and have greater price volatility, especially
during periods of economic uncertainty or change. These lower quality bonds tend
to be affected by economic changes and short-term corporate and industry
developments, as well as public perception of those changes and developments, to
a greater extent than higher quality securities, which react primarily to
fluctuations in the general level of interest rates.

In addition, the market for lower-rated debt securities may be thinner and less
active than that for higher-rated debt securities, which can adversely affect
the prices at which the former are sold. If market quotations are not available,
lower-rated debt securities will be valued in accordance with procedures
established by the Board of Trustees of the Fund, including the use of outside
pricing services. Judgment plays a greater role in valuing high yield corporate
debt securities than is the case for securities for which more external sources
for quotations and last sale information is available. Adverse publicity and
changing investor perception may also affect the availability of outside pricing
services to value lower-rated debt securities and the Fund's ability to dispose
of these securities. In addition, such securities generally present a higher
degree of credit risk. Issuers of lower-rated debt securities are often highly
leveraged and may not have more traditional methods of financing available to
them so that their ability to service their obligations during an economic
downturn or during sustained periods of rising interest rates may be impaired.
The risk of loss due to default by such issuers is significantly greater because
below investment grade securities generally are unsecured and frequently are
subordinated to the prior payment of senior indebtedness.

Since the risk of default is higher for lower-rated debt securities, the
Advisor's research and credit analysis are an especially important part of
managing securities of this type held by the Fund. In considering investments
for the Fund, the Advisor will attempt to identify those issuers of high yield
debt securities whose financial conditions are adequate to meet future
obligations, have improved or are expected to improve in the future. The
Advisor's analysis focuses on relative values based on such factors as interest
on dividend coverage, asset coverage, earnings prospects and the experience and
managerial strength of the issuer.

While the market for high yield corporate debt securities has been in existence
for many years and has weathered previous economic downturns, past experience
may not provide an accurate indication of future performance of the high yield
bond market, especially during periods of economic recession.

The Fund may choose, at its expense or in conjunction with others, to pursue
litigation or otherwise exercise its rights as a security holder to seek to
protect the interest of security holders if it determines this to be in the
interest of the Fund.

The Fund may invest in an affiliated mutual fund to gain exposure to lower rated
debt securities. The affiliated fund is permitted to invest in securities of
lower credit ratings than the Fund could invest in if it makes direct purchases
of high yield debt securities.

Inverse Floaters. The Fund may invest in inverse floaters. Inverse floaters are
debt instruments with a floating rate of interest that bears an inverse
relationship to changes in short-term market interest rates. Investments in this
type of security involve special risks as compared to investments in, for
example, a fixed rate municipal security. The Fund could lose money and its NAV
could decline if movements in interest rates are incorrectly anticipated.
Moreover, the markets for securities of this type may be less developed and may
have less liquidity than the markets for more traditional municipal securities.

Securities of Foreign Issuers

Investment in Emerging Markets. The Fund may invest to varying degrees in one or
more countries with emerging securities markets. These countries are generally
located in Latin America, Europe, the Middle East, Africa and Asia. Political
and economic structures in many of these countries may be undergoing significant
evolution and rapid development, and these countries may lack the social,
political and economic stability characteristic of more developed countries.
Certain of these countries may have in the past failed to recognize private
property rights and, at times, may have nationalized, or expropriated the assets
of private companies. As a result, these risks, including the risk of
nationalization or expropriation of assets, may be heightened. In addition,
unanticipated political or social developments may affect the value of the
Fund's investments in these countries, as well as the availability of additional
investments in these countries. The small size and inexperience of the
securities markets in certain of these countries and the limited volume of
trading in securities in these countries may make the Fund's investments in
these countries illiquid and more volatile than investments in most Western
European countries, and the Fund may be required to establish special custodial
or other arrangements before making certain investments in some of these
countries. There may be little financial or accounting information available
with respect to issuers located in certain of these countries, and may be
difficult as a result to assess the value or prospects of an investment in those
countries. The laws of some foreign countries may limit the Fund's ability to
invest in securities of certain issuers located in those countries.

Derivatives

General. The Fund may invest in various instruments that are commonly known as
"derivatives." Generally, a derivative is a financial arrangement, the value of
which is based on, or "derived" from, a traditional security, asset or market
index. There are, in fact, many different types of derivatives and many
different ways to use them. There are a range of risks associated with those
uses. For example, the Fund may use futures and options as a low-cost method of
gaining exposure to a particular securities market without investing directly in
those securities and for traditional hedging purposes to attempt to protect the
Fund from exposure to changing interest rates, securities prices or currency
exchange rates and for cash management or other investment purposes. The Fund
may use derivatives for non-hedging purpose, such as to enhance return. The use
of derivatives may result in leverage, which tends to magnify the effects of an
instrument's price changes as market conditions change. Leverage involves the
use of a small amount of money to control a large amount of financial assets,
and can in some circumstances lead to significant losses The Advisor may use
derivatives in circumstances where the Advisor believes they offer an economical
means of gaining exposure to a particular asset class. The use of derivatives
for non-hedging purposes may be considered speculative.
The Fund's investments in options, futures, forward contracts and similar
strategies depend on the Advisor's judgment as to the potential risks and
rewards of different types of strategies. Options and futures can be volatile
investments, and may not perform as expected. If the Advisor applies a hedge at
an inappropriate time or judges price trends incorrectly, options and futures
strategies may lower the Fund's return. The Fund could also experience losses if
the prices of its options and futures positions were poorly correlated with its
other investments, or if it could not close out its positions because of an
illiquid secondary market. Options and futures traded on foreign exchanges
generally are not regulated by US authorities, and may offer less liquidity and
less protection to the Fund in the event of default by the other party to the
contract.


Options on Securities. The Fund may purchase and write (sell) put and call
options on securities. A call option gives the purchaser of the option the right
to buy, and obligates the writer to sell, the underlying security at the
exercise price at any time during the option period. Similarly, a put option
gives the purchaser of the option the right to sell, and obligates the writer to
buy, the underlying security at the exercise price at any time during the option
period.

The Fund may write (sell) covered call and put options to a limited extent on
its portfolio securities ("covered options") in an attempt to increase income
through the premiums it receives for writing the option(s). However, in return
for the premium, the Fund may forgo the benefits of appreciation on securities
sold or may pay more than the market price on securities acquired pursuant to
call and put options written by the Fund.

A call option written by the Fund is "covered" if the Fund owns the underlying
security covered by the call or has an absolute and immediate right to acquire
that security without additional cash consideration (or for additional cash
consideration held in a segregated account by its custodian) upon conversion or
exchange of other securities held in its portfolio. A call option is also
covered if the Fund holds a call option on the same security and in the same
principal amount as the written call option where the exercise price of the call
option so held (a) is equal to or less than the exercise price of the written
call option or (b) is greater than the exercise price of the written call option
if the difference is segregated by the Fund in cash or liquid securities.

When the Fund writes a covered call option, it gives the purchaser of the option
the right to buy the underlying security at the price specified in the option
(the "exercise price") by exercising the option at any time during the option
period. If the option expires unexercised, the Fund will realize income in an
amount equal to the premium received for writing the option. If the option is
exercised, a decision over which a Fund has no control, the Fund must sell the
underlying security to the option holder at the exercise price. By writing a
covered call option, the Fund forgoes, in exchange for the premium less the
commission ("net premium"), the opportunity to profit during the option period
from an increase in the market value of the underlying security above the
exercise price. In addition, the Fund may continue to hold a security which
might otherwise have been sold to protect against depreciation in the market
price of the security.

A put option written by the Fund is "covered" when, among other things, cash or
liquid securities acceptable to the broker are placed in a segregated account to
fulfill the obligations undertaken. When the Fund writes a covered put option,
it gives the purchaser of the option the right to sell the underlying security
to the Fund at the specified exercise price at any time during the option
period. If the option expires unexercised, the Fund will realize income in the
amount of the net premium received for writing the option. If the put option is
exercised, a decision over which the Fund has no control, the Fund must purchase
the underlying security from the option holder at the exercise price. By writing
a covered put option, the Fund, in exchange for the net premium received,
accepts the risk of a decline in the market value of the underlying security
below the exercise price. The Fund will only write put options involving
securities for which a determination is made at the time the option is written
that the Fund wishes to acquire the securities at the exercise price.

The Fund may terminate its obligation as the writer of a call or put option by
purchasing an option with the same exercise price and expiration date as the
option previously written. This transaction is called a "closing purchase
transaction." The Fund will realize a profit or loss on a closing purchase
transaction if the amount paid to purchase an option is less or more, as the
case may be, than the amount received from the sale thereof. To close out a
position as a purchaser of an option, the Fund may enter into a "closing sale
transaction," which involves liquidating the Fund's position by selling the
option previously purchased. When the Fund cannot effect a closing purchase
transaction, it may be forced to incur brokerage commissions or dealer spreads
in selling securities it receives or it may be forced to hold underlying
securities until an option is exercised or expires.

When the Fund writes an option, an amount equal to the net premium received by
the Fund is included in the liability section of the Fund's Statement of Assets
and Liabilities as a deferred credit. The amount of the deferred credit will be
subsequently marked to market to reflect the current market value of the option
written. The current market value of a traded option is the last sale price or,
in the absence of a sale, the mean between the closing bid and asked price. If
an option expires on its stipulated expiration date or if the Fund enters into a
closing purchase transaction, the Fund will realize a gain (or loss if the cost
of a closing purchase transaction exceeds the premium received when the option
was sold), and the deferred credit related to such option will be eliminated. If
a call option is exercised, the Fund will realize a gain or loss from the sale
of the underlying security, and the proceeds of the sale will be increased by
the premium originally received. The writing of covered call options may be
deemed to involve the pledge of the securities against which the option is being
written. Securities against which call options are written will be identified on
the Fund's books.

The Fund may also purchase call and put options on any securities in which it
may invest. The Fund would normally purchase a call option in anticipation of an
increase in the market value of such securities. The purchase of a call option
would entitle the Fund, in exchange for the premium paid, to purchase a security
at a specified price during the option period. The Fund would ordinarily have a
gain if the value of the securities increased above the exercise price
sufficiently to cover the premium and would have a loss if the value of the
securities remained at or below the exercise price during the option period.

The Fund would normally purchase put options in anticipation of a decline in the
market value of securities in its portfolio ("protective puts") or securities of
the type in which it is permitted to invest. The purchase of a put option would
entitle the Fund, in exchange for the premium paid, to sell a security, which
may or may not be held by the Fund at a specified price during the option
period. The purchase of protective puts is designed merely to offset or hedge
against a decline in the market value of the Fund. Put options also may be
purchased by the Fund for the purpose of affirmatively benefiting from a decline
in the price of securities that the Fund does not own. The Fund would ordinarily
recognize a gain if the value of the securities decreased below the exercise
price sufficiently to cover the premium and would recognize a loss if the value
of the securities remained at or above the exercise price. Gains and losses on
the purchase of protective put options would tend to be offset by countervailing
changes in the value of underlying portfolio securities.

The hours of trading for options on securities and securities indices may not
conform to the hours during which the underlying securities are traded. To the
extent that the option markets close before the markets for the underlying
securities, significant price and rate movements can take place in the
underlying securities markets that cannot be reflected in the option markets. It
is impossible to predict the volume of trading that may exist in such options,
and there can be no assurance that viable exchange markets will develop or
continue.

The Fund may also engage in options transactions in the over-the-counter ("OTC")
market with broker-dealers who make markets in these options. The ability to
terminate OTC option positions is more limited than with exchange-traded option
positions because the predominant market is the issuing broker rather than an
exchange, and may involve the risk that broker-dealers participating in such
transactions will not fulfill their obligations. To reduce this risk, the Fund
will purchase such options only from broker-dealers who are primary US
government securities dealers recognized by the Federal Reserve Bank of New York
and who agree to (and are expected to be capable of) entering into closing
transactions, although there can be no guarantee that any such option will be
liquidated at a favorable price prior to expiration. The Advisor will monitor
the creditworthiness of dealers with whom the Fund enters into such options
transactions under the general supervision of the Fund's Board of Trustees.
Unless the Trustees conclude otherwise, the Fund intends to treat OTC options
purchased and the assets used to "cover" OTC options written as not readily
marketable and, therefore, subject to the Fund's limit on investments in
illiquid securities.

Options on Securities Indices. The Fund may also purchase and write
exchange-listed and OTC put and call options on securities indices. A securities
index measures the movement of a certain group of securities by assigning
relative values to the securities included in the index, which will fluctuate
with changes in the market values of the securities included in the index. Some
securities index options are based on a broad market index, such as the NYSE
Composite Index, or a narrower market index, such as the S&P 100. Indices may
also be based on a particular industry or market segment.

Options on securities indices are similar to options on securities except that
(1) the expiration cycles of securities index options are monthly, while those
of securities options are currently quarterly, and (2) the delivery requirements
are different. Instead of giving the right to take or make delivery of stock at
a specified price, an option on a securities index gives the holder the right to
receive a cash "exercise settlement amount" equal to (a) the amount, if any, by
which the fixed exercise price of the option exceeds (in the case of a put) or
is less than (in the case of a call) the closing value of the underlying index
on the date of exercise, multiplied by (b) a fixed "index multiplier." Receipt
of this cash amount will depend upon the closing level of the securities index
upon which the option is based being greater than, in the case of a call, or
less than, in the case of a put, the exercise price of the index and the
exercise price of the option times a specified multiple. The writer of the
option is obligated, in return for the premium received, to make delivery of
this amount. Securities index options may be offset by entering into closing
transactions as described above for securities options.

As discussed in "Options on Securities," the Fund would normally purchase a call
option in anticipation of an increase in the market value of the relevant index.
The purchase of a call option would entitle the Fund, in exchange for the
premium paid, to purchase the underlying securities at a specified price during
the option period. The Fund would ordinarily have a gain if the value of the
underlying securities increased above the exercise price sufficiently to cover
the premium and would have a loss if the value of the securities remained at or
below the exercise price during the option period.

As discussed in "Options on Securities," the Fund would normally purchase put
options in anticipation of a decline in the market value of the relevant index
("protective puts"). The purchase of a put option would entitle the Fund, in
exchange for the premium paid, to sell the underlying securities at a specified
price during the option period. The purchase of protective puts is designed
merely to offset or hedge against a decline in the market value of the index.
The Fund would ordinarily recognize a gain if the value of the index decreased
below the exercise price sufficiently to cover the premium and would recognize a
loss if the value of the index remained at or above the exercise price. Gains
and losses on the purchase of protective puts would tend to be offset by
countervailing changes in the value of the index.

Because the value of an index option depends upon movements in the level of the
index rather than the price of a particular stock, whether the Fund will realize
a gain or loss from the purchase or writing of options on an index depends upon
movements in the level of stock prices in the stock market generally or, in the
case of certain indices, in an industry or market segment, rather than movements
in the price of a particular stock. Accordingly, successful use by the Fund of
options on stock indices will be subject to the Advisor's ability to predict
correctly movements in the direction of the stock market generally or of a
particular industry. This requires different skills and techniques than
predicting changes in the price of individual stocks.

Options on securities indices entail risks in addition to the risks of options
on securities. The absence of a liquid secondary market to close out options
positions on securities indices is more likely to occur, although the Fund
generally will only purchase or write such an option if the Advisor believes the
option can be closed out. Use of options on securities indices also entails the
risk that trading in such options may be interrupted if trading in certain
securities included in the index is interrupted. The Fund will not purchase such
options unless the Advisor believes the market is sufficiently developed such
that the risk of trading in such options is no greater than the risk of trading
in options on securities.

Price movements in the Fund's investment portfolio may not correlate precisely
with movements in the level of an index and, therefore, the use of options on
indices cannot serve as a complete hedge. Because options on securities indices
require settlement in cash, the Advisor may be forced to liquidate portfolio
securities to meet settlement obligations. The Fund's activities in index
options may also be restricted by the requirements of the Code, for
qualification as a regulated investment company.

Hedging Strategies. The Fund may use certain strategies designed to adjust the
overall risk of its investment portfolio. These "hedging" strategies involve
derivative contracts, including (but not limited to) US Treasury and Eurodollar
futures contracts and exchange-traded put and call options on such futures
contracts. New financial products and risk management techniques continue to be
developed and may be used if consistent with the Fund's investment objective and
policies. Among other purposes, these hedging strategies may be used to
effectively maintain desired portfolio duration or to protect against market
risk should the Fund reallocate its investments among different types of fixed
income securities.

The Fund might not use any hedging strategies, and there can be no assurance
that any strategy used will succeed. If the Advisor is incorrect in its judgment
on market values, interest rates or other economic factors in using a hedging
strategy, the Fund may have lower net income and a net loss on the investment.
Each of these strategies involves certain risks, which include:

o    the fact that the skills  needed to use hedging  instruments  are different
     from those needed to select securities for the Fund;

o    the possibility of imperfect correlation,  or even no correlation,  between
     the price  movements  of hedging  instruments  and price  movements  of the
     securities or currencies being hedged;

o    possible  constraints  placed on the  Fund's  ability to  purchase  or sell
     portfolio investments at advantageous times due to the need for the Fund to
     maintain "cover" or to segregate securities; and

o    the possibility  that the Fund will be unable to close out or liquidate its
     hedged position.

A hedge is designed to offset a loss in a portfolio position with a gain in the
hedged position. At the same time, however, a properly correlated hedge will
result in a gain in the portfolio position being offset by a loss in the hedged
position. As a result, the use of options, futures and currency exchange
transactions for hedging purposes could limit any potential gain from an
increase in the value of the position hedged. With respect to futures contracts,
since the value of portfolio securities will far exceed the value of the futures
contracts sold by the Fund, an increase in the value of the futures contracts
could only mitigate, but not totally offset, the decline in the value of the
Fund's assets.

To the extent that the Fund engages in the strategies described above, the Fund
may experience losses greater than if these strategies had not been utilized. In
addition to the risks described above, these instruments may be illiquid and/or
subject to trading limits, and the Fund may be unable to close out a position
without incurring substantial losses, if at all. The Fund is also subject to the
risk of default by a counterparty to an off-exchange transaction. See "Illiquid
Securities."

Currency Management Techniques. The instruments involved in currency-related
transactions may be considered derivative instruments. The Fund may enter into
currency-related transactions to attempt to protect against an anticipated rise
in the US dollar price of securities that it intends to purchase. In addition,
the Fund may enter into currency-related transactions to attempt to protect
against the decline in value of its foreign currency denominated or quoted
portfolio securities, or a decline in the value of anticipated dividends or
interest from such securities, due to a decline in the value of the foreign
currency against the US dollar. The forecasting of currency market movements is
extremely difficult and there can be no assurance that currency hedging
strategies will be successful. If the Advisor is incorrect in its forecast,
currency hedging strategies may result in investment performance worse than if
the strategies were not attempted. In addition, forward contracts and
over-the-counter currency options may be illiquid and are subject to the risk
that the counterparty will default on its obligations.

Forward Foreign Currency Exchange Contracts. The Fund may exchange currencies in
the normal course of managing its investments in foreign securities and may
incur costs in doing so because a foreign exchange dealer may charge a fee for
conversion. The Fund may conduct foreign currency exchange transactions on a
"spot" basis (i.e., for prompt delivery and settlement) at the prevailing spot
rate for purchasing or selling currency in the foreign currency exchange market.
The Fund also may enter into forward foreign currency exchange contracts
("forward currency contracts") or other contracts to purchase and sell
currencies for settlement at a future date. A foreign exchange dealer, in that
situation, will expect to realize a profit based on the difference between the
price at which a foreign currency is sold to the Fund and the price at which the
dealer will cover the purchase in the foreign currency market. Foreign exchange
transactions are entered into at prices quoted by dealers, which may include a
mark-up over the price that the dealer must pay for the currency.

A forward currency contract involves an obligation to purchase or sell a
specific currency at a future date, which may be any fixed number of days from
the date of the contract agreed upon by the parties, at a price set at the time
of the contract. These contracts are traded in the interbank market conducted
directly between currency traders (usually large commercial banks) and their
customers. A forward contract generally has no deposit requirement, and no
commissions are generally charged at any stage for trades, but currency dealers
seek to obtain a "spread" or profit on each transaction.

At the maturity of a forward contract, the Fund may either accept or make
delivery of the currency specified in the contract or, at or prior to maturity,
enter into a closing purchase transaction involving the purchase or sale of an
offsetting contract.

The Fund may use forward currency transactions in an attempt to hedge against
losses, or where possible, to add to investment returns. For the purposes of
hedging, when the Fund enters into a contract for the purchase or sale of a
security denominated in a foreign currency, or when the Fund anticipates the
receipt in a foreign currency of dividend or interest payments on such a
security which it holds, the Fund may desire to "lock in" the US dollar price of
the security or the US dollar equivalent of such dividend or interest payment,
as the case may be. By entering into a forward contract for the purchase or
sale, for a fixed amount of US dollars, of the amount of foreign currency
involved in the underlying transactions, the Fund will attempt to protect itself
against an adverse change in the relationship between the US dollar and the
subject foreign currency during the period between the date on which the
security is purchased or sold, or on which the dividend or interest payment is
declared, and the date on which such payments are made or received.

Additionally, when management of the Fund believes that the currency of a
particular foreign country may suffer a substantial decline against the US
dollar, it may cause the Fund to enter into a forward contract to sell, for a
fixed amount of US dollars, the amount of foreign currency approximating the
value of some or all of the Fund's portfolio securities denominated in such
foreign currency. The precise matching of the forward contract amounts and the
value of the securities involved will not generally be possible because the
future value of such securities in foreign currencies will change as a
consequence of market movements in the value of those securities between the
date on which the contract is entered into and the date it matures.

Using forward currency contracts in an attempt to protect the value of the
Fund's portfolio securities against a decline in the value of a currency does
not eliminate fluctuations in the underlying prices of the securities. It simply
establishes a rate of exchange which the Fund can achieve at some future point
in time. The precise projection of short-term currency market movements is not
possible, and short-term hedging provides a means of fixing the dollar value of
only a portion of the Fund's foreign assets.

The Fund will cover the amount of its commitments to purchase foreign currencies
under forward currency contracts with liquid securities. If the value of such
securities declines below the value of the Fund's commitments under forward
currency contracts, additional liquid securities will be used as cover so that
the value of such securities will equal the amount of the Fund's commitments.
The securities will be marked-to-market on a daily basis.

The Fund generally will not enter into a forward currency contract with a term
of greater than one year. The forecasting of short-term currency market
movements is extremely difficult and there can be no assurance that short-term
hedging strategies will be successful.

While the Fund will enter into forward currency contracts to reduce currency
exchange rate risks, transactions in such contracts involve certain other risks.
Thus, while the Fund may benefit from currency transactions, unanticipated
changes in currency prices may result in a poorer overall performance for the
Fund than if it had not engaged in any such transactions. Moreover, there may be
an imperfect correlation between the Fund's holdings of securities denominated
in a particular currency and forward contracts entered into by the Fund. Such
imperfect correlation may cause the Fund to sustain losses which will prevent
the Fund from achieving a complete hedge or expose the Fund to risk of foreign
currency exchange loss. Forward currency contracts may be considered derivative
instruments.

Futures Contracts and Related Options

General. The Fund may enter into futures contracts on securities, securities
indices, foreign currencies and interest rates, and purchase and write (sell)
options thereon which are traded on exchanges designated by the Commodity
Futures Trading Commission (the "CFTC") or, if consistent with CFTC regulations,
on foreign exchanges. These futures contracts are standardized contracts for the
future delivery of, among other things, a commodity, a non-US currency, an
interest rate sensitive security or, in the case of index futures contracts or
certain other futures contracts, a cash settlement with reference to a specified
multiplier times the change in the index. An option on a futures contract gives
the purchaser the right, in return for the premium paid, to assume a position in
a futures contract.

The Fund may enter into futures contracts and options on futures contracts on
securities, securities indices and currencies to manage its exposure to changing
interest rates, security prices and currency exchange rates, as an efficient
means of managing allocations between asset classes and to enhance return.

The successful use of futures contracts and options thereon draws upon the
Advisor's skill and experience with respect to such instruments and are subject
to special risk considerations. A liquid secondary market for any futures or
options contract may not be available when a futures or options position is
sought to be closed. In addition, there may be an imperfect correlation between
movements in the securities or currency in the Fund. Successful use of futures
or options contracts is further dependent on the Advisor's ability to predict
correctly movements in the securities or foreign currency markets and no
assurance can be given that its judgment will be correct.

The Fund has claimed exclusion from the definition of the term "commodity pool
operator" under the regulations of the Commodity Futures Trading Commission.
Therefore, the Fund is not subject to commodity pool operator registration and
regulation under the Commodity Exchange Act. Futures and options on futures may
be entered into for bona fide hedging, risk management (including duration
management) or other portfolio and return enhancement management purposes to the
extent consistent with the exclusion from commodity pool operator registration.
Typically, maintaining a futures contract or selling an option thereon requires
the Fund to deposit with a financial intermediary as security for its
obligations an amount of cash or other specified assets (initial margin), which
initially is typically 1% to 10% of the face amount of the contract (but may be
higher in some circumstances). Additional cash or assets (variation margin) may
be required to be deposited thereafter on a daily basis as the marked to market
value of the contract fluctuates. The purchase of an option on financial futures
involves payment of a premium for the option without any further obligation on
the part of the Fund. If the Fund exercises an option on a futures contract it
will be obligated to post initial margin (and potential subsequent variation
margin) for the resulting futures position just as it would for any position.
Futures contracts and options thereon are generally settled by entering into an
offsetting transaction, but there can be no assurance that the position can be
offset prior to settlement at an advantageous price, nor that delivery will
occur.

Futures Contracts. Futures contracts are contracts to purchase or sell a fixed
amount of an underlying instrument, commodity or index at a fixed time and place
in the future. US futures contracts have been designed by exchanges which have
been designated "contracts markets" by the CFTC, and must be executed through a
futures commission merchant, or brokerage firm, which is a member of the
relevant contract market. Futures contracts trade on a number of exchange
markets, and, through their clearing corporations, the exchanges guarantee
performance of the contracts as between the clearing members of the exchange.
The Fund may enter into contracts for the purchase or sale for future delivery
of fixed-income securities, foreign currencies, or financial indices, including
any index of US government securities, foreign government securities or
corporate debt securities. The Fund may enter into futures contracts which are
based on debt securities that are backed by the full faith and credit of the US
government, such as long-term US Treasury Bonds, Treasury Notes and US Treasury
Bills. The Fund may also enter into futures contracts which are based on bonds
issued by governments other than the US government. Futures contracts on foreign
currencies may be used to hedge against securities that are denominated in
foreign currencies.

At the same time a futures contract is entered into, the Fund must allocate cash
or liquid securities as a deposit payment ("initial margin"). Daily thereafter,
the futures contract is valued and the payment of "variation margin" may be
required, since each day the Fund would provide or receive cash that reflects
any decline or increase in the contract's value.

At the time of delivery of securities pursuant to such a contract, adjustments
are made to recognize differences in value arising from the delivery of
securities with a different interest rate from that specified in the contract.
In some, but not many, cases, securities called for by a futures contract may
not have been issued when the contract was written.

Although futures contracts (other than those that settle in cash, such as index
futures) by their terms call for the actual delivery or acquisition of the
instrument underlying the contract, in most cases the contractual obligation is
fulfilled by offset before the date of the contract without the Fund's having to
make or take delivery of the instrument underlying the contract. The offsetting
of a contractual obligation is accomplished by entering into an opposite
position in an identical futures contract on the commodities exchange on which
the futures contract was entered into (or a linked exchange) calling for
delivery in the same month. Such a transaction, which is effected through a
member of an exchange, cancels the obligation to make or take delivery of the
instrument underlying the contract. Since all transactions in the futures market
are made, offset or fulfilled through a clearinghouse associated with the
exchange on which the contracts are traded, the Fund will incur brokerage fees
when it enters into futures contracts.

The purpose of the acquisition or sale of a futures contract, in cases where the
Fund holds or intends to acquire fixed-income securities, is to attempt to
protect the Fund from fluctuations in interest or foreign exchange rates without
actually buying or selling fixed-income securities or foreign currencies. For
example, if interest rates were expected to increase (which thus would cause the
prices of debt securities to decline), the Fund might enter into futures
contracts for the sale of debt securities. Such a sale would have much the same
effect as selling an equivalent value of the debt securities owned by the Fund.
If interest rates did increase, the value of the debt security in the Fund would
decline, but the value of the futures contracts to the Fund would increase at
approximately the same rate, thereby keeping the net asset value of the Fund
from declining as much as it otherwise would have.

Similarly, when it is expected that interest rates may decline (thus increasing
the value of debt securities), futures contracts may be purchased to attempt to
hedge against anticipated purchases of debt securities at higher prices. Since
the fluctuations in the value of futures contracts should be similar to those of
debt securities, the Fund could take advantage of the anticipated rise in the
value of debt securities without actually buying them until the market had
stabilized. At that time, the futures contracts could be liquidated and the Fund
could then buy debt securities on the cash market. The segregated assets
maintained to cover the Fund's obligations with respect to such futures
contracts will consist of cash or liquid securities acceptable to the broker
from its portfolio in an amount equal to the difference between the fluctuating
market value of such futures contracts and the aggregate value of the initial
and variation margin payments made by the Fund with respect to such futures
contracts.

The ordinary spreads between prices in the cash and futures market, due to
differences in the nature of those markets, are subject to distortions. First,
all participants in the futures market are subject to initial deposit and
variation margin requirements. Rather than meeting additional variation margin
requirements, investors may close futures contracts through offsetting
transactions, which could distort the normal relationship between the cash and
futures markets. Second, the liquidity of the futures market depends on most
participants entering into offsetting transactions rather than making or taking
delivery. To the extent that many participants decide to make or take delivery,
liquidity in the futures market could be reduced, thus producing distortion.
Third, from the point of view of speculators, the margin deposit requirements in
the futures market are less onerous than margin requirements in the securities
market. Therefore, increased participation by speculators in the futures market
may cause temporary price distortions. Due to the possibility of distortion, a
correct forecast of securities price, general interest rate or currency exchange
rate trends by the Advisor may still not result in a successful transaction.

In addition, futures contracts entail significant risks. Although the Advisor
believes that use of such contracts will benefit the Fund, if the Advisor's
investment judgment about the general direction of interest rates or an index is
incorrect, the Fund's overall performance would be poorer than if it had not
entered into any such contract. For example, if the Fund has hedged against the
possibility of an increase in interest rates or a decrease in an index which
would adversely affect the value of securities held in its portfolio and
interest rates decrease or securities prices increase instead, the Fund will
lose part or all of the benefit of the increased value of its securities which
it has hedged because it will have offsetting losses in its futures positions.
In addition, in such situations, if the Fund has insufficient cash, it may have
to sell securities from its portfolio to meet daily variation margin
requirements. Such sales of securities may, but will not necessarily, be at
increased prices which reflect the rising market. The Fund may have to sell
securities at a time when it may be disadvantageous to do so.

Futures Contracts on Securities Indices. The Fund may also enter into futures
contracts providing for the making and acceptance of a cash settlement based
upon changes in the value of an index of US or non-US securities. This
investment technique may be used as a low-cost method of gaining exposure to a
particular securities market without investing directly in those securities or
to hedge against anticipated future changes in general market prices that
otherwise might either adversely affect the value of securities held by the Fund
or adversely affect the prices of securities which are intended to be purchased
at a later date for the Fund or as an efficient means of managing allocation
between asset classes. A futures contract may also be entered into to close out
or offset an existing futures position.

When used for hedging purposes, each futures contract on a securities index
transaction involves the establishment of a position which the Advisor believes
will move in a direction opposite to that of the investment being hedged. If
these hedging transactions are successful, the futures positions taken for the
Fund will rise in value by an amount which approximately offsets the decline in
value of the portion of the Fund's investments that are being hedged. Should
general market prices move in an unexpected manner, the full anticipated
benefits of futures contracts may not be achieved or a loss may be realized.

Options on Futures Contracts (including Futures Contracts on Securities
Indices). The Fund may purchase and write (sell) options on futures contracts
for hedging purposes. For example, as with the purchase of futures contracts,
when the Fund is not fully invested it may purchase a call option on an interest
rate sensitive futures contract to hedge against a potential price increase on
debt securities due to declining interest rates.

The purchase of a call option on a futures contract is similar in some respects
to the purchase of a call option on an index or individual security. Depending
on the pricing of the option compared to either the price of the futures
contract upon which it is based or the price of the underlying debt securities,
it may or may not be less risky than ownership of the futures contract or
underlying debt securities.

The writing of a call option on a futures contract may constitute a partial
hedge against declining prices of the underlying portfolio securities which are
the same as or correlate with the security or foreign currency that is
deliverable upon exercise of the futures contract. If the futures price at
expiration of the option is below the price specified in the premium received
for writing the option ("exercise price"), the Fund will retain the full amount
of the net premium (the premium received for writing the option less any
commission), which provides a partial hedge against any decline that may have
occurred in the Fund's holdings.

The writing of a put option on an index futures contract may constitute a
partial hedge against increasing prices of the underlying securities or foreign
currency that are deliverable upon exercise of the futures contract. If the
futures price at expiration of the option is higher than the exercise price, the
Fund will retain the full amount of the option net premium, which provides a
partial hedge against any increase in the price of securities that a Fund
intends to purchase.

If a put or call option the Fund has written is exercised, the Fund will incur a
loss that will be reduced by the amount of the net premium it receives.
Depending on the degree of correlation between changes in the value of its
portfolio securities and changes in the value of its futures positions, the
Fund's losses from existing options on futures may to some extent be reduced or
increased by changes in the value of portfolio securities.

The purchase of a call or put option on a futures contract with respect to an
index is similar in some respects to the purchase of a call or protective put
option on an index. For example, the Fund may purchase a put option on an index
futures contract to hedge against the risk of lowering securities values.

The amount of risk the Fund assumes when it purchases an option on a futures
contract with respect to an index is the premium paid for the option plus
related transaction costs. In addition to the correlation risks discussed above,
the purchase of such an option also entails the risk that changes in the value
of the underlying futures contract will not be fully reflected in the value of
the option purchased.

Swaps. The Fund may enter into currency and other types of swaps and the
purchase or sale of related caps, floors and collars. The Fund expects to enter
into these transactions primarily to preserve a return or spread on a particular
investment or portion of its portfolio, to protect against currency
fluctuations, as a duration management technique or to protect against any
increase in the price of securities the Fund anticipates purchasing at a later
date. The Fund will not sell interest rate caps or floors where it does not own
securities or other instruments providing the income stream the Fund may be
obligated to pay. Interest rate swaps involve the exchange by the Fund with
another party of their respective commitments to pay or receive interest, e.g.,
an exchange of floating rate payments for fixed rate payments with respect to a
notional amount of principal. A currency swap is an agreement to exchange cash
flows on a notional amount of two or more currencies based on the relative value
differential among them and an index swap is an agreement to swap cash flows on
a notional amount based on changes in the values of the reference indices. The
purchase of a cap entitles the purchaser to receive payments on a notional
principal amount from the party selling such cap to the extent that a specified
index exceeds a predetermined interest rate or amount. The purchase of a floor
entitles the purchaser to receive payments on a notional principal amount from
the party selling such floor to the extent that a specified index falls below a
predetermined interest rate or amount. A collar is a combination of a cap and a
floor that preserves a certain return within a predetermined range of interest
rates or values.

Swaps have special risks associated including possible default by the
counterparty to the transaction, illiquidity and, where swaps are used for
hedges, the risk that the use of a swap could result in losses greater than if
the swap had not been employed. Whether the use of swap agreements will be
successful in furthering its investment objective will depend on the Advisor's
ability to correctly predict whether certain types of investments are likely to
produce greater returns than other investments. Certain swap agreements may be
considered to be illiquid because they are two party contracts and because they
may have terms of greater than seven days. Moreover, the Fund bears the risk of
loss of the amount expected to be received under a swap agreement in the event
of the default or bankruptcy of a swap agreement counterparty.

Credit Default Swaps. The Fund may invest up to 15% of its total assets in
credit default swaps. A credit default swap is a contract between a buyer and a
seller of protection against a pre-defined credit event. The buyer of protection
pays the seller a fixed regular fee provided that no event of default on an
underlying reference obligation has occurred. If an event of default occurs, the
seller must pay the buyer the full notional value, or "par value." of the
reference obligation in exchange for the reference obligation. Credit default
swaps are used as a means of "buying" credit protection, i.e., attempting to
mitigate the risk of default or credit quality deterioration in some portion of
the Fund's holdings, or "selling" credit protection, i.e., attempting to gain
exposure to an underlying issuer's credit quality characteristics without
directly investing in that issuer. No more than 5% of the Fund's assets may be
invested in credit default swaps for purposes of buying credit protection for
non-hedging purposes. Where the Fund is a seller of credit protection, it
effectively adds leverage to its portfolio because, in addition to its total net
assets, the Fund would be subject to investment exposure on the notional amount
of the swap. The Fund will only sell credit protection with respect to
securities in which it would be authorized to invest directly. The Fund
currently considers credit default swaps to be illiquid and treats the market
value of the contract as illiquid for purposes of determining compliance with
the Fund's restrictions on investing in illiquid securities.

If the Fund is a buyer of a credit default swap and no event of default occurs,
the Fund will lose its investment and recover nothing. However, if the Fund is a
buyer and an event of default occurs, the Fund will receive the full notional
value of the reference obligation that may have little or no value. As a seller,
the Fund receives a fixed rate of income through the term of the contract
(typically between six months and three years), provided that there is no
default event. If an event of default occurs, the seller must pay the buyer the
full notional value of the reference obligation. Credit default swaps involve
greater risks than if the Fund had invested in the reference obligation
directly.

The Fund may use credit default swaps to gain exposure to particular issuers or
particular markets through investments in portfolios of credit default swaps,
such as Dow Jones CDX.NA.HY certificates. By investing in certificates
representing interests in a basket of credit default swaps, the Fund is taking
credit risk with respect to an entity or group of entities and providing credit
protection to the swap counterparties. For example, the CDX EM is a tradable
basket of 19 credit default swaps on country credits which seeks to replicate
the returns on the indices of a broad group of emerging markets countries. The
credits are a subset of the countries represented by the JPMorgan Emerging
Markets Bond Index Global Diversified. By purchasing interests in CDX EM, the
Fund is gaining emerging markets exposure through a single investment. Unlike
other types of credit default swaps which are generally considered illiquid,
credit default swap certificates generally can be sold within seven days and are
not subject to the Fund's restrictions on investing in illiquid securities.

Other Considerations. The Fund will determine that the price fluctuations in the
futures contracts and options on futures used by it for hedging purposes are
substantially related to price fluctuations in securities or instruments held by
the Fund or securities or instruments which it expects to purchase.

The Fund will be required, in connection with transactions in futures contracts
and the writing of options on futures contracts, to make margin deposits, which
will be held by its custodian for the benefit of the futures commission merchant
through whom the Fund engages in such futures and option transactions. These
transactions involve brokerage costs, require margin deposits and, in the case
of futures contracts and options obligating the Fund to purchase securities,
require the Fund to segregate cash or liquid securities in an account maintained
with its custodian to cover such contracts and options.

While transactions in futures contracts and options on futures may reduce
certain risks, such transactions themselves entail certain other risks. Thus,
unanticipated changes in interest rates or securities prices may result in a
poorer overall performance for the Fund than if it had not entered into any
futures contracts or options transactions. The other risks associated with the
use of futures contracts and options thereon are (i) imperfect correlation
between the change in market value of the securities held by the Fund and the
prices of the futures and options and (ii) the possible absence of a liquid
secondary market for a futures contract or option and the resulting inability to
close a futures position prior to its maturity date.

In the event of an imperfect correlation between a futures position and
portfolio position which is intended to be protected, the desired protection may
not be obtained and the Fund may be exposed to risk of loss. The risk of
imperfect correlation may be minimized by investing in contracts whose price
behavior is expected to resemble that of the Fund's underlying securities. The
Fund will attempt to minimize the risk that it will be unable to close out
futures positions by entering into such transactions on a national exchange with
an active and liquid secondary market.

Limitations and Risks Associated with Transactions in Options, Futures Contracts
and Options on Futures Contracts

Options and futures transactions involve (1) liquidity risk that contractual
positions cannot be easily closed out in the event of market changes or
generally in the absence of a liquid secondary market, (2) correlation risk that
changes in the value of hedging positions may not match the securities market
fluctuations intended to be hedged, and (3) market risk that an incorrect
prediction of securities prices by the Advisor may cause the Fund to perform
worse than if such positions had not been taken. The ability to terminate
over-the-counter options is more limited than with exchange traded options and
may involve the risk that the counterparty to the option will not fulfill its
obligations. In accordance with a position taken by the SEC, the Fund will limit
its investments in illiquid securities to 15% of the Fund's net assets.

Options and futures transactions are highly specialized activities which involve
investment techniques and risks that are different from those associated with
ordinary portfolio transactions. Gains and losses on investments in options and
futures depend on the Advisor's ability to predict the direction of interest
rates, security prices, currencies and other economic factors. The loss that may
be incurred by the Fund in entering into futures contracts and written options
thereon is potentially unlimited. There is no assurance that higher than
anticipated trading activity or other unforeseen events might not, at times,
render certain facilities of an options clearing entity or other entity
performing the regulatory and liquidity functions of an options clearing entity
inadequate, and thereby result in the institution by an exchange of special
procedures which may interfere with the timely execution of customers' orders.
Most futures exchanges limit the amount of fluctuation permitted in a futures
contract's prices during a single trading day. Once the limit has been reached
no further trades may be made that day at a price beyond the limit. The price
limit will not limit potential losses, and may in fact prevent the prompt
liquidation of futures positions, ultimately resulting in further losses.

Global Asset Allocation Strategy ("GAA Strategy"). In connection with the GAA
Strategy and in addition to the securities described above, the Fund may invest
in indexed securities, futures contracts on securities indices, securities
representing securities of foreign issuers (e.g., ADRs, GDRs and EDRs), options
on stocks, options on futures contracts, foreign currency exchange transactions
and options on foreign currencies. These are discussed below, to the extent not
already described above.

Indexed Securities. The indexed securities in which the Fund may invest include
debt securities whose value at maturity is determined by reference to the
relative prices of various currencies or to the price of a stock index. The
value of such securities depends on the price of foreign currencies, securities
indices or other financial values or statistics. These securities may be
positively or negatively indexed; that is, their value may increase or decrease
if the underlying instrument appreciates.

Securities Representing Securities of Foreign Issuers. The Fund's investments in
the securities of foreign issuers may be made directly or in the form of
American Depositary Receipts ("ADRs"), Global Depositary Receipts ("GDRs," also
referred to as International Depositary Receipts or "IDRs"), European Depositary
Receipts ("EDRs") or other similar securities representing securities of foreign
issuers. These securities may not necessarily be denominated in the same
currency as the securities they represent, and while designed for use as
alternatives to the purchase of the underlying securities in their national
markets and currencies, are subject to the same risks as the foreign securities
to which they relate.

ADRs are receipts, typically issued by a US bank or trust company, which
evidence ownership of underlying securities issued by a foreign corporation.
EDRs, which are sometimes referred to as Continental Depository Receipts
("CDRs"), are receipts issued in Europe, and GDRs or IDRs are issued outside the
United States. EDRs (CDRs) and GDRs (IDRs) are typically issued by non-US banks
and trust companies and evidence ownership of either foreign or domestic
securities. Generally, ADRs in registered form are designed for use in US
securities markets, and EDRs (CDRs) and GDRs (IDRs) in bearer form are designed
for use in European and non-US securities markets, respectively. For purposes of
the Fund's investment policies, depository receipts generally are deemed to have
the same classification as the underlying securities they represent. Thus, a
depository receipt representing ownership of common stock will be treated as
common stock.

ADRs are publicly traded on exchanges or over-the-counter in the United States
and are issued through "sponsored" or "unsponsored" arrangements. In a sponsored
ADR arrangement, the foreign issuer assumes the obligation to pay some or all of
the depository's transaction fees, whereas under an unsponsored arrangement, the
foreign issuer assumes no obligations and the depository's transaction fees are
paid directly by the ADR holders. In addition, less information is available in
the United States about an unsponsored ADR than about a sponsored ADR.

Investments in foreign securities incur higher costs than investments in US
securities, including higher costs in making securities transactions as well as
foreign government taxes which may reduce the investment return of the Fund. In
addition, foreign investments may include risks associated with currency
exchange rates, less complete information about additional companies, less
market liquidity and political instability.

Repurchase Agreements. The Fund may engage in repurchase agreement transactions
with member banks of the Federal Reserve System and certain non-bank dealers,
including governmental securities dealers approved by the Fund Trust Board.
Under the terms of a typical repurchase agreement, the Fund would acquire any
underlying security for a relatively short period (usually not more than one
week), subject to an obligation of the seller to repurchase, and the Fund to
resell, the obligation at an agreed price and time, thereby determining the
yield during the Fund's holding period. This arrangement results in a fixed rate
of return that is not subject to market fluctuations during the Fund's holding
period. The value of the underlying securities will be at least equal at all
times to the total amount of the repurchase obligations, including interest. The
Fund bears a risk of loss in the event of default by or bankruptcy of the other
party to a repurchase agreement. The Fund may be delayed in, or prevented from,
exercising its rights to dispose of the collateralized securities. To the extent
that, in the meantime, the value of the securities repurchased had decreased or
the value of the securities had increased, the Fund could experience a loss. The
Advisor reviews the creditworthiness of those banks and dealers with which the
Fund enters into repurchase agreements and monitors on an ongoing basis the
value of the securities subject to repurchase agreements to ensure that it is
maintained at the required level. A repurchase agreement is considered to be a
loan under the 1940 Act.

Reverse Repurchase Agreements. The Fund may borrow funds for temporary or
emergency purposes, such as meeting larger than anticipated redemption requests,
and not for leverage, by, among other things, agreeing to sell portfolio
securities to financial institutions such as member banks of the Federal Reserve
System and certain non-bank dealers and to repurchase them at a mutually agreed
date and price (a "reverse repurchase agreement"). At the time the Fund enters
into a reverse repurchase agreement it will segregate cash or liquid securities
having a value equal to the repurchase price, including accrued interest. The
segregated assets will be marked-to-market daily and additional assets will be
segregated on any day in which the assets fall below the repurchase price (plus
accrued interest). The Fund's liquidity and ability to manage its assets might
be affected when it sets aside cash or portfolio securities to cover such
commitments. Reverse repurchase agreements involve the risk that the market
value of the securities sold by the Fund may decline below the repurchase price
of those securities. In the event the buyer of securities under a reverse
repurchase agreement files for bankruptcy or becomes insolvent, such buyer or
its trustee or receiver may receive an extension of time to determine whether to
enforce the Fund's obligation to repurchase the securities, and the Fund's use
of the proceeds of the reverse repurchase agreement may effectively be
restricted pending such decision. Reverse repurchase agreements are considered
to be borrowings by the Fund.

Mortgage Dollar Rolls. The Fund may enter into mortgage "dollar rolls" in which
the Fund sells securities for delivery in the current month and simultaneously
contracts to repurchase substantially similar (same dealer, type, coupon and
maturity), but not identical, securities on a specified future date. During the
roll period, the Fund forgoes principal and interest paid on the securities. The
Fund is compensated by the difference between the current sales price and the
lower forward price for the future purchase (often referred to as the "drop") or
fee income and by the interest earned on the cash proceeds of the initial sale.
A "covered roll" is a specific type of dollar roll for which there is an
offsetting cash position or a cash equivalent security position which matures on
or before the forward settlement date of the dollar roll transaction. The Fund
may enter into both covered and uncovered rolls. At the time the Fund enters
into a dollar roll transaction, it will segregate, with an approved custodian,
cash or liquid securities having a value not less than the repurchase price
(including accrued interest) and will subsequently monitor the segregated assets
to ensure that its value is maintained.

Borrowing. The Fund may not borrow money, except as permitted under the 1940
Act, and as interpreted or modified by regulatory authority having jurisdiction,
from time to time. 'Under the 1940 Act, the Fund is required to maintain
continuous asset coverage of 300% with respect to such borrowings and to sell
(within three days) sufficient portfolio holdings to restore such coverage if it
should decline to less than 300% due to market fluctuations or otherwise, even
if such liquidation of the Fund's holdings may be disadvantageous from an
investment standpoint.

Leveraging by means of borrowing may exaggerate the effect of any increase or
decrease in the value of the Fund's securities and the Fund's NAV per share, and
money borrowed by the Fund will be subject to interest and other costs (which
may include commitment fees and/or the cost of maintaining minimum average
balances) that may exceed the income received from the securities purchased with
the borrowed funds.

Lending of Portfolio Securities. The Fund may lend its investment securities to
approved institutional borrowers who need to borrow securities in order to
complete certain transactions, such as covering short sales, avoiding failures
to deliver securities or completing arbitrage operations. By lending its
investment securities, the Fund attempts to increase its net investment income
through the receipt of interest on the loan. Any gain or loss in the market
price of the securities loaned that might occur during the term of the loan
would belong to the Fund. The Fund may lend its investment securities so long as
the terms, structure and the aggregate amount of such loans are not inconsistent
with the 1940 Act or the rules and regulations or interpretations of the SEC
thereunder, which currently require that (a) the borrower pledge and maintain
with the Fund collateral consisting of liquid, unencumbered assets having a
value at all times not less than 100% of the value of the securities loaned, (b)
the borrower add to such collateral whenever the price of the securities loaned
rises (i.e., the borrower "marks to the market" on a daily basis), (c) the loan
be made subject to termination by the Fund at any time, and (d) the Fund
receives reasonable interest on the loan (which may include the Fund investing
any cash collateral in interest bearing short-term investments), and
distributions on the loaned securities and any increase in their market value.
The Fund will bear any losses incurred from the investment of the collateral it
receives. There may be risks of delay in recovery of the securities or even loss
of rights in the collateral should the borrower of the securities fail
financially. However, loans will be made only to borrowers selected by the
Fund's delegate after a commercially reasonable review of relevant facts and
circumstances, including the creditworthiness of the borrower.

At the present time, the staff of the SEC does not object if an investment
company pays reasonable negotiated fees in connection with loaned securities, so
long as such fees are set forth in a written contract and approved by the
investment company's Board of Trustees. In addition, voting rights may pass with
the loaned securities, but if a material event occurs affecting an investment on
loan, the loan must be called and the securities voted. Pursuant to an exemptive
order granted by the SEC, cash collateral received by the Fund may be invested
in a money market fund managed by the Advisor (or one of its affiliates).

Other Investment Companies. Securities of other investment companies may be
acquired by the Fund to the extent permitted under the 1940 Act, that is, the
Fund may invest a maximum of up to 10% of its total assets in securities of
other investment companies so long as not more than 3% of the total outstanding
voting stock of any one investment company is held by the Fund. In addition, not
more than 5% of the Fund's total assets may be invested in the securities of any
one investment company. The Fund may be permitted to exceed these limitations by
an exemptive order of the SEC. Pursuant to exemptive orders granted by the SEC,
the Fund may invest up to 25% of its total assets in affiliated money market
funds. It should be noted that investment companies incur certain expenses such
as management, custodian, and transfer agency fees, and therefore any investment
by the Fund in shares of other investment companies would be subject to such
duplicate expenses. The Fund will indirectly bear its proportionate share of any
management or other fees paid by investment companies in which it invests, in
addition to its own fees. No advisory fee is charged on assets invested in
affiliated money market funds.

Investment of Uninvested Cash Balances. The Fund may have cash balances that
have not been invested in portfolio securities ("Uninvested Cash"). Uninvested
Cash may result from a variety of sources, including dividends or interest
received from portfolio securities, unsettled securities transactions, reserves
held for investment strategy purposes, scheduled maturity of investments,
liquidation of investment securities to meet anticipated redemptions and
dividend payments, and new cash received from investors. Uninvested Cash may be
invested directly in money market instruments or other short-term debt
obligations. Pursuant to an Exemptive Order issued by the SEC, the Fund may use
Uninvested Cash to purchase shares of affiliated funds, including money market
funds and Cash Management QP Trust, or entities for which the Advisor may act as
investment advisor that operate as cash management investment vehicles and that
are excluded from the definition of "investment company" pursuant to Section
3(c)(1) or 3(c)(7) of the 1940 Act (collectively, the "Central Funds") in excess
of the limitations of Section 12(d)(1) of the 1940 Act. Investment by the Fund
in shares of the Central Funds will comply with Rule 2a-7 under the 1940 Act and
will be in accordance with the Fund's investment policies and restrictions.

The Fund will invest Uninvested Cash in Central Funds only to the extent that
the Fund's aggregate investment in the Central Funds does not exceed 25% of its
total assets. Purchases and sales of shares of Central Funds are made at net
asset value.


Impact of Large Redemptions and Purchases of Fund shares. From time to time,
shareholders of the Fund (which may include affiliated and/or non-affiliated
registered investment companies that invest in the Fund) may make relatively
large redemptions or purchases of Fund shares. These transactions may cause the
Fund to have to sell securities or invest additional cash, as the case may be.
While it is impossible to predict the overall impact of these transactions over
time, there could be adverse effects on the Fund's performance to the extent
that the Fund may be required to sell securities or invest cash at times when it
would not otherwise do so. These transactions could also accelerate the
realization of taxable income if sales of securities resulted in capital gains
or other income and could also increase transaction costs.

Investment Objective. The Fund's investment objective is not a fundamental
policy and may be changed upon notice to, but without the approval of, the
Fund's shareholders. If there is a change in the Fund's investment objective,
the Fund's shareholders should consider whether the Fund remains an appropriate
investment in light of their then-current needs. Shareholders of the Fund will
receive 30 days' prior written notice with respect to any change in the
investment objective of the Fund.

Rating Services

The ratings of rating services represent their opinions as to the quality of the
securities that they undertake to rate. It should be emphasized, however, that
ratings are relative and subjective and are not absolute standards of quality.
Although these ratings are an initial criterion for selection of portfolio
investments, the Advisor also makes its own evaluation of these securities,
subject to review by the Board of Trustees of the Trust. After purchase by the
Fund, an obligation may cease to be rated or its rating may be reduced below the
minimum required for purchase by the Fund. Neither event would require the Fund
to eliminate the obligation from its portfolio, but the Advisor will consider
such an event in its determination of whether the Fund should continue to hold
the obligation. A description of the ratings referred to herein and in the
Prospectus is set forth in the Appendix of this SAI.
The following is a chart of the various types of securities and investment
strategies employed by the Fund. Unless otherwise indicated, the Fund is not
obligated to pursue any of the following strategies and does not represent that
these techniques are available now or will be available at any time in the
future.  If the Fund's  investment in a particular type of security is limited
to a certain  percentage of the Fund's assets,  that percentage  limitation is
listed in the chart.  Above,  there is a description of how each type of
security and investment strategy may be used by the Fund. As a matter of
nonfundamental operating policy, the Fund may be subject to additional
restrictions. See the section entitled "Investment Restrictions."
<TABLE>
<CAPTION>
 -------------------------------------------------------- ----------------------------------------------------------
 INVESTMENT PRACTICE                                       DWS Short Duration Plus Fund
 ======================================================== ==========================================================

KEY TO TABLE:
 +   Permitted without stated limit
 o Permitted without stated limit, but not expected to be used to a significant
 extent X Not permitted

 20% Italic type (e.g. 20%) represents an investment limitation as a percentage of net fund assets; does not
 indicate actual use

 20% Roman type (e.g. 20%) represents an investment limitation as a percentage of total fund assets; does not
 indicate actual use
 -------------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>
 -------------------------------------------------------------------------------------------------------------------
 EQUITY SECURITIES
 -------------------------------------------------------- ----------------------------------------------------------
 Common Stock                                                                         X
 -------------------------------------------------------- ----------------------------------------------------------
 Warrants                                                                            20%
 -------------------------------------------------------- ----------------------------------------------------------
 Preferred Stock                                                                      X
 -------------------------------------------------------- ----------------------------------------------------------
 Convertible Securities                                                               X
 -------------------------------------------------------------------------------------------------------------------
 FIXED INCOME SECURITIES & MONEY MARKET INSTRUMENTS
 -------------------------------------------------------- ----------------------------------------------------------
 Short-Term Instruments                                                               +
 -------------------------------------------------------- ----------------------------------------------------------
 Obligations of Banks and Other Financial Institutions                                +
 -------------------------------------------------------- ----------------------------------------------------------
 Certificates of Deposit and Banker's Acceptances                                     +
 -------------------------------------------------------- ----------------------------------------------------------
 Commercial Paper                                                                     +
 -------------------------------------------------------- ----------------------------------------------------------
 Variable Rate Master Demand Notes                                                    +
 -------------------------------------------------------- ----------------------------------------------------------
 US Government Securities                                                             +
 -------------------------------------------------------- ----------------------------------------------------------
 Corporate Debt Securities                                                            +
 -------------------------------------------------------- ----------------------------------------------------------
 Custodial Receipts                                                                   o
 -------------------------------------------------------- ----------------------------------------------------------
 Zero Coupon Securities and Deferred Interest Bonds                                   +
 -------------------------------------------------------- ----------------------------------------------------------
 Variable Rate Securities                                                             +
 -------------------------------------------------------- ----------------------------------------------------------
 Warrants                                                                             +
 -------------------------------------------------------- ----------------------------------------------------------
 Inverse Floating Rate Securities                                                     o
  -------------------------------------------------------- ----------------------------------------------------------
 Lower-Rated Debt Securities                                                         10%
 -------------------------------------------------------- ----------------------------------------------------------
 Registered Loans                                                                     X
 -------------------------------------------------------- ----------------------------------------------------------
 Put Bonds                                                                            +
 -------------------------------------------------------- ----------------------------------------------------------
 Bank Loans                                                                           +
 -------------------------------------------------------- ----------------------------------------------------------
 Other Debt Obligations                                                               +
 -------------------------------------------------------------------------------------------------------------------
 MUNICIPAL SECURITIES
 -------------------------------------------------------- ----------------------------------------------------------
 Municipal Notes                                                                      o
 -------------------------------------------------------- ----------------------------------------------------------
 Tax Anticipation Notes                                                               o
 -------------------------------------------------------- ----------------------------------------------------------
 Revenue Anticipation Notes                                                           o
 -------------------------------------------------------- ----------------------------------------------------------
 Bond Anticipation Notes                                                              o
 -------------------------------------------------------- ----------------------------------------------------------
 Tax and Revenue Anticipation Notes                                                   o
 -------------------------------------------------------- ----------------------------------------------------------
 Construction Loan Notes                                                              o
 -------------------------------------------------------- ----------------------------------------------------------
 Miscellaneous, Temporary and Anticipatory Instruments                                o
 -------------------------------------------------------- ----------------------------------------------------------
 Tax-Exempt Commercial Paper                                                          o
 -------------------------------------------------------- ----------------------------------------------------------
 Municipal Securities                                                                 o
 -------------------------------------------------------- ----------------------------------------------------------
 General Obligation Bonds                                                             o
 -------------------------------------------------------- ----------------------------------------------------------
 Revenue Bonds                                                                        o
 -------------------------------------------------------- ----------------------------------------------------------
 Private Activity Bonds                                                               o
 -------------------------------------------------------- ----------------------------------------------------------
 Tender Option Bonds                                                                  o
 -------------------------------------------------------- ----------------------------------------------------------
 Municipal Leases, Certificates of Participation and
 Other Participation Interests                                                       5%
 -------------------------------------------------------- ----------------------------------------------------------
 Pre-Refunded Securities                                                              o
 -------------------------------------------------------- ----------------------------------------------------------
 Auction Rate Securities                                                              o
 -------------------------------------------------------- ----------------------------------------------------------
 Pay-in-Kind Securities                                                               o
 -------------------------------------------------------------------------------------------------------------------
 DERIVATIVE SECURITIES (OPTIONS)
 -------------------------------------------------------- ----------------------------------------------------------
 Options on Securities                                                                +
 -------------------------------------------------------- ----------------------------------------------------------
 Options on Securities Indices                                                        +
 -------------------------------------------------------- ----------------------------------------------------------
 Options on Non-US Securities Indices                                                 +
 -------------------------------------------------------------------------------------------------------------------
 DERIVATIVE SECURITIES (FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS)
 --------------------------------------------------------- ---------------------------------------------------------
 Futures Contracts                                                                    +
 --------------------------------------------------------- ---------------------------------------------------------
 Futures Contracts on Securities Indices, Foreign
 Currency and Interest Rates                                                          +
 --------------------------------------------------------- ---------------------------------------------------------
 Options on Futures Contracts (including Contracts on
 Securities Indices)                                                                  +
 -------------------------------------------------------------------------------------------------------------------
 DERIVATIVE SECURITIES (HEDGING STRATEGIES)
 -------------------------------------------------------- ----------------------------------------------------------
 Hedging Strategies                                                                   +
 -------------------------------------------------------- ----------------------------------------------------------
 Swap Agreements                                                                      +
 -------------------------------------------------------- ----------------------------------------------------------
 Credit Default Swaps                                                                15%
 -------------------------------------------------------------------------------------------------------------------
 MORTGAGE-BACKED AND ASSET-BACKED SECURITIES
 -------------------------------------------------------- ----------------------------------------------------------
 Government Guaranteed Mortgage-Backed Securities                                     +
 -------------------------------------------------------- ----------------------------------------------------------
 Ginnie Mae Certificates                                                              +
 -------------------------------------------------------- ----------------------------------------------------------
 Fannie Mae Certificates                                                              +
 -------------------------------------------------------- ----------------------------------------------------------
 Freddie Mac Certificates                                                             +
 -------------------------------------------------------- ----------------------------------------------------------
 Multi-Class Mortgage-Backed Securities (CMOs and
 REMICs)                                                                              +
 -------------------------------------------------------- ----------------------------------------------------------
 Privately Issued Commercial Mortgage-Backed Securities                               +
 -------------------------------------------------------- ----------------------------------------------------------
 Agency Commercial Mortgage-Backed Securities                                         +
 -------------------------------------------------------- ----------------------------------------------------------
 Mortgage Pass-Through Securities                                                     +
 -------------------------------------------------------- ----------------------------------------------------------
 Stripped Mortgage-Backed Securities                                                  +
 -------------------------------------------------------- ----------------------------------------------------------
 Adjustable Rate Mortgages                                                            +
 -------------------------------------------------------- ----------------------------------------------------------
 Asset-Backed Securities                                                              +
 -------------------------------------------------------------------------------------------------------------------
 SECURITIES OF NON-US ISSUERS
 -------------------------------------------------------- ----------------------------------------------------------
 Foreign Securities and Depository Receipts (ADRs,                                  +(1)
 EDRs, GDRs and IDRs)
 -------------------------------------------------------- ----------------------------------------------------------
 Foreign Corporate Debt Securities                                                  +(1)
 -------------------------------------------------------- ----------------------------------------------------------
 Foreign Government Debt Securities                                                 +(1)
 -------------------------------------------------------- ----------------------------------------------------------
 Investments in Emerging Markets                                                      +
 -------------------------------------------------------------------------------------------------------------------
 CURRENCY MANAGEMENT
 -------------------------------------------------------- ----------------------------------------------------------
 Currency Exchange Transactions                                                       +
 -------------------------------------------------------- ----------------------------------------------------------
 Currency Hedging Transactions                                                        +
 -------------------------------------------------------- ----------------------------------------------------------
 Cross Hedging                                                                        X
 -------------------------------------------------------- ----------------------------------------------------------
 Options on Foreign Currencies                                                        +
 -------------------------------------------------------------------------------------------------------------------
 OTHER INVESTMENTS AND INVESTMENT PRACTICES
 -------------------------------------------------------- ----------------------------------------------------------
 Illiquid Securities                                                                 15%
 -------------------------------------------------------- ----------------------------------------------------------
 TBA Commitments                                                                      +
 -------------------------------------------------------- ----------------------------------------------------------

 When-Issued and Delayed Delivery Securities                                         15%
 -------------------------------------------------------- ----------------------------------------------------------
 Repurchase Agreements                                                                +
 -------------------------------------------------------- ----------------------------------------------------------
 Reverse Repurchase Agreements                                                       5%
  -------------------------------------------------------- ----------------------------------------------------------
 Mortgage Dollar Rolls                                                               5%
 -------------------------------------------------------- ----------------------------------------------------------
 Lending of Portfolio Securities                                                   33 1/3%
 -------------------------------------------------------- ----------------------------------------------------------
 Borrowing                                                                         33 1/3%
 -------------------------------------------------------- ----------------------------------------------------------
 Short Sales                                                                          +
 -------------------------------------------------------- ----------------------------------------------------------
 Other Investment Companies                                                      limits vary
 -------------------------------------------------------- ----------------------------------------------------------
 Temporary Defensive Investments                                                      +
  -------------------------------------------------------- ----------------------------------------------------------
 Dow Jones CDX.NA.HY.3 and similar products                                           +
 -------------------------------------------------------- ----------------------------------------------------------
 Concentration of Investment in Any One Industry                                     25%
 -------------------------------------------------------- ----------------------------------------------------------
</TABLE>

(1) May be denominated in any currency.

Portfolio Holdings

In addition to the public disclosure of Fund portfolio holdings through required
SEC quarterly filings, the Fund may make its portfolio holdings information
publicly available on the DWS Funds' Web site as described in the Fund's
prospectus. The Fund does not disseminate non-public information about portfolio
holdings except in accordance with policies and procedures adopted by the Fund.

The Fund's procedures permit non-public portfolio holdings information to be
shared with Deutsche Asset Management and its affiliates (collectively "DeAM"),
subadvisors, if any, custodians, independent registered public accounting firms,
attorneys, officers and trustees/directors and each of their respective
affiliates and advisers who require access to this information to fulfill their
duties to the Fund and are subject to the duties of confidentiality, including
the duty not to trade on non-public information, imposed by law or contract, or
by the Fund's procedures. This non-public information may also be disclosed,
subject to the requirements described below, to certain third parties, such as
securities lending agents, financial printers, proxy voting firms, mutual fund
analysts and rating and tracking agencies, or to shareholders in connection with
in-kind redemptions (collectively, "Authorized Third Parties").

Prior to any disclosure of the Fund's non-public portfolio holdings information
to Authorized Third Parties, a person authorized by the Fund's Trustees must
make a good faith determination in light of the facts then known that the Fund
has a legitimate business purpose for providing the information, that the
disclosure is in the best interest of the Fund, and that the recipient assents
or otherwise has a duty to keep the information confidential and to not trade
based on the information received while the information remains non-public. No
compensation is received by the Fund or DeAM for disclosing non-public holdings
information. Periodic reports regarding these procedures will be provided to the
Fund's Trustees.

Portfolio holdings information distributed by the trading desks of DeAM or a
subadvisor for the purpose of facilitating efficient trading of such securities
and receipt of relevant research is not subject to the foregoing requirements.
Non-public portfolio holding information does not include portfolio
characteristics (other than holdings or subsets of holdings) about the Fund and
information derived therefrom, including, but not limited to, how the Fund's
investments are divided among various sectors, industries, countries, value and
growth stocks, bonds, currencies and cash, types of bonds, bond maturities,
duration, bond coupons and bond credit quality ratings so long as the identity
of the Fund's holdings could not be derived from such information.

Registered investment companies that are subadvised by DeAM may be subject to
different portfolio holdings disclosure policies, and neither DeAM nor the
Fund's Trustees exercise control over such policies. In addition, separate
account clients of DeAM have access to their portfolio holdings and are not
subject to the Fund's portfolio holdings disclosure policy. The portfolio
holdings of some of the funds subadvised by DeAM and some of the separate
accounts managed by DeAM may substantially overlap with the portfolio holdings
of the Fund.

DeAM also manages certain unregistered commingled trusts and creates model
portfolios, the portfolio holdings of which may substantially overlap with the
portfolio holdings of the Fund. To the extent that investors in these commingled
trusts or recipients of model portfolio holdings information may receive
portfolio holdings information of their trust or of a model portfolio on a
different basis from that on which Fund portfolio holdings information is made
public, DeAM has implemented procedures reasonably designed to encourage such
investors and recipients to keep such information confidential, and to prevent
those investors from trading on the basis of non-public holdings information.

There is no assurance that the Fund's policies and procedures with respect to
the disclosure of portfolio holdings information will protect the Fund from the
potential misuse of portfolio holdings information by those in possession of
that information.

                             MANAGEMENT OF THE FUND

Investment Advisor

DIMA, which is part of Deutsche Asset Management, is the investment advisor for
the Fund. Under the supervision of the Board of Trustees of the Fund, with
headquarters at 345 Park Avenue, New York, New York 10154, DIMA makes the Fund's
investment decisions, buys and sells securities for the Fund and conducts
research that leads to these purchase and sale decisions. DIMA manages the
Fund's daily investment and business affairs subject to the policies established
by the Fund's Board of Trustees. DIMA and its predecessors have more than 80
years of experience managing mutual funds. DIMA provides a full range of
investment advisory services to institutional and retail clients. DIMA is also
responsible for selecting brokers and dealers and for negotiating brokerage
commissions and dealer charges. On December 31, 2006, Deutsche Asset Management,
Inc. ("DAMI'') merged into DIMA. Prior to December 31, 2006 DAMI was the
investment advisor to the Fund. As a result of the merger, DIMA is now the
investment advisor to the Fund.

DeAM is the marketing name in the US for the asset management activities of
Deutsche Bank AG, DIMA, Deutsche Bank Trust Company Americas and DWS Trust
Company. DeAM is a global asset management organization that offers a wide range
of investing expertise and resources, including hundreds of portfolio managers
and analysts and an office network that reaches the world's major investment
centers. This well-resourced global investment platform brings together a wide
variety of experience and investment insight, across industries, regions, asset
classes and investing styles. DIMA is an indirect, wholly-owned subsidiary of
Deutsche Bank AG. Deutsche Bank AG is a major global banking institution that is
engaged in a wide range of financial services, including investment management,
mutual fund, retail, private and commercial banking, investment banking and
insurance. DWS Investments is part of Deutsche Bank's Asset Management division
and, within the US, represents the retail asset management activities of
Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Investment
Management Americas Inc. and DWS Trust Company.

The Advisor provides investment counsel for many individuals and institutions,
including insurance companies, industrial corporations, and financial and
banking organizations, as well as providing investment advice to open- and
closed-end SEC registered funds.

The Fund is managed by a team of investment professionals, each of whom plays an
important role in the Fund's management process. Team members work together to
develop investment strategies and select securities for the Fund's portfolio.
This team works for the Advisor or its affiliates and is supported by a large
staff of economists, research analysts, traders and other investment
specialists. The Advisor or its affiliates believe(s) its team approach benefits
fund investors by bringing together many disciplines and leveraging its
extensive resources. Team members with primary responsibility for management of
the Fund, as well as team members who have other ongoing management
responsibilities for the Fund, are identified in the Fund's prospectus, as of
the date of the Fund's prospectus. Composition of the team may change over time,
and fund shareholders and investors will be notified of changes affecting
individuals with primary fund management responsibility.

Investment Management Agreement

Pursuant to an Investment Management Agreement (the "Investment Management
Agreement") between the Fund and the Advisor, the Advisor provides continuing
investment management of the assets of the Fund. In addition to the investment
management of the assets of the Fund, the Advisor determines the investments to
be made for the Fund, including what portion of its assets remain uninvested in
cash or cash equivalents, and with whom the orders for investments are placed,
consistent with the Fund's policies as stated in its Prospectuses and this SAI,
or as adopted by the Fund's Board. The Advisor also monitors, to the extent not
monitored by the Fund's administrator or other agent, the Fund's compliance with
its investment and tax guidelines and other compliance policies.

The Advisor provides assistance to the Fund's Board in valuing the securities
and other instruments held by the Fund, to the extent reasonably required by
valuation policies and procedures that may be adopted by the Fund.

Pursuant to the Investment Management Agreement, (unless otherwise provided in
the agreement or as determined by the Fund's Board and to the extent permitted
by applicable law), the Advisor pays the compensation and expenses of all the
Board members, officers, and executive employees of the Fund, including the
Fund's share of payroll taxes, who are affiliated persons of the Advisor.

The Investment Management Agreement provides that the Fund is generally
responsible for expenses that include: fees payable to the Advisor; outside
legal, accounting or auditing expenses, including with respect to expenses
related to negotiation, acquisition or distribution of portfolio investments;
maintenance of books and records that are maintained by the Fund, the Fund's
custodian, or other agents of the Fund; taxes and governmental fees; fees and
expenses of the Fund's accounting agent, custodian, sub-custodians,
depositories, transfer agents, dividend reimbursing agents and registrars;
payment for portfolio pricing or valuation services to pricing agents,
accountants, bankers and other specialists, if any; brokerage commissions or
other costs of acquiring or disposing of any portfolio securities or other
instruments of the Fund; and litigation expenses and other extraordinary
expenses not incurred in the ordinary course of the Fund's business.

The Investment Management Agreement allows the Advisor to delegate any of its
duties under the Agreement to a subadvisor, subject to a majority vote of the
Board of the Fund, including a majority of the Board who are not interested
persons of the Fund, and, if required by applicable law, subject to a majority
vote of the Fund's shareholders.

The Investment Management Agreement provides that the Advisor shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Fund in connection with matters to which the agreement relates, except a
loss resulting from willful malfeasance, bad faith or gross negligence on the
part of the Advisor in the performance of its duties or from reckless disregard
by the Advisor of its obligations and duties under the agreement.

The Investment Management Agreement will continue from year to year only if its
continuance is approved annually by the vote of a majority of those Trustees who
are not parties to such Agreement or interested persons of the Advisor or the
Trust, cast in person at a meeting called for the purpose of voting on such
approval, and either by a vote of the Trust's Trustees or of a majority of the
outstanding voting securities.

The Investment Management Agreement may be terminated at any time, without
payment of penalty, by either party or by vote of a majority of the outstanding
voting securities of the Fund on 60 days' written notice.

In addition, the Board and shareholders have approved a subadvisor approval
policy for the Fund (the "Subadvisor Approval Policy"). The Subadvisor Approval
Policy permits the Advisor, subject to the approval of the Board, including a
majority of its independent board members, to appoint and replace subadvisors
and to amend sub-advisory contracts without obtaining shareholder approval.
Under the Subadvisor Approval Policy, the Board, including its independent board
members, will continue to evaluate and approve any new sub-advisory contracts
between the Advisor and any subadvisor, as well as all changes to any existing
sub-advisory contract. The Fund cannot implement the Subadvisor Approval Policy
without the SEC either adopting revisions to certain existing rules (as it
proposed to do in October 2003) or granting the Fund exemptive relief from such
existing rules. In the event that the Fund received exemptive relief or the SEC
adopted revisions to its current rules, the Fund and the Advisor would be
subject to certain conditions imposed by the SEC (and certain conditions that
may be imposed in the future within either exemptive relief or a rule) to ensure
that the interests of the Fund and its shareholders are adequately protected
whenever the Advisor acts under the Subadvisor Approval Policy, including any
shareholder notice requirements.

Effective April 23, 2007, for all services provided under the Investment
Management Agreement, the Fund pays the Advisor a fee, calculated daily and paid
monthly, at the annual rates shown below:

Average Daily Net Assets                         Fee Rate
------------------------                         --------

$0 - $1.5 billion                                0.365%
$1.5 billion - $2 billion                        0.340%
$2 billion - $3 billion                          0.315%
$3 billion - $4 billion                          0.300%
$4 billion - $5 billion                          0.285%
$5 billion - $6 billion                          0.270%
Over $6 billion                                  0.255%

Prior to April 23, 2007, the Fund paid the Advisor a fee, computed daily and
paid monthly, at the annual rate as a percentage of net assets shown below:

Average Daily Net Assets                         Fee Rate
------------------------                         --------

$0 - $500 million                                0.500%
$500 million - $1 billion                        0.485%
$1 billion - $2 billion                          0.470%
Over $2 billion                                  0.455%

Prior to the implementation of the above fee schedule, the fund's advisory fee
was equal to an annual rate of 0.70% of the Fund's average daily net assets,
computed and accrued daily and paid monthly.

The investment advisor has contractually agreed through September 30, 2009 to
waive a portion of its fees and reimburse expenses so that total annual
operating expenses will not exceed 0.64% for Class S shares, excluding certain
expenses such as extraordinary expenses, taxes, brokerage and interest.

In addition, the investment advisor has contractually agreed through April 22,
2010 to waive a portion of its fees and reimburse expenses so that total annual
operating expenses will not exceed 0.73% for Class S shares, excluding certain
expenses such as extraordinary expenses, taxes, brokerage and interest.


The total advisory fees charged to or paid by the Fund or PreservationPlus
Income Portfolio (the "Portfolio") (the master portfolio in which, until January
13, 2006, the Fund previously invested all of its assets) for each of the last
three fiscal years ended September 30 are shown in the table below.

         2008                  2007 (1)              2006(2), **
         ----                  --------              -----------

      $5,813,897              $3,286,584             $3,970,632

(1)      Charged to the Fund.

(2)      For the period from October 1, 2005 through January 13, 2006, the
         advisory fee charged to the Portfolio was $1,517,873, of which $625,126
         was waived. For the period January 14, 2006 through September 30, 2006,
         the advisory fee charged to the Fund was $2,452,759.


** Prior to July 1, 2006, these fees included an administrative service fee.

In reviewing the terms of the Investment Management Agreement and in discussions
with the Advisor concerning such Agreement, the Trustees of the Trust who are
not "interested persons" of the Advisor are represented by independent counsel
at the Fund's expense.

Under a separate agreement between Deutsche Bank AG and the Fund, Deutsche Bank
AG has granted a license to the Fund to utilize the trademark "DWS."

The Advisor may enter into arrangements with affiliates and third party service
providers to perform various administrative, back-office and other services
relating to client accounts. Such service providers may be located in the US or
in non-US jurisdictions.

Compensation of Portfolio Managers

Portfolio managers are eligible for total compensation comprised of base salary
and discretionary incentive compensation.

Base Salary - Base salary generally represents a smaller percentage of portfolio
managers' total compensation than discretionary incentive compensation. Base
salary is linked to job function, responsibilities and financial services
industry peer comparison through the use of extensive market data surveys.

Discretionary Incentive Compensation - Generally, discretionary incentive
compensation comprises a greater proportion of total compensation as a portfolio
manager's seniority and compensation levels increase. Discretionary incentive
compensation is determined based on an analysis of a number of factors,
including among other things, the performance of Deutsche Bank, the performance
of the Asset Management division, and the employee's individual contribution. In
evaluating individual contribution, management will consider a combination of
quantitative and qualitative factors. A portion of the portfolio manager's
discretionary incentive compensation may be delivered in long-term equity
programs (usually in the form of Deutsche Bank equity) (the "Equity Plan"). Top
performing portfolio managers may earn discretionary incentive compensation that
is a multiple of their base salary.

o    The quantitative  analysis of a portfolio manager's individual  performance
     is based  on,  among  other  factors,  performance  of all of the  accounts
     managed by the  portfolio  manager  (which  includes the fund and any other
     accounts  managed  by the  portfolio  manager)  over a  one-,  three-,  and
     five-year  period relative to the  appropriate  Morningstar and Lipper peer
     group universes  and/or  benchmark  index(es) with respect to each account.
     Additionally,  the portfolio  manager's  retail/institutional  asset mix is
     weighted,  as appropriate for evaluation purposes.  Generally the benchmark
     index used is a benchmark index set forth in the fund's prospectus to which
     the fund's  performance  is compared.  Additional or different  appropriate
     peer group or benchmark  indices may also be used.  Primary weight is given
     to pre-tax portfolio performance over three-year and five-year time periods
     (adjusted as appropriate if the portfolio  manager has served for less than
     five years) with lesser consideration given to portfolio performance over a
     one-year  period.  The  increase or decrease in a fund's  assets due to the
     purchase or sale of fund shares is not considered a material  factor.

o    The qualitative analysis of a portfolio manager's individual performance is
     based on,  among  other  things,  the results of an annual  management  and
     internal  peer  review  process,  and  management's  assessment  of overall
     portfolio  manager  contributions  to investor  relations,  the  investment
     process  and  overall  performance  (distinct  from fund and other  account
     performance). Other factors, including contributions made to the investment
     team,  as well as adherence to  Compliance  Policies and  Procedures,  Risk
     Management procedures, the firm's Code of Ethics and "living the values" of
     the Advisor are also factors.

The quantitative analysis of a portfolio manager's performance is given more
weight in determining discretionary incentive compensation than the qualitative
portion.

Certain portfolio managers may also participate in the Equity Plan. The amount
of equity awarded under the long-term equity programs is generally based on the
individual's total compensation package and may comprise from 0% to 30% of the
total compensation award. As discretionary incentive compensation increases, the
percentage of compensation awarded in Deutsche Bank equity also increases.
Portfolio managers may receive a portion of their equity compensation in the
form of shares in the proprietary mutual funds that they manage or support.

Fund Ownership of Portfolio Managers
------------------------------------

The following table shows the dollar range of shares owned beneficially and of
record by the Fund's portfolio managers in the Fund as well as in all DWS Funds
as a group (i.e., those funds advised by Deutsche Asset Management or its
affiliates), including investments by their immediate family members sharing the
same household and amounts invested through retirement and deferred compensation
plans. This information is provided as of the Fund's most recent fiscal year
end.
<TABLE>
<CAPTION>
                                                        Dollar Range of                    Dollar Range of All DWS
Name of Portfolio Manager                              Fund Shares Owned                      Fund Shares Owned
-------------------------                              -----------------                      -----------------
<S>                                                           <C>                                    <C>

Eric Meyer                                                    $0                                     $0
Gary Sullivan                                                 $0                             $50,001 - $100,000
Matthew MacDonald                                      $10,001 - $50,000                      $10,001 - $50,000
Robert Wang                                               $1 - $1,000                        $100,001 - $500,000
Thomas Picciochi                                       $10,001 - $50,000                     $100,001 - $500,000
William Chepolis                                      $50,001 - $100,000                     $100,001 - $500,000

Conflicts of Interest
---------------------

In addition to managing the assets of the Fund, the Fund's portfolio managers
may have responsibility for managing other client accounts of the Advisor or its
affiliates. The tables below show, for each portfolio manager, the number and
asset size of (1) SEC registered investment companies (or series thereof) other
than the Fund, (2) pooled investment vehicles that are not registered investment
companies and (3) other accounts (e.g., accounts managed for individuals or
organizations) managed by the portfolio manager. Total assets attributed to the
portfolio managers in the tables below include total assets of each account
managed by them, although the managers may only manage a portion of such
account's assets. The tables also show the number of performance based fee
accounts, as well as the total assets of the accounts for which the advisory fee
is based on the performance of the account. This information is provided as of
the Fund's most recent fiscal year end.

Other SEC Registered Investment Companies Managed:


                                                                   Number of
                        Number of          Total Assets of         Investment          Total Assets of
                        Registered           Registered         Company Accounts        Performance-
Name of Portfolio       Investment           Investment         with Performance-         Based Fee
 Manager                Companies            Companies              Based Fee             Accounts
 -------                ---------            ---------              ---------             --------

Eric Meyer                  1               $54,313,957                0                    $0

Gary Sullivan              11            $5,122,259,104                0                    $0

Matthew MacDonald          14            $7,186,736,667                0                    $0

Robert Wang                43           $12,522,105,162                0                    $0

Thomas Picciochi           12            $5,591,208,443                0                    $0

William Chepolis           16            $7,253,596,672                0                    $0

Other Pooled Investment Vehicles Managed:
-----------------------------------------
                                                                Number of Pooled
                                                                   Investment
                         Number of                              Vehicle Accounts         Total Assets of
                          Pooled          Total Assets of             with                Performance-
Name of Portfolio       Investment       Pooled Investment         Performance-             Based Fee
Manager                  Vehicles             Vehicles              Based Fee                Accounts
-------                  --------             --------              ---------               ---------


Eric Meyer                   5             $1,701,178,221               1                   $261,474,067

Gary Sullivan                0                         $0               0                             $0

Matthew MacDonald            0                         $0               0                             $0

Robert Wang                  36            $1,018,472,589               1                   $125,426,656

Thomas Picciochi             11              $644,711,755               1                   $125,426,656

William Chepolis              0                        $0               0                             $0

Other Accounts Managed:
-----------------------


                                                                    Number of
                                                                  Other Accounts           Total Assets of
                         Number of                                     with                  Performance-
Name of Portfolio         Other            Total Assets of         Performance-               Based Fee
Manager                  Accounts           Other Accounts           Based Fee                Accounts
-------                  --------           --------------           ---------                ---------

Eric Meyer                  0                      $0                      0                         $0

Gary Sullivan               0                      $0                      0                         $0

Matthew MacDonald           1            $116,697,183                      0                         $0

Robert Wang                49          $8,290,933,067                      8               $219,246,360

Thomas Picciochi           14            $944,218,197                      8               $219,246,360

William Chepolis            1            $116,697,183                      0                         $0
</TABLE>

In addition to the accounts above, an investment professional may manage
accounts in a personal capacity that may include holdings that are similar to,
or the same as, those of the Fund. The Advisor has in place a Code of Ethics
that is designed to address conflicts of interest and that, among other things,
imposes restrictions on the ability of portfolio managers and other "access
persons" to invest in securities that may be recommended or traded in the Fund
and other client accounts.

Real, potential or apparent conflicts of interest may arise when a portfolio
manager has day-to-day portfolio management responsibilities with respect to
more than one fund or account, including the following:

o    Certain  investments  may be  appropriate  for the Fund and also for  other
     clients advised by the Advisor,  including other client accounts managed by
     the Fund's portfolio management team. Investment decisions for the Fund and
     other clients are made with a view to achieving their respective investment
     objectives  and  after  consideration  of such  factors  as  their  current
     holdings,  availability  of  cash  for  investment  and the  size of  their
     investments generally. A particular security may be bought or sold for only
     one client or in different amounts and at different times for more than one
     but less than all  clients.  Likewise,  because  clients of the Advisor may
     have differing investment  strategies,  a particular security may be bought
     for one or more  clients  when one or more other  clients  are  selling the
     security.  The investment results achieved for the Fund may differ from the
     results achieved for other clients of the Advisor.  In addition,  purchases
     or sales of the same  security  may be made for two or more  clients on the
     same day. In such event,  such  transactions  will be  allocated  among the
     clients in a manner  believed by the Advisor to be most  equitable  to each
     client,  generally  utilizing a pro rata  allocation  methodology.  In some
     cases, the allocation procedure could potentially have an adverse effect or
     positive effect on the price or amount of the securities  purchased or sold
     by the Fund.  Purchase  and sale orders for the Fund may be  combined  with
     those of other clients of the Advisor in the interest of achieving the most
     favorable net results to the Fund and the other clients.

o    To the extent that a portfolio  manager has  responsibilities  for managing
     multiple client accounts,  a portfolio manager will need to divide time and
     attention among relevant  accounts.  The Advisor attempts to minimize these
     conflicts by aligning its portfolio management teams by investment strategy
     and by employing similar investment models across multiple client accounts.

o    In some  cases,  an  apparent  conflict  may arise where the Advisor has an
     incentive, such as a performance-based fee, in managing one account and not
     with respect to other  accounts it manages.  The Advisor will not determine
     allocations based on whether it receives a  performance-based  fee from the
     client.  Additionally,  the  Advisor  has in  place  supervisory  oversight
     processes to periodically monitor performance  deviations for accounts with
     like strategies.

o    The Advisor and its  affiliates  and the  investment  team of the Funds may
     manage other mutual funds and separate  accounts on a long-short basis. The
     simultaneous  management  of long and short  portfolios  creates  potential
     conflicts of interest  including  the risk that short sale  activity  could
     adversely  affect the market value of the long  positions(and  vice versa),
     the risk arising from sequential  orders in long and short  positions,  and
     the risks  associated with receiving  opposing orders at the same time. The
     Advisor has adopted procedures that it believes are reasonably  designed to
     mitigate  these  potential   conflicts  of  interest.   Included  in  these
     procedures are specific  guidelines  developed to ensure fair and equitable
     treatment  for all  clients  whose  accounts  are  managed  by each  Fund's
     portfolio  management  team. The Advisor and the portfolio  management team
     have established monitoring procedures, a protocol for supervisory reviews,
     as well as  compliance  oversight  to ensure that  potential  conflicts  of
     interest relating to this type of activity are properly addressed.

The Advisor is owned by Deutsche Bank AG, a multi-national financial services
company. Therefore, the Advisor is affiliated with a variety of entities that
provide, and/or engage in commercial banking, insurance, brokerage, investment
banking, financial advisory, broker-dealer activities (including sales and
trading), hedge funds, real estate and private equity investing, in addition to
the provision of investment management services to institutional and individual
investors. Since Deutsche Bank AG, its affiliates, directors, officers and
employees (the "Firm") are engaged in businesses and have interests other than
managing asset management accounts, such other activities involve real,
potential or apparent conflicts of interest. These interests and activities
include potential advisory, transactional and financial activities and other
interests in securities and companies that may be directly or indirectly
purchased or sold by the Firm for its clients' advisory accounts. These are
considerations of which advisory clients should be aware and which may cause
conflicts that could be to the disadvantage of the Advisor's advisory clients.
The Advisor has instituted business and compliance policies, procedures and
disclosures that are designed to identify, monitor and mitigate conflicts of
interest and, as appropriate, to report them to the Fund's Board.

Codes of Ethics

The Fund, the Advisor and the Fund's principal underwriter have each adopted
codes of ethics under rule 17j-1 under the 1940 Act. Board members, officers of
the Trust and employees of the Advisor and principal underwriter are permitted
to make personal securities transactions, including transactions in securities
that may be purchased or held by the Fund, subject to requirements and
restrictions set forth in the applicable Code of Ethics. The Advisor's Code of
Ethics contains provisions and requirements designed to identify and address
certain conflicts of interest between personal investment activities and the
interests of the Fund. Among other things, the Advisor's Code of Ethics
prohibits certain types of transactions absent prior approval, imposes time
periods during which personal transactions may not be made in certain
securities, and requires the submission of duplicate broker confirmations and
quarterly reporting of securities transactions. Additional restrictions apply to
portfolio managers, traders, research analysts and others involved in the
investment advisory process. Exceptions to these and other provisions of the
Advisor's Code of Ethics may be granted in particular circumstances after review
by appropriate personnel.

Regulatory Matters and Legal Proceedings

On December 21, 2006, Deutsche Asset Management ("DeAM") settled proceedings
with the SEC and the New York Attorney General on behalf of Deutsche Asset
Management, Inc. ("DAMI") and DIMA, the investment advisors to many of the DWS
Investments funds, regarding allegations of improper trading of fund shares at
DeAM and at the legacy Scudder and Kemper organizations prior to their
acquisition by DeAM in April 2002. These regulators alleged that although the
prospectuses for certain funds in the regulators' view indicated that the funds
did not permit market timing, DAMI and DIMA breached their fiduciary duty to
those funds in that their efforts to limit trading activity in the funds were
not effective at certain times. The regulators also alleged that DAMI and DIMA
breached their fiduciary duty to certain funds by entering into certain market
timing arrangements with investors. These trading arrangements originated in
businesses that existed prior to the currently constituted DeAM organization,
which came together as a result of various mergers of the legacy Scudder, Kemper
and Deutsche fund groups, and all of the arrangements were terminated prior to
the start of the regulatory investigations that began in the summer of 2003. No
current DeAM employee approved these trading arrangements. Under the terms of
the settlements, DAMI and DIMA neither admitted nor denied any wrongdoing.

The terms of the SEC settlement, which identified improper trading in the legacy
Deutsche and Kemper mutual funds only, provide for payment of disgorgement in
the amount of $17.2 million. The terms of the settlement with the New York
Attorney General provide for payment of disgorgement in the amount of $102.3
million, which is inclusive of the amount payable under the SEC settlement, plus
a civil penalty in the amount of $20 million. The total amount payable by DeAM,
approximately $122.3 million, will be distributed to shareholders of the
affected funds in accordance with a distribution plan to be developed by a
distribution consultant. The funds' investment advisors do not believe these
amounts will have a material adverse financial impact on them or materially
affect their ability to perform under their investment management agreements
with the DWS funds. The above-described amounts are not material to Deutsche
Bank, and have already been reserved.

Among the terms of the settled orders, DeAM is subject to certain undertakings
regarding the conduct of its business in the future, including formation of a
Code of Ethics Oversight Committee to oversee all matters relating to issues
arising under the advisors' Code of Ethics; establishment of an Internal
Compliance Controls Committee having overall compliance oversight responsibility
of the advisors; engagement of an Independent Compliance Consultant to conduct a
comprehensive review of the advisors' supervisory compliance and other policies
and procedures designed to prevent and detect breaches of fiduciary duty,
breaches of the Code of Ethics and federal securities law violations by the
advisors and their employees; and commencing in 2008, the advisors shall undergo
a compliance review by an independent third party.

In addition, DeAM is subject to certain further undertakings relating to the
governance of the mutual funds, including that at least 75% of the members of
the Boards of Trustees/Directors overseeing the DWS Funds continue to be
independent of DeAM; the Chairmen of the DWS Funds' Boards of Trustees/Directors
continue to be independent of DeAM; DeAM maintain existing management fee
reductions for certain funds for a period of five years and not increase
management fees for these certain funds during this period; the funds retain a
senior officer (or independent consultants, as applicable) responsible for
assisting in the review of fee arrangements and monitoring compliance by the
funds and the investment advisors with securities laws, fiduciary duties, codes
of ethics and other compliance policies, the expense of which shall be borne by
DeAM; and periodic account statements, fund prospectuses and the mutual funds'
web site contain additional disclosure and/or tools that assist investors in
understanding the fees and costs associated with an investment in the funds and
the impact of fees and expenses on fund returns.

DeAM has also settled proceedings with the Illinois Secretary of State regarding
market timing matters. The terms of the Illinois settlement provide for investor
education contributions totaling approximately $4 million and a payment in the
amount of $2 million to the Securities Audit and Enforcement Fund.

On September 28, 2006, the SEC and the National Association of Securities
Dealers ("NASD") (now known as the Financial Industry Regulatory Authority, or
"FINRA") announced final agreements in which Deutsche Investment Management
Americas Inc. ("DIMA"), Deutsche Asset Management, Inc. ("DAMI") and DWS Scudder
Distributors, Inc. (now known as DWS Investments Distributors, Inc. ("DIDI"))
settled administrative proceedings regarding disclosure of brokerage allocation
practices in connection with sales of the DWS Funds' (now known as the DWS
Investments Funds) shares during 2001-2003. The agreements with the SEC and NASD
are reflected in orders which state, among other things, that DIMA and DAMI
failed to disclose potential conflicts of interest to the funds' Boards and to
shareholders relating to DIDI's use of certain funds' brokerage commissions to
reduce revenue sharing costs to broker-dealer firms with whom it had
arrangements to market and distribute DWS Fund shares. These directed brokerage
practices were discontinued in October 2003.


Under the terms of the settlements, in which DIMA, DAMI and DIDI neither
admitted nor denied any of the regulators' findings, DIMA, DAMI and DIDI agreed
to pay disgorgement, prejudgment interest and civil penalties in the total
amount of $19.3 million. The portion of the settlements distributed to the funds
was approximately $17.8 million and was paid to the funds as prescribed by the
settlement orders based upon the amount of brokerage commissions from each fund
used to satisfy revenue sharing agreements with broker-dealers who sold fund
shares.

As part of the settlements, DIMA, DAMI and DIDI also agreed to implement certain
measures and undertakings relating to revenue sharing payments including making
additional disclosures in the funds' Prospectuses or Statements of Additional
Information, adopting or modifying relevant policies and procedures and
providing regular reporting to the fund Boards.

Additional  information  announced by DeAM  regarding  the  terms  of the
settlements  is  available at www.dws-investments.com/regulatory_settlements.

The matters alleged in the regulatory settlements described above also serve as
the general basis of a number of private class action lawsuits involving the DWS
funds. These lawsuits name as defendants various persons, including certain DWS
funds, the funds' investment advisors and their affiliates, and certain
individuals, including in some cases fund Trustees/Directors, officers, and
other parties. Each DWS fund's investment advisor has agreed to indemnify the
applicable DWS funds in connection with these lawsuits, or other lawsuits or
regulatory actions that may be filed making similar allegations.

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

                         FUND SERVICE PROVIDERS

Administrator

Pursuant to an administrative services agreement (the "Administrative Services
Agreement"), 345 Park Avenue, New York, New York 10154, DIMA provides most
administrative services to the Fund including, among others, providing the Fund
with personnel, preparing and making required filings on behalf of the Fund,
maintaining books and records for the Fund, and monitoring the valuation of Fund
securities. For all services provided under the Administrative Services
Agreement, the Fund pays DIMA a fee of 0.10% of the Fund's average daily net
assets. DIMA pays the accounting agency fees out of such Administrative Services
Agreement fee.

Under the Administrative Services Agreement, DIMA, as administrator, is
obligated on a continuous basis to provide such administrative services as the
Board of the Fund reasonably deems necessary for the proper administration of
the Fund. DIMA provides the Fund with personnel; arranges for the preparation
and filing of the Fund's tax returns; prepares and submits reports and meeting
materials to the Board and the shareholders; prepares and files updates to the
Fund's Prospectuses and SAI as well as other reports required to be filed by the
SEC; maintains the Fund's records; provides the Fund with office space,
equipment and services; supervises, negotiates the contracts of and monitors the
performance of third parties contractors; oversees the tabulation of proxies;
monitors the valuation of portfolio securities and monitors compliance with
Board-approved valuation procedures; assists in establishing the accounting and
tax policies of the Fund; assists in the resolution of accounting issues that
may arise with respect to the Fund; establishes and monitors the Fund's
operating expense budgets; reviews and processes the Fund's bills; assists in
determining the amount of dividends and distributions available to be paid by
the Fund, prepares and arranges dividend notifications and provides information
to agents to effect payments thereof; provides to the Board periodic and special
reports; provides assistance with investor and public relations matters; and
monitors the registration of shares under applicable federal and state law. The
Advisor also performs certain fund accounting services under the Administrative
Services Agreement. The Administrative Services Agreement provides that the
Advisor will not be liable under the Administrative Services Agreement except
for willful misfeasance, bad faith or negligence in the performance of its
duties or from the reckless disregard by it of its duties and obligations
thereunder.

For the period ended September 30, 2008, DIMA received $1,601,239 as
compensation for adminstrative services, of which $144,196 is unpaid.

For the period ended September 30, 2007, DIMA received $803,530 as compensation
for adminstrative services, of which $107,884 was unpaid.

For the period from July 1, 2006 through September 30, 2006, DIMA received an
administration fee of $122,624, of which $39,098 is unpaid.

Prior to July 1, 2006, ICCC received a fee of 0.35% of the Fund's average daily
net assets for serving as administrator of the Fund. For the year ended
September 30, 2006*, ICCC earned $1,672,070 as compensation for administrative
and other services provided to the Fund. During the same period, ICCC waived
$680,008 to the Fund to cover expenses. For the year ended September 30, 2006**,
ICCC earned $108,420 for administrative and other services provided to the
Portfolio.

*        For the period October 1, 2005 through June 30, 2006.

**       For the period October 1, 2005 through January 13, 2006.

Pursuant to an agreement between the Administrator and State Street Bank and
Trust Company (SSB), the Administrator has delegated certain administrative
functions to SSB. The costs and expenses of such delegation are borne by the
Administrator, not by the Fund.

Various third-party service providers (the "Service Providers"), some of which
are affiliated with the Advisor, provide certain services to the Fund pursuant
to separate agreements with the Fund.

The fees paid by the Fund to DIMA pursuant to the Administrative Services
Agreement are reduced by the amount of any credits received from the Fund's
custodian for cash balances.

Pursuant to DeAM procedures approved by the Boards on behalf of the DWS funds,
proof of claim forms are routinely filed on behalf of the DWS funds by a third
party service provider, with certain limited exceptions. The Boards of the DWS
funds receive periodic reports regarding the implementation of these procedures.

Distributor

Pursuant to a Distribution Agreement ("Distribution Agreement"), DIDI, 222 South
Riverside Plaza, Chicago, Illinois 60606, an affiliate of the Advisor, is the
principal underwriter and distributor for the Class S shares of the Fund and
acts as agent of the Fund in the continuous offering of Fund shares. The
Distribution Agreement continues in effect from year to year only if its
continuance is approved at least annually by a vote of the Board members of the
Fund, including the Trustees who are not interested persons of the Fund and who
have no direct or indirect financial interest in the Distribution Agreement.

The Distribution Agreement provides that the Distributor shall: (i) use
reasonable efforts to sell shares upon the terms and conditions contained in
Distribution Agreement and the Fund's then-current Prospectuses; (ii) use its
best efforts to conform with the requirements of all federal and state laws
relating to the sale of the shares; (iii) adopt and follow procedures as may be
necessary to comply with the requirements of FINRA and any other applicable
self-regulatory organization; (iv) perform its duties under the supervision of
and in accordance with the directives of the Fund's Board of Trustees and the
Fund's Declaration of Trust and By-Laws; and (v) provide the Fund's Board of
Trustees with a written report of the amounts expended in connection with the
Distribution Agreement. The Distributor shall devote reasonable time and effort
to effect sales of shares but shall not be obligated to sell any specific number
of shares. The services of the Distributor are not exclusive and the Distributor
shall not be liable to the Fund or its shareholders for any error of judgment or
mistake of law, for any losses arising out of any investment, or for any action
or inaction of the Distributor in the absence of bad faith, willful misfeasance,
or gross negligence in the performance of its duties or obligations under the
Distribution Agreement or by reason of the reckless disregard of its duties and
obligations under the Distribution Agreement. The Distribution Agreement further
provides that the Fund and the Distributor will mutually indemnify each other
for losses relating to disclosures in the Fund's registration statement.

The Distribution Agreement may be terminated at any time upon 60 days' written
notice by the Fund, without penalty, by the vote of a majority of the Trustees
of the Fund who are not interested persons of the Fund or by a vote of a
majority of the Fund's outstanding shares of the related class or upon 60 days'
written notice by the Distributor and shall automatically terminate in the event
of an assignment.

DIDI and certain broker-dealers ("Participating Dealers") have entered into
sub-distribution agreements under which such Participating Dealers have agreed
to process investor purchase and redemption orders and respond to inquiries from
shareholders concerning the status of their accounts and the operations of the
Fund. Any sub-distribution agreement may be terminated or assigned by either
party, without penalty, by the vote of a majority of the Fund's non-interested
Trustees or by a vote of a majority of the outstanding voting securities of the
Fund in the same manner as the Distribution Agreement.

Note: Although Class S shares do not have a 12b-1 Plan, and the Trustees have no
current intention of adopting one, the Fund will also pay those fees and
expenses permitted to be paid or assumed by the Trust pursuant to a 12b-1 Plan,
if any, adopted by the Trust, notwithstanding any other provision to the
contrary in the Distribution Agreement.

The Distributor currently offers shares of the Fund on a continuous basis to
investors in all states in which shares of the Fund may from time to time be
registered or where permitted by applicable law. The Distribution Agreement
provides that the Distributor accepts orders for shares at net asset value as no
sales commission or load is charged to the investor. The Distributor has made no
firm commitment to acquire shares of the Fund.

Custodian

The Fund employs SSB, 225 Franklin Street, Boston, Massachusetts 02110 as
custodian. SSB has entered into agreements with foreign subcustodians approved
by the Trustees pursuant to Rule 17f-5 under the 1940 Act. SSB uses Deutsche
Bank AG, an affiliate of the Advisor, as subcustodian ("DB Subcustodian") in
certain countries. To the extent the Fund holds any securities in the countries
in which SSB uses DB Subcustodian as a subcustodian, those securities will be
held by DB Subcustodian as part of a larger omnibus account in the name of SSB
(the "Omnibus Account"). For its services, DB Subcustodian receives (1) an
annual fee based on a percentage of the average daily net assets of the Omnibus
Account and (2) transaction charges with respect to transactions that occur
within the Omnibus Account.

Transfer Agent

DWS Investments Service Company ("DISC") serves as the Fund's Transfer Agent.
DISC is located at 222 South Riverside Plaza, Chicago, IL 60606-5808. Under its
transfer agency agreement with the Trust, DISC maintains the shareholder account
records for the Fund, handles certain communications between shareholders and
the Trust and causes to be distributed any dividends and distributions payable
by the Trust. DISC may be reimbursed by the Fund for its out-of-pocket expenses.

Pursuant to a sub-transfer agency agreement between DISC and DST Systems, Inc.
("DST"), DISC has delegated certain transfer agent, dividend paying agent and
shareholder servicing agent functions to DST. The costs and expenses of such
delegation are borne by DISC, not by the Funds.


The Transfer Agent receives an annual service fee for each account of the Fund,
based on the type of account. For open retail accounts, the fee is a flat fee
ranging from $20.00 to $27.50 per account, for open wholesale money funds the
fee is $32.50 per account, while for certain retirement accounts serviced on the
recordkeeping system of ADP, Inc., the fee is a flat fee up to $3.60 per account
(as of 2007, indexed to inflation) plus an asset based fee of up to 0.25% of
average net assets. 1/12th of the annual service charge for each account is
charged and payable to the Transfer Agent each month. A fee is charged for any
account which at any time during the month had a share balance in the Fund.
Smaller fees are also charged for closed accounts for which information must be
retained on the Transfer Agent's system for up to 18 months after closing for
tax reporting purposes.


Certain out-of-pocket expenses incurred by the Transfer Agent, including
expenses of printing and mailing routine fund disclosure documents, costs of
record retention and transaction processing costs are reimbursed by the Fund or
are paid directly by the Fund. Certain additional out-of-pocket expenses,
including costs of computer hardware and software, third party record-keeping
and processing of proxy statements, may only be reimbursed by the Fund with the
prior approval of the Fund's Board.



Service Plan

The Fund may enter into Shareholder Servicing Agreements with respect to its
Class S Shares pursuant to which the Advisor or its affiliates will provide
compensation out of their own resources for ongoing shareholder services.
Currently, banking laws and regulations do not prohibit a financial holding
company affiliate from acting as distributor or Shareholder Servicing Agent or
in other capacities for investment companies. Should future legislative,
judicial or administrative action prohibit or restrict the activities of the
Shareholder Servicing Agents in connection with the Shareholder Servicing
Agreements, the Trust may be required to alter materially or discontinue its
arrangements with the Shareholder Servicing Agents. Such financial institutions
may impose separate fees in connection with these services and investors should
review the Prospectus and this SAI in conjunction with any such institution's
fee schedule.

Prior to the Fund renaming Investment Class shares to Class S shares, the Fund
had adopted a service plan for its Investment Class shares, under which the Fund
paid Investment Company Capital Corp. ("ICCC") service fees at an aggregate
annual rate of up to 0.25% of the class's average daily net assets. ICCC
provided information and administrative services to the Fund. ICCC in turn had
various agreements with financial services firms to provide personal services
and/or account maintenance services to their customers and paid these fees based
upon the assets of shareholder accounts the firms serviced. For the fiscal years
ended September 30, 2006, September 30, 2005 and September 30, 2004, the Fund
incurred $696,348, $1,221,644 and $3,859,730, respectively, of which $621,888,
$1,221,644 and $1,101,950, respectively, was waived, in shareholder servicing
fees for Class S (former Investment Class) shares.

Legal Counsel

Vedder   Price  P.C.,   222  North
LaSalle Street, Chicago, Illinois 60601, serves as counsel to the Fund.

Ropes    &    Gray    LLP,     One
International Place, Boston, Massachusetts 02110-2624, serves as counsel to the
Independent Trustees.

Independent Registered Public Accounting Firm

PricewaterhouseCoopers LLP, 125 High Street, Boston, MA 02110, acts as
Independent Registered Public Accounting Firm of the Fund for the fiscal year
ended September 30, 2008.

                           PORTFOLIO TRANSACTIONS

The Advisor is generally responsible for placing the orders for the purchase and
sale of portfolio securities, including the allocation of brokerage.

The policy of the Advisor in placing orders for the purchase and sale of
securities for the Funds is to seek best execution, taking into account such
factors, among others, as price; commission (where applicable); the
broker-dealer's ability to ensure that securities will be delivered on
settlement date; the willingness of the broker-dealer to commit its capital and
purchase a thinly traded security for its own inventory; whether the
broker-dealer specializes in block orders or large program trades; the
broker-dealer's knowledge of the market and the security; the broker-dealer's
ability to maintain confidentiality; the broker-dealer's ability to provide
access to new issues; the broker-dealer's ability to provide support when
placing a difficult trade; the financial condition of the broker-dealer; and
whether the broker-dealer has the infrastructure and operational capabilities to
execute and settle the trade. The Advisor seeks to evaluate the overall
reasonableness of brokerage commissions with commissions charged on comparable
transactions and compares the brokerage commissions (if any) paid by the Fund to
reported commissions paid by others. The Advisor routinely reviews commission
rates, execution and settlement services performed and makes internal and
external comparisons.

Commission rates on transactions in equity securities on U.S. securities
exchanges are subject to negotiation. Commission rates on transactions in equity
securities on foreign securities exchanges are generally fixed. Purchases and
sales of fixed-income securities and certain over-the-counter securities are
effected on a net basis, without the payment of brokerage commissions.
Transactions in fixed income and certain over-the-counter securities are
generally placed by the Advisor with the principal market makers for these
securities unless the Advisor reasonably believes more favorable results are
available elsewhere. Transactions with dealers serving as market makers reflect
the spread between the bid and asked prices. Purchases of underwritten issues
will include an underwriting fee paid to the underwriter. Money market
instruments are normally purchased in principal transactions directly from the
issuer or from an underwriter or market maker.

It is likely that the broker-dealers selected based on the considerations
described in this section will include firms that also sell shares of the Fund
to their customers. However, the Advisor does not consider sales of shares of
the Fund as a factor in the selection of broker-dealers to execute portfolio
transactions for the Fund and, accordingly, has implemented policies and
procedures reasonably designed to prevent its traders from considering sales of
shares of the Fund as a factor in the selection of broker-dealers to execute
portfolio transactions for the Fund.

The Advisor is permitted by Section 28(e) of the Securities Exchange Act of
1934, as amended ("1934 Act"), when placing portfolio transactions for a Fund,
to cause the Fund to pay brokerage commissions in excess of that which another
broker-dealer might charge for executing the same transaction in order to obtain
research and brokerage services if the Advisor determines that such commissions
are reasonable in relation to the overall services provided. The Advisor may
from time to time, in reliance on Section 28(e) of the 1934 Act, execute
portfolio transactions with broker-dealers that provide research and brokerage
services to the Advisor. Consistent with the Advisor's policy regarding best
execution, where more than one broker is believed to be capable of providing
best execution for a particular trade, the Advisor may take into consideration
the receipt of research and brokerage services in selecting the broker-dealer to
execute the trade. Although certain research and brokerage services from
broker-dealers may be useful to a Fund and to the Advisor, it is the opinion of
the Advisor that such information only supplements its own research effort since
the information must still be analyzed, weighed and reviewed by the Advisor's
staff. To the extent that research and brokerage services of value are received
by the Advisor, the Advisor may avoid expenses that it might otherwise incur.
Research and brokerage services received from a broker-dealer may be useful to
the Advisor and its affiliates in providing investment management services to
all or some of its clients, which includes a Fund. Services received from
broker-dealers that executed securities transactions for the Fund will not
necessarily be used by the Advisor specifically to service such Fund.

Research and brokerage services provided by broker-dealers may include, but are
not limited to, information on the economy, industries, groups of securities,
individual companies, statistical information, accounting and tax law
interpretations, political developments, legal developments affecting portfolio
securities, technical market action, pricing and appraisal services, credit
analysis, risk measurement analysis, performance analysis and measurement and
analysis of corporate responsibility issues. Research and brokerage services are
typically received in the form of written or electronic reports, access to
specialized financial publications, telephone contacts and personal meetings
with security analysts, but may also be provided in the form of access to
various computer software and meetings arranged with corporate and industry
representatives.

The Advisor may also select broker-dealers and obtain from them research and
brokerage services that are used in connection with executing trades provided
that such services are consistent with interpretations under Section 28(e) of
the 1934 Act. Typically, these services take the form of computer software
and/or electronic communication services used by the Advisor to facilitate
trading activity with those broker-dealers.

Research and brokerage services may include products obtained from third parties
if the Advisor determines that such product or service constitutes brokerage and
research as defined in Section 28(e) and interpretations thereunder. The Advisor
may use brokerage commissions to obtain certain brokerage products or services
that have a mixed use (i.e., it also serves a function that does not relate to
the investment decision-making process). In those circumstances, the Advisor
will make a good faith judgment to evaluate the various benefits and uses to
which it intends to put the mixed use product or service and will pay for that
portion of the mixed use product or service that it reasonably believes does not
constitute research and brokerage services with its own resources.

DIMA will monitor regulatory developments and market practice in the use of
client commissions to obtain research and brokerage services and may adjust its
portfolio transactions policies in response thereto.

Investment decisions for the Fund and for other investment accounts managed by
the Advisor are made independently of each other in light of differing
conditions. However, the same investment decision may be made for two or more of
such accounts. In such cases, simultaneous transactions are inevitable. To the
extent permitted by law, the Advisor may aggregate the securities to be sold or
purchased for a Fund with those to be sold or purchased for other accounts in
executing transactions. Purchases or sales are then averaged as to price and
commission and allocated as to amount in a manner deemed equitable to each
account. While in some cases this practice could have a detrimental effect on
the price paid or received by, or on the size of the position obtained or
disposed of for, the Fund, in other cases it is believed that the ability to
engage in volume transactions will be beneficial to the Fund.

DIMA and its affiliates and the Fund's management team manage other mutual funds
and separate accounts, some of which use short sales of securities as a part of
their investment strategy. The simultaneous management of long and short
portfolios creates potential conflicts of interest including the risk that short
sale activity could adversely affect the market value of the long positions (and
vice versa), the risk arising from sequential orders in long and short
positions, and the risks associated with receiving opposing orders at the same
time.

DIMA has adopted procedures that it believes are reasonably designed to mitigate
these potential conflicts of interest. Incorporated in the procedures are
specific guidelines developed to ensure fair and equitable treatment for all
clients. DIMA and the investment team have established monitoring procedures and
a protocol for supervisory reviews, as well as compliance oversight to ensure
that potential conflicts of interest relating to this type of activity are
properly addressed.

Deutsche Bank AG or one of its affiliates may act as a broker for the Fund and
receive brokerage commissions or other transaction-related compensation from the
Fund in the purchase and sale of securities, options or futures contracts when,
in the judgment of the Advisor, and in accordance with procedures approved by
the Fund's Boards, the affiliated broker will be able to obtain a price and
execution at least as favorable as those obtained from other qualified brokers
and if, in the transaction, the affiliated broker charges the Funds a rate
consistent with that charged to comparable unaffiliated customers in similar
transactions.

     For the fiscal  year ended  September  30,  2008,  the Fund paid  brokerage
     commissions in the amount of $77,356.

     For the fiscal  year ended  September  30,  2007,  the Fund paid  brokerage
     commissions in the amount of $106,407.

     For the fiscal  year ended  September  30,  2006,  the Fund paid  brokerage
     commissions in the amount of $91,836.

The Fund did not pay any affiliated brokerage commissions for its most recent
fiscal year end.

Securities of Regular Broker-Dealers. The Fund is required to identify any
securities of its "regular brokers or dealers" (as such term is defined in the
1940 Act) that the Fund has acquired during the most recent fiscal year. As of
September 30, 2008, the Fund did not hold any securities of its regular brokers
or dealers.

Portfolio Turnover

Portfolio turnover rate is defined by the SEC as the ratio of the lesser of
sales or purchases to the monthly average value of such securities owned during
the year, excluding all securities whose remaining maturities at the time of
acquisition were one year or less.

Higher levels of activity by the Fund result in higher transaction costs and may
also result in taxes on realized capital gains to be borne by the Fund's
shareholders. Purchases and sales are made whenever necessary, in the Advisor's
discretion, to meet the Fund's objective.

Portfolio turnover rate measures the frequency that the Fund sells and replaces
the value of its securities within a given period. A 100% annual turnover rate
would occur, for example, if all portfolio securities (excluding short-term
obligations) were replaced once in a period of one year, or if 10% of the
portfolio securities were replaced ten times in one year. The rate of portfolio
turnover of the Fund may exceed that of certain other mutual funds with the same
investment objectives. High turnover can increase the Fund's transaction costs,
thereby lowering its returns. For the fiscal years ended September 30, 2007 and
September 30, 2008, the Fund and/or the Portfolio's turnover rates were 57% and
83%, respectively.

                        PURCHASE AND REDEMPTION OF SHARES

General Information

Policies and procedures affecting transactions in Fund shares can be changed at
any time without notice, subject to applicable law. Transactions may be
contingent upon proper completion of application forms and other documents by
shareholders and their receipt by the Fund's agents. Transaction delays in
processing (and changing account features) due to circumstances within or beyond
the control of the Fund and its agents may occur. Shareholders (or their
financial service firms) are responsible for all losses and fees resulting from
bad checks, cancelled orders or the failure to consummate transactions effected
pursuant to instructions reasonably believed to be genuine.

A distribution will be reinvested in shares of the same Fund and class if the
distribution check is returned as undeliverable.

Orders will be confirmed at a price based on the net asset value of the Fund
(including any applicable sales charge) next determined after receipt in good
order by DWS Investments Distributors Inc., the Fund's distributor ("DIDI" or
the "Distributor") of the order accompanied by payment. Orders received by
dealers or other financial services firms prior to the determination of net
asset value and received in good order by DIDI prior to the determination of net
asset value will be confirmed at a price based on the net asset value next
determined after receipt by DIDI ("trade date").

Certificates. Share certificates will not be issued. Share certificates now in a
shareholder's possession may be sent to the transfer agent for cancellation and
book-entry credit to such shareholder's account. Certain telephone and other
procedures require book-entry holdings. Shareholders with outstanding
certificates bear the risk of loss.

Additional Minimum Balance Policies. For fiduciary accounts such as IRAs, and
custodial accounts such as Uniform Gifts to Minor Act and Uniform Transfers to
Minor Act accounts, the minimum balance is $1,000 for Class S. A shareholder may
open an account with at least $1,000, if an automatic investment plan (AIP) of
$50/month is established. DWS Investments group retirement plans and certain
other accounts have similar or lower minimum share balance requirements.

Shareholders with a combined household account balance in any of the DWS Funds
of $100,000 or more, as well as group retirement and certain other accounts,
will not be subject to an automatic redemption.

Fiduciary (e.g., IRA or Roth IRA) and custodial accounts (e.g., UGMA or UTMA)
with balances below $1,000 are subject to automatic redemption following 60
days' written notice to applicable shareholders.

Use of Financial Services Firms. Investment dealers and other firms provide
varying arrangements for their clients to purchase and redeem the Fund's shares,
including higher minimum investments, and may assess transaction or other fees.
Firms may arrange with their clients for other investment or administrative
services. Such firms may independently establish and charge additional amounts
to their clients for such services. Firms also may hold the Fund's shares in
nominee or street name as agent for and on behalf of their customers. In such
instances, the Fund's transfer agent, DWS Investments Service Company (the
"Transfer Agent" or "DISC"), will have no information with respect to or control
over the accounts of specific shareholders. Such shareholders may obtain access
to their accounts and information about their accounts only from their firm.
Certain of these firms may receive compensation from the Fund through the
Shareholder Service Agent for record-keeping and other expenses relating to
these nominee accounts. In addition, certain privileges with respect to the
purchase and redemption of shares or the reinvestment of dividends may not be
available through such firms. Some firms may participate in a program allowing
them access to their clients' accounts for servicing, including, without
limitation, transfers of registration and dividend payee changes, and may
perform functions such as generation of confirmation statements and disbursement
of cash dividends. Such firms, including affiliates of DIDI, may receive
compensation from the Fund through the Shareholder Service Agent for these
services.

The Fund has authorized one or more financial service institutions, including
certain members of FINRA other than the Distributor ("financial institutions"),
to accept purchase and redemption orders for the Fund's shares. Such financial
institutions may also designate other parties, including plan administrator
intermediaries, to accept purchase and redemption orders on the Fund's behalf.
Orders for purchases or redemptions will be deemed to have been received by the
Fund when such financial institutions or, if applicable, their authorized
designees accept the orders. Subject to the terms of the contract between the
Fund and the financial institution, ordinarily orders will be priced at the
Fund's net asset value next computed after acceptance by such financial
institution or its authorized designees and accepted by the Fund. Further, if
purchases or redemptions of the Fund's shares are arranged and settlement is
made at an investor's election through any other authorized financial
institution, that financial institution may, at its discretion, charge a fee for
that service. The Board of Trustees and the Distributor, also the Fund's
principal underwriter, each has the right to limit the amount of purchases by,
and to refuse to sell to, any person. The Trustees and the Distributor may
suspend or terminate the offering of shares of the Fund at any time for any
reason.


DIDI has adopted an Incentive Plan (the "Plan") covering wholesalers that are
regional vice presidents ("DWS Investments Wholesalers"). Generally, DWS
Investments Wholesalers market shares of the DWS funds to financial advisors,
who in turn may recommend that investors purchase shares of a DWS fund. The Plan
is an incentive program that combines a monthly incentive component with a
quarterly strategic bonus component. Under the Plan, DWS Investments Wholesalers
will receive a monetary monthly incentive based on the amount of sales generated
from their marketing of the funds, and that incentive will differ depending on
the product category of the fund. Each fund is assigned to one of four product
categories--"Core," "Strategic," "Satellite" or "Non-CSS"-taking into
consideration, among other things, the following criteria, where applicable:
o    The Fund's 3-year  performance;
o    The Fund's Morningstar  rating;
o    Market size for the fund category;  o The Fund's size,  including sales and
     redemptions of the Fund's shares;
o    The length of time the Fund's Portfolio Managers have managed the Fund; and
o    The Fund's consistency with DWS Investments' branding.

This information and other factors are presented to a committee comprised of
representatives from various groups within DWS Investments, who review on a
quarterly basis the funds assigned to each product category described above, and
make any changes to those assignments at that time. No one factor, whether
positive or negative, determines a fund's placement in a given category; all
these factors together are considered, and the designation of funds in the Core,
Strategic and Satellite categories represents management's judgment based on the
above criteria. In addition, management may consider a fund's profile over the
course of several review periods before making a change to its category
assignment. These category assignments will be posted quarterly to the DWS
funds' Web site at www.dws-investments.com, approximately one month after the
end of each quarter. DWS Investments Wholesalers will receive the highest
compensation for Core and Strategic funds, less for Satellite funds and the
lowest for Non-CSS funds. The level of compensation among these categories may
differ significantly.

In the normal course of business, DWS Investments will from time to time
introduce new funds into the DWS family of funds. As a general rule, all new
funds will be placed in the Strategic compensation category for a minimum period
of four consecutive quarters, and DWS Investments Wholesalers will be paid at a
rate that is equivalent to that of the Core Fund category. After that four
quarter period, each new fund in the Strategic category will be reviewed by the
committee and either assigned to one of the four categories or continued as a
Strategic fund at that time.

The prospect of receiving, or the receipt of, additional compensation by a DWS
Investments Wholesaler under the Plan may provide an incentive to favor
marketing the Core, Strategic or Satellite funds over the Non-CSS funds. The
Plan, however, will not change the price that you pay for shares of a fund. The
DWS Investments Compliance Department monitors DWS Investments Wholesaler sales
and other activity in an effort to detect unusual activity in the context of the
compensation structure under the Plan. However, investors may wish to take the
Plan and the product category of the fund into account when considering
purchasing a fund or evaluating any recommendations relating to fund shares.

Telephone and Electronic Transaction Procedures. Shareholders have various
telephone, Internet, wire and other electronic privileges available. The Fund or
its agents may be liable for any losses, expenses or costs arising out of
fraudulent or unauthorized instructions pursuant to these privileges unless the
Fund or its agents reasonably believe, based upon reasonable verification
procedures, that the instructions were genuine. Verification procedures include
recording instructions, requiring certain identifying information before acting
upon instructions and sending written confirmations. During periods when it is
difficult to contact the Shareholder Service Agent, it may be difficult to use
telephone, wire and other privileges.

QuickBuy and QuickSell. QuickBuy and QuickSell permits the transfer of money via
the Automated Clearing House System (minimum $50 and maximum $250,000) from or
to a shareholder's bank, savings and loan, or credit union account in connection
with the purchase or redemption of Fund shares. Shares purchased by check or
through QuickBuy and QuickSell or Direct Deposit may not be redeemed under this
privilege until such Shares have been owned for at least 10 calendar days.
QuickBuy and QuickSell cannot be used with passbook savings accounts or for
certain tax-deferred plans.

Dividend Payment Option. Investors may have dividends and distributions
automatically deposited to their predesignated bank account through DWS
Investments' Dividend Payment Option request form. Shareholders whose
predesignated checking account of record is with a member bank of Automated
Clearing House Network (ACH) can have income and capital gain distributions
automatically deposited to their personal bank account usually within three
business days after a Fund pays its distribution. A Dividend Payment Option
request form can be obtained by visiting our Web site at:
www.dws-investments.com or calling (800) 728-3337. Confirmation Statements will
be mailed to shareholders as notification that distributions have been
deposited.

Tax-Sheltered Retirement Plans. The Shareholder Service Agent provides
retirement plan services and documents and DIDI can establish investor accounts
in any of the following types of retirement plans:
o    Traditional, Roth and Education IRAs. This includes Savings Incentive Match
     Plan for  Employees  of Small  Employers  ("SIMPLE"),  Simplified  Employee
     Pension Plan ("SEP") IRA accounts and prototype documents.

o    403(b)(7) Custodial  Accounts.  This type of plan is available to employees
     of most non-profit  organizations.

o    Prototype money purchase pension and profit-sharing plans may be adopted by
     employers.

Brochures describing these plans as well as model defined benefit plans, target
benefit plans, 457 plans, 401(k) plans, simple 401(k) plans and materials for
establishing them are available from the Shareholder Service Agent upon request.
Additional fees and transaction policies and procedures may apply to such plans.
Investors should consult with their own tax advisors before establishing a
retirement plan.

Purchases

The Fund reserves the right to withdraw all or any part of the offering made by
its prospectus and to reject purchase orders for any reason. Also, from time to
time, the Fund may temporarily suspend the offering of any class of its shares
to new investors. During the period of such suspension, persons who are already
shareholders of such class of the Fund may be permitted to continue to purchase
additional shares of such class and to have dividends reinvested.

To help the government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to obtain, verify
and record information that identifies each person who opens an account. For
more information, please see "Policies You Should Know About" in the Fund's
Prospectuses.

Eligible Class S Investors

A.        The following investors may purchase Class S shares of DWS Funds
          either (i) directly from DWS Investments Distributors, Inc. ("DIDI"),
          the Fund's principal underwriter; or (ii) through an intermediary
          relationship with a financial services firm established with respect
          to the DWS Funds as of December 31, 2004.

          1.      Existing shareholders of Class S shares of any DWS Fund as of
                  December 31, 2004, and household members residing at the same
                  address.

          2.      Shareholders of Class S of any DWS Fund who became Class S
                  shareholders in connection with the consolidation of Class
                  AARP and Class S on July 17, 2006 and household members
                  residing at the same address.

          3.      Shareholders who have owned Class S shares continuously since
                  December 31, 2004 and household members residing at the same
                  address may open new accounts for Class S shares of any DWS
                  Fund.

          4.      Any participant who has owned Class S shares of any DWS Fund
                  through an employee sponsored retirement, employee stock,
                  bonus, pension or profit sharing plan continuously since
                  December 31, 2004 may open a new individual account for Class
                  S shares of any DWS Fund.

          5.      Any participant who owns Class S shares of any DWS Fund
                  through a retirement, employee stock, bonus, pension or profit
                  sharing plan may complete a direct rollover to an IRA account
                  that will hold Class S shares. This applies to individuals who
                  begin their retirement plan investments with a DWS Fund at any
                  time, including after December 31, 2004.

          6.      Officers, Fund Trustees and Directors, and full-time employees
                  and their family members, of the Advisor and its affiliates.

          7.      Class S shares are available to any accounts managed by the
                  Advisor, any advisory products offered by the Advisor or DIDI
                  and to the Funds of DWS Allocation Series or other fund of
                  funds managed by the Advisor or its affiliates.

          8.      Shareholders of Class S of DWS Emerging Markets Equity Fund
                  who became shareholders of the fund in connection with the
                  fund's acquisition of Scudder New Asia Fund, Inc. on April 17,
                  2006.

          9.      Shareholders of Class S of any DWS Fund who became Class S
                  shareholders in connection with the consolidation of Class M
                  and Class S on August 18, 2006 and household members residing
                  at the same address.

          10.     Shareholders of Class S of any DWS Fund who became Class S
                  shareholders in connection with the renaming or conversion of
                  Investment Class to Class S on October 23, 2006.

B. The following additional investors may purchase Class S shares of DWS Funds.

          1.      Broker-dealers, banks and registered investment advisors
                  ("RIAs") may purchase Class S shares in connection with a
                  comprehensive or "wrap" fee program or other fee based
                  program.

          2.      Any group retirement, employee stock, bonus, pension or
                  profit-sharing plans.

          3.      Persons who purchase shares as part of an investment only
                  placement in a 529 College Savings Plan.

          4.      Persons who purchase shares through a Health Savings Account
                  or a Voluntary Employees' Benefit Association ("VEBA") Trust.

DIDI may, at its discretion, require appropriate documentation that shows an
investor is eligible to purchase Class S shares.

Clients having a regular investment counsel account with the Advisor or its
affiliates and members of their immediate families, officers and employees of
the Advisor or of any affiliated organization and members of their immediate
families, members of FINRA and banks may, if they prefer, subscribe initially
for at least $2,500 for Class S through DWS Investments Distributors, Inc. by
letter, fax, or telephone.

It is our policy to offer purchase privileges to current or former directors or
trustees of the Deutsche or DWS Investments mutual funds, employees, their
spouses or life partners and children or stepchildren age 21 or younger of
Deutsche Bank or its affiliates or a subadvisor to any fund in the DWS family of
funds or a broker-dealer authorized to sell shares of the funds. Qualified
individuals will generally be allowed to purchase shares in the class with the
lowest expense ratio, usually the Institutional Class shares. If a fund does not
offer Institutional Class shares, these individuals will be allowed to buy Class
A shares at NAV. The Fund also reserves the right to waive the minimum account
balance requirement for employees and director accounts. Fees generally charged
to IRA accounts will be charged to accounts of employees and directors.

Automatic Investment Plan. A shareholder may purchase shares of the Fund through
an automatic investment plan. Investments are made automatically (minimum $1,000
and maximum $250,000 for initial investments and a minimum of $50 and maximum
$250,000 for subsequent investments) from the shareholder's account at a bank,
savings and loan or credit union into the shareholder's Fund account.
Termination by a shareholder will become effective within thirty days after the
Shareholder Service Agent has received the request. The Fund may immediately
terminate a shareholder's automatic investment plan in the event that any item
is unpaid by the shareholder's financial institution.

Minimum Subsequent Investment Policies. For current shareholders there is a $50
minimum investment requirement for subsequent investments in the fund. There is
no minimum subsequent investment requirement for investments on behalf of
participants in certain fee-based and wrap programs offered through financial
intermediaries approved by the Advisor.

Payroll Investment Plans. A shareholder may purchase shares through Payroll
Direct Deposit or Government Direct Deposit. Under these programs, all or a
portion of a shareholder's net pay or government check is invested each payment
period. A shareholder may terminate participation in these programs by giving
written notice to the shareholder's employer or government agency, as
appropriate. (A reasonable time to act is required.) The Fund is not responsible
for the efficiency of the employer or government agency making the payment or
any financial institutions transmitting payments.

Expedited Purchase Procedures for Existing Shareholders. Shareholders of other
DWS funds who have submitted an account application and have certified a tax
identification number, clients having a regular investment counsel account with
the Advisor or its affiliates and members of their immediate families, officers
and employees of the Advisor or of any affiliated organization and their
immediate families, members of FINRA, and banks may open an account by wire by
calling (800) 728-3337 for instructions. The investor must send a duly completed
and signed application to the Fund promptly. A subsequent purchase order may be
placed by established shareholders (except by DWS Investments Individual
Retirement Account (IRA), DWS Simplified Profit Sharing and Money Purchase
Pension Plans, DWS Investments 401(k) and DWS Investments 403(b) Plan holders),
members of FINRA, and banks.

Revenue Sharing

In light of recent regulatory developments, the Advisor, the Distributor and
their affiliates have undertaken to furnish certain additional information below
regarding the level of payments made by them to selected affiliated and
unaffiliated brokers, dealers, participating insurance companies or other
financial intermediaries ("financial advisors") in connection with the sale
and/or distribution of Fund shares or the retention and/or servicing of
investors and Fund shares ("revenue sharing").

The Advisor, the Distributor and/or their affiliates may pay additional
compensation, out of their own assets and not as an additional charge to each
Fund, to financial advisors in connection with the sale and/or distribution of
Fund shares or the retention and/or servicing of Fund investors and Fund shares.
Such revenue sharing payments are in addition to any distribution or service
fees payable under any Rule 12b-1 or service plan of any fund, any record
keeping/sub-transfer agency/networking fees payable by each Fund (generally
through the Distributor or an affiliate) and/or the Distributor to certain
financial advisors for performing such services and any sales charges,
commissions, non-cash compensation arrangements expressly permitted under
applicable rules of FINRA or other concessions described in the fee table or
elsewhere in the Prospectuses or the SAI as payable to all financial advisors.
For example, the Advisor, the Distributor and/or their affiliates may compensate
financial advisors for providing each Fund with "shelf space" or access to a
third party platform or fund offering list, or other marketing programs
including, without limitation, inclusion of each Fund on preferred or
recommended sales lists, mutual fund "supermarket" platforms and other formal
sales programs; granting the Distributor access to the financial advisor's sales
force; granting the Distributor access to the financial advisor's conferences
and meetings; assistance in training and educating the financial advisor's
personnel; and, obtaining other forms of marketing support. The level of revenue
sharing payments made to financial advisors may be a fixed fee or based upon one
or more of the following factors: gross sales, current assets and/or number of
accounts of each Fund attributable to the financial advisor, the particular fund
or fund type or other measures as agreed to by the Advisor, the Distributor
and/or their affiliates and the financial advisors or any combination thereof.
The amount of these payments is determined at the discretion of the Advisor, the
Distributor and/or their affiliates from time to time, may be substantial, and
may be different for different financial advisors based on, for example, the
nature of the services provided by the financial advisor.

The Advisor, the Distributor and/or their affiliates currently make revenue
sharing payments from their own assets in connection with the sale and/or
distribution of DWS Fund shares, or the retention and/or servicing of investors,
to financial advisors in amounts that generally range from .01% up to .50% of
assets of the Fund serviced and maintained by the financial advisor, .05% to
..25% of sales of the Fund attributable to the financial advisor, a flat fee of
$13,350 up to $500,000, or any combination thereof. These amounts are annual
figures typically paid on a quarterly basis and are subject to change at the
discretion of the Advisor, the Distributor and/or their affiliates. Receipt of,
or the prospect of receiving, this additional compensation, may influence your
financial advisor's recommendation of this Fund or of any particular share class
of the Fund. You should review your financial advisor's compensation disclosure
and/or talk to your financial advisor to obtain more information on how this
compensation may have influenced your financial advisor's recommendation of this
Fund.

The Advisor, the Distributor and/or their affiliates may also make such revenue
sharing payments to financial advisors under the terms discussed above in
connection with the distribution of both DWS funds and non-DWS funds by
financial advisors to retirement plans that obtain record keeping services from
ADP, Inc. on the DWS Scudder branded retirement plan platform (the "Platform")
with the level of revenue sharing payments being based upon sales of both the
DWS funds and the non-DWS funds by the financial advisor on the Platform or
current assets of both the DWS funds and the non-DWS funds serviced and
maintained by the financial advisor on the Platform.

As of the date hereof, each Fund has been advised that the Advisor, the
Distributor and their affiliates expect that the following firms will receive
revenue sharing payments at different points during the coming year as described
above:

Channel: Broker-Dealers and Financial Advisors
AIG Advisors Group
Ameriprise
Cadaret, Grant & Co. Inc.
Capital Analyst, Incorporated
Citigroup Global Markets, Inc. (dba Smith Barney)
Commonwealth Equity Services, LLP (dba Commonwealth Financial Network) Deutsche
Bank Group Ensemble Financial Services First Allied Securities First
Clearing/Wachovia Securities HD Vest Investment Securities, Inc.
ING Advisors Network
John Hancock Distributors LLC
LPL Financial
M.L. Stern & Co.
Meridien Financial Group
Merrill Lynch, Pierce, Fenner & Smith Inc.
Morgan Stanley
Oppenheimer & Co., Inc.
PlanMember Services
Raymond James & Associates
Raymond James Financial Services
RBC Dain Rauscher, Inc
Securities America, Inc.
UBS Financial Services
Wells Fargo Investments, LLC

Channel: Cash Product Platform
Allegheny Investments LTD
Bank of New York (Hare & Co.)
Brown Brothers Harriman
Brown Investment Advisory & Trust Company
Cadaret Grant & Co.
Chicago Mercantile Exchange
D.A. Davidson & Company
Deutsche Bank Group
Emmett A. Larkin Company
Fiduciary Trust Co. - International
First Southwest Company
J.P. Morgan Clearing Corp.
Legent Clearing LLC
Lincoln Investment Planning
LPL Financial
Mellon Financial Markets LLC
Mesirow Financial, Inc.
Penson Financial Services
Pershing Choice Platform
ProFunds Distributors, Inc.
Ridge Clearing & Outsourcing Solutions
Robert W. Baird & Co.
Romano Brothers and Company
SAMCO Capital Markets
Smith Moore & Company
Sungard Institutional Brokerage Inc.
Treasury Curve LLC
US Bancorp
UBS Financial Services
William Blair & Company

Channel: Third Party Insurance Platforms
Allstate Life Insurance Company of New York
Ameritas Life Insurance Group
Annuity Investors Life Insurance Company
Columbus Life Insurance Company
Commonwealth Annuity and Life Insurance Company
Companion Life Insurance Company
Connecticut General Life Insurance Company
Farmers New World Life Insurance Company
Fidelity Security Life Insurance
Company First Allmerica Financial Life Insurance Company
First Great West Life and Annuity Company
Genworth Life Insurance Company of New York
Genworth Life and Annuity Insurance Company
Great West Life and Annuity Insurance Company
Hartford Life Insurance Company
Integrity Life Insurance Company
John Hancock Life Insurance companies
Kemper Investors Life Insurance Company
Lincoln Benefit Life Insurance Company
Lincoln Life & Annuity Company of New York
Lincoln National Life Insurance Company
Massachusetts Mutual Life Insurance Group
MetLife Group
Minnesota Life Insurance Company
National Life Insurance Company
National Integrity Life Insurance Company
Nationwide Group
New York Life Insurance and Annuity Corporation
Phoenix Life Insurance Company
Protective Life Insurance
Provident Mutual Life Insurance
Prudential Insurance Company of America
Sun Life Group
Symetra Life Insurance Company
Transamerica Life Insurance Company
Union Central Life Insurance Company
United of Omaha Life Insurance Company
United Investors Life Insurance Company
Western Southern Life Assurance Company

Any additions, modifications or deletions to the financial advisors identified
above that have occurred since the date hereof are not reflected.

The Advisor, the Distributor or their affiliates may enter into additional
revenue sharing arrangements or change or discontinue existing arrangements with
financial advisors at any time without notice.

The prospect of receiving, or the receipt of additional compensation or
promotional incentives described above by financial advisors may provide such
financial advisors and/or their salespersons with an incentive to favor sales of
shares of the DWS funds or a particular DWS fund over sales of shares of mutual
funds (or non-mutual fund investments) with respect to which the financial
advisor does not receive additional compensation or promotional incentives, or
receives lower levels of additional compensation or promotional incentives.
Similarly, financial advisors may receive different compensation or incentives
that may influence their recommendation of any particular share class of the
Fund or of other funds. These payment arrangements, however, will not change the
price that an investor pays for Fund shares or the amount that the Fund receives
to invest on behalf of an investor and will not increase Fund expenses. You may
wish to take such payment arrangements into account when considering and
evaluating any recommendations relating to Fund shares and you should discuss
this matter with your financial advisor and review your financial advisor's
disclosures.

It is likely that broker-dealers that execute portfolio transactions for the
Fund will include firms that also sell shares of the DWS funds to their
customers. However, the Advisor will not consider sales of DWS fund shares as a
factor in the selection of broker-dealers to execute portfolio transactions for
the DWS funds. Accordingly, the Advisor has implemented policies and procedures
reasonably designed to prevent its traders from considering sales of DWS fund
shares as a factor in the selection of broker-dealers to execute portfolio
transactions for the Fund. In addition, the Advisor, the Distributor and/or
their affiliates will not use fund brokerage to pay for their obligation to
provide additional compensation to financial advisors as described above.

Redemptions

Redemption fee. The Fund imposes a redemption fee of 2% of the total redemption
amount (calculated at net asset value) on all Fund shares redeemed or exchanged
within 15 days of buying them (either by purchase or exchange). The redemption
fee is paid directly to the Fund, and is designed to encourage long-term
investment and to offset transaction and other costs associated with short-term
or excessive trading. For purposes of determining whether the redemption fee
applies, shares held the longest time will be treated as being redeemed first
and shares held the shortest time will be treated as being redeemed last. The
redemption fee is applicable to fund shares purchased either directly or through
a financial intermediary, such as a broker-dealer. Transactions through
financial intermediaries typically are placed with the Fund on an omnibus basis
and include both purchase and sale transactions placed on behalf of multiple
investors. These purchase and sale transactions are generally netted against one
another and placed on an aggregate basis; consequently the identities of the
individuals on whose behalf the transactions are placed generally are not known
to the Fund. For this reason, the Fund has undertaken to notify financial
intermediaries of their obligation to assess the redemption fee on customer
accounts and to collect and remit the proceeds to the Fund. However, due to
operational requirements, the intermediaries' methods for tracking and
calculating the fee may be inadequate or differ in some respects from the
Fund's.

General. Policies and procedures affecting transactions in fund shares can be
changed at any time without notice, subject to applicable law. Transactions may
be contingent upon proper completion of application forms and other documents by
shareholders and their receipt by the Fund's agents. Transaction delays in
processing (and changing account features) due to circumstances within or beyond
the control of the Fund and its agents may occur. Shareholders (or their
financial service firms) are responsible for all losses and fees resulting from
bad checks, cancelled orders or the failure to consummate transactions effected
pursuant to instructions reasonably believed to be genuine.

In addition, the fund reserves the right to suspend or postpone redemptions as
permitted pursuant to Section 22(e) of the Investment Company Act of 1940.
Generally, those circumstances are when 1) the New York Stock Exchange is closed
other than customary weekend or holiday closings; 2) trading on the New York
Stock Exchange is restricted; 3) an emergency exists which makes the disposal of
securities owned by a fund or the fair determination of the value of the fund's
net assets not reasonably practicable; or 4) the SEC, by order, permits the
suspension of the right of redemption. Redemption payments by wire may also be
delayed in the event of a non-routine closure of the Federal Reserve wire
payment system.

Redemption requests must be unconditional. Redemption requests (and a stock
power for certificated shares) must be duly endorsed by the account holder. As
specified in the Prospectus, signatures may need to be guaranteed by a
commercial bank, trust company, savings and loan association, federal savings
bank, member firm of a national securities exchange or other financial
institution permitted by SEC rule. Additional documentation may be required,
particularly from institutional and fiduciary account holders, such as
corporations, custodians (e.g., under the Uniform Transfers to Minors Act),
executors, administrators, trustees or guardians.

A request for repurchase (confirmed redemption) may be communicated by a
shareholder through a financial services firm to DIDI, which firms must promptly
submit orders to be effective.

If the proceeds of the redemption (prior to the imposition of any contingent
deferred sales charge) are $100,000 or less and the proceeds are payable to the
shareholder of record at the address of record, normally a telephone request or
a written request by any one account holder without a signature guarantee is
sufficient for redemptions by individual or joint account holders and trust,
executor and guardian account holders, provided the trustee, executor or
guardian is named in the account registration. Other institutional account
holders may exercise this special privilege of redeeming shares by telephone
request or written request without signature guarantee subject to the same
conditions as individual account holders, provided that this privilege has been
pre-authorized by the institutional account holder by written instruction to the
Shareholder Service Agent with signatures guaranteed. This privilege may not be
used to redeem shares held in certificated form and may not be used if the
shareholder's account has had an address change within 15 days of the redemption
request.

Wires. Delivery of the proceeds of a wire redemption of $250,000 or more may be
delayed by the Fund for up to seven days if the Fund or the Shareholder Service
Agent deems it appropriate under then-current market conditions. The ability to
send wires is limited by the business hours and holidays of the firms involved.
The Fund is not responsible for the efficiency of the federal wire system or the
account holder's financial services firm or bank. The account holder is
responsible for any charges imposed by the account holder's firm or bank. To
change the designated account to receive wire redemption proceeds, send a
written request to the Shareholder Service Agent with signatures guaranteed as
described above or contact the firm through which Fund shares were purchased.

Automatic Withdrawal Plan. The owner of $5,000 or more of a class of the Fund's
shares at the offering price may provide for the payment from the owner's
account of any requested dollar amount to be paid to the owner or a designated
payee monthly, quarterly, semiannually or annually. The $5,000 minimum account
size is not applicable to IRAs. The minimum periodic payment is $50. Shares are
redeemed so that the payee should receive payment approximately the first of the
month. Investors using this Plan must reinvest Fund distributions.

Non-retirement plan shareholders may establish an Automatic Withdrawal Plan (the
"Plan") to receive monthly, quarterly or periodic redemptions from his or her
account for any designated amount of $50 or more. Shareholders may designate
which day they want the automatic withdrawal to be processed. The check amounts
may be based on the redemption of a fixed dollar amount, fixed share amount,
percent of account value or declining balance. The Plan provides for income
dividends and capital gains distributions, if any, to be reinvested in
additional shares. Shares are then liquidated as necessary to provide for
withdrawal payments. Since the withdrawals are in amounts selected by the
investor and have no relationship to yield or income, payments received cannot
be considered as yield or income on the investment and the resulting
liquidations may deplete or possibly extinguish the initial investment and any
reinvested dividends and capital gains distributions. Any such requests must be
received by the Fund's transfer agent ten days prior to the date of the first
automatic withdrawal. An Automatic Withdrawal Plan may be terminated at any time
by the shareholder, the Trust or its agent on written notice, and will be
terminated when all shares of the Fund under the Plan have been liquidated or
upon receipt by the Trust of notice of death of the shareholder.

In-kind Redemptions. The Fund reserves the right to honor any request for
redemption or repurchase by making payment in whole or in part in securities.
These securities will be chosen by the Fund and valued as they are for purposes
of computing the Fund's net asset value. A shareholder may incur transaction
expenses in converting these securities to cash.

Sale or Redemption of Shares. The sale, exchange or redemption of shares of the
Fund may give rise to a gain or loss equal to the difference between the amount
realized and the basis in such shares. In general, any gain or loss realized
upon a taxable disposition of shares will be treated as long-term capital gain
or loss if the shares have been held for more than one year. Otherwise, the gain
or loss on the taxable disposition of shares of the Fund will be treated as
short-term capital gain or loss. However, any loss realized upon a taxable
disposition of shares held for six months or less will be treated as long-term,
rather than short-term, to the extent of any long-term capital gain
distributions received (or deemed received) by the shareholder with respect to
the shares. All or a portion of any loss realized upon a taxable disposition of
shares of the Fund will be disallowed if other substantially identical shares of
the Fund are purchased within 30 days before or after the disposition. In such a
case, the basis of the newly purchased shares will be adjusted to reflect the
disallowed loss.

Exchanges

Shareholders may request a taxable exchange of their shares for shares of the
corresponding class of certain other DWS funds without imposition of a sales
charge, subject to the provisions below. For purposes of calculating any CDSC,
amounts exchanged retain their original cost and purchase date.

Shareholders who exchange their shares out of a DWS money market fund (not
including shares acquired by dividend reinvestment or by exchange from Class A
shares of another DWS fund) into Class A shares of certain other DWS funds, will
generally be subject to the applicable sales charge.

Certain DWS funds may not be available to shareholders on an exchange. To learn
more about which DWS funds may be available on exchange, please contact your
financial services firm or visit our Web site at: www.dws-investments.com or
call (800) 728-3337.

Shareholders may obtain prospectus(es) of the DWS fund they are exchanging into
from dealers, other firms or DIDI.

Automatic Exchange Plan. The owner of $1,000 or more of any class of shares of a
DWS fund may authorize the automatic exchange of a specified amount ($50
minimum) of such shares for shares of the same class of another such DWS fund.
Exchanges will be made automatically until the shareholder or a fund terminates
the privilege. Exchanges are subject to the terms and conditions described
above.

                                    DIVIDENDS

The Fund intends to follow the practice of distributing substantially all of its
investment company taxable income (determined without regard to the deduction
for dividends paid), which includes taxable ordinary income and any excess of
net realized short-term capital gains over net realized long-term capital
losses. The Fund may follow the practice of distributing the entire excess of
net realized long-term capital gains over net realized short-term capital
losses. However, the Fund may retain all or part of such gain for reinvestment,
after paying the related federal income taxes on such gain. Shareholders will
generally be required to include in their gross incomes their share of such
gains, but may be able to claim a credit against their federal income tax
liability for the federal income tax paid by the Fund on such gain. If the Fund
does not distribute the amount of capital gain and/or ordinary income required
to be distributed by an excise tax provision of the Code, the Fund may be
subject to a 4% excise tax on the undistributed amounts. In certain
circumstances, the Fund may determine that it is in the interest of shareholders
to distribute less than the required amount.

Any dividends or capital gains distributions declared in October, November or
December with a record date in such a month and paid during the following
January will be treated for federal income tax purposes as if received by
shareholders on December 31 of the calendar year declared.

Prior to August 28, 2006, net investment income was declared as a daily dividend
and distributed to shareholders monthly. Effective August 28, 2006, net
investment income is declared and distributed to shareholders monthly. The Fund
expects to distribute net capital gains, if any, annually. Additional
distributions may be made if necessary.

Income and capital gain dividends, if any, of the Fund will be credited to
shareholder accounts in full and fractional Shares of the same class of the Fund
at net asset value on the reinvestment date, except that, upon written request
to the Shareholder Service Agent, a shareholder may select one of the following
options:

1.       To receive income and short-term capital gain distributions in cash and
         long-term capital gain distributions in shares of the same class of the
         fund at net asset value; or

2.       To receive income and capital gain distributions in cash.

Dividends will be reinvested in shares of the same class of the Fund unless
shareholders indicate in writing that they wish to receive them in cash. If a
shareholder has elected to reinvest any dividends and/or other distributions,
such distributions will be made in shares of the same class of the Fund and
confirmations will be mailed to each shareholder. If a shareholder has chosen to
receive cash, a check will be sent. The Fund will reinvest dividend checks (and
future dividends) in shares of the same Fund and class if checks are returned as
undeliverable. Dividends and other distributions of the Fund in the aggregate
amount of $10 or less are automatically reinvested in shares of the Fund unless
the shareholder requests in writing that a check be issued for that particular
distribution.

Distributions of net investment income and net realized capital gains are
taxable for federal income tax purposes, whether made in shares or cash.

Each distribution is accompanied by a brief explanation of the form and
character of the distribution. The characterization of distributions on such
correspondence may differ from the characterization for federal income tax
purposes. In January of each year the Fund issues to each shareholder a
statement of the federal income tax status of all distributions in the prior
calendar year.

The Fund may at any time vary its foregoing dividend practices and, therefore,
reserves the right from time to time to either distribute or retain for
reinvestment such of its net investment income (which includes net short-term
capital gains) and net long-term capital gains, if any, as its Board determines
appropriate under the then current circumstances. In particular, and without
limiting the foregoing, the Fund may make additional distributions of net
investment income or net capital gains in order to satisfy the minimum
distribution requirements contained in the Code.


                                      TAXES

The following is intended to be a general summary of certain federal income tax
consequences of investing in the Fund. It is not intended as a complete
discussion of all such consequences, nor does it purport to deal with all
categories of investors, some of which may be subject to special tax rules, or
foreign, state or local taxes. Investors are therefore advised to consult with
their tax advisors before making an investment in the Fund. The summary is based
on the laws in effect on the date of this SAI and existing judicial and
administrative interpretations thereof, all of which are subject to change,
possibly with retroactive effect.

Taxation of the Fund

The Fund intends to continue to qualify to be treated as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"), in each taxable year . In order to qualify as a regulated investment
company, the Fund must meet certain requirements regarding the source of its
income, the diversification of its assets, and the distribution of its income:

(a)      The Fund must derive at least 90% of its gross income for each taxable
         year (i) from dividends, interest, payments with respect to certain
         securities loans, gains from the sale or other disposition of stock,
         securities and foreign currencies, and other income (including but not
         limited to gains from options, futures, or forward contracts) derived
         with respect to its business of investing in such stock, securities, or
         currencies and (ii) net income derived from interests in "qualified
         publicly traded partnerships" (i.e., partnerships that are traded on an
         established securities market or readily tradable on a secondary market
         or the substantial equivalent thereof other than partnerships that
         derive 90% or more of their gross income from the qualifying income
         described in (i) above);

 (b)     The Fund  must  diversify  its  holdings  so that,  at the end of each
         quarter of its taxable  year,  (i) at least 50% of the market value of
         the Fund's  total  assets is  represented  by cash and cash items,  US
         government  securities,   securities  of  other  regulated  investment
         companies,  and other securities  limited in respect of any one issuer
         of such other  securities  to a value not greater than 5% of the value
         of the Fund's total assets and to not more than 10% of the outstanding
         voting  securities  of such issuer,  and (ii) not more than 25% of the
         value of its total  assets is invested in the  securities  (other than
         those of the US Government or other regulated investment companies) of
         any one issuer, of two or more issuers,  or of which the Fund owns 20%
         or more of the  voting  stock  and  which  are  engaged  in the  same,
         similar,  or related  trades or businesses or in the securities of one
         or more qualified publicly traded partnerships.

(c)      The Fund is required to distribute to its shareholders at least 90% of
         its investment company taxable income (as that term is defined in the
         Code without regard to the deduction for dividends paid - generally,
         taxable ordinary income and the excess of net short-term capital gain
         over net long-term capital losses)and net tax-exempt income interest
         and generally is not subject to federal income tax to the extent that
         it distributes annually such net investment income and net realized
         capital gains (net long-term capital gains in excess of net short-term
         capital losses) in the manner required under the Code.

Fund investments in partnerships, including in qualified publicly traded
partnerships, may result in the Fund being subject to state, local or foreign
income, franchise or withholding tax liabilities.

If the Fund retains for investment an amount equal to all or a portion of its
net long-term capital gains in excess of its net short-term capital losses
(including any capital loss carryovers), it will be subject to federal income
tax at regular corporate rates, currently at a maximum rate of 35%, on the
amount retained. In that event, the Fund will designate such retained amounts as
undistributed capital gains in a notice to its shareholders who (a) will be
required to include in income for US federal income tax purposes, as long-term
capital gains, their proportionate shares of the undistributed amount, (b) will
be entitled to credit their proportionate shares of the 35% tax paid by the Fund
on the undistributed amount against their US federal income tax liabilities, if
any, and to claim refunds to the extent their credits exceed their liabilities,
if any, and (c) will be entitled to increase their tax basis, for US federal
income tax purposes, in their shares by an amount equal to to the difference
between the amount of undistributed capital gains included in the shareholder's
gross income under clause (a) and the tax deemed paid by the shareholder under
clasuse (b).

The Code imposes a 4% nondeductible federal excise tax on the Fund to the extent
it does not distribute by the end of any calendar year at least the sum of (i)
98% of its ordinary taxable income for that calendar year, (ii) 98% of its
capital gain net income (both long-term and short-term) for the one-year period
ending, as a general rule, on October 31 of that year and (iii) amounts that
were neither distributed nor taxed to the Fund during the prior calendar year.
For this purpose, however, any ordinary income or capital gain net income
retained by the Fund that is subject to corporate income tax will be considered
to have been distributed by year-end. In addition, the minimum amounts that must
be distributed in any year to avoid the excise tax will be increased or
decreased to reflect any underdistribution or overdistribution, as the case may
be, from the previous year. Although the Fund's distribution policies should
enable it to avoid federal excise tax liability, the Fund may retain, and be
subject to income or excise tax on, a portion of its capital gains or other
income if it appears to be in the interest of the Fund.

If for any taxable year the Fund does not qualify for the special federal income
tax treatment afforded regulated investment companies, all of its taxable income
will be subject to federal income tax at regular corporate rates (without any
deduction for distributions made to its shareholders), and all distributions
from earnings and profits, including any distributions of net tax-exempt income
and net long-term capital gains, would be taxable to shareholders as ordinary
income. Such distributions would be eligible, provided certain holding period
and other requirements are satisfied, (i) to be treated as qualified dividend
income, which is subject to reduced rates of federal income taxation for taxable
years beginning before January 1, 2011, in the case of shareholders taxed as
individuals and (ii) for the dividends received deduction in the case of
corporate shareholders. In addition, the Fund could be required to recognize
unrealized gains, pay substantial taxes and interest and make substantial
distributions before requalifying as a regulated investment company that is
accorded special federal income tax treatment.

Taxation of Fund Distributions

Distributions from the Fund generally will be taxable to shareholders as
ordinary income to the extent derived from net investment income and net
short-term capital gains (that is, the excess of net short-term capital gain
over net long-term capital loss). Distributions of net capital gains (that is,
the excess of net long-term capital gain over net short-term capital loss)
properly designated as capital gain dividends will be taxable to shareholders as
long-term capital gain, regardless of how long a shareholder has held the shares
in the Fund.

Long-term capital gain rates applicable to individuals have been temporarily
reduced, to a maximum rate of 15% with a lower rates applying to taxpayers in
the 10% and 15% rate federal income tax brackets for taxable years beginning
before January 1, 2011.

For taxable years beginning before January 1, 2011, distributions of net
investment income designed by the Fund as derived from "qualified dividend
income" received by an individual or other noncorporate taxpayer will be taxed
at the rates applicable to long-term capital gain assuming certain holding
period and other requirements are met. For this purpose, "qualified dividend
income" generally means income from dividends received by the Fund from US
corporations and qualified foreign corporations, provided that the Fund
satisfies certain holding period requirements in respect of the stock of such
corporations and has not hedged its position in the stock in certain ways.
However, qualified dividend income does not include any dividends received from
tax-exempt corporations and generally does not include dividends received from
real estate investment trusts. Also, dividends received by the Fund from another
regulated investment company generally are qualified dividend income only to the
extent the dividend distributions are made out of qualified dividend income
received by such other regulated investment company. In the case of securities
lending transactions, payments in lieu of dividends are not qualified dividend
income. If a shareholder elects to treat Fund dividends as investment income for
purposes of the limitation on the deductibility of investment interest, such
dividends would not be a qualified dividend income. The Fund does not expect to
generate substantial amounts of qualified dividend income.

Dividends received deduction. Dividends from domestic corporations may comprise
a part of the Fund's gross income. If any such dividends constitute a portion of
the Fund's gross income, a portion of the income distributions of the Fund may
be eligible for the 70% deduction for dividends received by corporations.
Shareholders will be informed of the portion of dividends which so qualify. The
dividends-received deduction is reduced to the extent the shares of the Fund
with respect to which the dividends are received are treated as debt-financed
under federal income tax law and is eliminated if either those shares or the
shares of the Fund are deemed to have been held by the Fund or the shareholder,
as the case may be, for less than 46 days during the 91-day period beginning 45
days before the shares become ex-dividend or in the case of certain preferred
stock, 91 days during the 181-day period beginning 90 days before such date) The
Fund does not expect a significant portion of its distributions to qualify for
the dividends received deduction.

Capital gains distributions may be reduced if Fund capital loss carryforwards
are available. Any capital loss carryforwards to which the Fund is entitled are
disclosed in the Fund's annual and semi-annual reports to shareholders.

All distributions by the Fund result in a reduction in the net asset value of
the Fund's shares. Should a distribution reduce the net asset value below a
shareholder's cost basis, such distribution would nevertheless be taxable to the
shareholder as ordinary income, qualified dividend income or capital gain as
described above, even though, from an investment standpoint, it may constitute a
partial return of capital. In particular, investors should be careful to
consider the tax implications of buying shares just prior to a distribution. The
price of shares purchased at that time includes the amount of the forthcoming
distribution. Those purchasing Fund shares just prior to a distribution will
receive a partial return of capital upon the distribution, which will
nevertheless be taxable to them for federal income tax purposes.

Sale or redemption of shares. The sale, exchange or redemption of Fund shares
may give rise to a gain or loss. In general, any gain or loss realized upon a
taxable disposition of shares will be treated as long-term capital gain or loss
if the shares have been held for more than one year. Otherwise, the gain or loss
on the taxable disposition of Fund shares will generally be treated as
short-term capital gain or loss. However, any loss realized upon a taxable
disposition of shares held for six months or less will be treated as long-term,
rather than short-term, to the extent of any long-term capital gain
distributions received (or deemed received) by the shareholder with respect to
the shares. All or a portion of any loss realized upon a taxable disposition of
Fund shares will be disallowed if other shares of the Fund or other
substantially identical stock or securities are purchased within 30 days before
or after the disposition. In such a case, the basis of the newly purchased stock
or securities will be adjusted to reflect the disallowed loss.

Under certain circumstances, shareholders of the Fund may exchange their shares
for shares of the same class of certain other funds (the "reinvested shares").
If a shareholder (other than a shareholder who holds his or here shares in a
tax-exempt account) makes such an exchange, the shareholder will recognize a
capital gain or loss for federal income tax purposes measured by the difference
between the value of the reinvested shares and the basis of the exchanged
shares. Upon the exchange of shares (or the reinvestment in shares of the Fund)
that were purchased subject to a sales charge and held for less than 91 days,
the lesser of (i) the sales charge incurred on the exchanged shares or (ii) the
sales charge waived on the reinvested shares is included in the basis of the
reinvested shares and is not included in the basis of the exchanged shares.

Foreign Taxation. Foreign withholding or other foreign taxes with respect to
income (possibly including, in some cases, capital gains) on certain foreign
securities may occur. These taxes may be reduced or eliminated under the terms
of an applicable US income tax treaty. As it is not expected that more than 50%
of the value of the Fund's total assets will consist of securities issued by
foreign corporations, the Fund will not be eligible to pass through to its
shareholders their proportionate share of any foreign taxes paid by the Fund,
with the result that shareholders will not be required to include in income, and
will not be entitled to take any credits or deductions for such foreign taxes.

Tax Effects of Certain Transactions

The Fund's use of options, futures contracts and forward contracts (to the
extent permitted) will be subject to special federal income tax rules (including
mark-to-market, constructive sale, straddle, wash sale, short sale and other
rules), the effect of which may be to accelerate income, defer losses, cause
adjustments in the holding periods of portfolio securities, convert capital
gains into ordinary income and affect whether cpaital gain or loss is
characterized as long-term or short-term. These rules could therefore affect the
amount, timing and character of distributions to investors. These rules also (a)
will require the Fund to mark-to-market certain types of the positions in its
portfolio (i.e., treat them as if they were closed out at the end of each year)
and (b) may cause the Fund to recognize income without receiving cash with which
to pay dividends or make distributions in amounts necessary to satisfy the
distribution requirements for avoiding federal income and excise taxes. The Fund
will monitor its transactions, make the appropriate tax elections and make the
appropriate entries in its books and records in order to mitigate the effect of
these rules and prevent disqualification of the Fund as a regulated investment
company.

Transactions in foreign currencies, foreign investment currency-denominated debt
securities and certain foreign currency options, futures contracts, forward
contracts and similar instruments (to the extent permitted) may give rise to
ordinary income or loss to the extent such income or loss results from
fluctuations in the value of the foreign currency concerned.

The Fund's investment in "section 1256 contracts," such as regulated futures
contracts, most foreign currency forward contracts traded in the interbank
market and options on most stock indices, are subject to special federal income
tax rules. All section 1256 contracts held by the Fund at the end of its taxable
year are required to be marked to their market value, and any unrealized gain or
loss on those positions will be included in the Fund's income as if each
position had been sold for its fair market value at the end of the taxable year.
The resulting gain or loss will be combined with any gain or loss realized by
the Fund from positions in section 1256 contracts closed during the taxable
year. Provided such positions were held as capital assets and were not part of a
"hedging transaction" nor part of a "straddle," 60% of the resulting net gain or
loss will be treated as long-term capital gain or loss, and 40% of such net gain
or loss will be treated as short-term capital gain or loss, regardless of the
period of time the positions were actually held by the Fund.

As a result of entering into swap contracts, the Fund may make or receive
periodic net payments. The Fund may also make or receive a payment when a swap
is terminated prior to maturity through an assignment of the swap or other
closing transaction. Periodic net payments will generally constitute ordinary
income or deductions, while termination of a swap will generally result in
capital gain or loss (which will be a long-term capital gain or loss if the Fund
has been a party to the swap for more than one year). With respect to certain
types of swaps, the Fund may be required to currently recognize income as loss
with respect to future payments on such swaps or may elect under certain
circumstances to mark such swaps to market annually for federal income tax
purposes as ordinary income or loss. The federal income tax treatment of many
types of credit default swaps is uncertain.

If the Fund invests in certain pay-in-kind securities, zero coupon securities,
deferred interest securities or, in general, any other securities with original
issue discount (or with market discount of the Fund elects to include market
discount in income currently), the Fund must accrue income on such investments
for each taxable year, which generally will be prior to the receipt of the
corresponding cash payments. However, the Fund must distribute to shareholders,
at least annually, all or substantially all of its investment company taxable
income (determined without regard to the deduction for dividends paid),
including such accrued income, to avoid federal income and excise taxes.
Therefore, the Fund may have to dispose of its portfolio securities under
disadvantageous circumstances to generate cash, or may have to leverage itself
by borrowing the cash, to satisfy these distribution requirements.

The Fund may also acquire market discount bonds. A market discount bond is a
security acquired in the secondary market at a price below its redemption value
(or its adjusted issue price if it is also an original issue discount bond). If
the Fund invests in a market discount bond, it will be required to treat any
gain recognized on the disposition of such market discount bond as ordinary
income (instead of capital gain) to the extent of the accrued market discount
unless the Fund elects to include the market discount in income as it accrues.

The Fund's investment in lower-rated or unrated debt securities may present
issues for the Fund if the issuers of these securities default on their
obligations because the federal income tax consequences to a holder if such
securities are not certain.

Certain types of income received by the Fund from real estate investment trusts,
REMICs, taxable mortgage pools or other investments may cause the Fund to
designate some or all of its distributions as "excess inclusion income." To Fund
shareholders such excess inclusion income may (1) constitute taxable income, as
unrelated business taxable income ("UBTI") for those shareholders who would
otherwise be tax-exempt such as individual retirement accounts, 401(k) accounts,
Keogh plans, pension plans and certain charitable entities; (2) not be offset by
otherwise allowable deductions for federal income tax purposes; (3) not be
eligible for reduced US withholding for non-US shareholders even from tax treaty
countries; and (4) cause the Fund to be subject to tax if certain "disqualified
organizations" as defined by the Code are Fund shareholders.

In addition, a tax-exempt shareholder could realize UBTI by virtue of its
investment in the Fund if shares in the Fund constitute debt-financed property
in the hands of the tax-exempt shareholder within the meaning of Section 514(b)
of the Code. If a charitable remainder trust (as defined in Section 664 of the
Code) realizes any UBTI for a taxable year, it may be subject to a 100% excise
tax on such UBTI. Charitable remainder trusts and other tax-exempt investors are
urged to consult their tax advisors concerning the tax consequences of investing
in the Fund.

Other Tax Considerations

Under the backup withholding provisions of the Code, redemption proceeds as well
as distributions may be subject to federal income tax withholding for certain
shareholders, including those who fail to furnish the Fund with their correct
taxpayer identification numbers and certifications as to their tax status.
Certain shareholders are exempt from backup withholding. Backup withholding is
not an additional tax and any amount withheld may be credited against a
shareholder's US federal income tax liability, provided the appropriate
information is furnished to the IRS.

Shareholders of the Fund may be subject to state and local taxes on
distributions received from the Fund and on redemptions of the Fund's shares.

Special tax rules apply to investments through defined contribution plans and
other tax-qualified plans. Shareholders should consult their tax advisers to
determine the suitability of shares of the Fund as an investment through such
plans and the precise effect of an investment on their particular tax situation.

Treasury Regulations provide that if a shareholder recognizes a loss with
respect to Fund shares of $2 million or more in a single taxable year (or $4
million or more in any combination of taxable years) for shareholders who are
individuals, S corporations or trusts, or $10 million or more in a single
taxable year ($20 million or more in any combination of taxable years) for a
corporate shareholder, the shareholder must file with the IRS a disclosure
statement on Form 8886. Direct shareholders of portfolio securities are in many
cases excepted from this reporting requirement, but under current guidance,
shareholders of a regulated investment company are not excepted. Future guidance
may extend the current exception from this reporting requirement to shareholders
of most or all regulated investment companies. The fact that a loss is
reportable under these regulations does not affect the legal determination of
whether the taxpayer's treatment of loss is proper. Shareholders should consult
their tax advisors to determine the applicability of these regulations in light
of their particular circumstances.

Non-US Shareholders

In general, dividends paid by the Fund to a shareholder that is not a "US
person" within the meaning of the Code (a "foreign person") to the extent
derived from net investment income and net short-term capital gains of the Fund
are subject to withholding of US federal income tax at a rate of 30% (or lower
applicable treaty rate) even if they are funded by income or gains (such as
portfolio interest, short-term capital gains, or foreign-source dividend and
interest income) that, if paid to a foreign person directly, would not be
subject to withholding. However, for the taxable years of the Fund beginning
before January 1, 2010, the Fund will not be required to withhold any amounts
(i) with respect to distributions (other than distributions to a foreign person
(w) that has not provided a satisfactory statement that the beneficial owner is
not a US person, (x) to the extent that the dividend is attributable to certain
interest on an obligation if the foreign person is the issuer or is a 10%
shareholder of the issuer, (y) that is within certain foreign countries that
have inadequate information exchange with the United States, or (z) to the
extent the dividend is attributable to interest paid by a person that is related
to the person of the foreign person and the foreign person is a controlled
foreign corporation) derived from the US source interest income that would be
subject to US federal income tax if earned directly by an individual foreign
person, to the extent such distributions are properly designated by the Fund,
and (ii) with respect to distributions (other that distributions to an
individual foreign person who is present in the United States for a period or
periods aggregating 183 days or more during the year of distribution) of net
short-term capital gains in excess of net long-term capital losses, to the
extent such distributions are properly designated by the Fund. Depending on the
circumstances, the Fund may make such designations with respect to all, some or
none of its potentially eligible dividends and/or treat such dividends, in whole
or in part, as ineligible for this exemption from withholding. In order to
qualify for this exemption from withholding, a foreign person will need to
comply with applicable certification requirements relating to its non-US status
(including, in general, furnishing an Internal Revenue Service Form W-8BEN or
substitute form). In the case of shares held through an intermediary, the
intermediary may withhold even if the Fund makes a designation with respect to a
payment. Foreign persons should consult their intermediaries with respect to the
application of these rules to their accounts.

If a beneficial holder who is a foreign person has a trade or business in the
United States, and the dividends are effectively connected with the conduct by
the beneficial holder of a trade or business in the United States, the dividend
will be subject to US federal income taxation on a net basis at regular income
tax rates.

Every non-US shareholder is urged to consult his own tax advisor with respect to
his own circumstances.

The foregoing is only a summary of certain material federal income tax
consequences affecting the Fund. Prospective shareholders are advised to consult
their own tax advisors with respect to the particular tax consequences to them
of an investment in the Fund.

                                 NET ASSET VALUE

The net asset value of Shares of the Fund is computed as of the close of regular
trading on the New York Stock Exchange ("the Exchange") on each day the Exchange
is open for trading (the "Value Time"). The Exchange is scheduled to be closed
on the following holidays: New Year's Day, Dr. Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas, and on the preceding Friday or subsequent Monday
when one of these holidays falls on a Saturday or Sunday, respectively. Net
asset value per share is determined separately for each class of shares by
dividing the value of the total assets of the Fund attributable to the shares of
that class, less all liabilities attributable to that class, by the total number
of shares of that class outstanding. The per share net asset value may be lower
for certain classes of the Fund because of higher expenses borne by these
classes.

An equity security is valued at its most recent sale price on the security's
primary exchange or over-the-counter ("OTC") market as of the Value Time.
Lacking any sales, the security is valued at the calculated mean between the
most recent bid quotation and the most recent asked quotation (the "Calculated
Mean") on such exchange or OTC market as of the Value Time. If it is not
possible to determine the Calculated Mean, the security is valued at the most
recent bid quotation on such exchange or OTC market as of the Value Time. In the
case of certain foreign exchanges or OTC markets, the closing price reported by
the exchange or OTC market (which may sometimes be referred to as the "official
close" or the "official closing price" or other similar term) will be considered
the most recent sale price.

Debt securities are valued as follows. Money market instruments purchased with
an original or remaining maturity of 60 days or less, maturing at par, are
valued at amortized cost. Other money market instruments are valued based on
information obtained from an approved pricing agent or, if such information is
not readily available, by using matrix pricing techniques (formula driven
calculations based primarily on current market yields). Bank loans are valued at
prices supplied by an approved pricing agent (which are intended to reflect the
mean between the bid and asked prices), if available, and otherwise at the mean
of the most recent bid and asked quotations or evaluated prices, as applicable,
based on quotations or evaluated prices obtained from one or more
broker-dealers. Privately placed debt securities, other than Rule 144A debt
securities, initially are valued at cost and thereafter based on all relevant
factors including type of security, size of holding and restrictions on
disposition. Municipal debt securities are valued at prices supplied by an
approved pricing agent (which are intended to reflect the mean between the bid
and asked prices), if available, and otherwise at the mean of the most recent
bid and asked quotations or evaluated price obtained from a broker-dealer. Other
debt securities not addressed above are valued at prices supplied by an approved
pricing agent, if available, and otherwise at the most recent bid quotation or
evaluated price, as applicable, obtained from one or more broker-dealers. If it
is not possible to value a particular debt security pursuant to the above
methods, the security is valued on the basis of factors including (but not
limited to) maturity, coupon, creditworthiness, currency denomination, and the
movement of the market in which the security is normally traded.

An exchange-traded option contract on securities, currencies and other financial
instruments is valued at its most recent sale price on the relevant exchange.
Lacking any sales, the option contract is valued at the Calculated Mean. If it
is not possible to determine the Calculated Mean, the option contract is valued
at the most recent bid quotation in the case of a purchased option contract or
the most recent asked quotation in the case of a written option contract, in
each case as of the Value Time. An option contract on securities, currencies and
other financial instruments traded in the OTC market is valued on the Value Date
at the evaluated price provided by the broker-dealer with which it was traded.
Futures contracts (and options thereon) are valued at the most recent settlement
price, if available, on the exchange on which they are traded most extensively.
With the exception of stock index futures contracts which trade on the Chicago
Mercantile Exchange, closing settlement times are prior to the close of trading
on the Exchange. For stock index futures contracts that trade on the Chicago
Mercantile Exchange, closing settlement prices are normally available at
approximately 4:20 p.m. Eastern time. If no settlement price is available, the
last traded price on such exchange will be used. If market quotations for a
portfolio asset are not readily available or the value of a portfolio asset as
determined in accordance with Board-approved procedures does not represent the
fair market value of the portfolio asset, the value of the portfolio asset is
taken to be an amount which, in the opinion of the Fund's Pricing Committee (or,
in some cases, the Board's Valuation Committee), represents fair market value.
The value of other portfolio holdings owned by the Fund is determined in a
manner which is intended to fairly reflect the fair market value of the asset on
the valuation date, based on valuation procedures adopted by the Fund's Board
and overseen primarily by the Fund's Pricing Committee.

                           BOARD MEMBERS AND OFFICERS

The following table presents certain information regarding the Board Members of
the Trust. Each Board Member's year of birth is set forth in parentheses after
his or her name. Unless otherwise noted, (i) each Board Member has engaged in
the principal occupation(s) noted in the table for at least the most recent five
years, although not necessarily in the same capacity, and (ii) the address of
each Board Member that is not an "interested person" (as defined in the 1940
Act) of the Trust or the Advisor (each, an "Independent Board Member") is c/o
Dawn-Marie Driscoll, PO Box 100176, Cape Coral, FL 33904. The term of office for
each Board Member is until the election and qualification of a successor, or
until such Board Member sooner dies, resigns, is removed or as otherwise
provided in the governing documents of the Trust. Because the Fund does not hold
an annual meeting of shareholders, each Board Member will hold office for an
indeterminate period. The Board Members may also serve in similar capacities
with other funds in the DWS fund complex.

<TABLE>
<CAPTION>
Independent Board Members

<S>                                             <C>                                                     <C>

--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth, Position                                                                   Number of Funds
 with the Trust and Length of     Business Experience and                                        in DWS Fund
 Time Served(1)                   Directorships During the Past 5 Years                          Complex Overseen
--------------------------------------------------------------------------------------------------------------------
Paul K. Freeman                   Consultant, World Bank/Inter-American Development Bank;               134
(1950)                            Governing Council of the Independent Directors Council
Chairperson since 2009, and      (governance, executive committees); formerly: Project Leader, Board
                                  Member since 1993 International Institute for Applied Systems Analysis
                                  (1998-2001); Chief Executive Officer, The Eric Group, Inc.
                                  (environmental insurance) (1986-1998)
--------------------------------------------------------------------------------------------------------------------
John W. Ballantine (1946)         Retired; formerly: Executive Vice President and Chief Risk            134
Board Member since 1999           Management Officer, First Chicago NBD Corporation/The First
                                  National Bank of Chicago (1996-1998); Executive Vice
                                  President and Head of International Banking (1995-1996);
                                  Directorships: Healthways Inc. (provider of disease and care
                                  management services); Portland General Electric (utility
                                  company); Stockwell Capital Investments PLC (private equity);
                                  former Directorships: First Oak Brook Bancshares, Inc. and
                                  Oak Brook Bank
--------------------------------------------------------------------------------------------------------------------
 Henry P. Becton, Jr. (1943)      Vice Chair, WGBH Educational Foundation; Directorships:               134
 Board Member since               Association of Public Television Stations; Becton Dickinson
 1990                             and Company(2) (medical technology company); Belo
                                  Corporation(2) (media company); Boston Museum
                                  of Science; Public Radio International; PRX,
                                  The Public Radio Exchange; The PBS Foundation;
                                  former Directorships: American Public
                                  Television; Concord Academy; New England
                                  Aquarium; Mass. Corporation for Educational
                                  Telecommunications; Committee for Economic
                                  Development; Public Broadcasting Service
--------------------------------------------------------------------------------------------------------------------
Dawn-Marie Driscoll (1946)        President, Driscoll Associates (consulting firm); Executive           134
Board Member since 1987           Fellow, Center for Business Ethics, Bentley University;
                                  formerly: Partner, Palmer & Dodge (1988-1990); Vice President
                                  of Corporate Affairs and General Counsel, Filene's
                                  (1978-1988); Directorships: Trustee of 20 open-end mutual
                                  funds managed by Sun Capital Advisers, Inc. (since 2007);
                                  Director of ICI Mutual Insurance Company (since 2007);
                                  Advisory Board, Center for Business Ethics,
                                  Bentley University; Trustee, Southwest Florida
                                  Community Foundation (charitable
                                  organization); former Directorships:
                                  Investment Company Institute (audit,
                                  executive, nominating committees) and
                                  Independent Directors Council (governance,
                                  executive
                                  committees)
--------------------------------------------------------------------------------------------------------------------
Keith R. Fox (1954)               Managing General Partner, Exeter Capital Partners (a series           134
Board Member since                of private equity funds); Directorships: Progressive Holding
1996                              Corporation (kitchen goods importer and distributor); Natural
                                  History, Inc. (magazine publisher); Box Top Media Inc.
                                  (advertising); The Kennel Shop (retailer)
--------------------------------------------------------------------------------------------------------------------
Kenneth C. Froewiss               Clinical Professor of Finance, NYU Stern School of Business           134
(1945)                            (1997-present); Member, Finance Committee, Association for
Board Member since                Asian Studies (2002-present); Director, Mitsui Sumitomo
2001                              Insurance Group (US) (2004-present); prior thereto, Managing
                                  Director, J.P. Morgan (investment banking firm) (until 1996)
--------------------------------------------------------------------------------------------------------------------
Richard J. Herring                Jacob Safra Professor of International Banking and Professor,         134
(1946)                            Finance Department, The Wharton School, University of
Board Member since                Pennsylvania (since July 1972); Co-Director, Wharton
1990                              Financial Institutions Center (since July 2000); Director,
                                  Japan Equity Fund, Inc. (since September 2007), Thai Capital
                                  Fund, Inc. (since September 2007), Singapore Fund, Inc.
                                  (since September 2007); formerly: Vice Dean and Director,
                                  Wharton Undergraduate Division (July 1995-June 2000);
                                  Director, Lauder Institute of International Management
                                  Studies (July 2000-June 2006)
--------------------------------------------------------------------------------------------------------------------
William McClayton (1944)          Managing Director, Diamond Management & Technology                    134
Board Member since 2004           Consultants, Inc. (global management consulting firm)
                                  (2001-present); Directorship: Board of Managers, YMCA of
                                  Metropolitan Chicago; formerly: Senior Partner, Arthur
                                  Andersen LLP (accounting) (1966-2001); Trustee, Ravinia
                                  Festival
--------------------------------------------------------------------------------------------------------------------
Rebecca W. Rimel                  President and Chief Executive Officer, The Pew Charitable             134
(1951)                            Trusts (charitable organization) (1994 to present); Trustee,
Board Member since                Thomas Jefferson Foundation (charitable organization) (1994
1995                              to present); Trustee, Executive Committee, Philadelphia
                                  Chamber of Commerce (2001 to 2007); Trustee,
                                  Pro Publica (2007-present) (charitable
                                  organization); formerly: Executive Vice
                                  President, The Glenmede Trust Company
                                  (investment trust and wealth management) (1983
                                  to 2004); Board Member, Investor Education
                                  (charitable organization) (2004-2005);
                                  Director, Viasys Health Care(2) (January
                                  2007-June 2007)
--------------------------------------------------------------------------------------------------------------------
William N. Searcy, Jr.            Private investor since October 2003; Trustee of 20 open-end           134
(1946)                            mutual funds managed by Sun Capital Advisers, Inc. (since
Board Member since                October 1998); formerly: Pension & Savings Trust Officer,
1993                              Sprint Corporation(2) (telecommunications) (November
                                  1989-September 2003)
--------------------------------------------------------------------------------------------------------------------
Jean Gleason Stromberg            Retired; formerly: Consultant (1997-2001); Director, US               134
(1943)                            Government Accountability Office (1996-1997); Partner,
Board Member since                Fulbright & Jaworski, L.L.P. (law firm) (1978-1996);
1997                              Directorships: The William and Flora Hewlett Foundation;
                                  Business Leadership Council, Wellesley College; former
                                  Directorships: Service Source, Inc., Mutual Fund Directors
                                  Forum (2002-2004), American Bar Retirement Association
                                  (funding vehicle for retirement plans) (1987-1990 and
                                  1994-1996)
--------------------------------------------------------------------------------------------------------------------
Robert H. Wadsworth (1940)        President, Robert H. Wadsworth & Associates, Inc. (consulting         137
Board Member since 1999           firm) (1983 to present); Director, The Phoenix Boys Choir
                                  Association
--------------------------------------------------------------------------------------------------------------------

Interested Board Member


--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth, Position                                                                   Number of Funds
 with the Trust and Length of     Business Experience and                                        in DWS Fund
 Time Served(1)                   Directorships During the Past 5 Years                          Complex Overseen
--------------------------------------------------------------------------------------------------------------------
 Axel Schwarzer(3)                Managing Director(4), Deutsche Asset Management; Head of              134
 (1958)                           Deutsche Asset Management Americas; CEO of DWS Investments;
 Board Member since               formerly: board member of DWS Investments, Germany
 2006                             (1999-2005); Head of Sales and Product Management for the
                                  Retail and Private Banking Division of
                                  Deutsche Bank in Germany (1997-1999); various
                                  strategic and operational positions for
                                  Deutsche Bank Germany Retail and Private
                                  Banking Division in the field of investment
                                  funds, tax driven instruments and asset
                                  management for corporates (1989-1996)
--------------------------------------------------------------------------------------------------------------------

Officers(5)


--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth, Position
 with the Trust and Length of     Business Experience and
 Time Served(6)                   Directorships During the Past 5 Years
--------------------------------------------------------------------------------------------------------------------
 Michael G. Clark(7) (1965)       Managing Director(4), Deutsche Asset Management (2006-present); President of
 President, 2006-present          DWS family of funds; Director, ICI Mutual Insurance Company (since
                                  October 2007); formerly: Director of Fund Board Relations (2004-2006) and
                                  Director of Product Development (2000-2004), Merrill Lynch Investment Managers;
                                  Senior Vice President Operations, Merrill Lynch Asset Management (1999-2000)
--------------------------------------------------------------------------------------------------------------------
 John Millette(8) (1962)          Director(4), Deutsche Asset Management
 Vice President and Secretary,
 1999-present
--------------------------------------------------------------------------------------------------------------------
 Paul H. Schubert(7) (1963)       Managing Director(4), Deutsche Asset Management (since July 2004); formerly:
 Chief Financial Officer,         Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family
 2004-present                     of Funds (1998-2004); Vice President and Director of Mutual Fund Finance at UBS
 Treasurer, 2005-present          Global Asset Management (1994-1998)
--------------------------------------------------------------------------------------------------------------------
 Caroline Pearson(8) (1962)       Managing Director(4), Deutsche Asset Management
 Assistant Secretary,
 1997-present
--------------------------------------------------------------------------------------------------------------------
 Rita Rubin(9) (1970)             Vice President and Counsel, Deutsche Asset Management (since October 2007);
 Assistant Secretary,             formerly, Vice President, Morgan Stanley Investment Management (2004-2007);
 2009-present                     Attorney, Shearman & Sterling LLP (2004); Vice President and Associate General
                                  Counsel, UBS Global Asset Management (2001-2004)
--------------------------------------------------------------------------------------------------------------------
 Paul Antosca(8)                  Director(4), Deutsche Asset Management (since 2006); formerly: Vice President,
 (1957)                           The Manufacturers Life Insurance Company (U.S.A.) (1990-2006)
 Assistant Treasurer,
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Jack Clark (8)                   Director(4), Deutsche Asset Management (since 2007); formerly: Vice President,
 (1967)                           State Street Corporation (2002-2007)
 Assistant Treasurer,
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Diane Kenneally(8)               Director(4), Deutsche Asset Management
 (1966)
 Assistant Treasurer,
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Jason Vazquez(9) (1972)          Vice President, Deutsche Asset Management (since 2006); formerly: AML
 Anti-Money Laundering            Operations Manager for Bear Stearns (2004-2006); Supervising Compliance
 Compliance Officer,              Principal and Operations Manager for AXA Financial (1999-2004)
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Robert Kloby(9) (1962)           Managing Director(4), Deutsche Asset Management (2004-present); formerly: Chief
 Chief Compliance Officer,        Compliance Officer/Chief Risk Officer, Robeco USA (2000-2004); Vice President,
 2006-present                     The Prudential Insurance Company of America (1988-2000); E.F. Hutton and
                                  Company (1984-1988)
--------------------------------------------------------------------------------------------------------------------
 J. Christopher Jackson(9)         Director(4), Deutsche Asset Management (2006-present); formerly: Director,
 (1951)                            Senior Vice President, General Counsel, and Assistant Secretary, Hansberger
 Chief Legal Officer,              Global Investors, Inc. (1996-2006); Director, National Society of Compliance
 2006-present                      Professionals (2002-2005) (2006-2009)
--------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)     The length of time  served  represents  the year in which the Board
        Member joined the board of one or more DWS funds currently overseen by
        the Board.

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

(3)      The mailing address of Axel Schwarzer is c/o Deutsche Investment
         Management Americas Inc., 345 Park Avenue, New York, New York 10154.
         Mr. Schwarzer is an interested Board Member by virtue of his positions
         with Deutsche Asset Management. As an interested person, Mr. Schwarzer
         receives no compensation from the Fund.

(4)      Executive title, not a board directorship.

(5)      As a result of their respective positions held with the Advisor, these
         individuals are considered "interested persons" of the Advisor within
         the meaning of the 1940 Act. Interested persons receive no compensation
         from the Fund.

(6)      The length of time served  represents  the year in which the officer
         was first  elected in such  capacity  for one or more DWS funds.

(7)      Address:  345 Park Avenue, New York, New York 10154.

(8)      Address: One Beacon Street, Boston, Massachusetts 02108.

(9)      Address:  280 Park Avenue, New York, New York 10017.

Certain officers hold similar positions for other investment companies for which
DIMA or an affiliate serves as the Advisor.

Officer's Role with Principal Underwriter: DWS Investments Distributors, Inc.

 Paul H. Schubert:                    Vice President
 Jason Vazquez:                       Vice President and AML Compliance Officer
 Caroline Pearson:                    Secretary

Board Members' Responsibilities. The officers of the Trust manage its day-to-day
operations under the direction of the Board. The primary responsibility of the
Board is to represent the interests of the Fund and to provide oversight of the
management of the Fund.

Board Committees. The Board has established the following standing committees:
Audit Committee, Nominating and Governance Committee, Contract Committee, Equity
Oversight Committee, Fixed-Income and Quant Oversight Committee, Marketing and
Shareholder Services Committee, and Operations Committee. For each committee,
the Board has adopted a written charter setting forth each committee's
responsibilities. Each committee was reconstituted effective April 1, 2008.

Audit Committee: The Audit Committee, which consists entirely of Independent
Board Members, assists the Board in fulfilling its responsibility for oversight
of (1) the integrity of the financial statements, (2) the Fund's accounting and
financial reporting policies and procedures, (3) the Fund's compliance with
legal and regulatory requirements related to accounting and financial reporting
and (4) the qualifications, independence and performance of the independent
registered public accounting firm for the Fund. It also approves and recommends
to the Board the appointment, retention or termination of the independent
registered public accounting firm for the Fund, reviews the scope of audit and
internal controls, considers and reports to the Board on matters relating to the
Fund's accounting and financial reporting practices, and performs such other
tasks as the full Board deems necessary or appropriate. The Audit Committee
receives annual representations from the independent registered public
accounting firm as to its independence. The members of the Audit Committee are
William McClayton (Chair), Kenneth C. Froewiss (Vice Chair), John W. Ballantine,
Henry P. Becton, Jr., Keith R. Fox and William N. Searcy, Jr. During the
calendar year 2008, the Audit Committee of the Fund's Board held six (6)
meetings.

Nominating and Governance Committee: The Nominating and Governance Committee,
which consists entirely of Independent Board Members, recommends individuals for
membership on the Board, nominates officers, Board and committee chairs, vice
chairs and committee members, and oversees the operations of the Board. The
Nominating and Governance Committee also reviews recommendations by shareholders
for candidates for Board positions. Shareholders may recommend candidates for
Board positions by forwarding their correspondence by US mail or courier service
to Dawn-Marie Driscoll, P.O. Box 100176, Cape Coral, FL 33904. The members of
the Nominating and Governance Committee are Henry P. Becton, Jr. (Chair),
Rebecca W. Rimel (Vice Chair), Paul K. Freeman and William McClayton. During the
calendar year 2008, the Nominating and Governance Committee of the Fund's Board
held four (4) meetings.

Contract Committee: The Contract Committee, which consists entirely of
Independent Board Members, reviews at least annually, (a) the Fund's financial
arrangements with DIMA and its affiliates, and (b) the Fund's expense ratios.
The members of the Contract Committee are Robert H. Wadsworth (Chair), Keith R.
Fox (Vice Chair), Henry P. Becton, Jr., Richard J. Herring, William McClayton
and Jean Gleason Stromberg. During the calendar year 2008, the Contract Review
Committee of the Fund's Board held seven (7) meetings.

Equity Oversight Committee: The Equity Oversight Committee reviews the
investment operations of those funds that primarily invest in equity securities
(except for those funds managed by a quantitative investment team). The members
of the Equity Oversight Committee are John W. Ballantine (Chair), William
McClayton (Vice Chair), Henry P. Becton, Jr., Keith R. Fox, Richard J. Herring
and Rebecca W. Rimel. During the calendar year 2008, the Equity Oversight
Committee of the Fund's Board held five (5) meetings.

Fixed-Income and Quant Oversight Committee: The Fixed-Income and Quant Oversight
Committee reviews the investment operations of those funds that primarily invest
in fixed-income securities or are managed by a quantitative investment team. The
members of the Fixed-Income and Quant Oversight Committee are William N. Searcy,
Jr. (Chair), Jean Gleason Stromberg (Vice Chair), Dawn-Marie Driscoll, Kenneth
C. Froewiss and Robert H. Wadsworth. During the calendar year 2008, the
Fixed-Income Oversight Committee of the Fund's Board held five (5) meetings.

Marketing and Shareholder Services Committee: The Marketing and Shareholder
Services Committee reviews the Fund's marketing program, sales practices and
literature and shareholder services. The members of the Marketing and
Shareholder Services Committee are Richard J. Herring (Chair), Dawn-Marie
Driscoll (Vice Chair), Rebecca W. Rimel, Jean Gleason Stromberg and Robert H.
Wadsworth. During the calendar year 2008, the Marketing/Distribution/Shareholder
Service Committee of the Fund's Board held four (4) meetings.

The Operations Committee: The Operations Committee reviews the administrative
operations, legal affairs and general compliance matters of the Fund. The
Operations Committee reviews administrative matters related to the operations of
the Fund, policies and procedures relating to portfolio transactions, custody
arrangements, fidelity bond and insurance arrangements, valuation of Fund assets
and securities and such other tasks as the full Board deems necessary or
appropriate. The Operations Committee also oversees the valuation of the Fund's
securities and other assets and determines, as needed, the fair value of Fund
securities or other assets under certain circumstances as described in the
Fund's Valuation Procedures. The Operations Committee has appointed a Valuation
Sub-Committee, which may make determinations of fair value required when the
Operations Committee is not in session. The members of the Operations Committee
are Dawn-Marie Driscoll (Chair), John W. Ballantine (Vice Chair), Kenneth C.
Froewiss, Rebecca W. Rimel and William N. Searcy, Jr. The members of the
Valuation Sub-Committee are Kenneth C. Froewiss (Chair), John W. Ballantine,
Dawn-Marie Driscoll (Alternate), Rebecca W. Rimel (Alternate) and William N.
Searcy, Jr. (Alternate). During the calendar year 2008, the Operations Committee
held four (4) meetings and the Valuation Sub-Committee did not hold any
meetings.

Ad Hoc Committees. In addition to the standing committees described above, from
time to time the Board may also form ad hoc committees to consider specific
issues.

Remuneration. Each Independent Board Member receives compensation from the Fund
for his or her services, which includes retainer fees and specified amounts for
various committee services and for the Board Chairperson. No additional
compensation is paid to any Independent Board Member for travel time to
meetings, attendance at directors' educational seminars or conferences, service
on industry or association committees, participation as speakers at directors'
conferences or service on special fund industry director task forces or
subcommittees. Independent Board Members do not receive any employee benefits
such as pension or retirement benefits or health insurance from the Fund or any
fund in the DWS fund complex.

Board Members who are officers, directors, employees or stockholders of Deutsche
Asset Management or its affiliates receive no direct compensation from the Fund,
although they are compensated as employees of Deutsche Asset Management, or its
affiliates, and as a result may be deemed to participate in fees paid by the
Fund. The following tables show compensation from the Fund and aggregate
compensation from all of the funds in the DWS fund complex received by each
Independent Board Member during the calendar year 2008. Mr. Schwarzer is an
interested person of the Fund and received no compensation from the Fund or any
fund in the DWS fund complex during the relevant periods.
<TABLE>
            <S>                                <C>                                <C>
                                      Aggregate Compensation              Total Compensation
                                           from DWS Short                   from Fund and
  Name of Board Member                   Duration Plus Fund              DWS Fund Complex(1)
  --------------------                   ------------------              -------------------

  John W. Ballantine                            $2,299                          $237,500
  Henry P. Becton, Jr.(2)                         $138                          $246,000
  Dawn-Marie Driscoll(2)(3)                       $146                          $292,500
  Keith R. Fox(2)                                 $136                          $229,500
  Paul K. Freeman                               $2,456                          $255,000
  Kenneth C. Froewiss                             $136                          $226,750
  Richard J. Herring(2)                           $138                          $240,000
  William McClayton(4)                          $2,396                          $257,500
  Rebecca W. Rimel(2)                             $136                          $233,500
  William N. Searcy, Jr.                          $138                          $238,000
  Jean Gleason Stromberg                          $136                          $225,500
  Robert H. Wadsworth                           $2,396                          $273,500


(1)      The DWS fund complex is composed of 136 funds as of December 31, 2008.

(2)      Aggregate compensation includes amounts paid to the Board Members for
         special meetings of ad hoc committees of the Board in connection with
         the consolidation of the DWS fund boards and various funds, meetings
         for considering fund expense simplification initiatives, and
         consideration of issues specific to the Fund's direct shareholders
         (i.e., those shareholders who did not purchase shares through financial
         intermediaries). Such amounts totaled $8,000 for Mr. Becton, $2,000 for
         Ms. Driscoll, $2,000 for Mr. Fox, $2,000 for Dr. Herring and $8,000 for
         Ms. Rimel. These meeting fees were borne by the funds.

(3)      Includes $70,000 in annual retainer fees received by Ms. Driscoll as
         Chairperson of DWS funds.

(4)      Includes $15,000 paid to Mr. McClayton for numerous special meetings of
         an ad hoc committee of the former Chicago Board in connection with
         board consolidation initiatives.

Board Member Ownership in the Fund

The following table shows the dollar range of equity securities beneficially
owned by each Board Member in the Fund and DWS fund complex as of December 31,
2008.

                                            Dollar Range of Beneficial            Aggregate Dollar Range of
                                                     Ownership               Ownership in all Funds Overseen by
                                                   in DWS Short                         Board Member
Board Member                                    Duration Plus Fund               in the DWS Fund Complex(1)
------------                                    ------------------              ----------------------------

Independent Board Member:

John W. Ballantine                                     None                                Over $100,000
Henry P. Becton, Jr.                             $10,001 - $50,000                         Over $100,000
Dawn-Marie Driscoll                                $1 - $10,000                            Over $100,000
Keith R. Fox                                           None                                Over $100,000
Paul K. Freeman                                        None                                Over $100,000
Kenneth C. Froewiss                              $10,001 - $50,000                         Over $100,000
Richard J. Herring                                     None                                Over $100,000
William McClayton                                      None                                Over $100,000
Rebecca W. Rimel                                       None                                Over $100,000
William N. Searcy, Jr.                          $50,001 - $100,000                         Over $100,000
Jean Gleason Stromberg                                 None                                Over $100,000
Robert H. Wadsworth                                    None                                Over $100,000

Interested Board Member:

Axel Schwarzer                                         None                                Over $100,000

(1)      Securities beneficially owned as defined under the 1934 Act include
         direct and/or indirect ownership of securities where the Board Member's
         economic interest is tied to the securities, employment ownership and
         securities when the Board Member can exert voting power, and when the
         Board Member has authority to sell the securities. The dollar ranges
         are: None, $1-$10,000, $10,001-$50,000, $50,001-$100,000 and over
         $100,000.

Ownership in Securities of the Advisor and Related Companies

As reported to the Fund, the information in the following table reflects
ownership by the Independent Board Members and their immediate family members of
certain securities as of December 31, 2008. Immediate family members can be a
spouse, children residing in the same household including step and adoptive
children, and any dependents. The securities represent ownership in the Advisor
or principal underwriter of the Fund and any persons (other than a registered
investment company) directly or indirectly controlling, controlled by, or under
common control with the Advisor or principal underwriter of the Fund (including
Deutsche Bank AG).


                                                                                   Value of        Percent of
                                   Owner and                                     Securities on     Class on an
Independent                     Relationship to                     Title of     an Aggregate       Aggregate
Board Member                      Board Member         Company        Class          Basis            Basis
------------                      ------------         -------        -----          -----            -----

John W. Ballantine                                      None
Henry P. Becton, Jr.                                    None
Dawn-Marie Driscoll                                     None
Keith R. Fox                                            None
Paul K. Freeman                                         None
Kenneth C. Froewiss                                     None
Richard J. Herring                                      None
William McClayton                                       None
Rebecca W. Rimel                                        None
William N. Searcy, Jr.                                  None
Jean Gleason Stromberg                                  None
Robert H. Wadsworth                                     None

Securities Beneficially Owned

As of January 14, 2009, the Board Members and officers of the Trust owned, as a
group, less than 1% of the outstanding shares of the Fund.

To the best of the Fund's knowledge, as of January 14, 2009, no person owned of
record or beneficially 5% or more of any class of the Fund's outstanding shares,
except as noted below.

DWS Short Duration Plus Fund

Name and Address of Investor Ownership                          Shares                      % of Total Shares
--------------------------------------                          ------                      -----------------


CHARLES SCHWAB & CO                                          26,417,273.46                  43.22% of Class A
MUTUAL FUNDS DEPT
SAN FRANCISCO CA  94104-4151

WELLS FARGO INVESTMENTS LLC                                  4,768,709.15                    7.8% of Class A
FBO CUSTOMER ACCOUNTS
ATTN MUTUAL FUND OPERATIONS
MINNEAPOLIS MN  55402-2323

MLPF&S FOR THE SOLE BENEFIT OF                                 24,082.47                    6.48% of Class B
ITS CUSTOMERS
ATTN FUND ADMINISTRATION #97D64
JACKSONVILLE FL  32246-6484

MLPF&S FOR THE SOLE BENEFIT OF                               2,682,371.27                   15.11% of Class C
ITS CUSTOMERS
ATTN FUND ADMINISTRATION 9K551
JACKSONVILLE FL  32246-6484

MORGAN STANLEY & CO.                                         1,854,244.25                   10.44% of Class C
HARBORSIDE FINANCIAL CENTER
PLAZA II 3RD FLOOR
JERSEY CITY NJ  07311

STATE STREET BANK & TRUST CO CUST                            3,063,510.67             76.37% of Institutional Class
FBO DWS VALUE BUILDER FUND CUST
QUINCY MA  02171-2105

STATE STREET BANK & TRUST CO                                  681,930.05               17% of Institutional Class
CUST FBO
DWS LIFECOMPASS RETIREMENT FUND
QUINCY MA  02171-2105

CHARLES SCHWAB & CO                                          8,940,030.60                   10.75% of Class S
OMNIBUS ACCOUNT REINVEST
ATTN: MUTUAL FUND ACCT MGMT TEAM
SAN FRANCISCO CA  94104-4151

LPL FINANCIAL                                                4,916,782.04                   5.91% of Class S
FBO CUSTOMER ACCOUNTS
ATTN MUTUAL FUND OPERATIONS
SAN DIEGO CA  92150-9046
</TABLE>


Agreement to Indemnify Independent Trustees for Certain Expenses

In connection with litigation or regulatory action related to possible improper
market timing or other improper trading activity or possible improper marketing
and sales activity in certain DWS Funds (the "Affected Funds"), DIMA has agreed
to indemnify and hold harmless the Affected Funds ("Fund Indemnification
Agreement") against any and all loss, damage, liability and expense, arising
from market timing or marketing and sales matters alleged in any enforcement
actions brought by governmental authorities involving or potentially affecting
the Affected Funds or DIMA ("Enforcement Actions") or that are the basis for
private actions brought by shareholders of the Affected Funds against the
Affected Funds, their directors and officers, DIMA and/or certain other parties
("Private Litigation"), or any proceedings or actions that may be threatened or
commenced in the future by any person (including governmental authorities),
arising from or similar to the matters alleged in the Enforcement Actions or
Private Litigation. In recognition of its undertaking to indemnify the Affected
Funds and in light of the rebuttable presumption generally afforded to
independent directors/trustees of investment companies that they have not
engaged in disabling conduct, DIMA has also agreed, subject to applicable law
and regulation, to indemnify certain (or, with respect to certain Affected
Funds, all) of the Independent Trustees of the Affected Funds, against certain
liabilities the Independent Trustees may incur from the matters alleged in any
Enforcement Actions or Private Litigation or arising from or similar to the
matters alleged in the Enforcement Actions or Private Litigation, and advance
expenses that may be incurred by the Independent Trustees in connection with any
Enforcement Actions or Private Litigation. DIMA is not, however, required to
provide indemnification and advancement of expenses: (1) with respect to any
proceeding or action which the Affected Funds' Board determines that the
Independent Trustees ultimately would not be entitled to indemnification or (2)
for any liability of the Independent Trustees to the Funds or their shareholders
to which the Independent Trustee would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the
Independent Trustee's duties as a director or trustee of the Affected Funds as
determined in a final adjudication in such action or proceeding. The estimated
amount of any expenses that may be advanced to the Independent Trustees or
indemnity that may be payable under the indemnity agreements is currently
unknown. These agreements by DIMA will survive the termination of the investment
management agreements between DIMA and the Affected Funds.

                               TRUST ORGANIZATION

The Fund is a series of DWS Advisor Funds (the "Trust"), an open-end management
investment company. The Trust is a Massachusetts business trust organized under
the laws of Massachusetts on July 21, 1986, and is governed by an Amended and
Restated Declaration of Trust that was approved by shareholders in the second
quarter of 2006, as may be further amended from time to time (the "Declaration
of Trust"). The Trust was organized under the name BT Tax-Free Investment Trust
and assumed its former name of BT Investment Funds on May 16, 1988. The Trust's
name was changed to Scudder Advisor Funds effective May 16, 2003 and to DWS
Advisor Funds as of February 6, 2006. All shares issued and outstanding are
fully paid and non-assessable, transferable, have no pre-emptive or conversion
rights (except as may be determined by the Board of Trustees) and are redeemable
as described in the SAI and the Fund's Prospectus. Each share has equal rights
with each other share of the same class of the Fund as to voting, dividends,
exchanges, conversion features and liquidation. Shareholders are entitled to one
vote for each full share held and fractional votes for fractional shares held.

The Fund generally is not required to hold meetings of its shareholders. Under
the Declaration of Trust, however, shareholder meetings will be held in
connection with the following matters to the extent and as provided in the
Declaration of Trust and as required by applicable law: (a) the election or
removal of trustees if a meeting is called for such purpose; (b) the termination
of the Trust or the Fund; (c) an amendment of the Declaration of Trust; and (d)
such additional matters as may be required by law or as the Trustees may
determine to be necessary or desirable. Shareholders also vote upon changes in
fundamental policies or restrictions.

The Declaration of Trust provides that shareholder meeting quorum requirements
shall be established in the Trust's By-laws. The By-laws currently in effect
provide that the presence in person or by proxy of the holders of thirty percent
of the shares entitled to vote at a meeting (or of an individual series or class
if required to vote separately) shall constitute a quorum for the transaction of
business at meetings of shareholders of the Trust.

On any matter submitted to a vote of shareholders, all shares of the Trust
entitled to vote shall, except as otherwise provided in the Trust's By-Laws, be
voted in the aggregate as a single class without regard to series or classes of
shares, except (a) when required by applicable law or when the Trustees shall
have determined that the matter affects one or more series or classes of shares
materially differently, shares shall be voted by individual series or class; and
(b) when the Trustees have determined that the matter affects only the interests
of one or more series or classes, only shareholders of such series or classes
shall be entitled to vote thereon.

The Declaration of Trust provides that the Board of Trustees may, in its
discretion, establish minimum investment amounts for shareholder accounts,
impose fees on accounts that do not exceed a minimum investment amount and
involuntarily redeem shares in any such account in payment of such fees. The
Board of Trustees, in its sole discretion, also may cause the Trust to redeem
all of the shares of the Trust or one or more series or classes held by any
shareholder for any reason, to the extent permissible by the 1940 Act, including
(a) if the shareholder owns shares having an aggregate net asset value of less
than a specified minimum amount, (b) if a particular shareholder's ownership of
shares would disqualify a series from being a regulated investment company, (c)
upon a shareholder's failure to provide sufficient identification to permit the
Trust to verify the shareholder's identity, (d) upon a shareholder's failure to
pay for shares or meet or maintain the qualifications for ownership of a
particular class or series of shares, (e) if the Board of Trustees determines
(or pursuant to policies established by the Board it is determined) that share
ownership by a particular shareholder is not in the best interests of remaining
shareholders, (f) when the Fund is requested or compelled to do so by
governmental authority or applicable law and (g) upon a shareholder's failure to
comply with a request for information with respect to the direct or indirect
ownership of shares of the Trust. The Declaration of Trust also authorizes the
Board of Trustees to terminate the Fund or any class of the Fund without
shareholder approval, and the Trust may suspend the right of shareholders to
require the Trust to redeem shares to the extent permissible under the 1940 Act.

Upon the termination of the Trust or any series, after paying or adequately
providing for the payment of all liabilities which may include the establishment
of a liquidating trust or similar vehicle, and upon receipt of such releases,
indemnities and refunding agreements as they deem necessary for their
protection, the Trustees may distribute the remaining Trust property or property
of the series, in cash or in kind or partly each, to the shareholders of the
Trust or the series involved, ratably according to the number of shares of the
Trust or such series held by the several shareholders of the Trust or such
series on the date of termination, except to the extent otherwise required or
permitted by the preferences and special or relative rights and privileges of
any classes of shares of a series involved, provided that any distribution to
the shareholders of a particular class of shares shall be made to such
shareholders pro rata in proportion to the number of shares of such class held
by each of them. The composition of any such distribution (e.g., cash,
securities or other assets) shall be determined by the Trust in its sole
discretion, and may be different among shareholders (including differences among
shareholders in the same series or class).

Under Massachusetts law, shareholders of a Massachusetts business trust could,
under certain circumstances, be held personally liable for obligations of a
Fund. The Declaration of Trust, however, disclaims shareholder liability for
acts or obligations of the Fund and requires that notice of such disclaimer be
given in each agreement, obligation, or instrument entered into or executed by
the Fund or the Fund's trustees. Moreover, the Declaration of Trust provides for
indemnification out of Fund property for all losses and expenses of any
shareholder held personally liable for the obligations of the Fund and the Fund
may be covered by insurance which the Trustees consider adequate to cover
foreseeable tort claims. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is considered by the Advisor remote and
not material, since it is limited to circumstances in which a disclaimer is
inoperative and the Fund itself is unable to meet its obligations.

                             PROXY VOTING GUIDELINES

The Fund has delegated proxy voting responsibilities to the Advisor, subject to
the Board's general oversight. The Advisor votes proxies pursuant to the proxy
voting policy and guidelines (set forth in Appendix A to this SAI).

You may obtain information about how a fund voted proxies related to its
portfolio securities during the 12-month period ended June 30 by visiting the
SEC's Web site at www.sec.gov or by visiting our Web site at:
www.dws-investments.com (click on "proxy voting" at the bottom of the page).

                              FINANCIAL STATEMENTS

The financial statements for the Fund for the fiscal year ended September 30,
2008 are incorporated herein by reference to the Annual Report to shareholders
of the Fund dated September 30, 2008. A copy of the Annual Report may be
obtained without charge by contacting the Fund.



                             ADDITIONAL INFORMATION

The CUSIP numbers for this class of the Fund is:

Class S:  23336Y755

The Fund has a fiscal year ending September 30.

Many of the investment changes in the Fund will be made at prices different from
those prevailing at the time they may be reflected in a regular report to
shareholders of the Fund. These transactions will reflect investment decisions
made by the Advisor in light of the Fund's investment objective and policies,
its other portfolio holdings and tax considerations, and should not be construed
as recommendations for similar action by other investors.

The Fund's prospectuses and this SAI omit certain information contained in the
Registration Statement and its amendments which the Fund has filed with the SEC
under the Securities Act of 1933 and reference is hereby made to the
Registration Statement for further information with respect to a Fund and the
securities offered hereby. The Registration Statement and its amendments are
available for inspection by the public at the offices of the SEC in Washington,
D.C.
                      APPENDIX A -- PROXY VOTING GUIDELINES

       Deutsche Asset Management ("AM") Proxy Voting Policy and Guidelines


I.       INTRODUCTION

AM has adopted and implemented the following policies and procedures, which it
believes are reasonably designed to ensure that proxies are voted in the best
economic interest of clients, in accordance with its fiduciary duties and local
regulation. These Proxy Voting Policies, Procedures and Guidelines shall apply
to all accounts managed by US domiciled advisers and to all US client accounts
managed by non US regional offices. Non US regional offices are required to
maintain procedures and to vote proxies as may be required by law on behalf of
their non US clients. In addition, AM's proxy policies reflect the fiduciary
standards and responsibilities for ERISA accounts.

The attached guidelines represent a set of global recommendations that were
determined by the Global Proxy Voting Sub-Committee ("the GPVSC"). These
guidelines were developed to provide AM with a comprehensive list of
recommendations that represent how AM will generally vote proxies for its
clients. The recommendations derived from the application of these guidelines
are not intended to influence the various AM legal entities either directly or
indirectly by parent or affiliated companies. In addition, the organizational
structures and documents of the various AM legal entities allows, where
necessary or appropriate, the execution by individual AM subsidiaries of the
proxy voting rights independently of any DB parent or affiliated company. This
applies in particular to non U.S. fund management companies. The individuals
that make proxy voting decisions are also free to act independently, subject to
the normal and customary supervision by the management/boards of these AM legal
entities.


II.      AM'S PROXY VOTING RESPONSIBILITIES

Proxy votes are the property of AM's advisory clients.(1) As such, AM's
authority and responsibility to vote such proxies depend upon its contractual
relationships with its clients. AM has delegated responsibility for effecting
its advisory clients' proxy votes to Institutional Shareholder Services ("ISS"),
an independent third-party proxy voting specialist. ISS votes AM's advisory
clients' proxies in accordance with AM's proxy guidelines or AM's specific
instructions. Where a client has given specific instructions as to how a proxy
should be voted, AM will notify ISS to carry out those instructions. Where no
specific instruction exists, AM will follow the procedures in voting the proxies
set forth in this document. Certain Taft-Hartley clients may direct AM to have
ISS vote their proxies in accordance with Taft Hartley voting Guidelines

_____________________

(1)      For purposes of these Policies and Procedures, "clients" refers to
         persons or entities: for which AM serves as investment adviser or
         sub-adviser; for which AM votes proxies; and that have an economic or
         beneficial ownership interest in the portfolio securities of issuers
         soliciting such proxies.

Clients may in certain instances contract with their custodial agent and notify
AM that they wish to engage in securities lending transactions. In such cases,
it is the responsibility of the custodian to deduct the number of shares that
are on loan so that they do not get voted twice.


III.     POLICIES

1.       Proxy voting activities are conducted in the best economic interest of
         clients

AM has adopted the following policies and procedures to ensure that proxies are
voted in accordance with the best economic interest of its clients, as
determined by AM in good faith after appropriate review.

2.       The Global Proxy Voting Sub-Committee

The Global Proxy Voting Sub-Committee (the "GPVSC") is an internal working group
established by the applicable AM's Investment Risk Oversight Committee pursuant
to a written charter. The GPVSC is responsible for overseeing AM's proxy voting
activities, including:

(i)    adopting, monitoring and updating guidelines, attached as Exhibit A (the
       "Guidelines"), that provide how AM will generally vote proxies pertaining
       to a comprehensive list of common proxy voting matters;

(ii)   voting proxies where (A) the issues are not covered by specific client
       instruction or the Guidelines; (B) the Guidelines specify that the issues
       are to be determined on a case-by-case basis; or (C) where an exception
       to the Guidelines may be in the best economic interest of AM's clients;
       and

(iii)  monitoring the Proxy Vendor Oversight's proxy voting activities (see
       below).

AM's Proxy Vendor Oversight, a function of AM's Operations Group, is responsible
for coordinating with ISS to administer AM's proxy voting process and for voting
proxies in accordance with any specific client instructions or, if there are
none, the Guidelines, and overseeing ISS' proxy responsibilities in this regard.

3.       Availability of Proxy Voting Policies and Procedures and proxy voting
         record

Copies of these Policies and Procedures, as they may be updated from time to
time, are made available to clients as required by law and otherwise at AM's
discretion. Clients may also obtain information on how their proxies were voted
by AM as required by law and otherwise at AM's discretion; however, AM must not
selectively disclose its investment company clients' proxy voting records. The
Proxy Vendor Oversight will make proxy voting reports available to advisory
clients upon request. The investment companies' proxy voting records will be
disclosed to shareholders by means of publicly-available annual filings of each
company's proxy voting record for 12-month periods ended June 30 (see
"Recordkeeping" below), if so required by relevant law.


IV.      PROCEDURES

The key aspects of AM's proxy voting process are as follows:

1.       The GPVSC's Proxy Voting Guidelines

The Guidelines set forth the GPVSC's standard voting positions on a
comprehensive list of common proxy voting matters. The GPVSC has developed, and
continues to update the Guidelines based on consideration of current corporate
governance principles, industry standards, client feedback, and the impact of
the matter on issuers and the value of the investments.

The GPVSC will review the Guidelines as necessary to support the best economic
interests of AM's clients and, in any event, at least annually. The GPVSC will
make changes to the Guidelines, whether as a result of the annual review or
otherwise, taking solely into account the best economic interests of clients.
Before changing the Guidelines, the GPVSC will thoroughly review and evaluate
the proposed change and the reasons therefore, and the GPVSC Chair will ask
GPVSC members whether anyone outside of the AM organization (but within Deutsche
Bank and its affiliates) or any entity that identifies itself as a AM advisory
client has requested or attempted to influence the proposed change and whether
any member has a conflict of interest with respect to the proposed change. If
any such matter is reported to the GPVSC Chair, the Chair will promptly notify
the Conflicts of Interest Management Sub-Committee (see below) and will defer
the approval, if possible. Lastly, the GPVSC will fully document its rationale
for approving any change to the Guidelines.

The Guidelines may reflect a voting position that differs from the actual
practices of the public company(ies) within the Deutsche Bank organization or of
the investment companies for which AM or an affiliate serves as investment
adviser or sponsor. Investment companies, particularly closed-end investment
companies, are different from traditional operating companies. These differences
may call for differences in voting positions on the same matter. Further, the
manner in which AM votes investment company proxies may differ from proposals
for which a AM-advised or sponsored investment company solicits proxies from its
shareholders. As reflected in the Guidelines, proxies solicited by closed-end
(and open-end) investment companies are generally voted in accordance with the
pre-determined guidelines of ISS. See Section IV.3.B.

Funds ("Underlying Funds") in which Topiary Fund Management Fund of Funds (each,
a "Fund") invest, may from time to time seek to revise their investment terms
(i.e. liquidity, fees, etc.) or investment structure. In such event, the
Underlying Funds may require approval/consent from its investors to effect the
relevant changes. Topiary Fund Management has adopted Proxy Voting Procedures
which outline the process for these approvals.

2.       Specific proxy voting decisions made by the GPVSC

The Proxy Vendor Oversight will refer to the GPVSC all proxy proposals (i) that
are not covered by specific client instructions or the Guidelines; or (ii) that,
according to the Guidelines, should be evaluated and voted on a case-by-case
basis.

Additionally, if, the Proxy Vendor Oversight, the GPVSC Chair or any member of
the GPVSC, a portfolio manager, a research analyst or a sub-adviser believes
that voting a particular proxy in accordance with the Guidelines may not be in
the best economic interests of clients, that individual may bring the matter to
the attention of the GPVSC Chair and/or the Proxy Vendor Oversight.(2)

_____________________

(2)      The Proxy Vendor Oversight generally monitors upcoming proxy
         solicitations for heightened attention from the press or the industry
         and for novel or unusual proposals or circumstances, which may prompt
         the Proxy Vendor Oversight to bring the solicitation to the attention
         of the GPVSC Chair. AM portfolio managers, AM research analysts and
         sub-advisers also may bring a particular proxy vote to the attention of
         the GPVSC Chair, as a result of their ongoing monitoring of portfolio
         securities held by advisory clients and/or their review of the periodic
         proxy voting record reports that the GPVSC Chair distributes to AM
         portfolio managers and AM research analysts.

If the Proxy Vendor Oversight refers a proxy proposal to the GPVSC or the GPVSC
determines that voting a particular proxy in accordance with the Guidelines is
not in the best economic interests of clients, the GPVSC will evaluate and vote
the proxy, subject to the procedures below regarding conflicts.

The GPVSC endeavors to hold meetings to decide how to vote particular proxies
sufficiently before the voting deadline so that the procedures below regarding
conflicts can be completed before the GPVSC's voting determination.

3.       Certain proxy votes may not be cast

In some cases, the GPVSC may determine that it is in the best economic interests
of its clients not to vote certain proxies. If the conditions below are met with
regard to a proxy proposal, AM will abstain from voting:

o        Neither the Guidelines nor specific client instructions cover an issue;

o        ISS does not make a recommendation on the issue;

o        The GPVSC cannot convene on the proxy proposal at issue to make a
         determination as to what would be in the client's best interest. (This
         could happen, for example, if the Conflicts of Interest Management
         Sub-committee found that there was a material conflict or if despite
         all best efforts being made, the GPVSC quorum requirement could not be
         met).

In addition, it is AM's policy not to vote proxies of issuers subject to laws of
those jurisdictions that impose restrictions upon selling shares after proxies
are voted, in order to preserve liquidity. In other cases, it may not be
possible to vote certain proxies, despite good faith efforts to do so. For
example, some jurisdictions do not provide adequate notice to shareholders so
that proxies may be voted on a timely basis. Voting rights on securities that
have been loaned to third-parties transfer to those third-parties, with loan
termination often being the only way to attempt to vote proxies on the loaned
securities. Lastly, the GPVSC may determine that the costs to the client(s)
associated with voting a particular proxy or group of proxies outweighs the
economic benefits expected from voting the proxy or group of proxies.

The Proxy Vendor Oversight will coordinate with the GPVSC Chair regarding any
specific proxies and any categories of proxies that will not or cannot be voted.
The reasons for not voting any proxy shall be documented.

4.       Conflict of Interest Procedures

A. Procedures to Address Conflicts of Interest and Improper Influence

Overriding Principle. In the limited circumstances where the GPVSC votes
proxies,(3) the GPVSC will vote those proxies in accordance with what it, in
good faith, determines to be the best economic interests of AM's clients.(4)

_____________________

(3)      As mentioned above, the GPVSC votes proxies (i) where neither a
         specific client instruction nor a Guideline directs how the proxy
         should be voted, (ii) where the Guidelines specify that an issue is to
         be determined on a case by case basis or (iii) where voting in
         accordance with the Guidelines may not be in the best economic
         interests of clients.

(4)      The Proxy Vendor Oversight, who serves as the non-voting secretary of
         the GPVSC, may receive routine calls from proxy solicitors and other
         parties interested in a particular proxy vote. Any contact that
         attempts to exert improper pressure or influence shall be reported to
         the Conflicts of Interest Management Sub-Committee.

Independence of the GPVSC. As a matter of Compliance policy, the GPVSC and the
Proxy Vendor Oversight are structured to be independent from other parts of
Deutsche Bank. Members of the GPVSC and the employee responsible for Proxy
Vendor Oversight are employees of AM. As such, they may not be subject to the
supervision or control of any employees of Deutsche Bank Corporate and
Investment Banking division ("CIB"). Their compensation cannot be based upon
their contribution to any business activity outside of AM without prior approval
of Legal and Compliance. They can have no contact with employees of Deutsche
Bank outside of the Private Client and Asset Management division ("PCAM")
regarding specific clients, business matters or initiatives without the prior
approval of Legal and Compliance. They furthermore may not discuss proxy votes
with any person outside of AM (and within AM only on a need to know basis).

Conflict Review Procedures. There will be a committee (the "Conflicts of
Interest Management Sub-Committee") established within AM that will monitor for
potential material conflicts of interest in connection with proxy proposals that
are to be evaluated by the GPVSC. Promptly upon a determination that a vote
shall be presented to the GPVSC, the GPVSC Chair shall notify the Conflicts of
Interest Management Sub-Committee. The Conflicts of Interest Management
Sub-Committee shall promptly collect and review any information deemed
reasonably appropriate to evaluate, in its reasonable judgment, if AM or any
person participating in the proxy voting process has, or has the appearance of,
a material conflict of interest. For the purposes of this policy, a conflict of
interest shall be considered "material" to the extent that a reasonable person
could expect the conflict to influence, or appear to influence, the GPVSC's
decision on the particular vote at issue. GPVSC should provide the Conflicts of
Interest Management Sub-Committee a reasonable amount of time (no less than 24
hours) to perform all necessary and appropriate reviews. To the extent that a
conflicts review can not be sufficiently completed by the Conflicts of Interest
Management Sub-Committee the proxies will be voted in accordance with the
standard guidelines.

The information considered by the Conflicts of Interest Management Sub-Committee
may include without limitation information regarding (i) AM client
relationships; (ii) any relevant personal conflict known by the Conflicts of
Interest Management Sub-Committee or brought to the attention of that
sub-committee; (iii) and any communications with members of the GPVSC (or anyone
participating or providing information to the GPVSC) and any person outside of
the AM organization (but within Deutsche Bank and its affiliates) or any entity
that identifies itself as a AM advisory client regarding the vote at issue. In
the context of any determination, the Conflicts of Interest Management
Sub-Committee may consult with, and shall be entitled to rely upon, all
applicable outside experts, including legal counsel.

Upon completion of the investigation, the Conflicts of Interest Management
Sub-Committee will document its findings and conclusions. If the Conflicts of
Interest Management Sub-Committee determines that (i) AM has a material conflict
of interest that would prevent it from deciding how to vote the proxies
concerned without further client consent or (ii) certain individuals should be
recused from participating in the proxy vote at issue, the Conflicts of Interest
Management Sub-Committee will so inform the GPVSC chair.

If notified that AM has a material conflict of interest as described above, the
GPVSC chair will obtain instructions as to how the proxies should be voted
either from (i) if time permits, the effected clients, or (ii) in accordance
with the standard guidelines. If notified that certain individuals should be
recused from the proxy vote at issue, the GPVSC Chair shall do so in accordance
with the procedures set forth below.

Note: Any AM employee who becomes aware of a potential, material conflict of
interest in respect of any proxy vote to be made on behalf of clients shall
notify Compliance. Compliance shall call a meeting of the conflict review
committee to evaluate such conflict and determine a recommended course of
action.

Procedures to be followed by the GPVSC. At the beginning of any discussion
regarding how to vote any proxy, the GPVSC Chair (or his or her delegate) will
inquire as to whether any GPVSC member (whether voting or ex officio) or any
person participating in the proxy voting process has a personal conflict of
interest or has actual knowledge of an actual or apparent conflict that has not
been reported to the Conflicts of Interest Management Sub-Committee.

The GPVSC Chair also will inquire of these same parties whether they have actual
knowledge regarding whether any director, officer or employee outside of the AM
organization (but within Deutsche Bank and its affiliates) or any entity that
identifies itself as a AM advisory client, has: (i) requested that AM, the Proxy
Vendor Oversight (or any member thereof) or a GPVSC member vote a particular
proxy in a certain manner; (ii) attempted to influence AM, the Proxy Vendor
Oversight (or any member thereof), a GPVSC member or any other person in
connection with proxy voting activities; or (iii) otherwise communicated with a
GPVSC member or any other person participating or providing information to the
GPVSC regarding the particular proxy vote at issue, and which incident has not
yet been reported to the Conflicts of Interest Management Sub- Committee.

If any such incidents are reported to the GPVSC Chair, the Chair will promptly
notify the Conflicts of Interest Management Sub-Committee and, if possible, will
delay the vote until the Conflicts of Interest Management Sub-Committee can
complete the conflicts report. If a delay is not possible, the Conflicts of
Interest Management Sub-Committee will instruct the GPVSC whether anyone should
be recused from the proxy voting process, or whether AM should vote the proxy in
accordance with the standard guidelines, seek instructions as to how to vote the
proxy at issue from ISS or, if time permits, the effected clients. These
inquiries and discussions will be properly reflected in the GPVSC's minutes.

Duty to Report. Any AM employee, including any GPVSC member (whether voting or
ex officio), that is aware of any actual or apparent conflict of interest
relevant to, or any attempt by any person outside of the AM organization (but
within Deutsche Bank and its affiliates) or any entity that identifies itself as
a AM advisory client to influence, how AM votes its proxies has a duty to
disclose the existence of the situation to the GPVSC Chair (or his or her
designee) and the details of the matter to the Conflicts of Interest Management
Sub-Committee. In the case of any person participating in the deliberations on a
specific vote, such disclosure should be made before engaging in any activities
or participating in any discussion pertaining to that vote.

Recusal of Members. The GPVSC will recuse from participating in a specific proxy
vote any GPVSC members (whether voting or ex officio) and/or any other person
who (i) are personally involved in a material conflict of interest; or (ii) who,
as determined by the Conflicts of Interest Management Sub-Committee, have actual
knowledge of a circumstance or fact that could effect their independent
judgment, in respect of such vote. The GPVSC will also exclude from
consideration the views of any person (whether requested or volunteered) if the
GPVSC or any member thereof knows, or if the Conflicts of Interest Management
Sub-Committee has determined, that such other person has a material conflict of
interest with respect to the particular proxy, or has attempted to influence the
vote in any manner prohibited by these policies.

If, after excluding all relevant GPVSC voting members pursuant to the paragraph
above, there are three or more GPVSC voting members remaining, those remaining
GPVSC members will determine how to vote the proxy in accordance with these
Policies and Procedures. If there are fewer than three GPVSC voting members
remaining, the GPVSC Chair will vote the proxy in accordance with the standard
guidelines, will obtain instructions as to how to have the proxy voted from, if
time permits, the effected clients and otherwise from ISS.

B.       Investment Companies and Affiliated Public Companies

Investment Companies. As reflected in the Guidelines, all proxies solicited by
open-end and closed-end investment companies are voted in accordance with the
pre-determined guidelines of ISS, unless the investment company client directs
AM to vote differently on a specific proxy or specific categories of proxies.
However, regarding investment companies for which AM or an affiliate serves as
investment adviser or principal underwriter, such proxies are voted in the same
proportion as the vote of all other shareholders (i.e., "mirror" or "echo"
voting). Master fund proxies solicited from feeder funds are voted in accordance
with applicable provisions of Section 12 of the Investment Company Act of 1940.

Subject to participation agreements with certain Exchange Traded Funds ("ETF")
issuers that have received exemptive orders from the U.S. Securities and
Exchange Commission allowing investing DWS funds to exceed the limits set forth
in Section 12(d)(1)(A) and (B) of the Investment Company Act of 1940, DeAM will
echo vote proxies for ETFs in which Deutsche Bank holds more than 25% of
outstanding voting shares globally when required to do so by participation
agreements and SEC orders.

Affiliated Public Companies. For proxies solicited by non-investment company
issuers of or within the Deutsche Bank organization, e.g., Deutsche bank itself,
these proxies will be voted in the same proportion as the vote of other
shareholders (i.e., "mirror" or "echo" voting).

Note: With respect to the QP Trust (not registered under the Investment Company
Act of 1940), the Fund is not required to engage in echo voting and the
investment adviser will use these Guidelines, and may determine, with respect to
the QP Trust, to vote contrary to the positions in the Guidelines, consistent
with the Fund's best interest.

C.       Other Procedures That Limit Conflicts of Interest

AM and other entities in the Deutsche Bank organization have adopted a number of
policies, procedures and internal controls that are designed to avoid various
conflicts of interest, including those that may arise in connection with proxy
voting, including:

o        Deutsche Bank Americas Restricted Activities Policy. This policy
         provides for, among other things, independence of AM employees from
         CIB, and information barriers between AM and other affiliates.
         Specifically, no AM employee may be subject to the supervision or
         control of any employee of CIB. No AM employee shall have his or her
         compensation based upon his or her contribution to any business
         activity within the Bank outside of the business of AM, without the
         prior approval of Legal or Compliance. Further, no employee of CIB
         shall have any input into the compensation of a AM employee without the
         prior approval of Legal or Compliance. Under the information barriers
         section of this policy, as a general rule, AM employees who are
         associated with the investment process should have no contact with
         employees of Deutsche Bank or its affiliates, outside of PCAM,
         regarding specific clients, business matters, or initiatives. Further,
         under no circumstances should proxy votes be discussed with any
         Deutsche Bank employee outside of AM (and should only be discussed on a
         need-to-know basis within AM).

Other relevant internal policies include the Deutsche Bank Americas Code of
Professional Conduct, the Deutsche Asset Management Information Sharing
Procedures, the Deutsche Asset Management Code of Ethics, the Sarbanes-Oxley
Senior Officer Code of Ethics, and the Deutsche Bank Group Code of Conduct. The
GPVSC expects that these policies, procedures and internal controls will greatly
reduce the chance that the GPVSC (or, its members) would be involved in, aware
of or influenced by, an actual or apparent conflict of interest.


V.       RECORDKEEPING

At a minimum, the following types of records must be properly maintained and
readily accessible in order to evidence compliance with this policy.

o        AM will maintain a record of each vote cast by AM that includes among
         other things, company name, meeting date, proposals presented, vote
         cast and shares voted.

o        The Proxy Vendor Oversight maintains records for each of the proxy
         ballots it votes. Specifically, the records include, but are not
         limited to:

         -        The proxy statement (and any additional solicitation
                  materials) and relevant portions of annual statements.

         -        Any additional information considered in the voting process
                  that may be obtained from an issuing company, its agents or
                  proxy research firms.

         -        Analyst worksheets created for stock option plan and share
                  increase analyses.

         -        Proxy Edge print-screen of actual vote election.

o        AM will retain these Policies and Procedures and the Guidelines; will
         maintain records of client requests for proxy voting information; and
         will retain any documents the Proxy Vendor Oversight or the GPVSC
         prepared that were material to making a voting decision or that
         memorialized the basis for a proxy voting decision.

o        The GPVSC also will create and maintain appropriate records documenting
         its compliance with these Policies and Procedures, including records of
         its deliberations and decisions regarding conflicts of interest and
         their resolution.

o        With respect to AM's investment company clients, ISS will create and
         maintain records of each company's proxy voting record for 12-month
         periods ended June 30. AM will compile the following information for
         each matter relating to a portfolio security considered at any
         shareholder meeting held during the period covered by the report and
         with respect to which the company was entitled to vote:

         -        The name of the issuer of the portfolio security;

         -        The exchange ticker symbol of the portfolio security (if
                  symbol is available through reasonably practicable means);

         -        The Council on Uniform Securities Identification Procedures
                  number for the portfolio security (if the number is available
                  through reasonably practicable means);

         -        The shareholder meeting date;

         -        A brief identification of the matter voted on;

         -        Whether the matter was proposed by the issuer or by a security
                  holder;

         -        Whether the company cast its vote on the matter;

         -        How the company cast its vote (e.g., for or against proposal,
                  or abstain; for or withhold regarding election of directors);
                  and

         -        Whether the company cast its vote for or against management.

Note: This list is intended to provide guidance only in terms of the records
that must be maintained in accordance with this policy. In addition, please note
that records must be maintained in accordance with the applicable AM Records
Management Policy.

With respect to electronically stored records, "properly maintained" is defined
as complete, authentic (unalterable) usable and backed-up. At a minimum, records
should be retained for a period of not less than six years (or longer, if
necessary to comply with applicable regulatory requirements), the first three
years in an appropriate AM office.


VI.      THE GPVSC'S OVERSIGHT ROLE

In addition to adopting the Guidelines and making proxy voting decisions on
matters referred to it as set forth above, the GPVSC will monitor the proxy
voting process by reviewing summary proxy information presented by ISS. The
GPVSC will use this review process to determine, among other things, whether any
changes should be made to the Guidelines. This review will take place at least
quarterly and will be documented in the GPVSC's minutes.


Attachment A - Global Proxy Voting Guidelines







                            Deutsche Asset Management

                         Global Proxy Voting Guidelines



                             As Amended October 2008


                                [GRAPHIC OMITTED]
Table of contents

I        Board Of Directors And Executives

         A        Election Of Directors

         B        Classified Boards Of Directors

         C        Board And Committee Independence

         D        Liability And Indemnification Of Directors

         E        Qualifications Of Directors

         F        Removal Of Directors And Filling Of Vacancies

         G        Proposals To Fix The Size Of The Board

         H        Proposals to Restrict Chief Executive Officer's Service on

                  Multiple Boards

         I        Proposals to Restrict Supervisory Board Members Service on

                  Multiple Boards

         J        Proposals to Establish Audit Committees

II       Capital Structure

         A        Authorization Of Additional Shares

         B        Authorization Of "Blank Check" Preferred Stock

         C        Stock Splits/Reverse Stock Splits

         D        Dual Class/Supervoting Stock

         E        Large Block Issuance

         F        Recapitalization Into A Single Class Of Stock

         G        Share Repurchases

         H        Reductions In Par Value

III      Corporate Governance Issues

         A        Confidential Voting

         B        Cumulative Voting

         C        Supermajority Voting Requirements

         D        Shareholder Right To Vote

IV       Compensation

         A        Establishment of a Remuneration Committee

         B        Executive And Director Stock Option Plans

         C        Employee Stock Option/Purchase Plans

         D        Golden Parachutes

         E        Proposals To Limit Benefits Or Executive Compensation

         F        Option Expensing

         G        Management board election and motion

         H        Remuneration (variable pay)

         I        Long-term incentive plans

         J        Shareholder Proposals Concerning "Pay For Superior
                  Performance"

         K        Executive Compensation Advisory

V        Anti-Takeover Related Issues

         A        Shareholder Rights Plans ("Poison Pills")

         B        Reincorporation

         C        Fair-Price Proposals

         D        Exemption From State Takeover Laws

         E        Non-Financial Effects Of Takeover Bids

VI       Mergers & Acquisitions

VII      Social & Political Issues

         A        Labor & Human Rights

         B        Diversity & Equality

         C        Health & Safety

         D        Government/Military

         E        Tobacco

VIII     Environmental Issues

IX       Miscellaneous Items

         A        Ratification Of Auditors

         B        Limitation Of Non-Audit Services Provided By Independent
                  Auditor

         C        Audit Firm Rotation

         D        Transaction Of Other Business

         E        Motions To Adjourn The Meeting

         F        Bundled Proposals

         G        Change Of Company Name

         H        Proposals Related To The Annual Meeting

         I        Reimbursement Of Expenses Incurred From Candidate Nomination

         J        Investment Company Proxies

         K        International Proxy Voting


These Guidelines may reflect a voting position that differs from the actual
practices of the public company (ies) within the Deutsche Bank organization or
of the investment companies for which AM or an affiliate serves as investment
adviser or sponsor.

NOTE: Because of the unique structure and regulatory scheme applicable to
closed-end investment companies, the voting guidelines (particularly those
related to governance issues) generally will be inapplicable to holdings of
closed-end investment companies. As a result, determinations on the appropriate
voting recommendation for closed-end investment company shares will be made on a
case-by-case basis.


I.       Board of Directors and Executives

A.       Election of Directors

Routine: AM Policy is to vote "for" the uncontested election of directors. Votes
for a director in an uncontested election will be withheld in cases where a
director has shown an inability to perform his/her duties in the best interests
of the shareholders.

Proxy contest: In a proxy contest involving election of directors, a
case-by-case voting decision will be made based upon analysis of the issues
involved and the merits of the incumbent and dissident slates of directors. AM
will incorporate the decisions of a third party proxy research vendor,
currently, Institutional Shareholder Services ("ISS") subject to review by the
Proxy Voting Sub-Committee (GPVSC) as set forth in the AM's Proxy Voting
Policies and Procedures.

Rationale: The large majority of corporate directors fulfill their fiduciary
obligation and in most cases support for management's nominees is warranted. As
the issues relevant to a contested election differ in each instance, those cases
must be addressed as they arise.

B.       Classified Boards of Directors

AM policy is to vote against proposals to classify the board and for proposals
to repeal classified boards and elect directors annually.

Rationale: Directors should be held accountable on an annual basis. By
entrenching the incumbent board, a classified board may be used as an
anti-takeover device to the detriment of the shareholders in a hostile take-over
situation.

C.       Board and Committee Independence

AM policy is to vote:

1.       "For" proposals that require that a certain percentage (majority up to
         66 2/3%) of members of a board of directors be comprised of independent
         or unaffiliated directors.

2.       "For" proposals that require all members of a company's compensation,
         audit, nominating, or other similar committees be comprised of
         independent or unaffiliated directors.

3.       "Against" shareholder proposals to require the addition of special
         interest, or constituency, representatives to boards of directors.

4.       "For" separation of the Chairman and CEO positions.

5.       "Against" proposals that require a company to appoint a Chairman who is
         an independent director.

Rationale: Board independence is a cornerstone of effective governance and
accountability. A board that is sufficiently independent from management assures
that shareholders' interests are adequately represented. However, the Chairman
of the board must have sufficient involvement in and experience with the
operations of the company to perform the functions required of that position and
lead the company.

No director qualifies as 'independent' unless the board of directors
affirmatively determines that the director has no material relationship with the
listed company (either directly or as a partner, shareholder or officer of an
organization that has a relationship with the company).

Whether a director is in fact not "independent" will depend on the laws and
regulations of the primary market for the security and the exchanges, if any, on
which the security trades.

D.       Liability and Indemnification of Directors

AM policy is to vote "for" management proposals to limit directors' liability
and to broaden the indemnification of directors, unless broader indemnification
or limitations on directors' liability would effect shareholders' interests in
pending litigation.

Rationale: While shareholders want directors and officers to be responsible for
their actions, it is not in the best interests of the shareholders for them to
be to risk averse. If the risk of personal liability is too great, companies may
not be able to find capable directors willing to serve. We support expanding
coverage only for actions taken in good faith and not for serious violations of
fiduciary obligation or negligence.

E.       Qualifications of Directors

AM policy is to follow management's recommended vote on either management or
shareholder proposals that set retirement ages for directors or require specific
levels of stock ownership by directors.

Rationale: As a general rule, the board of directors, and not the shareholders,
is most qualified to establish qualification policies.

F.       Removal of Directors and Filling of Vacancies

AM policy is to vote "against" proposals that include provisions that directors
may be removed only for cause or proposals that include provisions that only
continuing directors may fill board vacancies.

Rationale: Differing state statutes permit removal of directors with or without
cause. Removal of directors for cause usually requires proof of self-dealing,
fraud or misappropriation of corporate assets, limiting shareholders' ability to
remove directors except under extreme circumstances. Removal without cause
requires no such showing.

Allowing only incumbent directors to fill vacancies can serve as an
anti-takeover device, precluding shareholders from filling the board until the
next regular election.

G.       Proposals to Fix the Size of the Board

AM policy is to vote:

1.       "For" proposals to fix the size of the board unless: (a) no specific
         reason for the proposed change is given; or (b) the proposal is part of
         a package of takeover defenses.

2.       "Against" proposals allowing management to fix the size of the board
         without shareholder approval.

Rationale: Absent danger of anti-takeover use, companies should be granted a
reasonable amount of flexibility in fixing the size of its board.

H.       Proposals to Restrict Chief Executive Officer's Service on Multiple
         Boards

AM policy is to vote "For" proposals to restrict a Chief Executive Officer from
serving on more than three outside boards of directors.

Rationale: Chief Executive Officer must have sufficient time to ensure that
shareholders' interests are represented adequately.

Note: A director's service on multiple closed-end fund boards within a fund
complex are treated as service on a single Board for the purpose of the proxy
voting guidelines.

I.       Proposals to Restrict Supervisory Board Members Service on Multiple
         Boards (For FFT Securities)

AM policy is to vote "for" proposals to restrict a Supervisory Board Member from
serving on more than five supervisory boards.

Rationale: We consider a strong, independent and knowledgeable supervisory board
as important counter-balance to executive management to ensure that the
interests of shareholders are fully reflected by the company.

Full information should be disclosed in the annual reports and accounts to allow
all shareholders to judge the success of the supervisory board controlling their
company.

Supervisory Board Member must have sufficient time to ensure that shareholders'
interests are represented adequately.

Note: A director's service on multiple closed-end fund boards within a fund
complex are treated as service on a single Board for the purpose of the proxy
voting guidelines.

J.       Proposals to Establish Audit Committees (For FFT and U.S. Securities)
         AM policy is to vote "for" proposals that require the establishment of
         audit committees.

Rationale: The audit committee should deal with accounting and risk management
related questions, verifies the independence of the auditor with due regard to
possible conflicts of interest. It also should determine the procedure of the
audit process.


II.      Capital Structure

A.       Authorization of Additional Shares (For U.S. Securities)

AM policy is to vote "for" proposals to increase the authorization of existing
classes of stock that do not exceed a 3:1 ratio of shares authorized to shares
outstanding for a large cap company, and do not exceed a 4:1 ratio of shares
authorized to shares outstanding for a small-midcap company (companies having a
market capitalization under one billion U.S. dollars.).

Rationale: While companies need an adequate number of shares in order to carry
on business, increases requested for general financial flexibility must be
limited to protect shareholders from their potential use as an anti-takeover
device. Requested increases for specifically designated, reasonable business
purposes (stock split, merger, etc.) will be considered in light of those
purposes and the number of shares required.

B.       Authorization of "Blank Check" Preferred Stock (For U.S. Securities)

AM policy is to vote:

1.   "Against" proposals to create blank check preferred stock or to increase
     the number of authorized shares of blank check preferred stock unless the
     company expressly states that the stock will not be used for anti-takeover
     purposes and will not be issued without shareholder approval.

2.   "For" proposals mandating shareholder approval of blank check stock
     placement.

Rationale: Shareholders should be permitted to monitor the issuance of classes
of preferred stock in which the board of directors is given unfettered
discretion to set voting, dividend, conversion and other rights for the shares
issued.

C.       Stock Splits/Reverse Stock Splits

AM policy is to vote "for" stock splits if a legitimate business purpose is set
forth and the split is in the shareholders' best interests. A vote is cast "for"
a reverse stock split only if the number of shares authorized is reduced in the
same proportion as the reverse split or if the effective increase in authorized
shares (relative to outstanding shares) complies with the proxy guidelines for
common stock increases (see, Section II.A, above.)

Rationale: Generally, stock splits do not detrimentally effect shareholders.
Reverse stock splits, however, may have the same result as an increase in
authorized shares and should be analyzed accordingly.

D.       Dual Class/Supervoting Stock

AM policy is to vote "against" proposals to create or authorize additional
shares of super-voting stock or stock with unequal voting rights.

Rationale: The "one share, one vote" principal ensures that no shareholder
maintains a voting interest exceeding their equity interest in the company.

E.       Large Block Issuance (For U.S. Securities)

AM policy is to address large block issuances of stock on a case-by-case basis,
incorporating the recommendation of an independent third party proxy research
firm (currently ISS) subject to review by the GPVSC as set forth in AM's Proxy
Policies and Procedures.

Additionally, AM supports proposals requiring shareholder approval of large
block issuances.

Rationale: Stock issuances must be reviewed in light of the business
circumstances leading to the request and the potential impact on shareholder
value.

F.       Recapitalization into a Single Class of Stock

AM policy is to vote "for" recapitalization plans to provide for a single class
of common stock, provided the terms are fair, with no class of stock being
unduly disadvantaged.

Rationale: Consolidation of multiple classes of stock is a business decision
that may be left to the board and/management if there is no adverse effect on
shareholders.

G.       Share Repurchases

AM policy is to vote "for" share repurchase plans provided all shareholders are
able to participate on equal terms.

Rationale: Buybacks are generally considered beneficial to shareholders because
they tend to increase returns to the remaining shareholders.

H.       Reductions in Par Value

AM policy is to vote "for" proposals to reduce par value, provided a legitimate
business purpose is stated (e.g., the reduction of corporate tax
responsibility.)

Rationale: Usually, adjustments to par value are a routine financial decision
with no substantial impact on shareholders.


III.     Corporate Governance Issues

A.       Confidential Voting

AM policy is to vote "for" proposals to provide for confidential voting and
independent tabulation of voting results and to vote "against" proposals to
repeal such provisions.

Rationale: Confidential voting protects the privacy rights of all shareholders.
This is particularly important for employee-shareholders or shareholders with
business or other affiliations with the company, who may be vulnerable to
coercion or retaliation when opposing management. Confidential voting does not
interfere with the ability of corporations to communicate with all shareholders,
nor does it prohibit shareholders from making their views known directly to
management.

B.       Cumulative Voting (For U.S. Securities)

AM policy is to vote "against" shareholder proposals requesting cumulative
voting and "for"management proposals to eliminate it. The protections afforded
shareholders by cumulative voting are not necessary when a company has a history
of good performance and does not have a concentrated ownership interest.
Accordingly, a vote is cast "against" cumulative voting and "for" proposals to
eliminate it if:

a)       The company has a five year return on investment greater than the
         relevant industry index,

b)       All directors and executive officers as a group beneficially own less
         than 10% of the outstanding stock, and

c)       No shareholder (or voting block) beneficially owns 15% or more of the
         company.

Thus, failure of any one of the three criteria results in a vote for cumulative
voting in accordance with the general policy.

Rationale: Cumulative voting is a tool that should be used to ensure that
holders of a significant number of shares may have board representation;
however, the presence of other safeguards may make their use unnecessary.

C.       Supermajority Voting Requirements

AM policy is to vote "against" management proposals to require a supermajority
vote to amend the charter or bylaws and to vote "for" shareholder proposals to
modify or rescind existing supermajority requirements.

*Exception made when company holds a controlling position and seeks to lower
threshold to maintain control and/or make changes to corporate by-laws.

Rationale: Supermajority voting provisions violate the democratic principle that
a simple majority should carry the vote. Setting supermajority requirements may
make it difficult or impossible for shareholders to remove egregious by-law or
charter provisions. Occasionally, a company with a significant insider held
position might attempt to lower a supermajority threshold to make it easier for
management to approve provisions that may be detrimental to shareholders. In
that case, it may not be in the shareholders interests to lower the
supermajority provision.

D.       Shareholder Right to Vote

AM policy is to vote "against" proposals that restrict the right of shareholders
to call special meetings, amend the bylaws, or act by written consent. Policy is
to vote "for" proposals that remove such restrictions.

Rationale: Any reasonable means whereby shareholders can make their views known
to management or effect the governance process should be supported.


IV.      Compensation

Annual Incentive Plans or Bonus Plans are often submitted to shareholders for
approval. These plans typically award cash to executives based on company
performance. Deutsche Bank believes that the responsibility for executive
compensation decisions rest with the board of directors and/or the compensation
committee, and its policy is not to second-guess the board's award of cash
compensation amounts to executives unless a particular award or series of awards
is deemed excessive. If stock options are awarded as part of these bonus or
incentive plans, the provisions must meet Deutsche Bank's criteria regarding
stock option plans, or similar stock-based incentive compensation schemes, as
set forth below.

A.       Establishment of a Remuneration Committee (For FFT Securities)

AM policy is to vote "for" proposals that require the establishment of a
remuneration committee.

Rationale: Corporations should disclose in each annual report or proxy statement
their policies on remuneration. Essential details regarding executive
remuneration including share options, long-term incentive plans and bonuses,
should be disclosed in the annual report, so that investors can judge whether
corporate pay policies and practices meet the standard.

The remuneration committee shall not comprise any board members and should be
sensitive to the wider scene on executive pay. It should ensure that
performance-based elements of executive pay are designed to align the interests
of shareholders.

B.       Executive and Director Stock Option Plans

AM policy is to vote "for" stock option plans that meet the following criteria:

(1)      The resulting dilution of existing shares is less than (a) 15 percent
         of outstanding shares for large capital corporations or (b) 20 percent
         of outstanding shares for small-mid capital companies (companies having
         a market capitalization under one billion U.S. dollars.)

(2)      The transfer of equity resulting from granting options at less than FMV
         is no greater than 3% of the over-all market capitalization of large
         capital corporations, or 5% of market cap for small-mid capital
         companies.

(3)      The plan does not contain express repricing provisions and, in the
         absence of an express statement that options will not be repriced; the
         company does not have a history of repricing options.

(4)      The plan does not grant options on super-voting stock.

AM will support performance-based option proposals as long as a) they do not
mandate that all options granted by the company must be performance based, and
b) only certain high-level executives are subject to receive the performance
based options.

AM will support proposals to eliminate the payment of outside director pensions.

Rationale: Determining the cost to the company and to shareholders of
stock-based incentive plans raises significant issues not encountered with
cash-based compensation plans. These include the potential dilution of existing
shareholders' voting power, the transfer of equity out of the company resulting
from the grant and execution of options at less than FMV and the authority to
reprice or replace underwater options. Our stock option plan analysis model
seeks to allow reasonable levels of flexibility for a company yet still protect
shareholders from the negative impact of excessive stock compensation.
Acknowledging that small mid-capital corporations often rely more heavily on
stock option plans as their main source of executive compensation and may not be
able to compete with their large capital competitors with cash compensation, we
provide slightly more flexibility for those companies.

C.       Employee Stock Option/Purchase Plans

AM policy is to vote for employee stock purchase plans (ESPP's) when the plan
complies with Internal Revenue Code 423, allowing non-management employees to
purchase stock at 85% of FMV.

AM policy is to vote "for" employee stock option plans (ESOPs) provided they
meet the standards for stock option plans in general. However, when computing
dilution and transfer of equity, ESOPs are considered independently from
executive and director option plans.

Rationale: ESOPs and ESPP's encourage rank-and-file employees to acquire an
ownership stake in the companies they work for and have been shown to promote
employee loyalty and improve productivity.

D.       Golden Parachutes

AM policy is to vote "for" proposals to require shareholder approval of golden
parachutes and for proposals that would limit golden parachutes to no more than
three times base compensation. Policy is to vote "against" more restrictive
shareholder proposals to limit golden parachutes.

Rationale: In setting a reasonable limitation, AM considers that an effective
parachute should be less attractive than continued employment and that the IRS
has opined that amounts greater than three times annual salary, are excessive.

E.       Proposals to Limit Benefits or Executive Compensation

AM policy is to vote "against"

1.   Proposals to limit benefits, pensions or compensation and

2.   Proposals that request or require disclosure of executive compensation
     greater than the disclosure required by Securities and Exchange Commission
     (SEC) regulations.

Rationale: Levels of compensation and benefits are generally considered to be
day-to-day operations of the company, and are best left unrestricted by
arbitrary limitations proposed by shareholders.

F.       Option Expensing

AM policy is to support proposals requesting companies to expense stock options.

Rationale: Although companies can choose to expense options voluntarily, the
Financial Accounting Standards Board (FASB) does not yet require it, instead
allowing companies to disclose the theoretical value of options as a footnote.
Because the expensing of stock options lowers earnings, most companies elect not
to do so. Given the fact that options have become an integral component of
compensation and their exercise results in a transfer of shareholder value, AM
agrees that their value should not be ignored and treated as "no cost"
compensation. The expensing of stock options would promote more modest and
appropriate use of stock options in executive compensation plans and present a
more accurate picture of company operational earnings.

G.        Management board election and motion (For FFT Securities)

AM policy is to vote "against":

o        the election of board members with positions on either remuneration or
         audit committees;

o        the election of supervisory board members with too many supervisory
         board mandates;

o        "automatic" election of former board members into the supervisory
         board.

Rationale: Management as an entity, and each of its members, are responsible for
all actions of the company, and are - subject to applicable laws and regulations
- accountable to the shareholders as a whole for their actions.

Sufficient information should be disclosed in the annual company report and
account to allow shareholders to judge the success of the company.

H.       Remuneration (variable pay): (For FFT Securities)

Executive remuneration for Management Board

AM policy is to vote "for" remuneration for Management Board that is transparent
and linked to results.

Rationale: Executive compensation should motivate management and align the
interests of management with the shareholders. The focus should be on criteria
that prevent excessive remuneration; but enable the company to hire and retain
first-class professionals.

Shareholder interests are normally best served when management is remunerated to
optimise long-term returns. Criteria should include suitable measurements like
return on capital employed or economic value added.

Interests should generally also be correctly aligned when management own shares
in the company - even more so if these shares represent a substantial portion of
their own wealth.

Its disclosure shall differentiate between fixed pay, variable (performance
related) pay and long-term incentives, including stock option plans with
valuation ranges as well as pension and any other significant arrangements.

Executive remuneration for Supervisory Board

AM policy is to vote "for" remuneration for Supervisory Board that is at least
50% in fixed form.

Rationale: It would normally be preferable if performance linked compensation
were not based on dividend payments, but linked to suitable result based
parameters. Consulting and procurement services should also be published in the
company report.

I.       Long-term incentive plans (For FFT Securities)

AM policy is to vote "for" long-term incentive plans for members of a management
board that reward for above average company performance.

Rationale: Incentive plans will normally be supported if they:

o        directly align the interests of members of management boards with those
         of shareholders;

o        establish challenging performance criteria to reward only above average
         performance;

o        measure performance by total shareholder return in relation to the
         market or a range of comparable companies;

o        are long-term in nature and encourage long-term ownership of the shares
         once exercised through minimum holding periods;

o        do not allow a repricing of the exercise price in stock option plans.

J.       Shareholder Proposals Concerning "Pay for Superior Performance"

AM policy is to address pay for superior performance proposals on a case-by-case
basis, incorporating the recommendation of an independent third party proxy
research firm (currently ISS) subject to review by the GPVSC as set forth in
AM's Proxy Policies and Procedures.

Rationale: While AM agrees that compensation issues are better left to the
discretion of management, they appreciate the need to monitor for excessive
compensation practices on a case by case basis. If, after a review of the ISS
metrics, AM is comfortable with ISS's applying this calculation and will vote
according to their recommendation.

K.       Executive Compensation Advisory

AM policy is to follow management's recommended vote on shareholder proposals to
propose an advisory resolution seeking to ratify the compensation of the
company's named executive officers (NEOs) on an annual basis.

Rationale: AM believes that controls exist within senior management and
corporate compensation committees, ensuring fair compensation to executives.
This might allow shareholders to require approval for all levels of management's
compensation.

V.       Anti-Takeover Related Issues

A.       Shareholder Rights Plans ("Poison Pills")

AM policy is to vote "for" proposals to require shareholder ratification of
poison pills or that request boards to redeem poison pills, and to vote
"against" the adoption of poison pills if they are submitted for shareholder
ratification.

Rationale: Poison pills are the most prevalent form of corporate takeover
defenses and can be (and usually are) adopted without shareholder review or
consent. The potential cost of poison pills to shareholders during an attempted
takeover outweighs the benefits.

B.       Reincorporation

AM policy is to examine reincorporation proposals on a case-by-case basis. The
voting decision is based on: (1) differences in state law between the existing
state of incorporation and the proposed state of incorporation; and (2)
differences between the existing and the proposed charter/bylaws/articles of
incorporation and their effect on shareholder rights. If changes resulting from
the proposed reincorporation violate the corporate governance principles set
forth in these guidelines, the reincorporation will be deemed contrary to
shareholder's interests and a vote cast "against."

Rationale: Reincorporations can be properly analyzed only by looking at the
advantages and disadvantages to their shareholders. Care must be taken that
anti-takeover protection is not the sole or primary result of a proposed change.

C.       Fair-Price Proposals

AM policy is to vote "for" management fair-price proposals, provided that: (1)
the proposal applies only to two-tier offers; (2) the proposal sets an objective
fair-price test based on the highest price that the acquirer has paid for a
company's shares; (3) the supermajority requirement for bids that fail the
fair-price test is no higher than two-thirds of the outstanding shares; (4) the
proposal contains no other anti-takeover provisions or provisions that restrict
shareholders rights.

A vote is cast for shareholder proposals that would modify or repeal existing
fair-price requirements that do not meet these standards.

Rationale: While fair price provisions may be used as anti-takeover devices, if
adequate provisions are included, they provide some protection to shareholders
who have some say in their application and the ability to reject those
protections if desired.

D.       Exemption from state takeover laws

AM policy is to vote "for" shareholder proposals to opt out of state takeover
laws and to vote "against" management proposals requesting to opt out of state
takeover laws.

Rationale: Control share statutes, enacted at the state level, may harm
long-term share value by entrenching management. They also unfairly deny certain
shares their inherent voting rights.

E.       Non-financial Effects of Takeover Bids

Policy is to vote "against" shareholder proposals to require consideration of
non-financial effects of merger or acquisition proposals.

Rationale: Non-financial effects may often be subjective and are secondary to
AM's stated purpose of acting in its client's best economic interest.


VI.      Mergers & Acquisitions

Evaluation of mergers, acquisitions and other special corporate transactions
(i.e., takeovers, spin-offs, sales of assets, reorganizations, restructurings
and recapitalizations) are performed on a case-by-case basis incorporating
information from an independent proxy research source (currently ISS.)
Additional resources including portfolio management and research analysts may be
considered as set forth in AM's Policies and Procedures.


VII.     Social, Environmental & Political Issues

Social and environmental issues are becoming increasingly important to corporate
success. We incorporate social and environmental considerations into both our
investment decisions and our proxy voting decisions - particularly if the
financial performance of the company could be impacted.

With increasing frequency, shareholder proposals are submitted relating to
social and political responsibility issues. Almost universally, the company
management will recommend a vote "against" these proposals. These types of
proposals cover an extremely wide range of issues. Many of the issues tend to be
controversial and are subject to more than one reasonable, yet opposing, theory
of support. More so than with other types of proxy proposals, social and
political responsibility issues may not have a connection to the economic and
corporate governance principles effecting shareholders' interests. AM's policy
regarding social and political responsibility issues, as with any other issue,
is designed to protect our client shareholders' economic interests.

Occasionally, a distinction is made between a shareholder proposal requesting
direct action on behalf of the board and a request for a report on (or
disclosure of) some information. In order to avoid unduly burdening any company
with reporting requirements, AM's policy is to vote against shareholder
proposals that demand additional disclosure or reporting than is required by the
Securities and Exchange Commission unless it appears there is a legitimate issue
and the company has not adequately addressed shareholders' concerns.

A.       Labor & Human Rights

AM policy is to vote "against" adopting global codes of conduct or workplace
standards exceeding those mandated by law.

Rationale: Additional requirements beyond those mandated by law are deemed
unnecessary and potentially burdensome to companies

B.       Diversity & Equality

1.       AM policy is to vote "against" shareholder proposals to force equal
         employment opportunity, affirmative action or board diversity.

Rationale: Compliance with State and Federal legislation along with information
made available through filings with the EEOC provides sufficient assurance that
companies act responsibly and make information public.

2.       AM policy is also to vote "against" proposals to adopt the Mac Bride
         Principles. The Mac Bride Principles promote fair employment,
         specifically regarding religious discrimination.

Rationale: Compliance with the Fair Employment Act of 1989 makes adoption of the
Mac Bride Principles redundant. Their adoption could potentially lead to charges
of reverse discrimination.

C.       Health & Safety

1.       AM policy is to vote "against" adopting a pharmaceutical price
         restraint policy or reporting pricing policy changes.

Rationale: Pricing is an integral part of business for pharmaceutical companies
and should not be dictated by shareholders (particularly pursuant to an
arbitrary formula.) Disclosing pricing policies may also jeopardize a company's
competitive position in the marketplace.

2.       AM policy is to vote "against" shareholder proposals to control the use
         or labeling of and reporting on genetically engineered products.

Rationale: Additional requirements beyond those mandated by law are deemed
unnecessary and potentially burdensome to companies.

D.       Government/Military

1.       AM policy is to vote against shareholder proposals regarding the
         production or sale of military arms or nuclear or space-based weapons,
         including proposals seeking to dictate a company's interaction with a
         particular foreign country or agency.

Rationale: Generally, management is in a better position to determine what
products or industries a company can and should participate in. Regulation of
the production or distribution of military supplies is, or should be, a matter
of government policy.

2.       AM policy is to vote "against" shareholder proposals regarding
         political contributions and donations.

Rationale: The Board of Directors and Management, not shareholders, should
evaluate and determine the recipients of any contributions made by the company.

3.       AM policy is to vote "against" shareholder proposals regarding
         charitable contributions and donations.

Rationale: The Board of Directors and Management, not shareholders, should
evaluate and determine the recipients of any contributions made by the company.

E.       Tobacco

1.       AM policy is to vote "against" shareholder proposals requesting
         additional standards or reporting requirements for tobacco companies as
         well as "against" requesting companies to report on the intentional
         manipulation of nicotine content.

Rationale: Where a tobacco company's actions meet the requirements of legal and
industry standards, imposing additional burdens may detrimentally effect a
company's ability to compete. The disclosure of nicotine content information
could affect the company's rights in any pending or future litigation.

2.       Shareholder requests to spin-off or restructure tobacco businesses will
         be opposed.

Rationale: These decisions are more appropriately left to the Board and
management, and not to shareholder mandate.


VIII.    Environmental Issues

AM policy is to follow management's recommended vote on CERES Principles or
other similar environmental mandates (e.g., those relating to Greenhouse gas
emissions or the use of nuclear power).

Rationale: Environmental issues are extensively regulated by outside agencies
and compliance with additional requirements often involves significant cost to
companies.


IX.      Miscellaneous Items

A.       Ratification of Auditors

AM policy is to vote "for" a) the management recommended selection of auditors
and b) proposals to require shareholder approval of auditors.

Rationale: Absent evidence that auditors have not performed their duties
adequately, support for management's nomination is warranted.

B.       Limitation of non-audit services provided by independent auditor

AM policy is to support proposals limiting non-audit fees to 50% of the
aggregate annual fees earned by the firm retained as a company's independent
auditor.

Rationale: In the wake of financial reporting problems and alleged audit
failures at a number of companies, AM supports the general principle that
companies should retain separate firms for audit and consulting services to
avoid potential conflicts of interest. However, given the protections afforded
by the recently enacted Sarbanes-Oxley Act of 2002 (which requires Audit
Committee pre-approval for non-audit services and prohibits auditors from
providing specific types of services), and the fact that some non-audit services
are legitimate audit-related services, complete separation of audit and
consulting fees may not be warranted. A reasonable limitation is appropriate to
help ensure auditor independence and it is reasonable to expect that audit fees
exceed non-audit fees.

C.       Audit firm rotation

AM policy is to support proposals seeking audit firm rotation unless the
rotation period sought is less than five years.

Rationale: While the Sarbanes-Oxley Act mandates that the lead audit partner be
switched every five years, AM believes that rotation of the actual audit firm
would provide an even stronger system of checks and balances on the audit
function.

D.       Transaction of Other Business

AM policy is to vote against "transaction of other business" proposals.

Rationale: This is a routine item to allow shareholders to raise other issues
and discuss them at the meeting. As the nature of these issues may not be
disclosed prior to the meeting, we recommend a vote against these proposals.
This protects shareholders voting by proxy (and not physically present at a
meeting) from having action taken at the meeting that they did not receive
proper notification of or sufficient opportunity to consider.

E.       Motions to Adjourn the Meeting

AM Policy is to vote against proposals to adjourn the meeting.

Rationale: Management may seek authority to adjourn the meeting if a favorable
outcome is not secured. Shareholders should already have had enough information
to make a decision. Once votes have been cast, there is no justification for
management to continue spending time and money to press shareholders for
support.

F.       Bundled Proposals

AM policy is to vote against bundled proposals if any bundled issue would
require a vote against it if proposed individually.

Rationale: Shareholders should not be forced to "take the good with the bad" in
cases where the proposals could reasonably have been submitted separately.

G.       Change of Company Name

AM policy is to support management on proposals to change the company name.

Rationale: This is generally considered a business decision for a company.

H.       Proposals Related to the Annual Meeting

AM Policy is to vote in favor of management for proposals related to the conduct
of the annual meeting (meeting time, place, etc.)

Rationale: These are considered routine administrative proposals.

I.       Reimbursement of Expenses Incurred from Candidate Nomination

AM policy is to follow management's recommended vote on shareholder proposals
related to the amending of company bylaws to provide for the reimbursement of
reasonable expenses incurred in connection with nominating one or more
candidates in a contested election of directors to the corporation's board of
directors.

Rationale: Corporations should not be liable for costs associated with
shareholder proposals for directors.

J.       Investment Company Proxies

Proxies solicited by investment companies are voted in accordance with the
recommendations of an independent third party, currently ISS. However, regarding
investment companies for which AM or an affiliate serves as investment adviser
or principal underwriter, such proxies are voted in the same proportion as the
vote of all other shareholders. Proxies solicited by master funds from feeder
funds will be voted in accordance with applicable provisions of Section 12 of
the Investment Company Act of 1940.

Investment companies, particularly closed-end investment companies, are
different from traditional operating companies. These differences may call for
differences in voting positions on the same matter. For example, AM could vote
"for" staggered boards of closed-end investment companies, although AM generally
votes "against" staggered boards for operating companies. Further, the manner in
which AM votes investment company proxies may differ from proposals for which a
AM-advised investment company solicits proxies from its shareholders. As
reflected in the Guidelines, proxies solicited by closed-end (and open-end)
investment companies are voted in accordance with the pre-determined guidelines
of an independent third-party.

Subject to participation agreements with certain Exchange Traded Funds ("ETF")
issuers that have received exemptive orders from the U.S. Securities and
Exchange Commission allowing investing DWS funds to exceed the limits set forth
in Section 12(d)(1)(A) and (B) of the Investment Company Act of 1940, DeAM will
echo vote proxies for ETFs in which Deutsche Bank holds more than 25% of
outstanding voting shares globally when required to do so by participation
agreements and SEC orders.

Note: With respect to the QP Trust (not registered under the Investment Company
Act of 1940), the Fund is not required to engage in echo voting and the
investment adviser will use these Guidelines, and may determine, with respect to
the QP Trust, to vote contrary to the positions in the Guidelines, consistent
with the Fund's best interest.


K.       International Proxy Voting

The above guidelines pertain to issuers organized in the United States, Canada
and Germany. Proxies solicited by other issuers are voted in accordance with
international guidelines or the recommendation of ISS and in accordance with
applicable law and regulation.







--------------------------------------------------------------------------------
IMPORTANT: The information contained herein is the property of Deutsche Bank
Group and may not be copied, used or disclosed in whole or in part, stored in a
retrieval system or transmitted in any form or by any means (electronic,
mechanical, reprographic, recording or otherwise) without the prior written
permission of Deutsche Bank Group.
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                  APPENDIX B -- RATINGS OF INVESTMENTS

Description of Moody's Corporate Bond Ratings

Aaa -- Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt edge."
Interest payments are protected by a large or by an exceptionally stable margin
and principal is secure. While the various protective elements are likely to
change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.

Aa -- Bonds rated Aa are judged to be of high quality by all standards. Together
with the Aaa group they comprise what are generally known as high-grade bonds.
They are rated lower than the best bonds because margins of protection may not
be as large as in Aaa securities or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than in Aaa securities.

A -- Bonds rated A possess many favorable investment attributes and are to be
considered as upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.

Baa -- Bonds rated Baa are considered as medium-grade obligations, i.e. they are
neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.

Ba -- Bonds rated Ba are judged to have speculative elements. Their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class.

B -- Bonds rated B generally lack characteristics of a desirable investment.
Assurance of interest and principal payments or of maintenance of other terms of
the contract over any long period of time may be small.

Caa -- Bonds rated Caa are of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or interest.

Ca -- Bonds rated Ca represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked shortcomings.

C -- Bonds rated C are the lowest-rated class of bonds and issued so rated can
be regarded as having extremely poor prospects of ever attaining any real
investment standing.

Moody's applies numerical modifiers, 1, 2, and 3, in each generic rating
classification from Aa through B in its corporate bond system. The modifier 1
indicates that the security ranks in the higher end of its generic rating
category; the modifier 2 indicates a mid-range ranking; and the modifier 3
indicates that the issue ranks in the lower end of its generic rating category.

Description of S&P's Corporate Bond Ratings

AAA -- Debt rated AAA has the highest rating assigned by S&P to a debt
obligation. Capacity to pay interest and repay principal is extremely strong.

AA -- Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher-rated issues only in small degree.

A -- Debt rated A has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.

BBB -- Debt rated BBB is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to weakened capacity to pay interest and repay principal for debt
in this category than in higher-rated categories.

BB -- Debt rate BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments.

B -- Debt rated B has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The B rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied BB- rating.

CCC -- Debt rated CCC has a currently identifiable vulnerability to default, and
is dependent upon favorable business, financial, and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, it is not likely to have the
capacity to pay interest and repay principal.

CC -- Debt rated CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC debt rating.

C -- The rating C is typically applied to debt subordinated to senior debt which
is assigned an actual or implied CCC- debt rating. The C rating may be used to
cover a situation where a bankruptcy petition has been filed but debt service
payments are continued.

CI -- The rating CI is reserved for income bonds on which no interest is being
paid.

D -- Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The D rating will also be used upon the
filing of a bankruptcy petition if debt service payments are jeopardized.

Plus (+) or minus (-): The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.

Fitch's Long-Term Debt Ratings
Investment Grade

AAA
Highest credit quality. "AAA" ratings denote the lowest expectation of credit
risk. They are assigned only in case of exceptionally strong capacity for timely
payment of financial commitments. This capacity is highly unlikely to be
adversely affected by foreseeable events.

AA
Very high credit quality. "AA" ratings denote a very low expectation of credit
risk. They indicate very strong capacity for timely payment of financial
commitments. This capacity is not significantly vulnerable to foreseeable
events.

A
High credit quality. "A" ratings denote a low expectation of credit risk. The
capacity for timely payment of financial commitments is considered strong. This
capacity may, nevertheless, be more vulnerable to changes in circumstances or in
economic conditions than is the case for higher ratings.

BBB
Good credit quality. "BBB" ratings indicate that there is currently a low
expectation of credit risk. The capacity for timely payment of financial
commitments is considered adequate, but adverse changes in circumstances and in
economic conditions are more likely to impair this capacity. This is the lowest
investment-grade category.

Speculative Grade

BB
Speculative. "BB" ratings indicate that there is a possibility of credit risk
developing, particularly as the result of adverse economic change over time;
however, business or financial alternatives may be available to allow financial
commitments to be met. Securities rated in this category are not investment
grade.

B
Highly speculative. "B" ratings indicate that significant credit risk is
present, but a limited margin of safety remains. Financial commitments are
currently being met; however, capacity for continued payment is contingent upon
a sustained, favorable business and economic environment.

CCC, CC, C
High default risk. Default is a real possibility. Capacity for meeting financial
commitments is solely reliant upon sustained, favorable business or economic
developments. A "CC" rating indicates that default of some kind appears
probable. "C" ratings signal imminent default.

DDD, DD, D
Default. The ratings of obligations in this category are based on their
prospects for achieving partial or full recovery in a reorganization or
liquidation of the obligor. While expected recovery values are highly
speculative and cannot be estimated with any precision, the following serve as
general guidelines. "DDD" obligations have the highest potential for recovery,
around 90%-100% of outstanding amounts and accrued interest. "DD" indicates
potential recoveries in the range of 50%-90% and "D" the lowest recovery
potential, i.e., below 50%.

Entities rated in this category have defaulted on some or all of their
obligations. Entities rated "DDD" have the highest prospect for resumption of
performance or continued operation with or without a formal reorganization
process. Entities rated "DD" and "D" are generally undergoing a formal
reorganization or liquidation process; those rated "DD" are likely to satisfy a
higher portion of their outstanding obligations, while entities rated "D" have a
poor prospect of repaying all obligations.

Notes:

"+" or "-" may be appended to a rating to denote relative status within major
rating categories. Such suffixes are not added to the "AAA" category or to
categories below "CCC".

"NR" indicates that Fitch Ratings does not publicly rate the issuer or issue in
question.

"Withdrawn": A rating is withdrawn when Fitch Ratings deems the amount of
information available to be inadequate for rating purposes, or when an
obligation matures, is called, or refinanced.

Rating Watch: Ratings are placed on Rating Watch to notify investors that there
is a reasonable probability of a rating change and the likely direction of such
change. These are designated as "Positive," indicating a potential upgrade,
"Negative," for a potential downgrade, or "Evolving," if ratings may be raised,
lowered or maintained. Rating Watch is typically resolved over a relatively
short period.

A Rating Outlook indicates the direction a rating is likely to move over a one
to two-year period. Outlooks may be positive, stable, or negative. A positive or
negative Rating Outlook does not imply a rating change is inevitable. Similarly,
ratings for which outlooks are "stable" could be upgraded or downgraded before
an outlook moves to positive or negative if circumstances warrant such an
action. Occasionally, Fitch may be unable to identify the fundamental trend and
in these cases, the Rating Outlook may be described as "evolving."

Description of Moody's Short-Term Debt Ratings

Issuers rated Prime-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1 repayment
capacity will normally be evidenced by the following characteristics: leading
market positions in well-established industries; high rates of return on funds
employed; conservative capitalization structures with moderate reliance on debt
and ample asset protection; broad margins in earnings coverage of fixed
financial charges and high internal cash generation; well-established access to
a range of financial markets and assured sources of alternate liquidity.

Issuers rated Prime-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will normally
be evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.

Issuers rates Prime-3 (or related supporting institutions) have an acceptable
capacity for repayment of short-term promissory obligations. The effect of
industry characteristics and market composition may be more pronounced.
Variability in earnings and profitability may result in changes in the level of
debt protection measurements and the requirement for relatively high financial
leverage. Adequate alternate liquidity is maintained.

Description of S&P Short-Term Issuer Credit Ratings

A-1 An obligor rated "A-1" has STRONG capacity to meet its financial
commitments. It is rated in the highest category by Standard & Poor's. Within
this category, certain obligors are designated with a plus sign (+). This
indicates that the obligor's capacity to meet its financial commitments is
EXTREMELY STRONG.

A-2 An obligor rated "A-2" has SATISFACTORY capacity to meet its financial
commitments. However, it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligors in the highest
rating category.

A-3 An obligor rated "A-3" has ADEQUATE capacity to meet its financial
obligations. However, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity of the obligor to meet its financial
commitments.

Description of Fitch's Commercial Paper Ratings

F1
Highest credit quality. Indicates the strongest capacity for timely payment of
financial commitments; may have an added "+" to denote any exceptionally strong
credit feature.

F2
Good credit quality. A satisfactory capacity for timely payment of financial
commitments, but the margin of safety is not as great as in the case of the
higher ratings.

F3
Fair credit quality. The capacity for timely payment of financial commitments is
adequate; however, near-term adverse changes could result in a reduction to
non-investment grade.

B
Speculative. Minimal capacity for timely payment of financial commitments, plus
vulnerability to near-term adverse changes in financial and economic conditions.

C
High default risk. Default is a real possibility. Capacity for meeting financial
commitments is solely reliant upon a sustained, favorable business and economic
environment.

D
Default. Denotes actual or imminent payment default.

Notes

"+" or "-" may be appended to an "F1" rating class to denote relative status
within the category.

"NR" indicates that Fitch Ratings does not publicly rate the issuer or issue in
question.

"Withdrawn": A rating is withdrawn when Fitch Ratings deems the amount of
information available to be inadequate for rating purposes, or when an
obligation matures, is called, or refinanced.Rating Watch: Ratings are placed on
Rating

Watch to notify investors that there is a reasonable probability of a rating
change and the likely direction of such change. These are designated as
"Positive," indicating a potential upgrade, "Negative," for a potential
downgrade, or "Evolving," if ratings may be raised, lowered or maintained.
Rating Watch is typically resolved over a relatively short period.



                                            STATEMENT OF ADDITIONAL INFORMATION

                                                               February 1, 2009



Investment Advisor
DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC.
345 Park Avenue
New York, NY 10154

Administrator
DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC.
345 Park Avenue
New York, NY  10154

Transfer Agent
DWS INVESTMENTS SERVICE COMPANY
222 South Riverside Plaza
Chicago, IL 60606-5808

Custodian
STATE STREET BANK AND TRUST COMPANY
225 Franklin Street
Boston, MA 02110

Distributor
DWS INVESTMENTS DISTRIBUTORS, INC.
222 South Riverside Plaza
Chicago, IL 60606-5808

Independent Registered Public Accounting Firm
PRICEWATERHOUSECOOPERS LLP
125 High Street
Boston, MA 02110

Legal Counsel
VedderPrice P.C.
222 North LaSalle Street
Chicago, IL 60601

Trustee Counsel
Ropes & Gray LLP
One International Place
Boston, MA 02110-2624

No person has been authorized to give any information or to make any
representations other than those contained in the Fund's Prospectus, its SAI or
the Fund's official sales literature in connection with the offering of the
Fund's shares and, if given or made, such other information or representations
must not be relied on as having been authorized by the Trust. Neither the
Prospectus nor this SAI constitute an offer in any state in which, or to any
person to whom, such offer may not lawfully be made.