UNITED STATES

SECURITIES AND EXCHANGE            COMMISSION

Washington, DC 20549

 

**FORM N-Q**

**QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF            REGISTERED**

**MANAGEMENT INVESTMENT            COMPANY**

**_______________________________**

Investment Company Act file number            811-3657

DWS State Tax-Free Income Series

(Exact name of registrant as specified in            charter)

 

222            South Riverside Plaza

Chicago, IL 60606

(Address of principal executive offices)                        (Zip code)

 

Paul Schubert

345 Park Avenue

New York, NY 10154

(Name and address of agent for            service)

Registrant's telephone number, including area            code:(212) 454-7190

Date of fiscal year end:08/31

Date of reporting            period:11/30/07

 

ITEM 1.            SCHEDULE OF INVESTMENTS

 

| Investment Portfolio | **as of November 30, 2007 (Unaudited)** |
|----------------------|-----------------------------------------|

             

 

**DWS            California Tax-Free Income Fund**

 

 

|                                                                                                                             | **Principal****Amount ($)**         |   | **Value                            ($)** |
|----------------------------------------------------------------------------------------------------------------------------------|-------------------------------------|--------|------------------------------------------|
|                                                                                                                                  |
|                                                                                                                             | **Municipal Bonds and Notes 85.1%** |   |
| **California 77.6%**                                                                                                             |                                |
| Anaheim, CA, Other General Obligation Lease, Public                            Financing Authority, Public Improvements Project: |                                |
|                                                                                                                             | Series C, Zero Coupon, 9/1/2017 (a) |   | 1,455,000                                |   | 969,161 |
|                                                                                                                             | Series C, Zero Coupon, 9/1/2018 (a) |   | 1,000,000                                |   | 630,890 |
|                                                                                                                             | Series C, 6.0%, 9/1/2014 (a)        |   | 1,000,000                                |   | 1,144,740 |
|                                                                                                                             | Series C, 6.0%, 9/1/2016 (a)        |   | 1,000,000                                |   | 1,151,590 |
|                                                                                                                             | Series A, 6.0%, 9/1/2024 (a)        |   | 3,500,000                                |   | 4,179,840 |
| Benicia, CA, School District General Obligation,                            Unified School District:                             |                                |
|                                                                                                                             | Series A, Zero Coupon, 8/1/2017 (a) |   | 1,735,000                                |   | 1,154,209 |
|                                                                                                                                  |                                     |        |                                          |  |  |  |  |

 

 

 

|                                                                                                                                                                                              | Series A, Zero Coupon, 8/1/2018 (a)                                    |       | 1,510,000  |       | 951,073    |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------|------------|------------|------------|------------|
| Beverly Hills, CA, School District General                            Obligation, Unified School District:                                                                                        |                                                                   |
|                                                                                                                                                                                              | Series A, 5.375%, 8/1/2019                                             |       | 1,000,000  |       | 1,091,560  |
|                                                                                                                                                                                              | Series A, 5.375%, 8/1/2021                                             |       | 1,230,000  |       | 1,342,619  |
| Burbank, CA, School District General Obligation,                            Unified School District, Series B, Zero Coupon, 8/1/2014 (a)                                                          |                                                                   | 3,000,000  |       | 2,311,140  |
| Cabrillo, CA, County General Obligation Lease,                            Unified School District, Series A, Zero Coupon, 8/1/2019 (a)                                                            |                                                                   | 4,000,000  |       | 2,390,640  |
| California, Center Unified School District, Series C,                            Zero Coupon, 9/1/2014 (a)                                                                                        |                                                                   | 2,240,000  |       | 1,737,210  |
| California, Electric Revenue, Department of Water                            Resources and Power Supply:                                                                                          |                                                                   |
|                                                                                                                                                                                              | Series A, 5.375%, 5/1/2021                                             |       | 2,000,000  |       | 2,191,380  |
|                                                                                                                                                                                              | Series A, 5.375%, 5/1/2022                                             |       | 10,000,000 |       | 10,956,900 |
| California, Higher Education Revenue, 5.25%,                            11/1/2019 (a)                                                                                                             |                                                                   | 3,500,000  |       | 3,752,560  |
| California, Higher Education Revenue, Educational                            Facilities Authority, University of San Diego, Zero Coupon, 10/1/2014                            (a)                 |                                                                   | 1,470,000  |       | 1,129,636  |
| California, Hospital & Healthcare Revenue,                            Communities Development Authority, 6.5%, 8/1/2012                                                                       |                                                                   | 13,265,000 |       | 14,106,664 |
| California, Hospital & Healthcare Revenue, Health                            Facilities Finance Authority, Series A, Zero Coupon, 10/1/2012                            (a)                    |                                                                   | 4,900,000  |       | 4,125,359  |
| California, Hospital & Healthcare Revenue,                            Statewide Community Development Authority, 6.0%, 6/1/2010                            (a)                                |                                                                   | 1,000,000  |       | 1,064,470  |
| California, Housing Finance Agency Revenue, Home                            Mortgage, Series F, AMT, 3.6% *, 2/1/2033 (a)                                                                         |                                                                   | 3,000,000  |       | 3,000,000  |
| California, Residential Efficiency Financing                            Authority Certificates of Participation, Capital Improvements, Series                            2007, 5.5%, 4/1/2017 (a) |                                                                   | 35,000     |       | 35,757     |
| California, Resource Recovery Revenue, Tobacco                            Securitization Authority, Series A, 5.375%, 6/1/2041                                                                    |                                                                   | 5,000,000  |       | 5,348,250  |
| California, Senior Care Revenue, Statewide Community                            Development Authority, ETM, 5.6%, 11/15/2013                                                                      |                                                                   | 4,750,000  |       | 5,085,587  |
| California, Senior Care Revenue, Statewide Community                            Development Authority, California Lutheran Homes, ETM, 5.5%,                            11/15/2008                |                                                                   | 405,000    |       | 412,464    |
| California, Single Family Housing Revenue, Mortgage                            Finance Authority, AMT, Series B, 7.3%, 6/1/2031                                                                   |                                                                   | 30,000     |       | 30,956     |
| California, Special Assessment Revenue, Golden State                            Tobacco Securitization Corp.:                                                                                     |                                                                   |
|                                                                                                                                                                                              | Series A-1, 5.0%, 6/1/2033                                             |       | 10,000,000 |       | 8,779,100  |
|                                                                                                                                                                                              | Series B, 5.5%, 6/1/2043                                               |       | 9,950,000  |       | 10,957,537 |
|                                                                                                                                                                                              | Series B, 5.625%, 6/1/2038                                             |       | 13,655,000 |       | 15,122,639 |
|                                                                                                                                                                                              | Series A-1, 5.75%, 6/1/2047                                            |       | 4,815,000  |       | 4,533,804  |
|                                                                                                                                                                                              | Series 2003-A-1, 6.75%, 6/1/2039                                       |       | 16,750,000 |       | 19,486,950 |
| California, State Agency General Obligation Lease,                            Public Works Board, Department of Corrections:                                                                      |                                                                   |
|                                                                                                                                                                                              | Series A, 7.4%, 9/1/2010 (a)                                           |       | 1,000,000  |       | 1,107,000  |
|                                                                                                                                                                                              | Series A-2, 7.4%, 9/1/2010                                             |       | 3,365,000  |       | 3,713,277  |
| California, State Department of Water Resources,                            Power Supply Revenue, Series C-13, 3.45% *, 5/1/2022 (a)                                                              |                                                                   | 2,000,000  |       | 2,000,000  |
| California, State General Obligation:                                                                                                                                                             |                                                                   |
|                                                                                                                                                                                              | 5.0%, 2/1/2013                                                         |       | 1,250,000  |       | 1,316,888  |
|                                                                                                                                                                                              | 5.0%, 11/1/2027                                                        |       | 12,000,000 |       | 12,287,160 |
|                                                                                                                                                                                              | 5.0%, 9/1/2032                                                         |       | 10,000,000 |       | 10,139,400 |
|                                                                                                                                                                                              | 5.125%, 4/1/2024                                                       |       | 7,400,000  |       | 7,783,246  |
|                                                                                                                                                                                              | 5.125%, 11/1/2024                                                      |       | 1,000,000  |       | 1,048,800  |
|                                                                                                                                                                                              | 5.25%, 12/1/2019                                                       |       | 1,000,000  |       | 1,058,690  |
|                                                                                                                                                                                              | Prerefunded, 5.875%, 10/1/2019                                         |       | 8,925,000  |       | 9,417,214  |
|                                                                                                                                                                                              | Prerefunded, Series 2006, 5.875%,                            10/1/2019 |       | 785,000    |       | 828,725    |
|                                                                                                                                                                                              | Series 2006, 5.875%, 10/1/2019                                         |       | 290,000    |       | 306,153    |
|                                                                                                                                                                                              | 6.5%, 9/1/2010                                                         |       | 1,305,000  |       | 1,411,971  |
| California, State Public Works Board Lease Revenue,                            University of California Projects, Series F, 5.0%, 11/1/2018                                                       |                                                                   | 5,405,000  |       | 5,734,435  |
|                                                                                                                                                                                                   |                                                                        |            |            |            |            |  |

 

 

 

| California, State Public Works Board, Lease Revenue,                            Department of Mental Health, Series A, 5.5%, 6/1/2022                                                        |                                                                              | 2,600,000  |       | 2,828,358  |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------|------------|------------|------------|
| California, State University Revenue:                                                                                                                                                        |                                                                              |
|                                                                                                                                                                                         | Series C, 5.0%, 11/1/2019 (a)                                                     |       | 18,245,000 |       | 19,538,935 |
|                                                                                                                                                                                         | Series A, 5.0%, 11/1/2024 (a)                                                     |       | 5,000,000  |       | 5,226,150 |
|                                                                                                                                                                                         | Series A, 5.25%, 11/1/2021 (a)                                                    |       | 3,090,000  |       | 3,312,974 |
| California, Statewide Communities Development                            Authority, Certificates of Participation, 6.0%, 8/15/2017                            (a)                            |                                                                              | 1,000,000  |       | 1,051,840  |
| California, Statewide Communities Development                            Authority Revenue, Kiaser Permanente, Series B, 4.285% **,                            4/1/2036                      |                                                                              | 5,000,000  |       | 4,317,400  |
| California, Water & Sewer Revenue, Series W,                            5.5%, 12/1/2014 (a)                                                                                              |                                                                              | 12,000,000 |       | 13,572,240 |
| California, Water & Sewer Revenue, Metropolitan                            Water District of Southern California:                                                                        |                                                                              |
|                                                                                                                                                                                         | Series A, 5.25%, 7/1/2014                                                         |       | 5,210,000  |       | 5,593,456 |
|                                                                                                                                                                                         | Series A, 5.25%, 3/1/2017                                                         |       | 7,300,000  |       | 7,827,790 |
| Capistrano, CA, School District General Obligation,                            Unified School District, Improvement District No. 1, Series A, 6.25%,                            8/1/2018 (a) |                                                                              | 1,000,000  |       | 1,078,960  |
| Carlsbad, CA, School District General Obligation,                            Unified School District, Zero Coupon, 11/1/2018 (a)                                                             |                                                                              | 3,050,000  |       | 1,900,333  |
| Chino Basin, CA, Water & Sewer Revenue, Regional                            Financing Authority, 5.9%, 8/1/2011 (a)                                                                      |                                                                              | 1,290,000  |       | 1,407,055  |
| Contra Costa County, CA, GNMA Mortgage Backed                            Securities Program, AMT, ETM, 7.75%, 5/1/2022                                                                       |                                                                              | 2,715,000  |       | 3,470,259  |
| Corona, CA, Sales & Tax Revenue, Community                            Facilities District, Series 90-1-A, 5.5%, 9/1/2015 (a)                                                             |                                                                              | 9,240,000  |       | 10,234,686 |
| Corona-Norco, CA, Sales & Tax Revenue, Unified                            School District Public Financing Authority, Series A, 5.75%, 9/1/2014                            (a) (b)       |                                                                              | 2,750,000  |       | 2,782,808  |
| Dry Creek, CA, School District General Obligation,                            Joint Elementary School District:                                                                              |                                                                              |
|                                                                                                                                                                                         | Series A, Zero Coupon, 8/1/2016 (a)                                               |       | 555,000    |       | 393,040 |
|                                                                                                                                                                                         | Series A, Zero Coupon, 8/1/2021 (a)                                               |       | 1,920,000  |       | 1,040,813 |
|                                                                                                                                                                                         | Series A, Zero Coupon, 5/1/2022 (a)                                               |       | 1,385,000  |       | 718,870 |
| Encinitas, CA, State General Obligation, Unified                            School District, Zero Coupon, 8/1/2017 (a)                                                                       |                                                                              | 4,000,000  |       | 2,693,960  |
| Escondido, CA, School District General Obligation,                            Unified High School District:                                                                                  |                                                                              |
|                                                                                                                                                                                         | Zero Coupon, 5/1/2015 (a)                                                         |       | 3,165,000  |       | 2,376,377 |
|                                                                                                                                                                                         | Zero Coupon, 5/1/2016 (a)                                                         |       | 3,335,000  |       | 2,385,392 |
|                                                                                                                                                                                         | ETM, Zero Coupon, 11/1/2017 (a)                                                   |       | 5,500,000  |       | 3,698,750 |
|                                                                                                                                                                                         | Zero Coupon, 11/1/2018 (a)                                                        |       | 4,605,000  |       | 2,909,347 |
| Escondido, CA, Unified High School District, ETM,                            Zero Coupon, 11/1/2020 (a)                                                                                      |                                                                              | 7,000,000  |       | 3,999,380  |
| Foothill, CA:                                                                                                                                                                                |                                                                              |
|                                                                                                                                                                                         | ETM, Zero Coupon, 1/1/2018 (a)                                                    |       | 10,000,000 |       | 6,614,600 |
|                                                                                                                                                                                         | ETM, Zero Coupon, 1/1/2020 (a)                                                    |       | 10,000,000 |       | 5,944,600 |
|                                                                                                                                                                                         | Series A, Prerefunded, 7.15%, 1/1/2013                                            |       | 975,000    |       | 1,069,565 |
| Foothill, CA, Eastern Corridor Agency, Series A, ETM,                            Zero Coupon, 1/1/2020                                                                                       |                                                                              | 6,100,000  |       | 3,626,206  |
| Foothill, CA, School District General Obligation,                            Zero Coupon, 8/1/2016 (a)                                                                                       |                                                                              | 4,755,000  |       | 3,367,396  |
| Foothill, CA, Transportation/Tolls Revenue, Eastern                            Corridor Agency:                                                                                              |                                                                              |
|                                                                                                                                                                                         | Step-up Coupon, 0% to 7/15/2009, 5.8% to 1/15/2020                            (a) |       | 6,500,000  |       | 6,614,790 |
|                                                                                                                                                                                         | Step-up Coupon, 0% to 7/15/2009, 5.875% to                            1/15/2026   |       | 5,000,000  |       | 4,798,750 |
|                                                                                                                                                                                         | Zero Coupon, 1/15/2017 (a)                                                        |       | 5,975,000  |       | 3,828,541 |
|                                                                                                                                                                                         | Zero Coupon, 1/15/2018 (a)                                                        |       | 6,250,000  |       | 3,756,250 |
|                                                                                                                                                                                         | Zero Coupon, 1/15/2025                                                            |       | 10,000,000 |       | 3,760,600 |
|                                                                                                                                                                                         | Series A, Prerefunded, 6.0%, 1/1/2016                                             |       | 6,000,000  |       | 6,338,100 |
|                                                                                                                                                                                         | Series A, Prerefunded, 7.1%, 1/1/2011                                             |       | 6,000,000  |       | 6,576,420 |
|                                                                                                                                                                                         | Series A, Prerefunded, 7.15%, 1/1/2014                                            |       | 2,875,000  |       | 3,153,846 |
| Fresno, CA, School District General Obligation,                            Unified School District:                                                                                          |                                                                              |
|                                                                                                                                                                                         | Series C, 5.9%, 2/1/2017 (a)                                                      |       | 1,760,000  |       | 1,932,920 |
|                                                                                                                                                                                         | Series A, 6.4%, 8/1/2016 (a)                                                      |       | 2,000,000  |       | 2,328,360 |
| Grossmont, CA, Union High School District, Election                            of 2004, 5.375%, 8/1/2017 (a)                                                                                 |                                                                              | 2,840,000  |       | 3,119,200  |
| Healdsburg, CA, School District General Obligation,                            Unified School District, Zero Coupon, 7/15/2014 (a)                                                           |                                                                              | 400,000    |       | 308,688    |
| Las Virgenes, CA, School District General Obligation,                            Unified School District:                                                                                    |                                                                              |
|                                                                                                                                                                                              |                                                                                   |            |            |            |  |  |

 

 

 

|                                                                                                                                                                                          | Series A, Zero Coupon, 11/1/2013 (a) |       | 2,150,000  |       | 1,734,599  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------|------------|------------|------------|------------|
|                                                                                                                                                                                          | Series A, Zero Coupon, 11/1/2014 (a) |       | 1,050,000  |       | 809,225    |
|                                                                                                                                                                                          | Series A, Zero Coupon, 11/1/2015 (a) |       | 1,275,000  |       | 938,999    |
|                                                                                                                                                                                          | Zero Coupon, 11/1/2016 (a)           |       | 1,500,000  |       | 1,051,755  |
| Long Beach, CA, Bond Finance Authority, Natural Gas                            Purchase Revenue, Series A, 5.5%, 11/15/2028                                                                   |                                 | 10,000,000 |       | 10,206,400 |
| Long Beach, CA, Port Authority Revenue,                            AMT:                                                                                                                       |                                 |
|                                                                                                                                                                                          | Series A, 5.75%, 5/15/2016           |       | 12,570,000 |       | 13,330,611 |
|                                                                                                                                                                                          | Series A, 6.0%, 5/15/2017 (a)        |       | 1,500,000  |       | 1,738,260  |
|                                                                                                                                                                                          | Series A, 6.0%, 5/15/2018 (a)        |       | 4,000,000  |       | 4,657,720  |
| Los Angeles County, CA, Core City General Obligation                            Lease, Convention and Exhibition Center Authority, Series A, 6.125%,                            8/15/2011 (a) |                                 | 1,000,000  |       | 1,096,870  |
| Los Angeles County, CA, General Obligation Lease,                            Disney Parking Project, Zero Coupon, 3/1/2008                                                                    |                                 | 2,780,000  |       | 2,754,368  |
| Los Angeles, CA, Airport Revenue, AMT, Series B,                            5.5%, 8/1/2016 (a)                                                                                                |                                 | 6,500,000  |       | 6,920,615  |
| Los Angeles, CA, Core City General Obligation Lease,                            General Services, State Building Authority, Series A, 5.6%,                            5/1/2008               |                                 | 7,000,000  |       | 7,063,980  |
| Los Angeles, CA, Pollution Control Revenue, 6.0%,                            6/1/2021 (a)                                                                                                     |                                 | 2,000,000  |       | 2,413,040  |
| Los Angeles, CA, State General Obligation, 5.5%,                            7/1/2014 (a)                                                                                                      |                                 | 10,000,000 |       | 10,897,800 |
| Los Angeles, CA, Transportation/Tolls Revenue, Series                            B, 5.25%, 7/1/2015 (a)                                                                                       |                                 | 11,800,000 |       | 12,668,480 |
| Los Angeles, CA, Unified School District, Series A,                            5.375%, 7/1/2018 (a)                                                                                           |                                 | 1,030,000  |       | 1,136,255  |
| Lucia Mar, CA, School District General Obligation,                            Series A, Zero Coupon, 8/1/2016 (a)                                                                             |                                 | 1,000,000  |       | 700,400    |
| Merced, CA, School District General Obligation, High                            School District:                                                                                              |                                 |
|                                                                                                                                                                                          | Series A, Zero Coupon, 8/1/2014 (a)  |       | 2,045,000  |       | 1,575,427  |
|                                                                                                                                                                                          | Series A, Zero Coupon, 8/1/2015 (a)  |       | 2,090,000  |       | 1,539,034  |
|                                                                                                                                                                                          | Series A, Zero Coupon, 8/1/2016 (a)  |       | 2,140,000  |       | 1,498,856  |
| Midpeninsula Regional Open Space District, CA, Other                            General Obligation Lease, Zero Coupon, 9/1/2020 (a)                                                           |                                 | 1,190,000  |       | 677,181    |
| Millbrae, CA, Senior Care Revenue, Magnolia of                            Millbrae Project, AMT, Series A, 7.375%, 9/1/2027                                                                   |                                 | 3,660,000  |       | 3,772,948  |
| Modesto, CA, General Obligation Lease, Community                            Project, Series A, 5.6%, 11/1/2014 (a)                                                                            |                                 | 1,370,000  |       | 1,506,082  |
| Montebello, CA, School District General Obligation,                            Unified School District, Zero Coupon, 8/1/2013 (a)                                                             |                                 | 1,945,000  |       | 1,571,210  |
| Moreno Valley, CA, Special Assessment Revenue,                            Towngate Community Facilities District, Special Tax:                                                                |                                 |
|                                                                                                                                                                                          | 6.5%, 12/1/2009                      |       | 2,340,000  |       | 2,340,211  |
|                                                                                                                                                                                          | 7.125%, 10/1/2023                    |       | 2,810,000  |       | 2,843,467  |
| Murrieta Valley, CA, General Obligation, Unified                            School District:                                                                                                  |                                 |
|                                                                                                                                                                                          | Series A, Zero Coupon, 9/1/2016 (a)  |       | 2,500,000  |       | 1,745,025  |
|                                                                                                                                                                                          | 5.0%, 9/1/2026 (a)                   |       | 7,155,000  |       | 7,588,164  |
| Northern California, Power Agency, Prerefunded, 7.0%,                            7/1/2016                                                                                                     |                                 | 210,000    |       | 260,948    |
| Oakland, CA, Port Authority Revenue, AMT, 5.75%,                            11/1/2014 (a)                                                                                                     |                                 | 2,500,000  |       | 2,609,825  |
| Palmdale, CA, School District General Obligation,                            School Building Project, Zero Coupon, 10/1/2019 (a)                                                              |                                 | 1,420,000  |       | 849,316    |
| Pomona, CA, Unified School District, Series B, ETM,                            6.25%, 8/1/2014 (a)                                                                                            |                                 | 1,020,000  |       | 1,195,766  |
| Redondo Beach, CA, Project Revenue, South Bay Center                            Redevelopment Project:                                                                                        |                                 |
|                                                                                                                                                                                          | 7.0%, 7/1/2016                       |       | 925,000    |       | 935,767    |
|                                                                                                                                                                                          | 7.125%, 7/1/2026                     |       | 2,000,000  |       | 2,020,860  |
| Redwood City, CA, School District General Obligation,                            Elementary School District, Zero Coupon, 8/1/2017 (a)                                                        |                                 | 1,635,000  |       | 1,087,684  |
| Richmond, CA, Other General Obligation Lease, Joint                            Powers Finance Authority, 6.6%, 9/1/2016                                                                       |                                 | 1,000,000  |       | 1,011,440  |
| Richmond, CA, Water & Sewer Revenue, Zero Coupon,                            8/1/2020 (a)                                                                                                 |                                 | 2,495,000  |       | 1,425,044  |
| Riverside County, CA, Hospital & Healthcare                            Revenue, Asset Leasing Corp.:                                                                                      |                                 |
|                                                                                                                                                                                          | Zero Coupon, 6/1/2015 (a)            |       | 1,750,000  |       | 1,301,090  |
|                                                                                                                                                                                          | Zero Coupon, 6/1/2016 (a)            |       | 2,395,000  |       | 1,694,630  |
| Sacramento County, CA, Housing Authority Multi-Family                            Housing Revenue, California Place Apartments, Series B, AMT, 3.61% *,                            2/15/2031   |                                 | 4,500,000  |       | 4,500,000  |
|                                                                                                                                                                                               |                                      |            |            |            |            |  |

 

 

 

| Sacramento County, CA, Resource Recovery Revenue,                            Sanitation District Financing Authority, Series A, 6.0%,                            12/1/2014 |                                 | 5,000,000 |       | 5,432,750 |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------|-----------|------------|-----------|
| Sacramento County, CA, Sales & Special Tax                            Revenue, Community Facilities District No. 1:                                                    |                                 |
|                                                                                                                                                                       | 5.5%, 12/1/2010                      |      | 1,085,000  |      | 1,100,472 |
|                                                                                                                                                                       | 6.0%, 9/1/2011                       |      | 850,000    |      | 868,241 |
|                                                                                                                                                                       | 6.125%, 9/1/2014                     |      | 605,000    |      | 618,625 |
|                                                                                                                                                                       | 6.3%, 9/1/2021                       |      | 1,500,000  |      | 1,526,370 |
| Sacramento County, CA, Water Finance Authority                            Revenue, Water Agency Zones 40 & 41:                                                         |                                 |
|                                                                                                                                                                       | Series B, 4.309% **, 6/1/2039 (a)    |      | 10,000,000 |      | 8,813,800 |
|                                                                                                                                                                       | Series A, 5.0%, 6/1/2026 (a)         |      | 11,435,000 |      | 12,095,143 |
| Sacramento, CA, Electric Revenue, Municipal Utility                            District:                                                                                   |                                 |
|                                                                                                                                                                       | Series K, 5.75%, 7/1/2018 (a)        |      | 5,170,000  |      | 6,005,058 |
|                                                                                                                                                                       | Series G, 6.5%, 9/1/2013 (a)         |      | 1,270,000  |      | 1,415,809 |
| Sacramento, CA, Other General Obligation Lease, City                            Financing Authority:                                                                       |                                 |
|                                                                                                                                                                       | Series B, 5.0%, 11/1/2014            |      | 4,200,000  |      | 4,443,474 |
|                                                                                                                                                                       | Series A, 5.4%, 11/1/2020 (a)        |      | 5,000,000  |      | 5,639,200 |
| Sacramento, CA, Project Revenue, City Financing                            Authority, Convention Center Hotel, Series A, 6.25%,                            1/1/2030        |                                 | 9,965,000 |       | 9,963,107 |
| Sacramento, CA, Sales & Special Tax Revenue,                            Finance Authority, Series B, Zero Coupon, 11/1/2016 (a)                                        |                                 | 2,685,000 |       | 1,882,641 |
| Saddleback Valley, CA, Sales & Special Tax                            Revenue, Unified School District, Public Financing                            Authority:         |                                 |
|                                                                                                                                                                       | Series A, 6.0%, 9/1/2013 (a)         |      | 1,000,000  |      | 1,128,180 |
|                                                                                                                                                                       | Series A, 6.0%, 9/1/2014 (a)         |      | 2,195,000  |      | 2,512,704 |
|                                                                                                                                                                       | Series A, 6.0%, 9/1/2015 (a)         |      | 1,000,000  |      | 1,157,520 |
| Salinas, CA, School District General Obligation,                            Series A, 5.375%, 6/1/2022 (a)                                                                 |                                 | 2,700,000 |       | 2,962,494 |
| San Bernardino, CA, County General Obligation,                            Medical Center Financing Project:                                                                |                                 |
|                                                                                                                                                                       | 5.5%, 8/1/2017 (a)                   |      | 3,965,000  |      | 4,348,772 |
|                                                                                                                                                                       | 6.0%, 8/1/2009 (a)                   |      | 2,085,000  |      | 2,147,383 |
| San Bernardino, CA, Other Revenue Lease:                                                                                                                                   |                                 |
|                                                                                                                                                                       | Series A, 5.25%, 11/1/2013 (a)       |      | 3,115,000  |      | 3,388,902 |
|                                                                                                                                                                       | Series A, 5.25%, 11/1/2014 (a)       |      | 2,330,000  |      | 2,534,877 |
| San Bruno Park, CA, School District, General                            Obligation:                                                                                        |                                 |
|                                                                                                                                                                       | Zero Coupon, 8/1/2014 (a)            |      | 1,010,000  |      | 785,750 |
|                                                                                                                                                                       | Zero Coupon, 8/1/2016 (a)            |      | 1,000,000  |      | 708,180 |
|                                                                                                                                                                       | Zero Coupon, 8/1/2017 (a)            |      | 1,000,000  |      | 673,490 |
|                                                                                                                                                                       | Zero Coupon, 8/1/2019 (a)            |      | 1,100,000  |      | 664,213 |
| San Diego CA, School District General Obligation,                            5.25%, 7/1/2018 (a)                                                                           |                                 | 1,600,000 |       | 1,761,360 |
| San Diego, CA, School District General Obligation,                            Election of 1998:                                                                            |                                 |
|                                                                                                                                                                       | Series B, 6.0%, 7/1/2019 (a)         |      | 3,350,000  |      | 3,998,928 |
|                                                                                                                                                                       | Series B, 6.05%, 7/1/2018 (a)        |      | 770,000    |      | 917,671 |
| San Francisco, CA, Bay Area Rapid Transit District,                            Sales Tax Revenue:                                                                          |                                 |
|                                                                                                                                                                       | Prerefunded, 5.25%, 7/1/2016 (a)     |      | 845,000    |      | 903,077 |
|                                                                                                                                                                       | 5.25%, 7/1/2016 (a)                  |      | 305,000    |      | 324,740 |
| San Francisco, CA, Bay Area Rapid Transportation                            District, Election of 2004, Series B, 5.0%, 8/1/2027                                           |                                 | 5,085,000 |       | 5,403,168 |
| San Joaquin Hills, CA, Transportation Corridor                            Agency:                                                                                          |                                 |
|                                                                                                                                                                       | ETM, Zero Coupon, 1/1/2010           |      | 1,500,000  |      | 1,398,420 |
|                                                                                                                                                                       | ETM, Zero Coupon, 1/1/2014           |      | 3,680,000  |      | 2,956,402 |
| San Joaquin Hills, CA, Transportation/Tolls Revenue,                            Transportation Corridor Agency:                                                            |                                 |
|                                                                                                                                                                       | Series A, Zero Coupon, 1/15/2015 (a) |      | 12,065,000 |      | 9,124,036 |
|                                                                                                                                                                       | Series A, Zero Coupon, 1/15/2016 (a) |      | 3,485,000  |      | 2,506,064 |
|                                                                                                                                                                       | Series A, Zero Coupon, 1/15/2017 (a) |      | 3,965,000  |      | 2,706,192 |
|                                                                                                                                                                       | Series A, Zero Coupon, 1/15/2018 (a) |      | 2,640,000  |      | 1,707,552 |
|                                                                                                                                                                       | Series A, Zero Coupon, 1/15/2019 (a) |      | 3,185,000  |      | 1,945,557 |
| San Jose, CA, School District General Obligation,                            Unified School District:                                                                      |                                 |
|                                                                                                                                                                       | Series A, Zero Coupon, 8/1/2015 (a)  |      | 2,570,000  |      | 1,929,890 |
|                                                                                                                                                                       | Series A, Zero Coupon, 8/1/2017 (a)  |      | 1,350,000  |      | 917,001 |
|                                                                                                                                                                            |                                      |           |            |           |  |  |

 

 

 

| San Juan, CA, San Juan Project, Series D, ETM, 6.75%,                            7/1/2020 (a)                                                                                                  |                            | 1,680,000 |       | 2,010,893 |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------|-----------|------------|-----------|
| San Ysidro, CA, School District General Obligation,                            6.125%, 8/1/2021 (a)                                                                                            |                            | 1,400,000 |       | 1,594,866 |
| Santa Ana, CA, Other General Obligation, Police                            Administration and Holding Facility, Series A, 6.25%, 7/1/2024                            (a)                       |                            | 2,000,000 |       | 2,453,100 |
| Santa Barbara, CA, High School District, Election                            2000, Series B, 5.0%, 8/1/2029 (a)                                                                                |                            | 6,430,000 |       | 6,682,506 |
| Santa Clara County, CA, Hospital & Healthcare                            Revenue, Financing Authority, VMC Replacement Project, Series A, 7.75%,                            11/15/2008 (a) |                            | 3,250,000 |       | 3,381,722 |
| Santa Cruz County, CA, County General Obligation                            Lease, Capital Facilities Project:                                                                                 |                            |
|                                                                                                                                                                                           | 5.5%, 9/1/2017 (a)              |      | 1,005,000  |      | 1,142,916 |
|                                                                                                                                                                                           | 5.5%, 9/1/2018 (a)              |      | 1,060,000  |      | 1,210,234 |
|                                                                                                                                                                                           | 5.6%, 9/1/2019 (a)              |      | 1,115,000  |      | 1,288,282 |
|                                                                                                                                                                                           | 5.6%, 9/1/2020 (a)              |      | 1,180,000  |      | 1,363,891 |
|                                                                                                                                                                                           | 5.65%, 9/1/2024 (a)             |      | 1,445,000  |      | 1,684,639 |
|                                                                                                                                                                                           | 5.65%, 9/1/2025 (a)             |      | 1,520,000  |      | 1,778,050 |
|                                                                                                                                                                                           | 5.65%, 9/1/2026 (a)             |      | 1,605,000  |      | 1,880,723 |
| Santa Margarita/Dana Point, CA, Special Assessment                            Revenue, Improvement District Authority:                                                                         |                            |
|                                                                                                                                                                                           | Series B, 7.25%, 8/1/2012 (a)   |      | 3,675,000  |      | 4,275,715 |
|                                                                                                                                                                                           | Series B, 7.25%, 8/1/2013 (a)   |      | 3,400,000  |      | 4,058,002 |
| Santaluz, CA, Sales & Special Tax Revenue,                            Santaluz Community Facilities No. 2:                                                                                 |                            |
|                                                                                                                                                                                           | 6.25%, 9/1/2021                 |      | 1,995,000  |      | 2,000,147 |
|                                                                                                                                                                                           | 6.375%, 9/1/2030                |      | 4,925,000  |      | 4,934,751 |
| Southern California, Electric Revenue, Public Power                            Authority, Power Project, 6.75%, 7/1/2010                                                                       |                            | 6,000,000 |       | 6,481,740 |
| Southern California, Electric Revenue, Public Power                            Authority, Transmission Project, Zero Coupon, 7/1/2015                                                          |                            | 2,000,000 |       | 1,475,480 |
| Southern California, Metropolitan Water District,                            Waterworks Revenue:                                                                                               |                            |
|                                                                                                                                                                                           | Series A, ETM, 5.75%, 7/1/2021  |      | 880,000    |      | 1,017,905 |
|                                                                                                                                                                                           | Series A, 5.75%, 7/1/2021       |      | 1,120,000  |      | 1,305,259 |
| Southern California, Public Power Authority, Natural                            Gas Project Revenue, Project No. 1, Series A, 5.25%,                            11/1/2024                      |                            | 5,000,000 |       | 5,121,250 |
| Tahoe Truckee, CA, School District General                            Obligation, Unified School District Capital Improvement, Series A, Zero                            Coupon, 8/1/2022 (a)  |                            | 3,600,000 |       | 1,821,096 |
| Temple City, CA, School District General Obligation,                            Series A, Zero Coupon, 8/1/2015 (a)                                                                            |                            | 1,250,000 |       | 920,475   |
| Ukiah, CA, School District General Obligation,                            Unified School District,

Zero Coupon, 8/1/2016                            (a)                                       |                            | 2,000,000 |       | 1,400,800 |
| West Covina, CA, Sales & Special Tax Revenue,                            Fashion Plaza, 5.75%, 9/1/2009                                                                                    |                            | 595,000   |       | 612,219   |
|                                                                                                                                                                                                |
|                                                                                                                                                                                           | **667,708,875**                 |
| **Puerto Rico 6.5%**                                                                                                                                                                           |                            |
| Commonwealth of Puerto Rico, Public Improvement,                            Series A, 5.25%, 7/1/2022                                                                                          |                            | 2,000,000 |       | 2,069,040 |
| Puerto Rico, Electric Revenue, Electric Power                            Authority:                                                                                                            |                            |
|                                                                                                                                                                                           | Series JJ, 5.375%, 7/1/2017 (a) |      | 10,605,000 |      | 11,769,641 |
|                                                                                                                                                                                           | Series KK, 5.5%, 7/1/2016 (a)   |      | 10,000,000 |      | 11,301,600 |
| Puerto Rico, Industrial Development Revenue,                            Industrial Tourist Educational, Medical & Environmental Central                            Facilities:             |                            |
|                                                                                                                                                                                           | Series A, 5.625%, 7/1/2015 (a)  |      | 2,190,000  |      | 2,317,392 |
|                                                                                                                                                                                           | Series A, 5.625%, 7/1/2016 (a)  |      | 2,215,000  |      | 2,344,400 |
|                                                                                                                                                                                           | 5.625%, 7/1/2017 (a)            |      | 2,345,000  |      | 2,481,995 |
| Puerto Rico, Public Buildings Authority Revenue,                            Government Facilities, Series A, ETM, 6.25%, 7/1/2013 (a)                                                          |                            | 1,000,000 |       | 1,149,060 |
| Puerto Rico, Sales & Special Tax Revenue,                            Commonwealth Infrastructure Finance Authority, Series A, 5.5%,                            10/1/2020                   |                            | 2,000,000 |       | 2,119,840 |
| Puerto Rico, Sales & Special Tax Revenue, Highway                            & Transportation Authority:                                                                               |                            |
|                                                                                                                                                                                           | Series Z, 6.0%, 7/1/2018 (a)    |      | 7,250,000  |      | 8,528,828 |
|                                                                                                                                                                                           | Series Z, 6.25%, 7/1/2014 (a)   |      | 1,000,000  |      | 1,156,340 |
|                                                                                                                                                                                           | Series A, 6.25%, 7/1/2016 (a)   |      | 750,000    |      | 888,645 |
| Puerto Rico, State General Obligation:                                                                                                                                                         |                            |
|                                                                                                                                                                                           | 5.5%, 7/1/2015 (a)              |      | 3,665,000  |      | 4,117,078 |
|                                                                                                                                                                                                |                                 |           |            |           |  |  |  |

 

 

 

|                                                                                                                                                                                                | 5.65%, 7/1/2015 (a)                                                                                                                                                                                                                          |            | 1,000,000 |          | 1,119,150 |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------|-----------|---------------|-----------|
|                                                                                                                                                                                                | 6.5%, 7/1/2015 (a)                                                                                                                                                                                                                           |            | 4,000,000 |          | 4,750,800 |
|                                                                                                                                                                                                     |
|                                                                                                                                                                                                | **56,113,809**                                                                                                                                                                                                                               |
| **Virgin Islands 1.0%**                                                                                                                                                                             |                                                                                                                                                                                                                                         |
| Virgin Islands, Sales & Special Tax Revenue,                            Public Finance Authority, Series A, 6.5%, 10/1/2024                                                                     |                                                                                                                                                                                                                                         | 7,500,000       |      | **8,230,875** |
|                                                                                                                                                                                                     |
| **Total Municipal Bonds and Notes**(Cost $682,935,654)                                                                                                                                              |                                                                                                                                                                                                                                         | **732,053,559** |
|                                                                                                                                                                                                | **Municipal Inverse Floating Rate Notes                            31.1%**                                                                                                                                                                   |            |
| **California 24.8%**                                                                                                                                                                                |                                                                                                                                                                                                                                         |
| Big Bear Lake, CA, Water Revenue, 6.0%, 4/1/2015 (a)                            (c)                                                                                                                 |                                                                                                                                                                                                                                         | 3,400,000       |      | 3,832,582     |
|                                                                                                                                                                                                | *Trust: Big Bear Lake, CA, Water & Sewer                            Revenue, RITES-PA 597A, Series B, 144A,*

*8.085%, 4/1/2015, Leverage Factor at purchase                            date: 2 to 1*                                    |            |      |          |      |
| Big Bear Lake, CA, Water Revenue, 6.0%, 4/1/2022 (a)                            (c)                                                                                                                 |                                                                                                                                                                                                                                         | 13,500,000      |      | 16,027,267    |
|                                                                                                                                                                                                | *Trust: Big Bear Lake, CA, Water & Sewer                            Revenue, RITES-PA 597B, Series A, 144A,*

*8.085%, 4/1/2022, Leverage Factor at purchase                            date: 2 to 1*                                    |            |      |          |      |
| California, Bay Area Toll Authority, Toll Bridge                            Revenue, San Francisco Bay Area, Series F, 5.0%, 4/1/2025                            (c)                                |                                                                                                                                                                                                                                         | 13,870,000      |      | 14,725,008    |
|                                                                                                                                                                                                | *Trust: California, Bay Area Toll Authority, Toll                            Bridge Revenue, Series 1962-3, 144A,*

*8.656%, 4/1/2025, Leverage Factor at purchase                            date: 4 to 1*                                  |            |      |          |      |
| California, Bay Area Toll Authority, Toll Bridge                            Revenue, San Francisco Bay Area, Series F, 5.0%, 4/1/2031                            (c)                                |                                                                                                                                                                                                                                         | 11,475,000      |      | 12,028,221    |
|                                                                                                                                                                                                | *Trust: California, Bay Area Toll Authority, Toll                            Bridge Revenue, Series 1962, 144A,*

*8.658%, 4/1/2031, Leverage Factor at purchase                            date: 4 to 1*                                    |            |      |          |      |
| California, Bay Area Toll Authority, Toll Bridge                            Revenue, San Francisco Bay Area, Series F, 5.0%, 4/1/2014                            (c)                                |                                                                                                                                                                                                                                         | 17,205,000      |      | 18,210,082    |
|                                                                                                                                                                                                | *Trust: California, Bay Area Toll Authority,Toll                            Bridge Revenue, Series 1962-2, 144A,*

*8.661%, 4/1/2014, Leverage Factor at purchase                            date: 4 to 1*                                   |            |      |          |      |
| California, State Department Water Resource, Power                            Supply Revenue, Series A, 5.375%, 5/1/2018 (a) (c)                                                                    |                                                                                                                                                                                                                                         | 15,000,000      |      | 16,435,350    |
|                                                                                                                                                                                                | *Trust: California,                            State Department Water Resource, Power Supply Revenue, Series                            309,*

*144A, 6.905%, 5/1/2018, Leverage Factor at                            purchase date: 2 to 1* |            |      |          |      |
| California, State Economic Recovery, Series A, 5.0%,                            7/1/2015 (a) (c)                                                                                                    |                                                                                                                                                                                                                                         | 15,300,000      |      | 16,643,799    |
|                                                                                                                                                                                                | *Trust: California, State Economic Recovery,                            RITES-PA 1262, 144A, 6.02%,*

*7/1/2015, Leverage Factor at purchase date: 2 to                            1*                                                        |            |      |          |      |
| California, State General Obligation, 5.0%, 3/1/2027                            (c)                                                                                                                 |                                                                                                                                                                                                                                         | 10,000,000      |      | 10,206,000    |
| *Trust: California, UBS                            Municipal (CRVS), Various States, Series 2007-1031C, 144A, 9.72%,                            3/1/2027, Leverage Factor at purchase date: 5 to 1* |                                                                                                                                                                                                                                         |            |      |          |
| Long Beach, CA, Harbor Revenue, Series A, 6.0%,                            5/15/2016 (a) (c)                                                                                                        |                                                                                                                                                                                                                                         | 8,430,000       |      | 9,568,809     |
|                                                                                                                                                                                                | *Trust: Long Beach, CA, Sales & Special Tax                            Revenue, RITES-PA 651A, 144A, AMT,*

*8.105%, 5/15/2016, Leverage Factor at purchase                            date: 2 to 1*                                     |            |      |          |      |
| Long Beach, CA, Harbor Revenue, Series A, 6.0%,                            5/15/2019 (a) (c)                                                                                                        |                                                                                                                                                                                                                                         | 10,600,000      |      | 12,378,945    |
|                                                                                                                                                                                                | *Trust: Long Beach, CA, Sales & Special Tax                            Revenue, RITES-PA 651B, 144A, AMT,*

*8.105%, 5/15/2019, Leverage Factor at purchase                            date: 2 to 1*                                     |            |      |          |      |
| Los Angeles, CA, Unified School District, Series A,                            5.25%, 7/1/2013 (a) (c)                                                                                              |                                                                                                                                                                                                                                         | 6,250,000       |      | 6,855,250     |
|                                                                                                                                                                                                | *Trust: Los Angeles, CA, Higher Education Revenue,                            Unified School District, RITES-PA*

*1117-B, 144A, 6.57%, 7/1/2013, Leverage Factor at                            purchase date: 2 to 1*                       |            |      |          |      |
| Los Angeles, CA, Unified School District, Series A,                            6.0%, 7/1/2015 (a) (c)                                                                                               |                                                                                                                                                                                                                                         | 6,340,000       |      | 7,067,103     |
|                                                                                                                                                                                                | *Trust: Los Angeles, CA, School District General                            Obligation Lease, Unified School*

*District, RITES-PA 589A, 144A, 8.085%, 7/1/2015,                            Leverage Factor at purchase*

*date: 2 to 1*     |            |      |          |      |
|                                                                                                                                                                                                |                                                                                                                                                                                                                                         |            |      |          |      |
|                                                                                                                                                                                                |                                                                                                                                                                                                                                         |            |      |          |      |
| Los Angeles, CA, Unified School District, Series A,                            6.0%, 7/1/2012 (a) (c)                                                                                               |                                                                                                                                                                                                                                         | 2,970,000       |      | 3,370,267     |
|                                                                                                                                                                                                     |                                                                                                                                                                                                                                              |                 |           |               |           |  |  |  |  |  |  |  |

 

 

 

|                                                                                                                                                                                          | *Trust: Los Angeles, CA, School District General                            Obligation Lease, Unified School*

*District, RITES-PA 589B, 144A, 8.085%, 7/1/2012,                            Leverage Factor at purchase date: 2*

*to 1*           |       |   |       |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------|------------|--------|
| Los Angeles, CA, Unified School District, Series A,                            6.0%, 7/1/2013 (a) (c)                                                                                         |                                                                                                                                                                                                                                               | 5,820,000  |   | 6,711,566  |
|                                                                                                                                                                                          | *Trust: Los Angeles, CA, School District General                            Obligation Lease, Unified School*

*District, RITES-PA 589C, 144A, 8.085%, 7/1/2013,                            Leverage Factor at purchase date:*

*2 to 1*           |       |   |       |   |
| Los Angeles, CA, Unified School District, Series A,                            6.0%, 7/1/2014 (a) (c)                                                                                         |                                                                                                                                                                                                                                               | 7,120,000  |   | 8,314,772  |
|                                                                                                                                                                                          | *Trust: Los Angeles, CA, School District General                            Obligation Lease, Unified School*

*District, RITES-PA 589D, 144A, 8.085%, 7/1/2014,                            Leverage Factor at purchase*

*date: 2 to 1*           |       |   |       |   |
| Rancho, CA, Water District Financing Authority                            Revenue, Series A, 5.0%, 8/1/2027 (a) (c)                                                                           |                                                                                                                                                                                                                                               | 14,100,000 |   | 14,844,832 |
| Rancho, CA, Water District Financing Authority                            Revenue, Series A, 5.0%, 8/1/2029 (a) (c)                                                                           |                                                                                                                                                                                                                                               | 8,400,000  |   | 8,843,730  |
| *Trust: Rancho, CA,                            Water District Financing Authority Revenue, Series 1999, 8.42%,                            8/1/2027, Leverage Factor at purchase date: 4 to 1* |                                                                                                                                                                                                                                               |       |   |       |
| San Francisco, CA, City & County Airports                            Commission, International Airport Revenue, AMT,

Series 24A, 5.75%,                            5/1/2012 (a) (c)      |                                                                                                                                                                                                                                               | 2,570,000  |   | 2,711,851  |
|                                                                                                                                                                                          | *Trust: San Francisco, CA, City & County                            Airports Commission, International Airport*

*Revenue, AMT, RITES-PA 662B, 144A, 7.595%,                            5/1/2012, Leverage Factor at*

*purchase date: 2 to 1* |       |   |       |   |
| San Francisco, CA, City & County Airports                            Commission, International Airport Revenue, AMT,

Series 25, 5.75%, 5/1/2012                            (a) (c)       |                                                                                                                                                                                                                                               | 2,890,000  |   | 3,049,514  |
|                                                                                                                                                                                          | *Trust: San Francisco, CA, City & County                            Airports Commission, International Airport*

*Revenue, AMT, RITES-PA 662H, 144A, 7.595%,                            5/1/2012, Leverage Factor at*

*purchase date: 2 to 1* |       |   |       |   |
| San Francisco, CA, City & County Airports                            Commission, International Airport Revenue, AMT, Series 24A, 5.75%,                            5/1/2013 (a) (c)       |                                                                                                                                                                                                                                               | 2,730,000  |   | 2,892,408  |
|                                                                                                                                                                                          | *Trust: San Francisco, CA, City & County                            Airports Commission, International Airport*

*Revenue, AMT, RITES-PA 662C, 144A, 7.595%,                            5/1/2013, Leverage Factor at*

*purchase date: 2 to 1* |       |   |       |   |
| San Francisco, CA, City & County Airports                            Commission, International Airport Revenue, AMT, Series 25, 5.75%,                            5/1/2013 (a) (c)        |                                                                                                                                                                                                                                               | 3,070,000  |   | 3,252,634  |
|                                                                                                                                                                                          | *Trust: San Francisco, CA, City & County                            Airports Commission, International Airport*

*Revenue, AMT, RITES-PA 662I, 144A, 7.595%,                            5/1/2013, Leverage Factor at*

*purchase date: 2 to 1* |       |   |       |   |
| San Francisco, CA, City & County Airports                            Commission, International Airport Revenue, AMT, Series 24A, 5.75%,                            5/1/2014 (a) (c)       |                                                                                                                                                                                                                                               | 2,890,000  |   | 3,061,926  |
|                                                                                                                                                                                          | *Trust: San Francisco, CA, City & County                            Airports Commission, International Airport*

*Revenue, AMT, RITES-PA 662D, 144A, 7.595%,                            5/1/2014, Leverage Factor at*

*purchase date: 2 to 1* |       |   |       |   |
| San Francisco, CA, City & County Airports                            Commission, International Airport Revenue, AMT, Series 24A, 5.75%,                            5/1/2015 (a) (c)       |                                                                                                                                                                                                                                               | 3,060,000  |   | 3,209,665  |
|                                                                                                                                                                                          | *Trust: San Francisco, CA, City & County                            Airports Commission, International Airport*

*Revenue, AMT, RITES-PA 662E, 144A, 7.595%,                            5/1/2015, Leverage Factor at*

*purchase date: 2 to 1* |       |   |       |   |
| San Francisco, CA, City & County Airports                            Commission, International Airport Revenue, AMT, Series 24A, 5.875%,                            5/1/2016 (a) (c)      |                                                                                                                                                                                                                                               | 3,250,000  |   | 3,415,912  |
|                                                                                                                                                                                          | *Trust: San Francisco, CA, City & County                            Airports Commission, International Airport*

*Revenue, AMT, RITES-PA 662F, 144A, 7.845%,                            5/1/2016, Leverage Factor at*

*purchase date: 2 to 1* |       |   |       |   |
| San Francisco, CA, City & County Airports                            Commission, International Airport Revenue, AMT, Series 24A, 6.0%,                            5/1/2011 (a) (c)        |                                                                                                                                                                                                                                               | 2,160,000  |   | 2,295,367  |
|                                                                                                                                                                                          | *Trust: San Francisco, CA, City & County                            Airports Commission, International Airport*

*Revenue, AMT, RITES-PA 662A, 144A, 8.095%,                            5/1/2011, Leverage Factor at*

*purchase date: 2 to 1* |       |   |       |   |
|                                                                                                                                                                                          |                                                                                                                                                                                                                                               |       |   |       |
|                                                                                                                                                                                          |                                                                                                                                                                                                                                               |       |   |       |
|                                                                                                                                                                                          |                                                                                                                                                                                                                                               |       |   |       |
|                                                                                                                                                                                          |                                                                                                                                                                                                                                               |       |   |       |
|                                                                                                                                                                                               |                                                                                                                                                                                                                                                    |            |        |            |        |  |

 

 

 

| San Francisco, CA, City & County Airports                            Commission, International Airport Revenue, AMT, Series 25, 6.0%,                            5/1/2011 (a) (c)                                                                                                          |                                                                                                                                                                                                                                                                                                                       | 2,730,000                                         |                                     | 2,901,089   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------|------------------------------------------|-------------|
|                                                                                                                                                                                                                                                                                           | *Trust: San Francisco, CA, City & County                            Airports Commission, International Airport*

*Revenue, AMT, RITES-PA 662G, 144A, 8.095%,                            5/1/2011, Leverage Factor at*

*purchase date: 2 to 1*                                                                         |                                              |                                     |        |   |
|                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                           | **212,853,949**                                                                                                                                                                                                                                                                                                            |
| **Puerto Rico 6.3%**                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                       |
| Puerto Rico, Electric Power Authority, Power Revenue,                            Series KK, 5.5%, 7/1/2015 (a) (c)                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                       | 25,000,000                                        |                                     | 28,083,875  |
|                                                                                                                                                                                                                                                                                           | *Trust: Puerto Rico, Electric Revenue, Electric                            Power Authority, RITES-PA 1044, 144A,*

*10.249%, 7/1/2015, Leverage Factor at purchase                            date: 4 to 1*                                                                                                                |                                              |                                     |        |   |
| Puerto Rico, Commonwealth, 6.0%, 7/1/2014 (a)                            (c)                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                       | 10,000,000                                        |                                     | 11,417,800  |
|                                                                                                                                                                                                                                                                                           | *Trust: Puerto Rico, Sales & Special Tax                            Revenue, RITES-PA 620B, 144A, 8.095%,*

*7/1/2014, Leverage Factor at purchase date: 2 to                            1*                                                                                                                            |                                              |                                     |        |   |
| Puerto Rico, Commonwealth, Series A, 5.5%, 7/1/2020                            (a) (c)                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                       | 13,250,000                                        |                                     | 14,954,745  |
|                                                                                                                                                                                                                                                                                           | *Trust: Puerto Rico,                            Commonwealth, General Obligation, RITES-PA 944R-B,*

*144A, 7.11%, 7/1/2020, Leverage Factor at purchase                            date: 2 to 1*                                                                                                                          |                                              |                                     |        |   |
|                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                           | **54,456,420**                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                |
| **Total Municipal Inverse Floating Rate                            Notes**(Cost $252,353,102)                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                       | **267,310,369**                                   |
|                                                                                                                                                                                                                                                                                           | **Government & Agency Obligations                            0.0%**                                                                                                                                                                                                                                                    |                                              |
| US Treasury Bill, 3.7% ***, 1/17/2008 (Cost                            $391,157)                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                       | 393,000                                           |                                     | **391,535** |
|                                                                                                                                                                                                                                                                                           | **%                            of****Net Assets**                                                                                                                                                                                                                                                                          |                                              | **Value                            ($)** |
|                                                                                                                                                                                                                                                                                                |
| **Total Investment Portfolio**(Cost $935,679,913)                                                                                                                                                                                                                                              | 116.2                                                                                                                                                                                                                                                                                                                      |                                              | **999,755,463**                          |
| **Other Assets and Liabilities, Net**                                                                                                                                                                                                                                                          | (16.2)                                                                                                                                                                                                                                                                                                                     |                                              | **(139,496,376)**                        |
|                                                                                                                                                                                                                                                                                                |
| **Net Assets**                                                                                                                                                                                                                                                                                 | 100.0                                                                                                                                                                                                                                                                                                                      |                                              | **860,259,087**                          |
|                                                                                                                                                                                                                                                                                           | *For information on the Fund's policies regarding                            the valuation of investments and other significant accounting policies,                            please refer to the Fund's most recent semi-annual or annual financial                            statements.*                             |
| ***                                                                                                                                                                                                                                                                                            | *Variable rate demand notes are securities whose                            interest rates are reset periodically at market levels. These                            securities are often payable on demand and are shown at their current                            rates as of November 30, 2007.*                      |
| ****                                                                                                                                                                                                                                                                                           | *Floating rate notes are securities whose yields                            vary with a designated market index or market rate, such as the                            coupon-equivalent of the US Treasury bill rate. These securities are                            shown at their current rate as of August 31, 2007.* |
| *****                                                                                                                                                                                                                                                                                          | *Annualized yield at time of purchase; not a coupon                            rate.*                                                                                                                                                                                                                                      |
| *(a)*                                                                                                                                                                                                                                                                                          | *Bond is insured by one of these                            companies:*                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                           | ***Insurance Coverage***                                                                                                                                                                                                                                                                                                   | ***As a % of Total***

***Investment Portfolio*** |                                     |
|                                                                                                                                                                                                                                                                                           | *Ambac Financial Group, Inc.*                                                                                                                                                                                                                                                                                              | *5.7*                                             |                                     |
|                                                                                                                                                                                                                                                                                           | *Financial Guaranty Insurance Company*                                                                                                                                                                                                                                                                                     | *14.3*                                            |                                     |
|                                                                                                                                                                                                                                                                                           | *Financial Security Assurance, Inc.*                                                                                                                                                                                                                                                                                       | *14.1*                                            |                                     |
| * *                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                            |                                                   |                                          |             |  |  |  |  |  |  |  |
| *MBIA Corporation*                                                                                                                                                                                                                                                                             | *25.0*                                                                                                                                                                                                                                                                                                                     |                                              |                                          |
|                                                                                                                                                                                                                                                                                           | *Radian Asset Assurance, Inc.*                                                                                                                                                                                                                                                                                             | *1.3*                                             |                                     |
|                                                                                                                                                                                                                                                                                           | *XL Capital Assurance, Inc.*                                                                                                                                                                                                                                                                                               | *1.2*                                             |                                     |
| *(b)*                                                                                                                                                                                                                                                                                          | *At November 30, 2007, this security has been                            pledged, in whole or in part, as collateral for open interest rate                            swaps.*                                                                                                                                             |
| *(c)*                                                                                                                                                                                                                                                                                          | *Security forms part of the below tender option                            bond trust. Principal amount and value shown take into account the                            leverage factor.*                                                                                                                                 |
| *144A: Security exempt from registration under Rule                            144A of the Securities Act of 1933. These securities may be resold in                            transactions exempt from registration, normally to qualified                            institutional buyers.* |
| *AMT: Subject to alternative minimum                            tax.*                                                                                                                                                                                                                          |
| *CRVS: Custodial Residual and Variable                            Securities*                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                            |                                                   |                                          |             |  |  |  |  |  |  |  |

 

 

 

| *ETM: Bonds bearing the description ETM (escrow to                            maturity) are collateralized by US Treasury securities which are held                            in escrow and used to pay principal and interest on bonds so                            designated.*                                               |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *Prerefunded: Bonds which are prerefunded are                            collateralized by US Treasury securities which are held in escrow and                            are used to pay principal and interest on tax-exempt issues and to                            retire the bonds in full at the earliest refunding date.* |
| *RITES: Residual Interest Tax Exempt                            Security*                                                                                                                                                                                                                                                         |
|  

                                                                                                                                                                                                                                                                                                                     |
| *At November 30, 2007, open interest rate swaps                            were as follows:*                                                                                                                                                                                                                                      |
| **Effective/****Expiration****Dates**                                                                                                                                                                                                                                                                                             |   | **Notional****Amount ($)** |   | **Cash                            Flows Paid****by the Fund** |   | **Underlying Debt Obligation** |   | **Net                            Unrealized****Depreciation ($)** |
|                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                              |
| 2/13/20082/13/2022                                                                                                                                                                                                                                                                                                                |   |  

14,900,0001 |   | Fixed                                — 5.62% |   | Floating — LIBOR |   |  

(1,283,186) |   |
| 5/30/20085/30/2025                                                                                                                                                                                                                                                                                                                |   |  

10,800,0002 |   | Fixed — 4.948% |   | Floating — LIBOR |   |  

(90,958) |   |
| 6/4/2008

5/30/2025                                                                                                                                                                                                                                                                                                               |   | 10,800,0003 |   | Fixed                                — 4.867% |   | Floating — LIBOR |   | 0 |   |
| **Total net unrealized depreciation**                                                                                                                                                                                                                                                                                             | **(1,374,144)** |   |
|                                                                                                                                                                                                                                                                                                                                   |

 

| *Counterparties:*                                                                 |
|-----------------------------------------------------------------------------------|
| *1 Citigroup Global Markets,                            Inc.*                     |
| *2 Chase Securities, Inc.*                                                        |
| *3 Lehman Brothers, Inc.*                                                         |
| *LIBOR: Represents the London InterBank Offered                            Rate.* |

 

 

| **ITEM 2.** | **CONTROLS AND PROCEDURES**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|-------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|        | (a)                                     The Chief                            Executive and Financial Officers concluded that the Registrant’s                            Disclosure Controls and Procedures are effective based on the                            evaluation of the Disclosure Controls and Procedures as of a date                            within 90 days of the filing date of this report.                                                                                                                                                                               |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|        | (b)                                     There have been                            no changes in the registrant’s internal control over financial                            reporting that occurred during the registrant’s last half-year                            (the registrant’s second fiscal half-year in the case of the                            annual report) that has materially affected, or is reasonably likely to                            materially affect, the registrant’s internal controls over                            financial reporting. |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **ITEM 3.** | **EXHIBITS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|        | Certification pursuant to Rule 30a-2(a) under the                            Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and                            attached hereto as Exhibit 99.CERT.                                                                                                                                                                                                                                                                                                                                                                                                                                     |

 

 

**SIGNATURES**

 

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

 

| Registrant: | DWS California Tax-Free Income Fund, a series of DWS                            State Tax-Free Income Series |
|-------------|--------------------------------------------------------------------------------------------------------------|

 

| By: | /s/Michael G. Clark |
|-----|---------------------|

|   | Michael G. Clark |
|--------|------------------|

President

 

| Date: | January 16, 2008 |
|-------|------------------|

 

 

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

 

| Registrant: | DWS California Tax-Free Income Fund, a series of DWS                            State Tax-Free Income Series |
|-------------|--------------------------------------------------------------------------------------------------------------|

 

| By: | /s/Michael G. Clark |
|-----|---------------------|

|   | Michael G. Clark |
|--------|------------------|

President

 

| Date: | January 16, 2008 |
|-------|------------------|

 

 

| By: | /s/Paul Schubert |
|-----|------------------|

|   | Paul Schubert |
|--------|---------------|

Chief Financial Officer and Treasurer

 

| Date: | January 16, 2008 |
|-------|------------------|