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  811-2743

DWS Strategic Income Fund

(Exact name of registrant as specified in charter)

 

345 Park Avenue

New York, NY  10154

(Address of principal executive offices)             (Zip code)

 

Paul Schubert

345 Park Avenue

New York, NY  10154-0004

(Name and address of agent for service)

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

Date of fiscal year end:  10/31

Date of reporting period: 07/31/08

 

ITEM 1.  SCHEDULE OF INVESTMENTS

 

| Investment Portfolio | **as of July 31, 2008  (Unaudited)** |
|----------------------|--------------------------------------|

 

 

**DWS Strategic Income Fund**

 

 

|   | **Principal****Amount ($) (a)** |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | **Value ($)** |
|--------|---------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------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|        |
|   | **Corporate Bonds 37.2%**       |  
**Consumer Discretionary 4.3%**

 
AMC Entertainment, Inc., 8.0%, 3/1/2014 

 

 

500,000 

 

445,625 

American Achievement Corp., 8.25%, 4/1/2012 

 

 

115,000 

 

112,700 

American Achievement Group Holding Corp., 14.75%, 10/1/2012 (PIK)

 

 

185,054 

 

169,324 

Asbury Automotive Group, Inc.:

 
 

7.625%, 3/15/2017 

 

 

270,000 

 

199,463 

 

8.0%, 3/15/2014 (b) 

 

 

115,000 

 

94,303 

Ashtead Holdings PLC, 144A, 8.625%, 8/1/2015 (b) 

 

 

295,000 

 

258,125 

Burlington Coat Factory Warehouse Corp., 11.125%, 4/15/2014 

 

 

125,000 

 

92,344 

Cablevision Systems Corp., Series B, 7.133% ***, 4/1/2009 

 

 

90,000 

 

90,563 

CanWest MediaWorks LP, 144A, 9.25%, 8/1/2015 

 

 

190,000 

 

147,250 

 

 

 

Carrols Corp., 9.0%, 1/15/2013 (b) 

 

 

120,000 

 

103,200 

Charter Communications Holdings LLC, 11.0%, 10/1/2015 (b) 

 

 

172,000 

 

130,290 

Charter Communications Operating LLC, 144A, 10.875%, 9/15/2014 

 

 

680,000 

 

707,200 

Cirsa Capital Luxembourg SA, 144A, 7.875%, 7/15/2012 

EUR

 

115,000 

 

146,645 

Cooper-Standard Automotive, Inc., 7.0%, 12/15/2012 (b) 

 

 

155,000 

 

127,875 

CSC Holdings, Inc.:

 
 

6.75%, 4/15/2012 (b) 

 

 

210,000 

 

200,025 

 

Series B, 7.625%, 4/1/2011 

 

 

230,000 

 

227,413 

 

Series B, 8.125%, 7/15/2009 

 

 

220,000 

 

222,200 

 

Series B, 8.125%, 8/15/2009 

 

 

435,000 

 

439,350 

Denny's Holdings, Inc., 10.0%, 10/1/2012 (b) 

 

 

80,000 

 

77,200 

DIRECTV Holdings LLC, 144A, 7.625%, 5/15/2016 

 

 

630,000 

 

625,275 

Dollarama Group LP, 8.883% ***, 8/15/2012 (j) 

 

 

196,000 

 

177,380 

EchoStar DBS Corp.:

 
 

6.375%, 10/1/2011 

 

 

310,000 

 

300,313 

 

6.625%, 10/1/2014 

 

 

335,000 

 

307,362 

 

7.125%, 2/1/2016 

 

 

260,000 

 

239,850 

Fontainebleau Las Vegas Holdings LLC, 144A, 10.25%, 6/15/2015 

 

 

270,000 

 

143,100 

General Motors Corp.:

 
 

7.4%, 9/1/2025 

 

 

145,000 

 

66,700 

 

8.375%, 7/15/2033 

 

 

655,000 

 

322,587 

Great Canadian Gaming Corp., 144A, 7.25%, 2/15/2015 

 

 

235,000 

 

224,425 

Group 1 Automotive, Inc., 8.25%, 8/15/2013 

 

 

115,000 

 

104,650 

Hertz Corp., 8.875%, 1/1/2014 

 

 

595,000 

 

545,912 

Idearc, Inc., 8.0%, 11/15/2016 

 

 

540,000 

 

245,700 

Indianapolis Downs LLC, 144A, 11.0%, 11/1/2012 

 

 

155,000 

 

125,550 

Isle of Capri Casinos, Inc., 7.0%, 3/1/2014 

 

 

265,000 

 

184,175 

Kabel Deutschland GmbH, 10.625%, 7/1/2014 (b) 

 

 

360,000 

 

368,100 

Lamar Media Corp., Series C, 6.625%, 8/15/2015 

 

 

155,000 

 

139,500 

Liberty Media LLC:

 
 

5.7%, 5/15/2013 (b) 

 

 

30,000 

 

27,000 

 

8.25%, 2/1/2030 

 

 

190,000 

 

168,304 

 

8.5%, 7/15/2029 (b) 

 

 

310,000 

 

274,242 

MediMedia USA, Inc., 144A, 11.375%, 11/15/2014 

 

 

120,000 

 

120,000 

MGM MIRAGE:

 
 

6.75%, 9/1/2012 

 

 

365,000 

 

320,287 

 

8.375%, 2/1/2011 (b) 

 

 

245,000 

 

221,113 

MTR Gaming Group, Inc., Series B, 9.75%, 4/1/2010 

 

 

335,000 

 

331,650 

Norcraft Holdings LP, Step-up Coupon, 0% to 9/1/2008, 9.75% to 9/1/2012   

 

 

565,000 

 

514,150 

Penske Automotive Group, Inc., 7.75%, 12/15/2016 

 

 

490,000 

 

404,250 

Pinnacle Entertainment, Inc., 8.75%, 10/1/2013 (b) 

 

 

240,000 

 

229,200 

Quebecor Media, Inc., 7.75%, 3/15/2016 

 

 

160,000 

 

147,600 

Quebecor World, Inc., 144A, 9.75%, 1/15/2015** 

 

 

180,000 

 

81,900 

Quiksilver, Inc., 6.875%, 4/15/2015 (b) 

 

 

330,000 

 

259,050 

Reader's Digest Association, Inc., 9.0%, 2/15/2017 

 

 

180,000 

 

101,700 

Sabre Holdings Corp., 8.35%, 3/15/2016 

 

 

200,000 

 

140,000 

Seminole Hard Rock Entertainment, Inc., 144A, 5.276% ***, 3/15/2014 

 

 

275,000 

 

222,750 

Shaw Communications, Inc., 8.25%, 4/11/2010 

 

 

420,000 

 

431,550 

Shingle Springs Tribal Gaming Authority, 144A, 9.375%, 6/15/2015 

 

 

190,000 

 

153,900 

Simmons Co.:

 
 

Step-up Coupon, 0% to 12/15/2009, 10.0% to 12/15/2014   

 

 

725,000 

 

491,187 

 

7.875%, 1/15/2014 

 

 

85,000 

 

69,700 

Sinclair Television Group, Inc., 8.0%, 3/15/2012 (b) 

 

 

115,000 

 

115,000 

Sirius Satellite Radio, Inc., 9.625%, 8/1/2013 (b) 

 

 

505,000 

 

414,100 

Sonic Automotive, Inc., Series B, 8.625%, 8/15/2013 (b) 

 

 

225,000 

 

180,000 

Station Casinos, Inc., 6.5%, 2/1/2014 

 

 

85,000 

 

41,013 

 

 

 

Travelport LLC:

 
 

7.307% ***, 9/1/2014 

 

 

170,000 

 

131,750 

 

9.875%, 9/1/2014 

 

 

215,000 

 

180,600 

Trump Entertainment Resorts, Inc., 8.5%, 6/1/2015 (b) 

 

 

195,000 

 

96,038 

United Components, Inc., 9.375%, 6/15/2013 

 

 

40,000 

 

36,200 

Unity Media GmbH:

 
 

144A, 8.75%, 2/15/2015

EUR

 

380,000 

 

540,878 

 

144A, 10.375%, 2/15/2015

 

 

175,000 

 

167,125 

Univision Communications, Inc., 144A, 9.75%, 3/15/2015 (PIK)

 

 

190,000 

 

144,875 

UPC Holding BV:

 
 

144A, 7.75%, 1/15/2014 

EUR

 

235,000 

 

326,243 

 

144A, 8.0%, 11/1/2016 

EUR

 

120,000 

 

162,362 

Vitro SAB de CV:

 
 

9.125%, 2/1/2017 

 

 

815,000 

 

605,137 

 

11.75%, 11/1/2013 

 

 

100,000 

 

96,000 

Young Broadcasting, Inc., 8.75%, 1/15/2014 

 

 

1,165,000 

 

498,037 

 

**16,556,565**

**Consumer Staples 1.7%**

 
Alliance One International, Inc., 8.5%, 5/15/2012 

 

 

120,000 

 

112,500 

Delhaize America, Inc.:

 
 

8.05%, 4/15/2027 

 

 

75,000 

 

78,479 

 

9.0%, 4/15/2031 

 

 

510,000 

 

585,949 

General Nutrition Centers, Inc., 7.199% ***, 3/15/2014 (PIK)

 

 

145,000 

 

123,250 

Harry & David Operations Corp., 7.682% ***, 3/1/2012 

 

 

190,000 

 

146,300 

North Atlantic Trading Co., 144A, 10.0%, 3/1/2012 

 

 

873,750 

 

703,369 

Philip Morris International, Inc., 6.375%, 5/16/2038 

 

 

1,365,000 

 

1,306,222 

Reynolds American, Inc., 6.75%, 6/15/2017 

 

 

2,400,000 

 

2,355,953 

Smithfield Foods, Inc., 7.75%, 7/1/2017 

 

 

165,000 

 

141,075 

Viskase Companies, Inc., 11.5%, 6/15/2011 

 

 

1,330,000 

 

1,157,100 

 

**6,710,197**

**Energy 4.9%**

 
Atlas Energy Resources LLC, 144A, 10.75%, 2/1/2018 

 

 

515,000 

 

526,587 

Belden & Blake Corp., 8.75%, 7/15/2012 

 

 

1,150,000 

 

1,161,500 

Bristow Group, Inc., 7.5%, 9/15/2017 

 

 

260,000 

 

256,100 

Chaparral Energy, Inc.:

 
 

8.5%, 12/1/2015 

 

 

375,000 

 

323,437 

 

8.875%, 2/1/2017 

 

 

140,000 

 

120,750 

Chesapeake Energy Corp.:

 
 

6.25%, 1/15/2018 

 

 

145,000 

 

133,038 

 

6.875%, 1/15/2016 

 

 

635,000 

 

610,394 

 

7.25%, 12/15/2018 

 

 

435,000 

 

426,300 

 

7.5%, 6/15/2014 (b) 

 

 

110,000 

 

110,963 

Cimarex Energy Co., 7.125%, 5/1/2017 

 

 

185,000 

 

182,225 

Delta Petroleum Corp., 7.0%, 4/1/2015 

 

 

490,000 

 

406,700 

Dynegy Holdings, Inc.:

 
 

6.875%, 4/1/2011 

 

 

75,000 

 

74,063 

 

8.375%, 5/1/2016 

 

 

410,000 

 

406,925 

El Paso Corp.:

 
 

7.25%, 6/1/2018 

 

 

340,000 

 

336,600 

 

9.625%, 5/15/2012 

 

 

180,000 

 

195,271 

EXCO Resources, Inc., 7.25%, 1/15/2011 

 

 

355,000 

 

351,450 

Forest Oil Corp., 144A, 7.25%, 6/15/2019 

 

 

130,000 

 

122,200 

Frontier Oil Corp., 6.625%, 10/1/2011 (b) 

 

 

180,000 

 

174,600 

Gaz Capital (Gazprom), 144A, 6.51%, 3/7/2022 

 

 

785,000 

 

691,977 

KCS Energy, Inc., 7.125%, 4/1/2012 

 

 

945,000 

 

907,200 

 

 

 

Mariner Energy, Inc.:

 
 

7.5%, 4/15/2013 (b) 

 

 

215,000 

 

203,713 

 

8.0%, 5/15/2017 

 

 

265,000 

 

249,762 

Newfield Exploration Co., 7.125%, 5/15/2018 

 

 

390,000 

 

368,550 

OPTI Canada, Inc.:

 
 

7.875%, 12/15/2014 

 

 

325,000 

 

322,562 

 

8.25%, 12/15/2014 

 

 

630,000 

 

634,725 

Pemex Project Funding Master Trust:

 
 

144A, 5.75%, 3/1/2018 

 

 

1,570,000 

 

1,528,395 

 

Series REG S, 6.375%, 8/5/2016 

EUR

 

100,000 

 

154,628 

Petrobras International Finance Co., 5.875%, 3/1/2018 

 

 

330,000 

 

322,302 

Petrohawk Energy Corp.:

 
 

144A, 7.875%, 6/1/2015 

 

 

255,000 

 

246,713 

 

9.125%, 7/15/2013 

 

 

250,000 

 

253,125 

Petronas Capital Ltd., Series REG S, 7.875%, 5/22/2022 

 

 

290,000 

 

345,081 

Plains Exploration & Production Co.:

 
 

7.0%, 3/15/2017 (b) 

 

 

220,000 

 

205,700 

 

7.625%, 6/1/2018 

 

 

435,000 

 

421,950 

Quicksilver Resources, Inc., 7.125%, 4/1/2016 

 

 

640,000 

 

552,000 

Range Resources Corp., 7.25%, 5/1/2018 

 

 

45,000 

 

43,875 

Sabine Pass LNG LP, 7.5%, 11/30/2016 

 

 

705,000 

 

606,300 

SandRidge Energy, Inc., 144A, 8.0%, 6/1/2018 

 

 

170,000 

 

168,300 

Southwestern Energy Co., 144A, 7.5%, 2/1/2018 

 

 

320,000 

 

328,000 

Stallion Oilfield Services, 144A, 9.75%, 2/1/2015 

 

 

140,000 

 

110,600 

Stone Energy Corp.:

 
 

6.75%, 12/15/2014 

 

 

430,000 

 

373,025 

 

8.25%, 12/15/2011 (b) 

 

 

685,000 

 

667,875 

Tennessee Gas Pipeline Co., 7.625%, 4/1/2037 

 

 

190,000 

 

198,381 

Tesoro Corp., 6.5%, 6/1/2017 

 

 

180,000 

 

153,000 

Whiting Petroleum Corp.:

 
 

7.0%, 2/1/2014 

 

 

255,000 

 

245,438 

 

7.25%, 5/1/2012 

 

 

450,000 

 

442,125 

 

7.25%, 5/1/2013 

 

 

110,000 

 

107,525 

Williams Companies, Inc.:

 
 

8.125%, 3/15/2012 

 

 

695,000 

 

743,650 

 

8.75%, 3/15/2032 

 

 

1,010,000 

 

1,146,350 

Williams Partners LP, 7.25%, 2/1/2017 

 

 

190,000 

 

189,525 

 

**18,851,455**

**Financials 11.6%**

 
Algoma Acquisition Corp., 144A, 9.875%, 6/15/2015 

 

 

625,000 

 

587,500 

Ashton Woods USA LLC, 9.5%, 10/1/2015 

 

 

540,000 

 

324,000 

Buffalo Thunder Development Authority, 144A, 9.375%, 12/15/2014 

 

 

115,000 

 

66,700 

CIT Group, Inc., 5.4%, 2/13/2012 

 

 

1,600,000 

 

1,248,632 

Conproca SA de CV, Series REG S, 12.0%, 6/16/2010 

 

 

787,650 

 

882,168 

 

 
Ford Motor Credit Co., LLC:

 
 

7.25%, 10/25/2011 

 

 

1,395,000 

 

1,054,587 

 

7.375%, 10/28/2009 

 

 

2,260,000 

 

2,058,555 

 

7.875%, 6/15/2010 

 

 

685,000 

 

583,389 

GMAC LLC, 6.875%, 9/15/2011 

 

 

3,330,000 

 

2,198,806 

Hawker Beechcraft Acquisition Co., LLC:

 
 

8.5%, 4/1/2015 

 

 

435,000 

 

435,000 

 

8.875%, 4/1/2015 (PIK) (b)

 

 

350,000 

 

345,625 

 

9.75%, 4/1/2017 

 

 

495,000 

 

488,812 

Hexion US Finance Corp., 9.75%, 11/15/2014 

 

 

125,000 

 

106,563 

Inmarsat Finance PLC, Step-up Coupon, 0% to 11/15/2008, 10.375% to 11/15/2012   

 

 

750,000 

 

753,750 

 

 

 

iPayment, Inc., 9.75%, 5/15/2014 

 

 

165,000 

 

138,187 

iStar Financial, Inc., (REIT), 8.625%, 6/1/2013 

 

 

1,000,000 

 

785,000 

Kreditanstalt fuer Wiederaufbau:

 
 

2.05%, 2/16/2026 

JPY

 

1,850,000,000 

 

16,691,755 

 

5.0%, 1/4/2009 

EUR

 

8,000,000 

 

12,490,136 

Local TV Finance LLC, 144A, 9.25%, 6/15/2015 (PIK)

 

 

185,000 

 

140,600 

New ASAT (Finance) Ltd., 9.25%, 2/1/2011 

 

 

340,000 

 

217,600 

Qwest Capital Funding, Inc., 7.0%, 8/3/2009 

 

 

210,000 

 

207,900 

Rainbow National Services LLC, 144A, 10.375%, 9/1/2014 

 

 

39,000 

 

41,291 

Tropicana Entertainment LLC, 9.625%, 12/15/2014** 

 

 

660,000 

 

178,200 

UCI Holdco, Inc., 10.276% ***, 12/15/2013 (PIK)

 

 

274,035 

 

217,858 

Universal City Development Partners, 11.75%, 4/1/2010 

 

 

955,000 

 

974,100 

Wachovia Corp., Series G, 5.75%, 2/1/2018 

 

 

2,000,000 

 

1,707,658 

 

**44,924,372**

**Health Care 1.7%**

 
Advanced Medical Optics, Inc., 7.5%, 5/1/2017 

 

 

480,000 

 

432,000 

Bausch & Lomb, Inc., 144A, 9.875%, 11/1/2015 (b) 

 

 

335,000 

 

343,375 

Boston Scientific Corp., 6.0%, 6/15/2011 

 

 

295,000 

 

291,312 

Community Health Systems, Inc., 8.875%, 7/15/2015 

 

 

1,670,000 

 

1,682,525 

HCA, Inc.:

 
 

9.125%, 11/15/2014 

 

 

305,000 

 

314,150 

 

9.25%, 11/15/2016 

 

 

990,000 

 

1,019,700 

 

9.625%, 11/15/2016 (PIK)

 

 

335,000 

 

345,050 

HEALTHSOUTH Corp., 10.75%, 6/15/2016 (b) 

 

 

180,000 

 

192,600 

IASIS Healthcare LLC, 8.75%, 6/15/2014 

 

 

275,000 

 

275,687 

Psychiatric Solutions, Inc., 7.75%, 7/15/2015 

 

 

220,000 

 

215,050 

Surgical Care Affiliates, Inc., 144A, 8.875%, 7/15/2015 (PIK)

 

 

225,000 

 

196,313 

The Cooper Companies, Inc., 7.125%, 2/15/2015 (b) 

 

 

385,000 

 

369,600 

Vanguard Health Holding Co. I LLC, Step-up Coupon, 0% to 10/1/2009, 11.25% to 10/1/2015   

 

 

270,000 

 

237,600 

Vanguard Health Holding Co. II LLC, 9.0%, 10/1/2014 (b) 

 

 

590,000 

 

575,250 

 

**6,490,212**

**Industrials 3.1%**

 
Actuant Corp., 6.875%, 6/15/2017 

 

 

150,000 

 

145,875 

Allied Security Escrow Corp., 11.375%, 7/15/2011 

 

 

300,000 

 

300,000 

Allied Waste North America, Inc., 6.5%, 11/15/2010 

 

 

155,000 

 

155,000 

American Color Graphics, Inc., 10.0%, 6/15/2010**

 

 

285,000 

 

69,113 

American Color Graphics, Inc., 144A, Promissory Note due 9/15/2008 (c)

 

 

17,100 

 

0 

American Railcar Industries, Inc., 7.5%, 3/1/2014 

 

 

215,000 

 

198,875 

ARAMARK Corp.:

 
 

6.373% ***, 2/1/2015 

 

 

260,000 

 

239,200 

 

8.5%, 2/1/2015 

 

 

85,000 

 

84,681 

Baldor Electric Co., 8.625%, 2/15/2017 (b) 

 

 

195,000 

 

195,487 

BE Aerospace, Inc., 8.5%, 7/1/2018 

 

 

435,000 

 

449,137 

Belden, Inc., 7.0%, 3/15/2017 

 

 

195,000 

 

184,762 

Bombardier, Inc., 144A, 6.75%, 5/1/2012 

 

 

100,000 

 

98,500 

Browning-Ferris Industries, Inc., 7.4%, 9/15/2035 

 

 

540,000 

 

486,000 

Building Materials Corp. of America, 7.75%, 8/1/2014 

 

 

260,000 

 

202,800 

Cenveo Corp., 144A, 10.5%, 8/15/2016 

 

 

215,000 

 

211,775 

Congoleum Corp., 8.625%, 8/1/2008**

 

 

480,000 

 

360,000 

DRS Technologies, Inc.:

 
 

6.625%, 2/1/2016 

 

 

105,000 

 

106,050 

 

6.875%, 11/1/2013 

 

 

525,000 

 

527,625 

 

7.625%, 2/1/2018 

 

 

635,000 

 

660,400 

Education Management LLC, 8.75%, 6/1/2014 

 

 

160,000 

 

144,000 

 

 

 

Esco Corp.:

 
 

144A, 6.651% ***, 12/15/2013 

 

 

285,000 

 

267,900 

 

144A, 8.625%, 12/15/2013 

 

 

360,000 

 

359,100 

General Cable Corp.:

 
 

5.166% ***, 4/1/2015 

 

 

305,000 

 

268,400 

 

7.125%, 4/1/2017 (b) 

 

 

195,000 

 

184,275 

Gibraltar Industries, Inc., Series B, 8.0%, 12/1/2015 

 

 

195,000 

 

161,850 

Great Lakes Dredge & Dock Co., 7.75%, 12/15/2013 

 

 

175,000 

 

158,813 

Harland Clarke Holdings Corp., 9.5%, 5/15/2015 

 

 

185,000 

 

150,775 

K. Hovnanian Enterprises, Inc.:

 
 

8.875%, 4/1/2012 

 

 

665,000 

 

445,550 

 

144A, 11.5%, 5/1/2013 

 

 

45,000 

 

45,563 

Kansas City Southern de Mexico SA de CV:

 
 

7.375%, 6/1/2014 

 

 

360,000 

 

346,500 

 

7.625%, 12/1/2013 (b) 

 

 

520,000 

 

509,600 

 

9.375%, 5/1/2012 

 

 

650,000 

 

671,125 

Kansas City Southern Railway Co.:

 
 

7.5%, 6/15/2009 

 

 

160,000 

 

161,800 

 

8.0%, 6/1/2015 

 

 

395,000 

 

398,950 

Mobile Services Group, Inc., 9.75%, 8/1/2014 

 

 

255,000 

 

244,800 

Moog, Inc., 144A, 7.25%, 6/15/2018 

 

 

85,000 

 

83,088 

Navios Maritime Holdings, Inc., 9.5%, 12/15/2014 

 

 

290,000 

 

283,475 

Ply Gem Industries, Inc., 144A, 11.75%, 6/15/2013 (b) 

 

 

155,000 

 

138,725 

R.H. Donnelley Corp., Series A-4, 8.875%, 10/15/2017 

 

 

695,000 

 

333,600 

RBS Global & Rexnord Corp., 9.5%, 8/1/2014 

 

 

170,000 

 

162,350 

Seitel, Inc., 9.75%, 2/15/2014 

 

 

130,000 

 

115,700 

Titan International, Inc., 8.0%, 1/15/2012 

 

 

730,000 

 

711,750 

TransDigm, Inc., 7.75%, 7/15/2014 

 

 

115,000 

 

112,125 

US Concrete, Inc., 8.375%, 4/1/2014 (b) 

 

 

210,000 

 

174,300 

United Rentals North America, Inc.:

 
 

6.5%, 2/15/2012 (b) 

 

 

455,000 

 

410,637 

 

7.0%, 2/15/2014 

 

 

570,000 

 

440,325 

Vought Aircraft Industries, Inc., 8.0%, 7/15/2011 

 

 

140,000 

 

129,150 

 

**12,289,506**

**Information Technology 1.2%**

 
Alion Science & Technology Corp., 10.25%, 2/1/2015 

 

 

205,000 

 

141,706 

Freescale Semiconductor, Inc., 8.875%, 12/15/2014 

 

 

660,000 

 

559,350 

L-3 Communications Corp.:

 
 

5.875%, 1/15/2015 

 

 

625,000 

 

579,688 

 

Series B, 6.375%, 10/15/2015 

 

 

270,000 

 

253,800 

 

7.625%, 6/15/2012 

 

 

755,000 

 

764,438 

Lucent Technologies, Inc., 6.45%, 3/15/2029 

 

 

695,000 

 

489,975 

MasTec, Inc., 7.625%, 2/1/2017 

 

 

270,000 

 

230,850 

NXP BV, 7.713% ***, 10/15/2013 

EUR

 

305,000 

 

363,952 

Sanmina-SCI Corp., 144A, 5.526% ***, 6/15/2010 

 

 

93,000 

 

92,070 

Seagate Technology HDD Holdings, 6.8%, 10/1/2016 

 

 

380,000 

 

342,000 

SunGard Data Systems, Inc., 10.25%, 8/15/2015 

 

 

525,000 

 

532,875 

Vangent, Inc., 9.625%, 2/15/2015 

 

 

155,000 

 

130,781 

 

**4,481,485**

**Materials 3.3%**

 
Appleton Papers, Inc., Series B, 8.125%, 6/15/2011 

 

 

110,000 

 

104,775 

ARCO Chemical Co., 9.8%, 2/1/2020 

 

 

1,740,000 

 

1,287,600 

Cascades, Inc., 7.25%, 2/15/2013 

 

 

560,000 

 

476,000 

Chemtura Corp., 6.875%, 6/1/2016 

 

 

450,000 

 

380,250 

Clondalkin Acquisition BV, 144A, 4.776% ***, 12/15/2013 

 

 

215,000 

 

178,988 

 

 

 

CPG International I, Inc., 10.5%, 7/1/2013 

 

 

490,000 

 

387,100 

Exopack Holding Corp., 11.25%, 2/1/2014 

 

 

580,000 

 

516,200 

Freeport-McMoRan Copper & Gold, Inc.:

 
 

8.25%, 4/1/2015 

 

 

425,000 

 

443,062 

 

8.375%, 4/1/2017 

 

 

925,000 

 

968,937 

GEO Specialty Chemicals, Inc.:

 
 

144A, 7.5% ***, 3/31/2015 (PIK)

 

 

431,338 

 

322,964 

 

144A, 10.698% ***, 12/31/2009 

 

 

719,000 

 

538,351 

Georgia-Pacific LLC:

 
 

144A, 7.125%, 1/15/2017 

 

 

130,000 

 

119,925 

 

9.5%, 12/1/2011 

 

 

185,000 

 

186,388 

Hexcel Corp., 6.75%, 2/1/2015 

 

 

790,000 

 

764,325 

Huntsman LLC, 11.625%, 10/15/2010 

 

 

892,000 

 

927,680 

Innophos, Inc., 8.875%, 8/15/2014 

 

 

100,000 

 

100,000 

Jefferson Smurfit Corp., 8.25%, 10/1/2012 

 

 

385,000 

 

337,838 

Koppers Holdings, Inc., Step-up Coupon, 0% to 11/15/2009, 9.875% to 11/15/2014   

 

 

520,000 

 

468,000 

Metals USA Holdings Corp., 8.791% ***, 7/1/2012 (PIK)

 

 

140,000 

 

128,450 

Millar Western Forest Products Ltd., 7.75%, 11/15/2013 

 

 

110,000 

 

64,350 

Momentive Performance Materials, Inc., 9.75%, 12/1/2014 (b) 

 

 

450,000 

 

398,250 

NewMarket Corp., 7.125%, 12/15/2016 

 

 

455,000 

 

441,350 

NewPage Corp., 10.0%, 5/1/2012 

 

 

405,000 

 

387,787 

OI European Group BV, 144A, 6.875%, 3/31/2017 

EUR

 

220,000 

 

308,850 

Pliant Corp., 11.85%, 6/15/2009 (PIK)

 

 

5 

 

5 

Radnor Holdings Corp., 11.0%, 3/15/2010** 

 

 

100,000 

 

125 

Rhodia SA, 144A, 7.713% ***, 10/15/2013 

EUR

 

280,000 

 

393,082 

Smurfit-Stone Container Enterprises, Inc.:

 
 

8.0%, 3/15/2017 (b) 

 

 

320,000 

 

261,600 

 

8.375%, 7/1/2012 

 

 

185,000 

 

163,263 

Steel Dynamics, Inc.:

 
 

6.75%, 4/1/2015 

 

 

295,000 

 

277,300 

 

7.375%, 11/1/2012 

 

 

75,000 

 

74,250 

Terra Capital, Inc., Series B, 7.0%, 2/1/2017 

 

 

440,000 

 

434,500 

The Mosaic Co., 144A, 7.375%, 12/1/2014 

 

 

625,000 

 

643,750 

Witco Corp., 6.875%, 2/1/2026 

 

 

135,000 

 

85,725 

Wolverine Tube, Inc., 10.5%, 4/1/2009 

 

 

325,000 

 

301,438 

 

**12,872,458**

**Telecommunication Services 2.4%**

 
BCM Ireland Preferred Equity Ltd., 144A, 11.856%***, 2/15/2017 (PIK)

EUR

 

212,911 

 

164,537 

Centennial Communications Corp.:

 
 

10.0%, 1/1/2013 

 

 

155,000 

 

161,200 

 

10.125%, 6/15/2013 

 

 

315,000 

 

327,600 

Cincinnati Bell, Inc.:

 
 

7.25%, 7/15/2013 

 

 

400,000 

 

386,000 

 

8.375%, 1/15/2014 (b) 

 

 

220,000 

 

209,550 

Cricket Communications, Inc.:

 
 

9.375%, 11/1/2014 

 

 

475,000 

 

465,500 

 

144A, 10.0%, 7/15/2015 

 

 

430,000 

 

433,225 

Embratel, Series B, 11.0%, 12/15/2008 

 

 

79,000 

 

80,580 

Grupo Iusacell Celular SA de CV, 10.0%, 3/31/2012 

 

 

110,589 

 

101,742 

Hellas Telecommunications Luxembourg III, 144A, 8.5%, 10/15/2013 

EUR

 

100,000 

 

129,468 

Hellas Telecommunications Luxembourg V, 144A, 8.463% ***, 10/15/2012 

EUR

 

100,000 

 

138,047 

 

 
Intelsat Corp.:

 
 

144A, 9.25%, 8/15/2014 

 

 

90,000 

 

88,875 

 

144A, 9.25%, 6/15/2016 

 

 

335,000 

 

329,137 

Intelsat Subsidiary Holding Co., Ltd., 144A, 8.875%, 1/15/2015 

 

 

520,000 

 

512,200 

 

 

 

iPCS, Inc., 4.998% ***, 5/1/2013 

 

 

110,000 

 

97,900 

MetroPCS Wireless, Inc., 9.25%, 11/1/2014 

 

 

565,000 

 

548,050 

Millicom International Cellular SA, 10.0%, 12/1/2013 

 

 

1,010,000 

 

1,063,025 

Nortel Networks Ltd.:

 
 

7.041% ***, 7/15/2011 

 

 

345,000 

 

325,162 

 

144A, 10.75%, 7/15/2016 

 

 

300,000 

 

294,000 

Orascom Telecom Finance, 144A, 7.875%, 2/8/2014 (b) 

 

 

140,000 

 

128,450 

Qwest Corp.:

 
 

7.25%, 9/15/2025 

 

 

70,000 

 

56,350 

 

7.875%, 9/1/2011 (b) 

 

 

585,000 

 

576,225 

Rural Cellular Corp., 9.875%, 2/1/2010 

 

 

350,000 

 

357,875 

Sprint Nextel Corp., 6.0%, 12/1/2016 

 

 

215,000 

 

181,138 

Stratos Global Corp., 9.875%, 2/15/2013 (b) 

 

 

150,000 

 

157,500 

Telesat Canada, 144A, 11.0%, 11/1/2015 

 

 

595,000 

 

556,325 

US Unwired, Inc., Series B, 10.0%, 6/15/2012 (b) 

 

 

455,000 

 

459,550 

Virgin Media Finance PLC:

 
 

8.75%, 4/15/2014 

 

 

475,000 

 

442,937 

 

8.75%, 4/15/2014 

EUR

 

335,000 

 

472,908 

West Corp., 9.5%, 10/15/2014 

 

 

220,000 

 

189,200 

 

**9,434,256**

**Utilities 3.0%**

 
AES Corp.:

 
 

8.0%, 10/15/2017 

 

 

395,000 

 

389,075 

 

144A, 8.0%, 6/1/2020 

 

 

425,000 

 

409,063 

 

144A, 8.75%, 5/15/2013 

 

 

1,372,000 

 

1,423,450 

 

9.5%, 6/1/2009 

 

 

235,000 

 

240,875 

Allegheny Energy Supply Co., LLC, 144A, 8.25%, 4/15/2012 

 

 

1,840,000 

 

1,932,000 

CMS Energy Corp., 8.5%, 4/15/2011 (b) 

 

 

880,000 

 

928,873 

Edison Mission Energy, 7.0%, 5/15/2017 

 

 

450,000 

 

425,250 

Energy Future Holdings Corp., 144A, 10.875%, 11/1/2017 

 

 

600,000 

 

618,000 

Intergas Finance BV, Series REG S, 6.875%, 11/4/2011 

 

 

1,145,000 

 

1,102,062 

IPALCO Enterprises, Inc., 144A, 7.25%, 4/1/2016 

 

 

205,000 

 

205,513 

Knight, Inc., 6.5%, 9/1/2012 

 

 

120,000 

 

118,800 

Mirant Americas Generation LLC, 8.3%, 5/1/2011 

 

 

485,000 

 

494,700 

Mirant North America LLC, 7.375%, 12/31/2013 

 

 

150,000 

 

150,000 

NRG Energy, Inc.:

 
 

7.25%, 2/1/2014 

 

 

495,000 

 

482,625 

 

7.375%, 2/1/2016 

 

 

360,000 

 

349,200 

Oncor Electric Delivery Co., 7.0%, 9/1/2022 

 

 

185,000 

 

178,488 

Regency Energy Partners LP, 8.375%, 12/15/2013 

 

 

293,000 

 

298,860 

Reliant Energy, Inc., 7.875%, 6/15/2017 (b) 

 

 

495,000 

 

477,675 

Sierra Pacific Resources:

 
 

6.75%, 8/15/2017 

 

 

470,000 

 

458,214 

 

8.625%, 3/15/2014 

 

 

100,000 

 

104,750 

Texas Competitive Electric Holdings Co., LLC, 144A, 10.25%, 11/1/2015 

 

 

875,000 

 

875,000 

 

**11,662,473**

**Total Corporate Bonds** (Cost $154,555,724)

 

**144,272,979**

 

**Asset-Backed 0.7%**

 
**Credit Card Receivables**

 
Washington Mutual Master Note Trust, "C1", Series 2007-C1, 144A, 2.858% ***, 5/15/2014 (Cost $3,625,734)

 

 

3,800,000 

 

**2,895,718**

 

**Commercial and Non-Agency Mortgage-Backed Securities 2.2%**

 
Credit Suisse Mortgage Capital Certificates, "A2", Series 2007-C1, 5.268%, 2/15/2040 

 

 

3,719,000 

 

3,613,874 

 

 

 

JPMorgan Chase Commercial Mortgage Securities Corp., "F", Series 2004-LN2, 144A, 5.631% ***, 7/15/2041 

 

 

2,000,000 

 

1,518,261 

Wachovia Bank Commercial Mortgage Trust, "A2", Series 2007-C32, 5.924% ***, 6/15/2049 

 

 

3,600,000 

 

3,528,385 

**Total Commercial and Non-Agency Mortgage-Backed Securities** (Cost $8,759,064)

 

**8,660,520**

 

**Mortgage-Backed Securities Pass-Throughs 1.0%**

 
Federal Home Loan Mortgage Corp., 5.0%, 12/1/2034 (i) (Cost $3,748,750)

 

 

4,000,000 

 

**3,795,781**

 

**Government & Agency Obligations 46.5%**

 
**Sovereign Bonds 35.4%**

 
Aries Vermogensverwaltung GmbH, Series C, REG S, 9.6%, 10/25/2014 

 

 

2,250,000 

 

2,869,447 

Dominican Republic:

 
 

144A, 8.625%, 4/20/2027 

 

 

125,000 

 

115,938 

 

Series REG S, 9.5%, 9/27/2011 

 

 

745,438 

 

752,893 

Federal Republic of Germany:

 
 

Series 06, 4.0%, 7/4/2016 

EUR

 

2,000,000 

 

3,047,293 

 

Series 99, 4.0%, 7/4/2009 

EUR

 

3,000,000 

 

4,659,056 

Federal Republic of Nigeria, Promissory Note, Series RC, 5.092%, 1/5/2010 

 

 

32,000 

 

4,240 

Federative Republic of Brazil:

 
 

6.0%, 1/17/2017 (b) 

 

 

4,745,000 

 

4,847,017 

 

7.125%, 1/20/2037 (b) 

 

 

1,045,000 

 

1,152,112 

 

7.875%, 3/7/2015 

 

 

1,045,000 

 

1,180,850 

 

8.75%, 2/4/2025 

 

 

830,000 

 

1,037,500 

 

8.875%, 10/14/2019 

 

 

950,000 

 

1,176,100 

 

11.0%, 1/11/2012 (b) 

 

 

2,270,000 

 

2,775,075 

 

11.0%, 8/17/2040 (b) 

 

 

2,295,000 

 

3,029,400 

 

12.5%, 1/5/2016 

BRL

 

1,155,000 

 

762,089 

Government of Canada, 4.25%, 12/1/2008 

CAD

 

2,000,000 

 

1,963,182 

Government of Ukraine, Series REG S, 7.65%, 6/11/2013 

 

 

785,000 

 

766,356 

Kingdom of Spain, 3.15%, 1/31/2016 

EUR

 

4,600,000 

 

6,544,388 

Province of Quebec, Series PO, 1.6%, 5/9/2013 

JPY

 

1,600,000,000 

 

15,039,303 

Republic of Argentina:

 
 

3.092% ***, 8/3/2012 (PIK)

 

 

2,053,125 

 

1,750,806 

 

5.83%, 12/31/2033 (PIK)

ARS

 

432 

 

135 

Republic of Colombia:

 
 

7.375%, 1/27/2017 (b) 

 

 

710,000 

 

777,450 

 

8.25%, 12/22/2014 (b) 

 

 

85,000 

 

97,113 

 

10.0%, 1/23/2012 (b) 

 

 

1,245,000 

 

1,444,200 

 

10.75%, 1/15/2013 

 

 

335,000 

 

405,685 

Republic of El Salvador, 144A, 7.65%, 6/15/2035 

 

 

2,245,000 

 

2,195,610 

Republic of Ghana, 144A, 8.5%, 10/4/2017 

 

 

125,000 

 

125,313 

Republic of Greece:

 
 

3.6%, 7/20/2016 

EUR

 

5,500,000 

 

7,883,751 

 

4.5%, 9/20/2037 

EUR

 

7,500,000 

 

10,423,819 

Republic of Indonesia, 144A, 6.875%, 3/9/2017 

 

 

1,470,000 

 

1,455,300 

Republic of Panama:

 
 

7.125%, 1/29/2026 (b) 

 

 

630,000 

 

670,950 

 

9.375%, 1/16/2023 

 

 

2,075,000 

 

2,661,187 

Republic of Peru:

 
 

6.55%, 3/14/2037 (b) 

 

 

1,600,000 

 

1,657,600 

 

7.35%, 7/21/2025 (b) 

 

 

3,805,000 

 

4,309,162 

 

 
Republic of Philippines:

 
 

7.75%, 1/14/2031 (b) 

 

 

295,000 

 

323,025 

 

8.0%, 1/15/2016 

 

 

1,955,000 

 

2,160,275 

 

 

 

 

8.375%, 2/15/2011 

 

 

465,000 

 

497,550 

 

9.375%, 1/18/2017 

 

 

490,000 

 

589,225 

Republic of Turkey:

 
 

7.0%, 9/26/2016 

 

 

1,690,000 

 

1,702,675 

 

7.25%, 3/15/2015 

 

 

360,000 

 

372,600 

 

11.75%, 6/15/2010 

 

 

2,045,000 

 

2,277,619 

 

12.375%, 6/15/2009 

 

 

1,020,000 

 

1,095,072 

Republic of Uruguay:

 
 

7.625%, 3/21/2036 (b) 

 

 

605,000 

 

601,975 

 

8.0%, 11/18/2022 

 

 

955,000 

 

1,012,300 

 

9.25%, 5/17/2017 

 

 

735,000 

 

870,975 

Republic of Venezuela, 10.75%, 9/19/2013 

 

 

3,250,000 

 

3,331,250 

Russian Federation, Series REG S, 7.5%, 3/31/2030 

 

 

4,905,300 

 

5,518,462 

Russian Ministry of Finance, Series VII, 3.0%, 5/14/2011 

 

 

310,000 

 

296,594 

Socialist Republic of Vietnam, 144A, 6.875%, 1/15/2016 

 

 

2,050,000 

 

1,978,250 

United Kingdom Treasury Bond, 5.75%, 12/7/2009 

GBP

 

12,000,000 

 

24,047,429 

United Mexican States:

 
 

5.625%, 1/15/2017 (b) 

 

 

499,000 

 

503,242 

 

Series A, 5.875%, 1/15/2014

 

 

2,050,000 

 

2,116,625 

 

Series A, 6.75%, 9/27/2034 

 

 

318,000 

 

342,009 

 

**137,217,472**

**US Government Sponsored Agencies 1.1%**

 
Federal Home Loan Bank, Series HF-15, 7.869% ***, 6/26/2015 

 

 

1,500,000 

 

1,452,900 

Federal National Mortgage Association:

 
 

5.125%, 1/2/2014 

 

 

2,000,000 

 

1,922,198 

 

8.45% ***, 2/27/2023 

 

 

750,000 

 

750,000 

 

**4,125,098**

**US Treasury Obligations 10.0%**

 
US Treasury Bill, 1.35% ****, 10/16/2008 (d)

 

 

3,377,000 

 

3,365,542 

US Treasury Bonds:

 
 

4.375%, 2/15/2038 

 

 

1,520,000 

 

1,464,781 

 

5.25%, 11/15/2028 

 

 

3,490,000 

 

3,754,476 

US Treasury Notes:

 
 

2.0%, 2/28/2010 

 

 

15,000,000 

 

14,916,795 

 

3.375%, 6/30/2013 

 

 

8,620,000 

 

8,661,755 

 

3.875%, 5/15/2018 

 

 

6,820,000 

 

6,761,389 

 

**38,924,738**

**Total Government & Agency Obligations** (Cost $180,118,878)

 

**180,267,308**

 

**Loan Participations and Assignments 2.2%**

 
**Sovereign Loans 0.1%**

 
CSFB International (Exim Ukraine), 6.8%, 10/4/2012 

 

 

690,000 

 

**622,725**

**Senior Loans*** 2.1%**

 
Advanced Medical Optics, Inc., Term Loan B, LIBOR plus 1.75%, 5.003%, 4/2/2014

 

 

108,625

 

100,071

Algoma Steel, Inc., Term Loan, LIBOR plus 2.5%, 5.753%, 6/30/2013 

 

 

67,487 

 

62,763 

Bausch & Lomb, Inc.:

 
 

Term Delay Draw, LIBOR plus 3.25%, 6.503%, 4/11/2015 

 

 

48,000 

 

46,774 

 

Term Loan B, LIBOR plus 3.25%, 6.503%, 4/11/2015 

 

 

318,400 

 

310,262 

Buffets, Inc.:

 
 

Letter of Credit, 4.73%, 5/1/2013 

 

 

71,054 

 

38,511 

 

Term Loan B, 9.713%, 1/13/2011 

 

 

531,916

 

288,299

Charter Communications Operations:

 
 

Term Loan, LIBOR plus 2.0%, 5.253%, 3/6/2014 

 

 

420,000 

 

415,724 

 

Term Loan B, LIBOR plus 3.25%, 6.503%, 4/27/2011 

 

 

593,511 

 

522,254 

 

 

 

Energy Future Holdings Corp.:

 
 

Term Loan B1, LIBOR plus 3.5%, 6.753%, 10/10/2014

 

 

1,820,850 

 

1,710,570 

 

Term Loan B3, LIBOR plus 3.5%, 6.753%, 10/10/2014

 

 

1,185,997 

 

1,115,709 

Ford Motor Co., Term Loan B, LIBOR plus 3.0%, 6.253%, 12/16/2013 

 

 

220,000 

 

174,014 

General Nutrition Centers, Inc., Term Loan B, LIBOR plus 2.25%, 5.503%, 9/16/2013 

 

 

119,095 

 

108,675 

Golden Nugget, Inc., Term Loan, 5.72%, 6/16/2014 

 

 

230,000 

 

147,200 

Hawker Beechcraft, Inc.:

 
 

Letter of Credit, LIBOR plus 2.0%, 5.253%, 3/26/2014 

 

 

7,214 

 

6,781 

 

Term Loan B, LIBOR plus 2.0%, 5.253%, 3/26/2014 

 

 

123,481 

 

115,179 

HCA, Inc., Term Loan A1, 4.301%, 11/18/2012

 

 

637,227 

 

598,595 

Hexion Specialty Chemicals:

 
 

Term Loan C1, LIBOR plus 2.25%, 5.503%, 5/5/2013 

 

 

578,105 

 

506,769 

 

Term Loan C2, LIBOR plus 2.25%, 5.503%, 5/5/2013 

 

 

157,885 

 

138,403 

IASIS Healthcare LLC, Term Loan, 8.043%, 6/15/2014 

 

 

265,000 

 

233,200 

Longview Power LLC:

 
 

Demand Draw, 5.063%, 4/1/2014 

 

 

53,667 

 

48,635 

 

Letter of Credit, 5.063%, 4/1/2014 

 

 

15,333 

 

13,896 

 

Term Loan B, 5.063%, 4/1/2014

 

 

46,000 

 

41,688 

NewPage Corp., Term Loan B, LIBOR plus 3.0%, 6.253%, 11/5/2014 

 

 

49,750 

 

49,247 

Sabre, Inc., Term Loan B, LIBOR plus 2.25%, 5.503%, 9/30/2014 

 

 

179,784 

 

141,693 

Symbion, Inc.:

 
 

Term Loan A, 6.149%, 8/23/2013 

 

 

94,850 

 

84,061 

 

Term Loan B, 6.149%, 8/23/2014 

 

 

94,850 

 

84,061 

Telesat Canada, Inc:

 

 

 

 

 

 

Term Loan 5.9%, 9/1/2014

 

 

140,551 

 

134,412 

 

Term Loan B, LIBOR plus 3.0%, 6.253%, 10/31/2014

 

 

438,079

 

418,944

Tribune Co., Term Loan, 5.786%, 5/24/2014 

 

 

366,300 

 

261,752 

 

**7,918,142**

**Total Loan Participations and Assignments** (Cost $9,347,184)

 

**8,540,867**

 

**Preferred Securities 0.1%**

 
Citigroup, Inc., Series E, 8.4%, 4/30/2018 (e)

 

 

235,000 

 

201,216 

Xerox Capital Trust I, 8.0%, 2/1/2027 

 

 

120,000 

 

114,390 

**Total Preferred Securities** (Cost $359,875)

 

**315,606**

 

**Units**

 

**Value ($)**

 

**Other Investments 0.1%**

 
Hercules, Inc., (Bond Unit), 6.5%, 6/30/2029  (Cost $271,447)

 

315,000 

 

**258,300**

 

**Shares**

 

**Value ($)**

 

**Common Stocks 0.0%**

 
GEO Specialty Chemicals, Inc.*  

 

10,608 

 

9,017 

GEO Specialty Chemicals, Inc. 144A*  

 

966 

 

821 

**Total Common Stocks** (Cost $131,041)

 

**9,838**

 

**Convertible Preferred Stocks 0.0%**

 
**Consumer Discretionary**

 
ION Media Networks, Inc. 144A, 12.0%*  (Cost $13,911)

 

1 

 

**650**

 

**Warrants 0.0%**

 
Dayton Superior Corp., 144A, Expiration Date 6/15/2009*  

 

40 

 

0 

DeCrane Aircraft Holdings, Inc., 144A, Expiration Date 9/30/2008*  

 

2,740 

 

0 

New ASAT (Finance) Ltd., Expiration Date 2/1/2011*  

 

52,000 

 

12,207 

**Total Warrants** (Cost $0)

 

**12,207**

 

 

 

 

**Open End Investment Companies 1.3%**

 
DWS Floating Rate Plus Fund, "Institutional" (f) (Cost $5,257,063)

 

 

541,264 

 

**4,903,851**

 
 

**Securities Lending Collateral 7.6%**

 
Daily Assets Fund Institutional, 2.69%  (g) (h)(Cost $29,547,593)

 

 

29,547,593

 

**29,547,593**

 
 

**Cash Equivalents 7.8%**

 
Cash Management QP Trust, 2.42% (g)(Cost $30,153,336)

 

 

30,153,336

 

**30,153,336**

 
 

**% of****Net Assets**

 

**Value ($)**

 
 
**Total Investment Portfolio** (Cost $425,889,600) †

106.7

 

**413,634,554**

 
**Other Assets and Liabilities, Net**

(6.7)

 

**(25,816,860)**

 
 
**Net Assets**

100.0

 

**387,817,694**

 
*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.*

 
***

*Non-income producing security.*

 
****

*Non-income producing security.  In the case of a bond, generally denotes that the issuer has defaulted on the payment of principal or the interest or has filed for bankruptcy.  The following table represents bonds that are in default:*

 
* *

* *

***Maturity*****

***Principal*****

***Acquisition*****

* *

***Securities*****

***Coupon*****

***Date*****

***Amount ($)*****

***Cost ($)*****

***Value ($)*****

*American Color Graphics, Inc.***

*10.0%***

*6/15/2010***

*285,000***

*USD***

*206,669***

*69,113***

*Congoleum Corp.***

*8.625%***

*8/1/2008***

*480,000***

*USD***

*451,750***

*360,000***

*Quebecor World, Inc.***

*9.75%***

*1/15/2015***

*180,000***

*USD***

*180,000***

*81,900***

*Radnor Holdings Corp.***

*11.0%***

*3/15/2010***

*100,000***

*USD***

*88,363***

*125***

*Tropicana Entertainment LLC***

*9.625%***

*12/15/2014***

*660,000***

*USD***

*520,338***

*178,200***

 **

 **

 **

 **

 **

***1,447,120*****

***689,338*****

*****

*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 July 31, 2008.*

 
******

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

 
*†*

*The cost for federal income tax purposes was $428,020,441.  At July 31, 2008, net unrealized depreciation for all securities based on tax cost was $14,385,887.  This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $3,811,623 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $18,197,510.*

 
*(a)*

*Principal amount stated in US dollars unless otherwise noted.*

 
*(b)*

*All or a portion of these securities were on loan.  The value of all securities loaned at July 31, 2008 amounted to $28,664,325 which is 7.4% of net assets.*

 
*(c)*

*Security issued in lieu of interest payment due 12/15/2007, which has been deferred until 9/15/2008.  The security is deemed to be non-income producing*

 
*(d)*

*At July 31, 2008, this security has been pledged, in whole or in part, to cover initial margin requirements for open futures contracts.*

 
*(e)*

*Date shown is call date; not a maturity date for the perpetual preferred securities.*

 
*(f)*

*Affiliated fund managed by Deutsche Investment Management Americas Inc.*

 
*(g)*

*Affiliated fund managed by Deutsche Investment Management Americas Inc.  The rate shown is the annualized seven-day yield at period end.*

 
*(h)*

*Represents collateral held in connection with securities lending.  Income earned by the Fund is net of borrower rebates.*

 
*(i)*

*Mortgage dollar rolls included.*

 
 

 

 

*(j)*

*Security has deferred its 6/15/2008 interest payment until 12/15/2008.  This security is deemed to be non-income producing.*

*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.*

*LIBOR: Represents the London InterBank Offered Rate.*

*PIK: Denotes that all or a portion of the income is paid in kind.*

*REIT: Real Estate Investment Trust*

*At July 31, 2008, the Fund had unfunded loan commitments of $46,644 which could be extended at the option of the borrower, pursuant to the following loan agreement:*

 
* *

***Unfunded Loan*****

* *

***Unrealized*****

 
***Borrower*****

***Commitment ($)*****

***Value ($)*****

***Depreciation ($)*****

 
*Bausch & Lomb, Inc., Term Delay Draw, 4/11/2015***

*31,840***

*31,182***

*(658)***

 
*Telesat Canada, Inc., Term Loan B, 10/31/2014***

*14,804***

*14,337***

*(467)***

 
***Total*****

***46,644*****

***45,519*****

***(1,125)*****

 
*At July 31, 2008, open futures contracts purchased were as follows:*

**Futures**

 

**Expiration****Date**

 

**Contracts**

 

**Aggregated****Face****Value ($)**

 

**Value ($)**

 

**Unrealized****Appreciation ($)**

 

10 Year Australian Treasury Bond 

 

9/15/2008 

 

67 

 

6,076,362 

 

6,213,422 

 

137,060

 
10 Year US Treasury Note 

 

9/19/2008 

 

431 

 

49,123,379 

 

49,490,924 

 

367,545

 
United Kingdom Treasury Bond 

 

9/26/2008 

 

225 

 

47,004,555 

 

47,880,786 

 

876,231

 
**Total unrealized appreciation**

**1,380,836**

 
*At July 31, 2008, open futures contracts sold were as follows:*

**Futures**

 

 

**Expiration****Date**

 

**Contracts**

 

**Aggregated****Face****Value ($)**

 

**Value ($)**

 

**Unrealized****Depreciation ($)**

 

10 Year Canadian Government Bond

 

9/19/2008

 

98

 

11,220,537 

 

11,362,430

 

(141,893)

 
10 Year Federal Republic of Germany Bond

 

9/8/2008

 

282

 

49,013,091 

 

49,490,662 

 

(477,571)

 
10 Year Japanese Government Bond

 

9/10/2008

 

27

 

33,622,892 

 

34,138,852 

 

(515,960)

 
**Total unrealized depreciation**

**(1,135,424)**

 
 

 

 

 

 

 

 

 

 

 

 

 

*At July 31, 2008, open credit default swap contracts sold were as follows:*

**Effective/****Expiration****Dates**

 

**Notional****Amount ($)**

 

**Cash Flows Received****by the Portfolio**

 

**Underlying Debt Obligation**

 

**Unrealized****Appreciation/****(Depreciation) ($)**

 

10/4/2007

12/20/2008

 

200,0001

 

Fixed — 3.1%

 

Ford Motor Co., 6.5%, 8/1/2018

 

(5,466)

 
10/5/2007

12/20/2008

 

120,0002

 

Fixed — 3.15%

 

Ford Motor Co., 6.5%, 8/1/2018

 

(3,256)

 
10/13/2007

12/20/2009

 

225,0003

 

Fixed — 3.85%

 

Ford Motor Co., 6.5%, 8/1/2018

 

(35,673)

 
10/22/2007

12/20/2008

 

395,0004

 

Fixed — 3.05%

 

Ford Motor Co., 6.5%, 8/1/2018

 

(10,872)

 
12/13/2007

12/20/2009

 

220,0003

 

Fixed — 5.05%

 

Ford Motor Co., 6.5%, 8/1/2018

 

(22,565)

 
10/4/2007

12/20/2008

 

210,0005

 

Fixed — 2.6%

 

General Motors Corp., 7.125%, 7/15/2013

 

(8,869)

 
10/22/2007

12/20/2008

 

395,0004

 

Fixed — 3.06%

 

General Motors Corp., 7.125%, 7/15/2013

 

(15,983)

 
10/3/2007

12/20/2008

 

200,0002

 

Fixed — 3.2%

 

General Motors Corp., 7.125%, 7/15/2013

 

(7,985)

 
2/19/2008

3/20/2009

 

225,0003

 

Fixed — 3.8%

 

HCA, Inc.,7.7%, 3/20/2009 

 

2,676

 
1/29/2008

3/20/2013

 

185,0004

 

Fixed — 3.0%

 

HCA, Inc.,7.7%, 3/20/2009

 

864

 
1/28/2008

3/20/2009

 

305,0004

 

Fixed — 2.65%

 

HCA, Inc.,7.7%, 3/20/2009

 

(2,307)

 
11/21/2007

12/20/2008

 

220,0003

 

Fixed — 4.02%

 

Tenet Healthcare Corp., 7.375%, 2/1/2013

 

1,779

 
2/26/2008

3/20/2009

 

275,0003

 

Fixed — 5.0%

 

Tenet Healthcare Corp., 7.375%, 2/1/2013

 

5,238

 
12/19/2007

12/20/2008

 

290,0004

 

Fixed — 2.9%

 

Tenet Healthcare Corp., 7.375%, 2/1/2013

 

1,058

 
**Total net unrealized depreciation**

**(101,361)**

 
 

 

*At July 31, 2008, open credit default swap contracts purchased were as follows:*

**Effective/****Expiration****Dates**

 

**Notional****Amount ($)**

 

**Cash Flows Paid****by the Portfolio**

 

**Underlying Debt Obligation**

 

**Unrealized****Appreciation/****(Depreciation) ($)**

 

7/16/2008

9/20/2013

 

1,120,0001

 

Fixed — 1.45%

 

Nordstrom, Inc. 

6.95%, 3/15/2028

 

(11,371)

 
7/18/2008

9/20/2013

 

1,120,0006

 

Fixed — 1.76%

 

CenturyTel, Inc.,6.0%, 6/21/2017

 

(3,043)

 
5/6/2008

6/20/2013

 

215,0003

 

Fixed — 7.25%

 

ARCO Chemical Co., 9.8%, 2/1/2020

 

17,503

 
**Total net unrealized depreciation**

**3,089**

 
 

 

*Counterparties:*

*1*

*Goldman Sachs & Co.*

*2*

*JPMorgan Chase Securities, Inc.*

*3*

*Merrill Lynch & Co., Inc.*

*4*

*Lehman Brothers, Inc.*

 

 

 

*5*

*Citigroup Global Markets, Inc.*

*6*

*Bank of America Securities LLC*

 

 

 

 
*As of July 31, 2008, the Fund had the following open forward foreign currency exchange contracts:***

***Contracts to Deliver*****

***In Exchange For*****

***Settlement Date*****

***Unrealized Appreciation ($)*****

 
*CAD***

*31,360***

*USD***

*30,592***

*8/5/2008***

*16***

 
*EUR***

*104,700***

*USD***

*163,768***

*8/11/2008***

*548***

 
*EUR***

*2,062,100***

*USD***

*3,225,465***

*8/11/2008***

*10,804***

 
*CAD***

*79,000***

*USD***

*77,669***

*9/17/2008***

*686***

 
*CHF***

*13,364,000***

*USD***

*12,865,216***

*9/17/2008***

*116,673***

 
*CHF***

*3,305,000***

*USD***

*3,244,904***

*9/17/2008***

*92,111***

 
*USD***

*11,329,146***

*EUR***

*7,348,000***

*9/17/2008***

*97,867***

 
*USD***

*29,403,231***

*NOK***

*153,232,000***

*9/17/2008***

*309,123***

 
*SEK***

*16,460,000***

*USD***

*2,714,380***

*9/17/2008***

*2,912***

 
*SEK***

*74,896,000***

*USD***

*12,486,204***

*9/17/2008***

*148,529***

 
*USD***

*35,558,401***

*SGD***

*48,595,000***

*9/17/2008***

*64,253***

 
***Total unrealized appreciation*****

 **

 **

***843,522*****

 
* *

* *

* *

* *

* *

* *

 
***Contracts to Deliver*****

***In Exchange For*****

***Settlement Date*****

***Unrealized Depreciation ($)*****

 
*AUD***

*14,584***

*USD***

*13,715***

*8/5/2008***

*(6)***

 
*GBP***

*9,000,000***

*USD***

*17,678,079***

*9/15/2008***

*(85,818)***

 
*USD***

*4,653,500***

*JPY***

*500,000,000***

*9/16/2008***

*(15,304)***

 
*USD***

*831,655***

*AUD***

*874,000***

*9/17/2008***

*(14,137)***

 
*AUD***

*14,082,000***

*USD***

*13,163,713***

*9/17/2008***

*(8,237)***

 
*USD***

*4,215,491***

*CAD***

*4,299,000***

*9/17/2008***

*(26,260)***

 
*USD***

*3,814,821***

*GBP***

*1,925,000***

*9/17/2008***

*(15,921)***

 
*GBP***

*3,779,000***

*USD***

*7,352,045***

*9/17/2008***

*(105,639)***

 
*USD***

*5,070,834***

*JPY***

*541,129,000***

*9/17/2008***

*(50,800)***

 
*USD***

*1,490,397***

*JPY***

*158,000,000***

*9/17/2008***

*(24,637)***

 
*USD***

*6,986,509***

*NOK***

*35,656,000***

*9/17/2008***

*(72,655)***

 
*USD***

*1,795,200***

*SGD***

*2,430,000***

*9/17/2008***

*(13,884)***

 
***Total unrealized depreciation*****

 **

 **

***(433,298)*****

 
* *

* *

* *

* *

 
 
***Currency Abbreviations*****

 

 

 
 
*AUD***

*Australian Dollar***

*GBP***

*British Pound***

 
 
*ARS***

*Argentine Peso***

*JPY***

*Japanese Yen***

 
 
*BRL***

*Brazilian Real***

*NOK***

*Norwegian Krone***

 
 
*CAD***

*Canadian Dollar***

*SEK***

*Swedish Krona***

 
 
*CHF***

*Swiss Franc***

*SGD***

*Singapore Dollar***

 
 
*EUR***

*Euro***

*USD***

*United States Dollar***

 
 

 

 

**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 fiscal quarter 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 Strategic Income Fund

 

By:

/s/Michael G. Clark

 

Michael G. Clark

President

 

Date:

September 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 Strategic Income Fund

 

By:

/s/Michael G. Clark

 

Michael G. Clark

President

 

Date:

September 16, 2008

 

 

By:

/s/Paul Schubert

 

Paul Schubert

Chief Financial Officer and Treasurer

 

Date:                                        September 16, 2008

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