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  811-3749

DWS State Tax Free Trust

(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:  03/31

Date of reporting period: 06/30/08

 

ITEM 1.  SCHEDULE OF INVESTMENTS

 

| Investment Portfolio | **as of June 30, 2008  (Unaudited)** |
|----------------------|--------------------------------------|

 

 

**DWS Massachusetts Tax-Free Fund**

 

|   | **Principal****Amount ($)**         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | **Value ($)** |
|--------|-------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------|
|        |
|   | **Municipal Bonds and Notes 90.9%** |  
**Massachusetts 81.9%**

 
Bellingham, MA, Other General Obligation, 5.375%, 3/1/2015 (a) 

 

1,765,000

 

1,858,033

Boston, MA, Industrial Development Financing Authority Revenue, Crosstown Center    Project, AMT:

 
 

6.5%, 9/1/2035

 

1,950,000 

 

1,741,564 

 

8.0%, 9/1/2035

 

980,000 

 

869,681 

Boston, MA, Project Revenue, Convention Center Act 1997, Series A, 5.0%, 5/1/2015 (a) 

 

2,730,000

 

2,838,272

Boston, MA, Senior Care Revenue, Industrial Development Finance Authority, First Mortgage, Springhouse, Inc., 5.5%, 7/1/2008 

 

355,000

 

354,989

Chicopee, MA, Electrical Systems, ETM, 7.125%, 1/1/2017 

 

990,000

 

1,138,787

Groton-Dunstable, MA, School District General Obligation, Regional School District, 5.0%, 10/15/2015 (a) 

 

1,920,000

 

2,023,814

 

 

 

 

Holyoke, MA, Electric Revenue, Gas & Electric Department, Series A, 5.375%, 12/1/2016 (a) 

 

1,260,000

 

1,334,428

Hopkinton, MA, Other General Obligation:

 
 

5.5%, 9/1/2012

 

1,735,000 

 

1,858,948 

 

5.5%, 9/1/2014

 

1,735,000 

 

1,855,149 

Ipswich, MA, General Obligation, Prerefunded, 5.25%, 11/15/2017 (a) 

 

2,325,000

 

2,442,366

Massachusetts, Airport Revenue, Port Authority, Series A, 5.75%, 7/1/2011 

 

2,000,000

 

2,143,140

Massachusetts, Airport Revenue, USAir Private Jet, AMT, Series A, 5.75%, 9/1/2016 (a) 

 

1,000,000

 

993,490

Massachusetts, Bay Transportation Authority Revenue:

 
 

Series A, Prerefunded, 5.25%, 7/1/2021

 

2,000,000 

 

2,187,460 

 

Series A, 5.25%, 7/1/2025

 

2,960,000 

 

3,251,530 

 

Series A, 5.75%, 7/1/2011

 

355,000 

 

373,098 

 

Series A, 5.75%, 7/1/2015

 

535,000 

 

562,274 

 

Series B, 6.2%, 3/1/2016

 

3,100,000 

 

3,509,014 

Massachusetts, Bay Transportation Authority, Sales Tax Revenue:

 
 

Series A-2, Zero Coupon, 7/1/2027

 

21,090,000 

 

7,793,388 

 

Series C, ETM, 5.0%, 7/1/2015

 

190,000 

 

206,152 

 

Series C, 5.0%, 7/1/2015

 

2,985,000 

 

3,237,800 

 

Series C, ETM, 5.0%, 7/1/2016

 

75,000 

 

81,457 

 

Series C, 5.0%, 7/1/2016

 

2,125,000 

 

2,305,646 

 

Series A, 5.25%, 7/1/2020

 

6,270,000 

 

6,864,020 

 

Series A, 5.25%, 7/1/2021

 

5,000,000 

 

5,461,500 

 

Series C, ETM, 5.5%, 7/1/2017

 

165,000 

 

185,615 

 

Series C, 5.5%, 7/1/2017

 

4,835,000 

 

5,423,419 

Massachusetts, Bay Transportation System Authority, Series C, 6.1%, 3/1/2013 

 

1,500,000

 

1,633,455

Massachusetts, Health & Educational Facilities Authority, Boston College, Series N, 5.25%, 6/1/2017 

 

7,225,000

 

7,696,792

Massachusetts, Health & Educational Facilities Authority, Simmons College, Series F, Prerefunded, 5.0%, 10/1/2019 (a) 

 

1,230,000

 

1,322,963

Massachusetts, Higher Education Revenue, Building Authority, University of Massachusetts, ETM:

 
 

6.625%, 5/1/2010

 

2,575,000 

 

2,757,567 

 

6.75%, 5/1/2011

 

2,745,000 

 

3,023,123 

 

6.875%, 5/1/2014

 

1,300,000 

 

1,493,024 

Massachusetts, Higher Education Revenue, Development Finance Agency, Smith College, Prerefunded, 5.75%, 7/1/2015 

 

1,265,000

 

1,352,361

Massachusetts, Higher Education Revenue, Development Finance Agency, WGBH Educational Foundation:

 
 

Series A, Prerefunded, 5.375%, 1/1/2015 (a) 

 

1,200,000 

 

1,296,360 

 

Series A, Prerefunded, 5.375%, 1/1/2016 (a) 

 

1,200,000 

 

1,296,360 

 

Series A, Prerefunded, 5.375%, 1/1/2017 (a) 

 

1,200,000 

 

1,296,360 

Massachusetts, Higher Education Revenue, Health & Educational Facilities Authority, Massachusetts Institute of Technology, Series K, 5.375%, 7/1/2017 

 

5,500,000

 

6,161,925

Massachusetts, Higher Education Revenue, Health & Educational Facilities Authority, University of Massachusetts, Series C, Prerefunded, 5.5%, 10/1/2014 (a) 

 

1,645,000

 

1,790,484

Massachusetts, Hospital & Healthcare Revenue, Health & Educational Facilities Authority, Baystate Medical Center:

 
 

Series F, 5.7%, 7/1/2027

 

3,000,000 

 

3,042,330 

 

Series F, 5.75%, 7/1/2033

 

2,000,000 

 

2,014,900 

Massachusetts, Hospital & Healthcare Revenue, Health & Educational Facilities Authority, Berkshire Health System, Series E, 6.25%, 10/1/2031 

 

2,000,000

 

2,037,320

Massachusetts, Hospital & Healthcare Revenue, Health & Educational Facilities Authority, Civic Investments, Series A, Prerefunded, 9.0%, 12/15/2015 

 

3,600,000

 

4,313,736

Massachusetts, Hospital & Healthcare Revenue, Health & Educational Facilities Authority, Massachusetts General Hospital, Series F, 6.25%, 7/1/2012 (a) 

 

3,145,000

 

3,333,323

Massachusetts, Hospital & Healthcare Revenue, Health & Educational Facilities Authority, Milford-Whitinsville Regional:

 
 

Series C, 5.75%, 7/15/2013

 

1,505,000 

 

1,528,659 

 

Series D, Prerefunded, 6.35%, 7/15/2032

 

3,250,000 

 

3,632,655 

 

 

 

 

Massachusetts, Hospital & Healthcare Revenue, Health & Educational Facilities Authority, New England Medical Center:

 
 

Series H, Prerefunded, 5.375%, 5/15/2018 (a) 

 

4,875,000 

 

5,209,717 

 

Series H, Prerefunded, 5.375%, 5/15/2019 (a) 

 

1,800,000 

 

1,923,588 

Massachusetts, Hospital & Healthcare Revenue, Health & Educational Facilities Authority, North Adams Hospital, Series C, 6.625%, 7/1/2018 

 

730,000

 

730,007

Massachusetts, Hospital & Healthcare Revenue, Health & Educational Facilities Authority, UMass Memorial, Series C, 6.625%, 7/1/2032 

 

3,000,000

 

3,071,460

Massachusetts, Hospital & Healthcare Revenue, Health & Educational Facilities Authority, Winchester Hospital, Series B, Prerefunded, 6.75%, 7/1/2030 

 

1,925,000

 

2,073,167

Massachusetts, Industrial Development Revenue, Development Finance Agency, Series A, 7.1%, 7/1/2032 

 

3,750,000

 

3,782,587

Massachusetts, Municipal Wholesale Electric Co., Power Supply Systems Revenue, Nuclear Project No. 4, Series A, 5.25%, 7/1/2014 (a) 

 

5,915,000

 

6,233,700

Massachusetts, Project Revenue, Health & Educational Facilities Authority, Jordan Hospital, Series E, 6.75%, 10/1/2033 

 

5,000,000

 

5,026,650

Massachusetts, Sales & Special Tax Revenue, Federal Highway Grant:

 
 

Series A, Zero Coupon, 12/15/2014

 

9,000,000 

 

6,934,500 

 

Series A, 5.5%, 12/15/2013

 

5,000,000 

 

5,498,600 

Massachusetts, Sales & Special Tax Revenue, Grant Anticipation Notes, Series A, 5.25%, 12/15/2012 

 

7,050,000

 

7,601,239

Massachusetts, School District General Obligation, Development Finance Agency, Prerefunded, 5.375%, 9/1/2023 

 

1,175,000

 

1,265,898

Massachusetts, Special Obligation Consolidated Loan, Series A, 5.5%, 6/1/2016 (a) 

 

2,600,000

 

2,855,918

Massachusetts, Special Obligation Dedicated Tax Revenue, Prerefunded, 5.25%, 1/1/2021 (a) 

 

5,000,000

 

5,381,400

Massachusetts, State College Building Authority Project Revenue, Series A, 5.0%, 5/1/2031 (a) 

 

2,630,000

 

2,622,715

Massachusetts, State Development Finance Agency Revenue, Biomedical Research:

 
 

Series C, 6.25%, 8/1/2013

 

2,180,000 

 

2,297,437 

 

Series C, 6.375%, 8/1/2014

 

1,000,000 

 

1,060,380 

Massachusetts, State Development Finance Agency Revenue, Boston College:

 
 

Series P, 5.0%, 7/1/2021

 

2,500,000 

 

2,590,750 

 

Series P, 5.0%, 7/1/2022

 

1,500,000 

 

1,547,175 

Massachusetts, State Development Finance Agency Revenue, College of the Holy Cross, Series B, 5.0%, 9/1/2026 

 

1,500,000

 

1,565,550

Massachusetts, State Development Finance Agency Revenue, Linden Ponds, Inc. Facility, Series A, 5.5%, 11/15/2022 

 

1,750,000

 

1,573,618

Massachusetts, State Development Finance Agency Revenue, Resource Recovery, Series A, 5.625%, 1/1/2015 (a)

 

4,000,000 

 

4,237,360 

Massachusetts, State Development Finance Agency Revenue, Resource Recovery, SEMASS Partnership, Series A, 5.625%, 1/1/2014 (a)

 

5,000,000 

 

5,306,650 

Massachusetts, State Development Finance Agency Revenue, Wheelock College, Series C, 5.25%, 10/1/2029 

 

8,620,000

 

8,393,208

Massachusetts, State General Obligation:

 
 

Series A, 2.385% *, 11/1/2018

 

5,000,000 

 

4,450,000 

 

Series D, 5.5%, 11/1/2016

 

500,000 

 

557,305 

 

Series D, 5.5%, 11/1/2019

 

4,325,000 

 

4,838,940 

Massachusetts, State General Obligation, Consolidated Loan:

 
 

Series D, 5.5%, 11/1/2014 (a) 

 

4,990,000 

 

5,513,700 

 

Series C, 5.5%, 11/1/2015 (a) 

 

12,500,000 

 

13,817,500 

 

Series D, 5.5%, 11/1/2019 (a) 

 

2,500,000 

 

2,785,100 

Massachusetts, State Health & Educational Facilities Authority Revenue, Berklee College of Music, Series A, 5.0%, 10/1/2023 

 

3,385,000

 

3,439,905

Massachusetts, State Health & Educational Facilities Authority Revenue, Boston Medical Center Project, 5.75%, 7/1/2031 (b) 

 

3,000,000

 

3,031,800

Massachusetts, State Health & Educational Facilities Authority Revenue, CareGroup, Series E-1, 5.125%, 7/1/2038 

 

1,500,000

 

1,429,425

Massachusetts, State Health & Educational Facilities Authority Revenue, Catholic Health East Issue, Series C, 2.613% *, 11/15/2032 

 

2,000,000

 

1,568,000

 

 

 

 

Massachusetts, State Health & Educational Facilities Authority Revenue, Dana Farber Cancer Institute, Series K, 5.25%, 12/1/2027 

 

4,000,000

 

4,103,160

Massachusetts, State Health & Educational Facilities Authority Revenue, Havard University, Series B, 5.0%, 10/1/2038 

 

10,000,000

 

10,207,200

Massachusetts, State Health & Educational Facilities Authority Revenue, Partners Healthcare Systems:

 
 

Series G-5, 5.0%, 7/1/2022

 

1,400,000 

 

1,428,476 

 

Series C, Prerefunded, 5.75%, 7/1/2032

 

7,700,000 

 

8,361,353 

 

Series C, 5.75%, 7/1/2032

 

300,000 

 

305,838 

Massachusetts, State Health & Educational Facilities Authority Revenue, Quincy Medical Center, Series A, 6.25%, 1/15/2028 

 

1,450,000

 

1,396,974

Massachusetts, State Health & Educational Facilities Authority Revenue, UMass Worcester:

 
 

Series B, Prerefunded, 5.25%, 10/1/2013 (a) 

 

220,000 

 

234,412 

 

Series B, 5.25%, 10/1/2013 (a) 

 

280,000 

 

293,230 

Massachusetts, State Port Authority Revenue, AMT:

 
 

Series D, 6.125%, 7/1/2013

 

1,860,000 

 

1,922,515 

 

Series D, 6.125%, 7/1/2014

 

1,990,000 

 

2,042,755 

 

Series D, 6.125%, 7/1/2015

 

2,130,000 

 

2,184,613 

 

Series D, 6.25%, 7/1/2016

 

1,850,000 

 

1,898,340 

 

Series D, 6.25%, 7/1/2017

 

1,550,000 

 

1,590,037 

Massachusetts, State Port Authority Supply Facilities Revenue, Delta Air Lines, Inc.         Project, AMT:

 
 

Series A, 5.5%, 1/1/2014 (a) 

 

4,000,000 

 

3,892,840 

 

Series A, 5.5%, 1/1/2015 (a) 

 

3,000,000 

 

2,890,560 

 

Series A, 5.5%, 1/1/2016 (a) 

 

3,000,000 

 

2,859,960 

Massachusetts, State School Building Authority, Dedicated Sales Tax Revenue:

 
 

Series A, 5.0%, 8/15/2021 (a) 

 

4,500,000 

 

4,680,135 

 

Series A, 5.0%, 8/15/2024 (a) 

 

7,800,000 

 

8,071,128 

Massachusetts, State Water & Sewer Revenue, Water Pollution Abatement Trust, Series 2, 5.7%, 2/1/2015 

 

35,000

 

35,097

Massachusetts, State Water & Sewer Revenue, Water Pollution Abatement Trust, MWRA Program, Series A, 6.0%, 8/1/2019 (c)

 

4,000,000

 

4,685,880

Massachusetts, State Water Pollution Abatement Treatment, Pool Program:

 
 

Series 7, 5.25%, 2/1/2014

 

3,705,000 

 

3,897,771 

 

Series 6, 5.625%, 8/1/2015

 

120,000 

 

127,192 

Massachusetts, State Water Pollution Abatement Trust, Pool Program:

 
 

Series 11, 5.0%, 8/1/2017

 

115,000 

 

122,983 

 

Series 11, Prerefunded, 5.0%, 8/1/2020

 

3,000,000 

 

3,256,050 

 

Series 11, 5.0%, 8/1/2020

 

100,000 

 

104,856 

Massachusetts, State Water Resources Authority:

 
 

Series C, ETM, 5.25%, 12/1/2015

 

2,460,000 

 

2,662,384 

 

Series C, 5.25%, 12/1/2015

 

1,570,000 

 

1,690,058 

 

Series A, 5.25%, 8/1/2026 (a) 

 

1,950,000 

 

2,041,708 

 

Series D, ETM, 5.5%, 8/1/2011 (a) 

 

5,000,000 

 

5,360,350 

Massachusetts, Transportation/Tolls Revenue, Series E, Prerefunded, 5.25%, 1/1/2022 (a) 

 

4,500,000

 

4,795,515

 

 

 

 

 

 

 

 

 

 

Massachusetts, Transportation/Tolls Revenue, Rail Connections, Inc., Route 128 Parking Garage Project:

 
 

Series B, Prerefunded, Zero Coupon, 7/1/2015

 

750,000 

 

512,813 

 

Series B, Prerefunded, Zero Coupon, 7/1/2016

 

1,025,000 

 

655,754 

 

Series B, Prerefunded, Zero Coupon, 7/1/2017

 

1,000,000 

 

598,210 

 

Series A, ETM, 5.3%, 7/1/2009

 

705,000 

 

729,809 

 

Series A, Prerefunded, 6.0%, 7/1/2012

 

250,000 

 

265,443 

 

Series A, Prerefunded, 6.0%, 7/1/2014

 

250,000 

 

265,443 

Massachusetts, Water & Sewer Revenue, Water Pollution Abatement Program, New Bedford Program, Series A, 5.25%, 2/1/2013 

 

1,000,000

 

1,077,340

Massachusetts, Water & Sewer Revenue, Water Pollution Abatement Program, Pool Loan Program, Series 5, ETM, 5.375%, 8/1/2015 

 

5,000,000

 

5,543,000

Massachusetts, Water & Sewer Revenue, Water Resource Authority:

 
 

 

 

 

 

Series C, 5.25%, 12/1/2015 (a) 

 

6,050,000 

 

6,486,205 

 

Series A, ETM, 5.5%, 8/1/2013 (a) 

 

1,445,000 

 

1,585,021 

 

Series A, ETM, 6.5%, 7/15/2019

 

3,110,000 

 

3,632,013 

Medford, MA, Core City General Obligation, 5.0%, 2/15/2015 (a) 

 

2,085,000

 

2,185,935

Middleborough, MA, Other General Obligation, Prerefunded:

 
 

5.25%, 1/15/2017 (a) 

 

1,525,000 

 

1,601,723 

 

5.25%, 1/15/2018 (a) 

 

1,515,000 

 

1,591,220 

 

5.25%, 1/15/2019 (a) 

 

1,470,000 

 

1,543,956 

Narragansett, MA, School District General Obligation, Regional School District, 6.5%, 6/1/2012 (a) 

 

1,145,000

 

1,224,268

Northbridge, MA, Core City General Obligation, 5.25%, 2/15/2014 (a) 

 

1,490,000

 

1,582,484

Plymouth, MA, County General Obligation:

 
 

5.75%, 10/15/2015 (a) 

 

1,900,000 

 

2,018,104 

 

5.75%, 10/15/2016 (a) (c)

 

1,725,000 

 

1,832,226 

Route 3 North, MA, Transportation/Tolls Revenue, Transportation Improvement Association, Prerefunded:

 
 

5.75%, 6/15/2012 (a) 

 

1,105,000 

 

1,169,587 

 

5.75%, 6/15/2013 (a) 

 

2,500,000 

 

2,646,125 

Springfield, MA, Core City General Obligation, Prerefunded, 5.25%, 1/15/2019 (a) 

 

1,000,000

 

1,066,000

Springfield, MA, Core City General Obligation, Municipal Purpose Loan, Prerefunded:

 
 

5.5%, 8/1/2015 (a) 

 

1,505,000 

 

1,612,893 

 

5.5%, 8/1/2016 (a) 

 

1,685,000 

 

1,805,798 

Springfield, MA, Water & Sewer Revenue, Series A, Prerefunded, 5.375%, 11/1/2016 (a) 

 

1,250,000

 

1,351,025

Tantasqua, MA, School District General Obligation, Regional School District, Prerefunded:

 
 

5.625%, 8/15/2012 (a) 

 

1,000,000 

 

1,069,530 

 

5.625%, 8/15/2014 (a) 

 

2,575,000 

 

2,754,040 

University of Massachusetts, Building Authority Revenue, Series 2, 5.0%, 11/1/2020  (a) 

 

11,880,000

 

12,299,483

University of Massachusetts, Higher Education Revenue, University Building Authority, Prerefunded:

 
 

Series 2, 5.5%, 11/1/2015 (a) 

 

1,185,000 

 

1,258,304 

 

Series 2, 5.5%, 11/1/2016 (a) 

 

1,250,000 

 

1,327,325 

Westfield, MA, Core City General Obligation, Prerefunded, 6.5%, 5/1/2013 (a) 

 

1,170,000

 

1,261,506

Westford, MA, General Obligation:

 
 

5.125%, 4/1/2017 (a) 

 

85,000 

 

88,062 

 

Prerefunded, 5.125%, 4/1/2017 (a) 

 

1,065,000 

 

1,120,455 

Westford, MA, School District General Obligation, Series A, 5.75%, 4/1/2012 (a) 

 

1,140,000

 

1,195,450

Worcester, MA, Core City General Obligation, Series A, 5.5%, 8/15/2016 (a) 

 

1,285,000

 

1,347,194

Worcester, MA, Other General Obligation, Prerefunded, 5.625%, 8/15/2015 (a) 

 

705,000

 

754,019

 

**400,334,813**

**Puerto Rico 9.0%**

 
Commonwealth of Puerto Rico, Aqueduct & Sewer Authority Revenue, Series A, 6.0%, 7/1/2038 

 

8,000,000

 

8,379,840

Commonwealth of Puerto Rico, Government Development Bank, Series B, 5.0%, 12/1/2015 

 

3,970,000

 

3,980,560

Commonwealth of Puerto Rico, State General Obligation, Series A, 5.5%, 7/1/2022 (a) (c)

 

5,000,000

 

5,083,100

Puerto Rico, Commonwealth Highway & Transportation Authority, Highway Revenue:

 
 

Series Y, ETM, 6.25%, 7/1/2014

 

1,855,000 

 

2,136,088 

 

Series Y, 6.25%, 7/1/2014

 

145,000 

 

159,780 

Puerto Rico, Electric Power Authority Revenue, Series WW, 5.375%, 7/1/2024 

 

5,000,000

 

5,106,700

Puerto Rico, Public Buildings Authority Revenue, Government Facilities:

 
 

Series H, 5.5%, 7/1/2016 (a) 

 

10,350,000 

 

10,833,759 

 

Series M, 6.25%, 7/1/2022

 

5,000,000 

 

5,403,550 

Puerto Rico, State General Obligation, Highway & Transportation Authority, Series Y, 5.5%, 7/1/2015 (a) 

 

2,500,000

 

2,719,100

 

**43,802,477**

**Total Municipal Bonds and Notes** (Cost $432,272,226)

 

**444,137,290**

 

 

 

 

 

**Municipal Inverse Floating Rate Notes (d) 26.9%**

 
**Massachusetts**

 
Massachusetts, Bay Transportation Authority, Sales Tax Revenue, Series A, 5.25%,       7/1/2028 (e) 

 

10,000,000

 

10,940,700

 

*Trust: Massachusetts, Austin Trust Various States, Bay Transportation Sales, Series*

*2008-1111, 144A, 12.9%, 7/1/2028, Leverage Factor at purchase date: 4 to 1***

 

 

 

 

Massachusetts, State Water Pollution Abatement Trust, Series 13, 5.0%, 8/1/2025 (e)

 

5,000,000

 

5,207,300

Massachusetts, State Water Pollution Abatement Trust, Series 13, 5.0%, 8/1/2026 (e)

 

5,000,000

 

5,207,300

 

*Trust: Massachusetts, Department of Agricultural Resources Municipal Trust, Various*

*States, Series 3001, 144A, 14.81%, 8/1/2025, Leverage Factor at purchase date: 4 to 1***

 

 

 

 

Massachusetts, State General Obligation, Series C, 5.0%, 8/1/2026 (a) (e)

 

20,000,000

 

20,798,900

 

*Trust: Massachusetts, State General Obligation, Series 2648, 144A, 14.39%, 8/1/2026,*

*Leverage Factor at purchase date: 4 to 1***

 

 

 

 

Massachusetts, State General Obligation, Series C, 5.25%, 8/1/2023 (a) (e)

 

15,000,000

 

15,703,950

 

*Trust: Massachusetts, State General Obligation Series 2755-1, 144A, 33.283%,*

*8/1/2023, Leverage Factor at purchase date: 10 to 1*

 

 

 

 

Massachusetts, State General Obligation, Series D, 5.0%, 11/1/2024 (a) (e)

 

10,000,000

 

10,654,100

 

*Trust: Massachusetts, State General Obligation, RITES-PA 1281, 144A, 8.22%,*

*11/1/2024, Leverage Factor at purchase date: 2 to 1***

 

 

 

 

Massachusetts, State Port Authority Revenue, Series B, AMT, 5.5%, 7/1/2011 (a) (e)

 

8,390,000

 

8,702,569

 

*Trust: Massachusetts, State Port Authority Revenue, RITES-PA 592A, AMT, 144A,*

*9.145%, 7/1/2011, Leverage Factor at purchase date: 2 to 1***

 

 

 

 

Massachusetts, State Port Authority Revenue, Series B, AMT, 5.5%, 7/1/2012 (a) (e)

 

1,610,000

 

1,669,981

 

*Trust: Massachusetts, State Port Authority Revenue, RITES-PA 592B, AMT, 144A,*

*9.145%, 7/1/2012, Leverage Factor at purchase date: 2 to 1***

 

 

 

 

Massachusetts, State Port Authority Revenue, Series D, AMT, 5.5%, 7/1/2018 (e)

 

2,620,000

 

2,662,772

 

*Trust: Massachusetts, State Port Authority Revenue, RITES-PA 598F, AMT, 144A,*

*9.135%, 7/1/2018, Leverage Factor at purchase date: 2 to 1***

 

 

 

 

Massachusetts, State Water Pollution Abatement Trust, 5.25%, 8/1/2031(e)

 

12,615,000

 

13,833,701

 

*Trust: Massachusetts, State Water Pollution Abatement Trust, Series 2840, 144A,*

*35.756%, 8/1/2031, Leverage Factor at purchase date: 10 to 1***

 

 

 

 

Massachusetts, State Water Resource Authority, Series D, Prerefunded, 5.0%, 8/1/2021 (a) (e)

 

13,175,000

 

14,000,693

 

*Trust: Massachusetts, State Water Resource Authority, Series R-252, Prerefunded, 144A,*

*8.217%, 8/1/2021, Leverage Factor at purchase date: 2 to 1***

 

 

 

 

Massachusetts, State Water Resource Authority, Series J, 5.5%, 8/1/2021 (a) (e)

 

10,000,000

 

11,174,000

 

*Trust: Massachusetts, State Water Resources Authority, Series 2499, 144A, 72.95%,*

*8/1/2021, Leverage Factor at purchase date: 20 to 1***

 

 

 

 

Massachusetts, State General Obligation, Series E, 5.0%, 11/1/2023 (a) (e)

 

10,000,000

 

10,881,300

 

*Trust: Reset Option Certificates Trust II, Various States, Series R-680-1, 144A, 64.28%,*

*11/1/2023, Leverage Factor at purchase date: 20 to 1***

 

 

 

 

**Total Municipal Inverse Floating Rate Notes** (Cost $130,402,485)

 

**131,437,266**

 

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

 

**Value ($)**

**Total Investment Portfolio** (Cost $562,674,711) †

117.8

 

**575,574,556**

**Other Assets and Liabilities, Net**

(17.8)

 

**(86,831,424)**

**Net Assets**

100.0

 

**488,743,132**

*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.*

***

*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 June 30, 2008.*

*†*

*The cost for federal income tax purposes was $562,471,382.  At June 30, 2008, net unrealized appreciation for all securities based on tax cost was $13,103,174.  This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $18,612,138 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $5,508,964.*

 

 

 

 

*(a)*

*Bond is insured by one of these companies:*

 

 

 
* *

***As a % of Total*****

 
 
***Insurance Coverage*****

***Investment Portfolio*****

 
 
*Ambac Financial Group, Inc.***

*12.7***

 
 
*Financial Guaranty Insurance Company***

*10.2***

 
 
*Financial Security Assurance, Inc.***

*15.4***

 
 
*Municipal Bond Insurance Association***

*10.5***

 
*(b)*

*When-issued security.*

*(c)*

*At June 30, 2008, this security has been pledged, in whole or in part, as collateral for open interest rate swaps.*

*(d)*

*Securities represent the underlying municipal obligations of inverse floating rate obligations held by the Fund.*

*(e)*

*Security forms part of the below tender option bond trust. Principal amount and value shown take into account the leverage factor*

*144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.*

*AMT: Subject to alternative minimum tax.*

*ETM: Bonds bearing the description ETM (escrow to maturity) are collateralized usually by US Treasury securities which are held in escrow and used to pay principal and interest on bonds so designated.*

*Prerefunded: Bonds which are prerefunded are collateralized usually by US Treasury securities which are held in escrow and used to pay principal and interest on tax-exempt issues and to retire the bonds in full at the earliest refunding date.*

*RITES: Residual Interest Tax Exempt Security*

*At June 30, 2008, open interest rate swaps were as follows:*

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

 

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

 

**Cash Flows Paid****by the Fund**

 

**Cash Flows****Received by****the Fund**

 

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

 

12/10/200812/10/2023

 

 

8,800,0001

 

Fixed — 2.69%

 

Floating — LIBOR

 

 

(168,645)

 
11/18/200811/18/2025

 

 

5,300,0002

 

Fixed — 5.281%

 

Floating — LIBOR

 

 

(239,107)

 
5/12/20095/12/2028

 

 

7,400,0001

 

Fixed — 4.993%

 

Floating — LIBOR

 

 

(60,119)

 
**Total unrealized depreciation**

 

**(467,871)**

 
 

*Counterparties:*

*1*

*Morgan Stanley Co., Inc.*

*2*

*JPMorgan Chase Securities, Inc.*

*LIBOR: Represents the London InterBank Offered Rate.*

 

 

*The following is a summary of the inputs used as of June 30, 2008 in valuing the Fund’s assets carried at fair value:*

 

**Valuation Inputs**

**Investments in  Securities at**

**Value**

**Net Unrealized Depreciation on  Other Financial Instruments***††*

Level 1 - Quoted Prices

$                                 -   

$                              -   

Level 2 - Other Significant

575,574,556   

(467,871)   

Observable Inputs

Level 3 - Significant

-   

-   

Unobservable Inputs

**Total**

**$              575,574,556**

**$               (467,871)**

 

 

 

*†† Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.*

 

*The Fund adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“FAS 157"), which governs the application of generally accepted accounting principles that require fair value measurements of the Fund’s assets and liabilities.  Fair value is an estimate of  the price the Fund would receive upon selling a security in a timely transaction to an independent buyer in the principal or most advantageous market of the security. FAS 157 established a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, for example, the risk inherent in a particular valuationtechnique used to measure fair value including such a pricing model and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.*

 

*Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels as follows:*

 

 

**•**

*Level 1 – quoted prices in active markets for identical securities*

 

**•**

*Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)*

 

**•**

*Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)*

 

*For Level 1 inputs, the Fund uses unadjusted quoted prices in active markets for assets or liabilities with sufficient frequency and volume to provide pricing information as the most reliable evidence of fair value.  The Fund’s Level 2 valuation techniques include inputs other than quoted prices within Level 1 that are observable for an asset or liability, either directly or indirectly.  Level 2 observable inputs may include quoted prices for similar assets and liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that are not active in which there are few transactions, the prices are not current, or price quotations vary substantially over time or among market participants.  Inputs that are observable for the asset or liability in Level 2 include such factors as interest rates, yield curves, prepayment speeds, credit risk, and default rates forsimilar liabilities.  For Level 3 valuation techniques, the Fund uses unobservable inputs that reflect assumptions market participants would be expected to use in pricing the asset or liability. Unobservable inputs are used to measure fair value to the extent that observable inputs are not available and are developed based on the best information available under the circumstances.  In developing unobservable inputs, market participant assumptions are used if they are reasonably available without undue cost and effort.*

 

*The Fund may record changes to valuations based on the amount that might reasonably be expected to receive for a security upon its current sale consistent with the fair value measurement objective.  Each determination is based on a consideration of all relevant factors, which are likely to vary from one pricing context to another.  Examples of such factors may include, but are not limited to the type of the security, the existence of any contractual restrictions on the security’s disposition, the price and extent of public trading in similar securities of the issue or of comparable companies, quotations or evaluated prices from broker-dealers and/or pricing services, information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), an analysis of the company’s financial statements, an evaluation of the forces that influence the issuer and themarket(s) in which the security is purchased and sold, and with respect to debt securities, the maturity, coupon, creditworthiness, currency denomination, and the movement of the market in which the security is normally traded.   Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value determined upon sale of those investments.*

 

 

**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 Massachusetts Tax-Free Fund, a series of DWS State Tax Free Trust

 

By:

/s/Michael G. Clark

 

Michael G. Clark

President

 

Date:

August 20, 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 Massachusetts Tax-Free Fund, a series of DWS State Tax Free Trust

 

By:

/s/Michael G. Clark

 

Michael G. Clark

President

 

Date:

August 20, 2008

 

 

By:

/s/Paul Schubert

 

Paul Schubert

Chief Financial Officer and Treasurer

 

Date:                                        August 20, 2008

 

  |